<LETTER>
Michael D. Waters
334/269/3121
September 28, 1999
United States Securities
and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Vision Bancshares, Inc., Form SB-2, EDGAR Filing
Ladies and Gentlemen:
Enclosed you will find a Form SB-2 to be filed via EDGAR by
Vision Bancshares, Inc., the Registrant. The Registrant proposes to
register up to 1,000,000 shares of its common stock. The Registrant
is a bank holding company, in organization, and currently conducts
no operations other than those related to the formation of its
subsidiary bank and the receipt of appropriate regulatory approvals
to commence business as a bank holding company.
We would be glad to provide courtesy copies of the
Registration Statement, or the Prospectus, at your request. The
undersigned will be available to receive any questions or comments
that the Commission may have regarding the enclosed filing at the
telephone number indicated above or at the address indicated on
the cover page of the Registration Statement.
Sincerely yours,
/s/ Michael D. Waters
_______________________
Michael D. Waters
MDW/trh
Enclosures
cc: Mr. J. Daniel Sizemore
Chairman and CEO
</LETTER>
As Filed with the Securities and Exchange Commission
on September 28, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
VISION BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Alabama 6711 63-1230752
(State of incorporation (Primary Standard Industrial (I.R.S. Employer
or organization) Classification Code Number) Identification No.)
224 West 19th Avenue
Building E
Gulf Shores, Alabama 36542
(334) 967-4212
(Address and Telephone Number of Registrant's Principal
Executive Offices)
2201 West 1st Street
Gulf Shores, Alabama 36545
(Address of Principal Place of Business or
Intended Principal Place of Business)
with copies to:
J. Daniel Sizemore Michael D. Waters
224 West 19th Avenue Balch & Bingham LLP
Building E 2 Dexter Avenue
Gulf Shores, Alabama 36542 Montgomery, Alabama 36104
(334) 967-4212 (334) 834-6500
(Name, Address and Telephone Number of Agent for Service of Process)
Approximate date of commencement As soon as practicable
of proposed sale to the public : following the effective
date of this Registration
Statement.
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check
the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]_________________________________________
If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]_____________________________________________________________
If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]______________________________________________________________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each
class of Proposed Proposed
securities Amount maximum maximum
to be to be offering price aggregate Registration
registered registered per share offering price fee
Common Stock 1,000,000 $10.00 $10,000,000 $2,780.00
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
<PAGE>
The information in this Prospectus is not complete and may be
changed. We are not allowed to sell these securities until the
registration statement that we have filed with the Securities and
Exchange Commission becomes effective. This Prospectus is not an
offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not
permitted.
Preliminary Prospectus Dated September 29, 1999;
Subject to Completion.
Vision Bancshares, Inc.
1,000,000 Shares of Common Stock
Purchase Price of $10.00 per Share
This Prospectus describes an offer by Vision Bancshares, Inc.
of shares of its common stock at a purchase price of $10 per share.
The Company is being organized as a bank holding company for Vision
Bank in Gulf Shores, Alabama. The Bank is also being organized as
a new bank. Thus, your purchase of the shares will represent an
investment in a start-up banking venture.
See "Risk Factors" at page 4 for a discussion of certain risks
that you should consider before you invest.
Offering Price Per Share....................... $10.00
Selling Discounts or
Commissions.................................... $ 0
Minimum Proceeds to the Company
if 800,000 shares are sold..................... $8.0 million
Maximum Proceeds to the Company
if 1,000,000 shares are sold................... $10 million
No public market currently exists for our shares and no public
market is expected to develop. The offering price may not reflect
the value of our shares after the offering.
Our address and telephone number are:
2201 West 1st Street, Gulf Shores, Alabama 36545; (334) 967-4212.
The minimum purchase per purchaser is 100 shares and the
maximum purchase allowed is 25,000 shares. Funds will be placed in
an escrow account with an unaffiliated bank or trust company until
the minimum of 800,000 shares has been sold. The offering will
terminate no later than February 29, 2000, unless extended.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
Prospectus. Any representation to the contrary is a criminal
offense. The shares offered by this Prospectus are not deposits and
are not insured by the Federal Deposit Insurance Corporation or any
other governmental agency.
The date of this Prospectus is _______________, 1999
TABLE OF CONTENTS
Page
Summary..........................................................1
Risk Factors.....................................................4
Terms of the Offering............................................8
Use of Proceeds.................................................11
Pro Forma Capitalization........................................12
Proposed Business of the Bank...................................13
Supervision and Regulation......................................24
Directors and Officers..........................................25
Security Ownership of Management and
Principal Security Holders......................................32
Description of Capital Stock....................................32
Marketability of Securities.....................................34
Dividend Policy.................................................34
Legal Matters...................................................34
Experts.........................................................35
Financial Reports to Shareholders...............................35
Additional Information..........................................35
Index to Financial Statements
You should rely on the information contained in this document
or information that we have referred you to. We have not
authorized anyone to provide you with information that is
different.
SUMMARY
The following gives you a brief description of some matters
that are more fully described in other parts of this Prospectus.
You should read this Prospectus in full before deciding to invest
in the shares.
The Company The name of the Company is "Vision Bancshares,
Inc." The Company is an Alabama corporation formed
in 1999 to be the bank holding company for Vision
Bank.
The Company will file reports with the Securities
and Exchange Commission for fiscal year 1999.
After December 31, 1999, the Company will be
required to file such reports for a fiscal year
only if it has 300 or more shareholders at the
beginning of such fiscal year.
The Bank The Bank is being organized as an Alabama banking
corporation with the name "Vision Bank." The
directors of the Company and the Bank consist of 15
persons. The organizers of the Bank, which consist
of 14 of these 15 persons, have applied to the
Alabama Banking Department to organize and
incorporate the Bank under Alabama law, and they
have also applied to the Federal Deposit Insurance
Corporation to become an insured bank under the
Federal Deposit Insurance Act. They will file an
application with the Board of Governors of the
Federal Reserve System for permission for the
Company to become a bank holding company under
federal law. The organization of the Bank and the
issuance of the shares offered by this Prospectus
are subject to all of these regulatory approvals.
We plan to commence operations in January, 1999.
We expect the Bank to operate as a community bank,
emphasizing prompt personalized customer service to
individuals and businesses located in Baldwin
County, Alabama. We plan to offer a broad array of
competitively priced products and services
including:
* demand deposits
* regular savings accounts
* money market deposits
* certificates of deposit
* individual retirement accounts
* safe-deposit boxes and
* commercial, consumer and personal loans
J. Daniel Sizemore will serve as Chairman and Chief
Executive Officer of the Bank. Mr. Sizemore has 20
years of banking experience.
The Offering Shares to be Sold. The Company is offering a
minimum of 800,000 shares of its common stock,
$1.00 par value per share, at a price of $10.00 per
share. The directors of the Company intend to
acquire an aggregate of 422,500 shares at an
aggregate price of $4,225,000 in the offering.
If the minimum number of shares offered hereby are
sold, the Company will receive proceeds of
$8,000,000, before payment of expenses of the
offering. We estimate expenses to be $60,780.
The Company will invest $7,500,000 of the total
minimum proceeds as capital in the Bank. The
Company will retain approximately $500,000 as
working capital for the Company, before deducting
$60,780 of expenses associated with the offering.
Increase in Shares. At any time prior to
termination of the offering, the Company may, at
its discretion, increase this offering by any
amount up to an additional 200,000 shares. An
increase could bring the total maximum number of
shares sold in this offering to 1,000,000 shares
representing $10,000,000 of total proceeds. The
additional proceeds of up to $2,000,000 will be
retained by the Company for working capital, but
could be invested in the Bank, if needed.
Purchase Limits. There is a minimum purchase of
100 shares in the offer representing a minimum
purchase price of $1,000. No person may purchase
more than 25,000 shares. The Company may reject
subscriptions for shares for any reason. The
offering will terminate upon the earlier to occur
of (i) the Company's receipt of a number of
subscriptions that the Company deems sufficient,
assuming subscriptions for at least 800,000 shares
have been received; (ii) cancellation of the
offering by the Company; or (iii) February 29,
2000, unless the offer is extended.
Commissions. Certain executive officers and
directors of the Company are conducting the
offering. No person will be paid any direct or
indirect remuneration for soliciting any purchaser
of shares, other than normal salaries and
compensation to Company officers for their regular
duties. The Company has not hired a securities
broker-dealer or underwriter to sell the shares and
does not plan to do so.
Other Terms. The Company may decline any
subscription, and cancel accepted subscriptions,
until all required regulatory approvals have been
received. The Company will issue the shares that
have been properly subscribed, paid for and
accepted promptly after the receipt of all required
regulatory approvals.
Escrow. Subscription funds will be placed in
escrow with an unaffiliated bank or trust company
until the minimum number of shares have been sold.
Risk Factors This offering presents numerous risk factors. You
should consider these risk factors carefully. Risk
factors discussed in more detail in the next
section of this Prospectus include, but are not
limited to, the following:
* the Company and the Bank will be
newly-formed with no operating history,
* the banking business is highly
competitive, and
* there is likely to be no organized
trading market for the shares.
Cautionary
Statement About
Forward-Looking
Statements This Prospectus uses certain forward-looking
statements about the financial projections,
proposed operations and business of the Company.
The words "estimate," "project," "intend,"
"anticipate," "expect," "believe" and similar
expressions identify forward-looking statements.
These forward-looking statements are subject to
risks and uncertainties that could cause actual
results to differ materially from those
contemplated in such statements. Because
forward-looking statements involve risks and
uncertainties, there are important factors that
could cause actual results to differ materially
from those expressed or implied by the
forward-looking statements. These factors include,
among other things, risks associated with starting
a new business, a potential delay in beginning
operations, our dependence on our directors and key
personnel, the potential adverse effect of
competition, interest rate risks, the potential
adverse effect of unpredictable economic
conditions, potential limitations on growth
resulting from low lending limits, risks associated
with the year 2000 and other factors discussed
under "Risk Factors" age page 4.
RISK FACTORS
Any investment you make in the shares offered by this
Prospectus will carry a number of risks. In addition to the
information elsewhere in this Prospectus, you should pay close
attention to the following:
We are a new business enterprise with no operating history upon
which to base an estimate of our future performance.
The Company and the Bank will be newly-formed. This means
they will be subject to all the risks incident to a new business,
including the absence of any history of operations and performance.
The Company will have no significant on-going operations and will
act primarily as the parent company of the Bank. Thus, the success
of the Company will depend solely on the success of the Bank. A new
bank generally encounters problems, expenses and difficulties as a
start-up business. In particular, our Bank will have to attract
deposits and loan business, and many customers who make deposits
with or obtain loans from the Bank may have to decide to move their
business from other banks in the area. We do not expect the Bank
to make a profit in its first year of operation, and there is no
assurance that in future years a profit can be realized.
The banking business involves unique risks.
The banking business is subject to certain risks that are part
of the business of banking, and these risks apply to the Bank.
These risks include:
* Loan Losses - Making loans involves the risk that loans
will not be repaid. The Bank will reserve for potential
loan losses, but there is no precise method of predicting
loan losses and reserves could be insufficient to absorb
losses.
* Changes in Interest Rates - Changes in interest rates,
especially increasing rates, can have a negative impact
on profitability, especially if loans made at lower rates
are long-term loans.
* Asset/Liability Management - The Bank's profitability can
be affected by the spread between its interest income and
interest expense. If interest expense is greater than
interest income, or if interest expense increases at a
rate higher than interest income, profitability could be
affected negatively.
* Competition - The Bank will compete in a highly
competitive environment which includes competitors that
are significantly larger than the Bank with greater
resources than the Bank will have, as explained
immediately below.
Our bank will face stiff competition from our competitors.
Banking is a highly competitive business. The Bank will
compete for customers and employees with banks that are more
established as well as with other financial and depository
institutions. Many of these institutions have much greater
financial resources and experience. The banking business is
becoming more dependent on technology, and many customers of banks
are utilizing new ways to conduct their banking business such as
through the use of personal computers and the Internet. This
technology is enabling financial institutions to reach potential
customers in geographic areas and in ways not previously served by
these institutions. We believe there is a need for an independent,
locally-owned bank in the Bank's proposed market area. We also
believe that the Bank will have the benefit of experienced
management. Nevertheless, our Bank may not be able to compete
successfully or profitably with other financial institutions.
We will be restricted in our ability to pay dividends for the
foreseeable future.
As a start-up corporation, it is not likely that the Company
or the Bank will achieve in its early years of operations a level
of profitability that would justify or allow the payment of
dividends. We believe the following factors will affect the
Company's ability to pay dividends in the near future:
* The Company will not likely generate any significant
earnings on its own, and it will depend upon the payment
to it of dividends by the Bank if it is to pay dividends
on the shares.
* We expect that for at least the first three years of
operation all earnings will be retained by the Bank for
the Bank's future needs.
* State and federal banking laws restrict the payment of
dividends by banks, and in no event may dividends be paid
by the Bank during the first three years of operation
without the approval of the Alabama Banking Department
and the Federal Deposit Insurance Corporation.
Our offering price has been determined arbitrarily by us.
We have established the offering price of $10.00 per share
arbitrarily. That price bears no relationship to the Bank's
projected assets, possible future earnings, book value or other
generally accepted valuation criteria. Accordingly, the offering
price of the shares is not an indication of their value or the
value of the Bank. You should not assume that the shares can be
sold in the future for a price at or above the offering price.
Our business success will depend on key personnel whose departure
could impair operations.
The Bank will depend greatly upon its senior management. We
believe that the Bank will have a strong senior management team and
that the Bank's incentive compensation and employment arrangements
will enhance its management and operations. J. Daniel Sizemore will
serve as CEO and Chairman of the Company and the Bank. Mr.
Sizemore has 20 years in the banking business. The loss to the
Bank of the services of Mr. Sizemore, or any of its proposed senior
management, or the inability to attract other experienced banking
personnel could adversely affect the Bank's conduct of its
business. Some of these adverse effects could include the loss of
personal contacts with existing or potential customers as well as
the loss of special technical knowledge, experience and skills of
such individuals who are responsible for the operations of the
Bank.
Our computer systems, or those of our service providers, suppliers
or customers, may not operate properly on year 2000-sensitive
dates.
The Company and the Bank will rely on computers for the daily
conduct of business and for data processing. There is general
concern in the U.S. and world economies that on January 1, 2000
computers will be unable to "read" the new year and as a
consequence there could be widespread computer malfunctions.
Specifically, the year 2000 issue confronting the Company, the
Bank and the Bank's suppliers, customers, customers' suppliers and
competitors centers on the inability of computer systems to
recognize the year 2000 and other year 2000-sensitive dates. Many
existing computer programs and systems originally were programed
with six-digit dates that provided only two digits to identify the
calendar year in the date field. With the impending new
millennium, these programs and computers will recognize "00" as the
year 1900 rather than the year 2000. Like most financial service
providers, the Company and its operations may be affected
significantly by the year 2000 issue as a result of its dependence
on computer-generated financial information. Software, hardware
and equipment both within and outside the Company's and the Bank's
direct control, and third parties with whom the Company and the
Bank electronically or operationally interface (including customers
and third party vendors providing data processing, information
systems management, computer system maintenance and credit bureau
information) are likely to be affected. If computer systems are
not able to identify the year 2000, many computer applications
could fail or create erroneous results. Consequently, many
calculations that rely on date field information, such as interest,
payment or due dates and other operating functions, could generate
significantly misstated results, and the Company and the Bank could
lose their ability to process transactions, prepare statements or
engage in similar normal business activities. In addition, under
certain circumstances, failure to address adequately the year 2000
issue could adversely affect the viability of the Bank's suppliers
and creditors and the creditworthiness of its borrowers. If not
adequately addressed, the year 2000 issue could ultimately have a
significant adverse impact on the Company's and the Bank's
products, services and competitive condition and, in turn, their
financial condition and results of operations.
Because the Company and the Bank will be newly organized
businesses, the Company will not have existing "legacy" systems or
equipment requiring year 2000 testing and remediation. Rather, the
Company has purchased or will purchase all of its office equipment,
hardware and software and has obtained outsourcing service
commitments from vendors and service providers that can certify
that their products and services are year 2000 compliant. We
believe that the Company will be able to obtain these products and
services from vendors and service providers that can supply the
necessary certification. If the Company is unable to do so,
however, it will either forego acquiring the product or service
until the required certification is forthcoming or, if the product
or service is essential to its operations, arrange for independent
testing and verification of year 2000 compliance.
Future issuance of shares will cause dilution.
The Company's articles of incorporation permit the Company to
issue 10,000,000 shares of common stock. Of that amount, no shares
are currently outstanding. At least 800,000 shares will be
outstanding after this offer. Those shares outstanding do not
include the proposed issuance of 145,000 shares subject to issuance
upon exercise of options to be granted under the Company's stock
option plans and 7,500 shares reserved for issuance under the
Employee Stock Purchase Plan. Future issuance of any new shares
would cause a dilution in the value of the shares issued pursuant
to this offering, and outstanding at the time of the issuance of
shares in the future.
We will have no trading market for our shares.
Although the shares offered by this Prospectus have been
registered under applicable securities laws, the Company has no
plan to list the shares on any public trading market. Thus, it is
likely that no active trading market, or price quotations, for the
shares will develop. It may not be possible for you to readily
liquidate your investment in the shares.
Financial estimates are based on assumptions which may prove to be
inaccurate.
Any financial estimates included in this Prospectus have been
prepared by us on the basis of assumptions believed reasonable, but
they are merely estimates. Future operating results are impossible
to predict and no representation of any kind is made respecting the
future accuracy or completeness of these estimates.
Regulatory requirements may impose additional costs on the Bank and
adversely affect profitability.
State and federal banking laws will have a material effect on
the business and operations of the Company and the Bank. The
operation of the Bank and the Company will at all times be subject
to these laws, regulations and procedures. The purpose of those
laws is to protect the financial stability of the banking system
and consumer and commercial confidence in that system and is not to
protect investors. The Company and the Bank will be required to
comply with all such laws, regulations and procedures.
TERMS OF THE OFFERING
The Offering - Terms of Purchase
The Company is offering the shares at a cash price of $10.00
per share. There is no established public market for the shares
and we expect no established market to develop. The offering price
of the shares was determined arbitrarily by the Company based upon
the amount of capital needed by the Company and a per share price
that the Company deemed to be reasonable and attractive to
potential investors in the Bank's local market area.
This offering is for a minimum of 800,000 shares, subject to
a possible increase at the discretion of the Company to any amount
greater than 800,000 shares but not exceeding 1,000,000 shares.
Any decision to increase the offering will be made by the Company
in its discretion. The Company is likely to increase the offering
if there is a demand for the shares. The Company believes that
widespread ownership of the shares in the Gulf Shores and South
Alabama area will be beneficial for the business of the Bank, and,
therefore, if more than the minimum of 800,000 shares can be sold,
the Company is likely to sell as many shares as possible in the
offering subject to the maximum limit of 1,000,000 shares. In no
event will subscriptions for more than 1,000,000 shares be
accepted.
The offering will terminate upon the earlier to occur of the
following: (i) the Company's receipt of a number of subscriptions
deemed sufficient by the Company assuming the minimum of 800,000
shares can be sold; (ii) cancellation of the offering by the
Company; or (iii) February 29, 2000 unless extended. If by
February 29, 2000, any shares remain unsubscribed, the organizers
of the Company may, but are not required to, subscribe for any
unsold shares. If by that date, the Company has not received
subscriptions for at least 800,000 shares, the offering will be
terminated (unless it is extended) and all subscriptions which have
been accepted up to that time will be canceled.
The Company reserves the right to decline all or any part of
any subscription. There is no requirement that persons subscribing
for shares agree to open or maintain accounts with the Bank.
However, preference may be given to persons who have indicated
their intention to conduct business with the Bank.
In all circumstances, the formation of the Company and the
issuance of the shares is subject to appropriate regulatory
approvals, and the Company reserves the right to cancel accepted
subscription offers at the direction of the appropriate banking
agencies or otherwise, until the date the Company has received all
required regulatory approvals.
Shares duly subscribed and paid for will be issued upon
acceptance by the Company as soon as practicable after the Company
receives all such required regulatory approvals.
Procedure for Subscribing for Shares
The shares will be offered by certain executive officers and
directors of the Company through personal contact with potential
investors. No commissions, finders fees, or other remuneration has
or will be paid to any person in connection with the offer and sale
of the shares.
If you wish to purchase shares you must sign a Subscription
Agreement and deliver the Subscription Agreement along with a check
in the amount of the purchase price for the shares you wish to
purchase to the Company on or before the date of termination of the
offering (or mail it so that it is received by that date), at P.O.
Box 1248, Gulf Shores, Alabama 36547; telephone (334) 967-4212;
attention J. Daniel Sizemore. A Subscription Agreement will be
delivered to you after the effective date of the Registration
Statement of which this Prospectus is a part. Until you receive a
Subscription Agreement from us, you should not tender any funds for
the purchase of shares.
You must purchase at least 100 shares and you may not purchase
more than 25,000 shares.
Escrow Account
Until subscriptions for the minimum amount of $8,000,000 have
been received, payments for shares will be deposited in an
interest-bearing escrow account established for the purpose of this
offering at an unaffiliated bank or trust company, as the escrow
agent. Funds will be held in the escrow until the Company has
received payment for at least 800,000 shares and has received final
approval from the Alabama Banking Department and the FDIC.
Thereafter all funds received in payment for shares, plus interest
earned on such funds, less the escrow agent's fees and expenses,
will at that time be delivered to the Company and the shares will
be issued to you as soon as practicable thereafter. If the Company
cancels the offering and any subscriptions accepted up to that time
(whether because the offering has not been fully subscribed,
because subscribers have not made timely payment for their shares,
because of failure to obtain all required regulatory approvals, or
for any other reason), then any funds remitted by you in payment
for your shares, plus any interest earned on the funds, will be
returned to you on a pro rata basis based on the number of days on
deposit in the escrow. If the expenses of the escrow agent exceed
the total interest earned on the escrowed funds, those costs will
be paid by the organizers of the Company.
After the Company has accepted subscriptions for at least
800,000 shares of common stock, the Company will accept additional
subscriptions without escrow until the maximum of 1,000,000 shares
have been sold or the offer is terminated.
The form of the escrow agreement is included as an exhibit to
the Registration Statement of which this Prospectus is a part.
USE OF PROCEEDS
The proceeds from the sale of the shares by the Company will
aggregate at least $8,000,000. The proposed directors of the
Company intend to purchase an aggregate of 422,500 shares,
representing $4,225,000. From the total minimum proceeds of
$8,000,000, the Company will pay the legal, printing and other
expenses associated with this offering, estimated at $60,780.
At least $7,500,000 of the offering proceeds will be invested by
the Company as capital in the Bank. In general, these proceeds
will then be used by the Bank to pay organizational expenses and
preoperating expenses incurred before the Bank opens for business,
to pay operating expenses for the first twelve months after the
Bank opens for business, to make leasehold improvements and acquire
furniture and equipment for the Bank's premises, and for general
corporate purposes. We estimate that these funds will be utilized
by the Bank in the amounts set forth below:
Organizational and
pre-operating expenses $ 291,500
First year operating expenses:
Salaries and benefits $620,100
Interest on deposits $566,300
Net occupancy expenses $120,900
Furniture and equipment $124,800
Provision for loan losses $288,000
Other operating expenses $349,000
Total first year operating expenses: $2,069,100
General corporate purposes $5,139,400
Total $7,500,000
The Company will retain approximately $500,000 from the
proceeds of the offering, before deducting expenses associated with
the offering and after investing $7,500,000 in the Bank. We expect
that the proceeds from the offering will satisfy the Company's and
the Bank's capital requirements for at least the next 12 months.
The Company does not anticipate the need to raise additional
capital during that period.
If the offering is increased and the maximum of 1,000,000
shares are sold, representing $10,000,000 in proceeds, the
additional proceeds raised will be held as additional working
capital in the Company, but may be invested in the Bank as needed.
The foregoing amounts are estimates, are based upon
information and assumptions the Company believes accurate and
reasonable, and actual expenditures could vary, perhaps
significantly, from these estimates. In particular, the projected
expenditures reflect, among other things, the assumptions and
projections of management that the Bank will be able to attract
deposits during its first year of operation. Because banking
regulations and sound banking practice require the maintenance of
certain levels and ratios of assets, deposits and equity capital,
it is possible that expenditures would have to be reduced or that,
at some point in the future, additional capital would have to be
raised by the Company.
PRO FORMA CAPITALIZATION
The following table sets forth as of August 31, 1999 the pro
forma capitalization of the Company after accounting for the
payment for and issuance of the shares described in this offering.
