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As filed with the Securities and Exchange Commission on January 14, 1999
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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NEW COMMERCE BANCORP
(Exact name of registrant as specified in its charter)
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South Carolina 6021 58-2403844
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(State or other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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P. O. Box 129
Mauldin, South Carolina 29662
(864) 239-0616
(Address and Telephone Number of Intended Principal Place of Business)
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James D. Stewart
Chief Executive Officer
712 N. Main Street
Greenville, South Carolina 29609
(864) 313-7601
(Name, Address, and Telephone Number of Agent For Service)
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Copies of all communications, including copies of all communications
sent to agent for service, should be sent to:
Neil E. Grayson, Esq.
C. Russell Pickering, Esq.
Nelson Mullins Riley & Scarborough, L.L.P.
999 Peachtree Street, N.E., Suite 1400
Atlanta, Georgia 30309
(404) 817-6000
(404) 817-6225 (Fax)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
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. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED
MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE PRICE(1) FEE
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Common Stock, $.01 par value.... 800,000 $10.00 $8,000,000 $2,224
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933.
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The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to such Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED JANUARY ____, 1999
NEW COMMERCE BANCORP
[INSERT COMPANY LOGO HERE]
800,000 Shares of Common Stock
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This is an initial public offering of shares of common stock of New
Commerce BanCorp. New Commerce is offering a minimum of 550,000 shares and a
maximum of 800,000 shares at a price of $10.00 per share. The minimum purchase
amount will be 100 shares. There is currently no public market in the shares of
common stock. The market price of the shares after this offering may be higher
or lower than the initial public offering price.
New Commerce will use its best efforts to sell the securities offered.
The offering is scheduled to end on June 30, 1999, but the company may extend
the offering until February 1, 2000, at the latest. All money received will be
held in escrow until the minimum number of shares have been sold and New
Commerce has received preliminary regulatory approval for the bank it proposes
to create. If these criteria are not met prior to the end of the offering
period, all funds will be returned.
Purchases of the shares of common stock are not deposits into an
account of a bank and are not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other agency.
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. PLEASE REVIEW THE RISK
FACTORS BEGINNING ON PAGE 6.
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Per Share Minimum Total Maximum Total
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(550,000 Shares) (800,000 Shares)
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Public Offering Price................................ $10.00 $5,500,000 $8,000,000
Sales Agency Commissions (1)......................... 0.57 228,000 228,000
Proceeds to New Commerce (1)......................... 9.43 5,272,000 7,772,000
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(1) Reflects sales agent commissions and fees of 5.7% on a maximum of
400,000 shares.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS DATED _________________
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TABLE OF CONTENTS
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Page
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Summary ..........................................................................3
Risk Factors......................................................................6
The Offering.....................................................................10
Use of Proceeds .................................................................13
Capitalization...................................................................15
Dividend Policy .................................................................16
Plan of Operation................................................................16
Proposed Business................................................................17
Supervision and Regulation.......................................................21
Management.......................................................................27
Description of Capital Stock of New Commerce.....................................31
Legal Matters....................................................................34
Experts..........................................................................34
Additional Information ..........................................................34
Index to Financial Statements ..................................................F-1
Subscription Agreement..........................................................A-1
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New Commerce's principal executive offices will be located at One Five Forks
Plaza Court near the southwest corner of the intersection of Batesville Road
and Woodruff Road, in Simpsonville, South Carolina.
As used in this Prospectus,
- - "New Commerce" or the "Company" means New Commerce BanCorp.
- - The "Bank" means New Commerce Bank, N.A., which will be owned by New
Commerce.
This prospectus contains certain "forward-looking statements" concerning New
Commerce and the Bank and their operations, performance, and financial
conditions, including future economic performance, plans and objectives, and
the likelihood of success in developing their business. These statements are
based upon a number of assumptions and estimates which are subject to
significant uncertainties, many of which are beyond the control of New Commerce
or the Bank. The words "may," "would," "could," "will," "expect," "anticipate,"
"believe," "intend," "plan," and "estimate," as well as similar expressions,
are meant to identify such forward-looking statements. Actual results may
differ materially from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ materially
include, but are not limited to, those set forth in "Risk Factors."
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SUMMARY
This summary highlights information contained elsewhere in this
prospectus. It is not complete and may not contain all of the information you
should consider before investing in the common stock. You should read the
entire prospectus carefully, including the "Risk Factors" section and the
financial statements and the notes to those statements.
PURCHASES OF THE SHARES OF COMMON STOCK ARE NOT DEPOSITS INTO ACCOUNTS OF THE
BANK AND ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL
AGENCY.
New Commerce is a South Carolina company formed in July 1998 by a
group of twelve business leaders who are organizing a new, or de novo,
community bank to be located in Greenville County, South Carolina. These
organizers believe there is a demand for a new locally owned and controlled
community bank in the south part of Greenville County locally known as the
"Golden Strip," especially since most of the banks currently operating in that
area are branches of large regional banks. New Commerce will be the holding
company for this de novo national bank, which will be called New Commerce Bank,
N.A.
The twelve organizers, each of whom, except Mr. Few, will also serve
as directors of both the holding Company and the Bank, are:
Richard W. Bailey Tommy D. Greer
Timothy A. Brett Bobby L. Johnson
Marshall J. Collins, Jr. Robert Thomas Kellett
Ralph S. Crawley Dennis O. Raines
Richard L. Few, Jr. Curran A. Smith
G. Mitchell Gault James D. Stewart
James D. Stewart, age 45, is the President and Chief Executive Officer
of New Commerce BanCorp and will be President and Chief Executive Officer of
the Bank. Mr. Stewart has over twenty years of banking experience with three
years at First Union, five years at Wachovia and twelve years at BB&T. His last
five years have been in Greenville as Upstate Regional Executive with Southern
National Bank and through a merger with BB&T, a city executive. He has
extensive experience in sales and leadership roles in consumer and commercial
banking. A resident of Simpsonville, he graduated from the University of North
Carolina at Chapel Hill and the Stonier Graduate School of Banking.
In order to open the Bank (which will be a national bank), the
organizers must obtain approval from the Office of the Comptroller of the
Currency (the "OCC") and the Federal Deposit Insurance Corporation (the
"FDIC"). The organizers have submitted applications to these agencies and
anticipate receiving conditional approvals by March 1, 1999. The organizers
anticipate that these approvals will require New Commerce to capitalize the
Bank with at least $7,000,000. New Commerce will use the proceeds of this stock
offering for this purpose. The organizers believe that the bank will open in
the second quarter of 1999.
The Bank will engage in a general commercial and retail banking
business characterized by personalized service and local decision-making, and
will emphasize the banking needs of individuals and small- to medium-sized
businesses. Initially, neither New Commerce nor the Bank will pursue any other
activities.
Our initial office will be in Simpsonville, South Carolina and will
operate out of a temporary facility pending completion of our permanent
offices. We plan to move the main office of the Bank to our permanent facility
to be constructed in Mauldin, which should be completed in the third quarter of
1999. We will continue to operate a branch out of the temporary facility in
Simpsonville, pending the completion of a permanent branch facility at that
site, which should be completed prior to the end of 1999.
The principal executive offices of New Commerce BanCorp are currently
located at 712 North Main Street, Greenville, South Carolina 29609 and the
telephone number is (864) 313-7601.
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Prior to this offering, the organizers purchased 200,000 shares of
common stock, at $10.00 per share, for a total purchase price of $2,000,000, to
provide the initial capitalization for New Commerce. Although the organizers do
not intend to purchase additional shares in the offering, their immediate
family members may purchase additional shares. Based on the current ownership
of common stock by the organizers, the organizers will own approximately 26.7%
of the outstanding common stock based on the minimum number of shares offered
(550,000), and 20.0% of the outstanding common stock based on the maximum
number of shares (800,000). Additionally, in recognition of the financial risks
incurred by the organizers, each organizer will be granted a warrant to
purchase up to 7,500 additional shares of common stock at a price of $10.00 per
share, exercisable for ten years after the completion of this offering. If the
organizers were to fully exercise such warrants, they would own approximately
34.5% of the outstanding stock based on the minimum number of shares offered
and 26.6% of the outstanding common stock based on the maximum number of shares
offered. Although they have not promised to do so, the organizers may purchase
additional shares in the offering, including up to 100% of the minimum offering
(subject to obtaining regulatory approval) if necessary to complete the
offering. All shares purchased by the organizers will be for investment and not
with a view to resell the shares. Because purchases by the organizers may be
substantial, investors in this offering should not assume that the sale of a
specified minimum offering amount indicates the merits of this offering or that
an organizer's investment decision is shared by public investors. See "Risk
Factors - Control of New Commerce; Purchases by Organizers," "The Offering,"
and "Management."
THE OFFERING
Common stock offered................ Minimum: 550,000 shares
Maximum: 800,000 shares
Common stock outstanding
prior to this offering......... 200,000 shares
Common stock to be outstanding
after the offering ............ Minimum: 750,000 shares
Maximum: 1,000,000 shares
Offering price per share............ $10.00
Use of proceeds..................... New Commerce will use $7.0 million of
the first $7.5 million in proceeds
received from the prior sale of stock
to the organizers and the net proceeds
of the offering to capitalize the Bank.
Fifty percent (50%) of the net proceeds
in excess of $7.5 million will also be
used to capitalize the Bank. The
remaining net proceeds will be used to
pay organizational expenses and
expenses of this offering and to
provide working capital.
The Bank intends to use the $7.0
million it receives from the sale of
its stock to New Commerce for
organizational and pre-opening expenses
of the Bank; for purchase of temporary
facilities for the Bank; for purchase
of the Bank's sites; for construction
and furnishing of the Bank's offices;
and for working capital needs
(including paying the salaries of
officers and employees and making loans
and investments). See "Use of
Proceeds."
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Terms of the offering............... The offering is scheduled to expire on
June 30, 1999, but the Company is
reserving the right to continue the
offering up to February 1, 2000.
Initially, we will place all
subscription proceeds we receive in the
offering in an escrow account handled
by an independent escrow agent. The
escrow agent will not release these
funds to the Company, and no shares
will be issued in the offering, unless
on or before the expiration date of the
offering:
- We have accepted subscriptions
and payment in full for a minimum
of 550,000 shares (which will
result in gross offering proceeds a
minimum of $5.5 million);
- We have obtained approval from the
Federal Reserve and the South
Carolina State Board of Financial
Institutions (the "South Carolina
Board") for the Company to acquire
the stock of the Bank;
- We have received preliminary
approval of the Bank's application
for a charter from the OCC; and
- We have received preliminary
approval of the Bank's application
for deposit insurance from the
FDIC.
Plan of Distribution................ The sale of shares offered hereunder
will be made primarily by officers and
directors of the Company, who will not
receive any fees or commissions for
such efforts. Additionally, we have
engaged J.C. Bradford & Co. ("J.C.
Bradford") as our sales agent to use
its best efforts to sell up to 400,000
shares in the offering. J.C. Bradford
will receive commissions and fees of
$0.57 for each share sold. See "The
Offering - Plan of Distribution."
RISK FACTORS
Investment in the common stock involves certain risks. Some of the
risks are lack of operating history; dependence on key employees; significant
control of New Commerce by its organizers; and absence of an existing market
for the common stock. See "Risk Factors" for a full discussion of significant
risks.
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RISK FACTORS
Investing in the shares of common stock involves certain risks.
Investments should be made only after careful consideration of the following
risk factors. You should purchase common stock only if you can afford these
risks. PURCHASES OF THE SHARES OF COMMON STOCK IN THIS OFFERING ARE NOT
DEPOSITS IN AN ACCOUNT OF THE BANK AND ARE NOT INSURED OR GUARANTEED BY THE
FDIC OR ANY OTHER GOVERNMENTAL AGENCY.
NO ASSURANCE OF REGULATORY APPROVALS FOR THE BANK
Before we may open the Bank, the OCC must approve our charter
application for the Bank and our application to allow the Company to own the
Bank, and the FDIC must approve our application for deposit insurance for the
Bank. Although we anticipate receiving preliminary approvals by January 31,
1999, there is a risk these approvals will not be granted. Final approvals will
not be granted by the OCC or the FDIC until the Bank is ready to open its
business to the public. We anticipate this will occur in the second quarter of
1999.
Because we cannot open the Bank without these approvals, to reduce the
risks to investors in this offering we will place the proceeds from this
offering in an escrow account. The independent escrow agent will not release
the proceeds of the offering from escrow until the following conditions are
met:
- We have accepted subscriptions and payment in full for a minimum of
550,000 shares;
- We have obtained approval from the Federal Reserve and the South
Carolina Board for the Company to acquire the stock of the Bank;
- We have received preliminary approval of the Bank's application for
a charter from the OCC; and
- We have received preliminary approval of the Bank's application for
deposit insurance from the FDIC.
If we terminate the offering prior to satisfaction of these conditions, all
subscription funds will be returned to subscribers (without interest). See "The
Offering - Conditions to the Offering and Release of Funds."
NEW ENTERPRISE
New Commerce has been recently organized, and the organization of the
Bank will not be final until it is ready to open in May of 1999. Neither has
any operating history. Prospective purchasers of the shares have limited
information on which to base an investment decision. As a holding company, the
Company will be profitable only if the Bank is profitable. The operations of
new businesses are always risky. We expect that the Bank will incur large
initial expenses and may not be profitable for several years after starting
business, if ever. Due to the operating losses we expect to incur during the
initial years of the Bank's operations, the value of the shares of common stock
may decrease.
DEPENDENCE ON KEY EMPLOYEES
We will depend heavily on one individual to lead management and
conduct business. James D. Stewart will be the President and Chief Executive
Officer of the Company and the Bank. If he becomes unable or unwilling to
continue in his present positions, New Commerce and the Bank could be
materially adversely affected. The Company has entered into an employment
agreement with Mr. Stewart and has obtained a key man life insurance policy
covering Mr. Stewart in the amount of $1 million.
CONTROL OF NEW COMMERCE AND THE BANK; PURCHASES BY ORGANIZERS
With the exception of Mr. Few, the organizers will also serve as the
initial directors of the Company and the Bank. We anticipate that the
organizers and members of their immediate families will own at least 200,000
shares after the offering, equal to 26.7% of the shares outstanding upon
completion of the offering based on the
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minimum offer and 20.0% of the shares outstanding upon completion of the
offering based on the maximum number of shares offered. Additionally, each of
the organizers will receive warrants to purchase an additional 7,500 shares of
common stock at $10.00 per share, exercisable for ten years after the
completion of the offering. If each organizer were to exercise his warrant in
full, the organizers' ownership of the Company as a group would increase to
34.5% based on the minimum offering and 26.6% based on the maximum offering. As
a result of the anticipated stock ownership by the organizers, together with
their positions as directors of the Company and the Bank, the organizers as a
group will have substantial influence on the operations and management of the
Company and the Bank following the offering.
As a result of the warrants to be granted to the organizers, the
organizers will have an opportunity to profit from any rise in the market value
of the common stock or any increase in the net worth of the Company. Such
exercise may also result in the dilution of the interests of other
shareholders. The exercise of a substantial number of warrants by the
organizers could adversely impact the market value of the shares, the terms on
which the Company may be able to obtain additional capital. Furthermore, the
holders of the warrants could exercise the warrants at a time when the Company
could obtain any needed capital by a new offering of securities at a price
better than those provided for by the warrants. See "Management - Stock
Warrants."
OFFERING PRICE ARBITRARILY DETERMINED
We set the initial public offering price of $10.00 per share without
reference to traditional criteria for determining stock value, since criteria
such as book value or earnings are not available to a company with no
operations. The public offering price may bear no relationship to the market
price of the common stock after the offering. The price per share is
approximately the initial book value per share, before payment of
organizational expenses of the Company and the Bank.
ABSENCE OF TRADING MARKET
There is currently no market for the common stock. Upon completion of
the offering, we anticipate (based on discussion with our sales agent) that we
will be able to secure at least two broker-dealers to match buy and sell orders
for our common stock on the Over-the-Counter Bulletin Board and bid and ask
quotations will also be displayed on the Electronic Pink Sheet System. However,
a public market having depth and liquidity depends on the presence in the
marketplace of a sufficient number of buyers and sellers at any given time.
There can be no assurance that a liquid market for the common stock will
develop. If an active trading market does develop, there can be no assurance
that such a trading market will continue. Additionally, since the prices of
securities generally fluctuate, there can be no assurance that purchasers in
this offering will be able to sell the common stock at or above the
subscription price. See "Market for Common Stock."
FLUCTUATION IN EARNINGS AND VOLATILITY OF STOCK PRICES
The market price of the common stock will be effected by quarterly and
yearly operating results, which could fluctuate greatly. These fluctuations
could result from expenses of operating and expanding the Bank, trends in the
banking industry, economic conditions in the Bank's market area, and other
factors which are beyond our control. If operating results are below
expectations, the market price of the common stock would likely be materially
adversely affected.
COMPETITION
The banking business is highly competitive. We will encounter strong
competition from other banks, thrifts, credit unions, mortgage lenders,
consumer finance and insurance companies, brokerage firms, mutual funds and
other financial institutions operating in the Greenville County area and
elsewhere. Some of these competitors are well established in the target area,
and most of them have greater resources and lending limits and a lower cost of
funds than we do. Some may offer services, such as extensive and established
branch networks and trust services, that we either do not expect to provide or
will not provide for some time. Due to this competition, we may have to pay
higher rates of interest to attract deposits. In addition, competitors that are
non-depository institutions are generally not subject to the extensive
regulations applicable to the Company and the
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Bank. Recent federal legislation permits commercial banks to establish
operations nationwide. This will increase competition from out-of-state
financial institutions. There can be no assurances that we will be able to
compete successfully. See "Proposed Business - Competition" and "Supervision
and Regulation."
SUPERVISION AND REGULATION
The banking industry is heavily regulated. Our success depends not
only on competitive factors but also on state and federal regulations affecting
banks, thrifts, and their holding companies. These regulations are designed to
protect depositors, not shareholders. Changes in the regulation of the
financial institutions industry continue to occur, and the ultimate effect of
these regulatory changes cannot be predicted. In December 1991, Congress
enacted the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"). FDICIA and the regulations thereunder have increased the regulatory
and supervisory requirements for financial institutions, resulting in increased
operating expenses. Additional statutes affecting financial institutions are
proposed and enacted from time to time. Regulations affecting the Company and
the Bank may be modified at any time, and such modifications could adversely
affect our business. See "Supervision and Regulation."
ECONOMIC CONDITIONS
Our success will also depend upon local and national economic and
political conditions and governmental policies. Inflation, recession,
unemployment, high interest rates, short money supply, and other factors beyond
our control may adversely affect the Bank's deposit levels and loan demand and
could affect our earnings. Economic development may not be favorable, and we
may not achieve expected growth. See "Proposed Business."
DIVIDEND POLICY
We do not plan to pay cash dividends to our shareholders in the
foreseeable future if at all. The Company and the Bank are start-up operations
that should incur initial losses. We intend to retain any earnings for the
period of time we believe necessary to ensure the success of our operations.
The Company will be dependent upon the Bank for its earnings and funds to pay
dividends on the common stock. The payment of dividends is also subject to
legal and regulatory restrictions. Prior to payment of dividends by New
Commerce, the Board of Directors will consider the Bank's earnings, capital
requirements, financial condition and other relevant factors. See "Dividend
Policy," "Proposed Business," and "Supervision and Regulation."
LENDING LIMIT
We will be limited in the amount we can loan a single borrower
(including the borrower's related interests) by the amount of the Bank's
capital. These limits will increase and decrease as the Bank's capital
increases and decreases. If we are unable to sell participations in our loan
portfolio to other financial institutions, we may not be able to meet all of
the lending needs of some of our loan customers.
DILUTION
After the offering, we intend to adopt a stock option plan covering
our officers, directors, and employees. We would obtain shareholder approval
for this plan and anticipate that it would initially authorize a number of
shares equal to 15% of the shares to be outstanding after this offering. This
plan would include the options the Company will be obligated to issue to Mr.
Stewart under the terms of his employment agreement. Exercise of these options
could dilute the shareholders' interest in New Commerce's earnings and book
value. In addition, we may issue additional stock options or shares of common
stock or preferred stock in the future. Any stock offering would likely dilute
the holdings of purchasers in this offering.
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ANTITAKEOVER EFFECTS
New Commerce has certain takeover defenses in place. These defenses include:
- provisions relating to meetings of shareholders;
- the ability of the Board of Directors to issue additional shares
of authorized common stock and preferred stock without
shareholder approval;
- a staggered board of directors; and
- a bylaw provision that individuals affiliated with New Commerce's
business competitors may not qualify to serve on New Commerce's
Board of Directors.
These measures may impede a change in control of the Company which is not
supported by our Board of Directors, even if the change in control would be
beneficial to shareholders. See "Description of Capital Stock - Certain
Antitakeover Effects."
RISKS ASSOCIATED WITH THE YEAR 2000
Like many financial institutions, we will rely upon computers for the
daily conduct of our business and for information systems processing. There is
concern among industry experts that on January 1, 2000, computers will be
unable to read or interpret the new year and there may be widespread computer
malfunctions. We will generally rely on software and hardware developed by
independent third parties to provide our information systems. We will seek
written assurances about the Year 2000 compliance from all third party hardware
and software system providers we intend to use. To date, we have entered into
an agreement with Jack Henry & Associates, Inc. to provide our core data
processing software and services, and with CommLink Corp. to provide our ATM
processing services. Our written agreements with each of these vendors contain
comprehensive warranties regarding their Year 2000 capability and compliance.
We believe that our other internal systems and software, including our network
connections, will be programmed to comply with Year 2000 requirements, although
there is a risk they may not comply. Based on information currently available,
we believe that we will not incur significant expenses in connection with the
Year 2000 issue.
The business of many of our customers may also be negatively affected
by the Year 2000 issue. Any financial difficulties incurred by our customers in
solving Year 2000 issues could impair that customer's ability to repay loans we
may have extended. In addition, the failure of our customers to adequately
comply with Year 2000 requirements, and the costs involved in correcting such a
failure, could have a material adverse effect on our business, financial
condition, and results of operations.
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THE OFFERING
GENERAL
The Company is offering for sale a minimum of 550,000 shares and a
maximum of 800,000 shares of its common stock at a price of $10.00 per share to
raise gross proceeds of between $5,500,000 and $8,000,000 for the Company. The
minimum purchase for any investor (together with the investor's affiliates) is
100 shares and the maximum purchase is 5% of the offering unless the Company,
in its sole discretion, accepts a subscription for a lesser or greater number
of shares.
Prior to this offering, the organizers purchased 200,000 shares of
common stock, at $10.00 per share for a total price of $2 million, to provide
the initial capitalization for the Company. The organizers do not intend to
purchase additional stock in the offering, although members of their immediate
families may purchase additional shares. As a result, the organizers will own
approximately 26.7% of the common stock outstanding upon completion of the
offering based on the minimum number of shares offered (550,000), and 20.0% of
the common stock outstanding upon completion of the offering based on the
maximum number of shares offered (800,000). Additionally, each of the
organizers will receive a warrant to purchase an additional 7,500 shares of
common stock at $10.00 per share, exercisable for ten years after the
completion of the offering. If each organizer were to exercise his warrant in
full, the organizers' ownership of the Company as a group would increase to
34.5% based on the minimum offering and 26.6% based on the maximum offering.
Although they have not promised to do so, the organizers may purchase
additional shares in the offering, including up to 100% of the minimum offering
(subject to obtaining regulatory approval) if necessary to complete the
offering. All shares purchased by the organizers will be for investment and not
with a view to resell the shares. Because purchases by the organizers may be
substantial, investors in this offering should not assume that the sale of a
specified minimum offering amount indicates the merits of this offering or that
an organizer's investment decision is shared by public investors. See "Risk
Factors - Control of New Commerce; Purchases by Organizers" and "Management."
Subscriptions to purchase shares will be received until midnight,
Eastern Standard Time, on June 30, 1999, unless all of the shares are earlier
sold or the offering is earlier terminated or extended by the Company. See
"Conditions to the Offering and Release of Funds." The Company reserves the
right to terminate the offering at any time or to extend the expiration date
for additional periods not to extend beyond February 1, 2000. No written notice
of an extension of the offering period need be given prior to any extension and
any such extension will not alter the binding nature of subscriptions already
accepted by the Company. Once the Company is subject to the reporting
requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), it
will file quarterly reports on Form 10-Q and will make such documents available
to subscribers who request a copy. In addition, we intend to provide quarterly
communications to all subscribers which will include information concerning any
extensions of the offering. Extension of the expiration date might cause an
increase in our organizational and pre-opening expenses and in the expenses
incurred with this offering.
Following our acceptance, subscriptions will be binding on subscribers
and may not be revoked by subscribers except with our consent. In addition, we
reserve the right to cancel accepted subscriptions at any time and for any
reason until the proceeds of this offering are released from escrow (as
discussed in greater detail in "Conditions to the Offering and Release of
Funds" below), and we reserve the right to reject any subscription, in whole or
in part and in our sole discretion. We also have the discretion to allocate
shares among subscribers in the event of an oversubscription for the shares;
however, we anticipate that subscribers for the minimum number of shares will
not be adjusted. In determining which subscriptions to accept, in whole or in
part, we may take into account any factors we consider relevant, including the
order in which subscriptions are received, a subscriber's potential to do
business with or to direct customers to the Bank, and our desire to have a
broad distribution of stock ownership. If we reject any subscription, or accept
a subscription but in our discretion subsequently elect to cancel all or part
of such subscription, we will refund promptly the amount remitted that
corresponds to $10.00 multiplied by the number of shares as to which the
subscription is rejected or canceled. We will issue certificates representing
shares duly subscribed and paid for promptly after the offering conditions are
satisfied and we receive the escrowed funds.
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<PAGE> 12
CONDITIONS TO THE OFFERING AND RELEASE OF FUNDS
The offering is scheduled to expire on June 30, 1999, but we reserve
the right to continue the offering up to February 1, 2000. Initially, we will
place all subscription proceeds we receive in the offering in an escrow account
handled by an independent escrow agent. The escrow agent will not release these
funds to us, and no shares will be issued in the offering, unless on or before
the expiration date of the offering:
- We have accepted subscriptions and payment in full for a minimum of
550,000 shares (which will result in gross offering proceeds in
excess of a minimum of $5.5 million);
- We have obtained approval from the Federal Reserve and the South
Carolina Board for the Company to acquire the stock of the Bank;
- We have received preliminary approval of the Bank's application for a
charter from the OCC; and
- We have received preliminary approval of the Bank's application for
deposit insurance from the FDIC.
If the Company terminates the offering prior to satisfaction of these
conditions, then:
- Accepted subscription agreements will be of no further force or effect
and subscribers in the offering will not become shareholders of New
Commerce;
- The funds held in the escrow account will not be subject to the claims
of any creditor of New Commerce or available to defray the expenses of
this offering; and
- The full amount of all subscription funds will be returned promptly to
subscribers, without interest. We will retain any interest earned on
subscriptions to repay the expenses incurred in organizing the Bank.
The escrow agent has not investigated the desirability or advisability
of an investment in the shares by prospective investors and has not approved,
endorsed, or passed upon the merits of an investment in the shares.
Subscription funds held in escrow will be invested in interest-bearing savings
accounts, short-term United States Treasury securities, FDIC-insured bank
deposits, or such other investments as the escrow agent and the Company shall
agree. The organizers do not intend to invest the subscription proceeds held in
escrow in instruments that would mature after the expiration date of the
offering.
If the conditions for releasing subscription funds from escrow are met
and such funds are released but final regulatory approval to commence banking
operations is not obtained from the OCC or the Bank does not open for any other
reason, the Board of Directors intends to propose that the shareholders approve
a plan to liquidate the Company. Upon such a liquidation, the Company would be
dissolved and the Company's net assets (generally consisting of the amounts
received in this offering plus any interest earned thereon, less the amount of
all costs and expenses incurred by the Company and the Bank, including the
salaries of employees of the Bank and other pre-opening expenses) would be
distributed to the shareholders; provided that, in this event, no distributions
would be made to the organizers until shareholders other than the organizers
have received an amount equal to their initial investment in the Company.
PLAN OF DISTRIBUTION
Offers and sales of the common stock will be made on behalf of the
Company primarily by certain of its officers and directors. The officers and
directors will receive no commissions or other remuneration in connection with
such activities, but they will be reimbursed for reasonable expenses incurred
in the offering. In reliance on Rule 3a4-1 of the Exchange Act, the Company
believes such officers and directors will not be deemed to be brokers and/or
dealers under the Exchange Act.
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<PAGE> 13
We have also entered into a Sales Agency Agreement with J.C. Bradford
& Co. pursuant to which the sales agent has agreed to offer and sell to the
public as the Company's agent up to 400,000 shares of common stock on a "best
efforts" basis. The Company must reserve a minimum of 100,000 shares for sales
by the sales agent. The sales agent is required to use its best efforts through
the expiration date to sell the shares. The sales agent will receive fees and
commissions of 5.7% on shares it sells. The sales agent did not receive any
commission on the shares purchased by the organizers prior to the offering and
will not receive commissions on sales made by the officers or directors of the
Company.
The Sales Agency Agreement provides for reciprocal indemnification
between the Company and the sales agent against certain liabilities in
connection with this offering, including liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted pursuant to the Sales Agency Agreement, the Company has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed by the Securities Act and
is, therefore, unenforceable.
Prior to the date of the Prospectus, there has been no public market
for the shares. We established the initial offering price of the shares offered
hereby based upon our assessment of the capital needs of the Company and the
commercial potential of the services to be offered by the Company. We have had
discussions with the sales agent regarding the establishment and maintenance of
a market for the shares after the offering. Based upon such discussions, we
expect that a secondary market may eventually develop for the shares, although
we can make no assurances in this regard. In general, if a secondary market
develops, the shares will be freely transferable and assignable by the holder
thereof (except shares held by affiliates), and nonaffiliate shareholders may
sell any number of shares in such secondary market. See "Description of the
Capital Stock of the Company - Shares Available for Future Sale." In addition,
factors such as the degree to which the secondary market is active will
determine the willingness of the market makers, once a secondary market is
established, to continue to maintain the secondary market.
HOW TO SUBSCRIBE
Each prospective investor who desires to purchase shares of common
stock should:
1. Complete, date, and execute the subscription agreement which
has been delivered with this Prospectus;
2. Make a check, bank draft, or money order payable to The
Bankers Bank, Escrow Account for New Commerce BanCorp in the
amount of $10.00 times the number of shares subscribed for;
and
3. Deliver the completed subscription agreement and check to the
Company or the sales agent at the following address:
<TABLE>
<S> <C>
Mr. James D. Stewart Mr. Carl V. Cline
New Commerce BanCorp or J. C. Bradford & Co.
P.O. Box 129 400 2nd Avenue, N.W.
Mauldin, South Carolina 29662 Post Office Box 3857
Hickory, North Carolina 28603
</TABLE>
If you have any questions about the offering or how to subscribe,
please call Mr. Stewart at (864) 313-7601 (or any of the other organizers) or
Mr. Cline at (704) 322-3410. Subscribers should retain a copy of the completed
subscription agreement for their records. The subscription price is due and
payable when the subscription agreement is delivered.
12
<PAGE> 14
USE OF PROCEEDS
Although the amounts set forth below provide an indication of the
proposed use of funds based on the plans and estimates of the organizers,
actual expenses may vary from the estimates. We believe that the minimum
proceeds of $5,500,000 from the offering will satisfy our cash requirements for
our first three years of operations, but there can be no assurance that this
will be the case. Because we are a new enterprise, we cannot predict the Bank's
ability to generate revenues from investments and loan originations, and,
therefore, we cannot predict what the actual application of proceeds will be.
The gross proceeds to the Company from the sale of the minimum of
550,000 shares of common stock is estimated at $5,500,000 and from the maximum
of 800,000 shares is estimated at $8,000,000. Additionally, the Company has
received $2,000,000 from the sale of 200,000 shares to the organizers of the
Company. The Company's organizational and offering expenses estimated at
$100,000 are to be paid from the proceeds of the offering and sale of shares to
the organizers. The Bank's organizational and pre-opening expenses are
estimated not to exceed $352,700. We have established a line of credit in the
amount of $425,000 at the prime rate with the Bank of Newberry County, although
no amounts are outstanding under this line of credit and we do not anticipate
using such line of credit. All costs and expenses incurred to date have been
funded by the initial investment of the organizers. On the basis of the
foregoing assumptions, gross proceeds, expenses, and net proceeds at the
minimum and maximum offering amount would be as follows:
BY THE COMPANY
The following table sets forth the anticipated use of proceeds by the
Company based on the sale of the minimum number and maximum number of shares in
this offering. The Company will retain the balance of the proceeds and
initially invest the sums in United States government securities or as a
deposit with the Bank. In the long-term, the Company will use the sums for
working capital and other general corporate purposes, including payment of
expenses of the Company and the provision of additional capital for the Bank,
if necessary. The Company may also use such proceeds for potential expansion
opportunities, such as the establishment of additional branches or, the
acquisition of other financial institutions. The Company does not currently
have any definitive plans regarding any such expansion possibilities.
<TABLE>
<CAPTION>
Minimum Maximum
----------- -----------
Offering(2) Offering(3)
----------- -----------
<S> <C> <C>
Gross proceeds from offering(1)............................... $ 7,500,000 $ 10,000,000
Sales Agent's commission(4)................................... (228,000) (228,000)
Organizational and offering expenses of the Company........... (100,000) (100,000)
Investment in capital stock of the Bank(5).................... $ (7,000,000) $ (8,250,000)
Remaining proceeds............................................ $ 172,000 $ 1,422,000
============== ==============
</TABLE>
(1) Includes $2 million received from the organizers who purchased 200,000
shares of common stock prior to the offering at $10 per share.
(2) Assumes that 550,000 shares of common stock are sold in this offering.
(3) Assumes that 800,000 shares of common stock are sold in this offering.
(4) The commissions described in this table reflect the payment of a 5.7%
commission to the sales agent on a maximum of 400,000 shares.
(5) If the total offering proceeds (including the $2 million previously
received from the organizers) exceed $7.5 million, the Company will
contribute 50% of the net proceeds in excess of $7.5 million to the Bank.
This sum is included here.
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<PAGE> 15
BY THE BANK
The following table depicts the anticipated use of proceeds by the
Bank. All proceeds received by the Bank will be in the form of an investment by
the Company in the Bank's capital stock.
<TABLE>
<CAPTION>
Minimum Maximum
----------- -----------
Offering(2) Offering(3)
----------- -----------
<S> <C> <C>
Investment by the Company in the Bank's capital
stock(3)............................................. $ 7,000,000 $ 8,250,000
Organizational and pre-opening expenses of the Bank..... (352,700) (352,700)
Furniture, Fixtures and Equipment....................... (382,700) (382,700)
Lease of temporary facilities(4)........................ (37,200) (37,200)
Purchase of Bank sites(5)............................... (1,141,000) (1,141,000)
Construction of Bank offices(5)......................... (1,820,000) (1,820,000)
Remaining Proceeds...................................... $ 3,347,400 $ 4,597,400
============ =============
</TABLE>
- ---------------------------------------
(1) Assumes that 550,000 shares of common stock are sold in this offering.
(2) Assumes that 800,000 shares of common stock are sold in this offering.
(3) If the total offering (including the $2 million previously received from
the organizers) exceeds $7,500,000 the Company will contribute 50% of the
net proceeds to the Bank. The sum is included here.
(4) Reflects lease of temporary facilities for a period of 1 year at a rate of
$3,100 per month.
(5) Upon completion of the Bank offices, the Bank intends to enter into sale
/leaseback arrangements for the offices with an option to purchase, which
should return a significant amount of the purchase price for the Bank's
offices to the Bank for use as operating capital.
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<PAGE> 16
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
December 31, 1998 and the pro forma consolidated capitalization of the Company
and the Bank, as adjusted to give effect to the sale of the minimum of 550,000
shares and a maximum of 800,000 shares in this offering. The Bank has
established the second quarter of 1999 as the target for opening the Bank;
accordingly, the "As Adjusted" column reflects estimated pre-opening expenses
of the Company and the Bank through that date.
<TABLE>
<CAPTION>
As Adjusted As Adjusted
For for
December 31, Minimum Maximum
1998 Offering Offering
------------- ------------ -------------
<S> <C> <C> <C>
SHAREHOLDERS EQUITY:
Common Stock, par value $.01 per share; 10,000,000
shares authorized; 200,000 issued and
outstanding(1); 750,000 shares issued and
outstanding as adjusted (minimum offering);
1,000,000 shares issued and outstanding (maximum
offering).......................................... 2,000 7,500 10,000
Preferred Stock, par value $.01 per share; 10,000,000
shares authorized; no shares issued and outstanding... 0 0 0
Additional paid-in capital(2)......................... 1,998,000 7,192,300 9,689,800
Deficit accumulated during the pre-opening stage(3)... (46,524) (46,524) (46,524)
------------- ------------ -------------
Total shareholders' equity (deficit)(4)............ $ 1,953,476 $ 7,145,776 $ 9,643,276
============= ============ =============
</TABLE>
- ------------------------------------
(1) The organizers purchased 200,000 shares for a total of $2,000,000 prior to
the offering.
(2) The expenses of the offering will be charged against this account. These
expenses are estimated to be approximately $300,200 and these amounts have
been used in the calculation of the amounts shown in the "As Adjusted"
columns. The offering expenses include commissions and fees to be paid to
the sales agent of 5.7% on a maximum of 400,000 shares sold in the
offering.
(3) The deficit results from the expensing of estimated pre-opening expenses.
As of December 31, 1998, approximately $46,524 of pre-opening expenses and
organizational costs, and $143,427 in deferred offering costs had been
incurred on behalf of the Company and the Bank. Additionally, the Company
has purchased options for the purchase of land for its offices for a total
of $39,800 and furniture in the amount of approximately $8,200. The
Company's total accumulated shareholder's deficit was $46,524. The
organizers estimate that a total of $100,000 in organizational expenses
for the Company, $352,700 in organizational and pre-opening expenses for
the Bank, and up to $383,000 of capitalizable property costs for the
purchase of furniture, fixtures, and equipment are expected to be incurred
by the Company and the Bank prior to the commencement of operations
(assumed to occur in May of 1999). However, no assurances can be given
that the Bank will open by this date or at all, and the amount of
pre-opening expenses and organizational costs could ultimately be greater
than currently estimated. Furniture, fixtures, and equipment will be
capitalized and amortized over the life of the lease or over the estimated
useful life of the asset. The Company will retain any interest earned on
subscription payments held in escrow prior to conclusion of the offering.
Such interest will be used to help offset the deficit accumulated during
the pre-opening stage, but the figures shown above do not include any
estimate of the interest which may be earned.
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<PAGE> 17
(4) The shareholders are likely to experience additional dilution due to
operating losses expected to be incurred during the initial years of the
Bank's operations.
(5) Upon completion of the Bank offices, the Bank intends to enter into
sale/leaseback arrangements for the offices with an option to purchase,
which should return a significant amount of the purchase price for the
Bank's offices to the Bank for use as operating capital.
DIVIDEND POLICY
The Board of Directors expects initially to follow a policy of
retaining any earnings to provide funds to operate and expand the business.
Consequently, it is unlikely that any cash dividends will be paid in the near
future. The Company's ability to pay any cash dividends to its shareholders in
the future will depend primarily on the Bank's ability to pay dividends to the
Company. In order to pay dividends to the Company, the Bank must comply with
the requirements of all applicable laws and regulations. See "Supervision and
Regulation The Bank - Dividends" and "Supervision and Regulation - The Bank -
Capital Requirements." In addition to the availability of funds from the Bank,
the future dividend policy of the Company is subject to the discretion of the
Board of Directors and will depend upon a number of factors, including future
earnings, financial condition, cash needs, and general business conditions.
PLAN OF OPERATION
New Commerce was formed to organize and own all of the capital stock
of the Bank. The organizers filed an application with the OCC on October 26,
1998 to charter the Bank as a national bank. The issuance of a charter will
depend, among other things, upon compliance with certain legal requirements
that may be imposed by the OCC, including capitalization of the Bank with at
least a specified minimum amount of capital, which the organizers believe will
be $7,000,000. Additionally, the Company must obtain the approval of the
Federal Reserve to become a bank holding company before acquiring the capital
stock of the Bank. The Bank has also filed an application with the FDIC for
deposit insurance. The organizers expect to receive all regulatory approvals by
May of 1999.
As of December 31, 1998, the Company had total assets of $1,953,476,
consisting of cash ($1,762,031), deferred organization costs ($143,427), real
estate options ($39,800) and fixed assets ($8,218). The Company incurred a net
loss of $46,524 for the period from inception July 17, 1998 to December 31,
1998.
