<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 11, 2000
REGISTRATION NO.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
FUTURUS FINANCIAL SERVICES, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
GEORGIA 6021 58-2485661
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
1580 WARSAW ROAD, ROSWELL, GEORGIA 30076 (770) 643-2512
(ADDRESS, AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
___________ WINDWARD PARKWAY, ALPHARETTA, GEORGIA
30004 (ADDRESS OF PRINCIPAL PLACE OF BUSINESS OR INTENDED
PRINCIPAL PLACE OF BUSINESS)
WILLIAM M. BUTLER
FUTURUS FINANCIAL SERVICES, INC.
1580 WARSAW ROAD
ROSWELL, GEORGIA 30076
(770) 643-2512
(NAME, ADDRESS, AND TELEPHONE NUMBER, OF
AGENT FOR SERVICE)
---------------------------
COPIES TO:
KATHRYN L. KNUDSON, ESQ. BOYD C. CAMPBELL, JR., ESQ.
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP SMITH HELMS MULLISS & MOORE, LLP
191 PEACHTREE STREET, N.E., 16TH FLOOR 201 NORTH TRYON STREET, 30TH FLOOR
ATLANTA, GEORGIA 30303 CHARLOTTE, NORTH CAROLINA 28202
(404) 572-6600 (704) 343-2000
Approximate date of proposed sale to the public: as soon as practicable
after this Registration Statement has become effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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 the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
---------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------- --------------- -------------------------- -------------------- ------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER UNIT PRICE REGISTRATION FEE
- ------------------------------------- --------------- -------------------------- -------------------- ------------------
<S> <C> <C> <C> <C>
Common stock, no par value 1,265,000(1) $10.00 $12,650,000(2) $ 3,340
- ------------------------------------- --------------- -------------------------- -------------------- ------------------
Warrants to purchase common stock 185,000(3) $ 0 $ 0 $ 0
- ------------------------------------- --------------- -------------------------- -------------------- ------------------
Common Stock, no par value, issuable
upon the exercise of the warrants 185,000 $10.00(4) $ 1,850,000(5) $ 489
- ------------------------------------- --------------- -------------------------- -------------------- ==================
</TABLE>
(1) Includes 165,000 shares to cover over-allotments, if any, pursuant to the
over-allotment option granted to the underwriter.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
(3) Warrants to purchase an aggregate of 185,000 shares of common stock at an
exercise price of $10.00 per share will be issued to the organizers in
connection with this offering.
(4) Represents the exercise price per share for each warrant.
(5) Calculated in accordance with Rule 457(i) under the Securities Act of 1933,
as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE>
The information contained in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is 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 FEBRUARY 11, 2000; SUBJECT TO COMPLETION
1,100,000 SHARES
FUTURUS FINANCIAL SERVICES, INC.
A Proposed Bank Holding Company for
FUTURUS BANK, N.A. (PROPOSED)
COMMON STOCK
$10.00 per share
---------------------------
We are offering shares of Futurus Financial Services, Inc. common stock to
raise the money required to start Futurus Bank, N.A., a proposed new national
bank. Futurus Financial Services will be the holding company and sole
shareholder of Futurus Bank after it is organized. Futurus Bank will be
headquartered in Alpharetta, Georgia, and we expect to open Futurus Bank in the
second quarter of 2000. This is our first offering of common stock to the
public, and currently no public market exists for our shares. This is a firm
commitment underwriting. You may purchase a minimum of 100 shares and up to a
maximum of 60,000 shares, although we may waive these limits and accept
subscriptions for more or less shares. We will request that quotations for our
common stock be reported on the Nasdaq OTC Bulletin Board under the symbol
"FUTF."
Our organizers who purchase 20,000 or more shares of common stock in the
offering will receive warrants to purchase one share of common stock for each
share they purchase. Alternatively, organizers who purchase less than 20,000
shares in the offering will receive warrants to purchase one share of common
stock for every two shares they purchase. Once vested, our organizers may
exercise their warrants and purchase additional shares of common stock at an
exercise price of $10 per share. We describe the warrants in more detail under
the heading "Executive Compensation--Organizers' Warrants" on page __.
OUR COMMON STOCK IS NOT A DEPOSIT OR A BANK ACCOUNT AND IS NOT INSURED BY
THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN OUR COMMON STOCK
INVOLVES RISKS. YOU SHOULD NOT INVEST IN THIS OFFERING UNLESS YOU CAN AFFORD TO
LOSE ALL OF YOUR INVESTMENT. WE HAVE DESCRIBED WHAT WE BELIEVE ARE THE MATERIAL
RISKS OF THIS INVESTMENT UNDER THE HEADING "RISK FACTORS" BEGINNING ON PAGE __.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PER SHARE TOTAL
<S> <C> <C>
Public offering price $ 10.00 $11,000,000
Underwriting discount $ .68 $ 749,000
Proceeds to the company, before expenses $ 9.32 $10,251,000
</TABLE>
We will pay an underwriter's discount of $.35 per share on shares sold to
our officers and directors, up to 330,000 shares, and $.75 per share on all
other shares sold in the offering. The underwriter's discount shown in the
foregoing table reflects a blended rate based on the assumption that 190,000 of
the shares will have the lower discount. Wachovia Securities has the right to
purchase up to an additional 165,000 shares at $10.00 per share, less the
underwriter's discount of $.75 per share, within 30 days from the date of this
prospectus to cover over-allotments.
The underwriter expects to deliver the shares of common stock on ______,
2000.
WACHOVIA SECURITIES, INC.
___________, 2000
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
AND
FUTURUS BANK, N.A. (PROPOSED)
MARKET AREA
[INSERT DEMOGRAPHIC MAP]
3
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SUMMARY
THIS SUMMARY DOES NOT CONTAIN ALL THE INFORMATION YOU SHOULD CONSIDER
BEFORE INVESTING IN THE COMMON STOCK. WE ENCOURAGE YOU TO READ CAREFULLY THE
ENTIRE PROSPECTUS BEFORE INVESTING. UNLESS OTHERWISE STATED, ALL INFORMATION IN
THIS PROSPECTUS ASSUMES THE UNDERWRITER DOES NOT EXERCISE ITS OVER-ALLOTMENT
OPTION.
FUTURUS FINANCIAL SERVICES AND FUTURUS BANK
Futurus Financial Services, Inc. is a Georgia corporation that was
incorporated on August 12, 1999 to organize and serve as the holding company for
Futurus Bank, N.A., a proposed national bank. Futurus Bank will operate as a
community bank emphasizing personalized banking relationships with individuals
and businesses predominantly located in the northern part of Georgia's Fulton
County, which includes the communities of Alpharetta, Windward, Roswell,
Northridge and Sandy Springs.
On October 15, 1999 we filed an application with the Office of the
Comptroller of the Currency to organize Futurus Bank as a national bank in
Alpharetta, Georgia. In order to receive final approval of our application to
organize Futurus Bank, we anticipate that we will be required to raise a minimum
of $8,500,000 in capital, receive FDIC approval of our application for deposit
insurance and implement proper banking policies and procedures. We filed an
application with the FDIC for deposit insurance on October 15, 1999, and in
March 2000 we will file an application with the Federal Reserve to become a bank
holding company and to acquire all of the capital stock of Futurus Bank. After
receiving all necessary regulatory approvals, we anticipate beginning operations
at a temporary facility in the second quarter of 2000, and we expect to move to
our permanent facility in the fourth quarter of 2000.
WHY WE ARE ORGANIZING A NEW BANK IN NORTHERN FULTON COUNTY
We believe an attractive opportunity exists in the northern Fulton
County market for a locally headquartered community bank that focuses on
personalized service to individuals and businesses located within our primary
service area. The northern Fulton County market is growing and has a highly
diversified economic base. Northern Fulton County's broad economic base ranges
from large corporations such as AT&T Corporation, Compaq Computer Corporation
and United Parcel Service of America, Inc., to an extensive variety of small
businesses that, when combined, comprise approximately 85% of the membership of
the Greater Northern Fulton Chamber of Commerce. An additional economic focal
point of northern Fulton County is the presence of North Point Mall--one of
metropolitan Atlanta's leading retail shopping destinations with more than $500
million in 1998 annual sales.
We also believe that northern Fulton County's diverse economic base
will support continued growth in Futurus Bank's primary service area. According
to information compiled by DEMOGRAPHICS ON-CALL, during the nine-year period
from 1990 to 1999 the population in our primary service area grew from 160,592
to 221,864, representing a 38% increase. Additionally, the United States Census
Bureau estimates that over the next five years average annual household income
in the same area will increase from $67,730 to $76,357. We anticipate that the
area's expanding population and expected growth in household income will
increase the deposit base for our primary service area.
Bank and thrift deposits in Futurus Bank's primary service area grew
from approximately $1.9 billion in June 1994 to more than $2.5 billion in
June 1998. This multi-billion dollar deposit base is primarily controlled by
national and super-regional banks, which include Bank of America, Wachovia,
First Union and SunTrust. Although these large financial institutions are
well established in the area,
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local community banks have been successful in competing with these large banks
for deposits. From June 1994 to June 1998, the following trends occurred in
deposit market share:
- Total deposits for the national and super-regional banks described
above grew 18.6%, compared to 32.6% growth in the overall deposit
market.
- The slower relative growth of these large banks resulted in their
combined relative deposit market share falling from 71.8% to 64.3%.
