<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON __________, 1999
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------
THE PB FINANCIAL SERVICES CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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GEORGIA 6022 APPLIED FOR
(State or other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
Incorporation or Organization) Classification Code Number)
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9570 MEDLOCK BRIDGE ROAD
DULUTH, GEORGIA 30097
(770) 814-8100
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
MONTY G. WATSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
THE PB FINANCIAL SERVICES CORPORATION
9570 MEDLOCK BRIDGE ROAD
DULUTH, GEORGIA 30097
(770) 814-8100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
with copies to:
BETH LANIER
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
SUITE 1600
191 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30303
(404) 572-6600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
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(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.
[ ]
----------------
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CALCULATION OF REGISTRATION FEE
===================================================================================================================
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED (1) PER UNIT OFFERING PRICE (2) REGISTRATION FEE (3)
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Common Stock, $5.00 par value 775,375 N/A $7,753,750 $2,160
===================================================================================================================
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(1) This Registration Statement covers the maximum number of shares of the
common stock of the Registrant which is expected to be issued in
connection with the merger.
(2) Proceeds received from sale of shares of The Peachtree Bank were
$7,738,659,net of $15,091 in registration costs.
(3) Pursuant to Rule 457(f)(2), the registration fee was computed on the
basis of the aggregate book value of the common stock of The Peachtree
Bank to be exchanged in the merger. THE REGISTRANT HEREBY AMENDS THIS
REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO
DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
===============================================================================
<PAGE> 2
THE PEACHTREE BANK
9570 Medlock Bridge Road
Duluth, Georgia 30096
To the Shareholders of
The Peachtree Bank
On behalf of the board of directors, I am pleased to invite you to
attend the first annual shareholders meeting of The Peachtree Bank. The meeting
will be held at the main office of The Peachtree Bank located at 9570 Medlock
Bridge Road, Duluth, Georgia on Tuesday, June 29, 1999 at 4:00 p.m.
At this meeting we will share with you the progress of the bank. We
are encouraged by the market's reception of our new institution. Growth in
loans and deposits have surpassed our own optimistic expectations.
At this meeting we will ask for your approval of the organization of a
holding company for The Peachtree Bank. This will entail the conversion of your
shares in The Peachtree Bank into shares in The PB Financial Services
Corporation, the proposed holding company. You will receive one share of stock
in the holding company for each share you now hold in The Peachtree Bank. Your
percentage ownership will remain the same for the holding company as it has
been for The Peachtree Bank.
A holding company structure will provide many advantages to the bank
as we move forward, the most significant of which is managing our
capital position and funding our operations. Quality growth is a vital element
to enhancing the value of our shares and we see this step as an important way
to play for continued funding without interruption of growth. This transaction
is described in great detail in the enclosed proxy statement/prospectus. I
encourage you to read this document carefully.
Our desire is that all shareholders attend the annual meeting, but we
understand that a number of you may not be able to be present. Whether or
not you plan to attend please complete, sign and return the enclosed proxy card
promptly. If you are able to attend the meeting, you will still have the
opportunity to vote in person, even if you have previously returned your proxy
card.
ON BEHALF OF THE BOARD OF DIRECTORS I STRONGLY ENCOURAGE YOU TO VOTE
FOR APPROVAL OF THE TRANSACTION BY MARKING THE ENCLOSED PROXY CARD "FOR" ITEM
ONE.
We appreciate your continued support of The Peachtree Bank and we look
forward to seeing you at the meeting.
Sincerely,
Monty G. Watson
President and CEO
- -------------------------------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF THE SECURITIES TO BE ISSUED UNDER THIS PROXY
STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY STATEMENT/PROSPECTUS IS
ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR DEPOSIT ACCOUNTS OR
OTHER OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION AND THEY ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY
OTHER GOVERNMENT AGENCY.
- -------------------------------------------------------------------------------
This proxy statement/prospectus is dated June 3, 1999 and was first mailed to
shareholders on June 4, 1999.
<PAGE> 3
WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ABOUT THE MERGER OR OUR COMPANIES THAT DIFFERS FROM, OR ADDS TO,
THE INFORMATION IN THE PROXY STATEMENT/PROSPECTUS OR IN DOCUMENTS THAT ARE
PUBLICLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THEREFORE, IF ANYONE
DOES GIVE YOU DIFFERENT OR ADDITIONAL INFORMATION, YOU SHOULD NOT RELY ON IT.
IF YOU ARE IN A JURISDICTION WHERE IT IS UNLAWFUL TO OFFER TO EXCHANGE
OR SELL, OR TO ASK FOR OFFERS TO EXCHANGE OR BUY, THE SECURITIES OFFERED BY THIS
PROXY STATEMENT/PROSPECTUS OR TO ASK FOR PROXIES, OR IF YOU ARE A PERSON TO WHOM
IT IS UNLAWFUL TO DIRECT SUCH ACTIVITIES, THEN THE OFFER PRESENTED BY THIS PROXY
STATEMENT/PROSPECTUS DOES NOT EXTEND TO YOU.
THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS SPEAKS
ONLY AS OF ITS DATE UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER
DATE APPLIES.
INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS ABOUT THE PB FINANCIAL
SERVICES CORPORATION HAS BEEN SUPPLIED BY THE PB FINANCIAL SERVICES CORPORATION,
AND INFORMATION ABOUT THE PEACHTREE BANK HAS BEEN SUPPLIED BY THE PEACHTREE
BANK.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
Each company makes forward-looking statements that are subject to risks
and uncertainties in this document. The PB Financial Services Corporation's
public documents also contain forward-looking statements. These forward-looking
statements include information about possible or assumed future results of
operations or the performance of The PB Financial Services Corporation after the
holding company is established. When we use words such as "believes,"
"anticipates," "expects," "intends," "targeted," and similar expressions, we are
making forward-looking statements. Many possible events or factors could affect
the financial results and performance of each of our companies. This could cause
results or performances to differ materially from those expressed in our
forward-looking statements.
You should consider these risks when you vote on the reorganization.
These possible events or factors include the following:
(1) our cost savings from the reorganization are less than we
expect, or we are unable to obtain those cost savings as soon
as we expect;
(2) we lose more deposits, customers, or business than we expect;
(3) competition in the banking industry increases significantly;
(4) our restructuring costs are higher than we expect or our
operating costs after the reorganization are greater than we
expect;
(5) technological changes and systems integration are harder to
make or more expensive than we expect;
(6) changes in the interest rate environment reduce our margins;
(7) general economic or business conditions are worse than we
expect;
(8) legislative or regulatory changes occur which adversely
affect our business;
(9) changes occur in business conditions and inflation;
(10) changes occur in the securities markets; and
(11) we have more trouble obtaining regulatory approvals for the
merger than we expect.
<PAGE> 4
PROPOSED REORGANIZATION OF THE PEACHTREE BANK
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 29, 1999
The Peachtree Bank will hold the annual meeting of shareholders at the
main office of The Peachtree Bank, located at 9570 Medlock Bridge Road, Duluth,
Georgia, on Tuesday, June 29, 1999, at _____ p.m., local time, to vote on:
1. To elect eleven (11) directors to serve until the next annual
meeting and until their successors are elected and qualified.
2. A Plan of Reorganization providing for the reorganization of
The Peachtree Bank into a holding company structure by merging The Peachtree
Bank with Interim PB Corporation, a wholly-owned subsidiary of The PB Financial
Services Corporation. Both Interim PB Corporation and The PB Financial Services
Corporation have been organized at the direction of The Peachtree Bank. A copy
of the Plan of Reorganization is attached to the accompanying proxy
statement/prospectus as Appendix A.
3. Any other business as may come properly before the annual
meeting, or any adjournments or postponements.
Only shareholders who hold their stock at the close of business on [MAY
14], 1999, will be entitled to notice of and to vote at the annual meeting or
any adjournment or postponement of the meeting. Approval of the Plan of
Reorganization and the transactions contemplated in the plan requires the
affirmative vote of two-thirds of the issued and outstanding shares of The
Peachtree Bank common stock.
The Board of Directors of The Peachtree Bank recommends that
shareholders vote FOR approval of the Plan of Reorganization.
BY ORDER OF THE BOARD OF DIRECTORS
Monty G. Watson
President and Chief Executive Officer
Duluth, Georgia
, 1999
- ---------- --
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, DATE, AND SIGN THE ENCLOSED FORM OF PROXY AND PROMPTLY RETURN IT IN
THE ENCLOSED POSTAGE PAID RETURN ENVELOPE IN ORDER TO ENSURE THAT YOUR SHARES
WILL BE REPRESENTED AT THE ANNUAL MEETING.
--------------------
EACH SHAREHOLDER HAS THE RIGHT TO DISSENT FROM THE PLAN OF
REORGANIZATION AND DEMAND PAYMENT OF THE FAIR VALUE OF HIS SHARES IN CASH IF
THE MERGER IS CONSUMMATED. THE RIGHT OF ANY SHAREHOLDER TO RECEIVE SUCH PAYMENT
IS CONTINGENT UPON STRICT COMPLIANCE WITH THE REQUIREMENTS OF TITLE 14 CHAPTER
2, ARTICLE 13 OF THE GEORGIA BUSINESS CORPORATION CODE. THE FULL TEXT OF TITLE
14, CHAPTER 2, ARTICLE 13 THAT DESCRIBES THE RIGHT TO DISSENT IS INCLUDED AS
APPENDIX B TO THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. SEE "DESCRIPTION OF
MERGER--DISSENTERS' RIGHTS" IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS,
PAGE __.
<PAGE> 5
TABLE OF CONTENTS
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Page
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SUMMARY...........................................................................................................1
PROPOSAL 1 - ELECTION OF DIRECTORS................................................................................1
REORGANIZATION INTO HOLDING COMPANY STRUCTURE.....................................................................1
THE COMPANIES..................................................................................................1
THE REORGANIZATION.............................................................................................1
OUR REASONS FOR THE REORGANIZATION.............................................................................1
RECOMMENDATION TO PEACHTREE BANK SHAREHOLDERS..................................................................2
THE PEACHTREE BANK SPECIAL SHAREHOLDER MEETING.................................................................2
RECORD DATE FOR SPECIAL SHAREHOLDER MEETING....................................................................2
VOTE REQUIRED..................................................................................................2
WHAT PEACHTREE BANK SHAREHOLDERS WILL RECEIVE..................................................................2
REGULATORY APPROVALS...........................................................................................2
CONDITIONS TO THE REORGANIZATION...............................................................................3
TERMINATION OF THE PLAN OF REORGANIZATION......................................................................3
DISSENTERS' RIGHTS.............................................................................................3
IMPORTANT FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION................................................4
ACCOUNTING TREATMENT OF THE REORGANIZATION.....................................................................4
CERTAIN DIFFERENCES IN SHAREHOLDERS' RIGHTS....................................................................4
DIVIDENDS AFTER THE REORGANIZATION.............................................................................4
COMPARATIVE PER SHARE DATA.....................................................................................4
MEETING OF PEACHTREE BANK SHAREHOLDERS............................................................................5
DATE, PLACE, TIME, AND PURPOSE.................................................................................5
RECORD DATE, VOTING RIGHTS, REQUIRED VOTE, AND REVOCABILITY OF PROXIES.........................................5
PROPOSAL 1 - ELECTION OF DIRECTORS................................................................................7
REORGANIZATION INTO HOLDING COMPANY STRUCTURE.....................................................................8
DESCRIPTION OF THE REORGANIZATION.................................................................................6
GENERAL........................................................................................................6
PARTIES TO THE REORGANIZATION PLAN.............................................................................6
TERMS OF THE REORGANIZATION PLAN...............................................................................7
CONVERSION OF STOCK............................................................................................7
EXCHANGE OF STOCK CERTIFICATES.................................................................................7
REASONS FOR THE REORGANIZATION.................................................................................8
REGULATORY APPROVALS AND CONDITIONS; AMENDMENT AND TERMINATION.................................................9
ACCOUNTING TREATMENT..........................................................................................10
TAX CONSEQUENCES..............................................................................................10
STATUTORY PROVISIONS FOR DISSENTING SHAREHOLDERS..............................................................10
DESCRIPTION OF PB FINANCIAL COMMON STOCK.........................................................................12
EFFECT OF THE REORGANIZATION ON RIGHTS OF SHAREHOLDERS...........................................................12
GENERAL.......................................................................................................12
AUTHORIZED CAPITAL STOCK......................................................................................12
DIVIDENDS.....................................................................................................13
VOTING RIGHTS.................................................................................................14
LIQUIDATION RIGHTS............................................................................................14
PREEMPTIVE RIGHTS.............................................................................................14
REDEMPTION OF SHARES..........................................................................................14
OTHER.........................................................................................................14
ANTITAKEOVER PROVISIONS OF PB FINANCIAL'S ARTICLES OF INCORPORATION...........................................15
ADVANTAGES AND DISADVANTAGES OF ARTICLES 7, 8 AND 9...........................................................16
INDEMNIFICATION...............................................................................................19
ACTIONS BY SHAREHOLDERS WITHOUT A MEETING.....................................................................20
SHAREHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS.............................................................20
COMPARATIVE MARKET PRICES AND DIVIDENDS..........................................................................21
BUSINESS OF PEACHTREE BANK.......................................................................................21
GENERAL.......................................................................................................21
PROPERTIES....................................................................................................22
EMPLOYEES.....................................................................................................22
LEGAL PROCEEDINGS.............................................................................................22
MANAGEMENT OF PEACHTREE BANK.....................................................................................22
EXECUTIVE COMPENSATION...........................................................................................25
CERTAIN TRANSACTIONS.............................................................................................25
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MANAGEMENT STOCK OWNERSHIP....................................................................................26
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS OF PEACHTREE BANK................................................27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.........................27
BUSINESS OF PB FINANCIAL.........................................................................................32
GENERAL.......................................................................................................32
PROPOSED NONBANKING ACTIVITIES................................................................................32
EMPLOYEES.....................................................................................................32
PROPERTY......................................................................................................32
LEGAL PROCEEDINGS.............................................................................................33
MANAGEMENT OF PB FINANCIAL.......................................................................................33
PB FINANCIAL EXECUTIVE COMPENSATION..............................................................................33
CASH COMPENSATION.............................................................................................33
OUTSIDE DIRECTOR OPTION PLAN..................................................................................33
INTERESTS OF MANAGEMENT IN THE REORGANIZATION....................................................................35
OWNERSHIP OF PB FINANCIAL COMMON STOCK...........................................................................35
MANAGEMENT STOCK OWNERSHIP....................................................................................35
FINANCIAL INFORMATION............................................................................................35
FINANCIAL STATEMENTS..........................................................................................35
CAPITALIZATION................................................................................................38
SHAREHOLDER PROPOSALS............................................................................................39
LEGAL MATTERS....................................................................................................39
OTHER MATTERS....................................................................................................39
WHERE YOU CAN FIND MORE INFORMATION ABOUT PB FINANCIAL...........................................................39
APPENDIX A -- AGREEMENT AND PLAN OF MERGER BY AND AMONG PB FINANCIAL
CORPORATION, INTERIM PB CORPORATION AND THE PEACHTREE
BANK...........................................................................................A-1
APPENDIX B -- DISSENTERS' RIGHTS.............................................................................B-1
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<PAGE> 7
SUMMARY
This summary highlights selected information from this proxy
statement/prospectus. Because this is a summary, it does not contain all of the
information that may be important to you. You should read the entire proxy
statement/prospectus and its appendices carefully before you decide to vote.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board proposes that the current slate of directors to be reelected
as directors of The Peachtree Bank to serve an additional one-year term and
until their successors are duly elected and qualified. If any of these nominees
should become unavailable to serve as a director (which is not now
anticipated), then the persons named as proxies reserve full discretion to
vote for any other person or persons as may be nominated. The affirmative vote
of a majority of the shares voted is required for the election of directors.
PROPOSAL 2 -- REORGANIZATION INTO HOLDING COMPANY STRUCTURE
THE COMPANIES (Page __ for Peachtree Bank, Page __ for PB Financial)
The Peachtree Bank is a Georgia state-chartered bank. Peachtree Bank's
main office located in Duluth, Georgia is its sole banking office. Peachtree
Bank offers a broad range of banking and banking-related services. As of
December 31, 1998, Peachtree Bank's total assets were about $19.76 million,
deposits were about $12.61 million and shareholder's equity was about $6.99
million. The PB Financial Services Corporation, a Georgia corporation, was
organized on December 11, 1998, at the direction of Peachtree Bank to serve as a
bank holding company for and the sole shareholder of Peachtree Bank. Interim PB
Corporation, a Georgia corporation, was organized on February 18, 1999, at the
direction of Peachtree Bank. Interim is a wholly-owned subsidiary of PB
Financial and its sole purpose is to facilitate the reorganization of Peachtree
Bank. The principal executive offices of Peachtree Bank, PB Financial and
Interim are located at:
9570 Medlock Bridge Road
Duluth, Georgia 30096
(770) 814-8100
THE REORGANIZATION (Page ___)
The Plan of Reorganization provides for the merger of Peachtree Bank
and Interim. After the merger, the combined company will be called "The
Peachtree Bank" and will be a wholly-owned subsidiary of PB Financial after the
reorganization.
A copy of the Plan of Reorganization is included as Appendix A to this
proxy statement/prospectus. We encourage you to read the Plan of Reorganization
since it is the legal document that governs the reorganization.
OUR REASONS FOR THE REORGANIZATION (Page ___)
The Boards of Directors of Peachtree Bank and PB Financial unanimously
approved the Plan of Reorganization. In deciding to approve the Plan of
Reorganization, the Boards of Directors of Peachtree Bank and PB Financial
considered a number of factors, including:
- A holding company will have greater corporate flexibility to
issue stock, borrow money, and redeem stock;
- A holding company, subject to existing laws and required
regulatory approvals, may operate banks throughout Georgia
and may engage in non-banking activities; and
- The holding company structure will allow us to be more
competitive with larger banks, which are already members of a
multi-bank holding company system, and community banks, which
are now owned by a one-bank holding company.
<PAGE> 8
The Boards of Directors of Peachtree Bank and PB Financial believe
that the reorganization will result in a company with expanded opportunities
for profitable growth and will provide greater ability to compete in the
changing and competitive financial services industry.
RECOMMENDATION TO PEACHTREE BANK SHAREHOLDERS (Page ___)
Peachtree Bank's Board of Directors believes that the reorganization
of Peachtree Bank into a holding company structure is in the best interests of
Peachtree Bank and its shareholders. The Peachtree Bank Board unanimously
recommends that you vote FOR the reorganization.
THE PEACHTREE BANK SPECIAL SHAREHOLDER MEETING (Page ___)
The annual meeting will be held at the main office of Peachtree Bank,
located at 9570 Medlock Bridge Road, Duluth, Georgia, on Tuesday, June 29, 1999,
at ____ p.m., local time. Peachtree Bank's Board of Directors is soliciting
proxies for use at the annual meeting of Peachtree Bank shareholders. At the
annual meeting, Peachtree Bank's Board of Directors will ask the Peachtree Bank
shareholders to vote on a proposal to approve the reorganization of Peachtree
Bank into a holding company structure.
RECORD DATE FOR SPECIAL SHAREHOLDER MEETING (Page ___)
The Board of Directors of Peachtree Bank has set the record date for
the annual meeting as the close of business on [MAY 14], 1999. You may vote at
the annual meeting if you owned Peachtree Bank common stock on the record date.
You will have one vote for each share of Peachtree Bank common stock you owned
on the record date. You can revoke your proxy at any time prior to the vote at
the annual meeting.
VOTE REQUIRED (Page ___)
In order to approve the merger, shareholders holding two-thirds of the
outstanding shares of Peachtree Bank common stock must approve the Plan of
Reorganization. As of the record date, all directors and executive officers of
Peachtree Bank as a group (13 persons) could vote approximately 219,875 shares
of Peachtree Bank common stock, constituting approximately 28.36% of the total
number of shares of Peachtree Bank common stock outstanding at that date.
Peachtree Bank's directors and executive officers have committed to vote their
shares of Peachtree Bank common stock in favor of the reorganization.
WHAT PEACHTREE BANK SHAREHOLDERS WILL RECEIVE (Page ___)
As a result of the reorganization, each Peachtree Bank shareholder
will receive one share of PB Financial common stock for each share of Peachtree
Bank common stock that they own. Once the reorganization is complete, PB
Financial's transfer agent will mail to you materials and instructions for use
to exchange your Peachtree Bank stock certificates for PB Financial stock
certificates.
PEACHTREE BANK SHAREHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES
UNTIL THEY ARE INSTRUCTED TO DO SO AFTER THE REORGANIZATION.
REGULATORY APPROVALS (Page ___)
We cannot complete the reorganization until we receive approval of the
Federal Reserve, the FDIC and the Georgia Department of Banking and Finance. PB
Financial and Peachtree Bank filed an application with the FDIC seeking
approval of the merger of Peachtree Bank and Interim. PB Financial
2
<PAGE> 9
also filed an application with the Federal Reserve requesting authorization to
become a bank bolding company. PB Financial and Peachtree Bank also filed a
copy of these applications with the Georgia Department of Banking and Finance.
The Georgia Department of Banking and Finance is the primary regulator of
Peachtree Bank. It is possible that the Federal Reserve, FDIC or Georgia
Department of Banking and Finance approvals will impose conditions or
restrictions that PB Financial or Peachtree Bank believe to materially
adversely affect the economic or business benefits of the reorganization.
CONDITIONS TO THE REORGANIZATION (Page ___)
The completion of the reorganization depends upon PB Financial and
Peachtree Bank satisfying a number of conditions, including:
1. Peachtree Bank shareholders and Interim shareholders must
approve the Plan of Reorganization;
2. The number of shares held by shareholders of Peachtree Bank
who have perfected dissenter's rights of appraisal may not be
greater than 10% of Peachtree Bank's outstanding shares or
otherwise make the consummation of the reorganization
inadvisable;
3. PB Financial and Peachtree Bank must receive all required
regulatory approvals and any waiting periods required by law
must have passed; and
4. PB Financial and Peachtree Bank must receive a legal opinion
confirming the tax-free nature of the reorganization.
TERMINATION OF THE PLAN OF REORGANIZATION (Page ___)
Either PB Financial, Peachtree Bank or Interim can terminate the Plan
of Reorganization without completing the reorganization if, among other things,
any of the following occurs:
1. The number of shares voted against the Plan of Reorganization
makes the reorganization inadvisable in the opinion of the
Board of Directors of Peachtree Bank, PB Financial or
Interim;
2. Any action, suit, proceeding or claim is instituted or
threatened relating to the reorganization, which in the
opinion of the Board of Directors of Peachtree Bank, PB
Financial or Interim makes the consummation of the
reorganization inadvisable;
3. Any of the conditions to the reorganization are not
satisfied; or
4. Any other event occurs which the Board of Directors of
Peachtree Bank, PB Financial or Interim deem to cause the
reorganization to become inadvisable.
If the Plan of Reorganization is terminated, it will be void and of no
further effect. If the merger is not consummated, Peachtree Bank will continue
to operate as a state chartered bank under its present management.
DISSENTERS' RIGHTS (Page ___ and Appendix B)
The Georgia Business Corporation Code provides that a Peachtree Bank
shareholder may receive cash for the "fair value" of his or her shares if the
Peachtree Bank shareholder does not vote in favor of the reorganization and
complies with certain notice requirements and other procedures. If you wish to
dissent, you must precisely follow specific procedures to exercise the right to
dissent or the right to dissent may be lost. The procedures to exercise
dissenters' rights are described in this proxy statement/prospectus and the
provisions of the Georgia Business Corporation Code that describe the
procedures are attached as Appendix B.
3
<PAGE> 10
IMPORTANT FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION (Page ___)
We expect that PB Financial, Peachtree Bank and their shareholders
will not recognize any gain or loss for U.S. federal income tax purposes as a
result of the reorganization. Both companies have received a legal opinion that
this will be the case. This legal opinion is filed as an exhibit to the
Registration Statement of which this proxy statement/prospectus is a part. The
opinion will not bind the Internal Revenue Service, which could take a
different view. This tax treatment will not apply to any Peachtree Bank
shareholder who exercises dissenters' rights and receives cash in exchange for
his or her shares of Peachtree Bank stock. Determining the actual tax
consequences of the reorganization to you as an individual taxpayer can be
complicated. The tax treatment will depend on your specific situation and many
variables not within our control. You should consult your own tax advisor for a
full understanding of the reorganization tax consequences.
ACCOUNTING TREATMENT OF THE REORGANIZATION (Page ____)
The reorganization, if completed as proposed, will be accounted for in
a manner similar to that of a pooling of interests. This means that, for
accounting and financial reporting purposes, we will treat Peachtree Bank and
PB Financial as if they had always been one company. Therefore, the assets and
liabilities of Peachtree Bank will be recorded on the books of the holding
company at their respective values on the books of Peachtree Bank at the
effective date of the reorganization.
CERTAIN DIFFERENCES IN SHAREHOLDERS' RIGHTS (Page ___)
The rights of PB Financial shareholders differ from the rights of
Peachtree Bank shareholders in certain important respects, some of which
constitute additional anti-takeover provisions provided for in PB Financial's
Articles of Incorporation and Bylaws.
DIVIDENDS AFTER THE REORGANIZATION (Page ____)
Peachtree Bank has not paid dividends to its shareholders in the past.
Initially, we do not expect that upon completion of the reorganization PB
Financial will pay dividends to its shareholders.
COMPARATIVE PER SHARE DATA
Prior to the reorganization, PB Financial will not conduct any
operations. Since upon the consummation of the reorganization, each outstanding
share of Peachtree Bank will be converted into one share of PB Financial common
stock, the pro forma combined book value per share, net income per share and
market value per share for PB Financial are expected to be equal to the
respective historical per share amounts for Peachtree Bank.
4
<PAGE> 11
MEETING OF PEACHTREE BANK SHAREHOLDERS
DATE, PLACE, TIME, AND PURPOSE
Peachtree Bank's Board of Directors is sending you this proxy
statement/prospectus in connection with its solicitation of proxies for use at
the annual meeting of Peachtree Bank shareholders. At the annual meeting, the
Peachtree Bank Board of Directors will ask you to elect directors of Peachtree
Bank to serve until the next annual meeting and until their successors are duly
elected and qualified and to vote on a proposal to approve the Plan of
Reorganization. Peachtree Bank will pay the costs associated with the
solicitation of proxies for the annual meeting. The annual meeting will be held
at the main office of Peachtree Bank, located at 9570 Medlock Bridge Road,
Duluth, Georgia, on Tuesday, June 29, 1999, at ___ p.m., local time.
RECORD DATE, VOTING RIGHTS, REQUIRED VOTE, AND REVOCABILITY OF PROXIES
Peachtree Bank has set the close of business on [MAY 14], 1999, as the
record date for determining holders of outstanding shares of Peachtree Bank
common stock entitled to notice of and to vote at the annual meeting. Only
holders of Peachtree Bank common stock of record on the books of Peachtree Bank
at the close of business on the record date are entitled to notice of and to
vote at the annual meeting. As of the record date, there were 775,375 shares of
Peachtree Bank common stock issued and outstanding and entitled to vote at the
annual meeting, which shares were held by [570] holders of record.
Peachtree Bank shareholders are entitled to one vote for each share of
Peachtree Bank common stock owned on the record date. The affirmative vote of a
majority of the shares voted is required for the election of directors. The vote
required for the approval of the Plan of Reorganization is two-thirds of the
issued and outstanding shares of Peachtree Bank common stock entitled to vote at
the annual meeting. Consequently, with respect to the proposal to approve the
Plan of Reorganization, abstentions and broker non-votes will be counted as part
of the base number of votes to be used in determining if the proposal has
received the requisite number of base votes for approval. Thus, an abstention or
a broker non-vote will have the same effect as a vote "against" the proposal.