Upon the completion of the sale of common stock and opening of the
Bank, organization costs, estimated to be $100,000 (consisting principally of
legal, regulatory, consulting and incorporation fees), will be charged against
the initial period of operating results. Offering expenses, estimated to be
$272,224 (consisting principally of direct incremental costs of the stock
offering), will be deducted from the proceeds of the offering, and pre-opening
expenses, estimated to be $352,700 (consisting principally of salaries,
overhead and other operating costs), which are charged against the initial
period's operating results.
The Bank's initial office will be located at One Five Forks Plaza
Court near the intersection of Batesville Road and Woodruff Road in
Simpsonville, South Carolina. The Bank will operate out of a temporary facility
at this location while its permanent facilities are under construction. The
Bank intends to complete a 3,000 square foot permanent branch facility at this
location at a projected cost of $427,000 and a 10,000 square foot permanent
main office in Mauldin, South Carolina near Brookfield Parkway and East Butler
Road at projected cost of $1.4 million. We hope to complete both facilities
prior to the end of 1999. The Company entered into an agreement in September of
1998 to purchase the Simpsonville property for $450,000 and an agreement in
January of 1999 to purchase the Mauldin property for $691,000. Upon completion
of the Bank offices, the Bank intends to enter into sale/leaseback arrangements
for the offices with an option to purchase, which should return to the Bank a
significant amount of the cash to purchase the Bank sites and construct its
offices for use as operating capital.
Like many financial institutions, we will rely upon computers for the
daily conduct of our business and for information systems processing. There is
concern among industry experts that on January 1, 2000, computers will be
unable to read or interpret the new year and there may be widespread computer
malfunctions. We will
16
<PAGE> 18
generally rely on software and hardware developed by independent third parties
to provide our information systems. We will seek written assurances about the
Year 2000 compliance from all third party hardware and software system
providers we intend to use. To date, we have entered into an agreement with
Jack Henry & Associates, Inc. to provide our core data processing software and
services, and with CommLink Corp. to provide our ATM processing services. Our
written agreements with each of these vendors contain comprehensive warranties
regarding their Year 2000 capability and compliance. We believe that our other
internal systems and software, including our network connections, will be
programmed to comply with Year 2000 requirements, although there is a risk they
may not comply. Based on information currently available, we believe that we
will not incur significant expenses in connection with the Year 2000 issue.
PROPOSED BUSINESS
GENERAL
The Company was incorporated as a South Carolina corporation in July
1998, primarily to own and control all of the capital stock of the Bank. The
Company initially will engage in no business other than owning and managing the
Bank.
The organizers have chosen a holding company structure under which the
Company will acquire all of the capital stock of the Bank because, in the
judgment of the organizers, the holding company structure provides flexibility
that would not otherwise be available. The holding company structure can assist
the Bank in maintaining its required capital ratios because, subject to
compliance with Federal Reserve Board debt guidelines, the Company may borrow
money and contribute the proceeds to the Bank as primary capital. Moreover, a
holding company may engage in certain non-banking activities that the Federal
Reserve Board has deemed to be closely related to banking. Although the Company
has no present intention of engaging in any of these activities, if
circumstances should lead the Company's management to believe that there is a
need for these services in the Bank's market area and that such activities
could be profitably conducted, management of the Company would have the
flexibility of commencing these activities upon filing a notice or application
therefor with the Federal Reserve Board.
We will initially depend heavily on one individual to lead management
and conduct business. James D. Stewart will be the President and Chief
Executive Officer of the Company and the Bank. Recognized is the need for a
strong management team. Prior to opening of the bank, we will hire a Chief
Financial Officer, a Chief Commercial lender and a Chief Commercial Real Estate
lender, all with greater than 10 years experience in the financial services
industry. This management team collectively will have strong ties and local
experience in the Primary Service Area (PSA) the bank will serve.
The Bank is being organized as a national bank under the laws of the
United States and, subject to regulatory approval, the Bank will engage in a
commercial and consumer banking business with deposits insured by the FDIC. The
Bank may not commence business until the OCC issues a charter for the Bank and
the FDIC grants deposit insurance to the Bank. There is no assurance that the
Bank will be successful in receiving regulatory approval and satisfying any
conditions that may be imposed upon the Bank by the OCC or the FDIC prior to
the commencement of its business.
LOCATION AND SERVICE AREA
The Bank expects initially to draw a large percentage of its business
from the cities of Simpsonville, Mauldin, Fountain Inn and the unincorporated
areas of Enoree and Southside, which are located in the southern portion of
Greenville County. This area is known locally as the "Golden Strip" and is
bounded by Interstate 85 to the north, Highway 75 to the west, Laurens County
to the south and Spartanburg County to the east.
This area's median household income, household growth, and population
growth trends have consistently out-paced Greenville County and the State of
South Carolina. This area will benefit from the location of the Southern
Connector, and it is the home for BI-LO, a grocery store chain, and Kemet
Electronics. The bank will
17
<PAGE> 19
also leverage existing contacts and relationships with individuals and
companies known to management outside of the Golden Strip, primarily in
Greenville.
The Company's current mailing address is P.O. Box 129, Mauldin, South
Carolina 29662. The Company's telephone number is (864) 313-7601. See
"Facilities."
MARKETING FOCUS
Most of the banks in the Greenville County area are now local branches
of large regional banks. Although size gives the larger banks certain
advantages in competing for business from large corporations, including higher
lending limits and the ability to offer services in other areas of South
Carolina and of Greenville County, the organizers believe that there is a void
in the community banking market in the Golden Strip and Greenville County area
and believe that the Bank can successfully fill this void. The Bank will not
compete for the primary banking relationships of large corporations, but will
compete for niches in this business and for the consumer business of their
employees. This focus will also be on small to medium businesses and their
employees. This includes retail, service, wholesale distribution, manufacturing
and international business.
The Bank plans to advertise to emphasize the Company's local
ownership, community bank nature, and ability to provide more personalized
service than its competition. The Bank will however have the ability to offer
large bank services. The organizers are generally long-time residents and
business people in the target area and have determined the credit needs of the
area through personal experience and communications with their business
colleagues. The organizers believe that the proposed community bank focus of
the Bank is likely to succeed in this market and that the area will react
favorably to the Bank's emphasis on service to small businesses, individuals,
and professional concerns. However, no assurances in this respect can be given.
A high percentage of the banks in the Golden Strip have headquarters
out of the county. This trend continues with the announcements in late 1997 and
1998 of three more local area banks agreeing to be purchased by out of state
banks. Despite the dominance of larger national and regional banks, community
banks in the Golden Strip have shown a higher 5-year average growth rate in
deposits and market share for all financial institutions according to the FDIC
deposit and market share results through June 1997.
While the Bank has no plans to do so at present, due to continued
consolidation trends driven by bank mergers, the Bank may take advantage of the
market place with additional branches in the Golden Strip or growth corridors
in or outside of Greenville County. The Bank will also attempt to attract
commercial business based outside of the Golden Strip by offering courier
service. The Bank intends to attract such businesses based on relationships and
contacts which the Bank's directors and management have in the marketplace.
Many of these competitors are well established in the Greenville County area.
Most of them have substantially greater resources and lending limits than the
Bank and offer certain services, such as extensive and established branch
networks and trust services, that the Bank either does not expect to provide or
will not provide initially. As a result of these competitive factors, the Bank
may have to pay higher rates of interest to attract deposits.
More than sixty percent of all subdivisions planned in Greenville
County on average in the four years through 1997 were constructed in the Golden
Strip. The Bank will be active in providing residential mortgages, acquisition
and development financing for subdivisions and construction and permanent
financing for commercial real estate, particularly owner occupied property.
Consumers will enjoy extended branch operating hours, drive-up ATMs,
deposits made by 5:00 p.m. credited that day to customer accounts, and
convenient branch locations where road infrastructure is in place to make
access easier. Local decision-making with experienced bankers, and attention to
lower employee turnover, along with professional and responsive service, will
be targeted approaches by the Bank. We believe customers will be responsive to
a banking environment where they are encouraged with an approach of "what the
bank can do for you" versus an approach of "what the bank can't do for you."
This highlights the community bank approach New Commerce will earn in the
market place.
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<PAGE> 20
DEPOSITS
The Bank intends to offer a full range of deposit services that are
typically available in most banks and savings and loan associations, including
checking accounts, commercial accounts, savings accounts, and other time
deposits of various types, ranging from daily money market accounts to
longer-term certificates of deposit. The transaction accounts and time
certificates will be tailored to the Bank's principal market area at rates
competitive to those offered in the Greenville County area. In addition, the
Bank intends to offer certain retirement account services, such as Individual
Retirement Accounts (IRAs). The Bank intends to solicit these accounts from
individuals, businesses, associations and organizations, and governmental
authorities.
LENDING ACTIVITIES
General. The Bank intends to emphasize a range of lending services,
including real estate, commercial and consumer loans, to individuals and small-
to medium-sized businesses and professional concerns that are located in or
conduct a substantial portion of their business in the Bank's market area.
Real Estate Loans. The organizers expect that one of the primary
components of the Bank's loan portfolio will be loans secured by first or
second mortgages on real estate. These loans will generally consist of
commercial real estate loans, construction and development loans, and
residential real estate loans (but will exclude home equity loans, which are
classified as consumer loans). Loan terms generally will be limited to five
years or less, although payments may be structured on a longer amortization
basis. Interest rates may be fixed or adjustable, and will more likely be fixed
in the case of shorter term loans. The Bank will generally charge an
origination fee. Management will attempt to reduce credit risk in the
commercial real estate portfolio by emphasizing loans on owner-occupied office
and retail buildings where the loan-to-value ratio, established by independent
appraisals, does not exceed 80% and debtor cash flow exceed 120% of monthly
debt service obligations. In addition, the Bank will typically require personal
guarantees of the principal owners of the property backed with a review by the
Bank of the personal financial statements of the principal owners. These
reviews generally reveal secondary sources of payment and liquidity that
support the loan request. The principal economic risk associated with each
category of anticipated loans, including real estate loans, is the
creditworthiness of the Bank's borrowers. The risks associated with real estate
loans vary with many economic factors, including employment levels, strength of
local and national economy and fluctuations in the value of real estate.
Outside of the inherent risk of the credit worthiness of the Bank's borrowers,
other risks associated with residential mortgage loans would be the inability
to move foreclosed real estate in a down market or economy, shifts in the
demographics of a given market from residential zonings to commercial,
individual customers who have been displaced due to corporate downsizing/loss
of income, and an overall economic downturn creating unemployment due to lack
of product demand. The Bank will compete for real estate loans with a number of
bank competitors which are well established in the Greenville County area. Most
of these competitors have substantially greater resources and lending limits
than the Bank. As a result, the Bank may have to charge lower interest rates to
attract borrowers. See "Competition" below. The Bank may also originate loans
for sale into the secondary market. The Bank intends to limit interest rate
risk and credit risk on these loans by locking the interest rate for each loan
with the secondary investor and receiving the investor's underwriting approval
prior to originating the loan.
Commercial Loans. The Bank will make loans for commercial purposes in
various lines of businesses. Equipment loans will typically be made for a term
of five years or less at fixed or variable rates, with the loan fully amortized
over the term and secured by the financed equipment and with a loan-to-value
ratio of 80% or less. Working capital loans will typically have terms not
exceeding one year and will usually be secured by accounts receivable,
inventory, or personal guarantees of the principals of the business. For loans
secured by accounts receivable or inventory, principal will typically be repaid
as the assets securing the loan are converted into cash, and in other cases
principal will typically be due at maturity. Asset based lending, leasing and
factoring will be offered through third party vendors who can handle the paper
work, servicing and generally assume most of the credit risk. Trade letters of
credit, standby letters of credit, and foreign exchange will be handled through
a correspondent bank as agent for the bank. The bank expects to offer small
business loans utilizing government enhancements such as the Small Business
Administration ("SBA"), 7(a) program, SBA's 504 program, and Appalachian
Development Council (ADC). The principal economic risk associated with each
category of
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anticipated loans, including commercial loans, is the creditworthiness of the
Bank's borrowers. The risks associated with commercial loans vary with many
economic factors, including the economy in the Greenville County area. The
well-established banks in the Greenville County area will make proportionately
more loans to medium-to large-sized businesses than the Bank. Many of the
Bank's anticipated commercial loans will likely be made to small-to
medium-sized businesses which may be less able to withstand competitive,
economic, and financial conditions than larger borrowers.
Consumer Loans. The Bank will make a variety of loans to individuals
for personal and household purposes, including secured and unsecured
installment and term loans, and revolving lines of credit such as credit cards.
These loans typically will carry balances of less than $25,000 and, in the case
of non-revolving loans, will be amortized over a period not exceeding 48 months
or will be ninety-day term loans, in each case bearing interest at a fixed
rate. The revolving loans will typically bear interest at a fixed rate and
require monthly payments of interest and a portion of the principal balance.
The Bank will also provide home equity loans and lines of credit. The
underwriting criteria for home equity loans and lines of credit will generally
be the same as applied by the Bank when making a first mortgage loan, as
described above, and home equity lines of credit will typically expire ten
years or less after origination. Home Equity loans will typically carry
balances less than $100,000. As with the other categories of loans, the
principal economic risk associated with consumer loans is the creditworthiness
of the Bank's borrowers, and the principal competitors for consumer loans will
be the established banks in the Greenville County area. Consumer loans are
generally considered to have greater risk than first or second mortgages on
real estate.
Loan Approval and Review. The Bank's loan approval policies will
provide for various levels of officer lending authority. When the amount of
aggregate loans to a single borrower exceeds that individual officer's lending
authority, the loan request will be considered and approved by an officer with
a higher lending limit or the officers' loan committee. The Bank will establish
an officers' loan committee that has lending limits, and any loan in excess of
this lending limit will be approved by the directors' loan committee. The Bank
will not make any loans to any director, officer, or employee of the Bank
unless the loan is approved by the board of directors of the Bank and is made
on terms not more favorable to such person than would be available to a person
not affiliated with the Bank. The Bank currently intends to adhere to Federal
National Mortgage Association ("FNMA") and Federal Home Loan Mortgage
Corporation ("FHLMC") guidelines in its mortgage loan review process, but may
choose to alter this policy in the future. The Bank does not currently intend
to sell its mortgage loans on the secondary market, but may choose to do so in
the future.
Lending Limits. The Bank's lending activities will be subject to a
variety of lending limits imposed by federal law. While differing limits apply
in certain circumstances based on the type of loan or the nature of the
borrower (including the borrower's relationship to the Bank), in general the
Bank will be subject to a loan-to-one-borrower limit. These limits will
increase or decrease as the Bank's capital increases or decreases. Unless the
Bank is able to sell participations in its loans to other financial
institutions, the Bank will not be able to meet all of the lending needs of
loan customers requiring aggregate extensions of credit above these limits. It
is not currently anticipated that the Bank will have an initial loan loss
reserve when it commences operations.
OTHER BANKING SERVICES
Other anticipated bank services include cash management services for
commercial businesses such as sweep to a line of credit and PC banking. The
Bank will offer an 800 number, 24-hour telephone voice response system, drive
up ATMs, safe deposit boxes, travelers checks, direct deposit of payroll and
social security checks, and automatic drafts for various accounts. The Bank
plans to become associated with a shared network of automated teller machines
that may be used by Bank customers throughout Greenville County and other
regions. The organizers believe that by being associated with a shared network
of ATMs, the Bank will be better able to serve its customers and will be able
to attract customers who are accustomed to the convenience of using ATMs,
although the organizers do not believe that maintaining this association will
be critical to the Bank's success. The Bank intends to begin offering these
services shortly after the Bank's opening. The Bank also plans to offer a debit
card and VISA credit card services through a correspondent bank as an agent for
the Bank. The Bank does not plan to exercise trust powers during its initial
years of operation.
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COMPETITION
The banking business is highly competitive. The Bank will compete as a
financial intermediary with other commercial banks, savings and loan
associations, credit unions, and money market mutual funds operating in the
Greenville County area and elsewhere. In 1997, there were more than 139 banking
offices representing 21 financial institutions operating in Greenville County,
holding over $4.9 billion in deposits, and more than 17 banking offices
representing 10 financial institutions operating in the Golden Strip, holding
$425 million in deposits, representing a 4.2 percent increase over the previous
year. Based on a conservative growth rate of 4.2 percent, the deposits in the
Golden Strip will grow to approximately $523 million by the year 2003. The
Bank's plan over the next five years is to reach a 19 percent market share with
deposits in excess of 100 million dollars.
FACILITIES
The Bank's initial office will be located at One Five Forks Plaza
Court near the intersection of Batesville Road and Woodruff Road in
Simpsonville, South Carolina. The Bank will operate out of a temporary facility
at this location while its permanent facilities are under construction. The
Bank intends to complete a 3,000 square foot permanent branch facility at this
location at a projected cost of $427,000 and a 10,000 square foot permanent
main office in Mauldin, South Carolina near Brookfield Parkway and East Butler
Road at projected cost of $1.4 million. We hope to complete both facilities
prior to the end of 1999. The Company entered into an agreement in September of
1998 to purchase the Simpsonville property for $450,000 and an agreement in
January of 1999 to purchase the Mauldin property for $691,000. Upon completion
of the Bank offices, the Bank intends to enter into sale/leaseback arrangements
for the offices with an option to purchase, which should return a significant
amount of the purchase price from the Bank site and offices to the Bank for use
as operating capital.
The Company believes that the facilities will adequately serve the
Bank's needs for its first several years of operation.
EMPLOYEES
The Company anticipates that, upon commencement of operations, the
Bank will have approximately 13 full time employees and 1 part time employee
operating out of its temporary facilities in Simpsonville. By the end of 1999,
the Bank anticipates that it will have 20 full time employees and 1 part time
employee operating out of its permanent facilities in Mauldin and Simpsonville.
The Company, as the holding company for the Bank, will not have any employees
other than its officers.
LEGAL PROCEEDINGS
There are no material legal proceedings to which the Company or the
Bank or any of their properties are subject.
SUPERVISION AND REGULATION
The Company and the Bank are subject to state and federal banking laws
and regulations which impose specific requirements or restrictions on and
provide for general regulatory oversight with respect to virtually all aspects
of operations. These laws and regulations are generally intended to protect
depositors, not shareholders. To the extent that the following summary
describes statutory or regulatory provisions, it is qualified in its entirety
by reference to the particular statutory and regulatory provisions. Any change
in applicable laws or regulations may have a material effect on the business
and prospects of the Company. Beginning with the enactment of FIRREA in 1989
and following the FDICIA in 1991, numerous additional regulatory requirements
have been placed on the banking industry in the past several years, and
additional changes have been proposed. The operations of the Company may be
affected by legislative changes and the policies of various regulatory
authorities. The Company is unable to predict the nature or the extent of the
effect on its business and earnings that fiscal or monetary policies, economic
control, or new federal or state legislation may have in the future.
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The Company. Because it will own the outstanding capital stock of the
Bank, the Company will be a bank holding company within the meaning of the
federal Bank Holding Company Act of 1956 (the "BHCA") and the South Carolina
Bank Holding Company Act (the "South Carolina Act"). The activities of the
Company are also governed by the Glass-Steagall Act of 1933 (the
"Glass-Steagall Act").
The BHCA. Under the BHCA, the Company will be subject to periodic
examination by the Federal Reserve and required to file periodic reports of its
operations and such additional information as the Federal Reserve may require.
The Company's and the Bank's activities will be limited to banking, managing,
or controlling banks; furnishing services to or performing services for its
subsidiaries; and engaging in other activities that the Federal Reserve
determines to be so closely related to banking, managing, or controlling banks
as to be a proper incident thereto.
Investments, Control, and Activities. With certain limited exceptions,
the BHCA requires every bank holding company to obtain the prior approval of
the Federal Reserve before (i) acquiring substantially all the assets of any
bank, (ii) acquiring direct or indirect ownership or control of any voting
shares of any bank if after such acquisition it would own or control more than
5% of the voting shares of such bank (unless it already owns or controls the
majority of such shares), or (iii) merging or consolidating with another bank
holding company.
In addition, and subject to certain exceptions, the BHCA and the
Change in Bank Control Act, together with regulations thereunder, require
Federal Reserve approval (or, depending on the circumstances, no notice of
disapproval) prior to any person or company acquiring "control" of a bank
holding company, such as the Company. Control is conclusively presumed to exist
if an individual or company acquires 25% or more of any class of voting
securities of the bank holding company. Control is rebuttably presumed to exist
if a person acquires 10% or more but less than 25% of any class of voting
securities and either the Company has registered securities under Section 12 of
the Securities Exchange Act of 1934 (the "Exchange Act") (which the Company
will likely be required to do with respect to the common stock once it has more
than 500 shareholders of record) or no other person owns a greater percentage
of that class of voting securities immediately after the transaction. The
regulations provide a procedure for challenge of the rebuttable control
presumption.
Under the BHCA, a bank holding company is generally prohibited from
engaging in, or acquiring direct or indirect control of more than 5% of the
voting shares of any company engaged in nonbanking activities unless the
Federal Reserve Board, by order or regulation, has found those activities to be
so closely related to banking or managing or controlling banks as to be a
proper incident thereto. Some of the activities that the Federal Reserve Board
has determined by regulation to be proper incidents to the business of a bank
holding company include making or servicing loans and certain types of leases,
engaging in certain insurance and discount brokerage activities, performing
certain data processing services, acting in certain circumstances as a
fiduciary or investment or financial adviser, owning savings associations, and
making investments in certain corporations or projects designed primarily to
promote community welfare.
The Federal Reserve Board imposes certain capital requirements on the
Company under the BHCA, including a minimum leverage ratio and a minimum ratio
of "qualifying" capital to risk-weighted assets. These requirements are
described below under "- Capital Regulations." Subject to its capital
requirements and certain other restrictions, the Company is able to borrow
money to make a capital contribution to the Bank, and such loans may be repaid
from dividends paid from the Bank to the Company (although the ability of the
Bank to pay dividends is subject to regulatory restrictions as described below
in "The Bank - Dividends"). The Company is also able to raise capital for
contribution to the Bank by issuing securities without having to receive
regulatory approval, subject to compliance with federal and state securities
laws.
Source of Strength; Cross-Guarantee. In accordance with Federal
Reserve Board policy, the Company will be expected to act as a source of
financial strength to the Bank and to commit resources to support the Bank in
circumstances in which the Company might not otherwise do so. Under the BHCA,
the Federal Reserve Board may require a bank holding company to terminate any
activity or relinquish control of a nonbank subsidiary (other than a nonbank
subsidiary of a bank) upon the Federal Reserve Board's determination that such
activity or control constitutes a serious risk to the financial soundness or
stability of any subsidiary depository institution of the Bank holding company.
Further, federal bank regulatory authorities have additional discretion to
require a bank
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holding company to divest itself of any bank or nonbank subsidiary if the
agency determines that divestiture may aid the depository institution's
financial condition.
Glass-Steagall Act. The Company will also be restricted in its
activities by the provisions of the Glass-Steagall Act, which prohibits the
Company from owning subsidiaries that are engaged principally in the issue,
flotation, underwriting, public sale, or distribution of securities. The
interpretation, scope, and application of the provisions of the Glass-Steagall
Act currently are being considered and reviewed by regulators and legislators,
and the interpretation and application of those provisions have been challenged
in the federal courts.
South Carolina Act. As a bank holding company registered under the
South Carolina Act, the Company will be subject to regulations by the South
Carolina Board. Consequently, the Company must receive the approval of the
South Carolina Board prior to engaging in the acquisition of banking or
nonbanking institutions or assets. The Company must also file with the South
Carolina Board periodic reports with respect to its financial condition and
operations, management, and intercompany relationships between the Company and
its subsidiaries.
The Bank. The Bank will operate as a national banking association
incorporated under the laws of the United States and subject to examination by
the OCC. Deposits in the Bank will be insured by the FDIC up to a maximum
amount (generally $100,000 per depositor, subject to aggregation rules). The
OCC and the FDIC will regulate or monitor virtually all areas of the Bank's
operations, including security devices and procedures, adequacy of
capitalization and loss reserves, loans, investments, borrowings, deposits,
mergers, issuances of securities, payment of dividends, interest rates payable
on deposits, interest rates or fees chargeable on loans, establishment of
branches, corporate reorganizations, maintenance of books and records, and
adequacy of staff training to carry on safe lending and deposit gathering
practices. The OCC will require the Bank to maintain certain capital ratios and
imposes limitations on the Bank's aggregate investment in real estate, bank
premises, and furniture and fixtures. The Bank will be required by the OCC to
prepare quarterly reports on the Bank's financial condition and to conduct an
annual audit of its financial affairs in compliance with minimum standards and
procedures prescribed by the OCC.
Under FDICIA, all insured institutions must undergo regular on site
examinations by their appropriate banking agency. The cost of examinations of
insured depository institutions and any affiliates may be assessed by the
appropriate agency against each institution or affiliate as it deems necessary
or appropriate. Insured institutions are required to submit annual reports to
the FDIC and the appropriate agency (and state supervisor when applicable).
FDICIA also directs the FDIC to develop with other appropriate agencies a
method for insured depository institutions to provide supplemental disclosure
of the estimated fair market value of assets and liabilities, to the extent
feasible and practicable, in any balance sheet, financial statement, report of
condition or any other report of any insured depository institution. FDICIA
also requires the federal banking regulatory agencies to prescribe, by
regulation, standards for all insured depository institutions and depository
institution holding companies relating, among other things, to: (i) internal
controls, information systems, and audit systems; (ii) loan documentation;
(iii) credit underwriting; (iv) interest rate risk exposure; and (v) asset
quality.
National banks and their holding companies which have been chartered
or registered or have undergone a change in control within the past two years
or which have been deemed by the OCC or the Federal Reserve Board,
respectively, to be troubled institutions must give the OCC or the Federal
Reserve Board, respectively, thirty days prior notice of the appointment of any
senior executive officer or director. Within the thirty day period, the OCC or
the Federal Reserve Board, as the case may be, may approve or disapprove any
such appointment.
Deposit Insurance. The FDIC establishes rates for the payment of
premiums by federally insured banks and thrifts for deposit insurance. A
separate Bank Insurance Fund ("BIF") and Savings Association Insurance Fund
("SAIF") are maintained for commercial banks and thrifts, respectively, with
insurance premiums from the industry used to offset losses from insurance
payouts when banks and thrifts fail. In 1993, the FDIC adopted a rule which
establishes a risk-based deposit insurance premium system for all insured
depository institutions. Under this system, until mid-1995 depository
institutions paid to BIF or SAIF from $0.23 to $0.31 per $100 of insured
deposits depending on its capital levels and risk profile, as determined by its
primary federal regulator on a semiannual basis. Once the BIF reached its
legally mandated reserve ratio in mid-1995, the FDIC lowered
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premiums for well-capitalized banks, eventually to $00 per $100, with a minimum
semiannual assessment of $1,000. However, in 1996 Congress enacted the Deposit
Insurance Funds Act of 1996, which eliminated this minimum assessment. It also
separated the Financial Corporation (FICO) assessment to service the interest
on its bond obligations. The amount assessed on individual institutions,
including the Bank, by FICO is in addition to the amount paid for deposit
insurance according to the risk-related assessment rate schedule. Increases in
deposit insurance premiums or changes in risk classification will increase the
Bank's cost of funds, and there can be no assurance that such cost can be
passed on to the Bank's customers.
Transactions With Affiliates and Insiders. The Bank will be subject to
the provisions of Section 23A of the Federal Reserve Act, which place limits on
the amount of loans or extensions of credit to, or investments in, or certain
other transactions with, affiliates and on the amount of advances to third
parties collateralized by the securities or obligations of affiliates. The
aggregate of all covered transactions is limited in amount, as to any one
affiliate, to 10% of the bank's capital and surplus and, as to all affiliates
combined, to 20% of the bank's capital and surplus. Furthermore, within the
foregoing limitations as to amount, each covered transaction must meet
specified collateral requirements. Compliance is also required with certain
provisions designed to avoid the taking of low quality assets.
The Bank will also be subject to the provisions of Section 23B of the
Federal Reserve Act which, among other things, prohibits an institution from
engaging in certain transactions with certain affiliates unless the
transactions are on terms substantially the same, or at least as favorable to
such institution or its subsidiaries, as those prevailing at the time for
comparable transactions with nonaffiliated companies. The Bank will be subject
to certain restrictions on extensions of credit to executive officers,
directors, certain principal shareholders, and their related interests. Such
extensions of credit (i) must be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with third parties and (ii) must not involve more than
the normal risk of repayment or present other unfavorable features.
Dividends. A national bank may not pay dividends from its capital. All
dividends must be paid out of undivided profits then on hand, after deducting
expenses, including reserves for losses and bad debts. In addition, a national
bank is prohibited from declaring a dividend on its shares of common stock
until its surplus equals its stated capital, unless there has been transferred
to surplus no less than one-tenth of the bank's net profits of the preceding
two consecutive half-year periods (in the case of an annual dividend). The
approval of the OCC is required if the total of all dividends declared by a
national bank in any calendar year exceeds the total of its net profits for
that year combined with its retained net profits for the preceding two years,
less any required transfers to surplus.
Branching. National banks are required by the National Bank Act to
adhere to branch office banking laws applicable to state banks in the states in
which they are located. Under current South Carolina law, the Bank may open
branch offices throughout South Carolina with the prior approval of the OCC. In
addition, with prior regulatory approval, the Bank is able to acquire existing
banking operations in South Carolina. Furthermore, federal legislation has
recently been passed which permits interstate branching. The new law permits
out-of-state acquisitions by bank holding companies (subject to veto by new
state law), interstate branching by banks if allowed by state law, interstate
merging by banks, and de novo branching by national banks if allowed by state
law.
Community Reinvestment Act. The Community Reinvestment Act requires
that, in connection with examinations of financial institutions within their
respective jurisdictions, the Federal Reserve, the FDIC, the OCC, or the Office
of Thrift Supervision shall evaluate the record of the financial institutions
in meeting the credit needs of their local communities, including low and
moderate income neighborhoods, consistent with the safe and sound operation of
those institutions. These factors are also considered in evaluating mergers,
acquisitions, and applications to open a branch or facility.
Other Regulations. Interest and certain other charges collected or
contracted for by the Bank are subject to state usury laws and certain federal
laws concerning interest rates. The Bank's loan operations are also subject to
certain federal laws applicable to credit transactions, such as the federal
Truth-In-Lending Act, governing disclosures of credit terms to consumer
borrowers; the Home Mortgage Disclosure Act of 1975, requiring
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financial institutions to provide information to enable the public and public
officials to determine whether a financial institution is fulfilling its
obligation to help meet the housing needs of the community it serves; the Equal
Credit Opportunity Act, prohibiting discrimination on the basis of race, creed
or other prohibited factors in extending credit; the Fair Credit Reporting Act
of 1978, governing the use and provision of information to credit reporting
agencies; the Fair Debt Collection Act, governing the manner in which consumer
debts may be collected by collection agencies; and the rules and regulations of
the various federal agencies charged with the responsibility of implementing
such federal laws. The deposit operations of the Bank also are subject to the
Right to Financial Privacy Act, which imposes a duty to maintain
confidentiality of consumer financial records and prescribes procedures for
complying with administrative subpoenas of financial records, and the
Electronic Funds Transfer Act and Regulation E issued by the Federal Reserve
Board to implement that act, which governs automatic deposits to and
withdrawals from deposit accounts and customers' rights and liabilities arising
from the use of automated teller machines and other electronic banking
services.
Capital Regulations. The federal bank regulatory authorities have
adopted risk-based capital guidelines for banks and bank holding companies that
are designed to make regulatory capital requirements more sensitive to
differences in risk profiles among banks and bank holding companies and account
for off-balance sheet items. The guidelines are minimums, and the federal
regulators have noted that banks and bank holding companies contemplating
significant expansion programs should not allow expansion to diminish their
capital ratios and should maintain ratios in excess of the minimums. Neither
the Company nor the Bank has received any notice indicating that either entity
is subject to higher capital requirements. The current guidelines require all
bank holding companies and federally-regulated banks to maintain a minimum
risk-based total capital ratio equal to 8%, of which at least 4% must be Tier 1
capital. Tier 1 capital includes common shareholders' equity, qualifying
perpetual preferred stock, and minority interests in equity accounts of
consolidated subsidiaries, but excludes goodwill and most other intangibles and
excludes the allowance for loan and lease losses. Tier 2 capital includes the
excess of any preferred stock not included in Tier 1 capital, mandatory
convertible securities, hybrid capital instruments, subordinated debt and
intermediate term-preferred stock, and general reserves for loan and lease
losses up to 1.25% of risk-weighted assets.
Under these guidelines, banks' and bank holding companies' assets are
given risk-weights of 0%, 20%, 50%, or 100%. In addition, certain off-balance
sheet items are given credit conversion factors to convert them to asset
equivalent amounts to which an appropriate risk-weight applies. These
computations result in the total risk-weighted assets. Most loans are assigned
to the 100% risk category, except for first mortgage loans fully secured by
residential property and, under certain circumstances, residential construction
loans, both of which carry a 50% rating. Most investment securities are
assigned to the 20% category, except for municipal or state revenue bonds,
which have a 50% rating, and direct obligations of or obligations guaranteed by
the United States Treasury or United States Government agencies, which have a
0% rating.
The federal bank regulatory authorities have also implemented a
leverage ratio, which is equal to Tier 1 capital as a percentage of average
total assets less intangibles, to be used as a supplement to the risk-based
guidelines. The principal objective of the leverage ratio is to place a
constraint on the maximum degree to which a bank holding company may leverage
its equity capital base. The minimum required leverage ratio for top-rated
institutions is 3%, but most institutions are required to maintain an
additional cushion of at least 100 to 200 basis points.
FDICIA established a new capital-based regulatory scheme designed to
promote early intervention for troubled banks which requires the FDIC to choose
the least expensive resolution of bank failures. The new capital-based
regulatory framework contains five categories of compliance with regulatory
capital requirements, including "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." To quality as a "well capitalized" institution, a bank must
have a leverage ratio of no less than 5%, a Tier 1 risk-based ratio of no less
than 6%, and a total risk-based capital ratio of no less than 10%, and the bank
must not be under any order or directive from the appropriate regulatory agency
to meet and maintain a specific capital level. Initially, the Company and the
Bank will qualify as "well capitalized."
Under the FDICIA regulations, the applicable agency can treat an
institution as if it were in the next lower category if the agency determines
(after notice and an opportunity for hearing) that the institution is in an
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unsafe or unsound condition or is engaging in an unsafe or unsound practice.
The degree of regulatory scrutiny of a financial institution increases, and the
permissible activities of the institution decreases, as it moves downward
through the capital categories. Institutions that fall into one of the three
undercapitalized categories may be required to (i) submit a capital restoration
plan; (ii) raise additional capital; (iii) restrict their growth, deposit
interest rates, and other activities; (iv) improve their management; (v)
eliminate management fees; or (vi) divest themselves of all or a part of their
operations. Bank holding companies controlling financial institutions can be
called upon to boost the institutions' capital and to partially guarantee the
institutions' performance under their capital restoration plans.
These capital guidelines can affect the Company in several ways. If
the Company grows at a rapid pace, a premature "squeeze" on capital could occur
making a capital infusion necessary. The requirements could impact the
Company's ability to pay dividends. The Company's capital levels will initially
be more than adequate; however, rapid growth, poor loan portfolio performance
or poor earnings performance or a combination of these factors could change the
Company's capital position in a relatively short period of time.
FDICIA requires the federal banking regulators to revise the
risk-based capital standards to provide for explicit consideration of
interest-rate risk, concentration of credit risk, and the risks of
untraditional activities. It is uncertain what effect these regulations, when
implemented, would have on the Company.
Failure to meet these capital requirements would mean that a bank
would be required to develop and file a plan with its primary federal banking
regulator describing the means and a schedule for achieving the minimum capital
requirements. In addition, such a bank would generally not receive regulatory
approval of any application that requires the consideration of capital
adequacy, such as a branch or merger application, unless the bank could
demonstrate a reasonable plan to meet the capital requirement within a
reasonable period of time.
Enforcement Powers. FIRREA expanded and increased civil and criminal
penalties available for use by the federal regulatory agencies against
depository institutions and certain "institution-affiliated parties" (primarily
including management, employees, and agents of a financial institution, and
independent contractors such as attorneys and accountants and others who
participate in the conduct of the financial institution's affairs). These
practices can include the failure of an institution to timely file required
reports or the filing of false or misleading information or the submission of
inaccurate reports. Civil penalties may be as high as $1,000,000 a day for such
violations. Criminal penalties for some financial institution crimes have been
increased to twenty years. In addition, regulators are provided with greater
flexibility to commence enforcement actions against institutions and
institution-affiliated parties. Possible enforcement actions include the
termination of deposit insurance. Furthermore, FIRREA expanded the appropriate
banking agencies' power to issue cease-and-desist orders that may, among other
things, require affirmative action to correct any harm resulting from a
violation or practice, including restitution, reimbursement, indemnification's
or guarantees against loss. A financial institution may also be ordered to
restrict its growth, dispose of certain assets, rescind agreements or
contracts, or take other actions as determined by the ordering agency to be
appropriate.
Recent Legislative Developments. From time to time, various bills are
introduced in the United States Congress with respect to the regulation of
financial institutions. Certain of these proposals, if adopted, could
significantly change the regulation of banks and the financial services
industry. The Company cannot predict whether any of these proposals will be
adopted or, if adopted, how these proposals would affect the Company.
Effect of Governmental Monetary Policies. The earnings of the Company
are affected by domestic economic conditions and the monetary and fiscal
policies of the United States government and its agencies. The Federal Reserve
Bank's monetary policies have had, and are likely to continue to have, an
important impact on the operating results of commercial banks through its power
to implement national monetary policy in order, among other things, to curb
inflation or combat a recession. The monetary policies of the Federal Reserve
Board have major effects upon the levels of bank loans, investments and
deposits through its open market operations in United States government
securities and through its regulation of the discount rate on borrowings of
member banks and the reserve requirements against member bank deposits. It is
not possible to predict the nature or impact of future changes in monetary and
fiscal policies.
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MANAGEMENT
GENERAL
The following table sets forth the number and percentage of
outstanding shares of common stock beneficially owned as of the date of this
Prospectus by the organizers of the Company. This table also reflects the
anticipated purchases by the organizers in the offering. All purchases by the
organizers prior to the offering were made at a price of $10.00 per share, the
same price at which shares are being offered to the public.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES ANTICIPATED TO BE OWNED FOLLOWING
PRIOR TO THE OFFERING THE OFFERING
----------------------------- -----------------------------------------
PERCENTAGE PERCENTAGE
OF MINIMUM OF MAXIMUM
NAME OF BENEFICIAL OWNER NUMBER( 1)(3) PERCENTAGE(2) NUMBER( 3) OFFERING OFFERING
- ------------------------ ------------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
RICHARD W. BAILEY 20,000 10.0% 20,000 2.67% 2.00%
TIMOTHY A. BRETT 15,000 7.50 15,000 2.00 1.50
MARSHALL J. COLLINS, JR. 17,500 8.75 17,500 2.33 1.75
RALPH S. CRAWLEY 25,000 12.50 25,000 3.33 2.50
RICHARD L. FEW, JR. 7,500 3.75 7,500 1.00 0.75
G. MITCHELL GAULT 15,000 7.50 15,000 2.00 1.50
TOMMY D. GREER 25,000 12.50 25,000 3.33 2.50
BOBBY L. JOHNSON 15,000 7.50 15,000 2.00 1.50
ROBERT T. KELLETT 10,000 5.00 10,000 1.33 1.00
DENNIS O. RAINES 7,500 3.75 7,500 1.00 0.75
CURRAN A. SMITH 7,500 3.75 7,500 1.00 0.75
JAMES D. STEWART 35,000 17.50 35,000 4.67 3.50
TOTAL 200,000 100.00% 200,000 26.67% 20.00%
</TABLE>
- -----------------------
(1) Information relating to the beneficial ownership of Common Stock is based
upon "beneficial ownership" concepts set forth in rules of the Securities
and Exchange Commission under Section 13(d) of the Securities Exchange Act
of 1934. Under these rules a person is deemed to be a "beneficial owner"
of a security if that person has or shares "voting power," which includes
the power to vote or direct the voting of each security, or "investment
power," which includes the power to dispose or to direct the disposition
of such security. A person is also deemed to be a beneficial owner of any
security of which that person has the right to acquire beneficial
ownership within 60 days, including, without limitation, shares of Common
Stock subject to currently exercisable options. Under the rules, more than
one person may be deemed to be a beneficial owner of the same securities,
and a person may be deemed to be a beneficial owner of securities as to
which he has no beneficial interest. For instance, beneficial ownership
includes spouses, minor children, and other relatives residing in the same
household, and trusts, partnerships, corporations or deferred compensation
plans which are affiliated with the principal.
(2) Percent is calculated by treating shares subject to options held by the
named individual which are exercisable within the next 60 days as if
outstanding, but treating shares subject to options not exercisable within
60 days as not outstanding.
(3) Does not include warrants to purchase 7,500 shares of Common Stock to be
granted to each organizer.