Stockholder's equity:
Common stock, $1.00 par value:
10,000,000 shares authorized,
800,000 shares to be outstanding (1) $ 800,000
Additional paid-in capital (2) 7,200,000
Accumulated Deficit (181,820)
__________
Total capitalization: $7,818,180
(1) This table assumes the minimum of 800,000 shares are sold for
an aggregate of $8,000,000. It does not reflect an aggregate
145,000 shares which could be granted under stock option
plans, or 7,500 shares reserved for issuance under the
Company's Employee Stock Purchase Plan, or a possible increase
in the offering.
(2) Does not include offering expense of approximately
$60,780 (consisting primarily of legal, accounting and
printing expenses and registration fees).
BUSINESS OF THE BANK
General
The Company was organized as an Alabama corporation on July
16, 1999. When approval from the Board of Governors of the Federal
Reserve System is received, the Company will be licensed as a bank
holding company.
When incorporated and organized, the Bank will be a state
banking corporation organized under the laws of the State of
Alabama and will operate under the name "Vision Bank." The Bank
proposes to provide general retail and commercial banking services
principally to customers in Gulf Shores and Baldwin County,
Alabama. The Bank does not propose to provide trust or fiduciary
services in the initial two years of operation, but may do so in
the future.
The Bank's primary location will be 2201 West 1st Street, Gulf
Shores, Alabama 36545 with a branch at 25051 Canal Street, Orange
Beach, Alabama 36561, and its phone number is (334) 967-4212. Its
mailing address is P.O. Box 1248, Gulf Shores, Alabama 36547. The
Company will also be located at this address. The Company will not
have any significant operations and will serve primarily as the
parent company for the Bank. Under the Bank Holding Company Act
of 1956, as amended, the Company, as a bank holding company, may
engage in certain bank related businesses that the Bank may not
conduct, although the Company has no present plans for such
activities. See "Supervision and Regulation." The Company will
have no employees, and its officers and directors will receive no
compensation for their services to the Company but, instead, they
will be compensated for services performed in comparable capacities
for the Bank.
The Bank's lobby hours of operation will be 9 a.m. to 5 p.m.
Monday through Thursday, 9 a.m. to 6 p.m. on Friday, and closed
on Saturday. Drive-in hours will be 8 a.m. to 5 p.m. Monday
through Thursday, 8 a.m. to 6 p.m. Friday, and 8 a.m. to 12 noon
Saturday. The Bank anticipates having 12 to 15 employees.
The Bank will contract for off-premise electronic data
processing services.
Available Information
The Company is not a public company and currently files no
reports with the Securities and Exchange Commission ("SEC") or any
other agency. Upon the effective date of the Registration
Statement of which this Prospectus is a part and at least for the
fiscal year ending December 31, 1999, the Company will be subject
to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance therewith
will file annual, quarterly and periodic reports with the SEC.
Such reports and other information can be inspected and copied at
the public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the SEC's Regional Offices in New York (7 World Trade
Center, Suite 1300, New York, New York 10048) and Chicago
(Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661). Copies of such materials can be obtained
from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
Information on the operation of the Public reference facilities of
the SEC may be obtained by calling the SEC at 1-800-SEC-0330. The
Commission also maintains a Web Site that contains reports and
other information regarding registrants, that file electronically
with the Commission at http://www.sec.gov. These reports include
the Company's Registration Statement.
The Company has filed with the SEC a Registration Statement
(No. 333-________) on Form SB-2 (the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities
Act"), registering the shares to be issued pursuant to this
Prospectus. This Prospectus does not contain all of the
information set forth in the Registration Statement and the
exhibits thereto. For further information regarding the Company
and the shares offered hereby, you may review the complete
Registration Statement, including all amendments thereto and the
schedules and exhibits filed as a part thereof. Statements
contained herein or in any document incorporated by reference
herein as to the contents of documents are necessarily summaries of
the documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the
Commission.
Assuming the Registration Statement becomes effective in 1999,
the Company must file reports with the Commission for fiscal year
1999. The obligation of the Company to file such reports for any
fiscal year after 1999 will be suspended if, for any such fiscal
year, the Company has less than 300 shareholders on the first day
of such fiscal year. If the Registration Statement becomes
effective in 2000, the Company will file such reports for 2000, and
for any fiscal year thereafter if the Company has 300 or more
shareholders at the beginning of any such fiscal year.
Bank Premises
The Bank intends to lease a building, consisting of two
stories and approximately 9,600 square feet, located at 2201 West
1st Street, Gulf Shores, AL 36545 for its main office. The
building is under construction and will be owned by Gulf Shores
Investment Group, LLC, an entity owned by the organizers of the
Company. Construction should be completed within nine months.
Pending completion of the building, the Bank will operate out of a
temporary modular building on the site. The site is located in
the downtown area of the city, with a residential area behind the
bank. Downtown Gulf Shores is a civic area; approximately two
miles south is the beach, located on the Gulf of Mexico. Two strip
shopping centers are within one-half mile of downtown. Highway 59 near
the Bank site offers access to and from the downtown district.
Surrounding the Bank's office building are other large and small
office buildings with new construction across the street and behind
the building. The location is convenient to both residential areas
and businesses.
The Bank intends to provide customary banking services,
in-lobby safe deposit boxes to its customers, and is considering
various options regarding convenient, cost-effective access to
automated teller machines. As a key aspect of its marketing
strategy, the Bank intends to provide courier services for its more
significant banking relationships, including individuals, in an
effort to improve banking convenience, and reduce parking needs.
The Bank intends to serve the retail and business needs of the
community as one of the few locally owned, independent banks in the
area. In addition, the organizers have expertise and business
development skills in the areas of small business and real estate
lending. The Bank will also have more extensive operating hours
than any competing institution.
The proposed branch is located on Canal Street in Orange Beach
approximately 10 miles east of Gulf Shores, in a one story building
consisting of approximately 3,500 square feet, to be owned by Gulf
Shores Investment Group, LLC. Construction should be completed
within 12 months. Pending completion, the branch will operate out
of a temporary modular building on the site. The property is
flanked by small businesses and is located near a prime traffic
conduit. The variety of the surrounding businesses will encourage
use at diverse hours; the site is located next to a retail center,
across the street from a movie theatre, adjacent to a governmental
authority and less than one block from Columbia Southern
University.
Management intends to insure its properties adequately.
Management's Discussion and Analysis of Financial Condition and
Plan of Operations
The following discussion of the financial condition of the
Company should be read in conjunction with the Company's financial
statements and related notes, which are included in this
Prospectus. See "Index to Financial Statements."
The Company was organized as an Alabama corporation on July
16, 1999 to operate as a bank holding company for a proposed bank
to be organized under the laws of the State of Alabama. Since
inception, the main activities of the Company have been centered on
seeking, interviewing and selecting the Company's directors and
officers, applying for a state bank charter, applying for Federal
Deposit Insurance Corporation ("FDIC") deposit insurance, applying
to become a bank holding company and raising equity capital through
this offering.
The operations of the Company from July 16, 1999 ("Inception")
through the close of the offering have been and will continue to be
funded by advances received from the organizers. The organizers
have agreed to contribute a total of $350,000, of which $140,000
was outstanding at August 31, 1999. Management anticipates that
the Company will repay any advances from the organizers after the
closing of this offering.
Liquidity and Interest Rate Sensitivity. Since the company
has been in the organizational stage, there are no results to
present at this time. Nevertheless, once the Bank commences
operations, net interest income, the Company's primary source of
earnings, will fluctuate with significant interest rate movements.
To lessen the impact of these margin swings, management intends to
structure the balance sheet so that repricing opportunities exist
for both assets and liabilities in roughly equivalent amounts at
approximately the same time intervals. Imbalance in these
repricing opportunities at any point in time constitute interest
rate sensitivity.
Interest rate sensitivity refers to the responsiveness of
interest-bearing assets and liabilities to change in market
interest rates. The rate sensitive position, or gap, is the
difference in the volume of rate sensitive assets and liabilities
at a given time interval. The general objective of gap management
is to manage actively rate sensitive assets and liabilities so as
to reduce the impact of interest rate fluctuations on the net
interest margin. Management will generally attempt to maintain a
balance between rate sensitive assets and liabilities as the
exposure period is lengthened to minimize the Bank's overall
interest rate risks.
The asset mix of the balance sheet will be evaluated regularly
in terms of several variables: yield, credit quality, appropriate
funding sources and liquidity. To manage effectively the liability
mix of the balance sheet, management plans to focus on expanding
the various funding sources.
As the Bank continues to grow, management 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 management's strategy for the upcoming period. Such
strategy includes anticipations of 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. These funds can be obtained by
converting assets to cash or by attracting new deposits. The
Bank's primary source of liquidity will come from its ability to
maintain and increase deposits.
Management knows of no trends, demands, commitments, events or
uncertainties that should result in or are reasonably likely to
result in the Company's liquidity increasing or decreasing in any
material way in the foreseeable future, other than this offering.
Capital Adequacy. There are now two primary measures of
capital adequacy for banks and bank holding companies: (1)
risk-based capital guidelines and (2) the leverage ratio.
The risk-based capital guidelines measure the amount of a
bank's required capital in relation to the degree of risk perceived
in its assets and its off-balance sheet items. Under the
risk-based capital guidelines, capital is divided into two "tiers."
Tier 1 capital consists of common shareholders' equity,
noncumulative and cumulative (bank holding companies only)
perpetual preferred stock and minority interest. Goodwill is
subtracted from the total. Tier 2 capital consists of the allowance
for loan losses, hybrid capital instruments, term subordinated debt
and intermediate term preferred stock. Banks are required to
maintain a minimum risk-based capital ratio of 8.0%, with at least
4.0% consisting of Tier 1 capital.
The second measure of capital adequacy relates to the leverage
ratio. The FDIC and the Alabama Department of Banking have
established a 3.0% minimum leverage ratio requirement. The
leverage ratio is computed by dividing Tier 1 capital into total
assets. For banks that have not received the highest regulatory
rating by their primary regulator (which includes the Bank), the
minimum leverage ratio should be 3.0% plus an additional cushion of
at least 1% to 2%, depending upon risk profiles and other factors.
A new rule was recently promulgated by the Federal Reserve
Board of Governors (the 'Federal Reserve"), the OCC and the FDIC
that adds a measure of interest rate risk to the determination of
supervisory capital adequacy. In connection with this new rule,
the agencies have also proposed a measurement process to measure
interest rate risk. Under this proposal, all items reported on the
balance sheet, as well as off-balance sheet items, would be
reported according to maturity, repricing dates and cash flow
characteristics. A bank's reporting position would be multiplied
by duration-based risk factors and weighted according to rate
sensitivity. The net risk weighted position would be used in
assessing capital adequacy. The objective of this complex proposal
is to determine the sensitivity of a bank to various rising and
declining interest rate scenarios.
Management believes that the net proceeds of this offering
should satisfy the Company's and the Bank's cash requirements for
at least the three-year period following the opening of the Bank.
Accordingly, management does not anticipate that it will be
necessary to raise additional funds for the operation of the
Company or the Bank over the next three years. For additional
information regarding material expenditures during such period, see
"Use of Proceeds." Additional information regarding the plan
of operations for the Company and the Bank is included in this
section entitled "Business of the Bank."
Market Area and Demographic Information
The organizers are well acquainted with the communities of
South Baldwin County, Alabama. The attractive coastline draws
considerable tourism to the area and fosters strong activity in the
retail and housing areas of the local economy. Bordering
communities house industries that range from electronics to health
care. The banking industry has shown strong growth in the past
five years as well, although only one independent bank is
headquartered in the area. The organizers have identified several
services and products which a local bank could offer competitively
to the community within an expanding banking market: special
services personal banking; expanded hours; and a commitment to
fostering local real estate growth through lending.
The Primary Service Area (PSA) for the Bank will be South
Baldwin County, which includes the coastal communities of Gulf
Shores and Orange Beach, the cities in which the Bank will
establish offices. South Baldwin County is defined as the area of
the County south of U.S. Highway 98.
The Secondary Service Area (SSA) for the Bank encompasses the
remainder of Baldwin County and portions of neighboring Escambia
County in Florida, primarily Perdido Key. The organizers believe
that at least 75 percent of the Bank's proposed customers will be
businesses and residents located in the PSA and SSA.
Baldwin County is the seventh-largest county in the State of
Alabama. Although smaller, Baldwin County is growing much more
rapidly than neighboring Mobile County. South Baldwin County is
known for its beautiful beaches and is a major tourist destination,
thus attracting people from all over the state and country. The
area has grown considerably over the past several years, with
strong residential and commercial construction, particularly in the
towns of Orange Beach and Gulf Shores. The following table
summarizes various economic indicators of Baldwin County.
<TABLE>
<CAPTION>
ITEM PAST 5 YEARS
1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C>
Population 115,809 119,966 124,257 128,820 132,828
No. of housing starts
(residential building permits) 1,914 1,591 1,526 1,661 1,869
Industrial & commercial
building permits issued 359 397 496 490 473
Retail sales ($000s) 811,454 865,483 922,424 1,092,483 1,101,896
Wholesale sales *
</TABLE>
Tourism is a major industry in South Baldwin County.
According to the Gulf Coast Convention and Visitors Bureau, the
Gulf Coast area, which includes Gulf Shores, Orange Beach and Fort
Morgan, has an inventory of 219 hotels, motels and condominiums,
for a total of 13,214 available units.
Further, a new hurricane evacuation route, which would
originate in Gulf Shores and include a bridge near one of the
proposed bank locations, is planned for the area. This route would
connect Gulf Shores directly to Interstate 10, and provide
increased and easier access to the coastal communities of South
Baldwin County. Increased visitation would be expected to promote
further growth in related industries in the area.
Population
Based on population projections prepared by the Center for
Business and Economic Research of the University of Alabama,
Baldwin County is projected to be the fourth fastest growing county
in the state between 1995 and 2000. South Baldwin County, the PSA,
is fueling much of this growth. The area grew from 28,203 persons
in 1990 to an estimated 39,801 residents in 1997. Out of 443
cities and towns in Alabama, the town of Orange Beach had the
fourth greatest percent increase in population between the years of
1990 and 1996, nearly doubling its population. The town of Foley
ranked 15th, increasing its population by almost one-third, and
Gulf Shores ranked 28th in population growth, with an increase of
almost 24 percent. The following table depicts population
estimates and projections for Baldwin County overall as well as key
locations in the PSA and SSA. All of these areas experienced
sizeable growth in population between 1990 and 1996. This growth
is projected to continue over the next several years, as indicated
in the table below.
<TABLE>
Population of Service Area
---------------Estimates---------------
<CAPTION>
1990 2003 % Change
Census 1992 1994 1996 1998(1) Projection 1990-1996
<S> <C> <C> <C> <C> <C> <C> <C>
Baldwin County 98,920 106,226 115,809 124,257 130,168 147,419 25.6%
Foley 4,937 5,499 5,936 6,433 N/A N/A 30.3%
Gulf Shores 3,261 3,467 3,680 4,029 4,316 4,855 23.6%
Orange Beach 2,253 2,420 2,547 3,327 3,845 4,722 47.7%
Perdido Key, Florida 1,326 N/A N/A N/A 2,022 2,348 N/A
</TABLE>
The resident population of the PSA is only part of the overall
population picture. As a major tourist area, many people reside in
South Baldwin for the warmer months, and others for even smaller
amounts of time. During the summer months when people flock to the
coastal areas, the population of South Baldwin increases
dramatically. Based on information presented in the following
table, the seasonal population in the cities of Gulf Shores and
Orange Beach is almost six times the resident population.
<TABLE>
Seasonal Population and Projections - Gulf Coast Area
<CAPTION>
1988 1998 2008
<S> <C> <C> <C>
Gulf Shores 15,744 29,744 40,944
Orange Beach 18,236 25,836 32,484
Unincorporated 3,732 4,876 5,808
Total 37,712 60,456 79,236
</TABLE>
Estimates of the population by age groups show that there is
a slightly higher-than-average percentage of retirees in Baldwin
County (15% versus 13% nationally), but also a sizeable
concentration in the age groups that comprise most of the labor
force (ages 25-64, for a total of 52%):
<TABLE>
1995 Population by Age - Baldwin County
<CAPTION>
Number %
<S> <C> <C>
Total Population 119,966 100%
Ages 0-4 8,244 7%
Ages 5-17 21,957 18%
Ages 18-24 9,565 8%
Ages 25-44 34,549 29%
Ages 45-64 27,227 23%
Age 65+ 18,424 15%
</TABLE>
Industry and Employment
The PSA is renowned as a vacation destination and businesses
in the area reflect this. Hotels, restaurants and retail centers
are among the top employers in the PSA. Also present are businesses
that benefit from the robust construction. The portion of the PSA
that is not immediately bordering on the coast has a more diverse
mix of businesses, with a mixture of manufacturing, electronics,
government and health care businesses. The following table lists
the top 20 employers in South Baldwin County.
<TABLE>
Top 20 Employers in South Baldwin County
September, 1998
<CAPTION>
Full-Time
Equivalent
Company Product/Service Employment
<S> <C> <C>
Riviera Center Outlet Mall Retail 1,200
Packard Hughes Interconnect Electronic Products 825
South Baldwin Hospital Medical 450
BF Goodrich Aerospace Thrust Reversers 447
Wal Mart Super Center Retail 430
Hazel's Family of Restaurants Restaurants 365
Perdido Beach Resort Hotel 350-375
Solutia Manufacturing Company Aluminum Castings 350
Gulf Telephone Telecommunications 338
Voyagers Gulf Beach Hotel, Inc. Hotel 260
Gulf State Park Recreation, Motel 250
Vulcan, Inc. Aluminum & Steel Products 206
Foley Nursing Home Nursing Home 175
Baldwin County EMC Utilities 174
Bon Secour Fisheries Seafood Processing 170
Riviera Utilities Utilities 164
City of Gulf Shores Municipal Government 144
City of Foley Municipal Government 117
Peavey Electronics Sound Equipment 95
Reynolds Ready Mix Ready Mix Concrete 90
</TABLE>
Unemployment in Baldwin County was 3.2 percent in May, 1999,
which was well below the state and national unemployment rates.
The size of the labor force continues to grow, as the number of
persons employed in Baldwin County has increased almost 70 percent
since 1990. The composition of the labor force is 80 percent in
service-producing jobs, and the remaining 20 percent work in
goods-producing jobs, which includes manufacturing and
construction. Construction employment in the Gulf Coast area was
estimated to be 1,009 by Dun & Bradstreet's Marketplace Report as
of the second quarter of 1999. The overall employment mix in
Baldwin County is comparable to the nation's job mix. All of these
indicate a robust and diversified economy in the County. The
following table denotes trends in employment for the County.
<TABLE>
Baldwin County Labor Force Information
1990 - 1998
<CAPTION>
1990 1992 1994 1996 1998
<S> <C> <C> <C> <C> <C>
Civilian Labor Force (1) 46,360 52,140 57,970 64,210 68,670
Employed persons living in County (1) 43,910 48,930 55,240 61,400 66,800
Unemployment Rate (1) 5.3% 6.2% 4.7% 4.4% 2.7%
Persons working in Baldwin County (2) 27,300 31,520 36,810 41,620 46,230
Goods-Producing Employment (2) 6,350 6,440 7,320 7,860 9,000
Service-Producing Employment (2) 20,940 25,080 29,490 33,760 37,230
<FN>
(1) Based on place of residence.
(2) Based on place of work.
</FN>
</TABLE>
Baldwin County had the fifth highest per capita income in 1997
in the State of Alabama at $22,431. This is 108 percent of the
State's per capita income and 111 percent of the Mobile area's per
capita income. As indicated in the following table, median
household income is much higher in the coastal cities than in
Baldwin County overall.
<TABLE>
Household Income for Service Area
<CAPTION>
Area 1998 Median Household Income
<S> <C>
Baldwin County, Alabama $ 35,431
Gulf Shores, Alabama $ 42,461
Orange Beach, Alabama $ 42,688
Perdido Key, Florida $ 49,708
</TABLE>
Competitors & Growth in Deposits
Banking is a highly competitive business, and the Bank will be
competing for customers and employees with more established banks,
as well as other financial and depository institutions, many of
which have much greater financial resources, technological
capabilities and experience.
The following banks and savings and loan institutions are
located in Baldwin County, where the Bank proposes to locate its
main office and branch:
<TABLE>
<CAPTION>
LOCATION DEPOSITS DISTANCE FROM
(City and State) ($000's BANK
NAME OF INSTITUTION omitted) (miles)
<S> <C> <C> <C>
AmSouth Bank Foley, AL $35,090 10.5
AmSouth Bank Gulf Shores, AL $50,227 .4
Citizen's Bank, Inc. Foley, AL $ 1,080 10.6
Colonial Bank (West Laurel) Foley, AL $97,841 10.5
Colonial Bank (So. McKenzie) Foley, AL $ 3,330 10.5
Colonial Bank Gulf Shores, AL $34,606 .2
Colonial Bank Lillian, AL $ 6,686 18.1
Colonial Bank Orange Beach, AL $ 7,636 .7
First Gulf Bank Foley, AL $11,404 10.5
First Gulf Bank
(W. Ft. Morgan Road) Gulf Shores, AL $17,249 .9
First Gulf Bank
(W. Ft. Morgan Road) Gulf Shores, AL $35,765 .7
Regions Bank Elberta, AL $36,166 13.6
Regions Bank (W. Roosevelt) Foley, AL $67,738 10.5
Regions Bank Foley, AL $ 76 10
Regions Bank Gulf Shores, AL $62,007 .9
Regions Bank Orange Beach, AL $10,818 7
South Alabama Bank Foley, AL $ 1,304 10.6
SouthTrust Bank Foley, AL $32,062 10.7
SouthTrust Bank Gulf Shores, AL $35,999 .5
Union Planters Bank Foley, AL $ 3,795 10.4
United Bank Foley, AL $22,008 10.3
United Bank Lillian, AL $ 3,152 18
Whitney National Bank Foley, AL $ 89 10.5
Whitney National Bank Gulf Shores, AL $16,712 .4
Whitney National Bank Orange Beach, AL $10,414 6.9
</TABLE>
Baldwin County Banking Market
The banking market in Baldwin County totaled $1.476 billion in
deposits as of June 30, 1998. Eleven institutions operate a total
of 56 branches in the County. The County's banking market is
dominated by five large multi-branch commercial banks, with several
smaller regional banks as noted below:
<TABLE>
Market Share of FDIC-Insured Deposits in Baldwin County
By Banking Institution; Sorted by Market Share
June 30, 1998
<CAPTION>
Total
No. of Offices Deposits Market
Institution Name Headquarters in Baldwin County ($000s) Share
<S> <C> <C> <C> <C>
Regions Bank Birmingham, AL 12 $ 389,342 26.4%
SouthTrust Bank, NA Birmingham, AL 7 $ 256,061 17.4%
Colonial Bank Montgomery, AL 8 $ 215,699 14.6%
Amsouth Bank Birmingham, AL 7 $ 212,642 14.4%
Compass Bank Birmingham, AL 4 $ 195,355 13.2%
First Gulf Bank Gulf Shores, AL 6 $ 96,618 6.6%
Citizen's Bank Robertsdale, AL 4 $ 49,782 3.4%
Whitney National Bank New Orleans, LA 3 $ 27,215 1.8%
United Bank Atmore, AL 2 $ 25,160 1.7%
Union Planters Bank, NA Memphis, TN 2 $ 6,482 0.4%
South Alabama Bank Mobile, AL 1 $ 1,304 0.1%
Total 56 $1,475,660 100%
</TABLE>
There are no banks located in Perdido Key, Florida, which is
considered part of the SSA.
The banking market in Baldwin County grew at an average annual
rate of 8.3 percent from mid-1994 through mid-1998, from deposits
totaling $1.074 billion to $1.476 billion as of June 30, 1998.
Primary Service Area Banking Market
Within South Baldwin County, the PSA, there are ten banking
institutions with 25 offices. The entire PSA market had $603.3
million in aggregate deposits as of June 30, 1998. Two
institutions have over 50 percent of the area's market share for
deposits - Regions and Colonial. Compass Bank, which has a strong
presence in the County, does not have an office in the PSA. First
Gulf Bank is the only independent bank with headquarters in the
PSA. Its market share is close to 11 percent. The following table
lists deposits and market share by institution in the PSA.
<TABLE>
Market Share of FDIC-Insured Deposits in PSA
By Institution; Sorted by Market Share
June 30, 1998
<CAPTION>
No. of Total
Offices in Deposits Market
Name PSA ($000s) Share
<S> <C> <C> <C>
Regions Bank 5 $ 176,805 29.3%
Colonial Bank 5 150,099 24.9%
AmSouth Bank 2 85,317 14.1%
SouthTrust Bank 2 68,061 11.3%
First Gulf Bank 3 64,418 10.7%
Whitney National Bank 3 27,215 4.5%
United Bank 2 25,160 4.2%
Union Planters Bank 1 3,795 0.6%
South Alabama Bank 1 1,304 0.2%
Citizen's Bank, Inc. 1 1,080 0.2%
Total 25 $ 603,254 100.0%
</TABLE>
The South Baldwin banking market grew at an annual rate of
10.9 percent from mid-1994 through mid-1998. The number of banking
offices doubled in the area during this time, growing from 12
branch locations in 1994 to 25 in 1998.