The designated proxy holder will vote shares of Peachtree Bank common
stock, if such proxies are properly executed, received in time and not revoked,
in accordance with the instructions on the proxies. IF THE PROXY DOES NOT
CONTAIN INSTRUCTIONS OF HOW TO VOTE, THE PROXY HOLDERS WILL VOTE FOR APPROVAL
OF THE PLAN OF REORGANIZATION. ADDITIONALLY, IF YOU DO NOT INCLUDE INSTRUCTIONS
WITH YOUR PROXY, THE PROXY HOLDER WILL USE HIS OR HER DISCRETION TO VOTE ON ANY
OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING. FURTHER, IF
YOU DO NOT INCLUDE INSTRUCTIONS WITH YOUR PROXY AS TO HOW TO VOTE AT THE
ANNUAL MEETING, YOU WILL NOT BE ENTITLED TO ASSERT DISSENTERS' RIGHTS. SEE
"DESCRIPTION OF MERGER -- DISSENTERS' RIGHTS." If necessary, the proxy holder
may vote in favor of a proposal to adjourn the annual meeting in order to
permit further solicitation of proxies in the event there are not sufficient
votes to approve the proposal at the time of the annual meeting. No proxy that
is voted against the approval of the Plan of Reorganization will be voted in
favor of an adjournment of the annual meeting in order to permit further
solicitation of proxies.
- -------------------------------------------------------------------------------
FAILURE EITHER TO VOTE BY PROXY OR IN PERSON AT THE ANNUAL MEETING
WILL HAVE THE EFFECT OF A VOTE CAST AGAINST APPROVAL OF THE PLAN OF
REORGANIZATION.
- -------------------------------------------------------------------------------
A Peachtree Bank shareholder who has given a proxy may revoke it at
any time prior to its exercise at the annual meeting by (1) giving written
notice of revocation to the Secretary of Peachtree Bank, (2) properly
submitting to Peachtree Bank a duly executed proxy bearing a later date, or (3)
attending the annual meeting and voting in person. All written notices of
revocation and other
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<PAGE> 12
communications with respect to revocation of proxies should be addressed as
follows: The Peachtree Bank, 9570 Medlock Bridge Road, Duluth, Georgia 30097;
Attention: Monty G. Watson.
As of the record date, all directors and executive officers of
Peachtree Bank as a group (13 persons) were entitled to vote approximately
219,875 shares of Peachtree Bank common stock, constituting approximately
28.36% of the total number of shares of Peachtree Bank common stock outstanding
at that date. All directors and executive officers of Peachtree Bank have
committed to vote their shares of Peachtree Bank common stock in favor of the
Plan of Reorganization. See "BUSINESS OF PEACHTREE BANK -- Management."
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board proposes that the current slate of directors to be reelected as
directors of The Peachtree Bank to serve an additional one-year term and until
their successors are duly elected and qualified. If any of these nominees should
become unavailable to serve as a director (which is not now anticipated), then
the persons named as proxies reserve full discretion to vote for any other
person or persons as may be nominated. The affirmative vote of a majority of the
shares voted is required for the election of directors.
The table below sets forth for each director nominee (a) the person's name
(b) his age at January 1, 1999, (c) the year he was first elected as a director,
and (d) his position with Peachtree Bank other than as a director and his other
business experience for the past five years.
Director Nominees
To Serve a term of One Year Until 2000
<TABLE>
<CAPTION>
Year
First
Name Age Elected Principal Occupation
---- --- ------- --------------------
<S> <C> <C> <C>
Robert D. Cheeley 41 1998 Director of Peachtree Bank and Attorney/Retired
Daniel B. Cowart 40 1998 Director of Peachtree Bank and Real Estate
Developer
Paul D. Donaldson 50 1998 Director of Peachtree Bank and Real Estate
Developer
Charles Douglas 74 1998 Director of Peachtree Bank and Insurance
Agent/Retired
Dexter R. Floyd 52 1998 Director of Peachtree Bank and Direct Mail
Advertising/Printing
J. Edwin Howard 70 1998 Director of Peachtree Bank and Retired
John J. Howard 39 1998 Chairman of the Board of Peachtree Bank and
Retail/Hardware
J. Stephen Hurst 49 1998 Director of Peachtree Bank and Insurance Agent
Charles A. Machemehl, III 41 1998 Director of Peachtree Bank and Orthodontist
J. Paul Maggard 37 1998 Director of Peachtree Bank and Restaurateur
Monty G. Watson 41 1998 Chief Executive Officer, President and Director
of Peachtree Bank
</TABLE>
PROPOSAL 2 - REORGANIZATION INTO HOLDING COMPANY STRUCTURE
DESCRIPTION OF THE REORGANIZATION
The following information describes certain aspects of the
reorganization. This description is not complete and is qualified in its
entirety by reference to the Appendices hereto, including the Plan of
Reorganization, which is attached as Appendix A and is incorporated by
reference to this proxy statement/prospectus. All shareholders are urged to
read the Appendices in their entirety.
GENERAL
Upon consummation of the reorganization, Peachtree Bank will merge
with Interim, a wholly-owned subsidiary of PB Financial. Peachtree Bank will
survive the merger and the separate existence of Interim will cease. On the
effective date of the reorganization, each share of Peachtree Bank common stock
then issued and outstanding, excluding shares held by Peachtree Bank
shareholders who perfect their dissenters' rights, will be converted into and
exchanged for the right to receive one share of PB Financial common stock.
PARTIES TO THE REORGANIZATION PLAN
Peachtree Bank is a commercial bank organized and operating under the
Financial Institutions Code of Georgia.
PB Financial is a Georgia corporation which was organized at the
direction of Peachtree Bank to serve as a holding company for and the sole
shareholder of Peachtree Bank. As of the close of business on the record date,
PB Financial had 10,000,000 shares of common stock, $5.00 par value,
authorized, of which one share was issued and outstanding. At present, PB
Financial's sole shareholder is Monty G. Watson, but upon consummation of the
reorganization, each present shareholder of Peachtree Bank will hold the same
number of shares of PB Financial common stock as he or she held of Peachtree
Bank common stock prior to the reorganization.
Interim is a Georgia corporation which was organized at the direction
of Peachtree Bank for the sole purpose of facilitating the reorganization. At
the close of business on the record date, Interim had 10,000,000 shares of
common stock, $5.00 par value, authorized, of which one share was issued and
outstanding and held of record by PB Financial.
6
<PAGE> 13
TERMS OF THE REORGANIZATION PLAN
Peachtree Bank will be reorganized into a holding company structure by
merging Interim into Peachtree Bank as described in the Plan of Reorganization.
Peachtree Bank will be the survivor of the merger, or the resulting bank, and
Interim will cease to exist. The 775,375 issued and outstanding shares of the
resulting Peachtree Bank common stock, $5.00 par value, will be owned by PB
Financial.
Peachtree Bank's officers and directors will not be changed as a
result of the reorganization.
If the shareholders of Peachtree Bank approve the Plan of
Reorganization by the necessary vote, the merger of Interim into Peachtree Bank
will be effective and the reorganization will be consummated as of the date
specified in the certificate of merger which will be issued by the Georgia
Secretary of State in accordance with the provisions of Section 7-1-535 of the
Financial Institutions Code of Georgia.
CONVERSION OF STOCK
On the effective date of the reorganization, each issued and
outstanding share of Peachtree Bank common stock and Interim common stock will
be converted into the consideration described below:
(a) Each share of Peachtree Bank common stock will be converted
into one share of PB Financial common stock.
(b) The one share of Interim Stock held of record by PB Financial
will be converted into 775,375 shares of the resulting
Peachtree Bank common stock.
On the effective date of the reorganization, the resulting Peachtree
Bank will also distribute an amount equal to the capital and surplus of Interim
($5.00) to PB Financial, and PB Financial will use this distribution to redeem,
at cost, the one organization share of PB Financial common stock issued to
Monty G. Watson.
EXCHANGE OF STOCK CERTIFICATES
As soon as practicable after the effective date of the reorganization,
PB Financial will mail a letter of transmittal to shareholders who did not
perfect dissenters rights. The letter of transmittal will include instructions
for the exchange of stock certificates representing Peachtree Bank common stock
for stock certificates representing PB Financial common stock. PB Financial
will issue and mail to each holder of Peachtree Bank common stock, who returns
their certificates representing Peachtree Bank common stock and a properly
completed letter of transmittal, a certificate or certificates representing the
number of shares of PB Financial common stock to which the holder is entitled.
SHAREHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE THE
LETTER OF TRANSMITTAL.
After the effective date of the reorganization, Peachtree Bank
shareholders of record as of the effective date will be entitled to vote at any
meeting of the shareholders of PB Financial regardless of whether such
shareholders have surrendered their Peachtree Bank stock certificates.
7
<PAGE> 14
REASONS FOR THE REORGANIZATION
Peachtree Bank's Board of Directors considered forming a bank holding
company at the same time Peachtree Bank was formed but were advised that forming
a bank holding company at that time could delay the organization process. The
Board of Directors of Peachtree Bank now believes that reorganization into a
holding company structure is in the best interests of Peachtree Bank and its
shareholders for the following reasons:
- A holding company is a more modern corporate structure for a
financial institution.
- A holding company will have greater corporate flexibility
than Peachtree Bank, such as the ability, without regulatory
approvals under certain circumstances, to issue stock, borrow
money and redeem stock.
- A holding company, subject to required approvals, can acquire
interests in and operate banks throughout Georgia and
elsewhere in the Southeast, if deemed appropriate.
- A holding company may, subject to existing laws, engage in
nonbanking activities and form nonbank subsidiaries.
- PB Financial will have a large number of authorized shares of
PB Financial Stock available for issuance which can be issued
from time to time, if necessary, to raise additional capital,
to make acquisitions and for other proper corporate purposes
without further action by the shareholders of PB Financial.
See "Comparative Legal Rights of Shareholders Authorization
and Issuance of Shares."
- PB Financial will be able to borrow money for various
corporate purposes.
- PB Financial will also have the authority to redeem shares of
PB Financial common stock without prior approval of the Board
of Governors of the Federal Reserve System (the "Federal
Reserve") as long as (a) its total and tier 1 risk-based
capital ratios and its leverage capital ratio exceed the
thresholds for "well-capitalized" both before and after the
redemption; (b) it received a "1" or "2" rating on its most
recent examination; and (c) it is not the subject of any
unresolved supervisory issues. See "Certain Effects of the
Reorganization - Redemption of Shares."
- PB Financial will be more competitive since many of the
larger banks in Georgia are already members of a multi-bank
holding company system, and many community banks in Georgia
are now owned by a one-bank holding company.
Management believes that the power and flexibility of a holding
company structure will better enable Peachtree Bank and PB Financial to compete
with other financial institutions and will place PB Financial in a better
position for future growth.
At the present time, neither Peachtree Bank nor PB Financial has any
understanding or commitments to make acquisitions or to engage in new
activities. However, management of PB Financial believes that if the Plan of
Reorganization is approved, there may be opportunities for acquisitions and new
activities for PB Financial which the Board of Directors might consider to be
beneficial to PB Financial and its shareholders.
8
<PAGE> 15
The Board of Directors of Peachtree Bank has unanimously approved the
terms of the Plan of Reorganization and recommends that shareholders of
Peachtree Bank vote in favor of the Plan of Reorganization. The directors of PB
Financial and Interim have also unanimously approved the terms of the
Reorganization.
REGULATORY APPROVALS AND CONDITIONS; AMENDMENT AND TERMINATION
Consummation of the Reorganization is subject to various conditions
set forth in the Plan of Reorganization including the following: (a) approval
of the Plan of Reorganization by the holders of at least two-thirds of the
775,375 outstanding shares of Peachtree Bank common stock; (b) approval by the
FDIC, the Federal Reserve and the Georgia Department of Banking and Finance;
and (c) shareholders who have perfected dissenters' rights of appraisal holding
no more than 10% of the shares of Peachtree Bank common stock. As of the date
of this proxy statement/prospectus, applications for approval have been filed
with the FDIC, the Federal Reserve and the Department of Banking and are
pending. Peachtree Bank and PB Financial do not anticipate any difficulty in
securing the necessary regulatory approvals or in satisfying the other
conditions to consummation of the reorganization.
The Plan of Reorganization may be amended at any time before the
reorganization becomes effective by agreement among Peachtree Bank, PB
Financial and Interim; provided, however, no amendment reducing the number of
shares of PB Financial common stock to be received by shareholders of Peachtree
Bank will be valid without being approved by the shareholders of Peachtree
Bank.
The Plan of Reorganization may be terminated by any of the parties to
the Plan of Reorganization (a) if the number of shares of Peachtree Bank common
stock voted against the Plan of Reorganization makes the transaction
inadvisable in the opinion of the Board of Directors of any of the parties to
the reorganization, (b) if any lawsuit has been instituted or threatened
relating to the proposed reorganization which makes consummation of the
reorganization inadvisable in the opinion of the Board of Directors of any of
the parties to the reorganization, (c) if any of the conditions to consummation
of the reorganization have not been satisfied or (d) if for any other reason
consummation of the reorganization is deemed inadvisable in the opinion of the
Board of Directors of any of the parties to the reorganization.
The review of Peachtree Bank's application by the Federal Reserve, the
FDIC, and Georgia Department of Banking and Finance does not include an
evaluation of the proposed transaction from the financial perspective of the
individual shareholders of Peachtree Bank. Further, no shareholder should
construe regulatory approvals of the applications to be a recommendation that
the shareholders vote to approve the proposal. Each shareholder entitled to
vote should evaluate the proposal to determine the personal financial impact on
him or her of the completion of the proposed transaction. Shareholders not
fully knowledgeable in such matters are advised to obtain the assistance of
competent professionals in evaluating all aspects of the proposal including any
determination that the completion of the proposed transaction is in the best
financial interest of the shareholder.
9
<PAGE> 16
ACCOUNTING TREATMENT
The reorganization, if completed as proposed, will be treated in a
manner similar to that of a pooling of interests for accounting purposes.
Accordingly, under generally accepted accounting principles, the assets and
liabilities of Peachtree Bank will be recorded on the books of PB Financial at
their respective values on the books of Peachtree Bank at the effective date of
the reorganization.
TAX CONSEQUENCES
The proposed reorganization will be treated as a reorganization under
Section 368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code of 1986, or
an exchange under Section 351 of the Code. In form, the merger of Interim with
and into Peachtree Bank is structured to qualify as a reorganization within the
meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code.
Since Interim was formed solely for the purpose of participating in the
reorganization, will engage in no other business activities, and will go out of
existence on the effective date of the reorganization, special counsel to
Peachtree Bank believes that Interim's transitory existence may be disregarded
for tax purposes. Consequently, the transaction may be treated in substance as
an exchange by Peachtree Bank shareholders of their Peachtree Bank common stock
for PB Financial common stock. In either case, the federal income tax
consequences of the proposed reorganization will be as follows:
(a) No gain or loss will be recognized by a Peachtree Bank
shareholder who exchanges his or her Peachtree Bank common stock for PB
Financial common stock.
(b) The aggregate basis of PB Financial common stock received by
a Peachtree Bank shareholder will be the same as the aggregate basis of
Peachtree Bank common stock surrendered in the exchange.
(c) The holding period, if any, of PB Financial common stock
received by a Peachtree Bank shareholder will include the holding period of
Peachtree Bank common stock surrendered in the exchange, provided that the
Peachtree Bank common stock is held as a capital asset on the effective date of
the reorganization.
(d) If a Peachtree Bank shareholder dissents to the
reorganization and receives cash in exchange for his or her Peachtree Bank
common stock (pursuant to dissenters' rights provisions described in this proxy
statement/prospectus), the cash will be treated as received by the shareholder
as a distribution in redemption of his or her Peachtree Bank common stock,
subject to the provisions and limitations of Section 302 of the Internal
Revenue Code.
The discussion does not address the tax consequences that may be
relevant to a particular shareholder, such as a shareholder who does not hold
Peachtree Bank common stock as a capital asset. Each Peachtree Bank shareholder
should rely upon the shareholder's own tax advisor with respect to the federal,
state and local income tax consequences of the reorganization.
STATUTORY PROVISIONS FOR DISSENTING SHAREHOLDERS
The Plan of Reorganization provides for certain dissenters rights for
holders of Peachtree Bank common stock who object to the proposed
reorganization. Under Section 7-1-537 of the Financial Institutions Code of
Georgia, any holder of record of Peachtree Bank common stock who objects to the
proposed reorganization and who fully complies with all of the provisions of
Article 13
10
<PAGE> 17
of the Georgia Business Corporation Code (but not otherwise) shall be entitled
to demand and receive payment for all (but not less than all) of his or her
shares of Peachtree Bank common stock if the proposed reorganization is
consummated.
Any shareholder of Peachtree Bank who objects to the Plan of
Reorganization and desires to receive payment for his or her Peachtree Bank
common stock:
(a) Must file a written objection to the Plan of Reorganization
with Peachtree Bank either prior to the meeting or at the meeting but before
the vote is taken, and the written objection must contain a statement that the
shareholder intends to demand payment for his or her shares if the Plan of
Reorganization is approved; AND
(b) Must either abstain from voting or vote against approval of
the Plan of Reorganization; AND
(c) Must demand payment and deposit his or her Peachtree Bank
common stock certificate in accordance with the terms of the dissenters' notice
sent to the dissenting shareholder by Peachtree Bank following approval of the
Plan of Reorganization.
A vote against the Plan of Reorganization alone will not constitute
the separate written notice and demand for payment referred to in (a) and (c)
above; dissenting shareholders must separately comply with all three
conditions. Any notice required to be given to Peachtree Bank must be forwarded
to The Peachtree Bank, 9570 Medlock Bridge Road, Duluth, Georgia 30097.
Attention: Monty G. Watson.
If the Plan of Reorganization is approved, Peachtree Bank will mail no
later than 10 days after the approval by certified mail to each shareholder who
has complied with conditions (a) and (b) above, written notice of such
approval, addressed to the shareholder at the address the shareholder has
furnished Peachtree Bank in writing, or, if none, at the shareholder's address
as it appears on the records of Peachtree Bank. Peachtree Bank will set a date
by which Peachtree Bank must receive the payment demand, which date may not be
fewer than 30 nor more than 60 days after the date the dissenters' notice is
delivered. The shareholder must make the written election to dissent and demand
for payment described in condition (c) above by the payment demand date as set
by Peachtree Bank.
If all conditions in (a), (b) and (c) above are complied with in full,
Peachtree Bank is required to make a written offer within ten days after
receiving the payment demand, or within ten days after the consummation of the
reorganization, whichever is later, to each dissenting shareholder to purchase
all of such shareholder's shares of Bank Stock at a specific price. If
Peachtree Bank and any dissenting shareholder are unable to agree on the fair
value of the shares within sixty days, Peachtree Bank shall commence a
proceeding in the Superior Court of Fulton County, Georgia, to determine the
rights of the dissenting shareholder and the fair value of his or her shares.
If Peachtree Bank does not commence the proceeding within the sixty-day period,
it shall pay each dissenter whose demand remains unsettled the amount demanded.
One of the conditions to the Plan of Reorganization is that the
holders of no more than 10% of the shares of Peachtree Bank common stock shall
have filed notices of election to dissent. If this condition is not satisfied,
the parties to the Plan of Reorganization will not be required to consummate
the reorganization, in which event the dissenters' rights described in this
section would also terminate. However, it is the intent of management of PB
Financial to accommodate those
11
<PAGE> 18
Peachtree Bank shareholders electing to dissent to the extent that funds may be
obtained or financing may be arranged to purchase their shares and to the
extent that such accommodation does not create tax or regulatory obstacles.
The foregoing is not a complete statement of the provisions of Section
7-1-537 of the Financial Institutions Code of Georgia nor of Article 13 of the
Georgia Business Corporation Code, and it is qualified in its entirety by
reference to the applicable Code Sections, which are reproduced in full as
Appendix B to this proxy statement/prospectus.
Upon compliance with the statutory procedures, dissenting shareholders
will not have any rights as shareholders of Peachtree Bank or of PB Financial,
including, among other things, the right to receive dividends and the right to
vote on matters submitted for shareholder consideration.
DESCRIPTION OF PB FINANCIAL COMMON STOCK
PB Financial's authorized capital stock consists of 10,000,000 shares
of $5.00 par value common stock. The holders of the PB Financial common stock
have unlimited voting rights and are entitled to one vote per share for all
purposes. Holders of PB Financial common stock are entitled to any dividends as
may be declared by the Board of Directors of PB Financial in compliance with
the provisions of the Georgia Business Corporation Code and the regulations of
the appropriate regulatory authorities, and to receive the net assets of the
corporation upon dissolution. The PB Financial common stock does not have any
preemptive rights with respect to acquiring additional shares of PB Financial
common stock, and the shares are not subject to any conversion, redemption or
sinking fund provisions. The outstanding shares of PB Financial common stock to
be issued by PB Financial in connection with the Plan of Reorganization will be
fully-paid and nonassessable. The PB Financial Board of Directors is divided
into three classes, as nearly equal in number as possible. PB Financial common
stock does not have cumulative voting rights in the election of PB Financial
directors.
EFFECT OF THE REORGANIZATION ON RIGHTS OF SHAREHOLDERS
GENERAL
At the present time, Peachtree Bank is a state-chartered commercial
bank and the rights of shareholders of Peachtree Bank are governed by the
Articles of Incorporation and Bylaws of Peachtree Bank and by the Financial
Institutions Code of Georgia and the regulations issued by the Georgia
Department of Banking and Finance. If the reorganization is consummated,
shareholders of Peachtree Bank will become shareholders of PB Financial and
their rights will be governed by the Articles of Incorporation and Bylaws of PB
Financial and by the Georgia Business Corporation Code.
Summarized below are the material differences between the rights of
shareholders of Peachtree Bank and the rights of shareholders of PB Financial.
AUTHORIZED CAPITAL STOCK
Peachtree Bank is authorized by its Articles of Incorporation to issue
a maximum of 2,000,000 shares of common stock $5.00 par value. As of the record
date, there were 775,375 shares of Peachtree Bank common stock issued and
outstanding. The outstanding shares of Peachtree Bank common stock are fully
paid and nonassessable.
12
<PAGE> 19
PB Financial is authorized by its Articles of Incorporation to issue a
maximum of 10,000,000 shares of common stock, $5.00 par value. As of the record
date, there was one share of PB Financial Stock issued and outstanding. Upon
consummation of the Reorganization, PB Financial will issue 775,375 shares of
PB Financial common stock to the former shareholders of Peachtree Bank,
assuming there are no dissenting shareholders. Upon their issuance, the
outstanding shares of PB Financial common stock issued under the Plan of
Reorganization will be fully paid and nonassessable.
PB Financial has a large number of authorized but unissued shares
solely as a matter of future convenience. PB Financial currently does not have
any plans to issue additional shares of PB Financial common stock.
The offering price of Peachtree Bank's common stock was $10.00 per
share. Based on the trades of which Management is aware, Peachtree Bank's
common stock since the offering has traded at $10.00 per share. In the short
term, the formation of PB Financial should have no impact of the market value
of the stock. Over the long term, however, there is a possibility that PB
Financial may enhance the market value of the common stock.
DIVIDENDS
Currently, the holders of shares of Peachtree Bank common stock are
entitled to dividends and other distributions as and when declared by the Board
of Directors of Peachtree Bank out of the assets legally available for
dividends and other distributions. Peachtree Bank may pay dividends in cash,
property or shares of Peachtree Bank common stock provided that the payment
would not be prohibited by Peachtree Bank's Articles of Incorporation and would
not render Peachtree Bank insolvent. In addition, the Financial Institutions
Code of Georgia and the regulations issued under it by the Georgia Department
of Banking and Finance further provide (a) that dividends of cash or property
may be paid only out of Peachtree Bank's retained earnings, (b) that dividends
may not be paid if Peachtree Bank's paid-in capital and retained earnings which
are set aside for dividend payment and other distributions do not, in
combination, equal at least 20% of Peachtree Bank's capital stock, and (c) that
dividends may not be paid without prior approval of the Department of Banking
if (1) Peachtree Bank's total classified assets at its most recent examination
exceed 80% of its equity capital, (2) the aggregate amount of dividends to be
declared exceeds 50% of Peachtree Bank's net profits after taxes but before
dividends for the previous calendar year or (3) the ratio of equity capital to
total adjusted assets is less than 6%. Also, the Federal Deposit Insurance Act
of 1991 prohibits any insured institution, regardless of its level of
capitalization, from paying any dividend if following the payment the
institution would be undercapitalized.
If the reorganization is consummated, the holders of shares of PB
Financial common stock (the former shareholders of Peachtree Bank) will be
entitled to dividends and other distributions as and when declared by the Board
of Directors of PB Financial out of assets legally available for dividends.
Dividends will be payable in cash, property or shares of PB Financial common
stock, unless PB Financial is insolvent or the dividend payment would render it
insolvent. In the absence of other activities conducted by PB Financial, its
ability to pay dividends will depend on the earnings of Peachtree Bank.
Consequently, we cannot predict with any greater certainty whether or to what
extent dividends will be paid to shareholders in the future if the
reorganization is consummated than it could if the reorganization were not
consummated.
13
<PAGE> 20
VOTING RIGHTS
The holders of Peachtree Bank common stock and the holders of PB
Financial common stock are entitled to one vote per share on all matters
presented for action by shareholders including elections of directors.
LIQUIDATION RIGHTS
Upon the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of either Peachtree Bank or PB Financial, after the payment
in full of debts and other liabilities, the remaining assets, if any, are to be
distributed ratably among the shareholders.
PREEMPTIVE RIGHTS
Peachtree Bank common stock is currently subject to preemptive rights.
PB Financial common stock, however, will not be subject to preemptive rights,
which means that upon a proposed sale of additional shares of PB Financial
common stock for cash, shareholders will not have the right to acquire the
additional shares in proportion to their present holdings of stock upon terms
no less favorable than those of the proposed sale. This will permit the Board
of Directors of PB Financial to utilize the authorized and unissued shares of
PB Financial common stock as it determines to be in the best interests of PB
Financial and its shareholders. Since the Board could issue shares of PB
Financial common stock to raise additional equity capital and for other proper
corporate purposes, this difference could result in dilution of a shareholder's
interest in PB Financial. Any issuance of shares, however, would have to be
approved by the Board of Directors of PB Financial. Management does not have
any plans to issue additional shares of PB Financial common stock at the
present time.
REDEMPTION OF SHARES
Peachtree Bank is subject to certain regulatory restrictions regarding
the redemption of shares of Peachtree Bank common stock. Under Federal Reserve
regulations, PB Financial will have the authority to redeem shares of PB
Financial common stock without prior approval of the Federal Reserve System as
long as (a) its total and tier 1 risk-based capital ratios and its leverage
capital ratio exceed the thresholds for "well-capitalized" both before and
after the redemption; (b) it received a "1" or "2" rating on its most recent
examination; and (c) it is not the subject of any unresolved supervisory
issues. At this time, PB Financial does not have any plans to redeem shares of
PB Financial common stock following the reorganization. If PB Financial does
redeem shares of PB Financial common stock, the methods of redemption will be
determined by the Board of Directors and may include, but will not be limited
to, pro rata selection, random selection and selection in the discretion of the
Board of Directors.
OTHER
Neither Peachtree Bank common stock nor PB Financial common stock (a)
is subject to liability for further calls or to assessments by Peachtree Bank
or PB Financial, respectively, or (b) is subject to redemption, sinking fund or
conversion provisions.
14
<PAGE> 21
ANTITAKEOVER PROVISIONS OF PB FINANCIAL'S ARTICLES OF INCORPORATION
The following describes certain provisions of PB Financial's Articles
of Incorporation which may deter a takeover of control of PB Financial. This
description is not complete and is qualified in its entirety by reference to PB
Financial's Articles of Incorporation, which are attached to this proxy
statement/prospectus as Appendix C. All shareholders are urged to read the
Appendices in their entirety.
CLASSIFICATION OF THE BOARD OF DIRECTORS. Article 7 of PB Financial's
Articles of Incorporation divides the Board of Directors of PB Financial into
three classes. Each class is to consist, as nearly as possible, of an equal
number of members. The directors in each class will hold office for staggered
terms of three years each, after initial terms of one year, then two years and
three years, respectively. Each director also serves until his or her successor
is elected and qualified or until his earlier death, resignation or removal. If
the number of directors is modified, any increase or decrease in directorships
would be apportioned among the classes so as to make all classes as nearly
equal in number as possible.
Unless two-thirds of the directors approve of a proposed change, this
Article may only be amended or revoked by the affirmative vote of the holders
of at least two-thirds of the outstanding shares of PB Financial common stock.
Currently, directors of Peachtree Bank are elected on an annual basis.
