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As filed with the Securities and Exchange Commission on November 18, 1999.
Registration No. 333-87763
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
NBG BANCORP, INC.
(Name of Small Business Issuer in its Charter)
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Georgia 6711 58-2499542
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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2234 West Broad Street, Athens, Georgia 30606 (706) 355-3122
(Address and Telephone Number of Principal Executive Offices and
Principal Place of Business)
William S. Huggins
NBG Bancorp, Inc.
P.O. Box 6507
Athens, Georgia 30604
(706) 355-3122
(Name, Address, and Telephone Number of Agent for Service)
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Copy to:
Thomas O. Powell, Esq.
Troutman Sanders LLP
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308-2216
Phone (404) 885-3294
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Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
____________
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED NOVEMBER 18, 1999
800,000 Shares of Common Stock
372,500 Common Stock Purchase Warrants
NBG Bancorp, Inc.
A Proposed Bank Holding Company for
The National Bank of Georgia (Proposed)
Common Stock
______________________
NBG Bancorp, Inc. is conducting this initial public offering of shares of
its common stock to raise capital to form The National Bank of Georgia, a
national bank organizing in Athens, Georgia. NBG Bancorp will be the holding
company and sole shareholder of The National Bank of Georgia after the bank's
organization is completed. NBG Bancorp is offering a minimum of 610,000 shares
and a maximum of 800,000 shares at a price of $10.00 per share. NBG Bancorp is
also offering to its organizers 372,500 warrants to purchase shares of NBG
Bancorp common stock. Our executive officers will be marketing NBG Bancorp
common stock on a best efforts basis and will not receive any commissions for
sales they make. Because this is a best efforts offering, there is no guarantee
that the required minimum number of 610,000 shares will be sold. The minimum
subscription amount is 1,000 shares per investor. Shares sold in this offering
will not be listed on Nasdaq or any national exchange.
This offering is scheduled to end on ______________, but NBG Bancorp may
extend it - without notice to subscribers - until _____________, at the latest.
NBG Bancorp will deposit all subscription funds in an interest-bearing escrow
account with an independent escrow agent until it has received subscriptions for
610,000 shares. If NBG Bancorp does not receive subscriptions for 610,000
shares by _____________, NBG Bancorp will terminate this offering and promptly
return all funds to subscribers, with interest. NBG Bancorp reserves the right
to reject all or part of any subscription for any reason.
Investing in NBG Bancorp common stock involves risks which are described in
the "Risk Factors" section beginning on page 7 of this prospectus.
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Minimum Maximum
Per Share Offering Total
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Public offering price....................... $10.00 $6,100,000 $8,000,000
Proceeds to NBG Bancorp
before expenses............................ $10.00 $6,100,000 $8,000,000
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of NBG Bancorp's securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
The shares of NBG Bancorp common stock and the purchase warrants offered
are not deposits, savings accounts, or other obligations of a bank or savings
association and are not insured by the FDIC or any other governmental
agency.
______________________
The date of this prospectus is __________, 1999
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SUMMARY
This summary highlights information contained elsewhere in this prospectus.
This summary does not contain all of the information you should consider before
investing in NBG Bancorp common stock. To fully understand this offering, you
should read the entire prospectus carefully, including the risk factors and the
financial statements. References in this prospectus to "we," "us," and "our"
refer to NBG Bancorp, Inc. and The National Bank of Georgia.
General
NBG Bancorp, Inc. was formed to serve as a bank holding company for The
National Bank of Georgia, a national bank organizing in Athens, Georgia. The
National Bank of Georgia will operate as a community bank emphasizing prompt,
personalized customer service to the individuals and businesses located in
Athens, Georgia, including Clarke County, and a portion of adjacent Oconee
County, including the City of Watkinsville. After receiving all necessary
regulatory approvals, we anticipate beginning banking operations in early 2000.
Our offices are located at 2234 West Broad Street, Athens, Georgia 30306. Our
telephone number is (706) 355-3122.
The Athens and Oconee County Market
We believe the Athens and Oconee County market presents a growing and
highly diversified economic environment that will support the formation of The
National Bank of Georgia. Home to The University of Georgia, Athens is known as
the "Classic City." Athens is a cosmopolitan community with an eclectic mix of
history and learning, music and art, sports and recreation, as well as fairs,
festivals, dining and shopping. Adjacent Oconee County is growing even more
rapidly than Athens and with its low unemployment and relatively well educated
population, is a natural complement to Athens.
As the banking industry in Northeast Georgia has been consolidating, we
believe an attractive opportunity exists in the Athens and Oconee County market
for a locally-owned community bank that focuses on personalized service to
individuals and businesses. Over the last ten years, the following financial
institutions have entered or expanded in the Athens and Oconee County market by
acquiring community banks located in the area:
. SouthTrust Bank, N.A. (acquired The Georgia National Bank);
. Main Street Bank (acquired First Federal of Georgia);
. Wachovia Bank, N.A. (acquired Southern Heritage Savings Bank);
. Synovus Financial Corp./Athens First Bank & Trust (acquired Athens
Federal Savings Bank in Athens and Bank of Georgia in Watkinsville); and
. Bank of America (acquired Bank South Corporation).
As a result of these acquisitions, there are no longer any locally-owned
community banks in Athens and only one in Oconee County. However, we are aware
of a state bank in Oconee County that is in the organizational stages, but as of
the date of this prospectus, has not opened.
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Acquisitions of community banks by larger regional banks often result in
the dissolution of local boards of directors and in significant turnover in
management and customer service personnel who possess extensive banking
experience and strong ties to the local community. We believe that we have an
opportunity to attract and retain experienced and talented individuals who are
familiar with the banking needs of the local community. Bank mergers and
acquisitions also necessitate the consolidation of data processing systems which
often create disruptions in customer service. As the only locally-owned
community bank in Athens and one of the only locally-owned community banks
serving Oconee County, we will offer convenient service, local decision-making
and competitive loans. Additionally, by focusing our operations on the
community we serve, we believe that we will be able to respond to changes in our
market more quickly than large, centralized institutions.
Products and Services
The National Bank of Georgia plans to offer high quality products and
personalized services while providing its customers with the financial
sophistication and array of products typically offered by a larger bank. The
bank's lending services will include consumer loans to individuals, commercial
loans to small- to medium-sized businesses and professional concerns and real
estate-related loans. The National Bank of Georgia will offer a broad array of
competitively priced deposit services including demand deposits, regular savings
accounts, money market deposits, certificates of deposit and individual
retirement accounts. To complement its lending and deposit services, the bank
intends to also provide cash management services, safe-deposit boxes, travelers
checks, direct deposit, automatic drafts, and courier services to commercial
customers. The National Bank of Georgia intends to offer its services through a
variety of avenues, including automated teller machines and telephone
banking.
Directors and Officers
Our management team includes individuals who have significant experience in
the banking industry in Georgia and in our market area particularly. William S.
Huggins will serve as the President and the Chief Executive Officer of The
National Bank of Georgia. He has held numerous senior banking positions in
Georgia during his 30-year banking career, including President and Chief
Executive Officer of Georgia National Bank, which was recently acquired by
SouthTrust Bank, N.A., prior to NBG Bancorp's organization. Thomas Z. Lanier,
III, who will serve as the bank's Executive Vice President-Lending, and Michael
R. Carson, who will serve as the bank's Executive Vice President-Operations,
collectively have over 40 years of experience in banking and are both natives of
Georgia. See "Management" (page 36).
The Board of Directors of NBG Bancorp consists of 13 organizers who, if
approved by the Office of the Comptroller of the Currency, will also be the
directors of The National Bank of Georgia. All of the directors are residents
of, or own businesses in, the Athens and Oconee County area and are active
participants in the community. The directors intend to utilize their diverse
backgrounds and their extensive local business relationships to attract
customers from all segments of the community. NBG Bancorp's directors and
executive officers intend to purchase approximately 372,500 shares of NBG
Bancorp common stock, representing approximately 61% of the 610,000 shares of
common stock to be outstanding upon completion of the minimum offering, or
approximately 47% of the 800,000 shares to be outstanding if the maximum
offering is completed. In addition, our organizers - in recognition of the
financial risks undertaken by them in forming NBG Bancorp and The National Bank
of Georgia - will be granted warrants to purchase additional shares of NBG
Bancorp common stock. Each warrant will entitle the organizer to purchase one
additional share of common stock. The actual number of warrants granted will
depend on the number of shares of NBG Bancorp common stock our organizers
actually purchase in the offering. Therefore, given the organizers' intent to
purchase 372,500 shares in this
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offering, we expect that they will be granted warrants to purchase an aggregate
of 372,500 shares. If all of these warrants were exercised, our organizers would
own approximately 76% of the shares outstanding after the minimum offering and
64% of the outstanding shares after the maximum offering. See "Terms of the
Offering - Purchases by Organizers" (page 15) and "Description of Capital Stock
of NBG Bancorp - Organizers' Warrants" (page 46). We believe our directors'
financial interest in NBG Bancorp will encourage their active participation in
growing our business.
Business Strategy
Our strategy as an independent bank holding company will be carried out
through the operations and growth of The National Bank of Georgia. In an effort
to emphasize prompt, responsive service to our target customers and expand our
presence in our market, our business strategy is comprised of two components -
an operating strategy and a growth strategy - which are highlighted below.
Operating Strategy:
. Hire and retain highly experienced and qualified banking personnel.
. Provide individualized attention with local decision-making
authority.
. Capitalize on our directors' and officers' diverse community
involvement and business experience.
. Establish a community identity.
. Implement an aggressive marketing program.
Growth Strategy:
. Build on The National Bank of Georgia's position as the only
locally-owned community bank in Athens and one of the only
locally-owned community banks serving Oconee County.
. Hire and retain employees with established customer relationships.
. Utilize technology and strategic outsourcing to provide a broad
array of banking products and services.
The Offering
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Securities Offered............................. 800,000 shares of NBG Bancorp common stock and
372,500 common stock purchase warrants. To
complete this offering, NBG Bancorp must sell a
minimum of 610,000 shares, 372,500 of which are
expected to be sold to our organizers. Each
investor must purchase a minimum of 1,000 shares.
Each warrant entitles the holder to purchase one
share of common stock at an exercise price of
$10.00 per share. See "Terms of the Offering"
(page 13).
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Common Stock to be Outstanding After
the Offering.................................. Minimum - 610,000 shares
Maximum - 800,000 shares
These totals do not include up to 372,500 shares
of NBG Bancorp common stock issuable upon the
exercise of the common stock purchase warrants.
Offering Price Per Share............................ $10.00
Plan of Distribution................................ Shares of NBG Bancorp common stock will be sold
on a best efforts basis by NBG Bancorp's
executive officers who will receive no
commissions for any sales they make. See "Plan
of Distribution" (page 16).
Use of Proceeds..................................... To capitalize The National Bank of Georgia, to
pay organization, offering and pre-opening
expenses, to improve The National Bank of
Georgia's main office and to provide working
capital for The National Bank of Georgia,
including making loans and other investments.
See "Use of Proceeds" (page 18).
Offering Conditions................................. We must satisfy the following conditions to
complete our offering:
. at least $6,100,000 must be deposited with NBG
Bancorp's escrow agent, Georgia First Bank, N.A.,
Gainesville, Georgia;
. the Board of Governors of the Federal Reserve
System must approve NBG Bancorp's application to
become a bank holding company;
. the Office of the Comptroller of the Currency
must preliminarily approve The National Bank of
Georgia's charter application;
. the Federal Deposit Insurance Corporation must
approve The National Bank of Georgia's deposit
insurance application; and
. NBG Bancorp must not have canceled this
offering before funds are withdrawn from the
escrow account.
See "Terms of the Offering - Conditions of the
Offering" (page 13).
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Escrow Arrangements................................. Until we have satisfied all of the offering
conditions, NBG Bancorp will place all
subscription funds in an escrow account with
Georgia First. If we do not meet the offering
conditions by ____________, we will return to all
subscribers their funds placed in the escrow
account, with interest. Prior to the release of
the funds, Georgia First will invest the funds in
interest-bearing bank accounts. See "Terms of
the Offering Escrow of Subscription Funds" (page
14).
Once we have satisfied all of the offering
conditions, Georgia First will release all
subscription funds to NBG Bancorp. Any funds
received after this time will not be placed in
the escrow account, but will be immediately
available for use by us. Once the offering
conditions have been satisfied and subscription
funds released to NBG Bancorp, shareholders may
lose a portion of their investment. For example,
The National Bank of Georgia must obtain final
approval of its charter application and open for
business by ________, 2000. In addition, even
though we will have received the approvals of the
Federal Reserve and the FDIC prior to withdrawing
funds from the escrow account, their approvals
will contain conditions that will not be able to
be fulfilled until The National Bank of Georgia
is capitalized and is near opening. The approval
of the Georgia Department of Banking and Finance
will also be required for NBG Bancorp to operate
as a bank holding company. In the event we are
unable to begin banking operations after funds
have been withdrawn from the escrow account, NBG
Bancorp will seek shareholder approval for
dissolution and liquidation. Upon liquidation,
NBG Bancorp will promptly return to shareholders
all funds, with interest, less all expenses
incurred by us, including the expenses of this
offering and our organization and pre-opening
expenses. See "Terms of the Offering Failure to
Begin Banking Operations" (page 14).
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Dividends........................................... In light of regulatory restrictions and the need
for us to retain and build capital, we plan to
reinvest earnings and not pay dividends for the
next several years. NBG Bancorp's future
dividend policy will depend on our earnings,
capital requirements and financial condition, as
well as on other factors NBG Bancorp's Board of
Directors considers relevant. See "Dividends"
(page 21).
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RISK FACTORS
An investment in NBG Bancorp common stock involves a significant degree of
risk. You should not invest in NBG Bancorp common stock unless you can afford
to lose your entire investment. You should consider carefully the following
risk factors and other information in this prospectus before deciding to invest.
You should also carefully read the cautionary statement following this Risk
Factors section regarding our use of forward-looking statements.
We have no operating history upon which to base an estimate of our future
success.
The National Bank of Georgia, which initially will be the sole subsidiary
of NBG Bancorp, is in organization and neither NBG Bancorp, nor The National
Bank of Georgia, has any operating history on which to base any estimate of
their future performance. Accordingly, the financial statements presented in
this prospectus may not be as meaningful as those of a company which does have a
history of operations. In addition, the success of our operations must be
considered in light of the expenses, complications, and delays frequently
encountered in connection with the opening and development of a new bank.
Because of our lack of operating history, you do not have access to the type and
amount of information that would be available to a purchaser of securities of a
financial institution with an operating history.
If we fail to begin banking operations, you could lose all or a portion of your
investment.
If you subscribe to this offering and funds are released from the escrow
account and we incur start-up expenses, but are unable to begin banking
operations, we will seek to dissolve and liquidate. In this event, NBG Bancorp
would return to shareholders all of their funds with interest, less all expenses
incurred by us. If we dissolve and liquidate, we can give you no assurance that
our liabilities will not exceed our assets, in which case, you would lose your
entire investment. After withdrawing funds from the escrow account, we must
satisfy the following requirements in order to begin banking operations:
. receive the OCC's final approval of The National Bank of Georgia's
charter application and open for business by __________, 2000;
. satisfy conditions of the Federal Reserve's and the FDIC's approvals;
and
. receive the Georgia Department of Banking and Finance's approval for NBG
Bancorp to operate as a bank holding company.
Although we believe we will have little difficulty satisfying the above
requirements after funds are withdrawn from the escrow account, we may be
incorrect in our assumptions. If we are incorrect, you could lose all or a
portion of your investment. See "Terms of the Offering - Failure to Begin
Banking Operations" (page 14).
If we do not receive regulatory approvals in a timely manner, it could delay the
date on which The National Bank of Georgia opens for business, which would
increase our pre-opening expenses and would result in additional losses.
Although we expect to receive all regulatory approvals and to open for
business in the first quarter of 2000, we can give you no assurance as to when,
if at all, these events will occur. Any delay in beginning The National Bank of
Georgia's operations will increase our pre-opening expenses and postpone our
realization of potential revenues. Such a delay will cause our accumulated
deficit to
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increase as a result of continuing operating expenses, such as salaries and
other administrative expenses, and our lack of revenue.
The National Bank of Georgia will incur substantial start-up expenses and does
not expect to be profitable in the near future.
Typically, new banks incur substantial start-up expenses, are not
profitable in the first year of operation and, in some cases, are not profitable
for several years. The National Bank of Georgia will incur substantial expenses
in establishing itself as a going concern, and we can give you no assurance that
it will be profitable or that future earnings, if any, will meet the levels of
earnings prevailing in the banking industry. Because NBG Bancorp will initially
act as the sole shareholder of The National Bank of Georgia, the profitability
of the company will depend upon the bank's successful operation. See "Plan of
Operation" (page 22).
Failure to implement our business strategies may adversely affect our financial
performance.
If we cannot implement our business strategy, our financial performance may
be adversely affected. Our organizers have developed a business plan that
details the strategies that we intend to implement in our efforts to achieve
profitable operations. The strategies include hiring and retaining experienced
and qualified employees and attracting individual and business customers from
Athens and Oconee County. Even if these strategies are successfully
implemented, they may not have the favorable impact on operations that we
anticipate. See "Proposed Business of NBG Bancorp and The National Bank of
Georgia - Business Strategy" (page 27).
Departures of our key personnel or directors may impair our operations.
William S. Huggins, Thomas Z. Lanier, III, and Michael R. Carson are
important to our success and, if we were to lose any of their services, our
financial condition and results of operations could be adversely affected. Mr.
Huggins has been instrumental in our organization and will be the key management
official in charge of The National Bank of Georgia's daily business operations.
Mr. Lanier will be in charge of the bank's lending operations. Mr. Carson will
be the key officer in charge of the bank's financial and accounting operations.
Although we have entered into employment agreements with each of Messrs.
Huggins, Lanier, and Carson, we have not purchased key man life insurance on any
of them and we cannot be assured of their continued service. Additionally, our
directors' community involvement, diverse backgrounds and extensive local
business relationships are important to our success. Our growth could be
adversely affected if the composition of our Board of Directors changes
significantly. See "Management" (page 36).
Our organizers as a group will be able to exercise greater control over our
management and affairs than will any individual investor and they may have
interests that are different from yours as an investor.
Our organizers - who will become our directors and executive officers after
this offering - will be able to exercise significant control over the management
and affairs of NBG Bancorp and The National Bank of Georgia. The organizers may
have interests that are different from yours as an investor. Our organizers
intend to purchase 372,500 shares of NBG Bancorp common stock which will equal
approximately 61% of the 610,000 shares to be outstanding upon completion of the
minimum offering or approximately 47% of the 800,000 shares to be outstanding if
the maximum number of shares is sold. See "Management - Proposed Directors and
Executive Officers of NBG Bancorp and The National Bank of Georgia" (page
36).
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NBG Bancorp intends to grant warrants to our organizers and stock options to
some of The National Bank of Georgia's employees which, if exercised, would
reduce your percentage ownership in NBG Bancorp.
Upon completion of the minimum offering, NBG Bancorp will grant to our
organizers warrants to purchase additional shares of NBG Bancorp common stock in
recognition of the financial risks undertaken by them in forming NBG Bancorp and
The National Bank of Georgia. Each warrant will entitle the organizer to
purchase one additional share of common stock. The actual number of warrants
granted will depend on the number of shares of NBG Bancorp common stock our
organizers actually purchase in the offering. Therefore, given the organizers'
intent to purchase 372,500 shares in this offering, we expect that they will be
granted warrants to purchase an aggregate of 372,500 shares. If all of these
warrants were exercised, our organizers would own approximately 76% of the
shares outstanding after the minimum offering and 64% of the outstanding shares
after the maximum offering. See "Terms of the Offering - Purchases by
Organizers" (page 15) and "Description of Capital Stock of NBG Bancorp -
Organizers' Warrants" (page 46).
In addition, NBG Bancorp has established an incentive stock option plan which
will allow NBG Bancorp to grant stock options to employees of The National Bank
of Georgia who are contributing significantly to the management or operation of
the business of the bank. Under this plan, NBG Bancorp has reserved 70,000
shares of NBG Bancorp common stock for the issuance of options, of which Messrs.
Huggins, Lanier and Carson in the aggregate currently may receive options to
purchase up to 49,000 shares in the event The National Bank of Georgia meets
established performance goals. See "Executive Compensation - Stock Option Plan"
(page 42). Any future exercise of warrants or options would dilute your
percentage of ownership interest in NBG Bancorp. For example, prior to the
exercise of their warrants, our organizers will own 61% of the 610,000 shares to
be outstanding upon completion of the minimum offering or approximately 47% of
the 800,000 shares to be outstanding if the maximum number of shares is sold.
If all of the warrants and the maximum number of options were exercised,
organizers and employees would own approximately 77% of NBG Bancorp's
outstanding common stock after the minimum offering and 66% after the maximum
offering.
We will be competing primarily in and around Athens and Oconee County with many
other larger financial institutions which have greater financial resources than
us.
We will be competing primarily with other financial institutions in Athens
and Oconee County, but may also compete with internet banks and financial
institutions located throughout the United States for products such as large
certificates of deposit. All of our local competitors actively solicit business
from residents of the Athens and Oconee County area. Some of these institutions
are not subject to the same degree of regulation as we will be and all will have
greater resources than will be immediately available to us. In addition, The
National Bank of Georgia will compete with numerous other lenders and deposit-
takers, including other commercial banks, savings and loan associations,
internet banks, credit unions, finance companies, mutual funds, insurance
companies and brokerage and investment banking firms. Because there are no
longer any locally-owned community banks in Athens and only one other locally-
owned community bank in Oconee County, we could face increased competition if
another community bank like The National Bank of Georgia were to open in our
market area. We are aware of a state bank in Oconee County that is in the
organizational stages, but as of the date of this prospectus, has not opened.
See "Proposed Business of NBG Bancorp and The National Bank of Georgia - Market
Opportunities - Competition" (page 26).
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Our success will depend significantly upon general economic conditions in the
Athens and Oconee County area.
Since the majority of The National Bank of Georgia's borrowers and
depositors are projected to be individuals and businesses located and doing
business in the Athens and Oconee County area, our success will depend
significantly upon the general economic conditions in and around Athens and
Oconee County. For example, an adverse change in the local economy could make
it more difficult for borrowers to repay their loans, which could lead to loan
losses for The National Bank of Georgia. In addition, because many of our
shareholders will most likely be residents of this same area, a prolonged
downturn in the general economic conditions of the Athens and Oconee County area
could result in sales of large amounts of NBG Bancorp common stock.
The National Bank of Georgia's initial lending limit will be lower than many of
its competitors, which may discourage potential customers and restrict our
growth.
At least during its early years of operations, The National Bank of
Georgia's legally mandated lending limits will be lower than those of many of
its competitors because it will have less capital than many of its competitors.
Initially, the bank will have a legal lending limit for unsecured loans of
$855,000 to any one borrower. The National Bank of Georgia's lower lending
limit may discourage potential borrowers who have lending needs that exceed the
bank's limits, which may restrict our ability to grow. The bank may try to
serve the needs of these borrowers by selling loan participations to other
institutions, but this strategy may not succeed. See "Proposed Business of NBG
Bancorp and The National Bank of Georgia - Lending Services" (page 29).
Rapidly rising or falling interest rates could significantly harm our business.
A rapid increase or decrease in interest rates could significantly harm The
National Bank of Georgia's net interest income, capital and liquidity. The
bank's profitability will depend substantially on its net interest income, which
is the difference between the interest income earned on its interest-earning
assets and the interest expense paid on its interest-bearing liabilities (such
as deposits and borrowings). To the extent that the maturities of these assets
and liabilities differ, rapidly rising or falling interest rates could
significantly and adversely effect The National Bank of Georgia's earnings,
which, in turn, would impact NBG Bancorp's business. See "Proposed Business of
NBG Bancorp and The National Bank of Georgia - Asset and Liability Management"
(page 33).
NBG Bancorp's ability to pay dividends is limited and depends on The National
Bank of Georgia's ability to pay dividends and the bank does not expect to pay
dividends for at least several years.
NBG Bancorp will initially have no source of income other than dividends it
receives from The National Bank of Georgia. NBG Bancorp's ability to pay
dividends will therefore depend on the bank's ability to pay dividends to it,
which will be based on its earnings, capital requirements, and financial
condition, among other factors.
Bank holding companies and national banks are both subject to significant
regulatory restrictions on the payment of cash dividends. In light of these
restrictions and the need for NBG Bancorp and The National Bank of Georgia to
retain and build capital, it will be the policy of each of their respective
board of directors to reinvest earnings for the period of time necessary to help
support the success of their operations. As a result, NBG Bancorp does not plan
to pay dividends until The National Bank of Georgia is cumulatively profitable.
See "Dividends" (page 21).
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The offering price for NBG Bancorp common stock was arbitrarily set by our
organizers and may not accurately reflect the value of an investment in NBG
Bancorp common stock.
Because we were only recently formed and The National Bank of Georgia is in
the process of being organized, the public offering price could not be set by
referencing historical measures of the bank's financial performance. Therefore,
the public offering price may not indicate the market price for NBG Bancorp
common stock after this offering. The public offering price was arbitrarily
determined by our organizers based on several factors. These factors included
prevailing market conditions, the price to earnings and price to book value
multiples of comparable publicly traded companies and NBG Bancorp's growth
potential and cash flow and earnings prospects. See "Plan of Distribution -
Determination of Offering Price" (page 17).
We do not expect that an active trading market for NBG Bancorp common stock will
develop, which means that you may not be able to sell your shares.
Since the size of this offering is relatively small, we do not expect that
an active and liquid trading market for NBG Bancorp common stock will develop
within the next five years. Therefore, you should not invest in this offering
if you have a short-term investment intent.
If an active trading market does not develop, you may not be able to sell
your shares promptly or perhaps at all. You should consider carefully the
limited liquidity of your investment before purchasing any shares of NBG Bancorp
common stock.
The market price of NBG Bancorp common stock may be volatile.
If a market develops for NBG Bancorp common stock after this offering,
significant market price volatility may be experienced. Factors that may affect
the price of NBG Bancorp common stock include its depth and liquidity, investor
perception of our financial strength, conditions in the banking industry such as
credit quality and monetary policies, and general economic and market
conditions. Our quarterly operating results, changes in analysts' earnings or
other developments affecting us could cause the market price of NBG Bancorp
common stock to fluctuate substantially. In addition, from time to time the
stock market experiences extreme price and volume fluctuations. This volatility
may significantly affect the market price of NBG Bancorp common stock for
reasons unrelated to our operating performance.
Our profitability and growth could be adversely affected by changes in the law,
especially changes deregulating the banking industry.
We will be subject to extensive federal government supervision and
regulation. Our ability to achieve profitability and to grow could be adversely
affected by federal and state banking laws and regulations. These and other
restrictions limit the manner in which we may conduct our business and obtain
financing, including The National Bank of Georgia's ability to attract deposits,
make loans and achieve satisfactory interest spreads. Many of these regulations
are intended to protect depositors, the public, and the FDIC, not shareholders.
In addition, the burden imposed by federal and state regulations may place us at
a competitive disadvantage compared to competitors who are less regulated.
Applicable laws, regulations, interpretations and enforcement policies have been
subject to significant, and sometimes retroactively applied, changes in recent
years, and may be subject to significant future changes. Future legislation or
government policy may also adversely affect the banking industry or our
operations. We cannot predict the effects of any potential changes, but they
could adversely affect our future operations. See "Supervision and Regulation"
(page 52).
11
<PAGE>
The operation of The National Bank of Georgia may in the future require more
capital than NBG Bancorp will raise in this offering and we may not be able to
obtain additional capital on terms which are favorable to investors.
In the future, should we need additional capital, we may not be able to
raise additional funds through the issuance of additional shares of NBG Bancorp
common stock or other securities. Even if we were able to obtain additional
capital through the issuance of additional shares of NBG Bancorp common stock or
other securities, we may not issue these securities at prices or on terms better
than or equal to the public offering price and terms of this offering. The
issuance of new securities could dilute your ownership interest in NBG Bancorp.
NBG Bancorp's Articles of Incorporation and Bylaws contain provisions which
could deter or prevent takeover attempts by a potential purchaser of NBG Bancorp
common stock that would be willing to pay you a premium for your stock.
NBG Bancorp's Articles of Incorporation and Bylaws contain provisions that
may deter or prevent an attempt to change or gain control of NBG Bancorp. As a
result, you may be deprived of opportunities to sell some or all of your shares
of NBG Bancorp common stock at prices that represent a premium over market
prices. These provisions include the possible existence of preferred stock,
staggered terms for directors, restrictions on the ability to change the number
of directors or to remove a director, special provisions regarding combinations
with "interested" shareholders and the price at which an acquirer may purchase
your shares of NBG Bancorp common stock, and flexibility in evaluating
acquisition proposals. See "Important Provisions of NBG Bancorp's Articles of
Incorporation and Bylaws" (page 46).
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus are "forward-looking statements."
Forward-looking statements include statements about the competitiveness of the
banking industry, potential regulatory obligations, potential economic growth in
our primary service area, our strategies and other statements that are not
historical facts. When we use in this prospectus words like "anticipate,"
"believe," "expect," "estimate" and similar expressions, you should consider
them as identifying forward-looking statements. Because forward-looking
statements involve risks and uncertainties, there are important factors that
could cause actual results to differ significantly from those expressed or
implied by the forward-looking statements. Some of these factors are set forth
above in the section entitled "Risk Factors" on page 7.
12
<PAGE>
TERMS OF THE OFFERING
General
NBG Bancorp is offering up to 800,000 shares of its common stock for cash
at a price of $10.00 per share. In addition, NBG Bancorp is offering to our
organizers up to 372,500 warrants to purchase NBG Bancorp common stock. The
warrants are exercisable for a period of ten years, beginning on the first
anniversary of The National Bank of Georgia's opening, at an exercise price of
$10.00 per share. The minimum subscription amount is 1,000 shares per investor
which may be waived by NBG Bancorp in its sole discretion. The purchase price
of $10.00 per share must be paid in full upon signing and delivering a
subscription agreement. A subscription agreement for your use is attached to
this prospectus as Appendix B. All subscriptions delivered by subscribers are
subject to acceptance by NBG Bancorp, and NBG Bancorp reserves the absolute and
unqualified right to reject or reduce any subscription for any reason prior to
acceptance. Rejected subscriptions will be returned to the subscriber without
interest. If your subscription is reduced, you may withdraw your subscription
within ten days after being notified of NBG Bancorp's reduction. Once a
subscription has been accepted by NBG Bancorp, you may not withdraw your
subscription for any reason. NBG Bancorp reserves the right to terminate this
offering at any time, for any reason whatsoever, prior to the time it withdraws
funds from the subscription escrow account.
Prior to this offering, there has been no established public trading market
for NBG Bancorp common stock or the warrants and we do not anticipate that an
established market will develop. The offering price has been arbitrarily
determined and is not a reflection of NBG Bancorp's book value, net worth or any
other such recognized criteria of value. In determining the offering price of
NBG Bancorp common stock, our organizers considered, among other factors,
prevailing market conditions and price to book value multiples of comparable
publicly traded companies. There can be no assurance that, if a market should
develop for NBG Bancorp common stock, the post-offering market price will equal
or exceed NBG Bancorp's $10.00 offering price.
Conditions of the Offering
This offering will expire at 5:00 p.m. Eastern Time, on __________________,
unless this date is extended by NBG Bancorp. However, the __________________
expiration date may be extended by NBG Bancorp without notice to subscribers for
up to three consecutive 90-day periods, or not later than ________________.
This offering is expressly conditioned upon the fulfillment of the following
conditions on or prior to ___________. The offering conditions, which may not
be waived, are as follows:
. at least $6,100,000 must be deposited with NBG Bancorp's escrow agent,
Georgia First Bank, N.A., Gainesville, Georgia ("Georgia First");
. NBG Bancorp must receive approval from the Board of Governors of the
Federal Reserve System (the "Federal Reserve") of its application to
become a bank holding company;
. our organizers must receive preliminary approval from the Office of the
Comptroller of the Currency (the "OCC") to charter The National Bank of
Georgia;
. The National Bank of Georgia must receive approval of its deposit
insurance application from the Federal Deposit Insurance Corporation
(the "FDIC"); and
. NBG Bancorp must not have canceled this offering prior to the time funds
are withdrawn from the subscription escrow account.
13
<PAGE>
Escrow of Subscription Funds
Until the above offering conditions have been met, all subscriptions and
documents delivered by subscribers will be placed in an escrow account with
Georgia First. Under the terms of the escrow agreement (a copy of which is
attached as Appendix A), if all of the offering conditions are met, NBG Bancorp
will certify this fact to the escrow agent and the escrow agent will release all
funds, with interest, to NBG Bancorp.
Prior to the release of the funds from the escrow account, the escrow
agent will invest the funds in interest-bearing bank accounts, including savings
accounts and bank money market accounts, short-term direct obligations of the
United States Government and/or in short-term FDIC insured bank certificates of
deposit. NBG Bancorp will invest all funds obtained after the release of the
funds from the escrow account and before it infuses capital into NBG Bancorp in
a similar manner. NBG Bancorp will use the offering proceeds to purchase all of
the capital stock of The National Bank of Georgia and to repay expenses incurred
in the organization. See "Use of Proceeds."
If the offering conditions are not met by ______________, 1999, the
escrow agent will promptly return to NBG Bancorp's subscribers their
proportionate share of the funds. The escrow agent will also return to
subscribers their proportionate share of any interest earned. If the offering
conditions are not satisfied, the expenses incurred by NBG Bancorp will be borne
by our organizers and not by subscribers.
No assurance can be given that the funds in the escrow account can or will
be invested at the highest rate of return available or that any profits will be
released from the investment of these funds.
If all of the offering conditions are satisfied, and NBG Bancorp withdraws
the funds from the subscription escrow account, all profits and earnings on the
account will belong to NBG Bancorp. If the minimum offering of 610,000 shares of
common stock are sold before the expiration date, a minimum closing will be
held. At that minimum closing, the funds will be released from the escrow
account to NBG Bancorp and subscribers to this offering will become shareholders
of NBG Bancorp. Thereafter, subscribers' funds will be paid directly to NBG
Bancorp, rather than the escrow agent, upon acceptance.
Georgia First, by accepting appointment as escrow agent under the escrow
agreement, in no way endorses the purchase of NBG Bancorp common stock.
Failure to Begin Banking Operations
Although we believe it is unlikely, it is possible that subscribers
whose funds were originally placed in the escrow account may lose a portion of
their investment because while we may be able to fulfill the conditions of this
offering - and thus be able to withdraw funds from the escrow account - we may
fail to begin banking operations. When the conditions of this offering are met
and funds are withdrawn from the escrow account, shares of NBG Bancorp common
stock will be issued to subscribers whose funds had been deposited in the escrow
account. At that time, we will not have begun banking operations because final
approval of The National Bank of Georgia's charter application will not have
been received and conditions imposed by other regulatory authorities will not
have been satisfied.
Within 18 months after receiving preliminary approval of its charter
application, the OCC requires a new national bank to receive final approval of
the application and open for business. The National Bank of Georgia's charter
application received preliminary approval from the OCC on October 26, 1999.
Therefore, if The National Bank of Georgia does not obtain its charter and
open for business
14
<PAGE>
by _____________, 2000, the bank's preliminary charter approval will expire.
Other than capitalizing The National Bank of Georgia with at least $6,000,000,
we believe obtaining the charter and opening for business will be based on
meeting various requirements, such as purchasing stock in the Federal Reserve
Bank of Atlanta and passing a pre-opening examination. Because of our
experienced management team, we expect The National Bank of Georgia will have
little difficulty satisfying these requirements after funds are withdrawn from
the escrow account. In addition, even though we will have received the approvals
of the Federal Reserve and the FDIC prior to withdrawing funds from the escrow
account, their approvals will contain conditions that will not be able to be
fulfilled until The National Bank of Georgia is capitalized and is near opening.
We expect these conditions will be procedural in nature and capable of prompt
resolution. NBG Bancorp will also require the permission of the Georgia
Department of Banking and Finance (the "DBF") to operate as a bank holding
company. Since the DBF typically bases its permission in large measure on the
Federal Reserve's review and approval, we believe receipt of the DBF's approval
will also be timely.
However, in the event our assumptions are incorrect and we are unable to
begin banking operations after funds have been withdrawn from the escrow
account, NBG Bancorp will seek shareholder approval for dissolution and
liquidation. Upon liquidation, NBG Bancorp will promptly return to shareholders
all funds, with interest, less all expenses incurred by us, including the
expenses of this offering and our organization and pre-opening expenses. It is
possible that the amount returned to shareholders may be further reduced by
amounts paid to satisfy claims of creditors, as discussed below.
Once NBG Bancorp issues shares to subscribers, the offering proceeds will
be considered part of NBG Bancorp's general corporate funds and may be subject
to the claims of creditors of the company, including claims against the company
that may arise out of actions of its officers, directors, or employees. It is
possible, therefore, that one or more creditors may seek to attach the proceeds
of the offering before NBG Bancorp begins banking operations. If such an
attachment occurred and it became necessary to dissolve and liquidate NBG
Bancorp, the payment process might be delayed. Further, if it became necessary
to pay creditors from the subscription funds, the payment to shareholders might
be further reduced.
Purchases by Organizers
Our organizers anticipate purchasing 372,500 shares of common stock in
this offering, which will constitute approximately 61% of the 610,000 shares to
be outstanding upon completion of the minimum offering, or approximately 47% of
the 800,000 shares to be outstanding should the maximum number of shares be
sold. All purchases of shares by the organizers will be made at the same public
offering price, $10.00 per share, as that paid by other investors and will count
toward achieving the minimum offering. The organizers have represented to NBG
Bancorp that their purchases will be made for investment purposes only and not
with a view to resell their shares. See "Management - Proposed Directors and
Executive Officers of NBG Bancorp and The National Bank of Georgia."
In consideration for assisting in our organization, on the date The
National Bank of Georgia opens for business, each of our organizers will be
granted warrants to purchase additional shares of common stock. The warrants
will be granted to the organizers in recognition of the financial risk they have
undertaken in connection with the organizational expenses of this project.
Particularly, each of the organizers has personally guaranteed a line of credit
obtained from Georgia First. The warrants will provide our organizers with the
opportunity to profit from any future increase in the market value of the common
stock or any increase in the net worth of NBG Bancorp without paying for the
warrant shares initially.
15
<PAGE>
Each warrant will entitle an organizer to purchase one share of common
stock for each share he purchases in the offering. The actual number of
warrants granted to an organizer will depend on the number of shares of NBG
Bancorp common stock the organizer actually purchases in the offering.
Therefore, given the intent of our organizers to purchase 372,500 shares in the
offering, we expect that they will be granted warrants to purchase an aggregate
of 372,500 shares of NBG Bancorp common stock upon completion of this offering.
Each warrant will become exercisable on the first anniversary of the
date on which The National Bank of Georgia opens for business. At that time,
only 20% of the warrant will be exercisable. Thereafter, the warrant will
become exercisable in 20% annual increments. Each warrant will expire ten years
after the first anniversary of the date on which The National Bank of Georgia
opens for business. An organizer exercising his warrant will pay $10.00 for
each share purchased under the warrant, subject to adjustment for stock splits,
recapitalizations or other similar events. Any future exercise of the
organizers' warrants will reduce your percentage ownership interest in NBG
Bancorp. Assuming all of the warrants are exercised, the organizers will own
approximately 76% of the shares outstanding after the minimum offering and 64%
of the outstanding shares after the maximum offering. See "Description of
Capital Stock of NBG Bancorp - Organizers' Warrants."
PLAN OF DISTRIBUTION
General
NBG Bancorp may terminate this offering for any reason at any time during
its pendency for any reason whatsoever. Shares of NBG Bancorp common stock will
be marketed on a best efforts basis, with a required 1,000 share minimum per
investor (which may be waived by NBG Bancorp in its sole discretion), through
NBG Bancorp's directors and executive officers, none of whom will receive any
commissions or other form of remuneration based on the sale of the shares. In
addition, NBG Bancorp may engage sales agents to sell shares on a best efforts
basis. NBG Bancorp anticipates that if sales agents are retained, such persons
would be paid sales commissions not exceeding 10% of the aggregate dollar amount
of the common stock sold by the sales agents as well as marketing-related
expenses. As soon as practicable, but no more than ten business days after
receipt of a subscription to purchase shares of NBG Bancorp common stock, NBG
Bancorp will accept or reject the subscription. Subscriptions not rejected by
NBG Bancorp within this ten day period will be accepted. Once a subscription is
accepted by NBG Bancorp, it cannot be withdrawn by you.
How to Subscribe
If you desire to purchase shares of NBG Bancorp common stock, you
should:
1. Complete, date, and execute the subscription agreement you received
with this prospectus;
2. Make a check, bank draft, or money order payable to "Georgia First
Bank, N.A., Escrow Account for NBG Bancorp, Inc.," in the amount of
$10.00 times the number of shares you wish to purchase; and
16
<PAGE>
3. Deliver the completed subscription agreement and check to NBG Bancorp
at the following address:
William S. Huggins
President and Chief Executive Officer
NBG Bancorp, Inc.
P.O. Box 6507
Athens, Georgia 30604
No subscription agreement is binding until accepted by NBG Bancorp, which
may, in its sole discretion, refuse to accept any subscription for shares, in
whole or in part, for any reason whatsoever. Rejected subscriptions will be
returned to the subscriber without interest. If your subscription is reduced,
you may withdraw your subscription within ten days after being notified of NBG
Bancorp's reduction.
If you have any questions about this offering or how to subscribe,
please call Mr. Huggins at (706) 355-3122 (or any of the other organizers). If
you subscribe, you should retain a copy of the completed subscription agreement
for your records. You must pay the subscription price at the time you deliver
the subscription agreement.
Determination of Offering Price
Prior to this offering, there has been no public market for NBG
Bancorp common stock. The offering price of $10.00 per share in this offering
has been determined by our organizers based on a number of factors, including
prevailing market conditions, estimates of the business potential and earnings
prospects of NBG Bancorp, an assessment of The National Bank of Georgia's
management and the consideration of the above factors in relation to the market
valuation of other community banks and community bank holding companies in the
Southeast. In the event a market should develop for NBG Bancorp's common stock
after completion of this offering, there can be no assurance that its market
price will not be lower than the offering price in this offering.
17
<PAGE>
USE OF PROCEEDS
The gross proceeds from the sale of shares of NBG Bancorp common stock will
be $6,100,000 assuming the sale of a minimum of 610,000 shares, and $8,000,000
assuming the sale of a maximum of 800,000 shares. However, if 610,000 shares
are not sold prior to the expiration date of the offering, then NBG Bancorp will
terminate this offering and promptly return all funds received from subscribers,
with interest. See "Terms of the Offering."
The estimated expenses of this offering are as follows:
<TABLE>
<CAPTION>
<S> <C>
Registration fees, including blue sky fees and expenses.............................. $ 12,000
Legal fees and expenses.............................................................. 35,000
Accounting fees and expenses......................................................... 5,000
Printing and engraving expenses...................................................... 10,000
Entertainment........................................................................ 3,500
Miscellaneous........................................................................ 6,000
----------
Total Expenses.................................................................. $ 71,500
==========
Net Proceeds
Minimum offering................................................................ $6,028,500
Maximum offering................................................................ $7,928,500
</TABLE>
The net proceeds of this offering as well as any interest earned on the
subscription funds will be used by NBG Bancorp, after breaking escrow, primarily
for the purchase of all of the issued and outstanding capital stock of The
National Bank of Georgia. The National Bank of Georgia will, in turn, use the
funds as capital to begin its business operations, including paying officers'
and employees' salaries, purchasing its facility, and repaying expenses incurred
in its organization.
As indicated in The National Bank of Georgia's charter application filed
with the OCC, NBG Bancorp intends to capitalize The National Bank of Georgia at
$6,000,000. Any remaining funds from this offering are expected to be held by
NBG Bancorp and reserved for general corporate purposes at the holding company
level. NBG Bancorp anticipates that the proceeds received upon exercise of the
warrants, if any, will be used for working capital purposes.
A portion of the net proceeds of this offering beyond the minimum will be
retained by NBG Bancorp for the purpose of funding any required additions to the
capital of The National Bank of Georgia. Since national banks are regulated
with respect to the ratio that their total assets may bear to their total
capital, if The National Bank of Georgia experiences greater growth than
anticipated, it may require the infusion of additional capital to support that
growth. Management anticipates, however, that the proceeds of this offering
will be sufficient to support The National Bank of Georgia's immediate capital
needs and will seek, if necessary, additional long-and short-term financing to
support any additional needs; however, we can give you no assurance that such
financing, if needed, will be available or if available will be on terms
acceptable to us.
18
<PAGE>
The following is a schedule of the estimated use by The National Bank of
Georgia of the proceeds from the sale of NBG Bancorp common stock, including its
estimated operating expenses for its first 12 months of operation.
<TABLE>
<S> <C>
Organizational and pre-opening expenses, including salaries, legal and accounting
fees(1).......................................................................... $ 300,000(2)
Purchase of and improvements to bank facility(3).................................... 1,173,000(4)
Salaries and benefits(5)............................................................ 633,380(2)
General and administrative expenses, composed primarily of data processing,
marketing and advertising, telephone and casualty
and deposit insurance(6)......................................................... 331,446(4)
Furniture, fixtures and equipment(7)................................................ 450,000(2)
Working capital..................................................................... 3,112,174
----------
$6,000,000
==========
</TABLE>
__________________
(1) These expenses will be incurred prior to The National Bank of Georgia's
opening for business and are being funded from a line of credit our
organizers obtained from Georgia First in the principal amount of $250,000.
Approximately $38,000 was outstanding on the line of credit at October 31,
1999. This loan has been guaranteed by our organizers, bears interest at the
prime rate minus one as published in the Money Rates section of The Wall
Street Journal, and is due on November 25, 1999. We expect to renew the line
of credit prior to November 25, 1999.
(2) Includes expenses which will be incurred prior to The National Bank of
Georgia's opening for business.
(3) Costs of purchasing The National Bank of Georgia's permanent facility are
based on an agreed upon sale price with the owner of the facility. See
"Proposed Business of NBG Bancorp and The National Bank of Georgia -
Facilities."
(4) Represents operating expenses which will be incurred during The National
Bank of Georgia's first 12 months of operations.
(5) Salaries and benefits are based on management's estimates of the number and
types of employees which will be required during The National Bank of
Georgia's first 12 months of operations. It is presently anticipated that
the bank will employ ten persons during its first 12 months, including three
officers.
(6) These expenses are based on the experiences of similar size banks in the
region and on management's previous banking experience.
(7) Furniture and equipment cost is based on our organizers' estimates and upon
information from suppliers of bank equipment of the costs required to
furnish and equip The National Bank of Georgia for the expected level of
operations.