27
<PAGE> 29
EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY
The following sets forth certain information regarding the Company's
executive officers and directors as of the date of this Prospectus. The
Company's Articles of Incorporation provide for a classified Board of
Directors, so that, as nearly as possible, one-third of the directors are
elected each year to serve three-year terms. The terms of office of the classes
of directors expire as follows: Class I at the 1999 annual meeting of
shareholders, Class II at the 2000 annual meeting of shareholders, and Class
III at the 2001 annual meeting of shareholders. Executive officers of the
Company serve at the discretion of the Company's Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
Richard W. Bailey 65 Director III
Timothy A. Brett 45 Director III
Marshall J. Collins, Jr 57 Director I
Ralph S. Crawley 63 Director II
G. Mitchell Gault 43 Director III
Tommy D. Greer 66 Director I
Bobby L. Johnson 64 Director II
Robert T. Kellett 56 Director II
Dennis O. Raines 46 Director II
Curran A. Smith 54 Director I
James D. Stewart 45 Director III, Chief Executive Officer
</TABLE>
Richard W. Bailey, Class III director, is involved in commercial real
estate and development and has been affiliated with Caine Company for the past
twelve years. In 1985, he sold his majority interest in a food brokerage
company with offices in Greenville, Columbia, and Charleston. He is a past
member of the Golden Strip and Greenville advisory boards for BB&T.
Timothy A. Brett, Class III director, is President of Brett Public
Relations, Inc., a full service public relations company with offices in
Greenville and Columbia, South Carolina. Mr. Brett previously served as
Director of Governmental Affairs and Community Relations for Michelin North
America for almost seven years. He was also a member of the South Carolina
House of Representatives. After leaving the House of Representatives, he served
in various positions under former Governor Carroll A. Campbell, Jr. Mr. Brett
is a 1974 graduate of Newberry College. He serves his community through his
involvement in a number of charitable organizations, including the Salvation
Army, the YMCA, and the Blue Ridge Council Boy Scouts. He presently serves as
Chairman of the Newberry College Foundation Board.
Marshall J. Collins, Jr., Class I director, is Chairman of BI-LO,
Inc. and President and CEO of Ahold USA Support Services in Mauldin, South
Carolina. BI-LO, Inc. is a multi state grocery store chain and is one of the
largest employers in Greenville County, South Carolina. Mr. Collins was born
and raised in Chicago, Illinois and is a graduate of St. Mary's College in
Winona, Minnesota and the Advanced Management Program at Harvard Business
School.
Ralph S. Crawley, Class II director, is Co-Founder and President of
Carter and Crawley, Inc., a custom automated control systems supplier to
industrial and utility clients since 1967. He previously was Manager of Control
System Manufacturing for Metal Products Corporation. Mr. Crawley graduated from
Ruby High School in 1953 and attended Pierce College in Reseda, California. He
has held several positions with RCA and TRW involving manufacturing and sales.
Mr. Crawley is a member of the Mauldin Rotary Club, and past president and
member of the Rotary Foundation Scholarship Committee. Mr. Crawley is a member
of the Mauldin Library Committee and Chairman of The Building and Grounds
Committee of the new Greenville County branch library; past member of the
Chamber of Commerce organizing board; past member of the NCNB (n/k/a
NationsBank), and a member of the Mauldin-Simpsonville advisory board.
28
<PAGE> 30
G. Mitchell Gault, Class III director, is the President of Kent-Gault
Manufactured Homes, a retailer of manufactured homes a second generation
retailer serving the "Upstate" of South Carolina since 1959. The company
currently operates two sales centers in the "Golden Strip" area of Greenville
County, South Carolina. Mr. Gault is also involved in the development of
manufactured housing subdivisions, as well as owning and operating several
manufactured housing rental communities in the Upstate. Mr. Gault graduated
from the University of South Carolina in l977. He is a past President of the
Fountain Inn Rotary Club. He has served on the Board of Manufactured Housing
Institute of South Carolina for ten years, including two terms as chairman of
that association. Mr. Gault currently serves on the Board of the Mauldin
Chamber of Commerce. He is a volunteer for Meals on Wheels and is a life-long
member of Trinity United Methodist Church of Fountain Inn.
Tommy D. Greer, Class I director, is Chairman Emeritus of the Board of
Catalina Marketing. He has also served as President and CEO of Catalina. Mr.
Greer has 41 years of experience as one of the country's leading product
marketers. Prior to joining Catalina, he took Texize Chemicals Company, a
cleaning products manufacturer, from a small regional company to a nationally
known marketer of such category leaders as Fantastic Spray Cleaner, Spray'n
Wash, and Glass+Plus. Mr. Greer is a graduate of the Advanced Management
Program at the Harvard School of Business.
Bobby L. Johnson, Class II director, develops light industrial,
office, and warehouse properties. In 1989, he sold Carolina Material Handling,
a business he operated for twenty years in the Golden Strip. Mr. Johnson is a
member of Edwards Road Baptist Church in Greenville and is a volunteer with
Meals on Wheels. He previously served on the advisory board of Summit National
Bank.
Robert T. Kellett, Class II director, owns and operates several
business in the Golden Strip, including Tommy's Snack Bar, Kellett Fuel Oil,
Kellett's Korner, Inc., and Kellett's Garbage, Inc. He is a native of
Greenville County and he graduated from Hillcrest High School.
Dennis O. Raines, Class II director, is the Chief Financial Officer
for Brett Public Relations, a full-service public relations company. An honor
graduate of Limestone College, Raines holds a degree in business management. He
was employed at Kemet Electronics for 26 years, serving in various management
positions including manufacturing manager, human relations manager, and most
recently business services manager. Mr. Raines serves as a member of the
Mauldin City Council, where he is on the Recreation & Economic Development and
the Finance & Policy committees. He is also a member of the Mauldin Library
Task Force and on the board of the Golden Strip Human Resources Center and
Meals on Wheels of Greenville, Inc.
Curran A. Smith, Class I director, has owned and operated three Max
Saver convenience stores since 1992. He formerly was employed with Union
Carbide, and subsequently through merger with Kemet Electronics for 25 years.
Mr. Smith has lived in Fountain Inn for 27 years and is a graduate of Hillcrest
High School.
James D. Stewart, Class III director, is the Chief Executive Officer
and President of New Commerce and of the Bank. He has a 20 year banking career
in sales and leadership positions in commercial and consumer banking. He began
his career with Wachovia in 1978 and has had increasing levels of leadership
and sales responsibility in consumer and commercial business banking with First
Union, Southern National Bank, and BB&T. His last position was Senior Vice
President and City Executive for BB&T in Greenville, South Carolina. Mr.
Stewart received a B.A. degree in Journalism in 1976 from the University of
North Carolina and is a graduate of the Stonier Graduate School of Banking. Mr.
Stewart has served on the boards of directors of the Phyllis Wheatley Center,
Greenville Chamber of Commerce, Greenville United Way, Urban League, and Blue
Ridge Council Boy Scouts.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement with James D.
Stewart for a three-year term, pursuant to which Mr. Stewart will serve as the
President, Chief Executive Officer and a director of the Company and the Bank.
Mr. Stewart will be paid a salary of $96,000, plus his yearly medical insurance
premium. Mr. Stewart is entitled to receive a bonus of $10,000 upon the opening
of the Bank and will be eligible to receive a bonus of up to 36% of his salary
for meeting performance goals set by the board. Mr. Stewart will be eligible
29
<PAGE> 31
to participate in any management incentive program of the Bank or any long-term
equity incentive program and will be eligible for grants of stock options and
other awards thereunder. Upon the closing of the offering (or as soon
thereafter as an appropriate stock option plan is adopted by the Company), Mr.
Stewart will be granted options to purchase a number of shares of common stock
equal to 5% of the number of shares sold in this offering. The options will
vest over a five-year period and will have a term of ten years. Additionally,
Mr. Stewart will participate in the Bank's retirement, welfare, and other
benefit programs and is entitled to a life insurance policy and an accident
liability policy and reimbursement for automobile expenses, club dues, and
travel and business expenses.
The employment agreement with Mr. Stewart also provides that following
termination of his employment with the Bank and for a period of twelve months
thereafter, Mr. Stewart may not (i) compete with the Company, Bank, or any of
its affiliates by, directly or indirectly, forming, serving as an organizer,
director or officer of, or consultant to, or acquiring or maintaining more than
1% passive investment in, a depository financial institution or holding company
thereof if such depository institution or holding company has one or more
offices or branches in the territory, (ii) solicit major customers of the Bank
for the purpose of providing financial services, or (iii) solicit employees of
the Bank for employment. If Mr. Stewart terminates his employment for good
cause as that term is defined in the employment agreement or if Mr. Stewart is
terminated following a change in control of the Company as defined in the
agreement, he will be entitled to severance of his then current monthly salary
for a period of 24 months, plus accrued bonus, and all outstanding options and
incentives shall vest immediately. If Mr. Stewart's employment is terminated
for any reason other than for cause, he will be entitled to 12 months'
severance.
The Company and the Bank anticipate that they will enter into similar
employment arrangements with other key employees as they are hired.
DIRECTOR COMPENSATION
The organizers do not intend for the Company or the Bank to pay
directors' fees until such time as the Bank is cumulatively profitable.
However, the Company and the Bank reserve the right to pay directors' fees. In
addition, after the offering, the Company expects to adopt a stock option plan
which will permit the Company to grant options to officers, directors, and
employees of the Company. The Company anticipates that it will initially
authorize the issuance of a number of shares under the stock option plan equal
to 15% of the shares outstanding after the offering. The Company will not issue
stock options at less that 85% of the fair market value of the common stock on
the date of grant.
STOCK WARRANTS
In recognition of the financial risk and organizational risk they have
undertaken in organizing the Bank, each organizer will also receive, for no
additional consideration, a warrant to purchase 7,500 additional shares of
Common Stock at a purchase price of $10.00 per share. The warrants, which will
be represented by separate warrant agreements, will become exercisable on the
later of the date that the Bank opens for business and one year from the date
of this Prospectus and will be exercisable in whole or in part during the ten
year period following that date. The warrants and shares issued pursuant to the
exercise of such warrants will be transferable, subject to compliance with
applicable securities laws. See "--Shares Eligible for Future Sale." If the OCC
issues a capital directive or other order requiring the Bank to obtain
additional capital, the warrants will be forfeited if not then exercised.
INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
The Company and the Bank expect to have banking and other transactions
in the ordinary course of business with organizers, directors, and officers of
the Company and the Bank and their affiliates, including members of their
families or corporations, partnerships, or other organizations in which such
organizers, officers, or directors have a controlling interest, on
substantially the same terms (including price, or interest rates and
collateral) as those prevailing at the time for comparable transactions with
unrelated parties. Such transactions are not expected to involve more than the
normal risk of collectibility nor present other unfavorable features to the
30
<PAGE> 32
Company and the Bank. Loans to individual directors and officers must also
comply with the Bank's lending policies and statutory lending limits, and
directors with a personal interest in any loan application will be excluded
from the consideration of such loan application. The Company intends for all of
its transactions with organizers or other affiliates of the Company or the Bank
to be on terms no less favorable to the Company than could be obtained from an
unaffiliated third party and to be approved by a majority of the Company's
disinterested directors.
Byron Richardson, a banking consultant with Bank Resources, Inc., was
granted warrants to purchase 2,500 shares of the common stock of the Company in
connection with services provided related to the formation of the Bank,
including assistance in the preparation of the Bank's application for its
charter with the OCC and its application for federal deposit insurance with the
FDIC. Mr. Richardson's warrants were granted on the same terms as those
warrants received by the organizers prior to the offering.
EXCULPATION AND INDEMNIFICATION
The Company's Articles of Incorporation contain a provision which,
subject to certain limited exceptions, limits the liability of a director to
the Company or its shareholders for any breach of duty as a director. There is
no limitation of liability for: a breach of duty involving appropriation of a
business opportunity of the Company; an act or omission which involves
intentional misconduct or a knowing violation of law; any transaction from
which the director derives an improper personal benefit; or as to any payments
of a dividend or any other type of distribution that is illegal under Section
33-8-330 of the South Carolina Business Corporation Act of 1988 (the
"Corporation Act"). In addition, if at any time the Corporation Act shall have
been amended to authorize further elimination or limitation of the liability of
director, then the liability of each director of the Company shall be
eliminated or limited to the fullest extent permitted by such provisions, as so
amended, without further action by the shareholders, unless the provisions of
the Corporation Act require such action. The provision does not limit the right
of the Company or its shareholders to seek injunctive or other equitable relief
not involving payments in the nature of monetary damages.
The Company's bylaws contain certain provisions which provide
indemnification to directors of the Company that is broader than the protection
expressly mandated in Sections 33-8-510 and 33-8-520 of the Corporation Act. To
the extent that a director or officer of the Company has been successful, on
the merits or otherwise, in the defense of any action or proceeding brought by
reason of the fact that such person was a director or officer of the Company,
Sections 33-8-510 and 33-8-520 of the Corporation Act would require the Company
to indemnify such persons against expenses (including attorney's fees) actually
and reasonably incurred in connection therewith. The Corporation Act expressly
allows the Company to provide for greater indemnification rights to its
officers and directors, subject to shareholder approval.
Insofar as indemnification for liabilities arising under the
Corporation Act may be permitted to directors, officers, and controlling
persons of the Company and the Bank pursuant to the Articles of Incorporation
or Bylaws, or otherwise, the Company and the Bank have been advised that in the
opinion of the SEC such indemnification is against public policy as expressed
in the Corporation Act and is, therefore, unenforceable.
The Board of Directors also has the authority to extend to officers,
employees, and agents the same indemnification rights held by directors,
subject to all of the accompanying conditions and obligations. The Board of
Directors intends to extend indemnification rights to all of its executive
officers.
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
GENERAL
The authorized capital stock of the Company consists of 10,000,000
shares of common stock, par value $0.01 per share, and 10,000,000 shares of
preferred stock, par value $0.01 per share. The following summary describes the
material terms of the Company's capital stock. Reference is made to the
Articles of Incorporation of the Company, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, for a detailed
description of the provisions thereof summarized below.
31
<PAGE> 33
COMMON STOCK
Holders of shares of the common stock are entitled to receive such
dividends as may from time to time be declared by the Board of Directors out of
funds legally available therefor. The Company does not plan to declare any
dividends in the immediate future. See "Dividend Policy." Holders of common
stock are entitled to one vote per share on all matters on which the holders of
common stock are entitled to vote and do not have any cumulative voting rights.
Shareholders have no preemptive, conversion, redemption or sinking fund rights.
In the event of a liquidation, dissolution or winding-up of the Company,
holders of common stock are entitled to share equally and ratably in the assets
of the Company, if any, remaining after the payment of all debts and
liabilities of the Company and the liquidation preference of any outstanding
preferred stock. The outstanding shares of common stock are, and the shares of
common stock offered by the Company hereby when issued will be, fully paid and
nonassessable. The rights, preferences and privileges of holders of common
stock are subject to any classes or series of preferred stock that the Company
may issue in the future.
PREFERRED STOCK
The Articles provide that the Board of Directors is authorized,
without further action by the holders of the common stock, to provide for the
issuance of shares of preferred stock in one or more classes or series and to
fix the designations, powers, preferences, and relative, participating,
optional and other rights, qualifications, limitations, and restrictions
thereof, including the dividend rate, conversion rights, voting rights,
redemption price, and liquidation preference, and to fix the number of shares
to be included in any such classes or series. Any preferred stock so issued may
rank senior to the common stock with respect to the payment of dividends or
amounts upon liquidation, dissolution or winding-up, or both. In addition, any
such shares of preferred stock may have class or series voting rights. Upon
completion of this offering, the Company will not have any shares of preferred
stock outstanding. Issuances of preferred stock, while providing the Company
with flexibility in connection with general corporate purposes, may, among
other things, have an adverse effect on the rights of holders of common stock
(for example, the issuance of any preferred stock with voting or conversion
rights may adversely affect the voting power of the holders of common stock),
and in certain circumstances such issuances could have the effect of decreasing
the market price of the common stock. The Company has no present plan to issue
any shares of preferred stock. The Company will not issue preferred stock to
organizers on terms more favorable than those on which it issues preferred
stock to shareholders other than organizers.
CERTAIN ANTITAKEOVER EFFECTS
The provisions of the Articles, the Bylaws and South Carolina law
summarized in the following paragraphs may be deemed to have antitakeover
effects and may delay, defer, or prevent a tender offer or takeover attempt
that a shareholder might consider to be in such shareholder's best interest,
including those attempts that might result in a premium over the market price
for the shares held by shareholders, and may make removal of management more
difficult.
Authorized but Unissued Stock. The authorized but unissued shares of
common stock and preferred stock will be available for future issuance without
shareholder approval. These additional shares may be used for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions, and employee benefit plans. The existence of
authorized but unissued and unreserved shares of common stock and preferred
stock may enable the Board of Directors to issue shares to persons friendly to
current management, which could render more difficult or discourage any attempt
to obtain control of the Company by means of a proxy contest, tender offer,
merger or otherwise, and thereby protect the continuity of the Company's
management.
Number of Directors. The Bylaws provide that the number of directors
shall be fixed from time to time by resolution by at least a majority of the
directors then in office, but may not consist of fewer than five nor more than
fifteen members.
32
<PAGE> 34
Classified Board of Directors. The Articles and Bylaws divide the
Board of Directors into three classes of directors serving staggered three-year
terms. As a result, approximately one-third of the Board of Directors will be
elected at each annual meeting of shareholders. The classification of
directors, together with the provisions in the Articles and Bylaws described
below that limit the ability of shareholders to remove directors and that
permit the remaining directors to fill any vacancies on the Board of Directors,
will have the effect of making it more difficult for shareholders to change the
composition of the Board of Directors. As a result, at least two annual
meetings of shareholders may be required for the shareholders to change a
majority of the directors, whether or not a change in the Board of Directors
would be beneficial to the Company and its shareholders and whether or not a
majority of the Company's shareholders believes that such a change would be
desirable.
Removal of Directors and Filling Vacancies. The Bylaws provide that
all vacancies on the Board of Directors, including those resulting from an
increase in the number of directors, may be filled by a majority of the
remaining directors, even if they do not constitute a quorum. When one or more
directors resign from the Board of Directors effective at a future date, a
majority of directors then in office, including the directors who are to
resign, may vote on filling the vacancy.
Advance Notice Requirements for Shareholder Proposals and Director
Nominations. The Bylaws establish advance notice procedures with regard to
shareholder proposals and the nomination, other than by or at the direction of
the Board of Directors or a committee thereof, of candidates for election as
directors. These procedures provide that the notice of shareholder proposals
and shareholder nominations for the election of directors at any meeting of
shareholders must be in writing and be received by each director not later than
twenty-four hours prior to the meeting when delivered personally or by telecopy
or at least two days prior thereto when delivered by mail. The Company may
reject a shareholder proposal or nomination that is not made in accordance with
such procedures.
Certain Nomination Requirements. Pursuant to the Bylaws, the Company
has established certain nomination requirements for an individual to be elected
as a director of the Company at any annual or special meeting of the
shareholders, including that the nominating party provide the Company within a
specified time prior to the meeting (i) notice that such party intends to
nominate the proposed director; (ii) the name of and certain biographical
information on the nominee; and (iii) a statement that the nominee has
consented to the nomination. The chairman of any shareholders' meeting may, for
good cause shown, waive the operation of these provisions. These provisions
could reduce the likelihood that a third party would nominate and elect
individuals to serve on the Board of Directors.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company will have a minimum of
750,000 and a maximum of 1,000,000 shares of common stock outstanding. The
shares sold in this offering will be freely tradable, without restriction or
registration under the Securities Act, except for shares purchased by
"affiliates" of the Company, which will be subject to resale restrictions under
the Securities Act. An affiliate of the issuer is defined in Rule 144 under the
Securities Act as a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
issuer. Rule 405 under the Securities Act defines the term "control" to mean
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of the person whether through the
ownership of voting securities, by contract or otherwise. Directors of the
Company and the Bank will likely be deemed to be affiliates. These securities
held by affiliates may be sold without registration in accordance with the
provisions of Rule 144 or another exemption from registration.
In general, under Rule 144, an affiliate of the Company or a person
holding restricted shares may sell, within any three-month period, a number of
shares no greater than 1% of the then outstanding shares of the common stock or
the average weekly trading volume of the common stock during the four calendar
weeks preceding the sale, whichever is greater. Rule 144 also requires that the
securities must be sold in "brokers' transactions," as defined in the
Securities Act, and the person selling the securities may not solicit orders or
make any payment in connection with the offer or sale of securities to any
person other than the broker who executes
33
<PAGE> 35
the order to sell the securities. This requirement may make the sale of the
common stock by affiliates of the Company pursuant to Rule 144 difficult if no
trading market develops in the common stock. Rule 144 also requires persons
holding restricted securities to hold the shares for at least one year prior to
sale.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon
for the Company by Nelson Mullins Riley & Scarborough, L.L.P., Atlanta,
Georgia.
EXPERTS
The financial statements of the Company dated December 31, 1998 and
for the period from July 17, 1998 (inception), until December 31, 1998 have
been audited by Elliott Davis & Company, L.L.P., as stated in their report
appearing elsewhere herein, and have been so included in reliance on the report
of such firm given upon their authority as an expert in accounting and
auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (together with all
amendments, exhibits, schedules and supplements thereto, the "Registration
Statement"), under the Securities Act of 1933 and the rules and regulations
thereunder, for the registration of the common stock offered hereby. This
Prospectus, which forms a part of the Registration Statement, does not contain
all of the information set forth in the Registration Statement. For further
information with respect to the Company and the common stock, you should refer
to the Registration Statement and the exhibits thereto.
The Registration Statement may be examined at, and copies of the
Registration Statement may be obtained at prescribed rates from, the Public
Reference Section of the Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC also maintains a Web site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants, such as the Company, that file electronically with the
Commission.
The Company and the organizers have filed or will file various
applications with the OCC and the FDIC. Prospective investors should rely only
on information contained in this Prospectus and in the Company's related
Registration Statement in making an investment decision. To the extent that
other available information not presented in this Prospectus, including
information available from the Company and information in public files and
records maintained by the OCC and the FDIC, is inconsistent with information
presented in this Prospectus, such other information is superseded by the
information presented in this Prospectus. Projections appearing in the
applications were based on assumptions that the organizers believed were
reasonable, but as to which no assurances can be made. The Company specifically
disaffirms those projections for purposes of this Prospectus and cautions
prospective investors against placing reliance on them for purposes of making
an investment decision. Statements contained in this Prospectus regarding the
contents of any contract or other document referred to herein are not
necessarily complete. Where such contract or document is an exhibit to the
Registration Statement, each statement contained herein is qualified in all
respects by the provisions of such exhibit, to which reference is hereby made.
34
<PAGE> 36
NEW COMMERCE BANCORP (IN ORGANIZATION)
(A DEVELOPMENT STAGE ENTERPRISE)
GREENVILLE, SOUTH CAROLINA
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS F-2
FINANCIAL STATEMENTS
Balance sheet F-3
Statement of operations F-4
Statement of changes in owners' equity F-5
Statement of cash flows F-6
NOTES TO FINANCIAL STATEMENTS F-7 and F-8
</TABLE>
F-1
<PAGE> 37
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Directors
NEW COMMERCE BANCORP (in organization)
Greenville, South Carolina
We have audited the accompanying balance sheet of NEW COMMERCE BANCORP (in
organization) (a development stage enterprise) as of December 31, 1998 and the
related statements of operations, changes in owners' equity and cash flows for
the period from July 17, 1998 (date of inception) to December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 NEW COMMERCE BANCORP (in
organization) (a development stage enterprise) as of December 31, 1998 and the
results of its operations and its cash flows for the period from July 17, 1998
(date of inception), to December 31, 1998, in conformity with generally
accepted accounting principles.
Greenville, South Carolina
December 31, 1998
F-2
<PAGE> 38
NEW COMMERCE BANCORP (IN ORGANIZATION)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents $ 1,762,031
Real estate options 39,800
Deferred stock offering costs 143,427
Office furniture 8,218
---------------
Total assets $ 1,953,476
===============
LIABILITIES AND OWNERS' EQUITY
LIABILITIES $ --
COMMITMENTS AND CONTINGENCIES - Note 2
OWNERS' EQUITY
Preferred stock, $.01 par value per share; 10,000,000 shares
authorized, no shares issued --
Common stock, $.01 par value per share, 10,000,000 shares
authorized; 200,000 shares issued 2,000
Additional paid-in capital 1,998,000
Retained deficit accumulated during the development stage (46,524)
---------------
Total liabilities and owners' equity $ 1,953,476
===============
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-3
<PAGE> 39
NEW COMMERCE BANCORP (IN ORGANIZATION)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JULY 17, 1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1998
<TABLE>
<S> <C>
EXPENSES
Stock sale promotion $ 16,300
Rent 11,650
Telephone and supplies 944
Travel and meals 6,444
Printing and copying 4,338
Other 6,848
---------------
Loss before provision for income taxes (46,524)
PROVISION FOR INCOME TAXES --
Net loss $ (46,524)
===============
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-4
<PAGE> 40
NEW COMMERCE BANCORP (IN ORGANIZATION)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN OWNERS' EQUITY
FOR THE PERIOD FROM JULY 17,1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
RETAINED
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE
------------------------- PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
----------- ----------- -------------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
PROCEEDS FROM THE SALE OF
STOCK TO ORGANIZERS 200,000 $ 2,000 $ 1,998,000 $ -- $ 2,000,000
NET LOSS -- -- -- (46,524) (46,524)
----------- ----------- -------------- ----------------- -------------
BALANCE, DECEMBER 31, 1998 200,000 $ 2,000 $ 1,998,000 $ (46,524) $ 1,953,476
=========== =========== ============== ================= =============
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-5
<PAGE> 41
NEW COMMERCE BANCORP (IN ORGANIZATION)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JULY 17,1998 (DATE OF INCEPTION)
TO DECEMBER 31, 1998
<TABLE>
<S> <C>
NET CASH USED FOR PRE-OPERATING ACTIVITIES
Net loss $ (46,524)
Deferred stock offering costs (143,427)
---------------
Net cash used for pre-operating activities (189,951)
---------------
INVESTING ACTIVITIES
Purchase of office furniture (8,218)
Purchase of real estate options (39,800)
---------------
Net cash used for investing activities (48,018)
---------------
FINANCING ACTIVITIES
Proceeds from sale of stock 2,000,000
---------------
Net cash provided by financing activities 2,000,000
---------------
Net increase in cash 1,762,031
CASH AND CASH EQUIVALENTS, JULY 17, 1998
(DATE OF INCEPTION) --
---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,762,031
===============
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-6
<PAGE> 42
NEW COMMERCE BANCORP (IN ORGANIZATION)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND
ACTIVITIES
NEW COMMERCE BANCORP (the "Company") is a South Carolina corporation
organized for the purpose of owning and controlling all of the capital stock of
NEW COMMERCE BANK, N.A. (IN ORGANIZATION) (the "Bank"). The Bank is being
organized as a national bank under the laws of the United States with the
purpose of becoming a new community bank to be located in Greenville County,
South Carolina. The Company has filed a charter application with the OCC and an
application for deposit insurance with the FDIC. Provided that the applications
are timely approved and the necessary capital is raised, it is expected that
banking operations will commence in May of 1999.
The Company is a development stage enterprise as defined by Statement
of Financial Accounting Standard No. 7, "Accounting and Reporting by
Development Stage Enterprises", as it devotes substantially all its efforts to
establishing a new business. The Company's planned principal operations have
not commenced and revenue has not been recognized from the planned principal
operations.
The Company intends to sell a maximum of 1,000,000 and a minimum of
750,000 shares of its common stock at $10 per share. The maximum offering will
raise $9,700,000 and minimum offering will raise $7,200,000, each net of
$200,000 estimated sales agent commissions and $100,000 offering expenses. The
organizers of the Company have purchased 200,000 shares of common stock at $10
per share, for a total of $2,000,000. The remaining shares will be sold through
a public offering. The Company will use a maximum of $8,250,000 and minimum of
$7,000,000 of the proceeds to capitalize the proposed Bank.
YEAR-END
The Company has adopted a fiscal year ending on December 31, effective for
the period ending December 31, 1998.
ESTIMATES
The financial statements include estimates and assumptions that effect the
Company's financial position and results of operations and disclosure of
contingent assets and liabilities. Actual results could differ from these
estimates.
CASH EQUIVALENTS
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. The Company
places its temporary cash investments with high credit quality financial
institutions. At times such investments may be in excess of the FDIC
insurance limits.
DEFERRED STOCK OFFERING COSTS
Deferred stock offering costs are costs incurred by the Company in
connection with the offering and issuance of its stock. The deferred stock
offering costs will be deducted from the Company's additional paid-in
capital after the stock offering. If the stock offering is deemed
unsuccessful, all deferred stock offering costs will be charged to
operations during the period in which the offering is deemed unsuccessful.
ORGANIZATION COSTS
Organization costs are costs that have been incurred in the expectation
that they will generate future revenues or otherwise benefit periods after
the Company begins planned operations. Organization costs include
incorporation, legal and consulting fees incurred in connection with
establishing the Company. In accordance with SOP 98-5, "Reporting on the
Costs of Start-Up Activities," organization costs are expensed when
incurred.
F-7
<PAGE> 43
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, CONTINUED
This SOP is effective for fiscal periods beginning after December 15,
1998. The Company has elected early adoption of this pronouncement and
accordingly, has charged all organization costs to operations.
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred
taxes related primarily to differences between the financial reporting and
income tax bases of assets and liabilities. At December 31, 1998, no
taxable income has been generated and therefore, no tax provision has been
included in these financial statements.
NOTE 2 - COMMITMENTS AND CONTINGENCIES
The Company has entered into an agreement with a law firm to assist in
preparing and filing all organizational, incorporation, and bank applications
and to assist in preparing stock offering documents and consummating the
Company's initial offering. The aggregate cost of the services is expected to
approximate $40,000.
The Company has entered into an agreement with a bank consultant to
assist in establishing the Bank. The aggregate cost of the services is expected
to approximate $48,000.
The Company has entered into an agreement to purchase approximately
$40,000 of office furniture and equipment for its proposed branch office.
The Company leases temporary office space under a month-to-month
operating lease. The lease requires monthly payments of $600 and includes
secretarial services on an as needed basis. Additionally, the Company has
entered into a 12-month operating lease for a modular unit to temporarily serve
as its first branch office. The lease requires monthly payments of
approximately $3,100. The Company plans to construct a permanent building by
the conclusion of the lease term.
The Company has established a $425,000 line of credit with a bank.
This line is uncollateralized and is guaranteed by the organizers, jointly and
severally. The line bears interest at prime rate. No amounts are outstanding on
this line of credit as of December 31, 1998.
The Company has paid $35,000 for refundable options on three pieces of
real estate and plans to purchase the properties to build main and branch
offices. The first option (expires on January 26, 1999) for $15,000 entitles
the company to purchase 1.7 acres to be used as the main office for $584,000.
The second option (expires on March 30, 1999) for $15,000 is for an alternate
location for the main office and entitles the Company to purchase 2 acres for
$691,000. The third option for $5,000 is to purchase 1.04 acres for $440,000 to
be used as the site for the branch office. This transaction closed on January
7, 1999.
The Company entered into an employment agreement with its President
and Chief Executive Officer that includes a three-year compensation term, bonus
plan, incentive program, and term life insurance. The agreement contains
various termination clauses including abandonment of the effort to organize the
Bank.
NOTE 3 - RELATED PARTY TRANSACTIONS
One of the organizers of the Company owns the building from which the
Company leases its temporary office space.
F-8
<PAGE> 44
NEW COMMERCE BANCORP
STOCK ORDER FORM/SUBSCRIPTION AGREEMENT
TO: New Commerce BanCorp
712 N. Main Street
Greenville, South Carolina 29609
Ladies and Gentlemen:
You have informed me that New Commerce BanCorp, a South Carolina
corporation (the "Company"), is offering up to 800,000 shares of its common
stock, at a price of $10.00 per share payable as provided herein and as
described in and offered pursuant to the Prospectus furnished with this
Subscription Agreement to the undersigned (the "Prospectus").
1. SUBSCRIPTION. Subject to the terms and conditions hereof, the
undersigned hereby tenders this subscription, together with payment in United
States currency by check, bank draft, or money order payable to "The Bankers
Bank as escrow agent for New Commerce BanCorp" the amount indicated below (the
"Funds"), representing the payment of $10.00 per share for the number of shares
of common stock indicated below. The total subscription price must be paid at
the time the Subscription Agreement is executed.
2. ACCEPTANCE OF SUBSCRIPTION. It is understood and agreed that the
Company shall have the right to accept or reject this subscription in whole or
in part, for any reason whatsoever. The Company may reduce the number of shares
for which the undersigned has subscribed, indicating acceptance of less than
all of the shares subscribed on its written form of acceptance.
3. ACKNOWLEDGMENTS. The undersigned hereby acknowledges that he or she
has received a copy of the Prospectus. This Subscription Agreement creates a
legally binding obligation and the undersigned agrees to be bound by the terms
of this Agreement.
4. REVOCATION. The undersigned agrees that once this Subscription
Agreement is tendered to the Company, it may not be withdrawn and that this
Agreement shall survive the death or disability of the undersigned.
BY EXECUTING THIS AGREEMENT, THE SUBSCRIBER IS NOT WAIVING ANY RIGHTS HE OR SHE
MAY HAVE UNDER FEDERAL SECURITIES LAWS, INCLUDING THE SECURITIES ACT OF 1933
AND THE SECURITIES EXCHANGE ACT OF 1934.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR SAVINGS
DEPOSITS ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
A-1
<PAGE> 45
Please indicate in the space provided below the exact name or names
and address in which the stock certificate representing shares subscribed for
hereunder should be registered.
<TABLE>
<S> <C>
- ---------------------------------------------- --------------------------------------------------------
Number of Shares Subscribed Name or Names of Subscribers (Please Print)
for (minimum 100 shares)
$
- ---------------------------------------------- --------------------------------------------------------
Total Subscription Price at Please indicate form of ownership desired (individual,
$10.00 per share (funds must be joint tenants with right of survivorship, tenants in
enclosed) common, trust corporation, partnership, custodian, etc.)
Date: (L.S.)
---------------------------------------- --------------------------------------------------
Signature of Subscriber(s)
- ---------------------------------------------- --------------------------------------------------
Social Security Number or Federal Signature of Subscriber(s) (L.S.)
Taxpayer Identification Number
Street (Residence) Address:
------------------------------------------
------------------------------------------
------------------------------------------
City, State and Zip Code
</TABLE>
When signing as attorney, trustee, administrator, or guardian, please
give your full title as such. If a corporation, please sign in full corporate
name by president or other authorized officer. In the case of joint tenants or
tenants in common, each owner must sign.
TO BE COMPLETED BY THE COMPANY:
Accepted as of , 199 , as to shares.
------------------ -- -------------
NEW COMMERCE BANCORP
--------------------------------------------
By:
Title:
A-2
<PAGE> 46
FEDERAL INCOME TAX BACKUP WITHHOLDING
In order to prevent the application of federal income tax backup
withholding, each subscriber must provide the escrow agent with a correct
Taxpayer Identification Number ("TIN"). An individual's social security number
is his or her TIN. The TIN should be provided in the space provided in the
Substitute Form W-9, which is set forth below.
Under federal income tax law, any person who is required to furnish
his or her correct TIN to another person, and who fails to comply with such
requirements, may be subject to a $50 penalty imposed by the IRS.
Backup withholding is not an additional tax. Rather, the tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If backup withholding results in an overpayment of taxes, a refund
may be obtained from the IRS. Certain taxpayers, including all corporations,
are not subject to these backup withholding and reporting requirements.
If the shareholder has not been issued a TIN and has applied for a TIN
or intends to apply for a TIN in the near future, "Applied For" should be
written in the space provided for the TIN on the Substitute Form W-9.
SUBSTITUTE FORM W-9
Under penalties of perjury, I certify that: (i) The number shown on
this form is my correct Taxpayer Identification Number (or I am waiting for a
Taxpayer Identification Number to be issued to me), and (ii) I am not subject
to backup withholding because: (a) I am exempt from backup withholding; or (b)
I have not been notified by the Internal Revenue Service ("IRS") that I am
subject to backup withholding as a result of a failure to report all interest
or dividends; or (c) the IRS has notified me that I am no longer subject to
backup withholding.
You must cross out item (ii) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after being notified by
the IRS that you were subject to backup withholding you received another
notification from the IRS that you are not longer subject to backup
withholding, do not cross out item (ii).
Each subscriber should complete this section.
<TABLE>
<S> <C>
- ------------------------------------------------------- ----------------------------------------------------
Signature of Subscriber Signature of Subscriber
- ------------------------------------------------------- ----------------------------------------------------
Printed Name Printed Name
- ------------------------------------------------------- ----------------------------------------------------
Social Security or Employer Social Security or Employer
Identification No. Identification No.
</TABLE>
A-3
<PAGE> 47
=================================================================
No dealer, salesperson or other person has been authorized to
give any information or to make any representations other than
those contained in this Prospectus in connection with the offer
made hereby. If given or made, such information and
representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to
sell or solicitation of an offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction. Neither the
delivery of this Prospectus nor any sale made hereunder at any
time shall under any circumstances create any implication that
the information herein is correct at any time after the date
hereof.
_________________________
_________________________
UNTIL ____________________, ALL DEALERS EFFECTING TRANSACTIONS IN
THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
=================================================================
=================================================================
750,000 SHARES
NEW COMMERCE BANCORP
A PROPOSED HOLDING COMPANY FOR
NEW COMMERCE BANK, N.A.
(PROPOSED)
[INSERT LOGO HERE]
COMMON STOCK
PROSPECTUS
[DATE OF OFFER]
=================================================================
<PAGE> 48
PART II
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Item 24. Indemnification of Directors and Officers
The Company's Articles of Incorporation contain a provision which,
subject to certain limited exceptions, limits the liability of a director to
the Company or its shareholders for any breach of duty as a director. There is
no limitation of liability for: a breach of duty involving appropriation of a
business opportunity of the Company; an act or omission which involves
intentional misconduct or a knowing violation of law; any transaction from
which the director derives an improper personal benefit; or as to any payments
of a dividend or any other type of distribution that is illegal under Section
33-8-330 of the South Carolina Business Corporation Act of 1988 (The
"Corporation Act"). In addition, if at any time the Corporation Act shall have
been amended to authorize further elimination or limitation of the liability of
director, then the liability of each director of the Company shall be
eliminated or limited to the fullest extent permitted by such provisions, as so
amended, without further action by the shareholders, unless the provisions of
the Corporation Act require such action. The provision does not limit the right
of the Company or its shareholders to seek injunctive or other equitable relief
not involving payments in the nature of monetary damages.
The Company's bylaws contain certain provisions which provide
indemnification to directors of the Company that is broader than the protection
expressly mandated in Sections 33-8-510 and 33-8-520 of the Corporation Act. To
the extent that a director or officer of the Company has been successful, on
the merits or otherwise, in the defense of any action or proceeding brought by
reason of the fact that such person was a director or officer of the Company,
Sections 33-8-510 and 33-8-520 of the Corporation Act would require the Company
to indemnify such persons against expenses (including attorney's fees) actually
and reasonably incurred in connection therewith. The Corporation Act expressly
allows the Company to provide for greater indemnification rights to its
officers and directors, subject to shareholder approval.
Insofar as indemnification for liabilities arising under the
Corporation Act may be permitted to directors, officers, and controlling
persons of the Company and the Bank pursuant to the Articles of Incorporation
or Bylaws, or otherwise, the Company and the Bank have been advised that in the
opinion of the SEC such indemnification is against public policy as expressed
in the Corporation Act and is, therefore, unenforceable.
The Board of Directors also has the authority to extend to officers,
employees and agents the same indemnification rights held by directors, subject
to all of the accompanying conditions and obligations. The Board of Directors
has extended or intends to extend indemnification rights to all of its
executive officers.
The Company has the power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
Company against any liability asserted against him or incurred by him in any
such capacity, whether or not the Company would have the power to indemnify him
against such liability under the bylaws.
II-1
<PAGE> 49
Item 25. Other Expenses of Issuance and Distribution.
Estimated expenses (other than underwriting commissions) of the
sale of the shares of common stock are as follows:
<TABLE>
<S> <C>
Registration Fee $ 2,224
Printing and Engraving 20,000
Legal Fees and Expenses 30,000
Accounting Fees 5,000
Blue Sky Fees and Expenses 10,000
Miscellaneous Disbursements 5,000
------------
TOTAL $ 72,224
============
</TABLE>
Item 26. Recent Sales of Unregistered Securities.
From inception, the Company has issued a total of 200,000 shares of
its common stock to its organizers. The price per share was $10.00 for a total
purchase price of $2,000,000. There were no underwriting discounts or
commissions paid with respect to these transactions. All sales were exempt
under Section 4(2) of the Securities Act of 1933.