CHANGE IN NUMBER OF DIRECTORS. Article 8 of PB Financial's Articles of
Incorporation provides that any change in the number of directors of PB
Financial, as set forth in its Bylaws, would have to be made by the affirmative
vote of two-thirds of the entire Board of Directors or by the affirmative vote
of the holders of at least two-thirds of the outstanding shares of PB Financial
common stock.
The applicable provisions of the Georgia Business Corporation Code
provide that, in the absence of a provision such as Article 8, the number of
directors may be increased or decreased from time to time by amendment to the
Bylaws unless the number of directors is otherwise fixed by the shareholders.
Peachtree Bank's Bylaws currently provide that its Board of Directors
shall consist of not less than five nor greater than twenty-five persons with
the exact number being subject to change by resolution of the Board of
Directors or by resolution of the shareholders at any annual or special
meeting, provided that the Board of Directors may not increase or decrease the
number by more than two in any one year.
REMOVAL OF DIRECTORS. Article 9 of PB Financial's Articles of
Incorporation provides that directors of PB Financial may be removed during
their terms for "cause" only by the affirmative vote of the holders of a
majority of the outstanding shares of PB Financial common stock; or without
cause only by the affirmative vote of the holders of at least two-thirds of the
outstanding shares. "Cause" for this purpose is defined as final conviction of
a felony, request or demand for removal by any bank regulatory authority having
jurisdiction over PB Financial, or determination by at least two-thirds of the
incumbent directors of PB Financial that the conduct of the director to be
removed has been inimical to the best interests of PB Financial.
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<PAGE> 22
Unless two-thirds of the directors approve of a proposed change, this
Article may only be amended or revoked by the affirmative vote of the holders
of at least two-thirds of the outstanding Shares of PB Financial Common Stock.
In the absence of a provision dealing with the removal of directors,
such as Article 9, the Georgia Business Corporation Code provides that if the
directors have staggered terms, then the shareholders may remove directors only
for cause, unless the articles of incorporation or a bylaw adopted by the
shareholders provides otherwise.
Peachtree Bank's Bylaws currently provide that the entire Board of
Directors or any individual director may be removed from office without cause
by the affirmative vote of the holders of two-thirds of the shares entitled to
vote in an election of directors.
ADVANTAGES AND DISADVANTAGES OF ARTICLES 7, 8 AND 9. Articles 7, 8 and
9 of PB Financial's Articles of Incorporation would make it more difficult for
shareholders of PB Financial, including those holding a majority of the
outstanding shares of PB Financial common stock, to force an immediate change
in the composition of a majority of the Board of Directors, even if the reason
for the change were the performance of the present directors. Under Article 7,
the terms of only one-third of the incumbent directors will expire each year,
provided no new directorships are created and no directors resign or are
removed from office. Under Article 8, it will be more difficult to create new
directorships. Article 9 makes it difficult to remove directors without cause
as is the case under Peachtree Bank's Bylaws. Accordingly, two annual
shareholders' meetings will be required to change a majority of the directors
of PB Financial instead of one meeting.
The Board believes that Articles 7, 8 and 9 will help to assure future
continuity and stability in the leadership and policies of PB Financial and
Peachtree Bank. We also believe that these Articles will enable PB Financial to
protect the interests of its shareholders in the event that another party,
through a takeover bid or otherwise, obtains a substantial number of shares of
PB Financial common stock.
It would be impossible, assuming that no new directorships were
created, no directors resigned and no directors were removed from office, for
shareholders to change a majority of the directors at any one annual meeting
unless the shareholders controlled sufficient votes to amend Articles 7, 8 or 9
(two-thirds of the outstanding shares). Although Articles 7, 8 and 9 will make
it more difficult to acquire operating control of PB Financial in an unfriendly
manner, directors who oppose or who are discouraged by new controlling
shareholders might resign, which would allow directors elected by the new
controlling shareholders to fill the vacancies created by the resignation.
VOTE REQUIRED FOR SHAREHOLDER APPROVAL. The Georgia Business
Corporation Code requires that unless a greater vote is required elsewhere
under the Code or under the corporation's Articles of Incorporation or Bylaws,
more votes must be cast in favor of a proposal than against it in order to
approve a proposal. However, the Georgia Business Corporation Code requires the
vote of a majority of the votes entitled to be cast in order to approve certain
mergers or dispositions of assets and amendments to the Articles of
Incorporation.
PB Financial's Bylaws state that the affirmative vote of a majority of
the shares of PB Financial common stock represented at the meeting and entitled
to vote on the subject matter will represent the act of the shareholders,
except as otherwise provided by law or PB Financial's Articles of Incorporation
or Bylaws.
16
<PAGE> 23
Under PB Financial's Articles of Incorporation, unless two-thirds of
the directors then in office have approved the following matters, action on
these matters requires the affirmative vote of the holders of at least
two-thirds of the issued and outstanding shares of PB Financial common stock
entitled to vote in an election of directors:
(1) Amendment of the provision of the Articles of Incorporation
establishing a classified Board;
(2) An amendment of the Bylaws, which changes the number of
directors;
(3) Amendment of the provision of the Articles of Incorporation
setting forth the grounds and vote required for removal of
directors;
(4) A merger or consolidation of PB Financial with or into any
other corporation or the sale, lease, exchange or other
disposition of all or substantially all of its assets to any
other corporation, person or entity;
(5) Amendment of the provision of the Articles of Incorporation
prescribing the vote required for the transactions described
in clause (4) above; or
(6) Amendment of the provision of the Articles of Incorporation
listing the factors permitted to be considered by the Board
in evaluating a potential change of control of PB Financial.
The Georgia Business Corporation Code provision, which requires that
unless a greater vote is required elsewhere under the Code or under the
corporation's Articles of Incorporation or Bylaws, more votes must be cast in
favor of a proposal than against it in order to approve a proposal, also
applies to Peachtree Bank. Additionally, the Georgia Business Corporation Code
requires the vote of a majority of the votes entitled to be cast in order to
approve certain mergers or dispositions of assets and amendments to the
Peachtree Bank's Articles of Incorporation.
Peachtree Bank's Bylaws state that at all meetings of the
shareholders, the presence in person or by proxy, of the holders of more than
one-half of the shares outstanding and entitled to vote will constitute a
quorum for shareholder action. If a quorum is present, action on a matter,
other than the election of directors, is approved if the votes cast in favor of
the action exceed the votes cast opposing the action, unless the Georgia Code,
the Articles of Incorporation, or the Bylaws requires a different vote.
Peachtree Bank's Bylaws may be altered, amended or repealed by its Board of
Directors or shareholders.
SPECIAL MEETING OF SHAREHOLDERS. PB Financial's Bylaws state that
special meetings of the shareholders may be called at any time by its Board of
Directors, the President or upon the written request of any one or more
shareholders owning an aggregate of not less than 25% of the outstanding
capital stock. Notice must be given in writing not less than 10 or more than 60
days before the date of the meeting and must state the purpose for which the
meeting is called.
Peachtree Bank's Bylaws state that special meetings of the
shareholders may be called by the President, Chairman of the Board or the Board
of Directors or upon the written request of the holders of 25% or more of the
shares outstanding of common stock. Notice must be given in writing, not less
than 10 or more than 50 days before the date of the meeting and must state the
purpose for which the meeting is called.
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<PAGE> 24
EVALUATION OF AN ACQUISITION PROPOSAL. Article 14 of PB Financial's
Articles of Incorporation provides that the response of PB Financial to any
acquisition proposal made by another party will be based on the Board's
evaluation of the best interests of PB Financial and its shareholders. The term
"acquisition proposal" refers to any offer of another party (a) to make a
tender offer or exchange offer for any equity security of PB Financial, (b) to
merge or consolidate PB Financial with another corporation or (c) to purchase
or otherwise acquire all or substantially all of the properties and assets
owned by PB Financial.
Article 14 requires the Board, in evaluating an acquisition proposal,
to consider all relevant factors, including (a) the expected social and
economic effects of the transaction on the employees, customers and other
constituents (e.g., suppliers of goods and services) of PB Financial and
Peachtree Bank; (b) the expected social and economic effects on the communities
within which PB Financial and Peachtree Bank operate; and (c) the consideration
being offered by the other corporation in relation (1) to the then current
value of PB Financial as determined by a freely negotiated transaction and (2)
to the Board of Directors' then estimate of PB Financial's future value as an
independent entity. The enumerated factors are not exclusive, and the Board may
consider other relevant factors.
This Article has been included in PB Financial's Articles of
Incorporation because Peachtree Bank is charged with providing support to and
being involved with the communities it serves, and the Board believes its
obligations in evaluating an acquisition proposal extend beyond evaluating
merely the consideration being offered in relation to the then market or book
value of PB Financial common stock. Neither the Georgia Business Corporation
Code nor the Financial Institution Code specifically enumerates the factors a
corporation's or a bank's board of directors should consider in the event the
corporation or bank is presented with an acquisition proposal.
While the value of the consideration offered to shareholders is the
main factor when weighing the benefits of an acquisition proposal, the Board
believes it appropriate also to consider all other relevant factors. For
example, this Article directs the Board to evaluate the consideration being
offered in relation to the then current value of PB Financial determined in a
freely negotiated transaction and in relation to the Board's then estimate of
the future value of PB Financial as an independent concern. A takeover bid
often places the target corporation virtually in the position of making a
forced sale, sometimes when the market price of its stock may be depressed. The
Board believes that frequently the consideration offered in such a situation,
even though it may be in excess of the then market value (i.e., the value at
which shares are then currently trading) is less than that which could be
obtained in a freely negotiated transaction. In a freely negotiated
transaction, management would have the opportunity to seek a suitable partner
at a time of its choosing and to negotiate for the most favorable price and
terms which reflect not only the current value, but also the future value of PB
Financial.
One effect of this Article may be to discourage a tender offer in
advance. Often an offeror consults the Board of a target corporation prior to
or after commencing a tender offer in an attempt to avoid a contest from
developing. In the opinion of the Board, this provision will strengthen its
position in dealing with any potential offeror which might attempt to acquire
PB Financial through a hostile tender offer. Another effect of this Article may
be to dissuade shareholders who might be displeased with the Board's response
to an acquisition proposal from engaging PB Financial in costly litigation.
This provision, however, does not affect the right of a shareholder displeased
with the Board's response to an acquisition proposal to institute litigation
against PB Financial.
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<PAGE> 25
Article 14 would not make an acquisition proposal regarded by the
Board as being in the best interests of PB Financial more difficult to
accomplish. It would, however, permit the Board to determine that an
acquisition proposal was not in the best interests of PB Financial (and thus to
oppose it) on the basis of the various factors deemed relevant. In some cases,
such opposition by the Board might have the effect of maintaining the positions
of incumbent management.
INDEMNIFICATION
PB FINANCIAL. The PB Financial Bylaws generally provide that any
director, officer, employee or agent of PB Financial who is deemed eligible
will be indemnified against liability and other expenses incurred in a
proceeding which is initiated against the person by reason of his or her
serving as a director, officer, employee or agent. The individual will be
indemnified to the fullest extent authorized by the Georgia Business
Corporation Code; provided, however, that PB Financial will not indemnify any
director, officer, employee or agent for any liability or expenses incurred by
the individual for the following reasons:
(1) Any appropriation, in violation of his duties, of any
business opportunity of PB Financial;
(2) Any acts or omissions which involve intentional misconduct or
a knowing violation of law;
(3) The types of liability set forth in Section 14-2-832 of the
Georgia Business Corporation Code or successor provisions; or
(4) Any transaction from which the director derives an improper
personal benefit.
PB Financial's Bylaws provide for the advancement of expenses at the
outset of a proceeding, upon the receipt from the individual of the written
affirmation and repayment promise required by Section 14-2-856 of the Georgia
Business Corporation Code, the purchase of insurance by PB Financial against
any liability of the director, officer, employee or agent arising from his
duties and actions as such, the survival of indemnification to the director's,
officer's, employee's or agent's heirs, executors and administrators, and the
limitation of a director's, officer's, employee's or agent's liability to the
corporation itself. The indemnification provisions state that they are
non-exclusive, and shall not impair any other rights to which those seeking
indemnification or advancement of expenses may be entitled.
PEACHTREE BANK. Peachtree Bank's Bylaws provide that it shall
indemnify Peachtree Bank directors made a party to a proceeding because he or
she is a director against liability incurred in the proceeding. Provided,
however, Peachtree Bank will not indemnify a director for the following:
(1) Liability incurred in a proceeding in which the director is
found liable to Peachtree Bank or is subjected to injunctive
relief in favor of Peachtree Bank;
(2) Any appropriation, in violation of his or her duties, of any
business opportunity of Peachtree Bank;
(3) Acts or omissions which involve intentional misconduct or a
knowing violation of law;
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<PAGE> 26
(4) Acts described in Section 14-2-832 of the Georgia Business
Corporation Code; and
(5) Any transaction from which he or she received an improper
personal benefit.
Peachtree Bank may advance or reimburse reasonable expenses in advance
of the final disposition of the proceeding if the director furnishes Peachtree
Bank with a written affirmation of his good faith belief that his conduct does
not constitute behavior of the kind described in (1) through (5) above and a
written undertaking to repay advances that it is ultimately determined he or
she was not entitled.
Peachtree Bank shall indemnify an individual made a party to a
proceeding because he or she was an officer or employee of Peachtree Bank, if
the officer or employee acted in a manner he or she believed in good faith to
be in or not opposed to the best interests of Peachtree Bank, and in the case
of a criminal proceeding, he or she had no reasonable cause to believe his
conduct was unlawful. However, Peachtree Bank may not indemnify an officer or
employee if:
(1) He or she is adjudged liable to Peachtree Bank or subject to
injunctive relief in favor of the bank; or
(2) He or she was adjudged liable on the basis that personal
benefit was improperly received by him or her.
ACTIONS BY SHAREHOLDERS WITHOUT A MEETING
PB FINANCIAL. In accordance with Section 14-2-704 of the Georgia
Business Corporation Code, action required or permitted by the Code to be taken
at an annual or special meeting may be taken without a meeting if the action is
taken by all the shareholders entitled to vote on the action. Additionally,
under Section 14-2-704, if provided in the corporation's articles of
incorporation, action may also be taken by written consent of persons, who
would be entitled to vote at a meeting, having voting power to cast not less
than the minimum number of votes that would be necessary to authorize or take
the action at a meeting at which all shareholders entitled to vote were present
and voted. Article 12 of PB Financial's Articles of Incorporation provide for
action to be taken by its shareholders in this manner.
The provisions of the Georgia Business Corporation Code do not affect
the special voting requirements contained in the PB Financial Articles of
Incorporation or Bylaws for the approval of a business combination or the
amendment of any provisions of the Articles of Incorporation.
PEACHTREE BANK. The Peachtree Bank Bylaws provide that any action
required to be taken at a meeting of the shareholders or any other action which
may be taken at a meeting of shareholders, may be taken without a meeting if
written consent, setting forth the action taken, is given by all of the
shareholders entitled to vote with respect to the subject matter.
SHAREHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS
PB FINANCIAL. PB Financial's Bylaws permit the holder of 2% of the
outstanding shares of PB Financial Common Stock to inspect the books and
records of account, minutes and record of shareholders of PB Financial upon a
written demand, which states the purpose of the inspection. Generally, other
shareholders may inspect these books and records only if:
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<PAGE> 27
(1) His or her demand is in good faith and for a proper purpose
which is reasonably relevant to his or her legitimate
interests as a shareholder;
(2) He or she describes with reasonable particularity his or her
purpose;
(3) The records he or she seeks to inspect are directly connected
to that purpose, and
(4) The records are only used for that purpose.
PEACHTREE BANK. The Peachtree Bank Bylaws state that the Board of
Directors of Peachtree Bank has the power to determine which accounts and books
of Peachtree Bank, if any, will be open to the inspection of shareholders,
except such books and records which are required by law to be held open for
inspection.
COMPARATIVE MARKET PRICES AND DIVIDENDS
The 775,375 shares of Peachtree Bank common stock is held by 570
shareholders. There is no established public trading market for the Peachtree
Bank common stock, and no reliable information is available as to trades of its
shares of common stock or the prices at which shares have traded. Peachtree
Bank has not paid dividends to its shareholders in the past. To the knowledge
of Peachtree Bank, the most recent trade of Peachtree Bank common stock was the
sale of 1,000 shares on November 4, 1998 at $10.00 per share.
The foregoing information regarding Peachtree Bank common stock is
provided for informational purposes only and, due to the absence of an active
market for Peachtree Bank's shares, should not be viewed as indicative of the
actual or market value of Peachtree Bank common stock.
The holders of PB Financial common stock are entitled to receive
dividends when and if declared by the Board of Directors out of funds legally
available for dividends.
PB Financial is a legal entity separate and distinct from Peachtree
Bank and its revenues depend in significant part on the payment of dividends
from Peachtree Bank, which is subject to certain legal restrictions on the
amount of dividends it is permitted to pay.
BUSINESS OF PEACHTREE BANK
GENERAL
In January 1998, the Georgia Department of Banking and Finance and the
FDIC granted final approval to the organizers of Peachtree Bank to organize
Peachtree Bank as a state-chartered commercial bank and for FDIC insurance of
Peachtree Bank's deposits. Peachtree Bank began its banking operations on
October 5, 1998.
Peachtree Bank conducts a general commercial banking business,
emphasizing in its marketing plan Peachtree Bank's local management and
ownership. Peachtree Bank markets itself as a community bank, specializing in
the banking needs of individuals and small- to medium-sized businesses and
professional concerns. Peachtree Bank offers personal and business checking
accounts, interest-bearing accounts, savings accounts, money market accounts
and various types of
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<PAGE> 28
certificates of deposit. Peachtree Bank also offers installment loans, real
estate loans, construction loans, second mortgage loans, commercial loans and
home equity lines of credit. It also acts as an issuing agent for U.S. Savings
Bonds, travelers checks, money orders and cashier's checks. It offers official
bank checks, credit cards, bank by mail, direct deposit of payroll and social
security checks and wire transfer facilities. Peachtree Bank has a drive-in
teller facility, an automatic teller machine offering 24-hour transactions,
safe deposit boxes and night depository facilities.
PROPERTIES
Peachtree Bank is located on a 1.2 acre tract of land in northeast
Fulton County, Georgia, which was purchased at a price of approximately
$604,200. Peachtree Bank's operations are conducted through its main office
which is located at this site. Peachtree Bank operates its business in a
building of approximately 16,000 square feet in size which was constructed and
furnished at cost, including all furnishings, site preparation, landscaping,
paving, security equipment and automatic teller machine, of approximately
$3,296,700. Currently, Peachtree Bank utilizes approximately 10,300 square feet
of the space in the building. Additional space over and above that required to
operate Peachtree Bank is leased and generates lease income for Peachtree Bank.
Peachtree Bank will continue to lease this space until such time as Peachtree
Bank requires use of the space. The building is of brick construction and has
six inside teller windows, four drive-in lanes and one drive-up ATM.
EMPLOYEES
As of March 1, 1999, Peachtree Bank had 16 full-time employees and two
part-time employees. Peachtree Bank is not a party to any collective bargaining
agreement and, in the opinion of management, enjoys excellent relations with its
employees.
LEGAL PROCEEDINGS
Peachtree Bank is not a party to any legal proceedings other than
routine litigation incidental to its business.
MANAGEMENT OF PEACHTREE BANK
The following table lists for each director and executive officer of
Peachtree Bank (a) the person's name, (b) his or her age at January 1, 1999,
(c) the year he or she was first elected as a director and/or executive officer
and (d) his or her positions with Peachtree Bank and his or her other business
experience for the past five years. These persons will also serve as the
directors and officers of PB Financial.
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<PAGE> 29
Set forth below is a brief account of the business experience of the
directors and executive officers of Peachtree Bank during the past five years
including principal occupations and employment during that period. These persons
will also serve as the directors and officers of PB Financial.
ROBERT D. CHEELEY practiced law with law firm of Butler, Wooten,
Overby and Cheeley until 1996. In 1996, he retired from the active practice of
law and now is active in both residential and commercial real estate
development as the President and owner of Mt. Vernon Commons, Inc. and Galleria
Properties, Ltd.
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<PAGE> 30
DANIEL B. COWART has been, since 1991, President and owner of Dan
Cowart, Inc. and, since 1995, he has been Vice President and principal of James
Creek Development Corporation, both of which are real estate development
companies.
PAUL D. DONALDSON is President and owner of Donaldson and Associates, a
partnership engaged in the real estate development business. He served as a
founding member of the Board of Directors of First Gwinnett Bank from 1987 until
1996, and as a member of the Board of Directors of Regions Bank of Atlanta from
1996 until 1997.
CHARLES L. DOUGLAS serves as Chairman of Love, Douglas and Pope, an
insurance firm specializing in risk management and commercial business insurance
services. Mr. Douglas served as a founding member of the Board of Directors of
First Gwinnett Bank from 1987 until 1996.
DEXTER R. FLOYD, since 1985 has served as President of Southeast
Marketing Services, Inc., a data processing, mail processing and fulfillment
company. Since 1981, he has served as President of Atlanta Presort, Inc., a mail
bar-coding and presorting company. He is also a partner in several other
businesses involved in laser printing, computer processing, mail production and
fulfillment.
J. EDWIN HOWARD is retired from the grocery and hardware business. Mr.
Howard's business and community affiliations include the following: member of
the Board of Directors of Gwinnett Bank and Trust from 1968 until 1985; founding
member of the Board of Directors and Chairman of the Board of First Gwinnett
Bank from 1987 until 1996; and member of the Gwinnett County Board of
Commissioners from 1979 until 1983.
JOHN J. HOWARD is President and co-owner of Howard Brothers, Inc.,
which operates retail hardware, outdoor power equipment and rental stores. Mr.
Howard served as the founding member of the Board of Directors of First Gwinnett
Bank from 1987 until 1996 and a member of the Board of Directors of Regions Bank
of Atlanta from 1996 to 1997. He also served as a member of the Board of MARTA
from 1993 until 1996.
J. STEPHEN HURST has served, since 1981, as Vice President and
Principal of Love, Douglas and Pope, a large multiline, independent insurance
agency located in north Atlanta.
KELLY J. JOHNSON is Senior Vice President and Chief Financial Officer
of Peachtree Bank. She served as Senior Vice President and Controller for Tucker
Federal Bank from 1996 to 1997. She was Senior Vice President and Chief
Financial Officer at First Gwinnett Bank from 1995 until 1996, and at Commercial
Bank of Gwinnett from 1992 until 1995.
T. DAVID LAUTARES is Senior Vice President of Construction Lending at
Peachtree Bank. He was employed from 1996 to 1998 as Vice President of HomeBanc
Mortgage Corporation, and from 1994 to 1996 as Vice President, Residential
Construction at First Capital Bank.
CHARLES A. MACHEMEHL, III is an orthodontist who has practiced
orthodonture in Duluth since 1985.
J. PAUL MAGGARD is a franchise owner of restaurants, and currently
owns and operates 215 quick service restaurants in three states through his
companies, Maggard Enterprises, Inc. and Rubicon Restaurant Group, Inc. He is
also active in commercial real estate.
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<PAGE> 31
MONTY G. WATSON serves as President and CEO of Peachtree Bank. His
previous banking experience includes serving as Senior Vice President and
Commercial Banking Manager of Regions Bank of Atlanta from 1996 to 1997,
following Regions Bank's acquisition of First Gwinnett Bank, where he served
from 1989 until 1996, first as Senior Vice President and then as President,
chief Executive Officer and Director.
PEACHTREE BANK EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
the compensation paid the Chief Executive Officer for the fiscal year ended
December 31, 1998.
CASH COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Principal Position Year Salary
--------------------------- ---- ------
<S> <C> <C>
Monty G. Watson, President and Chief 1998 $125,000
Executive Officer
</TABLE>
Currently, the directors of Peachtree Bank receive no compensation for
their service as directors, and they will not be compensated for their service
as directors until Peachtree Bank achieves profitability.
The following table contains, with respect to the person named in the
Summary Compensation Table, information concerning the number of Peachtree Bank
stock options held, the number currently exercisable, and the value of the
exercisable options. On October 20, 1998, Peachtree Bank granted Mr. Watson an
option to purchase 20,000 shares of Peachtree Bank common stock, with all shares
being exercisable on the date of grant. If the reorganization is consummated,
each option to purchase one share of Peachtree Bank common stock will be
converted into an option to purchase one share of PB Financial common stock.
Based on the limited trading information available to Peachtree Bank, the per
share fair market value of Peachtree Bank common stock at December 31, 1998
($10.00) was equal to the per share exercise price of the listed options
($10.00). Fair market value is based on trades in Bank Stock during 1998.
Fiscal Year -End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
No. of Unexercised In-the-Money
Options at 12/31/98 Options at 12/31/98
------------------- -------------------
Name (#):Exercisable/Unexercisable (#):Exercisable/Unexercisable
---- ----------------------------- -----------------------------
<S> <C> <C>
Monty G. Watson 20,000/0 $0/$0
</TABLE>
CERTAIN TRANSACTIONS
Peachtree Bank's directors and principal offices, their immediate
family members and certain companies and other entities associated with them,
have been customers of and have had banking transactions with Peachtree Bank and
are expected to continue these relationships in the future. In
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the opinion of Peachtree Bank's management, the extensions of credit made by
Peachtree Bank to such individuals, companies and entitles (a) were made in the
ordinary course of business, (b) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and (c) did not involve more than a
normal risk of collectibiltiy or present other unfavorable features.
OWNERSHIP OF PEACHTREE BANK COMMON STOCK
MANAGEMENT STOCK OWNERSHIP
The following table presents information about each of the directors
and executive officers of Peachtree Bank and all executive officers and
directors as a group. Unless otherwise indicated, each person has sole voting
and investment powers over the indicated shares. Information relating to
beneficial ownership of the Peachtree Bank common stock is based upon
"beneficial ownership" concepts described in the rules issued under the
Securities Exchange Act of 1934, as amended. 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 to direct the voting of the
security, or investment power, which includes the power to dispose or to direct
the disposition of such security. Under the rules, more than one person may be
deemed to be a beneficial owner of the same securities.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
BENEFICIALLY OWNED AT OF
NAME THE RECORD DATE CLASS (%)
- ---- --------------- ---------
<S> <C> <C>
(A) DIRECTORS
Robert D. Cheeley 30,000 3.87%
Daniel B. Cowart 30,000 3.87%
Paul D. Donaldson 23,620 3.05%
Charles L. Douglas 10,500 1.35%
Dexter R. Floyd 24,500 3.16%
J. Edwin Howard 10,000 1.29%
John J. Howard 27,800 3.59%
J. Stephen Hurst 10,000 1.29%
Charles Machemehl, III 20,000 2.58%
J. Paul Maggard 21,500 2.77%
Monty G. Watson 30,155(1) 3.89%
</TABLE>
26
<PAGE> 33
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
BENEFICIALLY OWNED AT OF
NAME THE RECORD DATE CLASS (%)
- ---- --------------- ---------
<S> <C> <C>
(B) EXECUTIVE OFFICERS
Kelly J. Johnson 6,800(2) 0.88%
T. David Lautares 1,000 0.13%
(C) EXECUTIVE OFFICERS AND DIRECTORS 244,875 31.58%
AS A GROUP (12 PERSONS)
</TABLE>
(1) Includes option to purchase 20,000 shares of Peachtree Bank common stock.
(2) Includes option to purchase 5,000 shares of Peachtree Bank common stock.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS OF PEACHTREE BANK
There are no shareholders of record that directly or indirectly owned,
controlled, or held with power to vote 5% or more of the 775,375 outstanding
shares of Peachtree Bank common stock as of the record date.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion of Peachtree Bank's financial condition and
results of operations should be read in conjunction with Peachtree Bank's
financial statements, related notes and statistical information included herein.
Peachtree Bank was organized under the laws of the State of Georgia.
Peachtree Bank commenced operations as a commercial banking business based in
Duluth, Georgia, on October 5, 1998 ("inception").
Year-end balances at December 31, 1998 showed total assets of
$19,759,633. At December 31, 1998, total deposits were $12,608,404 and total
gross loans were $8,162,065. At December 31, 1998, time deposits were
$6,102,885, while all other deposit accounts were $6,505,519. Loans, federal
funds sold and investment securities were funded by deposits as well as by the
capital raised in the initial stock offering. There were no related party loans
or other loans that were considered nonperforming on December 31, 1998.