Because of the market dominance of the top two commercial
banks which control over 50 percent of deposits in the PSA, a new
entrant would serve to increase competition and provide the public
with greater choices for obtaining banking services. The overall
strength of the banking market also provides all competing
institutions with additional opportunities for growth.
Deposit and Loan Assumption
The organizers developed a peer group to use as a basis for
determining the Bank's projected deposit and loan growth mix.
Seven banks that serve the PSA have been included in this "Peer
Group." Assets for these peer institutions as of December 31, 1998
ranged from $112 million to $38 billion. Included in the Peer
Group is one bank headquartered in the Bank's primary service area
of South Baldwin County.
The following table contains deposit and market share
information for each banking office in the PSA as of June 30, 1998.
<TABLE>
Market Share of FDIC-Insured Deposits in South Baldwin County
By Bank Branch; Sorted by Market Share
June 30, 1998
<CAPTION>
Name City Total Deposits Market
($000s) Share
<S> <C> <C> <C>
AmSouth Bank - McKenzie Street Foley $ 30,090 5.8%
AmSouth Bank - Hwy 59 Gulf Shores 50,227 8.3%
Citizen's Bank, Inc. - Orange Ave. Foley 1,080 0.2%
Colonial Bank - West Laurel Foley 97,841 16.2%
Colonial Bank - So. McKenzie Street Foley 3,330 0.6%
Colonial Bank - Gulf Shores Pkwy Gulf Shores 34,606 57.0%
Colonial Bank - US Hwy 98 Lillian 6,686 1.1%
Colonial Bank - Perdido Bch Blvd Orange Beach 7,636 1.3%
First Gulf Bank - Hwy 59 Foley 11,404 1.9%
First Gulf Bank - W. Fort Morgan Rd. Gulf Shores 17,249 2.9%
First Gulf Bank - W. Fort Morgan Rd. Gulf Shores 35,765 5.9%
Regions Bank - East State St. Elberta 36,166 6.0%
Regions Bank - W. Roosevelt Foley 67,738 11.2%
Regions Bank Foley 76 0.0%
Regions Bank - Gulf Shores Pkwy Gulf Shores 62,007 10.3%
Regions Bank - Orange Bch Blvd. Orange Beach 10,818 1.8%
South Alabama Bank - So. McKenzie Foley 1,304 0.2%
SouthTrust Bank - McKenzie Foley 32,062 5.3%
SouthTrust Bank - Hwy 59 Gulf Shores 35,999 6.0%
Union Planters Bank - 1190 So. McKe Foley 3,795 0.6%
United Bank - 516 So. McKenzie Foley 22,008 3.6%
United Bank - Hwy 98 Lillian 3,152 0.5%
Whitney National Bank - So. McKenzie Foley 89 0.0%
Whitney National Bank - Glf Shores Pkwy Gulf Shores 16,712 2.8%
Whitney National Bank - Org. Bch. Blvd Orange Beach 10,414 1.7%
Total $603,254 100.0%
</TABLE>
Deposit Assumptions
The deposit growth potential for the Bank is strong. The
average annual growth rate of aggregate deposits in South Baldwin
County (the PSA) between 1994 and 1998 equaled 10.9 percent. The
table below demonstrates that not only have deposits grown, but
also the number of bank branches has more than doubled from 1994
through 1998. As of June 30, 1998 deposits totaled $603.3 million
in the PSA, and there were 25 banking offices.
<TABLE>
Growth in Deposits
1994 - 1998
<CAPTION>
Average Annual
1994 1995 1996 1997 1998 Growth
<S> <C> <C> <C> <C> <C> <C>
Total Deposits ($000) $ 399.054 $ 426.535 $ 481.231 $ 540.145 $ 603.254 10.9%
Offices 12 12 17 20 25
</TABLE>
The Bank's share of projected deposits is based on an analysis
of the average deposit growth rate in the PSA since 1994. It was
assumed that total market deposits would continue annual growth for
the next three years equal to the average growth rate experienced
from June 30, 1994 to June 30, 1998. Given this growth assumption,
total aggregate deposits in South Baldwin County at the end of the
third year of operation are projected at $822.8 million.
Deposit levels for the Bank are based on the organizers'
estimates of available business in the Bank's PSA, given the
projected market growth rates. It is believed that the Bank will
achieve market share gains in each of the first three years of
operation. For reference, the Peer Group Deposit Mix and Projected
Bank Deposit Mix are as follows:
Peer Group Deposit Mix
Demand Deposits 14.9%
Now Accounts 3.6%
CD's under $100,000 34.9%
CD's over $100,000 12.2%
MMA and Savings 34.4%
Loan Assumptions
The organizers believe that the loan demand within the market
areas is substantial. Commercial and real estate loans will be the
prevalent loan types for the Bank. The organizers recognize that
South Baldwin County offers both tourism and manufacturing-based
lending opportunities. The initial prospective
customers of the Bank will include professional contacts of the
organizers - a group with a long and successful history in
the real estate and small business community. The customer base
will be grown with expanded manufacturing and service-based clients
as the bank's community visibility heightens. The targeted
customers are businesses and corporations of various sizes and in
various industries and professions which have banking needs that
include operating accounts, cash managements services, lines of
credit, term loans and real estate loans. It is also expected that
the Bank will have the opportunity to successfully bid for the
operating accounts of public agencies.
The organizers projected total loans have the following
approximate relationship to deposits for the first three years:
Projected Bank Loans to Deposits Ratio
Year 1 Year 2 Year 3
Loans/Deposits 80% 84% 89%
The organizers have significant banking knowledge of the
Gulf Shores market. It is the belief of the organizers, based on
discussions with prospective customers, that the projected loan
levels are achievable, without sacrificing loan quality. The loan
to deposit ratio for the peer groups as of June 30, 1998 was 75.6%.
In the pro forma projections, the organizers have assumed
that prevailing interest rates will continue to exist. However,
the organizers recognize the risks associated with
increasing rates, which may be the operating environment when the
Bank opens for business. The business plan is based on the premise
that the Bank will attempt to maintain a constant positive spread
between the interest earned in investments and loans, and the
interest cost incurred on deposits. The positive spread will be
achieved by generally offering floating rate loans. Fixed rate
loans will be offered only when their maturities match the
projected maturities of long term certificates of deposits or other
borrowings.
The organizers have assumed that the pricing for loans
will continue to be very competitive and has assumed the following
interest rates in the Bank's three year business plan:
Assumptions of Interest on Loans
Commercial Loans 8.00%-9.00%
Real Estate Loans 8.00%
Consumer Loans 9.00%
Federal Funds Sold 4.80%
Other Investments 5.50%
Assumptions on Interest Rates on Deposits
Now Accounts 3.50%
Savings Accounts 4.90%
Money Market Accounts 3.50%
CDs Less than $100,000 5.25%
CDs Over $100,000 5.25%
Other Assumptions
The organizers have made detailed projections of the
Bank's statements of condition, of income (loss) and of capital,
which are included in the attached exhibit. The assumptions used
in determining asset, deposit, and loan mix as well as other
details were based upon an analysis of peer group data available
through SNL Securities.
Asset and Liability Structure
The asset/liability mix of the Bank will be designed to earn a
maximum rate of return within the confines of reasonable liquidity,
interest sensitivity, and credit risk. The mix of loans proposed
will cover a broad enough segment of the market to prevent
concentrations of credit in any loan type or industry segment. The
loan mix will be similar to that of other Gulf Shores community banks.
The mix of loans will allow reasonable liquidity due to maturity
schedules and amortization. The mix of loans will be related to loan
growth in the marketplace and the interest sensitivity requirements
of the Bank.
The liability mix will not differ significantly from that of
other banks in the marketplace. The target deposit customer will
often maintain interest bearing transaction and savings accounts.
Time deposits will be kept short but may be extended based on the
liquidity and growth expectation of the Bank. Large time deposits
and brokered deposits will not be sought.
The investment portfolio will consist primarily of short
maturities, but may be extended based on the liquidity and growth
expectations of the Bank. The loan portfolio will be comprised
primarily of adjustable rate loans with average maturities of less
than five years.
The Bank will have a funds management policy that will attempt
to match maturities and interest rate sensitivity of assets and
liabilities, allowing for reasonable tolerance. The organizers
realize that a perfect match of assets and liability interest rates
sensitivity is not possible and may not be desirable in some cases.
Business Strategy
The Bank expects to develop as a full-service commercial
banking organization by initially developing the extensive
relationship networks of the proposed President and Senior Lender.
Prospective customers are businesses and corporations of various
sizes and in various industries and professions which have banking
needs that include operating accounts, cash management services,
lines of credit, term loans and real estate loans. It is also
expected that the Bank will have the opportunity to successfully
bid for the operating accounts of public agencies in the City of
Gulf Shores and Orange Beach. The organizers are aware of the
increased processing and administrative costs of handling public
operating accounts and are aware of the pledging requirements for
public deposits. The organizers also intend to develop
banking relationships with the seasonal residents of Gulf Shores,
individuals who generally are wealthy and who have not yet
developed significant ties with any of the financial institutions
in the area.
Through strategic alliances yet to be finalized with either
third-party vendors or correspondent banks, the Bank expects to
offer specialized services to enhance the personal nature of the
banking relationship and provide greater value as a way of
capturing and retaining customer loyalty. These services will
include courier service, internet banking through the Bank's data
processing vendor, investment services, debit cards, credit cards,
and payroll services.
In order to accommodate the credit needs of the businesses and
corporations that have been identified as likely prospective
customers, the Bank expects to enter into loan participations with
several correspondent banks that are familiar with the marketplace
and with the Bank's officers and credit standards. Examples of
such correspondent banking relationships could be several large
Alabama banks such as Compass, NBC, the Banker's Bank, and
SouthTrust. The Bank expects to have numerous opportunities to
consider financing for small businesses and certain entrepreneurial
organizations, and will extend credit through participation in the
Small Business Administration programs. It is expected that these
loans, if any, will be organized and then packaged and sold to
enhance fee income for the Bank.
The Bank plans to engage in aggressive direct marketing and
officer calling during the first year of operation to achieve loan
and deposit goals and to fully implement the Bank's strategy to
acquire the banking relationships of the targeted contacts of the
organizers. Depending on the success of this effort, the
Bank will expand marketing and promotional efforts as appropriate,
including expanding staff to include a full-time business
development officer.
Proposed Loan and Deposit Services
The Bank intends to offer the following deposit-related
products to its customers:
Consumer Deposit Products
Regular Checking
Interest Checking
Money Market Checking
Senior (Age 50+) Checking
Regular Savings
Certificates of Deposit
Individual Retirement Accounts
Commercial Deposit Products
Regular Business Checking
Regular Business Interest Checking
Money Market Checking
Regular Savings
Certificates of Deposit
Miscellaneous Services
ATM/Debit Card
Night Depository
Safe Deposit Boxes
Stop Payments
Collections
Direct Deposits
Savings Bonds
Wire Transfer
Bank by Mail
Travelers Checks
Official Checks
MasterCard/Visa
Automatic Transfer
Courier Service
Overdraft Protection
The organizers are continuing their market studies to
confirm the final pricing for deposit products.
SUPERVISION AND REGULATION
Bank holding companies and banks are regulated extensively
under both federal and state law. The following information
describes some but not all of the applicable statutory and
regulatory provisions, and it is qualified in its entirety by
reference to the particular statutory and regulatory provisions.
Any change in applicable law or regulation may have a material
effect on the business of the Company and the Bank.
The Company
The Company will be bank holding company registered with, and
subject to supervision by, the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") under the Bank Holding
company Act of 1956, as amended (the "BHC Act"). The Federal
Reserve Board may examine the Company and the Bank.
The BHC Act requires prior Federal Reserve Board approval for,
among other things, the acquisition by a bank holding company of
direct or indirect ownership or control of more than 5% of the
voting shares or substantially all the assets of any bank, or for
a merger or consolidation of a bank holding company with another
bank holding company. With certain exceptions, the BHC Act
prohibits a bank holding company from acquiring direct or indirect
ownership or control of any voting shares of any company which is
not a bank or bank holding company and from engaging directly or
indirectly in any activity other than banking or managing or
controlling banks or performing services for its authorized
subsidiaries. A bank holding company may, however, engage in or
acquire an interest in a company that engages in activities which
the Federal Reserve Board has determined, by regulation or order,
to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto.
The Company and the Bank will be subject to the Federal
Reserve Act, Section 23A. Section 23A defines "covered
transactions" to include extensions of credit and limits a bank's
covered transactions with any single affiliate to no more than 10%
of a bank's capital and surplus. Covered transactions with all
affiliates combined are limited to no more than 20% of a bank's
capital and surplus. All covered and exempt transactions between
a bank and its affiliates must be on terms and conditions
consistent with safe and sound banking practices and a bank and its
subsidiaries are prohibited from purchasing low quality assets from
the bank's affiliates. Finally, Section 23A requires that all of
a bank's extensions of credit to an affiliate be appropriately
secured by collateral. The Company and the Bank will also be
subject to Federal Reserve Act, Section 23B, which further limits
transactions among affiliates.
The Company's ability to pay dividends will depend upon the
earnings and financial condition of the Bank and certain legal
requirements. The Federal Reserve Board has stated that bank
holding companies should not pay dividends except out of current
earnings and unless the prospective rate of earnings retention by
the Company appears consistent with its capital needs, asset
quality and overall financial condition.
In the future, the Company will rely upon the payment to it,
if any, of dividends by the Bank for the payment of dividends on
its shares of common stock.
The Bank
The Bank will be a state bank organized under the laws of the
State of Alabama and its deposits will be insured by the Federal
Deposit Insurance Corporation ("FDIC") up to the maximum amount
permitted by law. The Bank will be subject to regulation,
supervision and regular examination by the Superintendent of the
Alabama State Banking Department (the "Superintendent") and the
FDIC. Federal and state banking laws and regulations regulate,
among other things, the scope of the banking business conducted by
the Bank, its loans and investments, reserves against deposits,
mergers and acquisitions, borrowings, dividends, minimum capital
requirements, and the locations of branch offices and certain
facilities.
Under the Alabama Banking Code, a state bank may not declare
or pay a dividend in excess of 90% of the net earnings of such bank
until the surplus of the bank is equal to at least 20% of its
capital, and thereafter the prior written approval of the
Superintendent is required if the total of all dividends declared
by the bank in any calendar year exceeds the total of its net
earnings for that year combined with its retained net earnings for
the preceding two years less any required transfers to surplus. No
dividends, withdrawals or transfers may be made from the bank's
surplus without prior written approval of the Superintendent. As
a newly organized bank, the Bank may not pay dividends during its
first three years of operation without the prior approval of the
Superintendent and the FDIC.
The various federal bank regulators, including the Federal
Reserve Board, have adopted a risk-based capital requirement for
assessing bank and bank holding company capital adequacy. These
standards establish minimum capital standards in relation to the
relative credit risk of assets and off-balance sheet exposures.
Capital is classified into two tiers. Tier I capital consists of
common shareholders' equity and perpetual preferred stock (subject
to certain limitations) and is reduced by goodwill and minority
interests in the common equity accounts of consolidated
subsidiaries. Tier II capital consists of the allowance for
possible loan losses (subject to certain limitations) and certain
subordinated debt. The risk-based capital guidelines require
financial institutions to maintain specific defined credit risk
factors (risk-adjusted assets). The minimum Tier I and the
combined Tier I and Tier II capital to risk-weighted assets ratios
are 4.0% and 8.0%, respectively. The Federal Reserve Board also
has adopted regulations which supplement the risk-based capital
guidelines to include a minimum leverage ratio of Tier I capital to
total assets of 3.0% to 5.0%.
The Federal Reserve Board's risk based capital guidelines will
be applied to the Company and the Bank on a consolidated basis.
This will limit the Company's ability to engage in acquisitions
financed by debt. The FDIC has adopted similar risk-based capital
requirements that are applicable to the Bank. The Federal Reserve
Board, the FDIC and the Superintendent have imposed minimum capital
(leverage) requirements. Those rules may affect the future
development of the Company's long-term business and capital plans,
and may affect its ability to acquire additional financial
institutions and other companies.
Support of Subsidiary Institutions
Under Federal Reserve Board policy, the Company will be
expected to act as a source of financial strength for, and to
commit resources to support, the Bank. This support may be
required at times when, without this Federal Reserve Board policy,
the Company might not be inclined to provide it. In addition, any
capital loans by the Company to the Bank may be repaid only after
its deposits and certain other indebtedness are repaid in full. In
the event of a bank holding company's bankruptcy, any commitment by
the bank holding company to a federal bank regulatory agency to
maintain the capital of a banking subsidiary will be assumed by the
bankruptcy trustee and entitled to a priority of payment.
Prompt Corrective Action
The Federal Deposit Insurance Corporation Improvement Act of
1991 establishes a system of prompt corrective action to resolve
the problems of undercapitalized institutions. Under this system,
the federal banking regulators have established five capital
categories (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized), are required to take certain mandatory
supervisory actions, and are authorized to take other discretionary
actions, with respect to institutions in the three undercapitalized
categories. The severity of the action will depend upon the
capital category in which the institution is placed. Generally,
subject to a narrow exception, the banking regulator must appoint
a receiver or conservator for an institution that is critically
undercapitalized. The federal banking agencies have specified by
regulation the relevant capital level for each category.
An institution that is categorized as undercapitalized,
significantly undercapitalized or critically undercapitalized is
required to submit an acceptable capital restoration plan to its
appropriate federal banking agency. A bank holding company must
guarantee that a 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 depositary institutions that takes into account the risks
attributable to different categories and concentrations of assets
and liabilities. The system assigns an institution to one of three
capital categories: (1) well capitalized; (2) adequately
capitalized; and (3) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories
described above, with the "undercapitalized" category including
institutions that are undercapitalized, significantly
undercapitalized, and critically undercapitalized for prompt
corrective action purposes. The FDIC also assigns an institution
to one of three supervisory subgroups within each capital group.
The supervisory subgroup to which an institution is assigned is
based on a supervisory evaluation that the institution's primary
federal regulator provides to the FDIC and information that the
FDIC determines to be relevant to the institution's financial
condition and the risk posed to the deposit insurance funds. The
FDIC then determines an institution's insurance assessment rate
based on the institution's capital category and supervisory
category. Under the risk-based assessment system, there are nine
combinations of capital groups and supervisory subgroups to which
different assessment rates are applied. Assessments range from 0
to 27 cents per $100 of deposits, depending on the institution's
capital group and supervisory subgroup.
In addition, effective January 1, 1997, the FDIC imposed
assessments to help pay off the $780 million in annual interest
payments on the $8 billion Financing Corporation bonds issued in
the late 1980s as part of the government rescue of the thrift
industry. The FDIC will assess banks at a rate of 1.3 cents per
$100 deposits until December 31, 1999. Thereafter, it will add
approximately 2.4 cents per $100 of deposits to each assessment.
The FDIC may terminate its insurance of deposits if it finds
that the institution has engaged in unsafe and unsound practices,
is in an unsafe or unsound condition to continue operations or has
violated any applicable law, regulation, rule, order, or condition
imposed by the FDIC.
Other Legislative Action
Other legislative and regulatory proposals regarding changes
in banking, and the regulation of banks, thrifts and other
financial institutions are considered from time to time by the
executive branch of the federal government, Congress and various
state governments. Some of those proposals, if adopted, could
significantly change the regulation of banks and the financial
services industry. It cannot be predicted whether any proposals
will be adopted, and, if adopted, how these will affect the Company
or the Bank.
Monetary and Fiscal Policy
Banking is a business which depends on interest rate
differentials. In general, the difference between the interest
paid by a bank on its deposits and its other borrowings and the
interest received by a bank on its loans to customers and its
securities holdings, constitutes the major portion of a bank's
earnings. Thus, the earnings and growth of the Company and the
Bank will be subject to the influence of economic conditions
generally, both domestic and foreign, and also to the monetary and
fiscal policies of the United States and its agencies, particularly
the Federal Reserve Board. The Federal Reserve Board regulates the
supply of money through various means, including open-market
dealings in United States government securities, the discount rate
at which members may borrow, and reserve requirements on deposits
and funds availability regulations. These instruments are used in
varying combinations to influence the overall growth of bank loans,
investments and deposits and also affect interest rates charged on
loans or paid on deposits. The policies of the Federal Reserve
Board have had a significant effect on the operating results of
commercial banks in the past and will continue to do so in the
future. The nature and timing of any future changes in Federal
Reserve Board policies and their impact on the Company cannot be
predicted.
DIRECTORS AND OFFICERS
Background
The organizers of the Company together with Olen Crawford will
serve as members of the board of directors of the Company, or the
Bank, or both. The table below lists the directors and executive
officers of the Company.
<TABLE>
<CAPTION>
Position Principal Occupation
Name and Age with the Company for the Last Five Years
and the Bank
<S> <C> <C>
J. Daniel Sizemore, 51 Proposed CEO Proposed CEO, Director and
Director of Company Organizer of the Company and
& Bank the Bank since April, 1999;
President and Chief Executive
Officer, The Bank, Birmingham,
Alabama 1998 - 1999; President
and Chief Executive Officer,
Commerce Bank of Alabama,
Albertville, Alabama 1994 - 1998
James Ryan Owen, Jr., 47 Director of Company & President, Gulf Shores
Bank Title Insurance Co., Inc.
(Title Insurance Company)
Olen E. Crawford, 47 Company Director Business Developer
(self-employed) since 1998;
Owner, Gulf Shares
Title Company;
President, Call Points
Business Unit of Vialog
Communication 1997-1998;
Executive Vice President,
Conference Source International,
1992-1997
Joe C. Campbell, 53 Company Director District Manager, ALFA
Insurance Company
(General Insurance)
Donald W. Peak, 59 Director of Company & President, Forest Manor
Bank Nursing Home, Inc.
(long-term care facility);
President, Phoenix Therapy
Associates (rehabilitation
therapy); President,
Central Medical Supplies
of Alabama
(durable medical equipment)
Thomas Gray Skipper, 28(1) Company Director Vice President, Scotch
Plywood Company
Gordon Barnhill, Jr., 44 Director of Company & Owner, Barnhill Land
Bank and Real Estate
(Real Estate Business)
and farmer
Daniel M. Scarborough, M.D., 54 Director of Company & Vice President, Community
Bank Health Systems, Inc. since 1997;
Private practice of medicine
prior to July 4, 1997
Patrick Willingham, CPA, 54 Director of Company & President and CEO, Community
Bank Health Systems, Inc.
(Certified Public Accountant)
S. Millard Johnson, 75 Company Director Retired Business Executive
William T. Carlson, Jr., 48 Company Director Of Counsel,
Capell & Howard, P.C.
(Lawyer)
Rick A. Phillips, 47 Director of Company & Owner, Professional Real
Bank Estate Partners, Inc.
(Real Estate Brokerage
and Marketing)
William D. Moody, 52 Director of Company & President, Alpha Development
Bank Group, Inc.
(Real Estate Development)
George W. Skipper, III, 54(1) Company Director Vice President, Skipper
Insurance
(General Insurance)
Julian Brackin, 49 Company Director Partner, Brackin and
McGriff, P.C.
(Attorney)
Nancy Jayne Jackson, 44 Senior Vice President Senior Vice President,
the Company; Senior Vice
President, Operations,
Ready Bank, Ft. Walton
Beach, Florida, 1999;
Vice President and
Information Systems
Auditor, Aiant Bank,
Montgomery, Alabama
prior to 1999
<FN>
(1) George W. Skipper, III is the father of Thomas Gray Skipper.
</FN>
</TABLE>
Election and Terms of Board of Directors
Directors of the Company will be elected annually for three
year terms. The terms will be staggered with approximately
one-third of the Directors being elected each year for three year
terms. The following directors will serve until the 2000 annual
meeting: Messers. Barnhill, Brackin, Campbell, Carlson and
Crawford. Directors Johnson, Moody, Owen, Peak and Phillips will
serve until the 2001 annual meeting, and directors Scarborough,
Sizemore, George W. Skipper, III, Thomas Gray Skipper and
Willingham will serve until the 2002 annual meeting. Directors of
the Bank will also be elected annually and serve one year terms.
Officers of the Company and the Bank serve at the discretion of the
respective boards of directors.
During the Bank's first fiscal year, directors will not
receive any fees for serving in that capacity. Thereafter,
director fees may be paid in amounts determined by the board of
directors of the Bank. Directors who are employees of the Bank
will receive no compensation for serving as Bank directors. The
directors of the Company could receive director fees from the
Company paid out of the capital retained by the Company.