Item 27. Exhibits.
<TABLE>
<S> <C>
3.1. Articles of Incorporation, as amended
3.2. Bylaws
4.1. See Exhibits 3.1 and 3.2 for provisions in the Company's Articles of
Incorporation and Bylaws defining the rights of holders of the common
stock
4.2. Form of certificate of common stock
5.1. Opinion Regarding Legality
10.1. Employment Agreement dated August 1, 1998 between the Company and
James D. Stewart
10.2. *Agreement to Buy and Sell dated January 4, 1999, between the Company,
as buyer, and The Bess G. Kirkland Trust, as seller
10.3. Agreement to Buy and Sell dated September 30, 1998 between the Company,
as buyer, and Stephen M. Young and Lewis P. Young, Trustees of
Wilbert Burial Vault, Inc., Profit Sharing Plan, as seller
10.4 Agreement to Buy and Sell dated October 26, 1998, between Company, as
buyer, and Hawkins Development Corporation, as seller
10.5 Sales Agency Agreement dated December 11, 1998 between the Company and
J.C. Bradford & Co.
10.6 Escrow Agreement dated October 27, 1998 between the Company and The
Bankers Bank
10.7 Data Processing Services Agreement and Contract Modification dated
December 1, 1998 between the Company and Jack Henry & Associates,
Inc.
10.8 Form of Stock Warrant Agreement
23.1. Consent of Independent Public Accountants
23.2. Consent of Nelson Mullins Riley & Scarborough, L.L.P. (appears in its
opinion filed as Exhibit 5.1)
</TABLE>
II-2
<PAGE> 50
<TABLE>
<S> <C>
24.1. Power of Attorney (filed as part of the signature page to the
Registration Statement)
27.1. *Financial Data Schedule (for electronic filing purposes)
</TABLE>
* To be filed by Amendment
Item 28. Undertakings.
The undersigned Company will:
(a)(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the provisions described in Item
24 above, or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 51
SIGNATURES
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ G. Mitchell Gault
- ------------------------------------
G. Mitchell Gault Director January 14, 1999
/s/ Tommy D. Greer
- ------------------------------------
Tommy D. Greer Director January 14, 1999
/s/ Bobby L. Johnson
- ------------------------------------
Bobby L. Johnson Director January 14, 1999
/s/ Robert T. Kellett
- ------------------------------------
Robert T. Kellett Director January 14, 1999
/s/ Dennis O. Raines
- ------------------------------------
Dennis O. Raines Director January 14, 1999
/s/ Curran A. Smith
- ------------------------------------
Curran A. Smith Director January 14, 1999
/s/ James D. Stewart
- ------------------------------------
James D. Stewart Director, Chief Executive January 14, 1999
Officer and President
</TABLE>
<PAGE> 52
SIGNATURES
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ G. Mitchell Gault
- ------------------------------------
G. Mitchell Gault Director January 14, 1999
/s/ Tommy D. Greer
- ------------------------------------
Tommy D. Greer Director January 14, 1999
/s/ Bobby L. Johnson
- ------------------------------------
Bobby L. Johnson Director January 14, 1999
/s/ Robert T. Kellett
- ------------------------------------
Robert T. Kellett Director January 14, 1999
/s/ Dennis O. Raines
- ------------------------------------
Dennis O. Raines Director January 14, 1999
/s/ Curran A. Smith
- ------------------------------------
Curran A. Smith Director January 14, 1999
/s/ James D. Stewart
- ------------------------------------
James D. Stewart Director, Chief Executive January 14, 1999
Officer and President
</TABLE>
<PAGE> 53
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
Item 27. Exhibits.
3.1. Articles of Incorporation, as amended
3.2. Bylaws
4.1. See Exhibits 3.1 and 3.2 for provisions in the Company's Articles of
Incorporation and Bylaws defining the rights of holders of the common
stock
4.2. Form of certificate of common stock
5.1. Opinion Regarding Legality
10.1. Employment Agreement dated August 1, 1998 between the Company and James
D. Stewart
10.2 *Agreement to Buy and Sell dated January 4, 1999, between the Company,
as buyer, and The Bess G. Kirkland Trust, as seller
10.3 Agreement to Buy and Sell dated September 30, 1998 between the Company,
as buyer, and Stephen M. Young and Lewis P. Young, Trustees of
Wilbert Burial Vault, Inc., Profit Sharing Plan, as seller
10.4 Agreement to Buy and Sell dated October 26, 1998, between Company, as
buyer, and Hawkins Development Corporation, as seller
10.5 Sales Agency Agreement dated December 11, 1998 between the Company
and J.C. Bradford & Co.
10.6 Escrow agreement dated October 27, 1998 between the Company and The
Bankers Bank
10.7 Data Processing Services Agreement and Contract Modification dated
December 1, 1998 between the Company and Jack Henry & Associates,
Inc.
10.8 Form of Stock Warrant Agreement
23.1. Consent of Independent Public Accountants
23.2. Consent of Nelson Mullins Riley & Scarborough, L.L.P. (appears in its
opinion filed as Exhibit 5.1)
24.1. Power of Attorney (filed as part of the signature page to the
Registration Statement)
27.1. *Financial Data Schedule (for electronic filing purposes)
</TABLE>
* To be filed by Amendment
<PAGE> 1
EXHIBIT 3.1
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
RESTATED ARTICLES OF INCORPORATION
Pursuant to ss.33-10-107 of the 1976 South Carolina, as amended, the
corporation hereby submits the following information:
1. The name of the Corporation is NEW COMMERCE BANCORP.
2. If the name of the Corporation has ever been changed, all of its former
names:
a) MSB Investments, Inc.
------------------------------------------------------
(name specified in original articles of incorporation)
b) ------------------------------------------------------
c) ------------------------------------------------------
3. The original articles of incorporation were filed on July 22, 1998.
4. The registered office of the corporation is 100 East Coffee Street in
the City of Greenville, South Carolina 29601, and the registered agent
at such address is Richard L. Few, Jr.
The corporation is authorized to issue shares of stock as follows.
Complete a or b, whichever is applicable:
a. [ ] If the corporation is authorized to issue a single class of
shares, the total number of shares authorized is ____________.
b. [b] The corporation is authorized to issue more than one class of
shares:
Class of Shares Authorized No. of Each Class
Common 10,000,000
Preferred 10,000,000
<PAGE> 2
The relative rights, preferences, and limitations of the shares of
each class, and each series within a class, are as follows:
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK OF THE CORPORATION
SHALL BE 10,000,000 WITH A PAR VALUE OF $0.01 EACH.
THE NUMBER OF AUTHORIZED SHARES OF PREFERRED STOCK OF THE CORPORATION
IS HEREBY INCREASED TO 10,000,000 WITH A PAR VALUE OF $0.01, WITH
TERMS AND CONDITIONS OF SUCH PREFERRED STOCK TO BE DETERMINED BY THE
BOARD OF DIRECTORS IN ITS SOLE DISCRETION.
NO SHAREHOLDER OF THE CORPORATION SHALL HAVE ANY PREEMPTIVE OR
PREFERENTIAL RIGHT OF SUBSCRIPTION TO ANY SHARES OF ANY CLASS OF THE
CORPORATION, WHETHER NOW OR HEREAFTER AUTHORIZED, OR TO ANY
OBLIGATIONS CONVERTIBLE INTO SHARES OF THE CORPORATION, ISSUED OR
SOLD, NOR ANY RIGHT OF SUBSCRIPTION TO ANY THEREOF.
THE SHAREHOLDERS SHALL NOT BE ABLE TO CUMULATIVELY VOTE THEIR SHARES
OF STOCK IN THE CORPORATION ON ANY MATTER.
6. The optional provisions which the corporation elects to include in the
articles of incorporation are as follows (See ss.33-2-101 and the
applicable comments thereto; and ss.ss.35-2-105 and 35-2-221 of the
South Carolina Code):
AT ANY TIME THAT THE BOARD HAS SIX OR MORE MEMBERS, UNLESS PROVIDED
OTHERWISE BY THE ARTICLES OF INCORPORATION, THE TERMS OF OFFICE OF
DIRECTORS WILL BE STAGGERED BY DIVIDING THE TOTAL NUMBER OF DIRECTORS
INTO THREE CLASSES, WITH EACH CLASS ACCOUNTING FOR ONE-THIRD, AS NEAR
AS MAY BE, OF THE TOTAL. THE TERMS OF DIRECTORS IN THE FIRST CLASS
EXPIRE AT THE FIRST ANNUAL SHAREHOLDERS' MEETING AFTER THEIR ELECTION,
THE TERMS OF THE SECOND CLASS EXPIRE AT THE SECOND ANNUAL
SHAREHOLDERS' MEETING AFTER THEIR ELECTION, AND THE TERMS OF THE THIRD
CLASS EXPIRE AT THE THIRD ANNUAL SHAREHOLDERS' MEETING AFTER THEIR
ELECTION. AT EACH ANNUAL SHAREHOLDERS' MEETING HELD THEREAFTER,
DIRECTORS SHALL BE CHOSEN FOR A TERM OF THREE YEARS TO SUCCEED THOSE
WHOSE TERMS EXPIRE. IF THE NUMBER OF DIRECTORS IS CHANGED, ANY
INCREASE OR DECREASE SHALL BE SO APPORTIONED AMONG THE CLASSES AS TO
MAKE ALL CLASSES AS NEARLY EQUAL IN NUMBER AS POSSIBLE, AND WHEN THE
<PAGE> 3
NUMBER OF DIRECTORS IS INCREASED AND ANY NEWLY CREATED DIRECTORSHIPS
ARE FILLED BY THE BOARD, THE TERMS OF THE ADDITIONAL DIRECTORS SHALL
EXPIRE AT THE NEXT ELECTION OF DIRECTORS BY THE SHAREHOLDERS. EACH
DIRECTOR, EXCEPT IN THE CASE OF HIS EARLIER DEATH, WRITTEN
RESIGNATION, RETIREMENT, DISQUALIFICATION OR REMOVAL, SHALL SERVE FOR
THE DURATION OF HIS TERM, AS STAGGERED, AND THEREAFTER UNTIL HIS
SUCCESSOR SHALL HAVE BEEN ELECTED AND QUALIFIED.
7. Unless a delayed effective date is specified, this application will be
effective upon acceptance for filing by the Secretary of State (See
ss. 33-1-230(b)): January 13,1999
---------------
<PAGE> 4
CERTIFICATE ACCOMPANYING THE RESTATED
ARTICLES OF INCORPORATION
Check either A or B, whichever is applicable; and if B applies,
complete the additional information requested:
A. [ ] The attached restated articles of incorporation do not contain
any amendments to the corporation's articles of incorporation and have been
duly approved by the corporation's board of directors as authorized by
ss.33-10-107(a).
B. [x] The attached restated articles of incorporation contain one or
more amendments to the corporation's articles of incorporation. Pursuant to
Section 33-10-107(d)(2), the following information concerning the amendment(s)
is hereby submitted:
2. On January 12, 1999, the corporation adopted the following
amendments(s) to its articles of incorporation: (Type or Attach the
Complete Text of Each Amendment):
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK OF THE CORPORATION
SHALL BE 10,000,000 WITH A PAR VALUE OF $0.01 EACH.
THE NUMBER OF AUTHORIZED SHARES OF PREFERRED STOCK OF THE CORPORATION
IS HEREBY INCREASED TO 10,000,000 WITH A PAR VALUE OF $0.01, WITH
TERMS AND CONDITIONS OF SUCH PREFERRED STOCK TO BE DETERMINED BY THE
BOARD OF DIRECTORS IN ITS SOLE DISCRETION.
NO SHAREHOLDER OF THE CORPORATION SHALL HAVE ANY PREEMPTIVE OR
PREFERENTIAL RIGHT OF SUBSCRIPTION TO ANY SHARES OF ANY CLASS OF THE
CORPORATION, WHETHER NOW OR HEREAFTER AUTHORIZED, OR TO ANY
OBLIGATIONS CONVERTIBLE INTO SHARES OF THE CORPORATION, ISSUED OR
SOLD, NOR ANY RIGHT OF SUBSCRIPTION TO ANY THEREOF.
THE SHAREHOLDERS SHALL NOT BE ABLE TO CUMULATIVELY VOTE THEIR SHARES
OF STOCK IN THE CORPORATION ON ANY MATTER.
AT ANY TIME THAT THE BOARD HAS SIX OR MORE MEMBERS, UNLESS PROVIDED
OTHERWISE BY THE ARTICLES OF INCORPORATION, THE TERMS OF OFFICE OF
DIRECTORS WILL BE STAGGERED BY DIVIDING THE TOTAL NUMBER OF DIRECTORS
INTO THREE CLASSES, WITH EACH
<PAGE> 5
CLASS ACCOUNTING FOR ONE-THIRD, AS NEAR AS MAY BE, OF THE TOTAL. THE
TERMS OF DIRECTORS IN THE FIRST CLASS EXPIRE AT THE FIRST ANNUAL
SHAREHOLDERS' MEETING AFTER THEIR ELECTION, THE TERMS OF THE SECOND
CLASS EXPIRE AT THE SECOND ANNUAL SHAREHOLDERS' MEETING AFTER THEIR
ELECTION, AND THE TERMS OF THE THIRD CLASS EXPIRE AT THE THIRD ANNUAL
SHAREHOLDERS' MEETING AFTER THEIR ELECTION. AT EACH ANNUAL
SHAREHOLDERS' MEETING HELD THEREAFTER, DIRECTORS SHALL BE CHOSEN FOR A
TERM OF THREE YEARS TO SUCCEED THOSE WHOSE TERMS EXPIRE. IF THE NUMBER
OF DIRECTORS IS CHANGED, ANY INCREASE OR DECREASE SHALL BE SO
APPORTIONED AMONG THE CLASSES AS TO MAKE ALL CLASSES AS NEARLY EQUAL
IN NUMBER AS POSSIBLE, AND WHEN THE NUMBER OF DIRECTORS IS INCREASED
AND ANY NEWLY CREATED DIRECTORSHIPS ARE FILLED BY THE BOARD, THE TERMS
OF THE ADDITIONAL DIRECTORS SHALL EXPIRE AT THE NEXT ELECTION OF
DIRECTORS BY THE SHAREHOLDERS. EACH DIRECTOR, EXCEPT IN THE CASE OF
HIS EARLIER DEATH, WRITTEN RESIGNATION, RETIREMENT, DISQUALIFICATION
OR REMOVAL, SHALL SERVE FOR THE DURATION OF HIS TERM, AS STAGGERED,
AND THEREAFTER UNTIL HIS SUCCESSOR SHALL HAVE BEEN ELECTED AND
QUALIFIED.
THE RESTATED ARTICLES OF INCORPORATION, THE FORM OF WHICH ARE ATTACHED
IN THIS CONSENT, ARE HEREBY ADOPTED AS THE ARTICLES OF INCORPORATION
OF THE CORPORATION, WITH ALL AMENDMENTS TO THE ORIGINAL ARTICLES OF
INCORPORATION OF THE CORPORATION REFLECTED THEREIN.
2. The manner, if not set forth in the amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the
Amendment shall be effected, is as follows: (if not applicable, insert
"not applicable" or "NA"). Not Applicable
3. Complete either a or b, whichever is applicable.
a. [x] Amendment(s) adopted by shareholder action.
At the date of adoption of the Amendment, the number of outstanding
shares of each voting group entitled to vote separately on the
Amendment, and vote of such shares was:
<TABLE>
<CAPTION>
Number of Number of Number of Votes Number of Undisputed*
Voting Outstanding Votes Entitled Represented At Shares Voted
Group Shares to be Cast the meeting For Against
- ------ ----------- -------------- --------------- --- ---------
<S> <C> <C> <C> <C> <C>
Common 200,000 200,000 200,000 200,000 -0-
</TABLE>
<PAGE> 6
b. [ ] The amendment(s) was duly adopted by the Incorporators or broad
of directors without shareholder approval pursuant to
ss.33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South
Carolina Code as amended, and shareholder action was not
required.
DATE: January 12, 1999 New Commerce BanCorp.
-----------------------
By: /s/ James D. Stewart
-----------------------------------------
James D. Stewart, President
*NOTE: PURSUANT TO SECTION 33-10-106(6)(I), THE CORPORATION CAN ALTERNATIVELY
STATE THE TOTAL NUMBER OF UNDISPUTED SHARES CAST FOR THE AMENDMENT BY
EACH VOTING GROUP TOGETHER WITH A STATEMENT THAT THE NUMBER OF CAST
FOR THE AMENDMENT BY EACH VOTING GROUP WAS SUFFICIENT FOR APPROVAL BY
THAT VOTING GROUP.
<PAGE> 7
FILING INSTRUCTIONS
1. Two copies of this form, the original and either a duplicate original
or a conformed copy, must be filed.
2. If the space in this form is insufficient, please attach additional
sheets containing a reference to the appropriate paragraph in this
form.
3. The filing fee is $10.00 payable to the Secretary of State at the time
this document is filed. If the restated articles of incorporation
includes any amendments to the corporation's articles of
incorporation, a $100.00 filing tax must be paid in addition the
$10.00 filing fee.
NOTE: PLEASE DISCARD THIS PAGE BEFORE FILING
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
NEW COMMERCE BANCORP.
DATED:
JANUARY 12, 1999
----------------
<PAGE> 2
TABLE OF CONTENTS
BYLAWS OF
NEW COMMERCE BANCORP.
<TABLE>
<S> <C> <C>
ARTICLE I. OFFICES........................................................................1
ss.1.1 BUSINESS OFFICE................................................................1
ss.1.2 REGISTERED OFFICE..............................................................1
ARTICLE II. SHAREHOLDERS...................................................................1
2.1 ANNUAL MEETING.................................................................1
ss.2.2 SPECIAL MEETINGS...............................................................1
ss.2.3 PLACE OF MEETING...............................................................2
ss.2.4 NOTICE OF MEETING..............................................................2
(a) Required notice............................................................2
(b) Adjourned Meeting..........................................................3
(c) Waiver of Notice...........................................................3
(d) Contents of Notice.........................................................4
ss.2.5 FIXING OF RECORD DATE..........................................................4
ss.2.6 SHAREHOLDER LIST...............................................................5
ss.2.7 SHAREHOLDER PROPOSALS..........................................................6
ss.2.8 QUORUM AND VOTING REQUIREMENTS.................................................7
ss.2.9 INCREASING EITHER QUORUM OR VOTING REQUIREMENTS................................7
ss.2.10 PROXIES........................................................................8
ss.2.11 VOTING OF SHARES...............................................................8
ss.2.12 CORPORATION'S ACCEPTANCE OF VOTES..............................................8
ss.2.13 INFORMAL ACTION BY SHAREHOLDERS...............................................10
ss.2.14 NOMINATION AND VOTING FOR DIRECTORS...........................................10
ss.2.15 SHAREHOLDER'S RIGHTS TO INSPECT CORPORATE RECORDS.............................11
(a)Minutes and Accounting Records.............................................11
(b)Absolute Inspection Rights of Records Required at Principal Office.........11
(c)Conditional Inspection Right...............................................12
(d)Copy Costs.................................................................13
ss.2.16 FINANCIAL STATEMENTS SHALL BE FURNISHED TO THE SHAREHOLDERS...................13
ss.2.17 DISSENTER'S RIGHTS............................................................14
ARTICLE III. BOARD OF DIRECTORS............................................................14
ss.3.1 GENERAL POWERS................................................................14
ss.3.2 NUMBER, TENURE AND QUALIFICATIONS OF DIRECTORS................................14
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
ss.3.3 REGULAR MEETINGS..............................................................16
ss.3.4 SPECIAL MEETINGS..............................................................16
ss.3.5 NOTICE OF SPECIAL MEETING.....................................................16
ss.3.6 DIRECTOR QUORUM...............................................................16
ss.3.7 MANNER OF ACTING..............................................................16
(a)Required Vote..............................................................16
(b)Telephone Meeting..........................................................17
(c)Failure To Object To Action................................................17
ss.3.8 ESTABLISHING A "SUPERMAJORITY" QUORUM OR VOTING REQUIREMENT...................17
ss.3.9 ACTION WITHOUT A MEETING......................................................18
ss.3.10 REMOVAL OF A DIRECTOR.........................................................18
ss.3.11 VACANCIES.....................................................................18
ss.3.12 COMPENSATION..................................................................19
ss.3.13 COMMITTEES....................................................................19
(a) Creation of Committees....................................................19
(b) Selection of Members......................................................19
(c) Required Procedures.......................................................19
(d) Authority.................................................................20
ARTICLE IV. OFFICERS......................................................................20
ss.4.1 NUMBER........................................................................20
ss.4.2 APPOINTMENT AND TERM OF OFFICE................................................21
ss.4.3 REMOVAL.......................................................................21
ss.4.4 CHAIRMAN OF THE BOARD.........................................................21
ss.4.5 PRESIDENT.....................................................................21
ss.4.6 THE VICE-PRESIDENTS...........................................................22
ss.4.7 THE SECRETARY.................................................................22
ss.4.8 THE TREASURER.................................................................22
ss.4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS................................23
ss.4.10 SALARIES......................................................................23
ARTICLE V. INDEMNIFICATION...............................................................23
ss.5.1 INDEMNIFICATION OF DIRECTORS..................................................23
ss.5.2 ADVANCEMENT OF EXPENSES.......................................................24
ss.5.3 INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS.............................25
ss.5.4 INSURANCE.....................................................................25
ss.5.5 NONEXCLUSIVITY OF RIGHTS; AGREEMENTS..........................................25
ss.5.6 CONTINUING BENEFITS; SUCCESSORS...............................................26
ss.5.7 INTERPRETATION; CONSTRUCTION..................................................26
ss.5.8 AMENDMENT.....................................................................26
ss.5.9 SEVERABILITY..................................................................27
ARTICLE VI. ISSUANCE OF AND...............................................................27
ss.6.1 CERTIFICATES FOR SHARES.......................................................27
(a) Content...................................................................27
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
(b) Legend as to Class or Series..............................................28
(c) Shareholder List..........................................................28
(d) Transferring Shares.......................................................28
ss.6.2 ISSUANCE OF PREFERRED SHARES..................................................28
(a) Preferred Shares in Series................................................28
(b) Dividends.................................................................30
(c) Redemption of Preferred Shares............................................30
ss.6.3 REGISTRATION OF THE TRANSFER OF SHARES........................................30
ss.6.4 RESTRICTIONS ON TRANSFER OF SHARES PERMITTED..................................31
ss.6.5 ACQUISITION OF SHARES.........................................................31
ss.6.6 CONTROL SHARE ACQUISITIONS STATUTE............................................31
ARTICLE VII. DISTRIBUTIONS.................................................................32
ss.7.1 DISTRIBUTIONS.................................................................32
ARTICLE VIII. CORPORATE SEAL................................................................32
ss.8.1 CORPORATE SEAL................................................................32
ARTICLE IX. EMERGENCY BYLAWS..............................................................32
ss.9.1 EMERGENCY BYLAWS..............................................................32
(a) Notice of Board Meetings..................................................32
(b) Temporary Directors and Quorum............................................32
(c) Actions Permitted to be taken.............................................33
(1) Officers Powers....................................................33
(2) Delegation of any Power............................................33
(3) Lines of succession................................................33
(4) Relocate principal place of business...............................33
(5) All Other Action...................................................33
ARTICLE X. AMENDMENTS....................................................................33
ss.10.1 AMENDMENTS....................................................................33
ARTICLE XI. GENERAL PROVISIONS............................................................34
ss.11.1 BOOKS AND RECORDS.............................................................34
ss.11.2 EXECUTION OF DOCUMENTS........................................................34
ss.11.3 FISCAL YEAR...................................................................35
ss.11.4 RESIGNATION...................................................................35
ss.11.5 COMPUTATION OF DAYS...........................................................35
ss.11.6 CONSTRUCTION..................................................................35
ss.11.7 HEADINGS......................................................................35
</TABLE>
<PAGE> 5
BY-LAWS OF NEW COMMERCE BANCORP.
ARTICLE I. OFFICES
ss. 1.1 BUSINESS OFFICE.
The original principal office of the corporation shall be in the State
of South Carolina and shall be located 712 N. Main Street, Greenville,
South Carolina 29609. The board of directors may change the location
of the principal office. The corporation shall maintain at its
principal office a copy of certain records, as specified in ss. 2.15
of Article II. The corporation may have such other offices, either
within or without the State of South Carolina, as the board of
directors may designate or as the business of the corporation may
require from time to time.
ss. 1.2 REGISTERED OFFICE.
The registered office of the corporation, required by ss. 33-5-101 of
the South Carolina Code of Laws of 1976, as amended, may be, but need
not be, identical with the principal office in the state of South
Carolina, and the address of the registered office may be changed from
time to time.
ARTICLE II. SHAREHOLDERS
2.1 ANNUAL MEETING.
The annual meeting of the shareholders shall be held each year at such
time on such day as shall be fixed by the Board of Directors in
accordance with all applicable notice requirements, for the purpose of
electing directors and for the transaction of such other business as
may come before the meeting.
If the election of directors shall not be held within the time period
designated herein for any annual meeting of the shareholders, or at
any subsequent continuation after adjournment thereof, the board of
directors shall cause the election to be held at a special meeting of
the shareholders as soon thereafter as convenient.
ss. 2.2 SPECIAL MEETINGS.
(a) Special meetings of the shareholders, for any purpose or
purposes, described in the meeting notice, may be called by
the chief executive officer, the president, or by a majority
of the Board of Directors.
1
<PAGE> 6
(b) In addition to a special meeting called in accordance
with ss.2.2, the Corporation shall, if and to the extent that
it is required by applicable law, hold a special meeting of
shareholders if the holders of at least ten percent of all
the votes entitled to be cast on any issue proposed to be
considered at such special meeting sign, date and deliver to
the secretary of the Corporation one or more written demands
for the meeting. Such written demands shall be delivered to
the secretary by certified mail, return receipt requested.
Such written demands sent to the secretary of the Corporation
shall set forth as to each matter the shareholder or
shareholders propose to be presented at the special meeting
(i) a description of the purpose or purposes for which the
meeting is to be held (including the specific proposal(s) to
be presented); (ii) the name and record address of the
shareholder or shareholders proposing such business; (iii)
the class and number of shares of the Corporation that are
owned of record by the shareholder or shareholders as of a
date within ten days of the delivery of the demand; (iv) the
class and number of shares of the Corporation that are held
beneficially, but not held of record, by the shareholder or
shareholders as of a date within ten days of the delivery of
the demand; and (v) any interest of the shareholder or
shareholders in such business. Any such special shareholders'
meeting shall be held at a location designated by the Board
of Directors. The Board of Directors may set such rules for
any such meeting as it may deem appropriate, including when
the meeting will be held (subject to any requirements of the
Act), the agenda for the meeting (which may include any
proposals made by the Board of Directors), who may attend the
meeting in addition to shareholders of record and other such
matters.
(c) Business transacted at any special meeting shall be confined
to the specific purpose or purposes stated in the notice of
the meeting.
ss. 2.3 PLACE OF MEETING.
The board of directors may designate any place within or without the
State of South Carolina as the place of meeting for any annual or
special meeting of the shareholders, stated in the notice of meeting
or in a wavier of notice. If no designation is made, the place of
meeting shall be the principal office of the corporation in the state
of South Carolina.
ss. 2.4 NOTICE OF MEETING.
(a) Required notice.
Written notice stating the place, day and hour of any annual or
special shareholder meeting shall be delivered not less than ten nor
more than sixty days before the date of the meeting, either personally
or by mail,
2
<PAGE> 7
by or at the direction of the president, the board of directors or
other persons calling the meeting, to each shareholder of record
entitled to vote at such meeting and to any other shareholder entitled
by the South Carolina Model Business Corporation Act of 1988 or the
articles of incorporation to receive notice of the meeting. Notice
shall be deemed to be effective at the earlier of: (1) when deposited
in the United States mail, addressed to the shareholder at his address
as it appears on the stock transfer books of the corporation, with
postage thereon prepaid, (2) 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, (3) when
received, or (4) 5 days after deposit in the United States mail, if
mailed postpaid and correctly addressed to an address other than that
shown in the corporation's current record of shareholders.
(b) Adjourned Meeting.
If any shareholder meeting is adjourned to a different date, time, or
place, notice need not be given of the new date, time or place, if the
new date, time and place is announced at the meeting before
adjournment. If a new record date for the adjourned meeting is, or
must be, fixed (see ss. 2.5 of this Article II) then notice must be
given pursuant to the requirements of paragraph (a) of this ss. 2.4,
to those persons who are shareholders as of the new record date.
(c) Waiver of Notice.
The shareholder may waive notice of the meeting (or any notice
required by the Act, articles of incorporation, or bylaws), by a
writing signed by the shareholder entitled to the notice, which is
delivered to the corporation (either before or after the date and time
stated in the notice) for inclusion in the minutes or filing with the
corporate records.
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;
(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.
3
<PAGE> 8
(d) Contents of Notice.
The notice of each special shareholder meeting shall include
a description of the purpose or purposes for which the
meeting is called. Except as provided in this ss. 2.4(d), or
as provided in the corporation's articles, or otherwise in
the South Carolina Model Business Corporation Act, the notice
of an annual shareholder meeting need not include a
description of the purpose or purposes for which the meeting
is called.
If a purpose of any shareholder meeting is to consider
either: (1) a proposed amendment to the articles of
incorporation (including any restated articles requiring
shareholder approval); (2) a plan of merger or share
exchange; (3) the sale, lease, exchange or other disposition
of all, or substantially all of the corporation's property;
(4) the adoption, amendment or repeal of a bylaw; (5)
dissolution of the corporation; (6) election of a director
(except at the annual meeting) or, (7) removal of a director,
the notice must so state and be accompanied by respectively a
copy or summary of the: (1) articles of amendment; (2) plan
of merger or share exchange; (3) transaction for disposition
of all the corporation's property; or (4) bylaw proposal. If
the proposed corporation action creates dissenter's rights,
the notice must state that shareholders are, or may be
entitled to assert dissenter's rights, and must be
accompanied by a copy of Chapter 13 of the South Carolina
Model Business Corporation Act. If the corporation issues, or
authorizes the issuance of shares for promissory notes or for
promises to render services in the future, the corporation
shall report in writing to all the shareholders the number of
shares authorized or issued, and the consideration received
with or before the notice of the next shareholder meeting.
Likewise, if the corporation indemnifies or advances expenses
to a director (as defined in ss. 33-16-210 of the South
Carolina Code of Laws of 1976, as amended), this shall be
reported to all the shareholders with or before notice of the
next shareholder's meeting.
ss. 2.5 FIXING OF RECORD DATE.
For the purpose of determining shareholders of any voting group
entitled to notice of or to vote at any meeting of shareholders, or
shareholders entitled to receive payment of any distribution or
dividend, or in order to make a determination of shareholders for any
other proper purpose, the board of directors may fix in advance a date
as the record date. Such record date shall not be more than seventy
days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If no record date is so
fixed by the board for the determination of shareholders entitled to
notice of, or to vote at a meeting of shareholders, or shareholders
entitled to receive a share dividend or distribution, the record date
for determination of such shareholders shall be at the close of
business on:
4
<PAGE> 9
(a) With respect to an annual shareholder meeting or any
special shareholder meeting called by the board or
any person specifically authorized by the board or
these bylaws to call a meeting, the day before the
first notice is delivered to shareholders;
(b) With respect to a special shareholder's meeting
demanded by the shareholders, the date the first
shareholder signs the demand;
(c) With respect to the payment of a share dividend, the
date the board authorizes the share dividend;
(d) With respect to actions taken in writing without a
meeting (pursuant to Article II ss. 2.13), the date
the first shareholder signs a consent;
(e) And with respect to a distribution to shareholders,
(other than one involving a repurchase or
reacquisition of shares), the date the board
authorizes the distribution.
When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof unless the board
of directors fixes a new record date which it must do if the meeting
is adjourned to a date more than 120 days after the date fixed for the
original meeting.
ss. 2.6 SHAREHOLDER LIST.
The officer or agent having charge of the stock transfer books for
shares of the corporation shall make a complete record of the
shareholders entitled to vote at each meeting of shareholders thereof,
arranged in alphabetical order, with the address of and the number of
shares held by each. The list must be arranged by voting group (if
such exists, see Art. II, ss. 2.8) and within each voting group by
class or series of shares. The shareholder's list must be available
for inspection by any shareholder, beginning on the date on which
notice of the meeting is given for which the list was prepared and
continuing through the meeting. The list shall be available at the
corporation's principal office or at a place identified in the meeting
notice in the city where the meeting is to be held. A shareholder, his
agent or attorney is entitled on written demand to inspect, and
subject to the requirements of ss. 2.15 of this Article II, to copy
the list at his expense during regular business hours, and during the
period it is available for inspection. The corporation shall maintain
the shareholder list in written form or in another form capable of
conversion into written form within a reasonable time.
5
<PAGE> 10
ss. 2.7 SHAREHOLDER PROPOSALS.
(a) To the extent required by applicable law, a shareholder may
bring a proposal before an annual meeting of shareholders as
set forth in this ss.2.7. To be properly brought before an
annual meeting of shareholders, business must be (i)
specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of
Directors; (ii) otherwise properly brought before the meeting
by or at the direction of the Board of Directors; or (iii)
otherwise properly brought before the meeting by a
shareholder. In addition to any other applicable
requirements, for business to be properly brought before an
annual meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the secretary of
the Corporation. To be timely, a shareholder's notice must be
given, either by personal delivery or by United States mail,
postage prepaid, return receipt requested, to the secretary
of the Corporation not later than ninety days in advance of
the annual meeting. A shareholder's notice to the secretary
of the Corporation shall set forth for each matter the
shareholder proposes to bring before the annual meeting (i) a
description of the business desired to be brought before the
annual meeting (including the specific proposal(s) to be
presented) and the reasons for conducting such business at
the annual meeting; (ii) the name and record address of the
shareholder proposing such business; (iii) the class and
number of shares of the Corporation that are owned of record,
and the class and number of shares of the Corporation that
are held beneficially, but not held of record, by the
shareholder as of the record date for the meeting, if such
date has been made publicly available, or as of a date within
ten days of the effective date of the notice by the
shareholder if the record date has not been made publicly
available; and (iv) any interest of the shareholder in such
business. In the event that a shareholder attempts to bring
business before an annual meeting without complying with the
provisions of this ss.2.7, the chairman of the meeting shall
declare to the meeting that the business was not properly
brought before the meeting in accordance with the foregoing
procedures, and such business shall not be transacted. The
chairman of any annual meeting, for good cause shown and with
proper regard for the orderly conduct of business at the
meeting, may waive in whole or in part the operation of
this ss.2.7.
(b) If any shareholder of the Corporation notifies the
Corporation that such shareholder intends to present a
proposal for action at a forthcoming meeting of the
Corporation's shareholders and requests that the Corporation
include the proposal in its proxy statement and such
shareholder complies with all the requirements of Rule 14a-8
promulgated under the Securities Exchange Act of 1934, the
Corporation shall consider inclusion of such proposal in the
proxy
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statement unless it determines that the proposal is
inappropriate for consideration by the shareholders at the
meeting.
ss. 2.8 QUORUM AND VOTING REQUIREMENTS.
If the articles of incorporation or the South Carolina Model Business
Corporation Act of 1988 provides for voting by a single voting group
on a matter, action on that matter is taken when voted upon by that
voting group.
Shares entitled to vote as a separate voting group may take action on
a matter at a meeting only if a quorum of those shares exists with
respect to that matter. Unless the articles of incorporation, a bylaw
adopted pursuant to ss. 2.9 of this Article II, or the South Carolina
Model Business Corporation Act of 1988 provide otherwise, a majority
of the votes entitled to be cast on the matter by the voting group
constitutes a quorum of that voting group for action on that matter.
If the bylaws, articles of incorporation or the South Carolina Model
Business Corporation Act provide for voting by two or more voting
groups on a matter, action on that matter is taken only when voted
upon by each of those voting groups counted separately. Action may be
taken by one voting group on a matter even though no action is taken
by another voting group entitled to vote on the matter. With respect
to the matters described in ss.2.4(d) of these bylaws, action shall be
taken on any such matter only upon the vote of two-thirds of the votes
entitled to be cast for each voting group or class then existing.
Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes. If a quorum exists, action on a matter
(other than the election of directors) by a voting group is approved
if the votes cast within the voting group favoring the action exceed
the votes cast opposing the action, unless the articles of
incorporation, a bylaw adopted pursuant to ss. 2.9 of this Article II,
or the South Carolina Model Business Corporation Act of 1988 require a
greater number of affirmative votes.
ss. 2.9 INCREASING EITHER QUORUM OR VOTING REQUIREMENTS.
For purposes of this ss. 2.9, a "supermajority" quorum is a
requirement that more than a majority of the votes of the voting group
be present to constitute a quorum; and a "supermajority" voting
requirement is any requirement that requires the vote of more than a
majority of the affirmative votes of a voting group at a meeting.
The shareholders, as provided below, may adopt, amend or delete a
bylaw which fixes a "supermajority" quorum or "supermajority" voting
requirement.
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The adoption or amendment of a bylaw that adds, changes, or deletes a
"supermajority" quorum or voting requirement for shareholders must
meet the same quorum requirement and be adopted by the same vote and
voting groups required to take action under the quorum and voting
requirement then in effect or proposed to be adopted, whichever is
greater.
A bylaw that fixes a supermajority quorum or voting requirement for
shareholders may not be adopted, amended, or repealed by the board of
directors.
ss. 2.10 PROXIES.
At all meetings of shareholders, a shareholder may vote in person, or
vote by proxy which is executed in writing by the shareholder or which
is executed by his duly authorized attorney-in-fact. Such proxy shall
be dated and filed with the secretary of the corporation or other
person authorized to tabulate votes before or at the time of the
meeting. Unless a time of expiration is otherwise specified, a proxy
is valid for eleven months. A proxy is revocable unless executed in
compliance with ss. 33-7-220(d) of the South Carolina Code of Laws of
1976, as amended, or any succeeding statute of like tenor and effect.
ss. 2.11 VOTING OF SHARES.
Unless otherwise provided in the articles, each outstanding share of
common stock entitled to vote shall be entitled to one vote upon each
matter submitted to a vote at a meeting of shareholders. Each
outstanding share of other classes of stock, if any, shall have such
voting rights as may be prescribed by the Board of Directors.
Except as provided by specific court order, no shares held by another
corporation, if a majority of the shares entitled to vote for the
election of directors of such other corporation are held by the
corporation, shall be voted at any meeting or counted in determining
the total number of outstanding shares at any given time for purposes
of any meeting. Provided, however, the prior sentence shall not limit
the power of the corporation to vote any shares, including its own
shares, held by it in a fiduciary capacity.
Redeemable shares are not entitled to vote after notice of redemption
is mailed to the holders and a sum sufficient to redeem the shares has
been deposited with a bank, trust company, or other financial
institution under an irrevocable obligation to pay the holders the
redemption price on surrender of the shares.
ss. 2.12 CORPORATION'S ACCEPTANCE OF VOTES.
(a) If the name signed on a vote, consent, waiver, or proxy
appointment corresponds to the name of a shareholder, the
corporation if acting in
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good faith is entitled to accept the vote, consent, waiver,
or proxy appointment and give it effect as the act of the
shareholders.
(b) If the name signed on a vote, consent, waiver, or proxy
appointment does not correspond to the name of its
shareholder, the corporation if acting in good faith is
nevertheless entitled to accept the vote, consent, waiver, or
proxy appointment and give it effect as the act of the
shareholder if:
(1) the shareholder is an entity as defined in the South
Carolina Business Corporation Act of 1988 and the
name signed purports to be that of an officer or
agent of the entity;
(2) the name signed purports to be that of an
administrator, executor, guardian, or conservator
representing the shareholder and, if the corporation
requests, evidence of fiduciary status acceptable to
the corporation has been presented with respect to
the vote, consent, waiver, or proxy appointment;
(3) the name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the
corporation requests, evidence of this status
acceptable to the corporation has been presented
with respect to the vote, consent, waiver, or proxy
appointment;
(4) the name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the
shareholder and, if the corporation requests,
evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder
has been presented with respect to the vote,
consent, waiver, or proxy appointment;
(5) two or more persons are the shareholder as cotenants
or fiduciaries and the name signed purports to be
the name of at least one of the co-owners and the
person signing appears to be acting on behalf of all
the co-owners.
(c) The corporation is entitled to reject a vote, consent,
waiver, or proxy appointment if the secretary or other
officer or agent authorized to tabulate votes, acting in good
faith, has reasonable basis for doubt about the validity of
the signature on it or about the signatory's authority to
sign for the shareholder.
(d) The corporation and its officer or agent who accepts or
rejects a vote, consent, waiver, or proxy appointment in good
faith and in accordance with the standards of this section
are not liable in damages to the shareholder for the
consequences of the acceptance or rejection.