- Six community-oriented banks operating in the service area during the
entire four year period saw their total deposits grow 322.6%. These
banks included Bank of North Georgia, Milton National Bank, Fidelity
National Bank, Etowah Bank, First Colony Bank and Tucker Federal Bank.
- These six community banks increased their combined relative deposit
market share from 6.3% to 20.0%.
In addition to offering competitive banking products, we believe that
community banks must provide personalized service and must make timely, local
decisions in order to compete successfully. We also believe that recent
acquisitions of several community banks in the Atlanta market may diminish the
quality of banking services available to small- and medium-sized businesses and
consumers in the market. Further consolidation is likely to create additional
opportunities for community banks to capture deposits from affected clients who
may be dissatisfied with their new financial institutions.
We will compete directly with many of the institutions previously
named. Additionally, two new start-up banks have established operations within
our primary service area since 1998. Although community banks and thrifts
operating within our market area will compete directly with Futurus Bank for
banking products and services, none of these community banking institutions has
a location within approximately three miles of our proposed main office site. As
a result, we believe that we have an opportunity to bring community banking to
an underserved, local market. See "Proposed Business of Futurus Financial
Services and Futurus Bank" on page __.
In addition, we expect to benefit from our potential referral
relationship with Real Estate Financial Services, Inc., a retail mortgage
lending company that is principally owned by two members of our board of
directors, Gregory A. Janicki and Deborah M. Janicki. Real Estate Financial
Services has expressed an interest in establishing a referral relationship with
us, which may provide Futurus Bank with an important source of new banking
relationships with individuals and businesses that are locating to the
metropolitan Atlanta area. We anticipate that our referral relationship with
Real Estate Financial Services will commence as soon as we are able to begin our
operations, helping us build our client base and generating loan product leads
for our lending officers.
DIRECTORS AND OFFICERS
Our management team is led by William M. Butler, the proposed president
and chief executive officer of Futurus Financial Services and Futurus Bank. Mr.
Butler has over 17 years of experience in the banking industry and has served in
various management positions throughout his career. Most recently, Mr. Butler
served as senior vice president and senior lender of Charter Bank & Trust,
Marietta, Georgia, where he was second in command and was responsible for all
commercial lending activities. After joining Charter Bank & Trust in 1997, Mr.
Butler was instrumental in increasing the bank's total loans outstanding from
$73 million to $98 million and improving the overall credit quality of the
bank's loan portfolio, as measured by the level of adversely rated assets. Mr.
Butler's banking experience also
5
<PAGE>
includes a position as division manager with Bank South, Atlanta, Georgia, from
June 1990 until January 1996 when the bank was acquired by NationsBank
Corporation (now Bank of America Corporation).
The board of directors of Futurus Financial Services consists of ten
organizers who will also be the directors of Futurus Bank. These directors
include:
- William M. Butler - Gregory A. Janicki
- C. Parke Day - Richard W. Stimson
- Nathan E. Hardwick, IV - Donald S. Shapleigh, Jr.
- Michael S. Hug - Danny L. Tesney
- Deborah M. Janicki - Joel P. Weinbach
The directors intend to utilize their diverse backgrounds and their extensive
local business relationships to attract clients from all segments of Futurus
Bank's primary service area. See "Management" beginning on page __.
PRODUCTS AND SERVICES
We plan to offer our products and services through high quality,
personalized delivery systems while providing our clients with the financial
sophistication and array of products typically offered by a larger bank. Futurus
Bank's lending services will include consumer loans to individuals, commercial
loans to small- to medium-sized businesses and professional concerns and real
estate-related loans. Futurus Bank will offer a broad array of competitively
priced deposit services including demand deposits, regular savings accounts,
money market deposits, certificates of deposit and individual retirement
accounts. To complement our lending and deposit services, we will also provide
additional services like ATM cards, debit cards, travelers checks, direct
deposit, automatic transfers and courier services for targeted commercial
clients. We intend to offer our services through a variety of delivery systems
including online banking, automated teller machines, telephone banking and, in
the future, additional branch offices.
PHILOSOPHY AND STRATEGY
Our management philosophy is to deliver superior service to our clients
and to create a banking experience that motivates them to tell others about
Futurus Bank. By strategically utilizing current banking and communications
technology to deliver tailored banking services, we will endeavor to exceed our
clients' individual expectations of what banking should be. As part of our
marketing effort, we will employ a "high tech, high touch" theme to emphasize
our commitment to complement our client-oriented service approach with
user-friendly technologies. We believe that this philosophy, encompassing the
service aspects of community banking with the perceived convenience of larger
banks, will distinguish Futurus Bank from its competitors and will lead us to
success.
To carry out our philosophy, our business strategies will involve:
- Utilizing technology and strategic outsourcers to provide a broad
array of convenient products and services.
- Hiring and retaining highly experienced and qualified banking
personnel, preferably with established client relationships, and
viewing our staff not as our employees, but as our associates.
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- Positioning our main office in a highly visible location that is
near a large concentration of our targeted commercial and
residential clients.
- Capitalizing on the directors' and officers' diverse community
involvement, professional expertise, and personal and business
contacts within our primary service area.
- Attracting our initial client base by offering highly competitive
interest rates on our deposit accounts.
- Providing individualized attention with consistent, local
decision-making authority.
- Implementing an aggressive marketing program.
- Capitalizing on industry consolidation within our primary service
area.
- Evaluating strategic growth and acquisition opportunities as they
become available.
THE OFFERING AND OWNERSHIP BY OUR ORGANIZERS AND DIRECTORS
We are offering 1,100,000 shares of our common stock for $10.00 per
share. Our organizers and directors intend to purchase 190,000 shares, which
will represent 17.3% of the shares outstanding after the offering. To reward our
organizers for their financial risk and efforts in organizing Futurus Financial
Services and Futurus Bank, they will receive warrants to purchase shares of
common stock at $10.00 per share. Organizers who purchase 20,000 or more shares
of common stock in the offering will receive warrants to purchase one share of
common stock for each share they purchase. Alternatively, organizers who
purchase less than 20,000 shares in the offering will receive warrants to
purchase one share of common stock for every two shares they purchase. We hope
to sell the remaining shares to individuals and businesses primarily within the
Atlanta metropolitan area who share our desire to support a new community bank.
The 1,100,000 shares of common stock offered does not include the
underwriter's option to purchase up to 165,000 additional shares, 185,000 shares
issuable upon the exercise of the warrants issued to our organizers or 110,000
shares that we may issue under our stock incentive plan.
USE OF PROCEEDS
We will use $8,500,000 raised in this offering to capitalize Futurus
Bank. We anticipate that this is the amount of capital that our banking
regulators will require us to invest in Futurus Bank prior to its opening. We
will use the remaining net proceeds of this offering to repay the amount drawn
on our line of credit, to provide Futurus Financial Services with working
capital and for other general business purposes. Additionally, Futurus Bank will
use the funds that it receives from Futurus Financial Services to lease the site
for its main office, to construct and furnish the facility and to provide
working capital to operate Futurus Bank. For more detailed information, see "Use
of Proceeds" on page __.
7
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LOCATION OF OFFICES
The address and phone number of our temporary executive offices are:
1580 Warsaw Road
Roswell, Georgia 30076
(770) 643-2512
Our permanent main office and executive offices will be located at:
__________ Windward Parkway
Alpharetta, Georgia 30004
.
Our main office will be a building with approximately 7,100 square feet
located on a 1.35 acre site that is one-half mile west of Georgia Highway 400 on
Windward Parkway. We anticipate that construction of our main office will begin
in the second quarter of 2000 and will be completed in the fourth quarter of
2000. Until our main office is completed, we plan to begin our operations in a
temporary facility that will be located approximately three miles from our
permanent site. Our temporary facility will be located in the Alpharetta Square
shopping center just south of the Alpharetta Highway (also known as South Main
Street) and Old Milton Parkway intersection. We anticipate that we will open for
business in our temporary facility in the second quarter of 2000.
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RISK FACTORS
THE FOLLOWING PARAGRAPHS DESCRIBE WHAT WE BELIEVE ARE THE MATERIAL
RISKS OF AN INVESTMENT IN THE COMMON STOCK. WE MAY FACE OTHER RISKS AS WELL,
WHICH WE HAVE NOT ANTICIPATED. AN INVESTMENT IN THE COMMON STOCK INVOLVES A
SIGNIFICANT DEGREE OF RISK, AND YOU SHOULD NOT INVEST IN THE COMMON STOCK UNLESS
YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. BEFORE DECIDING TO INVEST IN THE
COMMON STOCK, PLEASE CAREFULLY READ THE ENTIRE PROSPECTUS, INCLUDING THE
CAUTIONARY STATEMENT FOLLOWING THE RISK FACTORS REGARDING THE USE OF
FORWARD-LOOKING STATEMENTS.
YOU MAY BE DEPRIVED OF AN OPPORTUNITY TO SELL YOUR SHARES AT A PREMIUM OVER
MARKET PRICES BECAUSE GEORGIA STATE LAW AND OUR ARTICLES OF INCORPORATION LIMIT
THE ABILITY OF OTHERS TO ACQUIRE US.