The Company's articles set the minimum number of directors at
6 and the maximum at 20, with the exact number to be determined by
resolution of the directors. Initially, there are expected to be 15
members of the board, as shown above. It is presently contemplated
that the Bank will employ a senior vice president and that the
person holding that position will be appointed by the other board
members as a member of the board of directors.
Committees of the Board
The board of directors of the Bank will initially have an
audit committee, loan committee and investment committee.
The audit committee, consisting of Messrs. Patrick Willingham,
Gordon Barnhill, Rick A. Phillips and Daniel M. Scarborough, will
recommend to the board of directors the independent accountants to
be selected as the Bank's auditors, review the audit plan,
financial statements and audit results, review with internal and
independent auditors and bank examiners the Bank's accounting
practices and policies, and overall accounting and financial
controls, and conduct an appropriate review of any related party
transactions and potential conflict of interest situations.
The investment committee will consist of Messrs. J. Daniel
Sizemore, James Ray Owen, Jr., William D. Moody, Gordon Barnhill,
and Daniel M. Scarborough. In addition, it is anticipated that a
senior vice president of the Bank will serve on this committee.
The investment committee will be charged with reviewing the Bank's
investment portfolio and investment activities.
The loan committee will include Messrs. J. Daniel Sizemore,
James Ray Owen, Jr., Patrick Willingham, William D. Moody and Rick
A. Phillips, as well as the Bank's senior loan officer.
Executive Compensation
Officers of the Company and the Bank will serve at the
discretion of the board of directors.
J. Daniel Sizemore will serve as Chairman of the Board and
chief executive officer of the Bank and the Company. Mr. Sizemore
will receive an annual base salary of $120,000, subject to
adjustments as may be determined by the Bank's board of directors.
Mr. Sizemore will also be eligible for annual cash bonuses to be
determined by the board. Mr. Sizemore will be granted options for
35,000 shares, exercisable for ten years at $10 per share, under
the Company's Incentive Stock Compensation Plan.
The Bank also proposes to employ 5 other senior officers,
including a president at a salary of approximately $85,000 per
year, and to make an immediate grant of options for an aggregate of
15,000 shares under the Incentive Stock Compensation Plan to such
persons.
The following tables show on a prospective basis for 1999 the
anticipated annual rate of compensation and stock option grants to
be paid to the Company's chairman and chief executive officer.
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation Long Term
Compensation
Awards
Name and Securities
Principal Other Annual Underlying
Position Year Salary ($) Bonus ($) Compensation Options (#)
<S> <C> <C> <C> <C> <C>
J. Daniel Sizemore
Chairman and CEO 1999 $120,000 (1) $0 35,000(2)
<FN>
(1) Bonuses will be determined annually.
(2) The exercise price is $10.00 per share.
</FN
</TABLE>
<TABLE>
Options to be Granted
<CAPTION>
Number of
Securities % of Total
Underlying Options
Options to Granted to Exercise Price
Name be Granted Employees ($/Sh) Expiration Date
<S> <C> <C> <C> <C>
J. Daniel Sizemore 35,000 70% $10 10 Years
</TABLE>
Employment Agreements
J. Daniel Sizemore has an employment agreement with the
Company to serve as President and Chief Executive Officer of the
Company and Chairman and Chief Executive Officer of the Bank. The
agreement has a three year term and may be renewed daily for a
continuous three year term. The agreement may only be terminated
upon three years notice except that the agreement may be terminated
by the Company at any time for cause. Mr. Sizemore will receive a
base salary of $120,000 per year, and be entitled to certain
benefits such as life insurance, a $750 per month automobile
allowance, and country club and civic dues. The agreement also
provides that Mr. Sizemore will receive options of 35,000 shares of
the Company's common stock at a price of $10 per share.
Certain Relationships and Related Transactions
Each of the organizers has signed an agreement providing that
each person will contribute up to a maximum of $25,000 to pay his
pro rata portion of the organizational expenses for the Bank and
the Company. The agreement provides that upon receipt of
appropriate regulatory approvals, the Bank will reimburse the
organizers for these expenses.
Gulf Shores Investment Group, LLC (the "Investment Group") is
an Alabama limited liability company that proposes to own the real
estate and construct and own the buildings for the Bank's main
office and branch office. The Investment Group will be formed by
those persons who are directors of the Company, except Olen E.
Crawford . The lease agreement for the Bank's main office will have
a three year term and will provide for annual lease payments of
$155,295, payable monthly with additional rental payments made
based upon certain operating costs of the building. The lease may
be extended for three, three year terms. The Bank will operate out
of a temporary modular unit owned by the Bank for approximately
nine months and will pay $2,630 per month in ground lease payments
to the Investment Group.
The lease for the branch office will have a three year term
and provide for annual lease payments of $63,000, payable monthly,
with additional rental payments made based upon certain operating
costs of the building. The lease may be extended for three, three
year terms. It is anticipated that the construction of the branch
office will not be completed until approximately August, 2000. In
the meantime, the Investment Group leases the ground for the branch
to the Bank at a monthly lease of $1,975. The Bank maintains a
temporary modular building on this site for use as the branch bank
premises. The Investment Group will purchase the site of this
branch from George W. Skipper, III, and Thomas Grey Skipper,
organizers and directors of the Company.
In the future, the Bank may make loans to its directors and
officers in the ordinary course of business. Such loans, or other
banking transactions involving these persons, will be made on the
same terms, including interest rate and collateral requirements,
that the Bank would make to the general public.
Incentive Stock Compensation Plan
The board of directors of the Company has adopted an Incentive
Stock Compensation Plan. The directors believe an incentive
program will be an important asset in attracting and retaining
qualified personnel and motivating their efforts on behalf of the
Bank and its interests. This plan will be submitted to a vote of
the Company shareholders at the first meeting of shareholders.
The following discussion outlines some of the essential
features of this plan, but is qualified in its entirety by
reference to the full text of the plan which is included as an
exhibit to the Registration Statement of which this Prospectus is
a part.
All key employees of the Bank are eligible to participate in
this plan. The selection of participants is entirely within the
discretion of the stock option plan committee which is to be
comprised of two or more members of the board of directors of the
Company designated by resolution. The Plan will be administered by the
committee, which has the exclusive right, subject to the provisions
of the Plan, to interpret its provisions and to prescribe, amend
and rescind rules and regulations for its administration.
The Company has reserved a total of 75,000 shares of common
stock for issue under the plan. For "incentive stock options"
qualified as such under section 422(a) of the Internal Revenue
Code, the aggregate value of the shares for which an employee may
be granted options in any year cannot exceed $100,000, measured by
the fair market value at date of grant, plus any unused carryover
of this annual limitation. The price of the option cannot be less
than 100% of the fair market value of the shares on the date the
option is granted, except as to persons who hold more than 10% of
the voting power of the Company, in which case the option price
cannot be less than 110% of fair market value.
No option may be exercised more than ten years after it is
granted. An option becomes exercisable, subject to the foregoing
limitation, any time after it is granted unless vesting
requirements are imposed with the grant. An option must be
exercised within 90 days of retirement, and within 90 days of other
termination from the Company or the Bank. All vesting requirements
on options may be waived if there is a change of control, or
potential change of control of the Company.
The board of directors of the Company has granted options to
Mr. Sizemore for 35,000 shares and plans to grant options to other
officers for an aggregate of 15,000 shares. These options are
exercisable at $10.00 per share, and otherwise on the terms
described above.
The plan also provides that notwithstanding any other
provision in the plan or any agreement under the plan, the
Company's primary bank regulator shall at any time have the right
to require any holder of options to exercise such options or
forfeit options not exercised if the Company's capital falls below
minimum capital required by the Company's primary bank regulator.
Employee Stock Purchase Plan
The board of directors of the Company has also adopted an
Employee Stock Purchase Plan, which is intended to qualify under
Section 423(b) of the Internal Revenue Code. Under this plan
eligible Bank employees may purchase shares of the Company through
a payroll deduction plan. We believe it is important that
employees of the Bank have an opportunity to invest in the
Company's future, and that this plan can be a valuable incentive
for employees. This plan will also be submitted to a vote at the
Company's first shareholders meeting.
The form of the Employee Stock Purchase Plan was filed as an
exhibit to the Registration Statement of which this Prospectus is
a part. The following discussion outlines some of the essential
features of the plan, but is qualified in its entirety by reference
to the full text of the plan.
Generally, all active full-time employees of the Bank are
eligible to participate in the Employee Stock Purchase Plan. No
employee may be permitted to subscribe for shares if immediately
after subscribing he or she would own shares (including those which
may be purchased under outstanding subscriptions under the Employee
Stock Purchase Plan) representing 5% or more of the total combined
voting power or value of all classes of stock of the Company.
Employees will have the opportunity to subscribe to purchase
shares at a series of offerings occurring at six-month intervals.
Offering periods will be for 15 days. The total number of shares
available under all offerings on a cumulative basis is 7,500. To
subscribe to purchase shares, an employee must sign a subscription
agreement specifying the number of shares he or she will purchase.
During an offering period, an employee may subscribe for a minimum
of 10 shares and a maximum of 50. An employee may subscribe to
purchase stock in more than one offering period.
The purchase price of a share must not be less than 85% of the
fair market value of the shares on the date offered.
No employee may subscribe to purchase shares under the
Employee Stock Purchase Plan if doing so would permit his or her
rights to purchase shares under all stock purchase plans of the
Company to accrue at a rate which exceeds $25,000 of the fair
market value of such shares (determined at the time such right to
subscribe is granted) for each calendar year in which such right to
subscribe is outstanding at any time. Pursuant to this limitation,
Mr. Sizemore will not be eligible to participate in the Employee
Stock Purchase Plan.
Each employee who subscribes to purchase shares during an
offering period must sign an authorization for payroll deductions
by the Bank to pay the purchase price of the subscribed shares.
Payment will be made in equal regular installments, at least
monthly, over a period of 12 calendar months.
Employees will not have voting or other rights of shareholders
with respect to any shares covered by subscription agreements until
the date the full purchase price of all shares covered by such
subscription agreement has been paid.
Director Stock Plan
The board of directors of the Company has adopted a Director
Stock Plan. This plan permits stock options to be granted to
directors and permits directors to receive director fees in stock
in lieu of cash.
The following discussion outlines some of the essential
features of this plan, but is qualified in its entirety by
reference to the full text of the plan which is included as an
exhibit to the Registration Statement of which this Prospectus is
a part.
The Plan will be administered by the compensation committee of
the board, which has the exclusive right, subject to the provisions
of the Plan, to interpret its provisions and to prescribe, amend
and rescind rules and regulations for its administration.
The Company has reserved a total of 70,000 shares of common
stock for issue under the plan and plans to issue options to each
director.
No option may be exercised more than ten years after it is
granted. Subject to the foregoing limitation, an option becomes
exercisable any time after it is granted, unless it is subject to
vesting requirements at the time of grant.
Under the plan, members of the board of directors may elect to
receive shares of common stock as restricted stock in lieu of
receiving cash director fees at an amount equal to the cash fees
that would be due to be paid divided by 75 percent of the fair
market value of the common stock.
The plan also provides that notwithstanding any other
provision in the plan or any agreement under the plan, the
Company's primary bank regulator shall at any time have the right
to require any holder of options to exercise such options or
forfeit options not exercised if the Company's capital falls below
minimum capital required as determined by the Company's primary
bank regulator.
Change in Control Provisions
Both the Incentive Stock Compensation Plan and the Director
Stock Plan provide that if a change in control or potential
change in control of the Company occurs, options outstanding that
are not yet exercisable as a result of vesting requirements may
nevertheless be exercised. Also, options may be cashed out by the
Company on the basis of any change in control price. A change in
control occurs when a person or entity acquires 20 percent or
more of the Company's common stock or when certain other events
occur such as a change in two-thirds of the board of directors
that is not recommended by the incumbent directors.
A potential change in control occurs when the Company enters
into an agreement that would result in a change of control or a
person or entity acquires 5 percent or more of the Company's
common stock and the board of directors determines by
resolution that such acquisition constitutes a change in control.
Indemnification of Directors and Officers
The bylaws of the Company provide that the Company will
indemnify its and the Bank's officers, directors, employees and
agents to the extent permitted by the Alabama Business Corporation
Act. That Act permits a corporation to indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by
reason of the fact that he is or was a director, officer, employee
or agent of the corporation, against expenses (including attorney's
fees), judgments, fines and settlements incurred by him in
connection with any such suit or proceeding. In order to receive
indemnification, the person must have acted in good faith and in a
manner reasonably believed to be in or not opposed to the best
interests of the corporation, and, in the case of a derivative
action on behalf of the corporation, that he not be adjudged to be
liable for negligence or misconduct.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company or the Bank, pursuant to the
foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the
Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL SECURITY HOLDERS
The following table shows the proposed beneficial ownership of
the shares of common stock of the directors and executive officers
of the Company, assuming the minimum of 800,000 shares will be
outstanding after completion of the offer.
<TABLE>
<CAPTION>
Name and Address Number of Shares of
Common Stock to be Owned Percentage Ownership
<S> <C> <C>
J. Daniel Sizemore
4560A Highway 180
Gulf Shores, AL 36542 67,500(1) 8.4%
James Ryan Owen, Jr.
P.O. Box 895
Gulf Shores, AL 36547 25,000 3.125%
Olen E. Crawford
Post Office Box 895
Gulf Shores, Alabama 36547 50,000 6.25%
Joe C. Campbell
110 Eagle Drive
Albertville, AL 35951 30,000 3.75%
Donald W. Peak
2401 32nd Street
Northport, AL 35476 25,000 3.125%
Thomas Gray Skipper
1452 Drewry Road
Monroeville, AL 36460 25,000 3.125%
Gordon Barnhill, Jr.
Post Office Box 644
Robertsdale, AL 36567 25,000 3.125%
Daniel M. Scarborough, M.D.
30815 Peninsula Drive
Orange Beach, AL 36561 25,000 3.125%
Patrick Willingham, CPA
30475 Harbour Drive
Orange Beach, AL 36561 25,000 3.125%
S. Millard Johnson
P.O. Box 375
216 W. Canal Road
Gulf Shores, AL 36547 25,000 3.125%
William T. Carlson, Jr.
3038 Taralane Drive
Birmingham, AL 35216 25,000 3.125%
Rick A. Phillips
Post Office Box 3351
Gulf Shores, AL 36547 30,000 3.75%
William D. Moody
4170 Spinnaker Drive
Unit #1020-D
Gulf Shores, AL 36542 30,000 3.75%
George W. Skipper, III
307 Skipper Drive
Jackson, AL 36545 25,000 3.125%
Julian Brackin
1261 Patrick Street
Daphne, AL 36526 25,000 3.125%
Nancy Jayne Jackson
2771 Mammal Drive
Lillian, AL 36549 0 0%
All Directors and Officers
as a group (16 persons) 457,500(2) 54.79%
<FN>
*Less than one percent
(1) Includes 35,000 shares subject to options to be granted to Mr.
Sizemore under the Incentive Stock Compensation Plan.
(2) Includes options referenced in footnote (1).
</FN>
</TABLE>
DESCRIPTION OF CAPITAL STOCK
The following summarizes certain provisions of the Company's
capital stock. Additional information regarding the capital stock
is set forth in the articles of incorporation and bylaws of the
Company that are included as exhibits to the Registration Statement
of which this Prospectus is a part and in the applicable provisions
of the Alabama Business Corporation Act under which the Company is
incorporated and by which its corporate affairs will be governed.
General
The authorized capital stock of the Company consists of
10,000,000 shares of common stock, $1.00 par value per share, 100
shares of which are currently issued to Daniel Sizemore for
organizational purposes and 1,000,000 shares of preferred stock,
par value $1.00 per share, none of which is outstanding. A minimum
of 800,000 and a maximum of 1,000,000 shares of common stock are
offered by this Prospectus. In addition, an aggregate of 152,500
shares of common stock are reserved for issuance under the
Company's stock option plans and the Employee Stock Purchase Plan.
The Company's preferred stock may be issued from time to time
as a class without series, or if so determined by the Company's
board of directors, either in whole or in part in one or more series.
The voting rights, and such designations, preferences and relative,
participating, optional or other special rights, if any, and the
qualifications, limitations or restrictions thereof, if any,
including, but not limited to, the dividend rights, conversion
rights, redemption rights and liquidation preferences, if any, of
any wholly unissued series of preferred stock (or of the entire class
of preferred stock if none of such shares has been issued), the
number of shares constituting any such series and the terms and
conditions of the issue thereof may be fixed by resolution of the
board of directors. The Company's preferred stock may have a
preference over the common stock with respect to the payment of
dividends and the distribution of assets in the event of the
liquidation or winding-up of the Company and such other preferences
as may be fixed by the Company's board of directors.
Voting
Holders of the shares of common stock are entitled to one vote
per share on all matters to be voted upon by shareholders. The Company's
articles of incorporation provide that directors are elected for
three year terms. The holders of the shares of common stock do not
have cumulative voting rights, which means that the holders of more
than one-half of the outstanding shares can elect all of the
directors.
Shareholders may call special meetings of shareholders if they
own 10 percent or more of the outstanding shares of common stock of
the Company. Shareholders may take action without a shareholder
meeting only by a written consent signed by all shareholders
entitled to vote on the subject matter at a shareholder meeting.
The board of directors may increase or decrease by 30 percent
or less the number of directors last elected by shareholders and
may fill any vacancies so created. Increases or decreases in the
number of directors by more than 30 percent may only be made by
shareholders, with shareholders filling any vacancies as a result
of such increase.
Dividends
Shareholders may receive dividends when and if declared by the
board of directors in accordance with applicable law. See "Dividend
Policy."
Other Rights
Holders of shares of common stock are entitled to share
ratably in the assets of the Company legally available for
distribution to its shareholders in the event of liquidation,
dissolution or winding up of the Company. Shareholders have no
preemptive, subscription, redemption or conversion rights. All
outstanding shares of common stock and the shares to be issued in
this offering will be, upon payment therefor and issuance, fully
paid and non-assessable.
Possible Issuance of Shares - Certain Anti-Takeover Effects
Under the Company's articles of incorporation, and after
reserving for the maximum of 1,000,000 shares that could be issued
in the offer and 152,500 shares that may be issued under benefit
plans, the board of directors may issue up to an additional
8,847,500 shares of the Company's common stock without further
approval or authorization of the shareholders. It is possible that
additional shares could be issued in the future and that such
issuance could cause dilution in the value of shares then
outstanding. The existence of authorized shares could enable the
board of directors to issue shares to persons friendly to current
management, which could render more difficult or discourage any
attempt to gain control of the Company by means of a proxy contest,
tender offer, merger or otherwise that is not favored by
management.
The authority of the board of directors to issue preferred
stock with such rights and privileges, including voting rights,
as it may deem appropriate could also enable the board to defer
or prevent a change in control despite a shift in the ownership
of the common stock.
Because directors are elected for three year terms, with
approximately one-third of the board elected each year, two
elections will be required to change a majority of the members of
the board. This method could delay, or make more difficult, a
change in the board or in control of the Company.
Directors may only be removed by shareholders for cause.
MARKETABILITY OF SECURITIES
Although the 1,000,000 shares offered by this Prospectus will
be registered under applicable state and federal securities laws,
we do not expect that a public trading market, or public price
quotations of the shares, will develop. Investors should expect to
hold their shares for an indefinite period of time.
After the offering, the Company will have reserved 152,500
shares of common stock for issuance under its stock plans. No
holders of shares of common stock or options have the right to
require that the Company undertake the registration of their shares
or to include their shares in any registration statement undertaken
by the Company.
The shares sold in the offering will be freely tradeable
without restriction under the Securities Act of 1933, unless the
shares held by persons deemed to be "affiliates" of the Company.
An affiliate of an issuer is defined in Rule 144 under the
Securities Act as a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under
common control with the issuer. Rule 405 under the Securities Act
defines the term "control" to mean the possession, direct or
indirect, of the power to direct or cause the direction of the
management and policies of the person whether through the ownership
of voting securities, by contract or otherwise. All directors of
the Company will be deemed to be affiliates. The 457,500 shares of
common stock held by affiliates will be subject to restrictions on
resale contained in the provisions of Rule 144.
In general, under Rule 144, persons who are affiliates of the
Company will be entitled to sell within any 90-day period that
number of shares which does not exceed the greater of 1% of the
then outstanding shares (immediately following the offering) or the
average weekly trading volume of the shares during the four
calendar weeks preceding the sale.
A condition to the use of Rule 144 is that the Company file
public reports at the SEC. The Company will file such reports for
the fiscal year in which its Registration Statement for the
shares becomes effective, but may not be required to file such
reports for fiscal years thereafter. Hence, Rule 144
may not be available for resales by affiliates in the future.
DIVIDEND POLICY
We do not expect the Bank or the Company to realize a profit
during its initial year of operation, and it is not likely during
the first few years that the Company will generate sufficient
profit to justify or allow it to pay dividends. The Company will
rely on the payment of dividends to it by the Bank in order to
provide funds for the payment of dividends by it to its
shareholders. In no event during the first three years of
operations can any dividends be declared or paid by the Bank
without the approval of the Alabama Banking Department and the
Federal Deposit Insurance Corporation. In addition, banking
regulations restrict the payment of dividends under certain
circumstances. Future dividend policy of the Company will be
subject therefore not only to banking regulations, but to the
discretion of the directors, and will be contingent on the Bank's
financial condition, capital requirements, general business
conditions and other factors. We do not expect cash dividends to be
paid during at least the first three years of operation, and all
earnings will be retained for the Bank's future needs.
LEGAL MATTERS
Certain legal matters regarding the shares offered hereby will
be passed upon for the Company by Balch & Bingham, LLP, Montgomery,
Alabama.
EXPERTS
The financial statements of the Company contained in this
Memorandum have been included in reliance upon the report of
Mauldin & Jenkins LLC, Albany, Georgia, independent certified
public accountants, and upon the authority of such firm as experts
in accounting and auditing.
FINANCIAL REPORTS TO SHAREHOLDERS
Assuming the Registration Statement of which this Prospectus
is a part becomes effective in 1999, the Company will file public
reports with the Securities and Exchange Commission for 1999. As
part of these reports, the Company will file an annual report on
Form 10-K for the fiscal year ending December 31, 1999, which will
contain audited financial statements. Thereafter, whether the
Company will be required to file such reports will depend upon the
number of shareholders in the Company. If the number is less than
300 at the beginning of any fiscal year, no reports at the
Securities and Exchange Commission will be required for that fiscal
year. The Company will likely distribute an annual report to its
shareholders reviewing the previous year's operations, but the
report may not contain audited financial statements on the Company
if the Company is no longer required to file public reports at the
Securities and Exchange Commission.
<PAGE>
VISION BANCSHARES, INC.
(A Development Stage Company)
FINANCIAL REPORT
AUGUST 31, 1999
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Balance sheet as of August 31, 1999 2
Statement of loss and accumulated deficit
for the period from July 16, 1999, date of
inception, to August 31, 1999 3
Statement of stockholder's deficit for
the period from, July 16, 1999, date of
inception to August 31, 1999 4
Statement of cash flows for the period from
July 16, 199, date of inception,
to August 31, 1999 5
Notes to financial statements 6-8
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Vision Bancshares, Inc.
Gulfshores, Alabama
We have audited the accompanying balance sheet of Vision
Bancshares, Inc., a development stage company, as of August 31,
1999, and the related statements of loss and accumulated deficit,
stockholder's deficit and cash flows for the period from July 16,
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 audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Vision Bancshares, Inc. as of August 31, 1999, and the results of
its operations and its cash flows for the period from July 16,
1999, date of inception, to August 31, 1999, in conformity with
generally accepted accounting principles.
/s/ Mauldin & Jenkins, L.L.C.
Albany, Georgia
September 13, 1999
<PAGE>
<TABLE>
VISION BANCHSARES, INC.
(A Development Stage Company)
BALANCE SHEET
AUGUST 31, 1999
ASSETS
<S> <C>
Cash in bank $ 27,058
Other assets 24,780
$ 51,838
LIABILITIES AND STOCKHOLDER'S DEFICIT
LIABILITIES
Due to organizers $ 140,000
Other liabilities 90,000
Total liabilities 230,000
COMMITMENTS
STOCKHOLDER'S DEFICIT
Common stock, $1 par value; 10,000,000
shares authorized; 100 shares
issued and outstanding 100
Additional paid-in capital 3,558
Deficit accumulated during the development stage (181,820)
Total stockholder's deficit (178,162)
$ 51,838
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<TABLE>
VISION BANCHSARES, INC.