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(e) Corporate action based on the acceptance or rejection of a
vote, consent, waiver, or proxy appointment under this
section is valid unless a court of competent jurisdiction
determines otherwise.
ss. 2.13 INFORMAL ACTION BY SHAREHOLDERS.
Any action required or permitted to be taken at a meeting of the
shareholders may be taken without a meeting if one or more consents in
writing, setting forth the action so taken, shall be signed by all of
the shareholders entitled to vote with respect to the subject matter
thereof and are delivered to the corporation for inclusion in the
minute book. If the act to be taken requires that notice be given to
non-voting shareholders, the corporation shall give the non-voting
shareholders written notice of the proposed action at least 10 days
before the action is taken, which notice shall contain or be
accompanied by the same material that would have been required if a
formal meeting had been called to consider the action. A consent
signed under this section has the effect of a meeting vote and may be
described as such in any document.
ss. 2.14 NOMINATION AND VOTING FOR DIRECTORS.
(a) Nomination of persons to serve as directors of the
Corporation, other than those made by or on behalf of the
Board of Directors of the Corporation, shall be made in
writing and shall be delivered either by personal delivery or
by United States mail, postage prepaid, return receipt
requested, to the secretary of the Corporation no later than
(i) with respect to an election to be held at an annual
meeting of shareholders, ninety days in advance of such
meeting; and (ii) with respect to an election to be held at a
special meeting of shareholders for the election of
directors, the close of business on the seventh day following
the date on which notice of such meeting is first given to
shareholders. Each notice shall set forth: (i) the name and
address of the shareholder who intends to make the nomination
and of the person or persons to be nominated; (ii) a
representation that the shareholder is a holder of record of
stock of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (iii)
a description of all arrangements or understandings between
the shareholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder;
(iv) such other information regarding each nominee proposed
by such shareholder as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission, had the nominee been
nominated, or intended to be nominated, by the Board of
Directors; and (v) the consent of each nominee to serve as a
director of the Corporation if so
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elected. The chairman of the meeting may refuse to
acknowledge the nomination of any person not made in
compliance with the foregoing procedure. The chairman of any
such meeting, for good cause shown and with proper regard for
the orderly conduct of business at the meeting, may waive in
whole or in part the operation of this ss.2.14.
(b) Notwithstanding subsection (a) of this ss.2.14, if the
Corporation or any banking subsidiary of the Corporation is
subject to the requirements of Section 914 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989,
then no person may be nominated by a shareholder for election
as a director at any meeting of shareholders unless the
shareholder furnishes the written notice required by
subsection (a) of this Section 2.14 to the secretary of the
Corporation at least ninety days prior to the date of the
meeting and the nominee has received regulatory approval to
serve as a director prior to the date of the meeting.
(c) General Provision.
Unless otherwise provided in the articles, at each election
for directors every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy,
the number of votes he is entitled to cast for each director
to be elected and for whose election he has a right to vote.
(d) Plurality Requirement.
Unless otherwise provided in the articles of incorporation,
directors are elected by a plurality of the votes cast by the
shares entitled to vote in the election at a meeting at which
a quorum is present.
ss. 2.15 SHAREHOLDER'S RIGHTS TO INSPECT CORPORATE RECORDS.
(a) Minutes and Accounting Records.
The corporation shall keep as permanent records minutes of
all meetings of its shareholders and board of directors, a
record of all actions taken by the shareholders or board of
directors without a meeting, and a record of all actions
taken by a committee of the board of directors in place of
the board of directors on behalf of the corporation. The
corporation shall maintain appropriate accounting records.
(b) Absolute Inspection Rights of Records Required at Principal
Office.
If he gives the corporation written notice of his demand at
least five business days before the date on which he wishes
to inspect and copy,
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a shareholder (or his agent or attorney) has the right to
inspect and copy, during regular business hours any of the
following records, all of which the corporation is required
to keep at its principal office:
(1) its articles or restated articles of incorporation
and all amendments to them currently in effect;
(2) its bylaws or restated bylaws and all amendments to
them currently in effect;
(3) resolutions adopted by its board of directors
creating one or more classes or series of shares,
and fixing their relative rights, preferences, and
limitations, if shares issued pursuant to those
resolutions are outstanding;
(4) the minutes of all shareholders' meetings, and
records of all action taken by shareholders without
a meeting, for the past 10 years;
(5) all written communications to shareholders generally
within the past three years, including the financial
statement furnished for the past three years to the
shareholders;
(6) a list of the names and business addresses of its
current directors and officers;
(7) its most recent annual report delivered to the South
Carolina Department of Revenue; and
(8) if the shareholder owns at least one percent of any
class of shares, he may inspect and copy its federal
and state income tax returns for the last ten years.
(c) Conditional Inspection Right.
In addition, if he gives the corporation a written demand
made in good faith and for a proper purpose at least five
business days before the date on which he wishes to inspect
and copy, he describes with reasonable particularity his
purpose and the records he desires to inspect, and the
records are directly connected with his purpose, a
shareholder of a corporation (or his agent or attorney) is
entitled to inspect and copy, during regular business hours
at a reasonable location specified by the corporation, any of
the following records of the corporation:
(1) excerpts from minutes of any meeting of the board of
directors, records of any action of a committee of
the board of directors on
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behalf of the corporation, minutes of any meeting of
the shareholders, and records of action taken by the
shareholders or board of directors without a
meeting, to the extent not subject to inspection
under paragraph (a) of this ss. 2.15.
(2) accounting records of the corporation; and
(3) the record of shareholders (compiled no earlier than
the date of the shareholder's demand).
(d) Copy Costs.
The right to copy records includes, if reasonable, the right
to receive copies made by photographic, xerographic, or other
means. The corporation may impose a reasonable charge,
covering the costs of labor and material, for copies of any
documents provided to the shareholder. The charge may not
exceed the estimated cost of production or reproduction of
the records.
ss. 2.16 FINANCIAL STATEMENTS SHALL BE FURNISHED TO THE SHAREHOLDERS.
(a) The corporation shall furnish its shareholders annual
financial statements, which may be consolidated or combined
statements of the corporation and one or more of its
subsidiaries, as appropriate, that include a balance sheet as
of the end of the fiscal year, an income statement for that
year, and a statement of changes in shareholders' equity for
the year unless that information appears elsewhere in the
financial statements. If financial statements are prepared for
the corporation on the basis of generally accepted accounting
principles, the annual financial statements for the
shareholders also must be prepared on that basis.
(b) If the annual financial statements are reported upon by a
public accountant, his report must accompany them. If not, the
statements must be accompanied by a statement of the president
or the person responsible for the corporation's accounting
records:
(1) stating his reasonable belief whether the statements
were prepared on the basis of generally accepted
accounting principles and, if not, describing the
basis of preparation; and
(2) describing any respects in which the statements were
not prepared on a basis of accounting consistent
with the statements prepared for the preceding year.
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(c) A corporation shall mail the annual financial statements to
each shareholder within 120 days after the close of each
fiscal year. Thereafter, on written request from a
shareholder who was not mailed the statements, the
corporation shall mail him the latest financial statements.
ss. 2.17 DISSENTER'S RIGHTS.
Each shareholder shall have the right to dissent from, and obtain
payment for his shares when so authorized by the South Carolina Model
Business Corporation Act of 1988, articles of incorporation, these
bylaws, or in a resolution of the board of directors.
ARTICLE III. BOARD OF DIRECTORS
ss. 3.1 GENERAL POWERS.
Unless the articles of incorporation have dispensed with or limited
the authority of the board of directors by describing who will perform
some or all of the duties of a board of directors, all corporate
powers shall be exercised by or under the authority of, and the
business and affairs of the corporation shall be managed under the
direction of the board of directors.
ss. 3.2 NUMBER, TENURE AND QUALIFICATIONS OF DIRECTORS.
(a) Unless otherwise provided in the Articles of Incorporation,
the number of directors of the Corporation shall be that
number as may be fixed from time to time by resolution of the
Board of Directors, but in no event shall the number be less
than five or greater than fifteen. The initial number of
directors shall be eleven. The number of members of the Board
of Directors can be increased or decreased within the
foregoing range at any time by the Board of Directors. In
addition, unless provided otherwise by resolution of the
Board of Directors, if, in any case after proxy materials for
an annual meeting of shareholders have been mailed to
shareholders, any person named therein to be nominated at the
direction of the Board of Directors becomes unable or
unwilling to serve, the number of authorized directors shall
be automatically reduced by a number equal to the number of
such persons. The members of the Board of Directors need not
be shareholders nor need they be residents of any particular
state. At any time that the Board has six or more members,
unless provided otherwise by the Articles of Incorporation,
the terms of office of directors will be staggered by
dividing the total number of directors into three classes,
with each class accounting for one-third, as near as may be,
of the total. The terms of directors in the first class
expire at the first annual
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shareholders' meeting after their election, the terms of the
second class expire at the second annual shareholders'
meeting after their election, and the terms of the third
class expire at the third annual shareholders' meeting after
their election. At each annual shareholders' meeting held
thereafter, directors shall be chosen for a term of three
years to succeed those whose terms expire. If the number of
directors is changed, any increase or decrease shall be so
apportioned among the classes as to make all classes as
nearly equal in number as possible, and when the number of
directors is increased and any newly created directorships
are filled by the board, the terms of the additional
directors shall expire at the next election of directors by
the shareholders. Each director, except in the case of his
earlier death, written resignation, retirement,
disqualification or removal, shall serve for the duration of
his term, as staggered, and thereafter until his successor
shall have been elected and qualified.
(b) No individual who is or becomes a Business Competitor (as
defined below) or who is or becomes affiliated with, employed
by or a representative of any individual, corporation,
association, partnership, firm, business enterprise or other
entity or organization which the Board of Directors, after
having such matter formally brought to its attention,
determines to be in competition with the Corporation or any
of its subsidiaries (any such individual, corporation,
association, partnership, firm, business enterprise or other
entity or organization being hereinafter referred to as a
"Business Competitor") shall be eligible to serve as a
director if the Board of Directors determines that it would
not be in the Corporation's best interests for such
individual to serve as a director of the Corporation. Such
affiliation, employment or representation may include,
without limitation, service or status as an owner, partner,
shareholder, trustee, director, officer, consultant,
employee, agent, or counsel, or the existence of any
relationship which results in the affected person having an
express or implied obligation to act on behalf of a Business
Competitor; provided, however, that passive ownership of a
debt or equity interest not exceeding 1% of the outstanding
debt or equity, as the case may be, in any Business
Competitor shall not constitute such affiliation, employment
or representation. Any financial institution having branches
or affiliates in Greenville County, South Carolina, shall be
presumed to be a Business Competitor unless the Board of
Directors determines otherwise.
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ss. 3.3 REGULAR MEETINGS.
The Board of Directors may provide, by resolution, the time and place
(which may be within or without the State of South Carolina for the
holding of regular meetings without other notice than such resolution.
(If so permitted by ss. 3.7, any such regular meeting may be held by
telephone.)
ss. 3.4 SPECIAL MEETINGS.
Unless otherwise provided in the articles, special meetings of the
Board of Directors may be called by the Chairman of the Board of
Directors, the Chief Executive Officer, or the President. Any such
special meeting shall be held at such time and place as stated in the
notice of the meeting delivered pursuant to ss. 3.5. If permitted by
ss. 3.7, such meeting may be held by telephone.
ss. 3.5 NOTICE OF SPECIAL MEETING.
Notice of a special meeting may be given not less than twenty four
hours in advance by personal notice, telephone, facsimile, electronic
communication, overnight courier or United States mail to each
director. The notice need not describe the purpose or purposes of the
special meeting. Any director may waive notice of any meeting. Except
as provided in the next sentence, the waiver must be in writing,
signed by the director entitled to the notice, and filed with the
minutes or corporate records. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except
where a director attends a meeting for the express purpose of
objecting to the transaction of any business and at the beginning of
the meeting (or promptly upon his arrival) objects to holding the
meeting or transacting business at the meeting, and does not
thereafter vote for or assent to action taken at the meeting.
ss. 3.6 DIRECTOR QUORUM.
A majority of the number of directors in office immediately before the
meeting begins shall constitute a quorum for the transaction of
business at any meeting of the board of directors, unless the articles
require a greater number. Any amendment to this quorum requirement is
subject to the provisions of ss. 3.8 of this Article III.
ss. 3.7 MANNER OF ACTING.
(a) Required Vote.
The act of the majority of the directors present at a meeting
at which a quorum is present when the vote is taken shall be
the act of the board of directors unless the articles of
incorporation require a greater percent-
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age. Any amendment which changes the number of directors
needed to take action, is subject to the provisions of ss.
3.8 of this Article III.
(b) Telephone Meeting.
Unless the articles of incorporation provide otherwise, any
or all directors may participate in a regular or special
meeting by, or conduct the meeting through the use of, any
means of communication by which all directors participating
may simultaneously hear each other during the meeting. A
director participating in a meeting by this means is deemed
to be present in person at the meeting.
(c) Failure To Object To Action.
A director who is present at a meeting of the board of
directors or a committee of the board of directors when
corporate action is taken is deemed to have assented to the
action taken unless: (1) he objects at the beginning of the
meeting (or promptly upon his arrival) to holding it or
transacting business at the meeting; or (2) his dissent or
abstention from the action taken is entered in the minutes of
the meeting; or (3) he delivers written notice of his dissent
or abstention to the presiding officer of the meeting before
its adjournment or to the corporation immediately after
adjournment of the meeting. The right of dissent or
abstention is not available to a director who votes in favor
of the action taken.
ss. 3.8 ESTABLISHING A "SUPERMAJORITY" QUORUM OR VOTING REQUIREMENT.
For purposes of this ss. 3.8, a "supermajority" quorum is a
requirement that more than a majority of the directors in office
constitute a quorum; and a "supermajority" voting requirement is any
requirement that requires the vote of more than a majority of those
directors present at a meeting at which a quorum is present to be the
act of the directors.
A bylaw that fixes a supermajority quorum or supermajority voting
requirement may be amended or repealed:
(1) if originally adopted by the shareholders, only by the
shareholders (unless otherwise provided by the shareholders);
(2) if originally adopted by the board of directors, either by
the shareholders or by the board of directors.
A bylaw adopted or amended by the shareholders that fixes a
supermajority quorum or supermajority voting requirement for the board
of directors may
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provide that it may be amended or repealed only by a specified vote of
either the shareholders or the board of directors.
Subject to the provisions of the preceding paragraph, action by the
board of directors to adopt, amend, or repeal a bylaw that changes the
quorum or voting requirement for the board of directors must meet the
same quorum requirement and be adopted by the same vote required to
take action under the quorum and voting requirement then in effect or
proposed to be adopted, whichever is greater.
ss. 3.9 ACTION WITHOUT A MEETING.
Unless the articles of incorporation provide otherwise, action
required or permitted by the South Carolina Model Business Corporation
Act of 1988, to be taken at a board of directors' meeting may be taken
without a meeting if the action is assented to by all members of the
board.
The action may be evidenced by one or more written consents describing
the action taken, signed by each director, and included in the minutes
or filed with the corporate records reflecting the action taken.
Action evidenced by written consents under this section is effective
when the last director signs the consent, unless the consent specifies
a different effective date. A consent signed under this section has
the effect of a meeting vote and may be described as such in any
document.
ss. 3.10 REMOVAL OF A DIRECTOR.
The shareholders may remove one or more directors at a meeting called
for that purpose if notice has been given that a purpose of the
meeting is such removal. The removal may be with or without cause
unless the articles provide that directors may only be removed with
cause. If a director is elected by a voting group of shareholders,
only the shareholders of that voting group may participate in the vote
to remove him. A director may be removed only if the number of votes
cast to remove him exceeds the number of votes cast not to remove him.
ss. 3.11 VACANCIES.
Except as otherwise provided by law, in the Articles of Incorporation,
or in these Bylaws (a) the office of a director shall become vacant if
he dies, resigns, or is removed from office, and (b) the Board of
Directors may declare vacant the office of a director if (i) he is
interdicted or adjudicated an incompetent, (ii) an action is filed by
or against him, or any entity of which he is employed as his principal
business activity, under the bankruptcy laws of the United States,
(iii) in the sole opinion of the Board of Directors he becomes
incapacitated by illness or other infirmity so that he is unable to
perform his
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duties for a period of six months or longer, or (iv) he ceases at any
time to have the qualifications required by law, the Articles of
Incorporation or these Bylaws. The remaining directors may, by a
majority vote, fill any vacancy on the Board of Directors (including
any vacancy resulting from an increase in the authorized number of
directors, or from the failure of the shareholders to elect the full
number of authorized directors) for an unexpired term; provided that
the shareholders shall have the right at any special meeting called
for such purpose prior to action by the Board of Directors to fill the
vacancy.
ss. 3.12 COMPENSATION.
Unless otherwise provided in the articles, by resolution of the board
of directors, each director may be paid his expenses, if any, of
attendance at each meeting of the board of directors, and may be paid
a stated salary as director or a fixed sum for attendance at each
meeting of the board of directors or both. No such payment shall
preclude any director from serving the corporation in any capacity and
receiving compensation therefor.
ss. 3.13 COMMITTEES.
(a) Creation of Committees.
Unless the articles of incorporation provide otherwise, the
board of directors may create one or more committees and
appoint members of the board of directors to serve on them.
Each committee must have two or more members, who serve at
the pleasure of the board of directors.
(b) Selection of Members.
The creation of a committee and appointment of members to it
must be approved by the greater of (1) a majority of all the
directors in office when the action is taken or (2) the
number of directors required by the articles of incorporation
to take such action, (or if not specified in the articles the
numbers required by, ss. 3.7 of this Article III to take
action).
(c) Required Procedures.
ss.ss. 3.4, 3.5, 3.6, 3.7, 3.8 and 3.9 of this Article III,
which govern meetings, action without meetings, notice and
waiver of notice, quorum and voting requirements of the board
of directors, apply to committees and their members.
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(d) Authority.
Unless limited by the articles of incorporation, each
committee may exercise those aspects of the authority of the
board of directors which the board of directors confers upon
such committee in the resolution creating the committee.
Provided, however, a committee may not:
(1) authorize distributions;
(2) approve or propose to shareholders action that the
South Carolina Model Business Corporation Act of
1988 requires be approved by shareholders;
(3) fill vacancies on the board of directors or on any
of its committees;
(4) amend the articles of incorporation pursuant to the
authority of directors, to do so granted by ss.
33-10-102 of the South Carolina Code of Laws of
1976, as amended;
(5) adopt, amend, or repeal bylaws;
(6) approve a plan of merger not requiring shareholder
approval;
(7) authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the
board of directors; or
(8) authorize or approve the issuance or sale or
contract for sale of shares or determine the
designation and relative rights, preferences, and
limitations of a class or series of shares, except
that the board of directors may authorize a
committee (or a senior executive officer of the
corporation) to do so within limits specifically
prescribed by the board of directors.
ARTICLE IV. OFFICERS
ss. 4.1 NUMBER.
The officers of the Corporation shall consist of a chief executive
officer, chief financial officer, president and a secretary, each of
whom shall be elected by the Board of Directors. The Board of
Directors may also create and establish the duties of other offices as
it deems appropriate. The Board of Directors shall also elect a
chairman of the Board and may elect a vice chairman of the Board from
among its members. The Board of Directors from time to time may
appoint, or may authorize the president to appoint or authorize
specific officers
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to appoint, the persons who shall hold such other offices as may be
established by the Board of Directors, including one or more vice
presidents (including executive vice presidents, senior vice
presidents, assistant vice presidents), one or more assistant
secretaries, and one or more assistant treasurers. Any two or more
offices may be held by the same person.
ss. 4.2 APPOINTMENT AND TERM OF OFFICE.
The officers of the corporation shall be appointed by the board of
directors for a term as determined by the board of directors. (The
designation of a specified term grants to the officer no contract
rights, and the board can remove the officer at any time prior to the
termination of such term). If no term is specified, they shall hold
office until they resign, die, or until they are removed in the manner
provided in ss. 4.3 of this Article IV.
ss. 4.3 REMOVAL.
Unless appointed by the shareholders, any officer or agent may be
removed by the board of directors at any time, with or without cause.
Any officer or agent appointed by the shareholders may be removed by
the shareholders with or without cause. Such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Appointment of an officer or agent shall not of itself create contract
rights.
ss. 4.4 CHAIRMAN OF THE BOARD.
The Chairman of the Board of Directors, if elected by the Board of
Directors, or failing his election, the President, shall preside at
all meetings of the Board of Directors and shall perform such other
duties as may be prescribed from time to time by the Board of
Directors or by these bylaws.
ss. 4.5 PRESIDENT.
The president shall be the principal executive officer of the
corporation and, subject to the control of the board of directors,
shall in general supervise and control all of the business and affairs
of the corporation. He shall, when present, preside at all meetings of
the shareholders and of the board of directors. He may sign, with the
secretary or any other proper officer of the corporation thereunto
authorized by the board of directors, certificates for shares of the
corporation and deeds, mortgages, bonds, contracts, or other
instruments which the board of directors has authorized to be
executed, except in cases where the signing and execution thereof
shall be expressly delegated by the board of directors or by these
bylaws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the office of
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president and such other duties as may be prescribed by the board of
directors from time to time.
ss. 4.6 THE VICE-PRESIDENTS.
If appointed, in the absence of the president or in the event of his
death, inability or refusal to act, the vice-president (or in the
event there be more than one vice-president, the vice-presidents in
the order designated at the time of their election, or in the absence
of any designation, then in the order of their appointment) shall
perform the duties of the president, and when so acting, shall have
all the powers of and be subject to all the restrictions upon the
president. (If there is no vice-president, then the treasurer shall
perform such duties of the president). Any vice-president may sign,
with the secretary or an assistant secretary, certificates for shares
of the corporation the issuance of which have been authorized by
resolution of the board of directors; and shall perform such other
duties as from time to time may be assigned to him by the president or
by the board of directors.
ss. 4.7 THE SECRETARY.
The secretary shall: (a) keep the minutes of the proceedings of the
shareholders and of the board of directors in one or more books
provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these bylaws or as required by law;
(c) be custodian of the corporate records and of any seal of the
corporation and if there is a seal of the corporation, see that it is
affixed to all documents the execution of which on behalf of the
corporation under its seal is duly authorized; (d) when requested or
required, authenticate any records of the corporation; (e) keep a
register of the post office address of each shareholder which shall be
furnished to the secretary by such shareholder; (f) sign with the
president, or a vice-president, certificates for shares of the
corporation, the issuance of which shall have been authorized by
resolution of the board of directors; (g) have general charge of the
stock transfer books of the corporation; and (h) 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 president or by the
board of directors.
ss. 4.8 THE TREASURER.
The treasurer shall: (a) have charge and custody of and be responsible
for all funds and securities of the corporation; (b) receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation
in such banks, trust companies or other depositaries as shall be
selected by the board of directors; and (c) in general perform all of
the duties incident to the office of treasurer and such other duties
as from time to time may be assigned to him by the president or by the
board of directors. If required by the board of directors,
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the treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the board of
directors shall determine.
ss. 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.
The assistant secretaries, when authorized by the board of directors,
may sign with the president or a vice-president certificates for
shares of the corporation the issuance of which shall have been
authorized by a resolution of the board of directors. The assistant
treasurers shall respectively, if required by the board of directors,
give bonds for the faithful discharge of their duties in such sums and
with such sureties as the board of directors shall determine. The
assistant secretaries and assistant treasurers, in general, shall
perform such duties as shall be assigned to them by the secretary or
the treasurer, respectively, or by the president or the board of
directors.
ss.4.10 SALARIES.
The salaries of the officers shall be fixed from time to time by the
board of directors.
ARTICLE V. INDEMNIFICATION
OF DIRECTORS, OFFICERS,
AGENTS, AND EMPLOYEES
ss. 5.1 INDEMNIFICATION OF DIRECTORS
(a) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law, any person (an
"Indemnified Person") who was or is a party or is threatened
to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or other
proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal, by reason of
the fact that he, or a person for whom he is a legal
representative (or other similar representative), is or was a
director of the Corporation or is or was serving at the
Corporation's request as a director, officer, partner,
trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or
other enterprise, against expenses (including attorneys'
fees), judgments, fines, amounts paid in settlement or other
similar costs actually and reasonably incurred in connection
with such action, suit or proceeding. For purposes of this
Article V, all terms used herein that are defined in Section
33-8-500 of the Act or any successor provision or provisions
shall have the meanings so prescribed in such Section.
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(b) Without limiting the provisions of ss.5.1(a), the Corporation
shall indemnify a director who was wholly successful, on the
merits or otherwise, in the defense of any proceeding to
which he was a party because he is or was a director of the
Corporation against reasonable expenses incurred by him in
connection with the proceeding. In addition, the Corporation
shall indemnify an individual made a party to a proceeding
because he is or was a director against liability incurred in
the proceeding if: (i) he conducted himself in good faith;
(ii) he reasonably believed: (A) in the case of conduct in
his official capacity with the Corporation, that his conduct
was in its best interest; and (B) in all other cases, that
his conduct was at least not opposed to its best interest;
and (iii) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful. The
termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its
equivalent is not, of itself, determinative that the director
did not meet the standard of conduct described in this
subsection (b). The determination of whether the director met
the standard of conduct described in this subsection (b)
shall be made in accordance with Section 33-8-550 of the Act
or any successor provision or provisions.
ss. 5.2 ADVANCEMENT OF EXPENSES
(a) With respect to any proceeding to which an Indemnified Person
is a party because he is or was a director of the
Corporation, the Corporation shall, to the fullest extent
permitted by applicable law, pay for or reimburse the
Indemnified Person's reasonable expenses (including, but not
limited to, attorneys' fees and disbursements, court costs,
and expert witness fees) incurred by the Indemnified Person
in advance of final disposition of the proceeding.
(b) Without limiting the provisions of ss.5.2(a), the Corporation
shall, to the fullest extent permitted by applicable law, pay
for or reimburse the reasonable expenses (including, but not
limited to, attorneys' fees and disbursements, court costs
and expert witness fees) incurred by a director who is a
party to a proceeding in advance of final disposition of the
proceeding if: (a) the director furnishes the Corporation a
written affirmation of his good faith belief that he has met
the standard of conduct described in ss.5.1(b); (b) the
director furnishes the Corporation a written undertaking,
executed personally or on his behalf, to repay the advance if
it is ultimately determined that he did not meet such
standard of conduct; and (c) a determination is made that the
facts then known to those making the determination would not
preclude indemnification under this Article V. The
Corporation shall expeditiously pay the amount of such
expenses to the director following the director's delivery to
the Corporation of a written request for an advance pursuant
to this
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ss.5.2 together with a reasonable accounting of such
expenses. The undertaking required by this ss.5.2 shall be an
unlimited general obligation of the director but need not be
secured and may be accepted without reference to financial
ability to make repayment. Determinations and authorizations
of payments under this ss.5.2 shall be made in the manner
specified in Section 33-8-550 of the Act or any successor
provision or provisions.
ss. 5.3 INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS.
An officer of the Corporation who is not a director is entitled to the
same indemnification rights which are provided to directors of the
Corporation in ss.5.1 and the Corporation shall advance expenses to
officers of the Corporation who are not directors to the same extent
and in the same manner as to directors as provided in ss.5.2. In
addition, the Board of Directors shall have the power to cause the
Corporation to indemnify, hold harmless and advance expenses to any
officer, employee or agent of the Corporation who is not a director to
the fullest extent permitted by public policy, by adopting a
resolution to that effect identifying such officers, employees or
agents (by position and name) and specifying the particular rights
provided, which may be different for each of the persons identified.
Any officer entitled to indemnification pursuant to the first sentence
of this ss.5.3 and any officer, employee or agent granted
indemnification by the Board of Directors in accordance with the
second sentence of this ss.5.3 shall, to the extent specified herein
or by the Board of Directors, be an "Indemnified Party" for the
purposes of the provisions of this Article V.
ss. 5.4 INSURANCE.
The Corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
Corporation, or who, while a director, officer, employee or agent of
the Corporation, is or was serving at the request of the Corporation
as a director, officer, partner, trustee, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against liability asserted
against or incurred by him in that capacity or arising from his status
as a director, officer, employee or agent, whether or not the
Corporation would have the power to indemnify him against the same
liability under this Article V.
ss. 5.5 NONEXCLUSIVITY OF RIGHTS; AGREEMENTS.
The rights conferred on any person by this Article V shall neither
limit nor be exclusive of any other rights which such person may have
or hereafter acquire under any statute, agreement, provision of the
Articles, these Bylaws, vote of shareholders or otherwise. The
provisions of this Article V shall be deemed to
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constitute an agreement between the Corporation and each person
entitled to indemnification hereunder. In addition to the rights
provided in this Article V, the Corporation shall have the power, upon
authorization by the Board of Directors, to enter into an agreement or
agreements providing to any person who is or was a director, officer,
employee or agent of the Corporation certain indemnification rights.
Any such agreement between the Corporation and any director, officer,
employee or agent of the Corporation concerning indemnification shall
be given full force and effect, to the fullest extent permitted by
applicable law, even if it provides rights to such director, officer,
employee or agent more favorable than, or in addition to, those rights
provided under this Article V.
ss. 5.6 CONTINUING BENEFITS; SUCCESSORS.
The indemnification and advancement of expenses provided by or granted
pursuant to this Article V shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such person. For purposes
of this Article V, the term "Corporation" shall include any
corporation, joint venture, trust, partnership or unincorporated
business association that is the successor to all or substantially all
of the business or assets of this Corporation, as a result of merger,
consolidation, sale, liquidation or otherwise, and any such successor
shall be liable to the persons indemnified under this Article 6 on the
same terms and conditions and to the same extent as this Corporation.
ss. 5.7 INTERPRETATION; CONSTRUCTION.
This Article V is intended to provide indemnification to the directors
and permit indemnification to the officers of the Corporation to the
fullest extent permitted by applicable law as it may presently exist
or may hereafter be amended and shall be construed in order to
accomplish this result. To the extent that a provision herein prevents
a director or officer from receiving indemnification to the fullest
extent intended, such provision shall be of no effect in such
situation. If at any time the Act is amended so as to permit broader
indemnification rights to the directors and officers of this
Corporation, then these Bylaws shall be deemed to automatically
incorporate these broader provisions so that the directors and
officers of the Corporation shall continue to receive the intended
indemnification to the fullest extent permitted by applicable law.
ss. 5.8 AMENDMENT.
Any amendment to this Article V that limits or otherwise adversely
affects the right of indemnification, advancement of expenses or other
rights of any Indemnified Person hereunder shall, as to such
Indemnified Person, apply only
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to claims, actions, suits or proceedings based on actions, events or
omissions (collectively, "Post Amendment Events") occurring after such
amendment and after delivery of notice of such amendment to the
Indemnified Person so affected. Any Indemnified Person shall, as to
any claim, action, suit or proceeding based on actions, events or
omissions occurring prior to the date of receipt of such notice, be
entitled to the right of indemnification, advancement of expenses and
other rights under this Article V to the same extent as if such
provisions had continued as part of the Bylaws of the Corporation
without such amendment. This ss. 5.8 cannot be altered, amended or
repealed in a manner effective as to any Indemnified Person (except as
to Post Amendment Events) without the prior written consent of such
Indemnified Person.
ss. 5.9 SEVERABILITY.
Each of the Sections of this Article V, and each of the clauses set
forth herein, shall be deemed separate and independent, and should any
part of any such Section or clause be declared invalid or
unenforceable by any court of competent jurisdiction, such invalidity
or unenforceability shall in no way render invalid or unenforceable
any other part thereof or any separate Section or clause of this
Article V that is not declared invalid or unenforceable.
ARTICLE VI. ISSUANCE OF AND
TRANSFER OF SHARES
ss. 6.1 ISSUANCE AND CERTIFICATES FOR SHARES.
(a) Content.
All shares of stock issued by the corporation shall be issued
as authorized by the board of directors (unless the articles
of incorporation otherwise require) shall be evidenced by
certificates representing such shares of the corporation and
shall, at minimum, state on their face the name of the
issuing corporation and that it is formed under the laws of
South Carolina; the name of the person to whom issued; and
the number and class of shares and the designation of the
series, if any, the certificate represents; and be in such
form as determined by the board of directors. Such
certificates shall be signed (either manually or by
facsimile) by the president or a vice-president and by the
secretary or an assistant secretary and may be sealed with a
corporate seal or a facsimile thereof. Each certificate for
shares shall be consecutively numbered or otherwise
identified.
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(b) Legend as to Class or Series.
If the corporation is authorized to issue different classes
of shares or different series within a class, 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) must be summarized on the front
or back of each certificate. Alternatively, each certificate
may state conspicuously on its front or back that the
corporation will furnish the shareholder this information on
request in writing and without charge.
(c) Shareholder List.
The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and
date of issue, shall be entered on the stock transfer books
of the corporation.
(d) Transferring Shares.
All certificates surrendered to the corporation for transfer
shall be canceled and no new certificate shall be issued
until the former certificate for a like number of shares
shall have been surrendered and canceled, except that in case
of a lost, destroyed or mutilated certificate a new one may
be issued therefor upon such terms and indemnity to the
corporation as the board of directors may prescribe.
ss. 6.2 ISSUANCE OF PREFERRED SHARES.
(a) Preferred Shares in Series.
Preferred shares may be issued from time to time in one or
more series or classes in any manner permitted by law, as
determined from time to time by the board of directors and
stated in the resolution or resolutions providing for the
issuance of such shares adopted by the board of directors
pursuant to authority hereby vested in it, each series or
class to be appropriately designed, prior to the issuance of
any shares thereof, by some distinguishing letter, number, or
title. All shares of each series of preferred shares shall be
alike in every particular (except as to the dates from which
dividends shall commence to accrue) and all preferred shares
shall be of equal rank and have the same powers, preferences,
and rights, and shall be subject to the same qualifications,
limitations, and restrictions, without distinction between
the shares of different series thereof, except only in regard
to the following particulars, which may be different in
different series:
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(1) the annual rate or rates of dividends, if any, payable on
shares of such series, and the dates from which such
dividends shall commence to accrue, whether such dividends
are cumulative and have priority over other dividends
declared and paid by the corporation and whether such shares
shall participate in other dividends declared and paid by the
corporation;
(2) the amount or amounts payable upon redemption thereof and the
manner in which the same may be redeemed;
(3) the amount or amounts payable to holders thereof upon any
voluntary or involuntary liquidation, dissolution, or winding
up of the corporation;
(4) the provisions of the sinking fund, if any, with respect
thereto;
(5) the terms and rates of conversion or exchange thereof, if
convertible or exchangeable; and
(6) the provisions as to voting rights, if any; provided that
the shares of any series or class of preferred shares having
voting power shall not have more than one vote per share, and
if the stated dividends and amount payable on liquidation are
not paid in full, the shares of all series or classes of the
preferred shares shall share ratably in the payment of
dividends including accumulations, if any, in accordance with
the sums which would be payable on such shares if all
dividends were declared and paid in full, and in any
distribution of assets other than by way of dividends in
accordance with the sums which would be payable on such
distribution if all sums payable were discharged in full.
The designation of each particular series or class of preferred shares
and its terms in respect of the foregoing particulars shall be fixed
and determined by the board of directors in any manner permitted by
law and stated in the resolution or resolutions providing for the
issuance of such shares adopted by the board of directors pursuant to
authority hereby vested in it, before any shares of such series or
class are issued, and shall be set forth in full or summarized on the
certificates for such series or class. the board of directors may from
time to time increase the number of shares of any series or class of
preferred shares already created by providing that any unissued
preferred shares shall constitute part of such series or class, or may
decrease (but not below the number of shares thereof then outstanding)
the number of shares of any series or class of preferred
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shares already created by providing that any unissued shares
previously assigned to such series or class shall no longer constitute
part thereof. The board of directors is hereby empowered to classify
or reclassify any unissued preferred by fixing or altering the terms
thereof in respect of the above mentioned particulars and by assigning
the same to an existing or newly created series or class from time to
time before the issuance of such shares.
(b) Dividends. If rights to dividends are accorded to a
particular series or class, the holders of preferred shares
of such series or class shall be entitled to receive, out of
any funds legally available for the purpose, when and as
declared by the board of directors, cash dividends thereon at
such rate per annum as shall be fixed by resolution of the
board of directors for such series or class payable quarterly
on the days fixed by the board of directors.
(c) Redemption of Preferred Shares. The corporation, at the
option of the board of directors, may at any time redeem the
whole, or from time to time may redeem any part, of any
series or class of preferred shares, by paying therefor in
cash the amount which shall have been determined by the board
of directors, in the resolution or resolutions authorizing
such series or class to be payable upon the redemption of
such shares at such time. Redemption may be made of the whole
or any part of the outstanding shares of any one or more
series or class, in the discretion of the board of directors;
if the redemption be a part of a series or class, the shares
to be redeemed may be selected by lot, or all of the shares
of such series or class may be redeemed pro rata, in such
manner as may be prescribed by resolution of the board of
directors.
Subject to the foregoing provisions and to any qualifications,
limitations, or restrictions applicable to any particular
series of preferred shares which may be stated in the
resolution or resolutions providing for the issuance of such
series or class, the board of directors shall have authority
to prescribe from time to time the manner in which any series
or class of preferred shares shall be redeemed.
ss. 6.3 REGISTRATION OF THE TRANSFER OF SHARES.
The Corporation shall register the transfer of a certificate for
shares presented to it for transfer if: (a) the certificate is
properly endorsed by the registered owner or by his duly authorized
attorney; (b) the signature of such person has been guaranteed by a
commercial bank or brokerage firm that is a member of the National
Association of Securities Dealers and reasonable assurance is given
that such endorsements are effective; (c) the Corporation has no
notice of an adverse claim or has discharged any duty to inquire into
such a claim; (d)
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any applicable law relating to the collection of taxes has been
complied with; and (e) the transfer is in compliance with applicable
provisions of any transfer restrictions of which the Corporation shall
have notice.
ss. 6.4 RESTRICTIONS ON TRANSFER OF SHARES PERMITTED.
The Board of Directors, on behalf of the Corporation, or the
shareholders may impose restrictions on the transfer of shares
(including any security convertible into, or carrying a right to
subscribe for or acquire shares) to the maximum extent permitted by
law. A restriction does not affect shares issued before the
restriction was adopted unless the holders of the shares are parties
to the restriction agreement or voted in favor of the restriction. A
restriction on the transfer of shares is valid and enforceable against
the holder or a transferee of the holder if the restriction is
authorized by this ss. 6.4 and its existence is noted conspicuously on
the front or back of the certificate.
ss. 6.5 ACQUISITION OF SHARES.
The corporation may acquire its own shares and unless otherwise
provided in the articles of incorporation, the shares so acquired
constitute authorized but unissued shares.
If the articles of incorporation prohibit the reissue of acquired
shares, the number of authorized shares is reduced by the number of
shares acquired, effective upon amendment of the articles of
incorporation, which amendment shall be adopted by the shareholders or
the board of directors without shareholder action. The article of
amendment must be delivered to the Secretary of State and must set
forth:
(1) the name of the corporation;
(2) the reduction in the number of authorized shares, itemized by
class and series; and
(3) the total number of authorized shares, itemized by class and
series, remaining after reduction of the shares.
ss.6.6 CONTROL SHARE ACQUISITIONS STATUTE
The Corporation elects not to be subject to or governed by the South
Carolina Control Share Acquisitions Statute contained in Sections
35-2-101 to 35-2-111 of the South Carolina Code, or any successor
provision or provisions.
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ARTICLE VII. DISTRIBUTIONS
ss. 7.1 DISTRIBUTIONS.
The board of directors may authorize, and the corporation may make,
distributions (including dividends on its outstanding shares) in the
manner and upon the terms and conditions provided by law and in the
corporation's articles of incorporation.
ARTICLE VIII. CORPORATE SEAL
ss. 8.1 CORPORATE SEAl.
The board of directors may provide a corporate seal which may be
circular in form and have inscribed thereon any designation including
the name of the corporation, South Carolina as the state of
incorporation, and the words "Corporate Seal."
ARTICLE IX. EMERGENCY BYLAWS
ss. 9.1 EMERGENCY BYLAWS.
Unless the articles of incorporation provide otherwise, the following
provisions of this Article IX, ss. 9.1 "Emergency Bylaws" shall be
effective during an emergency which is defined as when a quorum of the
corporation's directors cannot be readily assembled because of some
catastrophic event.
During such emergency:
(a) Notice of Board Meetings.
Any one member of the board of directors or any one of the
following officers: president, any vice-president, secretary,
or treasurer, may call a meeting of the board of directors.
Notice of such meeting need be given only to those directors
whom it is practicable to reach, and may be given in any
practical manner, including by publication and radio. Such
notice shall be given at least six hours prior to
commencement of the meeting.
(b) Temporary Directors and Quorum.
One or more officers of the corporation present at the
emergency board meeting, as is necessary to achieve a quorum,
shall be considered to be
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directors for the meeting, and shall so serve in order of
rank, and within the same rank, in order of seniority. In the
event that less than a quorum (as determined by Article III
ss. 3.6) of the directors are present (including any officers
who are to serve as directors for the meeting), those
directors present (including the officers serving as
directors) shall constitute a quorum.