In many cases, shareholders receive a premium for their shares when a
company is purchased by another. Under Georgia law, however, no bank holding
company may acquire control of Futurus Financial Services until Futurus Bank has
been incorporated for five years. In addition, state and federal law and our
articles of incorporation make it difficult for anyone to purchase Futurus
Financial Services without approval of our board of directors. These provisions
include the existence of preferred stock, staggered terms for the directors,
restrictions on the ability to change the number of directors or to remove a
director, supermajority voting requirements, flexibility in considering
acquisition proposals and, for five years, limitations on an investor's ability
to own 10% or more of our voting stock. See "Selected Provisions of the Articles
of Incorporation and Bylaws" on page __.
WE HAVE NO OPERATING HISTORY UPON WHICH TO BASE AN ESTIMATE OF OUR FUTURE
FINANCIAL PERFORMANCE.
We do not have any operating history on which to base any estimate of
our future earning prospects. Futurus Financial Services was only recently
formed, and Futurus Bank will not receive final approval from the Office of the
Comptroller of the Currency to begin operations until after this offering is
completed. Consequently, you will not have access to historical information that
would be helpful in deciding whether to invest in Futurus Financial Services.
WE EXPECT TO INCUR LOSSES INITIALLY, AND YOU MAY NOT RECOVER ALL OR ANY PART OF
YOUR INVESTMENT IF WE DO NOT BECOME PROFITABLE.
Most new banks incur substantial start-up expenses, are not profitable
in the first year of operation and, in some cases, are not profitable for
several years. If we are ultimately unsuccessful, you may not recover all or any
part of your investment in the common stock. Additionally, Futurus Bank's loans
will initially be unseasoned--new loans to new borrowers. As a result, it will
take several years to establish the borrowers' payment histories, making it more
difficult to evaluate reliably the quality of the loan portfolio. Our
profitability will depend on Futurus Bank's profitability, and we can give no
assurance that Futurus Bank will ever operate profitably. See "Management's
Discussion and Analysis of Financial Condition and Plan of Operations" on page
__.
FAILURE TO IMPLEMENT OUR BUSINESS STRATEGIES MAY ADVERSELY AFFECT OUR FINANCIAL
PERFORMANCE.
If we cannot implement our business strategies, we will be hampered in
our ability to develop business and serve our clients, which could in turn have
an adverse effect on our financial performance. The organizers have developed a
business plan that details the strategies that we intend to implement in our
efforts to achieve profitable operations. Our business strategies include
establishing a "high tech, high touch" niche, hiring highly qualified associates
and opening our strategically located, full service office in the fourth quarter
of 2000. Even if our business strategies are successfully implemented, they
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may not have the favorable impact on operations that we anticipate. See
"Proposed Business of Futurus Financial Services and Futurus Bank--Philosophy
and Strategy" on page __.
DEPARTURES OF OUR KEY PERSONNEL OR DIRECTORS MAY IMPAIR OUR OPERATIONS.
William M. Butler is important to our success, and if he terminates his
employment with us, our financial condition and results of operations may be
adversely affected. Mr. Butler has been instrumental in our organization and
will be the key management official in charge of our daily business operations.
While we have entered into a three-year employment agreement with Mr. Butler, we
cannot be assured of his continued service.
Additionally, our directors' community involvement, diverse backgrounds
and extensive local business relationships are important to our success. For
example, we expect to benefit from our potential relationship with Real Estate
Financial Services. If Mr. or Mrs. Janicki, the owners of Real Estate Financial
Services, or any of our other directors discontinue his or her relationship with
us for whatever reason, or if the composition of our board of directors changes
materially, our growth could be adversely affected. See "Management" on page __.
A DELAY IN BEGINNING FUTURUS BANK'S OPERATIONS WILL RESULT IN ADDITIONAL LOSSES.
A delay in the start of Futurus Bank's operations will increase
pre-opening expenses and postpone Futurus Bank's realization of potential
revenues. This could cause our accumulated deficit to increase as a result of
continuing operating expenses, such as salaries and other administrative
expenses, coupled with our lack of revenue. Although we expect to receive all
final regulatory approvals and to begin business in the second quarter of 2000,
we can give no assurance as to when, if at all, these events will occur.
IF REGULATORY CONDITIONS ARE NOT SATISFIED, WE MAY DISSOLVE AND LIQUIDATE AND
YOU MAY ONLY RECEIVE A PORTION, IF ANY, OF YOUR INVESTMENT.
If we do not receive final approval for Futurus Bank to start its
banking operations, we anticipate that we will dissolve Futurus Financial
Services. If we dissolve Futurus Financial Services after the close of the
offering, shareholders will receive only a portion, if any, of their original
investment because we will have used the proceeds of the offering to pay all
expenses of the offering, organizational and pre-opening expenses and capital
costs incurred through the time that Futurus Financial Services is finally
dissolved. Although we have applied for the requisite regulatory approvals to
begin banking operations, final approvals may not be granted in a timely manner,
if at all. The closing of this offering is not conditioned upon the receipt of
final regulatory approvals.
WE WILL FACE STRONG COMPETITION FOR CLIENTS, ESPECIALLY FROM LARGE AND MORE
ESTABLISHED FINANCIAL INSTITUTIONS, WHICH MAY HINDER US FROM OBTAINING CLIENTS
AND MAY CAUSE US TO PAY HIGHER INTEREST RATES ON OUR DEPOSITS OR CHARGE LOWER
INTEREST RATES ON OUR LOANS THAN OUR COMPETITORS' RATES FOR AN EXTENDED PERIOD.
We anticipate offering very competitive loan and deposit rates as we
establish ourselves in the market, but if excessive competition forces us to
offer more aggressive pricing indefinitely, our net interest margin will suffer
and our financial performance will be negatively impacted. Futurus Bank will
compete with numerous other lenders and deposit-takers, including other
commercial banks, savings and loan associations, credit unions, finance
companies, mutual funds, insurance companies and brokerage and investment
banking firms. With multiple financial institutions already doing business in
the northern Fulton County area, and given the chance that additional
competitors may enter the market in the future,
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we will be faced with continuous competition. Moreover, some of these
competitors are not subject to the same degree of regulation as we will be and
may have greater resources than will be available to us. Competition from
non-traditional financial institutions may also affect our success due to the
Gramm-Leach-Bliley Act of 1999. See "Proposed Business of Futurus Financial
Services and Futurus Bank--Market Opportunities--Competition" on page __.
WE MAY NOT BE ABLE TO COMPETE WITH OUR LARGER COMPETITORS FOR LARGER CLIENTS
BECAUSE OUR LENDING LIMITS WILL BE LOWER THAN THEIRS.
Our lending limit will be significantly less than the limits for most
of our competitors, and may hinder our ability to establish relationships with
larger businesses in our market area. A national bank's legal lending limit to a
single borrower is roughly equal to 15% of its capital and surplus plus an
additional 10%, if the amount that exceeds 15% is fully secured by readily
marketable collateral. Based on Futurus Bank's proposed capitalization, Futurus
Bank's initial legal lending limit will be approximately $1,275,000 for loans
not fully secured plus an additional $850,000, or an estimated total of $2.1
million, for loans that meet the federal guidelines. These legal limits will
increase or decrease as Futurus Bank's capital increases or decreases as a
result of its earnings or losses, among other reasons. Our management team has
also adopted an internal lending limit of $1 million, which will initially be
lower than the applicable legal limit. Based on either our internal lending
limit or our legal lending limit, Futurus Bank will need to sell participations
in its loans to other financial institutions in order to meet the lending needs
of our clients requiring extensions of credit above these limits. However, our
strategy to accommodate larger loans by selling participations in those loans to
other financial institutions may not be successful. See "Proposed Business of
Futurus Financial Services and Futurus Bank--Lending Services--Lending Limits"
on page __.
GOVERNMENT REGULATION MAY HAVE AN ADVERSE EFFECT ON OUR PROFITABILITY AND
GROWTH.
We are subject to extensive government supervision and regulation. Our
ability to achieve profitability and to grow could be adversely affected by
state and federal banking laws and regulations that limit the manner in which we
make loans, purchase securities and pay dividends. These regulations are
intended primarily to protect depositors, not shareholders. In addition, the
burden imposed by federal and state regulations may place us at a competitive
disadvantage compared to competitors who are less regulated. Future legislation
or government policy may also adversely affect the banking industry or our
operations. In particular, various provisions of the Gramm-Leach-Bliley Act,
which will take effect on March 11, 2000, will eliminate many of the federal and
state law barriers to affiliations among banks and securities firms, insurance
companies and other financial services providers. We believe the elimination of
these barriers may significantly increase competition in our industry. See
"Supervision and Regulation" on page __.
CHANGES IN INTEREST RATES MAY DECREASE OUR NET INTEREST INCOME.
Our profitability depends substantially on Futurus Bank's net interest
income, which is the difference between the interest income earned on its loans
and other assets and the interest expense paid on its deposits and other
liabilities. A large change in interest rates may significantly decrease our net
interest income and eliminate our profitability. Most of the factors that cause
changes in market interest rates, including economic conditions, are beyond our
control. While we intend to take measures to minimize the effect that changes in
interest rates will have on our net interest income and profitability, these
measures may not be effective. See "Management's Discussion and Analysis of
Financial Condition and Plan of Operations--Liquidity and Interest Rate
Sensitivity" on page __.
11
<PAGE>
AN ECONOMIC DOWNTURN, ESPECIALLY ONE AFFECTING OUR PRIMARY SERVICE AREA, MAY
REDUCE OUR DEPOSIT BASE AND THE DEMAND FOR OUR LOANS AND OTHER PRODUCTS AND MAY
DECREASE OUR EARNINGS.