(A Development Stage Company)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
PERIOD FROM JULY 16, 1999, DATE OF INCEPTION,
TO AUGUST 31, 1999
<S> <C>
Income $ -
Expenses
Organizational expense 110,447
Personnel expense 57,476
Interest 2,658
Postage and telephone 2,054
Rental expense 1,933
Automobile expense 1,205
Education and training 3,551
Dues 1,300
Miscellaneous 1,196
181,820
Net loss for the period and accumulated deficit $ (181,820)
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
VISION BANCHSARES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDER'S DEFICIT
PERIOD FROM JULY 16, 1999, DATE OF INCEPTION,
TO AUGUST 31, 1999
<CAPTION>
Deficit
Accumulated
Additional During the Total
Common Stock Paid-in Development Stockholders'
Shares Par Value Capital Stage Deficit
<S> <C> <C> <C> <C> <C>
Issue of common stock 100 $ 100 $ 900 $ - $ 1,000
Imputed interest on advances from
organizer credited to capital
surplus - - 2,658 - 2,658
Net loss for the period from
July 16, 1999, date of
inception, to August 31, 1999 - - - (181,820) (181,820)
Balance, August 31, 1999 100 $ 100 $ 900 $ (181,820) $ (178,162)
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<TABLE>
<PAGE>
VISION BANCSHARES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
PERIOD FROM JULY 16, 1999, DATE OF INCEPTION,
TO AUGUST 31, 1999
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (181,820)
Adjustment to reconcile net loss to net cash used in
operating activities:
Imputed interest on advances from organizer 2,658
Other prepaids and accruals, net 65,220
Net cash used in operating activities (113,942)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from advances by organizer 140,000
Proceeds from issuance of common stock 1,000
Net cash provided by financing activities 141,000
Net increase in cash 27,058
Cash at beginning of period -
Cash at end of period $ 27,058
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
VISION BANCSHARES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
Vision Bancshares, Inc. (the "Company") was organized as an Alabama
Corporation on July 16, 1999 to operate as a bank holding company
pursuant to the Federal Bank Holding Company Act of 1956, as
amended, and to purchase 100% of the issued and outstanding capital
stock of Vision Bank (the "Bank"), an association to be organized
under the laws of the State of Alabama, which will conduct a
general banking business in Gulf Shores, Alabama. The organizers
have filed an application with the State of Alabama Department of
Banking (the "ADB") to charter the proposed bank. The Company has
filed an application to become a bank holding company with the
Board of Governors of the Federal Reserve System (the "Federal
Reserve") and the ADB. Upon obtaining regulatory approval, the
Company will be a registered bank holding company subject to
regulation by the Federal Reserve and the ADB.
Activities since inception have consisted of the organizers of the
Company and the Bank engaging in organizational and preopening
activities necessary to obtain regulatory approvals and to prepare
to commence business as a financial institution.
Significant Accounting Policies
Basis of Presentation
The financial statements have been prepared on the accrual basis in
accordance with generally accepted accounting principles.
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. OTHER ASSETS
Other assets consist of $17,500 paid as an option on the purchase
of land on which the proposed bank will be constructed and $7,280
paid to architects for building plans. The Company intends to
lease the building to serve as the Bank's main office. The Bank's
premises will be owned by an entity owned by certain organizers of
the Company. The Company expects the amounts included in other
assets to be reimbursed by the entity which will own the building
and lease it to the Bank
NOTE 3. DUE TO ORGANIZER
Organizers have advanced $140,000 to the Company to pay for
organizational expenses and other expenditures. The advances are
noninterest bearing. In the event that the requisite approvals are
obtained and the proposed stock offering is successfully completed,
a portion of the proceeds of the offering will be used to repay the
organizer's advances, without interest, to the extent such
repayment is allowed by regulatory authorities. To the extent that
repayment is not allowed by regulatory authorities, such advances,
if any, will be considered as contributed capital.
Interest on advances from the organizer has been imputed at the
prime rate of interest, which is currently 8.25%.
NOTE 4. EMPLOYMENT AGREEMENT
The Company has entered into an employment agreement with the
proposed President and Chief Executive Officer of the Company and
Chairman and Chief Executive Officer of the Bank. The agreement has
a three year term and may be renewed daily for a continuous three
years. The agreement may only be terminated upon three years'
notice except that the agreement may be terminated by the Company
at any time for cause. The agreement provides for a base annual
salary of $120,000, with up to 30% of base salary as a bonus, a
monthly car allowance of $750, reimbursement for business travel,
country club and civic dues, and life and disability insurance.
The agreement also provides that the proposed officer will receive
options of 35,000 shares of the Company's common stock at a price
of $10 per share.
NOTE 5. YEAR 2000 ISSUES
The Company and the Bank will rely heavily upon computers for the
conduct of their business and for their information processing
systems. Industry experts have expressed concern that there may be
widespread computer malfunctions on January 1, 2000 if computers
are unable to read the new year. The Company and the Bank will
generally rely on software and hardware developed by independent
third parties to provide the information systems used by them. The
Company is currently negotiating with vendors and intends to seek
assurances from any selected third party hardware or software
systems providers that any products provided by them will be Year
2000 compliant.
The Company believes that any information systems purchased
including hardware and software products will be adequately
programmed to address the Year 2000 issue. Based on information
currently available, management believes that it will not incur
significant costs in connection with the Year 2000 issue.
Nevertheless, some of the hardware and software products that
either the Company or the Bank acquires may not be Year 2000
compliant, and one cannot predict with certainty the costs the
Company or the Bank will incur to respond to any Year 2000 issue.
NOTE 6. COMMON STOCK OFFERING
The Company plans to commence a private offering to sell a minimum
of 800,000 and a maximum of 1,000,000 shares of the Company's $1
par value common stock at a price of $10 per share. The organizers
and directors intend to purchase an aggregate of 422,500 shares of
common stock in the offering at a price of $10 per share.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
The Company is an Alabama corporation. Section 10-2B-8.50
et. seq. of the Alabama Business Corporation Act (the "ABCA")
empowers an Alabama corporation to indemnify any person who is
made a party to any proceeding because he or she is or was a
director, officer, employee or agent of such corporation, or is
or was serving at the request of such corporation as a director,
officer, employee or agent of another corporation or enterprise.
A corporation may indemnify such person against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. A corporation may, in
advance of the final disposition of any civil, criminal,
administrative or investigative action, suit or proceeding, pay
the expenses (including attorneys' fees) incurred by any officer
or director in defending such action, provided that the director
or officer undertakes to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the
corporation.
An Alabama corporation may not indemnify officers and
directors in connection with any action by or in the right of the
corporation in which the officer or director is adjudged to be
liable to the corporation, or any other action charging improper
personal benefit to the officer or director in which the officer
or director is adjudged to be liable to the corporation on the
basis that personal benefit was improperly received by him or
her.
Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses (including
attorneys' fees) which he actually and reasonably incurred in
connection therewith.
The indemnification provided by statute (discussed above) is
not deemed to be exclusive of any other rights to which an
officer or director may be entitled under any corporation's
bylaws, agreement, vote or otherwise.
The Company's Articles of Incorporation provides that a
director shall not be held personally liable to the Company or
its shareholders for monetary damages for any action taken, or
any failure to take any action as a director, except this
provision shall not eliminate the liability of a director for (i)
the amount of a financial benefit received by a director to which
he or she is not entitled; (ii) an intentional infliction of harm
on the Company or the shareholders; (iii) a violation of Section
10-2B-8.33 of the Alabama Business Corporation Act (regarding
unlawful distributions); (iv) an intentional violation of
criminal law; or (v) a breach of a director's duty of loyalty to
the Company or its shareholders. It is the intention that the
directors of the Company be protected from personal liability to
the fullest extent permitted by the Alabama Business Corporation
Act as it now or hereafter exists. If at any time in the future
the Alabama Business Corporation Act is modified to permit
further or additional limitations on the extent to which
directors may be held personally liable to the Company, the
protection afforded by these provisions in the Company's Articles
of Incorporation shall be expanded to afford the maximum
protection permitted under such law.
The Company's Bylaws provide that the Company shall
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed claim,
action, suit or proceeding, whether civil, criminal,
administrative or investigative, including appeals and whether
formal or informal by reason of the fact that he is or was a
director, officer, employee or agent of the Company, or is or was
serving at the request of the Company as a director, officer,
partner, trustee, employee or agent of another corporation,
ullest extent authorized by Alabama Law against all expense,
liability and loss reasonably incurred by such indemnitee in such
action, suit or proceeding. The Company's Bylaws also provide
for mandatory advancement of expenses to such indemnitees,
provided certain conditions are satisfied. The Company's Bylaws
also provide that the Company may maintain insurance, at its
expense, to protect itself and any director, officer, employee or
agent of the Company or of another corporation, partnership,
joint venture, trust or other enterprise against any expense,
liability or loss.
Item 25. Other Expenses of Issuance and Distribution.
Registration fee under the Securities Act
of 1933, as amended $ 2,780
Accounting fees 15,000
Legal fees 30,000
Financial Printing and EDGAR filing fees 7,000
Transfer Agent fees --
Blue Sky fees 5,000
Miscellaneous 1,000
Total $ 60,780
__________________________
* To be filed by amendment.
Item 26. Recent Sales of Unregistered Securities.
None.
Item 27. Exhibits and Financial Statement Schedules.
An index to Exhibits attached to this registration statement
appears at page II-5 hereof.
Item 28. Undertakings
(e) Insofar as indemnification for liabilities arising
under the Securities 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 the public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
[Signature Pages and Exhibits follow]
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
SB-2 and authorizes this Registration Statement to be signed on
its behalf by the undersigned, in the City of Gulf Shores,
State of Alabama, on September 28, 1999.
Vision Bancshares, Inc.
By: /s/ J. Daniel Sizemore
________________________________
J. Daniel Sizemore, Chairman
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual
whose signature appears below constitutes and appoints J. Daniel
Sizemore and his true and lawful attorney-in-fact and agents, with
full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration
statement, and to sign any registration statement for the same
offering covered by this registration statement that is to be
effective upon filing pursuant to Rule 462(b) promulgated under
the Securities Act of 1933, as amended, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto
and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
In accordance with the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities indicated on September 28, 1999.
SIGNATURE TITLE
/s/ J. Daniel Sizemore Chairman and Chief
_________________________________ Executive Officer
(J. Daniel Sizemore) Principal Financial Officer
_________________________________ Director
(James Ryan Owen, Jr.)
/s/ Joe C. Campbell
_________________________________ Director
(Joe C. Campbell)
/s/ Donald W. Peak
_________________________________ Director
(Donald W. Peak)
/s/ Thomas Gray Skipper
_________________________________ Director
(Thomas Gray Skipper)
/s/ Gordon Barnhill, Jr.
_________________________________ Director
(Gordon Barnhill, Jr.)
/s/ Daniel W. Scarborough
_________________________________ Director
(Daniel W. Scarborough, M.D.)
/s/ Patrick Willingham
_________________________________ Director
(Patrick Willingham, C.P.A.)
/s/ S. Millard Johnson
_________________________________ Director
(S. Millard Johnson)
_________________________________ Director
(William T. Carlson, Jr.)
/s/ Rick A. Phillips
_________________________________ Director
(Rick A. Phillips)
/s/ William D. Moody
_________________________________ Director
(William D. Moody)
/s/ George W. Skipper, III
_________________________________ Director
(George W. Skipper, III)
/s/ Julian Brackin
_________________________________ Director
(Julian Brackin)
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
3.1* Amended and Rrestated Articles of
Incorporation of Vision Bancshares, Inc.
3.2 Bylaws of Vision Bancshares, Inc.
5* Opinion of Balch & Bingham LLP as to legality
of the shares to be issued by the Company
10.1 Incentive Stock Option Plan
10.2 Director Stock Option Plan
10.3 Employee Stock Purchase Plan
10.4* Escrow Agreement regarding minimum shares to be
issued in the offering
10.5* Lease Agreement with Gulf Shores Investment
Group, LLC.
10.6 Subscription Agreement
21 List of Subsidiaries of Vision Bancshares, Inc.
23.1 Consent of Mauldin & Jenkins, LLC,
Independent Certified Public Accountants
23.2 Consent of Balch & Bingham (included in the
opinion in Exhibit 5)
24 Powers of Attorney for Officers and Directors
(included in Signature page of this
Registration Statement)
_____________________________________
* To be filed by amendment.
<PAGE>
Exhibit 3.2
VISION BANCSHARES, INC.
BY-LAWS
Adopted as of August 6, 1999
<PAGE>
Vision Bancshares, Inc.
BY-LAWS
ARTICLE I
Offices
Section 1. Registered Office. The registered office of the
Corporation, as designated in the Articles of Incorporation, may
be changed from time to time by resolution of the Board of
Directors and by filing notice of such change as required by law.
Section 2. Principal Office. The Corporation's principal
office will be in the City of Gulf Shores, County of Baldwin,
State of Alabama.
Section 3. Other Offices. The Corporation may also have
offices at such other places both within and without the State of
Alabama as the Board of Directors may from time to time determine
or the business of the Corporation may require to the extent not
prohibited by law.
ARTICLE II
Meetings of Shareholders
Section 1. Location. All meetings of shareholders shall be
held at the Corporation's principal office in Gulf Shores,
Alabama, or at such other place either within or without the
State of Alabama as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting.
Section 2. Annual Meetings. Annual meetings of
shareholders shall be held on the second Tuesday in March in each
year, if not a legal holiday, and if a legal holiday, then on the
next business day following. At the annual meeting, the
shareholders shall elect a Board of Directors by plurality vote,
and shall transact any other business as may properly come before
the meeting.
Section 3. Special Meetings. Special meetings of
shareholders for any purpose or purposes, unless otherwise
prescribed by statute or by the Articles of Incorporation, may be
called by (i) the Chairman, the President or the Board of
Directors; (ii) the holders of not less than ten percent (10%) of
all the Shares entitled to be cast on any issue proposed to be
considered at the proposed special meeting or if such holders
sign, date and deliver to the Corporation's President or
Secretary one or more written demands for the meeting describing
the purpose or purposes for which it is to be held, who shall,
within 21 days of the receipt of such demand, cause notice to be
given of the meeting to be held within the minimum time following
the notice prescribed in Section 4 below; or (iii) the holders of
not less than ten percent (10%) of the votes entitled to be cast
at the special meeting who signed a demand under clause (ii)
above if notice was not given within the 21 days after such
demand or the special meeting was not held in accordance with the
notice.
Section 4. Notice of Shareholders' Meetings. Written
notice stating the place, day and hour of the meeting and, in
case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) nor
more than sixty (60) days before the date of the meeting, either
personally or by mail, by or at the direction of the President,
the Secretary, or the officer or persons calling the meeting, to
each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder
at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid. The capital stock or
bonded indebtedness of the Corporation shall not be increased at
the annual meeting unless thirty (30) days' notice has been given
before the date of the meeting, or pursuant to such lesser or
greater requirements of Section 234 of the Constitution of
Alabama as the same may be amended from time to time.
Section 5. Shareholder List. After fixing a record date
for a meeting, the officer having charge of the stock transfer
books for Shares of the Corporation shall prepare an alphabetical
list of the names of all its shareholders who are entitled to
notice of a shareholders' meeting. The list must be arranged by
voting group (and within each voting group by class or series of
shares) and show the address of and number of shares held by each
shareholder. The shareholders' list must be available for
inspection by any shareholder, beginning two business days after
notice of the meeting is given for which the list was prepared
and continuing through the meeting, at the Corporation's
principal office. A shareholder, or his or her agent or
attorney, is entitled on written demand to inspect and, for a
proper purpose, to copy the list, during regular hours and at its
expense, during the period it is available for inspection. The
Corporation shall make the list available at the meeting, and any
shareholder, or his or her agent or attorney, is entitled to
inspect the list at any time during the meeting or any
adjournment thereof. The stock transfer records of the
Corporation shall be prima facie evidence as to who are the
shareholders entitled to examine the shareholders' list or
transfer records or to vote at any meeting of shareholders.
Section 6. Business of Special Meetings. Business
transacted at any special meeting of shareholders shall be
limited to the purposes stated in the notice.
Section 7. Quorum of Shareholders. A majority of the
Shares entitled to vote, represented in person or by proxy, shall
constitute a quorum at all meetings of shareholders. If,
however, such quorum is not present or represented at any meeting
of the shareholders, the shareholders entitled to vote thereat,
present in person or represented by proxy, shall have the power
to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty (30) days,
or if after the adjournment a new record date is fixed for the
adjourned meeting, written notice of the adjourned meeting shall
be given to the shareholders entitled to vote at the meeting.
Every meeting of the shareholders may be adjourned from time to
time until its business is completed, and except as provided
herein or by applicable law, no notice need be given of such
adjourned meeting.
Section 8. Action by Shareholders. If a quorum is
present, the affirmative vote of the majority of the Shares
represented at the meeting and entitled to vote on the subject
matter shall be the act of the shareholders, unless the vote of a
greater number or voting by classes is required by the
Constitution of Alabama as the same may be amended from time to
time, statute, or the Articles of Incorporation.
Section 9. Voting. Each shareholder shall at every
meeting of the shareholders be entitled to one (1) vote in person
or by proxy for each Share having voting power held by such
shareholder. A proxy may be appointed by an instrument in
writing subscribed by such shareholder or his duly authorized
attorney-in-fact. The proxy holder need not be a shareholder.
No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy.
Section 10. Waiver of Notice. Whenever any notice is
required to be given to any shareholder, a waiver thereof in
writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be
equivalent to the giving of such notice. A shareholder's
attendance at a meeting: (i) 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 before
action is taken on the matter.
Section 11. Action by Shareholders Without a Meeting. Any
action required to be taken at a meeting of shareholders of the
Corporation may be taken without a meeting if the action is taken
by all shareholders entitled to vote on the action. The action
must be evidenced by one or more written consents describing the
action taken, signed by all the shareholders entitled to vote on
the action, and such consent shall be delivered to the
Corporation for inclusion in the minutes or filing with the
corporate records. The record date for determining the
shareholders entitled to take action without a meeting is the
date the first shareholder signs the consent.
ARTICLE III
Board of Directors
Section 1. General Powers; Number, Tenure and
Qualifications. All corporate powers shall be exercised by or
under authority of, and the business and affairs of the
Corporation shall be managed under the direction of, its Board of
Directors, comprised of not less than one (1) nor more than
twenty (20) persons. The Board may increase or decrease by
thirty percent (30%) or less the number of directors last
approved by the shareholders, but only the shareholders may
increase or decrease by more than thirty percent (30%) the number
of directors last approved by the shareholders. Directors shall
be natural persons of the age of at least nineteen (19) but need
not be residents of the State of Alabama or shareholders of the
Corporation. Directors shall be elected at each annual meeting
of the shareholders, and after the terms of the initial Board of
Directors have expired, shall hold office for three (3)
successive years or until their successors are elected and
qualified.
Section 2. Vacancies. If a vacancy occurs on the Board:
(i) the shareholders may fill the vacancy, whether resulting from
an increase in the number of directors or otherwise; (ii) the
board of directors may fill the vacancy, except that the
directors shall not have the power to fill a vacancy resulting
from an increase in the number of directors by more than thirty
percent (30%) of the number of directors last approved by the
shareholders, or (iii) if the directors remaining in office
constitute fewer than a quorum of the Board, they may fill the
vacancy, if it is one that the directors are authorized to fill,
by the affirmative vote of a majority of all the directors
remaining in office. A director elected to fill a vacancy shall
be elected to serve until the next annual meeting of shareholders.
If there are no directors in office, then the shareholders may
hold a special meeting to elect directors.
Section 3. Location of Meetings. Meetings of the Board of
Directors, regular or special, shall be held at the Corporation's
principal office unless otherwise specified in the notice
thereof, in which event the meeting shall be held where specified
in the notice, either within or without the State of Alabama.
Section 4. Organizational Meeting. The first meeting of
each newly-elected Board of Directors shall be held immediately
after and in the same place as the annual meeting of
shareholders. No notice of such meeting shall be necessary to
the newly-elected directors in order to legally constitute the
meeting, provided a quorum is present.
Section 5. Regular Meetings. Regular meetings of the
Board of Directors shall be held on the day and time specified by
resolution of the Board of Directors. No notice of regular
meetings need be given, unless the time and place of such
meetings are other than those stated therein.
Section 6. Special Meetings. Special meetings of the
Board of Directors may be called by the Chairman or President or
any two (2) or more directors on twenty-four (24) hours'
personal, telephonic, or telegraphic notice to each director, or
preceded by at least two days' notice of the date, time and place
of the meeting. The notice need not describe the purpose of the
special meeting. Attendance at or participation by a director at
a special meeting (i) waives objection to lack of any required
notice or defective notice of the meeting, unless the director at
the beginning of the meeting (or promptly upon 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; and (ii) waives objection to consideration of a
particular matter at the meeting that is not within the purpose
described in the meeting notice, unless the director objects to
considering the matter before action is taken on the matter.
Section 7. Meetings by Conference Telephone, etc.
Meetings of the Board of Directors and of any committee thereof
may be held by means of a conference telephone or other
communication by which all directors participating may
simultaneously hear each other during the meeting. Participation
by such means shall constitute presence in person at any such
meeting.
Section 8. Quorum of Directors. A majority of the fixed
number of directors shall constitute a quorum for the transaction
of business. 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 unless the Articles of Incorporation require the vote
of a greater number of directors. A director is, unless
established to the contrary, presumed present for quorum purposes
for the remainder of the meeting at which he has been present for
any purpose. A director who is present at a meeting of the Board
or any committee of the Board when corporate action is taken is
deemed to assent to the action taken place unless (i) he objects
at the beginning of the meeting (or promptly upon arrival) to
holding it or transacting business at the meeting or, as to a
matter required under the Articles of Incorporation or these By-
Laws to be included in the notice of the purpose of the meeting,
he objects before action is taken on the matter; (ii) his dissent
or abstention from action taken is entered in the minutes of the
meeting; or (iii) he delivers written notice of his dissent or
abstention to the presiding officer of the meeting before its
adjournment or to the Corporation immediately after adjournment
of the meeting. The right of dissent or abstention is not
available to a director who votes in favor of the action taken.
Section 9. Action Without a Meeting. Any action required
or permitted to be taken at any meeting of the Board of Directors
or of any committee thereof may be taken without a meeting, if
the action is taken by all members of the Board and evidenced by
one or more consents in writing, setting forth the action so
taken, shall be signed by each member of the Board or committee,
as the case may be, and included in the minutes or filed with the
corporate records reflecting the action taken. Action taken is
effective when the last director signs the consent, unless the
consent specifies a different effective date. Such consent shall
have the same effect as a unanimous vote.
Section 10. Committees. The Board of Directors may create
one (1) or more committees, each committee to consist of one (1)
or more members, who serve at the pleasure of the Board. The
creation of a committee and appointment of members to it must be
approved by the greater of (i) a majority of all the directors in
office when the action is taken or (ii) the number of directors
required by the Articles of Incorporation or By-Laws to take
action. To the extent specified by the Board or in the Articles
of Incorporation or By-Laws, each committee may exercise the
authority of the Board of Directors, shall have and may exercise
all the authority of the Board of Directors in the management of
the business and affairs of the Corporation; except that no such
committee shall have the authority of the Board of Directors with
reference to (1) authorizing distributions, (2) approving or
proposing to shareholders actions requiring approval by
shareholders, (3) filling vacancies on the board of directors or
on any of its committees, (4) amending articles of incorporation,
(5) adopting, amending or repealing these By-Laws, (6) approving
a plan of merger not requiring shareholder approval, (7)
authorizing or approving reacquisition of shares, except
according to formula or method prescribed by the board of
directors, or (8) authorizing or approving the issuance or sale
or contract for sale of shares, or determining the designation
and relative rights, except that the board of directors may
authorize a committee (or a senior executive officer of the
corporation) to do so within limits specifically prescribed by
the board of directors.
Section 11. Committee Meetings, Minutes and Reports.
Meetings of any committee of the Board may be called by the
President, or by the chairman of the committee, at any time upon
personal, telephonic, telegraphic, written or such other notice
as may be determined by such committee. A majority of the
members of each committee may fix such committee's rules of
procedure, determine its manner of acting, and fix the time and
place, whether within or without the State of Alabama, of its
meetings. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Directors whenever
required or requested.
Section 12. Compensation. The Board of Directors shall
have the authority to fix the compensation of directors. The
directors may be paid their expenses, if any, of attending each
meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated
salary as directors. No such payment shall preclude any director
from serving the Corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees
may be allowed like compensation for attending committee
meetings.
Section 13. Transactions with Directors, etc. A director's
conflicting interest transaction may not be enjoined, set aside,
or give rise to an award of damages or other sanctions, in a
proceeding by a shareholder or by or in the right of the
Corporation, because the director, or any person with whom or
which he or she has a personal, economic, or other association,
has an interest in the transaction, if:
(1) Director's action respecting the transaction was at any
time taken in compliance with Section 10-2B-8.62; or
(2) Shareholders' action respecting the transaction was at
any time taken in compliance with Section 10-2B-8.63;
or
(3) The transaction, judged according to the circumstances
at the time of commitment, is established to have been
fair to the Corporation.