The expenses described above are estimates only and assume The National Bank
of Georgia will open for business in March 2000, or as soon thereafter as
practicable. Actual expenses may exceed these amounts. A portion of these
expenses will be offset by revenues generated by the bank during its first year
of operation.
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<PAGE>
CAPITALIZATION
The following table shows NBG Bancorp's capitalization as of October 31,
1999 and its pro forma consolidated capitalization, as adjusted to give effect
to the receipt of the net proceeds from the sale of a minimum of 610,000 and a
maximum of 800,000 shares of NBG Bancorp common stock in this offering.
Upon NBG Bancorp's incorporation, William S. Huggins, the President of The
National Bank of Georgia and NBG Bancorp and Chief Executive Officer of The
National Bank of Georgia, purchased one share of common stock at the price of
$1.00. NBG Bancorp will redeem this share for $1.00 upon the issuance of shares
in this offering. The number of shares shown as outstanding after giving effect
to this offering do not include shares of NBG Bancorp common stock issuable upon
the exercise of warrants that will be granted to our organizers or pursuant to
options that may be granted under NBG Bancorp's stock incentive plan. For
additional information regarding the number and terms of those warrants and
options, see "Description of Capital Stock of NBG Bancorp - Organizers'
Warrants" and "Executive Compensation - Stock Option Plan."
<TABLE>
<CAPTION>
As Adjusted As Adjusted
for Minimum for Maximum
Actual Offering Offering
------------------ --------------------- --------------------
<S> <C> <C> <C>
Borrowings
- ----------
Note Payable $ 38,000 $ -0- $ -0-
Shareholders' Equity Actual And As Adjusted
- -------------------------------------------
Preferred stock, par value $1.00 per share;
1,000,000 shares authorized; no shares issued
and outstanding $ -0- $ -0- $ -0-
Common stock, par value $1.00 per share;
10,000,000 shares authorized; 1 share issued
and outstanding; 610,000 shares issued and
outstanding as adjusted (minimum offering);
800,000 shares issued and outstanding as adjusted
(maximum offering) $ 1 $ 610,000 $ 800,000
Additional paid-in capital $ -0- $5,418,500 $7,128,500
Accumulated deficit during development stage $(139,149)(1) $ (300,000)(2) $ (300,000)(2)
Total shareholders' equity $(101,149) $5,728,500 $7,628,500
========= ========== ==========
</TABLE>
___________________________
(1) This deficit reflects pre-opening expenses incurred through October 31,
1999, consisting primarily of salaries and employee benefits.
(2) The "As Adjusted" accumulated deficit results from estimated organizational
and pre-opening expenses of $300,000 incurred through The National Bank of
Georgia's target opening date in March 2000. Actual organizational and
pre-opening expenses may be higher and may therefore increase the deficit
accumulated during the pre-opening stage and further reduce shareholders'
equity.
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<PAGE>
DIVIDENDS
NBG Bancorp will initially have no source of income other than dividends
that The National Bank of Georgia pays to it. NBG Bancorp's ability to pay
dividends to its shareholders will therefore depend on the bank's ability to pay
dividends to NBG Bancorp. In the future, NBG Bancorp may begin income-producing
operations independent from those of The National Bank of Georgia, which may
provide another source of income from which NBG Bancorp could pay dividends to
you. However, we can give you no assurance as to when, if at all, these
operations may begin or whether they will be profitable.
Bank holding companies and national banks are both subject to significant
regulatory restrictions on the payment of cash dividends. In light of these
restrictions and the need for NBG Bancorp and The National Bank of Georgia to
retain and build capital, the Boards of Directors of the company and the bank
plan to reinvest earnings for the period of time necessary to support successful
operations. As a result, NBG Bancorp does not plan to pay dividends until it
recovers any losses incurred and becomes profitable, and its future dividend
policy will depend on the earnings, capital requirements and financial condition
of the company and the bank and on other factors that NBG Bancorp's Board of
Directors considers relevant.
Additionally, regulatory authorities may determine, under circumstances
relating to the financial condition of NBG Bancorp or The National Bank of
Georgia, that the payment of dividends would be an unsafe or unsound practice
and may prohibit dividend payment. See "Supervision and Regulation - Payment of
Dividends."
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<PAGE>
PLAN OF OPERATION
General
NBG Bancorp is in the development stage and will remain in that stage
until this offering is completed. NBG Bancorp was organized in September 1999
to serve as a holding company for The National Bank of Georgia. Since it was
organized, NBG Bancorp's main activities have been centered on seeking,
interviewing and selecting its directors, applying for a national bank charter,
applying for FDIC deposit insurance, applying to become a bank holding company
and raising equity capital through this offering.
NBG Bancorp's financial statements and related notes, which are included in
this prospectus, provide additional information relating to the following
discussion of its financial condition. See "Index to Financial Report."
NBG Bancorp's operations from June 1, 1999 through the close of the
offering have been, and will continue to be, funded through a line of credit
from Georgia First. The total amount available on the line of credit is
$250,000, of which approximately $38,000 was outstanding at October 31, 1999.
This loan has been guaranteed by our organizers, bears interest at the prime
rate minus one as published in the Money Rates section of The Wall Street
Journal, and is due on November 25, 1999. We expect to renew the line of credit
prior to November 25, 1999.
A portion of the proceeds of this offering will be used to repay the line
of credit, to the extent that such repayment is reasonable and not detrimental
to the operations of The National Bank of Georgia, and to the extent that such
repayment is allowed by the OCC and other appropriate regulatory authorities.
See "Use of Proceeds." Total organizational costs, as of October 31, 1999,
amounted to $139,149.
Liquidity and Interest Rate Sensitivity
Since NBG Bancorp has been in the development stage, there are no results
to present at this time. Nevertheless, once The National Bank of Georgia begins
operations, net interest income, its primary source of earnings, will fluctuate
with significant interest rate movements. To lessen the impact of these margin
swings, we intend to structure the balance sheet so we will have regular
opportunities to change the interest rates on (or "reprice") the bank's
interest-bearing assets and liabilities. Imbalance in these repricing
opportunities at any point in time constitute interest rate sensitivity.
Interest rate sensitivity refers to the responsiveness of interest-bearing
assets and liabilities to change in market interest rates. The rate sensitive
position, or gap, is the difference in the volume of rate sensitive assets and
liabilities at a given time interval. The general objective of gap management
is to actively manage rate sensitive assets and liabilities in order to reduce
the impact of interest rate fluctuations on the net interest margin. We will
generally attempt to maintain a balance between rate sensitive assets and
liabilities as the exposure period is lengthened to minimize The National Bank
of Georgia's overall interest rate risks.
We will evaluate regularly the balance sheet's asset mix in terms of
several variables: yield, credit quality, appropriate funding sources and
liquidity. To manage effectively the balance sheet's liability mix, we plan to
focus on expanding our deposit base and converting assets to cash as necessary.
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As The National Bank of Georgia continues to grow, we will continuously
structure its rate sensitivity position in an effort to hedge against rapidly
rising or falling interest rates. The bank's Asset and Liability Management
Committee will meet on a quarterly basis to develop a strategy for the upcoming
period. The committee's strategy will include anticipating future interest rate
movements.
Liquidity represents the ability to provide steady sources of funds for
loan commitments and investment activities, as well as to maintain sufficient
funds to cover deposit withdrawals and payment of debt and operating
obligations. The National Bank of Georgia can obtain these funds by converting
assets to cash or by attracting new deposits. The National Bank of Georgia's
ability to maintain and increase deposits will serve as its primary source of
liquidity.
We know of no trends, demands, commitments, events or uncertainties that
should result in, or are reasonably likely to result in, The National Bank of
Georgia's or NBG Bancorp's liquidity increasing or decreasing in any material
way in the foreseeable future, other than this offering.
Capital Adequacy
We believe that the net proceeds of this offering will satisfy our cash
requirements for at least the next 12 months following the opening of The
National Bank of Georgia. Accordingly, we do not anticipate that it will be
necessary to raise additional funds to operate NBG Bancorp or The National Bank
of Georgia for at least the next 12 months. All anticipated material
expenditures for such period have been identified and provided for out of the
proceeds of this offering. For additional information about planned
expenditures, see "Use of Proceeds." For additional information about our plan
of operations, see "Proposed Business of NBG Bancorp and The National Bank of
Georgia."
Year 2000 Issues
Like many financial institutions, we will rely upon computers for the
daily conduct of our business and for information systems processing. There is
concern among industry experts that on January 1, 2000, computers will be unable
to "read" the new year and there may be widespread computer malfunctions. We
will generally be relying on software and hardware developed by independent
third parties for our information systems.
We anticipate opening The National Bank of Georgia after January 1, 2000,
at which time we believe that most of the uncertainty surrounding the year 2000
issue should be resolved. In this event, our risks associated with computer
malfunctions should be greatly reduced, but we will still seek to ensure that
our computer systems and our major vendors' and clients' computer systems are in
compliance and functioning properly.
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PROPOSED BUSINESS OF NBG BANCORP
AND THE NATIONAL BANK OF GEORGIA
Background
NBG Bancorp. NBG Bancorp was incorporated as a Georgia corporation on
September 23, 1999 to serve as a bank holding company for The National Bank of
Georgia. NBG Bancorp plans to use $6,000,000 of the net proceeds of this
offering to capitalize The National Bank of Georgia. In return, the bank will
issue all of its common stock to the company, and the company will be the bank's
sole shareholder. Initially, The National Bank of Georgia will be NBG Bancorp's
sole operating subsidiary. NBG Bancorp will apply to the Federal Reserve and
the Georgia Department of Banking and Finance for approval to capitalize The
National Bank of Georgia. If these agencies grant the necessary approvals, NBG
Bancorp will become a bank holding company within the meaning of the Bank
Holding Company Act of 1956, as currently in effect, and the Georgia Bank
Holding Company Act when it purchases The National Bank of Georgia's common
stock. See "Supervision and Regulation - General."
NBG Bancorp has been organized to make it easier for The National Bank of
Georgia to serve its future customers. The holding company structure will
provide flexibility for expanding The National Bank of Georgia's banking
business by possibly acquiring other financial institutions and providing
additional capital and banking-related services. A holding company structure
will make it easier for NBG Bancorp to raise capital for the bank because NBG
Bancorp will be able to issue securities without the need for prior banking
regulatory approval and the proceeds of debt securities issued by the company
can be invested in the bank as primary capital.
The National Bank of Georgia. Our organizers filed applications on behalf
of The National Bank of Georgia with the OCC and with the FDIC on June 29, 1999
for authority to organize as a national bank with federally insured deposits.
The National Bank of Georgia will not be authorized to conduct its banking
business until it obtains a charter from the OCC. The issuance of the charter
will depend, among other things, upon The National Bank of Georgia's receipt of
at least $6,000,000 in capital from NBG Bancorp and upon compliance with other
standard conditions expected to be imposed by the OCC. These conditions are
generally designed to familiarize The National Bank of Georgia with national
bank operating requirements and to prepare it to begin business operations. The
OCC requires that a new national bank obtain a charter and open for business
within 18 months after receipt of its preliminary approval from the OCC. The
National Bank of Georgia received preliminary approval of its charter
application from the OCC on October 26, 1999 and is awaiting approval of its
FDIC deposit insurance application as well as final approval from the OCC and
receipt of a charter. We expect The National Bank of Georgia will open for
business in March 2000.
Market Opportunities
Primary Service Area. The National Bank of Georgia's initial primary
service area is the approximate ten mile radius surrounding its main office,
which is located at 2234 West Broad Street in Athens, Georgia. The primary
service area represents a geographic area that includes the City of Athens,
Clarke County, and the northeastern portion of Oconee County. Athens is served
by several major thoroughfares, including U.S. Highways 29 and 129. Athens is
located approximately 65 miles northeast of Atlanta.
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Economic and Demographic Factors. Athens is the key economic focal point
of the Athens Metropolitan Statistical Area ("MSA") as well as NBG Bancorp's
primary service area, which encompasses a smaller geographic area than the
Athens MSA. Athens' continuing expansion is due to its location in the path of
Atlanta's growth, increasing enrollments at The University of Georgia, major
infra-structure improvements and a growing hospitality industry. The estimated
per capita personal income for Clarke and Oconee Counties in 1988 were $22,044
and $24,755, respectively. From 1993 through 1998, Clarke County's per capita
personal income grew at an annual growth rate of 4.8%, while Oconee County's
grew at an annual growth rate of 4.4%. Clarke County's, as well as Oconee's,
per capita personal income annual growth rate is projected to slow down to 3.7%
and 2.9%, respectively through 2003. We believe that one of the most important
characteristics of the Athens MSA, as well as NBG Bancorp's primary service
area, is that it tends to be insulated from severe economic downturns. With
over 30,000 students, we believe The University of Georgia provides a
stabilizing effect economically on the area and will continue to insure that it
remains a unique market with growth opportunities.
Population. The estimated populations for Clarke and Oconee Counties in
1998 were 92,281 and 24, 274, respectively. According to The University of
Georgia's Selig Center for Economic Growth (the "Selig Center"), from 1993
through 1997 Clarke County's population grew at an annual growth rate of 0.8%
while Oconee County's population grew at an annual growth rate of 4.7%. Clarke
County's annual growth rate is projected to increase to 1.4% through 2003, while
Oconee County's annual growth rate is projected to remain vibrant at 4.5%. The
number of households within the Athens MSA has increased from 38,583 in 1980 to
nearly 51,000 in 1990.
Industry, Labor and Employment. According to the Selig Center, the number
of nonagricultural workers increased in the Athens MSA from 59,700 in 1990 to
71,500 in 1997, an average annual increase of 2.6%. In the first three quarters
of 1998, nonagricultural employment in the Athens MSA grew faster than in any
other metropolitan area in Georgia. An unusually fast increase in government
sector jobs accounts for this rapid growth. The Athens MSA has an unusually
high number of college-educated workers, which is regularly supplemented by
hundreds of graduates from The University of Georgia. Moreover, large numbers
of students provide a core of part-time workers for employers where flexible
scheduling is viable.
The University of Georgia, together with other state, federal and local
government institutions, provided 27.6% of the Athens MSA's area jobs in 1997.
Employment in the government sector increased at a low 0.8% average annual rate
between 1990 and 1997. After declining in 1996 and 1997, the government sector
expanded at a rapid rate of 15.3% in the first nine months of 1998.
The services and trade sectors provided almost half of the Athens MSA's
nonagricultural jobs in 1997. They also were the area's fastest growing
industries between 1990 and 1997. Services added jobs at a high 6.0% average
annual rate, and trade followed with a 4.0% average annual growth. The rate of
growth slowed significantly in both of those sectors in 1997, and the first nine
months of 1998 saw 0.4% decline in service jobs, a 2.7% growth in retail trade
employment, and a 4.6% decline in wholesale trade employment.
Manufacturing, responsible for 16.2% of jobs in 1997, has been the slowest
growing sector in the Athens MSA economy, adding jobs at a 0.2% average annual
rate, which translates into 200 jobs between 1990 and 1997. Between January and
September of 1998, employment in manufacturing rose by 1.1%, up from a 1.7%
decline in 1997.
In 1997, jobs in the construction, transportation, communications and
public utilities, and financial sectors made up about 9.1% of the area's total
nonagricultural employment. Construction, the
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largest of those sectors, saw the most rapid growth in the years preceding the
1996 Olympic Games. Athens was the site of three venues during the 1996 Olympic
Games. Between 1994 and 1995, the sector grew by 8.7%. After registering 4.0%
growth in 1997, employment in contract construction declined by 0.9% in the
first quarters of 1998. After two years of growth, employment in transportation,
communications, and public utilities suffered a 10.0% decline in 1997. The
sector regained some of its losses and grew by 3.2% in the first nine months of
1998.
Unemployment rates in Athens declined steadily from 1994 to 1997, a trend
that continued into the first nine months of 1998. The Athens MSA had the
lowest unemployment rate among Georgia's MSAs both in 1997 (3.0%) and in 1998
(2.9%). In particular, Clarke County's and Oconee County's average unemployment
rates in 1997 were 3.2% and 2.0%, respectively, well below the state's average
unemployment rate of 4.5% for that year.
According to the Georgia Department of Labor, the largest non-government
employers in Clarke County are Gold Kist, Inc., Seaboard Farms and St. Mary's
Hospital. Athens' top ten employers are listed below and illustrate the
diversification of business and trade in the area.
<TABLE>
<CAPTION>
Athens' Top Ten Employers Total Employees Industry
------------------------- --------------- ------------
<S> <C> <C>
The University of Georgia......................... 8,903 Education
Athens Regional Medical Centers................... 1,882 Health Care
Seaboard Farms.................................... 1,688 Agriculture
Clarke County School District..................... 1,600 Education
Athens-Clarke County.............................. 1,375 Public Service
St. Mary's Hospital............................... 1,110 Health Care
Gold Kist, Inc.................................... 1,056 Agriculture
Reliance Electric Corp............................ 900 Manufacturing
General Time Corporation.......................... 700 Manufacturing
ABB Power T&D Company, Inc........................ 605 Manufacturing
</TABLE>
From 1993 through 1998, the number of persons employed in Clarke and Oconee
Counties grew at annual growth rates of 3.3% and 9.2%, respectively. Although
Clarke County's annual growth rate is projected to decrease to 2.2% through
2003, Oconee County's annual job growth rate is expected to remain strong at
7.3% through 2003.
We believe that the Athens MSA presents a stable and diversified economic
environment that will support NBG Bancorp's formation. As a community bank, The
National Bank of Georgia will be designed to serve the needs of the citizens and
businesses within this growing economy. We believe continued economic growth in
the Athens MSA - especially Clarke and Oconee Counties - will be important to
NBG Bancorp's long-term success.
Competition. The banking business is highly competitive. The National
Bank of Georgia will compete with other commercial banks, savings and loan
associations, credit unions, and money market mutual funds operating in its
primary service area. Clarke County is served by at least seven insured
financial institutions operating a total of 30 retail branches as of June 30,
1998, the latest date for which information is available. In Oconee County, as
of June 30, 1998, there were at least five insured financial institutions
operating a total of eight retail branches. A number of these competitors are
well established in NBG Bancorp's primary service area.
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The following tables illustrate the June 30, 1998 deposit base and market
share of the financial institutions located in Clarke and Oconee Counties.
<TABLE>
<CAPTION>
Clarke County $ %
- ------------- --- ---
(Dollars in millions)
Financial Institution
<S> <C> <C>
Athens First Bank and Trust Company.................................. 309 28.2
SunTrust Bank, Northeast Georgia..................................... 222 20.2
Bank of America (formerly NationsBank)............................... 208 18.9
Wachovia Bank........................................................ 147 13.4
First American Bank & Trust Company.................................. 94 8.5
SouthTrust Bank (formerly The Georgia National Bank)................. 74 6.8
Main Street Bank..................................................... 44 4.0
Oconee County
- -------------
Financial Institution
Oconee State Bank.................................................... 105 56.5
Athens First Bank and Trust Company.................................. 73* 39.2
Bank of America (formerly NationsBank)............................... 7 3.8
First American Bank & Trust Company.................................. 1 0.5
</TABLE>
__________
* Includes deposits of Bank of Georgia which was acquired by Athens First
after June 30, 1998.
Some of The National Bank of Georgia's competitors have substantially
greater resources and lending limits than The National Bank of Georgia will, and
some competitors provide other services - such as extensive and established
branch networks and trust services - that The National Bank of Georgia does not
expect to provide initially. As a result of these competitive factors, The
National Bank of Georgia may have to pay higher interest rates to attract
depositors or extend credit with lower interest rates to attract borrowers, thus
decreasing its net interest margin.
Several of the larger regional banks have a presence in The National Bank
of Georgia's primary service area through branch offices. Many of their
customer service functions, as well as authority for loan approval, however, are
located outside of the area. Although several community banks also have
branches in The National Bank of Georgia's primary service area, no other
locally-owned community banks are headquartered in Athens and The National Bank
of Georgia will be one of the only locally-owned community banks serving Oconee
County. We are aware, however, of a state bank in Oconee County that is
currently in the organizational stages.
As a result of the various mergers that have taken place in the Athens and
Oconee County area over the past years, we believe an attractive opportunity
exists in The National Bank of Georgia's primary service area for a new bank
that positions itself as a locally-owned community bank prepared to take
advantage of changes occurring in the regional banking structure. We intend to
differentiate The National Bank of Georgia from other financial institutions
primarily through personal service and strong involvement in our market.
Business Strategy
Management Philosophy. The National Bank of Georgia's philosophy is to
operate as a community bank emphasizing prompt, personalized customer service to
the individuals and businesses located in Athens, and northeastern Oconee
County. The National Bank of Georgia has adopted this philosophy in order to
attract customers and acquire market share now controlled by other financial
institutions in its primary service area. We believe that local ownership and
control will allow the bank to serve customers
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more efficiently and will aid in its growth and success. Additionally, we
believe that the expansion and growth of The National Bank of Georgia's services
will be a significant factor in its success. Accordingly, we will implement the
following operating and growth strategies:
Operating Strategy. In order to achieve the level of prompt, responsive
service that we believe will be necessary to attract customers and to develop
The National Bank of Georgia's image as a local bank with an individual focus,
we will employ the following operating strategies:
. Quality Employees. We will strive to hire highly trained and seasoned
staff. We plan to train the staff to answer questions about all of our
products and services so that the first employee the customer encounters
can resolve customer questions. We are committed to hiring experienced
and qualified staff, although this may result in higher personnel costs
than are typically experienced by similar financial institutions.
. Experienced Senior Management. The National Bank of Georgia's senior
management possesses extensive experience in the banking industry as
well as substantial business and banking contacts in the Athens and
Oconee County area. For example, the bank's principal executive officer,
William S. Huggins, has over 30 years of banking experience, the bank's
principal lending officer, Thomas Z. Lanier, III, has over 25 years of
banking experience and the bank's principal accounting officer, Michael
R. Carson, has over 17 years of banking experience. Collectively,
Messrs. Huggins, Lanier and Carson have over 35 years of banking
experience in the Athens and Oconee County area. See "Management."
. Community-Oriented Board of Directors. The National Bank of Georgia's
Board of Directors will consist predominately of long time residents of
the Athens and Oconee County area who represent the bank's target
markets and will be sensitive and responsive to the needs of the
community. Additionally, The National Bank of Georgia's Board of
Directors will represent a wide array of business experience and
community involvement. We expect that the directors will bring
substantial business and banking contacts to the bank as a result of
their experience and involvement.
. Community Involvement. All of The National Bank of Georgia's officers
and proposed directors are active in the Athens and Oconee County area,
and their continued active community involvement will provide an
opportunity to promote the bank and its products and services.
. Officer and Director Call Program. We intend to implement an active
officer and director call program to promote The National Bank of
Georgia. The purpose of this call program will be to visit prospective
customers and describe the bank's products and services.
. Highly Visible Site. The National Bank of Georgia's main office location
is visible and accessible and is near one of the busiest intersections
in the Athens MSA. We believe this will enhance the bank's image as a
strong competitor.
. Individual Customer Focus. The National Bank of Georgia will focus on
providing individualized service and attention to its target customers,
which include individuals and small- to medium-sized businesses. As its
employees, officers and directors become familiar with its customers,
the bank will respond to credit requests quickly and be more flexible in
approving loans based on collateral quality and personal knowledge of
the customer.
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. Local Decision Making. The National Bank of Georgia's position as the
only locally-owned community bank in Athens, and one of the only
locally-owned community banks serving Oconee County, will allow the bank
to be more responsive to customer requests and to the needs of customers
within the community.
. Marketing and Advertising. We plan to promote The National Bank of
Georgia and to develop its image as a community-oriented bank with an
emphasis on quality service and personal contact. We will also use media
services such as local newspapers, drive-time radio, direct mail
campaigns and television to promote its products and services.
Growth Strategy. Because we believe that growth and expansion of The
National Bank of Georgia's customer base will be a significant factor in the
bank's success, we plan to implement the following growth strategies:
. Capitalize on Trend Toward Consolidation. The National Bank of Georgia
will capitalize on its position as the only locally-owned community bank
in Athens and one of the only locally-owned community banks serving
Oconee County to attract individual and small- to medium-sized business
customers that may be underserved as a result of recent bank
consolidations.
. Attract Employees with Established Customer Relationships. We will hire
employees who have, through their experience in banking, established
significant customer relationships. By hiring employees with established
customer relationships, we believe The National Bank of Georgia will
grow more rapidly than it would if it were to hire employees who would
require time to develop a customer base.
. Offer Fee-Generating Products and Services. The National Bank of
Georgia's range of services, pricing strategies, interest rates paid and
charged, and hours of operation will be structured to attract its target
customers and increase its market share. The bank will offer small
businesses, professionals, entrepreneurs and consumers superior loan
services while charging aggressively for such services and using
technology and engaging third-party service providers to perform some
functions at a lower cost to increase fee income.
Lending Services
Lending Policy. The National Bank of Georgia is being established to
generally support the Athens and Oconee County area. Consequently, the bank
will aggressively lend money to creditworthy borrowers within this limited
geographic area. The National Bank of Georgia will emphasize both commercial
loans to small- and medium-sized businesses and professional concerns as well as
real estate-related loans, including construction loans for residential and
commercial properties, and primary and secondary mortgage loans for the
acquisition or improvement of personal residences. To a lesser extent, the bank
will also make consumer loans.
The National Bank of Georgia intends to maintain a balanced loan portfolio.
The bank estimates that real estate-related loans will comprise 50% of the
portfolio, commercial loans to small- to medium-sized businesses will comprise
40% of the portfolio, and consumer loans to individuals will comprise 10% of the
portfolio. The bank plans to avoid concentrations of loans to a single industry
or based on a single type of collateral. To address the risks inherent in
making loans, the bank will maintain an allowance for loan losses based on,
among other things, an evaluation of the bank's loan loss experience, the amount
of past due and nonperforming loans, current and anticipated economic changes
and the values of certain loan collateral. Based upon such factors, the bank's
management will make various
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<PAGE>
assumptions and judgments about the ultimate collectibility of the loan
portfolio and provide an allowance for potential loan losses based upon a
percentage of the outstanding balances and for specific loans. However, because
there are certain risks that cannot be precisely quantified, management's
judgment of the allowance is necessarily an approximation and imprecise. The
adequacy and methodology of the allowance for loan losses will be subject to
regulatory examination and compared to a peer group of financial institutions
identified by the bank's regulatory agencies.
Loan Approval and Review. The National Bank of Georgia's loan approval
policies will provide for various levels of officer lending authority. When the
amount of total loans to a single borrower exceeds that individual officer's
lending authority, either an officer with a higher lending limit or the bank's
Loan Committee will determine whether to approve the loan request. The bank
will not make any loans to any of its directors or executive officers unless its
Board of Directors approves the loan, the terms of the loan are no more
favorable than would be available to any other applicant with similar credit
factors not affiliated with the bank, and the loan otherwise complies with
applicable law.
Lending Limits. The National Bank of Georgia's lending activities will be
subject to a variety of lending limits imposed by law. Differing limits apply
in some circumstances based on the type of loan or the nature of the borrower,
including the borrower's relationship to the bank. In general, however, the
bank will be able to loan any one borrower a maximum amount equal to either: (i)
15% of the bank's capital and surplus or (ii) 25% of its capital and surplus if
the excess over 15% is within federal guidelines, which provide an exception to
the 15% limit for some types of secured debt. Based on its proposed minimum
capitalization and projected pre-opening expenses, the bank's initial lending
limit will be approximately $855,000 for loans not fully secured plus an
additional $570,000, or a total of approximately $1,425,000, for loans that meet
the federal guidelines. The bank has not yet established any minimum or maximum
loan limits other than the statutory lending limits described above. These
limits will increase or decrease as the bank's capital increases or decreases as
a result of its earnings or losses, among other reasons. The bank may sell
participations in its loans to other financial institutions in order to meet all
of the lending needs of loan customers.
Credit Risks. The principal economic risk associated with each category of
loans that The National Bank of Georgia expects to make is the creditworthiness
of the borrower. Borrower creditworthiness is affected by general economic
conditions and the strength of the services and retail market segments. General
economic factors affecting a borrower's ability to repay include interest,
inflation and employment rates, as well as other factors affecting a borrower's
customers, suppliers and employees.
With respect to real estate loans generally, the ability of a borrower to
repay a real estate loan will depend upon a number of economic factors,
including employment levels and fluctuations in the value of real estate. In
the case of a real estate purchase loan, the borrower may be unable to repay the
loans at the end of the loan term and may thus be forced to refinance the loan
at a higher interest rate, or, in certain cases, the borrower may default as a
result of its inability to refinance the loan. In either case, the risk of
nonpayment by the borrower is increased. In the case of a real estate
construction loan, there is generally no income from the underlying property
during the construction period, and the developer's personal obligations under
the loan are typically limited. Each of these factors increases the risk of
nonpayment by the borrower. The National Bank of Georgia will also face
additional credit risks to the extent that it engages in adjustable rate
mortgage loans ("ARMs"). In the case of an ARM, as interest rates increase, the
borrower's required payments increase, thus increasing the potential for
default. The marketability of all real estate loans, including ARMs, is also
generally affected by the prevailing level of interest rates.
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<PAGE>
The risks associated with commercial loans vary with many economic factors,
including the economy in the Athens and Oconee County area. The well established
financial institutions in the Athens and Oconee County area are likely to make
proportionately more loans to large-sized businesses than The National Bank of
Georgia will make. Many of the bank's anticipated commercial loans will likely
be made to small- to medium-sized businesses that may be less able to withstand
competitive, economic and financial pressures than larger borrowers. In
addition, because payments on loans secured by commercial property generally
depend to a large degree on the results of operations and management of the
properties, repayment of such loans may be subject, to a greater extent than
other loans, to adverse conditions in the real estate market or the economy.
Consumer loans generally involve more credit risks than other loans because
of the type and nature of the underlying collateral or because of the absence of
any collateral. Consumer loan repayments are dependent on the borrower's
continuing financial stability and are likely to be adversely affected by job
loss, divorce and illness. Furthermore, the application of various federal and
state laws, including federal and state bankruptcy and insolvency laws, may
limit the amount which can be recovered on such loans in the case of default. In
most cases, any repossessed collateral will not provide an adequate source of
repayment of the outstanding loan balance. Although the underwriting process for
consumer loans includes a comparison of the value of the security, if any, to
the proposed loan amount, The National Bank of Georgia cannot predict the extent
to which the borrower's ability to pay, and the value of the security, will be
affected by prevailing economic and other conditions.
Real Estate Loans. The National Bank of Georgia will make commercial real
estate loans, construction and development loans, and residential real estate
loans. These loans will include some commercial loans where the bank will take a
security interest in real estate out of an abundance of caution and not as the
principal collateral for the loan, but will exclude home equity loans, which are
classified as consumer loans.
. Commercial Real Estate. Commercial real estate loan terms generally will
be limited to five years or less, although payments may be structured on
a longer amortization basis. Interest rates may be fixed or adjustable.
The National Bank of Georgia will generally charge an origination fee.
We will attempt to reduce credit risk on our commercial real estate
loans by emphasizing loans on owner-occupied office and retail buildings
where the ratio of the loan principal to the value of the collateral as
established by independent appraisal does not exceed 80% and net
projected cash flow available for debt service equals 120% of the debt
service requirement. In addition, the bank may require personal
guarantees from the principal owners of the property supported by a
review by the bank's management of the principal owners' personal
financial statements. Risks associated with commercial real estate loans
include fluctuations in the value of real estate, new job creation
trends, tenant vacancy rates and the quality of the borrower's
management. The bank will limit its risk by analyzing borrowers' cash
flow and collateral value on an ongoing basis. The bank will compete for
real estate loans with competitors that are well established in its
primary service area.
. Construction and Development Loans. Construction and development loans
will be made both on a pre-sold and speculative basis. If the borrower
has entered into an agreement to sell the property prior to beginning
construction, then the loan is considered to be on a pre-sold basis. If
the borrower has not entered into an agreement to sell the property
prior to beginning construction, then the loan is considered to be on a
speculative basis. Construction and development loans are generally made
with a term of nine months and interest is paid periodically. The ratio
of the loan principal to the value of the collateral as established by
independent appraisal will not generally exceed 80%. Speculative loans
will be based on the borrower's financial strength and cash flow
position. Loan proceeds will be disbursed based on
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<PAGE>
the percentage of completion and only after the project has been
inspected by an experienced construction lender or appraiser. Risks
associated with construction loans include fluctuations in the value of
real estate and new job creation trends.
. Residential Real Estate. The National Bank of Georgia's residential real
estate loans will consist of residential first and second mortgage loans
and residential construction loans. The bank will offer fixed and
variable rates on our mortgages with the amortization of first mortgages
with maturity dates of three years and beyond. These loans will be made
consistent with the bank's appraisal policy and with the ratio of the
loan principal to the value of collateral as established by independent
appraisal generally not to exceed 95%. We expect these loan to value
ratios will be sufficient to compensate for fluctuations in real estate
market value and to minimize losses that could result from a downturn in
the residential real estate market. The National Bank of Georgia plans
to open a mortgage department to process home loans immediately upon
opening, which will allow it to originate long term mortgages to be sold
on the secondary market. The bank intends to limit interest rate risk
and credit risk on these loans by locking in the interest rate for each
loan with the secondary market investor and receiving the investor's
underwriting approval before funding the loan.
Commercial Loans. We expect that loans for commercial purposes in
various lines of businesses also will be one of the primary components of The
National Bank of Georgia's loan portfolio. The terms of these loans will vary by
purpose and by type of underlying collateral, if any. The bank will typically
make equipment loans for a term of five years or less at fixed or variable
rates, with the loan fully amortized over the term. Equipment loans generally
will be secured by the financed equipment, and the ratio of the loan principal
to the value of the financed equipment or other collateral will generally be 80%
or less. Loans to support working capital will typically have terms not
exceeding one year and will usually be secured by accounts receivable,
inventory, or other collateral, as well as personal guarantees of the principals
of the business. For loans secured by accounts receivable or inventory,
principal will typically be repaid as the assets securing the loan are converted
into cash, and for loans secured with other types of collateral, principal will
typically be due at maturity. The quality of the commercial borrower's
management and its ability both to evaluate properly changes in the supply and
demand characteristics affecting its markets for products and services and to
respond effectively to such changes are significant factors in a commercial
borrower's creditworthiness.
Consumer Loans. The National Bank of Georgia will make a variety of
loans to individuals for personal, family and household purposes, including
secured and unsecured installment and term loans, home equity loans and lines of
credit. Consumer loan repayments depend upon the borrower's financial stability
and are more likely to be adversely affected by divorce, job loss, illness and
personal hardships. Because many consumer loans are secured by depreciable
assets such as boats, cars, and trailers the loan should be amortized over the
useful life of the asset. The borrower will generally be required to be employed
for at least 12 months prior to obtaining the loan. The loan officer will review
the borrower's past credit history, past income level, debt history and, when
applicable, cash flow and determine the impact of all these factors on the
ability of the borrower to make future payments as agreed. We expect that the
principal competitors for consumer loans will be the established banks in the
Athens and Oconee County area.
32
<PAGE>
Investments
In addition to loans, The National Bank of Georgia will make other
investments primarily in obligations of the United States or obligations
guaranteed as to principal and interest by the United States and other taxable
securities. No investment in any of those instruments will exceed any
applicable limitation imposed by law or regulation. The Asset and Liability
Management Committee will review the investment portfolio on an ongoing basis in
order to ensure that the investments conform to the bank's policy as set by the
Board of Directors. The members of the committee will be Jack L. Barton,
Michael R. Carson, Ronald L. Hill and William S. Huggins. The committee will be
chaired by Tommy E. Warner. See "Management - Committees of the Boards of
Directors."
Asset and Liability Management
The Asset and Liability Management Committee will manage The National Bank
of Georgia's assets and liabilities and will strive to provide an optimum and
stable net interest margin, a profitable after-tax return on assets and return
on equity and adequate liquidity. The committee will conduct these management
functions within the framework of written loan and investment policies that the
bank will adopt. The committee will attempt to maintain a balanced position
between rate sensitive assets and rate sensitive liabilities. Specifically, it
will chart assets and liabilities on a matrix by maturity, effective duration
and interest adjustment period and attempt to manage any gaps in maturity
ranges.
Deposit Services
The National Bank of Georgia will establish solid core deposits, including
checking accounts, money market accounts, a variety of certificates of deposit
and IRA accounts. To attract deposits, the bank will employ an aggressive
marketing plan in the overall service area and feature a broad product line and
competitive services. The primary sources of deposits will be residents of, and
businesses and their employees located in, the Athens and Oconee County area.
NBG Bancorp plans to obtain these deposits through personal solicitation by its
officers and directors, direct mail solicitations and advertisements published
in the local media. It will generate deposits by offering a broad array of
competitively priced deposit services, including demand deposits, regular
savings accounts, transaction and investment money market deposits, certificates
of deposit, retirement accounts and other legally permitted deposit or funds
transfer services that may be offered to remain competitive in the market.
Other Banking Services
Other anticipated bank services include cash management services, safe-
deposit boxes, travelers checks, direct deposit of payroll and social security
checks, and automatic drafts for various accounts. The National Bank of Georgia
plans to become associated with a shared network of automated teller machines
that its customers will be able to use throughout Georgia and other regions.
The bank may offer annuities, mutual funds and other financial services through
a third party that has not yet been chosen. The bank also plans to offer
Mastercard(R) and VISA(R) credit card services through a correspondent bank as
an agent for the bank. The National Bank of Georgia will not exercise trust
powers during its early years of operation. It may in the future offer a
full-service trust department, but cannot do so without the prior approval of
the OCC.
The National Bank of Georgia will also offer its targeted commercial
customers a courier service that will pick up non-cash deposits from the
customer's place of business and deliver them to the bank. We believe that this
will be an important service for our customers because the bank will initially
have only one location.
33
<PAGE>
Marketing and Advertising
The National Bank of Georgia's target customers will be the residents and
the small- to medium-sized businesses and their employees located in the Athens
and Oconee County area.
We plan to use a targeted marketing approach through local newspapers,
radio advertisements during peak driving times, direct mail campaigns, and
television spots as necessary. Additionally, we plan to sponsor community
activities on an ongoing basis.
Employees
When it begins operations, The National Bank of Georgia will have
approximately ten employees and one part-time employee. We do not expect NBG
Bancorp to have any employees who are not also employees of the bank.
William S. Huggins is the President of NBG Bancorp and will be the
President and Chief Executive Officer of The National Bank of Georgia. Mr.
Huggins has over 30 years of banking experience, including extensive experience
in the areas of finance and management.
Thomas Z. Lanier, III will be The National Bank of Georgia's senior lending
officer. Mr. Lanier has over 25 years of banking experience, including
extensive lending and management experience.
Michael R. Carson will be in charge of The National Bank of Georgia's
operations. Mr. Carson has over 17 years of banking experience, including
extensive experience in the areas of finance and operations.
See "Management" for additional information about our executive officers
and their qualifications.
Facilities
We are located at 2234 West Broad Street in Athens, Georgia. On June 1,
1999, we entered into a letter agreement with Century South Banks, Inc., the
owner of our West Broad Street facility, under which Century South will sell us
the facility when the conditions to this offering are met and subscription funds
are released from the escrow account. See "Terms of the Offering - Escrow of
Subscription Funds." The purchase price, which is good until March 1, 2000, or
when subscription funds are released from the escrow account - whichever occurs
first - is $1,078,052. Until we purchase the facility, we have agreed to rent
it from Century South at a rate of $3,000 per month plus utilities. Georgia
First, our escrow agent, is a wholly-owned subsidiary of Century South.
The facility consists of approximately 3,000 square feet and includes one
vault, three offices, a loan operations area, five teller stations, three drive-
in windows, and one automated teller machine. We plan to update and improve the
facility, the estimated costs of which are expected to total $95,000. We do not
anticipate any material expenditures in connection with complying with
environmental laws related to our occupancy of the facility.
Located within 200 yards of one of the busiest intersections in The
National Bank of Georgia's primary service area, our facility offers high
visibility and ample parking in an area with significant traffic. We believe
our location is the central location for business, residential, commuting and
shopping in the bank's primary service area.
34
<PAGE>
Legal Proceedings
As of the date of this prospectus, there were no material legal proceedings to
which we, or any of our properties, were subject.
35
<PAGE>
MANAGEMENT
Proposed Directors and Executive Officers of NBG Bancorp and The National Bank
of Georgia
The following table sets forth, for the directors and executive officers of
NBG Bancorp, (i) their names, addresses and ages at November 1, 1999, (ii) their
respective positions with us, (iii) the number of shares of common stock they
intend to purchase in the offering, (iv) the percentage of outstanding shares
such number will represent, and (v) the number of shares subject to warrants and
options that they will receive when we complete this offering.
<TABLE>
<CAPTION>
Percentage of
Outstanding Shares Shares
of minimum/maxi- Shares Subject Subject to
Name and Address (Age) Positions to Be Held Number of Shares mum offerings to Warrants Options
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class I Directors:
(Initial term expiring in 2000)
John Harold Barrett (45) Director 50,000 8.2/6.3 50,000 -0-
325 Red Oak Trail
Athens, Georgia 30606
Jack Lee Barton (45) Director 25,000 4.1/3.1 25,000 -0-
1100 Shoals Pointe
Athens, Georgia 30606
Robert E. Burton (51) Director 50,000 8.2/6.3 50,000 -0-
105 Post Oak Trail
Athens, Georgia 30606
Michael R. Carson (39) Director, Executive 10,000 1.6/1.3 10,000 12,853*
210 Waterford Way Vice President
Athens, Georgia 30606
Class II Directors:
(Initial term expiring in 2001)
Michael S. Gautreaux (50) Director 15,000 2.5/1.9 15,000 -0-
1522 Highway 330
Bogart, Georgia 30622
Ronald Lewis Hill (47) Director 10,000 1.6/1.3 10,000 -0-
1516 Annapolis Way
Grayson, Georgia 30017
William S. Huggins (52) Director, President and 25,000 4.1/3.1 25,000 20,884*
1051 Ridge Pointe Chief Executive Officer
Athens, Georgia 30606
Henry D. Joiner (48) Director 25,000 4.1/3.1 25,000 -0-
410 Millstone Circle
Athens, Georgia 30606
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Percentage of
Outstanding Shares Shares
of minimum/maxi- Shares Subject Subject to
Name and Address (Age) Positions to Be Held Number of Shares mum offerings to Warrants Options
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class III Directors:
(Initial term expiring 2002)
Thomas Z. Lanier, III (47) Director, Executive 22,500 3.7/2.8 22,500 15,263*
240 Oak Bend Drive Vice President
Athens, Georgia 30606
Ted R. Ridlehuber (60) Director 40,000 6.6/5.0 40,000 -0-
211 McWhorter Drive
Athens, Georgia 30606
Thomas W. Scott (36) Director 20,000 3.3/2.5 20,000 -0-
265 Lullwater Road
Athens, Georgia 30606
Tommy E. Warner (54) Director 50,000 8.2/6.3 50,000 -0-
180 Wedgefield Lane
Athens, Georgia 30606
Claude Williams, Jr. (76) Director 30,000 4.9/3.8 30,000 -0-
570 Springdale Street
Athens, Georgia 30606 --------------- ------- -------- ------- ------
All Proposed Directors and 372,500 61/47 372,500 49,000
Executive Officers as a Group
(13 persons)
</TABLE>
_______________
* Represents the maximum number of incentive stock options to be granted if The
National Bank of Georgia achieves performance goals. See "Executive
Compensation - Employment Agreements.
Each person listed above has been a director of NBG Bancorp since
September 23, 1999. Directors of NBG Bancorp serve staggered terms, which means
that one-third of the directors will be elected each year at NBG Bancorp's
annual meeting of shareholders. The initial term of the Class I directors
expires in 2000, the initial term of the Class II directors expires in 2001, and
the initial term of the Class III directors expires in 2002. Thereafter, each
director will serve for a term of three years. NBG Bancorp's officers are
appointed by the Board of Directors and hold office at the will of the Board.
See "Important Provisions of NBG Bancorp's Articles of Incorporation and
Bylaws."
Each person listed above is also a proposed director of The National Bank
of Georgia. Each of the bank's proposed directors will, upon approval of the
OCC, serve until the bank's first shareholders' meeting, which will convene
shortly after NBG Bancorp receives its charter. NBG Bancorp, as the sole
shareholder of The National Bank of Georgia, will nominate each proposed
director to serve as director of the bank at that meeting. After the first
shareholders' meeting, directors of the bank will serve for a term of one year
and will be elected by NBG Bancorp each year at the bank's annual meeting of
shareholders. The bank's officers will be appointed by its Board of Directors
and will hold office at the will of the Board.
37
<PAGE>
John Harold Barrett has been in the construction and development business
in the Southeast and NBG Bancorp's primary service area since finishing his
education at The University of Georgia in 1974. He is the founder of Barrett
Properties, Inc., a property management company that manages his family's real
estate interests, including approximately 1,500 rental units in the Southeast, a
large number of which are located in Athens. Mr. Barrett is currently on the
board of trustees of Athens Academy and has served on the board of directors of
the Athens YMCA, the Chamber of Commerce, and the Athens Area Homebuilders
Association.
Jack Lee Barton is the majority owner of Lintel, Inc., a holding company
for Hart Telephone Company of Hartwell, Georgia. He has been employed by the
company since 1976 and currently serves as its chief executive officer. Mr.
Barton has been instrumental in the development of the YMCA of Hartwell and was
the developer of Catteegee Golf Club of Hartwell. He and his family currently
reside in Athens and are active in the community. Mr. Barton graduated from The
University of Georgia in 1976 with a business degree. He is the past president
of the Hart County Chamber of Commerce and the Hartwell Rotary Club. Mr. Barton
is also the past president of the Georgia Telephone Association and was for six
years director of the National Telephone Association. Mr. Barton has served on
the advisory board of the Rural Telephone Finance Cooperative, a financial
services institution lending to electric utilities and telephone companies
throughout the United States.
Robert E. Burton is the co-founder of Flowers, Inc., the largest wholesaler
of balloons and gift items in the United States. He has been the company's
chief executive officer since 1971. Mr. Burton graduated from The University of
Georgia in 1971. Mr. Burton is active in several real estate investment
partnerships and is an active investor in commercial banking ventures.
Michael R. Carson most recently served as senior vice president and chief
financial officer of The Georgia National Bank (which was recently purchased by
SouthTrust, National Association), a position he had held since 1989. In this
capacity, he was responsible for all bank operations, bank investments,
personnel, accounting, and data processing activities. Mr. Carson graduated
from The University of Georgia in 1981 with a business degree. Mr. Carson also
earned a graduate degree in banking from The Banking School of the South in
Baton Rouge, Louisiana in 1991. Mr. Carson has served as an instructor in bank
operations for the Community Bankers Association of Georgia for the last seven
years. He also has served on the board of directors of the Hope Haven School
for Adult Mentally Handicapped Persons since 1991. Mr. Carson has further
served on the local board of directors of the American Heart Association and has
been a mentor in the Clarke County School System.