As a holding company for a community bank, our success will depend on
the economy of the region in which we operate. The majority of Futurus Bank's
borrowers and depositors will be individuals and small- to medium-sized
businesses located or doing business in Georgia's Fulton, Forsyth, Cobb and
Gwinnett counties. Futurus Bank's success will therefore depend on the general
economic conditions in these counties, particularly in northern Fulton County,
which we cannot predict with certainty. Factors that adversely affect the
economy in these counties could reduce our deposit base and the demand for our
products and services, which may decrease our earnings. For example, an adverse
change in the local economy could make it more difficult for borrowers to repay
their loans, which could lead to loan losses for Futurus Bank. See "Proposed
Business of Futurus Financial Services and Futurus Bank" on page __.
OUR ABILITY TO PAY DIVIDENDS TO OUR SHAREHOLDERS IS LIMITED AND DEPENDS ON
FUTURUS BANK'S ABILITY TO PAY DIVIDENDS AND THE JUDGMENT OF OUR BOARD OF
DIRECTORS.
Futurus Financial Services will initially have no source of income
other than dividends that it receives from Futurus Bank. Our ability to pay
dividends will depend on Futurus Bank's ability to pay dividends to Futurus
Financial Services. Additionally, bank holding companies and national banks are
both subject to significant regulatory restrictions on the payment of cash
dividends. In light of these restrictions and our plans to build capital, it
will be our policy to reinvest earnings for an undetermined period of time. As a
result, we do not plan to pay dividends until we recover any losses that we may
have incurred and become profitable. Our future dividend policy will depend on
our earnings, capital requirements, financial condition and other factors that
the boards of directors of Futurus Financial Services and Futurus Bank consider
relevant. See "Dividends" on page __.
WE DETERMINED THE PUBLIC OFFERING PRICE ARBITRARILY, AND OUR FUTURE STOCK PRICE
MAY FLUCTUATE BELOW THE INITIAL PUBLIC OFFERING PRICE ONCE THE SHARES BECOME
FREELY TRADEABLE.
Futurus Financial Services and the underwriter arbitrarily set the
public offering price after considering prevailing market conditions and the
price of comparable publicly traded companies. Because we have no operating
history, the public offering price could not be based on historical measures of
our financial performance. Therefore, the public offering price may not reflect
the market price for the common stock after the offering. Several factors will
cause the market price to fluctuate after the offering, and the price for the
common stock may drop below its initial public offering price. These factors
include our results of operations, financial analysts' future estimates of our
earning potential, economic conditions in our market area and trends in the
banking industry. See "Underwriting" on page __.
WE WILL NOT HAVE A LARGE NUMBER OF SHAREHOLDERS NOR A LARGE NUMBER OF SHARES
OUTSTANDING AFTER THE OFFERING, WHICH MAY LIMIT YOUR ABILITY TO SELL YOUR SHARES
OF COMMON STOCK.
Prior to the offering, there has been no public market for Futurus
Financial Services' common stock and the development of an active trading market
normally requires a significant number of shares and shareholders. If an active
trading market does not develop or continue after the offering, you may not be
able to sell your shares at or above the price at which these shares are being
offered to the public. Although we have applied to list the common stock on the
Nasdaq OTC Bulletin Board, an active trading market may not develop or continue
after the offering. Additionally, the sale of a large block of shares
outstanding after the close of the offering could adversely effect the market
price of the common stock. After the close of the offering, all of our
outstanding shares will be freely tradeable without restriction except for
190,000 shares, which represents the number of shares that we anticipate our
organizers and
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<PAGE>
executive officers will purchase in the offering. Our directors and executive
officers have agreed with the underwriter not to sell the shares they purchase
in the offering for a period of 180 days after the date of this prospectus
without the underwriter's consent. After the 180-day period, the shares held by
our organizers and executive officers will be eligible for sale subject to the
resale limitations of Rule 144 of the Securities Act. You should consider
carefully the limited liquidity of your investment before purchasing any shares
of the common stock. See "Underwriting" on page __ and "Shares Eligible for
Future Sale" on page __.
EXERCISE OF WARRANTS AND STOCK OPTIONS WILL CAUSE DILUTION OF YOUR OWNERSHIP IN
FUTURUS FINANCIAL SERVICES.
Our organizers, executive officers and other individuals employed by us
may exercise their warrants or options to purchase common stock, which would
result in the dilution of your proportionate interest in Futurus Financial
Services. Upon completion of this offering, we will issue to our organizers
warrants to purchase a total of up to 185,000 shares of common stock, and will
issue to our executive officers, under our stock incentive plan, options to
purchase a total of 25,000 shares of common stock. The warrants issued to our
organizers will vest in one-third annual increments over three years and will be
exercisable at a price of $10.00 per share. The options issued to our executive
officers will vest in one-fifth annual increments over 5 years and will be
exercisable at a price of $10.00 per share. The remaining 85,000 shares reserved
for issuance under our stock incentive plan may be granted to individuals
employed by us in a manner consistent with the plan and on terms determined by
the Compensation Committee to be in our best interest. See "Executive
Compensation" on page __.
WE MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL ON TERMS FAVORABLE TO US, IF AT
ALL.
In the future, should we need additional capital to support our
business, expand our operations or maintain our minimum capital requirements, we
may not be able to raise additional funds through the issuance of additional
shares of common stock or other securities. Even if we are able to obtain
capital through the issuance of additional shares of common stock or other
securities, the sale of these additional shares could significantly dilute your
ownership interest and may be made at prices lower than the price we are selling
shares in this offering. In addition, the holders of warrants or options could
exercise them at a time when we could otherwise obtain capital by offering
additional securities on terms more favorable to us than those provided by the
warrants or options.
WE ARE AUTHORIZED TO ISSUE ADDITIONAL SHARES OF COMMON STOCK AND SHARES OF
PREFERRED STOCK WHICH, IF ISSUED, MAY ADVERSELY AFFECT VOTING RIGHTS AND REDUCE
THE MARKET PRICE OF OUR COMMON STOCK.
We are authorized by our articles of incorporation to issue additional
shares of common stock and shares of preferred stock without the consent of our
shareholders. Preferred stock, when issued, may rank senior to common stock with
respect to voting rights, payment of dividends, and amounts received by
shareholders upon liquidation, dissolution or winding up. The existence of
rights which are senior to common stock may reduce the price of our shares of
common stock. We do not have any plans to issue any shares of preferred stock at
this time.
OUR DIRECTORS AND OFFICERS COULD HAVE THE ABILITY TO INFLUENCE SHAREHOLDER
ACTIONS.
Our directors and executive officers together may be able to influence
the outcome of director elections or block a significant transaction that might
otherwise be approved by the shareholders. We anticipate that after this
offering, our directors and executive officers will directly or indirectly own
190,000 shares, representing 17.3% of the outstanding common stock.
Additionally, we will be issuing warrants and options to our directors and
executive officers. Although these warrants and options will
13
<PAGE>
vest over time, if our directors and executive officers exercised all of their
warrants and options, they could directly or indirectly own approximately
400,000 shares, representing 30.5% of our outstanding common stock on a fully
diluted basis. Our board members also serve staggered three-year terms, which
means that approximately one-third of our board is elected each year at our
annual meeting. Consequently, it would take at least two years to replace a
majority of our board members. See "Selected Provisions of the Articles of
Incorporation and Bylaws" on page __.
WE MAY NOT ALLOCATE ALL OF THE NET PROCEEDS IN THE MOST PROFITABLE MANNER.
After capitalizing Futurus Bank with $8.5 million, our board of
directors and management will have broad discretion in allocating a total of
approximately $1.3 million, or 12.6%, of the net proceeds of the offering.
Although we principally intend to use these proceeds to maintain appropriate
liquidity, we may also use these proceeds to provide additional capital to
Futurus Bank, to purchase United States government securities or certificates of
deposit of Futurus Bank or for other general corporate purposes. Additionally,
our anticipated allocation of these proceeds could change if we are faced with
unexpected liquidity issues. Because the allocation of these proceeds will
directly affect our earnings, it will be difficult to predict our results of
operations. Although we intend to utilize the funds to serve our best interests,
we cannot assure you that our allocation will ultimately reflect the most
profitable application of these proceeds. See "Use of Proceeds" on page __.
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<PAGE>
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements concerning Futurus Financial
Services and Futurus Bank and their operations, performance, financial
conditions and likelihood of success. Forward-looking statements are based on
many assumptions and estimates, and include statements about the competitiveness
of the banking industry, potential regulatory obligations, our business
strategies and other statements that are not historical facts. When used in this
prospectus, the words "may," "would," "could," "will," "expect," "anticipate,"
"believe," "intend," "plan" and "estimate," and similar expressions generally
identify forward-looking statements. Because forward-looking statements involve
risks and uncertainties that are beyond our control, actual results may differ
materially from those expressed in the forward-looking statements. The most
significant of these risks, uncertainties and other factors are discussed under
the heading "Risk Factors" beginning on page __ of this prospectus. We urge you
to carefully consider these factors prior to making an investment in our common
stock.