ARTICLE IV
Notices
Section 1. Manner of Giving Notice. Except as otherwise
required by law, whenever notice is required to be given to any
director or shareholder, such notice requirement can be satisfied
by giving written notice by mail or private carrier, addressed to
such director or shareholder, at his address as it appears on the
records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the earliest time of
when received, five days after its deposit in the United States
mail, as evidenced by the postmark, if mailed postpaid and
correctly addressed or 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. Notice to directors may also be given in person, or
by telephone, telegraph, teletype, telecopier, facsimile
transmission, or other form of wire or wireless communication.
Written notice by a domestic or foreign corporation to its
shareholders is effective when mailed, if mailed postpaid and
correctly addressed to the shareholder's address shown in the
Corporation's current record of shareholders. The Secretary
shall give, or cause to be given, the notices required by law or
these By-Laws of all meetings of the Shareholders, and of the
Board of Directors and its committees.
Section 2. Waiver of Notice. Whenever any notice is
required to be given to any shareholder or director of the
Corporation, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such
notice and shall be delivered to the Corporation for inclusion in
the minutes or filing with the corporate records.
ARTICLE V
Officers
Section 1. Number. The Board of Directors shall elect the
Corporation's officers. The Board of Directors or a duly
appointed officer may appoint one or more officers or assistant
officers. The Board of Directors shall delegate to one of the
officers responsibility for preparing minutes of the directors'
and shareholders' meetings and for authenticating records of the
Corporation. Any number of offices may be held by the same
person.
Section 2. Election. The Board of Directors, at its
annual organizational meeting, may choose a Chairman, Vice
Chairman, President, one or more Vice Presidents, a Secretary, a
Treasurer and such other officers as it deems necessary or
desirable. If the officers, or any of them, for any reason
should not be elected at the Board of Directors' organizational
meeting, they may be elected at any regular or special meeting of
the Board of Directors.
Section 3. Appointive Officers. The Board may from time
to time appoint or delegate the appointment of such other
officers as it may deem necessary, including one or more
Assistant Secretaries and one or more Assistant Treasurers. Such
officers shall hold office for such period, have such authority
and perform such duties, subject to the control of the Board, as
are in these By-Laws provided or as the Chairman of the Board,
the President or the Board may from time to time prescribe. The
President shall have authority to appoint and remove agents and
employees and to prescribe their powers and duties and may
authorize any other officer or officers to do so.
Section 4. Compensation. The salaries and other
compensation of the Corporation's principal officers shall be
fixed by the Board of Directors, after taking account of any
recommendations by any committee which is authorized to advise
the Board with respect to compensation. The Board may from time
to time delegate to any principal officer or to any committee
power to fix the salaries and other compensation for all other
Corporation officers, employees and agents. The action of the
Board of Directors in so fixing officer compensation shall not be
rendered invalid by reason of the fact that a director voted in
favor of a resolution fixing his own salary or by reason of the
fact that his presence was necessary to constitute a quorum of
the Board.
Section 5. Term, Removal, Resignation and Vacancies. The
Corporation's officers shall hold office until their successors
are elected and qualified. Any officer may be removed at any
time with or without cause by the affirmative vote of a majority
of the Board of Directors. An officer may resign at any time by
giving notice to the Corporation. A resignation is effective
when the notice is given unless the notice specifies a later
effective date. If a resignation is made effective at a later
date and the Corporation accepts the future effective date, the
Board may fill the pending vacancy before the effective date if
the Board provides that the successor does not take office until
the effective date. Any vacancy occurring in any office of the
Corporation shall be filled in the manner prescribed in these By-
Laws for regular election or appointment to such office.
Section 6. Chairman of the Board. The Chairman of the
Board shall, when present, preside at all meetings of the Board
of Directors, and of the shareholders. In general, he shall
perform all the duties incident to the office of Chairman of the
Board, and such other duties as the board may from time to time
determine or as may be prescribed by these By-Laws.
Section 7. Vice Chairman. The Vice Chairman, in the
absence, inability or disability of the Chairman, shall perform
the Chairman's duties. The Vice Chairman shall have such other
duties as may be prescribed by the Board of Directors from time
to time.
Section 8. President. The President shall be the chief
executive officer of the Corporation, and subject to the control
of the Board of Directors, shall determine the Corporation's
basic policies, have general supervision of its business and
affairs and be responsible for all internal operations of the
Corporation. The President shall report to the Board of
Directors, and shall be responsible for personnel, and shall
designate and assign the duties of the officers under his super-
vision, at the direction or with the approval of the Board of
Directors.
The President shall have the authority to execute bonds,
mortgages and other contracts and instruments requiring a seal,
under the seal of the Corporation; and shall have the authority
to endorse, when sold, assigned, transferred, or otherwise
disposed of, all certificates for shares of stock, bonds,
securities or evidences of indebtedness issued by other
corporations, associations, trusts, individuals or entities,
whether public or private, or by any government or agency
thereof, which are owned or held by the Corporation, and to make,
execute and deliver all instruments of assignment or transfer of
any stocks, bonds, securities, evidences of indebtedness,
agreements, or other property owned or held by the Corporation in
any capacity. He shall, under the supervision of the Board, be
responsible for all investments of the Corporation and shall have
full authority to do any and all things delegated to him by the
Board of Directors or by any committee of the Board having
authority.
Section 9. Vice Presidents. The Vice Presidents, in order
of their seniority or as designated by the Board of Directors,
shall in the absence, inability or disability of the President,
perform the duties and exercise the powers of said office, and
when so acting shall be subject to all restrictions upon the
President. At all other times the Vice Presidents shall perform
such other duties and exercise such other powers as the Board of
Directors may prescribe, or as the President may delegate.
Section 10. Treasurer. The Treasurer shall be the
Corporation's chief financial officer and shall have the custody
of such property and assets of the Corporation as may be
entrusted to him by the Board of Directors or by the President.
He shall, subject to the general supervision of the Board of
Directors and any audit committee thereof, have general
supervision and authority over the Corporation's books and
accounts, its methods and systems of recording and keeping
account of its business transactions and of its assets and
liabilities, and within such authority, prepare and deliver all
reports and returns required of the Corporation by law or by any
governmental or regulatory authority pertaining to the condition
of the Corporation and its assets and liabilities. He shall be
responsible for preparing statements showing the Corporation's
financial condition and results of operation, and shall furnish
such reports and financial records as may be required or
requested by the Board of Directors, the Chairman or the
President. He shall receive and give receipt for funds due and
payable to the Corporation, shall have charge and custody of all
funds and securities of the Corporation and shall deposit all
such funds in the Corporation's name in such banks and
depositories selected or authorized by the Board. The Treasurer
shall perform or cause to be performed all duties incident to the
office of Treasurer and such other duties as from time to time
may be assigned to him by the Board.
Section 11. Assistant Treasurers. The Assistant Treasurer,
or if there are more than one, the Assistant Treasurers in the
order designated by the Board of Directors shall, in the absence
of the Treasurer or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the Treasurer,
and at all other times shall perform such duties and have such
powers as the Board of Directors, the Chairman, the President or
the Treasurer may prescribe from time to time.
Section 12. Secretary. The Secretary shall attend all
meetings of the Board of Directors and of the shareholders, and
shall keep the minutes of all proceedings of such meetings in
books kept for these purposes, and shall perform like duties for
the standing committees of the Board when required. The
Secretary shall perform such other duties as may be prescribed by
the Board of Directors, the Chairman or the President. He shall
have custody of the corporate seal of the Corporation and shall
affix the same to any instrument requiring it, and when so
affixed, it may be attested by his signature or by the signature
of any Assistant Secretary. The Secretary shall also keep a
stock ledger containing the names of all persons who are now or
hereafter become shareholders of the Corporation showing their
places of residence, the respective number of Shares held by
them, and the time when they respectively became the holders of
such Shares.
Section 13. Assistant Secretary. The Assistant Secretary,
or if there are more than one, the Assistant Secretaries in the
order determined by the Board of Directors (or if there is no
such determination, then in the order of their election), shall,
in the absence of the Secretary or in the event of his inability
or refusal to act, perform the duties and exercise the power of
the Secretary, and at all other times shall perform such other
duties and have such other powers as the Board of Directors, the
Chairman, the President or the Secretary may from time to time
prescribe.
Section 14. Corporation, Officer and Employee Bonds. The
Board of Directors shall fix and prescribe the amount of bond, if
any, that may be required of the Corporation, and of each officer
and employee of the Corporation. Such bonds shall be made by a
bonding company or companies authorized to make such bonds in
Alabama or any other applicable jurisdiction, and in such form as
may be approved by the Corporation's Board of Directors. The
Board of Directors may in its discretion, require an increase in
the amount of such bond or other additional bond and security, as
the Board deems necessary, desirable or expedient for the better
protection of the Corporation and those with whom it does busi-
ness.
Section 15. Execution of Instruments. The Chairman and the
President are authorized, in their discretion, and to the extent
permitted herein and by law, to do and perform any and all
corporate and official acts in carrying on the Corporation's
business, including, but not limited to, the authority to make,
execute, acknowledge and deliver all deeds, mortgages, releases,
bills of sale, assignments, transfers, leases, powers of attorney
or of substitution, proxies to vote stock, or any other
instrument in writing that may be necessary in the purchase,
sale, lease, assignment, transfer, management or handling in any
way of property of any description held or controlled by the
Corporation, in any capacity. This shall include authority from
time to time, to borrow money in such amounts, for such lengths
of time, at such rates of interest and upon such terms and
conditions as any said officer may deem proper, and to evidence
the indebtedness thereby created by executing and delivering in
the Corporation's name, promissory notes or other appropriate
evidences of indebtedness. The enumeration herein of particular
powers shall not restrict in any way the general powers and
authority of said officers. The Board may authorize any other
officer or officers or agent or agents to enter into any contract
or execute and deliver any instrument in the name of and on
behalf of the Corporation, and such authority may be delegated by
the person so authorized; but unless so authorized by the Board
or these By-Laws, no officer, agent or employee shall have any
power or authority to bind the Corporation by any contract or
engagement or to pledge its credit or to render it liable for any
purpose or to any amount. In addition to the Treasurer, the
Secretary or any Vice President, Assistant Treasurer or Assistant
Secretary is authorized to attest the signature of the President
or Chairman and to affix the corporate seal to any and all
instruments requiring such attestation or execution under seal.
Section 16. Receipts, Checks, Drafts, etc. All checks,
drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the Corporation
shall be signed by such officer or officers, or agent or agents,
as shall from time to time be determined by resolution of the
Board. The President, any Vice President, the Treasurer, any
Assistant Treasurer or any other officer or employee designated
by the Board of Directors, is authorized and empowered on behalf
of the Corporation and in its name to endorse checks and
warrants, to draw drafts, to give receipts for money due and
payable to the Corporation, and to sign such other papers and do
such other acts as are necessary or appropriate to perform his
duties.
ARTICLE VI
Capital Stock
Section 1. Certificates. Every holder of fully-paid
Corporation Shares shall be entitled to have a certificate,
signed in the Corporation's name by the Chairman, the President,
the Treasurer or a Vice-President and by the Secretary or an
Assistant Secretary of the Corporation, certifying the number and
class of Shares and the designation of the series, if any, owned
by him. Certificates representing Corporation Shares shall be
issued in numerical order, and the Corporation's seal or a
facsimile thereof may be affixed to each certificate. The
signature of any of the specified officers may be actual or a
facsimile. If the person who signed (either manually or in
facsimile) a share certificate no longer holds office when the
certificate is issued, the certificate is nevertheless valid.
Shares or interests in the stock of corporations are personal
property, transferable on the books of the Corporation in the
manner provided by law.
Section 2. Stock Records. A record shall be kept of the
respective names of persons owning the Shares represented by
certificates, the number of Shares represented by such
certificates, respectively, and the respective issue dates
thereof, and in the case of cancellation, the respective dates of
cancellation. Every certificate surrendered to the Corporation
for exchange or transfer shall be canceled and a new certificate
or certificates shall not be issued in exchange for any existing
certificates until such existing certificate shall have been so
canceled, except in cases otherwise provided for in this
Article VI.
Section 3. Stock Transfer. Corporation Shares shall be
transferred only upon the Corporation's books by the registered
holder thereof, either in person or by his attorney thereunto
authorized by power of attorney duly executed and filed with the
Secretary of the Corporation, or with the Corporation's duly
appointed transfer agent, upon payment of all taxes on such
transfer, and surrender of properly endorsed certificates for
such Shares. The Corporation shall be entitled to recognize the
exclusive right of a person or entity registered on its books as
the owner of Shares entitled to receive dividends and to vote as
such owner, and the Corporation shall not be bound to recognize
any equitable or other claim to, or interest in, such Share or
Shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as may otherwise be
required by the laws of Alabama. The Corporation's obligation to
effect a transfer of Shares shall be subject to all provisions of
the Articles of Incorporation and these By-Laws, and to any
applicable restrictions on transfer imposed or permitted pursuant
to such Articles of Incorporation, these By-Laws, or applicable
law or agreement.
Section 4. Lost, Destroyed and Mutilated Certificates.
The holder of any Shares shall immediately notify the Corporation
of any loss, destruction or mutilation of the certificate
therefor, and the Board may, in its discretion, and after the
expiration of such period of time as it may determine to be
advisable, cause a new certificate or certificates for Shares of
stock to be issued, upon the surrender of the mutilated
certificate, or in case of loss or destruction of the certifi-
cate, upon proof satisfactory to the Board of such loss or
destruction. The Board may, in its sole discretion, require the
owner of the lost, destroyed or mutilated certificate, or his
legal representatives, to give the Corporation a bond, in such
sum and with such surety or sureties as it may direct, to
indemnify the Corporation against any claim that may be made
against it on account of the alleged loss, destruction or
mutilation of any such certificate or the issuance of such new
certificate.
Section 5. Record Date. For the purpose of determining
shareholders entitled to notice of a shareholders' meeting, to
demand a special meeting, to vote, or to take any other action,
the Board of Directors of the Corporation may fix the record date
but not to exceed, in any case, seventy (70) days before the
meeting or action requiring a determination of shareholders. 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 one hundred
twenty (120) days after the date fixed for the original meeting.
Section 6. Regulations. The Board may make such rules and
regulations as it may deem expedient, not inconsistent with these
By-Laws, concerning the issue, transfer and registration of
certificates for Shares of the Corporation. It may appoint, or
authorize any principal officer or officers to appoint, one (1)
or more transfer agents and one (1) or more registrars, and may
require all certificates for Shares of the Corporation to bear
the signature or signatures of any of them.
ARTICLE VII
General Provisions
Section 1. Declaration of Distributions. Except as
otherwise expressly provided by the Articles of Incorporation,
distributions with respect to the Corporation's Shares may be
declared by the Board of Directors at any regular or special
meeting, pursuant to law. Distributions may be paid in cash,
property, or in Shares of the Corporation of any class or series.
Section 2. Annual Reports to Shareholders. The Board of
Directors shall cause the Corporation to mail to each of its
shareholders, not later than one hundred twenty (120) days after
the close of each of its fiscal years, a financial statement,
which may be consolidated, including a balance sheet as of the
end of such fiscal year and a statement of income for such fiscal
year. Such financial statement shall be prepared in accordance
with generally accepted accounting principles, or, if the books
of the Corporation are not maintained on that basis, may be
prepared either on the same basis used by the Corporation for
filing its United States income tax returns or as required by
appropriate regulatory agencies. The financial statement shall
be accompanied by a report of the President, the officer of the
Corporation in charge of its financial records or a certified
public accountant stating whether, in his opinion, the financial
statements of the Corporation present fairly the financial
position of the Corporation and the results of its operations in
accordance with generally accepted accounting principles and, if
not, describing the basis of their preparation and giving his
opinion of the fairness of the presentation of the data shown by
them, in accordance with accounting procedures generally used in
the trade, industry or business conducted by the Corporation.
Section 3. Fiscal Year. The fiscal year of the
Corporation shall be fixed by resolution of the Board of
Directors.
Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the words "Seal"
or "Corporate Seal" and "Alabama", as impressed in the margin
hereof. The seal may be used by causing it or a facsimile
thereof to be impressed, affixed, or reproduced or otherwise used
on document or instrument.
Section 5. Indemnification.
(a) The Corporation shall indemnify all persons who may
be indemnified by the Corporation to the full extent required or
permitted by law, including but not limited to the
indemnification provided in Sections 10-2B-8.50 through 10-2B-
8.58 of the Alabama Business Corporation Act, as such Alabama
Business Corporation Act or such Sections 10-2B-8.50 through 10-
2B-8.58 now or hereafter exist.
(b) In addition to the above, and without restricting
the power or duty of the Corporation to provide indemnification,
the Corporation shall:
(i) Indemnify any person who was or is a party or is
threatened to be made a party to any threatened,
pending or completed claim, action, suit or
proceeding, whether civil, criminal,
administrative or investigative, including appeals
and whether formal or informal by reason of the
fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a
director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other
enterprise, against expenses (including reasonable
attorneys' fees), judgments, fines, penalties and
amounts paid in settlement actually and reasonably
incurred by him in connection with such claim,
action, suit or proceeding if he conducted himself
in good faith and he reasonably believed (1) in
the case of conduct in his official capacity with
the Corporation, that his conduct was in the best
interests of the Corporation, (2) in the case of
conduct with respect to an employee benefit plan,
that his conduct was for a purpose that was in the
best interests of the participants and
beneficiaries, and (3) in all other cases (except
a criminal action or proceeding), that his conduct
was at least not opposed to the Corporation's best
interests, and, with respect to any criminal
action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination
of any claim, action, suit or proceeding by
judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, is not,
of itself, determinative that the person did not
conduct himself in good faith and in a manner in
which he reasonably believed (1) in the case of
conduct in his official capacity with the
Corporation, that his conduct was not in the best
interests of the Corporation, (2) in the case of
conduct with respect to an employee benefit plan,
that his conduct was for a purpose that was not in
the best interests of the participants and
beneficiaries, and (3) in all other cases (except
a criminal action or proceeding), that his conduct
was opposed to the best interests of the
Corporation and, with respect to any criminal
action or proceeding, had reasonable cause to
believe that his conduct was unlawful. The
Corporation may not, however, indemnify a person
if (1) in connection with any claim, action, suit
or proceeding by or in the right of the
Corporation, if the person was adjudged liable to
the Corporation or (2) in connection with any
other claim, action, suit or proceeding charging
improper personal benefit to the person, whether
or not involving action in his official capacity,
if the person was adjudged liable on the basis
that a personal benefit was improperly received by
him.
(ii) Indemnify any director, officer, employee or agent
of the Corporation against expenses (including at-
torneys' fees) actually and reasonably incurred by
him in connection with any action, suit, or
proceeding referred to in paragraph (i) of this
subsection or in defense of any claim, issue or
matter therein, to the extent that he has been
successful on the merits or otherwise in defense
of any such action, suit or proceedings, or in
defense of any claim, issue or matter therein.
Any indemnification under paragraph (i) of this
subsection, unless ordered by a court, shall be
made by the Corporation only as authorized in the
specific case upon a determination that
indemnification of the director, officer, employee
or agent is proper in the circumstances because he
has met the applicable standard of conduct set
forth in paragraph (i) of this subsection. Such
determination shall be made (1) by the Board of
Directors by a majority vote of a quorum
consisting of directors who were not parties to
such claim, action, suit or proceeding, or (2) if
such a quorum is not obtainable, by majority vote
of a committee duly designated by the board of
directors (in which designated directors who are
parties to such action may participate) consisting
solely of two or more directors not at the time
parties to the action, or (3) by special legal
counsel, selected by the board of directors or its
committee in the manner prescribed in (1) or (2)
or, if a quorum of the board of directors cannot
be obtained under (1) and a committee cannot be
designated under (2), selected by a majority vote
of the full board of directors (in which selected
directors who are parties to the action may
participate, or (4) by the shareholders, but
Shares owned by or voted under the control of
directors, officers, employees or agents who are
at the time parties to the action may not be voted
on the determination. (In the case of a
shareholder vote, a majority of the Shares that
are entitled to vote on the transaction by virtue
of not being owned by or under the control of such
directors constitutes a quorum for the purpose of
taking action under this provision).
(iii) Indemnify any person who was or is a party or is
threatened to be made a party to any threatened,
pending or completed claim, action, suit or
proceeding if the court in which such action was
brought or another court of competent jurisdiction
determines that the person is entitled to
mandatory indemnification under Section 10-2B-8.52
of the Alabama Business Corporation Act or that
the person is fairly and reasonably entitled to
indemnification in view of all the relevant
circumstances, whether or not he met the
applicable standard of conduct in paragraph (i) of
this subsection or was adjudged liable to the
Corporation.
(c) In addition to the above provisions of this Section,
and without restricting the power or duty of the Corporation to
provide indemnification thereunder, unless prohibited by law, the
Corporation may indemnify any director, officer, employee or
agent under such circumstances and to the extent approved by the
holders of a majority of the Shares of stock of the Corporation;
provided, however, that the Shares of stock of the person or
persons proposed to be indemnified shall not be included for the
purpose of determining what constitutes a majority and such
Shares shall not be voted on the issue. Indemnification may be
provided under this subsection (c) notwithstanding the fact that
it has been denied, expressly or by implication, under subsec-
tions (a) or (b) of this Section.
(d) Expenses (including attorneys' fees) incurred in
defending a civil or criminal claim, action, suit or proceeding
may be paid by the Corporation in advance of the final
disposition of such claim, action, suit or proceeding as
authorized in the manner provided in subsections (b) and (c) of
this Section upon (1) if authorized pursuant to subsection (b),
receipt of a written affirmation by the director, officer,
employee or agent of good faith belief that he has met the
appropriate standard of conduct provided in subsection (b), (2)
receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount if and to the
extent that it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in
subsections (b) and (c) of this Section, and (3) a determination
that the facts then known to those making the determination would
not prevent indemnification under these By-Laws.
(e) The indemnification authorized by this Section shall
not be deemed exclusive of and shall be in addition to any other
right to which those indemnified may be entitled under any
statute, rule of law, provision of the Articles of Incorporation,
these By-Laws, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent of the Corporation and shall
inure to the benefit of the heirs, executors, administrators, and
personal representatives of such a person.
(f) The Corporation may purchase and maintain insurance
or furnish similar protection (including but not limited to trust
funds, self-insurance reserves, or the like) on behalf of any
person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise against any liability
asserted against him and incurred by him in any such capacity or
arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability
under the provisions of this Section or under Sections 10-2B-8.50
through 10-2B-8.58 of the Alabama Business Corporation Act, as
such Sections 10-2B-8.50 through 10-2B-8.58 or such Act now or
may hereafter exist.
(g) For purposes of these By-Laws, the phrase official
capacity shall mean (i) with respect to a director, the office of
director in the Corporation; and (ii) when used with respect to
an individual other than a director, the office in the
Corporation held by an officer or the employment or agency
relationship undertaken by the employee or agent on behalf of the
Corporation. Official capacity does not include service for any
other foreign or domestic corporation or any partnership, joint
venture, trust, employee benefit plan, or other enterprise.
ARTICLE VIII
Amendment of By-Laws
These By-Laws may be altered, amended, added to, or repealed
and new By-Laws adopted by the Board of Directors at any regular
meeting of the Board of Directors, or at any special meeting of
the Board of Directors if notice of such proposed action is
contained in the notice of such special meeting. The Board of
Directors may not alter, amend, add to, or repeal any By-Law
establishing what constitutes a quorum at meetings of the
shareholders. These By-Laws also may be altered, amended, added
to or repealed and new By-Laws adopted by majority vote of the
shareholders at any annual meeting thereof, or at any special
meeting if notice of such proposed action shall have been given
to each shareholder.
<PAGE>
Exhibit 10.1
VISION BANCSHARES, INC.
INCENTIVE STOCK COMPENSATION PLAN
ARTICLE I
PURPOSE, SCOPE AND ADMINISTRATION OF THE PLAN
1.1 Purpose
The purpose of the Plan is to promote the long-term success of
the Company by providing financial incentives to employees who
are in positions to make significant contributions toward such
success. The Plan is designed to attract individuals of
outstanding ability to employment with the Company to
encourage such persons to acquire a proprietary interest in
the Company, and thereby to render superior performance for
the Company.
1.2 Definitions
Unless the context clearly indicates otherwise, for purposes
of this Plan the following terms have the respective meanings
set forth below:
(a) "Board of Directors" means the Board of Directors of the
Company.
(b) "Change of Control" has the meaning set forth in Section
3.1(b) hereof.
(c) "Change of Control Price" shall have the meaning set
forth in Section 3.1(d) hereof.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means the Compensation Committee of the Board
of Directors (or any successor committee thereto), which
committee shall be composed of not less than two members
of the Board of Directors.
(f) "Common Stock" means the common stock of the Company, par
value $.01 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 4.1
hereof.
(g) "Company" means Vision Bancshares, Inc. and its majority
owned subsidiaries including subsidiaries which become
such after the date of adoption of this Plan.