NET INTEREST INCOME
Peachtree Bank's results of operations are impacted by its ability to
effectively manage interest income and expense, to minimize loan and investment
losses, to generate noninterest income and to control noninterest expense.
Because interest rates are determined by market forces and economic conditions
beyond the control of Peachtree Bank, the ability to generate net interest
income depends on Peachtree Bank's ability to maintain an adequate spread
between the rate earned on earning assets and the rate paid on interest-bearing
liabilities, such as deposits and borrowings. Thus, net interest income is the
key performance measure of income.
27
<PAGE> 34
Net interest income in 1998 was $111,204. Since Peachtree Bank
commenced operations on October 5, 1998, the ratio of loans to deposits
increased to 65 percent. Additional interest income was earned by investing in
U.S. Government agency securities. The yield on average interest-earning assets
was 7.32 percent, and the cost of average interest-bearing liabilities was 4.95
percent in 1998.
The provision for loan losses in 1998 was $81,621. The provision for
loan losses reflects management's estimate of potential loan losses inherent in
the portfolio and the creation of an allowance for loan losses adequate to
absorb such losses. The allowance for loan losses represented approximately 1.0
percent of total loans outstanding at December 31, 1998. There were no
charge-offs during 1998.
A dedicated loan review function is utilized by Peachtree Bank which is
supplemented by the use of an outside loan review specialist. All loans of
$50,000 or more are reviewed at least annually and placed into various loan
grading categories which assists in developing lists of potential problem loans.
These loans are regularly monitored by the loan review process to ensure the
early identification of repayment problems so that adequate allowances can be
made through the provision for loan losses. Management believes that the current
allowance of $81,621 is adequate based upon Peachtree Bank's loan portfolio and
current economic conditions.
NONINTEREST INCOME
Noninterest income for the period from inception to December 31, 1998
was $11,366 and consisted primarily of mortgage fees and service charges on
deposit accounts.
NONINTEREST EXPENSE
Noninterest expense for the period from inception to December 31, 1998
totaled $780,286. The efficiency ratio (noninterest expense divided by total
income) was 3.7 to 1. Below are the components of noninterest expense for the
period from inception to December 31, 1998:
<TABLE>
<S> <C>
Salaries and employee benefits $228,708
Occupancy expense 72,959
Start-up and organization expenses, net 311,894
Other operating expenses 166,725
---------
Total noninterest expense $780,286
=========
</TABLE>
Peachtree Bank's net loss for the period from inception to December 31,
1998 was $739,337. Due to the net operating loss carryforward and the
recognition of tax benefits being dependent upon future earnings, there was no
tax provision in 1998.
INVESTMENTS
The investment portfolio consists of federal funds sold and U.S.
Government agency securities, which provides Peachtree Bank with a source of
liquidity and a long-term and relatively stable source of income. Additionally,
the investment portfolio provides a balance to interest rate and credit risk in
other categories of the balance sheet while providing a vehicle for the
investment of available funds and furnishing liquidity to Peachtree Bank.
28
<PAGE> 35
LIQUIDITY
Peachtree Bank must maintain, on a daily basis, sufficient funds to
cover the withdrawals from depositors' accounts and to supply new borrowers with
funds. To meet these obligations, Peachtree Bank keeps cash on hand, maintains
account balances with its correspondent banks, and purchases and sells federal
funds and other short-term investments. Asset and liability maturities are
monitored in an attempt to match these to meet liquidity needs. It is the policy
of Peachtree Bank to monitor its liquidity to meet regulatory requirements and
their local funding requirements.
Peachtree Bank maintains relationships with correspondent banks that
can provide funds to it on short notice, if needed. Peachtree Bank currently has
arrangements with correspondent banks for short-term unsecured advances up to
$3,900,000. No amounts were borrowed under these arrangements in 1998.
Cash and cash equivalents were $6,189,291 at December 31, 1998 as cash
provided by financing activities less cash used by operating activities outpaced
amounts used by investing activities. Cash outflows from operations totaled
$515,374 in 1998, while inflows from financing activities totaled $20,347,063,
most of which were net deposit increases during 1998 of $12,608,404 and
$7,738,659 in net proceeds from sales of capital stock.
Investing activities used $13,642,398 of cash and cash equivalents,
principally composed of net advances of loans to customers of $8,162,065 during
1998 and purchases of premises and equipment totaling $4,177,869.
CAPITAL ADEQUACY
The following table presents Peachtree Bank's regulatory capital
position at December 31, 1998:
<TABLE>
<CAPTION>
Risk-Based Capital Ratios
-------------------------
<S> <C>
Tier 1 Capital 51.6%
Tier 1 Capital minimum requirement 4.0%
----
Excess 47.6%
====
Total Capital 52.2%
Total Capital minimum requirement 8.0%
----
Excess 44.2%
====
Tier 1 Capital to adjusted average assets 35.4%
("Leverage Ratio")
Minimum leverage requirement 4.0%
----
Excess 31.4%
====
</TABLE>
29
<PAGE> 36
The above ratios indicate that the capital position of Peachtree Bank
is sound and that Peachtree Bank is well positioned for future growth.
ASSET/LIABILITY MANAGEMENT
It is Peachtree Bank's objective to manage assets and liabilities to
provide a satisfactory, consistent level of profitability within the framework
of established cash, loan, investment, borrowing and capital policies. Certain
officers are charged with the responsibility for monitoring policies and
procedures that are designed to ensure acceptable composition of the
asset/liability mix. It is the overall philosophy of management to support asset
growth primarily through the growth of core deposits, which include deposits of
all categories made by local individuals, partnerships and corporations. The
objective of the policy is to control interest-sensitive assets and liabilities
so as to minimize the impact of substantial movements in interest rates on
earnings.
The asset/liability mix is monitored on a regular basis. A report
reflecting the interest-sensitive assets and interest-sensitive liabilities is
prepared and presented to the Board of Directors on a periodic basis.
One method to measure a bank's interest rate exposure is through its
repricing gap. The gap is calculated by taking all assets that reprice or mature
within a given time frame and subtracting all liabilities that reprice or mature
within that same time frame. The difference between these two amounts is called
the "gap", the amount of either liabilities or assets that will reprice without
a corresponding asset or liability repricing.
A negative gap (more liabilities repricing than assets) generally
indicates that Peachtree Bank's net interest income will decrease if interest
rates rise and will increase if interest rates fall. A positive gap generally
indicates that a bank's net interest income will decrease if interest rates fall
and will increase if interest rates rise.
The following table summarizes the amounts of interest-earning assets
and interest-bearing liabilities outstanding at December 31, 1998 that are
expected to mature, prepay or reprice in each of the future time periods shown.
Except as stated in the following table, the amount of assets or liabilities
that mature or reprice during a particular period was determined in accordance
with the contractual terms of the asset or liability. Adjustable rate loans are
included in the period in which interest rates are next scheduled to adjust
rather than in the period in which they are due, and fixed rate loans and
mortgage-backed securities are included in the periods in which they are
anticipated to be repaid based on scheduled maturities. Peachtree Bank's savings
accounts and interest-bearing demand accounts (NOW and money market deposit
accounts), which are generally subject to immediate withdrawal, are included in
the "Three Months or Less" category, although historical experience has proven
these deposits to be more stable over the course of a year.
30
<PAGE> 37
<TABLE>
<CAPTION>
Maturing or Repricing in:
------------------------------------------------------------------
Four
Three Months One to
Months to 12 Five Over
or Less Months Years 5 Years Total
---------- ----------- ---------- ---------- ------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Interest-earning assets:
Federal funds sold $5,490 $ - $ - $ - $ 5,490
Investment securities - - 1,526 - 1,526
Loans 4,148 1,323 2,617 74 8,162
------ --------- -------- -------- --------
Total interest-earning assets $9,638 $ 1,323 $4,143 $ 74 $ 15,178
====== ========= ======== ======== ========
Interest-bearing liabilities:
Deposits
Interest-bearing demand and savings $5,090 $ - $ - $ - $ 5,090
Time deposits 840 3,569 1,694 - 6,103
------ --------- -------- -------- --------
Total interest-bearing liabilities $5,930 $ 3,569 $1,694 $ - $11,193
====== ========= ======== ======== ========
Interest sensitivity difference per period $3,708 $(2,246) $2,449 $ 74 $ 3,985
====== ========= ======== ======== ========
Cumulative interest sensitivity difference $3,708 $ 1,462 $3,911 $3,985
====== ========= ======== ========
Cumulative difference to total assets 18.8% 7.4% 19.8% 20.2%
====== ========= ======== ========
</TABLE>
At December 31, 1998, the difference between Peachtree Bank's
liabilities and assets repricing or maturing within one year was $1,462,000. Due
to a greater level of assets repricing or maturing within one year, a decrease
in interest rates would cause Peachtree Bank's net interest income to decrease.
Certain shortcomings are inherent in the method of analysis presented
in the foregoing table. For example, although certain assets and liabilities may
have similar maturities or periods to repricing, they may react, in different
degrees or at different points in time, to changes in market interest rates.
Changes in interest rates, prepayment rates, early withdrawal levels and the
ability of borrowers to service their debt, among other factors, may vary
significantly from the assumptions made in the table.
YEAR 2000 ISSUES
The costs of assessing, testing and remedying year 2000 issues were
nonexistent in 1998, and Peachtree Bank estimates such costs to total
approximately $3,000 in 1999.
The committee believes that it has identified all major internal
business and operational functions that will be impacted by the date change.
Testing of these functions was substantially complete at March 31, 1999. Based
on these tests, Peachtree Bank believes that its computer software and hardware
systems are substantially year 2000 compliant.
Peachtree Bank began operations using a software application system
provided by Fiserv, Inc. Fiserv has represented in its contract that the Fiserv
application systems are year 2000 compliant.
31
<PAGE> 38
Peachtree Bank has reviewed the Fiserv testing of its applications, including
the general ledger system, the loan application system, and the deposit
application system.
Peachtree Bank monitors and documents the year 2000 compliance efforts
of its loan customers. Peachtree Bank has developed a questionnaire for its
lending officers to use in assessing the year 2000 risk for larger loan
customers. A provision to Peachtree Bank's loan agreements has been added
relating to the borrower's year 2000 compliance.
THE BANK'S CONTINGENCY PLANS. Peachtree Bank believes that its computer
software and hardware systems are substantially year 2000 compliant, based on
its testing and verification of the results by third party software vendors and
consultants. However, should Peachtree Bank's computer software and hardware not
contain the necessary date code change, the systems would cease operating or
malfunction when the date change occurs. In that case, Peachtree Bank's
preliminary contingency plan contemplates converting to a manual entry system.
Management of Peachtree Bank believes that Peachtree Bank would be able to
continue to operate in a manual manner without significant loss. However,
Peachtree Bank believes that its computer software and hardware systems are
substantially year 2000 compliant.
BUSINESS OF PB FINANCIAL
GENERAL
PB Financial was incorporated as a Georgia Corporation on December 11,
1998 in order to serve as a bank holding company for and the sole shareholder of
Peachtree Bank. PB Financial was organized at the direction of Peachtree Bank
and has had no operations since the time of its incorporation.
PROPOSED NONBANKING ACTIVITIES
Management of PB Financial is currently reviewing permissible
nonbanking activities for the holding company but has no specific plans with
respect to such nonbanking activities. PB Financial's future nonbanking
activities may include financial and other activities permitted by law and such
activities could be conducted by subsidiary corporations which have not yet been
organized. Commencement of nonbanking operations by subsidiaries, if they are
organized, will be contingent upon approval by the board of directors of PB
Financial and by appropriate regulatory authorities.
EMPLOYEES
Except for the principal officers of Peachtree Bank, who presently
serve as officers of Peachtree Financial, Peachtree Financial does not have any
employees.
PROPERTY
PB Financial's main office is located at Peachtree Bank's main office
at 9570 Medlock Bridge Road, Duluth, Georgia. At the present time PB Financial
does not have any plans to establish additional offices.
32
<PAGE> 39
LEGAL PROCEEDINGS
PB Financial is not a party to any legal proceedings.
MANAGEMENT OF PB FINANCIAL
The directors and executive officers of PB Financial are the same as
the directors and executive officers of Peachtree Bank. The directors of PB
Financial are divided into three classes as follows: Class I consists of Robert
D. Cheeley, Daniel B. Cowart, Paul D. Donaldson and Charles L. Douglas; Class
II consists of Dexter R. Floyd, J. Edwin Howard, John J. Howard and J. Stephen
Hurst; and Class III consists of Charles Machemehl, III, J. Paul Maggard and
Monty G. Watson.
Directors will be elected at each annual meeting of shareholders to
succeed those in the class whose terms then expire. Directors will be elected
for three-year terms, so that the term of office of one class of directors will
expire each year. See "Comparative Legal Rights of Shareholders - Antitakeover
Provisions of PB Financial's Articles - Classification of the Board of
Directors." Additional information concerning the directors and Executive
Officers of PB Financial is set forth in the table under the heading "Management
of Peachtree Bank - Directors and Executive Officers."
PB FINANCIAL EXECUTIVE COMPENSATION
CASH COMPENSATION
At the present time, directors and officers of PB Financial do not
receive cash compensation for their services to PB Financial.
OUTSIDE DIRECTOR OPTION PLAN
On December 14, 1998, the Board of Directors adopted The PB Financial
Services Corporation 1998 Outside Director Stock Incentive Plan and made certain
individual option awards to certain directors of PB Financial.
GENERAL. The stock incentive plan is intended to provide incentive to
eligible directors to focus their efforts toward the success of PB Financial and
to manage the business of PB Financial in a manner that will promote long-term
growth and profitability of PB Financial. The stock incentive plan also provides
a means for PB Financial to attract and retain well-qualified directors. The
board of directors has reserved 157,612 shares of common stock for issuance
under the plan. The number of shares reserved for issuance may change in the
event of a stock split, recapitalization or similar event as described in the
stock incentive plan.
ADMINISTRATION. A committee designated by the PB Financial board of
directors administers the plan. The committee has the authority to grant awards
under the plan, to determine the terms of each award, to interpret the
provisions of the plan and to make all other determinations that it may deem
necessary or advisable to administer the plan. Currently, the entire membership
of the Board of Directors serves as the committee.
33
<PAGE> 40
The committee may grant stock options only to directors who are not
employees of PB Financial or its affiliates. The committee may grant these
options on an individual basis or design a program providing for grants to a
group of eligible directors. The committee determines, within the limits of the
plan, the number of shares of common stock subject to an option, to whom an
option is granted and the exercise price and forfeiture or termination
provisions of each option. A holder of a stock option generally may not transfer
the option during his or her lifetime.
OPTION TERMS. The stock incentive plan provides for the grant of
non-qualified stock options. Each option is evidenced by an agreement
describing the material terms of the option.
The committee determines the exercise price of an option. The exercise
price of non-qualified stock options may not be less than the fair market value
of the common stock on the date that the option is awarded. The committee may
permit the exercise price to be paid in cash, by the delivery of previously
owned shares of common stock or, to the extent applicable, through a cashless
exercise executed through a broker.
The committee also determines the term of an option. The term of an
option may not exceed ten years from the date of grant or sixty days from the
date the director ceases to serve on the board of directors of PB Financial or
an affiliate.
CERTAIN REORGANIZATIONS. The stock incentive plan provides for
appropriate adjustment, as determined by the committee, in the number and kind
of shares reserved for issuance under the plan, a s well as those subject to
unexercised options in the event of any change in the outstanding shares of
common stock by reason of a stock split, stock dividend, combination or
reclassification of shares, recapitalization, merger or similar event. A
corresponding adjustment may also be made to the exercise price of outstanding
options. In the event of certain corporate reorganizations where PB Financial
will not be the surviving entity, the committee may, within the terms of the
plan and the applicable agreement, cancel the options in exchange for cash
payments as described by the terms of the plan.
AMENDMENT AND TERMINATION OF THE OPTION PLAN. The Board of Directors
has the authority to amend or terminate the stock incentive plan. The Board of
Directors is not required to obtain shareholder approval to amend or terminate
the plan, but may condition any amendment or termination of the plan upon
shareholder approval if it determines that shareholder approval is necessary or
appropriate under tax, securities, or other laws. The Board's action may not
adversely affect the rights of a holder of a stock option without the holder's
consent.
OPTIONS AWARDED TO NON-EMPLOYEE DIRECTORS UNDER
THE PB FINANCIAL SERVICES CORPORATION
1998 OUTSIDE DIRECTORS STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
DIRECTORS OPTION SHARES
--------- -------------
<S> <C>
J. Paul Maggard 15,271
Charles A. Mchemehl, III 15,271
J. Stephen Hurst 7,636
J. Edwin Howard 7,636
John H. Howard 21,227
Dexter R. Floyd 18,707
</TABLE>
34
<PAGE> 41
<TABLE>
<CAPTION>
DIRECTORS OPTION SHARES
--------- -------------
<S> <C>
Charles Douglas 8,017
Paul D. Donaldson 18,035
Daniel B. Cowert 22,907
Robert D. Cheeley 22,907
------
TOTAL 157,612
</TABLE>
INTERESTS OF PB FINANCIAL MANAGEMENT IN THE REORGANIZATION
At the present time, Monty G. Watson owns one issued and outstanding
share of common stock, and paid an aggregate of $5.00 for the share in order to
supply the initial capitalization of PB Financial. As soon as practicable after
consummation of the reorganization, PB Financial will redeem the one share
issued to Mr. Watson, so that after consummation of the reorganization the
outstanding shares of PB Financial common stock will consist solely of shares
issued to the shareholders of Peachtree Bank in the reorganization.
Except for the above, to the knowledge of Peachtree Bank's management,
no director or officer of Peachtree Bank nor any of their associates has any
direct or indirect interest in or the reorganization except an interest
resulting solely from ownership of Peachtree Bank common stock or from his or
her position as a director or as an officer of Peachtree Bank.
OWNERSHIP OF PB FINANCIAL COMMON STOCK
MANAGEMENT STOCK OWNERSHIP
As of the date of this proxy statement/information statement, Monty G.
Watson owns the one issued and outstanding share of PB Financial common stock.
See "Interest of Management in the Reorganization."
FINANCIAL INFORMATION
UNAUDITED FINANCIAL STATEMENTS
35
<PAGE> 42
PROFORMA BALANCE SHEET OF
THE PB FINANCIAL SERVICES CORPORATION
(CONSOLIDATED)
REFLECTING THE ACQUISITION OF
THE PEACHTREE BANK
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
The PB Financial
The PB Financial The Peachtree Services corp.
Services Corp. Bank Historical Pro Forma
Pro Forma 12/31/98 Eliminations Consolidated
----------------- --------------- ------------ -----------------
<S> <C> <C> <C> <C>
Cash and due from $ $ 699,291 $ $ 699,291
Federal funds sold 5,490,000 5,490,000
Investment securities 1,526,078 1,526,078
Loans, net 8,047,909 8,047,909
Property and equpiment, net 3,880,737 3,880,737
Investment in The Peachtree Bank 7,738,659 (7,738,659)
Accrued interest and other assets 115,618 115,618
------------ ----------- ----------- -----------
$ 7,738,659 $19,759,633 $(7,738,659) $19,759,633
============ =========== =========== ===========
Deposits 12,608,404 12,608,404
Accrued interest and other liabilities 156,558 156,558
----------- -----------
12,764,962 12,764,962
Common stock, $5.00 par value 3,876,875 3,876,875 (3,876,875) 3,876,875
Surplus 3,861,784 3,361,784 (3,361,784) 3,861,784
Pre-opening expense fund 500,000 (500,000)
Unrealized gain (loss on -- (4,651) (4,651)
securities available for sale
Retained earnings (losses) -- (739,337) (739,337)
------------ ----------- ----------- -----------
7,738,659 6,994,671 6,994,671
------------ ----------- ----------- -----------
$7,738,659 $19,759,633 $(7,738,659) $19,759,633
============ =========== =========== ===========
</TABLE>
36
<PAGE> 43
THE PEACHTREE BANK
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION TO DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INTEREST INCOME
Interest and fees on loans $ 103,696
Interest on investment securities 11,683
U.S. Government Agency
Interest on federal funds sold 85,469
---------
Total interest income 200,858
---------
INTEREST EXPENSE
Interest on deposits 82,791
Interest on securities sold under agreements to repurchase 6,863
---------
89,654
---------
Net interest income 111,204
PROVISION FOR LOAN LOSSES 81,621
---------
Net interest income after provision for loan losses 29,583
OTHER OPERATING INCOME
Service fees and other 11,366
OTHER OPERATING EXPENSE
Salaries and benefits 228,708
Occupancy expense 72,959
Other operating expense 166,725
Total other operating expense 468,392
---------
INCOME (LOSS) BEFORE ORGANIZATIONAL EXPENSE (427,443)
ORGANIZATIONAL EXPENSE 311,894
---------
NET INCOME (LOSS) $(739,337)
=========
</TABLE>
37
<PAGE> 44
CAPITALIZATION
The following table presents the capitalization of PB Financial
immediately preceding the reorganization, the capitalization of Peachtree Bank
at December 31, 1998, and the resulting consolidated capitalization on a pro
forma basis.
PRO FORMA CAPITALIZATION
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, 1998
-------------------------------------------------------------------
PB Peachtree Pro Forma Pro Forma
Financial Bank Adjustments Combined
--------- ---- ----------- --------
<S> <C> <C> <C> <C>
Number of shares issued,
common stock, $5 par value 1 775,375 (1) 775,375
========== ========== =========== ===========
Stockholders' equity:
Common Stock $3,876,875 $3,876,875 $(3,876,875) $3,876,875
Paid in capital 3,861,784 3,861,784 (3,861,784) 3,861,784
Market valuation adjustment on -- (4,651) -- (4,651)
securities available for sale
Retained earnings (loss) -- (739,337) -- (739,337)
---------- ---------- ----------- ----------
Total capital $7,738,659 $6,994,671 $(7,738,659) $6,994,6711
========== ========== =========== ===========
</TABLE>
- ---------------------------------------
(1) Peachtree Bank has authorized 2,000,000 shares of common stock, $5.00 par
value. PB Financial authorized 10,000,000 shares of common stock, $5.00 par
value. At December 31, 1998, Peachtree Bank had 775,375 shares of common
stock issued and outstanding. PB Financial has one share of common stock
issued and outstanding and held by Monty G. Watson, the President and Chief
Executive Officer of Peachtree Bank and PB Financial.
38
<PAGE> 45
SHAREHOLDER PROPOSALS
Proposals of shareholders of PB Financial (if the reorganization is
completed) or of Peachtree Bank (if the reorganization is not completed)
intended to be presented at the next annual meeting of shareholders must be
received by PB Financial or Peachtree Bank at its principal executive offices on
or before March 31, 2000 in order to be included in the proxy statement and
proxy relating to the next annual meeting of shareholders.
LEGAL MATTERS
The legality of the shares of PB Financial common stock to be issued in
the merger and certain tax consequences of the merger will be passed upon by
Powell, Goldstein, Frazer & Murphy LLP, Atlanta, Georgia.
OTHER MATTERS
Management of Peachtree Bank does not know of any matters to be brought
before the Special Meeting other than those described above. If any other
matters properly come before the Special Meeting, the persons designated as
Proxies will vote on such matters in accordance with their best judgment.
WHERE YOU CAN FIND MORE INFORMATION ABOUT PB FINANCIAL
PB Financial has filed with the SEC a registration statement on Form
S-4 to register the shares that PB Financial will issue to Peachtree Bank
shareholders. This document is a part of the registration statement. This proxy
statement/prospectus does not include all of the information contained in the
Registration statement. For further information about PB Financial and the
securities offered in this Proxy Statement/ Prospectus. You should review the
registration statement. You can inspect or copy the registration statement, at
prescribed rates, at the SEC's public reference facilities at the addresses
listed above.
39
<PAGE> 46
APPENDIX A
PLAN OF REORGANIZATION
BY AND AMONG THE PEACHTREE BANK, THE PB FINANCIAL SERVICES
CORPORATION AND INTERIM PB CORPORATION
DATED AS OF FEBRUARY 18, 1999
A-1
<PAGE> 47
PLAN OF REORGANIZATION
THIS PLAN OF REORGANIZATION (the "Plan"), made and entered into as of
the 18th day of February, 1999, by and among THE PEACHTREE BANK (the "Bank"), a
bank organized under the laws of the State of Georgia, THE PB FINANCIAL SERVICES
CORPORATION (the "Holding Company"), a Georgia corporation, and INTERIM PB
CORPORATION ("Interim"), a Georgia corporation and wholly-owned subsidiary of
the Holding Company;
WITNESSETH
WHEREAS, the principal offices of the Bank, the Holding Company and
Interim are located at 9570 Medlock Bridge Road, Duluth, Georgia 30096;
WHEREAS, the authorized capital stock of the Bank consists of 2,000,000
shares of common stock ("Bank Stock"), $5.00 par value, of which 775,375 shares
are issued and outstanding;
WHEREAS, the authorized capital stock of the Holding Company consists
of 10,000,000 shares of common stock ("Holding Company Stock"), $5.00 par value,
of which one share is issued and outstanding;
WHEREAS, the authorized capital stock of Interim consists of 10,000,000
shares of common stock ("Interim Stock"), $5.00 par value, of which one share is
issued and outstanding;
WHEREAS, the respective Boards of Directors of the Bank and Interim
deem it advisable and in the best interests of the Bank and Interim and their
respective shareholders that Interim be merged with and into the Bank and, by
resolutions duly adopted, have approved and adopted this Plan and directed that
it be submitted to the respective shareholders of the Bank and Interim for their
approval; and
WHEREAS, the Board of Directors of the Holding Company has approved and
adopted this Plan, and the Holding Company has agreed to join in and be bound
hereby and to issue the shares of Holding Company Stock which shareholders of
the Bank will receive upon consummation of the Reorganization and merger as
herein provided;
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements herein contained, and for the purpose of stating the method, terms
and conditions of the merger provided for herein, the mode of carrying the same
into effect, the manner and basis of converting and exchanging the shares of
Bank Stock and Interim Stock as hereinafter provided, and such other provisions
relating to the merger as the parties deem necessary or desirable, the parties
hereto agree as follows:
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SECTION 1
REORGANIZATION
Pursuant to the provisions of the Financial Institutions Code of
Georgia, as amended (the "Financial Institutions Code"), and other applicable
provisions of Georgia law, Interim shall be merged with and into the Bank. The
Bank shall be the survivor of the merger (the "Resulting Bank") continuing under
the charter of the Bank and with the name "The Peachtree Bank."
SECTION 2
EFFECTIVE DATE OF THE REORGANIZATION
The merger of Interim with and into the Bank and the reorganization of
the Bank into a holding company structure shall be effective as of the date (the
"Effective Date of the Reorganization") specified in the certificate of merger
to be issued by the Georgia Secretary of State in accordance with the applicable
provisions of the Financial Institutions Code, O.C.G.A. ss. 7-l-535(b).
Since the merger of Interim with and into the Bank will effect the
reorganization of the Bank into a holding company structure, such merger and
reorganization, collectively, shall hereinafter be referred to as the
"Reorganization."
SECTION 3
LOCATION, ARTICLES AND BYLAWS, MANAGEMENT
AND CAPITAL STRUCTURE OF THE RESULTING BANK
On the Effective Date of the Reorganization:
(a) The principal office of the Resulting Bank shall be located at 9570
Medlock Bridge Road, Duluth, Georgia 30096, or such other location where the
Bank is located immediately prior to the Effective Date of the Reorganization.
(b) The Articles of Incorporation and Bylaws of the Resulting Bank
shall be the same as the Articles of Incorporation and Bylaws of the Bank as in
effect immediately prior to the Effective Date of the Reorganization.
(c) The directors and officers of the Resulting Bank shall be the
directors and officers of the Bank immediately prior to the Effective Date of
the Reorganization. All such directors and officers of the Resulting Bank shall
serve until their respective successors are elected or appointed pursuant to the
Bylaws of the Resulting Bank.
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(d) The Resulting Bank will distribute to the Holding Company all of
the capital and surplus of Interim, so that the resulting capital structure of
the Resulting Bank shall be identical to the capital structure of the Bank
immediately prior to the Effective Date of the Reorganization. The capital
structure of the Bank shall not be altered or amended by the Reorganization and
shall continue in effect as that of the Resulting Bank.