15
<PAGE>
USE OF PROCEEDS
We estimate that we will receive net proceeds of $10,116,000 from the
sale of 1,100,000 shares of common stock in the offering, after deducting the
estimated underwriting discount of $749,000 and estimated offering expenses of
$135,000. If the underwriter exercises its over-allotment option in full, we
will receive $1,526,250 in additional net proceeds, after deducting an
additional underwriting discount of $123,750. We have established a line of
credit with the Banker's Bank in the amount of $500,000 at 0.50% less than the
prime rate, as published in the Money Rates section of THE WALL STREET JOURNAL,
to pay our pre-opening expenses prior to the completion of the offering. We
intend to pay off this line of credit with proceeds that we receive from this
offering. The following two sections describe our proposed use of proceeds based
on our present plans and business conditions.
USE OF PROCEEDS BY FUTURUS FINANCIAL SERVICES
The following table shows the anticipated use of the proceeds by
Futurus Financial Services. We describe Futurus Bank's anticipated use of
proceeds in the following section.
<TABLE>
<CAPTION>
AMOUNT
<S> <C>
Gross proceeds from offering $11,000,000
Underwriter's discount $ 749,000
Organizational expenses $ 344,000
Offering expenses $ 135,000
Investment in capital stock of Futurus Bank $ 8,500,000
-----------
Remaining proceeds $ 1,272,000
===========
</TABLE>
As shown, we will use $8.5 million to capitalize Futurus Bank. We will
initially invest the remaining net proceeds in United States government
securities or deposit them with Futurus Bank. In the long-term, we will use
these funds for operational expenses and other general corporate purposes,
including the provision of additional capital to Futurus Bank, if necessary.
Although we do not have any specific plans for expansion, we may also use the
proceeds to open additional facilities or acquire other financial institutions
if deemed appropriate.
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<PAGE>
USE OF PROCEEDS BY FUTURUS BANK
The following table shows the anticipated use of the proceeds allocated
to Futurus Bank. These proceeds will be in the form of an investment in Futurus
Bank's common stock by Futurus Financial Services. During the period between the
opening of Futurus Bank and the completion of our permanent facility, we will be
conducting operations from a temporary facility. Futurus Bank will pay $1,750
per month for the temporary facility. When completed, we will then move into our
permanent facility at an initial base rent payment of $14,312.50 per month, plus
an initial monthly rental agency commission of $715.63. We expect our permanent
facility to be completed in the fourth quarter of 2000. The following table
shows the cost of the temporary and permanent facilities for a period of 12
months from the completion of this offering, which includes a four-month period
of time where our temporary and permanent facility leases overlap. Leasehold
improvements, furniture, fixtures and equipment will be capitalized and
amortized over the life of the lease or over the estimated useful life of the
asset. Futurus Bank will use the remaining proceeds to make loans, purchase
securities and otherwise conduct business operations.
<TABLE>
<CAPTION>
AMOUNT
<S> <C>
Investment by Futurus Financial Services in Futurus
Bank's common stock.......................................$8,500,000
Construction of our main office building, including
furniture, fixtures and equipment.........................$1,497,000
Rental payments for temporary building facility
(9 months)................................................$ 15,750
Rental payments for permanent building facility
(7 months)................................................$ 105,197
----------
Remaining proceeds...........................................$6,882,053
==========
</TABLE>
17
<PAGE>
CAPITALIZATION
The following table shows Futurus Financial Services' capitalization as
of December 31, 1999 and its pro forma consolidated capitalization, as adjusted
to give effect to the receipt of the net proceeds from the sale of 1,100,000
shares of common stock in the offering.
Upon Futurus Financial Services' incorporation, Gregory A. Janicki,
chairman of the board of directors of Futurus Financial Services, purchased one
share of common stock at a price of $10.00. Futurus Financial Services will
redeem this share for $10.00 upon the issuance of shares in this offering. The
number of shares shown as outstanding after giving effect to the offering, and
the book value of those shares, do not include shares of common stock issuable
upon the exercise of the warrants held by the organizers or stock options
issuable under our stock incentive plan. For additional information regarding
the number and terms of these warrants and options, see "Executive
Compensation--Organizers' Warrants" and "--Stock Incentive Plan" on pages __ and
__, respectively.
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY ACTUAL AS ADJUSTED
<S> <C> <C>
Preferred stock, no par value, 2,000,000 shares
authorized; no shares issued or outstanding .......... -- --
Common stock, no par value, 10,000,000
shares authorized; 1 share issued and outstanding;
1,100,000 shares issued and outstanding as adjusted(1) $ 10 $ 10,116,000
Deficit accumulated during the development stage ....... (183,566)(2) (344,000)(3)
------------ ------------
Total shareholders' equity ........................ $ (183,556) $ 9,772,000
============ ============
Book value per share(4)................................. N/A $ 8.88
============
</TABLE>
- -------------------------
(1) The expenses of the offering will be charged against this account. We
estimate that the offering expenses will be $884,000, which includes
$749,000 in underwriting discounts and $135,000 in other offering expenses,
including legal, accounting and printing expenses and registration fees.
(2) This deficit reflects pre-opening expenses incurred through December 31,
1999, consisting primarily of legal and consulting fees.
(3) The "As Adjusted" accumulated deficit results from estimated organizational
and pre-opening expenses of $344,000 incurred through Futurus Bank's target
opening date in the second quarter of 2000. Actual organizational and
pre-opening expenses may be higher and may therefore increase the deficit
accumulated during the pre-opening stage and further reduce shareholders'
equity.
(4) After giving effect to the receipt of the net proceeds from this offering,
there is an immediate dilution in the book value per share of $1.12,
resulting from recognition of organizational and pre-opening expenses and
charging the offering expenses against common stock.
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<PAGE>
DIVIDENDS
Initially, we intend to retain all of our earnings to support our
operations and to expand our business. Additionally, we are subject to
significant regulatory restrictions on the payment of cash dividends. In light
of these restrictions and our need to retain and build capital, we do not plan
to pay dividends until we become profitable and recover any losses incurred
during our initial operations. Our payment of future dividends and our dividend
policy will depend on our earnings, capital requirements and our financial
condition, as well as other factors that our board of directors considers
relevant. See "Supervision and Regulation--Payment of Dividends" on page __.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
PLAN OF OPERATIONS
Futurus Financial Services' financial statements and related notes,
which are included in this prospectus, provide additional information relating
to the following discussion of our financial condition. See "Index to Financial
Statements."
Futurus Financial Services was incorporated on August 12, 1999 to serve
as a holding company for Futurus Bank, N.A., a proposed national bank. Since we
organized, our main activities have been:
- seeking, interviewing and selecting our directors and officers;
- preparing our business plan;
- securing a line of credit;
- applying for a national bank charter;
- applying for FDIC deposit insurance;
- applying to become a bank holding company; and
- raising equity capital through this offering.
Futurus Financial Services' operations from August 12, 1999 through the
close of the offering have been and will continue to be funded through a line of
credit from The Bankers Bank. The total amount available on the line of credit
is $500,000, of which $170,000 was drawn down at December 31, 1999. Eight of our
ten organizers have guaranteed a portion of the line of credit, each in the
amount of $93,750. The line of credit bears interest at 0.50% less than the
prime rate, as published in the Money Rates section of THE WALL STREET JOURNAL,
and is due on August 23, 2000. Futurus Financial Services plans to repay the
line of credit after the closing of this offering.
FINANCIAL RESULTS
From August 12, 1999 through December 31, 1999, the net loss amounted
to $183,566. The estimated net loss for the period from August 12, 1999 through
April 17, 2000, the anticipated opening date of Futurus Bank, is $344,000, which
is attributable to the following estimated expenses:
<TABLE>
<S> <C>
Officer compensation .................. $123,000
Legal, consulting and professional fees 141,000
Other pre-opening expenses ............ 80,000
--------
Total .......................... $344,000
========
</TABLE>
OFFICES
On September 7, 1999, Futurus Financial Services signed a letter of
intent to lease a 1.35 acre lot located on Windward Parkway, one-half mile west
of Georgia Highway 400. The leased property will be the site for our main
office, which is expected to have approximately 7,100 square feet of office
space. Construction of the permanent facility is expected to begin in the second
quarter of 2000 with approximately $450,000 of the $1.5 million construction
costs being funded by the landlord, Pioneer Real Estate Development, Inc. After
Futurus Bank is capitalized, it will assume our lease with Pioneer and will pay
the remaining balance of the construction costs. The term of the office lease is
12 years, with two five-year renewal options with initial monthly rent being
$14,312.50. In connection with the leased property, Futurus Financial Services
will pay an initial rental agency commission to The Myrick Company in the amount
of $14,312.50, and is further obligated to pay The Myrick Company 5% of all
20
<PAGE>
remaining rents, due monthly as rent is paid. Futurus Financial Services'
obligation to The Myrick Company will be assumed by Futurus Bank.
Until our permanent facility is completed, we will conduct our
operations in a temporary facility, which is approximately three miles from our
proposed permanent location. Our temporary facility will be located in the
Alpharetta Square shopping center at 201 South Main Street, Alpharetta, Georgia,
just south of the Alpharetta Highway (also known as South Main Street) and Old
Milton Parkway intersection. The lease term for our temporary facility will be
for six months and includes an additional six-month renewal option. Futurus Bank
will pay monthly rent in the amount of $1,750 for the temporary facility. We
expect to be open for business in our temporary facility in the second quarter
of 2000.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Since Futurus Financial Services has been in the organizational stage,
there are no results of operations to present at this time. Nevertheless, once
Futurus Bank begins operations, net interest income, Futurus Financial Services'
primary source of earnings, will fluctuate with significant interest rate
movements. To lessen the impact of these fluctuations, we intend to structure
the balance sheet so that repricing opportunities exist for both assets and
liabilities in roughly equal amounts at approximately the same time intervals.