(h) "Fair Market Value" of a share of Common Stock on any
particular date means the average between the bid and ask
prices quoted on such date by the National Daily
Quotation Service, or on the National Association of
Securities Dealers Automated Quotation ("NASDAQ") System
or a registered securities exchange, if listed thereon.
In the event that both bid and ask prices are not so
quoted, then the Fair Market Value shall be the bid price
determined by the National Association of Securities
Dealers, Inc. ("NASD") local quotations committee as most
recently published in a daily newspaper of general
circulation in Mobile County or Jefferson County,
Alabama. In the event that no such bid price is
published, then Fair Market Value shall be the fair
market value as determined by the Board of Directors.
(i) "Grant Date," as used with respect to a particular Option
means the date as of which such Option, right or award is
granted by the Committee pursuant to the Plan.
(j) "Grantee" means the person to whom an Option is granted
by the Committee pursuant to the Plan.
(k) "Incentive Stock Option" means an Option that qualifies
as an incentive stock option as described in Section
422(b) of the Code.
(l) "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 Supplemental Stock
Option, as provided in Section 2.1 hereof.
(m) "Option Agreement" means the agreement between the
Company and a Grantee under which the Grantee is granted
an Option pursuant to the Plan.
(n) "Option Period" means the period fixed by the Committee
during which an Option may be exercised, provided that no
Incentive Stock Option shall, under any circumstances, be
exercisable more than ten years after the Grant Date.
(o) "Plan" means the Vision Bancshares, Inc. Incentive Stock
Compensation Plan as set forth herein and as amended from
time to time.
(p) "Potential Change of Control" has the meaning set forth
in Section 3.1(c) hereof.
(q) "Retirement," as applied to a Grantee, means the
Grantee's termination of employment in a manner which
qualifies the Grantee to receive immediately payable
retirement benefits under any retirement plan hereafter
adopted by the Company, or which in the absence of any
such retirement plan is determined by the Committee to
constitute retirement.
(r) "Supplemental Stock Option" means any Option granted
under this Plan, other than an Incentive Stock Option.
(s) "Total and Permanent Disability," as applied to a
Grantee, means that the Grantee (1) has established to
the satisfaction of the Committee that the Grantee is
unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to last for a continuous
period of not less than 12 months (all within the meaning
of Section 22(e)(3) of the Code), and (2) has satisfied
any requirement imposed by the Committee in regard to
evidence of such disability.
1.3 Shares Available Under the Plan
(a) The number of shares of Common Stock with respect to
which Options may be granted shall be 75,000 shares of
Common Stock, subject to Section 3.1 and subject to
adjustment in accordance with the remaining provisions of
this Section 1.3 and the provisions of Section 4.1.
(b) In the event that any Option expires or otherwise
terminates prior to being fully exercised, the Committee
may, without decreasing the number of shares authorized
above in this Section 1.3, grant new Options hereunder to
any eligible Grantee for the shares with respect to which
the expired or terminated Option was not exercised.
(c) Any shares of Common Stock to be delivered by the Company
upon the exercise of Options may, at the discretion of
the Board of Directors, be issued from the Company's
authorized but unissued shares of Common Stock or be
transferred from any available treasury stock.
1.4 Administration of the Plan
(a) Except as provided in Section 1.4(c), the Plan shall be
administered by the Committee which shall have the
authority:
(1) To determine those persons 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
employee, the employee's potential contribution to
the long term success of the Company and such other
factors as the Committee in its discretion shall
deem relevant;
(2) To interpret and construe the provisions of the
Plan and to establish rules and regulations
relating to it;
(3) To prescribe the terms and conditions of the Option
Agreements for the grant of Options (which need not
be identical) in accordance and consistent with the
requirements of the Plan including the provision in
Section 1.2(n) allowing adjustments to the duration
of the Option Period after the Option Agreement has
been entered into; and
(4) 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 in response to questions
or in connection with other matters concerning the Plan
or any Option shall (whether or not so stated in the
particular instance in the Plan) be final, conclusive and
binding on all persons, including, without limitation,
the Company, the shareholders and directors of the
Company and any persons having any interest in any
Options which may be granted under the Plan.
(c) In all cases in this Plan in which the Committee is
authorized or directed to take action, such action may be
taken by the Board of Directors as a whole. It is the
intention of this Plan that the Committee may be
appointed by the Board of Directors for convenience and
efficiency of administration.
1.5 Eligibility for Awards
The Committee shall designate from time to time the employees
of the Company who are to be granted Options. All salaried
employees of the Company are eligible to participate.
1.6 Effective Date of Plan
Subject to the receipt of all required regulatory approvals,
the Plan shall become effective upon 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 the
Company is subject to such shareholder approval within twelve
months of adoption of the Plan 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 employees
under appropriate Option Agreements to purchase
shares of Common Stock.
(b) The Committee may designate any Option which satisfies
the requirements of Section 2.3 hereof as an Incentive
Stock Option and may designate any Option granted
hereunder as a Supplemental Stock Option, or the
Committee may designate a portion of an Option as an
Incentive Stock Option (so long as that portion satisfies
the requirements of Section 2.3 hereof) and the remaining
portion as a Supplemental Stock Option. Any portion of
an Option that is not designated as an Incentive Stock
Option shall be a Supplemental Stock Option. A
Supplemental 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 of shares of Common Stock that may
be purchased upon its exercise and containing such terms
and conditions not inconsistent with the Plan and based
on such factors as the Committee shall determine, in its
sole discretion, to be applicable to that particular
Option.
(b) An Option shall be exercisable at such time or times and
subject to such terms and conditions as shall be
determined by the Committee and stated in the Option
Agreement; provided, however, that an Option shall become
immediately exercisable upon the death of an employee or
upon employment with the Company ceasing because of Total
and Permanent Disability or upon a Change of Control or
Potential Change in Control. If the Committee provides
that any Option is exercisable only in installments or
provides other vesting requirements, the Committee may
waive such provisions at any time, in whole or in part,
based on such factors as the Committee shall, in its sole
discretion, determine.
(c) An Option shall expire by its terms at the expiration of
the Option Period and shall not be exercisable
thereafter; provided, however, that an Option may be
exercised immediately upon the death of the Grantee and
for a period of up to 365 days after the death of the
Grantee despite the expiration during that time of the
Option Period, except that an Incentive Stock Option can
never be exercised more than 10 years after its Grant
Date.
(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.
(e) The option price per share of Common Stock shall be
determined by the Committee at the time of grant but
shall be not less than 100% of the Fair Market Value of
a share of Common Stock on the Grant Date.
(f) An Option shall not be transferable other than by will or
the laws of descent and distribution and, 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.
(g) An Option, to the extent that it has not previously been
exercised, shall terminate upon the earliest to occur of
(1) the expiration of the applicable Option Period as set
forth in the Option Agreement granting such Option, (2)
the expiration of 90 days after the Grantee's Retirement,
(3) the expiration of one year after the Grantee ceases
to be an employee of the Company due to Total and
Permanent Disability, (4) subject to the application
of the provisions of subsection (c) above the expiration
of one year after the Grantee ceases to be an employee of
the Company due to the death of the Grantee, or (5) three
months after the date on which a Grantee ceases to be an
employee of the Company for any reason other than
Retirement, Total and Permanent Disability or death,
unless the Option Agreement provides for earlier
termination.
(h) A person electing to exercise an Option shall give
written notice of such election to the Company, in such
form as the Committee may require, accompanied by payment
in cash or in such other manner as may be approved by the
Committee, of the full purchase price of the shares of
Common Stock for which the election is made. As
determined by the Committee, in its sole discretion,
whether before or after the Grant Date, payment in full
or in part may be made in the form of unrestricted Common
Stock already owned by the Grantee or in the form of a
withholding of sufficient shares of Common Stock
otherwise issuable upon the exercise of the Option to
constitute payment of the purchase price based, in each
case, on the Fair Market Value of the Common Stock on the
date the Option is exercised; provided that an election
to make such payment in Common Stock or to have shares so
withheld, in addition to being subject to the approval of
the Committee, shall be irrevocable.
Further, upon written request and authorization of the
Grantee and to the extent permitted by applicable law,
the Committee may allow arrangements whereby an Option
may be exercised and the exercise price (together with
any tax withholding obligations of the Grantee) paid
pursuant to arrangements with brokerage firms permitted
under Regulation T of the Board of Governors of the
Federal Reserve System (or successor regulations or
statutes). In no event, however, may such transaction or
arrangement take place if a violation by the Grantee of
the provisions of Section 16(b) of the Securities
Exchange Act of 1934 ("Section 16(b)"), if applicable,
would result therefrom.
2.3 Incentive Stock Option Requirements
(a) An Option designated by the Committee as an Incentive
Stock Option is intended to qualify as an "incentive
stock option" within the meaning of Section 422(b) 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.
(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 the Company, unless the
Committee provides in the Option Agreement with any such
individual that the option price per share of Common
Stock will not be less than 110% of the Fair Market Value
of a share of Common Stock on the Grant Date and that the
Option Period will 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 as to which Incentive
Stock Options are exercisable for the first time by any
Grantee with respect to the Plan and incentive stock
options (within the meaning of Section 422(b) of the
Code) under any other plan of the Company or any parent
or subsidiary thereof, in any calendar year shall not
exceed $100,000.00. To the extent that the aggregate
Fair Market Value of Common Stock with respect to which
Incentive Stock Options are exercisable for the first
time by an individual during any calendar year under all
incentive stock option plans of the Company exceeds
$100,000 (within the meaning of Section 422 of the Code),
such excess Incentive Stock Options shall be treated as
Options which do not constitute Incentive Stock Options.
The Board of Directors shall determine, in accordance
with applicable provisions of the Code, Treasury
regulations and other administrative pronouncements,
which of an Optionee's Incentive Stock Options will not
constitute Incentive Stock Options because of such
limitation and shall notify the Optionee of such
determination as soon as practicable after such
determination.
ARTICLE III
CHANGE OF CONTROL PROVISIONS
3.1 Change of Control.
The following acceleration and valuation provisions shall
apply in the event of a "Change of Control" or "Potential Change of
Control," as defined in this Article III:
(a) In the event of a "Change of Control," as defined in
Section 3.1(b) below, unless otherwise determined by the Committee
or the Board in writing at or after the grant of awards hereunder,
but prior to the occurrence of such Change of Control, or, if and
to the extent so determined by the Committee or the Board in
writing at or after the grant of awards hereunder (subject to any
right of approval expressly reserved by the Committee or the Board
at the time of such determination) in the event of a "Potential
Change of Control," as defined in Section 3.1(c) below:
(i) any Options awarded under the Plan not previously
exercisable and vested shall become fully exercisable and
vested;
(ii) the value of all outstanding Options shall, to the
extent determined by the Committee, be cashed out on the basis
of the "Change of Control Price" (as defined in Section 3.1(d)
below) as of the date the Change of Control occurs or
Potential Change of Control is determined to have occurred, or
such other date as the Committee may determine prior to the
Change of Control or Potential Change of Control.
(b) For purposes of Section 3.1(a) above, a "Change of
Control" means the happening of any of the following:
(i) when any "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the
Company, any subsidiary of the Company, or any Company
employee benefit plan, including its trustee), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Company representing twenty percent (20%) or more of the
combined voting power of the Company's then outstanding
securities;
(ii) the occurrence of any transaction or event relating
to the Company required to be described pursuant to the
requirements of Item 6(e) of Schedule 14A of Regulation 14A of
the Securities and Exchange Commission under the Exchange Act;
(iii) when, during any period of two (2) consecutive
years during the existence of the Plan, the individuals who,
at the beginning of such period, constitute the Board cease,
for any reason other than death, to constitute at least a
majority thereof, unless each director who was not a director
at the beginning of such period was elected by, or on the
recommendation of, at least two-thirds (2/3) of the directors
at the beginning of such period; or
(iv) the occurrence of a transaction requiring
stockholder approval for the acquisition of the Company by an
entity other than the Company or a subsidiary of the Company
through purchase of assets, or by merger, or otherwise.
(c) For purposes of Section 3.1(a) above, a "Potential
Change of Control" means the happening of any of the following:
(i) the entering into an agreement by the Company,
the consummation of which would result in a Change of Control of
the Company as defined in Section 3.1(b) above; or
(ii) the acquisition of beneficial ownership directly
or indirectly, by any entity, person or group (other than the
Company, a subsidiary of the Company, or any Company employee
benefit plan (including its trustee)) of securities of the Company
representing five percent (5%) or more of the combined voting power
of the Company's outstanding securities and the adoption by the
Board of Directors of a resolution to the effect that a Potential
Change of Control of the Company has occurred for purposes of this
Plan.
(d) For purposes of this Article III, "Change of Control
Price" means the highest price per share paid or offered in any
transaction reported on the New York Stock Exchange, or the
National Association of Securities Dealers Automated Quotation
Systems, Inc. or paid or offered in any transaction related to a
potential or actual Change of Control of the Company at any time
during the preceding sixty (60) day period as determined by the
Committee, except that, in the case of Options, such price shall be
based only on transactions reported for the date on which the
Committee decides to cash out such Options.
ARTICLE IV
GENERAL PROVISIONS
4.1 Adjustment Provisions
(a) In the event of (1) any dividend payable in shares of
Common Stock; (2) any recapitalization, reclassification,
split-up or consolidation of, or other change in, the
Common Stock; or (3) an exchange of the outstanding
shares of Common Stock, in connection with a merger,
consolidation or other reorganization of or involving the
Company or a sale by the Company of all or a portion of
its assets, for a different number or class of shares of
stock or other securities of the Company or for shares of
the stock or other securities of any other corporation
(whether issued to the Company or to its shareholders);
the number of shares of Common Stock available under the
Plan pursuant to Section 1.3 shall be adjusted to
appropriately reflect the occurrence of the event
specified in clauses (1), (2) or (3) above and the
Committee shall, in such manner as it shall determine in
its sole discretion, appropriately adjust the number and
class of shares or other securities which shall be
subject to Options and/or 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, without limitation, the Company, the
shareholders and directors of the Company and any persons
having any interest in any Options which may be granted
under the Plan.
(b) Except as provided in paragraph (a) immediately above,
issuance by the Company of shares of stock of any class
or securities convertible into shares of stock of any
class shall not affect the Options.
4.2 Additional Conditions
(a) 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
the Company may impose.
(b) If prior to the time a Grantee has exercised all Options,
the Committee or the Corporate Secretary of the Company
receives from the Company notice of suspected dishonesty
of the Grantee, or of suspected conduct by the Grantee
which causes or reasonably may be expected to cause
substantial damage to the Company or one or more of its
subsidiaries, each Option, to the extent not previously
exercised, shall terminate immediately and neither the
Grantee nor any one claiming under him shall have any
rights thereto.
4.3 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 Common Stock
which are subject to any Option until such shares have been
issued and delivered to the Grantee or any such person
pursuant to the exercise of such Option. Furthermore, the
Plan shall not confer upon any Grantee any rights of
employment with the Company, including without limitation any
right to continue in the employ of the Company, or affect the
right of the Company to terminate the employment of a Grantee
at any time, with or without cause.
4.4 General Restrictions
Each award under the Plan shall be subject to the requirement
that, if at any time the Committee shall determine that (a)
the listing, registration or qualification of the shares of
Common Stock subject or related thereto upon any securities
exchange or under any state or federal law, or (b) the consent
or approval of any government regulatory body, or (c) an
agreement by the recipient of an award with respect to the
disposition of shares of Common Stock, is necessary or
desirable as a condition of, or in connection with, the
granting of such award or the issue or purchase of shares of
Common Stock thereunder, such award may not be consummated in
whole or in part unless such listing, registration,
qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to
the Committee. A participant shall agree, as a condition of
receiving any award under the Plan, to execute any documents,
make any representations, agree to restrictions on stock
transferability and take any actions which in the opinion of
legal counsel to the Company are required by any applicable
law, ruling or regulation. The Company is in no event
obligated to register any such shares, to comply with any
exemption from registration requirements or to take any other
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.
4.5 Rights Unaffected
The existence of the Options shall not affect: the right or
power of the Company or its shareholders to make adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; any issue of
bonds, debentures, preferred or prior preference stocks
affecting the Common Stock or the rights thereof; the
dissolution or liquidation of the Company, or sale or transfer
of any part of its assets or business; or any other corporate
act, whether of a similar character or otherwise.
(a) As a condition of grant, exercise or lapse of
restrictions on any 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 (including,
without limitation, any required FICA or AMT payments),
in connection with the grant of or lapse of restrictions
on the grant of or any exercise of an Option. Whenever
payment or withholding of such taxes is required, the
Grantee may satisfy the obligation, in whole or in part,
by electing to deliver to the Company shares of Common
Stock already owned by the Grantee or electing to have
the Company withhold shares of Common Stock which would
otherwise be delivered to the Grantee, in each case
having a value equal to the amount required to be
withheld, and provided that such shares may be
surrendered only at the minimum statutory rate. For
these purposes, the value of the shares to be withheld is
the Fair Market Value on the date that the amount of tax
to be withheld is to be determined (the "Tax Date").
(b) An election by a Grantee to deliver shares of Common
Stock already owned by the Grantee or to have shares
withheld for purposes of subsection (a) of this section
(an "Election") must meet the following requirements in
order to be effective:
(1) the Election must be made prior to the Tax Date;
(2) the Election is irrevocable; and
(3) the Election may be disapproved by the Committee in
its sole discretion.
4.6 Choice of Law
The validity, interpretation and administration of the Plan,
the Option Agreement 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 Alabama.
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
Alabama, 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.
4.7 Amendment, Suspension and Termination of Plan
(a) The Plan may be terminated, suspended or amended, from
time to time, by the Board of Directors in such respects
as it shall deem advisable; provided, however, that (i)
any such amendment that would require shareholder
approval in order to ensure compliance with Rule 16b-3
under the Securities Exchange Act of 1934, or any
successor rule thereto, or any other applicable rules or
regulations, shall be subject to approval by the
shareholders of the Company and (ii) any amendment that
would change the maximum aggregate number of shares for
which Options may be granted under the Plan (except as
required under any adjustments pursuant to Sections 1.3
and 4.1 hereof) shall be subject to approval of the
shareholders of the Company.
(b) Notwithstanding any other provision herein contained, no
Incentive Stock Options shall be granted on or after the
tenth anniversary of the approval of the Plan by the
Board of Directors and the Plan shall terminate and all
Options previously granted shall terminate, in the event
and on the date of liquidation or dissolution of the
Company.
(c) Whether before or after termination of the Plan, the
Board of Directors has full authority in accordance with
Section 4.7(a) to amend the Plan, effective for Options
which remain outstanding under the Plan.
4.8 Loans
The Company may at any time, consistent with applicable
regulations, including Regulation 0 of the Federal Reserve
Board and any Company policy restricting or prohibiting loans
to executive officers, lend to a Grantee any funds required in
connection with any aspect of the Plan, including without
limitation the exercise price and any taxes that must be paid
or withheld.
4.9 Regulatory Capital Requirements
All Options granted under this Plan are subject to the
requirement that, notwithstanding any other provision of the
Plan or the Option Agreement, the Company's primary bank
regulator shall at any time have the right to require the
Grantee to exercise the Option or to forfeit the Option if not
exercised if the Company's capital falls below minimum capital
required as determined by the Company's primary bank
regulator.
4.10 Disclosures
A copy of this Plan shall be given to any Grantee. Any
security issued pursuant to this Plan that is not registered
under the Securities Act of 1933 or the Alabama Securities Act
shall be deemed restricted within the meaning of SEC Rule 144
and certificates respecting such shares shall be marked with an
appropriate legend indicating applicable restrictions on resale.
<PAGE>
Exhibit 10.2
VISION BANCSHARES, INC.
DIRECTOR STOCK PLAN
Section 1. Purpose of the Plan.
The purpose of the Vision Bancshares, Inc. Director Stock Plan
(the "Plan") is to provide stock based compensation to eligible
directors of Vision Bancshares, Inc. (the "Company") in order to
encourage the highest level of director performance and to promote
long-term shareholder value by providing such directors with a
proprietary interest in the Company's success and progress through
grants of shares of the Company's Common Stock in lieu of cash
director fees in accordance with the terms and conditions set forth
below and by granting them options to purchase shares of Common
Stock.
Section 2. Certain Definitions.
(A) "Board" means the Board of Directors of the Company.
(B) "Change of Control" has the meaning set forth in
Section 8(b) hereof.
(C) "Change of Control Price" shall have the meaning set
forth in Section 8(d) hereof.
(D) "Code" means the Internal Revenue Code of 1986, as amended.
(E) "Committee" means the Compensation Committee of the Board.
(F) "Common Stock" means the common stock of the Company.
(G) "Company" means Vision Bancshares, Inc., an Alabama
corporation.
(H) "Director" means each member of the Board.
(I) "Director Fee" means the retainer fee payable to a
Director in accordance with the Company's regular
payment practices with respect to service on the Board.
(J) "Disability" means a permanent and total disability as
determined under procedures established by the Committee
for purposes of the Plan. The determination of
Disability for purposes of this Plan shall not be
construed to be an admission of disability for any other
purpose.
(K) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(L) "Fair Market Value" means, as of any given date, the
closing price of the Common Stock on the New York
Stock Exchange Composite Tape or, if not listed on such
exchange, any other national exchange on which the Common
Stock is listed or on NASDAQ. If there is no regular
public trading market for such stock, the Fair Market
Value of the Common Stock shall be determined by the
Committee in good faith.
(M) "Normal Retirement" means the date specified by the
Board as the retirement date for members of the Board.
(N) "Options" means options to purchase shares of Common
Stock granted pursuant to Section 6 of the Plan.
(O) "Plan" means the Vision Bancshares, Inc. Director Stock
Plan.
(P) "Potential Change of Control" has the meaning set forth
in Section 8(c) hereof.
(Q) "Payment Date" means the date on which the Company pays
Director Fees or issues restricted stock in lieu thereof
in accordance with Section 7 hereof.
(R) "Restricted Stock" means shares of Common Stock granted
pursuant to Section 7 of the Plan.
(S) "Restricted Stock Agreement" means a written agreement
evidencing an award of Restricted Stock and setting forth
the terms and conditions of such award.
(T) "Rule 16b-3" means Rule 16b-3, as currently in effect
or as hereinafter amended or modified, promulgated under
the Exchange Act.
Section 3. Administration of the Plan.
The Plan shall be administered by the Committee. Grants of
options to purchase Common Stock under the Plan and the amount and
nature of the awards of Restricted Stock shall be made as provided
in Sections 6 and Section 7, respectively. The Committee shall
have full authority to interpret the Plan, to promulgate such rules
and regulations with respect to the Plan as it deems desirable, and
to make all other determinations necessary or appropriate for the
administration of the Plan, and such determinations shall be final
and binding upon all persons having an interest in the Plan. In
all cases in this Plan in which the Committee is authorized or
directed to take action, such action may be taken by the Board of
Directors as a whole. It is the intention of this Plan that the
Committee may be appointed by the Board of Directors for
convenience and efficiency of administration.
Section 4. Common Stock Subject to the Plan.
The total number of shares of Common Stock reserved and
available for distribution under the Plan shall be 70,000. Such
shares may consist, in whole or in part, of authorized and unissued
shares or treasury shares. If any shares of Common Stock that have
been optioned cease to be subject to option, or if any shares
subject to any Restricted Stock award granted hereunder are
forfeited or such award otherwise terminates, such shares shall
again be available for distribution in connection with future
awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, Common Stock dividend, or other change in
corporate structure affecting the Common Stock, a substitution or
adjustment shall be made in the aggregate number of shares reserved
for issuance under the Plan, in the number and option price of
shares subject to outstanding Stock Options grantee appropriate by
the Committee, in its sole discretion, provided that the number of
shares subject to any award shall always be a whole number.
Section 5. Participation.
Each Director shall be eligible to participate in the Plan.
Section 6. Non-Qualified Stock Options.
(a) General. Options granted to Directors under the Plan
shall be options which are not intended to be "incentive stock
options" within the meaning of Section 422 of the Code.
(b) Grant of Options. Options may be granted to each
Director in such amounts and at such times as the Committee may
determine.
(c) Terms of Options. Options granted under the Plan shall
be evidenced by a written agreement in such form as the Committee
shall from time to time approve, which agreements shall comply with
and be subject to the following terms and conditions:
(i) Option Price. The option price per share of Common
Stock purchasable under an Option shall be 100% of the Fair Market
Value of the Common Stock on the date of the grant of the Option.
(ii) Option Term. Each Option shall be exercisable for
a term of ten (10) years from the date such Option is granted
(subject to prior termination as hereinafter provided).
(iii) Exercisability. Except as provided in Sections 8
and 9, the right to exercise Options may be subject to such vesting
schedule as the Committee may determine and as shall be stated in
an appropriate Option agreement.