(c) Actions Permitted to be taken.
The board may as constituted in paragraph (b), and after
notice as set forth in paragraph (a):
(1) Officers Powers.
Prescribe emergency powers to any officer of the
corporation;
(2) Delegation of any Power.
Delegate to any officer or director, any of the
powers of the board of directors;
(3) Lines of succession.
Designate lines of succession of officers and
agents, in the event that any of them are unable to
discharge their duties;
(4) Relocate principal place of business.
Relocate the principal place of business, or
designate successive or simultaneous principal
places of business;
(5) All Other Action.
Take any other action, convenient, helpful, or
necessary to carry on the business of the
corporation.
ARTICLE X. AMENDMENTS
ss. 10.1 AMENDMENTS.
The corporation's board of directors may amend or repeal any of the
corporation's bylaws unless:
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(1) the articles of incorporation or the South Carolina Model
Business Corporation Act of 1988 reserve this power
exclusively to the shareholders in whole or part; or
(2) the shareholders in adopting, amending, or repealing a
particular bylaw provide expressly that the board of
directors may not amend or repeal that bylaw; or
(3) the bylaw either establishes, amends, or deletes, a
supermajority shareholder quorum or voting requirement (as
defined in ss. 2.9 of Article II).
Any amendment which changes the voting or quorum requirement for the
board must comply with Article III ss. 3.8, and for the shareholders,
must comply with Article II ss. 2.9.
The corporation's shareholders may amend or repeal the corporation's
bylaws even though the bylaws may also be amended or repealed by its
board of directors. Any notice of a meeting of shareholders at which
bylaws are to be adopted, amended, or repealed shall state that the
purpose, or one of the purposes, of the meeting is to consider the
adoption, amendment, or repeal of bylaws and contain or be accompanied
by a copy or summary of the proposal.
ARTICLE XI. GENERAL PROVISIONS
ss. 11.1 BOOKS AND RECORDS.
The Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its shareholders
and Board of Directors.
ss. 11.2 EXECUTION OF DOCUMENTS.
The Board of Directors or these Bylaws shall designate the officers,
employees and agents of the Corporation who shall have the power to
execute and deliver deeds, contracts, mortgages, bonds, debentures,
checks and other documents for and in the name of the Corporation, and
may authorize such officers, employees and agents to delegate such
power (including authority to redelegate) to other officers, employees
or agents of the Corporation. Unless so designated or expressly
authorized by these Bylaws, no officer, employee or agent shall have
any power or authority to bind the Corporation by any contract or
engagement or to pledge its credit or to render it liable pecuniarily
for any purpose or any amount.
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ss. 11.3 FISCAL YEAR.
The fiscal year of the Corporation shall be the same as the calendar
year.
ss. 11.4 RESIGNATION.
A director may resign by delivering written notice to the Board of
Directors, the chairman or the Corporation. Such resignation of a
director is effective when the notice is delivered unless the notice
specifies a later effective date. An officer may resign at any time by
delivering notice to the Corporation. Such resignation of an officer
is effective when the notice is delivered unless the notice specifies
a later effective date. If a resignation of an officer is made
effective at a later date and the Corporation accepts the future
effective date, the Board of Directors may fill the pending vacancy
before the effective date if the Board of Directors provides that the
successor does not take office until the effective date.
ss. 11.5 COMPUTATION OF DAYS.
In computing any period of days prescribed hereunder the day of the
act after which the designated period of days begins to run is not to
be included. The last day of the period so computed is to be included.
ss. 11.6 CONSTRUCTION.
If any portion of these Bylaws shall be invalid or inoperative, then,
so far as is reasonable and possible: (a) the remainder of these
Bylaws shall be considered valid and operative and (b) effect shall be
given to the intent manifested by the portion held invalid or
inoperative.
ss. 11.7 HEADINGS.
The headings are for convenience of reference only and shall not
affect in any way the meaning or interpretation of these Bylaws.
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<PAGE> 40
The undersigned, as President of the Corporation, hereby certifies
that the bylaws contained herein are the true and correct bylaws adopted by the
Corporation's board of directors in compliance with any procedural requirements
of the Corporation's Articles of Incorporation and the laws of the State of
South Carolina, and the rules and regulations promulgated thereunder.
/s/ James D. Stewart
-----------------------------------------------
James D. Stewart
President
Date: January 12, 1999
------------------------------------------
36
<PAGE> 1
EXHIBIT 4.2
[FORM OF FACE OF CERTIFICATE]
NEW COMMERCE BANCORP
INCORPORATED UNDER THE LAWS OF SOUTH CAROLINA
THE CORPORATION IS TO ISSUE 10,000,000 SHARES OF COMMON STOCK - PAR VALUE $.01
EACH
This certifies that _______________________________is the registered holder of
_______________________________ Shares of Common Stock which are fully paid and
non-assessable and transferable only on the books of the Corporation by the
holder hereof in person or by Attorney upon surrender of this Certificate
properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate
to be signed by its duly authorized officers and its Corporate Seal to be
hereunto affixed this ______________ day of _______________ A.D. 19____
____________________________________ ___________________________________
SECRETARY PRESIDENT
<PAGE> 2
[FORM OF BACK OF CERTIFICATE]
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
<TABLE>
<S> <C>
TEN COM --as tenants in common UNIF GIFT MIN ACT--____Custodian
TEN ENT --as tenants by the entireties (Cust) (Minor)
JT TEN --as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act____________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, _________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
________________________________________________________________________________
__________________________________________________________________________Shares
represented by the within Certificate, and do hereby irrevocably constitute and
appoint ____________________ Attorney to transfer the said shares on the books
of the within-named Corporation with full power of substitution in the
premises.
Dated, _____________________
In presence of
__________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
<PAGE> 1
EXHIBIT 5.1
negLAW OFFICES
Nelson Mullins Riley & Scarborough, L.L.P.
A REGISTERED LIMITED LIABILITY PARTNERSHIP
January 12, 1999
New Commerce BanCorp
712 N. Main Street
Greenville, South Carolina 29609
Re: Registration Statement on Form SB-2
Ladies and Gentlemen:
We have acted as counsel to New Commerce BanCorp (the "Company") in connection
with the filing of a Registration Statement on Form SB-2 (the "Registration
Statement"), under the Securities Act of 1933, covering the offering of up to
800,000 shares (the "Shares") of the Company's Common Stock, par value $.01 per
share. In connection therewith, we have examined such corporate records,
certificates of public officials, and other documents and records as we have
considered necessary or proper for the purpose of this opinion.
The opinions set forth herein are limited to the laws of the State of
South Carolina and applicable federal laws.
Based on the foregoing, and having regard to legal considerations which
we deem relevant, we are of the opinion that the Shares, when issued and
delivered as subscribed in the Registration Statement, will be legally issued,
fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus contained in the Registration Statement.
NELSON MULLINS RILEY & SCARBOROUGH
By: /s/ Neil E. Grayson
-------------------------------
Neil E. Grayson
<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of August 1,
1998, is made by and between MSB Investments Corp., a South Carolina corporation
(the "Employer" or the "Company") which is the proposed bank holding company for
a proposed national bank (the "Bank"), and JAMES D. STEWART, an individual
resident of South Carolina (the "Executive").
The Employer is in the process of organizing the Bank, and the
Executive has agreed to serve as President and Chief Executive Officer of the
Bank and the Company. Upon organization of the Bank, the Employer and the
Executive contemplate that this Agreement will be assigned by the Employer to
the Bank and that the Bank will assume the duties of the Company hereunder
(except pursuant to Section 3). In addition, if the organizers of the Company
elect to form a separate corporation to serve as the holding company of the
Bank, this Agreement will be assigned to that corporation and the Executive will
serve as President and Chief Executive Officer of that corporation. Following
any such assignment, the term "Employer" as used herein from time to time shall
refer to the Bank.
The Employer recognizes that the Executive's contribution to the growth
and success of the Bank during its organization and initial years of operations
will be a significant factor in the success of the Bank. The Employer desires to
provide for the employment of the Executive in a manner which will reinforce and
encourage the dedication of the Executive to the Bank and promote the best
interests of the Bank and its shareholders. The Executive is willing to serve
the Employer on the terms and conditions herein provided. Certain terms used in
this Agreement are defined in Section 17 hereof.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment. The Employer shall employ the Executive, and the
Executive shall serve the Employer, as President and Chief Executive Officer of
the Bank and the Company upon the terms and conditions set forth herein. The
Executive shall also serve on the Board of Directors of the Company and the
Bank. The Executive shall have such authority and responsibilities consistent
with his position as are set forth in the Company's or the Bank's Bylaws or
assigned by the Company's or the Bank's Board of Directors (the "Board") from
time to time. The Executive shall devote his full business time, attention,
skill and efforts to the performance of his duties hereunder, except during
periods of illness or periods of vacation and leaves of absence consistent with
Bank policy. The Executive may devote reasonable periods to service as a
director or advisor to other organizations, to charitable and community
activities, and to managing his personal investments, provided that such
activities do not materially interfere with the performance of his duties
hereunder and are not in conflict or competitive with, or adverse to, the
interests of the Company or the Bank.
<PAGE> 2
2. Term. Unless earlier terminated as provided herein, the
Executive's employment under this Agreement shall commence on the date hereof
and be for a term (the "Term") of three years; provided that the Executive or
the Bank may at any time, by written notice, fix the Term to a finite term of
two years commencing with the date of the notice. Notwithstanding the foregoing,
the Term of employment hereunder will end on the date that the Executive attains
the retirement age, if any, specified in the Bylaws of the Bank for directors of
the Bank.
3. Compensation and Benefits.
(a) Starting August 1, 1998, the Employer shall pay the
Executive a salary of $96,000, plus his yearly medical insurance premium. The
Board (or an appropriate committee of the Board) shall review the Executive's
salary at least annually and may increase (but not decrease) the Executive's
base salary if it determines in its sole discretion that an increase is
appropriate.
(b) The Executive shall receive a cash bonus in the
amount of $10,000 on the date that the Bank opens for business (the "Opening
Date"). For each calendar year beginning the year that the Bank opens, the
Executive shall be eligible to receive a cash bonus equaling up to 36% of his
salary if the Bank achieves certain performance levels for return on assets and
non-performing loans or other specified goals and criteria agreed to by the
Employer and the Executive (the "Bonus Plan"), with such bonus to be paid no
later than March 31st of the following calendar year.
(c) The Executive shall participate in the Bank's
long-term equity incentive program and be eligible for the grant of stock
options, restricted stock, and other awards thereunder or under any similar plan
adopted by the Company. On the date of the closing of the stock offering for the
initial capitalization of the Bank, or as soon thereafter as an appropriate
stock option plan is adopted by the Board, the Company shall grant to the
Executive an option to purchase a number of shares of Common Stock equal to 5%
of the number of shares sold in the offering. The award agreement for the stock
option shall provide that one-fifth of the shares subject to the option will
vest on each of the first five anniversaries of the Opening Date, but only if
the Executive remains employed by the Company on such date. In addition, the
award agreement will provide that the Executive's option shall be qualified as
an incentive stock option under the Internal Revenue Code of 1986, as amended
(the "Code"); all options shall be exercisable at any time during the ten years
following the date of grant at a price per share equal to the public offering
price in the offering (subject to standard antidilution adjustments in the event
of stock splits, dividends or combinations), which the parties agree is the fair
market value of the Common Stock as of the date of grant; and all options shall
be nontransferable and nonassignable by the Executive or by any other person
entitled hereunder to exercise any such rights; provided, however, that upon the
death of the Executive any rights granted hereunder shall be transferable by the
Executive's will or by the applicable laws of descent and distribution. In the
event of a Change in Control, the restrictions on any outstanding incentive
awards (including restricted stock) granted to the Executive under any incentive
plan or arrangement shall lapse and such incentive award shall become 100%
vested and all stock options, performance units, and stock appreciation rights
granted to the Executive shall become immediately exercisable and shall
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<PAGE> 3
become 100% vested. Nothing herein shall be deemed to preclude the granting to
the Executive of warrants or options under a director option plan in addition to
the options granted hereunder.
(d) The Executive shall participate in all retirement,
welfare and other benefit plans or programs of the Employer now or hereafter
applicable generally to employees of the Employer or to a class of employees
that includes senior executives of the Employer.
(e) The Employer shall provide the Executive with a term
life insurance policy providing for death benefits totaling $500,000 payable to
the Executive's spouse and heirs (and may provide for additional death benefits
of up to $500,000 payable to the Employer), and the Executive shall cooperate
with the Employer in the securing and maintenance of such policy. The Employer
shall also pay for an accident liability policy on the Executive totaling
$1,000,000 to protect the Employer from damages or lawsuits resulting from
injuries to third parties caused by the Executive.
(f) Prior to the Opening Date, the Employer shall provide
the Executive with a $700 monthly automobile allowance. Beginning upon the
Opening Date, at the Company's election, the Company shall provide the Executive
with either an automobile (at a cost not to exceed $30,000) owned or leased by
the Company of a make and model appropriate to the Executive's status, or a $700
monthly automobile allowance. If the Company provides the Executive with an
automobile, the Company shall provide for reasonable expenses associated with
the automobile, including, but not limited to insurance, taxes, etc.
(g) In addition, commencing on the Opening Date, the
Employer shall obtain a membership in and pay the initiation fee (not to exceed
$8,000) for and the dues pertaining to Holly Tree Country Club and shall
designate the Executive as the authorized user of such membership for so long as
the Executive remains the President and CEO of the Employer and this Agreement
remains in force.
(h) The Employer shall reimburse the Executive for
reasonable travel and other expenses related to the Executive's duties which are
incurred and accounted for in accordance with the normal practices of the
Employer.
4. Termination.
(a) The Executive's employment under this Agreement may
be terminated prior to the end of the Term only as follows:
(i) upon the death of the Executive;
(ii) upon the disability of the Executive for a
period of 180 days which, in the opinion of the Board of
Directors, renders him unable to perform the essential
functions of his job and for which reasonable accommodation is
unavailable. For purposes of this Agreement, a "disability" is
defined as a physical or mental impairment that substantially
limits one or more major life activities, and a "reasonable
accommodation" is one that does not impose an undue hardship
on the Employer;
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<PAGE> 4
(iii) by the Employer for Cause upon delivery of a
Notice of Termination to the Executive;
(iv) by the Executive for Good Reason upon
delivery of a Notice of Termination to the Employer within a
90-day period beginning on the 30th day after the occurrence
of a Change in Control or within a 90-day period beginning on
the one year anniversary of the occurrence of a Change in
Control;
(v) by the Employer if its effort to organize
the Bank is abandoned; and
(vi) by the Executive effective upon the 30th day
after delivery of a Notice of Termination.
(b) If the Executive's employment is terminated because
of the Executive's death, the Executive's estate shall receive any sums due him
as base salary and/or reimbursement of expenses through the end of the month
during which death occurred, plus any bonus earned or accrued under the Bonus
Plan through the date of death (including any amounts awarded for previous years
but which were not yet vested) and a pro rata share of any bonus with respect to
the current fiscal year which had been earned as of the date of the Executive's
death.
(c) During the period of any incapacity leading up to the
termination of the Executive's employment as a result of disability, the
Employer shall continue to pay the Executive his full base salary at the rate
then in effect and all perquisites and other benefits (other than any bonus)
until the Executive becomes eligible for benefits under any long-term disability
plan or insurance program maintained by the Employer, provided that the amount
of any such payments to the Executive shall be reduced by the sum of the
amounts, if any, payable to the Executive for the same period under any
disability benefit or pension plan of the Employer or any of its subsidiaries.
Furthermore, the Executive shall receive any bonus earned or accrued under the
Bonus Plan through the date of incapacity (including any amounts awarded for
previous years but which were not yet vested) and a pro rata share of any bonus
with respect to the current fiscal year which had been earned as of the date of
the Executive's incapacity.
(d) If the Executive's employment is terminated for Cause
as provided above, or if the Executive resigns (except for a termination of
employment pursuant to Section 4(e), the Executive shall receive any sums due
him as base salary and/or reimbursement of expenses through the date of such
termination.
(e) If the Executive's employment is terminated by the
Executive pursuant to clause (iv) of Section 4(a) or by the Employer for any
reason within a one year period after a Change in Control, in addition to other
rights and remedies available in law or equity, the Executive shall be entitled
to the following:
(i) the Employer shall pay the Executive in cash
within fifteen days of the date of termination severance
compensation in an amount equal to 100% of his then current
monthly base salary each month for twenty-four months from the
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<PAGE> 5
date of termination, plus any bonus earned or accrued under
the Bonus Plan through the date of termination (including any
amounts awarded for previous years but which were not yet
vested) and a pro rata share of any bonus with respect to the
current fiscal year which had been earned as of the date of
termination.
(ii) for the period beginning on the date of
termination and lasting until the lesser of ten years or the
date that the Executive attains the age of 65 (the
"Continuation Period"), the Employer shall at its expense
continue on behalf of the Executive and his dependents and
beneficiaries the life insurance, disability, medical, dental,
and hospitalization benefits provided (x) to the Executive at
any time during the 90-day period prior to the Change in
Control or at any time thereafter or (y) to other similarly
situated executives who continue in the employ of the Employer
during the Continuation Period. Such coverage and benefits
(including deductibles and costs) shall be no less favorable
to the Executive and his dependents and beneficiaries than the
most favorable of such coverages and benefits during any of
the periods referred to above. The Employer's obligation
hereunder with respect to the foregoing benefits shall be
limited to the extent that the Executive obtains any such
benefits pursuant to a subsequent employer's benefit plans, in
which case the Employer may reduce the coverage of any
benefits it is required to provide the Executive hereunder as
long as the aggregate coverages and benefits of the combined
benefit plans are comparable to the coverages and benefits
required to be provided hereunder. This subsection (ii) shall
not be interpreted so as to limit any benefits to which the
Executive or his dependents or beneficiaries may be entitled
under any of the Employer's employee benefit plans, programs,
or practices following the Executive's termination of
employment, including, without limitation, retiree medical and
life insurance benefits; and
(iii) the restrictions on any outstanding
incentive awards (including restricted stock) granted to the
Executive under the Company's or the Bank's long-term equity
incentive program or any other incentive plan or arrangement
shall lapse and become 100% vested, all stock options and
stock appreciation rights granted to the Executive shall
become immediately exercisable and shall become 100% vested,
all performance units granted to the Executive shall become
100% vested, and the restrictive covenants contained in
Section 9 shall not apply to the Executive.
(f) If the Executive's employment is terminated pursuant
to clause (v) of Section 4(a), the Executive shall receive any sums due him as
base salary and/or reimbursement of expenses through the date of such
termination.
(g) If the Employer terminates the Executive's employment
other than pursuant to clauses (i), (ii), (iii) or (v) of Section 4(a), the
Employer shall pay to the Executive severance compensation in an amount equal to
100% of his then current monthly base salary each month for twelve months from
the date of termination, plus any bonus earned or accrued
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<PAGE> 6
under the Bonus Plan through the date of termination (including any amounts
awarded for previous years but which were not yet vested) and a pro rata share
of any bonus with respect to the current fiscal year which had been earned as of
the date of the Executive's termination.
(h) With the exceptions of the provisions of this Section
4, and the express terms of any benefit plan under which the Executive is a
participant, it is agreed that, upon termination of the Executive's employment,
the Employer shall have no obligation to the Executive for, and the Executive
waives and relinquishes, any further compensation or benefits (exclusive of
COBRA benefits). At the time of termination of employment, the Employer and the
Executive shall enter into a mutually satisfactory form of release acknowledging
such remaining obligations and discharging both parties, as well as the
Employer's officers, directors and employees with respect to their actions for
or on behalf of the Employer, from any other claims or obligations arising out
of or in connection with the Executive's employment by the Employer, including
the circumstances of such termination.
(i) In the event that the Executive's employment is
terminated for any reason, the Executive shall (and does hereby) tender his
resignation as a director of the Employer and effective as of the date of
termination.
(j) The parties intend that the severance payments and
other compensation provided for herein are reasonable compensation for the
Executive's services to the Employer and shall not constitute "excess parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of
1986 and any regulations thereunder. In the event that the Employer's
independent accountants acting as auditors for the Employer on the date of a
Change in Control determine that the payments provided for herein constitute
"excess parachute payments," then the compensation payable hereunder shall be
increased, on a tax gross-up basis, so as to reimburse the Executive for the tax
payable by the Executive, pursuant to Section 4999 of the Internal Revenue Code,
on such "excess parachute payments," taking into account all taxes payable by
the Executive with respect to such tax gross-up payments hereunder, so that the
Executive shall be, after payment of all taxes, in the same financial position
as if no taxes under Section 4999 had been imposed upon him.
5. Ownership of Work Product. The Employer shall own all Work
Product arising during the course of the Executive's employment (prior, present
or future). For purposes hereof, "Work Product" shall mean all intellectual
property rights, including all Trade Secrets, U.S. and international copyrights,
patentable inventions, and other intellectual property rights in any
programming, documentation, technology or other work product that relates to the
Employer, its business or its customers and that employee conceives, develops,
or delivers to the Employer at any time during his employment, during or outside
normal working hours, in or away from the facilities of the Employer, and
whether or not requested by the Employer. If the Work Product contains any
materials, programming or intellectual property rights that the Executive
conceived or developed prior to, and independent of, the Executive's work for
the Employer, the Executive agrees to point out the pre-existing items to the
Employer and the Executive grants the Employer a worldwide, unrestricted,
royalty-free right, including the right to sublicense such items. The Executive
agrees to take such actions and execute such
6
<PAGE> 7
further acknowledgments and assignments as the Employer may reasonably request
to give effect to this provision.
6. Protection of Trade Secrets. The Executive agrees to maintain
in strict confidence and, except as necessary to perform his duties for the
Employer, the Executive agrees not to use or disclose any Trade Secrets of the
Employer during or after his employment. "Trade Secret" means information,
including a formula, pattern, compilation, program, device, method, technique,
process, drawing, cost data or customer list, that: (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
7. Protection of Other Confidential Information. In addition, the
Executive agrees to maintain in strict confidence and, except as necessary to
perform his duties for the Employer, not to use or disclose any Confidential
Business Information of the Employer during his employment and for a period of
24 months following termination of the Executive's employment. "Confidential
Business Information" shall mean any internal, non-public information (other
than Trade Secrets already addressed above) concerning the Employer's financial
position and results of operations (including revenues, assets, net income,
etc.); annual and long-range business plans; product or service plans; marketing
plans and methods; training, educational and administrative manuals; customer
and supplier information and purchase histories; and employee lists. The
provisions of Sections 6 and 7 above shall also apply to protect Trade Secrets
and Confidential Business Information of third parties provided to the Employer
under an obligation of secrecy.
8. Return of Materials. The Executive shall surrender to the
Employer, promptly upon its request and in any event upon termination of the
Executive's employment, all media, documents, notebooks, computer programs,
handbooks, data files, models, samples, price lists, drawings, customer lists,
prospect data, or other material of any nature whatsoever (in tangible or
electronic form) in the Executive's possession or control, including all copies
thereof, relating to the Employer, its business, or its customers. Upon the
request of the Employer, employee shall certify in writing compliance with the
foregoing requirement.
9. Restrictive Covenants.
(a) No Solicitation of Customers. During the Executive's
employment with the Employer and for a period of 12 months thereafter, the
Executive shall not (except on behalf of or with the prior written consent of
the Employer), either directly or indirectly, on the Executive's own behalf or
in the service or on behalf of others, (A) solicit, divert, or appropriate to or
for a Competing Business, or (B) attempt to solicit, divert, or appropriate to
or for a Competing Business, any person or entity that was a customer of the
Employer or any of its Affiliates on the date of termination and is located in
the Territory. This restriction does not apply after a Change in Control.
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<PAGE> 8
(b) No Recruitment of Personnel. During the Executive's
employment with the Employer and for a period of 12 months thereafter, the
Executive shall not, either directly or indirectly, on the Executive's own
behalf or in the service or on behalf of others, (A) solicit, divert, or hire
away, or (B) attempt to solicit, divert, or hire away, to any Competing Business
located in the Territory, any employee of or consultant to the Employer or any
of its Affiliates engaged or experienced in the Business, regardless of whether
the employee or consultant is full-time or temporary, the employment or
engagement is pursuant to written agreement, or the employment is for a
determined period or is at will. This restriction does not apply after a Change
in Control.
(c) Non-Competition Agreement. During the Executive's
employment with the Employer and for a period of 12 months thereafter, the
Executive shall not (without the prior written consent of the Employer) compete
with the Employer or any of its Affiliates by, directly or indirectly, forming,
serving as an organizer, director or officer of, or consultant to, or acquiring
or maintaining more than a 1% passive investment in, a depository financial
institution or holding company therefor if such depository institution or
holding company has one or more offices or branches located in the Territory.
Notwithstanding the foregoing, the Executive may serve as an officer of or
consultant to a depository institution or holding company therefor even though
such institution operates one or more offices or branches in the Territory, if
the Executive's employment does not directly involve, in whole or in part, the
depository financial institution's or holding company's operations in the
Territory. This restriction does not apply after a Change in Control.
10. Independent Provisions. The provisions in each of the above
Sections 9(a), 9(b), and 9(c) are independent, and the unenforceability of any
one provision shall not affect the enforceability of any other provision.
11. Successors; Binding Agreement. The rights and obligations of
this Agreement shall bind and inure to the benefit of the surviving corporation
in any merger or consolidation in which the Employer is a party, or any assignee
of all or substantially all of the Employer's business and properties. The
Executive's rights and obligations under this Agreement may not be assigned by
him, except that his right to receive accrued but unpaid compensation,
unreimbursed expenses and other rights, if any, provided under this Agreement
which survive termination of this Agreement shall pass after death to the
personal representatives of his estate.
12. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other; provided, however, that all
notices to the Employer shall be directed to the attention of the Employer with
a copy to the Secretary of the Employer. All notices and communications shall be
deemed to have been received on the date of delivery thereof.
13. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of South
Carolina without giving effect to the
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<PAGE> 9
conflict of laws principles thereof. Any action brought by any party to this
Agreement shall be brought and maintained in a court of competent jurisdiction
in State of South Carolina.
14. Non-Waiver. Failure of the Employer to enforce any of the
provisions of this Agreement or any rights with respect thereto shall in no way
be considered to be a waiver of such provisions or rights, or in any way affect
the validity of this Agreement.
15. Enforcement. The Executive agrees that in the event of any
breach or threatened breach by the Executive of any covenant contained in
Section 9(a), 9(b), or 9(c) hereof, the resulting injuries to the Employer would
be difficult or impossible to estimate accurately, even though irreparable
injury or damages would certainly result. Accordingly, an award of legal
damages, if without other relief, would be inadequate to protect the Employer.
The Executive, therefore, agrees that in the event of any such breach, the
Employer shall be entitled to obtain from a court of competent jurisdiction an
injunction to restrain the breach or anticipated breach of any such covenant,
and to obtain any other available legal, equitable, statutory, or contractual
relief. Should the Employer have cause to seek such relief, no bond shall be
required from the Employer, and the Executive shall pay all attorney's fees and
court costs which the Employer may incur to the extent the Employer prevails in
its enforcement action.
16. Saving Clause. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision or clause of this Agreement, or portion thereof, shall be held by any
court or other tribunal of competent jurisdiction to be illegal, void, or
unenforceable in such jurisdiction, the remainder of such provision shall not be
thereby affected and shall be given full effect, without regard to the invalid
portion. It is the intention of the parties that, if any court construes any
provision or clause of this Agreement, or any portion thereof, to be illegal,
void, or unenforceable because of the duration of such provision or the area or
matter covered thereby, such court shall reduce the duration, area, or matter of
such provision, and, in its reduced form, such provision shall then be
enforceable and shall be enforced. The Executive and the Employer hereby agree
that they will negotiate in good faith to amend this Agreement from time to time
to modify the terms of Sections 9(a), 9(b), and 9(c), the definition of the term
"Territory," and the definition of the term "Business," to reflect changes in
the Employer's business and affairs so that the scope of the limitations placed
on the Executive's activities by Section 9 accomplishes the parties' intent in
relation to the then current facts and circumstances. Any such amendment shall
be effective only when completed in writing and signed by the Executive and the
Employer.
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<PAGE> 10
17. Certain Definitions.
(a) "Affiliate" shall mean any business entity controlled
by, controlling or under common control with the Employer.
(b) "Business" shall mean the operation of a depository
financial institution, including, without limitation, the solicitation and
acceptance of deposits of money and commercial paper, the solicitation and
funding of loans and the provision of other banking services, and any other
related business engaged in by the Employer or any of its Affiliates as of the
date of termination.
(c) "Cause" shall consist of any of (A) the commission by
the Executive of a willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or grossly negligent
omission to act by the Executive, which is intended to cause, causes or is
reasonably likely to cause material harm to the Employer (including harm to its
business reputation), (B) the indictment of the Executive for the commission or
perpetration by the Executive of any felony or any crime involving dishonesty,
moral turpitude or fraud, (C) the material breach by the Executive of this
Agreement that, if susceptible of cure, remains uncured ten days following
written notice to the Executive of such breach, (D) the receipt of any form of
notice, written or otherwise, that any regulatory agency having jurisdiction
over the Employer intends to institute any form of formal or informal (e.g., a
memorandum of understanding which relates to the Executive's performance)
regulatory action against the Executive or the Employer or the Employer
(provided that the Board of Directors determines in good faith, with the
Executive abstaining from participating in the consideration of and vote on the
matter, that the subject matter of such action involves acts or omissions by or
under the supervision of the Executive or that termination of the Executive
would materially advance the Employer's compliance with the purpose of the
action or would materially assist the Employer in avoiding or reducing the
restrictions or adverse effects to the Employer related to the regulatory
action); (E) the exhibition by the Executive of a standard of behavior within
the scope of his employment that is materially disruptive to the orderly conduct
of the Employer's business operations (including, without limitation, substance
abuse or sexual misconduct) to a level which, in the Board of Directors' good
faith and reasonable judgment, with the Executive abstaining from participating
in the consideration of and vote on the matter, is materially detrimental to the
Employer's best interest, that, if susceptible of cure remains uncured ten days
following written notice to the Executive of such specific inappropriate
behavior; (F) the failure of the Executive to devote his full business time and
attention to his employment as provided under this Agreement that, if
susceptible of cure, remains uncured 30 days following written notice to the
Executive of such failure; or (G) the consistent failure by the Executive to
achieve or maintain the performance goals established by Bank management and
approved by the Board of Directors from time to time for the Executive and the
Company.
(d) "Change in Control" shall mean the occurrence during
the Term of any of the following events, unless such event is a result of a
Non-Control Transaction:
(i) The individuals who, as of the date of this
Agreement, are members of the Board of Directors of the
Employer (the "Incumbent Board") cease for any
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<PAGE> 11
reason to constitute at least a majority of the Board of
Directors of the Employer; provided, however, that if the
election, or nomination for election by the Employer's
shareholders, of any new director was approved in advance by a
vote of at least a majority of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered
as a member of the Incumbent Board; provided, further, that no
individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act"), or other actual or
threatened solicitation of proxies or consents by or on behalf
of any person other than the Board of Directors of the
Employer (a "Proxy Contest"), including by reason of any
agreement intended to avoid or settle any Election Contest or
Proxy Contest.
(ii) An acquisition (other than directly from the
Employer) of any voting securities of the Employer (the
"Voting Securities") by any "Person" (as the term "person" is
used for purposes of Section 13(d) or 14(d) of the Exchange
Act) immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of the combined voting power
of the Employer's then outstanding Voting Securities;
provided, however, that in determining whether a Change in
Control has occurred, Voting Securities which are acquired in
a Non-Control Acquisition shall not constitute an acquisition
which would cause a Change in Control.
(iii) Approval by the shareholders of the Employer
of: (i) a merger, consolidation, or reorganization involving
the Employer; (ii) a complete liquidation or dissolution of
the Employer; or (iii) an agreement for the sale or other
disposition of all or substantially all of the assets of the
Employer to any Person (other than a transfer to a
Subsidiary).
(iv) A notice of an application is filed with the
Office of Comptroller of the Currency (the "OCC") or the
Federal Reserve Board or any other bank or thrift regulatory
approval (or notice of no disapproval) is granted by the
Federal Reserve, the OCC, the Federal Deposit Insurance
Corporation, or any other regulatory authority for permission
to acquire control of the Employer or any of its banking
subsidiaries.
(e) "Competing Business" shall mean any business that, in
whole or in part, is the same or substantially the same as the Business.
(f) "Good Reason" shall mean the occurrence after a
Change in Control of any of the events or conditions described in subsections
(i) through (viii) hereof:
(i) a change in the Executive's status, title,
position or responsibilities (including reporting
responsibilities) which, in the Executive's reasonable
judgment, represents a material adverse change from his
status, title,
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position or responsibilities as in effect at any time within
ninety days preceding the date of a Change in Control or at
any time thereafter; the assignment to the Executive of any
duties or responsibilities which, in the Executive's
reasonable judgment, are inconsistent with his status, title,
position or responsibilities as in effect at any time within
ninety days preceding the date of a Change in Control or at
any time thereafter; any removal of the Executive from or
failure to reappoint or reelect him to any of such offices or
positions, except in connection with the termination of his
employment for Disability or Cause, as a result of his death,
or by the Executive other than for Good Reason, or any other
change in condition or circumstances that in the Executive's
reasonable judgment makes it materially more difficult for the
Executive to carry out the duties and responsibilities of his
office than existed at any time within ninety days preceding
the date of Change in Control or at any time thereafter;
(ii) a material reduction in the Executive's base
salary or any failure to pay the Executive any compensation or
benefits to which he is entitled within five days of the date
due;
(iii) the Employer's requiring the Executive to be
based at any place outside a 30-mile radius from the executive
offices occupied by the Executive immediately prior to the
Change in Control, except for reasonably required travel on
the Employer's business which is not materially greater than
such travel requirements prior to the Change in Control;
(iv) the failure by the Employer to (A) continue
in effect (without material reduction in benefit level and/or
reward opportunities) any material compensation or employee
benefit plan in which the Executive was participating at any
time within ninety days preceding the date of a Change in
Control or at any time thereafter, unless such plan is
replaced with a plan that provides substantially equivalent
compensation or benefits to the Executive, or (B) provide the
Executive with compensation and benefits, in the aggregate,
substantially equivalent (in terms of benefit levels and/or
reward opportunities) to those provided for under each other
employee benefit plan, program and practice in which the
Executive was participating at any time within ninety days
preceding the date of a Change in Control or at any time
thereafter;
(v) the insolvency or the filing (by any party,
including the Employer) of a petition for bankruptcy of the
Employer, which petition is not dismissed within sixty days;
(vi) any material breach by the Employer of any
material provision of this Agreement;
(vii) any purported termination of the Executive's
employment for Cause by the Employer which does not comply
with the terms of this Agreement; or
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<PAGE> 13
(viii) the failure of the Employer to obtain an
agreement, satisfactory to the Executive, from any successor
or assign to assume and agree to perform this Agreement, as
contemplated in Section 11 hereof.
Any event or condition described in clause (i) through (viii) above
which occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a third party, or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control. The Executive's
right to terminate his employment for Good Reason shall not be affected by his
incapacity due to physical or mental illness.
(g) "Non-Control Transaction" shall mean a transaction
described below:
(i) the shareholders of the Employer,
immediately before such merger, consolidation or
reorganization, own, directly or indirectly, immediately
following such merger, consolidation or reorganization, at
least 50% of the combined voting power of the outstanding
voting securities of the corporation resulting from such
merger, consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such
merger, consolidation or reorganization; and
(ii) immediately following such merger,
consolidation or reorganization, the number of directors on
the board of directors of the Surviving Corporation who were
members of the Incumbent Board shall at least equal the number
of directors who were affiliated with or appointed by the
other party to the merger, consolidation or reorganization.
(h) "Territory" shall mean a radius of ten miles from (i)
the main office of the Employer or (ii) any branch office of the Employer.
(i) "Notice of Termination" shall mean a written notice
of termination from the Employer of the Executive which specifies an effective
date of termination, indicates the specific termination provision in this
Agreement relied upon, and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
18. Expenses. The Employer shall pay all legal fees and related
expenses (including the costs of experts, evidence, and counsel) incurred by the
Executive as they become due as a result of (a) the preparation of this
Agreement, (b) the Executive's termination of employment (including all such
fees and expenses, if any, incurred in contesting or disputing any such
termination of employment), and (c) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement. However, the party against
which any final judgment is obtained in any litigation resulting from the
circumstances described in clauses (b) or (c) shall
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<PAGE> 14
pay or reimburse the successful party for all legal fees and related expenses
incurred by such successful party in such litigation.
19. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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<PAGE> 15
IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective as
of the date first above written.
MSB INVESTMENTS CORP.
By: /s/ Dennis Raines
-------------------------------
Name: Dennis Raines
Title: Treasurer
EXECUTIVE
/s/ James D. Stewart
-----------------------------------
James D. Stewart
15
<PAGE> 1
EXHIBIT 10.3
AGREEMENT TO BUY AND SELL
1. PARTIES. This legally binding contract entered into on this 30th day of
September, 1998, between Stephen M. Young and Lewis P. Young, Trustees of
Wilbert Burial Vault, Inc., Profit Sharing Plan (hereafter the "Seller"), and
MSB Investments Corp. (hereafter the "Buyer").
2. PROPERTY TO BE SOLD. Subject to terms and conditions herein, Seller
agrees to sell and Buyer agrees to buy, approximately 43,600 square feet of
property as shown on the attached EXHIBIT A.
3. PURCHASE PRICE. The Purchase Price shall be $10.00 per square foot to
be adjusted upon final survey net of any highway right of way.
4. EFFECTIVE DATE. The Effective Date of this Agreement will be the date
of the last signature of the parties. Should the Inspection Period or any
Extension fall on a weekend or holiday, the following business day shall be the
date of expiration.
5. METHOD OF PAYMENT. Within three (3) days of execution of this
Agreement, the Buyer shall pay as earnest money the sum of Five Thousand and
00/100 ($5,000) Dollars to Caine Company, Inc., P.O. Box 2287, Greenville, South
Carolina 29602, as escrow agent. Seller shall grant Buyer an Inspection Period
as defined in Paragraph 15. Following the Inspection Period, Buyer may deposit
in escrow an additional Five Thousand and 00/100 ($5,000) Dollars to extend this
Agreement an additional ninety (90) days. However, if Buyer elects to extend the
Inspection Period, Buyer herein agrees that the only contingencies remaining
shall be satisfactory title and the contingencies outlined in Paragraph 14
herein. In the event Buyer does not notify Seller of its intention to exercise
the extension period at the expiration of the Inspection Period, this Agreement
will terminate, and Seller will refund earnest money to Buyer. At closing, the
balance of the Purchase Price shall be paid in cash. The amounts paid by Buyer
as earnest money under this Paragraph 5 shall be applied as a credit against the
Purchase Price.
6. CLOSING COSTS. Closing Costs, including the costs of obtaining any
financing shall be paid as follows:
(a) Seller shall provide or pay for preparation of deed, cost of
deed stamps, all deed recording fees pursuant to Title 12, Chapter 24, S.C. Code
of Laws, and/or any other documentary stamps or transfer taxes which are now or
may hereafter be applicable to real estate transfers, and any cost necessary to
provide a marketable title, including recording of any satisfactions, and any
cost necessary to provide a marketable title, including recording of any
satisfactions, property taxes to the day of closing, and any other cost agreed
to herein.
<PAGE> 2
(b) Unless otherwise agreed herein, Buyer shall pay the costs of
the title examination, all recording fees (except for deed recording fees
pursuant to Title 12, Chapter 24, S.C. Code of Laws, which shall be Seller's
obligation), and, if applicable, any loan costs, the costs of any appraisal, and
the preparation of other closing documents.
7. CLOSING DATE. The Closing Date shall be no later than thirty (30) days
following the expiration of the Inspection Period and all extensions provided in
this Agreement.
8. POSSESSION. Seller shall give possession to the Buyer at closing,
provided title has passed.
9. AUTHORITY. Seller represents to Buyer that it either owns the subject
property or has full authority to enter into an agreement to sell such property
on behalf of the owners.
10. ENTIRE AGREEMENT. This written instrument expresses the Entire
Agreement and all promises, covenants, and warranties between the Buyer and
Seller. It can only be changed by a subsequent written instrument (Addendum)
signed by both parties.
11. REAL PROPERTY. The Real Property to be sold, unless otherwise agreed by
the parties, includes all improvements of any kind, which are attached to or
planted on the premises. Seller represents and warrants that there are no
persons who have any outstanding agreements to acquire any interest in the
property and no outstanding liens affecting the property and that there is no
pending litigation affecting the property. Seller will maintain property with
all applicable laws and regulations.