Imbalances in these repricing opportunities at any point in time constitute
interest rate sensitivity.
Interest rate sensitivity refers to the responsiveness of
interest-bearing assets and liabilities to change in market interest rates. The
rate sensitive position, or "gap," is the difference in the volume of rate
sensitive assets and liabilities at a given time interval. The general objective
of gap management is to actively manage rate sensitive assets and liabilities in
order to reduce the impact of interest rate fluctuations on the net interest
margin. We will generally attempt to maintain a balance between rate sensitive
assets and liabilities as the exposure period is lengthened to minimize Futurus
Bank's overall interest rate risk.
We will regularly evaluate the balance sheet's asset mix in terms of
several variables:
- yield;
- credit quality;
- appropriate funding sources; and
- liquidity.
To effectively manage the balance sheet's liability mix, we plan to focus on
expanding our deposit base and converting assets to cash as necessary.
As Futurus Bank continues to grow, we will continuously structure its
rate sensitivity position in an effort to hedge against rapidly rising or
falling interest rates. Futurus Bank's asset and liability committee will meet
on a monthly basis to develop a strategy for the upcoming period.
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. We can obtain these funds by converting assets to cash or by
attracting new deposits. Futurus Bank's ability to maintain and increase
deposits will serve as its primary source of liquidity.
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<PAGE>
Other than this offering, we know of no trends, demands, commitments,
events or uncertainties that should result in or are reasonably likely to result
in Futurus Financial Services' liquidity increasing or decreasing in any
material way in the foreseeable future.
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 perpetual preferred stock and minority
interests. 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 Office of the Comptroller of the Currency has established a 3.0% minimum
leverage ratio requirement. The leverage ratio is computed by dividing Tier 1
capital into total assets. In the case of Futurus Bank and other banks that are
experiencing growth or have not received the highest regulatory rating from
their primary regulator, 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.
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<PAGE>
PROPOSED BUSINESS OF FUTURUS FINANCIAL SERVICES AND FUTURUS BANK
BACKGROUND
FUTURUS FINANCIAL SERVICES. We incorporated Futurus Financial Services
as a Georgia corporation on August 12, 1999 to serve as a bank holding company
that will own 100% of the capital stock of Futurus Bank. Futurus Financial
Services plans to use $8.5 million of the net proceeds of this offering to
purchase the capital stock of Futurus Bank. Initially, we will have no business
operations other than owning and managing Futurus Bank.
We will file an application with the Federal Reserve to become a bank
holding company after receiving our preliminary approval from the OCC. We have
chosen this holding company structure because we believe it will provide
flexibility that would not otherwise be available. With a holding company
structure, we may assist Futurus Bank in maintaining its required capital ratios
by borrowing money and contributing the proceeds of that debt to Futurus Bank as
primary capital. Additionally, under provisions of the Gramm-Leach-Bliley Act,
which will take effect March 11, 2000, a holding company may engage in
activities that are financial in nature or incidental or complementary to a
financial activity, including some insurance transactions, real estate
development activities and merchant banking activities, in which Futurus Bank
will be prohibited from engaging. Although we do not presently intend to engage
in other activities, we will be able to do so with a proper notice or filing to
the Federal Reserve if we believe that there is a need for these services in our
market area, that we can be successful in these activities and that these
activities could be profitable. See "Supervision and Regulation--Futurus
Financial Services" on page __.
FUTURUS BANK. On October 15, 1999, we filed an application with the
Office of the Comptroller of the Currency to organize Futurus Bank and with the
FDIC to obtain insurance for Futurus Bank's deposits. Final approval of our
application to the Office of the Comptroller of the Currency will be conditioned
upon our raising the required minimum capital, receipt of FDIC approval and the
implementation of proper bank regulatory policies and procedures. Subject to
receiving final regulatory approvals from these agencies, we plan to open the
bank in the second quarter of 2000 and engage in general commercial and consumer
banking.
MARKET OPPORTUNITIES
PRIMARY SERVICE AREA. The boundaries for Futurus Bank's initial primary
service area are represented by the Fulton County/Forsyth County and Cherokee
County lines to the north, the Fulton County/Gwinnett County line to the east,
Interstate 285 to the south, and the Fulton County/Cobb County line to the west.
Accordingly, the primary service area represents a geographic area that includes
the Alpharetta, Windward, Roswell, Sandy Springs and Northridge communities in
northern Fulton County.
Futurus Bank will be located adjacent to the Windward development in
Alpharetta, Georgia, a focal point of Futurus Bank's primary service area.
Windward is considered to be one of Atlanta's premier mixed-use developments and
a unique environment in which to live and work. Totaling more than 3,400 acres,
Windward includes a 1,000-acre business community. There are more than 15,000
people employed by businesses located in Windward, and the residential area is
home to more than 1,500 families. The Windward residential community offers more
than a dozen distinct neighborhoods, including a 195-acre lake and two private
golf courses.
LOCAL ECONOMY. Northern Fulton County is a significant focal point of
Atlanta's metropolitan area with its diversified economic base. This economic
base includes major operations of American Honda Motor Company, Inc., AT&T
Corporation, CibaVision Ltd., Compaq Computer Corporation,
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<PAGE>
E*Trade Securities, Inc., Equifax, Inc., GTE Corporation, Holiday Inn Worldwide,
Kimberly-Clark, Inc., Lucent Technologies, Inc., McKesson HBOC, Inc., Nortel
Communications, Siemens Energy & Automation, Inc. and United Parcel Service of
America, Inc. The presence of these corporations has fueled the growth of small
businesses in northern Fulton County. The strength of the local economy relies
heavily on its large and highly diversified small business community, which
makes up 85% of the membership of the Greater Northern Fulton Chamber of
Commerce.
The characteristics of the individuals and small businesses in the
primary service area represent the type of client that Futurus Bank will target
for its client base. We believe that northern Fulton County represents a dynamic
and unique market with its well diversified and growing customer base. We also
believe that the primary service area presents an environment that will support
Futurus Bank's formation and growth. As a community bank, Futurus Bank will be
designed to serve the needs of the residents and small- to medium-sized
businesses within this growing economy. We believe continued economic growth in
the northern Fulton County market will be important to Futurus Bank's long term
success.
RETAIL. A significant economic factor of the primary service area is
the presence of North Point Mall. The one-mile stretch of land located east of
Georgia Highway 400 between Mansell Road and Haynes Bridge Road represents one
of the largest commercial retail shopping areas in the Atlanta metropolitan
area. The largest shopping center in the area is North Point Mall, which is
anchored by six major department stores and 180 specialty shops. In addition,
ToysRUs, Service Merchandise, Target, major furniture stores, numerous bank
branches, movie theaters, eating establishments and commercial office buildings
are located in close proximity to North Point Mall.
POPULATION. Our primary service area represents a diverse market that
includes a growing population with numerous new and established residential
neighborhoods and small- to medium-sized businesses. Additionally, there are a
growing number of large employers continuing to relocate to the area. The
accessibility of Georgia Highway 400, sometimes referred to as "The Golden
Corridor," has been a key to the population growth and economic development of
northern Fulton County.
The cities of Alpharetta and Roswell represent an important part of
Futurus Bank's primary service area. According to estimates released by the
United States Census Bureau as recently as July 1, 1998, Alpharetta ranked first
in Georgia in terms of population growth between 1990 and 1998, with a
percentage increase of 91%, and Roswell ranked twelfth with a population
increase of 19%. The total population of the primary service area reported by
the U.S. Census was 160,592 in 1990. This figure was estimated to be 221,864 in
1999 and is projected to reach 254,520 by 2004. Additionally, the median family
income was estimated to be $67,730 in 1999 and is projected to reach $76,357 by
2004.
COMPETITION. Bank and thrift deposits in Futurus Bank's primary
service area grew from approximately $1.9 billion in June 1994 to more than
$2.5 billion in June 1998. This multi-billion dollar deposit base is
primarily controlled by national and super-regional banks, which include Bank
of America, Wachovia, First Union and SunTrust. Although these large
financial institutions are well established in the area, local community
banks have been successful in competing with these large banks for deposits.
From June 1994 to June 1998, the following trends occurred in deposit market
share:
- Total deposits for the national and super-regional banks
described above grew 18.6%, compared to 32.6% growth in the
overall deposit market.
- The slower relative growth of these large banks resulted in their
combined relative deposit market share falling from 71.8%
to 64.3%.
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- Six community-oriented banks operating in the service area during
the entire four year period saw their total deposits grow 322.6%.
These banks included Bank of North Georgia, Milton National Bank,
Fidelity National Bank, Etowah Bank, First Colony Bank and Tucker
Federal Bank.
- These six community banks increased their combined relative
deposit market share from 6.3% to 20.0%.
In addition to offering competitive banking products, we believe that
community banks must provide personalized service and must make timely, local
decisions in order to compete successfully. We also believe that recent
acquisitions of several community banks in the Atlanta market may diminish the
quality of banking services available to small- and medium-sized businesses and
consumers in the market. Further consolidation is likely to create additional
opportunities for community banks to capture deposits from affected clients who
may be dissatisfied with their new financial institutions.