Michael Sidney Gautreaux co-owns Athens Insurers, an insurance agency
selling a wide range of insurance products to large and small businesses and
individuals. He has been an owner of the company since 1974. Mr. Gautreaux
served as an advisory board member for Bank South's (now Bank of America's)
Athens branches for one year. He has a degree in industrial engineering from
the University of Rhode Island and an MBA from The University of Georgia. Mr.
Gautreaux is past chairman of the Independent Insurance Agents of America, where
he served on the E&O Professional Liability Committee, and is currently a
President's Club member of Selective Insurance Agents. Mr. Gautreaux is active
in the local community and serves as a member of the board of trustees of Athens
Academy. He is also on the board of trustees of the Athens YMCA and serves as
committee chairman of the membership committee of the Athens Chamber of
Commerce.
Ronald Lewis Hill owns two automobile dealerships in Athens, University
Motors, Inc., a Ford and Mazda dealership, and University Automotive, Inc., a
Lincoln, Mercury and Jeep dealership. Mr. Hill has owned and operated these two
dealerships since 1994. Mr. Hill attended DeKalb Junior College and has been
involved in the automobile business in Atlanta and Athens for over 23 years.
Mr. Hill is a member of the Athens Rotary Club.
38
<PAGE>
William S. Huggins most recently served as president and chief executive
officer and a director of The Georgia National Bank, a position he had held
since 1993. From 1992 to 1993, he served as president and chief executive
officer of Embry National Bank in Atlanta. From 1969 to 1991, Mr. Huggins was
employed by Bank South Corporation, Atlanta, where he served as executive vice
president of its corporate banking group. A native of Athens, Mr. Huggins
graduated in 1969 from The University of Georgia with a business degree. He is
also a graduate of The Banking School of the South in Baton Rouge, Louisiana.
Mr. Huggins is on the board of directors of the Athens YMCA. He is also a member
of the Athens Rotary Club and serves as an advisory director of Presidential
Financial Corporation of Atlanta.
Henry D. Joiner is a real estate broker with Joiner and Associates, an
Athens real estate company he has owned since 1996. Prior to 1996, Mr. Joiner
owned ReMax Associates, an Athens real estate company, and Athena Management
Company, a real estate management company based in Athens. He is a graduate of
Gainesville Junior College and attended The University of Georgia.
Thomas Z. Lanier, III most recently served as executive vice president and
a director of The Georgia National Bank, a position he had held since 1993.
Prior to joining The Georgia National Bank, he had served as vice president and
loan officer for C&S National Bank of Athens (now Bank of America). Mr. Lanier
graduated from The University of Georgia in 1974 with a marketing degree. He is
active in the Athens Little League program and has served as its president for
the last four years. He also serves as the treasurer of the Clarke Central
Booster Club.
Ted Ruff Ridlehuber owns Cannon Financial Institute, a financial services
training and consulting company headquartered in Athens that serves regional
banking companies throughout the country. Mr. Ridlehuber has served as chief
executive officer of the company since 1993. Prior to that time, he was senior
vice president with the C&S National Bank of Athens (now Bank of America) from
1964 to 1983. Mr. Ridlehuber was an organizer and a director of The Georgia
National Bank, where he served as chairman of its strategic planning committee.
Mr. Ridlehuber graduated from The University of Georgia in 1962 and earned his
law degree from The University of Georgia in 1963.
Thomas Wells Scott is a certified public accountant who has served a
variety of business and individual clients through his firm, Thomas W. Scott and
Associates, since 1989. Mr. Scott graduated from The University of Georgia with
an accounting degree in 1986. In addition to his accounting practice, Mr. Scott
is a partner in a number of commercial real estate projects.
Tommy Edward Warner has owned and served as president of several
Blockbuster Video franchises, since 1990. Mr. Warner also manages Warner
Properties, LLC, a real estate investment company owning residential properties.
Mr. Warner served as a director of The Georgia National Bank, where he was a
member of the asset/liability committee. Mr. Warner graduated from The
University of Georgia in 1968 with a business degree.
Claude Williams, Jr. has managed his family's controlling interest in
Allison Outdoor Advertising, Ltd., and co-owned Williamson Outdoor Advertising
since 1997. Mr. Williams was an organizer of The Georgia National Bank and
served as its chairman. He also has served as a director of First American Bank
of Athens and Citizens Bank of Gainesville. Mr. Williams has been in the media
business for much of his life, having owned interests in radio stations, outdoor
advertising companies, and newspapers. Mr. Williams is currently a trustee of
The University of Georgia Foundation and is past chairman of the North Georgia
College board of trustees. He is a past president of the Athens Chamber of
Commerce, past chairman of the Athens Regional Hospital Development Council and
is active in many other charitable organizations.
39
<PAGE>
Committees of the Boards of Directors
We have established the following committees. Other committees may be
established as needed once we begin banking operations.
Audit, Compliance and Compensation Committee. The Audit, Compliance and
Compensation Committee will recommend to the Board of Directors of NBG Bancorp
the independent public accountants to be selected to audit NBG Bancorp's and The
National Bank of Georgia's annual financial statements and will approve any
special assignments given to the independent public accountants. The committee
also will review the planned scope of the annual audit, any changes in
accounting principles and the effectiveness and efficiency of the bank's
internal accounting staff. Additionally, the committee will provide oversight
to NBG Bancorp's and The National Bank of Georgia's compliance staff for
adherence with regulatory rules and regulations, including the Community
Reinvestment Act. The committee further will establish compensation levels for
officers of NBG Bancorp and The National Bank of Georgia, review management
organization and development, review significant employee benefit programs and
establish and administer executive compensation programs, including the Stock
Option Plan described in this prospectus. The committee will be chaired by
Thomas W. Scott, and also will include Robert E. Burton, Michael S. Gautreaux,
and Ted R. Ridlehuber.
Loan Committee. The National Bank of Georgia's Loan Committee will review
any loan request made by a potential borrower over an established credit
threshold for compliance with the bank's lending policies and federal and state
rules and regulations governing extensions of credit. After making this review,
the committee will decide whether to extend credit to the potential borrower.
The committee will be chaired by Claude Williams, Jr., and also will include
John M. Barrett, William S. Huggins, Henry D. Joiner, and Thomas Z. Lanier, III.
Asset and Liability Management Committee. The Asset and Liability
Management Committee will provide guidance to NBG Bancorp and The National Bank
of Georgia in balancing the yields and maturities in the bank's loans and
investments to its deposits. The committee will be chaired by Tommy E. Warner,
and also will include Jack L. Barton, Michael R. Carson, Ronald L. Hill, and
William S. Huggins.
40
<PAGE>
EXECUTIVE COMPENSATION
1999 Compensation
The following table shows information for 1999 with regard to compensation
for services rendered in all capacities to NBG Bancorp by its President and
Chief Executive Officer. No other executive officer earned more than $100,000
in salary and bonus in 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
----------------------------------------------------------------------
Name and Other Annual
Principal Position Year Salary ($) Bonus ($) Compensation ($)
- -------------------------- --------------------- --------------------- --------------------- ----------------
<S> <C> <C> <C> <C>
William S. Huggins, 1999 44,333(1) -0- -0-
President and Chief
Executive Officer
</TABLE>
(1) Represents salary accrued since June 29, 1999. Mr. Huggins' salary will
continue to accrue at a rate of $11,083.33 per month until The National Bank
of Georgia receives final regulatory approvals to open. See "- Employment
Agreements."
Employment Agreements
NBG Bancorp and The National Bank of Georgia have entered into employment
agreements with William S. Huggins, Thomas Z. Lanier, III and Michael R. Carson
regarding Mr. Huggins' employment as President and Chief Executive Officer of
the bank, Mr. Lanier's employment as Executive Vice President-Lending of the
bank and Mr. Carson's employment as Executive Vice President-Operations of the
bank. Under the terms of the agreements, Mr. Huggins will receive a base salary
of $133,000 per year, Mr. Lanier will receive a base salary of $99,000 per year
and Mr. Carson will receive a base salary of $84,000 per year. These salaries
have been accruing since the date The National Bank of Georgia's charter
application was filed with the OCC (June 29, 1999) and will continue to do so
until the bank receives final regulatory approvals to open from the OCC and the
FDIC. As soon as practicable after The National Bank of Georgia receives these
final approvals, the bank will pay Messrs. Huggins, Lanier and Carson their
accrued compensation in a lump sum payment and, thereafter, in bi-weekly
installments. The agreements provide that at the end of each year, Messrs.
Huggins, Lanier and Carson will be entitled to receive a cash bonus, to be
awarded by NBG Bancorp's Board of Directors, based on the bank's performance.
Additionally, the agreements provide that NBG Bancorp will grant incentive stock
options to purchase a number of shares of NBG Bancorp common stock also based on
the bank's performance. If granted, the options will become exercisable in
equal annual increments of 20% beginning on the one-year anniversary of the date
of grant and will have an exercise price of $10.00 per share. The aggregate and
maximum number of shares that would be granted under the options in the event
all performance goals were achieved is 49,000 (Messrs. Huggins, Lanier and
Carson would each receive 20,884 shares, 15,263 shares and 12,853 shares,
respectively). NBG Bancorp will also provide an automobile to Mr. Huggins.
41
<PAGE>
The initial term of the employment agreements commenced on June 29, 1999
and will continue for a period of three years. At the end of the first year of
each agreement, and at the end of each year thereafter, each agreement will be
extended for a successive one-year period unless one of the parties to the
agreement notifies the other parties of his or its intent not to extend the
agreement. Employment under the employment agreements may be terminated:
. by NBG Bancorp for cause (as defined in the agreements);
. by the employee if NBG Bancorp breaches any material provision of his
agreement; or
. upon employee's death or disability.
If NBG Bancorp or The National Bank of Georgia terminates employment
without cause or the employee terminates employment with cause, the company or
the bank will be required to pay the compensation and provide the health and
dental insurance coverage due under the agreement for a period equal to the
greater of 12 months from the date of termination or the remaining term of the
agreement. If the employment of the employee is terminated for any reason, the
employee will be prohibited from competing with NBG Bancorp or The National Bank
of Georgia or soliciting its customers or employees within the geographic area
set forth in the agreement for two years after the date of termination. If the
employee provides notice of termination of employment within 90 days following a
change of control (as defined in each agreement) NBG Bancorp will pay the
employee's then-current compensation and benefits for 12 months after
termination.
Director Compensation
The directors of NBG Bancorp and The National Bank of Georgia will not be
compensated separately for their services as directors until we become
cumulatively profitable. Thereafter, we will adopt compensatory policies for
our directors that conform to applicable law.
Stock Option Plan
General. NBG Bancorp has adopted a Stock Option Plan that provides NBG
Bancorp with the flexibility to grant the stock incentives described in this
section of the prospectus to key employees, officers, directors, consultants and
advisers of NBG Bancorp or The National Bank of Georgia for the purpose of
giving them a proprietary interest in, and to encourage them to remain in the
employ or service of, the company or the bank. NBG Bancorp's Board of Directors
has reserved 70,000 shares of NBG Bancorp common stock - an amount equal to
approximately 11.5% of the minimum and approximately 7.0% of the maximum amount
of shares of stock to be sold in this offering - for issuance under the plan.
The number of shares reserved for issuance may change in the event of a stock
split, recapitalization or similar event as described in the plan.
Administration. It is expected that NBG Bancorp's Audit, Compliance and
Compensation Committee, which is comprised of at least two non-employee
directors appointed by NBG Bancorp's Board of Directors, will administer the
plan. NBG Bancorp's Board of Directors will consider the standards contained in
both Section 162(m) of the Internal Revenue Code of 1986, as currently in effect
and Rule 16(b)(3) under the Securities Exchange Act of 1934, as currently in
effect, when appointing members to the Compensation Committee. The Audit,
Compliance and Compensation Committee and NBG Bancorp's Board of Directors will
have the authority to grant awards under the plan, to determine the terms of
each award, to interpret the provisions of the plan and to make all other
determinations that they may deem necessary or advisable to administer the
plan.
42
<PAGE>
The plan permits the Audit, Compliance and Compensation Committee or NBG
Bancorp's Board of Directors, to grant stock options to eligible persons.
Options may be granted on an individual basis or to a group of eligible persons.
Accordingly, the Audit, Compliance and Compensation Committee or NBG Bancorp's
Board of Directors, will determine, within the limits of the plan, the number of
shares of NBG Bancorp 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 plan provides for incentive stock options and non-
qualified stock options. The Audit, Compliance and Compensation Committee or
NBG Bancorp's Board of Directors, will determine whether an option is an
incentive stock option or a non-qualified stock option when it grants the
option, and the option will be evidenced by an agreement describing the material
terms of the option.
The Audit, Compliance and Compensation Committee or NBG Bancorp's Board of
Directors will determine the exercise price of an option. The exercise price of
an incentive stock option may not be less than the fair market value of NBG
Bancorp common stock on the date of the grant, or less than 110% of the fair
market value if the participant owns more than 10% of NBG Bancorp's outstanding
common stock. When the incentive stock option is exercised, NBG Bancorp will be
entitled to place a legend on the certificates representing the shares of common
stock purchased upon exercise of the option to identify them as shares of common
stock purchased upon the exercise of an incentive stock option. The exercise
price of non-qualified stock options may be greater than, less than or equal to
the fair market value of the common stock on the date that the option is
awarded, based upon any reasonable measure of fair market value. The committee
may permit the exercise price to be paid in cash or by the delivery of
previously owned shares of common stock, and, if permitted in the applicable
option agreement, through a cashless exercise executed through a broker or by
having a number of shares of common stock otherwise issuable at the time of
exercise withheld.
The Audit, Compliance and Compensation Committee or NBG Bancorp's Board of
Directors, will also determine the term of an option. The term of an incentive
stock option or non-qualified stock option may not exceed ten years from the
date of grant, but any incentive stock option granted to a participant who owns
more than 10% of NBG Bancorp's outstanding common stock will not be exercisable
after the expiration of five years after the date the option is granted.
Subject to any further limitations in the applicable agreement, if a
participant's employment terminates, an incentive stock option will terminate
and become unexercisable no later than three months after the date of
termination of employment. If, however, termination of employment is due to
death or disability, one year will be substituted for the three-month period.
Incentive stock options are also subject to the further restriction that the
aggregate fair market value, determined as of the date of the grant, of NBG
Bancorp common stock as to which any incentive stock option first becomes
exercisable in any calendar year is limited to $100,000 per recipient. If
incentive stock options covering more than $100,000 worth of NBG Bancorp common
stock first become exercisable in any one calendar year, the excess will be non-
qualified options. For purposes of determining which options, if any, have been
granted in excess of the $100,000 limit, options will be considered to become
exercisable in the order granted.
Termination of Options. The terms of particular options may provide that
they terminate, among other reasons, upon the holder's termination of employment
or other status with NBG Bancorp or The National Bank of Georgia, upon a
specified date, upon the holder's death or disability, or upon the occurrence of
a change in control of NBG Bancorp. An agreement may provide that if the holder
dies or becomes disabled, the holder's estate or personal representative may
exercise the option. The Audit, Compliance and Compensation Committee or NBG
Bancorp's Board of Directors, may, within the terms of the plan and the
applicable agreement, cancel, accelerate, pay or continue an option that would
otherwise terminate for the reasons discussed above.
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Reorganizations. The plan provides for an appropriate adjustment in the
number and kind of shares subject to unexercised options in the event of any
change in the outstanding shares of common stock by reason of a stock split,
stock dividend, combination or reclassification of shares, recapitalization,
merger or similar event. In the event of some types of corporate
reorganizations, the Audit, Compliance and Compensation Committee or NBG
Bancorp's Board of Directors, may, within the terms of the plan and the
applicable agreement, substitute, cancel, accelerate, cancel for cash or
otherwise adjust the terms of an option.
Amendment and Termination of the Plan. NBG Bancorp's Board of Directors
has the authority to amend or terminate the plan. NBG Bancorp's Board of
Directors is not required to obtain shareholder approval to terminate the plan
or, generally, to amend 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. However, any
action by NBG Bancorp's Board of Directors may not adversely affect the rights
of a holder of a stock option without the holder's consent.
Federal Income Tax Consequences. The following discussion outlines
generally the federal income tax consequences of participation in the plan.
Individual circumstances may vary and each participant should rely on his or her
own tax counsel for advice regarding federal income tax treatment under the
plan.
. Incentive Stock Options. A participant will not recognize income upon
the grant of an incentive stock option. A participant who exercises an
incentive stock option will not be taxed when he or she exercises the
option or a portion of the option. Instead, the participant will be
taxed when he or she sells the shares of common stock purchased upon
exercise of the incentive stock option. The participant will be taxed on
the difference between the price he or she paid for the NBG Bancorp
common stock and the amount for which he or she sells the stock. If the
participant does not sell the shares of NBG Bancorp common stock prior
to two years from the date of grant of the incentive stock option and
one year from the date the stock is transferred to him or her, the gain
will be a capital gain and NBG Bancorp will not get a corresponding
deduction. If the participant sells the shares of NBG Bancorp common
stock at a gain before that time, the difference between the amount the
participant paid for the stock and the lesser of its fair market value
on the date of exercise or the amount for which the stock is sold will
be taxed as ordinary income and NBG Bancorp will be entitled to a
corresponding tax deduction. If the participant sells the shares of NBG
Bancorp common stock for less than the amount he or she paid for the
stock prior to the one- or two-year period indicated, no amount will be
taxed as ordinary income and the loss will be taxed as a capital loss.
Exercise of an incentive stock option may subject a participant to, or
increase a participant's liability for, the alternative minimum tax.
. Non-Qualified Options. A participant will not recognize income upon the
grant of a non-qualified option or at any time before the exercise of
the option or a portion of the option. When the participant exercises a
non-qualified option or portion of the option, he or she will recognize
compensation taxable as ordinary income in an amount equal to the excess
of the fair market value of NBG Bancorp common stock on the date the
option is exercised over the price paid for the stock, and NBG Bancorp
will then be entitled to a corresponding deduction.
Depending upon the time period for which shares of NBG Bancorp common stock
are held after exercising an option, the sale or other taxable disposition of
shares acquired by exercising a non-qualified option generally will result in a
short- or long-term capital gain or loss equal to the difference
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between the amount realized on the disposition and the fair market value of such
shares when the non-qualified option was exercised.
Special rules apply to a participant who exercises a non-qualified option
by paying the exercise price, in whole or in part, by the transfer of shares of
NBG Bancorp common stock to NBG Bancorp and to a participant who is subject to
the reporting requirements of Section 16 of the Securities Exchange Act of 1934,
as currently in effect.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NBG Bancorp and The National Bank of Georgia may have banking and other
business transactions in the ordinary course of business with directors and
officers of the company and the bank, including members of their families or
corporations, partnerships or other organizations in which these directors and
officers have a controlling interest. If transactions between NBG Bancorp or
The National Bank of Georgia and any of their directors or officers occur, the
transaction:
. will be on substantially the same terms, including price or interest
rate and collateral, as those prevailing at the time for comparable transactions
with unrelated parties, and any banking transactions will not be expected to
involve more than the normal risk of collectibility or present other unfavorable
features to the company or the bank;
. will be on terms no less favorable than could be obtained from an
unrelated third party; and
. will be approved by a majority of the directors, including a majority of
the directors who do not have an interest in the transaction.
DESCRIPTION OF CAPITAL STOCK OF NBG BANCORP
Common Stock
NBG Bancorp's Articles of Incorporation authorize NBG Bancorp to issue up
to 10,000,000 shares of common stock, par value $1.00 per share, of which up to
800,000 shares will be issued pursuant to this offering. As of the date of this
prospectus, 70,000 shares of NBG Bancorp common stock, or an amount equal to
approximately 11.5% of the minimum and approximately 7.0% of the maximum number
of shares of NBG Bancorp common stock to be sold in this offering, were reserved
for issuance upon the exercise of stock options to be issued under NBG Bancorp's
Incentive Stock Option Plan and 372,500 shares of NBG Bancorp common stock were
reserved for issuance upon the exercise of warrants to be issued to our
organizers.
All shares of NBG Bancorp common stock will be entitled to share equally in
dividends from legally available funds, when, as and if declared by NBG
Bancorp's Board of Directors. Upon NBG Bancorp's voluntary or involuntary
liquidation or dissolution, all shares of NBG Bancorp common stock will be
entitled to share equally in all of NBG Bancorp's assets that are available for
distribution to the shareholders. NBG Bancorp does not anticipate paying any
cash dividends on NBG Bancorp common stock in the near future. Each holder of
NBG Bancorp common stock will be entitled to one vote for each share on all
matters submitted to shareholders. Holders of NBG Bancorp common stock will not
have any right to acquire authorized but unissued capital stock of NBG Bancorp
whenever it issues new shares of capital stock. No cumulative voting right with
respect to the election of directors, redemption rights, sinking fund provisions
or conversion rights apply to NBG Bancorp common stock. All shares of NBG
Bancorp common stock issued in the offering will be fully paid and non-
assessable.
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Preferred Stock
NBG Bancorp's Articles of Incorporation also authorize its Board of
Directors to issue up to 1,000,000 shares of preferred stock, par value $1.00
per share. NBG Bancorp's Board of Directors may determine the terms of the
preferred stock. Preferred stock may have voting rights, subject to applicable
law and determination by NBG Bancorp's Board of Directors. Although NBG Bancorp
has no present plans to issue any preferred stock, the ownership and control of
NBG Bancorp by the holders of the common stock would be diluted if NBG Bancorp
were to issue preferred stock that had voting rights.
Organizers' Warrants
Our organizers intend to purchase approximately 372,500 shares of NBG
Bancorp common stock in this offering at a price of $10.00 per share. This
represents approximately 61% of the 610,000 shares that will be outstanding
after completing the minimum offering, or 47% of the 800,000 shares that will be
outstanding if the maximum offering is completed. Our organizers have
guaranteed a line of credit from Georgia First for an amount up to $250,000.
In recognition of the financial risks undertaken by personally guaranteeing
the line of credit with Georgia First, NBG Bancorp will issue to our organizers
warrants to purchase additional shares of NBG Bancorp common stock. NBG Bancorp
will issue to each organizer a warrant to purchase one share of common stock for
each share the organizer purchases in this offering. Accordingly, based on our
organizers' intent to purchase approximately 372,500 shares of NBG Bancorp
common stock in this offering, we expect the organizers to be able to purchase
up to 372,500 more shares through the exercise of warrants. The warrants will
become exercisable in 20% annual increments beginning on the one-year
anniversary of the date The National Bank of Georgia opens for business.
Warrants will remain exercisable for the ten year period following the first
anniversary of the date on which the bank opens for business. Each share
purchased under a warrant will be issued at a price of $10.00, subject to
adjustment for stock splits, recapitalizations or other similar events.
Additionally, if either NBG Bancorp's or The National Bank of Georgia's capital
falls below the minimum level mandated by its primary federal regulator, NBG
Bancorp may be directed to require the organizers to exercise or forfeit their
warrants. If all of the warrants were exercised, our organizers would own
approximately 76% of the shares of NBG Bancorp common stock outstanding after
the minimum offering and 64% of the outstanding shares after the maximum
offering.
IMPORTANT PROVISIONS OF NBG BANCORP'S
ARTICLES OF INCORPORATION AND BYLAWS
Protective Provisions
General. Shareholders' rights and related matters are governed by the
Georgia Business Corporation Code and NBG Bancorp's Articles of Incorporation
and Bylaws. NBG Bancorp's Articles of Incorporation and Bylaws contain
protective provisions that would have the effect of impeding an attempt to
change or remove NBG Bancorp's management or to gain control of NBG Bancorp if a
particular transaction was not supported by NBG Bancorp's Board of Directors.
These provisions are discussed in more detail below. In general, the purpose of
these provisions is to further and protect NBG Bancorp's interests and those of
its shareholders as appropriate under the circumstances, including if the Board
of Directors determines that a sale of control is in the best interests of NBG
Bancorp and its shareholders, by enhancing the Board of Director's ability to
maximize the value to be received by shareholders upon such a sale.
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Although NBG Bancorp's management believes the protective provisions are
beneficial to NBG Bancorp's shareholders, they also may tend to discourage some
takeover bids. As a result, NBG Bancorp's shareholders may be deprived of
opportunities to sell some or all of their shares at prices that represent a
premium over prevailing market prices. On the other hand, defeating undesirable
acquisition offers can be an expensive and time-consuming process. To the
extent that the protective provisions discourage undesirable proposals, NBG
Bancorp may be able to avoid those expenditures of time and money.
The protective provisions also may discourage open market purchases by a
potential acquirer. These purchases could increase the market price of NBG
Bancorp common stock temporarily, enabling shareholders to sell their shares at
a price higher than that which otherwise would prevail. In addition, the
provisions could decrease the market price of NBG Bancorp common stock by making
the stock less attractive to persons who invest in securities in anticipation of
price increases from potential acquisition attempts. The provisions also could
make it more difficult and time consuming for a potential acquirer to obtain
control of NBG Bancorp by replacing its Board of Directors and management.
Furthermore, the provisions could make it more difficult for NBG Bancorp's
shareholders to replace the Board of Directors or management, even if a majority
of the shareholders believes that replacing them would be in NBG Bancorp's best
interests.
The protective provisions contained in NBG Bancorp's Articles of
Incorporation and Bylaws are discussed more fully below.
Preferred Stock. The existence of preferred stock could impede a takeover
of NBG Bancorp without the approval of its Board of Directors. This is because
NBG Bancorp's Board of Directors could issue shares of preferred stock to
persons friendly to current management, which could render more difficult or
discourage any attempt to gain control of NBG Bancorp through a proxy contest,
tender offer, merger or otherwise. In addition, the issuance of shares of
preferred stock with voting rights may adversely affect the rights of the
holders of NBG Bancorp common stock and, in certain circumstances, could
decrease its market price.
Staggered Terms for Board of Directors. NBG Bancorp's Articles of
Incorporation provide that NBG Bancorp's Board of Directors will be divided into
three classes. Directors serve staggered terms, which means that one-third of
the directors will be elected each year at NBG Bancorp's annual meeting of
shareholders. The initial term of the Class I directors expires in 2000, the
initial term of the Class II directors expires in 2001 and the initial term of
the Class III directors expires in 2002. Thereafter, each director will serve
for a term of three years. This means that unless the existing directors were
to resign, it would take at least two annual meetings of NBG Bancorp's
shareholders to replace a majority of NBG Bancorp's directors.
Under Georgia law, directors are elected annually for a term of one year
unless the articles of incorporation provide otherwise.
Removal of Directors. NBG Bancorp's Articles of Incorporation provide that
one or more directors may be removed from office at any time, but only for
cause, and only by the affirmative vote of the holders of at least 66 2/3% of
the total number of votes entitled to be cast by the holders of all of the
shares of NBG Bancorp's capital stock who are entitled to vote in an election of
directors.
Under Georgia law, the shareholders may remove one or more directors with
or without cause unless the articles of incorporation or a bylaw adopted by the
shareholders provides that directors may be removed only for cause. A director
may be removed only by a majority of the votes entitled to be cast. If the
directors have staggered terms, directors may be removed only for cause, unless
the articles of
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incorporation or a bylaw adopted by shareholders provides otherwise. A director
may be removed by the shareholders only at a meeting called for the purpose of
removing him or her and the meeting notice must state the purpose, or one of the
purposes, of the meeting is the removal of the director.
Business Combinations. NBG Bancorp's Articles of Incorporation and Bylaws
explicitly "opt in" to Georgia's business combination statute. Generally, under
this statute, "business combinations" (mergers or purchases of 10% or more of
NBG Bancorp's assets or securities) with an "interested shareholder" (a person
who beneficially owns 10% or more of NBG Bancorp's voting stock) that occur
within five years of the acquirer becoming an interested shareholder are
prohibited unless:
. the Board of Directors approved the business combination or the
transaction that made the acquirer an interested shareholder;
. the interested shareholder attained 90% of the voting stock in the
transaction that made the shareholder an interested shareholder; or
. the interested shareholder attains 90% of the voting stock subsequent to
becoming an interested shareholder and a majority of NBG Bancorp's voting shares
approves the acquisition.
Fair Price. Similar to the protective provisions relating to business
combinations, NBG Bancorp's Articles of Incorporation and Bylaws explicitly "opt
in" to Georgia's fair price provisions. Under these provisions, in addition to
any other approvals required by law, a business combination with an interested
shareholder generally must be unanimously approved by the "continuing directors"
(any director who is not an affiliate or associate of the interested shareholder
and who was a director prior to the time the shareholder became an interested
shareholder) or recommended by at least 66 2/3% of the continuing directors and
approved by the affirmative vote of a majority of the shares not beneficially
owned by the interested shareholder unless:
. the consideration to be received by NBG Bancorp's shareholders meets
certain minimum levels (typically the highest price paid by the
interested shareholder for any shares it has acquired);
. the consideration to be received by shareholders who are not interested
is paid in cash or in the same form as the interested shareholder
previously paid for other purchased shares; and
. there has been no reduction in the annual dividend rate from that which
was paid prior to the time the interested shareholder became an
interested shareholder.
Considerations in Evaluating an Acquisition Proposal. NBG Bancorp's
Articles of Incorporation provide factors that NBG Bancorp's Board of Directors
must consider in evaluating whether an acquisition proposal made by another
party is in the best interest of NBG Bancorp and its shareholders. The term
"acquisition proposal" refers to any offer of another party:
. to make a tender offer or exchange offer for NBG Bancorp's common stock
or any other equity security of NBG Bancorp;
. to merge or consolidate NBG Bancorp with another corporation; or
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. to purchase or otherwise acquire all or substantially all of the
properties and assets owned by NBG Bancorp.
NBG Bancorp's Articles of Incorporation charge the Board of Directors, in
evaluating an acquisition proposal, to consider all relevant factors, including:
. the payment being offered by the other corporation in relation (i) to
the current value of NBG Bancorp at the time of the proposal as
determined in a freely negotiated transaction and (ii) to the Board of
Directors' estimate of NBG Bancorp's future value as an independent
company at the time of the proposal;
. the expected social and economic effects of the transaction on the
employees, customers and other constituents - such as suppliers of goods
and services - of NBG Bancorp and The National Bank of Georgia; and
. the expected social and economic effects on the communities within which
NBG Bancorp and The National Bank of Georgia operate.
NBG Bancorp's Board of Directors may also consider other relevant factors.
This provision is included in NBG Bancorp's Articles of Incorporation
because NBG Bancorp is charged with providing support to, and being involved
with, the communities it serves. As a result, NBG Bancorp's Board of Directors
believes its obligations in evaluating an acquisition proposal extend beyond
evaluating merely the payment being offered in relation to the market or book
value of NBG Bancorp common stock at the time of the proposal. Georgia law does
not specifically list the factors a corporation's board of directors should
consider in the event the corporation is presented with an acquisition proposal.
While the value of what is being offered to shareholders in exchange for
their stock is the main factor when weighing the benefits of an acquisition
proposal, NBG Bancorp's Board of Directors believes it is appropriate also to
consider all other relevant factors. For example, this provision directs NBG
Bancorp's Board of Directors to evaluate what is being offered in relation to
the current value of NBG Bancorp at the time of the proposal as determined in a
freely negotiated transaction and in relation to the Board of Directors'
estimate of the future value of NBG Bancorp as an independent concern at the
time of the proposal. A takeover bid often places the target corporation
virtually in the position of making a forced sale, sometimes when the market
price of its stock may be depressed. NBG Bancorp's Board of Directors believes
that frequently the payment offered in such a situation, even though it may
exceed the value at which shares are then trading, is less than that which could
be obtained in a freely negotiated transaction. In a freely negotiated
transaction, management would have the opportunity to seek a suitable partner at
a time of its choosing and to negotiate for the most favorable price and terms
that would reflect not only NBG Bancorp's current value, but also its future
value.
One effect of this provision, as well as the business combination and fair
price provisions discussed above, may be to discourage a tender offer in
advance. Often an offeror consults the board of directors of a target
corporation before or after beginning a tender offer in an attempt to prevent a
contest from developing. In the opinion of NBG Bancorp's Board of Directors,
these provisions will strengthen its position in dealing with any potential
offeror that might attempt to acquire NBG Bancorp through a hostile tender
offer. Another effect of these provisions may be to dissuade NBG Bancorp
shareholders who might be displeased with the Board of Directors' response to an
acquisition proposal from engaging NBG Bancorp in costly litigation. These
provisions permit NBG Bancorp's Board of Directors to determine that an
acquisition proposal is not in NBG Bancorp's and its shareholders' best
interest, and
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thus to oppose it. The effect of these provisions, as well as the other
protective provisions discussed above, in some cases, may have the effect of
maintaining incumbent management.
Indemnification
NBG Bancorp's Bylaws contain indemnification provisions that provide that
NBG Bancorp's directors and officers, and, in some cases, NBG Bancorp's
employees or agents (collectively, the "insiders"), will be indemnified against
expenses that they actually and reasonably incur if they are successful on the
merits of a claim or proceeding. In addition, NBG Bancorp's Bylaws provide that
NBG Bancorp must advance to its insiders reasonable expenses of any claim or
proceeding so long as the insider furnishes NBG Bancorp with a written
affirmation of his or her good faith belief that the applicable standard of
conduct has been met and a written statement that the insider will repay any
advances if it is ultimately determined that he or she is not entitled to
indemnification.
When a case or dispute is settled or otherwise not ultimately determined on
its merits, the indemnification provisions provide that NBG Bancorp will
indemnify insiders when they meet the applicable standard of conduct. The
applicable standard of conduct is met if the insider:
. in his or her official capacity, acted in a manner he or she in good
faith believed to be in NBG Bancorp's best interests;
. in all cases not involving official capacity or criminal activities, he
or she acted in a manner that was at least not opposed to NBG Bancorp's
best interests; and
. in the case of a criminal action or proceeding, if he or she had no
reasonable cause to believe his or her conduct was unlawful.
NBG Bancorp's Board of Directors, its shareholders or independent legal
counsel determines whether the insider has met the applicable standard of
conduct in each specific case.
NBG Bancorp's Bylaws also provide that the indemnification rights contained
in the Bylaws do not exclude other indemnification rights to which an insider
may be entitled under any bylaw, resolution or agreement, either specifically or
in general terms approved by the affirmative vote of the holders of a majority
of the shares entitled to vote. NBG Bancorp can also provide for greater
indemnification than is provided for in the Bylaws if it chooses to do so,
subject to approval by its shareholders. NBG Bancorp may not, however,
indemnify an insider for liability arising out of circumstances that would cause
the insider to remain liable for his or her actions as described under "-
Limitation of Liability" below.
The indemnification provisions of the Bylaws specifically provide that NBG
Bancorp may purchase and maintain insurance on behalf of any director against
any liability asserted against and incurred by him or her in his or her capacity
as a director, whether or not NBG Bancorp would have had the power to indemnify
against such liability.
NBG Bancorp is not aware of any pending or threatened action, suit or
proceeding involving any of its insiders for which indemnification from NBG
Bancorp may be sought.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of NBG
Bancorp under the foregoing provisions, or otherwise, NBG Bancorp has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
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Limitation of Liability
NBG Bancorp's Articles of Incorporation, eliminate, with certain
exceptions, the potential personal liability of a director for monetary damages
to NBG Bancorp or to its shareholders for any failure to take any action as a
director. However, there is no elimination of liability for:
. a breach of duty involving the appropriation of a NBG Bancorp business
opportunity;
. an act or omission involving intentional misconduct or a knowing
violation of law;
. a transaction from which the director derives an improper material
tangible personal benefit; or
. distributions - such as the payment of a dividend or approval of a stock
repurchase - that are illegal under Georgia law.
Georgia law allows corporations to include in their Articles of
Incorporation provisions eliminating or limiting the liability of directors,
except in the circumstances described above. As a result, and to encourage
qualified individuals to serve and remain as directors, NBG Bancorp included
these types of provisions in its Articles of Incorporation. While NBG Bancorp
has not experienced any problems in locating directors, it could experience
difficulty in the future as its business activities increase and diversify. NBG
Bancorp also adopted liability limiting provisions to enhance its ability to
secure liability insurance for its directors at a reasonable cost. NBG Bancorp
intends to obtain liability insurance covering actions taken by its directors in
their capacities as directors. The Board of Directors believes that liability
limiting provisions will enable NBG Bancorp to obtain such insurance on terms
more favorable than if they were not included in NBG Bancorp's Articles of
Incorporation.
Amendments
Any amendment of the provisions contained in NBG Bancorp's Articles of
Incorporation regarding:
. NBG Bancorp's staggered Board of Directors;
. the ability of NBG Bancorp's Board of Directors to consider various
factors when evaluating an acquisition proposal; or
. the limitation of a director's personal liability requires the
affirmative vote of the holders of 66 2/3% of the total number of votes
entitled to be cast by the holders of all of the shares of NBG Bancorp's
capital stock who are entitled to vote in an election of directors.
Except as may otherwise be required by Georgia law, NBG Bancorp's Board of
Directors may amend any provision of NBG Bancorp's Bylaws by the affirmative
vote of a majority of the entire Board, unless NBG Bancorp's shareholders have
adopted, amended or repealed a particular bylaw provision and, in doing so, have
expressly reserved to NBG Bancorp's shareholders the right of amendment or
repeal therefor. NBG Bancorp's Bylaws require the affirmative vote of the
holders of not less than 66 2/3% of the total number of votes entitled to be
cast by the holders of all of the shares of capital stock of NBG Bancorp then
entitled to vote generally in the election of directors to amend NBG Bancorp's
Bylaws.
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SUPERVISION AND REGULATION
The following discussion describes the material elements of the regulatory
framework that applies to banks and bank holding companies and provides certain
specific information related to The National Bank of Georgia.
General
NBG Bancorp will be a bank holding company registered with the Federal
Reserve under the Bank Holding Company Act of 1956, as currently in effect. As
a result, NBG Bancorp and any future non-bank subsidiaries will be subject to
the supervision, examination, and reporting requirements of the Bank Holding
Company Act and the regulations of the Federal Reserve.
The Bank Holding Company Act requires every bank holding company to obtain
the Federal Reserve's prior approval before:
. it may acquire direct or indirect ownership or control of any voting
shares of any bank if, after the acquisition, the bank holding company
will directly or indirectly own or control more than 5% of the bank's
voting shares;
. it or any of its non-bank subsidiaries may acquire all or substantially
all of the assets of any bank; or
. it may merge or consolidate with any other bank holding company.
The Bank Holding Company Act further provides that the Federal Reserve may
not approve any transaction that would result in or tend to create a monopoly
or, substantially lessen competition or otherwise function as restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. The Federal Reserve's consideration of financial resources generally
focuses on capital adequacy, which is discussed below.
NBG Bancorp and any other bank holding company located in Georgia may
acquire a bank located in any other state, and any bank holding company located
outside of Georgia may acquire any Georgia-based bank, regardless of state law
to the contrary. In each case, certain deposit-percentage, aging requirements
and other restrictions will apply. National and state-chartered banks may
branch across state lines by acquiring banks in other states. By adopting
legislation prior to June 1, 1997, a state could elect either to "opt in" and
accelerate the date after which interstate branching would be permissible or
"opt out" and prohibit interstate branching altogether. The Georgia Interstate
Banking Act provides that interstate acquisitions by or of institutions located
in Georgia are permitted in states that also allow national interstate
acquisitions. The Georgia Interstate Branching Act permits Georgia-based banks
and bank holding companies owning or acquiring banks outside of Georgia and all
non-Georgia banks and bank holding companies owning or acquiring banks in
Georgia to merge any lawfully acquired bank into an interstate branch network.
The Georgia Interstate Branching Act also allows banks to establish new start-up
branches throughout Georgia, which removes a barrier to competition.
The Bank Holding Company Act generally prohibits NBG Bancorp from engaging
in activities other than banking or managing or controlling banks or other
permissible subsidiaries and from acquiring or keeping direct or indirect
control of any company engaged in any activities other than those
activities
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that the Federal Reserve determines to be closely related to banking or managing
or controlling banks. In determining whether a particular activity is
permissible, the Federal Reserve must consider whether the performance of such
an activity reasonably can be expected to produce benefits to the public, such
as greater convenience, increased competition, or gains in efficiency, that
outweigh possible adverse effects, such as undue concentration of resources,
decreased or unfair competition, conflicts of interest, or unsound banking
practices. For example, the Federal Reserve has determined that factoring
accounts receivable, acquiring or servicing loans, leasing personal property,
conducting discount securities brokerage activities, performing certain data
processing services, acting as agent or broker in selling credit life insurance
and certain other types of insurance in connection with credit transactions, and
performing certain insurance underwriting activities are permissible activities
of bank holding companies. The Bank Holding Company Act does not place
territorial limitations on permissible non-banking activities of bank holding
companies. Despite prior approval, the Federal Reserve may order a holding
company or its subsidiaries to terminate any activity or to terminate its
ownership or control of any subsidiary when it has reasonable cause to believe
that the holding company's continued ownership, activity or control constitutes
a serious risk to the financial safety, soundness, or stability of any of its
bank subsidiaries.
The National Bank of Georgia's deposits will be insured by the FDIC to the
maximum extent provided by law. The National Bank of Georgia will also be
subject to numerous state and federal statutes and regulations that will affect
its business, activities and operations, and it will be supervised and examined
by one or more state or federal bank regulatory agencies.
The OCC will regularly examine The National Bank of Georgia's operations
and has the authority to approve or disapprove mergers, the establishment of
branches and similar corporate actions. The OCC also has the power to prevent
the continuance or development of unsafe or unsound banking practices or other
violations of law.
Payment of Dividends
NBG Bancorp is a legal entity separate and distinct from The National Bank
of Georgia. The principal sources of NBG Bancorp's cash flow, including cash
flow to pay dividends to its shareholders, are dividends that The National Bank
of Georgia pays to its sole shareholder, NBG Bancorp. Statutory and regulatory
limitations apply to the bank's payment of dividends to the company as well as
to the company's payment of dividends to its shareholders.
If, in the opinion of the OCC, The National Bank of Georgia were engaged in
or about to engage in an unsafe or unsound practice, the OCC could require,
after notice and a hearing, the bank to cease and desist from the practice. The
federal banking agencies have indicated that paying dividends that deplete a
depository institution's capital base to an inadequate level would be an unsafe
and unsound banking practice. Under the Federal Deposit Insurance Corporation
Improvement Act of 1991, a depository institution may not pay any dividend if
payment would cause it to become undercapitalized or if it already is
undercapitalized. Moreover, the federal agencies have issued policy statements
that provide that bank holding companies and insured banks should generally only
pay dividends out of current operating earnings. See "- Prompt Corrective
Action."
The payment of dividends by NBG Bancorp and The National Bank of Georgia
may also be affected by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines.
53
<PAGE>
Capital Adequacy
NBG Bancorp and The National Bank of Georgia will be required to comply
with the capital adequacy standards established by the Federal Reserve (in the
case of the company) and the OCC (in the case of the bank). The Federal Reserve
has established two basic measures of capital adequacy for bank holding
companies: a risk-based measure and a leverage measure. A bank holding company
must satisfy all applicable capital standards to be considered in
compliance.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles among banks and bank
holding companies, to account for off-balance sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance sheet items,
such as letters of credit and unfunded loan commitments, are assigned to broad
risk categories, each with appropriate weights. The resulting capital ratios
represent capital as a percentage of total risk-weighted assets and off-balance
sheet items.
The minimum guideline for the ratio of total capital to risk-weighted
assets is 8%. At least half of total capital must comprise common stock,
minority interests in the equity accounts of consolidated subsidiaries,
noncumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less goodwill and certain other intangible assets, or
"Tier 1 Capital." The remainder may consist of subordinated debt, other
preferred stock, and a limited amount of loan loss reserves, or "Tier 2
Capital."
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets, of 3% for bank holding companies that meet certain specified
criteria, including having the highest regulatory rating. All other bank
holding companies generally are required to maintain a leverage ratio of at
least 3%, plus an additional cushion of 100 to 200 basis points. The guidelines
also provide that bank holding companies experiencing internal growth, as will
be the case for NBG Bancorp, or making acquisitions will be expected to maintain
strong capital positions substantially above the minimum supervisory levels
without significant reliance on intangible assets. Furthermore, the Federal
Reserve has indicated that it will consider a bank holding company's Tier 1
Capital leverage ratio, after deducting all intangibles, and other indicators of
capital strength in evaluating proposals for expansion or new activities.
The National Bank of Georgia will be subject to risk-based and leverage
capital requirements adopted by the OCC, which are substantially similar to
those adopted by the Federal Reserve for bank holding companies.
Failure to meet capital guidelines could subject a bank to a variety of
enforcement remedies, including issuance of a capital directive, the termination
of deposit insurance by the FDIC, a prohibition on the taking of brokered
deposits, and certain other restrictions on its business. As described below,
substantial additional restrictions can be imposed on FDIC-insured depository
institutions that fail to meet applicable capital requirements. See "- Prompt
Corrective Action."
Support of Subsidiary Institutions
Under Federal Reserve policy, NBG Bancorp is expected to act as a source of
financial strength for, and to commit resources to support, The National Bank of
Georgia. This support may be required at times when, without this Federal
Reserve policy, NBG Bancorp might not be inclined to provide it. In addition,
any capital loans by a bank holding company to The National Bank of Georgia will
be repaid only after its deposits and certain other indebtedness are repaid in
full. In the event of a bank holding
54
<PAGE>
company's bankruptcy, any commitment by the bank holding company to a federal
bank regulatory agency to maintain the capital of a banking subsidiary will
be assumed by the bankruptcy trustee and entitled to a priority of payment.
Prompt Corrective Action
The Federal Deposit Insurance Corporation Improvement Act of 1991
establishes a system of prompt corrective action to resolve the problems of
undercapitalized institutions. Under this system, the federal banking
regulators have established five capital categories (well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized and
critically undercapitalized), are required to take certain mandatory supervisory
actions, and are authorized to take other discretionary actions, with respect to
institutions in the three undercapitalized categories. The severity of the
action will depend upon the capital category in which the institution is placed.
Generally, subject to a narrow exception, the banking regulator must appoint a
receiver or conservator for an institution that is critically undercapitalized.
The federal banking agencies have specified by regulation the relevant capital
level for each category.
An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
A bank holding company must guarantee that a subsidiary depository institution
meets its capital restoration plan, subject to certain limitations. The
controlling holding company's obligation to fund a capital restoration plan is
limited to the lesser of 5% of an undercapitalized subsidiary's assets or the
amount required to meet regulatory capital requirements. An undercapitalized
institution is also generally prohibited from increasing its average total
assets, making acquisitions, establishing any branches or engaging in any new
line of business, except under an accepted capital restoration plan or with FDIC
approval. In addition, the appropriate federal banking agency may test an
undercapitalized institution in the same manner as it treats a significantly
undercapitalized institution if it determines that those actions are necessary.