SECTION 4
EXISTENCE, RIGHTS, DUTIES, ASSETS
AND LIABILITIES OF THE RESULTING BANK
(a) As of the Effective Date of the Reorganization, the existence of
Interim as a separate entity shall cease, but its existence shall continue in
the Resulting Bank.
(b) As of the Effective Date of the Reorganization, the Resulting Bank
shall have, without further act or deed, all of the properties, rights, powers,
trusts, duties and obligations of the Bank and Interim.
(c) As of the Effective Date of the Reorganization, the Resulting Bank
shall have the authority to engage only in such businesses and to exercise only
such powers as are then permissible upon the original incorporation of a bank
under the Financial Institutions Code and as are provided for in the Articles of
Incorporation of the Resulting Bank, and the Resulting Bank shall be subject to
the same prohibitions and limitations to which it would be subject upon original
incorporation, except that the Resulting Bank may engage in any business and may
exercise any right that the Bank could lawfully have exercised or engaged in
immediately prior to the Effective Date of the Reorganization.
(d) No liability of the Bank or Interim or of any of their
shareholders, directors or officers shall be affected by the Reorganization, nor
shall any lien on any property of the Bank or Interim be impaired by the
Reorganization. Any claim existing or any action pending by or against the Bank
or Interim may be prosecuted to judgment as if the Reorganization had not taken
place, or the Resulting Bank may be substituted in place of the Bank or Interim.
SECTION 5
MANNER AND BASIS OF CONVERTING SHARES OF INTERIM STOCK
THE MANNER AND BASIS OF CONVERTING AND EXCHANGING THE SHARES OF INTERIM
STOCK INTO SHARES OF RESULTING BANK STOCK SHALL BE AS FOLLOWS:
As soon as practicable after the Effective Date of the Reorganization,
the Holding Company shall, upon presentation and surrender of a certificate
representing all of the issued and outstanding shares of Interim Stock to the
Bank, as exchange agent, be entitled to receive in exchange therefor a
certificate or certificates representing all of the then outstanding shares of
Resulting Bank Stock.
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SECTION 6
MANNER AND BASIS OF CONVERTING SHARES OF BANK STOCK
The manner and basis of converting shares of Bank Stock into shares of
Holding Company Stock, excluding those shares of Bank Stock held by shareholders
who have perfected dissenters' rights of appraisal under the applicable
provisions of the Financial Institutions Code, O.C.G.A. ss. 7-1-537, and the
Georgia Business Corporations Code, O.C.G.A. ss. 14-2-1301 et seq.
(collectively, the "Dissenters' Rights Provisions"), shall be as follows:
(a) Exchange Ratio. Each share of Bank Stock outstanding immediately
prior to the Effective Date of the Reorganization shall, by virtue of the
Reorganization and without any action on the part of the holder or holders
thereof, be converted into the right to receive one share of Holding Company
Stock.
(b) Rights of Former Bank Shareholders. As of the Effective Date of the
Reorganization, each certificate theretofore representing one or more
outstanding shares of Bank Stock shall be deemed for all corporate purposes to
evidence only the right to receive a certificate representing shares of Holding
Company Stock in accordance with this Plan.
(c) Letter of Transmittal. As soon as practicable after approval of the
Reorganization by the Bank's shareholders, a letter of transmittal shall be
mailed to each Bank shareholder as of the close of business on the date
immediately preceding the Effective Date of the Reorganization. Upon receipt of
the letter of transmittal, each holder of a certificate or certificates
theretofore representing shares of Bank Stock shall surrender such certificates
to the Bank, as exchange agent, together with a properly completed and signed
letter of transmittal, and shall receive in exchange therefor a certificate
representing an equivalent number of shares of Holding Company Stock, subject to
the restrictions and conditions of this Plan.
(d) Failure to Surrender Bank Stock Certificates. Until the former Bank
shareholder surrenders his or her Bank Stock certificate or certificates to the
Bank (or suitable arrangements are made to account for any lost, stolen or
destroyed certificates according to the Bank's usual procedures), the
shareholder:
(i) shall not be issued a certificate
representing the shares of Holding Company Stock or
the cash which such Bank Stock certificate may
entitle the shareholder to receive;
(ii) shall not have any voting rights in
respect of the shares of Holding Company Stock which
such Bank Stock certificate may entitle the
shareholder to receive; and
(iii) shall not be paid dividends or other
distributions in respect of the shares of Holding
Company Stock which such Bank Stock
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certificate may entitle the shareholder to receive;
instead such dividends or distributions shall be
retained, without interest, for the shareholder's
account until surrender of such Bank Stock
certificate.
SECTION 7
ACQUISITION OF DISSENTERS' BANK STOCK
Any shareholder of the Bank who fully complies with the Dissenters'
Rights Provisions shall be paid an amount of cash (as determined under such
Provisions) for his or her shares of Bank Stock by the Bank. Immediately upon
the Bank's acquisition of any of Bank Stock from its shareholders pursuant to
the Dissenters' Rights Provisions, the Holding Company shall acquire such shares
from the Bank for the same price as shall have been paid by the Bank to the
dissenting shareholders. The shares of Bank Stock so acquired by the Holding
Company shall be cancelled.
SECTION 8
REDEMPTION OF HOLDING COMPANY STOCK
As soon as practicable after the Effective Date of the Reorganization,
the Holding Company shall redeem any shares of Holding Company Stock which may
have been issued prior to the Effective Date of the Reorganization at a
redemption price equal to the same consideration paid for such shares, so that
immediately after such redemption the then outstanding shares of Holding Company
Stock shall consist solely of the shares to be issued by the Holding Company
upon the conversion of shares of Bank Stock as provided herein.
SECTION 9
FURTHER ACTIONS
From time to time, as and when requested by the Resulting Bank, or by
its successors or assigns, Interim shall execute and deliver or cause to be
executed and delivered all such deeds and other instruments, and shall take or
cause to be taken all such other actions, as the Resulting Bank, or its
successors and assigns, may deem necessary or desirable in order to vest in and
confirm to the Resulting Bank, and its successors and assigns, title to and
possession of all the property, rights, powers, trusts, duties and obligations
referred to in Section 4 hereof and otherwise to carry out the intent and
purposes of this Plan.
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SECTION 10
CONDITIONS PRECEDENT TO CONSUMMATION OF THE REORGANIZATION
This Plan is subject to, and consummation of the Reorganization herein
provided for is conditioned upon, the fulfillment prior to the Effective Date of
the Reorganization of each of the following conditions:
(a) Approval of the Plan by the affirmative vote of the holders of at
least two-thirds of the outstanding voting shares of the Bank and Interim;
(b) The number of shares held by persons who have perfected dissenters'
rights of appraisal pursuant to the Dissenters' Rights Provisions shall not be
deemed by the parties hereto to make consummation of this Plan inadvisable and,
in any event, shall not exceed 10% of the Bank's outstanding shares (or 77,538
as of the date of this Agreement);
(c) Procurement of any action, consent, approval or ruling,
governmental or otherwise, which is, or in the opinion of counsel for the Bank
may be, necessary to permit or enable the Resulting Bank, upon and after the
Reorganization, to conduct all or any part of the business and activities
conducted by the Bank prior to the Reorganization; and
(d) The receipt by the Bank of a written opinion of special counsel to
the Bank that for federal income tax purposes no gain or loss will be recognized
by a Bank shareholder who exchanges his or her Bank Stock for Holding Company
Stock, as provided by this Plan.
SECTION 11
TERMINATION
In the event that:
(a) The number of shares of Bank Stock voted against the Reorganization
shall make consummation of the Reorganization inadvisable in the opinion of the
Board of Directors of the Bank, Interim or the Holding Company;
(b) Any action, suit, proceeding or claim has been instituted, made or
threatened relating to the proposed Reorganization which shall make consummation
of the Reorganization inadvisable in the opinion of the Board of Directors of
the Bank, Interim or the Holding Company;
(c) Any action, consent, approval, opinion, or ruling required to be
provided by Section 10 of this Plan shall not have been obtained; or
(d) For any other reason consummation of the Reorganization is deemed
inadvisable in the opinion of the Board of Directors of the Bank, Interim or the
Holding Company;
then this Plan may be terminated at any time before consummation of the
Reorganization by written notice, approved or authorized by the Board of
Directors of the party wishing to terminate, to the other parties. Upon
termination by written notice as provided by this Section 11, this Plan shall be
void and of no further effect, and there shall be no liability by reason of this
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Plan or the termination hereof on the part of the Bank, Interim, the Holding
Company or their directors, officers, employees, agents or shareholders.
SECTION 12
AMENDMENT; WAIVER
(a) At any time before or after approval and adoption hereof by the
respective shareholders of the Bank, Interim and the Holding Company, this Plan
may be amended by agreement among the Bank, Interim and the Holding Company;
provided, however, that after the approval and adoption of this Plan by the
shareholders of the Bank, no amendment reducing the consideration payable to
Bank shareholders pursuant to Section 6(a) and (b) hereof shall be valid without
having been approved by the shareholders of the Bank in the manner required for
approval of this Plan.
(b) A waiver by any party hereto of any breach of a term or condition
of this Plan shall not operate as a waiver of any other breach of such term or
condition or of other terms or conditions, nor shall failure to enforce any term
or condition operate as a waiver or release of any other right, in law or in
equity, or claim which any party may have against another party for anything
arising out of, connected with or based upon this Plan. A waiver shall be
effective only if evidenced by a writing signed by the party who is entitled to
the benefit of the term or condition of this Plan which is to be waived. A
waiver of a term or condition on one occasion shall not be deemed to be a waiver
of the same or of any other term or condition on a future occasion.
SECTION 13
BINDING EFFECT; COUNTERPARTS; HEADINGS; GOVERNING LAW
This Plan is binding upon the parties hereto and upon their successors
and assigns. This Plan may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument. The title of this Plan and the headings
herein set out are for convenience or reference only and shall not be deemed a
part of this Plan. This Plan shall be governed by and construed in accordance
with the laws of the State of Georgia.
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IN WITNESS WHEREOF, the parties hereto have caused this Plan of
Reorganization to be executed by their duly authorized officers and their bank
and corporate seals to be affixed hereto all as of the day and year first above
written.
THE PEACHTREE BANK
[BANK SEAL] By: /s/
------------------------------
Monty G. Watson
President
ATTEST:
/s/
- ---------------------------------
Secretary
INTERIM PB CORPORATION
[INTERIM SEAL] By: /s/
------------------------------
Monty G. Watson
President
ATTEST:
/s/
- ---------------------------------
Secretary
THE PB FINANCIAL SERVICES
CORPORATION
[CORPORATE SEAL] By: /s/
------------------------------
Monty G. Watson
President
ATTEST:
/s/
- ---------------------------------
Secretary
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APPENDIX B
EXCERPTS FROM
THE GEORGIA BUSINESS CORPORATION CODE
RELATING TO DISSENTER'S RIGHTS
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EXCERPTS FROM THE GEORGIA BUSINESS CORPORATION
CODE RELATING TO DISSENTING SHAREHOLDERS
14-2-1301. DEFINITIONS.
As used in this article, the term:
(1) "Beneficial shareholder" means the person who is a
beneficial owner of shares held in a voting trust or
by a nominee as the record shareholder.
(2) "Corporate action" means the transaction or other
action by the corporation that creates dissenters'
rights under Code Section 14-2-1302.
(3) "Corporation" means the issuer of shares held by a
dissenter before the corporate action, or the
surviving or acquiring corporation by merger or share
exchange of that issuer.
(4) "Dissenter" means a shareholder who is entitled to
dissent from corporate action under Code Section
14-2-1302 and who exercises that right when and in
the manner required by Code Sections 14-2-1320
through 14-2-1327.
(5) "Fair value," with respect to a dissenter's shares,
means the value of the shares immediately before the
effectuation of the corporate action to which the
dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action.
(6) "Interest" means interest from the effective date of
the corporate action until the date of payment, at a
rate that is fair and equitable under all the
circumstances.
(7) "Record shareholder" means the person in whose name
shares are registered in the records of a corporation
or the beneficial owner of shares to the extent of
the rights granted by a nominee certificate on file
with a corporation.
(8) "Shareholder" means the record shareholder or the
beneficial shareholder.
14-2-1302. RIGHT TO DISSENT.
(a) A record shareholder of the corporation is entitled to dissent from,
and obtain payment of the fair value of his or her shares in the event of, any
of the following corporate actions:
(1) Consummation of a plan of merger to which the
corporation is a party:
(A) If approval of the shareholders of the
corporation is required for the merger by Code Section
14-2-1103 or the articles of incorporation and the shareholder
is entitled to vote on the merger; or
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(B) If the corporation is a subsidiary that is merged
with its parent under Code Section 14-2-1104;
(2) Consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be
acquired, if the shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange of all or
substantially all of the property of the corporation if a shareholder
vote is required on the sale or exchange pursuant to Code Section
14-2-1202, but not including a sale pursuant to court order or a sale
for cash pursuant to a plan by which all or substantially all of the
net proceeds of the sale will be distributed to the shareholder within
one year after the date of sale;
(4) An amendment of the articles of incorporation that
materially and adversely affects rights in respect of a dissenter's
shares because it:
(A) Alters or abolishes a preferential right of the
shares;
(B) Creates, alters, or abolishes a right in respect
of redemption, including a provision respecting a sinking fund
for the redemption or repurchase, of the shares;
(C) Alters or abolishes a preemptive right of the
holder of the shares to acquire shares or other securities;
(D) Excludes or limits the rights of the shares to
vote on any matter, or to cumulate votes, other than a
limitation by dilution through issuance of shares or other
securities with similar voting rights;
(E) Reduces the number of shares owned by the
shareholder to a fraction of a share if the fractional share
so created is to be acquired for cash under Code Section
14-2-604; or
(F) Cancels, redeems, or repurchases all or part of
the shares of the class; or
(5) Any corporate action taken pursuant to a shareholder
vote to the extent that Article 9 of this chapter, the articles of
incorporation, bylaws, or a resolution of the board of directors
provides that voting or nonvoting shareholders are entitled to dissent
and obtain payment for their shares.
(b) A shareholder entitled to dissent and obtain payment for his or her
shares under this article may not challenge the corporate action creating his or
her entitlement unless the corporate action fails to comply with procedural
requirements of this chapter or the articles of incorporation or bylaws of the
corporation or the vote required to obtain approval of the corporate action was
obtained by fraudulent and deceptive means, regardless of whether the
shareholder has exercised dissenter's rights.
(c) Notwithstanding any other provision of this article, there shall be no
right of dissent in favor of the holder of shares of any class or series which,
at the record date fixed to determine the
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shareholders entitled to receive notice of and to vote at a meeting at which a
plan of merger or share exchange or a sale or exchange of property or an
amendment of the articles of incorporation is to be acted on, were either listed
on a national securities exchange or held of record by more than 2,000
shareholders, unless:
(1) In the case of a plan of merger or share exchange, the
holders of shares of the class or series are required under the plan of
merger or share exchange to accept for their shares anything except
shares of the surviving corporation or another publicly held
corporation which at the effective date of the merger or share exchange
are either listed on a national securities exchange or held of record
by more than 2,000 shareholders, except for scrip or cash payments in
lieu of fractional shares; or
(2) The articles of incorporation or a resolution of the board
of directors approving the transaction provides otherwise.
14-2-1303. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.
A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his or her name only if he dissents with respect to all
shares beneficially owned by any one beneficial shareholder and notifies the
corporation in writing of the name and address of each person on whose behalf
asserts dissenters' rights. The rights of a partial dissenter under this Code
section are determined as if the shares as to which dissents and his or her
other shares were registered in the names of different shareholders.
14-2-1320. NOTICE OF DISSENTERS' RIGHTS.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, the meeting
notice must state that shareholders are or may be entitled to assert dissenters'
rights under this article and be accompanied by a copy of this article.
(b) If corporate action creating dissenters' rights under Code Section
14-2-1302 is taken without a vote of shareholders, the corporation shall notify
in writing all shareholders entitled to assert dissenters' rights that the
action was taken and send them the dissenters' notice described in Code Section
14-2-1322.
14-2-1321. NOTICE OF INTENT TO DEMAND PAYMENT.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, a record
shareholder who wishes to assert dissenters' rights:
(1) Must deliver to the corporation before the vote is taken
written notice of his or her intent to demand payment for his or her
shares if the proposed action is effectuated; and
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(2) Must not vote his or her shares in favor of the proposed
action.
(b) A record shareholder who does not satisfy the requirements of
subsection (a) of this Code section is not entitled to payment for his or her
shares under this article.
14-2-1322. DISSENTERS' NOTICE.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who satisfied the
requirements of Code Section 14-2-1321.
(b) The dissenters' notice must be sent no later than ten days after the
corporate action was taken and must:
(1) State where the payment demand must be sent and where and
when certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent
transfer of the shares will be restricted after the payment demand is
received;
(3) Set a date by which the corporation must receive the
payment demand, which date may not be fewer than 30 nor more than 60
days after the date the notice required in subsection (a) of this Code
section is delivered; and
(4) Be accompanied by a copy of this article.
14-2-1323. DUTY TO DEMAND PAYMENT.
(a) A record shareholder sent a dissenters' notice described in Code
Section 14-2-1322 must demand payment and deposit his or her certificates in
accordance with the terms of the notice.
(b) A record shareholder who demands payment and deposits his or her
shares under subsection (a) of this Code section retains all other rights of a
shareholder until these rights are canceled or modified by the taking of the
proposed corporate action.
(c) A record shareholder who does not demand payment or deposit his or her
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for his or her shares under this article.
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14-2-1324. SHARE RESTRICTIONS.
(a) The corporation may restrict the transfer of uncertificated shares
from the date the demand for their payment is received until the proposed
corporate action is taken or the restrictions released under Code Section
14-2-1326.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are canceled or modified by the taking of the proposed corporate action.
14-2-1325. OFFER OF PAYMENT.
(a) Except as provided in Code Section 14-2-1327, within ten days of the
later of the date the proposed corporate action is taken or receipt of a payment
demand, the corporation shall offer to pay each dissenter who complied with Code
Section 14-2-1323 the amount the corporation estimates to be the fair value of
his or her shares, plus accrued interest.
(b) The offer of payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal
year ending not more than 16 months before the date of payment, an
income statement for that year, a statement of changes in shareholders'
equity for that year, and the latest available interim financial
statements, if any;
(2) A statement of the corporation's estimate of the fair
value of the shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment
under Code Section 14-2-1327; and
(5) A copy of this article.
(c) If the shareholder accepts the corporation's offer by written notice
to the corporation within 30 days after the corporation's offer, payment for his
or her shares shall be made within 60 days after the making of the offer or the
taking of the proposed corporate action, whichever is later.
14-2-1326. FAILURE TO TAKE ACTION.
(a) If the corporation does not take the proposed action within 60 days
after the date set for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(b) If, after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under Code Section 14-2-1422 and repeat the payment demand
procedure.
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14-2-1327. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(a) A dissenter may notify the corporation in writing of his or her own
estimate of the fair value of his or her shares and amount of interest due, and
demand payment of his or her estimate of the fair value of his or her shares and
interest due, if:
(1) The dissenter believes that the amount offered under Code
Section 14-2-1325 is less than the fair value of his or her shares or
that the interest due is incorrectly calculated; or
(2) The corporation, having failed to take the proposed
action, does not return the deposited certificates or release the
transfer restrictions imposed on uncertificated shares within 60 days
after the date set for demanding payment.
(b) A dissenter waives his or her right to demand payment under this Code
section unless he notifies the corporation of his or her demand in writing under
subsection (a) of this Code section within 30 days after the corporation made or
offered payment for his or her shares.
(c) If the corporation does not offer payment within the time set forth in
subsection (a) of Code Section 14-2-1325:
(1) The shareholder may demand the information required under
subsection (b) of Code Section 14-2-1325, and the corporation shall
provide the information to the shareholder within ten days after
receipt of a written demand for the information; and
(2) The shareholder may at any time, subject to the
limitations period of Code Section 14-2-1332, notify the corporation of
his or her own estimate of the fair value of his or her shares and the
amount of interest due and demand payment of his or her estimate of the
fair value of his or her shares and interest due.
14-2-1330. COURT ACTION.
(a) If a demand for payment under Code Section 14-2-1327 remains unsettled,
the corporation shall commence a proceeding within 60 days after receiving the
payment demand and petition the court to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding within
the 60 day period, it shall pay each dissenter whose demand remains unsettled
the amount demanded.
(b) The corporation shall commence the proceeding, which shall be a nonjury
equitable valuation proceeding, in the superior court of the county where a
corporation's registered office is located. If the surviving corporation is a
foreign corporation without a registered office in this state, it shall commence
the proceeding in the county in this state where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
corporation was located.
(c) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding, which
shall have the effect of an action quasi in rem against their shares. The
corporation shall serve a copy of the petition in the proceeding upon
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each dissenting shareholder who is a resident of this state in the manner
provided by law for the service of a summons and complaint, and upon each
nonresident dissenting shareholder either by registered or certified mail and
publication, or in any other manner permitted by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) of this Code section is plenary and exclusive. The court
may appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers described
in the order appointing them or in any amendment to it. Except as otherwise
provided in this chapter, Chapter 11 of the Title 9, known as the "Georgia Civil
Practice Act," applies to any proceeding with respect to dissenters' rights
under this chapter.
(e) Each dissenter made a party to the proceeding is entitled to judgment
for the amount which the court finds to be the fair value of his or her shares,
plus interest to the date of judgment.
14-2-1331. COURT COSTS AND COUNSEL FEES.
(a) The court in an appraisal proceeding commenced under Code Section
14-2-1330 shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court, but not
including fees and expenses of attorneys and experts for the respective parties.
The court shall assess the costs against the corporation, except that the court
may assess the costs against all or some of the dissenters, in amounts the court
finds equitable, to the extent the court finds the dissenters acted arbitrarily,
vexatiously, or not in good faith in demanding payment under Code Section
14-2-1327.
(b) The court may also assess the fees and expenses of attorneys and
experts for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all
dissenters if the court finds the corporation did not substantially
comply with the requirements of Code Sections 14-2-1320 through
14-2-1327; or
(2) Against either the corporation or a dissenter, in favor of
any other party, if the court finds that the party against whom the
fees and expenses are assessed acted arbitrarily, vexatiously, or not
in good faith with respect to the rights provided by this article.
(c) If the court finds that the services of attorneys for any dissenter
were of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these attorneys reasonable fees to be paid out of the amounts
awarded the dissenters who were benefited.
14-2-1332. LIMITATION OF ACTIONS.
No action by any dissenter to enforce dissenters' rights shall be
brought more than three years after the corporate action was taken, regardless
of whether notice of the corporate action and of the right to dissent was given
by the corporation in compliance with the provisions of Code Section 14-2-1320
and Code Section 14-2-1322.
B-8
<PAGE> 63
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Consistent with the applicable provisions of the laws of Georgia, the
Registrant's Bylaws provide that the Registrant shall have the power to
indemnify its directors and officers against expenses (including attorneys'
fees) and liabilities arising from actual or threatened actions, suits or
proceedings, whether or not settled, to which they become subject by reason of
having served in such role if such director or officer acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best
interests of the Registrant and, with respect to a criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Advances against expenses shall be made so long as the person seeking
indemnification agrees to refund the advances if it is ultimately determined
that he or she is not entitled to indemnification. A determination of whether
indemnification of a director or officer is proper because he met the applicable
standard of conduct shall be made (1) by the Board of Directors of the
Registrant, (2) in certain circumstances, by independent legal counsel in a
written opinion or (3) by the affirmative vote of a majority of the shares
entitled to vote.
In addition, Article 11 of the Registrant's Articles of Incorporation,
subject to certain exceptions, eliminates the potential personal liability of a
director for monetary damages to the Registrant and to the shareholders of the
Registrant for breach of a duty as a director. There is no elimination of
liability for (1) a breach of duty involving appropriation of a business
opportunity of the Registrant, (2) an act or omission involving intentional
misconduct or a knowing violation of law, (3) a transaction from which the
director derives an improper material tangible personal benefit or (4) as to any
payment of a dividend or approval of a stock repurchase that is illegal under
the Georgia Business Corporation Code. The Articles of Incorporation do not
eliminate or limit the right of the Registrant or its shareholders to seek
injunctive or other equitable relief not involving monetary damages.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
<S> <C> <C>
2.1 Plan of Reorganization, dated as of February 18, 1999, by and among The Peachtree Bank, The
PB Financial Services Corporation, and Interim PB Corporation (included in Appendix A to the
proxy statement/prospectus and incorporated by reference herein)
4.1 Articles of Incorporation of The PB Financial Services Corporation
4.2 Bylaws of The PB Financial Services Corporation
</TABLE>
II-1
<PAGE> 64
<TABLE>
<CAPTION>
<S> <C>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
5 Opinion of Powell, Goldstein, Frazer & Murphy LLP (including consent)
8 Opinion of Powell, Goldstein, Frazer & Murphy LLP regarding federal income tax matters
(including consent)
10.1 Employment Agreement between Monty G. Watson and The Peachtree Bank dated as of January 13,
1998*
10.2 The PB Financial Services 1998 Outside Directors Option Plan*
21 Subsidiaries of the registrant
23.6 Consents of Powell, Goldstein, Frazer & Murphy LLP (included in Exhibits 5 and 8)
24 Powers of Attorney (appears on the signature page to this Registration Statement)
99.1 Form of Proxy of The Peachtree Bank
</TABLE>
*The indicated exhibit is a compensatory plan required to be filed as
an exhibit to this Registration Statement on Form S-4.
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
II-2
<PAGE> 65
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the prospectus
is sent or given, the latest annual report, to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the Registrant's Articles of Incorporation
or Bylaws, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
(d) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(e) The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE> 66
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Duluth, State of Georgia, on May 11, 1999.
THE PB FINANCIAL SERVICES CORPORATION
By: /s/
------------------------------------
Monty G. Watson
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Monty G. Watson and Kelly J. Johnson, and
each of them, as true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to the Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, including any
Registration Statement filed pursuant to Rule 462(b) of the Securities Act of
1933, as amended, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully and to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all which said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do, or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed by the following persons
in the capacities indicated on October 14, 1998.
SIGNATURE TITLE
--------- -----
/s/ Director
- --------------------------------------------------
Robert D. Cheeley
/s/ Director
- --------------------------------------------------
Daniel B. Cowart
/s/ Director
- --------------------------------------------------
Paul D. Donaldson
II-3
<PAGE> 67
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Director
- --------------------------------------------------
Charles Douglas
/s/ Director
- --------------------------------------------------
Dexter R. Floyd
/s/ Director
- --------------------------------------------------
J. Edwin Howard
/s/ Chairman of the Board and Director
- --------------------------------------------------
John J. Howard
/s/ Director
- --------------------------------------------------
J. Stephen Hurst
/s/ Chief Financial Officer/Chief Operations Officer
- -------------------------------------------------- (principal financial officer)
Kelly J. Johnson
/s/ Director
- --------------------------------------------------
Charles A. Machemehl, III
/s/ Director
- --------------------------------------------------
J. Paul Maggard
/s/ President, Chief Executive Officer and Director
- -------------------------------------------------- (principal executive officer)
Monty G. Watson
</TABLE>
II-4
<PAGE> 68
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
<S> <C> <C>
2.1 - Plan of Reorganization, dated as of February 18, 1999, by and among The Peachtree Bank, The
PB Financial Services Corporation and Interim PB Corporation (included in Appendix A to the
proxy statement/prospectus and incorporated by reference herein)
4.1 - Articles of Incorporation of The PB Financial Services Corporation
4.2 - Bylaws of The PB Financial Services Corporation
5 - Opinion of Powell, Goldstein, Frazer & Murphy LLP (including consent)
8 - Opinion of Powell, Goldstein, Frazer & Murphy LLP regarding federal income tax matters
(including consent)
10.1
- Employment Agreement between Monty G. Watson and The Peachtree Bank dated as of January 13, 1998
10.2 - The PB Financial Services 1998 Outside Directors Option Plan*
21 - Subsidiaries of the registrant
23.6 - Consents of Powell, Goldstein, Frazer & Murphy LLP (included in Exhibits 5 and 8)
24 - Powers of Attorney (appears on the signature page to this Registration Statement)
99.1 - Form of Proxy of The Peachtree Bank
</TABLE>
*The indicated exhibit is a compensatory plan required to be filed as an exhibit
to this Registration Statement on Form S-4
<PAGE> 1
EXHIBIT 4.1
ARTICLES OF INCORPORATION
OF
THE PB FINANCIAL SERVICES CORPORATION
1.