We will compete directly with many of the institutions previously
named. Additionally, two new start-up banks have established operations within
our primary service area since 1998. Although community banks and thrifts
operating within our market area will compete directly with Futurus Bank for
banking products and services, none of these community banking institutions has
a location within approximately three miles of our proposed main office site. As
a result, we believe that we have an opportunity to bring community banking to
an underserved, local market.
We recognize that most of our competitors have substantially greater
resources and lending limits than Futurus Bank will have and provide other
services, such as extensive and established branch networks and trust services,
that Futurus Bank does not expect to provide initially. As a result of these
competitive factors, Futurus Bank may have to pay higher interest rates to
attract depositors or extend credit with lower interest rates to attract
borrowers. However, we will attempt to minimize these competitive factors and
attract new banking relationships by offering our clients what we believe is a
new and innovative banking experience through our "high tech, high touch"
approach to community banking. For example, we intend to differentiate Futurus
Bank from our competitors primarily through our significant involvement in the
communities we serve, the quality of our associates and our strategic
application of current technologies that we anticipate will make banking with
Futurus Bank both convenient and enjoyable.
PHILOSOPHY AND STRATEGY
Our management philosophy is to deliver superior service to our clients
and to create a banking experience that motivates them to tell others about our
banking services. As part of our marketing effort, we will employ a "high tech,
high touch" theme to emphasize our commitment to complement our client-oriented
service approach with user-friendly technologies. Futurus Bank has adopted this
philosophy to attract clients and acquire new deposits in our market as well as
deposits now controlled by other financial institutions in our primary service
area. Additionally, we believe that significant local ownership and control will
be a major factor in furthering our ability to respond more efficiently to our
clients' needs and will aid in Futurus Bank's growth and success. To implement
our philosophy and to grow and expand our operations, we intend to put into
practice the following strategies:
ADVANCED TECHNOLOGY. Futurus Bank intends to use advanced banking and
communications technology to deliver services that will match the level of
sophistication of Futurus Bank's anticipated client base. By positioning Futurus
Bank as a community bank committed to enhancing its service quality and
convenience through user-friendly technologies, we expect to establish
meaningful client relationships from both new and existing residents and
businesses in the area.
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<PAGE>
EXPERIENCED SENIOR MANAGEMENT. We are assembling a senior management
team that possesses extensive experience in the banking industry, as well as
substantial business and banking contacts in our market. For example, our
president and chief executive officer, William M. Butler, has over 17 years of
banking experience. See "Management" on page __.
SKILLED ASSOCIATES. We will strive to hire highly trained and seasoned
staff that can bring with them existing client relationships established through
prior banking experience. By hiring associates with established client
relationships, Futurus Bank will be able to grow more rapidly than if we hired
associates who required time to develop a sufficient client base. Additionally,
we plan to train our associates to answer questions about all of our products
and services so that the first associate a client encounters will be able to
resolve all of the client's banking-related questions.
INDIVIDUAL CLIENT FOCUS. We will focus on providing individualized
service and attention to our clients, which will include individuals and small-
to medium-sized businesses. We will concentrate on establishing and maintaining
long-term client relationships by working to ensure that our clients have
positive banking experiences. As our associates, officers and directors become
familiar with each client on an individual basis, we will be able to respond to
credit requests more quickly and be more flexible in approving loans based on
collateral quality and personal knowledge of the client's banking needs.
HIGHLY VISIBLE SITE. Futurus Bank's main office location is highly
visible and near a large concentration of our targeted commercial business and
residential clients. We believe this will enhance Futurus Bank's image as a
strong competitor. Additionally, our nearest competing community bank is
approximately three miles away from our main office, providing us with what we
believe is a better opportunity to develop a community banking niche.
COMMUNITY-ORIENTED BOARD OF DIRECTORS. Our board of directors consists
primarily of long-time metropolitan Atlanta residents with extensive contacts in
our primary service area. The board of directors also represents a wide array of
business experience and community involvement, and their continued active
involvement will provide an opportunity to promote Futurus Bank and its products
and services. We anticipate that our directors will bring substantial business
and banking contacts to Futurus Bank as a result of their experience,
involvement and community standing.
OFFICER AND DIRECTOR CALL PROGRAM. We intend to implement an active
officer and director call program to promote Futurus Bank's philosophy. The
purpose of this call program will be to personally visit prospective clients,
introduce Futurus Bank's "high tech, high touch" philosophy and invite them to
do business with us.
PROPOSED RELATIONSHIP WITH REAL ESTATE FINANCIAL SERVICES. We expect to
benefit from our proposed referral relationship with Real Estate Financial
Services, a retail mortgage lending company that is principally owned by two of
our directors, Gregory A. Janicki and Deborah M. Janicki. Real Estate Financial
Services regularly refers consumer and commercial business to various financial
institutions located in the metropolitan Atlanta area. Once Futurus Bank begins
its operations, we anticipate that Real Estate Financial Services may be a
consistent and important source of new banking relationships, helping us to
build our client base. Additionally, because Real Estate Financial Services does
not generally fund commercial loans, consumer second mortgages, home equity
loans or home equity lines of credit, we believe that our relationship with Real
Estate Financial Services may also generate loan product leads for our
lending officers.
LOCAL DECISION-MAKING. We will emphasize local decision-making with
experienced bankers and will focus on both associate retention and the delivery
of personal, professional and responsive service. If Futurus Bank expands into
other communities, it intends to maintain its policy of making
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<PAGE>
decisions locally. This will allow Futurus Bank to be more responsive to client
requests and to the needs of clients within the particular community.
MARKETING AND ADVERTISING. Futurus Financial Services has retained The
Stern Marketing Group, a national marketing firm located in Berkley, California,
to promote Futurus Bank and to develop its "high tech, high touch" image as a
technologically responsive, community-focused bank that emphasizes prompt,
professional and personalized service to individuals and businesses. Futurus
Bank will also sponsor various community activities in our primary service area
and will use media services such as local newspapers and direct mail campaigns
to promote its products and services.
CAPITALIZE ON TREND TOWARD CONSOLIDATION. We believe that consolidation
in the banking industry will continue and will result in many individuals and
small- to medium-sized businesses being dissatisfied with the upheaval in their
banking relationships. We expect to capitalize on this continued industry
consolidation. By positioning ourselves as a true community bank that is
interested in delivering unparalleled personal service, we believe that we will
draw many of those dissatisfied clients to us.
OFFER FEE-GENERATING PRODUCTS AND SERVICES. Futurus Bank's range of
services, pricing strategies, interest rates paid and charged, and hours of
operation will be structured to attract its target clients and grow its market
share. Futurus Bank will strive to offer small- to medium-sized businesses,
professionals, entrepreneurs and consumers the best loan services available
while charging appropriate fees for these services. Additionally, we anticipate
using sophisticated technology and third-party service providers to perform
selected functions at a lower cost in order to enhance non-interest income.
LENDING SERVICES
LENDING POLICY. We will offer a full range of lending products,
including commercial, real estate and consumer loans to individuals and small-
to medium-sized businesses and professional concerns. We will compete for these
loans with competitors who are well established in the northern Fulton County
area and have greater resources and lending limits. As a result, we may
initially have to offer more flexible pricing and terms to attract borrowers.
We estimate that Futurus Bank's loan portfolio will be comprised of the
following:
<TABLE>
<CAPTION>
LOAN CATEGORY RATIO
------------- -----
<S> <C>
Commercial loans to small- and
medium-sized businesses 60%
Real estate related loans 30%
Consumer loans 10%
</TABLE>
Based on our executive officers' past lending experience, we believe that, when
properly managed and monitored, none of these categories represents a
significantly higher risk than the other. Additionally, Futurus Bank plans to
avoid concentrations of loans to a single industry or secured by a particular
type of collateral.
LOAN APPROVAL AND REVIEW. Futurus Bank's loan approval policies will
provide for various levels of officer lending authority. When the amount of
total loans to a single borrower exceeds that individual officer's lending
authority, an officer with a higher lending limit or Futurus Bank's Loan
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<PAGE>
Committee will determine whether to approve the loan request. Futurus Bank will
not make any loans to any of its directors or executive officers unless its
board of directors, excluding the interested party, first approves the loan, and
the terms of the loan are no more favorable than would be available to any
comparable borrower.
LENDING LIMITS. Futurus Bank's lending activities will be subject to a
variety of lending limits imposed by federal law. Differing limits apply based
on the type of loan or the nature of the borrower, including the borrower's
relationship to the bank. In general, however, Futurus Bank will be able to loan
any one borrower a maximum amount equal to either:
- 15% of Futurus Bank's capital and surplus; or
- 25% of its capital and surplus if the amount that exceeds 15% is fully
secured by readily marketable collateral.
Based on its proposed capitalization and projected pre-opening
expenses, Futurus Bank's initial legal lending limit will be approximately
$1,275,000 for loans not fully secured plus an additional $850,000, or a total
of approximately $2.1 million, for loans that meet the federal guidelines. These
legal limits will increase or decrease as Futurus Bank's capital increases or
decreases as a result of its earnings or losses, among other reasons. Our
management team has adopted an internal lending limit of $1 million, which will
initially be lower than the applicable legal limit. However, based on either our
internal lending limit or our legal lending limit, Futurus Bank will need to
sell participations in its loans to other financial institutions in order to
meet all of the lending needs of our clients requiring extensions of credit
above these limits.