FDIC Insurance Assessments
The FDIC has adopted a risk-based assessment system for insured depository
institutions that takes into account the risks attributable to different
categories and concentrations of assets and liabilities. The system assigns an
institution to one of three capital categories: (i) well capitalized; (ii)
adequately capitalized; and (iii) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories described
above, with the "undercapitalized" category including institutions that are
undercapitalized, significantly undercapitalized, and critically
undercapitalized for prompt corrective action purposes. The FDIC also assigns
an institution to one of three supervisory subgroups within each capital group.
The supervisory subgroup to which an institution is assigned is based on a
supervisory evaluation that the institution's primary federal regulator provides
to the FDIC and information that the FDIC determines to be relevant to the
institution's financial condition and the risk posed to the deposit insurance
funds. The FDIC then determines an institution's insurance assessment rate
based on the institution's capital category and supervisory category. Under the
risk-based assessment system, there are nine combinations of capital groups and
supervisory subgroups to which different assessment rates are applied.
Assessments range from 0 to 27 cents per $100 of deposits, depending on the
institution's capital group and supervisory subgroup.
The FDIC may terminate its insurance of deposits if it finds that the
institution has engaged in unsafe and unsound practices, is in an unsafe or
unsound condition to continue operations or has violated any applicable law,
regulation, rule, order, or condition imposed by the FDIC.
55
<PAGE>
Recent Legislation
On November 15, 1999, President Clinton signed the Gramm-Leach-Bliley Act
of 1999. The Act addresses concerns relating to the competitiveness and the
safety and soundness of the financial services industry and alters the
structure, regulation, and competitive relationships of the nation's financial
institutions. Among other things, the Act:
. Repeals the Glass-Steagall Act of 1933 that separated commercial and
investment banking and eliminates the prohibition on insurance
underwriting activities under the Bank Holding Company Act of 1956.
. Creates "financial holding companies" that may conduct a broad list of
financial activities, including insurance and securities underwriting,
and real estate development and investment.
. Establishes the Federal Reserve as the primary federal regulator of
financial holding companies.
. Allows financial holding companies to conduct activities that are
"complementary" to banking.
. Allows banks to underwrite securities through direct subsidiaries and
use direct subsidiaries for insurance or securities sales or other
low-risk activities.
. Prohibits a bank holding company from merging with insurance or
securities firms or embarking on new powers if any of its banks earned
less than a "satisfactory" Community Reinvestment Act rating on its most
recent exam. The company would be barred from additional powers or
acquisitions if one of the banks' CRA ratings dropped below
"satisfactory" later.
. Extends the period between CRA exams to five years for banks and thrifts
under $250 million of assets that earned an "outstanding" rating in
their last exam. Small institutions with a "satisfactory" rating would
only be subject to CRA exams once every four years. Regulators could
conduct an exam sooner if a bank filed a merger application or if the
regulators have a "reasonable cause."
. Requires financial institutions to establish privacy policies and
disclose them at the start of a customer relationship and once a year
thereafter.
. Requires banks to give customers a chance to block sharing of
confidential information with third parties except in cases of marketing
agreements between financial institutions and some other marketing
agreements.
. Prohibits credit card and account numbers from being shared with third-
party marketers.
Although the Act is considered to be one of the most significant banking
laws since Depression-era statutes were enacted, because of our small size and
recent organization, we do not expect the Act to materially affect our initial
products, services or other business activities.
56
<PAGE>
LEGAL MATTERS
Troutman Sanders LLP, Atlanta, Georgia, will pass upon the validity of the
shares of common stock offered by this prospectus for NBG Bancorp.
EXPERTS
NBG Bancorp's audited financial statements for the period from June 1,1999
through August 31, 1999, included in this prospectus have been included in
reliance on the report of Mauldin & Jenkins, LLC, independent certified public
accountants, given on the authority of that firm as experts in accounting and
auditing.
REPORTS TO SHAREHOLDERS
Upon the effective date of the Registration Statement on Form SB-2 that
registers the shares of common stock offered by this prospectus with the
Securities and Exchange Commission, NBG Bancorp will be subject to the reporting
requirements of the Securities Exchange Act of 1934, as currently in effect,
which include requirements to file annual reports on Form 10-KSB and quarterly
reports on Form 10-QSB with the Securities and Exchange Commission. This
reporting obligation will exist for at least one year and will continue for
successive fiscal years, except that these reporting obligations may be
suspended for any subsequent fiscal year if at the beginning of such year NBG
Bancorp common stock is held of record by less than 300 persons.
At any time that NBG Bancorp is not a reporting company, it will furnish
its shareholders with annual reports containing audited financial information
for each fiscal year on or before the date of the annual meeting of shareholders
as required by Rule 80-6-1-.05 of the Georgia Department of Banking and Finance.
NBG Bancorp's fiscal year ends on December 31. Additionally, NBG Bancorp will
also furnish such other reports as it may determine to be appropriate or as
otherwise may be required by law.
ADDITIONAL INFORMATION
NBG Bancorp has filed with the Securities and Exchange Commission a
Registration Statement on Form SB-2 under the Securities Act of 1933, as
currently in effect, with respect to the shares of NBG Bancorp common stock
offered by this prospectus. This prospectus does not contain all of the
information contained in the Registration Statement. For further information
with respect to NBG Bancorp and its common stock, we refer you to the
Registration Statement and the exhibits to it. The Registration Statement may
be examined and copied at the public reference facilities maintained by the
Securities and Exchange Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the
Securities and Exchange Commission located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and Seven World Trade Center,
13th Floor, New York, New York 10048. Copies of the Registration Statement are
available at prescribed rates from the Public Reference Section of the
Securities and Exchange Commission, Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549. You may obtain additional information regarding
the operation of the public reference facilities by calling the Securities and
Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission
also maintains a Web site (http:/ /www.sec.gov) that contains registration
statements, reports, proxy and information statements and other information
regarding registrants, such as NBG Bancorp, that file electronically with the
Securities and Exchange Commission.
NBG Bancorp and our organizers have filed or will file various applications
with the FDIC, the Federal Reserve, the OCC and the Georgia Department of
Banking and Finance. These applications and
57
<PAGE>
the information they contain are not incorporated into this prospectus. You
should rely only on information contained in this prospectus and in the related
Registration Statement in making an investment decision. To the extent that
other available information not presented in this prospectus, including
information available from NBG Bancorp and information in public files and
records maintained by the FDIC, the Federal Reserve, the OCC and the Georgia
Department of Banking and Finance is inconsistent with information presented in
this prospectus or provides additional information, that information is
superseded by the information presented in this prospectus and should not be
relied on. Projections appearing in the applications are based on assumptions
that our organizers believe are reasonable, but as to which they can make no
assurances. NBG Bancorp specifically disaffirms those projections for purposes
of this prospectus and cautions you against relying on them for purposes of
making an investment decision.
58
<PAGE>
NBG BANCORP, INC.
(A Development Stage Company)
FINANCIAL REPORT
AUGUST 31, 1999
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditor's Report........................................... F-2
Balance Sheet, August 31, 1999......................................... F-3
Statement of Loss, Period from June 1, 1999, Date of Inception,
to August 31, 1999................................................... F-4
Statement of Cash Flows, Period from June 1, 1999, Date of Inception,
to August 31, 1999................................................... F-5
Notes to Financial Statements.......................................... F-6
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
- --------------------------------------------------------------------------------
To the Board of Directors
NBG Bancorp, Inc.
Athens, Georgia
We have audited the accompanying balance sheet of NBG Bancorp, Inc., a
development stage company, as of August 31, 1999, and the related statements of
loss and cash flows for the period from June 1, 1999, date of inception, to
August 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of NBG Bancorp, Inc., a
development stage company, as of August 31, 1999, and the results of its
operations and its cash flows for the period from June 1, 1999, date of
inception, to August 31, 1999, in conformity with generally accepted accounting
principles.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
September 8, 1999, except for
Note 1 as to which the date is
September 23, 1999
F-2
<PAGE>
NBG BANCORP, INC.
(A Development Stage Company)
BALANCE SHEET
AUGUST 31, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash $ 4,191
Equipment (net of accumulated depreciation of $294) 8,923
--------
Total assets $ 13,114
========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
LIABILITIES
Line of credit $ 28,000
Accrued expenses 73,291
--------
Total liabilities 101,291
--------
COMMITMENTS
STOCKHOLDERS' (DEFICIT)
Preferred stock, $1 par value; 1,000,000 shares
authorized; no shares issued and outstanding 0
Common stock, $1 par value; 10,000,000 shares
authorized; no shares issued and outstanding 0
Deficit accumulated during the development stage (88,177)
--------
Total stockholders' (deficit) (88,177)
--------
Total liabilities and stockholders' (deficit) $ 13,114
========
See Notes to Financial Statements.
</TABLE>
F-3
<PAGE>
NBG BANCORP, INC.
(A Development Stage Company)
STATEMENT OF LOSS
PERIOD FROM JUNE 1, 1999, DATE OF INCEPTION,
TO AUGUST 31, 1999
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Expenses
<S> <C>
Personnel expenses 67,819
Interest 315
Equipment and occupancy expenses 8,831
Filing and application fees 8,115
Other expenses 3,097
--------
88,177
--------
Net loss and deficit accumulated
during the development stage $(88,177)
========
See Notes to Financial Statements.
</TABLE>
F-4
<PAGE>
NBG BANCORP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
PERIOD FROM JUNE 1, 1999, DATE OF INCEPTION,
TO AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OPERATING ACTIVITIES
<S> <C>
Net loss $(88,177)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 294
Increase in accrued expenses 73,291
--------
Net cash used in operating activities (14,592)
--------
INVESTING ACTIVITIES
Purchase of equipment (9,217)
--------
Net cash used in investing activities (9,217)
--------
FINANCING ACTIVITIES
Proceeds from line of credit 28,000
--------
Net cash provided by financing activities 28,000
--------
Net increase in cash 4,191
Cash at beginning of period 0
--------
Cash at end of period $ 4,191
========
See Notes to Financial Statements.
</TABLE>
F-5
<PAGE>
NBG BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
NBG Bancorp, Inc. (the "Company") was incorporated on September 22,
1999, to operate as a bank holding company pursuant to the Federal
Bank Holding Company Act of 1956, as amended, and the Georgia Bank
Holding Company Act. The Company intends to acquire 100% of the
issued and outstanding capital stock of The National Bank of Georgia
(In Organization) (the "Bank"), a corporation organized under the
laws of the State of Georgia to conduct a general banking business in
Athens, Georgia. On June 29, 1999, the organizers filed an
application for approval of the organization of the Bank with the
Office of the Comptroller of the Currency ("OCC") and also with the
Federal Deposit Insurance Corporation ("FDIC") for insurance of the
Bank's deposits. As an insured bank, the Bank will be a member of
the Bank Insurance Fund. The Company will file an application with
the Federal Reserve Bank of Atlanta (the "FRB") and the Georgia
Department of Banking and Finance ("DBF") to become a bank holding
company upon receiving preliminary approval by the OCC. Upon
obtaining regulatory approval, the Company will be a registered bank
holding company subject to regulation by the FRB and DBF.
Activities since inception have consisted primarily of the Company's
and the Bank's organizers engaging in organizational and preopening
activities necessary to obtain regulatory approvals and to prepare to
commence business as a financial institution. The organizers have
also been involved in limited mortgage loan origination activities.
Significant Accounting Policies
Basis of Presentation
The financial statements have been prepared on the accrual basis in
accordance with generally accepted accounting principles.
F-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Organization and Stock Offering Costs
Organization costs will be expensed as incurred in accordance with
generally accepted accounting principles. Stock offering costs
will be charged to capital surplus upon completion of the stock
offering. Additional costs are expected to be incurred for
organization costs and stock offering costs.
Income Taxes
The Company will be subject to Federal and state income taxes when
taxable income is generated. No income taxes have been accrued
because of operating losses incurred during the preopening period.
Fiscal Year
The Company will adopt a calendar year for both financial reporting
and tax reporting purposes.
NOTE 2. LINE OF CREDIT
To facilitate the formation of the Company and the Bank, the
organizers have established a $250,150 line of credit with an
independent bank for the purpose of paying organization and
preopening expenses for the Company and the Bank and the expenses of
the Company's common stock offering. The line of credit bears
interest at the lender's prime rate less 1% and matures on November
25, 1999. Interest is payable at maturity. The interest rate at
August 31, 1999 was 7.25%. The organizers have personally guaranteed
repayment of the line of credit. All funds advanced on behalf of the
Company and the Bank will be repaid from the proceeds of the stock
offering. The Company's ability to repay these advances and relieve
the organizers from their personal guarantees depends upon the
completion of the offering.
F-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 3. COMMITMENTS
On June 1, 1999, the organizers entered into a lease agreement for
the proposed site of the Bank. The monthly lease is equal to $3,000
adjusted for a percentage of the mortgage origination fees retained
by the lessor. As of August 31, 1999, total rental expense incurred
was $5,156. The organizers intend to purchase the facility upon
release of the stock offering funds from escrow as the permanent
banking location.
Pursuant to employment contracts between the organizers and the
proposed executive officers of the Company, consulting fees will be
paid to the executive officers contingent upon the completion of
certain events during the development stage. These events include
receiving final approval from the OCC, FDIC, and the FRB. The
consulting fees began accruing on June 29, 1999 at a rate equal to
the base salaries of the executive officers as outlined in the
employment contracts. These fees are not payable unless final
regulatory approval is obtained. However, because obtaining final
regulatory approval is a probable event, the fees, which totaled
$52,667 at August 31, 1999, have been included with personnel
expenses in the financial statements of the Company.
Year 2000
The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year.
Systems that do not properly recognize the year "2000" could
generate erroneous data or cause systems to fail. The Company will
be dependent on computer processing and telecommunication systems in
the daily conduct of business activities. The Company presently
believes that the Year 2000 issue will not pose significant
operational problems for the Company or have a material adverse
effect on future operating results.
NOTE 4. COMMON STOCK OFFERING
The Company proposes to file a Registration Statement on Form SB-2
with the Securities and Exchange Commission offering for sale a
minimum of 610,000 shares and a maximum of 800,000 shares of the
Company's common stock at a price of $10 per share.
F-8
<PAGE>
APPENDIX "A"
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
November 10, 1999, by and between NBG Bancorp, Inc., a Georgia corporation (the
"Company"), and Georgia First Bank, N.A., a banking association organized and
existing under the laws of the United States (the "Escrow Agent").
WITNESSETH:
----------
WHEREAS, the Company proposes to publicly offer and sell (the "Offering") a
minimum of 610,000 shares (the "Minimum Offering") and a maximum of 800,000
shares (the "Maximum Offering") of its common stock, $1.00 par value per share
(the "Shares"), to investors at $10.00 per Share pursuant to a registered public
offering;
WHEREAS, the Offering will be made pursuant to a Prospectus (the
"Prospectus") and a related Subscription Agreement (the "Subscription
Agreement"), each of which will be distributed to prospective investors and a
form of each of which has been delivered to the Escrow Agent; and
WHEREAS, the Company desires to establish an escrow account (the "Escrow
Account") to hold and invest subscription funds ("Subscription Funds") that are
delivered by subscribers for the Shares ("Subscribers") pending satisfaction of
the conditions to the Minimum Offering, and the Escrow Agent is willing to serve
as escrow agent upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Deposit with Escrow Agent.
(a) The Escrow Agent understands that, pursuant to the instructions
contained in the Prospectus and the Subscription Agreement,
Subscribers in the Offering shall deliver to the Company a
completed Subscription Agreement together with Subscription Funds
for the Shares subscribed. The Company will accept only those
subscriptions that satisfy the following conditions:
(i) the Subscription Agreement is properly completed and
signed;
(ii) the Subscription Agreement is for the purchase of at least
1,000 Shares;
(iii) the Subscription Agreement is accompanied by Subscription
Funds in an amount sufficient to pay for all subscribed
Shares; and
(iv) the Subscription Funds are paid by check, money order or
other bona fide payment instrument to "Georgia First Bank,
N.A., NBG Escrow Agent."
If any of the foregoing conditions is not satisfied, the Company
will promptly return the Subscription Agreement and the
Subscription Funds to the Subscriber,
A-1
<PAGE>
showing the defects and requesting correction and return of a
properly completed Subscription Agreement and related payments,
and the Escrow Agent shall have no obligations with respect to
such rejected subscriptions.
(b) With respect to all subscriptions that satisfy the conditions set
forth in Section 1(a), the Company will promptly forward to the
Escrow Agent: (i) a copy of the Subscription Agreement, which
sets forth, among other things, the Subscriber's name and
address, certified tax identification number, and the number of
Shares subscribed, and (ii) the Subscription Funds payable to the
Escrow Agent for the number of Shares subscribed.
(c) The Escrow Agent agrees that it will from time to time accept, in
its capacity as escrow agent, Subscription Funds for the Shares,
which have been forwarded to the Escrow Agent by the Company, and
which, upon collection, the Escrow Agent will invest in
accordance with Section 2 hereof. The Escrow Agent agrees that
it will not accept any Subscription Agreements or Subscription
Funds sent from Subscribers directly to the Escrow Agent, and
that, in the event the Escrow Agent does receive Subscription
Agreements or Subscription Funds directly from Subscribers, the
Escrow Agent shall promptly forward them to the Company.
(d) All checks shall be made payable to the Escrow Agent. If any
check does not clear normal banking channels in due course, the
Escrow Agent will promptly notify the Company. Any check which
does not clear normal banking channels and is returned by the
drawer's bank to the Escrow Agent will be promptly turned over to
the Company along with all other subscription documents relating
to such check. Any check received that is made payable to a
party other than the Escrow Agent shall be returned to the
Company for return to the proper party. The Company in its sole
and absolute discretion may reject any subscription for shares
for any reason and upon such rejection it shall notify and
instruct the Escrow Agent in writing to return the Escrowed Funds
by check made payable to the Subscriber.
2. Investment of Escrowed Funds. Upon collection of each check by the
Escrow Agent, the Escrow Agent shall invest the Subscription Funds
(following their acceptance by the Escrow Agent and clearance of
normal bank collection processes and availability, the "Escrowed
Funds") in deposit accounts or certificates of deposit which are fully
insured by the Federal Deposit Insurance Corporation or another agency
of the United States government, short-term securities issued or fully
guaranteed by the United States government, federal funds, or such
other investments as the Escrow Agent and the Company shall agree.
The Company shall provide the Escrow Agent with instructions from time
to time concerning in which of the specific investment instruments
described above the Escrowed Funds shall be invested, and the Escrow
Agent shall adhere to such instructions. Unless and until otherwise
instructed by the Company, the Escrow Agent shall by means of a
"Sweep" or other automatic investment program invest the Escrowed
Funds in blocks of $10,000 in federal funds. Interest and other
earnings shall start accruing on such funds as soon as such funds
would be deemed to be available for access under applicable banking
laws and pursuant to the Escrow Agent's own banking policies.
A-2
<PAGE>
3. Distribution of Escrowed Funds. The Escrow Agent shall distribute the
Escrowed Funds in the amounts, at the times, and upon the conditions
hereinafter set forth in this Agreement.
(a) If at any time on or prior to the Expiration Date (as defined
herein) of the Offering, (i) the Escrow Agent has certified to
the Company in writing that the Escrow Agent has received at
least $6,100,000 in Escrowed Funds, and (ii) the Escrow Agent has
received confirmation from the President or the Chairman of the
Board of Directors of the Company that all of the other
conditions to the release of the Escrowed Funds as described in
the Prospectus with respect to the Minimum Offering have been
met, then, upon direction of the Company, the Escrow Agent shall
deliver the Escrowed Funds plus any profits or earnings thereon
after deducting the Escrow Agent's fees, if any, to the Company
in the manner specified by the Company. For purposes of this
Agreement, the term "Expiration Date" shall mean the date which
marks the 90th day after the date of the Prospectus; provided,
--------
however, in the event that the Escrow Agent is given oral
-------
notification, followed in writing, by the Company that it has
elected to extend the Minimum Offering for an additional period
of 90 days after the initial period, then the Expiration Date
shall mean the date which marks the 180th day after the date of
the Prospectus; provided further, in the event that the Escrow
-------- -------
Agent is given oral notification, followed in writing, by the
Company that it has elected to extend the Minimum Offering for an
additional period of 90 days after the first extension, then the
Expiration Date shall mean the date which marks the 270th day
after the date of the Prospectus; provided further, in the event
-------- -------
the Escrow Agent is given oral notification, followed in writing,
by the Company that it has elected to extend the Minimum Offering
for an additional period of 90 days after the second extension,
then the Expiration Date shall mean the date which marks the
360th day after the date of the Prospectus.
(b) If the Escrowed Funds do not, on or prior to the Expiration Date,
become deliverable to the Company based on the failure to meet
the conditions described in Section 3(a) hereof, or if the
Company terminates the Offering at any time prior to the
Expiration Date and delivers written notice to the Escrow Agent
of such termination, then the Escrow Agent shall return the
Escrowed Funds to Subscribers whose Subscription Agreements and
Subscription Funds were accepted by the Company, in amounts equal
to the Subscription Funds paid by each of them, plus interest
earned thereon divided amongst the Subscribers according to the
number of Shares subscribed and the amount of time the
Subscriber's Subscription Funds have been held in the Escrow
Account by the Escrow Agent.
The specific allocation of interest and net profits attributable
to each Subscriber shall be determined by the Escrow Agent as
follows: each Subscriber's allocated share of earnings on the
Escrowed Funds, after deducting the Escrow Agent's fees
hereunder, if any, shall be that fraction (i) the numerator of
which is equal to (x) the amount of each Subscriber's accepted
Subscription Funds multiplied by (y) the number of days between
the date that the Escrow Agent collected such funds and the date
of the Offering's termination (with respect to each Subscriber,
the Subscriber's "Time Subscription Factor"), and (ii) the
denominator of which is equal to the aggregate Time Subscription
Factors of all Subscribers' depositing Escrowed Funds in the
Escrow Account.
A-3
<PAGE>
All Subscription Funds which have been delivered to the Escrow
Agent by the Company but which have not been collected shall
first be collected by the Escrow Agent and subsequently returned
to the respective Subscribers without interest. The Company is
aware and understands that, until it becomes entitled to receive
the Escrowed Funds, as described in Section 3(a) hereof, the
Company is not entitled to any Escrowed Funds, and that no
amounts deposited in the Escrow Account shall become the property
of, or become subject to the debts of, the Company or any other
entity.
4. Fee of Escrow Agent. The Escrow Agent shall accrue a service charge
of $15.00 per month each month that it holds Escrowed Funds. In
addition, a $20.00 per check fee shall be charged if the Escrow
Account has to be refunded due to a failure to complete the Offering.
The Escrow Agent is hereby authorized to deduct such fees from the
Escrowed Funds prior to any release thereof pursuant to Section 3
hereof.
5. Liability of Escrow Agent.
(a) In performing any of its duties under this Agreement, or upon the
claimed failure to perform its duties hereunder, the Escrow Agent
shall not be liable to anyone for any damages, losses or expenses
which it may incur as a result of any action or the failure to
act by the Escrow Agent that is made in good faith by the Escrow
Agent; provided, however, the Escrow Agent shall be liable for
-------- -------
damages arising out of its willful default or misconduct or its
gross negligence under this Agreement. Accordingly, the Escrow
Agent shall not incur any such liability with respect to (i) any
action taken or omitted to be taken in good faith upon advice of
its counsel or counsel for the Company which is given with
respect to any questions relating to the duties and
responsibilities of the Escrow Agent hereunder; or (ii) any
action taken or omitted to be taken in reliance upon any
document, including any written notice or instructions provided
for by this Agreement, not only as to its due execution and to
the validity and effectiveness of its provisions, but also as to
the truth and accuracy of any information contained therein, if
the Escrow Agent shall in good faith believe such document to be
genuine, to have been signed or presented by a proper person or
persons, and to conform with the provisions of this Agreement.
(b) The Company agrees to indemnify and hold harmless the Escrow
Agent against any and all losses, claims, damages, liabilities
and expenses, including, without limitation, reasonable costs of
investigation and counsel fees and disbursements which may be
imposed by the Escrow Agent or incurred by it in connection with
its acceptance of this appointment as escrow agent hereunder or
the performance of its duties hereunder, including, without
limitation, any litigation arising from this Agreement or
involving the subject matter thereof, except, that if it is
determined that the Escrow Agent breached this Agreement,
willfully engaged in misconduct, or acted with gross negligence
in connection herewith, then, the Escrow Agent shall bear all
such losses, claims, damages and expenses.
A-4
<PAGE>
(c) If a dispute ensues between any of the parties hereto which, in
the opinion of the Escrow Agent, is sufficient to justify its
doing so, the Escrow Agent shall retain legal counsel of choice
as it reasonably may deem necessary to advise it concerning its
obligations hereunder and to represent it in any litigation to
which it may be a party by reason of this Agreement. The Escrow
Agent shall be entitled to tender into the registry or custody of
any court of competent jurisdiction all money or property in its
hands under the terms of this Agreement, and to file such legal
proceedings as it deems appropriate, and shall thereupon by
discharged from all further duties under this Agreement. Any
such legal action may be brought in any such court as the Escrow
Agent shall determine to have jurisdiction thereof. In
connection with such dispute, the Company shall indemnify the
Escrow Agent against its court costs and reasonable attorney's
fees incurred.
(d) The Escrow Agent may resign at any time upon giving 30 days
written notice to the Company. If a successor escrow agent is
not appointed by Company within 30 days after notice of
resignation, the Escrow Agent may petition any court of competent
jurisdiction to name a successor escrow agent and the Escrow
Agent shall be fully relieved of all liability under this
Agreement to any and all parties upon the transfer of the
Escrowed Funds and all related documentation thereto, including
appropriate information to assist the successor escrow agent with
the reporting of earnings of the Escrowed Funds to the
appropriate state and federal agencies in accordance with
applicable state and federal income tax laws.
6. Appointment of Successor. The Company may, upon the delivery of 30
days written notice appointing a successor escrow agent to the Escrow
Agent, terminate the services of the Escrow Agent hereunder. In the
event of such termination, the Escrow Agent shall immediately effect
the transfer of the Escrowed Funds and all related documentation
thereto, including appropriate information to assist the successor
escrow agent with the reporting of earnings of the Escrowed Funds to
appropriate state and federal agencies in accordance with applicable
state and federal income tax laws, less any fees and expenses due to
be paid to the Escrow Agent or required to be paid by the Escrow Agent
to a third party pursuant to this Agreement.
7. Notice. All notices, requests, demands and other communications or
deliveries required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given three days after
having been deposited for mailing if sent by registered mail, or
certified mail return receipt requested, or delivery by courier, to
the respective addresses set forth below:
If to the Subscribers for Shares: To their respective addresses as specified in
their Subscription Agreements.
The Company: William S. Huggins
President and Chief Executive Officer
NBG Bancorp, Inc.
P. O. Box 6507
Athens, Georgia 30604
A-5
<PAGE>
With a copy to: Thomas O. Powell, Esquire
Troutman Sanders LLP
600 Peachtree Street, N.E.
Suite 5200
Atlanta, Georgia 30308-2216
The Escrow Agent: Georgia First Bank, N.A.
P. O. Box 667
Duluth, Georgia 30096
Attention: H. Randolph Lee, Jr.
8. Representations of the Company. The Company hereby acknowledges that
the Escrow Agent shall have the duties and responsibilities stated
herein, and the Company agrees that it will not represent or imply
that the Escrow Agent, by serving as the Escrow Agent hereunder or
otherwise, has investigated the desirability or advisability in an
investment in the Shares, or has approved, endorsed or passed upon the
merits of the Shares. The Company shall not use the name of the
Escrow Agent in any manner whatsoever in connection with the offer or
sale of the Shares, other than by disclosing this Agreement, the
Escrow Agent's services hereunder, and the Escrow Agent's name and
address to potential investors in the Offering.
9. General.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
(b) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or
interpretation of this Agreement.
(c) This Agreement sets forth the entire agreement and understanding
of the parties with regard to this escrow transaction and
supersedes all prior agreements, arrangements and understandings
relating to the subject matter hereof.
(d) This Agreement may be amended, modified, superseded or canceled,
and any of the terms or conditions hereof may be waived, only by
a written instrument executed by each party hereto or, in the
case of a waiver, by the party waiving compliance. The failure
of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right to require
such performance at a later time. No waiver in any one or more
instances by any party of any condition, or of the breach of any
term contained in this Agreement, whether by conduct or
otherwise, shall be deemed to be, or construed as, a further or
continuing waiver of any such condition or breach, or a waiver of
any other condition or of the breach of any other terms of this
Agreement.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(f) This Agreement shall inure to the benefit of the parties hereto
and their respective administrators, successors and assigns. The
Escrow Agent shall be bound only by the terms of this Escrow
Agreement and shall not be bound by or
A-6
<PAGE>
incur any liability with respect to any other agreement or
understanding between the parties except as herein expressly
provided. The Escrow Agent shall not have any duties hereunder
except those specifically set forth herein.
(g) No interest in any part to this Agreement shall be assignable in
the absence of a written agreement by and between all of the
parties to this Agreement, executed with the same formalities as
this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
COMPANY:
NBG BANCORP, INC.
By: /s/ William S. Huggins
----------------------
William S. Huggins
President and Chief Executive Officer
ESCROW AGENT:
GEORGIA FIRST BANK, N.A.
By: /s/ H. Randolph Lee, Jr.
------------------------
H. Randolph Lee, Jr.
Acting President
A-7
<PAGE>
APPENDIX "B"
NBG BANCORP, INC.
SUBSCRIPTION AGREEMENT
To: NBG Bancorp, Inc.
P.O. Box 6507
Athens, Georgia 30604
Gentlemen:
You have informed the undersigned that NBG Bancorp, Inc. (the "Company") is
offering up to 800,000 shares of its $1.00 par value per share common stock (the
"Common Stock") at a price of $10.00 per share as described in and offered
pursuant to the Prospectus furnished to the undersigned herewith (the
"Prospectus"). In addition, you have informed the undersigned that the minimum
subscription is _____ shares.
1. Subscription. Subject to the terms and conditions hereof, the
undersigned hereby tenders this subscription, together with
payment in United States currency by check, bank draft or money
order payable to "Georgia First Bank, N.A., Escrow Agent for NBG
Bancorp, Inc." (the "Funds"), representing the payment of $10.00
per share for the number of shares of the Common Stock indicated
below.
2. Acceptance of Subscription. It is understood and agreed that the
Company shall have the right to accept or reject this
subscription in whole or in part, for any reason whatsoever. The
Company shall reject this subscription, if at all, in writing
within ten business days after receipt of this subscription. The
Company may reduce the number of shares for which the undersigned
has subscribed, indicating acceptance of less than all of the
shares subscribed on its written form of acceptance.
3. Acknowledgments. The undersigned hereby acknowledges receipt of
a copy of the Prospectus and agrees to be bound by the terms of
this Agreement and the Escrow Agreement.
4. Revocation. The undersigned agrees that once this Subscription
Agreement is accepted by the Company, it may not be withdrawn.
Therefore, until the earlier of the expiration of five business
days after receipt by the Company of this Subscription Agreement
or acceptance of this Subscription Agreement by the Company, the
undersigned may withdraw this subscription and receive a full
refund of the subscription price. The undersigned agrees that,
except as provided in this Section 4, the undersigned shall not
cancel, terminate or revoke this Subscription Agreement or any
agreement of the undersigned made hereunder and that this
Subscription Agreement shall survive the death, disability or
dissolution of the undersigned.
By executing this Subscription Agreement, the undersigned is not waiving any
rights the undersigned may have under federal securities laws, including the
Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as
amended.
B-1
<PAGE>
Please fill in the information requested below, make your check payable to
"Georgia First Bank, N.A., Escrow Agent for NBG Bancorp, Inc." and mail the
Subscription Agreement, Stock Certificate Registration Instructions, Substitute
Form W-9, and check to the attention of William S. Huggins, President and Chief
Executive Officer, NBG Bancorp, Inc., P.O. Box 6507, Athens, Georgia 30604.
------------------------------------
No. of Shares Subscribed: (Signature of Subscriber)
_________________
------------------------------------
Funds Tendered ($10.00 (Name Please Print or Type)
per share subscribed):
$________________
Date:
-------------------------------
Phone Number:
(Home)
------------------------------
(Office)
-----------------------------
Residence Address:
------------------------------------
------------------------------------
------------------------------------
City, State and Zip Code
------------------------------------
Social Security Number or other
Taxpayer Identification Number
B-2
<PAGE>
STOCK CERTIFICATE REGISTRATION INSTRUCTIONS
Name:
------------------------------------------
Additional Name if Tenant in Common or Joint Tenant:
- -------------------------------------------------------------------------------
Mailing Address:
- -----------------------------
- -----------------------------
- -----------------------------
Social Security Number or other Taxpayer Identification Number:
-------------
Number of shares to be registered in above name(s):
---------------
Legal form of ownership:
___ Individual ___ Joint Tenants with Rights of Survivorship
___ Tenants in Common ___ Uniform Gift to Minors
___ Other___________________
INFORMATION AS TO BANKING INTERESTS
1. As a prospective shareholder, I would be interested in the following
services checked below:
<TABLE>
<CAPTION>
PERSONAL BUSINESS
<S> <C> <C>
(a) Checking Account ____ ____
(b) Savings Account ____ ____
(c) Certificates of Deposit ____ ____
(d) Individual Retirement Accounts ____ ____
(e) Checking Account Overdraft Protection ____ ____
(f) Consumer Loans (auto, etc.) ____ ____
(g) Commercial Loans ____ ____
(h) Equity Line of Credit ____ ____
(i) Mortgage Loans ____ ____
(j) Revolving Personal Credit Line ____ ____
(k) Safe Deposit Box ____ ____
(l) Automatic Teller Machines ____ ____
</TABLE>
2. I would like our new bank to provide the following additional services:
(a)
-----------------------------------
(b)
-----------------------------------
B-3
<PAGE>
Federal Income Tax Backup Withholding
In order to prevent the application of federal income tax backup
withholding, each subscriber must provide the escrow agent with a correct
Taxpayer Identification Number ("TIN"). An individual's social security number
is his or her TIN. The TIN should be provided in the space provided in the
Substitute Form W-9, which is set forth below.
Under federal income tax law, any person who is required to furnish his or
her correct TIN to another person, and who fails to comply with such
requirements, may be subject to a $50 penalty imposed by the Internal Revenue
Service ("IRS").
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If backup withholding results in an overpayment of taxes, a refund
may be obtained from the IRS. Certain taxpayers, including all corporations,
are not subject to these backup withholding and reporting requirements.
If the shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future, "Applied For" should be written
in the space provided for the TIN on the Substitute Form W-9.
- --------------------------------------------------------------------------------
Substitute Form W-9
Under penalties of perjury, I certify that: (i) The number shown on this
form is my correct Taxpayer Identification Number (or I am waiting for a
Taxpayer Identification Number to be issued to me), and (ii) I am not subject to
backup withholding because: (a) I am exempt from backup withholding; or (b) I
have not been notified by the Internal Revenue Service ("IRS") that I am subject
to backup withholding as a result of a failure to report all interest or
dividends; or (c) the IRS has notified me that I am no longer subject to backup
withholding.
You must cross out item (ii) above if you have been notified by the IRS
that you are subject to backup withholding because of underreporting interest or
dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from
the IRS that you are not longer subject to backup withholding, do not cross out
item (ii).
Each subscriber should complete this section.
- --------------------------------- -----------------------------------
Signature of Subscriber Signature of Subscriber
- --------------------------------- -----------------------------------
Printed Name Printed Name
- --------------------------------- -----------------------------------
Social Security or Employer Social Security or Employer
Identification No.: Identification No.:
-------------- ----------------
B-4
<PAGE>
FORM OF ACCEPTANCE
NBG Bancorp, Inc.
P.O. Box 6507
Athens, Georgia 30604
[Date]
To:
----------------
----------------
----------------
Dear Subscriber:
NBG Bancorp, Inc. (the "Company") acknowledges receipt of your subscription
for _____ shares of its $1.00 par value per share Common Stock and your check
for $_________.
The Company hereby accepts your subscription for the purchase of _____
shares of its Common Stock, at $10.00 per share, for an aggregate of
$___________, effective as of the date of this letter.
Your stock certificate(s) representing shares of Company Common Stock duly
authorized and fully paid will be issued to you as soon as practicable after all
subscription funds are released to the Company from the Company's subscription
escrow account with Georgia First Bank, N.A., all as described in the
Subscription Agreement executed by you and in the Company's Prospectus furnished
to you. In the event that (i) the offering is canceled, or (ii) the minimum
number of subscriptions (610,000 shares) is not obtained, or (iii) the Company
shall not have received approval from the Board of Governors of the Federal
Reserve System to become a bank holding company, or (iv) The National Bank of
Georgia (In Organization) shall not have received final charter approval from
the Office of the Comptroller of the Currency and approval for deposit insurance
from the Federal Deposit Insurance Corporation, your subscription funds will be
returned to you, adjusted for net profits from the investment of such funds, if
any, as described in the Company's Prospectus.
If this acceptance is for a lesser number of shares than that number
subscribed by you as indicated in your Subscription Agreement, your payment for
shares of Common Stock in excess of the number of shares accepted hereby will be
refunded to you by mail, without interest, within ten days of the date hereof.
Very Truly Yours,
NBG BANCORP, INC.
By:
-------------------------------------
William S. Huggins
President and Chief Executive Officer
B-5
<PAGE>
(This page intentionally left blank)
<PAGE>
================================================================================
Prospective investors may rely only on the information contained in this
prospectus. No one has authorized anyone to provide prospective investors with
information different from that contained in this prospectus. This prospectus
is not an offer to sell nor is it seeking an offer to buy these securities in
any jurisdiction where the offer or sale is not permitted. The information
contained in this prospectus is correct only as of the date of this prospectus,
regardless of the time of the delivery of this prospectus or any sale of these
securities.
------------
TABLE OF CONTENTS
Page
----
Summary................................. 1
Risk Factors............................ 7
A Warning About Forward-Looking
Statements........................... 12
Terms of the Offering................... 13
Plan of Distribution.................... 16
Use of Proceeds......................... 18
Capitalization.......................... 20
Dividends............................... 21
Plan of Operation....................... 22
Proposed Business of NBG Bancorp and
The National Bank of Georgia.......... 24
Management.............................. 36
Executive Compensation.................. 41
Certain Relationships and Related
Transactions.......................... 45
Description of Capital Stock of
NBG Bancorp........................... 45
Important Provisions of NBG Bancorp's
Articles of Incorporation and Bylaws.. 46
Supervision and Regulation.............. 52
Legal Matters........................... 57
Experts................................. 57
Reports to Shareholders................. 57
Additional Information.................. 57
Index to Financial Report............... F-1
Appendix A - Escrow Agreement
Appendix B - Subscription Materials
Until ____________, 1999 (90 days after the date of this prospectus), all
dealers that effect transfers in these securities or trade the common stock,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
800,000 Shares of Common Stock
372,500 Common Stock
Purchase Warrants
NBG BANCORP, INC.
A Proposed Bank Holding Company
for
THE NATIONAL BANK OF GEORGIA
(Proposed)
Common Stock
_________________
PROSPECTUS
_________________
____________, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
Consistent with the applicable provisions of the laws of Georgia, the
Registrant's Bylaws provide that the Registrant shall have the power to
indemnify its directors, officers, employees and agents against expenses
(including attorneys' fees) and liabilities arising from actual or threatened
actions, suits or proceedings, whether or not settled, to which they become
subject by reason of having served in such role if such director, officer,
employee or agent acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Registrant and,
with respect to a criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. Advances against expenses shall be
made so long as the person seeking indemnification agrees to refund the advances
if it is ultimately determined that he or she is not entitled to
indemnification. A determination of whether indemnification of a director,
officer, employee or agent is proper because he or she met the applicable
standard of conduct shall be made (i) by the Board of Directors of the
Registrant, (ii) in certain circumstances, by independent legal counsel in a
written opinion or (iii) 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 (i) a breach of duty involving appropriation of a business
opportunity of the Registrant, (ii) an act or omission involving intentional
misconduct or a knowing violation of law, (iii) a transaction from which the
director derives an improper material tangible personal benefit or (iv) as to
any payment of a dividend or approval of a stock repurchase that is illegal
under the Georgia Business Corporation Code. The Articles of Incorporation do
not eliminate or limit the right of the Registrant or its shareholders to seek
injunctive or other equitable relief not involving monetary damages.
Item 25. Other Expenses Of Issuance And Distribution.
Estimated expenses, other than underwriting discounts and commissions, of
the sale of the Registrant's Common Stock, $1.00 par value per share, are as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee................................ $ 3,260
Blue Sky Fees and Expenses......................................................... 8,740
Legal Fees and Expenses............................................................ 35,000
Accounting Fees and Expenses....................................................... 5,000
Printing and Engraving Expenses.................................................... 10,000
Entertainment...................................................................... 3,500
Miscellaneous...................................................................... 6,000
-------
Total........................................................................... $71,500
=======
</TABLE>
Item 26. Recent Sales of Unregistered Securities.
On September 23, 1999, the Registrant issued to William S. Huggins, in a
private placement, one share of the Registrant's Common Stock, $1.00 par value
per share, for an aggregate price of $1.00 in connection with the organization
of the Company. The sale to Mr. Huggins was exempt from registration under the
Securities Act of 1933, as amended (the "Act") pursuant to Section 4(2) of the
Act because it was a transaction by an issuer that did not involve a public
offering.
II-1
<PAGE>
Item 27. Exhibits.
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation*
3.2 Bylaws
4.1 Specimen Common Stock Certificate
4.2 See Exhibits 3.1 and 3.2 for provisions of the Articles of
Incorporation and Bylaws defining rights of holders of the Common
Stock
4.3 Form of Organizer Warrant Agreement
5.1 Legal Opinion of Troutman Sanders LLP
10.1 Letter Agreement for purchase of main office property dated June 1,
1999
10.2 [Reserved]
10.3 Employment Agreement, dated November 15, 1999, by and among The
National Bank of Georgia (Proposed), NBG Bancorp, Inc. and William
S. Huggins
10.4 Employment Agreement, dated November 15, 1999, by and among The
National Bank of Georgia (Proposed), NBG Bancorp, Inc. and Thomas Z.
Lanier, III
10.5 Employment Agreement, dated November 15, 1999, by and among The
National Bank of Georgia (Proposed), NBG Bancorp, Inc. and Michael
R. Carson
10.6 Loan Agreement between William S. Huggins, Thomas Z. Lanier, III and
Michael R. Carson, as Borrowers and Georgia First Bank, N.A. as
Lender, and Organizers as Guarantors
10.7 NBG Bancorp, Inc. Stock Option Plan
10.8 Form of NBG Bancorp, Inc. Incentive Stock Option
10.9 Form of NBG Bancorp, Inc. Non-Qualified Stock Option
10.10 Escrow Agreement, dated as of November 10, 1999, by and between NBG
Bancorp, Inc. and Georgia First Bank, N.A. (included as Appendix A
to the prospectus and incorporated by reference herein)
10.11 Form of Organizer Warrant Agreement (contained in Exhibit 4.3)
21.1 List of Subsidiaries*
II-2
<PAGE>
23.1 Consent of Mauldin & Jenkins, LLC
23.2 Consent of Troutman Sanders LLP (contained in Exhibit 5.1)
24.1 Power of Attorney (included in the original signature page to this
Registration Statement)*
27.1 Financial Data Schedule (for SEC use only)
99.1 Form of Subscription Agreement (included as Appendix B to the
prospectus and incorporated by reference herein)
- ---------------------
*Previously filed.
Item 28. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes as follows:
(a)(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) Include any additional or changed material information on the
plan of distribution.
II-3
<PAGE>
(2) For determining liability under the Securities Act, treat each post-
effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities being registered that remain unsold at the end of the
offering.
The Registrant hereby undertakes as follows:
(b)(1) For determining any liability under the Securities Act, to treat the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant under Rule 424(b)(1), or (4) or
497(h) under the Securities Act as part of this Registration Statement as
of the time the Commission declared it effective.
(2) For determining any liability under the Securities Act, to treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the Registration
Statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
II-4
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form SB-2 and authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
City of Athens, State of Georgia, on November 16, 1999.
NBG BANCORP, INC.
/s/ William S. Huggins
----------------------
William S. Huggins
President and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement was signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
- --------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C>
* Director November 16, 1999
- ---------------------------------
John Harold Barrett
* Director November 16, 1999
- ---------------------------------
Jack Lee Barton
* Director November 16, 1999
- ---------------------------------
Robert E. Burton
/s/ Michael R. Carson Executive Vice President and November 16, 1999
- --------------------------------- Director
Michael R. Carson (principal financial and
accounting officer)
* Director November 16, 1999
- ---------------------------------
Michael Sidney Gautreaux
* Director November 16, 1999
- ---------------------------------
Ronald Lewis Hill
/s/ William S. Huggins President and Chief Operating November 16, 1999
- --------------------------------- Officer and Director
William S. Huggins (principal executive officer)
* Director November 16, 1999
- ---------------------------------
Henry D. Joiner
/s/ Thomas Z. Lanier, III Executive Vice President and November 16, 1999
- --------------------------------- Director
Thomas Z. Lanier, III
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
* Director November 16, 1999
- ---------------------------------
Ted Ruff Ridlehuber
* Director November 16, 1999
- ---------------------------------
Thomas Wells Scott
* Director November 16, 1999
- ---------------------------------
Tommy Edward Warner
* Director November 16, 1999
- ---------------------------------
Claude Williams, Jr.
</TABLE>
* /s/ William S. Huggins
----------------------
William S. Huggins
Attorney-in-Fact
II-6
<PAGE>
Exhibit
Number Description of Exhibits
- --------------------------------------------------------------------------------
3.2 Bylaws
4.1 Specimen Common Stock Certificate
4.3 Form of Organizer Warrant Agreement
5.1 Legal Opinion of Troutman Sanders LLP
10.1 Letter Agreement for purchase of main office property dated
June 1, 1999
10.3 Employment Agreement, dated November 15, 1999, by and among The
National Bank of Georgia (Proposed), NBG Bancorp, Inc. and William S.
Huggins
10.4 Employment Agreement, dated November 15, 1999, by and among The
National Bank of Georgia (Proposed), NBG Bancorp, Inc. and Thomas Z.
Lanier, III
10.5 Employment Agreement, dated November 15, 1999, by and among The
National Bank of Georgia (Proposed), NBG Bancorp, Inc. and
Michael R. Carson
10.6 Loan Agreement between William S. Huggins, Thomas Z. Lanier, III and
Michael R. Carson, as Borrowers and Georgia First Bank, N.A. as
Lender, and Organizers as Guarantors
10.7 NBG Bancorp, Inc. Stock Option Plan
10.8 Form of NBG Bancorp, Inc. Incentive Stock Option
10.9 Form of NBG Bancorp, Inc. Non-Qualified Stock Option
23.1 Consent of Mauldin & Jenkins, LLC
27.1 Financial Data Schedule
<PAGE>
EXHIBIT 3.2
BYLAWS
OF
NBG BANCORP, INC.