The name of the Corporation is: "The PB Financial Services
Corporation."
2.
The Corporation is organized pursuant to the provisions of the Georgia
Business Corporation Code.
3.
The object of the Corporation is pecuniary gain and profit, and the
Corporation is formed for the purpose of becoming and operating as a bank
holding company and engaging in such related and permissible activities in
connection therewith as the Board of Directors may from time to time specify by
resolution.
4.
The Corporation shall have the authority to issue ten million
(10,000,000) shares of common stock (the "Common Stock"), $5.00 par value.
5.
The initial registered office of the Corporation shall be at 9570
Medlock Bridge Road, Duluth, Fulton County, Georgia 30096. The initial
registered agent of the Corporation at such address shall be Monty G. Watson.
<PAGE> 2
6.
The mailing address of the initial principal office of the corporation
is P.O. Box 933, Duluth, Georgia 30096.
7.
(a) The Board of Directors shall be divided into three (3) classes,
Class I, Class II and Class III, which shall be as nearly equal in number as
possible. Each director in Class I shall be elected to an initial term of one
(1) year, each director in Class II shall be elected to an initial term of two
(2) years, each director in Class III shall be elected to an initial term of
three (3) years, and each director shall serve until the election and
qualification of his or her successor or until his or her earlier resignation,
death or removal from office. Upon the expiration of the initial terms of office
for each Class of directors, the directors of each Class shall be elected for
terms of three (3) years, to serve until the election and qualification of their
successors or until their earlier resignation, death or removal from office.
(b) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 7 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote in an election of
directors, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
<PAGE> 3
8.
(a) Except as provided in paragraph (b) of this Article 8, the Board of
Directors shall have the right to adopt, amend or repeal the bylaws of the
Corporation by the affirmative vote of a majority of all directors then in
office, and the shareholders shall have such right by the affirmative vote of a
majority of the issued and outstanding shares of the Corporation entitled to
vote in an election of directors.
(b) Notwithstanding paragraph (a) of this Article 8, any amendment of
the bylaws of the Corporation changing the number of directors shall require the
affirmative vote of two-thirds (2/3) of all directors then in office or the
affirmative vote of the holders of two-thirds (2/3) of the issued and
outstanding shares of the Corporation entitled to vote in an election of
directors, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
9.
(a) At any shareholders' meeting with respect to which notice of such
purpose has been given, the entire Board of Directors or any individual director
may be removed without cause only by the affirmative vote of the holders of at
least two-thirds (2/3) of the issued and outstanding shares of the Corporation
entitled to vote in an election of directors.
(b) At any shareholders' meeting with respect to which notice of such
purpose has been given, the entire Board of Directors or any individual director
may be removed with cause only by the affirmative vote of the holders of at
least a majority of the issued and outstanding shares of the Corporation
entitled to vote in an election of directors.
(c) For purposes of this Article 9, a director of the Corporation may
be removed for cause if (i) the director has been convicted of a felony; (ii)
any bank regulatory authority having jurisdiction over the Corporation requests
or demands the removal; or (iii) at least two-thirds (2/3) of
<PAGE> 4
the directors of the Corporation then in office, excluding the director to be
removed, determine that the director's conduct has been inimical to the best
interests of the Corporation.
(d) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 9 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote in an election of
directors, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
10.
The initial Board of Directors of the Corporation shall consist of
eleven (11) members who shall be and whose addresses are:
Robert D. Cheeley 435 Old Homestead Trail
Duluth, Georgia 30097
Daniel B. Cowart 4607 Armley Court
Norcross, Georgia 30092
Paul D. Donaldson 2140 Arbor Chase
Cumming, Georgia 30041
Charles Douglas 350 Royal Birkdale Court
Duluth, Georgia 30136
Dexter R. Floyd 5762 Revington Drive
Duluth, Georgia 30136
J. Edwin Howard 6569 Pleasantdale Road
Doraville, Georgia 30340
John J. Howard 2586 Green Valley Drive
Norcross, Georgia 30071
J. Stephen Hurst 1260 Old Woodbine Road
Atlanta, Georgia 30308
Charles A. Machemehl, III 130 Vintage Club Court
Duluth, Georgia 30097
<PAGE> 5
J. Paul Maggard 100 Downing Street
Alpharetta, Georgia 30202
Monty G. Watson 305 Parian Run
Duluth, Georgia 30097
11.
(a) A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages, for breach of any duty as
a director, except for liability for:
(i) any appropriation, in violation of his or her
duties, of any business opportunity of the Corporation;
(ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law;
(iii) the types of liability set forth in Section
14-2-832 of the Georgia Business Corporation Code dealing with
unlawful distributions of corporate assets to shareholders; or
(iv) any transaction from which the director derived
an improper material tangible personal benefit.
(b) Any repeal or modification of this Article by the shareholders of
the Corporation shall be prospective only and shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification.
(c) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 11 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote thereon, at any
regular or special meeting of the shareholders, and notice of the proposed
change must be contained in the notice of the meeting.
<PAGE> 6
12.
Any action required by law or by the Bylaws of the Corporation to be
taken at a meeting of the shareholders of the Corporation, and any action which
may be taken at such a meeting, may be taken without a meeting, if written
consent, setting forth the action so taken, is signed by persons entitled to
vote at a meeting those shares having sufficient voting power to cast not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote were present and
voted. Notice of such action without a meeting by less than unanimous written
consent shall be given within ten (10) days after taking such action to those
shareholders of record on the date when the written consent is first executed
and whose shares were not represented on the written consent.
13.
(a) Approval of any merger or share exchange of the Corporation with or
into any other corporation, or any sale, lease, exchange or other disposition of
substantially all of the assets of the Corporation to any other corporation,
person or other entity, shall require either:
(i) the affirmative vote of two-thirds (2/3)
of the directors of the Corporation then in office
and the affirmative vote of a majority of the issued
and outstanding shares of the corporation entitled to
vote; or
(ii) the affirmative vote of a majority of
the directors of the Corporation then in office and
the affirmative vote of the holders of at least
two-thirds (2/3) of the issued and outstanding shares
of the Corporation entitled to vote.
(b) The Board of Directors shall have the power to determine for the
purposes of this Article 13, on the basis of information known to the
Corporation, whether any sale, lease or exchange
<PAGE> 7
or other disposition of part of the assets of the Corporation involves
substantially all of the assets of the Corporation.
(c) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 13 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote thereon, at any
regular or special meeting of the shareholders, and notice of the proposed
change must be contained in the notice of the meeting.
14.
(a) The Board of Directors, when evaluating any offer of another party
(i) to make a tender offer or exchange offer for any equity security of the
Corporation, (ii) to merge or consolidate any other corporation with the
Corporation, or (iii) to purchase or otherwise acquire all or substantially all
of the assets of the Corporation, shall, in determining what is in the best
interests of the Corporation and its shareholders, give due consideration to all
relevant factors, including without limitation: (A) the short-term and long-term
social and economic effects on the employees, customers, shareholders and other
constituents of the Corporation and its subsidiaries, and on the communities
within which the Corporation and its subsidiaries operate (it being understood
that any subsidiary bank of the Corporation is charged with providing support to
and being involved in the communities it serves); and (B) the consideration
being offered by the other party in relation to the then-current value of the
Corporation in a freely negotiated transaction and in relation to the Board of
Directors' then-estimate of the future value of the Corporation as an
independent entity.
(b) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 14 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote thereon, at any
regular or special meeting of the shareholders, and notice of the proposed
change must be contained in the notice of the meeting.
<PAGE> 8
15.
Should any provision of these Articles of Incorporation, or any clause
hereof, be held to be invalid, illegal or unenforceable, in whole or in part,
the remaining provisions and clauses of these Articles of Incorporation shall
remain valid and fully enforceable.
16.
The name and address of the incorporator of the Corporation is:
Monty G. Watson
5717 Fairley Hall Court
Norcross, Georgia 30092
<PAGE> 9
IN WITNESS WHEREOF, the undersigned has caused these Articles of
Incorporation to be executed, this 11th day of December, 1998.
THE PB FINANCIAL SERVICES CORPORATION
/s/
---------------------------------------
BETH LANIER
Attorney for Incorporator
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
(404) 572-6600
<PAGE> 1
EXHIBIT 4.2
BYLAWS
THE PB FINANCIAL SERVICES CORPORATION
<PAGE> 2
BYLAWS
THE PB FINANCIAL SERVICES CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
ARTICLE ONE - OFFICES..................................................................................... 1
ARTICLE TWO - SHAREHOLDERS' MEETINGS...................................................................... 1
2.1 Annual Meeting
2.2 Special Meetings............................................................................. 1
2.3 Place........................................................................................ 1
2.4 Notice....................................................................................... 1
2.5 Quorum....................................................................................... 2
2.6 Proxies; Required Vote....................................................................... 2
2.7 Presiding Officer and Secretary .............................................................. 2
2.8 Shareholder List ............................................................................. 2
2.9 Action in Lieu of Meeting ................................................................... 2
ARTICLE THREE - DIRECTORS ................................................................................ 2
3.1 Management .................................................................................. 2
3.2 Number of Directors ......................................................................... 3
3.3 Vacancies .................................................................................. 3
3.4 Election of Directors ....................................................................... 3
3.5 Removal ..................................................................................... 3
3.6 Resignation ................................................................................. 3
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
3.7 Compensation ................................................................................ 3
3.8 Honorary and Advisory Directors ............................................................. 3
ARTICLE FOUR - COMMITTEES ................................................................................ 4
4.1 Executive Committee ......................................................................... 4
4.2 Other Committees ............................................................................ 5
4.3 Removal ..................................................................................... 5
ARTICLE FIVE - MEETINGS OF THE BOARD OF DIRECTORS ........................................................ 5
5.1 Time and Place .............................................................................. 5
5.2 Regular Meetings ............................................................................ 5
5.3 Special Meetings ............................................................................ 5
5.4 Content and Waiver of Notice ................................................................ 6
5.5 Quorum; Participation by Telephone .......................................................... 6
5.6 Action in Lieu of Meeting ................................................................... 6
5.7 Interested Directors and Officers ........................................................... 6
ARTICLE SIX - OFFICERS, AGENTS AND EMPLOYEES ............................................................. 7
6.1 General Provisions .......................................................................... 7
6.2 Powers and Duties of the Chairman of the Board and the President............................. 7
6.3 Powers and Duties of Vice Presidents ........................................................ 8
6.4 Powers and Duties of the Secretary .......................................................... 8
6.5 Powers and Duties of the Treasurer ........................................................... 8
6.6 Appointment, Powers and Duties of Assistant Secretaries ..................................... 8
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
6.7 Appointment, Powers and Duties of Assistant Treasurers ...................................... 9
6.8 Delegation of Duties ........................................................................ 9
ARTICLE SEVEN - CAPITAL STOCK ............................................................................. 9
7.1 Certificates ................................................................................ 9
7.2 Shareholder List ........................................................................... 10
7.3 Transfer of Shares ......................................................................... 10
7.4 Record Dates ............................................................................... 10
7.5 Registered Owner ........................................................................... 10
7.6 Transfer Agent and Registrars .............................................................. 10
7.7 Lost Certificates ......................................................................... 10
7.8 Fractional Shares or Scrip ................................................................. 11
ARTICLE EIGHT - BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS ............................................. 11
8.1 Inspection of Books and Records ............................................................ 11
8.2 Seal ....................................................................................... 12
8.3 Annual Statements .......................................................................... 12
ARTICLE NINE - INDEMNIFICATION .......................................................................... 12
9.1 Authority to Indemnify ..................................................................... 12
9.2 Mandatory Indemnification .................................................................. 12
9.3 Advances for Expenses ...................................................................... 13
9.4 Court-ordered Indemnification and Advances for Expenses .................................... 13
9.5 Determination of Indemnification ........................................................... 13
9.6 Authorization of Indemnification ........................................................... 14
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C> <C>
9.7 Other Rights .............................................................................. 14
9.8 Insurance .................................................................................. 14
9.9 Continuation of Expenses ................................................................... 14
ARTICLE TEN - NOTICES: WAIVERS OF NOTICE ............................................................... 14
10.1 Notices .................................................................................... 14
10.2 Waivers of Notice .......................................................................... 15
ARTICLE ELEVEN - EMERGENCY POWERS ....................................................................... 15
11.1 Bylaws ..................................................................................... 15
11.2 Lines of Succession ........................................................................ 15
11.3 Head Office ................................................................................ 15
11.4 Period of Effectiveness ................................................................... 15
11.5 Notices .................................................................................... 15
11.6 Officers as Directors Pro Tempore .......................................................... 16
11.7 Liability of Officers, Directors and Agents ................................................ 16
ARTICLE TWELVE - CHECKS, NOTES, DRAFTS, ETC. ............................................................ 16
ARTICLE THIRTEEN - AMENDMENTS ........................................................................... 16
</TABLE>
iv
<PAGE> 6
BYLAWS
OF
THE PB FINANCIAL SERVICES CORPORATION
ARTICLE ONE
OFFICES
The corporation shall at all times maintain its principal office in
Duluth, Georgia, its registered office in the State of Georgia and its
registered agent at that address, but it may have other offices located within
or outside the State of Georgia as the Board of Directors may determine.
ARTICLE TWO
SHAREHOLDERS' MEETINGS
2.1 Annual Meeting. A meeting of shareholders of the corporation shall
be held annually, within six (6) months after the end of each fiscal year of the
corporation. The annual meeting shall be held at such time and place and on such
date as the Directors shall determine from time to time and as shall be
specified in the notice of the meeting.
2.2 Special Meetings. Special meetings of the shareholders may be
called at any time by the corporation's Board of Directors, its President, and
by the corporation upon the written request of any one or more shareholders,
owning an aggregate of not less than twenty-five percent of the outstanding
capital stock of the corporation. Special meetings shall be held at such a time
and place and on such date as shall be specified in the notice of the meeting.
2.3 Place. Annual or special meetings of shareholders may be held
within or without the State of Georgia.
2.4 Notice. Notice of annual or special shareholders meetings stating
place, day and hour of the meeting shall be given in writing not less than ten
nor more than sixty days before the date of the meeting, either mailed to the
last known address or personally given to each shareholder. Notice of any
special meeting of shareholders shall state the purpose or purposes for which
the meeting is called. The notice of any meeting at which amendments to or
restatements of the articles of incorporation, merger or share exchange of the
corporation, or the disposition of corporate assets requiring shareholder
approval are to be considered shall state such purpose, and shall further comply
with all requirements of law. Notice of a meeting may be waived by an instrument
in writing executed before or after the meeting. The waiver need not specify the
purpose of the meeting or the business transacted, unless one of the purposes of
the meeting concerns a plan of merger or share exchange, in which event the
waiver shall comply with the further requirements of law concerning such
waivers. Attendance at such meeting in person or by proxy shall constitute a
waiver of notice thereof.
2.5 Quorum. At all meetings of shareholders a majority of the
outstanding shares of stock shall constitute a quorum for the transaction of
business, and no resolution or business shall be
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transacted without the favorable vote of the holders of a majority of the shares
represented at the meeting and entitled to vote. A lesser number may adjourn
from day to day, and shall announce the time and place to which the meeting is
adjourned.
2.6 Proxies; Required Vote. At every meeting of the shareholders,
including meetings of shareholders for the election of Directors, any
shareholder having the right to vote shall be entitled to vote in person or by
proxy, but no proxy shall be voted after eleven months from its date, unless
said proxy provides for a longer period. Each shareholder shall have one vote
for each share of stock having voting power, registered in his or her name on
the books of the corporation. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders, except as otherwise
provided by law, by the Articles of Incorporation or by these bylaws.
2.7 Presiding Officer and Secretary. At every meeting of shareholders,
the Chairman or the President, or, if such officers shall not be present, then
the person appointed by one of them shall preside. The Secretary or an Assistant
Secretary, or if such officers shall not be present, the appointee of the
presiding officer of the meeting, shall act as secretary of the meeting.
2.8 Shareholder List. The officer or agent having charge of the stock
transfer books of the corporation shall produce for inspection of any
shareholder at, and continuously during, every meeting of the shareholders, a
complete alphabetical list of shareholders showing the address and share
holdings of each shareholder. If the record of shareholders readily shows such
information, it may be produced in lieu of such a list.
2.9 Action in Lieu of Meeting. Any action to be taken at a meeting of
the shareholders of the corporation, or any action that may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing setting forth the action so taken shall be signed by those persons who
would be entitled to vote at a meeting those shares having voting power to cast
not less than the minimum number (or numbers, in the case of voting by class) of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote were present and voted.
ARTICLE THREE
DIRECTORS
3.1 Management. Subject to these bylaws, or any lawful agreement
between the shareholders, the full and entire management of the affairs and
business of the corporation shall be vested in the Board of Directors, which
shall have and may exercise all of the powers that may be exercised or performed
by the corporation.
3.2 Number of Directors. The Board of Directors shall consist of not
less than five (5) nor more than twenty-five (25) members. The number of
Directors may be fixed or changed from time to time, within the minimum and
maximum, by the shareholders by the affirmative vote of two-thirds (66-2/3%) of
the issued and outstanding shares of the corporation entitled to vote in an
election of Directors, or by the Board of Directors by the affirmative vote of
two-thirds (66-2/3%) of all Directors then in office.
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3.3 Vacancies. The Directors, even though less than a quorum, may fill
any vacancy on the Board of Directors, including a vacancy created by an
increase in the number of Directors. Such appointment by the Directors shall
continue until the expiration of the term of the Director whose place has become
vacant, or, in the case of an increase in the number of Directors, until the
next meeting of the shareholders.
3.4 Election of Directors. The Board of Directors shall be divided into
three (3) classes, Class I, Class II and Class III, which shall be nearly equal
in number as possible. Each Director in Class I shall be elected to an initial
term of one (1) year, each Director in Class II shall be elected to an initial
term of two (2) years and each Director in Class III shall be elected to an
initial term of three (3) years, and each Director shall serve until the
election and qualification of his or her successor or until his or her earlier
resignation, death or removal from office. Upon the expiration of the initial
terms of office for each Class of Directors, the Directors of each Class shall
be elected for terms of three (3) years, to serve until the election and
qualification of their successors or until their earlier resignation, death or
removal from office.
3.5 Removal. Any Director may be removed from office, at a meeting with
respect to which notice of such purpose is given, with cause, only upon the
affirmative vote of the holders of a majority of the issued and outstanding
shares of the corporation. Any Director may be removed from office, at a meeting
with respect to which notice of such purpose is given, without cause, only upon
the affirmative vote of two-thirds of the holders of a majority of the issued
and outstanding shares of the corporation.
3.6 Resignation. Any Director may resign at any time either orally at
any meeting of the Board of Directors or by so advising the Chairman of the
Board or the President or by giving written notice to the corporation. A
Director who resigns may postpone the effectiveness of his or her resignation to
a future date or upon the occurrence of a future event specified in a written
tender of resignation. If no time of effectiveness is specified therein, a
resignation shall be effective upon tender. A vacancy shall be deemed to exist
at the time a resignation is tendered, and the Board of Directors or the
shareholders may, then or thereafter, elect a successor to take office when the
resignation by its terms becomes effective.
3.7 Compensation. Directors may be allowed such compensation for their
services as Directors as may from time to time be fixed by resolution of the
Board of Directors.
3.8 Honorary and Advisory Directors. When a Director of the corporation
retires under the retirement policies of the corporation as established from
time to time by the Board of Directors, such Director automatically shall become
an Honorary Director of the corporation following his or her retirement. The
Board of Directors of the corporation also may appoint any individual an
Honorary Director, Director Emeritus, or member of any advisory board
established by the Board of Directors. Any individual automatically becoming an
Honorary Director or appointed an Honorary Director, Director Emeritus, or
member of an advisory board as provided by this Section 3.8 may be compensated
as provided in Section 3.7, but such individual may not vote at any meeting of
the Board of Directors or be counted in determining a quorum as provided in
Section 5.5 and shall not have any responsibility or be subject to any liability
imposed upon a Director, or otherwise be deemed a Director.
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ARTICLE FOUR
COMMITTEES
4.1 Executive Committee. (a) The Board of Directors may, by resolution
adopted by a majority of the entire Board, designate an Executive Committee
consisting of one or more Directors. Each Executive Committee member shall hold
office until the first meeting of the Board of Directors after the annual
meeting of shareholders and until the member's successor is elected and
qualified, or until the member's death, resignation or removal, or until the
member shall cease to be a Director.
(b) During the intervals between the meetings of the
Board of Directors, the Executive Committee may exercise all the authority of
the Board of Directors; provided, however, that the Executive Committee shall
not have the power to amend or repeal any resolution of the Board of Directors
that by its terms shall not be subject to amendment or repeal by the Executive
Committee, and the Executive Committee shall not have the authority of the Board
of Directors in reference to (i) the amendment of the Articles of Incorporation
or bylaws of the corporation; (ii) the adoption of a plan of merger or
consolidation; (iii) the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the corporation; or (iv) a
voluntary dissolution of the corporation or the revocation of any such voluntary
dissolution.
(c) The Executive Committee shall meet from time to time
on call of the Chairman of the Board or the President or of any two or more
members of the Executive Committee. Meetings of the Executive Committee may be
held at such place or places, within or without the State of Georgia, as the
Executive Committee shall determine or as may be specified or fixed in the
respective notices or waivers of such meetings. The Executive Committee may fix
its own rules of procedure, including provision for notice of its meetings. It
shall keep a record of its proceedings and shall report these proceedings to the
Board of Directors at the meeting thereof held next after they have been taken,
and all such proceedings shall be subject to revision or alteration by the Board
of Directors except to the extent that action shall have been taken pursuant to
or in reliance upon such proceedings prior to any such revision or alteration.
(d) The Executive Committee shall act by majority vote of
its members; provided, however, that contracts or transactions of and by the
corporation in which officers or Directors of the corporation are interested
shall require the affirmative vote of a majority of the disinterested members of
the Executive Committee at a meeting of the Executive Committee at which the
material facts as to the interest and as to the contract or transaction are
disclosed or known to the members of the Executive Committee prior to the vote.
(e) Members of the Executive Committee may participate in
committee proceedings by means of conference telephone or similar communications
equipment by means of which all persons participating in the proceedings can
hear each other, and such participation shall constitute presence in person at
such proceedings.
(f) The Board of Directors, by resolution adopted in
accordance with paragraph (a) of this section, may designate one or more
Directors as alternate members of the Executive Committee who may act in the
place and stead of any absent member or members at any meeting of said
committee.
4.2 Other Committees. The Board of Directors, by resolution adopted by
a majority of the entire Board, may designate one or more additional committees,
each committee to consist of one or
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more of the Directors of the corporation, which shall have such name or names
and shall have and may exercise such powers of the Board of Directors, except
the powers denied to the Executive Committee, as may be determined from time to
time by the Board of Directors. Such committees shall provide for their own
rules of procedure, subject to the same restrictions thereon as provided above
for the Executive Committee.
4.3 Removal. The Board of Directors shall have power at any time to
remove any member of any committee, with or without cause, and to fill vacancies
in and to dissolve any such committee.
ARTICLE FIVE
MEETINGS OF THE BOARD OF DIRECTORS
5.1 Time and Place. Meetings of the Board of Directors may be held at
any place either within or without the State of Georgia.
5.2 Regular Meetings. Regular meetings of the Board of Directors may be
held without notice at such time and place, within or without the State of
Georgia, as shall be determined by the Board of Directors from time to time.
5.3 Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board or the President on not less than one day's
notice by mail, telegram, cablegram, personal delivery or telephone to each
Director and shall be called by the Chairman of the Board or the President in
like manner and on like notice on the written request of any two or more
Directors. Any such special meeting shall be held at such time and place, within
or without the State of Georgia, as shall be stated in the notice of the
meeting.
5.4 Content and Waiver of Notice. No notice of any meeting of the Board
of Directors need state the purposes thereof. Notice of any meeting may be
waived by an instrument in writing executed before or after the meeting.
Attendance in person at any such meeting shall constitute a waiver of notice
thereof unless the director at the beginning of the meeting (or promptly upon
his or her arrival) objects to holding the meeting or transacting business at
the meeting and does not thereafter vote for or assent to action taken at the
meeting.
5.5 Quorum; Participation by Telephone. At all meetings of the Board of
Directors, the presence of a majority of the authorized number of Directors
shall be necessary and sufficient to constitute a quorum for the transaction of
business. Directors may participate in any meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
by means of such communications equipment shall constitute the presence in
person at such meeting. Except as may be otherwise specifically provided by law,
the Articles of Incorporation or these bylaws, all resolutions adopted and all
business transacted by the Board of Directors shall require the affirmative vote
of a majority of the Directors present at the meeting. In the absence of a
quorum, a majority of the Directors present at any meeting may adjourn the
meeting from time to time until a quorum is present. Notice of any adjourned
meeting need only be given by announcement at the meeting at which the
adjournment is taken.
5.6 Action in Lieu of Meeting. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if a written
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consent thereto is signed by all members of the Board of Directors or of such
committee, as the case may be, and such written consent is filed with the
minutes of the proceedings of the Board of Directors and upon compliance with
any further requirements of law pertaining to such consents.
5.7 Interested Directors and Officers. An interested Director or
officer is one who is a party to a contract or transaction with the corporation
or who is an officer or Director of, or has a financial interest in, another
corporation, partnership or association which is a party to a contract or
transaction with the corporation. Contracts and transactions between the
corporation and one or more interested Directors or officers shall not be void
or voidable solely because of the involvement or vote of such interested persons
as long as (a) the contract or transaction is approved in good faith by the
Board of Directors or appropriate committee by the affirmative vote of a
majority of disinterested Directors, even if the disinterested Directors be less
than a quorum, at a meeting of the Board or committee at which the material
facts as to the interested person or persons and the contract or transaction are
disclosed or known to the Board or committee prior to the vote; or (b) the
contract or transaction is approved in good faith by the shareholders after the
material facts as to the interested person or persons and the contract or
transaction have been disclosed to them; or (c) the contract or transaction is
fair as to the corporation as of the time it is authorized, approved or ratified
by the Board, committee or shareholders. Interested Directors may be counted in
determining the presence of a quorum at a meeting of the Board or committee
which authorizes the contract or transaction.
ARTICLE SIX
OFFICERS, AGENTS AND EMPLOYEES
6.1 General Provisions. The officers of the corporation shall be a
President and a Secretary, and may include a Treasurer, Chairman of the Board,
one or more Vice Presidents, one or more Assistant Secretaries, and one or more
Assistant Treasurers. The officers shall be elected by the Board of Directors at
the first meeting of the Board of Directors after the annual meeting of the
shareholders in each year or shall be appointed as provided in these bylaws. The
Board of Directors may elect other officers, agents and employees, who shall
have such authority and perform such duties as may be prescribed by the Board of
Directors. All officers shall hold office until the meeting of the Board of
Directors following the next annual meeting of the shareholders after their
election or appointment and until their successors shall have been elected or
appointed and shall have qualified. Any two or more offices may be held by the
same person. Any officer, agent or employee of the corporation may be removed by
the Board of Directors with or without cause. Removal without cause shall be
without prejudice to such person's contract rights, if any, but the election or
appointment of any person as an officer, agent or employee of the corporation
shall not of itself create contract rights. The compensation of officers, agents
and employees elected by the Board of Directors shall be fixed by the Board of
Directors or by a committee thereof, and this power may also be delegated to any
officer, agent or employee as to persons under his or her direction or control.
The Board of Directors may require any officer, agent or employee to give
security for the faithful performance of his or her duties.
6.2 Powers and Duties of the Chairman of the Board and the President.
The powers and duties of the Chairman of the Board and the President, subject to
the supervision and control of the Board of Directors, shall be those usually
appertaining to their respective offices and whatever other powers and duties
are prescribed by these bylaws or by the Board of Directors.
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(a) The Chairman of the Board shall preside at all
meetings of the Board of Directors and at all meetings of the shareholders. The
Chairman of the Board shall perform such other duties as the Board of Directors
may from time to time direct, but shall not participate in any major
policy-making functions of the corporation other than in his or her capacity as
a director. The Vice-Chairman shall act as Chairman of the Board of Directors
unless another director is elected Chairman.