12. PRORATIONS. Property taxes and rent, as well as other expenses and
income of the property, if applicable, shall be apportioned to the date of
closing. Annual expenses or income shall be apportioned using 365 days. Monthly
property expenses or income shall be apportioned by the number of days in the
month of closing. The amount of the property taxes shall be estimated by closing
attorney or agent using information available. Prorations at closing shall be
final.
13. ENCUMBRANCES AND RESTRICTIONS. Seller shall convey marketable title to
the property to Buyer in fee simple free from all liens, except restrictions of
record (see EXHIBIT B) and those Buyer has agreed to assume.
If Seller is unable to convey marketable title without a court action
or incurring any unusual expenses or within thirty ('30) days after herein
specified closing date, Buyer has the option of terminating this Agreement by
giving written notice to the Seller.
14. CONTINGENCIES. Purchase of the property is contingent on:
(a) Buyer obtaining approval from the Office of the Comptroller of
the Currency (OCC) of its charter as a national bank or bank holding company by
April 1, 1999;
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(b) Buyer completing successfully an offering of its stock by
April 1, 1999 as a result of which not less that $6,000,000 in capital is raised
by the Buyer.
In the event that the herein listed contingencies are not resolved to
Buyer's satisfaction, Buyer may terminate this Agreement, all earnest money
deposits paid by Buyer under Paragraph 5 hereof will be refunded, and all
obligations of each party shall cease to exist.
15. INSPECTION PERIOD. For a period of ninety (90) days from the date of
execution of this Agreement, Seller grants Buyer and its agents the right to
enter the property during an Inspection Period for conducting soil test, market
studies, borings, engineering studies, environmental tests, or other such
exploratory measures as Buyer deems prudent. In the event Buyer, at its sole
discretion, determines that property is unsuitable, Buyer may terminate
Agreement, earnest money deposits shall be refunded to Buyer, and all
obligations of each party to the other shall cease to exist.
16. ENVIRONMENTAL HAZARDS. Seller represents and warrants that Seller has
received no notices form any federal or state agency advising Seller of any
potential environmental hazards or, contamination on this parcel or any
adjoining parcel, and further, the Seller has no knowledge of any chemical,
petroleum, or other hazardous material storage or burial on the subject property
or that any other environmental hazards exist. In the event that any
environmental audit or assessment requires further evaluation, the Inspection
Period as outlined in Paragraph 15 will be extended until thirty (30) days
following the reporting of the results of such additional tests or evaluations.
Additionally, Seller agrees to refund all earnest money deposits in the event
that an environmental finding exceeds acceptable state or federal guidelines.
Buyer shall be obligated to initiate any environmental studies within ten (10)
days of the Effective Date of this Agreement.
17. RISK OF LOSS OF DAMAGE. Any loss or damage to the property by fire or
other casualty until the day of closing shall be the responsibility of Seller.
In such case, Seller shall have the option of restoring property to its present
condition within thirty (30) days after herein specified closing date, with date
of closing and possession to be extended accordingly. If property is not
restored within said period, Buyer shall have the right to terminate this
Agreement by written notice to Seller. In such case, both parties shall execute
a written release of the other from this Agreement.
18. DEFAULT. If Buyer elects to terminate this Agreement (after Inspection
Period), Seller shall retain all earnest money deposits as full liquidated
damages, and obligations of each party to the other shall cease. If termination
is because of default by Seller, Buyer shall seek all remedies of specified
performance including damages.
19. PERSONS BOUND. The benefits and obligations of this Agreement shall
inure to and bind heirs, assigns, successors, executors or administrators.
Whenever used, singular shall include plural, and use of any gender shall
include all. This is a legally binding Agreement.
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<PAGE> 4
20. TELECOPY. Buyer and Seller both agree that receipt of a signed
Agreement by telecopy (FAX) will be the same as receipt of an original signed
Agreement.
21. SIGN EASEMENT. Prior to or at Closing, Buyer agrees to provide Seller a
sign easement at the front comer of Buyer's lot at Woodruff Road and Five Fork
Plaza Court and immediately next to Five Forks Plaza Court. Said easement shall
be a minimum of ten feet (10') wide and five feet (5) deep - any larger size
sign easement shall be mutually agreed upon by Buyer and Seller. The sign
easement shall be included in the final survey prior to Closing.
22. MODULAR BANK BUILDING. Seller agrees to allow Buyer to locate a modular
bank building on the Property to be purchased for a period of time until the new
bank building can be constructed; however, Buyer is required to initiate
construction for the new bank building within eighteen (18) months of Closing
for the Property. If the new bank building is not completed and a Certificate of
Occupancy issued within thirty six (36) months of Closing, then Buyer agrees to
remove the modular unit from the Property within thirty (30) days notice from
Seller.
23. STORMWATER MANAGEMENT POND EASEMENT AND MAINTENANCE. Prior to or at
Closing, Buyer and Seller mutually agree to execute a Stormwater Management Pond
Easement and Management Agreement that establishes an easement for Buyer's use
of a joint retention pond and an agreement for joint maintenance of the
retention pond.
24. STORMWATER EASEMENT. Prior to or at Closing, Seller shall provide Buyer
with an easement across Seller's adjoining property for stormwater drainage to
the joint retention pond.
25. LIMITATIONS ON ASSIGNMENT. Buyer understands that the specific use of
the subject property has a significant impact on the development of the
remainder of Seller's adjoining property. Consequently, Buyer herein agrees that
this Contract may not be assigned to a non-bank user without the prior written
permission of the Seller.
26. DRIVEWAY CROSS EASEMENT AND MAINTENANCE. Buyer and Seller agree to
share equally in the costs of constructing a joint private driveway to the rear
of the property and approximately perpendicular to Five Forks Plaza Court (see
location of driveway on Exhibit A herein). Buyer and Seller agree to provide for
joint easement and for maintenance of said driveway on a 50/50-percentage basis.
27. JOINT CURB CUT AND DRIVEWAY ENTRY FROM WOODRUFF ROAD. During the
Inspection Period, Buyer agrees to request a curb cut from the South Carolina
Department of Transportation with the centerline of the curb cut to be located
at the southeastern comer of the Property along Woodruff Road (see Exhibit A).
If the South Carolina Department of Transportation agrees to a curb cut at this
location, then Buyer agrees to construct the curb cut and driveway beginning at
the pavement edge of the new Woodruff Road, connecting with the front boundary
of the Property, and extending from the property line inward by a distance to be
mutually agreed upon by Buyer and Seller prior to Closing.
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Buyer and Seller shall share in the costs of the curb cut and driveway on a
50/50-percentage basis. Buyer and Seller shall execute an agreement for joint
easement of the entry driveway at or prior to closing.
28. EXPIRATION. This offer will expire and become null and void if not
executed by Seller and returned by Buyer by _____________________________.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties.
SELLER: Wilbert Burial Vault Co., Inc.
Profit Sharing Plan
/s/ John W. Fort By: /s/ Stephen M. Young 09/30/98
- ----------------------- -----------------------------------------
Witness Trustee Date
BUYER: MSB Investments Corp.
/s/ Gwen Britt By: /s/ James D. Stewart
- ----------------------- -----------------------------------------
Witness Trustee Date
Its: President 09/24/98
---------------------------------------
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<PAGE> 1
EXHIBIT 10.4
AGREEMENT TO BUY AND SELL
1. PARTIES. This legally binding contract entered into on this 26th day of
October, 1998, between Hawkins Development Corporation (hereafter the "Seller"),
and MSB Investments Corp. (hereafter the "Buyer"). Buyer acknowledges that
seller has the property to be sold as defined in paragraph 2 under contract to
close by December 31, 1998.
2. PROPERTY TO BE SOLD. Subject to terms and conditions herein, Seller
agrees to sell and Buyer agrees to buy, approximately 73,684 square feet of
property as shown on the attached EXHIBIT A. The exact site, configuration and
description of the property shall be determined by a site plan and survey
acceptable to Buyer and Seller prior to the expiration of the Feasibility Period
provided below.
3. PURCHASE PRICE. The Purchase Price shall be $8.00 per square foot to be
adjusted upon final survey.
4. EFFECTIVE DATE. The Effective Date of this Agreement will be the date
of the last signature of the parties. Should the Inspection Period or any
Extension fall on a weekend or holiday, the following business day shall be the
date of expiration.
5. METHOD OF PAYMENT. Within three (3) days of execution of this
Agreement, the Buyer shall pay as earnest money the sum of Fifteen Thousand and
00/100 ($15,000) Dollars to Easlan Capital Caine, 30 Petewood Drive, Suite 180,
Greenville, South Carolina 29615, as escrow agent. Seller shall grant Buyer an
Feasibility Period as defined in Paragraph 15. Following the Feasibility Period,
Buyer may deposit in escrow an additional Ten Thousand and 00/100 ($10,000)
Dollars to extend this Agreement an additional sixty (60) days. However, if
Buyer elects to extend the Feasibility Period, Buyer herein agrees that the only
contingencies remaining shall be satisfactory title and the contingencies
outlined in Paragraph 14 herein. In the event Buyer does not notify Seller of
its intention to exercise the extension period at the expiration of the
Feasibility Period, this Agreement will terminate, and Seller will refund
earnest money to Buyer. At closing, the balance of the Purchase Price shall be
paid in cash. The amounts paid by Buyer as earnest money under this Paragraph 5
shall be applied as a credit against the Purchase Price.
6. CLOSING COSTS. Closing Costs, including the costs of obtaining any
financing shall be paid as follows:
(a) Seller shall provide or pay for preparation of deed, cost of
deed stamps, all deed recording fees pursuant to Title 12, Chapter 24, S.C. Code
of Laws, and/or any other documentary stamps or transfer taxes which are now or
may hereafter be applicable to real estate transfers, and any cost necessary to
provide a marketable title, including recording of any satisfactions, and any
cost necessary to provide a marketable title, including recording of
<PAGE> 2
any satisfactions, property taxes to the day of closing, and any other cost
agreed to herein.
(b) Unless otherwise agreed herein, Buyer shall pay the costs of
the title examination, all recording fees (except for deed recording fees
pursuant to Title 12, Chapter 24, S.C. Code of Laws, which shall be Seller's
obligation), and, if applicable, any loan costs, the costs of any appraisal, and
the preparation of other closing documents.
7. CLOSING DATE. The Closing Date shall be no later than thirty (30) days
following the expiration of the Feasibility Period and all extensions provided
in this Agreement.
8. POSSESSION. Seller shall give possession to the Buyer at closing,
provided title has passed.
9. AUTHORITY. Seller represents to Buyer that it has the subject property
under contract to purchase.
10. ENTIRE AGREEMENT. This written instrument expresses the Entire
Agreement and all promises, covenants, and warranties between the Buyer and
Seller. It can only be changed by a subsequent written instrument (Addendum)
signed by both parties.
11. REAL PROPERTY. The Real Property to be sold, unless otherwise agreed by
the parties, includes all improvements of any kind, which are attached to or
planted on the premises. Seller represents and warrants that there are no
persons who have any outstanding agreements to acquire any interest in the
property and no outstanding liens affecting the property and that there is no
pending litigation affecting the property. Seller will maintain property with
all applicable laws and regulations.
12. PRORATIONS. Property taxes and rent, as well as other expenses and
income of the property, if applicable, shall be apportioned to the date of
closing. Annual expenses or income shall be apportioned using 365 days. Monthly
property expenses or income shall be apportioned by the number of days in the
month of closing. The amount of the property taxes shall be estimated by closing
attorney or agent using information available. Prorations at closing shall be
final.
13. ENCUMBRANCES AND RESTRICTIONS. Seller shall convey marketable title to
the property to Buyer in fee simple free from all liens, except restrictions of
record (see EXHIBIT B) and those Buyer has agreed to assume.
If Seller is unable to convey marketable title without a court action
or incurring any unusual expenses or within thirty ('30) days after herein
specified closing date, Buyer has the option of terminating this Agreement by
giving written notice to the Seller.
2
<PAGE> 3
14. CONTINGENCIES. Purchase of the property is contingent on:
(a) Buyer obtaining approval from the Office of the Comptroller of
the Currency (OCC) of its charter as a national bank and bank holding company by
April 1, 1999;
(b) Buyer completing successfully an offering of its stock by
April 1, 1999 as a result of which not less that $6,50,000 in capital is raised
by the Buyer.
(c) Seller and Buyer agreeing to the exact layout of the property
being purchased.
(d) Seller closing its purchase of the subject property.
In the event that the herein listed contingencies are not resolved to
Buyer's satisfaction, Buyer may terminate this Agreement, all earnest money
deposits paid by Buyer under Paragraph 5 hereof will be refunded, and all
obligations of each party shall cease to exist.
15. FEASIBILITY PERIOD. For a period of one hundred twenty (120) days from
the date of execution of this Agreement and any extension, Seller grants Buyer
and its agents the right to enter the property during an Feasibility Period for
conducting soil test, market studies, borings, engineering studies,
environmental tests, or other such exploratory measures as Buyer deems prudent.
In the event Buyer, at its sole discretion, determines that property is
unsuitable, Buyer may terminate Agreement, earnest money deposits shall be
refunded to Buyer, and all obligations of each party to the other shall cease to
exist.
16. ENVIRONMENTAL HAZARDS. Seller represents and warrants that Seller has
received no notices form any federal or state agency advising Seller of any
potential environmental hazards or, contamination on this parcel or any
adjoining parcel, and further, the Seller has no knowledge of any chemical,
petroleum, or other hazardous material storage or burial on the subject property
or that any other environmental hazards exist. In the event that any
environmental audit or assessment requires further evaluation, the Inspection
Period as outlined in Paragraph 15 will be extended until thirty (30) days
following the reporting of the results of such additional tests of evaluations.
Additionally, Seller agrees to refund all earnest money deposits in the event
that an environmental finding exceeds acceptable state or federal guidelines.
Buyer shall be obligated to initiate any environmental studies within ten (10)
days of the Effective Date of this Agreement.
17. RISK OF LOSS OF DAMAGE. Any loss or damage to the property by fire or
other casualty until the day of closing shall be the responsibility of Seller.
In such case, Seller shall have the option of restoring property to its present
condition within thirty (30) days after herein specified closing date, with date
of closing and possession to be extended accordingly. If property is not
restored within said period, Buyer shall have the right to terminate this
Agreement by written notice to Seller. In such case, both parties shall execute
a written release of the other from this Agreement.
3
<PAGE> 4
18. DEFAULT. If Buyer elects to terminate this Agreement (after Feasibility
Period), Seller shall retain all earnest money deposits as full liquidated
damages, and obligations of each party to the other shall cease. If termination
is because of default by Seller, Buyer shall have specific performance as its
sole remedy.
19. PERSONS BOUND. The benefits and obligations of this Agreement shall
inure to and bind heirs, assigns, successors, executors or administrators.
Whenever used, singular shall include plural, and use of any gender shall
include all. This is a legally binding Agreement.
20. TELECOPY. Buyer and Seller both agree that receipt of a signed
Agreement by telecopy (FAX) will be the same as receipt of an original signed
Agreement.
21. EXCLUSION. A financial institution (savings and loan, thrift, savings
bank, bank, or credit union) would not be allowed in the adjacent parcel.
22. COMMISSIONS. Seller represents that there are no brokerage fees or real
estate commissions due or owing in connection with this transaction other than
to Easlan Capital and Windsor/Aughtry Company which shall be paid solely by
Seller. Seller agrees to pay a ten percent commission to be split equally by
Easlan Capital and Windsor/Aughtry Company at closing.
23. LIMITATIONS ON ASSIGNMENT. Buyer understands that the specific use of
the subject property has a significant impact on the development of the
remainder of Seller's adjoining property. Consequently, Buyer herein agrees that
this Contract may not be assigned to a non-bank user without the prior written
permission of the Seller.
24. DRIVEWAY CROSS EASEMENT AND MAINTENANCE. Buyer and Seller agree to
share equally in the costs of constructing and maintaining a joint private
driveway to the rear of the property which connects with Brookfield Parkway (see
location of driveway on Exhibit A herein). Buyer and Seller agree during the due
diligence period to agree on joint easements and for maintenance of said
driveway on an equitable percentage basis.
25. STORMWATER EASEMENT. Prior to or at closing, Seller and Buyer mutually
agree to execute a Stormwater Management Pond Easement and Management Agreement
that establishes an easement for Buyer's use of a common area joint detention
pond and an agreement for joint maintenance of the detention pond.
26. EXPIRATION. This offer will expire and become null and void if not
executed by Seller and returned by Buyer by October 26, 1998.
4
<PAGE> 5
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties.
SELLER: HAWKINS DEVELOPMENT CORP.
/s/ Robert E. Blackwell By: /s/ Scott D. Hawkins
- -------------------------- -------------------------------------------
Witness
Its: President Date: 10/26/98
-------------------------------------------
BUYER: MSB INVESTMENTS CORP.
/s/ Byron Richardson By: /s/ James D. Stewart
- -------------------------- -------------------------------------------
Witness
Its: President Date: 10/26/98
/s/ Leigh Gauthier -------------------------------------------
- --------------------------
Witness
5
<PAGE> 1
EXHIBIT 10.5
NEW COMMERCE BANK (IN ORGANIZATION)
SALES AGENCY AGREEMENT
December 11, 1998
J.C. Bradford & Co.
400 Second Avenue NW
First Lawyers Building, 2nd Floor
Hickory, North Carolina 28601
Ladies and Gentlemen:
This letter sets forth and confirms the terms and conditions of the
engagement (the "Agreement") of J.C. Bradford & Co. ("Bradford") by New
Commerce Bank (the "Company") as non-exclusive selling agent of the Company
with respect to the Company's proposed public offering (the "Offering") of its
common stock (the "Common Stock"). The Offering will be made by means of a
prospectus (the "Prospectus"), which will be provided to Bradford.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to, and agrees with Bradford as
follows:
(a) The Prospectus does not and will not contain any untrue
statements of material fact or omit to state any material
facts required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) The Company is a corporation validly existing and in good
standing under the laws of the state of its incorporation;
has full corporate and other power and authority under such
laws to own its properties and conduct its business as
described in the Prospectus; and is duly qualified to do
business as a foreign corporation in each other jurisdiction
in which it owns or leases properties or conducts it business
so as to require qualification and is in good standing in
each such jurisdiction, except where failure to be so
qualified would not have a material adverse effect on the
condition, financial or otherwise, results of operations,
affairs or business prospects of the Company.
(c) The shares of common stock to be issued and sold by the
Company hereunder (the "Shares"), when issued and delivered
against payment therefor as provided
<PAGE> 2
herein, will be duly and validly authorized and issued and
fully paid and will conform to the description thereof
contained in the Prospectus.
(d) Except as disclosed in the Prospectus or information
incorporated therein by reference, there are no (i)
outstanding securities or obligations of the Company
convertible into or exchangeable for any capital stock of the
Company, (ii) warrants, rights or options to subscribe for or
purchase from the Company any such capital stock or any such
convertible or exchangeable securities or obligations (iii)
obligations of the Company to issue any such convertible or
exchangeable securities or obligations, or any such warrants,
rights or options.
(e) The Company has the full legal right, power and authority to
enter into and perform this Agreement and sell and deliver
the Shares as provided herein, and this Agreement has been
duly authorized by its Board of Directors and duly executed
and delivered on behalf of the Company.
(f) Other than filings with, and any necessary registrations,
qualifications or exemptions from the Securities and Exchange
Commission and applicable state securities and "blue sky"
authorities, no consent, approval, authorization or order,
registration or qualification of or with any court or
governmental agency or body is required for the issuance and
sale of the Shares or for the consummation of the other
transactions contemplated by this Agreement.
(g) Except as provided in section 2(a), there are no contracts,
agreements or understanding between the Company and any
person which would give rise to a valid claim against the
Company for a brokerage commission, finder's fee or other
like payment in connection with the offering of the Shares,
other than compensation due and payable to Bradford.
(h) No action, suit or proceeding at law or in equity is pending
or, to the Company's knowledge, threatened to which the
Company is a party, and no proceedings are pending or, to the
Company's knowledge, threatened against or affecting the
Company before or by any governmental official, commission,
board or other administrative agency, (other than in
connection with required regulatory approvals) wherein an
unfavorable decision, ruling or finding could have a material
adverse effect on the consummation of this Agreement or the
condition, financial or otherwise, results of operations,
affairs or business prospects of the Company.
(i) The Company has such permits, licenses, franchises and
governmental and regulatory authorizations ("permits") as are
necessary to own its properties and conduct its business in
the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus, and
except where the failure to have such permits would not have
a material adverse effect on the consummation of this
Agreement or the condition, financial or otherwise, results
of operations, affairs, or business prospects of the Company.
<PAGE> 3
(j) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940.
(k) The Company agrees as follows:
(i) The Company will notify Bradford immediately, and
confirm such notice in writing, of the receipt of
any comments from any state securities commission or
regulatory authority that relate to the Prospectus
or any amendment thereto or requests by any state
securities commission or regulatory authority for
amendments to the Prospectus or amendments or
supplements to the Prospectus or for additional
information;
(ii) The Company will use the net proceeds from the sale
of the Shares received by it in the manner specified
in the Prospectus under the caption "Use of
Proceeds."
(iii) The Company will supply Bradford with such number of
Prospectuses as Bradford shall reasonably request.
(iv) For three years from the date of this Agreement, the
Company will furnish to Bradford copies of all
reports and communications (financial or otherwise)
furnished by the Company to its stockholders, copies
of all reports or financial statements filed with
the regulatory agencies as soon as such are
available, and such other publicly available
documents, reports and information concerning the
business and financial condition of the Company as
Bradford may reasonably request.
2. SERVICES TO BE PROVIDED BY BRADFORD.
In connection with this Agreement, the scope of Bradford's services
shall include, but not be limited to, the following:
(a) Pursuant to this Agreement, Bradford will serve as the
exclusive selling agent for the Company and will offer up to
400,000 Shares for sale, on a "Best Efforts" basis.
(b) Bradford will perform its duties pursuant to this Agreement
in compliance with all applicable federal and state
securities laws, and will offer and sell the Shares only by
means of the Prospectus and only in such Jurisdictions
specified by the Company and in which such offers and sales
may be made lawfully.
In exchange for the services of Bradford pursuant to this
Agreement, the Company agrees to pay Bradford a selling
commission of $.50 for each Share
<PAGE> 4
sold by Bradford as selling agent. The selling commission
shall be payable at such time as the subscription Shares sold
by Bradford as selling agent are accepted by and payment in
full is received therefor by the Company and the funds are
released from escrow. The Company shall make and pay all NASD
and SEC and blue sky filings and fees.
3. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless Bradford
and each person, if any, who controls Bradford within the
meaning of Section 15 of the Securities Act of 1933 (the
"1933 Act"), against any and all losses, claims, damages,
liabilities and expenses (including reasonable cost of
investigation and counsel's fees) arising out of or based
upon any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus, or in any
amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any breach of this Agreement except insofar as such losses,
claims, damages, liabilities and expenses arise out of or are
based upon any untrue statement or omission or alleged untrue
statement or omission made by any means by Bradford or its
agents, directors or employees in connection with the offer
and sale of the Common Stock. The foregoing indemnity shall
not, with respect to untrue statements or omissions in the
Prospectus inure to the benefit of Bradford or any affiliate
or person who controls Bradford, from whom the person
asserting any such loss, liability, claim, damage or expense
purchased any of the Shares that are the subject hereof, if
such person was not sent or given a copy of the Prospectus
(as amended or supplemented).
(b) If any action or claim shall be brought or asserted against
Bradford or any person controlling Bradford in respect of
which indemnity may be sought from the Company, Bradford or
such controlling person shall promptly notify the Company in
writing, enclosing copies of all papers served on or
delivered to such party, and the Company shall assume the
defense thereof, including the employment of one counsel for
all of Bradford and the payment of all expenses. The failure
to notify an indemnifying party shall not relieve the
indemnifying party from any liability hereunder to the extent
it is not materially prejudiced as a result of such failure.
Bradford or any such controlling person shall have the right
to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses
of such counsel shall be at the sole expense of Bradford or
such controlling person unless (i) the employment thereof has
been specifically authorized in advance by the Company in
writing, (ii) the Company failed to assume the defense and
employ counsel as described above or (iii) the named parties
to any such action (including any impleaded parties) include
both Bradford or such controlling person and the Company, and
Bradford or such controlling person shall have been advised
by such counsel
<PAGE> 5
that there may be one or more legal defenses available to it
that are different from or in addition to those available to
the Company (in which case, if Bradford or such controlling
person notifies the Company in writing that it elects to
employ separate counsel at the expense of the Company, the
Company shall not have the right to assume the defense of
such action on behalf of Bradford or such controlling
person). No indemnified party shall settle, compromise or
consent to the entry of any judgment with respect to any
litigation, any investigation or proceeding by any
governmental agency or body, commenced or threatened, or
claim whatsoever in respect of which indemnification or
contribution can be sought under this Section 3 (whether or
not the indemnified parties are actual or potential parties),
unless the indemnified party gives prior written notification
to the indemnifying party and such settlement, compromise or
consent does not include any statement or admission of fault,
culpability or failure to act on behalf of, or with respect
to, any indemnified party.
(c) Bradford agrees individually, and not jointly with any other
selling agent for the Shares, to indemnify and hold harmless
the Company and its respective directors and each person, if
any who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the Securities Exchange Act
of 1934 against, any and all loss, liability, claim, damage
and expenses described in the indemnity contained in
subsection (a) of this Section 3 but only with respect to
untrue statements or omissions, or alleged untrue statements
or omissions made in the Prospectus (as amended or
supplemental) based upon information furnished to the Company
by Bradford.
(d) If the indemnification provided for in this Section 3 is
unavailable to an indemnified party under paragraphs (a), (b)
or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and Bradford on the other from the
Offering or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault
of the Company on the one hand and of Bradford on the other
in connection with the statements or omissions that resulted
in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and
Bradford on the other shall be deemed to be in the same
proportion as the total net proceeds received by the Company
from the Shares sold by Bradford in the Offering (before
deducting expenses), and the total selling commission
received by Bradford. The relative fault of the Company on
the one hand and of Bradford on the other shall be determined
by references to, among other things, whether the untrue or
alleged untrue
<PAGE> 6
statement of a material fact or the omission to state a
material fact relates to information supplied by the Company,
or by Bradford and the parties relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission.
The Company on the one hand and Bradford on the other agree
that it would not be just and equitable if contribution be
made pursuant to this Section 3 were determined by pro rata
allocation or by any other method of allocation that does not
take account of the equitable considerations referred to in
the immediately preceding paragraph. The amount paid or
payable by, an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in the
immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party
in connection with defending any such action or claim.
Notwithstanding the provisions of this Section 3, Bradford
shall not be required to contribute any amount in excess of
the amount by which the total price at which the Shares sold
by it exceeds the amount of any damages that Bradford has
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1993 Act) shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
4. REPRESENTATION, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
The representations, warranties, indemnities, agreements and
other statements of the Company set forth in or made pursuant
tot his Agreement shall remain operative and in full force
and effect regardless of any investigation made by or on
behalf of Bradford or the Company or controlling person of
the Company, and shall survive delivery of and payment for
the Shares.
5. GOVERNING LAW; ASSIGNMENTS.
This Agreement shall be governed by the laws of the State of
South Carolina. Neither party may assign this Agreement
without the prior written consent of the other party.
6. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
and when a counterpart has been executed by each party hereto
all such counterparts taken together shall constitute one and
the same Agreement. Signatures sent by facsimile shall have
the same effect as if manually signed copies had been
delivered, and shall be binding upon the parties.
<PAGE> 7
7. NO PERSONAL LIABILITY.
In no event shall any officer or director of the Company have
any personal liability to Bradford or to any other person
under this Agreement.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart
hereof, whereupon this shall become a binding agreement
between the Company and Bradford.
Very truly yours,
New Commerce Bank (In Organization)
By: /s/ James D. Stewart, President
----------------------------------
CONFIRMED AND ACCEPTED,
J.C. Bradford & Co.
By: /s/ Carl V. Cline
--------------------------
Name: Carl V. Cline
Title: Partner
<PAGE> 8
COMPENSATION
(a) Pursuant to this Agreement, Bradford will serve as the exclusive
selling agent for the Company and will offer as many shares as the
Company may allot, but in no case less than 100,000 shares and more
than 400,000 shares for sale on a "best efforts" basis.
(b) Bradford may associate with other dealers as the need arises at its
discretion.
(c) The Company agrees to pay Bradford a general selling commission of
$.50 per share for each share sold by Bradford at the public offering
price of $10.00.
(d) The Company agrees to pay Bradford a general and administrative fee of
$.07 per share sold by or through Bradford at the public offering
price of $10.00.
(e) No selling commission will be payable on shares sold to the Company's
employees, officers, directors and immediate families of the
employees, officers and directors.
<PAGE> 1
EXHIBIT 10.6
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into and effective
as of the 27th day of October, 1998, by and between New Commerce National Bank
(In Organization), a National Banking Association (the "Company"), and The
Bankers Bank (the "Escrow Agent").
W I T N E S S E T H :
WHEREAS, the Company proposes to offer and sell (the "Offering") up to
1,000,000 shares of Common Stock, $5.00 par value per share (the "Shares"), to
investors at $10.00 per Share pursuant to a registered public offering; and
WHEREAS, the Company desires to establish an escrow for funds
forwarded by subscribers for Shares, and the Escrow Agent is willing to serve
as Escrow Agent upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEPOSIT WITH ESCROW AGENT.
(a) The Escrow Agent agrees that it will from time to time
accept, in its capacity as escrow agent, subscription funds for the Shares (the
"Escrowed Funds") received by it from subscribers or from the Company when it
has received checks from subscribers. All checks shall be made payable to the
Escrow Agent. If any check does not clear normal banking channels in due
course, the Escrow Agent will promptly notify the Company. Any check which does
not clear normal banking channels and is returned by the drawer's bank to
Escrow Agent will be promptly turned over to the Company along with all other
subscription documents relating to such check. Any check received that is made
payable to a party other than the Escrow Agent shall be returned to the Company
for return to the proper party. The Company in its sole and absolute discretion
may reject any subscription for shares for any reason and upon such rejection
it shall notify and instruct the Escrow Agent in writing to return the Escrowed
Funds by check made payable to the subscriber.
(b) Subscription agreements for the Shares shall be reviewed for
accuracy by the Company and, immediately thereafter, the Company shall deliver
to the Escrow Agent the following information: (i) the name and address of the
subscriber; (ii) the number of Shares subscribed for by such subscriber; (iii)
the subscription price paid by such subscriber; (iv) the subscriber's tax
identification number certified by such subscriber; and (v) a copy of the
subscription agreement.
<PAGE> 2
2. INVESTMENT OF ESCROWED FUNDS. Upon collection of each check
by the Escrow Agent, the Escrow Agent shall invest the funds in deposit
accounts or certificates of deposit which are fully insured by the Federal
Deposit Insurance Corporation or another agency of the United States
government, short-term securities issued or fully guaranteed by the United
States government, or such other investments as the Escrow Agent and the
Company shall agree. The Company shall provide the Escrow Agent with
instructions from time to time concerning in which of the specific investment
instruments described above the Escrowed Funds shall be invested, and the
Escrow Agent shall adhere to such instructions. Interest and other earnings
shall start accruing on such funds as soon as such funds would be deemed to be
available for access under applicable banking laws and pursuant to the Escrow
Agent's own banking policies.
3. DISTRIBUTION OF ESCROWED FUNDS. The Escrow Agent shall
distribute the Escrowed Funds in the amounts, at the times, and upon the
conditions hereinafter set forth in this Agreement.
(a) If at any time on or prior to the expiration date of the
offering as described in the prospectus relating to the offering (the "Closing
Date"), (i) the Escrow Agent has certified to the Company in writing that the
Escrow Agent has received at least $5,500,000 in Escrowed Funds, and (ii) the
Escrow Agent has received a certificate from the President or the Chairman of
the Board of the Company that all other conditions to the release of funds as
described in the Company's Registration Statement filed with the Comptroller of
the Currency pertaining to the public offering have been met, then the Escrow
Agent shall deliver the Escrowed Funds to the Company to the extent such
Escrowed Funds are collected funds. If any portion of the Escrowed Funds are
not collected funds, then the Escrow Agent shall notify the Company of such
facts and shall distribute such funds to the Company only after such funds
become collected funds. For purposes of this Agreement, "collected funds" shall
mean of all funds received by the Escrow Agent which have cleared normal
banking channels.
(b) If the Escrowed Funds do not, on or prior to the Closing
Date, become deliverable to the Company based on failure to meet the conditions
described in Paragraph 3(a), or if the Company terminates the offering at any
time prior to the Closing Date and delivers written notice to the Escrow Agent
of such termination (the "Termination Notice"), the Escrow Agent shall return
the Escrowed Funds which are collected funds as directed in writing by the
Company to the respective subscribers in amounts equal to the subscription
amount theretofore paid by each of them. All uncleared checks representing
Escrowed Funds which are not collected funds as of the initial Closing Date
shall be collected by the Escrow Agent, and together with all related
subscription documents thereof shall be delivered to the Company by the Escrow
Agent, unless the Escrow Agent is otherwise specifically directed in writing by
the Company.
4. DISTRIBUTION OF INTEREST. Any interest earned on the Escrowed
Funds shall be retained by the Company.
-2-
<PAGE> 3
5. FEE OF ESCROW AGENT. The escrow account will accrue a service
charge of $15.00 per month. In addition, a $20.00 per check fee will be charged
if the escrow account has to be refunded due to a failure to complete the
subscription All of these fees are payable upon the release of the Escrowed
Funds, and the Escrow Agent is hereby authorized to deduct such fees from the
Escrow Funds prior to any release thereof pursuant to Section 3 hereof.
6. LIABILITY OF ESCROW AGENT.
(a) In performing any of its duties under the Agreement, or upon
the claimed failure to perform its duties hereunder, the Escrow Agent shall not
be liable to anyone for any damages, losses or expenses which it may incur as a
result of the Escrow Agent so acting, or failing to act; provided, however, the
Escrow Agent shall be liable for damages arising out of its willful default or
misconduct or its gross negligence under this Agreement. Accordingly, the
Escrow Agent shall not incur any such liability with respect to (i) any action
taken or omitted to be taken in good faith upon advice of its counsel or
counsel for the Company which is given with respect to any questions relating
to the duties and responsibilities of the Escrow Agent hereunder; or (ii) any
action taken or omitted to be taken in reliance upon any document, including
any written notice or instructions provided for this Escrow Agreement, not only
as to its due execution and to the validity and effectiveness of its provisions
but also as to the truth and accuracy of any information contained therein, if
the Escrow Agent shall in good faith believe such document to be genuine, to
have been signed or presented by a proper person or persons, and to conform
with the provisions of this Agreement.
(b) The Company agrees to indemnify and hold harmless the Escrow
Agent against any and all losses, claims, damages, liabilities and expenses,
including, without limitation, reasonable costs of investigation and counsel
fees and disbursements which may be imposed by the Escrow Agent or incurred by
it in connection with its acceptance of this appointment as Escrow Agent
hereunder or the performance of its duties hereunder, including, without
limitation, any litigation arising from this Escrow Agreement or involving the
subject matter thereof; except, that if the Escrow Agent shall be found guilty
of willful misconduct or gross negligence under this Agreement, then, in that
event, the Escrow Agent shall bear all such losses, claims, damages and
expenses.
(c) If a dispute ensues between any of the parties hereto which,
in the opinion of the Escrow Agent, is sufficient to justify its doing so, the
Escrow Agent shall retain legal counsel of its choice as it reasonably may deem
necessary to advise it concerning its obligations hereunder and to represent it
in any litigation to which it may be a part by reason of this Agreement. The
Escrow Agent shall be entitled to tender into the registry or custody of any
court of competent jurisdiction all money or property in its hands under the
terms of this Agreement, and to file such legal proceedings as it deems
appropriate, and shall thereupon be discharged from all further duties under
this Agreement. Any such legal action may be brought in any such court as the
Escrow Agent shall determine to have jurisdiction thereof. In connection with
such dispute, the Company shall indemnify the Escrow Agent against its court
costs and reasonable attorney's fees incurred.
-3-
<PAGE> 4
(d) The Escrow Agent may resign at any time upon giving thirty
(30) days' written notice to the Company. If a successor escrow agent is not
appointed by Company within thirty (30) days after notice of resignation, the
Escrow Agent may petition any court of competent jurisdiction to name a
successor escrow agent, and the Escrow Agent herein shall be fully relieved of
all liability under this Agreement to any and all parties upon the transfer of
the Escrowed Funds and all related documentation thereto, including appropriate
information to assist the successor escrow agent with the reporting of earnings
of the Escrowed Funds to the appropriate state and federal agencies in
accordance with the applicable state and federal income tax laws, to the
successor escrow agent designated by the Company appointed by the court.
7. APPOINTMENT OF SUCCESSOR. The Company may, upon the delivery
of thirty (30) days' written notice appointing a successor escrow agent to the
Escrow Agent, terminate the services of the Escrow Agent hereunder. In the
event of such termination, the Escrow Agent shall immediately deliver to the
successor escrow agent selected by the Company all documentation and Escrowed
Funds including interest earnings thereon in its possession, less any fees and
expenses due to the Escrow Agent or required to be paid by the Escrow Agent to
a third party pursuant to this Agreement.
8. NOTICE. All notices, requests, demands and other
communications or deliveries required or permitted to be given hereunder shall
be in writing and shall be deemed to have been duly given three days after
having been deposited for mailing if sent by registered mail, or certified mail
return receipt requested, or delivery by courier, to the respective addressees
set forth below:
IF TO THE SUBSCRIBERS FOR SHARES: To their respective addresses as
specified in their Subscription
Agreements.
THE COMPANY New Commerce Bank (Proposed)
P.O. Drawer 129
Mauldin, SC 29662
Attention: Jim Stewart
President
WITH A COPY TO: J.C. Bradford
400 2nd Ave., NW
2nd Floor
Hickory, NC 28601
Attention: Carl V. Cline
Partner
-4-
<PAGE> 5
THE ESCROW AGENT: The Bankers Bank
2410 Paces Ferry Road
600 Paces Summit
Atlanta, GA 30339-4098
Attention: William R. Burkett
Senior Vice President
9. REPRESENTATION OF THE COMPANY. The Company hereby
acknowledges that the status of the Escrow Agent with respect to the offering
of the Shares is that of agent only for the limited purposes herein set forth,
and hereby agrees it will not represent or imply that the Escrow Agent, by
serving as the Escrow Agent hereunder or otherwise, has investigated the
desirability or advisability in an investment in the Shares, or has approved,
endorsed or passed upon the merits of the Shares, nor shall the Company use the
name of the Escrow Agent in any manner whatsoever in connection with the offer
or sale of the Shares, other than by acknowledgement that it has agreed to
serve as Escrow Agent for the limited purposes herein set forth.
10. GENERAL.
(a) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia.
(b) The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
(c) This Agreement sets forth the entire agreement and
understanding of the parties with regard to this escrow transaction and
supersedes all prior agreements, arrangements and understandings relating to
the subject matter hereof.
(d) This Agreement may be amended, modified, superseded or
canceled, and any of the terms or conditions hereof may be waived, only by a
written instrument executed by each party hereto or, in the case of a waiver,
by the party waiving compliance. The failure of any part at any time or times
to require performance of any provision hereof shall in no manner affect the
right at a later time to enforce the same. No waiver in any one or more
instances by any part of any condition, or of the breach of any term contained
in this Agreement, whether by conduct or otherwise, shall be deemed to be, or
construed as, a further or continuing waiver of any such condition or breach,
or a waiver of any other condition or of the breach of any other terms of this
Agreement.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) This Agreement shall inure to the benefit of the parties
hereto and their respective administrators, successors and assigns. The Escrow
Agent shall be bound only by
-5-
<PAGE> 6
the terms of this Escrow Agreement and shall not be bound by or incur any
liability with respect to any other agreement or understanding between the
parties except as herein expressly provided. The Escrow Agent shall not have
any duties hereunder except those specifically set forth herein.
(g) No interest in any part to this Agreement shall be assignable
in the absence of a written agreement by and between all the parties to this
Agreement, executed with the same formalities as this original Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
the date first written above.
COMPANY: ESCROW AGENT:
NEW COMMERCE BANK (Proposed) THE BANKERS BANK
By: /s/ James D. Stewart By: /s/ Kenneth T. Vassey
-------------------------------- --------------------------------
James D. Stewart Kenneth T. Vassey
President Senior Vice President
-6-
<PAGE> 1
EXHIBIT 10.7
JACK HENRY AND ASSOCIATES, INC.
DATA PROCESSING SERVICES AGREEMENT
This Agreement, entered into this 1ST day of DECEMBER, 1998 between:
NEW COMMERCE BANK
712 NORTH MAIN
GREENVILLE, SC 29601
hereafter called "Client" and
JACK HENRY AND ASSOCIATES, INC.
663 HIGHWAY 60
MONETT, MO 65708
hereafter called "JHA".