ARTICLE I.
DEFINITIONS
As used in these Bylaws, the capitalized terms set forth below shall have
the following meanings:
"Articles of Incorporation" means the Articles of Incorporation of the
Corporation, as amended from time to time.
"Board" shall mean the Board of Directors of the Corporation.
"Chief Executive Officer" shall mean the President of the Corporation, or
such other Officer as shall be designated by the Board as having the duties of
the Chief Executive Officer, as described in Section 4 of Article V of these
Bylaw s.
"Code" shall mean the Georgia Business Corporation Code, as amended from
time to time.
"Corporation" shall mean NBG Bancorp, Inc., a Georgia corporation.
"Secretary" shall mean the Secretary of the Corporation, or such other
officer as shall be designated by the Board as having the duties of the
corporate Secretary as described in Section 5 of Article V of these Bylaws.
"Secretary of State" shall mean the Secretary of State of Georgia.
"Voting group" shall have the meaning set forth in subsection (a) of
Section 6 of Article III of these Bylaws.
ARTICLE II.
GENERAL PROVISIONS REGARDING NOTICES
Section 1. Notices. Except as otherwise provided in the Articles of
Incorporation or these Bylaws, or as otherwise required by applicable law:
<PAGE>
(a) Any notice required by these Bylaws or by law shall be in writing
unless oral notice is reasonable under the circumstances.
(b) Notice may be communicated in person; by telephone, telegraph,
teletype, or other form of wire or wireless communication; or by mail or private
carrier. If these forms of personal notice are impracticable, notice may be
communicated by a newspaper of general circulation in the area where published,
or by radio, television, or other form of public broadcast communication.
(c) Written notice by the Corporation to any shareholder, if in a
comprehensible form, is effective when mailed, if mailed with first-class
postage prepaid and correctly addressed to the shareholder's address shown in
the Corporation's current record of shareholders; provided, however, that if the
-------- -------
Corporation has more than 500 shareholders of record entitled to vote at a
meeting, it may utilize a class of mail other than first class if the notice of
the meeting is mailed, with adequate postage prepaid, not less than 30 days
before the date of the meeting.
(d) Written notice to the Corporation may be addressed to its registered
agent at its registered office or to the Corporation or its Secretary at its
principal office shown in its most recent annual registration with the Secretary
of State.
(e) Except as provided in subsection (c) of this Section 1, written
notice, if in a comprehensible form, is effective at the earliest of the
following:
(1) When received, or when delivered, properly addressed, to the
addressee's last known principal place of business or residence;
(2) Five days after its deposit in the mail, as evidenced by the
postmark, if mailed with first-class postage prepaid and
correctly addressed; or
(3) On the date shown on the return receipt, if sent by registered or
certified mail, return receipt requested, and the receipt is
signed by or on behalf of the addressee.
(f) Oral notice is effective when communicated if communicated in a
comprehensible manner.
(g) In calculating time periods for notice under these Bylaws, when a
period of time measured in days, weeks, months, years, or other measurement of
time is prescribed for the exercise of any privilege or the discharge of any
duty, the first day shall not be counted but the last day shall be counted.
Section 2. Waiver of Notice. Except as otherwise provided or required by
the Articles of Incorporation, these Bylaws or applicable law:
(a) A shareholder may waive any notice required to be given to such
shareholder, before or after the date and time stated in the notice. The waiver
must be in writing, be signed by
2
<PAGE>
the shareholder entitled to the notice, and be delivered to the Corporation for
inclusion in the minutes or filing with the Corporation's corporate records.
(b) A shareholder's attendance at a meeting:
(1) Waives objection to lack of notice or defective notice of the
meeting, unless the shareholder at the beginning of the meeting
objects to holding the meeting or transacting business at the
meeting; and
(2) Waives objection to consideration of a particular matter at the
meeting that is not within the purpose or purposes described in
the meeting notice, unless the shareholder objects to considering
the matter when it is presented.
(c) Neither the business transacted nor the purpose of the meeting need be
specified in the waiver, except that any waiver by a shareholder of the notice
of a meeting of shareholders with respect to an amendment of the Articles of
Incorporation, a plan of merger or share exchange, a sale of assets or any other
action which would entitle the shareholder to exercise statutory dissenter's
rights under the Code and obtain payment for his shares shall not be effective
unless:
(1) Prior to the execution of the waiver, the shareholder shall have
been furnished the same material that under the Code would have
been required to be sent to the shareholder in a notice of the
meeting, including notice of any applicable dissenters rights, as
provided in the Code; or
(2) The waiver expressly waives the right to receive the material
required to be furnished.
(d) A director may waive any notice required to be given to such director
by the Code, the Articles of Incorporation, or these Bylaws before or after the
date and time stated in the notice. Except as provided by subsection (e) of this
Section 2, the waiver must be in writing, signed by the director entitled to the
notice, and delivered to the Corporation for inclusion in the minutes or filing
with the Corporation's corporate records.
(e) A director's attendance at or participation in a meeting waives any
required notice to him of the meeting unless the director at the beginning of
the meeting (or promptly upon his 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.
ARTICLE III.
SHAREHOLDERS' MEETINGS
Section 1. Place of Meeting. The Board may designate any place within or
outside the State of Georgia as the place of meeting for any annual or special
meeting of shareholders.
3
<PAGE>
Section 2. Annual Meeting. An annual meeting of the Corporation's
shareholders shall be held each year, on such date, at such time and place as
the Board shall determine, at which time the Corporation's shareholders shall
elect directors and transact such other business as may be properly brought
before the meeting.
Section 3. Special Meetings. Except to the extent otherwise prescribed by
statute or the Articles of Incorporation, special meetings of shareholders, for
any purpose or purposes, may be called by the Chairman of the Board, the Chief
Executive Officer, or the Board pursuant to resolution adopted by a majority of
the Board.
Section 4. Notice to Shareholders.
(a) Except as otherwise specifically provided in this Section 4,
requirements with respect to the giving of notice and waiver of notice shall be
governed by the provisions of Article II of these Bylaws.
(b) The Corporation shall give notice to each shareholder entitled to vote
thereat of the date, time and place of each annual and special shareholders,
meeting no fewer than 10 nor more than 60 days before the meeting date.
(c) Unless otherwise required by the Code with respect to meetings at
which specified actions will be considered (including but not limited to
mergers, certain share exchanges, certain asset sales by the Corporation, and
dissolution of the Corporation), notice of an annual meeting need not contain a
description of the purpose or purposes for which the meeting is called.
(d) Notice of a special meeting must include a description of the purpose
or purposes for which the meeting is called.
(e) Unless a new record date is set (or is required by law or by the terms
of these Bylaws to be set) therefor, notice of the date, time and place of any
adjourned meeting need not be given otherwise than by the announcement at the
meeting before adjournment. If a new record date for the adjourned meeting is or
must be fixed, however, notice of the adjourned meeting must be given in
accordance with these Bylaws as if such adjourned meeting were a newly-called
meeting.
(f) If any corporate action proposed to be considered at a meeting of
shareholders would or might give rise to statutory dissenters' rights under the
Code, the notice of such meeting shall state that the meeting is to include
consideration of such proposed corporate action, and that the consummation of
such action will or might give rise to such dissenters rights, and shall include
the description of such statutory dissenters rights required by the Code.
(g) If any corporate action which would give rise to statutory dissenter
rights under the Code is taken by written consent of shareholders without a
meeting, or is taken at a meeting with respect to which less than all
shareholders were entitled to receive notice, or is otherwise taken without a
vote of shareholders, the Corporation shall cause notice thereof, including the
4
<PAGE>
information concerning statutory dissenters rights contemplated by paragraph (b)
above, to be given, not more than 10 days after the adoption of such action by
shareholder vote at a meeting or by written consent to those shareholders who
did not execute such written consent or who were not entitled to receive notice
of such meeting, or to all shareholders if such action was otherwise taken
without a vote of shareholders.
Section 5. Fixing of Record Date.
(a) For the purpose of determining shareholders entitled to notice of or
to vote at any meeting of shareholders, or shareholders entitled to demand a
special meeting of shareholders, or shareholders entitled to take any other
action, the Board may fix in advance (but not retroactively from the date the
Board takes such action) a date as the record date for any such determination of
shareholders, such date in any case to be not more than 70 days prior to the
meeting or action requiring such determination of shareholders. If no record
date is fixed for the determination of shareholders entitled to notice of or to
vote at a meeting of shareholders, the close of business on the last business
day before the first notice of such meeting is delivered to shareholders shall
be the record date. If no record date is fixed for determining shareholders
entitled to take action without a meeting, the date the first shareholder signs
the consent shall be the record date for such purpose. If no record date is
fixed for determining shareholders entitled to demand a special meeting, or to
take other action, the date of receipt of notice by the Corporation of demand
for such meeting, or the date on which such other action is to be taken by the
Corporation's shareholders, shall be the record date for such purpose.
(b) A separate record date may be established for each voting group
entitled to vote separately on a matter at a meeting.
(c) A determination of shareholders entitled to notice of or to vote at a
shareholders meeting is effective for any adjournment of the meeting unless the
Board fixes a new record date, which it must do if the meeting is adjourned to a
date more than 120 days after the date fixed for the original meeting.
(d) For the purpose of determining shareholders entitled to a distribution
by the Corporation (other than one involving a purchase, redemption or other
acquisition of the Corporation's shares), the record date shall be the date
fixed for such purpose by the Board, or if the Board does not fix such a date,
the date on which the Board authorizes such distribution.
Section 6. Quorum and Voting Requirements.
(a) Except as otherwise provided by the Articles of Incorporation or the
Code:
(1) A "voting group" with respect to any given matter means all
shares of one or more class or series which, under the Articles
of Incorporation or the Code, are entitled to vote and be counted
together collectively on that matter, and unless specified
otherwise in the Articles of Incorporation, the Code or these
Bylaws, all shares entitled to vote on a given matter shall be
deemed to be a single voting group for purposes of that matter.
5
<PAGE>
(2) Each outstanding share, regardless of class, is entitled to one
vote on each matter voted on at a shareholders meeting.
(3) A majority of the votes entitled to be cast on the matter by a
voting group constitutes a quorum of that voting group for action
on that matter.
(4) The presence of a quorum of each voting group entitled to vote
thereon shall be the requisite for transaction of business on a
given matter.
(5) Action on a matter other than election of directors is approved
by a voting group if a quorum of such voting group exists and the
number of votes cast within such voting group in favor of such
action exceeds the number of votes cast within such voting group
against such action.
(6) Except as otherwise provided in these Bylaws, all shares entitled
to vote for election of directors shall vote thereon as a single
voting group, and directors shall be elected by a plurality of
votes cast by shares entitled to vote in the election in a
meeting at which a quorum of such voting group is present.
(b) Once a share is represented for any purpose other than solely to
object to holding a meeting or transacting business at the meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is, or is required by law
or these Bylaws to be, set for that adjourned meeting.
(c) If a quorum for transaction of business shall not be present at a
meeting of the Corporation's shareholders, the shareholders entitled to vote
thereat, present in person or by proxy, shall have the power to adjourn the
meeting from time to time, until the requisite amount of voting stock shall be
present. No notice other than announcements at the meeting before adjournment
shall be required of the new date, time or place of the adjourned meeting,
unless a new record date for such adjourned meeting is, or is required by law or
these Bylaws to be, fixed. At such adjourned meeting (for which no new record
date is, or is required to be, set) at which a quorum shall be present in person
or by proxy, any business may be transacted that might have been transacted at
the meeting originally called.
Section 7. Proxies. At every meeting of shareholders, any shareholder
having the right to vote shall be entitled to vote in person or by proxy, but no
proxy shall be: (i) effective unless given in writing and signed, either
personally by the shareholder or his agent or his attorney-in-fact; or (ii)
effective until received by the inspector of election or the officer or the
agent authorized to tabulate votes; or valid after 11 months after its date,
unless said proxy expressly provides for a longer period.
Section 8. Informal Actions by Shareholders. Any action required or
permitted to be taken at a meeting of shareholders may be taken without a
meeting if written consent (which may take the form of one or more counterpart
copies), bearing the date of signature and setting forth
6
<PAGE>
the action so taken, shall be signed by all the holders of all the shares
entitled to vote with respect to the subject matter thereof and delivered to the
Corporation for inclusion in the minutes or filing with the corporate records.
Such consent shall have the same force and effect as a unanimous vote of the
Corporation's shareholders; provided, however, that no such consent which
-------- ------
purports to be an approval of any plan of merger, share exchange, asset sale or
transaction (i) as to which shareholder approval is required by the Code
and (ii) with respect to which specific disclosure requirements to voting
shareholders are imposed by the Code, shall be effective unless:
(1) prior to the execution of the consent, each consenting shareholder
shall have been furnished the same material which, under the Code,
would have been required to be sent to shareholders in a notice of a
meeting at which the proposed action would have been submitted to the
shareholders for action, including notice of any applicable dissenters
rights; or
(2) the written consent contains an express waiver of the right to receive
the material otherwise required to be furnished.
ARTICLE IV.
DIRECTORS
Section 1. General Powers. All corporate powers of the Corporation shall be
exercised by or under the authority of, and the business and affairs of the
Corporation managed under the direction of, its Board, subject to any limitation
set forth in the Articles of Incorporation, or any amendment to these Bylaws
approved by the Corporation's shareholders, or any otherwise lawful agreement
among the Corporation's shareholders.
Section 2. Number, Election and Terms. Except as otherwise fixed by or
pursuant to the provisions of the Articles of Incorporation relating to the
rights of the holders of any series of preferred stock to elect additional
directors under specified circumstances, the number of directors comprising the
Board shall be fixed from time to time by resolution of the Board; provided,
--------
however, that the number of directors fixed by the Board shall not be less than
- -------
five or more than 25. The Board shall be divided into three classes, as nearly
equal in number as possible, with the term of office of the first class of
directors to expire at the annual meeting of the Corporation's shareholders to
be held in 2000, the term of office of the second class of directors to expire
at the annual meeting of the Corporation's shareholders to be held in 2001, and
the term of office of the third class of directors to expire at the annual
meeting of the Corporation's shareholders to be held in 2002. At each annual
meeting of the Corporation's shareholders, and except as otherwise so fixed by
or pursuant to the provisions of the Articles of Incorporation relating to the
rights of holders of any series of preferred stock to elect additional directors
under specified circumstances, the successors of the class of directors whose
terms expire at that meeting shall be elected for a term of office expiring at
the annual meeting of the Corporation's shareholders held in the third year
following the year of their election.
7
<PAGE>
Section 3. Vacancies, How Filled. Subject to the rights of the holders of
any series of preferred stock then outstanding, newly created directorships
resulting from any increase in the number of directors or any vacancies
occurring in the Board resulting from death, resignation, retirement,
disqualification, removal from office or other cause shall be filled by the
affirmative vote of a majority of the remaining directors then in office,
although less than a quorum of the Board, or by the sole remaining director. A
director so chosen shall hold office until the next annual meeting of the
Corporation's shareholders. No decrease in the number of directors constituting
the Board shall shorten the term of any incumbent director.
Section 4. Continuances in Office. Notwithstanding the foregoing provisions
of this Article IV, any director whose term of office has expired shall continue
to hold office until his successor shall be elected and qualified.
Section 5. Removal. Subject to the rights of the holders of any series of
preferred stock then outstanding, any director, or the entire Board, may be
removed from office at any time, but only for cause, and only by the affirmative
vote of the holders of at least 66 2/3% of the total number of votes entitled to
be cast by the holders of all of the shares of capital stock of the Corporation
then entitled to vote generally in the election of directors. The holder of each
share of capital stock entitled to vote thereon shall be entitled to cast the
same number of votes as the holder of such shares is entitled to cast generally
in the election of each director.
Section 6. Place of Meeting. The Board may hold its meetings at such place
or places within or outside the State of Georgia as it may from time to time
determine.
Section 7. Compensation. Directors may be allowed such compensation for
attendance at regular or special meetings of the Board and of any special or
standing committees thereof as the Board may from time to time determine.
Section 8. Regular Meetings. A regular annual meeting of the Board shall be
held, without other notice than this Bylaw, immediately after, and at the same
place as, the annual meeting of shareholders. The Board may provide, by
resolution, the time and place within or outside the State of Georgia, for the
holding of additional regular meetings without other notice than such
resolution.
Section 9. Special Meetings. Special meetings of the Board may be called by
the Chairman of the Board or the Chief Executive Officer, on not less than two
days notice to each director by mail, telegram, cablegram or other form of wire
or wireless communication, or personal delivery or other form of communication
authorized under the circumstances by the Code, and shall be called by the Chief
Executive Officer or the Secretary in like manner and on like notice on the
written request of any two or more members of the Board. Such notice shall state
the time, date and place of such meeting, but need not describe the purpose of
the meeting. Any such special meeting shall be held at such time and place as
shall be stated in the notice of the meeting.
8
<PAGE>
Section 10. General Provisions Regarding Notice and Waiver. Except as
otherwise expressly provided in this Article IV, matters relating to notice to
directors and waiver of notice by directors shall be governed by the provisions
of Article II of these Bylaws.
Section 11. Quorum. At all meetings of the Board, unless otherwise provided
in the Articles of Incorporation or other provisions of these Bylaws, the
presence of a majority of the directors shall constitute a quorum for the
transaction of business. In the absence of a quorum a majority of the directors
present at any meeting may adjourn from time to time until a quorum be had.
Notice of the time and place of any adjourned meeting need only be given by
announcement at the meeting at which adjournment is taken.
Section 12. Manner of Acting. Except as expressly otherwise provided in the
Articles of Incorporation or other provisions of these Bylaws, if a quorum is
present when a vote is taken, the affirmative vote of a majority of directors
present is the act of the Board. A director who is present at a meeting when
corporate action is taken is deemed to have assented to the action unless:
(1) He objects at the beginning of the meeting (or promptly upon his
arrival) to holding it or transacting business at the meeting;
(2) His dissent or abstention from the action taken is entered in the
minutes of the meeting; or
(3) He delivers written notice of his dissent or abstention to the
presiding officer of the meeting before its adjournment or to the
Corporation immediately after adjournment of the meeting.
Section 13. Committees.
(a) Except as otherwise provided by the Articles of Incorporation, the
Board may create one or more committees and appoint members of the Board to
serve on them. Each committee may have one or more members, who serve at the
pleasure of the Board.
(b) The provisions of these Bylaws and of the Code which govern meetings,
action without meetings, notice and waiver of notice, and quorum and voting
requirements of the Board, shall apply as well to committees created under this
Section 13 and their members.
(c) To the extent specified by the Articles of Incorporation, these Bylaws
and the resolution of the Board creating such committee, each committee may
exercise the authority of the Board; provided, however, that a committee may
-------- -------
not:
(1) Approve, or propose to shareholders for approval, action required
by the Code to be approved by shareholders;
(2) Fill vacancies on the Board or on any of its committees;
9
<PAGE>
(3) Exercise any authority which the Board may have to amend the
Articles of Incorporation;
(4) Adopt, amend, or repeal bylaws; or
(5) Approve a plan of merger not requiring shareholder approval.
Section 14. Action Without Formal Meeting. Except as expressly otherwise
provided in the Articles of Incorporation, any action required or permitted to
be taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if written consent thereto (which may take the form of one or
more counterparts) is signed by all members of the Board or of such committee,
as the case may be, and such written consent is filed with the minutes of the
proceedings of the Board or committee. A consent executed in accordance herewith
has the effect of a meeting vote and may be described as such in any document.
Section 15. Conference Call Meetings. Members of the Board, or any
committee of the Board, may participate in a meeting of the Board or committee
by means of conference, telephone or similar communications equipment by means
of which all persons participating in the meeting can simultaneously hear each
other during the meeting, and participation in a meeting pursuant to this
Section 15 shall constitute presence in person at such meeting.
ARTICLE V.
OFFICERS
Section 1. Generally. The Board shall from time to time elect or appoint
such officers as it shall deem necessary or appropriate to the management and
operation of the Corporation, which officers shall hold their offices for such
terms as shall be determined by the Board and shall exercise such powers and
perform such duties as are specified in these Bylaws or in a resolution of the
Board. Except as specifically otherwise provided in resolutions of the Board,
the following requirements shall apply to election or appointment of officers:
(a) The Corporation shall have, at a minimum, the following officers,
whose offices shall bear the titles designated therefor by resolution of the
Board, but in the absence of such designation shall bear the titles set forth
below:
Office Title
------ -----
Chief Executive Officer President and Chief Executive Officer
Chief Financial Officer Treasurer
Secretary Secretary
(b) All officers of the Corporation shall serve at the pleasure of the
Board, and in the absence of specification otherwise in a resolution of the
Board, each officer shall be elected to serve until the next succeeding annual
meeting of the Board and the election and qualification of his successor,
subject to his earlier death, resignation or removal.
10
<PAGE>
(c) Any person may hold two or more offices simultaneously, and no officer
need be a shareholder of the Corporation.
(d) If so provided by resolution of the Board, any officer may be
delegated the authority to appoint one or more officers or assistant officers,
which appointed officers or assistant officers shall have the duties and powers
specified in the resolution of the Board.
Section 2. Compensation. The salaries of the officers of the Corporation
shall be fixed by the Board, except that the Board may delegate to any officer
or officers the power to fix the compensation of any other officer.
Section 3. Vacancies. A vacancy in any office, because of resignation,
removal or death may be filled by the Board for the unexpired portion of the
term, or if so provided by resolution of the Board, by an officer of the
Corporation to whom has been delegated the authority to appoint the holder of
such vacated office.
Section 4. Chief Executive Officer. The Chief Executive Officer shall have
such title or titles designated by the Board or these Bylaws and shall be the
principal executive officer of the Corporation. Subject to the control of the
Board, the Chief Executive Officer shall in general manage, supervise and
control all of the business and affairs of the Corporation. He may sign,
individually or in conjunction with any other proper officer of the Corporation
thereunto authorized by the Board, certificates for shares of the Corporation,
any deeds, mortgages, bonds, policies of insurance, contracts, investment
certificates, or other instruments which the Board has authorized to be
executed, except in cases where the execution thereof shall be expressly
delegated by the Board or by these Bylaws to some other officer or agent of the
Corporation, or shall be required by law to be otherwise signed or executed; and
in general shall perform all duties incident to the office of the Chief
Executive Officer and such other duties as may be prescribed by the Board from
time to time.
Section 5. Secretary. The Secretary may be designated by any such title as
determined by resolution of the Board, but shall have the duties of the officer
denominated the "Secretary" under the Code. Such officer shall: (i) attend and
keep the Minutes of all shareholders' meetings and all of the Board's meetings
in one or more books provided for that purpose; (ii) see that all notices are
duly given in accordance with the provisions of these Bylaws or as otherwise
required by law or the provisions of the Articles of Incorporation; (iii) be
custodian of the corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all documents, the execution of
which on behalf of the Corporation under its seal is duly authorized; (iv)
maintain, or cause an agent designated by the Board to maintain, a record of the
Corporation's shareholders in a form that permits the preparation of a list of
the names and addresses of all shareholders in alphabetical order by class of
shares, showing the number and class of shares held by each; (v) have general
charge of the stock transfer books of the Corporation or responsibility for
supervision, on behalf of the Corporation, of any agent to which stock transfer
responsibility has been delegated by the Board; (vi) have responsibility for the
custody, maintenance and preservation of those corporate records which the
Corporation is required by the Code or otherwise to create, maintain or
preserve; and (vii) in general, perform
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<PAGE>
all duties incident to the legal office of "Secretary," as described in the
Code, and such other duties as from time to time may be assigned to him by the
Board.
Section 6. Chief Financial Officer. The Chief Financial Officer, unless
otherwise determined by the Board, shall: (i) have charge and custody of and be
responsible for all funds and securities of the Corporation; receive and give
receipts for monies due and payable to the Corporation from any source
whatsoever, and deposit all such monies in the name of the Corporation in such
banks, trust companies or other depositories as shall be selected by the Board;
and (ii) in general, perform all the duties incident to the office of Chief
Financial Officer and such other duties as from time to time may be assigned by
the Board.
Section 7. Deputy Officers. The Board may create one or more deputy
officers whose duties shall be, among any other designated thereto by the Board,
to perform the duties of the officer to which such office has been deputized in
the event of the unavailability, death or inability or refusal of such officer
to act. Deputy officers may hold such titles as designated therefor by the
Board; provided, however, any office designated with the prefix "Vice" or
-------- -------
"Deputy" shall be, unless otherwise specified by resolution of the Board,
automatically a deputy officer to the office with the title of which the prefix
term is conjoined. Deputy officers shall have such other duties as prescribed by
the Board from time to time.
Section 8. Assistant Officers. The Board may appoint one or more officers
who shall be assistants to principal officers of the Corporation, or their
deputies, and who shall have such duties as shall be delegated to such assistant
officers by the Board or such principal officers, including the authority to
perform such functions of those principal officers in the place of and with full
authority of such principal officers as shall be designated by the Board or (if
so authorized) by such principal officers. The Board may by resolution authorize
appointment of assistant officers by those principal officers to which such
appointed officers will serve as assistants.
ARTICLE VI.
INDEMNIFICATION
Section 1. Definitions for Indemnification Provisions.
(a) As used in this Article VI, the term:
(1) "Corporation" (when spelled with an initial capital letter)
includes any domestic or foreign predecessor entity of the
"Corporation" (as defined in Article I of these Bylaws) in a
merger or other transaction in which the predecessor's existence
ceased upon consummation of the transaction.
(2) "director" or "officer" means an individual who is or was a
director or officer, respectively, of the Corporation or an
individual who, while a director or officer of the Corporation,
is or was serving at the Corporation's request as a director,
officer, partner, trustee, employee, or
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<PAGE>
agent of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan, or other entity. A
director or officer is considered to be serving an employee
benefit plan at the Corporation's request if his duties to the
Corporation also impose duties on, or otherwise involve services
by, him to the plan or to participants in or beneficiaries of the
plan. Director or officer includes, unless the context requires
otherwise, the estate or personal representative of a director or
officer.
(3) "disinterested director" means a director who at the time of a
vote or selection referred to in subsection (b) or (c) of Section
4 of this Article VI or subsection (a) of Section 5 of this
Article VI or a vote referred to in subsection (c) of Section 6
of this Article VI is not:
(A) A party to the proceeding; or
(B) An individual who is a party to a proceeding having a
familial, financial, professional, or employment relationship
with the director whose indemnification or advance for expenses
is the subject of the decision being made with respect to the
proceeding, which relationship would, in the circumstances,
reasonably be expected to exert an influence on the director's
judgment when voting on the decision being made.
(4) "expenses" include attorneys fees.
(5) "liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to
an employee benefit plan), or reasonable expenses incurred with
respect to a proceeding.
(6) "official capacity" means:
(A) When used with respect to a director, the office of director
in the Corporation; and
(B) When used with respect to an officer, as contemplated in
Section 7 of this Article VI, the office in the Corporation held
by the officer.
Official capacity does not include service for any other domestic
or foreign corporation or any partnership, joint venture, trust,
employee benefit plan, or other entity.
(7) "party" includes an individual who was, is, or is threatened to
be made a named defendant or respondent in a proceeding.
(8) "proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative,
arbitrative or investigative and whether formal or informal.
13
<PAGE>
Section 2. Mandatory Indemnification Against Expenses. The Corporation
shall indemnify a director who was wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party because he
was a director of the Corporation against reasonable expenses incurred by the
director in connection with the proceeding.
Section 3. Authority For Permissive Indemnification.
(a) Except as otherwise provided in this Section 3, the Corporation may
indemnify an individual who is a party to a proceeding because he is or was a
director against liability incurred in the proceeding if he conducted himself in
good faith and reasonably believed, in the case of conduct in his official
capacity, that such conduct was in the best interests of the Corporation; in all
other cases, that such conduct was at least not opposed to the best interests of
the Corporation; and in the case of a criminal proceeding, that he had no
reasonable cause to believe such conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for a
purpose he believed in good faith to be in the interests of the participants in
and beneficiaries of the plan is conduct that the director reasonably believed
was at least not opposed to the best interests of the Corporation.
(c) 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 did not meet the standard of conduct set
forth in subsection (a) of this Section 3.
(d) The Corporation may not indemnify a director under this Section 3:
(1) In connection with a proceeding by or in the right of the
Corporation; except for reasonable expenses incurred in
connection with the proceeding if it is determined that the
director has met the relevant standard of conduct set forth in
subsection (a) of this Section 3; or
(2) In connection with any proceeding with respect to conduct for
which he was adjudged liable on the basis that personal benefit
was improperly received by him, whether or not involving action
in his official capacity.
Section 4. Determination and Authorization of Permitted Indemnification.
(a) The Corporation may not indemnify a director under Section 3 of
this Article VI unless authorized thereunder and a determination has been made
in the specific proceeding that indemnification of the director is permissible
in the circumstances because he has met the relevant standard of conduct set
forth in subsection (a) of such Section 3.
(b) The determination required by subsection (a) hereof shall be made:
14
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(1) If there are two or more disinterested directors, by the Board by
a majority vote of all the disinterested directors (a majority of
whom shall for such purpose constitute a quorum) or by a majority
of the members of a committee of two or more disinterested
directors appointed by such a vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this
subsection; or
(B) If there are fewer than two disinterested directors,
selected by the Board (in which selection directors who do
not qualify as disinterested directors may participate); or
(3) By the Corporation's shareholders, but shares owned by or voted
under the control of a director who at the time does not qualify
as a disinterested director may not be voted on the
determination.
(c) Authorization of indemnification or an obligation to indemnify and
evaluation as to reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible, as set forth in
subsection (b) hereof, except that if there are fewer than two disinterested
directors or 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 (b)(2)(B) of this Section 4 to
select special legal counsel.
Section 5. Shareholder-Approved Indemnification.
(a) Without regard to any limitations contained in any other section of
this Article VI, the Corporation may, if authorized by its shareholders by a
majority of votes which would be entitled to be cast (which authorization may
take the form of an amendment to the Articles of Incorporation or a contract,
resolution or bylaw approved or ratified by the requisite shareholder vote),
indemnify or obligate itself to indemnify a director made a party to a
proceeding, including a proceeding brought by or in the right of the
Corporation, but shares owned or voted under the control of a director who at
the time does not qualify as a disinterested director with respect to any
existing or threatened proceeding that would be covered by the authorization may
not be voted on the authorization.
(b) The Corporation shall not indemnify a director under this Section 5
for any liability incurred in a proceeding in which the director is adjudged
liable to the Corporation or is subjected to injunctive relief in favor of the
Corporation:
(1) For any appropriation, in violation of his duties, of any
business opportunity of the Corporation;
(2) For acts or omissions which involve intentional misconduct or a
knowing violation of law;
15
<PAGE>
(3) For any type of liability for unlawful distributions under
Section 14-2-832 of the Code; or
(4) For any transaction from which he received an improper personal
benefit.
(c) Where approved or authorized in the manner described in subsection (a)
of this Section 5, the Corporation may advance or reimburse expenses incurred in
advance of final disposition of the proceeding only if:
(1) The director furnishes the Corporation a written affirmation of
his good faith belief that his conduct does not constitute
behavior of the kind described in subsection (b) of this Section
5; and
(2) The director furnishes the Corporation a written undertaking,
executed personally or on his behalf, to repay any advances if it
is ultimately determined that he is not entitled to
indemnification under this Section 5.
Section 6. Advances For Expenses.
(a) The Corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of final
disposition of the proceeding if:
(1) The director furnishes the Corporation a written affirmation of
his good faith belief that he has met the standard of conduct set
forth in subsection (a) of Section 3 of this Article VI or that
the proceeding involves conduct for which liability has been
eliminated under a provision of the Articles of Incorporation of
the Corporation as authorized by paragraph (4) of subsection (b)
of Section 14-2-202 of the Code; and
(2) The director furnishes the Corporation a written undertaking to
repay any funds advanced if it is ultimately determined that he
is not entitled to indemnification under this Article.
(b) The undertaking required by paragraph (2) of subsection (a) of this
Section 6 must be an unlimited general obligation of the director but need not
be secured and may be accepted without reference to financial ability to make
repayment.
(c) Authorizations under this Section 6 shall be made:
(1) By the Board:
(A) When there are two or more disinterested directors, by a
majority vote of all the disinterested directors (a majority
of whom shall for such purpose constitute a quorum) or by a
majority of the members
16
<PAGE>
of a committee of two or more disinterested directors
appointed by such a vote; or
(B) When there are fewer than two disinterested directors, by
the vote necessary for action by the Board in accordance
with subsection (c) of Section 14-2-824 of the Code, in
which authorization directors who do not qualify as
disinterested directors may participate; or
(2) By the Corporation's shareholders, but shares owned or voted
under the control of a director who at the time does not qualify
as a disinterested director with respect to the proceeding may
not be voted on the authorization.
Section 7. Indemnification of Officers, Employees, and Agents.
(a) The Corporation may indemnify and advance expenses under this part
to an officer of the Corporation who is a party to a proceeding because he is an
officer of the Corporation:
(1) To the same extent as a director; and
(2) If he is not a director, to such further extent as may be
provided by the Articles of Incorporation, these Bylaws, a
resolution of the Board, or contract except for liability arising
out of conduct that constitutes:
(A) Appropriation, in violation of his duties, of any business
opportunity of the Corporation;
(B) Acts or omissions which involve intentional misconduct or a
knowing violation of law;
(C) The types of liability for unlawful distributions under
Section 14 2-832 of the Code; or
(D) Receipt of an improper personal benefit.
(b) The provisions of paragraph (2) of subsection (a) of this Section 7
shall apply to an officer who is also a director if the sole basis on which he
is made a party to the proceeding is an act or omission solely as an officer.
(c) An officer of the Corporation who is not a director is entitled to
mandatory indemnification under Section 2 of this Article VI, and may apply to a
court under Section 14 854 of the Code for indemnification or advances for
expenses, in each case to the same extent to which a director may be entitled to
indemnification or advances for expenses under those provisions.
17
<PAGE>
(d) The Corporation may also indemnify and advance expenses to an
employee or agent who is not a director to the extent, consistent with public
policy, that may be provided by the Articles of Incorporation, Bylaws, general
or specific action of the Board, or contract.
Section 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, serves 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 entity
against liability asserted against or incurred by him in that capacity or
arising from his status as a director, officer, employee, or agent, whether or
not the Corporation would have power to indemnify or advance expenses to him
against the same liability under this Article VI.
Section 9. Expenses for Appearance as Witness. Nothing contained in this
Article VI shall be deemed to limit the Corporation's power to pay or reimburse
expenses incurred by a director or officer in connection with his appearance as
a witness in a proceeding at a time when he is not a party.
ARTICLE VII.
FAIR PRICE
The fair price requirements contained in Sections 14-2-1110 through 14-2-
1113 of the Code shall apply to the Corporation.
ARTICLE VIII
CRETAIN BUSINESS COMBINATIONS
The requirements regarding business combinations with interested
shareholders contained in Sections 14-2-1131 through 14-2-1133 of the Code shall
apply to the Corporation.
ARTICLE IX.
REIMBURSEMENT OF NON-DEDUCTIBLE
PAYMENTS TO OFFICERS AND EMPLOYEES
In the event any payments to an officer or employee of the Corporation,
such as salary, commission, bonus, interest or rent expenses incurred by him, is
thereafter disallowed in whole or in part by the Internal Revenue Service as a
proper deduction for income tax purposes under Section 162 of the Internal
Revenue Code of 1986, as amended (or disallowed under any similar statutory
section which may subsequently replace such Section 162), such disallowed
payments shall be deemed to be an obligation owed by such officer or employee to
the Corporation. Such disallowed payments shall be reimbursed by such officer or
employee to the Corporation on or before 90 days following the final
determination of such disallowance by the Internal Revenue Service or entry of
the final judgment of such determination if adjudicated. It shall be the duty of
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<PAGE>
the Board to enforce reimbursement of each such amount disallowed, including the
withholding from future compensation payments to such officer or employee until
the amount owed to the Corporation has been recovered.
ARTICLE X.
FISCAL YEAR
The fiscal year of the Corporation shall be established by the Board or, in
the absence of Board action establishing such fiscal year, by the Chief
Executive Officer.
ARTICLE XI.
ANNUAL STATEMENTS
(a) No 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:
(1) A balance sheet showing in reasonable detail the financial
condition of the Corporation as of the close of the fiscal year;
and
(2) A profit and loss statement showing the results of its operation
during the fiscal year.
Upon written request, the Corporation shall mail promptly to any
shareholder of record a copy of the most recent such balance sheet and profit
and loss statement. If prepared for other purposes, the Corporation shall also
furnish upon written request a statement of sources and applications of funds
and a statement of changes in shareholders, equity for the fiscal year. If
financial statements are prepared by the Corporation on the basis of generally
accepted accounting principles, the annual financial statements must also be
prepared, and disclose that they are prepared, on that basis. If financial
statements are prepared otherwise than on the basis of generally accepted
accounting principles, they must so disclose and must be prepared on the same
basis as other reports or statements prepared by the Corporation for the use of
others.
(b) If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the Chief Executive Officer or the person
responsible for the Corporation's accounting records:
(1) Stating his reasonable belief whether the statements were
prepared on the basis of generally accepted accounting principles
and, if not, describing the basis of preparation; and
(2) Describing any respects in which the statements were not prepared
on a basis of accounting consistent with the statements prepared
for the preceding year.
19
<PAGE>
ARTICLE XII.
CAPITAL STOCK
Section 1. Form.
(a) Except as otherwise provided in subsection (b) of this Section 1,
the interest of each shareholder shall be evidenced by a certificate
representing shares of stock of the Corporation, which shall be in such form as
the Board may from time to time adopt and shall be numbered and shall be entered
in the books of the Corporation as they are issued. Each certificate shall
exhibit the holder's name, the number of shares and class of shares and series,
if any, represented thereby, the name of the Corporation and a statement that
the Corporation is organized under the laws of the State of Georgia. Each
certificate shall be signed, either manually or by facsimile, by one or more
officers of the Corporation specified by resolution of the Board, but in the
absence of such specifications, shall be valid if executed by the Chief
Executive Officer or any Deputy or Assistant thereto, and such execution is
countersigned by the Secretary, or any Deputy or Assistant thereto. If the
certificate is signed by facsimile, then it must be countersigned by a transfer
agent or registered by a registrar other than the Corporation itself or an
employee of the Corporation. The transfer agent or a registrar may sign either
manually or by facsimile. Each stock certificate may but need not be sealed with
the seal of the Corporation.
(b) If authorized by resolution of the Board, the Corporation may issue
some or all of the shares of any or all of its classes or series without
certificates. The issuance of such shares shall not affect shares already
represented by certificates until they are surrendered to the Corporation.
Within a reasonable time after the issuance or transfer of any shares not
represented by certificates, the Corporation shall send to the holder of such
shares a written statement setting forth, with respect to such shares (i) the
name of the Corporation as issuer and that the Corporation is organized under
the laws of the State of Georgia, (ii) the name of the person to whom such
shares are issued, (iii) the number of shares and class of shares and series, if
any, and (iv) the terms of any restrictions on transfer which, were such shares
represented by a stock certificate, would be required to be noted on such
certificate, by law, by the Articles of Incorporation or these Bylaws, or by any
legal agreement among the shareholders of the Corporation.
Section 2. Transfer. Transfers of stock shall be made on the books of the
Corporation only by the person named in the certificate, or, in the case of
shares not represented by certificates, the person named in the Corporation's
stock transfer records as the owner of such shares, or, in either case, by
attorney lawfully constituted in writing. In addition, with respect to shares
represented by certificates, transfers shall be made only upon surrender of the
certificate therefor, or in the case of a certificate alleged to have been lost,
stolen or destroyed, upon compliance with the provisions of Section 4 of this
Article XII.
Section 3. Rights of Holder. The Corporation shall be entitled to treat
the holder of record of any share of the Corporation as the person entitled to
vote such share (to the extent such share is entitled to vote), to receive any
distribution with respect to such share, and for all
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<PAGE>
other purposes and, accordingly, shall not be bound to recognize any equitable
or other claim to or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by law.
Section 4. Lost or Destroyed Certificates. Any person claiming a
certificate of stock to be lost, stolen or destroyed shall make an affidavit or
affirmation of the fact in such manner as the Board may require and shall, if
the Board so requires, give the Corporation a bond of indemnity in the form and
amount and with one or more sureties satisfactory to the Board, whereupon an
appropriate new certificate may be issued in lieu of the one alleged to have
been lost, stolen or destroyed.
ARTICLE XIII.
SEAL
The corporate seal shall be in such form as shall be specified in the
minutes of the organizational meeting of the Corporation, or as the Board may
from time to time determine.
ARTICLE XIV.
REGISTERED OFFICE AND REGISTERED AGENT
The street address of the initial registered office of the Corporation is
2234 West Broad Street, Athens, Georgia 30606. The initial registered office is
located in Walton County. The initial registered agent of the Corporation at
such office is William S. Huggins. The Corporation may amend this Article XIV at
any time to change its registered office or registered agent, without further
action of its officers or directors, by filing with the Secretary of State a
notice of such change, in accordance with Section 14-2-502 of the Code, or any
successor statute.
The Corporation may have other offices at such places within or outside of
the State of Georgia as the Board may from time to time designate or the
business of the Corporation may require or make desirable.
ARTICLE XV.
AMENDMENT TO BYLAWS
Section 1. Amendment of Bylaws by Board. Except as otherwise provided in
the Articles of Incorporation, by applicable law, or by the provisions of this
Article XV, the Board may amend or repeal any provision of these Bylaws or adopt
any new bylaw by the affirmative vote of a majority of the entire Board, unless
the Corporation's shareholders have adopted, amended or repealed a particular
bylaw provision and, in doing so, have expressly reserved to the Corporation's
shareholders the right of amendment or repeal therefor.
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<PAGE>
Section 2. Supermajority Required for Amendment by Shareholders. The
Corporation's shareholders have the right, in accordance with the voting
requirements set forth in this Section 2, to amend or repeal any provision of
these Bylaws or adopt any new bylaw, even though such provision may also be
amended, repealed or adopted by the Board. Except as may otherwise specifically
be required by law, the affirmative vote of the holders of not less than 66 2/3%
of the total number of votes entitled to be cast by the holders of all of the
shares of capital stock of the Corporation then entitled to vote generally in
the election of directors shall be required for the shareholders to amend or
repeal any provision of these Bylaws or adopt any new bylaw.
22
<PAGE>
EXHIBIT 4.1
INCORPORATED UNDER THE LAWS OF THE STATE OF GEORGIA
See Reverse for
Certain Definitions
NBG BANCORP, INC
Common Stock, Par Value $1.00 Per Share
This is to Certify that _________________________________________________ is the
owner of _______________________________________________________________________
fully paid and non-assessable shares of the above Corporation transferable only
on the books of the Corporation by the holder hereof in person or by duly
authorized Attorney upon surrender of this Certificate properly endorsed.
Witness, the seal of the Corporation and the signatures of its duly authorized
officers.
Dated
September 23, 1999
_________________________________ ___________________________________
William S. Huggins, President and Michael R. Carson, Secretary
Chief Executive Officer
<PAGE>
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT ...... Custodian ........
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
Act .........................
(State)
</TABLE>
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above
list.
For value received ______ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------------------------
- --------------------------------------------------------------------------------
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________ Shares
represented by the within Certificate, and do hereby irrevocably constitute and
appoint _______________________________________________________ Attorney to
transfer the said Shares on the books of the within named Corporation with full
power of substitution in the premises.
Dated ________________________ 19__
In presence of
_________________________________________
__________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
EXHIBIT 4.3
THE WARRANT GRANTED PURSUANT TO THIS AGREEMENT SHALL BE NON-TRANSFERABLE, EXCEPT
IN THE CASE OF THE WARRANT HOLDER'S DEATH, AND THEREUPON ONLY BY WILL OR UNDER
THE LAWS OF DESCENT AND DISTRIBUTION. UPON THE DEATH OF THE WARRANT HOLDER, THE
DECEASED HOLDER'S LEGAL OR PERSONAL REPRESENTATIVE, OR ANY PERMITTED TRANSFEREE
OF THE WARRANT SHALL, WITHIN 30 DAYS OF THE HOLDER'S DEATH, NOTIFY THE COMPANY
OF SUCH EVENT AND THE NEW HOLDER'S NAME, ADDRESS AND CAPACITY IN WHICH THE
WARRANT IS HELD. SUCH PERMITTED TRANSFEREE WILL BE SUBJECT TO, AND BOUND BY, THE
TERMS AND PROVISIONS OF THIS AGREEMENT TO THE SAME EXTENT AS THE ORIGINAL
HOLDER.
ORGANIZER WARRANT AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of this _____
day of _____________, 19__, by and between NBG Bancorp, Inc., a Georgia
corporation (the "Company"), and ________________________ (the "Warrant
Holder").
W I T N E S S E T H
-------------------
WHEREAS, the Warrant Holder has served as an organizer in the formation of
the Company and the formation and establishment of The National Bank of Georgia
(the "Bank"), the wholly-owned subsidiary of the Company; and
WHEREAS, the Warrant Holder has purchased ___________ shares of the
Company's common stock, $1.00 par value per share (the "Common Stock"), at a
price per share of $10.00, subject to certain adjustments; and
WHEREAS, the Company, in recognition of the financial risk undertaken by
the Warrant Holder in organizing the Company and the Bank, desires to provide
the Warrant Holder with the right to acquire the same number of shares as the
Warrant Holder purchased in the initial stock offering of the Company's Common
Stock, including any additional shares purchased specifically to attain the
minimum subscription requirements of the minimum offering.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Warrant. Subject to the terms, restrictions, limitations and
conditions stated herein, the Company hereby grants to the Warrant Holder the
right (the "Warrant") to purchase all or any part of an aggregate of
______________ shares of the Company's Common Stock, subject to adjustment in
accordance with Sections 7 and 8 hereof (such shares, as adjusted, the "Warrant
Shares").
<PAGE>
2. Vesting and Term.
(a) The Warrant shall vest at the rate of 20% per year beginning on
the first anniversary of the date that the Bank opens for business (the
"Issue Date"). On each successive anniversary of the Issue Date, an
additional 20% of the Warrant shall vest. The portion of the Warrant which
is vested may be exercised in whole, or from time to time in part, at any
time prior to the Expiration Time (as defined herein).
(b) The term for the exercise of the Warrant begins at 9:00 a.m.,
Eastern Time, on the Issue Date and ends at 5:00 p.m., Eastern Time, on the
10th anniversary of the Issue Date (the "Expiration Time").