(b) The President shall, unless otherwise provided by the
Board of Directors, be the chief executive officer of the corporation. The
President shall have general charge of the business and affairs of the
corporation and shall keep the Board of Directors fully advised. The President
shall employ and discharge employees and agents of the corporation, except such
as shall be elected by the Board of Directors, and he or she may delegate these
powers. The President shall have such powers and perform such duties as
generally pertain to the office of the President, as well as such further powers
and duties as may be prescribed by the Board of Directors. The President may
vote the shares or other securities of any other domestic or foreign corporation
of any type or kind which may at any time be owned by the corporation, may
execute any shareholders' or other consents in respect thereof and may in his or
her discretion delegate such powers by executing proxies, or otherwise, on
behalf of the corporation. The Board of Directors, by resolution from time to
time, may confer like powers upon any other person or persons.
6.3 Powers and Duties of Vice Presidents. Each Vice President shall
have such powers and perform such duties as the Board of Directors or the
President may prescribe and shall perform such other duties as may be prescribed
by these bylaws. In the absence or inability to act of the President, unless the
Board of Directors shall otherwise provide, the Vice President who has served in
that capacity for the longest time and who shall be present and able to act,
shall perform all duties and may exercise any of the powers of the President.
The performance of any such duty by a Vice President shall be conclusive
evidence of his or her power to act.
6.4 Powers and Duties of the Secretary. The Secretary shall have charge
of the minutes of all proceedings of the shareholders and of the Board of
Directors and shall keep the minutes of all their meetings at which he or she is
present. Except as otherwise provided by these bylaws, the Secretary shall
attend to the giving of all notices to shareholders and Directors. He or she
shall have charge of the seal of the corporation, shall attend to its use on all
documents the execution of which on behalf of the corporation under its seal is
duly authorized and shall attest the same by his or her signature whenever
required. The Secretary shall have charge of the record of shareholders of the
corporation, of all written requests by shareholders that notices be mailed to
them at an address other than their addresses on the record of shareholders, and
of such other books and papers as the Board of Directors may direct. Subject to
the control of the Board of Directors, the Secretary shall have all such powers
and duties as generally are incident to the position of Secretary or as may be
assigned to the Secretary by the President or the Board of Directors.
6.5 Powers and Duties of the Treasurer. The Treasurer shall have charge
of all funds and securities of the corporation, shall endorse the same for
deposit or collection when necessary and deposit the same to the credit of the
corporation in such banks or depositaries as the Board of Directors may
authorize. The Treasurer may endorse all commercial documents requiring
endorsements for or on behalf of the corporation and may sign all receipts and
all commercial documents requiring endorsements for or on behalf of the
corporation and may sign all receipts and vouchers for payments made to the
corporation. The Treasurer shall have all such powers and duties
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as generally are incident to the position of Treasurer or as may be assigned to
the Treasurer by the President or by the Board of Directors.
6.6 Appointment, Powers and Duties of Assistant Secretaries. Assistant
Secretaries may be appointed by the President or elected by the Board of
Directors. In the absence or inability of the Secretary to act, any Assistant
Secretary may perform all the duties and exercise all the powers of the
Secretary. The performance of any such duty shall be conclusive evidence of the
Assistant Secretary's power to act. An Assistant Secretary shall also perform
such other duties as the Secretary or the Board of Directors may assign to him
or her.
6.7 Appointment, Powers and Duties of Assistant Treasurers. Assistant
Treasurers may be appointed by the President or elected by the Board of
Directors. In the absence or inability of the Treasurer to act, an Assistant
Treasurer may perform all the duties and exercise all the powers of the
Treasurer. The performance of any such duty shall be conclusive evidence of the
Assistant Treasurer's power to act. An Assistant Treasurer shall also perform
such other duties as the Treasurer or the Board of Directors may assign to him
or her.
6.8 Delegation of Duties. In case of the absence of any officer of the
corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors (or in the case of Assistant Secretaries or
Assistant Treasurers only, the President) may confer for the time being the
powers and duties, or any of them, of such officer upon any other officer or
elect or appoint any new officer to fill a vacancy created by death,
resignation, retirement or termination of any officer. In such latter event such
new officer shall serve until the next annual election of officers.
ARTICLE SEVEN
CAPITAL STOCK
7.1 Certificates. (a) The interest of each shareholder shall be
evidenced by a certificate or certificates representing shares of the
corporation which shall be in such form as the Board of Directors may from time
to time adopt and shall be numbered and shall be entered in the books of the
corporation as they are issued. Each certificate representing shares shall set
forth upon the face thereof the following:
(i) the name of this corporation;
(ii) that the corporation is organized under the
laws of the State of Georgia;
(iii) the name or names of the person or persons
to whom the certificate is issued;
(iv) the number and class of shares, and the
designation of the series, if any, which the certificate represents; and
(v) if any shares represented by the certificate
are nonvoting shares, a statement or notation to that effect; and, if the shares
represented by the certificate are subordinate to shares of any other class or
series with respect to dividends or amounts payable on liquidation,
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the certificate shall further set forth on either the face or back thereof a
clear and concise statement to that effect.
(b) Each certificate shall be signed by the President or
a Vice President and the Secretary or an Assistant Secretary and may be sealed
with the seal of the corporation or a facsimile thereof. If a certificate is
countersigned by a transfer agent or registered by a registrar, other than the
corporation itself or an employee of the corporation, the signature of any such
officer of the corporation may be a facsimile. In case any officer or officers
who shall have signed, or whose facsimile signature or signatures shall have
been used on, any such certificate or certificates shall cease to be such
officer or officers of the corporation, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the corporation, such certificate or certificates may nevertheless be delivered
as though the person or persons who signed such certificate or certificates or
whose facsimile signatures shall have been used thereon had not ceased to be
such officer or officers.
7.2 Shareholder List. The corporation shall keep or cause to be kept a
record of the shareholders of the corporation which readily shows, in
alphabetical order or by alphabetical index, and by classes or series of stock,
if any, the names of the shareholders entitled to vote, with the address of and
the number of shares held by each. Said record shall be presented and kept open
at all meetings of the shareholders.
7.3 Transfer of Shares. Transfers of stock shall be made on the books
of the corporation only by the person named in the certificate, or by power of
attorney lawfully constituted in writing, and upon surrender of the certificate,
or in the case of a certificate alleged to have been lost, stolen or destroyed,
upon compliance with the provisions of Section 7.7 of these bylaws.
7.4 Record Dates. For the purpose of determining shareholders entitled
to notice of or to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders, such date to be not more than seventy days and,
in case of a meeting of shareholders, not less than ten days, prior to the date
on which the particular action requiring such determination of shareholders is
to be taken.
7.5 Registered Owner. The corporation shall be entitled to treat the
holder of record of any share of stock of the corporation as the person entitled
to vote such share, to receive any dividend or other distribution with respect
to such share, and for all other purposes and accordingly shall not be bound to
recognize any equitable or other claim or interest in such share on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by law.
7.6 Transfer Agent and Registrars. The Board of Directors may appoint
one or more transfer agents and one or more registrars and may require each
stock certificate to bear the signature or signatures of a transfer agent or a
registrar or both.
7.7 Lost Certificates. Any person claiming a certificate of stock to be
lost, stolen or destroyed shall make an affidavit or affirmation of the fact in
such manner as the Board of Directors may require and, if the Directors so
require, shall give the corporation a bond of indemnity in form and amount and
with one or more sureties satisfactory to the Board of Directors, whereupon an
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appropriate new certificate may be issued in lieu of the certificate alleged to
have been lost, stolen or destroyed.
7.8 Fractional Shares or Scrip. The corporation may, when and if
authorized so to do by its Board of Directors, issue certificates for fractional
shares or scrip in order to effect share transfers, share distributions or
reclassifications, mergers, consolidations or reorganizations. Holders of
fractional shares shall be entitled, in proportion to their fractional holdings,
to exercise voting rights, receive dividends and participate in any of the
assets of the corporation in the event of liquidation. Holders of scrip shall
not, unless expressly authorized by the Board of Directors, be entitled to
exercise any rights of a shareholder of the corporation, including voting
rights, dividend rights or the right to participate in any assets of the
corporation in the event of liquidation. In lieu of issuing fractional shares or
scrip, the corporation may pay in cash the fair value of fractional interests as
determined by the Board of Directors; and the Board of Directors may adopt
resolutions regarding rights with respect to fractional shares or scrip as it
may deem appropriate, including without limitation the right for persons
entitled to receive fractional shares to sell such fractional shares or purchase
such additional fractional shares as may be needed to acquire one full share, or
sell such fractional shares or scrip for the account of such persons.
ARTICLE EIGHT
BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS
8.1 Inspection of Books and Records. (a) Any person who shall be the
holder of record of, or authorized in writing by the holders of record of, at
least two (2%) percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine in person or by agent or attorney, at any reasonable time or
times, for any proper purpose, the books and records of account, minutes and
record of shareholders and to make extracts therefrom.
(b) A shareholder may inspect and copy the records
described in the immediately preceding paragraph only if (i) his or her demand
is made in good faith and for a proper purpose that is reasonably relevant to
his or her legitimate interest as a shareholder; (ii) the shareholder describes
with reasonable particularity his or her purpose and the records he or she
desires to inspect; (iii) the records are directly connected with the stated
purpose; and (iv) the records are to be used only for that purpose.
(c) If the Secretary or a majority of the corporation's
Board of Directors or Executive Committee members find that the request is
proper, the Secretary shall promptly notify the shareholder of the time and
place at which the inspection may be conducted.
(d) If said request is found by the Secretary, the Board
of Directors or the Executive Committee to be improper, the Secretary shall so
notify the requesting shareholder on or prior to the date on which the
shareholder requested to conduct the inspection. The Secretary shall specify in
said notice the basis for the rejection of the shareholder's request.
(e) The Secretary, the Board of Directors and the
Executive Committee shall at all times be entitled to rely on the corporate
records in making any determination hereunder.
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8.2 Seal. The corporate seal shall be in such form as the Board of
Directors may from time to time determine. In the event it is inconvenient to
use such a seal at any time, the signature of the corporation followed by the
word "Seal" enclosed in parentheses or scroll shall be deemed the seal of the
corporation.
8.3 Annual Statements. Not later than four months after the close of
each fiscal year, and in any case prior to the next annual meeting of
shareholders, the corporation shall prepare:
(a) A balance sheet showing in reasonable detail the
financial condition of the corporation as of the close of its fiscal year, and
(b) A profit and loss statement showing the results of
its operations during its fiscal year. Upon written request, the corporation
promptly shall mail to any shareholder of record a copy of its most recent
balance sheet and profit and loss statement.
ARTICLE NINE
INDEMNIFICATION
9.1 Authority to Indemnify. The corporation shall indemnify or obligate
itself to indemnify an individual made a party to a proceeding because he or she
is or was a director, officer, employee or agent of the corporation (or was
serving at the request of the corporation as a director, officer or employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise) for reasonable expenses, judgments, fines, penalties and amounts
paid in settlement (including attorneys' fees), incurred in connection with the
proceeding if the individual acted in manner he or she believed in good faith to
be in or not opposed to the best interests of the corporation and, in the case
of any criminal proceeding, he or she had no reasonable cause to believe his or
her conduct was unlawful. The termination of a proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contendere or its equivalent
is not, of itself, determinative that the director, officer, employee or agent
did not meet the standard of conduct set forth above. Indemnification permitted
under this action in connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in connection with the
proceeding.
9.2 Mandatory Indemnification. The extent that a director, officer,
employee or agent of the corporation has been successful, on the merits or
otherwise, in the defense of any proceeding to which he or she was a party, or
in defense of any claim, issue, or matter therein , because he or she is or was
a director, officer, employee or agent of the corporation, the corporation shall
indemnify the director, employee or agent against reasonable expenses incurred
by him or her in connection therewith.
9.3 Advance for Expenses. The corporation shall pay for or reimburse
the reasonable expenses incurred by a director, officer, employee or agent of
the corporation who is a party to a proceeding in advance of final disposition
of the proceeding if (a) he or she furnishes the corporation written affirmation
of his or her good faith belief that he or she has met the standard of conduct
set forth in Section 9.1 of this section, and (b) he or she furnishes the
corporation a written undertaking, executed personally or on his or her behalf,
to repay any advances if it is ultimately determined that he or she is not
entitled to indemnification. The undertaking required by this section must be an
unlimited general obligation but need not be secured and may be accepted without
reference to financial ability to make repayment.
11
<PAGE> 17
9.4 Court-ordered Indemnification and Advances for Expenses. A
director, officer, employee or agent of the corporation who is a party to a
proceeding may apply for indemnification or advances for expenses to the court
conducting the proceeding or to another court of competent jurisdiction.
9.5 Determination of Indemnification. Except as provided in Section 9.2
and except as may be ordered by the court, the corporation may not indemnify a
director, officer, employee or agent under Section 9.1 unless authorized
thereunder and a determination has been made in the specific case that
indemnification of the director, officer, employee or agent is permissible in
the circumstances because he or she has met the standard of conduct set forth in
Section 9.1. The determination shall be made:
(a) By the board of directors by majority vote of a
quorum consisting of directors not at the time parties to the proceedings;
(b) If a quorum cannot be obtained, by majority vote of a
committee duly designated by the board of directors (in which designation
directors who are parties may participate), consisting solely of two or more
directors not at the time parties to the proceeding;
(c) By special legal counsel:
(i) Selected by the board of directors or its
committee in the manner prescribed in paragraph (a) or (b) of this section; or
(ii) If a quorum of the board of directors cannot
be obtained and a committee cannot be designated, selected by majority vote of
the full board of directors (in which selection directors who are parties may
participate); or
(d) By the shareholders, but shares owned by or voted
under the control of directors who are at the time parties to the proceeding may
not be voted on the determination.
9.6 Authorization of Indemnification. Authorization of indemnification
or an obligation to indemnify and evaluation as the reasonableness of expenses
shall be made in the same manner as the determination that indemnification is
permissible, except that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to reasonableness of expenses
shall be made by those entitled under subsection (c) of Section 9.5 to select
counsel.
9.7 Other Rights. The indemnification and advancement of expenses
provided by or granted pursuant to this Article Nine shall not be deemed
exclusive of any other rights, in respect of indemnification or otherwise, to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, resolution, agreement or contract either specifically or in
general terms approved by the affirmative vote of the holders of a majority of
the shares entitled to vote thereon taken at a meeting the notice of which
specified that such bylaw, resolution or agreement would be placed before the
stockholders, both as to action by a director, trustee, officer, employee or
agent in his or her official capacity and as to action in another capacity while
holding such office or position; except that no such other rights, in respect to
indemnification or otherwise, may be provided or granted to a director, trustee,
officer, employee, or agent pursuant to this Section 9.7 by the corporation for
liability for (a) any appropriation, in violation of his or her duties, of any
business
12
<PAGE> 18
opportunity of the corporation; (b) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (c) the types of
liability set forth in Section 14-2-832 of the Georgia Business Corporation Code
dealing with illegal or unauthorized distributions of corporate assets, whether
as dividends or in liquidation of the corporation or otherwise; or (d) any
transaction from which the director derived an improper material tangible
personal benefit.
9.8 Insurance. The corporation may purchase and maintain insurance on
behalf of an individual who is or was a director, officer, employee, or agent of
the corporation or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise against liability asserted against or incurred by him or her in that
capacity or arising from his or her status as a director, officer, employee, or
agent whether or not the corporation would have power to indemnify him or her
against the same liability under this Article Nine.
9.9 Continuation of Expenses. The indemnification and advancement of
expenses provided by or granted pursuant to this Article Nine shall continue as
to a person who has ceased to be a director, trustee, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person.
ARTICLE TEN
NOTICES: WAIVERS OF NOTICE
10.1 Notices. Except as otherwise specifically provided in these
bylaws, whenever under the provisions of these bylaws notice is required to be
given to any shareholder, Director or officer, it shall not be construed to mean
personal notice, but such notice may be given by personal notice, by telegram or
cablegram, or by mail by depositing the same in the post office or letter box in
a postage prepaid sealed wrapper, addressed to such shareholder, Director or
officer at such address as appears on the books of the corporation, and such
notice shall be deemed to be given at the time when the same shall be thus sent
or mailed.
10.2 Waivers of Notice. Except as otherwise provided in these bylaws,
when any notice is required to be given by law, by the Articles of Incorporation
or by these bylaws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. In the case of a shareholder, such waiver of notice may be
signed by the shareholder's attorney or proxy duly appointed in writing.
ARTICLE ELEVEN
EMERGENCY POWERS
11.1 Bylaws. The Board of Directors may adopt emergency bylaws, subject
to repeal or change by action of the shareholders, which shall, notwithstanding
any provision of law, the Articles of Incorporation or these Bylaws, be
operative during any emergency in the conduct of the business of the corporation
resulting from an attack on the United States or on a locality in which the
corporation conducts its business or customarily holds meeting of its Board of
Directors or its shareholders, or during any nuclear or atomic disaster, or
during the existence of any catastrophe, or other similar emergency condition,
as a result of which a quorum of the Board of Directors or a
13
<PAGE> 19
standing committee thereof cannot readily be convened for action. The emergency
bylaws may make any provision that may be practical and necessary for the
circumstances of the emergency.
11.2 Lines of Succession. The Board of Directors, either before or
during any such emergency, may provide, and from time to time modify, lines of
succession in the event that during such an emergency any or all officers or
agents of the corporation shall for any reason be rendered incapable of
discharging their duties.
11.3 Head Office. The Board of Directors, either before or during any
such emergency, may (effective during the emergency) change the head office or
designate several alternative head offices or regional offices, or authorize the
officers to do so.
11.4 Period of Effectiveness. To the extent not inconsistent with any
emergency bylaws so adopted, these bylaws shall remain in effect during any such
emergency and upon its termination, the emergency bylaws shall cease to be
operative.
11.5 Notices. Unless otherwise provided in emergency bylaws, notice of
any meeting of the Board of Directors during any such emergency may be given
only to such of the Directors as it may be feasible to reach at the time, and by
such means as may be feasible at the time, including publication, radio or
television.
11.6 Officers as Directors Pro Tempore. To the extent required to
constitute a quorum at any meeting of the Board of Directors during any such
emergency, the officers of the corporation who are present shall, unless
otherwise provided in emergency bylaws, be deemed, in order of rank and within
the same rank in order of seniority, Directors for such meeting.
11.7 Liability of Officers, Directors and Agents. No officer, Director,
agent or employee acting in accordance with any emergency bylaw shall be liable
except for willful misconduct. No officer, Director, agent or employee shall be
liable for any action taken by him or her in good faith in such an emergency in
furtherance of the ordinary business affairs of the corporation even though not
authorized by the bylaws then in effect.
ARTICLE TWELVE
CHECKS, NOTES, DRAFTS, ETC.
Checks, notes, drafts, acceptances, bills of exchange and other orders
or obligations for the payment of money shall be signed by such officer or
officers or person or persons as the Board of Directors by resolution shall from
time to time designate.
ARTICLE THIRTEEN
AMENDMENTS
The bylaws of the corporation may be altered or amended and new bylaws
may be adopted by the shareholders at any annual or special meeting of the
shareholders or by the Board of Directors at any regular or special meeting of
the Board of Directors; provided, however, that, if such action is to be taken
at a meeting of the shareholders, notice of the general nature of the proposed
change in the bylaws shall be given in the notice of meeting. The shareholders
may provide by resolution that
14
<PAGE> 20
any bylaw provision repealed, amended, adopted, or altered by them may not be
repealed, amended, adopted or altered by the Board of Directors. Except as
otherwise provided in the Articles of Incorporation, action by the shareholders
with respect to bylaws shall be taken by an affirmative vote of a majority of
all shares entitled to elect Directors, and action by the Board of Directors
with respect to bylaws shall be taken by an affirmative vote of a majority of
all Directors then holding office.
15
<PAGE> 1
May 11, 1999
The PB Financial Services Corporation
9570 Medlock Bridge Road
Duluth, Georgia 30096
Ladies and Gentlemen:
This opinion is given in connection with the filing of a Registration
Statement on Form S-4 (the "Registration Statement") with the Securities and
Exchange Commission, by The PB Financial Services Corporation, a corporation
organized and existing under the laws of the State of Georgia ("PB Financial"),
with respect to the registration under the Securities Act of 1933, as amended,
of 775,375 shares of the $5.00 par value common stock of PB Financial (the "PB
Financial common stock") to be issued in connection with the proposed merger of
The Peachtree Bank ("Peachtree Bank") with Interim PB Corporation ("Interim"), a
wholly-owned subsidiary of PB Financial (the "Merger").
The Merger is intended to be effected pursuant to a Plan of
Reorganization dated as of February 18, 1999, among PB Financial, Interim and
Peachtree Bank (the "Plan"), pursuant to which each outstanding share of $5.00
par value common stock of Peachtree Bank (other than shares held by PB
Financial, Peachtree Bank or their subsidiaries or by shareholders who perfect
dissenters' rights) will be converted into and exchanged for the right to
receive one share of PB Financial common stock.
In rendering this opinion, we have examined such corporate records and
documents as we have deemed relevant and necessary as the basis for the opinion
set forth herein.
Based upon the foregoing, it is our opinion that the shares of PB
Financial common stock when issued to holders of Peachtree Bank common stock on
the terms and upon fulfillment of the conditions set forth in the Plan, will be
validly issued, fully paid and nonassessable under the Georgia Business
Corporation Code.
We consent to the use of this opinion and to the reference made to the
firm in the proxy statement/prospectus of PB Financial and Peachtree Bank
constituting part of the Registration Statement.
Very truly yours,
/s/
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
<PAGE> 1
May 12, 1999
The Peachtree Bank
9570 Medlock Bridge Road
Duluth, Georgia 30420
The PB Financial Services Corporation
9570 Medlock Bridge Road
Duluth, Georgia 30096
Ladies and Gentlemen:
You have requested our opinion with respect to certain federal income
tax consequences of the merger of Interim PB Corporation, a corporation
organized and existing under the laws of the state of Georgia ("Interim"), with
and into The Peachtree Bank, a state-chartered commercial bank located in
Duluth, Georgia ("Peachtree Bank") with Peachtree Bank as the survivor of the
merger (the "Merger"). The PB Financial Services Corporation, a corporation
organized and existing under the laws of the state of Georgia ("PB Financial"),
owns all of the issued and outstanding stock of Interim. For purposes of
rendering this opinion, we have reviewed and relied on the Plan of
Reorganization by and between PB Financial, Peachtree Bank and Interim dated as
of February 18, 1999 (the "Plan of Reorganization"), the certificates attached
hereto, and such other documents as we have considered appropriate. Unless
otherwise indicated, terms used in this opinion have the same meaning as in the
Plan of Reorganization.
For purposes of this opinion, we have assumed that the Merger will be
consummated at the Effective Time pursuant to the terms and conditions set forth
in the Plan of Reorganization. We have assumed that the cash paid to Peachtree
Bank shareholders pursuant to the Merger (including pursuant to a shareholder's
statutory right to dissent) will not exceed twenty percent (20%) of the value of
all shares of Peachtree Bank Common Stock outstanding as of the Effective Time.
In addition, we have assumed with your permission that the facts and
representations certified to us in writing by Peachtree Bank, Interim and PB
Financial which are set forth in the certificate attached hereto, apply as of
the Effective Time. A copy of such certificate is attached hereto and
incorporated herein by reference. We have neither investigated nor verified the
accuracy of any of the facts that have been certified to us, upon which this
opinion is based.
This opinion is based also on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations, Internal Revenue Service rulings,
judicial decisions, and other applicable authority, all as in effect on the date
of this opinion. The legal authorities on which this opinion is based may be
changed at any time. Any such changes may be retroactively applied and could
modify the opinions expressed herein. This opinion does not address any tax
considerations under foreign, state, or local laws, or the tax considerations to
certain Peachtree Bank shareholders in light of their particular circumstances,
including, persons who are not United States persons, dealers in securities,
tax-exempt entities, shareholders who do not hold Peachtree Bank common stock as
<PAGE> 2
The Peachtree Bank
The PB Financial Services Corporation
May 11, 1999
Page 2
"capital assets" within the meaning of Code Section 1221, and shareholders who
acquired their shares of Peachtree Bank common stock pursuant to the exercise of
Peachtree Bank options or otherwise as compensation.
Based upon and subject to the foregoing, we are of the opinion that the
Merger will constitute a reorganization within the meaning of Code Section
368(a)(1)(A) and (a)(2)(E), and that the following are certain federal income
tax consequences that will result:
(a) No gain or loss will be recognized for federal income tax
purposes by Peachtree Bank shareholders upon the exchange of their
shares of Peachtree Bank common stock for PB Financial common stock.
(b) The basis of the shares of PB Financial common stock to be
received by Peachtree Bank shareholders will be the same as the basis
of Peachtree Bank common stock surrendered in exchange therefor, less
any basis allocable to the PB Financial fractional shares that are
redeemed for cash if the redemption meets the requirements for sale or
exchange treatment under the provisions of Code Section 302(b)(1).
(c) The holding period of the PB Financial common stock to be
received by each Peachtree Bank shareholder will include the period
during which the shares of Peachtree Bank common stock surrendered in
exchange therefor were held.
(d) Peachtree Bank shareholders who receive solely cash
pursuant to their statutory right to dissent will be treated as having
received such payment in redemption of their Peachtree Bank common
stock, as provided in Section 302(a) of the Internal Revenue Code, of
their stock. Generally, any gain or loss recognized by any such
Peachtree Bank shareholder will be capital gain or loss, provided (i)
The Peachtree Bank common stock constitutes a capital asset in the
hands of such shareholder, and (ii) the requirements of Code Section
302(b)(1), (2), or (3) are met. Each affected Peachtree Bank
shareholder should consult such shareholder's own tax advisor for the
tax effect of such redemption (i.e., exchange treatment or dividend).
(e) No gain or loss will be recognized for federal income tax
purposes by Peachtree Bank, Interim, or PB Financial as a consequence
of the Merger.
This opinion is being rendered solely to the parties to whom it is
addressed and may be relied upon by them and the shareholders of Peachtree Bank.
This opinion may not be relied upon by any other party without the express
written permission of our Firm.
Very truly yours,
/s/
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS Agreement made and entered into on the 13th day of January, 1998,
by and between THE PEACHTREE BANK, a bank organized under the laws of the State
of Georgia (the "Bank"), and MONTY G. WATSON (hereinafter "Executive");
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Bank believe that it is in the
best interest of the Bank to arrange terms of employment for Executive so as to
reasonably induce Executive to remain in his capacities with the Bank for the
term hereof; and
WHEREAS, Executive is willing to provide services to the Bank in
accordance with the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. For the Term of Employment, as hereinafter defined, the
Bank agrees to employ Executive as its President and Chief Executive Officer and
Executive agrees to accept such employment and to perform such duties and
functions as the Board of Directors of the Bank may assign to Executive from
time to time, but only administrative and managerial functions commensurate with
Executive's past experience and performance level. Executive agrees to devote
his full business time, attention. skill and efforts to the business of the
Bank, and shall perform his duties in a trustworthy and businesslike manner, all
for the purpose of advancing the interests of the Bank.
2. TERM OF EMPLOYMENT. The "Term of Employment" referred to in Section
1 hereof and hereinafter shall be deemed to have commenced as of the date first
above mentioned and shall continue for a period of three (3) years, unless
sooner terminated pursuant to this Agreement. and shall include any extension of
the period of employment in accordance with this paragraph . The period of
employment shall automatically be extended without further action by the parties
for an additional twelve (12) full calendar months, beginning on the third
anniversary hereof, and on each succeeding anniversary thereafter, respectively,
unless (i) either party shall have served written notice upon the other of its
intention that this Agreement shall not be extended on or before 90 days prior
to any such anniversary date, or (ii) the Executive's employment hereunder shall
have been terminated pursuant to Section 4 hereof. Failure to renew this
Agreement by the Bank if followed by the subsequent voluntary termination of
employment hereunder by the Executive prior to the end of the Term of Employment
shall be deemed a termination "without cause" under Section 4.3 below, effective
as of the date of the written notice of nonrenewal by the Bank for purposes of
the twelve (12) months severance compensation under Section 4.3 provided that
the severance compensation shall be reduced by any Base Salary paid after the
written notice of nonrenewal.