(iv) Method of Exercise. Options may be exercised in
whole or in part at any time during the option period by giving
written notice of exercise to the Company specifying the number of
shares to be purchased, accompanied by payment in full of the
purchase price, in cash, by check or such other instrument as may
be acceptable to the Committee. Payment in full or in part may
also be made in the form of unrestricted Common Stock already owned
by the optionee (based on the Fair Market Value of the Common Stock
on the date the Option is exercised). No shares of Common Stock
shall be issued until full payment therefor has been made. An
optionee shall have the right to dividends or other rights of a
stockholder with respect to shares subject to an Option which the
optionee has given written notice of exercise and has paid in full
for such shares.
(v) Non-transferability of Options; Exception. Except as
otherwise set forth in this Section 6(v), no Option shall be
transferable by the optionee otherwise than by will or by the laws
of descent and distribution, and all Options shall be exercisable,
during the optionee's lifetime, only by the optionee. The
Committee shall have the discretionary authority, however, to grant
Options which would be transferable to members of an optionee's
immediate family, including trusts for the benefit of such family
members and partnerships in which such family members are the only
partners. For purposes of Section 9, a transferred Option may be
exercised by the transferee only to the extent that the optionee
would have been entitled had the option not been transferred.
Section 7. Restricted Stock.
(a) Awards.
Each Director may elect, pursuant to a written election, to
receive Restricted Stock in lieu of part or all of such Director's
Director Fee. Such election shall be effective beginning on the
next date of payment of the cash director fees as to which the
election has been made (the "Payment Date"). The number of shares
of Restricted Stock granted to a Director pursuant to such election
shall be equal to the dollar amount of Director Fees which the
Director has elected not to receive, divided by seventy-five
percent (75%) of the Fair Market Value of the Common Stock as of
each applicable Payment Date. Such an election by a Director shall
continue in effect until the earlier of (i) such Director's
termination as a director of the Company or (ii) the receipt by the
Company of a written election by such Director to discontinue
receiving Restricted Stock in lieu of all or a portion of such
Director's Director Fees or a written election by a Director to
change the amount of such election.
(b) Awards and Certificates.
(i) A Director who elects to receive Restricted Stock
pursuant to this Section 7 shall not have any rights with respect
to such award, unless and until such recipient has executed a
Restricted Stock Agreement and has delivered a fully executed copy
thereof to the Company, and has otherwise complied with the then
applicable terms and conditions.
(ii) The Committee may provide that certificates
evidencing the Restricted Stock shall not be issued until the
Director terminates services as a director or until a minimum
number of shares are due to be issued.
(c) Restrictions and Conditions. The shares of Restricted
Stock awarded pursuant to this Section 7 shall be subject to the
following restrictions and conditions:
(i) Subject to the provisions of this Plan and the
Restricted Stock Agreements, a Director shall not be permitted to
sell, transfer, pledge or assign shares of Restricted Stock awarded
under the Plan unless the sale of the shares of Common Stock
subject to such agreement have been registered under applicable
state and federal securities laws or an exemption from registration
is applicable to such transfer.
(ii) Except as provided in Section 7(b), a Director shall
have, with respect to the shares of Restricted Stock, all of the
rights of a stockholder of the Company, including the right to vote
and to receive any dividends. Dividends paid in stock of the
Company or stock received in connection with a stock split with
respect to Restricted Stock shall be subject to the same
restrictions as on such Restricted Stock.
Section 8. Change of Control.
The following acceleration and valuation provisions shall
apply in the event of a "Change of Control" or "Potential Change of
Control," as defined in this Section 8:
(a) In the event of a "Change of Control," as defined in
Section 8(b) below, unless otherwise determined by the Committee or
the Board in writing at or after the grant of awards hereunder, but
prior to the occurrence of such Change of Control, or, if and to
the extent so determined by the Committee or the Board in writing
at or after the grant of awards hereunder (subject to any right of
approval expressly reserved by the Committee or the Board at the
time of such determination) in the event of a "Potential Change of
Control," as defined in Section 8(c) below:
(i) any Options awarded under the Plan not previously
exercisable and vested shall become fully exercisable and vested;
(ii) the value of all outstanding Options and Restricted
Stock awards shall, to the extent determined by the Committee,
be cashed out on the basis of the "Change of Control Price"
(as defined in Section 8(d) below) as of the date the Change
of Control occurs or Potential Change of Control is determined
to have occurred, or such other date as the Committee may
determine prior to the Change of Control or Potential Change
of Control.
(b) For purposes of Section 8(a) above, a "Change of
Control" means the happening of any of the following:
(i) when any "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the
Company, or any subsidiary thereof, or any Company employee
benefit plan, including its trustee), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Company representing twenty percent (20%) or more of the
combined voting power of the Company's then outstanding
securities;
(ii) the occurrence of any transaction or event relating
to the Company required to be described pursuant to the
requirements of Item 6(e) of Schedule 14A of Regulation 14A of
the Securities and Exchange Commission under the Exchange Act;
(iii) when, during any period of two (2) consecutive
years during the existence of the Plan, the individuals who,
at the beginning of such period, constitute the Board cease,
for any reason other than death, to constitute at least a
majority thereof, unless each director who was not a director
at the beginning of such period was elected by, or on the
recommendation of, at least two-thirds (2/3) of the directors
at the beginning of such period; or
(iv) the occurrence of a transaction requiring
stockholder approval for the acquisition of the Company by an
entity other than the Company or a subsidiary thereof through
purchase of assets, or by merger, or otherwise.
(c) For purposes of Section 8(a) above, a "Potential
Change of Control" means the happening of any of the following:
(i) the entering into an agreement by the Company, the
consummation of which would result in a Change of Control of
the Company as defined in Section 8(b) above; or
(ii) the acquisition of beneficial ownership directly
or indirectly, by any entity, person or group (other than the
Company or any subsidiary thereof, or any Company employee
benefit plan (including its trustee)) of securities of the
Company representing five percent (5%) or more of the combined
voting power of the Company's outstanding securities and the
adoption by the Board of Directors of a resolution to the
effect that a Potential Change of Control of the Company has
occurred for purposes of this Plan.
(d) For purposes of this Section 8, "Change of Control
Price" means the highest price per share paid or offered in any
transaction related to a potential or actual Change of Control of
the Company at any time during the preceding sixty (60) day period
as determined by the Committee, except that, in the case of
Options, such price shall be based only on transactions reported
for the date on which the Committee decides to cash out such
Options.
Section 9. Termination of Directorship.
(a) Termination by Reason of Disability or Death.
Upon the termination of a Director by reason of Disability or
death, any Options held by such optionee may thereafter be
immediately exercised, notwithstanding the provisions of Section 6
hereof, by the optionee or, in the case of death, by the legal
representative of the estate or by the legatee of the optionee
under the will of the optionee, until the expiration of the stated
term of such Options.
(b) Termination by Reason of Normal Retirement. If an
optionee's status as a Director with the Company terminates by
reason of Normal Retirement, any Options held by such optionee
shall become immediately exercisable and may thereafter be
exercised until the expiration of the stated term of the Options.
If the retired optionee dies while any Options are still
outstanding, such Options may be exercised by the legal
representative of the estate or by the legatee of the optionee
under the will of the optionee, until the expiration of the stated
term of the Options.
(c) Other Termination. Upon the termination of a Director
with the Company for any reason other than Normal Retirement,
Disability or death, any Options held by such optionee, to the
extend exercisable, may thereafter only be exercised for a period
of 90 days after such termination unless the Options expire sooner.
Section 10. Termination or Amendment of the Plan.
The Board may suspend or terminate the Plan or any portion
thereof at any time, and the Board may amend the Plan from time to
time as may be deemed to be in the best interests of the Company;
provided, however, that no such amendment, alteration or
discontinuation shall be made (a) that would impair the rights of
a Director with respect to Options and Restricted Stock theretofore
awarded, without such person's consent, or (b) without the approval
of the stockholders (i) if such approval is necessary to comply
with any legal, tax or regbject to this Plan, increase the maximum
number of shares issuable to any Director under this Plan, or
change the definition of persons eligible to receive awards under
this Plan, or (c) unless such amendment is necessary to comply with
changes in the Internal Revenue Code of 1986, as amended, or the
Employee Retirement Income Security Act of 1974, as amended, or
rules promulgated thereunder.
Section 11. Section 16.
It is intended that the Plan and any grants made to a person
subject to Section 16 of the Exchange Act meet all of the
applicable requirements of Rule 16b-3. If any provision of the
Plan or any award hereunder would disqualify the Plan or such
award, or would otherwise not comply with Rule 16b-3, such
provision or award shall be construed or deemed amended to conform
to Rule 16b-3.
Section 12. General Provisions.
(a) No Right of Continued Service. Nothing in the Plan
shall be deemed to create any obligation on the part of the Board
to nominate any Director for reelection by the Company's
stockholders.
(b) Payment of Taxes.
(i) The Company shall have the right to require, prior to
the issuance or delivery of any Restricted Stock or issuance
and delivery of Common Stock upon the exercise of Options,
payment by the Director of any taxes required by law with
respect to the issuance or delivery of such shares. Such
amount may be paid in cash, in shares of Common Stock
previously owned by the Director, by withholding a portion of
the shares of Common Stock that otherwise would be distributed
to such Director upon delivery of the Restricted Stock or
exercise of an Option or a combination of cash and shares of
Common Stock, in each case having a value equal to the amount
required to be withheld, and provided that such shares may be
surrendered only at the minimum statutory rate. For these
purposes, the value of the shares to be withheld is the Fair
Market Value on the date that the amount of tax to be withheld
is to be determined (the "Tax Date").
(ii) An election by a Director to deliver shares of
Common Stock already owned by the Director or to have shares
withheld for purposes of subsection (b)(i) (an "Election")
must meet the following requirements in order to be effective:
(1) the Election must be made prior to the Tax
Date;
(2) the Election is irrevocable; and
(3) the Election may be disapproved by the
Committee in its sole discretion.
(c) Shares. The shares of Common Stock granted as
Restricted Stock or issued upon the exercise of Options under the
Plan may be either authorized but unissued shares or shares which
have been or may be reacquired by the Company, as determined from
time to time by the Board.
(d) Governing Law. The Plan and all actions taken
thereunder shall be governed by and construed in accordance with
the laws of the State of Alabama. The Plan shall be construed to
comply with all applicable law, and to avoid liability to the
Company or a Director, including, without limitation, liability
under Section 16(b) of the Exchange Act.
(e) Headings. The headings contained in this Plan are for
reference purposes only and shall not affect the meaning or
interpretation of this Plan.
(f) Severability. If any provision of this Plan shall for
any reason be held to be invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provision hereby,
and this Plan shall be construed as if such invalid or
unenforceable provision were omitted.
(g) Successors and Assigns. This Plan shall inure to the
benefit of and be binding upon each successor and assign of the
Company. All obligations imposed upon a Director, and all rights
granted to the Company hereunder, shall be binding upon the
Director's heirs, legal representatives and successors.
(h) Securities Laws. To the extent the shares of Common
Stock issued under this Plan have not been registered for sale
under applicable federal and state securities laws, certificates
evidencing such shares shall be marked with a legend indicating
that fact and that such shares may not be sold or transferred
absent such registration or an appropriate exemption therefrom.
(i) Regulatory Capital Requirements. All Options granted
under this Plan are subject to the requirement that,
notwithstanding any other provision of the Plan or the Option
agreement, the Company's primary bank regulator shall at any time
have the right to require the grantee to exercise the Option or to
forfeit the Option if not exercised if the Company's capital falls
below minimum capital required as determined by the Company's
primary bank regulator.
<PAGE>
Exhibit 10.3
VISION BANCSHARES, INC.
EMPLOYEE STOCK PURCHASE PLAN
Vision Bancshares, Inc. desires to provide its employees a
program by which they can conveniently acquire shares of the
Company's common stock on favorable terms. Accordingly, the
Company adopts this employee stock purchase plan on the terms set
forth below.
1. PURPOSE.
The purpose of this Plan is to provide eligible employees of
the Company with the opportunity to acquire shares of common stock
of the Company on a payroll deduction basis. The Company believes
that employee participation in the ownership of the Company will be
to the mutual benefit of both the employees and the Company. The
Company intends to qualify the Plan as an "employee stock purchase
plan" under the provisions of Section 423 of the Internal Revenue
Code of 1986, and the Plan shall be administered and construed in
a manner consistent with such provisions.
2. DEFINITIONS.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" means the Committee appointed to administer
the Plan as provided in Section 3.
(d) "Common Stock" or "Stock" means the Company's common
stock, par value $.01 per share.
(e) "Company" means Vision Bancshares, Inc., its subsidiaries
and their successors and assigns.
(f) "Plan" means the Vision Bancshares, Inc. Employee Stock
Purchase Plan, as set forth herein.
3. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a Committee composed of at
least two members to be selected from time to time by the Board.
The Committee shall have full authority to make and interpret such
equitable rules and regulations regarding administration of the
Plan as it may deem advisable, subject to the terms of the Plan.
Its determination as to the interpretation and operation of the
Plan shall be final and conclusive. In all cases in this Plan in
which the Committee is authorized or directed to take action, such
action may be taken by the Board of Directors as a whole. It is
the intention of this Plan that the Committee may be appointed by
the Board of Directors for convenience and efficiency of
administration.
4. EMPLOYEES ELIGIBLE TO PARTICIPATE.
Any employee of the Company who is actively employed by the
Company during the offering period described in Section 5 is
eligible to subscribe for the purchase of shares of Stock under the
Plan, except:
(a) employees who have been employed by the Company less than
three months;
(b) employees whose customary employment is 20 hours or less
per week; and
(c) employees whose customary employment is for not more than
five months in any calendar year.
5. OFFERING PERIODS.
The Company will offer its Stock at six-month intervals
granting, its eligible employees the opportunity to purchase shares
of Stock. Each offering period shall be for a period of fifteen
days. The last business day of each offering period shall be
deemed the offering date for such period. In order to purchase
shares of Stock offered hereunder, an eligible employee must sign
a subscription agreement and any other related documents during or
before the offering period.
6. PURCHASE PRICE.
The purchase price per share of Stock at each offering will be
85% of the then fair market value for shares of Common Stock as
determined by the Board of Directors of the Company. The Company
will issue, from its authorized but unissued shares, or will
acquire from shares available in the open market, such shares as it
will require to satisfy the subscriptions of the employees within
a period of time ending not later than two weeks after the offering
date for the subscription period. In no event will the purchase
price be less than 85% of the fair market value of the Stock as of
the offering date. The purchase price per share shall be subject
to adjustment in accordance with the provisions of Section 17.
7. STOCK.
The maximum number of shares which shall be made available for
sale under the Plan shall be 7,500 shares, subject to adjustment as
provided in Section 17. If the total number of shares subscribed
for hereunder exceeds 7,500 as of any offering date, the Company
shall make a pro rata allocation of the shares remaining available
in as nearly a uniform and equitable manner as shall be practicable
so that the aggregate number of shares subscribed for will not
exceed 7,500.
8. SUBSCRIPTION LIMITS.
The minimum number of shares for which an employee will be
permitted to subscribe at any one offering is 10 shares and the
maximum is 50, subject to the maximum number of shares as provided
in Section 18.
9. PAYROLL DEDUCTIONS.
Concurrently with his execution of a subscription agreement,
a subscribing employee shall authorize the Company to make payroll
deductions to pay for the shares of Stock to which he has
subscribed. Payment of the purchase price of such shares shall be
made in equal regular installments (not less often than monthly)
withheld from the subscribing employee's regular pay during the
period of 12 calendar months commencing with the month following
that in which the offering period expires. If an employee
subscribes for additional shares of Stock in successive offering
periods, the amount of his payroll deductions shall be increased
accordingly. An employee may prepay the amount due by him in whole
or in part at any time.
10. ACCOUNT; DELIVERY OF SHARES.
The Company will maintain an account for each employee who
purchases shares hereunder showing the number of shares each
employee has subscribed to purchase and the number of shares
allocated to each employee's account. At least annually (or more
often if the Committee deems it appropriate) the Company shall
furnish each subscribing employee a statement of his account.
Shares of Stock covered by a subscription agreement shall be deemed
to have been sold to the employee on the date on which the full
purchase price of all shares covered by such agreement has been
withheld or paid. After receiving the full purchase price of all
such shares, the Company may continue to hold such shares in an
employee's account for his benefit and convenience, provided that
if an employee makes a written request for delivery of his shares,
the Company shall promptly deliver a stock certificate or
certificates for such shares to him. All cash dividends declared
and received on the Stock held for an employee will be credited to
the employee's account and will be used to purchase shares in the
Plan.
11. CANCELLATION OF PARTICIPATION IN THE PLAN.
Each subscribing employee shall have the right to cancel his
subscription agreement at any time prior to payment in full for the
shares for which he has subscribed by giving the Company written notice
thereof. In that event the Company will refund all money the employee
has had withheld or has paid in with respect to the canceled subscription.
Such cancellation will have no effect on any shares of Stock
purchased under a previous subscription agreement which are held in
his account. Should any installment be due and unpaid for 15 days
without satisfactory arrangement for the payment thereof being made
within such 15-day period, the subscription agreement shall thereby
be automatically terminated and the money previously paid shall be
refunded to the employee.
12. EMPLOYEES' RIGHTS AS SHAREHOLDERS.
No subscribing employee shall have any rights as a shareholder
of the Company until he has made full payment for the shares he has
subscribed for. No subscribing employee will be entitled to any
cash dividends declared by the Company unless the participant has
made full payment for the shares he has subscribed for prior to the
ex-dividend date of such declared dividends. Thereafter, he shall
have full rights as a shareholder of the Company, but it shall not
be necessary for the Company to make actual delivery of a stock
certificate to him.
13. INTEREST.
No interest will be credited or paid by the Company on any
money withheld or paid in hereunder by the participating employees
under any circumstances.
14. RIGHTS NOT TRANSFERABLE.
No subscribing employee shall have the right to transfer or
pledge his rights under the Plan or any subscription agreement
entered into pursuant to the Plan other than by will or the laws of
descent and distribution. Such rights are exercisable during his
lifetime only by him.
15. TERMINATION OF EMPLOYMENT.
Upon termination of employment for any reason whatsoever,
including, but not limited to, death or retirement, the subscribing
employee, or his personal representative in the event of his death,
may elect within 60 days after the happening of such event to pay
the entire balance due and receive the shares subscribed for. The
failure to make such election within such period will be treated as
notice of cancellation and a refund will be paid to such employee
or his estate as provided in paragraph 11.
16. AMENDMENT OR DISCONTINUANCE OF THE PLAN.
The Board shall have the right to amend, modify, or terminate
the Plan at any time without notice, provided that no employee's
rights under existing subscription agreements are adversely
affected thereby, and provided further that no such amendment of
the Plan shall, except as provided in Section 17:
(a) increase above 7,500 the total number of shares to be
offered without approval of the shareholders of the
Company; or
(b) cause the Plan to fail to meet the requirements of an
employee stock purchase plan as defined in Section 423 of
the Code.
17. ADJUSTMENT OF SUBSCRIPTIONS.
In the event of reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation,
offerings of rights, or any other change in the structure of the
Common Stock of the Company, the Board may make such adjustments,
if any, as it may deem appropriate in the number, kind, and the
subscription price of shares available for purchase under the Plan,
and in the minimum number of shares which an eligible employee is
entitled to purchase.
18. SHARE OWNERSHIP.
Notwithstanding anything herein to the contrary:
(a) No employee shall be permitted to subscribe for any
shares under the Plan if such employee, immediately after
such subscription, owns shares (including all shares which
may be purchased under outstanding subscriptions under
the Plan) possessing 5% or more of the total combined voting
power or value of all classes of shares of the Company. For
the foregoing purposes, the rules of Section 424(d) of the
Code shall apply in determining share ownership.
(b) No employee shall be allowed to subscribe for any shares
under the Plan which permits his rights to purchase shares
under all stock purchase plans of the Company to accrue at
a rate which exceeds $25,000 of the fair market value of
such shares (determined at the time the subscription
agreement is entered into) for each calendar year in which
such right to subscribe is outstanding at any time.
19. APPROVAL OF SHAREHOLDERS.
The Plan shall be submitted for approval by the Shareholders
of the Company at their next annual meeting. Subscriptions
hereunder shall be subject to the condition that the Plan will be
so approved. If the Plan is not so approved within the time
required by Section 423(b)(2) of the Code, the Plan shall
terminate, all subscriptions shall be canceled, and all persons who
shall have subscribed for shares hereunder shall be entitled to the
prompt refund in cash of all sums withheld from or paid by them
pursuant to the Plan and subscriptions hereunder.
20. PRONOUNS; HEADINGS.
Wherever any words are used in the masculine gender, they
shall be construed as though they were also used in the feminine
gender in all cases where they would so apply. Headings used
herein are for general information only and do not constitute part
of the Plan.
21. DISCLOSURES.
A copy of this Plan shall be given to any participant. Any
security issued pursuant to this Plan that is not registered under
the Securities Act of 1933 or the Alabama Securities Act shall be
deemed restricted within the meaning of SEC Rule 144 and
certificates representing such Shares shall be marked with an
appropriate legend indicating applicable restrictions on resale.
________________________________________
<PAGE>
Instructions:
Complete the section according
to the action you wish to take,
sign and date the forms and
return to _____________________
Employee Stock Purchase Plan
Subscription Agreement and Payroll Authorization Form
Name: _____________________________________________________________________
Last First M.I.
Social Security Number: ___________________________________________________
I wish to subscribe for __________ shares of _________________
common stock under the Employee Stock Purchase Plan for [check one]
(A) [__] the offering period beginning ___________ __________, or
(B) [__] each offering period hereafter until I give written notice
to the Company of my termination in the plan.
I hereby authorize the Company to withhold approximately
$______________ per pay period until the total cost of the shares
is paid, but in no event longer than twelve calendar months
following the month in which the offering period ends. I
understand I may pre-pay in whole or in part the amount due at any
time.
In lieu of payroll deductions I attached a check in the amount
of $_________________ in payment of the total cost of the
subscribed shares.
Cancellation of Participation in the Employee Stock Purchase Plan
I wish to cancel my participation in the Employee Stock
Purchase Plan for the subscription period which commenced on
________________. I understand that all amounts previously paid
for such period will be refunded without interest.
Employee Signature: _________________________________
Date:________________________________________________
<PAGE>
Exhibit 10.6
SUBSCRIPTION AGREEMENT
Vision Bancshares, Inc.
2201 West 1st Street
Gulf Shores, Alabama 36545
Gentlemen:
I refer to the proposed sale by Vision Bancshares, Inc., an
Alabama corporation (the "Company"), of a maximum of 1,000,000
shares of its common stock (the "Shares"). Capitalized terms
herein have the same meaning given to them in the Prospectus dated
_______________, 1999 (the "Prospectus") of the Company unless
defined otherwise herein.
1. Subscription. I hereby agree to purchase and subscribe
for the amount of Shares for an aggregate purchase price set forth
next to my name at the end of this Agreement upon the terms and
conditions set forth herein and in the Prospectus. (A minimum
purchase of 100 shares is required.) I understand that my
subscription is subject to acceptance or rejection by the Company
and shall not be binding unless and until this Agreement has been
countersigned by the Company. A check in the amount of the
purchase price is enclosed.
2. Acceptance of Subscription. If my subscription is not
accepted by the Company for any reason whatsoever, then the Company
shall return to me, with any applicable interest earned thereon,
the check (or its check in the identical amount of the check) and
thereupon, this Agreement shall be null and void and of no further
force or effect.
3. Joint Ownership. If more than one person is signing this
Agreement, each undertaking herein shall be a joint and several
undertaking of such persons.
4. Applicable Law. This Agreement shall be construed in
accordance with and be governed by the laws applicable to contracts
made and wholly performed in the State of Alabama.
5. Entire Agreement. This Agreement, if accepted by the
Company, constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof and may be amended only
by a writing executed by the parties.
6. Assignability. I acknowledge that I may not assign any of
my rights or interest in and under this Agreement without prior
written consent of the Company, and any attempted assignment
without such consent shall be void and without effect.
IN WITNESS WHEREOF, I have executed this Subscription
Agreement this _____ day of __________________, 1999.
Number of Shares __________________________________
Purchased:_______________________ Signature
Name (Please Print)
Total Purchase Price of Shares
Purchased:_______________________ __________________________________
Street Address
__________________________________
City and State
__________________________________
Telephone Number
__________________________________
SUBSCRIPTION ACCEPTED:
By:_______________________________
For Vision Bancshares, Inc.
<PAGE>
Exhibit 21
LIST OF SUBSIDIARIES OF VISION BANCSHARES, INC.
1. Vision Bank (in organization)
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the incorporation by reference of our
report dated September 13, 1999, relating to the financial
statements of Vision Bancshares, Inc. in the Registration Statement
on Form SB-2 and Prospectus, and to the reference to our firm
therein under the caption "Experts."
Albany, Georgia
September 27, 1999