(c) Notwithstanding any other provision of this Agreement, the
Warrant shall expire on any earlier date than that provided in Section 2(b)
hereof in the event the primary federal regulator of the Company or the
Bank (the "Federal Regulator") may require the Warrant Holder to exercise
or forfeit the Warrant due to the capital of the Company or the Bank
falling below the minimum requirements as determined by the Federal
Regulator.
3. Purchase Price. The price per share to be paid by the Warrant Holder
for the Warrant Shares shall be $10.00 subject to adjustment as set forth in
Section 7 hereof (such price, as adjusted, the "Purchase Price").
4. Exercise of Warrant. The Warrant may be exercised by the Warrant
Holder by delivery to the Company, at the address of the Company set forth under
Section 11(a) hereof or such other address as to which the Company advises the
Warrant Holder pursuant to Section 11(a) hereof, of the following:
(a) A completed and signed notice of exercise (including the
Substitute Form W-9, which forms a part thereof) (the "Notice of
Exercise"), as attached hereto as Schedule A;
----------
(b) A cashier's or certified check payable to the Company for the
full amount of the aggregate Purchase Price for the number of Warrant
Shares as to which the Warrant is being exercised; and
(c) A copy of this Agreement.
5. Issuance of Warrant Shares. Upon receipt of the items set forth in
Section 4 hereof, and subject to the terms hereof, the Company shall cause to be
delivered to the Warrant Holder stock certificate(s) for the number of Warrant
Shares specified in the Notice of Exercise, such share or shares to be
registered under the name of the Warrant Holder. Notwithstanding the foregoing,
the Company shall not be required to issue or deliver any certificate for the
Warrant Shares or any portion thereof prior to the fulfillment of the following
conditions:
2
<PAGE>
(a) The completion of any registration or other qualification of such
shares which the Company shall deem necessary or advisable under any
federal or state law or under the rulings or regulations of the Securities
and Exchange Commission or any other governmental regulatory body, unless
the availability of an exemption from such registration or qualification
shall be established to the satisfaction of counsel for the Company;
(b) The obtaining of any approval or other clearance from any federal
or state governmental agency or body, which the Company shall determine to
be necessary or advisable; or
(c) The lapse of such reasonable period of time following the
exercise of the Warrant, or any portion thereof, as the Company from time
to time may establish for reasons of administrative convenience.
Each stock certificate delivered pursuant to the Notice of Exercise shall
be in such denomination as may be requested by the Warrant Holder and shall be
registered in the name of the Warrant Holder. If the Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of said stock
certificate(s), deliver to the Warrant Holder a new Warrant evidencing the right
of the Warrant Holder to purchase the remaining Warrant Shares covered by this
Agreement. The Company shall pay all expenses, stock transfer taxes and other
charges payable in connection with the preparation, execution and delivery of
such stock certificate(s).
6. Restrictive Legends. Each certificate representing the Warrant Shares
shall contain the following legends:
(a) "The shares of the Company's Common Stock represented by this
certificate are held subject to, and transfer of such shares restricted by,
the terms of a Warrant Agreement, dated as of the ___ day of _________,
1999, a copy of which is on file at the office of the Company. No transfer
of any share represented by this certificate shall be valid unless made in
accordance with the terms of the Warrant Agreement."
(b) "The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the "1933 Act"),
or the securities laws of any state, in reliance upon exemptions from the
registration requirements of the 1933 Act and such state laws. These
securities may not be transferred, nor will any assignee or endorsee hereof
be recognized as an owner hereof by the issuer for any purposes, except in
transactions registered under the 1933 Act and any applicable state
securities laws, unless the availability of an exemption from registration
under the 1933 Act and any applicable state securities laws with respect to
any proposed transfer or disposition of such securities shall be
established to the satisfaction of counsel for the issuer."
The Warrant Holder understands and agrees that the Company may refuse to
permit the transfer of the Warrant Shares, and that the Warrant Holder may be
required to hold the Warrant Shares indefinitely, in the absence of compliance
with the terms of such legends.
3
<PAGE>
7. Antidilution, Etc.
(a) If, at any time, the Company shall:
(i) establish a record date for the determination of holders
of record of its outstanding shares of Common Stock for the purpose of
entitling them to receive a dividend payable in, or other
distributions of, additional shares of its Common Stock;
(ii) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock; or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock;
then (A) the number of Warrant Shares for which the Warrant Holder's
Warrant is exercisable immediately after the occurrence of any such event
shall be adjusted to equal the number of shares of Company Common Stock
which a record holder of the same number of shares of Common Stock for
which Warrant Shares is exercisable immediately prior to the occurrence of
such event would own or be entitled to receive after the happening of such
event, and (B) the Purchase Price shall be adjusted to equal (x) the
Purchase Price multiplied by the Warrant Shares for which the Warrant
Holder's Warrant is exercisable immediately prior to the adjustment divided
by (y) the Warrant Shares for which Holder's Warrant is exercisable
immediately after such adjustment.
(b) The following provisions shall be applicable to adjustments made
pursuant to Section 7(a) hereof:
(i) The adjustments required by Section 7(a) hereof shall be
made whenever and as often as any event requiring an adjustment shall
occur. For the purpose of any such adjustment, any event shall be
deemed to have occurred at the close of business on the date of its
occurrence.
(ii) In computing adjustments under this Section 7(b),
fractional interests in the Company's Common Stock shall be taken into
account to the nearest 1/10th of a share. In no event, however, shall
fractional shares or a scrip representing fractional shares be issued
upon the exercise of the Warrant. In lieu thereof, a cash payment
shall be made to the Warrant Holder in an amount equal to such
fraction multiplied by the Purchase Price.
(iii) If the Company shall establish a record date for the
determination of the holders of record of the Company's Common Stock
for the purpose of entitling such holders to receive a dividend
payable in Company Common Stock and shall, thereafter and before the
distribution to shareholders thereof, legally abandon its plan to pay
or deliver such dividend, then no adjustment shall be
4
<PAGE>
required by reason of the establishment of such record date and any
such adjustment previously made in respect thereof shall be rescinded
and annulled.
8. Reorganization, Reclassification, Consolidation or Merger.
(a) If, prior to the Expiration Time, there shall be any
reorganization or reclassification of the Company's Common Stock (other
than a subdivision or combination of shares provided for in Section 7
hereof), or any consolidation or merger of the Company with another entity,
the Warrant Holder shall thereafter be entitled to receive, during the term
hereof and upon payment of the Purchase Price, the number of shares of
stock or other securities or property of the Company or of the successor
entity (or its parent company) resulting from such consolidation or merger,
as the case may be, to which a holder of the Company's Common Stock,
deliverable upon the exercise of the Warrant, would have been entitled upon
such reorganization, reclassification, consolidation or merger; and in any
case, appropriate adjustment (as determined by the Board of Directors of
the Company in its sole discretion) shall be made in the application of the
provisions herein set forth with respect to the rights and interest
thereafter of the Warrant Holder to the end that the provisions set forth
herein (including the adjustment of the Purchase Price and the Warrant
Shares) shall thereafter be applicable, as near as may reasonably be
practicable, in relation to any shares or other property thereafter
deliverable upon the exercise hereof.
(b) If any such reorganization, reclassification, consolidation,
merger or share exchange results in a cash distribution in excess of the
Purchase Price provided by this Warrant, the Warrant Holder may, at the
Warrant Holder's option, exercise this Warrant without making payment of
the Purchase Price, and in such case the Company or its successors and
assigns shall, upon distribution to such Warrant Holder, consider the
Purchase Price to have been paid in full, and in making settlement to such
Warrant Holder, shall deduct an amount equal to the Purchase Price from the
amount payable to such Warrant Holder. Notwithstanding anything herein to
the contrary, the Company will not effect any such reorganization,
reclassification, merger, consolidation or share exchange unless prior to
the consummation thereof, the corporation that may be required to deliver
any stock, securities or other assets upon the exercise of the Warrant
issuable pursuant to this Agreement shall agree by an instrument in writing
to deliver such stock, cash, securities or other assets to the Warrant
Holder. A sale, transfer or lease of all or substantially all of the assets
of the Company to another person shall be deemed a reorganization,
reclassification, consolidation, merger or share exchange for the foregoing
purposes.
9. Notice of Adjustments. Upon any adjustment provided for in Section 7
or Section 8 hereof, the Company, within 30 days thereafter, shall give written
notice thereof to the Warrant Holder at the address set forth under Section
11(a) hereof or such other address as the Warrant Holder may advise the Company
pursuant to Section 11(a) hereof, which notice shall state the Purchase Price as
adjusted and the increased or decreased number of Warrant Shares, setting, forth
in reasonable detail the method of calculation of each.
5
<PAGE>
10. Transfer and Assignment.
(a) This Agreement shall be non-transferable, except in the case of
the Warrant Holder's death, and thereupon only by will or under the laws of
descent and distribution. Upon the death of the Warrant Holder, the
deceased Warrant Holder's heirs, legal or personal representative, or any
permitted transferee of the Warrant shall, within 30 days of the Warrant
Holder's death, notify the Company of such event and the new holder's name,
address and capacity in which the Warrant is held, and present letters
testamentary, a death certificate and such other information as the Company
may reasonably request to ascertain the authority of such person. Such
permitted transferee will be subject to, and bound by, the terms and
provisions of this Agreement to the same extent as the original Warrant
Holder.
(b) The Warrant Shares granted hereby may not be transferred or sold
unless the transfer is exempt from further regulatory approval or otherwise
permissible under applicable law, including state and federal securities
laws, and will bear a legend to this effect as set forth in Section 6
hereof.
11. Miscellaneous.
(a) All notices, requests, demands and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, telegram or facsimile transmission, or
if mailed, by postage prepaid first class mail, on the third business day
after mailing, to the following address (or at such other address as a
party may notify the other hereunder):
To the Company:
NBG Bancorp, Inc.
P.O. Box 6507
Athens, Georgia 30604
Attention: William S. Huggins,
President and Chief Executive Officer
To the Warrant Holder:
_________________________
_________________________
_________________________
(b) The Company covenants that it has reserved and will keep
available, solely for the purpose of issue upon the exercise of the
Warrant, a sufficient number of shares of the Company's Common Stock to
permit the exercise of the Warrant in full.
6
<PAGE>
(c) No holder of the Warrant, as such, shall be entitled to vote or
receive dividends with respect to the Warrant Shares subject thereto or be
deemed to be a shareholder of the Company for any purpose until the
Company's Common Stock has been issued.
(d) This Agreement may be amended only by an instrument in writing
executed by the party against whom enforcement of amendment is sought.
(e) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the
same instrument.
(f) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a
duly authorized officer and its corporate seal to be affixed hereto and the
Warrant Holder has executed this Agreement, all as of the day and year first
above written.
NBG BANCORP, INC.
By:_____________________________________
William S. Huggins
President and Chief Executive Officer
WARRANT HOLDER
_______________________________________
7
<PAGE>
SCHEDULE A
NOTICE OF EXERCISE
OF WARRANT TO PURCHASE COMMON STOCK OF
NBG BANCORP, INC.
To: NBG Bancorp. Inc.
The undersigned, the registered owner of the right to purchase shares of
Common Stock (the "Common Stock") of NBG Bancorp, Inc. (the "Company"), hereby
irrevocably elects to exercise such right to purchase thereunder ________ shares
of the Common Stock of the Company and herewith makes payment of $________
therefor, and requests that the certificate(s) evidencing such shares be issued
in the name of and be delivered to:
Name:____________________________
Address:_________________________
_________________________
_________________________
Social Security or
Tax I.D. Number:_______________
and if such shares shall not be all of the shares purchasable hereunder, that a
new warrant of like tenor for the balance of the shares purchasable hereunder be
delivered to the undersigned.
Date:_________________
NAME OF WARRANT HOLDER
By:_______________________
Name:__________________
THIS NOTICE OF EXERCISE SHALL NOT BE GIVEN EFFECT
BY THE COMPANY UNLESS THE HOLDER OF THE UNDERLYING
WARRANT HAS PROPERLY COMPLETED AND SIGNED BOTH
THIS NOTICE OF EXERCISE FORM AND THE SUBSTITUTE FORM W-9
ATTACHED HERETO.
<PAGE>
SUBSTITUTE FORM W-9
Under the penalties of perjury, I certify that:
1. The Social Security Number or Taxpayer Identification Number given
below is correct; and
2. I am not subject to backup withholding either because I have not been
notified that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or because the Internal
Revenue Service has notified me that I am no longer subject to backup
withholding.
IMPORTANT INSTRUCTIONS: You must cross out #2 above if you have been notified by
the Internal Revenue Service that you are subject to backup withholding because
of under reporting interest or dividends on your tax return and if you have not
received a notice from the Internal Revenue Service advising you that backup
withholding due to notified payee under reporting has terminated.
SIGNATURE*______________________
DATE____________________________
* If a corporation, please sign in full corporate name by president or other
authorized officer. When signing as officer, attorney, custodian, trustee,
administrator, guardian, etc., please give your full title as such. In case of
joint tenants, each person must sign.
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF TROUTMAN SANDERS LLP APPEARS HERE]
November 16, 1999
NBG Bancorp, Inc.
P. O. Box 6507
Athens, Georgia 30604
Re: NBG Bancorp, Inc. Registration Statement on Form SB-2
800,000 Shares of Common Stock
372,500 Common Stock Purchase Warrants
Registration No. 333-87763
Gentlemen:
We have served as counsel to NBG Bancorp, Inc. (the "Company"), a
corporation organized and existing under the laws of the State of Georgia, in
connection with the filing by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
of the above-described Registration Statement (the "Registration Statement")
with respect to the offer and sale of 800,000 shares of common stock, par value
$1.00 per share, of the Company (the "Shares") and 372,500 common stock purchase
warrants of the Company (the "Warrants").
In rendering this opinion, we have examined originals (or copies certified
or otherwise identified to our satisfaction) of the Registration Statement, as
amended through the date hereof; (ii) the Articles of Incorporation of the
Company, certified by the Secretary of State of the State of Georgia; (iii) the
Bylaws of the Company, certified as complete and correct by the Secretary of the
Company; (iv) the form of the common stock certificate of the Company; (v) the
form of Organizer Warrent Agreement; and (vi) such corporate and other
documents, records and papers, certificates of public officials, and
certificates of officers of the Company as we have deemed necessary for the
purposes of the opinions expressed herein. In such examination, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, and the genuineness and conformity to original documents of
documents submitted to us as certified or photostatic copies.
Based upon such examination, we are of the opinion that, subject to (i)
compliance with the pertinent provisions of the Securities Act and the
Securities Exchange Act of 1934, as amended; and (ii) compliance with the
applicable provisions of the securities or "blue sky" laws of the various
states, the Shares and the Warrants, when certificates or agreements therefor
(as the case may be) have been duly executed, countersigned, registered, issued
and delivered by the proper officers of the Company in accordance with the terms
of the Registration Statement, will be duly and validly issued, fully paid, and
non-assessable.
We are members of the Bar of the State of Georgia. In expressing the
opinions set forth above, we are not passing on the laws of any jurisdiction
other than the laws of the State of Georgia and the Federal law of the United
States of America.
<PAGE>
NBG Bancorp, Inc.
November 16, 1999
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Registration Statement, including the prospectus
constituting a part thereof, as originally filed or as subsequently amended. In
giving this consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Securities and Exchange Commission thereunder.
Sincerely,
/s/ TROUTMAN SANDERS LLP
-------------------------
TROUTMAN SANDERS LLP
<PAGE>
EXHIBIT 10.1
[CENTURY SOUTH BANKS, INC. LETTERHEAD]
Stephen W. Doughty 4951 Forsyth Road (31210)
Executive Vice President P.O. Box 14099
Chief Credit Officer Macon, Georgia 31203-4099
(912) 475-4347
Fax (912) 757-2023
June 1, 1999
Mr. William S. Huggins
1051 Ridge Pointe
Athens, Georgia 30606
Dear Bill:
Upon approval by the Office of the Comptroller of the Currency regarding
National Bank of Georgia's, in Organization banking charter, Century South
Banks, Inc. agrees to sell the bank building located at 2234 West Broad Street,
Athens, Georgia for the purchase price of $1,078,052.
This purchase price is good for nine months or whenever National Bank of
Georgia, in Organization is able to "break escrow", whichever occurs first.
Sincerely,
/s/ Steve Doughty
Steve Doughty
SD:lpt
<PAGE>
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into as
of November 15, 1999 by and among William S. Huggins, a resident of the State of
Georgia ("Employee"), The National Bank of Georgia, a proposed national banking
association ("Employer") and NBG Bancorp, Inc., a Georgia corporation and sole
shareholder of Employer ("Bancorp").
W I T N E S S E T H:
WHEREAS, Employer and Employee each deem it necessary and desirable, for
their mutual protection, to execute a written document setting forth the terms
and conditions of their employment relationship;
NOW, THEREFORE, in consideration of the employment of Employee by Employer,
of the premises and the mutual promises and covenants contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment and Duties. Employer hereby employs Employee to serve as
President and Chief Executive Officer of Employer and to perform such other
duties and responsibilities as customarily performed by persons acting in such
capacity. During the terms of this Agreement, Employee will devote his full
time and effort to his duties hereunder.
2. Term. Subject to the provisions of Section 12 of this Agreement, the
period of Employee's employment under this Agreement shall be deemed to have
commenced as of the date of Employer's filing of Employer's charter application
(the "Application") with the Office of the Comptroller of the Currency (the
"OCC") and shall continue for a period of 36 calendar months thereafter (i)
unless Employee dies before the end of such 36 months or (ii) Employer is not
successful in obtaining final opening approvals (the "Final Approvals") from the
OCC and the Federal Deposit Insurance Corporation (the "FDIC"). In either case,
the period of
<PAGE>
employment shall continue until the end of the month of Employee's death or the
inability to obtain the OCC's and FDIC's Final Approvals. The said 36 month
period of employment shall automatically be extended for additional one year
terms without further action by the parties, commencing on the first year
anniversary of this Agreement and each one year anniversary thereafter. No such
automatic extension shall occur if either party shall, within 90 days prior to
any said anniversary, have served written notice upon the other of its intention
that this Agreement shall not be so extended.
3. Compensation. For all services to be rendered by Employee during the
term of this Agreement, Employer shall pay Employee in accordance with the terms
set forth in Exhibit A; provided, however, that any compensation payable to
--------- -------- -------
Employee from the date of Employer's filing of the Application until the OCC's
and FDIC's Final Approvals shall accrue. As soon as practicable after
Employer's receipt of the OCC's and FDIC's Final Approvals, Employer shall pay
Employee all accrued compensation in a lump sum payment and, thereafter, in
accordance with the terms set forth in Exhibit A, net of applicable
---------
withholdings, payable in bi-weekly installments.
4. Expenses. So long as Employee is employed hereunder, Employee is
entitled to receive reimbursement for, or seek payment directly by Employer of,
all reasonable expenses which are consistent with the normal policy of Employer
in the performance of Employee's duties hereunder, provided that Employee
accounts for such expenses in writing.
5. Employee Benefits. So long as Employee is employed hereunder, Employee
shall be entitled to participate in the various employee benefit programs
adopted by Employer and Bancorp from time to time.
6. Vacation. Employee shall be entitled to four weeks annual vacation.
7. Confidentiality. In Employee's position as an employee of Employer,
Employee has had and will have access to confidential information, trade secrets
and other proprietary information of vital importance to Employer and Bancorp
and has and will also develop relationships with customers, employees and others
who deal with Employer or Bancorp which
2
<PAGE>
are of value to Employer and Bancorp. Employer requires, as a condition to
Employee's employment with Employer, that Employee agree to certain restrictions
on Employee's use of the proprietary information and valuable relationships
developed during Employee's employment with Employer. In consideration of the
terms and conditions contained herein, the parties hereby agree as follows:
7.1 Employer and Employee mutually agree and acknowledge that
Employer and Bancorp may entrust Employee with highly sensitive, confidential,
restricted and proprietary information concerning various Business Opportunities
(as hereinafter defined), customer lists, and personnel matters. Employee
acknowledges that he shall bear a fiduciary responsibility to Employer and
Bancorp to protect such information from use or disclosure that is not necessary
for the performance of Employee's duties hereunder, as an essential incident of
Employee's employment with Employer.
7.2 For the purposes of this Section 7, the following definitions
shall apply:
7.2.1 "Trade Secret" shall mean the identity and addresses of
customers of Employer or Bancorp, the whole or any portion or phase of any
scientific or technical information, design, process, procedure, formula or
improvement that is valuable and secret (in the sense that it is not generally
known to competitors of Employer or Bancorp) and which is defined as a "trade
secret" under Georgia law pursuant to the Georgia Trade Secrets Act.
7.2.2 "Confidential Information" shall mean any data or
information, other than Trade Secrets, which is material to Employer or Bancorp
and not generally known by the public. Confidential Information shall include,
but not be limited to, Business Opportunities of Employer or Bancorp (as
hereinafter defined), the details of this Agreement, Employer's or Bancorp's
business plans and financial statements and projections, information as to the
capabilities of Employer's or Bancorp's employees, their respective salaries and
benefits and any other terms of their employment and the costs of the services
Employer or Bancorp may offer or provide to the customers it serves, to the
extent such information is material to Employer or Bancorp and not generally
known by the public.
3
<PAGE>
7.2.3 "Business Opportunities" shall mean any specialized
information or plans of Employer or Bancorp concerning the provision of
financial services to the public, together with all related information
concerning the specifics of any contemplated financial services regardless of
whether Employer has contacted or communicated with such target person or
business.
7.2.4 Notwithstanding the definitions of Trade Secrets,
Confidential Information, and Business Opportunities set forth above, Trade
Secrets, Confidential Information, and Business Opportunities shall not include
any information:
(i) that is or becomes generally known to the public;
(ii) that is already known by Employee or is developed
by Employee after termination of employment through entirely independent
efforts;
(iii) that Employee obtains from an independent source
having a bona fide right to use and disclose such information;
(iv) that is required to be disclosed by law, except to
the extent eligible for special treatment under an appropriate protective order;
or
(v) that Employer's or Bancorp's Board of Directors
approves for release.
7.3 Employee shall not, without the prior approval of Employer's or
Bancorp's Board of Directors, during his employment with Employer and for so
long thereafter as the information or data remain Trade Secrets, use or
disclose, or negligently permit any unauthorized person who is not an employee
of Employer or Bancorp to use, disclose, or gain access to, any Trade Secrets.
7.4 Employee shall not, without the prior written consent of Employer
or Bancorp, during his employment with Employer and for a period of 24 months
thereafter as long as the information or data remain competitively sensitive,
use or disclose, or negligently permit any unauthorized person who is not
employed by Employer or Bancorp to use, disclose, or gain access to, any
Confidential Information to which the Employee obtained access by virtue of his
employment with Employer, except as provided in Section 7.2 of this Agreement.
4
<PAGE>
8. Observance of Security Measures. During Employee's employment with
Employer, Employee is required to observe all security measures adopted to
protect Trade Secrets, Confidential Information and Business Opportunities.
9. Return of Materials. Upon the request of Employer or Bancorp and, in
any event, upon the termination of his employment with Employer, Employee shall
deliver to Employer all memoranda, notes, records, manuals or other documents,
including all copies of such materials containing Trade Secrets or Confidential
Information, whether made or compiled by Employee or furnished to him from any
source by virtue of his employment with Employer.
10. Severability. Employee acknowledges and agrees that the covenants
contained in Sections 7 through 9 and Section 14 of this Agreement shall be
construed as covenants independent of one another and distinct from the
remaining terms and conditions of this Agreement, and severable from every other
contract and course of business by and among Employer, Bancorp and Employee, and
that the existence of any claim, suit or action by Employee against Employer
and/or Bancorp, whether predicated upon this Agreement or any other agreement,
shall not constitute a defense to Employer's or Bancorp's enforcement of any
covenant contained in Sections 7 through 9 and Section 14 of this Agreement.
11. Specific Performance. Employee acknowledges and agrees that the
covenants contained in Sections 7 through 9 and Section 14 of this Agreement
shall survive any termination of employment, as applicable, with or without
Cause (as hereinafter defined), at the instigation or upon the initiative of any
party. Employee further acknowledges and agrees that the ascertainment of
damages in the event of Employee's breach of any covenant contained in Sections
7 through 9 and Section 14 of this Agreement would be difficult, if at all
possible. Employee therefore acknowledges and agrees that Employer and Bancorp
shall be entitled in addition to and not in limitation of any other rights,
remedies, or damages available to Employer and Bancorp in arbitration, at law or
in equity, upon submitting whatever affidavit the law may require, and posting
any necessary bond, to have a court of competent jurisdiction enjoin Employee
from committing any such breach.
5
<PAGE>
12. Termination.
12.1 During the term of this Agreement, Employee's employment,
including without limitation, all compensation, salary, expenses reimbursement,
and employee benefits may be terminated (i) at the election of Employer for
Cause; (ii) at Employee's election upon Employer's breach of any material
provision of this Agreement; (iii) upon Employee's death; (iv) at the election
of either party, upon Employee's disability resulting in an inability to perform
the duties described in Section 1 of this Agreement for a period of 90
consecutive days; or (v) as set forth in Section 15 of this Agreement.
12.2 As used in this Agreement, "Cause" shall mean (i) conduct
by Employee that amounts to fraud, material dishonesty, gross negligence or
willful misconduct in the performance of his duties hereunder; (ii) the
conviction (from which no appeal may be, or is, timely taken) of Employee of a
felony; (iii) initiation of suspension or removal proceedings against Employee
by federal or state regulatory authorities acting under lawful authority
pursuant to provisions of federal or state law or regulation which may be in
effect from time to time; (iv) knowing violation of federal or state banking
laws or regulations; or (v) refusal to perform a duly authorized directive of
Employer's Board of Directors.
12.3 No termination for Cause shall be effective unless it is
approved by a two-thirds (2/3) vote of Employer's Board of Directors, excluding
the vote, if any, of Employee.
12.4 If this Agreement is terminated either pursuant to Cause,
Employee's death or Employee's disability, Employee shall receive no further
compensation or benefits, other than Employee's salary and other compensation as
accrued through the date of such termination.
13. Notices. All notice provided for herein shall be in writing and shall
be deemed to be given when delivered in person or deposited in the United States
Mail, registered or certified, return receipt requested, with proper postage
prepaid and addressed as follows:
6
<PAGE>
Employer and Bancorp: NBG Bancorp, Inc.
2234 West Broad Street
Athens, Georgia 30606
Attn: Claude Williams, Jr., Director
with a copy to: Troutman Sanders LLP
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308-2216
Attn: Thomas O. Powell, Esquire
Employee: William S. Huggins
1051 Ridge Pointe
Athens, Georgia 30606
14. Covenant Not to Compete and Not to Solicit.
14.1 For purposes of this Section 14, Employer and Employee conduct
the following business in the following geographic areas:
14.1.1 Employer is engaged in the business of transacting
business as a bank which accepts deposits, makes loans, cashes checks and
otherwise engages in the business of banking (collectively, the "Business of
Employer").
14.1.2 Employer actively conducts business in a certain
geographic area of Georgia from its office located at 2234 West Broad Street,
Athens, Georgia 30606 (the "Main Office").
14.1.3 Employee has established business relationships and
performs the duties described in Section 1 of this Agreement in the geographic
area covered by a circle having a radius of 50 miles from the Main Office, and
will work primarily in such area while in the employ of Employer.
14.2 Employee covenants and agrees that for a period of two years
after the termination of this Agreement for any reason other than non-renewal of
this Agreement by Employer or Bancorp on any anniversary date or pursuant to
Section 12.1(ii) of this Agreement, Employee shall not, directly or indirectly,
as principal, agent, trustee, consultant or through the agency of any financial
institution, corporation, partnership, association, trust or other entity or
person, on Employee's own behalf or for others, provide the duties described in
Section 1 of this
7
<PAGE>
Agreement for any entity or person conducting the Business of Employer within
the geographic area covered by a circle having a radius of 50 miles from the
Main Office.
14.3 During the term of this Agreement and for a period of two years
after the termination of this Agreement for any reason other than non-renewal of
this Agreement by Employer or Bancorp on any anniversary date or pursuant to
Section 12.1(ii) of this Agreement, Employee will not enter into, and will not
participate in, any plan or arrangement to cause any employee of Employer to
terminate his or her employment with Employer, and, Employee agrees that for a
period of at least two years after the termination of employment by any employee
of Employer, Employee will not hire such employee in connection with any
business initiated by Employee or any other person, firm or corporation.
Employee further agrees that information as to the capabilities of Employer's
employees, their salaries and benefits, and any other terms of their employment
is Confidential Information and proprietary to Employer.
14.4 Employee and Employer shall periodically amend this Agreement by
updating the address referenced in Section 14.1.2 of this Agreement so that it
at all times lists the then current geographic area served by Employer for which
Employee performs the duties described in Section 1 of this Agreement.
14.5 Notwithstanding any provision herein to the contrary, the
covenant not to compete and not to solicit set forth in Sections 14.2 and 14.3
shall be null and void in the event either (i) this Agreement is not renewed by
Employer or Bancorp on any anniversary date or (ii) terminated by Employee
pursuant to Section 12.1(ii) of this Agreement.
15. Change in Control.
None of the benefits provided in this Section 15 shall be payable to
Employee unless (i) there shall have been a Change in Control of Bancorp, as set
forth in this Section 15, and (ii) Employee is employed by Employer at such
time.
15.1 "Change in Control" shall mean:
15.1.1 any transaction, whether by merger, consolidation, asset
sale, tender offer, reverse stock split, or otherwise, which results in the
acquisition or beneficial
8
<PAGE>
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, of 50% or more of the
outstanding shares of common stock of Bancorp;
15.1.2 the sale of all or substantially all of the assets of
Bancorp; or
15.1.3 the liquidation of Bancorp.
15.2 If there occurs a Change in Control of Bancorp, Employee shall be
entitled for a period of 90 days after the date of closing of the transaction
effecting such Change in Control to deliver to Bancorp and Employer written
notice of termination of this Agreement whereupon Employer shall pay Employee a
lump sum cash payment in an amount equal to the product of two and eleven-
twelfths (2 and 11/12) multiplied times Employee's then-current compensation and
benefits from Employer, including salary, bonuses, all perquisites, and all
other forms of compensation paid to Employee however characterized for the
fiscal year during the term of this Agreement for which such compensation was
highest. This payment shall be paid to Employee by Employer within 30 days after
the delivery of such notice of termination by Employee to Employer.
16. Miscellaneous.
16.1 This Agreement, together with Exhibit A, constitutes and
expresses the whole agreement of the parties in reference to the employment of
Employee by Employer, and there are no representations, inducements, promises,
agreements, arrangements, or undertakings oral or written, between the parties
other than those set forth herein.
16.2 This Agreement shall be governed by the laws of the State of
Georgia.
16.3 Should any clause or any other provision of this Agreement be
determined to be void or unenforceable for any reason, such determination shall
not affect the validity or enforceability of any clause or provision of this
Agreement, all of which shall remain in full force and effect.
16.4 Time is of the essence in this Agreement.
9
<PAGE>
16.5 This Agreement shall be binding upon and enure to the benefit of
the parties hereto and their successors and assigns. This Agreement shall not
be assignable by Employee without the prior written consent of Employer.
16.6 This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute but a single instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
"Employee"
/s/ Thomas Z. Lanier, III /s/ William S. Huggins (SEAL)
- --------------------------------------- -----------------------------------
Witness William S. Huggins
ATTEST: "Employer"
THE NATIONAL BANK OF GEORGIA
By: /s/ Michael R. Carson By: /s/ Thomas W. Scott
------------------------------------ --------------------------------
Michael R. Carson, Secretary Its: Chairman of Audit, Compliance
(BANK SEAL) and Compensation Committee
ATTEST: "Bancorp"
NBG BANCORP, INC.
By: /s/ Michael R. Carson By: /s/ Thomas W. Scott
------------------------------------ --------------------------------
Michael R. Carson, Secretary Its: Chairman of Audit, Compliance
and Compensation Committee
(CORPORATE SEAL)
10
<PAGE>
Exhibit A
to Employment Agreement By and Among
William S. Huggins, The National Bank of Georgia (proposed) and
NBG Bancorp, Inc. (the "Employment Agreement")
Employee Compensation and Duties
Capitalized terms used herein and not defined shall have the meanings set forth
in the Employment Agreement.
Base Salary: $133,000 per year; annual increases per year on the anniversary
date of the opening of National Bank of Georgia (the "Bank") in an amount equal
to the greater of either (i) 3% or (ii) such greater amount as the Board of
Directors in its discretion shall determine to be appropriate under the
circumstances.
Option/Bonus Plans: Assuming shareholder approval of that certain incentive
stock option plan of NBG Bancorp, Inc. ("Bancorp"), incentive stock options
("ISOs") granted at the market price of Bancorp' common stock on the day of
grant, vesting ratably over 5 years, at 20% per year for each year of continued
employment as set forth below:
Target Number One: Commencement of profitable operations by the Bank within 90
days of the target date set forth in the business plan approved by the Bank's
Board of Directors and provided that the Bank receives an overall CAMELS rating
of 2 or better and an asset quality rating of 2 or better as set forth in a full
OCC examination for the period during which such cumulative profitability was
realized.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
COMMENCEMENT OF
PROFITABLE OPERATIONS BONUS ($) ISOs GRANTED (#)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Achieves within 180 days after Target Number One 5,000 5,000
- ----------------------------------------------------------------------------------------------------
Achieves within 90 days after Target Number One 10,000 10,000
- ----------------------------------------------------------------------------------------------------
Achieves on or before Target Number One 15,000 14,884
- ----------------------------------------------------------------------------------------------------
</TABLE>
Target Number Two: 6,000 ISOs granted upon the opening of the Bank and 100%
vested thereon.
Bonus: Payable each January, based on a performance matrix established against
budgets and approved by the Bank's Board of Directors.
Auto allowance: The Bank will provide, for Employee's use, a late model
American made automobile and will reimburse Employee for the costs of its
operations and normal maintenance.
Insurance: Employee's and his dependent's, hospitalization, and dental, any
other insurance plans as adopted by the Bank's Board of Directors for employees
of the Bank.
11
<PAGE>
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into as
of November 15, 1999 by and among Thomas Z. Lanier, III, a resident of the State
of Georgia ("Employee"), The National Bank of Georgia, a proposed national
banking association ("Employer") and NBG Bancorp, Inc., a Georgia corporation
and sole shareholder of Employer ("Bancorp").
W I T N E S S E T H:
WHEREAS, Employer and Employee each deem it necessary and desirable, for
their mutual protection, to execute a written document setting forth the terms
and conditions of their employment relationship;
NOW, THEREFORE, in consideration of the employment of Employee by Employer,
of the premises and the mutual promises and covenants contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment and Duties. Employer hereby employs Employee to serve as
Executive Vice President - Credit of Employer and to perform such other duties
and responsibilities as customarily performed by persons acting in such
capacity. During the terms of this Agreement, Employee will devote his full
time and effort to his duties hereunder.
2. Term. Subject to the provisions of Section 12 of this Agreement, the
period of Employee's employment under this Agreement shall be deemed to have
commenced as of the date of Employer's filing of Employer's charter application
(the "Application") with the Office of the Comptroller of the Currency (the
"OCC") and shall continue for a period of 36 calendar months thereafter (i)
unless Employee dies before the end of such 36 months or (ii) Employer is not
successful in obtaining final opening approvals (the "Final Approvals") from the
OCC and
<PAGE>
the Federal Deposit Insurance Corporation (the "FDIC"). In either case, the
period of employment shall continue until the end of the month of Employee's
death or the inability to obtain the OCC's and FDIC's Final Approvals. The said
36 month period of employment shall automatically be extended for additional one
year terms without further action by the parties, commencing on the first year
anniversary of this Agreement and each one year anniversary thereafter. No such
automatic extension shall occur if either party shall, within 90 days prior to
any said anniversary, have served written notice upon the other of its intention
that this Agreement shall not be so extended.
3. Compensation. For all services to be rendered by Employee during the
term of this Agreement, Employer shall pay Employee in accordance with the terms
set forth in Exhibit A; provided, however, that any compensation payable to
--------- -------- -------
Employee from the date of Employer's filing of the Application until the OCC's
and FDIC's Final Approvals shall accrue. As soon as practicable after
Employer's receipt of the OCC's and FDIC's Final Approvals, Employer shall pay
Employee all accrued compensation in a lump sum payment and, thereafter, in
accordance with the terms set forth in Exhibit A, net of applicable
---------
withholdings, payable in bi-weekly installments.
4. Expenses. So long as Employee is employed hereunder, Employee is
entitled to receive reimbursement for, or seek payment directly by Employer of,
all reasonable expenses which are consistent with the normal policy of Employer
in the performance of Employee's duties hereunder, provided that Employee
accounts for such expenses in writing.
5. Employee Benefits. So long as Employee is employed hereunder, Employee
shall be entitled to participate in the various employee benefit programs
adopted by Employer and Bancorp from time to time.
6. Vacation. Employee shall be entitled to three weeks annual vacation.
7. Confidentiality. In Employee's position as an employee of Employer,
Employee has had and will have access to confidential information, trade secrets
and other proprietary information of vital importance to Employer and Bancorp
and has and will also develop
2
<PAGE>
relationships with customers, employees and others who deal with Employer or
Bancorp which are of value to Employer and Bancorp. Employer requires, as a
condition to Employee's employment with Employer, that Employee agree to certain
restrictions on Employee's use of the proprietary information and valuable
relationships developed during Employee's employment with Employer. In
consideration of the terms and conditions contained herein, the parties hereby
agree as follows:
7.1 Employer and Employee mutually agree and acknowledge that
Employer and Bancorp may entrust Employee with highly sensitive, confidential,
restricted and proprietary information concerning various Business Opportunities
(as hereinafter defined), customer lists, and personnel matters. Employee
acknowledges that he shall bear a fiduciary responsibility to Employer and
Bancorp to protect such information from use or disclosure that is not necessary
for the performance of Employee's duties hereunder, as an essential incident of
Employee's employment with Employer.
7.2 For the purposes of this Section 7, the following definitions
shall apply:
7.2.1 "Trade Secret" shall mean the identity and addresses of
customers of Employer or Bancorp, the whole or any portion or phase of any
scientific or technical information, design, process, procedure, formula or
improvement that is valuable and secret (in the sense that it is not generally
known to competitors of Employer or Bancorp) and which is defined as a "trade
secret" under Georgia law pursuant to the Georgia Trade Secrets Act.
7.2.2 "Confidential Information" shall mean any data or
information, other than Trade Secrets, which is material to Employer or Bancorp
and not generally known by the public. Confidential Information shall include,
but not be limited to, Business Opportunities of Employer or Bancorp (as
hereinafter defined), the details of this Agreement, Employer's or Bancorp's
business plans and financial statements and projections, information as to the
capabilities of Employer's or Bancorp's employees, their respective salaries and
benefits and any other terms of their employment and the costs of the services
Employer or Bancorp may offer or
3
<PAGE>
provide to the customers it serves, to the extent such information is material
to Employer or Bancorp and not generally known by the public.
7.2.3 "Business Opportunities" shall mean any specialized
information or plans of Employer or Bancorp concerning the provision of
financial services to the public, together with all related information
concerning the specifics of any contemplated financial services regardless of
whether Employer has contacted or communicated with such target person or
business.
7.2.4 Notwithstanding the definitions of Trade Secrets,
Confidential Information, and Business Opportunities set forth above, Trade
Secrets, Confidential Information, and Business Opportunities shall not include
any information:
(i) that is or becomes generally known to the public;
(ii) that is already known by Employee or is developed by
Employee after termination of employment through entirely independent efforts;
(iii) that Employee obtains from an independent source
having a bona fide right to use and disclose such information;
(iv) that is required to be disclosed by law, except to
the extent eligible for special treatment under an appropriate protective order;
or
(v) that Employer's or Bancorp's Board of Directors
approves for release.
7.3 Employee shall not, without the prior approval of Employer's or
Bancorp's Board of Directors, during his employment with Employer and for so
long thereafter as the information or data remain Trade Secrets, use or
disclose, or negligently permit any unauthorized person who is not an employee
of Employer or Bancorp to use, disclose, or gain access to, any Trade Secrets.
7.4 Employee shall not, without the prior written consent of Employer or
Bancorp, during his employment with Employer and for a period of 24 months
thereafter as long as the information or data remain competitively sensitive,
use or disclose, or negligently permit any unauthorized person who is not
employed by Employer or Bancorp to use, disclose, or gain
4
<PAGE>
access to, any Confidential Information to which the Employee obtained access by
virtue of his employment with Employer, except as provided in Section 7.2 of
this Agreement.
8. Observance of Security Measures. During Employee's employment with
Employer, Employee is required to observe all security measures adopted to
protect Trade Secrets, Confidential Information and Business Opportunities.
9. Return of Materials. Upon the request of Employer or Bancorp and, in
any event, upon the termination of his employment with Employer, Employee shall
deliver to Employer all memoranda, notes, records, manuals or other documents,
including all copies of such materials containing Trade Secrets or Confidential
Information, whether made or compiled by Employee or furnished to him from any
source by virtue of his employment with Employer.
10. Severability. Employee acknowledges and agrees that the covenants
contained in Sections 7 through 9 and Section 14 of this Agreement shall be
construed as covenants independent of one another and distinct from the
remaining terms and conditions of this Agreement, and severable from every other
contract and course of business by and among Employer, Bancorp and Employee, and
that the existence of any claim, suit or action by Employee against Employer
and/or Bancorp, whether predicated upon this Agreement or any other agreement,
shall not constitute a defense to Employer's or Bancorp's enforcement of any
covenant contained in Sections 7 through 9 and Section 14 of this Agreement.
11. Specific Performance. Employee acknowledges and agrees that the
covenants contained in Sections 7 through 9 and Section 14 of this Agreement
shall survive any termination of employment, as applicable, with or without
Cause (as hereinafter defined), at the instigation or upon the initiative of any
party. Employee further acknowledges and agrees that the ascertainment of
damages in the event of Employee's breach of any covenant contained in Sections
7 through 9 and Section 14 of this Agreement would be difficult, if at all
possible. Employee therefore acknowledges and agrees that Employer and Bancorp
shall be entitled in addition to and not in limitation of any other rights,
remedies, or damages available to Employer and Bancorp in arbitration, at law or
in equity, upon submitting whatever affidavit the law may
5
<PAGE>
require, and posting any necessary bond, to have a court of competent
jurisdiction enjoin Employee from committing any such breach.
12. Termination.
12.1 During the term of this Agreement, Employee's employment,
including without limitation, all compensation, salary, expenses reimbursement,
and employee benefits may be terminated (i) at the election of Employer for
Cause; (ii) at Employee's election upon Employer's breach of any material
provision of this Agreement; (iii) upon Employee's death; (iv) at the election
of either party, upon Employee's disability resulting in an inability to perform
the duties described in Section 1 of this Agreement for a period of 90
consecutive days; or (v) as set forth in Section 15 of this Agreement.
12.2 As used in this Agreement, "Cause" shall mean (i) conduct by
Employee that amounts to fraud, material dishonesty, gross negligence or willful
misconduct in the performance of his duties hereunder; (ii) the conviction (from
which no appeal may be, or is, timely taken) of Employee of a felony; (iii)
initiation of suspension or removal proceedings against Employee by federal or
state regulatory authorities acting under lawful authority pursuant to
provisions of federal or state law or regulation which may be in effect from
time to time; (iv) knowing violation of federal or state banking laws or
regulations; or (v) Employee's refusal to perform a duly authorized directive of
Employer's Board of Directors.
12.3 No termination for Cause shall be effective unless it is
approved by a two-thirds (2/3) vote of Employer's Board of Directors, excluding
the vote, if any, of Employee.
12.4 If this Agreement is terminated either pursuant to Cause,
Employee's death or Employee's disability, Employee shall receive no further
compensation or benefits, other than Employee's salary and other compensation as
accrued through the date of such termination.
13. Notices. All notice provided for herein shall be in writing and shall
be deemed to be given when delivered in person or deposited in the United States
Mail, registered or certified, return receipt requested, with proper postage
prepaid and addressed as follows:
6
<PAGE>
Employer and Bancorp: NBG Bancorp, Inc.
2234 West Broad Street
Athens, Georgia 30606
Attn: Claude Williams, Jr., Director
with a copy to: Troutman Sanders LLP
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308-2216
Attn: Thomas O. Powell, Esquire
Employee: Thomas Z. Lanier, III
240 Oak Bend Drive
Athens, Georgia 30606
14. Covenant Not to Compete and Not to Solicit.
14.1 For purposes of this Section 14, Employer and Employee conduct
the following business in the following geographic areas:
14.1.1 Employer is engaged in the business of transacting
business as a bank which accepts deposits, makes loans, cashes checks and
otherwise engages in the business of banking (collectively, the "Business of
Employer").
14.1.2 Employer actively conducts business in a certain
geographic area of Georgia from its office located at 2234 West Broad Street,
Athens, Georgia 30606 (the "Main Office").
14.1.3 Employee has established business relationships and
performs the duties described in Section 1 of this Agreement in the geographic
area covered by a circle having a radius of 50 miles from the Main Office, and
will work primarily in such area while in the employ of Employer.
14.2 Employee covenants and agrees that for a period of two years
after the termination of this Agreement for any reason other than non-renewal of
this Agreement by Employer or Bancorp on any anniversary date or pursuant to
Section 12.1(ii) of this Agreement, Employee shall not, directly or indirectly,
as principal, agent, trustee, consultant or through the agency of any financial
institution, corporation, partnership, association, trust or other entity or
person, on Employee's own behalf or for others, provide the duties described in
Section 1 of this
7
<PAGE>
Agreement for any entity or person conducting the Business of Employer within
the geographic area covered by a circle having a radius of 50 miles from the
Main Office.
14.3 During the term of this Agreement and for a period of two years
after the termination of this Agreement for any reason other than non-renewal of
this Agreement by Employer or Bancorp on any anniversary date or pursuant to
Section 12.1(ii) of this Agreement, Employee will not enter into, and will not
participate in, any plan or arrangement to cause any employee of Employer to
terminate his or her employment with Employer, and, Employee agrees that for a
period of at least two years after the termination of employment by any employee
of Employer, Employee will not hire such employee in connection with any
business initiated by Employee or any other person, firm or corporation.
Employee further agrees that information as to the capabilities of Employer's
employees, their salaries and benefits, and any other terms of their employment
is Confidential Information and proprietary to Employer.
14.4 Employee and Employer shall periodically amend this Agreement by
updating the address referenced in Section 14.1.2 of this Agreement so that it
at all times lists the then current geographic area served by Employer for which
Employee performs the duties described in Section 1 of this Agreement.
14.5 Notwithstanding any provision herein to the contrary, the
covenant not to compete and not to solicit set forth in Sections 14.2 and 14.3
shall be null and void in the event either (i) this Agreement is not renewed by
Employer or Bancorp on any anniversary date or (ii) terminated by Employee
pursuant to Section 12.1(ii) of this Agreement.