JHA is in the business of providing data processing services throughout its
trade area and Client is desirous of securing such services from JHA.
Therefore, on the date hereinafter indicated, the parties do hereby agree as
follows:
1. DESCRIPTION OF SERVICES
Client hereby contracts for and JHA hereby agrees to furnish, on the terms
and conditions hereinafter set forth, the data processing services which
are enumerated on Exhibit "A" attached to and a part of this Agreement.
2. TERM OF AGREEMENT
The original term of this agreement shall be for five (5) years commencing
on the day of conversion to the new system. This Agreement shall be
automatically extended for successive terms of one year from the expiration
date of the original term. Either party may terminate the Agreement at the
end of any contract term provided that written notice to this effect is
given to the other party not less than 90 days prior to the end of any
contract term. It being understood that if proper notification is not
given, the term will automatically be renewed for one year.
In the event that the Client provides timely notice to JHA as aforesaid of
its intention to terminate this Agreement, this Agreement shall terminate
as provided herein. In the event of such termination, the Client shall pay
JHA all direct expenses incurred by JHA in turning over to the Client all
information maintained by JHA and relating to data processing services
performed by JHA for the Client. These expenses shall include, but shall
not be limited to, charges for computer run time and programming
requirements in accordance with JHA published rate schedules in effect at
that time.
In the event that the Client discontinues using JHA for processing prior to
the end of any contract term, the Client will be liable to JHA for a lump
sum settlement to be calculated as the average monthly billing exclusive of
pass through cost including, but not limited to, data lines, postage,
Federal Reserve charges, etc., for the past twelve months multiplied by the
number of months and any portion of a month remaining in the contract term.
In the event that any entity assumes the deposit liabilities of Client,
such entity will automatically assume the obligations and liabilities of
Client hereunder for the remaining contract term.
<PAGE> 2
Schedule of service fees will remain in effect for the term of the
Agreement. At the end of each twelve (12) month period during the term, JHA
may increase the Schedule of Service Fees then in effect by such an amount
as JHA determines to be appropriate; provided, however, that JHA may not at
that time increase the service fees in effect by a percentage greater than
the percentage increase during the preceding twelve (12) month period in
the "Consumer Price Index Seasonally Adjusted US City Average for All Items
for all Urban Consumers (1982-84 = 100)" published monthly in the "Monthly
Labor Review" of the Bureau of Labor Statistics of the United States
Department of Labor or, should that index cease to be published, the most
comparable index published on a regular basis by the US Government. JHA
will provide a ninety (90) day advance written notice to Client before such
changed fees go into effect.
3. OWNERSHIP AND CONFIDENTIAL NATURE OF COMPUTER PROGRAMS AND MATERIAL
During the term of this Agreement, JHA covenants to furnish and maintain,
on its premises and at its cost, all of the equipment which it deems
necessary to perform the Data Processing Services. JHA retains the right to
move the equipment to any other location provided that such change will not
materially alter the services JHA provides to Client as specified in this
Agreement. During the term of this Agreement, Client covenants to furnish
and maintain, on its premises and at its cost, all of the equipment and
materials specified by JHA as being necessary for Client to receive,
transmit and otherwise utilize the data processing services specified in
Exhibit "A". The Client shall also notify JHA of the anticipated
commencement of on-line services through new or additional terminals or the
opening of new branches at least thirty (30) days in advance of the
commencement of such services so as to enable JHA to arrange for necessary
communication lines and with the understanding that the scheduled
implementation date of such new on-line support may be dependent on the
delivery schedules of third party vendors. The Client agrees to reimburse
JHA when billed for charges, or the Client's portion of charges pro-rated
among those Clients served, for communication lines or devices or
installation of communication lines or devices arranged and paid for by JHA
on behalf of the Client. Any equipment leased by JHA to Client shall be
maintained in accordance with the provisions of a separate lease agreement.
All data processing programs, specifications, documentation (including
manuals, routines, sub-routines, or techniques, herein collectively called
"programs" and original ideas or formulae relating to data processing or
other handling or treatment of data (herein collectively called "ideas"),
are and shall remain the property of JHA. It is agreed that the Client will
not copy related materials or divulge the contents of said programs and
ideas to any third party without permission for such disclosure or use
being granted in writing by JHA.
The Client shall reimburse JHA for any prior agreed upon costs incurred by
JHA in developing customized programs or modifications to programs to
satisfy the requirements of the Client or the Client's independent
auditors, including the cost of the computer time to run said programs. It
is further agreed that such customized programs or modifications will
remain the property of JHA and, as such, JHA has the right to use said
programs or modifications in providing services to other financial
institutions.
4. TRANSPORTATION OF DATA
The parties acknowledge that reliable transportation of Client's input data
and its processed work is necessary for JHA to perform in accordance with
the Agreement. Accordingly, Client may either provide its own
transportation of both the input data and processed work or it may elect to
authorize JHA to contract for an authorized carrier to provide the
transportation services and/or utilize JHA's own or its agent's vehicles to
transport Client's input data and processed work for a fee as shown in
Exhibit "A".
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<PAGE> 3
In the event Client elects to authorize JHA to provide the transportation
services and JHA elects to contract for a carrier to provide the necessary
transportation services, such services will be rendered under the terms and
conditions of a contract between JHA and said carrier or courier which such
contract shall be made a part hereof by reference. JHA reserves the right
to change carrier or couriers from time to time during the term of this
Agreement. Client has the right to obtain from JHA a copy of the contract
which is in effect upon written request to JHA. Client agrees that it is a
third party beneficiary of said contract and any other which JHA may elect
to become a party to during the term of this Agreement. As such, it agrees
to be bound by and subject to all terms and conditions of these courier
contracts, which shall be standard courier contracts, including, but not by
way of limitation, any limitation of liability provisions. It is the intent
of the parties that JHA's liability to Client or third parties for losses
in transit, if any, shall be the same as the liability of the carrier to
JHA under its Agreement.
In the event JHA elects to utilize its own or its agent's vehicles to
render the transportation services necessary for the performance of this
Agreement, then the parties agree to be bound by a Compensation Schedule
for such services, which shall be mutually agreed upon. Accordingly the
same limitation of liability provisions as provided in standard courier
contracts or such additional agreements as may be required by JHA to
perform such courier services shall apply whether any claim is by JHA
and/or Client against the authorized carrier or Client against JHA
utilizing its own or its agent's vehicles.
5. EXAMINATION
The records maintained by JHA for the Client shall be subject to
examination by those Federal or State agencies having jurisdiction over the
Client to the same extent that such records would be subject to examination
were they maintained and produced by the Client on its own premises, and
JHA is authorized to provide the representatives of such agencies access to
such records. Reasonable expenses incurred by JHA on the Client's behalf
during the course of such examination may, at JHA's sole discretion, be
charged to the Client by JHA with itemized accounting of such expenses.
6. RESPONSIBILITY FOR DATA
All records transmitted to JHA by Client shall remain the property of the
Client. JHA shall consider all information transmitted to it by the Client
to be of a confidential nature and JHA shall use its best effort to keep
such information confidential, including the use of reasonable care to
prevent unauthorized access to information transmitted by the Client
pursuant to this Agreement.
JHA will use reasonable care in the processing of the accounts for the
Client and reports to the Client. The Client agrees to promptly check and
verify all of the reports received from JHA to ascertain that all data has
been processed and reported correctly, and to report any discrepancies to
JHA not later than three (3) business days following receipt of such
reports. Business days will be defined to be Monday through Friday, from
8:00 A.M. to 5:00 P.M. EST. Failure to report any discrepancies within the
time prescribed in the previous sentences shall constitute a conclusive
presumption that such reports are correct and accurate.
JHA will provide safeguards determined at its discretion to ensure
protection against destruction of records and programs by fire or other
disasters, loss of data in transit or machine or human error, or
unauthorized manipulation of data or reports insofar as can reasonably be
expected using then current techniques and/or then current accepted
business practices for storage and transfer of magnetic media.
JHA maintains a disaster recovery plan with off-site data files and
communications facilities for the re-establishment of services in the event
of a disaster at JHA and agrees to make such backup processing
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<PAGE> 4
capability available to the Client in the event of a major disaster at JHA.
7. WARRANTIES, EXCLUSIVE REMEDIES AND LIMITATION OF LIABILITY
JHA shall have no duties or responsibilities except those expressly set
forth in this Agreement. JHA warrants to provide the services under this
Agreement in a competent manner consistent with industry standards. The
warranty set forth in this Agreement is in lieu of all other warranties,
express or implied, whether of merchantability, fitness or otherwise.
Should JHA breach such warranty, JHA shall diligently and in good faith
attempt to correct that breach by performing or correcting its services,
provided that nothing herein shall be construed as requiring JHA to provide
any services without compensation. If within a reasonable time JHA is
unable to correct such breach as aforesaid, Client shall be entitled to an
equitable reduction in fees paid to JHA for the defective services. The
remedies herein contained are exclusive.
Not by way of limitation or exclusion, JHA shall not be liable to Client or
to any third party, including, but not limited to, customers of Client, for
errors resulting from defects or malfunctions of the mechanical or
electronic equipment used in performing its services hereunder. In
addition, JHA shall not be liable to Client or to any third party,
including, but not limited to, customers of Client, for any loss, damage,
cost or expense arising from the use of any lost or stolen ATM cards;
failure or delay in making a requested transfer; erroneous transfers;
liability by reason of insufficiency of funds in any account; unauthorized
transfers; and failure to comply with state or federal laws, rules or
regulations. Any liability of JHA to Client resulting from failure to
comply with the terms of this Agreement or wherein JHA shall become legally
obligated to pay for damages resulting from any claim arising from this
Agreement shall be limited to the actual damages suffered by Client.
JHA shall not be liable or responsible to Client or to any third party,
including, but not limited to, customers of Client, for any consequential,
special, indirect, or incidental damages, even if JHA has been advised of
the possibility of such damages, except to the extent such damages result
from the willful misconduct or gross negligence of JHA.
JHA shall not be liable for delays or failures in the performance or
completion of any of its obligations under or with respect to this
Agreement beyond its reasonable control including, but not limited to,
delays caused by acts of civil or military authority, riots, epidemics,
war, governmental regulations, strikes, lockouts, labor difficulties, fire,
hurricanes, flood, insurrection, catastrophes, failures of transportation,
communications or power supply, unavoidable mechanical difficulty with its
computer equipment, acts of God, or other causes beyond its control or due
to third parties.
8. BILLING AND PAYMENT FOR SERVICES
The Client agrees to accept the services and equipment described in this
Agreement and in the attached Exhibit "A" and to pay JHA all amounts due
hereunder in accordance with such Exhibit "A". Following the end of each
billing period, JHA shall bill the Client for all amounts due JHA hereunder
for such billing period (including, but not limited to, all standard
repetitive charges, all charges for additional requested services, and
other charges incurred by the Client whether contemplated by this Agreement
or agreed to by independent written contract or verbal contract or
otherwise requested). Payment shall be made by the Client when invoice is
rendered. Payment of all invoice amounts not received by JHA within 30 days
of invoice date shall bear interest at the rate of 1.5% per month until
paid.
9. MAGNETIC INK CHARACTER RECOGNITION
JHA requires that the magnetic ink character recognition (MICR) line
printed on certain Client input documents conform to standards acceptable
to JHA. JHA shall not be liable for failure of its equipment to read the
Client's input documents, nor for any subsequent errors in transmission of
data
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<PAGE> 5
or printed listing if the MICR specifications are not adhered to. Items
returned in error or processed in error due to the inability of JHA
equipment to read unacceptable MICR of any of the Client's input documents
shall be the sole liability of the Client. Upon request, JHA will furnish
the Client with detailed specifications for acceptable MICR standards.
10. SEVERABILITY
If any provision of this Agreement or the application of any provision to
either party or third person should be held invalid by a court of law, the
remainder of this Agreement or the application of such provision to the
parties or third parties other than those to which it is held invalid,
shall not be affected thereby and shall remain in full force and effect.
11. ENTIRE AGREEMENT
This Agreement constitutes the sole and entire Agreement between JHA and
the Client pertaining to the provision of subject Data Processing Services
and supersedes all prior agreements and understandings of the parties in
connection herewith.
JHA makes no representations or warranties, expressed or implied, by
operation of law or otherwise, except expressly stated herein. This
Agreement shall not be modified, amended, rescinded or waived in whole or
in part except by a duly executed written document signed by the parties.
This Agreement and the exhibits and schedules attached hereto shall be
governed by the laws of the State of Missouri, and the rules and
regulations of the appropriate banking regulatory agencies. The parties
hereto bind themselves and their successors and assigns to the faithful
observance and performance of this Agreement and the terms and conditions
hereof; provided that the Client shall not assign its rights hereunder
without the prior written consent of JHA.
All notices required by this Agreement shall be sent via certified or
registered mail, return receipt requested, postage prepaid, addressed to
JHA at:
JACK HENRY AND ASSOCIATES, INC.
663 HIGHWAY 60
MONETT, MO 65708
ATTENTION: PRESIDENT
and to the Client at:
NEW COMMERCE BANK
712 NORTH MAIN
GREENVILLE, SC 29601
ATTENTION: PRESIDENT
The notice shall be deemed delivered on the actual date of delivery, that
being the delivered date on said return receipt.
12. AUDIT RESPONSIBILITY
JHA shall cause to be performed, on an annual basis, a third party
operational review of its data processing centers. A copy of the most
recently completed audit for Clients servicing center will be made
available upon written request to the manager of the center. JHA shall,
upon request, schedule a mutually convenient time whereby Client audit
representatives may visit the processing center for further audit needs.
Client should review on a daily basis any audit, maintenance and exception
reports available from JHA.
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<PAGE> 6
13. TIME FRAMES FOR RECEIPT AND DELIVERY OF WORK
JHA shall make available the following:
- Access to on-line files between 7:00 A.M. and 7:00 P.M. daily.
- Access to print spool files for initiating of report printing at
Client location between 6:00 A.M. and 7:00 P.M. daily.
Additional access to on-line and print files may be made available upon
request by Client.
Client shall make data available to JHA for daily processing as follows:
- Maintenance transactions for new and existing Client customers by
7:00 P.M.
- MICR data files for processed items by 7:00 P.M. Later
availability times may be made available on request by Client for
exception conditions.
JHA recognizes that availability of certain data required for processing of
Client's work (such as ATM and ACH transactions) may not be under Client's
direct control. JHA will make reasonable efforts to accommodate the
processing time frames of these other providers.
For Clients utilizing backroom check processing services of JHA a courier
pickup and delivery schedule will be established within 30 days of
acceptance of this Agreement by JHA.
14. NOTIFICATION OF CHANGES
JHA shall notify Client in advance of any changes that would affect Client
procedures, system access or functionality, reports, processing time frames
or related areas.
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate as of
the date first written above.
By: /s/ James D. Stewart
-----------------------------------------
Type/Print Name: James D. Stewart NEW COMMERCE BANK
---------------------------- 712 NORTH MAIN
GREENVILLE, SC 29601
Title: President
--------------------------------------
Date: December 1, 1998
---------------------------------------
By: /s/ Michael R. Wallace
-----------------------------------------
Type/Print Name: Michael R. Wallace JACK HENRY & ASSOCIATES. INC.
---------------------------- 663 HIGHWAY 60, P.O. BOX 807
MONETT, MO 65708
Title: President and Chief Operating Officer
--------------------------------------
Date: December 1, 1998
---------------------------------------
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<PAGE> 7
EXHIBIT "A"
ADDENDUM TO DATA PROCESSING AGREEMENT
Monthly Processing Costs will be as follows:
Base Processing Fee includes the following applications:
<TABLE>
<S> <C> <C> <C>
- - Customer Information File - Account Analysis
- - Demand Deposit Accounting - Customer Profitability
- - Savings & Club Accounting - Accounts Payable
- - Loans (All types) - Overdraft Protection
- - Time Deposit Accounting - Home Equity Loans
- - Repurchase Agreements - Loan pricing
- - Individual Retirement Accounting - Cash Sweep
- - General Ledger - ACH Origination
- - Safe Deposit Box Accounting - Executive Reminder System
- - Stockholder Accounting - Account Reconciliation
- - Automatic Funds Transfer System - Audit Confirmations
- - Loan Collections
</TABLE>
Base Processing Fee for the first two years will be $2,750 per month. After
second year, fixed for the term of the agreement at $3,000 per month for up to
5,000 deposit and loan accounts. Thereafter, standard per account pricing would
apply.
MONTHLY COSTS:
<TABLE>
<S> <C> <C>
BASE PROCESSING FEE $2,750
(Includes up to 10 devices)
ADDITIONAL 5 DEVICES $ 150
TELEPHONE LINE CHARGES (Estimated) $ 750
ADDITIONAL MONTHLY FEES:
ACH Fed-Line Interface N/C
Inclearing via Fed N/C
Call Reporter Interface N/C
Enhanced Statements $ 90
Mutual Fund Sweep $ 145
JHA Host Based Optical Reports $ 250
Regency Voice Response $ 400
(includes up to 3,750 transactions. Above 3,750 @ $.06 each)
JHA Cash Management (non NetTeller) $ 550
(will also require a Cash Management Server)
JHA Platform (deposits & loans) $ 770
JHA Teller - Teller Automation System $ 250
JHA On-Line Integration $ 100
SIGMASTER $ 100
CHECKMASTER $ 100
CTRMASTER $ 100
Store & Forward N/C
ATM On-Line Integration (CommLink) $ 300
ATM Driver Fees $ 300
Debit Card Service Bureau Transaction Authorization $ 105
Check Image Item Processing (see attached "Check Image
Processing Schedule") $1,100
------
$4,660
------
TOTAL MONTHLY COSTS: $8,310
</TABLE>
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<PAGE> 8
ONE TIME COSTS
<TABLE>
<S> <C>
CIF 20/20 CONVERSION-INSTALLATION $ 7,500
EDUCATION
- PARAMETER TRAINING $ 1,200
4.5 days in Charlotte, N.C. for up to 3 people. Parameter and product
plan training to facilitate conversion planning activities. Each additional
person $500
- ON-SITE TRAINING $ 3,700
3.5 days training at bank location. Training bank staff on daily functions
(Bank provides training room and equipment) Each additional day $1,200
PHONE LINE INSTALLATION (Estimated) $ 750
ACH FED-LINE INTERFACE $ -0-
INCLEARING VIA FED $ -0-
CALL REPORTER INTERFACE $ -0-
ENHANCED STATEMENTS $ -0-
MUTUAL FUND SWEEP $ 1,000
JHA HOST BASED OPTICAL $ 7,500
REGENCY VOICE RESPONSE $ 5,000
JHA CASH MANAGEMENT (non-NetTeller) $ 5,000
JHA PLATFORM (deposits & loans) $ 9,500
JHATELLER (includes only the modules listed in the "Monthly Costs" section) $ 5,000
STORE & FORWARD (4 licenses @ $250 each) $ 1,000
ATM ON-LINE INTEGRATION W/DEBIT (CommLink) $ 3,000
ATM DRIVER FEES $ 3,000
DEBIT CARD SERVICE BUREAU TRANSACTION AUTHORIZATION $ 2,500
CHECK IMAGE ONE-TIME INSTALLATION & SETUP $10,250
(see attached "Check Image Processing Schedule") -------
TOTAL INSTALLATION/TRAINING CHARGES $65,900
LESS JHA ALLOWANCE $ 5,000
-------
$60,900
</TABLE>
Client will pay additional costs beyond monthly processing charges as follows:
- Telecommunication line charges and installation fees at actual cost
(if different from those indicated).
- Hardware maintenance charges on equipment.
- Any forms and supplies related to Client's printing requirements.
- Costs associated with Credit Bureau Reporting, including a charge of
$75.00 per tape generated.
- Out of pocket expenses of conversion/education personnel traveling to
Client location.
BY: /s/ James D. Stewart
---------------------------------------
NEW COMMERCE BANK
DATE: December 1, 1998
-------------------------------------
BY: /s/ Michael R. Wallace
---------------------------------------
JACK HENRY & ASSOCIATES, INC.
DATE: December 1, 1998
-------------------------------------
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<PAGE> 9
<TABLE>
<CAPTION>
SCHEDULE OF SERVICE FEES
# OF ACCOUNTS PRICE PER ACCOUNT
- ------------- -----------------
<S> <C>
4000 $ 1
5000 0.8500
6000 0.7500
7000 0.6786
8000 0.6250
9000 0.6050
10000 0.6000
11000 0.5950
12000 0.5900
13000 0.5850
14000 0.5800
15000 0.5750
16000 0.5700
17000 0.5650
18000 0.5600
19000 0.5550
20000 0.5500
21000 0.5450
22000 0.5400
23000 0.5350
24000 0.5300
25000 0.5250
26000 0.5200
27000 0.5150
28000 0.5100
29000 0.5050
30000 0.5000
31000 0.4990
32000 0.4980
33000 0.4970
34000 0.4960
35000 0.4950
36000 0.4940
37000 0.4930
38000 0.4920
39000 0.4910
40000 0.4900
41000 0.4890
42000 0.4880
43000 0.4870
44000 0.4860
45000 0.4850
46000 0.4840
47000 0.4830
48000 0.4820
49000 0.4810
50000 0.4800
51000 0.4790
52000 0.4780
53000 0.4770
54000 0.4760
</TABLE>
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<PAGE> 10
CHECK IMAGE PROCESSING SCHEDULE
NEW COMMERCE BANK
GREENVILLE, SC
1-DEC-98
Main Street Bank will handle item encoding functions, delivering qualified on-us
and transit items to JHA on a schedule to be developed. JHA will capture MICR
and Images, deliver transit items to the Federal Reserve or other designated
clearing house, perform all bulk file, statement sorting, and statement
rendering. JHA will return the actual items to the bank for storage or disposal.
<TABLE>
<CAPTION>
SERVICES PRICE VOLUMES COSTS
- -------- ----- ------- -----
<S> <C> <C> <C>
Proof Encoding Bank to provide encoded items
Proof Adjustments 2.5000 -- --
TOTAL PROOF SERVICES --
Image Capture 0.0300 -- --
Reject Re-Entry 0.0800 -- --
Cash Letter Processing 50.00 -- --
Exception Item Pulls 200.00 -- --
Special Serial Sorts (per Account) 25.00 -- --
TOTAL ITEM CAPTURE SERVICES --
Image Statement Processing 0.3500 -- --
Non Image Statements w/Checks 3.5000 -- --
Non Image Savings Statements 0.1000 -- --
Statement Inserts 0.0100 -- --
Item Research 2.5000 -- --
Return Item Processing 1.2500 -- --
TOTAL STATEMENT SERVICES --
Courier Expenses 0.0000 -- --
Microfilm Expenses 0.0000 -- --
Postage Expenses 0.0000 -- --
(Above items are billed at costs)
MONTHLY ITEM PROCESSING FEES --
MINIMUM MONTHLY ITEM PROCESSING FEES 1,100.00
TOTAL ONE-TIME INSTALLATION & SETUP 10,250.00
</TABLE>
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<PAGE> 11
CONTRACT MODIFICATION
This Contract Modification is entered into on December 1, 1998, by and between
NEW COMMERCE BANK, 712 North Main, Greenville, SC 29601 (Client) and JACK HENRY
& ASSOCIATES, INC. (JHA) who mutually contract and agree as follows:
Client and JHA are signing and entering into multiple other written contracts
and agreements dated December 1, 1998. Certain of those contracts and agreements
are changed and modified as follows:
THE "DATA PROCESSING SERVICES AGREEMENT" IS CHANGED AND MODIFIED AS FOLLOWS:
IN SECTION "2. TERM OF AGREEMENT."
FOLLOWING THE ORIGINAL FOURTH SUBPARAGRAPH INSERT A NEW PARAGRAPH AS FOLLOWS:
"Upon the completion of thirty-six (36) months of processing by JHA,
Client may opt to go to in-house processing without penalty, provided
that such in-house processing utilizes the JHA CIF 20/20 Software.
Client will be responsible to JHA for the purchasing of the AS/400
required to run the aforesaid Software in addition to all training and
implementation costs and fees. In the event that Client opts to
exercise this option, the deconversion fees discussed in Section "2.
Term of Agreement." shall be waived."
INSERT A NEW FIRST SUBPARAGRAPH AS FOLLOWS:
"This Agreement is contingent upon the approval of Client's charter
application by the Office of the Comptroller of the Currency. However,
if federal regulatory approval of the Client's applications are not
approved the Client shall be released from all contracts and
agreements and any liability except for a)the restocking charge and
other penalties assessed by IBM for return and restocking of any
machines ordered by or on Client's behalf under the current term of
this Agreement b)any third party connectivity services which have been
entered in to in order to accommodate Client's processing needs c) all
training and other installation services provided to Client which will
be billed at JHA's then current rates for such services"
IN SECTION "6. RESPONSIBILITY FOR DATA.":
STRIKE THE FIRST SUBPARAGRAPH AND REPLACE IT WITH:
"All records, data and other information transferred or transmitted to
JHA by Client (Client Data) shall remain the sole property of Client.
JHA shall consider all Client Data transmitted to it by Client to be
of a confidential nature and JHA shall use its best efforts to keep
such Client Data confidential and prevent unauthorized access to such
Client Data. JHA shall maintain the Client Data under commercially
reasonable storage conditions suitable for such records, data and
other information in a facility which is accessible only to authorized
employees of JHA or to governmental agents as provided for under
Section "5. Examination." above. Except as provided for in this
Agreement including the provisions of Section "5. Examination." JHA
shall not disclose, transfer, make available, or use the Client Data.
JHA shall not disclose the contents of this
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<PAGE> 12
Agreement to any third party except as provided for under "Section 5.
Examination.". If JHA receives a subpoena or other order of a court or
other judicial tribunal pertaining to the disclosure of the release of
the Client Data, JHA shall, if it is legally permissible, immediately
notify Client to allow Client to challenge any such order."
IN THE THIRD SENTENCE OF THE SECOND SUBPARAGRAPH IMMEDIATELY FOLLOWING "EST"
INSERT "EXCLUDING HOLIDAYS RECOGNIZED BY THE FEDERAL RESERVE SYSTEM.".
IN SECTION "7. WARRANTIES, EXCLUSIVE REMEDIES AND LIMITATION OF LIABILITY.":
INSERT A NEW FIRST SUBPARAGRAPH AS FOLLOWS:
"JHA represents and warrants that the Software as more fully described
in and the subject of this Agreement, is designed to be used prior to,
during and after the calendar year 2000 A.D., and that said Software
will operate during each such time period and without error relating
to date data, specifically including any error relating to, or the
product of, date data which represents or references different
centuries or more than one century. Without limiting the generality of
the foregoing, JHA further represents and warrants:
(a) That said Software will not abnormally end or provide invalid or
incorrect results as a result of date data, specifically including
date data which represents or references different centuries or more
than one century;
(b) That said Software has been designed to ensure year 2000
compatibility, including but not limited to date data century
recognition, calculations which accommodate same century and
multi-century formulas and date values, and date data interface values
that reflect the century; and
(c) That said Software includes "year 2000 capabilities." For purposes
of this Addendum and the Agreement, "year 2000 capabilities" means the
Software:
(1) will manage and manipulate data involving dates, including
single century formulas and multi-century formulas, and will not
cause an abnormally ending scenario within the application or
generate incorrect values or invalid results involving such
dates;
(2) provides that all date-related user input functionalities
will use a technique called "windowing" to enter the century of
any date from a time window (i.e., 06/06/02 would be 06/06/2002)
and data fields include the indication of century; and
(3) provides that all date-related data interface functionalities
include the indication of century."
IN THE FIFTH SENTENCE OF THE FIRST SUBPARAGRAPH IMMEDIATELY FOLLOWING
"REASONABLE TIME" INSERT "(AS JUDGED BY THEN CURRENT INDUSTRY STANDARDS)".
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<PAGE> 13
IN SECTION "11. ENTIRE AGREEMENT.":
IMMEDIATELY FOLLOWING THE THIRD SUBPARAGRAPH INSERT A NEW SUBPARAGRAPH AS
FOLLOWS:
"In the event that JHA wishes to assign this Agreement, Client shall permit
such assignment provided that if Client is in good faith unsatisfied with
the new servicer, Client may opt to deconvert from JHA's successor provided
that Client notifies JHA's successor within sixty (60) days following the
date of the assignment. Client has 120 days after such prior written notice
to complete such deconversion."
IN "13. TIME FRAMES FOR RECEIPT AND DELIVERY OF WORK.":
STRIKE ALL SUBPARAGRAPHS AND REPLACE THEM WITH THE FOLLOWING:
"JHA will assign a project manager to Client by January 1, 1999.
JHA shall make available the following:
- Access to on-line files between 7:00 A.M. and 7:00 P.M. daily.
- Access to print spool files for initiating of report printing at
Client location between 6:00 A.M. and 7:00 P.M. daily.
Additional access to on-line and print files may be made available
upon request by Client.
Client shall make data available to JHA for daily processing as
follows:
- Maintenance transactions for new and existing Client customers by
8:00 P.M.
- MICR data files for processed items by 8:00 P.M. Later
availability times may be made available on request by Client
for conditions.
JHA recognizes that availability of certain data required for
processing of Client's work (such as ATM and ACH transactions) may not
be under Client's direct control. JHA will make reasonable efforts to
accommodate the processing time frames of these other providers.
For Clients utilizing backroom check processing services of JHA a
courier pickup and delivery schedule will be established within 30
days of acceptance of this Agreement by JHA. Additionally, within (30)
thirty days following the execution of this Agreement JHA and Client
shall establish mutually acceptable default deadlines for the
installation of the following systems:
- ATM on-line system
- Vertex Teller
- Cash management system
- Voice response system
- Deposit platform system
- Loan platform system"
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<PAGE> 14
In witness whereof, the parties have caused this CONTRACT MODIFICATION to be
executed by their duly authorized representatives.
JACK HENRY & ASSOCIATES, INC. NEW COMMERCE BANK
663 Highway 60, P. O. Box 807 712 North Main
Monett, MO 65708 Greenville, SC 29601
(JHA) (Client)
BY: /s/ Michael R. Wallace BY: /s/ James D. Stewart
-------------------------- ----------------------------
Michael R. Wallace James D. Stewart
- ----------------------------- -------------------------------
Type/Print Name Type/Print Name
TITLE: President and Chief Operating Officer TITLE: President
-------------------------------------- -------------------------
Page 14
<PAGE> 1
EXHIBIT 10.8
THE WARRANTS EVIDENCED BY THIS CERTIFICATE HAVE BEEN ISSUED OR SOLD IN RELIANCE
ON EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION
WHICH IS EXEMPT UNDER SUCH ACT AND STATE LAWS OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND STATE LAWS.
NEW COMMERCE BANCORP.
STOCK WARRANT AGREEMENT
JANUARY 12, 1999 7,500 Shares
Warrants to purchase 7,500 shares of Common Stock (the "Shares") of New
Commerce BanCorp., a South Carolina corporation (the "Company"), are hereby
granted to __________________ (the "Warrant Holder") in consideration of the
financial risk associated with Warrant Holder's investment in the Company during
its organizational stage. Such Warrants are granted on the following terms and
conditions:
1. EXERCISE OF WARRANTS. The warrants granted in this agreement (the
"Warrants") may be exercised in whole or in part at any time beginning on the
later of the date that New Commerce Bank (the "Bank") opens for business and the
date that the first anniversary of the date of the Company's Registration
Statement filed with the Securities and Exchange Commission in connection with
the Company's initial public offering is completed (the "Vesting Date").
Exercise of the Warrants is subject to the following:
(a) EXERCISE PRICE. The exercise price (the "Exercise Price")
shall be $10.00 per Share, subject to adjustment pursuant to
Section 2 below.
(b) EXPIRATION OF WARRANT TERM. The Warrants will expire at 5:00
p.m. Eastern Standard Time on the tenth anniversary of the
Vesting Date, and may not be exercised thereafter (the
"Expiration Date").
(c) PAYMENT. The purchase price for Shares as to which the
Warrants are being exercised shall be paid in cash, by wire
transfer, by certified or bank cashier's check, or by personal
check drawn on funds on deposit with the Bank.
(d) METHOD OF EXERCISE. The Warrants shall be exercisable by a
written notice delivered to the President or Secretary of the
Company which shall:
(i) State the owner's election to exercise the Warrants,
the number of Shares with respect to which it is
being exercised, the person in whose name the stock
certificate for such Shares is to be registered and
such person's address and tax identification number
(or, if more than one, the names, addresses and tax
identification numbers of such persons);
<PAGE> 2
(ii) Be signed by the person or persons entitled to
exercise the Warrants and, if the Warrants are being
exercised by any person or persons other than the
original holder thereof, be accompanied by proof
satisfactory to counsel for the Company of the right
of such person or persons to exercise the Warrants;
and
(iii) Be accompanied by the originally executed copy of
this Stock Warrant Agreement.
(e) PARTIAL EXERCISE. In the event of a partial exercise of the
Warrants, the Company shall either issue a new agreement for
the balance of the Shares subject to this Stock Warrant
Agreement after such partial exercise, or it shall
conspicuously note hereon the date and number of Shares
purchased pursuant to such exercise and the number of Shares
remaining covered by this Stock Warrant Agreement.
(f) RESTRICTIONS ON EXERCISE. The Warrants may not be exercised
(i) if the issuance of the Shares upon such exercise would
constitute a violation of any applicable federal or state
securities laws or other law or regulation or (ii) unless the
Company or the holder hereof, as applicable, obtains any
approval or other clearance which the Company determines to be
necessary or advisable from the Federal Reserve Board, the
Office of the Comptroller of the Currency, the Federal Deposit
Insurance Corporation or any other state or federal banking
regulatory agency with regulatory authority over the operation
of the Company or the Bank (collectively the "Regulatory
Agencies"). The Company may require representations and
warranties from the Warranty Holder as required to comply with
applicable laws or regulations, including the Securities Act
of 1933 and state securities laws.
2. ANTI-DILUTION; MERGER. If, prior to the exercise of Warrants hereunder,
the Company (i) declares, makes or issues, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable on the Shares in shares of its capital stock, (ii)
subdivides the outstanding Shares, (iii) combines the outstanding Shares, (iv)
issues any shares of its capital stock by reclassification of the Shares,
capital reorganization or otherwise (including any such reclassification or
reorganization in connection with a consolidation or merger or and sale of all
or substantially all of the Company's assets to any person), then the Exercise
Price, and the number and kind of shares receivable upon exercise, in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification shall be proportionately adjusted
so that the holder of any Warrant exercised after such time shall be entitled to
receive the aggregate number and kind of shares which, if such Warrant had been
exercised immediately prior to such time, he would have owned upon such exercise
and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination, reclassification, reorganization, consideration,
merger or sale.
3. VALID ISSUANCE OF COMMON STOCK. The Company possesses the full
authority and legal right to issue, sell, transfer, and assign this Warrant and
the Shares issuable pursuant to this Warrant. The issuance of this Warrant vests
in the holder the entire legal and beneficial interests in this Warrant, free
and clear of any liens, claims, and encumbrances and subject to no legal or
equitable restrictions of any kind except as described herein. The Shares that
are
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<PAGE> 3
issuable upon exercise of this Warrant, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid, and non-assessable, and
will be free of restrictions on transfer other than restrictions under
applicable state and federal securities.
4. COMPLIANCE WITH SECURITIES LAWS. This Agreement and the Warrants
represented hereby were issued in reliance on an exemption from registration
under the Securities Act of 1933 (the "Act") pursuant to Section 4(2) of the
Act, and other applicable exemptions under state securities laws. The Company's
reliance on such exemption is predicated in part on the Warrant Holder's
representations set forth herein. Warrant Holder understands that the Warrants
and the Shares issuable upon exercise of the Warrants may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act of 1933, or an exemption therefrom, and that in the absence of an effective
registration statement covering such shares or an available exemption from
registration under the Securities Act, such Shares must be held indefinitely.
5. RESTRICTIONS ON TRANSFERABILITY. This Agreement, the Warrants, and
the Shares issuable on exercise of the Warrants may not assigned or transferred
by the Warrant Holder without the Company's prior written consent and, if so
requested by the Company, the delivery by the Warrant Holder to the Company of
an opinion of counsel in form and substance satisfactory to the Company stating
that such transfer or assignment is in compliance with the Securities Act of
1933 and applicable state securities laws. More particularly, but without
limiting the generality of the foregoing, the Warrants may not be assigned,
transferred (except as provided above), pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of these Warrants contrary to the
provisions hereof shall be without legal effect.
6. RESTRICTIVE LEGEND. Each certificate for Shares issued upon
exercise of the Warrant shall bear a legend stating that they have not been
registered under the Securities Act of 1933 or any state securities laws and
referring to the restrictions on transferability and sale herein.
7. MANDATORY EXERCISE; TERMINATION.
(a) The Company or the Bank may be required to increase its
capital to meet capital requirements imposed by statute, rule,
regulation, or guideline. In order to achieve such capital
increase, the Regulatory Agencies may direct the Company to
require the Warrant Holders to either (i) exercise all part of
their Warrants or (ii) allow the Warrants to be terminated. If
the Regulatory Agencies so direct the Company, then the
Warrant Holder must exercise or forfeit the Warrants as set
forth below.
(b) When the Company or the Bank is required to increase its
capital as described in subsection (a) above, the Company
shall send a notice (the "Notice") to the Warrant Holder (i)
specifying the number of Shares relating to the Warrants for
which the Warrants must be exercised (the "Number") (if less
than all shares relating to warrants held by all holders of
warrants of the Company under agreements substantially similar
to this one are required by the Company to be exercised or
cancelled, the Number for the Warrant Holder shall reflect a
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<PAGE> 4
proportionate allocation based on the number of Shares subject
to this Agreement as compared to the total number of shares
subject to warrants held by all such warrant holders as a
group); (ii) specifying the date prior to which the Warrants
must be totally or partially exercised, as the case may be
(the "Deadline"); (iii) specifying the Exercise Price for the
Shares to be purchased pursuant to the Warrants (such Exercise
Price not to be less than current book value per share); and
(iv) stating that the failure of the Warrant holder to
exercise the Warrants shall result in their automatic
termination.
(c) If the Warrant holder does not exercise the Warrants pursuant
to the terms of the Notice, this Agreement shall be
automatically terminated on the Deadline, without further act
or action by the Warrant Holder or the Company, and the
Warrant Holder shall deliver this Agreement to the Company for
cancellation. If the Number is less than the total number of
Shares that are then subject to exercise under this Agreement,
the Company shall issue a new Stock Warrant Agreement in
compliance with Section 1(e) hereof.
8. COVENANTS OF THE COMPANY. During the term of the Warrants, the Company
shall:
(a) at all times authorize, reserve and keep available, solely for
issuance upon exercise of this Warrant, sufficient shares of
common stock from time to time issuable upon exercise of this
Warrant;
(b) on receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft, or destruction, on delivery
of any indemnity agreement or bond reasonably satisfactory in
form and amount to the Company or, in the case of mutilation,
on surrender and cancellation of this Warrant, at its expense
execute and deliver, in lieu of this Warrant, a new Warrant of
like tenor; and
(c) on surrender for exchange of this Warrant or any Warrant
substituted therefor pursuant hereto, properly endorsed, to
the Company, at its expense, issue and deliver to or on the
order of the holder thereof a new Warrant or Warrants of like
tenor, in the name of such holder or as such holder (on
payment by such holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face or faces thereof
for the issuances of the number of shares of Common Stock
issuable pursuant to the terms of the Warrant or Warrants so
surrendered.
9. NO DILUTION OR IMPAIRMENT. The Company shall not amend its Certificate of
Incorporation or participate in any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of securities or any other
voluntary action for the purpose of avoiding or seeking to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in carrying out all such
action as may be reasonably necessary in order to protect the exercise rights of
the holder against improper dilution or other impairment.
10. AMENDMENT. Neither this Agreement nor the rights granted hereunder may be
amended, changed or waived except in writing signed by each party hereto.
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<PAGE> 5
IN WITNESS WHEREOF, the Company has executed and the holder has
accepted this Stock Warrant Agreement as of the date and year first above
written.
NEW COMMERCE BANCORP.
By:
--------------------------------------
President
(CORPORATE SEAL)
Attest:
----------------------------------
Secretary
WARRANT HOLDER:
By:
--------------------------------------
Signature
--------------------------------------
Print Name
-5-
<PAGE> 1
EXHIBIT 23.1
ELLIOTT, DAVIS & COMPANY, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS
870 South Pleasantburg Drive
Greenville, South Carolina 29607
(864) 242-3370
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the incorporation by reference of our report
dated December 31, 1998, relating to the financial statements of New Commerce
BanCorp, in the Registration Statement on Form SB-2 and Prospectus, and to the
reference to our firm therein under the caption, "Experts."
ELLIOTT, DAVIS & COMPANY, L.L.P.
By: /s/ Elliott, Davis & Company, L.L.P.
--------------------------------------
Greenville, South Carolina
January 11, 1999