<PAGE> 2
3. COMPENSATION.
3.1 Base Salary. During the Term of Employment, Executive
shall be paid an annual base salary (hereinafter "Base Salary") of $125,000. 00
which shall be paid in equal installments in accordance with the Bank's normal
pay practices, but not less frequently than monthly. Executive's salary shall be
reviewed by the Board of Directors of Bank annually, and Executive shall be
entitled to receive annually an increase (but in no event a decrease) in such
amount, if any, as may be determined by the Board of Directors of the Bank.
3.2 Management Incentives and Discretionary Bonuses. During
the Term of Employment, the Executive shall be entitled, in an equitable manner
based on the terms of any bonus and incentive plans that have been approved, or
may from time to time be approved, by the Board of Directors, with all other key
management personnel of the Bank, to such incentives and discretionary bonuses
as may be authorized declared and paid by the Board of Directors to the Bank's
key management employees. No other compensation provided for in this Agreement
shall be deemed a substitute for the Executive's right to such incentives and
discretionary bonuses when and as declared by the Board.
3.3 Additional Benefits. During the Term of Employment,
Executive shall be provided with such employee benefits and benefit levels,
including health, life and disability insurance, the exclusive use of an
automobile and a club membership. etc. as may be provided by the Board of
Directors of the Bank. These benefits shall be provided and maintained at a
level of not less than that in effect at the time this Agreement is executed.
Throughout the Term of Employment, Executive shall also be entitled to
reimbursement for reasonable business expenses incurred by him in the
performance of his duties hereunder, as approved from time to time by the Board
of Directors of the Bank.
4. TERMINATION.
4.1 Death or Disability. This Agreement may be terminated
before the expiration of the Term of Employment upon the occurrence of any one
of the following events:
(a) Upon Executive's death, this Agreement
shall terminate immediately. Any salary and any other amounts that may be due
Executive from Bank at the time of his death whether pursuant to benefits plans
or otherwise shall be paid to the executor or administrator of his estate.
(b) The Bank may terminate this Agreement upon
Executive's "Total Disability." As used in this Agreement, "Total Disability"
means any physical or mental disorder that renders Executive incapable of
performing his normal duties and services under this Agreement for a period of
one hundred twenty (120) days in any consecutive twelve (12) month period, as
determined by a licensed physician selected by mutual agreement of the Bank and
the Executive or the Executive's legal representative. If this Agreement is
terminated as a result of the Executive's "Total Disability," the Executive's
compensation hereunder shall terminate and the Executive shall be paid in
accordance with such long-term disability plans of the Bank as
<PAGE> 3
may be in effect. The Executive's compensation, title and status shall continue
during any such period of disability until the date of termination except that
the Bank may provide disability insurance to cover the Executive during any part
of such disability period and the Bank's obligation for the Executive's
compensation for any such period shall be reduced by the amount of any such
insurance proceeds which the Executive receives.
4.2 For Cause. This Agreement may be terminated by the
Board of Directors of the Bank for cause for any of the following reasons:
(a) failure of Executive to follow reasonable
written instructions or policies of the Board of Directors of the Bank;
(b) gross negligence or willful misconduct of
Executive materially damaging to the business of the Bank;
(c) conviction of Executive of a crime
involving breach of trust, moral turpitude, theft or fraud;
(d) the willful failure by the Executive to
perform substantially his duties other than any failure resulting from
incapacity due to physical or mental illness;
(e) willful commission of (A) acts involving
dishonesty or fraud with respect to the Bank or (B) acts causing harm to the
Bank;
(f) a willful misrepresentation by the Executive
to the stockholders or the Board of Directors of the Bank which causes
substantial injury to the Bank; or
(g) a request by any state or federal authority
regulating the Bank that the Executive be removed from his office as President
of the Bank.
For purposes of this Agreement, no act, or failure to act, on the part of the
Executive shall be considered "willful" unless done, or omitted to be done, by
him not in good faith and without reasonable belief that his action or omission
was in the best interest of the Bank and the stockholders of the Company. The
Bank shall notify the Executive in writing of the specific reasons for the
termination for "Cause" and the Executive will be allowed thirty (30) days to
reply in writing to the accusation before any termination for "Cause". If the
Employee is terminated for "Cause," he shall receive only his salary and any
other amounts due to him from the Bank (whether pursuant to benefit plans or
otherwise) through the date of termination.
4.3 Without Cause. The Bank, may immediately terminate
this Agreement at any time "without Cause" by giving the Executive written
notice of the termination date. If this Agreement is terminated pursuant to this
provision the Executive shall be paid severance compensation in an amount equal
to (i) his annual "Base Salary" (as defined in Section 3.1) then in effect which
shall be paid over a twelve (12)-month period in such installments and intervals
as if the Executive had remained employed, and (ii) any other amounts owing to
the Executive by the Bank under this Agreement at such termination date. If this
Agreement is terminated
<PAGE> 4
"without cause," the Bank will continue all insurance benefits in effect at such
termination for the Executive and his dependents with the Bank paying the same
amount of premiums on behalf of the Executive and his dependents as when the
Executive was employed for a period of twelve (12) months from the termination
date or until such time as the Executive is employed by another employer (which
shall exclude self-employment), whichever period of time is shorter. Anything in
this Agreement to the contrary notwithstanding. upon a termination without cause
pursuant to this paragraph 4.3, Executive's sole rights and remedies against the
Bank arising out of any such termination of his employment hereunder are to
receive the severance compensation and the other amounts and benefits as are
explicitly set forth in this paragraph 4.3.
5. CHANGE IN CONTROL OF THE BANK OR THE COMPANY. In the event of
a "Change in Control" of the Bank during the Term of Employment, as defined
herein, and if as a result of any such Change in Control Executive either (i) is
terminated, during the Term of Employment (except "for cause" as defined in
Section 4.2 above) from his employment hereunder and before he reaches age 65 or
(ii) has a "Chance in Duties or Salary" as defined below and resigns, during the
Term of Employment, as a result of such change, then Executive shall be entitled
to receive severance compensation in an amount equal to his Base Salary then in
effect which shall be paid in a lump sum within 14 days following the date of
termination or resignation.
For purposes of this Section 5, "Change in Control" of the Bank or the
Company shall mean:
(i) any transaction, whether by merger, consolidation, asset
sale, tender offer, reverse stock split or otherwise, which results in
the acquisition of beneficial ownership (as such term is defined under
rules and regulations promulgated under the Securities Exchange Act of
1934, as amended) by any person or entity or any group of persons or
entities acting, in concert, with the exception of the Bank's or
Company's Board of Directors or the Company's shareholders of 50% or
more of the outstanding shares of common stock of the Bank or the
Company;
(ii) the sale of all or substantially all of the assets of
the Bank or the Company; or
(iii) the liquidation of the Bank or the Company.
For purposes of this Agreement, "Change in Duties or Salary" of
Executive shall mean any of: (i) a change in duties and responsibilities of
Executive from those duties and responsibilities of Executive for the Bank in
effect at the time a Change in Control occurs, which change results in the
assignment of duties and responsibilities inferior to those duties and
responsibilities of Bank at the time such Change in Control occurs; (ii) a
reduction in rate of annual salary from such rate in effect at the time of
Change in Control; or (iii) a change in the place of assignment of Bank from
Duluth, Georgia, to any other city or geographical location that is located
further than 25 miles from the principal office of the Bank in Duluth, Georgia.
6. NONCOMPETE AND NON-SOLICITATION COVENANTS
<PAGE> 5
6.1 Definitions. In this Agreement the following terms
shall have the meanings set forth below:
(a) Affiliate shall be used to indicate a
relationship to a specified person, firm, corporation, partnership, association
or entity, and shall mean any person, firm, corporation, partnership,
association or entity that, directly or indirectly or through one or more
intermediaries, controls, is controlled by or is under common control with such
person, firm, corporation, partnership, association or entity.
(b) Applicable Period shall mean twelve (12) months
following the effective date of the termination of this Agreement.
(c) Area shall mean the geographic area within 10
miles of the Bank's principal location in Duluth, Georgia.
(d) Competing Business shall mean a federally insured
financial institution.
(e) Proprietary Information shall mean information
with respect to the Bank or its Affiliates which (i) derives economic value.
actual or potential, from not being generally known to or readily ascertainable
by any persons (outside the Bank or its Affiliates) who can obtain economic
value from its disclosure or use, and (ii) is the subject of efforts by the Bank
or its Affiliates that are reasonable under the circumstances to maintain its
secrecy or confidentiality. Assuming the foregoing criteria are met, Proprietary
Information includes, but is not limited to, technical or nontechnical data
related to compilations, programs, methods, techniques, processes, finances.
actual or potential customers and suppliers, existing and future products, and
employees of the Bank or its Affiliates, and all physical embodiments of the
foregoing. Proprietary Information also includes information disclosed to the
Bank or its Affiliates by a third party which the Bank or its Affiliates are
obliged to treat as confidential.
6.2 Agreement Not to Compete. The Executive hereby agrees
that during his employment by the Bank and for the Applicable Period thereafter,
he will not (except on behalf of, or with the prior written consent of, the
Bank) for a Competing Business located within the Area, either directly or
indirectly, on his own behalf, or in the service or on behalf of others, as a
principal, Partner, officer, director, manager, supervisor, administrator,
consultant, employee or in any other capacity which involves the duties and
responsibilities similar to those undertaken for the Bank as described in
Section 1, engage or participate in, or control or own (other than ownership of
less than five percent (5%) of the outstanding voting securities of an entity
whose voting securities are traded on a national securities exchange or quoted
on the National Association of Securities Dealers, Inc. Automated Quotation
System), a beneficial interest in, any Competing Business.
6.3 Agreement Not to Solicit Customers. The Executive
agrees that during his employment by the Bank for the Applicable Period
thereafter, he will not, without the prior written consent of the Bank, either
directly or directly, on his own behalf or in the service or on behalf of
others, solicit, divert or appropriate, or attempt to solicit, divert or
appropriate, to any
<PAGE> 6
Competing Business any customer or client or actively sought prospective
customer or client of the Bank or any Affiliate located in the Area who was
serviced by or under the supervision of the Executive in the course of his
employment within the one (1) year period immediately prior to the termination
of the Executive's employment with the Bank.
6.4 Agreement Not to Solicit Employees. The Executive
agrees that during his employment by the Bank and for the Applicable Period
thereafter, he will not, either directly or indirectly, on his own behalf or in
the service or on behalf of others, solicit, divert or hire away, any person
employed by the Bank or any of its Affiliates, whether or not such employee is a
full-time, a part-time or a temporary employee and whether or not such
employment is pursuant to a written agreement and whether or not such employment
is for a determined period or is at will.
7. OWNERSHIP AND PROTECTION OF PROPRIETARY INFORMATION
7.1 Confidentiality. All Proprietary Information and all
physical embodiments thereof received or developed by the Executive while
employed by the Bank are confidential to and are and will remain the sole and
exclusive property of the Bank. Except to the extent necessary to perform the
duties assigned to him by the Bank, the Executive will hold such Proprietary
Information in trust and strictest confidence, and will not use, reproduce,
distribute, disclose or otherwise disseminate the Proprietary Information or any
physical embodiments thereof and may in no event take any action causing or fail
to take the action necessary in order to prevent any Proprietary Information
disclosed to or developed by the Executive to lose its character or cease to
qualify as Proprietary Information.
7.2 Return of Property. Upon request, the Bank, and in
any event upon termination of the employment of the Executive with the Bank for
any reason, the Executive will promptly deliver to the Bank all property
belonging to the Bank, including, without limitation, all Proprietary
Information (and all physical embodiments thereof) then in his custody, control
or possession.
7.3 Termination. The Executive shall maintain and observe the
obligations OF confidentiality contained in this Agreement with respect to
Proprietary Information during the term of his employment with the Bank and at
all times following the termination of such employment for any reason
whatsoever.
8. INJUNCTIVE RELIEF. The Executive agrees that the covenants and
agreements contained in Sections 6 and 7 of this Agreement, and the subsections
of these Sections, are of the essence of this Agreement; that each of such
covenants is reasonable and necessary to protect and preserve the interests and
properties of the Bank and the business of the Bank; that the Bank is engaged in
and throughout the Area in the business of the Bank; that irreparable loss and
damage will be suffered by the Bank should the Executive breach any of such
covenants and agreements; and that, in addition to other remedies available to
it, the Bank shall be entitled to both temporary and permanent injunctions to
prevent a breach or contemplated breach by the Executive of any of such
covenants or agreements.
<PAGE> 7
9. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto regarding employment of Executive, and
supersedes and replaces any prior agreement between the parties.
10. ASSIGNMENT. Neither of the parties hereto may assign this
Agreement without the prior written consent of the other party hereto.
11. SEVERABILITY. Each section and subsection of this Agreement
constitutes a separate and distinct understanding. covenant and provision hereof
in the event that any provision of this Agreement shall finally be determined to
be unlawful, such provision shall be deemed to be severed from this Agreement,
but every other provision of this Agreement shall remain in full force and
effect.
12. GOVERNING LAW . This Agreement shall in all respects be
interpreted, construed and governed by and in accordance with the laws of the
State of Georgia.
13. RIGHTS OF THIRD PARTIES. Nothing herein expressed or implied
is intended to or shall be construed to confer upon or give to any person, firm
or other entity, other than the parties hereto and their permitted assigns. any
rights or remedies under or by reason of this Agreement.
14. AMENDMENT. This Agreement may not be amended orally but only
by an instrument in writing duly executed by the parties hereto.
15, NOTICES. Any notice or other document or communication
permitted or required to be given to Executive pursuant to the terms hereof
shall be deemed given if personally delivered to Executive or sent to him
postage prepaid, by registered or certified mail, at 5717 Fairly Hall Court,
Norcross, Georgia 30092, or at any such other address as Executive shall have
notified the Bank in writing. Any notice or other document or other
communication permitted or required to be given to the Bank pursuant to the
terms hereof shall be deemed given if personally delivered or sent to the Bank,
postage prepaid, by registered or certified mail, at 9570 Medlock Bridge Road,
Duluth, Georgia 30096, or at such other address as the Bank shall have notified
Executive in writing.
16. WAIVER. The waiver by either party hereto of a breach of any
provision of this Agreement by the other shall not operate or be construed as a
waiver of any subsequent breach of the same or any other provision of this
Agreement by the breaching party.
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
THE PEACHTREE BANK
[BANK SEAL]
By: /s/
-----------------------------------
Chairman of the Board of Directors
Attest:
/s/
- -----------------------------------
Secretary
EXECUTIVE
By: /s/ Monty G. Watson (SEAL)
-------------------------
Monty G. Watson
<PAGE> 1
EXHIBIT 10.2
THE PB FINANCIAL SERVICES CORPORATION
1998 OUTSIDE DIRECTOR STOCK INCENTIVE PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 1 DEFINITIONS............................................................................................1
1.1 DEFINITIONS..............................................................................................1
SECTION 2 GENERAL PROVISIONS.....................................................................................2
2.1 THE PURPOSE OF THE PLAN..................................................................................2
2.2 STOCK SUBJECT TO THE PLAN................................................................................2
2.3 ADMINISTRATION OF THE PLAN...............................................................................2
2.4 ELIGIBILITY..............................................................................................2
SECTION 3 OPTION AWARDS..........................................................................................2
3.1 GENERAL..................................................................................................2
3.2 OPTION AWARDS............................................................................................2
3.3 EXERCISE AND PAYMENT OF OPTION AWARDS....................................................................2
3.4 NON-TRANSFERABILITY......................................................................................3
SECTION 4 MISCELLANEOUS PROVISIONS...............................................................................3
4.1 CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION...........................................................3
4.2 RIGHT TO REMOVE DIRECTOR.................................................................................3
4.3 RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS.....................................................3
4.4 NON-ALIENATION OF BENEFITS...............................................................................4
4.5 TERMINATION AND AMENDMENT OF THE PLAN....................................................................4
4.6 CHOICE OF LAW............................................................................................4
4.7 EFFECTIVE DATE OF PLAN...................................................................................4
</TABLE>
-i-
<PAGE> 3
THE PB FINANCIAL SERVICES CORPORATION
1998 OUTSIDE DIRECTOR STOCK INCENTIVE PLAN
SECTION 1 DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun shall be
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:
(a) "Board of Directors" means the board of directors of
the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" means a committee of the Board of
Directors or, in lieu of the designation of any such committee, the Board of
Directors.
(d) "Company" means The PB Financial Services Corporation, a
Georgia corporation.
(e) "Director" means a member of the Board of Directors.
(f) "Disability" means that condition described in Code
Section 22(e)(3), as amended from time to time. In the event of a dispute, the
determination of Disability shall be made by the Board of Directors and shall be
supported by advice of a physician competent in the area to which such
Disability relates.
(g) "Eligible Director" means a Director who is not an
Employee.
(h) "Employee" means any person who is employed by the
Company or an affiliate for purposes of the Federal Insurance Contributions Act.
(i) "Fair Market Value" refers to the determination of
the value of a share of Stock. If the Stock is actively traded on any national
securities exchange or any Nasdaq quotation or market system, Fair Market Value
shall mean the closing price at which shares of Stock shall have been sold on
the most recent trading date immediately prior to the date of determination, as
reported by any such exchange or system selected by the Committee on which the
shares of Stock are then traded. If the shares of Stock are not actively traded
on any such exchange or system, Fair Market Value shall mean the arithmetic mean
of the bid and asked prices for the shares of Stock on the most recent trading
date or dates within a reasonable period prior to the determination date as
reported by such exchange or system. If there are no bid and asked prices within
a reasonable period or if the shares of Stock are not traded on any exchange or
system as of the determination date, Fair Market Value shall mean the fair
market value of a share of Stock as determined by the Committee taking into
account such facts and circumstances deemed to be material by the Committee to
the value of the Stock in the hands of the Eligible Director.
(j) "Option" means a non-qualified stock option granted
under the Plan to buy shares of Stock as set forth in Plan Section 3.
(k) "Option Exercise Price" refers to the per share
purchase price for Stock subject to each Option granted under Section 3 and that
per share purchase price shall be one hundred percent (100%) of the Fair Market
Value of the Stock as of the date the Option is granted.
<PAGE> 4
(l) "Plan" means The PB Financial Services Corporation
1998 Outside Director Stock Incentive Plan.
(m) "Stock" means the Company's common stock, $5.00 par\
value.
(n) "Stock Option Agreement" means an agreement between
the Company and an Eligible Director or other documentation evidencing an award
of an Option.
SECTION 2 GENERAL PROVISIONS
2.1 The Purpose of the Plan. The Plan is intended to provide
incentive to Eligible Directors to stimulate their efforts toward the success of
the Company and to manage the business of the Company in a manner that will
provide for the long-term growth and profitability of the Company. Accordingly,
the Plan is intended to promote a close identity of interests among the Company,
Eligible Directors and its stockholders, as well as to provide a means to retain
well-qualified directors.
2.2 Stock Subject to the Plan. Subject to adjustment in accordance
with Section 4.1, 157,612 shares of Stock (the "Maximum Plan Shares") are hereby
reserved exclusively for issuance pursuant to Options. At no time shall the
aggregate of (a) shares of Stock issuable pursuant to outstanding Options; and
(b) shares of Stock issued pursuant to Options exceed the Maximum Plan Shares.
If an Option expires or terminates for any reason without being exercised in
full, the unpurchased shares subject to such Option shall again be available for
purposes of the Plan.
2.3 Administration of the Plan. The Plan shall be administered by
the Committee. Subject to the provisions of the Plan, the Committee shall have
full and conclusive authority to interpret the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the terms and
provisions of the respective Stock Option Agreements consistent with the
provisions of the Plan and to make all other determinations necessary or
advisable for the proper administration of the Plan. The Committee's decisions
shall be final and binding on all Eligible Directors.
2.4 Eligibility. Only Eligible Directors are eligible to receive
awards pursuant to Section 3.2.
SECTION 3 OPTION AWARDS
3.1 General. Each Option contemplated by this Section 3 shall be
evidenced by a Stock Option Agreement which shall incorporate the applicable
terms of the Plan. The terms of each Stock Option Agreement shall provide: (a)
that the per share purchase price for each share of Stock subject to the Option
shall be the Option Exercise Price; and (b) that the Option shall expire upon
the earlier of the tenth (10th) anniversary following the date of grant or sixty
(60) days from the date the Director ceases to serve upon the Board of Directors
and the board of directors of any affiliate for any reason.
3.2 Option Awards. Each Eligible Director shall be granted an
Option to purchase shares of Stock at such time and upon such terms as
determined by the Board of Directors in its sole discretion.
3.3 Exercise and Payment of Option Awards. All Options may be
exercised to the extent vested. All Options may be exercised only by written
notice to the Company. Payment for all shares of Stock purchased pursuant to
exercise of an Option shall be made (a) in cash; (b) by delivery to the Company
of a number of shares of Stock which have been beneficially owned by the
Eligible Director for at least six (6) months prior to the date of exercise
having an aggregate Fair Market Value of not less than the product of the
exercise price multiplied by the number of shares the Eligible Director intends
to purchase upon exercise of the Option on the date of delivery; or (c) to the
extent available, in a cashless exercise through a broker. Payment shall be made
at the time that the Option or any part thereof is
-2-
<PAGE> 5
exercised, and no shares shall be issued or delivered upon exercise of an Option
until full payment has been made by the Eligible Director. The holder of an
Option, as such, shall have none of the rights of a stockholder.
3.4 Non-Transferability. An Option shall not be transferable or
assignable except by will or by the laws of descent and distribution and shall
be exercisable, during the Eligible Director's lifetime, only by the Eligible
Director, or in the event of the Eligible Director's Disability, by his or her
legal representative.
SECTION 4 MISCELLANEOUS PROVISIONS
4.1 Changes in Capitalization; Merger; Liquidation
(a) The number of shares of Stock reserved with respect
to Options that may be granted under the Plan, the number of shares of Stock
reserved for issuance upon the exercise of each outstanding Option, and the
exercise price of each outstanding Option shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Stock resulting from
a subdivision or combination of shares or the payment of an ordinary stock
dividend in shares of Stock to holders of outstanding shares of Stock or any
other increase or decrease in the number of shares of Stock outstanding effected
without receipt of consideration by the Company.
(b) If the Company shall be the surviving corporation in
any merger or consolidation, extraordinary dividend (including a spin-off),
reorganization or other change in the corporate structure of the Company or its
Stock, an appropriate adjustment shall be made in each Stock Option Agreement
such that the Eligible Director shall be entitled to purchase or receive the
number and class of securities to which a holder of the number of shares of
Stock subject to the Stock Option Agreement at the time of such transaction
would have been entitled to receive as a result of such transaction, and a
corresponding adjustment shall be made in the exercise price of each outstanding
Option. A dissolution or liquidation of the Company shall cause Options to
terminate as to any portion thereof not exercised as of the effective date of
the dissolution or liquidation. In the event of a sale of substantially all the
Stock or property of the Company or the merger or consolidation of the Company
into another corporation where the survivor does not agree to the assumption of
the Options, each Option shall be terminated in consideration of the payment to
the Eligible Directors of the difference between the then Fair Market Value of
the Stock subject to the unexercised portion of the Option and the aggregate
Option Exercise Price.
(c) The existence of the Plan and the Options granted
pursuant to the Plan shall not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification, reorganization or
other change in its capital or business structure, any merger or consolidation
of the Company, any issue of debt or equity securities having preferences or
priorities as to the Stock or the rights thereof, the dissolution or liquidation
of the Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding.
4.2 Right to Remove Director. Nothing in the Plan or in any
Stock Option Agreement shall confer upon any Eligible Director the right to
continue as a member of the Board of Directors or affect the right of the
Company or any affiliate to terminate an Eligible Director's directorship at any
time.
4.3 Restrictions on Delivery and Sale of Shares; Legends. Each
Option is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares of Stock covered by such Option upon any securities exchange or under
any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Option or the purchase or delivery of
shares of Stock thereunder, the delivery of any or all shares pursuant to such
-3-
<PAGE> 6
Option may be withheld unless and until such listing, registration or
qualification shall have been effected. If a registration statement is not in
effect under the Securities Act of 1933 or any applicable state securities laws
with respect to the shares of Stock purchasable or otherwise deliverable under
Options then outstanding, the Eligible Director shall, as a condition of
exercise of any Option or as a condition to any other delivery of Stock pursuant
to an Option, represent, in writing, that the shares received pursuant to the
Option are being acquired for investment and not with a view to distribution and
agree that the shares will not be disposed of except pursuant to an effective
registration statement, unless the Company shall have received an opinion of
counsel satisfactory to the Company that such disposition is exempt from such
requirement under the Securities Act of 1933 and any applicable state securities
laws. The Company may include on certificates representing shares of Stock
delivered pursuant to an Option such legends referring to the foregoing
representations or restrictions or any other applicable restrictions on resale
as the Company, in its discretion, shall deem appropriate.
4.4 Non-alienation of Benefits Other than as specifically provided
with regard to the death of an Eligible Director, no benefit under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge; and any attempt to do so shall be
void. No such benefit shall, prior to receipt by the Eligible Director, be in
any manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Eligible Director.
4.5 Termination and Amendment of the Plan. The Board of Directors
at any time may amend or terminate the Plan without stockholder approval;
provided, however, that the Board of Directors may condition any amendment on
the approval of stockholders of the Company if such approval is necessary or
advisable with respect to tax, securities or other applicable laws. No
termination, modification or amendment of the Plan, without the consent of an
Eligible Director who has been awarded an Option shall adversely affect the
rights of that Eligible Director under such Option.
4.6 Choice of Law. The laws of the State of Georgia shall govern
the Plan, to the extent not preempted by federal law.
4.7 Effective Date of Plan. The Plan shall become effective as of
December 14, 1998.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed as
of December 14, 1998.
THE PB FINANCIAL SERVICES CORPORATION
By:
----------------------------------------
Print Name:
--------------------------------
[CORPORATE SEAL]
Title:
--------------------------------------
ATTEST:
- --------------------------------
Print Name:
----------------------
Secretary
-4-
<PAGE> 1
EXHIBIT 21
Subsidiaries of the Registrant
The PB Financial Services Corporation
The Peachtree Bank
<PAGE> 1
EXHIBIT 99.1
PROXY
THE PEACHTREE BANK
ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby constitutes and appoints Monty G. Watson and
Kelly J. Johnson, or either of them, as proxies, each with full power of
substitution, to vote the number of shares of common stock of The Peachtree
Bank, a state-chartered commercial bank ("Peachtree Bank"), which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Peachtree Bank Shareholders to be held at the main office of
Peachtree Bank located at 9570 Medlock Bridge Road, Duluth, Georgia, on Tuesday,
June 29, 1999, at _____ p.m., local time, and at any adjournment or postponement
thereof (the "Annual Meeting") upon the proposals described in the proxy
statement/prospectus and the Notice of Annual Meeting of Shareholders, dated
________, 1999, the receipt of which is acknowledged in the manner specified
below.
Proposal 1. To elect the following persons to serve as directors for a one-year
term until the next annual meeting:
Nominees: Robert D. Cheeley, Daniel B. Cowart, Paul D. Donaldson,
Charles Douglas, Dexter R. Floyd, J. Edwin Howard, John J. Howard,
J. Stephen Hurst, Charles A. Machemehl, III, J. Paul Maggard, Monty
G. Watson
[ ] FOR All Nominees [ ] Withhold Authority to Vote
for All Nominees Listed Above
To withhold authority to vote for any nominee, write that nominee's
name below:
Proposal 2. Reorganization. To approve, ratify, confirm and adopt the Plan of
Reorganization, dated as of February 18, 1999 (the "Plan of
Reorganization"), by and among Peachtree Bank, The PB Financial
Services Corporation ("PB Financial") and Interim PB Corporation
("Interim") pursuant to which (i) Peachtree Bank will merge (the
"Merger") with and into Interim, and (ii) each share of the $5 par
value common stock of Peachtree Bank ("Peachtree Bank common
stock") issued and outstanding at the effective time of the Merger
will be exchanged for one share of $5.00 par value common stock of
PB Financial ("PB Financial common stock").
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 3. In the discretion of the proxies on such other matters as may
properly come before the Annual Meeting or any adjournments
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1 ABOVE.
Please sign this proxy exactly as your name appears below. When shares
are held jointly, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
DATED: , 1999
-----------------------------
-----------------------------------------
Signature
-----------------------------------------
Signature if held jointly
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE PEACHTREE
BANK, AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
I _____will _____will not attend the Annual Meeting.