15. Change in Control.
None of the benefits provided in this Section 15 shall be payable to
Employee unless (i) there shall have been a Change in Control of Bancorp, as set
forth in this Section 15, and (ii) Employee is employed by Employer at such
time.
15.1 "Change in Control" shall mean:
15.1.1 any transaction, whether by merger, consolidation, asset
sale, tender offer, reverse stock split, or otherwise, which results in the
acquisition or beneficial
8
<PAGE>
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, of 50% or more of the
outstanding shares of common stock of Bancorp;
15.1.2 the sale of all or substantially all of the assets of
Bancorp; or
15.1.3 the liquidation of Bancorp.
15.2 If there occurs a Change in Control of Bancorp, Employee shall be
entitled for a period of 90 days after the date of closing of the transaction
effecting such Change in Control to deliver to Bancorp and Employer written
notice of termination of this Agreement whereupon Employer shall pay Employee a
lump sum cash payment in an amount equal to the product of two and eleven-
twelfths (2 and 11/12) multiplied times Employee's then-current compensation and
benefits from Employer, including salary, bonuses, all perquisites, and all
other forms of compensation paid to Employee however characterized for the
fiscal year during the term of this Agreement for which such compensation was
highest. This payment shall be paid to Employee by Employer within 30 days after
the delivery of such notice of termination by Employee to Employer.
16. Miscellaneous.
16.1 This Agreement, together with Exhibit A, constitutes and
---------
expresses the whole agreement of the parties in reference to the employment of
Employee by Employer, and there are no representations, inducements, promises,
agreements, arrangements, or undertakings oral or written, between the parties
other than those set forth herein.
16.2 This Agreement shall be governed by the laws of the State of
Georgia.
16.3 Should any clause or any other provision of this Agreement be
determined to be void or unenforceable for any reason, such determination shall
not affect the validity or enforceability of any clause or provision of this
Agreement, all of which shall remain in full force and effect.
16.4 Time is of the essence in this Agreement.
9
<PAGE>
16.5 This Agreement shall be binding upon and enure to the benefit of
the parties hereto and their successors and assigns. This Agreement shall not be
assignable by Employee without the prior written consent of Employer.
16.6 This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute but a single instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
"Employee"
/s/ William S. Huggins /s/ Thomas Z. Lanier, III (SEAL)
- ------------------------------------ -----------------------------
Witness Thomas Z. Lanier, III
ATTEST: "Employer"
THE NATIONAL BANK OF GEORGIA
By: /s/ Michael R. Carson By: /s/ Thomas W. Scott
-------------------------------- ------------------------------------
Michael R. Carson, Secretary Its: Chairman of Audit, Compliance
and Compensation Committee
(BANK SEAL)
ATTEST: "Bancorp"
NBG BANCORP, INC.
By: /s/ Michael R. Carson By: /s/ Thomas W. Scott
-------------------------------- ------------------------------------
Michael R. Carson, Secretary Its: Chairman of Audit, Compliance
and Compensation Committee
(CORPORATE SEAL)
10
<PAGE>
Exhibit A
to Employment Agreement By and Among
Thomas Z. Lanier, III, The National Bank of Georgia (proposed) and
NBG Bancorp, Inc. (the "Employment Agreement")
Employee Compensation and Duties
Capitalized terms used herein and not defined shall have the meanings set forth
in the Employment Agreement.
Base Salary: $99,000 per year; annual increases per year on the anniversary
date of the opening of National Bank of Georgia (the "Bank") in an amount equal
to the greater of either (i) __% or (ii) such greater amount as the Board of
Directors in its discretion shall determine to be appropriate under the
circumstances.
Option/Bonus Plans: Assuming shareholder approval of that certain incentive
stock option plan of NBG Bancorp, Inc. ("Bancorp"), incentive stock options
("ISOs") granted at the market price of Bancorp' common stock on the day of
grant, vesting ratably over __ years, at __% per year for each year of continued
employment as set forth below:
Target Number One: Commencement of profitable operations by the Bank within 90
days of the target date set forth in the business plan approved by the Bank's
Board of Directors and provided that the Bank receives an overall CAMELS rating
of 2 or better and an asset quality rating of 2 or better as set forth in a full
OCC examination for the period during which such cumulative profitability was
realized.
- --------------------------------------------------------------------------------
COMMENCEMENT OF ISOs
PROFITABLE OPERATIONS BONUS ($) GRANTED (#)
- --------------------------------------------------------------------------------
Achieves within 180 days after Target Number One 3,700 3,600
- --------------------------------------------------------------------------------
Achieves within 90 days after Target Number One 7,400 7,200
- --------------------------------------------------------------------------------
Achieves on or before Target Number One 11,000 10,878
- --------------------------------------------------------------------------------
Target Number Two: 4,385 ISOs granted upon the opening of the Bank and 100%
vested thereon.
Bonus: Payable each January, based on a performance matrix established against
budgets and approved by the Bank's Board of Directors.
Insurance: Employee's hospitalization, and dental, any other insurance plans as
adopted by the Bank's Board of Directors for employees of the Bank.
<PAGE>
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into as
of November 15, 1999 by and among Michael R. Carson, a resident of the State of
Georgia ("Employee"), The National Bank of Georgia, a proposed national banking
association ("Employer") and NBG Bancorp, Inc., a Georgia corporation and sole
shareholder of Employer ("Bancorp").
W I T N E S S E T H:
WHEREAS, Employer and Employee each deem it necessary and desirable, for
their mutual protection, to execute a written document setting forth the terms
and conditions of their employment relationship;
NOW, THEREFORE, in consideration of the employment of Employee by Employer,
of the premises and the mutual promises and covenants contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment and Duties. Employer hereby employs Employee to serve as
Executive Vice President - Operations of Employer and to perform such other
duties and responsibilities as customarily performed by persons acting in such
capacity. During the terms of this Agreement, Employee will devote his full
time and effort to his duties hereunder.
2. Term. Subject to the provisions of Section 12 of this Agreement, the
period of Employee's employment under this Agreement shall be deemed to have
commenced as of the date of Employer's filing of Employer's charter application
(the "Application") with the Office of the Comptroller of the Currency (the
"OCC") and shall continue for a period of 36 calendar months thereafter (i)
unless Employee dies before the end of such 36 months or (ii) Employer is not
successful in obtaining final opening approvals (the "Final Approvals") from the
OCC and
<PAGE>
the Federal Deposit Insurance Corporation (the "FDIC"). In either case, the
period of employment shall continue until the end of the month of Employee's
death or the inability to obtain the OCC's and FDIC's Final Approvals. The said
36 month period of employment shall automatically be extended for additional one
year terms without further action by the parties, commencing on the first year
anniversary of this Agreement and each one year anniversary thereafter. No such
automatic extension shall occur if either party shall, within 90 days prior to
any said anniversary, have served written notice upon the other of its intention
that this Agreement shall not be so extended.
3. Compensation. For all services to be rendered by Employee during the
term of this Agreement, Employer shall pay Employee in accordance with the terms
set forth in Exhibit A; provided, however, that any compensation payable to
--------- -------- -------
Employee from the date of Employer's filing of the Application until the OCC's
and FDIC's Final Approvals shall accrue. As soon as practicable after
Employer's receipt of the OCC's and FDIC's Final Approvals, Employer shall pay
Employee all accrued compensation in a lump sum payment and, thereafter, in
accordance with the terms set forth in Exhibit A, net of applicable
---------
withholdings, payable in bi-weekly installments.
4. Expenses. So long as Employee is employed hereunder, Employee is
entitled to receive reimbursement for, or seek payment directly by Employer of,
all reasonable expenses which are consistent with the normal policy of Employer
in the performance of Employee's duties hereunder, provided that Employee
accounts for such expenses in writing.
5. Employee Benefits. So long as Employee is employed hereunder, Employee
shall be entitled to participate in the various employee benefit programs
adopted by Employer and Bancorp from time to time.
6. Vacation. Employee shall be entitled to three weeks annual vacation.
7. Confidentiality. In Employee's position as an employee of Employer,
Employee has had and will have access to confidential information, trade secrets
and other proprietary information of vital importance to Employer and Bancorp
and has and will also develop
2
<PAGE>
relationships with customers, employees and others who deal with Employer or
Bancorp which are of value to Employer and Bancorp. Employer requires, as a
condition to Employee's employment with Employer, that Employee agree to certain
restrictions on Employee's use of the proprietary information and valuable
relationships developed during Employee's employment with Employer. In
consideration of the terms and conditions contained herein, the parties hereby
agree as follows:
7.1 Employer and Employee mutually agree and acknowledge that Employer and
Bancorp may entrust Employee with highly sensitive, confidential, restricted and
proprietary information concerning various Business Opportunities (as
hereinafter defined), customer lists, and personnel matters. Employee
acknowledges that he shall bear a fiduciary responsibility to Employer and
Bancorp to protect such information from use or disclosure that is not necessary
for the performance of Employee's duties hereunder, as an essential incident of
Employee's employment with Employer.
7.2 For the purposes of this Section 7, the following definitions shall
apply:
7.2.1 "Trade Secret" shall mean the identity and addresses of
customers of Employer or Bancorp, the whole or any portion or phase of any
scientific or technical information, design, process, procedure, formula or
improvement that is valuable and secret (in the sense that it is not generally
known to competitors of Employer or Bancorp) and which is defined as a "trade
secret" under Georgia law pursuant to the Georgia Trade Secrets Act.
7.2.2 "Confidential Information" shall mean any data or information,
other than Trade Secrets, which is material to Employer or Bancorp and not
generally known by the public. Confidential Information shall include, but not
be limited to, Business Opportunities of Employer or Bancorp (as hereinafter
defined), the details of this Agreement, Employer's or Bancorp's business plans
and financial statements and projections, information as to the capabilities of
Employer's or Bancorp's employees, their respective salaries and benefits and
any other terms of their employment and the costs of the services Employer or
Bancorp may offer or
3
<PAGE>
provide to the customers it serves, to the extent such information is material
to Employer or Bancorp and not generally known by the public.
7.2.3 "Business Opportunities" shall mean any specialized information
or plans of Employer or Bancorp concerning the provision of financial services
to the public, together with all related information concerning the specifics of
any contemplated financial services regardless of whether Employer has contacted
or communicated with such target person or business.
7.2.4 Notwithstanding the definitions of Trade Secrets, Confidential
Information, and Business Opportunities set forth above, Trade Secrets,
Confidential Information, and Business Opportunities shall not include any
information:
(i) that is or becomes generally known to the public;
(ii) that is already known by Employee or is developed by
Employee after termination of employment through entirely independent efforts;
(iii) that Employee obtains from an independent source having a
bona fide right to use and disclose such information;
(iv) that is required to be disclosed by law, except to the
extent eligible for special treatment under an appropriate protective order; or
(v) that Employer's or Bancorp's Board of Directors approves
for release.
7.3 Employee shall not, without the prior approval of Employer's or
Bancorp's Board of Directors, during his employment with Employer and for so
long thereafter as the information or data remain Trade Secrets, use or
disclose, or negligently permit any unauthorized person who is not an employee
of Employer or Bancorp to use, disclose, or gain access to, any Trade Secrets.
7.4 Employee shall not, without the prior written consent of Employer or
Bancorp, during his employment with Employer and for a period of 24 months
thereafter as long as the information or data remain competitively sensitive,
use or disclose, or negligently permit any unauthorized person who is not
employed by Employer or Bancorp to use, disclose, or gain
4
<PAGE>
access to, any Confidential Information to which the Employee obtained access by
virtue of his employment with Employer, except as provided in Section 7.2 of
this Agreement.
8. Observance of Security Measures. During Employee's employment with
Employer, Employee is required to observe all security measures adopted to
protect Trade Secrets, Confidential Information and Business Opportunities.
9. Return of Materials. Upon the request of Employer or Bancorp and, in
any event, upon the termination of his employment with Employer, Employee shall
deliver to Employer all memoranda, notes, records, manuals or other documents,
including all copies of such materials containing Trade Secrets or Confidential
Information, whether made or compiled by Employee or furnished to him from any
source by virtue of his employment with Employer.
10. Severability. Employee acknowledges and agrees that the covenants
contained in Sections 7 through 9 and Section 14 of this Agreement shall be
construed as covenants independent of one another and distinct from the
remaining terms and conditions of this Agreement, and severable from every other
contract and course of business by and among Employer, Bancorp and Employee, and
that the existence of any claim, suit or action by Employee against Employer
and/or Bancorp, whether predicated upon this Agreement or any other agreement,
shall not constitute a defense to Employer's or Bancorp's enforcement of any
covenant contained in Sections 7 through 9 and Section 14 of this Agreement.
11. Specific Performance. Employee acknowledges and agrees that the
covenants contained in Sections 7 through 9 and Section 14 of this Agreement
shall survive any termination of employment, as applicable, with or without
Cause (as hereinafter defined), at the instigation or upon the initiative of any
party. Employee further acknowledges and agrees that the ascertainment of
damages in the event of Employee's breach of any covenant contained in Sections
7 through 9 and Section 14 of this Agreement would be difficult, if at all
possible. Employee therefore acknowledges and agrees that Employer and Bancorp
shall be entitled in addition to and not in limitation of any other rights,
remedies, or damages available to Employer and Bancorp in arbitration, at law or
in equity, upon submitting whatever affidavit the law may
5
<PAGE>
require, and posting any necessary bond, to have a court of competent
jurisdiction enjoin Employee from committing any such breach.
12. Termination.
12.1 During the term of this Agreement, Employee's employment,
including without limitation, all compensation, salary, expenses reimbursement,
and employee benefits may be terminated (i) at the election of Employer for
Cause; (ii) at Employee's election upon Employer's breach of any material
provision of this Agreement; (iii) upon Employee's death; (iv) at the election
of either party, upon Employee's disability resulting in an inability to perform
the duties described in Section 1 of this Agreement for a period of 90
consecutive days; or (v) as set forth in Section 15 of this Agreement.
12.2 As used in this Agreement, "Cause" shall mean (i) conduct by
Employee that amounts to fraud, material dishonesty, gross negligence or willful
misconduct in the performance of his duties hereunder; (ii) the conviction (from
which no appeal may be, or is, timely taken) of Employee of a felony; (iii)
initiation of suspension or removal proceedings against Employee by federal or
state regulatory authorities acting under lawful authority pursuant to
provisions of federal or state law or regulation which may be in effect from
time to time; (iv) knowing violation of federal or state banking laws or
regulations; or (v) Employee's refusal to perform a duly authorized directive of
Employer's Board of Directors.
12.3 No termination for Cause shall be effective unless it is approved
by a two-thirds (2/3) vote of Employer's Board of Directors, excluding the vote,
if any, of Employee.
12.4 If this Agreement is terminated either pursuant to Cause,
Employee's death or Employee's disability, Employee shall receive no further
compensation or benefits, other than Employee's salary and other compensation as
accrued through the date of such termination.
13. Notices. All notice provided for herein shall be in writing and shall
be deemed to be given when delivered in person or deposited in the United States
Mail, registered or certified, return receipt requested, with proper postage
prepaid and addressed as follows:
6
<PAGE>
Employer and Bancorp: NBG Bancorp, Inc.
2234 West Broad Street
Athens, Georgia 30606
Attn: Claude Williams, Jr., Director
with a copy to: Troutman Sanders LLP
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308-2216
Attn: Thomas O. Powell, Esquire
Employee: Michael R. Carson
210 Waterford Way
Athens, Georgia 30606
14. Covenant Not to Compete and Not to Solicit.
14.1 For purposes of this Section 14, Employer and Employee conduct
the following business in the following geographic areas:
14.1.1 Employer is engaged in the business of transacting
business as a bank which accepts deposits, makes loans, cashes checks and
otherwise engages in the business of banking (collectively, the "Business of
Employer").
14.1.2 Employer actively conducts business in a certain
geographic area of Georgia from its office located at 2234 West Broad Street,
Athens, Georgia 30606 (the "Main Office").
14.1.3 Employee has established business relationships and
performs the duties described in Section 1 of this Agreement in the geographic
area covered by a circle having a radius of 50 miles from the Main Office, and
will work primarily in such area while in the employ of Employer.
14.2 Employee covenants and agrees that for a period of two years
after the termination of this Agreement for any reason other than non-renewal of
this Agreement by Employer or Bancorp on any anniversary date or pursuant to
Section 12.1(ii) of this Agreement, Employee shall not, directly or indirectly,
as principal, agent, trustee, consultant or through the agency of any financial
institution, corporation, partnership, association, trust or other entity or
person, on Employee's own behalf or for others, provide the duties described in
Section 1 of this
7
<PAGE>
Agreement for any entity or person conducting the Business of Employer within
the geographic area covered by a circle having a radius of 50 miles from the
Main Office.
14.3 During the term of this Agreement and for a period of two years
after the termination of this Agreement for any reason other than non-renewal of
this Agreement by Employer or Bancorp on any anniversary date or pursuant to
Section 12.1(ii) of this Agreement, Employee will not enter into, and will not
participate in, any plan or arrangement to cause any employee of Employer to
terminate his or her employment with Employer, and, Employee agrees that for a
period of at least two years after the termination of employment by any employee
of Employer, Employee will not hire such employee in connection with any
business initiated by Employee or any other person, firm or corporation.
Employee further agrees that information as to the capabilities of Employer's
employees, their salaries and benefits, and any other terms of their employment
is Confidential Information and proprietary to Employer.
14.4 Employee and Employer shall periodically amend this Agreement by
updating the address referenced in Section 14.1.2 of this Agreement so that it
at all times lists the then current geographic area served by Employer for which
Employee performs the duties described in Section 1 of this Agreement.
14.5 Notwithstanding any provision herein to the contrary, the
covenant not to compete and not to solicit set forth in Sections 14.2 and 14.3
shall be null and void in the event either (i) this Agreement is not renewed by
Employer or Bancorp on any anniversary date or (ii) terminated by Employee
pursuant to Section 12.1(ii) of this Agreement.
15. Change in Control.
None of the benefits provided in this Section 15 shall be payable to
Employee unless (i) there shall have been a Change in Control of Bancorp, as set
forth in this Section 15, and (ii) Employee is employed by Employer at such
time.
15.1 "Change in Control" shall mean:
15.1.1 any transaction, whether by merger, consolidation, asset
sale, tender offer, reverse stock split, or otherwise, which results in the
acquisition or beneficial
8
<PAGE>
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, of 50% or more of the
outstanding shares of common stock of Bancorp;
15.1.2 the sale of all or substantially all of the assets of
Bancorp; or
15.1.3 the liquidation of Bancorp.
15.2 If there occurs a Change in Control of Bancorp, Employee shall be
entitled for a period of 90 days after the date of closing of the transaction
effecting such Change in Control to deliver to Bancorp and Employer written
notice of termination of this Agreement whereupon Employer shall pay Employee a
lump sum cash payment in an amount equal to the product of two and eleven-
twelfths (2 and 11/12) multiplied times Employee's then-current compensation and
benefits from Employer, including salary, bonuses, all perquisites, and all
other forms of compensation paid to Employee however characterized for the
fiscal year during the term of this Agreement for which such compensation was
highest. This payment shall be paid to Employee by Employer within 30 days after
the delivery of such notice of termination by Employee to Employer.
16. Miscellaneous.
16.1 This Agreement, together with Exhibit A, constitutes and
---------
expresses the whole agreement of the parties in reference to the employment of
Employee by Employer, and there are no representations, inducements, promises,
agreements, arrangements, or undertakings oral or written, between the parties
other than those set forth herein.
16.2 This Agreement shall be governed by the laws of the State of
Georgia.
16.3 Should any clause or any other provision of this Agreement be
determined to be void or unenforceable for any reason, such determination shall
not affect the validity or enforceability of any clause or provision of this
Agreement, all of which shall remain in full force and effect.
16.4 Time is of the essence in this Agreement.
9
<PAGE>
16.5 This Agreement shall be binding upon and enure to the benefit of
the parties hereto and their successors and assigns. This Agreement shall not be
assignable by Employee without the prior written consent of Employer.
16.6 This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute but a single instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
"Employee"
/s/ Thomas Z. Lanier, III /s/ Michael R. Carson (SEAL)
- -------------------------------------- -------------------------------
Witness Michael R. Carson
ATTEST: "Employer"
THE NATIONAL BANK OF GEORGIA
By:/s/ William S. Huggins By:/s/ Thomas W. Scott
- -------------------------------------- --------------------------------------
William S. Huggins, President Its: Chairman of Audit, Compliance
and Compensation Committee
(BANK SEAL)
ATTEST: "Bancorp"
NBG BANCORP, INC.
By:/s/ William S. Huggins By:/s/ Thomas W. Scott
- -------------------------------------- --------------------------------------
William S. Huggins, President Its: Chairman of Audit, Compliance
and Compensation Committee
(CORPORATE SEAL)
10
<PAGE>
Exhibit A
to Employment Agreement By and Among
Michael R. Carson, The National Bank of Georgia (proposed) and
NBG Bancorp, Inc. (the "Employment Agreement")
Employee Compensation and Duties
Capitalized terms used herein and not defined shall have the meanings set forth
in the Employment Agreement.
Base Salary: $84,000 per year; annual increases per year on the anniversary
date of the opening of National Bank of Georgia (the "Bank") in an amount equal
to the greater of either (i) __% or (ii) such greater amount as the Board of
Directors in its discretion shall determine to be appropriate under the
circumstances.
Option/Bonus Plans: Assuming shareholder approval of that certain incentive
stock option plan of NBG Bancorp, Inc. ("Bancorp"), incentive stock options
("ISOs") granted at the market price of Bancorp' common stock on the day of
grant, vesting ratably over __ years, at __% per year for each year of continued
employment as set forth below:
Target Number One: Commencement of profitable operations by the Bank within 90
days of the target date set forth in the business plan approved by the Bank's
Board of Directors and provided that the Bank receives an overall CAMELS rating
of 2 or better and an asset quality rating of 2 or better as set forth in a full
OCC examination for the period during which such cumulative profitability was
realized.
- --------------------------------------------------------------------------------
COMMENCEMENT OF ISOs
PROFITABLE OPERATIONS BONUS ($) GRANTED (#)
- --------------------------------------------------------------------------------
Achieves within 180 days after Target Number One 3,075.00 3,050
- --------------------------------------------------------------------------------
Achieves within 90 days after Target Number One 6,150.00 6,100
- --------------------------------------------------------------------------------
Achieves on or before Target Number One 9,200.00 9,161
- --------------------------------------------------------------------------------
Target Number Two: 3,692 ISOs granted upon the opening of the Bank and 100%
vested thereon.
Bonus: Payable each January, based on a performance matrix established against
budgets and approved by the Bank's Board of Directors.
Insurance: Employee's hospitalization, and dental, any other insurance plans as
adopted by the Bank's Board of Directors for employees of the Bank.
<PAGE>
EXHIBIT 10.6
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
WILLIAM S HUGGINS THOMAS Z. GEORGIA FIRST BANK, N.A.
LANIER 455 JESSE JEWELL PARKWAY Loan Number _______________
MICHAEL R. CARSON GAINESVILLE, GA 30501 Date: MAY 27, 1999
1051 RIDGE POINTE Maturity Date: NOV. 25, 1999
ATHENS, GA. 30606 Loan Amount: $250,150.00
Renewal Of _________________
BORROWER'S NAME AND ADDRESS LENDER'S NAME AND ADDRESS OPR CODES: N/01/510/3/290
"I" includes each borrower above, joint "You" means the lender, its successors
and severally. and assigns.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
For value received, I promised to pay to you, or your order, at your address
listed above the PRINCIPAL sum of TWO HUNDRED FIFTY THOUSAND ONE HUNDRED FIFTY
--------------------------------------------
AND NO/100* * * * * * * * * Dollars $250,150.00
- --------------------------- -----------
[_] Single Advance: I will receive all of this principal sum on_______________.
No additional advances are contemplated under this note.
[X] Multiple Advance: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On MAY 27, 1999 I will receive the
------------
amount of $150.00 and future principal advances are contemplated. Conditions:
-------
The conditions for future advances are AT THE BORROWERS REQUEST AND AT THE BANKS
-----------------------------------------
DISCRETION
- --------------------------------------------------------------------------------
________________________________________________________________________________
[X] Open End Credit: You and I agree that I may borrow up to maximum amount
of principal more than one time. This feature is subject to all other
conditions and expires on NOVEMBER 25, 1999
-----------------------------
[_] Closed End Credit: You and I agree that I may borrow up to the maximum
only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from MAY
---
27, 1999 at the rate of 6.750% per year until FIRST CHANGE DATE
-------- ----- -------------------------------.
[X] Variable Rate: This rate may then change as stated below.
[X] Index Rate: The future rate will be 1.000% UNDER the following index rate
------------
PRIME LENDING RATE AS PUBLISHED IN THE WALL STREET JOURNAL
----------------------------------------------------------------------------
_____________________________________________________________________________
[_] No Index: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
[X] Frequency and Timing: The rate on this note may change as often as
MONTHLY. A change in the interest rate will take effect ON THE FIRST DAY OF
-------------------
THE MONTH.
---------
[_] Limitations: During the term of this loan, the applicable annual interest
rate will not be more________ % or less than______________ %. The rate
may not change more_________________ % each___________.
Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments.
[_] The same amount of each scheduled payment will change.[_] The amount of
the final payment will change
[X] THE AMOUNT DUE AT MATURITY WILL CHANGE.
---------------------------------------------------------------
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/360 basis.
----------
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note
owing after maturity, and until paid in full, as stated below:
[_] on the same fixed or variable rate basis in effect before maturity (as
indicated above).
[X] at a rate equal to 16.000%.
-------
[X] LATE CHARGE: If a payment is made more than 10 days after it is due, I
--
agree to pay a late charge of 10.000% OF THIS LATE PAYMENT WITH A MAXIMUM
-------------------------------------------
OF $100.00.
----------
[X] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which [_] are [_] are not included in the principal amount above:
LOAN FEE $150.00.
----------------
PAYMENTS: I agree to pay this note as follows:
[X] Interest: I agree to pay accrued interest AT MATURITY.
-----------
[X] Principal: I agree to pay the principal NOVEMBER 25, 1999.
-----------------
_______________________________________________________________________
<PAGE>
[_] Installments: I agree to pay this note in _______________payments. The
first payment will be in the amount of $ ______________________ and will
be due ________________. A payment of $ __________________ will be due
thereafter. The final payment of the entire unpaid balance of principal
and interest will be due______________________________________________.
[_] If checked, and this loan is secured by a first lien on real estate, then
any accrued interest not paid when due (whether due by reason of a
schedule of payments or due because of lender?s demand) will become part
of the principal thereafter, and will bear interest at the interest rate
in effect from time to time as provided in this agreement.
ADDITIONAL TERMS:
_____________________________________
[_] SECURITY: This note is separately PURPOSE: The purpose of this loan is
secured by (describe separate BUSINESS: OPERATING LINE OF CREDIT
document by type and date): ----------------------------------
(This section is for your internal use. SIGNATURES AND SEALS: IN WITNESS
Failure to list a separate security WHEREOF, I HAVE SIGNED MY NAME AND
document does not mean the agreement AFFIXED MY SEAL ON THIS 27TH DAY OF
will not secure this note.) ----
- ---------------------------------------
MAY, 1999. BY DOING SO, I AGREE TO
---------
THE TERMS OF THIS NOTE (INCLUDING
THOSE ON PAGE 2). I HAVE RECEIVED
A COPY OF TODAY?S DATE.
<TABLE>
<S> <C>
/S/William Huggins /s/ Thomas Z. Lanier
-------------------------------------------
WILLIAM S. HUGGINS THOMAS Z. LANIER
X Signature for Lender X /s/ Michael R. Carson
- ------------------------------------ ------------------------------------------(Seal)
RANDY LEE, EVP/005 MICHAEL R. CARSON
____________________________________ __________________________________________(Seal)
__________________________________________(Seal)
</TABLE>
Page 2 of 11
<PAGE>
<TABLE>
<S> <C>
DEFINITIONS: As used on page 1, "[X]" means the terms that apply ACCURAL METHOD: The amount of interest that I will pay on this
to this loan. "I," "me" or "my" means each Borrower who signs loan will be calculated using the interest rate and accrual
this note and each other person or legal entity (including method stated on page 1 of this note. For the purpose of interest
guarantors, endorsers, and sureties) who agrees to pay this note calculation, the accrual method will determine the number of day
(together referred to as "us"). "You" or "your" means the Lender in a "year." If no accrual method is stated, then you may use any
and its successors and assigns. reasonable accrual method for calculating interest.
APPLICABLE LAW: The law of the state of Georgia will govern this POST MATURITY RATE: For purposes of deciding when the "Post
note. Any term of this note which is contrary to applicable law Maturity Rate" (shown on page 1) applies, the term "maturity"
will not be effective, unless the law permits you and me to agree means the date of the last scheduled payment indicated on page 1
to such a variation. If any provision of this agreement cannot be of this note or the date you accelerate payment on the note,
enforced according to its terms, this fact will not affect the whichever is earlier.
enforceability of the remainder of this agreement. No
modification of this agreement may be mad without your express SINGLE ADVANCE LOANS: If this is a single advance loan, you and I
written consent. Time is of the essence in this agreement. expect that you will make only one advance of principal. However,
you may add other amounts to the principal of you make any
PAYMENTS: Each payment I make on this note will first reduce the payments described in the "PAYMENTS BY LENDER" paragraph below,
amount I owe you for charges which are neither interest nor or if we have agreed that accrued interest not paid when due may
principal. The remainder of each payment will then reduce accrued be added to principal.
unpaid interest, and then unpaid principal. If you and I agree to
a different application of payments, we will describe our MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you
agreement on this note. I may prepay a part of, or the entire and I expect that you will make more than one advance of
balance of this loan without penalty, unless we specify to the principal. If this is closed end credit, repaying a part of the
contrary on this note. Any partial prepayment will not excuse or principal will not entitle me to addition al credit.
reduce any later scheduled payment until this note is paid in
full (unless, when I make the prepayment, you and I agree in PAYMENTS BY LENDER: If you are authorized to pay, on my behalf,
writing to the contrary). charges I am obligated to pay (such as property insurance
premiums), then you may treat those payments made by you as
INTEREST: Interest accrues on the principal remaining unpaid from advances and add them to the unpaid principal under this note, or
time to time, until paid in full. If I receive the principal in you may demand immediate payment of the charges.
more than one advance, each advance will start to earn interest
only when I receive the advance. The interest rate in effect on SET-OFF: I agree that you may set off any amount due and payable
this note at any given time will apply to the entire principal under this note against any right I have to receive money from
advanced at that time. You and I may provide in this agreement you.
for accrued interest not paid when due to be added to principal. "Right to receive money from you" means:
Notwithstanding anything to the contrary. I do not agree to pay (1) any deposit account balance I have with you
and you do not intent to charge any rate of interest that is (2) any money owed to me on an item presented to you or in
higher than the maximum rate of interest you could charge under you possession for collection or exchange; and
applicable law for the extension of credit that is agreed to here (3) any repurchase agreement or other nondeposit obligation.
(either before or after maturity). If any notice of interest
accrual is sent and is in error, we mutually agree to correct it, "Any amount due and payable under this note" means the total
and if you actually collect more interest than allowed by law and amount of which you are entitled to demand payment under the
this agreement, you agree to refund it to me. terms of this note at the time you set off. This total includes
any balance the due date for which you properly accelerated under
INDEX RATE: The index will serve only as a device for setting the the note.
rate on this note. You do not guarantee by selecting this index, If my right to receive money from you is also owned by someone
or the margin, that the rate on this note will be the same rate who has not agreed to pay this note, your right to set off will
you charge on any other loans or class of loans to me or other apply to may interest in the obligation and to any other amounts
borrowers. My sole I could withdraw on
</TABLE>
page 3 of 11
<PAGE>
<TABLE>
<S> <C>
my sole request or endorsement. Your right of set off does not (3) You may demand security, additional security, or additional
apply to an account or other obligation where my rights are only parties to be obligated to pay this note as a condition for
as a representative. It also does not apply to any Individual not using any other remedy.
Retirement Account or other tax-deferred retirement account. (4) You may refuse to make advances to me or allow purchases on
You will not be liable for the dishonor of any check when the credit by me.
dishonor occurs because you set off this debt against any of my (5) You may use any remedy you have under state or federal law.
accounts, I agree to hold you harmless from any such claims
arising as a result of you exercise of you right of set off. By selecting any one or more of these remedies you do not give up
your right to later use any other remedy. By waiving your right
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by to declare an event to be a default, you do not waive your right
real estate or a residence that is personal property, the or later consider the event as a default if it continues or
existence of a default and your remedies for such a default will happens again.
be determined by applicable law, by the terms of any separate
instrument creating the security interest and, to the extent no COLLECTION COSTS AND ATTORNEY'S FEES:
prohibited by law and not contrary to the terms of the separate I agree to pay all costs of collection, replevin or any other
security instrument, by the "Default" and "Remedies" paragraphs similar type of cost if I am in default. In addition, if you hire
herein. any attorney to collect this note, I also agree to pay any fee,
not to exceed 15 percent of the principal and interest then owed,
DEFAULTS: I will be in default if any one or more of the you incur with such attorney plus court costs (except where
following occur: (1) I fail to make a payment on time or in the prohibited by law). To the extent permitted by the United States
amount due; (2) I fail to keep the property insured, if required; Bankruptcy Code, I also agree to pay the reasonable attorney's
(3) I fail to pay, or keep any promise, on any debt or agreement fees and costs you incur to collect this debt as awarded by any
I have with you: (4) any other creditor of mine attempts to court exercising jurisdiction under the Bankruptcy Code.
collect any debt I owe him through court proceedings; (4) I die,
am declared incompetent, make an assignment for the benefit of WAIVER: I give up my rights to require you to do certain things.
creditors, or become insolvent (either because my liabilities I will not require you to
exceed my assets or I am unable to pay my debts as they become (1) demand payment of amounts due (presentation);
due); (5) I make any written statement or provide any financial (2) obtain official certification of nonpayment (protest);
information that is untrue or in accurate at the time it was (3) give notice that amounts due have not been paid (notice of
provided; (7) I do or fail to do something which causes you to dishonor),or
believe that you will have difficulty collecting the amount I owe (4) give me notice prior to seizure of my personal property
you; (8) any collateral securing this note is used in a manner or when you are seeking to foreclose a secured interest in any
for a purpose which threatens confiscation by a legal authority; of my personal property used to secure a commercial
(9) I change my name or assume an additional name without first transaction.
notifying you before making such a change; (10) I fail to plant,
cultivate and harvest crops in due season; (11) any loan proceeds I waive any defenses I have based on suretyship or impairment of
are used for a purpose that will contribute to excessive erosion collateral.
of highly erodible land or to the conversion of wetlands to
produce an agricultural commodity, as further explained in 7 OBLIGATIONS INDEPENDENT: I understand that I must pay this note
C.F.R. Part 1940, Subpart G, Exhibit M. even if someone else has also agreed to pay it (by, for example,
signing this form or a separate guarantee or endorsement). You
REMEDIES: I am in default on this note you have, but are not may sue me alone; or anyone else who is obligated on this note,
limited to, the following remedies: or any number of us together, to collect this note. You may do so
(1) You may demand immediate payment of all I owe you under without any notice that it has not been paid (notice of
this note (principal, accrued unpaid interest and other dishonor). You may without notice release any party to this
accrued charges). agreement without releasing any other party. If you give up any
(2) You may set off this debt against any right I have to the of your rights, with or without notice, it will not affect, my
payment of money from you, subject to the terms of the "Set- duty to pay this note, or any portion of the note or debt, from
Off" paragraph herein. time to time without limit or notice and for any term without
affecting my liability for payment of the note. I will not assign
</TABLE> my
Page 4 of 11
<PAGE>
<TABLE>
<S> <C>
obligation under this agreement without your prior NOTICE: Unless otherwise required by law,
written approval. any notice to me shall be given by
delivering it or my mailing it by first
CREDIT INFORMATION: I agree and authorize class mail addressed to me at my last known
you to obtain credit information about me address. My current address is on page 1. I
from time to time (for example, by agree to inform you in writing of any
requesting a credit report) and to report change in my address. I will give any
to others your credit experience with me notice to you by mailing it first class to
(such as a credit reporting agency). I your address stated on page 1 of this
agree to provide you, upon request, agreement, or to any other address that you
financial statements and information I have designated.
provide to you are or will be accurate,
correct and complete.
</TABLE>
<TABLE>
<CAPTION>
Borrower's
Date of Principal Initials Principal Principal Interest Rate Interest Interest Paid
Transaction Advance (not required) Payments Balance Payments Through:
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
page 5 of 11
<PAGE>
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
WILLIAM S HUGGINS THOMAS Z. GEORGIA FIRST BANK, N.A.
LANIER 455 JESSE JEWELL PARKWAY
MICHAEL R. CARSON GAINESVILLE, GA 30501
1051 RIDGE POINTE
ATHENS, GA. 30606
Line of Credit No. _____________
BORROWER'S NAME AND ADDRESS LENDER'S NAME AND ADDRESS Date: MAY 27, 1999
"I" includes each borrower "You" means the lender, its Max. Credit Amt.: $250,150.00
above, joint and severally. successors and assigns. Loan Ref. No.___________________
- --------------------------------------------------------------------------------------------------------
</TABLE>
You have extended to me a line of credit in the
AMOUNT of TWO HUNDRED FIFTY THOUSAND ONE HUNDRED FIFTY AND NO/100 $ 250,150.00
------------------------------------------------------- ----------
You will make loans to me from time to time until 5:00 p.m. on
---------
NOVEMBER 25, 1999. Although the line of credit expires on that date, I will
- -----------------
remain obligated to perform all my duties under this agreement so long as I owe
you any money advanced according to the terms of this agreement, as evidenced by
any note or notes I have signed promised to repay these amounts.
This line of credit is an agreement between you and me. It is not intended
that any third party receive any benefit from this agreement, whether by direct
payment, reliance for future payment or in any other manner. This agreement is
not a letter of credit.
1. AMOUNT: This line of credit is:
[_] OBLIGATORY: You may not refuse to make a loan to me under this line of
credit unless one of the following occurs:
a. I have borrowed the maximum amount available to me;
b. This line of credit has expired;
c. I have defaulted on the note (or notes) which show my
indebtedness under this line of credit;
d. I have violated any term of this line of credit or any note or
other agreement entered into a connection with this line of
credit;
e. _________________________________________________________________
_________________________________________________________________
_________________________________________________________________
[X] DISCRETIONARY: You may refuse to make a loan to me under this line of
credit once the aggregate outstanding advance equal or exceed
$250,150.00 $ 250,150.00.
---------- ----------
Subject to the obligatory or discretionary limitations above, this line of
credit is:
[X] OPEN-END (Business or Agricultural only): I may borrow up to the
maximum amount of principal more than one time.
[_] CLOSED-END: I may borrow up to the maximum only one time.
2. PROMISSORY NOTE: I will repay any advances made according to this line of
credit agreement as set out in the promissory note, I signed on MAY 27, 1999,
------------
or any note(s) I sign at a later time which represent advances under this
agreement. The note(s) set(s) out the terms relating to maturity, interest rate,
repayment and advances. If indicated on the promissory note, the advances will
be made as follows: AT THE REQUEST OF THE BORROWER AND AT THE DISCRETION OF THE
-----------------------------------------------------------
BANK
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
3. RELATED DOCUMENTS: I have signed the following documents in with this line
of credit and note(s) entered into in accordance with this line of credit:
[_] security agreement dated [X] LINE OF CREDIT AGREEMENT 5/27/99
---------------------------------
[_] mortgage dated [_] _________________________________
[_] guaranty dated MAY 27, 1999 [_] _________________________________
------------
4. REMEDIES: If I am in default on the note(s) you may:
(a) take any action as provided in the related documents;
(b) without notice to me, terminate this line of credit.
By selecting any of these remedies you do not give up your right to
later use any other remedy. By deciding not to use any remedy should I
default, you do not waive your right to later consider the event a
default, if it happens again.
5. COSTS AND FEES: If you hire an attorney to enforce this agreement I will
pay your reasonable attorney's fees, where permitted by law. I will also pay
your court costs and costs of collection, where permitted by law.
page 6 of 11
<PAGE>
6. COVENANTS: For as long as this line of credit is in effect or I owe you
money or advances made in accordance with the line of credit, I will do the
following:
a. maintain books and records of my operations relating to the need for
this line of credit;
b. permit you or any of your representatives to inspect and/or copy
these records;
c. provide to you any documentation requested by you which support the
reason for making any advance under this line of credit;
d. permit you to make any advance payable to the sell (or seller and
me) of any items being purchased with that advance.
e. ____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
7. NOTICES: All notices or other correspondence with me should be sent to my
address stated above. The notice or correspondence shall be effective
when deposited in the mail, first class, or delivered to me in person.
8. MISCELLANEOUS: This line of credit may not be changed except by a written
agreement signed by you and me. The law of the state in which you are
located will govern this agreement. Any term of this agreement which is
contrary to applicable law will not be effective, unless the law permits
you and me to agree to such a variation.
FOR THE LENDER SIGNATURES: I AGREE TO THE TERMS OF THIS LINE
OF CREDIT.
RANDY LEE /s/ William S. Huggins /s/ Thomas Z. Lanier
- ----------------------------- ---------------------------------------------
WILLIAM S. HUGGINS THOMAS Z. LANIER
Title EVP/005 X /s/ Michael R. Carson
----------------------- ---------------------------------------------
MICHAEL R. CARSON
page 7 of 11
<PAGE>
GUARANTY
GAINESVILLE , GA
------------------- ----------
(City) (State)
MAY 27, 1999
------------
For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and to induce GEORGIA FIRST BANK, N.A., 455 JESSE JEWELL
------------------------------------------
PARKWAY, GAINESVILLE, GA 30501 herein, with its participants, successors and
- ------------------------------
assigns, called "Lender"), at its option, at any time or from time to time to
make loans or extend other accommodations to or for the account of WILLIAM S.
----------
HUGGINS THOMAS Z. LANIER AND MICHAEL R. CARSON (herein called "Borrower") or to
- ----------------------------------------------
engage in any other transactions with Borrower, the Undersigned hereby
absolutely and unconditionally guarantees to Lender the full and prompt payment
when due, whether at maturity or earlier by reason of acceleration or otherwise,
of the debts, liabilities and obligations described as follows;
A. If this [X] is checked, the Undersigned guarantees to Lender the
payment and performance of the debt, liability or obligation of
Borrower to Lender evidenced by or arising out of the following:
PROMISSORY NOTE DATED 5/27/99 I/A/0 $250,150.00 WHICH MATURES 11/25/99
----------------------------------------------------------------------
and any extensions, renewals or replacements thereof (hereinafter
referred to as the "Indebtedness").
B. If this is [_] checked, the Undersigned guarantees to Lender the
payment and performance of each and every debt, liability and
obligation of every type and description which Borrower may now or at
any time hereafter owe to Lender (whether such debt, liability or
obligation now exists or is hereafter created or incurred, and whether
it is or may be direct or indirect, due or to become due, absolute or
contingent, primary or secondary, liquidated or unliquidated, or joint,
several, or joint and several; all such debts, liabilities and
obligations being hereinafter collectively referred to as the
"Indebtedness"). Without limitation, this guaranty includes the
following described debt(s): _________________________________________.
The term "Indebtedness" as used in this guaranty shall not include any
obligations entered into between Borrower and Lender after the date
hereof (including any extensions, renewals or replacements of such
obligations) for which Borrower meets the Lender's standard of
creditworthiness based on Borrower's own assets and income without the
addition of a guaranty, or for which a guaranty is required but Borrower
chooses someone other than the joint Undersigned to guaranty the
obligation.
The Undersigned further acknowledges and agrees with Lender that:
1. No act or thing need occur to establish the liability of the
Undersigned hereunder, and no act or thing, except full payment and discharge of
all indebtedness, shall in any way exonerate the Undersigned or modify, reduce,
limit or release the liability of the Undersigned hereunder.
2. This is an absolute, unconditional and continuing guaranty of payment
of the Indebtedness and shall continue to be in force and be binding upon the
Undersigned, whether or not all Indebtedness is paid in full, until this
guaranty is revoked by written notice actually received by the Lender, and such
revocation shall not be effective as to Indebtedness existing or committed for
at the time of actual receipt of such notice by the Lender, or as to any
renewals, extensions and refinancings thereof. If there be more than one
Undersigned, such revocation shall be effective only as to the one so revoking.
The death or incompetence of the Undersigned shall not revoke this guaranty,
except upon actual receipt of written notice thereof by Lender and then only as
to the decedent or the incompetent and only prospectively, as to future
transaction, as herein set forth..
3. If the Undersigned shall be dissolved shall die, or shall be or become
insolvent (however defined) or revoke this guaranty, then the Lender shall have
the right to declare immediately due and payable, and the Undersigned will
forthwith pay to the Lender, the full amount of all Indebtedness, whether due
and payable or unmatured. If the Undersigned voluntarily commences or there is
commenced involuntarily against the Undersigned a case under the United States
Bankruptcy Code, the full amount of all Indebtedness, whether due and payable or
unmatured, shall be immediately due and payable without demand or notice
thereof.
4. The liability of the Undersigned hereunder shall be limited to a
principal amount of $ UNLIMITED (if unlimited or if no amount is stated, the
---------
Undersigned shall be liable for all Indebtedness, without any limitation as to
amount), plus accrued interest thereon and all attorneys' fees, collection costs
and enforcement expenses referable thereto. Indebtedness may be created and
continued in any amount, whether or not in excess of such principal amount,
without affecting or impairing the liability of the Undersigned hereunder. The
Lender may apply (except the Undersigned), from their properties, out of any
collateral security or from any other source to payment
page 8 of 11
<PAGE>
hereunder. If the liability of the Undersigned is limited to a stated amount
pursuant to this paragraph 4, any payment made by the Undersigned under this
guaranty shall be effective to reduce or discharge such liability only if
accompanied by a written transmittal document, received by the Lender, advising
the Lender that such payment is made under this guaranty for such purpose.
5. The Undersigned will pay or reimburse Lender for all costs and
expenses (including reasonable attorneys' fees and legal expenses) incurred by
Lender in connection with the protection, defense or enforcement of this
guaranty in any litigation or bankruptcy or insolvency proceedings.
This guaranty includes the additional provisions on page 2, all of which
are made a part hereof.
This guaranty is [X] unsecured; [ ] secured by a mortgage or security
agreement dated _______________; [ ] secured by ______________________________.
IN WITNESS WHEREOF, this guaranty has been duly executed by the Undersigned
the day and year first above written.
X /s/ John Harold Barrett
-------------------------------
JOHN HAROLD BARRETT
X /s/ Jack Lee Barton
-------------------------------
JACK LEE BARTON
X /s/ Robert E. Burton
-------------------------------
ROBERT E. BURTON
X /s/ Michael Sidney Gautreaux
-------------------------------
MICHAEL SIDNEY GAUTREAUX
X /s/ Ronald Lewis Hill
-------------------------------
RONALD LEWIS HILL
X /s/ Henry D. Joiner
-------------------------------
HENRY D. JOINER
X /s/ Ted Ruff Ridlehuber
-------------------------------
TED RUFF RIDLEHUBER
X /s/ Thomas Wells Scott
-------------------------------
THOMAS WELLS SCOTT
X /s/ Tommy Edward Warner
-------------------------------
TOMMY EDWARD WARNER
X /s/ Claude Williams, Jr.
-------------------------------
CLAUDE WILLIAMS, JR.
page 9 of 11
<PAGE>
ADDITIONAL PROVISONS
6. Whether or not any existing relationship between the Undersigned and
Borrower has been changed or ended and whether or not this guaranty has been
revoked, Lender may, but shall not be obligated to, enter into transactions
resulting in the creation or continuance of Indebtedness, without any consent or
approval by the Undersigned and without any notice to the Undersigned. The
liability of the Undersigned shall not be affected or impaired by any of the
following acts or things (which Lender is expressly authorized to do, omit or
suffer from time to time , both before and after revocation of this guaranty,
without notice to or approval by the Undersigned): (i) any acceptance of
collateral security , guarantors, accommodation parties or sureties for any or
all Indebtedness; (ii) any one or more extensions or renewals of Indebtedness
(whether or not for longer than the original period) or any modification of the
interest rates, maturities or other contractual terms applicable to any
Indebtedness; (iii) any waiver, adjustment, forbearance, compromise or
indulgence granted to Borrower, any delay or lack of diligence in the
enforcement of Indebtedness, or any failure to institute proceedings, file a
claim, give any required notices or otherwise protect any Indebtedness; (iv) any
full or partial release of, settlement with, or agreement not to sue, evidence
of Indebtedness or the acceptance of any instrument in renewal thereof or
substitution therefor; (vi) any failure to obtain collateral security (including
rights of setoff) for Indebtedness, or to see to the proper or sufficient
creation and perfection thereof, or to establish the priority thereof, or to
protect, insure, or enforce any collateral security; or any release,,
modification, substitution, discharge, impairment, deterioration, waste, or loss
of any collateral security; (vii) any foreclosure or enforcement of any
collateral security; (viii) any transfer of any Indebtedness or any evidence
thereof; (ix) any order of application of any payments or credits upon
Indebtedness; (x) any election by the Lender under (S) 1111(b)(2) of the United
States Bankruptcy Code.
7. The Undersigned waives any an all defenses, claims and discharges of
Borrower, or any other obligor, pertaining to Indebtedness, except the defense
of discharge by payment in full. Without limiting the generality of the
foregoing, the Undersigned will not assert, plead or enforce against Lender any
defense of waiver, release, statute of limitations, res judicata, statute of
frauds, fraud, incapacity, minority, usury, illegality or unenforceability which
may be available to Borrower or any other person liable in respect of any
Indebtedness, or any setoff available against Lender to Borrower or any such
other person, whether or not on account of a related transaction. The
Undersigned expressly agrees that the Undersigned shall be and remain liable, to
the fullest extent permitted by applicable law, for any deficiency remaining
after foreclosure of any mortgage or security interest securing Indebtedness,
whether or not the liability of Borrower or any other obligor for such
deficiency is discharged pursuant to statute or judicial decision. The
undersigned shall remain obligated, to the fullest extent permitted by law, to
pay such amounts as though the Borrower's obligations had not been discharged.
8. The Undersigned further agrees that the Undersigned shall be and remain
obligated to pay Indebtedness even though any other person obligated to pay
Indebtedness, including Borrower, has such obligation discharged in bankruptcy
or otherwise discharged by law. "Indebtedness" shall include post-bankruptcy
petition interest and attorneys' fees and any other amounts which Borrower is
discharged from paying or which do not otherwise accrue to Indebtedness due to
Borrower's discharge, and the Undersigned shall remain obligated to pay such
amounts as though Borrower's obligations had not been discharged.
9. If any payment applied by Lender to Indebtedness is thereafter set aside,
recovered, rescinded or require to re returned for any reason (including,
without limitation, the bankruptcy, insolvency or reorganization of Borrower or
any other obligor), the Indebtedness to which such payment was applied shall for
the purposes of this guaranty be deemed to have continued in existence,
notwithstanding such application, and this guaranty shall be enforceable as to
such Indebtedness as fully as if such application had never been made.
10. The Undersigned waives any claim, remedy or other right which the
Undersigned may now have or hereafter acquire against Borrower or any other
person obligated to pay Indebtedness arising out of the creating or performance
of the Undersigned's obligation under this guaranty, including, without
limitation, any right of subrogation, contribution, reimbursement,
indemnification, exoneration, and any right to participate in any claim or
remedy the Undersigned may have against the Borrower, collateral, or other party
obligated for Borrower's debts, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law.
11. The Undersigned waives presentment, demand for payment, notice of dishonor
or nonpayment, and protest of any instrument evidencing Indebtedness. Lender
shall not be required first to resort for payment of the Indebtedness to
Borrower or other persons or their properties, or first to enforce, realize upon
or exhaust any collateral security for Indebtedness, enforcing this guaranty.
page 10 of 11
<PAGE>
12. The liability of the Undersigned under this guaranty is in addition to and
shall be cumulative with all other liabilities of the Undersigned to Lender as
guarantor or otherwise, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.
13. This guaranty shall be enforceable against each person signing this
guaranty, even if only one person signs and regardless of any failure of other
persons to sign this guaranty. If there be more than one signer, all agreements
and promises herein shall be construed to be, and are hereby declared to be,
joint and several in each of every particular and shall be fully binding upon
and enforceable against either, any or all the Undersigned. This guaranty shall
be effective upon delivery to Lender, without further act, condition or
acceptance by Lender, without further act, condition or acceptance by Lender,
shall be binding upon the Undersigned and the heirs, representatives, successors
and assigns of the Undersigned and shall be inure to the benefit of Lender and
its participants, successors and assigns. Any invalidity or unenforceability of
any provision or application of this guaranty shall not affect other lawful
provisions and application hereof, and to this end the provisions of this
guaranty are declared to be severable. Except as authorized by the terms
herein, this guaranty may not be waived, modified, amended, terminated, released
or otherwise changed except by a writing signed by the Undersigned and Lender.
This guaranty shall be governed by the laws o the State in which it is executed.
The Undersigned waives notice of Lender's acceptance hereof.
page 11 of 11
<PAGE>
EXHIBIT 10.7
NBG BANCORP, INC.
STOCK OPTION PLAN
ARTICLE I
Purpose, Scope and Administration of the Plan
1.1 Purpose. The purpose of this Stock Option Plan is to promote the long-
term success of NBG Bancorp, Inc. ("NBG"), and its affiliates and to encourage
growth in shareholder value by providing financial incentives to selected
members of its and its affiliates' boards of directors, employees, consultants
and advisers who are in positions to make significant contributions toward that
success. It is intended that NBG will, through the grant of options to purchase
its common stock, attract and retain (and allow its affiliates to attract and
retain) highly qualified and competent employees and directors and motivate such
employees and directors to exert their best efforts on behalf of NBG and its
affiliates.
1.2 Definitions. Unless the context clearly indicates otherwise, for
purposes of this Plan:
(a) "Board of Directors" means the Board of Directors of NBG.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Audit, Compliance and Compensation Committee of
the Board of Directors, which shall be composed of two or more members appointed
from time to time by the Board of Directors from among its members. If the Board
of Directors does not appoint a Compensation Committee, all references in this
Plan to the "Committee" shall be deemed to be references to the Board of
Directors where the context so permits or requires.
(d) "Common Stock" means the Common Stock of NBG, $1.00 par value per
share, or such other class of shares or other securities to which the provisions
of the Plan may be applicable by reason of the operation of Section 3.1 hereof.
(e) "Company" means NBG and any affiliates of NBG, including affiliates
of NBG which become such after adoption of this Plan; provided, however, that
for purposes of granting Incentive Stock Options, the term "Company" shall
include only NBG and its subsidiaries that are corporations in which NBG
directly or indirectly owns stock possessing 50 percent or more of the total
combined voting power of all classes of stock in such corporation as provided in
Code Section 424(f).
<PAGE>
(f) "Fair Market Value" of a share of Common Stock on a specified date
means:
(i) if the Common Stock is then traded on a national securities
exchange, the closing price on such date of a share of the Common Stock
as traded on the largest securities exchange on which it is then traded;
or
(ii) if the Common Stock is not then traded on a national securities
exchange, the mean between the closing composite inter-dealer "bid" and
"ask" prices for Common Stock, as quoted on the NASDAQ National Market
System (A) on such date, or (B) if no "bid" and "ask" prices are quoted
on such date, then on the next preceding date on which such prices were
quoted; or
(iii) if the Common Stock is not then traded on a national securities
exchange or quoted on the NASDAQ National Market System, the value
determined in good faith by the Committee.
(g) "Grant Date," as used with respect to a particular Option, means the
date as of which the Option is granted by the Committee pursuant to the Plan.
(h) "Grantee" means the person to whom an Option is granted by the
Committee pursuant to the Plan.
(i) "Incentive Stock Option" means an Option, or any portion thereof,
granted to an employee of the Company which qualifies as an Incentive Stock
Option as described in Section 422 of the Code, unless the Committee expressly
designates the Option, or such portion thereof, as a Nonqualified Stock Option.
(j) "Nonqualified Stock Option" means any option granted under this
Plan, other than an Incentive Stock Option.
(k) "Option" means an Option granted by the Committee pursuant to Article
II to purchase shares of Common Stock, which shall be designated at the time of
grant as either an Incentive Stock Option or a Nonqualified Stock Option, as
provided in Section 2.1 hereof.
(l) "Option Agreement" means the agreement between NBG and a Grantee
under which the Grantee is granted an Option pursuant to the Plan. Option
Agreements need not be identical with other Option Agreements, either in form or
substance, and need only conform to the terms and conditions of this Plan.
(m) "Option Period" means, with respect to any Option granted hereunder,
the period beginning on the Grant Date and ending at such time not later than
the tenth anniversary of the Grant Date as the Committee in its sole discretion
shall determine and during which the Option may be exercised.
(n) "Plan" means this NBG Stock Option Plan as set forth herein and as
amended from time to time.
2
<PAGE>
1.3 Aggregate Limitation.
(a) The maximum number of shares of Common Stock with respect to which
Options may be granted shall not exceed a total of seventy thousand (70,000)
shares in the aggregate, subject to possible adjustment in accordance with
Section 3.1.
(b) Any shares of Common Stock to be delivered by NBG upon the exercise
of Options shall, at the discretion of the Board of Directors, be issued from
NBG's authorized but unissued shares of Common Stock or transferred from any
available Common Stock held in treasury.
(c) The Committee may grant new Options hereunder with respect to any
shares for which an Option expires or otherwise terminates prior to being
exercised.
1.4 Administration of the Plan.
(a) The Plan shall be administered by the Committee, which shall have the
authority:
(i) To determine the directors, employees, consultants and advisers
of the Company to whom, and the times at which, Options shall be granted,
and the number of shares of Common Stock to be subject to each such
Option, taking into consideration the nature of the services rendered by
the particular Grantee, the Grantee's potential contribution to the long-
term success of the Company and such other factors as the Committee in
its discretion may deem relevant;
(ii) To interpret and construe the provisions of the Plan and to
establish rules and regulations relating to it;
(iii) To prescribe the terms and conditions of the Option Agreements
for the grant of Options (which need not be identical for all Grantees)
in accordance and consistent with the requirements of the Plan; and
(iv) To make all other determinations necessary or advisable to
administer the Plan in a proper and effective manner.
(b) All decisions and determinations of the Committee in the
administration of the Plan and on other matters concerning the Plan or any
Option shall be final, conclusive and binding on all persons, including (but not
by way of limitation) the Company, the shareholders and directors of NBG, and
any persons having any interest in any Options. The Committee shall be entitled
to rely in reaching its decisions on the advice of counsel (who may be counsel
to the Company).
3
<PAGE>
1.5 Eligibility for Awards. The Committee shall in accordance with Article
II designate from time to time the directors, employees, consultants and
advisers of the Company who are to be granted Options. In no event may a person
who is not an employee of the Company be granted an Incentive Stock Option under
the Plan.
1.6 Effective Date and Duration of Plan. The Plan shall become effective on
the date of its adoption by the Board of Directors; provided, that any grant of
Options under the Plan prior to approval of the Plan by the shareholders of NBG
is subject to such shareholder approval within 12 months of adoption of the Plan
by the Board of Directors. Unless previously terminated by the Board of
Directors, the Plan (but not any Options then outstanding) shall terminate on
the tenth anniversary of its adoption by the Board of Directors.
ARTICLE II
Stock Options
2.1 Grant of Options.
(a) The Committee may from time to time, subject to the provisions of the
Plan, grant Options to directors, employees, consultants and advisers of the
Company under appropriate Option Agreements to purchase shares of Common Stock
up to the aggregate number of shares of Common Stock set forth in Section
1.3(a).
(b) The Committee may designate as an Incentive Stock Option any Option
(or portion thereof) granted to an employee of the Company which satisfies the
requirements of Sections 2.2 and 2.3 hereof. Any portion of an Option that is
not designated as an Incentive Stock Option (or otherwise does not qualify as an
Incentive Stock Option) shall be a Nonqualified Stock Option. A Nonqualified
Stock Option must satisfy the requirements of Section 2.2 hereof, but shall not
be subject to the requirements of Section 2.3.
2.2 Option Requirements.
(a) An Option shall be evidenced by an Option Agreement specifying the
number and class of shares of Common Stock that may be purchased upon its
exercise and containing such other terms and conditions consistent with the Plan
as the Committee may determine to be applicable to that Option.
(b) No Option shall be granted under the Plan on or after the tenth
anniversary of the date upon which the Plan was adopted by the Board of
Directors.
(c) An Option shall expire by its terms at the expiration of the Option
Period and shall not be exercisable thereafter.
(d) The Committee may provide in the Option Agreement for the expiration
or termination of the Option prior to the expiration of the Option Period,
upon the occurrence of any event specified by the Committee.
4
<PAGE>
(e) The Committee may provide in the Option Agreement for vesting periods
which require the passage of time and/or the occurrence of events in order for
the Option to become exercisable.
(f) The option price per share of Common Stock of an Incentive Stock
Option shall not be less than the Fair Market Value of a share of Common Stock
on the Grant Date. The option price per share of Common Stock of a Nonqualified
Stock Option shall be such price as shall be determined by the Committee at the
time any such Nonqualified Option is granted, and may be greater than, equal to,
or less than the Fair Market Value of a share of Common Stock at the time such
Nonqualified Option is granted.
(g) An Option shall not be transferable other than by will or the laws of
descent and distribution, except that any vested portion of Nonqualified Stock
Options may be transferred if the transfer is approved in advance in writing by
the Committee or Board of Directors in their sole discretion. Unless transferred
with approval as provided in the preceding sentence, during the Grantee's
lifetime an Option shall be exercisable only by the Grantee or, if the Grantee
is disabled and the Option remains exercisable, by his or her duly appointed
guardian or other legal representative. Upon the Grantee's death, but only to
the extent that the Option is otherwise exercisable hereunder, an Option may be
exercised by the Grantee's legal representative or by a person who receives the
right to exercise the Option under the Grantee's will or by the applicable laws
of descent and distribution.
(h) Each Option Agreement shall contain an agreement that, upon demand by
the Committee for such a representation, the Grantee (or any person acting on
the Grantee's behalf) shall deliver to the Committee at the time of any exercise
of an Option a written representation that the Common Stock to be acquired upon
such exercise is to be acquired for investment and not for resale or with a view
to the distribution thereof or such other representation as may be required by
the Committee. Upon such demand, delivery of such representation prior to the
delivery of any Common Stock issued upon exercise of an Option and prior to the
expiration of the Option period shall be a condition precedent to the right of
the Grantee or such other person to purchase any shares of Common Stock.
(i) A person electing to exercise an Option shall give written notice
of election to NBG in such form as the Committee may require, accompanied
by payment of the full purchase price of the shares of Common Stock for
which the election is made. Payment of the purchase price shall be made in
cash or in such other form as the Committee may specify in the applicable
Option Agreement.
2.3 Incentive Stock Option Requirements.
(a) An Option granted to an employee of the Company and designated by the
Committee as an Incentive Stock Option is intended to qualify as an "incentive
stock option" within the meaning of Section 422 of the Code and shall satisfy,
in addition to the conditions of Section 2.2 above, the conditions set forth in
this Section 2.3.
5
<PAGE>
(b) An Incentive Stock Option shall not be granted to an individual who
on the Grant Date owns stock possessing more than ten percent of the total
combined voting power of all classes of stock of NBG, unless the option price
per share of Common Stock will not be less than 110% of the Fair Market Value
thereof on the Grant Date and the Option Period does not extend beyond five
years from the Grant Date.
(c) The aggregate Fair Market Value, determined on the Grant Date, of the
shares of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by a Grantee during any calendar year (under the
Plan or any other plan of NBG or any parent or subsidiary thereof) shall not
exceed $100,000.
ARTICLE III
General Provisions
3.1 Adjustment Provisions.
(a) In the event of:
(i) payment of a stock dividend in respect of Common Stock; or
(ii) any recapitalization, reclassification, split-up or
consolidation of or other change in the Common Stock; or
(iii) any exchange of the outstanding shares of Common
Stock in connection with a merger, consolidation or other reorganization
of or involving NBG or a sale by NBG of all or a portion of its assets,
for a different number or class of shares of stock or other securities of
NBG or for shares of the stock or other securities of any other
corporation;
then the Committee shall, in such manner as it may determine in its sole
discretion, appropriately adjust the number and class of shares or other
securities which shall be subject to Options and the purchase price per share
which must be paid thereafter upon exercise of any Option. Any such adjustments
made by the Committee shall be final, conclusive and binding upon all persons,
including (but not by way of limitation) the Company, the shareholders and
directors of NBG, and any persons having any interest in any Options which may
be granted under the Plan.
(b) Except as provided above in subparagraph (a) of this paragraph 3.1,
issuance by NBG of shares of stock of any class or securities convertible into
shares of stock of any class shall not affect the Options.
3.2 Additional Conditions. Any shares of Common Stock issued or transferred
under any provision of the Plan may be issued or transferred subject to such
conditions, in addition to those specifically provided in the Plan, as the
Committee or NBG may impose, and may require as a condition to exercise of the
Option that the Grantee (or any person acting on the Grantee's behalf) enter
into any agreement or execute any acknowledgment that the Committee shall deem
necessary
6
<PAGE>
to ensure that the shares of Common Stock acquired pursuant to the Option will
be subject to any shareholders agreement as may be in effect at the time such
Option is exercised.
3.3 No Rights as Shareholder or to Employment. No Grantee or any other
person authorized to purchase Common Stock upon exercise of an Option shall have
any interest in or shareholder rights with respect to any shares of the Common
Stock which are subject to any Option until certificates evidencing the shares
have been issued and delivered to the Grantee or any such person upon the
exercise of the Option. Furthermore, an Option shall not confer upon any Grantee
any rights to employment or any other relationship with the Company, including
without limitation any right to continue in the employ of the Company, nor
affect the right of the Company to terminate the employment or other
relationship of the Grantee with the Company at any time with or without cause.
3.4 Legal Restrictions. If in the opinion of legal counsel for NBG the
issuance or sale of any shares of Common Stock pursuant to the exercise of an
Option would not be lawful for any reason, including (but not by way of
limitation) the inability or failure of NBG to obtain from any governmental
authority or regulatory body the authority deemed necessary by such counsel for
such issuance or sale, NBG shall not be obligated to issue or sell any Common
Stock pursuant to the exercise of an Option to a Grantee or any other authorized
person unless NBG receives evidence satisfactory to its legal counsel that the
issuance and sale of the shares would not constitute a violation of any
applicable securities laws. NBG shall in no event be obligated to take any
action which may be required in order to permit, or to remedy or remove any
prohibition or limitation on, the issuance or sale of such shares to any Grantee
or other authorized person.
3.5 Rights Unaffected. The existence of the Options shall not affect: the
right or power of NBG and its shareholders to make adjustments,
recapitalizations, reorganizations or other changes in the NBG's capital
structure or its business; any issuance of bonds, debentures, preferred or prior
preference stocks affecting the Common Stock or the rights thereof; the
dissolution or liquidation of NBG, or sale or transfer of any part of its assets
or business; or any other corporate act, whether of a similar character or
otherwise.
3.6 Withholding Taxes. As a condition to exercise of an Option, the Company
may in its sole discretion withhold or require the Grantee to pay or reimburse
the Company for any taxes which the Company determines are required to be
withheld in connection with the grant or any exercise of an Option.
3.7 Choice of Law. The validity, interpretation and administration of the
Plan and of any rules, regulations, determinations or decisions made thereunder,
and the rights of any and all persons having or claiming to have any interest
therein or thereunder, shall be determined exclusively in accordance with the
laws of the State of Georgia. Without limiting the generality of the foregoing,
the period within which any action in connection with the Plan must be commenced
shall be governed by the laws of the State of Georgia, without regard to the
place where the act or omission complained of took place, the residence of any
party to such action or the place where the action may be brought or maintained.
7
<PAGE>
3.8 Amendment, Suspension and Termination of Plan. The Plan may from time to
time be terminated, suspended or amended by the Board of Directors in such
respects as it may deem advisable, including any such amendment effected (i) so
that the Incentive Stock Options granted hereunder shall be "incentive stock
options" as such term is defined in Section 422 of the Code, or (ii) to conform
to any change in any law or regulation governing the Plan, or the Options
granted hereunder; provided, however, that no such amendment shall change the
following unless approved by the shareholders of NBG within twelve months
following the date such amendment is adopted:
(a) The maximum aggregate number of shares for which Options may be
granted under the Plan, except as required under any adjustment pursuant to
Section 3.1 hereof; or
(b) The requirements as to eligibility for participation in the Plan in
any material respect.
3.9 Headings. The headings in this Plan are for convenience only and are not
to be used in interpreting the meaning or effect of any provisions hereof.
ADOPTED BY THE BOARD OF DIRECTORS OF NBG BANCORP, INC. AS OF SEPTEMBER 23,
1999.
NBG BANCORP, INC.
By: /s/ Michael R. Carson
---------------------
Secretary
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<PAGE>
EXHIBIT 10.8
NBG BANCORP, INC.
INCENTIVE STOCK OPTION
COMMON STOCK
($1.00 Par Value Per Share)
STOCK OPTION PLAN: NBG BANCORP, INC. STOCK OPTION PLAN
OPTION FOR THE PURCHASE OF: _______ SHARES
EXERCISE PRICE PER SHARE: __________
DATE OF GRANT: __________________
THIS OPTION AGREEMENT, made and entered into this ____ day of __________, ____
by and between NBG Bancorp, Inc., a Georgia corporation ("NBG"), and
______________________________________ (the "Grantee");
W I T N E S S E T H:
WHEREAS, the NBG BANCORP, INC. STOCK OPTION PLAN (the "Plan") has been adopted
by NBG; and
WHEREAS, Article II of the Plan authorizes the Committee to cause NBG to enter
into a written agreement with the Grantee setting forth the form and the amount
of any award and any conditions and restrictions of the award imposed by the
Plan and the Committee; and
WHEREAS, the Committee desires to make an award to the Grantee consisting of
an Incentive Stock Option;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt of which is hereby
acknowledged, NBG and the Grantee hereby agree as follows:
1. General Definitions. Any capitalized terms herein shall have the meaning
set forth in the Plan, and, in addition, for purposes of this Option Agreement,
each of the following terms, when used herein, shall have the meaning set forth
below:
(a) "NBG" shall mean NBG Bancorp, Inc.
(b) The "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) The "Common Stock" shall mean the common stock of NBG, $1.00 par value
per share.
(d) The "Exercise Date" shall mean the first anniversary of the Date of
Grant. At any time during the period of this Option commencing with the first
anniversary of the Date of Grant, the Grantee may purchase up to 33-1/3% of the
shares covered by this Option and may
<PAGE>
purchase an additional 33-1/3% on the second and third anniversary from the Date
of Grant so that this Option will be fully vested on the third anniversary of
the Date of Grant.
(e) The "Expiration Date" shall mean the date on which this Option expires
pursuant to the provisions of paragraph 4 hereof.
(f) "Fair Market Value" of a share of Common Stock on a specified date
means:
(i) if the Common Stock is then traded on a national securities
exchange, the closing price on such date of a share of the Common Stock as
traded on the largest securities exchange on which it is then traded; or
(ii) if the Common Stock is not then traded on a national securities
exchange, the mean between the closing composite inter-dealer "bid" and
"ask" prices for Common Stock, as quoted on the NASDAQ National Market
System (A) on such date, or (B) if no "bid" and "ask" prices are quoted on
such date, then on the next preceding date on which such prices were
quoted; or
(iii) if the Common Stock is not then traded on a national securities
exchange or quoted on the NASDAQ National Market System, the value
determined in good faith by the Committee.
(g) "Good Cause," with respect to any dismissal of Grantee from his or her
employment with NBG or any of its affiliates, shall mean the dismissal of the
Grantee from such employment by NBG or any of its affiliates by reason of (i)
the Grantee's being convicted of, or pleading guilty or confessing to, any
felony or any act of fraud, misappropriation or embezzlement, (ii) the Grantee's
improperly releasing or misappropriating trade secrets or other tangible or
intangible property of NBG or any of its affiliates or engaging in a dishonest
act to the damage or prejudice of NBG or any of its affiliates or in willful or
grossly negligent conduct or activities materially damaging to the property,
business or reputation of NBG or any of its affiliates, or (iii) the Grantee's
failing, without reasonable cause, to devote his or her full business time and
efforts to NBG or any of its affiliates.
(h) This "Option" shall mean the option evidenced by this Option
Agreement, which is intended to be an "incentive stock option" within the
meaning of Code Section 422.
(i) The "Option Price" shall mean the purchase price of each share of
Common Stock that may be purchased by the Grantee upon the exercise of this
Option, in whole or in part.
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<PAGE>
The Option Price is set forth under "Exercise Price Per Share" on page 1 of this
Option Agreement as adjusted from time to time in accordance with the provisions
hereof.
2. Grant of Option. Upon the terms and subject to the conditions and
limitations hereinafter set forth, the Grantee shall have the right, at any time
after the Exercise Date and on or before the Expiration Date, to purchase the
number of shares of Common Stock set forth on page 1 of this Option Agreement
and vested under Paragraph 1(d), such number of shares and the Option Price
being subject to adjustment in accordance with the provisions set forth below
and in accordance with the terms of the Plan notwithstanding anything to the
contrary herein.
3. Manner of Exercise. Subject to the terms, conditions, and limitations set
forth herein, this Option may be exercised in whole or in part at any time or
from time to time after the Exercise Date and on or before the Expiration Date
as to any part of the number of whole shares of Common Stock then vested under
Paragraph 1(d) and available under this Option. Such exercise shall be
effective only if the Grantee duly executes and delivers to NBG, at the
principal executive office of NBG or at such other address as NBG may designate
by notice in writing to the Grantee, an option exercise form substantially the
same as that attached hereto as Exhibit A, indicating the number of shares of
---------
Common Stock to be purchased and accompanied by payment of the Option Price and
any withholding amounts described below. Payment of the Option Price and any
such withholding amounts may be made (i) in cash or by the Grantee's personal
check, a certified check, a bank draft, or a postal or express money order
payable to the order of NBG in lawful money of the United States or in any
combination of the foregoing, or (ii) by delivery of mature shares of Common
Stock, the Fair Value of which is equal to the Option Price as of the Exercise
Date.
Upon any effective exercise of this Option, NBG shall become obligated to
issue a certificate or certificates to the Grantee representing the number of
shares of Common Stock so purchased. Notwithstanding the foregoing, no shares
of Common Stock will be issued unless the Grantee (or his representative as the
case may be) shall pay to NBG or any affiliate, as applicable, such amount as
NBG or any affiliate may advise it is required under applicable federal, state
or local law to withhold and pay over to governmental taxing authorities by
reason of the purchase of such shares of Common Stock pursuant to this Option.
No fractional shares will be issued.
4. Expiration of Option. This Option shall expire, shall become null and
void, and shall be of no further force and effect upon the earlier to occur of
the following events:
(a) Three months after the date of the Grantee's resignation or other
voluntary termination of his or her employment with NBG or any of its affiliates
(other than by reason of his or her death or "disability" within the meaning of
Section 22(e)(3) of the Code), but during such three month period the Option
shall be exercisable only to the extent that it was exercisable as of the date
of resignation or termination;
(b) The dismissal of the Grantee from his or her employment with NBG or
any affiliate for Good Cause at any time;
(c) Three months after the date on which NBG or any affiliate terminates
the Grantee's employment for any reason other than Good Cause, but during such
three month period
3
<PAGE>
the Option shall be exercisable only to the extent that it was exercisable as of
the date of termination;
(d) One year after the date on which Grantee's employment with NBG or any
affiliate is terminated by reason of the Grantee's death or "disability" within
the meaning of Section 22(e)(3) of the Code, but during such one year period the
Option shall be exercisable only to the extent that it was exercisable as of the
date of death or disability; or
(e) Ten years from the Date of Grant.
5. Holder's Exercise Subject to Compliance with Securities Laws.
Notwithstanding the exercise of this Option, in whole or in part, in accordance
with all other provisions of this Option, NBG shall have no obligation to honor
such exercise and to issue Common Stock pursuant thereto unless and until the
Grantee furnishes NBG an agreement in such form as the Committee may specify) in
which the Grantee (or any person acting on his behalf) represents that the
Common Stock acquired by him upon exercise are being acquired for investment and
not with a view to the sale or distribution thereof, or such other
representations as may be required by the Committee in accordance with the
advice of legal counsel, unless the Committee shall have received advice from
legal counsel that such representation is not required.
6. Adjustment of Option Price and Number of Shares That May be Purchased
Hereunder. The Option Price and the number of shares of Common Stock that may
be purchased hereunder shall be subject to adjustment from time to time by the
Committee in accordance with the terms of the Plan in the event of certain
changes in the Common Stock or certain corporate transactions affecting the
number or value of the shares of Common Stock.
7. Notice of Adjustments. Upon the occurrence of any adjustment of the
Option Price, or any increase or decrease in the number of shares of Common
Stock that may be purchased upon the exercise of this Option, then, and in each
such case, NBG, within 30 days thereafter, shall give written notice thereof to
the Grantee at the address of the Grantee as shown on the books of NBG, which
notice shall state the Option Price as adjusted and the increased or decreased
number of shares that may be purchased upon the exercise of this Option, setting
forth in reasonable detail the method of calculation of each.
8. Additional Conditions. The Grantee and any person acting on the Grantee's
behalf agrees and acknowledges that any shares of Common Stock issued or
transferred under this Option may be issued or transferred subject to such
conditions, in addition to those set forth in this Option, as the Committee or
NBG may impose and may require the Grantee (or any person acting on the
Grantee's behalf) to deliver and comply in all respects with NBG's shareholders
agreement, if any, as may be in effect at the time of any exercise of this
Option. No shares shall be issued upon exercise of this Option prior to the
delivery of a properly executed shareholders agreement or such other agreement
or acknowledgment that the Committee shall deem necessary to ensure that the
Common Stock acquired pursuant to the Option will be subject to such
shareholders agreement.
9. Assignment. This Option may not be transferred or assigned by the Grantee
otherwise than by will or by the laws of descent and distribution and, during
the lifetime of the
4
<PAGE>
Grantee, may be exercised, in whole or in part, only by the Grantee; provided,
however, subject to paragraph 4(d) hereof, in the event of the Grantee's death
or disability, this Option may be exercised by his or her personal
representative, heirs or legatees.
10. No Right to Continued Employment. This Option does not confer upon the
Grantee the right to continued employment with NBG or any affiliate, nor shall
it interfere with the right of NBG or any affiliate to terminate his or her
employment at any time.
11. Disqualifying Disposition. If the Grantee disposes of any shares of
Common Stock acquired pursuant to exercise of this Option prior to the later of
two years after the Date of Grant of this Option or one year after the transfer
of any share to the Grantee pursuant to the exercise of this Option, such
disposition shall be treated as a disqualifying disposition under Code Section
421(b) and not a disposition of a share acquired pursuant to the exercise of an
incentive stock option. The Grantee shall notify NBG in writing in the event
that, prior to the later of two years after the date of grant of this Option or
one year after the transfer of any share to the Grantee pursuant to the exercise
of this Option, the Grantee shall dispose of such share. Such notice shall
state the date of disposition, the nature of the disposition and the price, if
any, received for the share.
12. Miscellaneous.
(a) NBG covenants that it will at all times reserve and keep available,
solely for the purpose of issue upon the exercise of this Option, a sufficient
number of shares of Common Stock to permit the exercise of this Option in full.
(b) The terms of this Option shall be binding upon and shall inure to the
benefit of any successors or assigns of NBG and of the Grantee.
(c) The Grantee shall not be entitled to vote or to receive dividends
with respect to any Common Stock that may be, but has not been, purchased under
this Option and shall not be deemed to be a shareholder of NBG with respect to
any such Common Stock for any purpose.
(d) This Option has been issued pursuant to the Plan and shall be subject
to, and governed by, the terms and provisions thereof. The Grantee hereby agrees
to be bound by all the terms and provisions of the Plan. In the event of any
conflict between the terms of the Plan and this Option Agreement, the provisions
of the Plan shall govern.
(e) This Option Agreement shall be governed by the laws of the State of
Georgia.
5
<PAGE>
IN WITNESS WHEREOF, NBG and the Grantee have executed this Option Agreement
as of the day and year first above written.
NBG BANCORP, INC.
By:
---------------------------
Its:
--------------------------
GRANTEE:
------------------------------
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<PAGE>
EXHIBIT A
---------
OPTION EXERCISE FORM
--------------------
(To be executed by the Grantee to
exercise the rights to purchase Common Stock
evidenced by the foregoing Option)
TO: NBG Bancorp, Inc.
The undersigned hereby exercises the right to purchase __________ shares of
Common Stock covered by the attached Option in accordance with the terms and
conditions thereof, and herewith makes payment of the Option Price of such
shares in full.
____________________________________
Signature
____________________________________
____________________________________
Address
____________________________________
Social Security Number
Date:__________
<PAGE>
EXHIBIT 10.9
NBG BANCORP, INC.
NONQUALIFIED STOCK OPTION
COMMON STOCK
($1.00 Par Value Per Share)
STOCK OPTION PLAN: NBG BANCORP, INC. STOCK OPTION PLAN
OPTION FOR THE PURCHASE OF: _________ SHARES
EXERCISE PRICE PER SHARE: _________
DATE OF GRANT: __________________
THIS OPTION AGREEMENT, made and entered into this ____ day of __________, ____
by and between NBG BANCORP, INC., a Georgia corporation ("NBG"), and
______________________________________ (the "Grantee");
W I T N E S S E T H:
WHEREAS, the NBG BANCORP, INC. STOCK OPTION PLAN (the "Plan") has been adopted
by NBG; and
WHEREAS, Article II of the Plan authorizes the Committee to cause NBG to enter
into a written agreement with the Grantee setting forth the form and the amount
of any award and any conditions and restrictions of the award imposed by the
Plan and the Committee; and
WHEREAS, the Committee desires to make an award to the Grantee consisting of a
Nonqualified Stock Option;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt of which is hereby
acknowledged, NBG and the Grantee hereby agree as follows:
1. General Definitions. Any capitalized terms herein shall have the meaning
set forth in the Plan, and, in addition, for purposes of this Option Agreement,
each of the following terms, when used herein, shall have the meaning set forth
below:
(a) "NBG" shall mean NBG Bancorp, Inc.
(b) The "Code" shall mean the Internal Revenue Code of 1986, as amended.
<PAGE>
(c) The "Common Stock" shall mean the common stock of NBG, $1.00 par value per
share.
(d) The "Exercise Date" shall mean the first anniversary of the Date of Grant.
At any time during the period of this Option commencing with the first
anniversary of the Date of Grant, the Grantee may purchase up to 25% of the
shares covered by this Option and may purchase an additional 25% on the second,
third and fourth anniversary from the Date of Grant so that this Option will be
fully vested on the fourth anniversary of the Date of Grant.
(e) The "Expiration Date" shall mean the date on which this Option expires
pursuant to the provisions of paragraph 4 hereof.
(f) "Fair Market Value" of a share of Common Stock on a specified date means:
(i) if the Common Stock is then traded on a national securities
exchange, the closing price on such date of a share of the Common Stock as
traded on the largest securities exchange on which it is then traded; or
(ii) if the Common Stock is not then traded on a national securities
exchange, the mean between the closing composite inter-dealer "bid" and
"ask" prices for Common Stock, as quoted on the NASDAQ National Market
System (A) on such date, or (B) if no "bid" and "ask" prices are quoted on
such date, then on the next preceding date on which such prices were
quoted; or
(iii) if the Common Stock is not then traded on a national securities
exchange or quoted on the NASDAQ National Market System, the value
determined in good faith by the Committee.
(g) "Good Cause," with respect to any dismissal of Grantee from his or her
employment with NBG or any of its affiliates, shall mean the dismissal of the
Grantee from such employment by NBG or any of its affiliates by reason of (i)
the Grantee's being convicted of, or pleading guilty or confessing to, any
felony or any act of fraud, misappropriation or embezzlement, (ii) the Grantee's
improperly releasing or misappropriating trade secrets or other tangible or
intangible property of NBG or any of its affiliates or engaging in a dishonest
act to the damage or prejudice of NBG or any of its affiliates or in willful or
grossly negligent conduct or activities materially damaging to the property,
business or reputation of NBG or any of its affiliates, or (iii) the Grantee's
failing, without reasonable cause, to devote his or her full business time and
efforts to NBG or any of its affiliates.
(h) This "Option" shall mean the option evidenced by this Option Agreement,
which is intended to be a "nonqualified stock option".
(i) The "Option Price" shall mean the purchase price of each share of Common
Stock that may be purchased by the Grantee upon the exercise of this Option, in
whole or in part.
2
<PAGE>
The Option Price is set forth under "Exercise Price Per Share" on page 1 of this
Option Agreement as adjusted from time to time in accordance with the provisions
hereof.
2. Grant of Option. Upon the terms and subject to the conditions and
limitations hereinafter set forth, the Grantee shall have the right, at any time
after the Exercise Date and on or before the Expiration Date, to purchase the
number of shares of Common Stock set forth on page 1 of this Option Agreement
and vested under Paragraph 1(d), such number of shares and the Option Price
being subject to adjustment in accordance with the provisions set forth below
and in accordance with the terms of the Plan notwithstanding anything to the
contrary herein.
3. Manner of Exercise. Subject to the terms, conditions, and limitations set
forth herein, this Option may be exercised in whole or in part at any time or
from time to time after the Exercise Date and on or before the Expiration Date
as to any part of the number of whole shares of Common Stock then vested under
Paragraph 1(d) and available under this Option. Such exercise shall be
effective only if the Grantee duly executes and delivers to NBG, at the
principal executive office of NBG or at such other address as NBG may designate
by notice in writing to the Grantee, an option exercise form substantially the
same as that attached hereto as Exhibit A, indicating the number of shares of
---------
Common Stock to be purchased and accompanied by payment of the Option Price and
any withholding amounts described below. Payment of the Option Price and any
such withholding amounts may be made (i) in cash or by the Grantee's personal
check, a certified check, a bank draft, or a postal or express money order
payable to the order of NBG in lawful money of the United States or in any
combination of the foregoing, or (ii) by delivery of mature shares of Common
Stock, the Fair Value of which is equal to the Option Price as of the Exercise
Date.
Upon any effective exercise of this Option, NBG shall become obligated to
issue a certificate or certificates to the Grantee representing the number of
shares of Common Stock so purchased. Notwithstanding the foregoing, no shares
of Common Stock will be issued unless the Grantee (or his representative as the
case may be) shall pay to NBG or any affiliate, as applicable, such amount as
NBG or any affiliate may advise it is required under applicable federal, state
or local law to withhold and pay over to governmental taxing authorities by
reason of the purchase of such shares of Common Stock pursuant to this Option.
No fractional shares will be issued.
4. Expiration of Option. This Option shall expire, shall become null and
void, and shall be of no further force and effect upon the earlier to occur of
the following events:
(a) Three months after the date of the Grantee's resignation or other
voluntary termination of his or her employment with NBG or any of its affiliates
(other than by reason of his or her death or "disability" within the meaning of
Section 22(e)(3) of the Code), but during such three month period the Option
shall be exercisable only to the extent that it was exercisable as of the date
of resignation or termination;
(b) The dismissal of the Grantee from his or her employment with NBG or
any affiliate for Good Cause at any time;
(c) Three months after the date on which NBG or any affiliate terminates
the Grantee's employment for any reason other than Good Cause, but during such
three month period
3
<PAGE>
the Option shall be exercisable only to the extent that it was exercisable as of
the date of termination;
(d) One year after the date on which Grantee's employment with NBG or any
affiliate is terminated by reason of the Grantee's death or "disability" within
the meaning of Section 22(e)(3) of the Code, but during such one year period the
Option shall be exercisable only to the extent that it was exercisable as of the
date of death or disability; or
(e) Ten years from the Date of Grant.
5. Holder's Exercise Subject to Compliance with Securities Laws.
Notwithstanding the exercise of this Option, in whole or in part, in accordance
with all other provisions of this Option, NBG shall have no obligation to honor
such exercise and to issue Common Stock pursuant thereto unless and until the
Grantee furnishes NBG an agreement in such form as the Committee may specify) in
which the Grantee (or any person acting on his behalf) represents that the
Common Stock acquired by him upon exercise are being acquired for investment and
not with a view to the sale or distribution thereof, or such other
representations as may be required by the Committee in accordance with the
advice of legal counsel, unless the Committee shall have received advice from
legal counsel that such representation is not required.
6. Adjustment of Option Price and Number of Shares That May be Purchased
Hereunder. The Option Price and the number of shares of Common Stock that may
be purchased hereunder shall be subject to adjustment from time to time by the
Committee in accordance with the terms of the Plan in the event of certain
changes in the Common Stock or certain corporate transactions affecting the
number or value of the shares of Common Stock.
7. Notice of Adjustments. Upon the occurrence of any adjustment of the
Option Price, or any increase or decrease in the number of shares of Common
Stock that may be purchased upon the exercise of this Option, then, and in each
such case, NBG, within 30 days thereafter, shall give written notice thereof to
the Grantee at the address of the Grantee as shown on the books of NBG, which
notice shall state the Option Price as adjusted and the increased or decreased
number of shares that may be purchased upon the exercise of this Option, setting
forth in reasonable detail the method of calculation of each.
8. Additional Conditions. The Grantee and any person acting on the Grantee's
behalf agrees and acknowledges that any shares of Common Stock issued or
transferred under this Option may be issued or transferred subject to such
conditions, in addition to those set forth in this Option, as the Committee or
NBG may impose and may require the Grantee (or any person acting on the
Grantee's behalf) to deliver and comply in all respects with NBG's shareholders
agreement, if any, as may be in effect at the time of any exercise of this
Option. No shares shall be issued upon exercise of this Option prior to the
delivery of a properly executed shareholders agreement or such other agreement
or acknowledgment that the Committee shall deem necessary to ensure that the
Common Stock acquired pursuant to the Option will be subject to such
shareholders agreement.
9. Assignment. This Option may not be transferred or assigned by the Grantee
otherwise than by will or by the laws of descent and distribution and, during
the lifetime of the
4
<PAGE>
Grantee, may be exercised, in whole or in part, only by the Grantee; provided,
however, subject to paragraph 4(d) hereof, in the event of the Grantee's death
or disability, this Option may be exercised by his or her personal
representative, heirs or legatees.
10. No Right to Continued Employment. This Option does not confer upon the
Grantee the right to continued employment with NBG or any affiliate, nor shall
it interfere with the right of NBG or any affiliate to terminate his or her
employment at any time.
11. Miscellaneous.
(a) NBG covenants that it will at all times reserve and keep available,
solely for the purpose of issue upon the exercise of this Option, a sufficient
number of shares of Common Stock to permit the exercise of this Option in full.
(b) The terms of this Option shall be binding upon and shall inure to the
benefit of any successors or assigns of NBG and of the Grantee.
(c) The Grantee shall not be entitled to vote or to receive dividends
with respect to any Common Stock that may be, but has not been, purchased under
this Option and shall not be deemed to be a shareholder of NBG with respect to
any such Common Stock for any purpose.
(d) This Option has been issued pursuant to the Plan and shall be subject
to, and governed by, the terms and provisions thereof. The Grantee hereby agrees
to be bound by all the terms and provisions of the Plan. In the event of any
conflict between the terms of the Plan and this Option Agreement, the provisions
of the Plan shall govern.
(e) This Option Agreement shall be governed by the laws of the State of
Georgia.
IN WITNESS WHEREOF, NBG and the Grantee have executed this Option Agreement
as of the day and year first above written.
NBG BANCORP, INC.
By:
---------------------------
Its:
--------------------------
GRANTEE:
----------------------
5
<PAGE>
EXHIBIT A
---------
OPTION EXERCISE FORM
--------------------
(To be executed by the Grantee to
exercise the rights to purchase Common Stock
evidenced by the foregoing Option)
TO: NBG BANCORP, INC.
The undersigned hereby exercises the right to purchase __________ shares of
Common Stock covered by the attached Option in accordance with the terms and
conditions thereof, and herewith makes payment of the Option Price of such
shares in full.
------------------------------
Signature
------------------------------
------------------------------
Address
------------------------------
Social Security Number
Date:
------------------------
<PAGE>
EXHIBIT 23.1
CONSENT OF MAULDIN & JENKINS, LLC
CONSENT OF INDEPENDENT AUDITOR
We have issued our report, dated September 8, 1999, accompanying the financial
statements as of and for the period ended August 31, 1999 contained in the
Registration Statement on Form SB-2 of NBG Bancorp, Inc. (the "Registration
Statement") and the Prospectus constituting a part thereof (the "Prospectus").
We consent to the use of the aforementioned report in the Registration Statement
and Prospectus, and to the use of our name as it appears under the caption
"Experts."
/s/ MAULDIN & JENKINS, LLC
November 17, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> JUN-01-1999
<PERIOD-END> AUG-31-1999
<CASH> 4,191
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 13,114
<DEPOSITS> 0
<SHORT-TERM> 28,000
<LIABILITIES-OTHER> 73,291
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> (88,177)
<TOTAL-LIABILITIES-AND-EQUITY> 13,114
<INTEREST-LOAN> 0
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<INTEREST-EXPENSE> 315
<INTEREST-INCOME-NET> (315)
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 87,862
<INCOME-PRETAX> (88,177)
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (88,177)
<EPS-BASIC> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
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