CREDIT RISKS. The principal economic risk associated with each category
of loans that Futurus Bank expects to make is the creditworthiness of the
borrower. Borrower creditworthiness is affected by general economic conditions
and the strength of the relevant business market segment. General economic
factors affecting a borrower's ability to repay include interest, inflation and
employment rates, as well as other factors affecting a borrower's customers,
suppliers and employees.
The well established financial institutions in the northern Fulton
County market are likely to make proportionately more loans to medium- to
large-sized businesses than Futurus Bank will make. Many of Futurus Bank's
anticipated commercial loans will likely be made to small- to medium-sized
businesses that may be less able to withstand competitive, economic and
financial pressures than larger borrowers.
COMMERCIAL LOANS. We expect that loans for commercial purposes in
various lines of businesses will be one of the primary components of Futurus
Bank's loan portfolio. The terms of these loans will vary by purpose and by type
of underlying collateral, if any. Futurus Bank will typically make equipment
loans for a term of five years or less at fixed or variable rates, with the loan
fully amortized over the term. Equipment loans generally will be secured by the
financed equipment, and the ratio of the loan principal to the value of the
financed equipment or other collateral will generally be 80% or less. Loans to
support working capital will typically have terms not exceeding one year and
will usually be secured by accounts receivable, inventory or personal guarantees
of the principals of the business. For loans secured by accounts receivable or
inventory, principal will typically be repaid as the assets securing the loan
are converted into cash, and for loans secured with other types of collateral,
principal will typically be due at maturity. The quality of the commercial
borrower's management and its ability both to properly evaluate changes in the
supply and demand characteristics affecting its markets for products and
services and to effectively respond to such changes are significant factors in a
commercial borrower's creditworthiness.
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REAL ESTATE LOANS. Futurus Bank will make commercial real estate loans,
construction and development loans, and residential real estate loans. These
loans include commercial loans where Futurus Bank takes a security interest in
real estate out of an abundance of caution and not as the principal collateral
for the loan, but will exclude home equity loans, which are classified as
consumer loans.
- COMMERCIAL REAL ESTATE. Commercial real estate loan terms
generally will be limited to five years or less, although payments may be
structured on a longer amortization basis. Interest rates may be fixed or
adjustable, although rates typically will not be fixed for a period exceeding 60
months. Futurus Bank will generally charge an origination fee of one percent. We
will attempt to reduce credit risk on our commercial real estate loans by
emphasizing loans on owner-occupied office and retail buildings where the ratio
of the loan principal to the value of the collateral as established by
independent appraisal does not exceed 80% and net projected cash flow available
for debt service equals 120% of the debt service requirement. In addition,
Futurus Bank generally will require personal guarantees from the principal
owners of the property supported by a review by Futurus Bank's management of the
principal owners' personal financial statements. Risks associated with
commercial real estate loans include fluctuations in the value of real estate,
new job creation trends, tenant vacancy rates and the quality of the borrower's
management. Futurus Bank will limit its risk by analyzing borrowers' cash flow
and collateral value on an ongoing basis.
- CONSTRUCTION AND DEVELOPMENT LOANS. We will make construction and
development loans both on a pre-sold and speculative basis. If the borrower has
entered into an agreement to sell the property prior to beginning construction,
then the loan is considered to be on a pre-sold basis. If the borrower has not
entered into an agreement to sell the property prior to beginning construction,
then the loan is considered to be on a speculative basis. Construction and
development loans are generally made with a term of nine to twelve months and
interest is paid quarterly. The ratio of the loan principal to the value of the
collateral as established by independent appraisal typically will not exceed
75%. Speculative loans will be based on the borrower's financial strength and
cash flow position. Loan proceeds will be disbursed based on the percentage of
completion and only after the project has been inspected by an experienced
construction lender or independent appraiser. Risks associated with construction
loans include fluctuations in the value of real estate and new job creation
trends.
- RESIDENTIAL REAL ESTATE. Futurus Bank's residential real estate
loans will consist of residential second mortgage loans and residential
construction loans only. We will offer fixed and variable rates on our mortgages
with the amortization of second mortgages generally not exceeding 15 years and
the rates generally not being fixed for over 60 months. These loans will be made
in accordance with Futurus Bank's appraisal policy and with the ratio of the
loan principal to the value of collateral as established by independent
appraisal not exceeding 95%. We expect that these loan-to-value ratios will be
sufficient to compensate for fluctuations in real estate market value and to
minimize losses that could result from a downturn in the residential real estate
market.
CONSUMER LOANS. Futurus Bank will make a variety of loans to
individuals for personal, family and household purposes, including secured and
unsecured installment and term loans, home equity loans and home equity lines of
credit. Consumer loan repayments depend upon the borrower's financial stability
and are more likely to be adversely affected by divorce, job loss, illness and
personal hardships. Because many consumer loans are secured by depreciable
assets such as boats, cars and trailers the loan should be amortized over the
useful life of the asset. To minimize the risk that the borrower cannot afford
the monthly payments, all fixed monthly obligations should not exceed 38% of the
borrower's gross monthly income. The borrower should also be continuously
employed for at least 12 months prior to obtaining the loan. The loan officer
will review the borrower's past credit history, past income level, debt history
and, when applicable, cash flow and determine the impact of all these factors on
the ability of the
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borrower to make future payments as agreed. We expect that the principal
competitors for consumer loans will be the established banks in the Futurus Bank
market.
LENDING OFFICERS. Futurus Bank intends to initially hire a commercial
lender and a consumer lender in order to develop our loan portfolios. Each
lender will have experience within the northern Fulton County market and will be
expected to bring substantial business to Futurus Bank.
INVESTMENTS
In addition to loans, Futurus Bank will make other investments
primarily in obligations of the United States or obligations guaranteed as to
principal and interest by the United States and other taxable securities. No
investment in any of those instruments will exceed any applicable limitation
imposed by law or regulation. The Asset and Liability Committee will review the
investment portfolio on an ongoing basis in order to ensure that the investments
conform to Futurus Bank's policy as set by the board of directors. The Asset and
Liability Committee will be chaired by C. Parke Day and will also include Joel
P. Weinbach, Danny L. Tesney and Nathan E. Hardwick, IV.
ASSET AND LIABILITY MANAGEMENT
The Asset and Liability Committee will manage Futurus Bank's assets and
liabilities and will strive to provide a stable, optimized net interest margin,
adequate liquidity and a profitable after-tax return on assets and return on
equity. The committee will conduct these management functions within the
framework of written loan and investment policies that Futurus Bank will adopt.
The committee will attempt to maintain a balanced position between rate
sensitive assets and rate sensitive liabilities. Specifically, it will chart
assets and liabilities on a matrix by maturity, effective duration and interest
adjustment period and attempt to manage any gaps in maturity ranges.
DEPOSIT SERVICES
Futurus Bank will seek to establish a broad base of core deposits,
including savings accounts, checking accounts, money market accounts, a variety
of certificates of deposit and IRA accounts. To attract deposits, Futurus Bank
will employ an aggressive marketing plan in its overall service area and will
feature a broad product line and competitive rates and services. The primary
sources of deposits will be residents of, and businesses and their employees
located in, Futurus Bank's primary market area. Futurus Bank plans to obtain
these deposits through personal solicitation by its officers and directors,
direct mail solicitations and advertisements published in the local media. In
order to attract its initial deposit base, Futurus Bank may offer higher
interest rates on various deposit accounts.
OTHER BANKING SERVICES
Other anticipated banking services include limited cash management
services, on-line banking services, travelers checks, direct deposit of payroll
and social security checks, night depository, ATM cards and debit cards. Futurus
Bank plans to become associated with one or more nationwide networks of
automated teller machines that our clients will be able to use throughout
Georgia and other regions. Futurus Bank plans to offer discount brokerage
services through a third party that has not yet been chosen. We also plan to
offer MasterCard-Registered Trademark- and VISA-Registered Trademark- credit
card services through a correspondent bank as an agent for Futurus Bank. Futurus
Bank does not plan to exercise trust powers during its initial years of
operation. It may in the future offer a full-service trust department, but
cannot do so without the prior approval of the Office of the Comptroller of the
Currency.
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Futurus Bank will also offer its targeted commercial clients a courier
service that will pick up non-cash deposits and minimal cash deposits of up to
$200 from the client's place of business and deliver them to the bank. We
believe that this will be an important service for our clients because Futurus
Bank will initially have only one location. Futurus Bank will provide this
service through a third party, which has not yet been chosen, that is approved
by the Public Service Commission for bank-related work.
FUTURE SERVICES
In addition to the services described above, we anticipate that at some
time in the future we will also offer to our clients permissible insurance
products. We will probably delay offering these products until both Futurus
Financial Services and Futurus Bank are operating profitably.
INFORMATION SYSTEMS AND THE YEAR 2000
The year 2000 issue confronting Futurus Financial Services and Futurus
Bank and their suppliers, clients, clients' suppliers and competitors centers on
the inability of computer systems to recognize the year 2000 and other year
2000-sensitive dates such as February 29, 2000 or January 1, 2001. Many existing
computer programs and systems originally were programmed with six-digit dates
that provided only two digits to identify the calendar year in the date field.
After the new millennium, these programs and computers may recognize "00" as the
year 1900 rather than the year 2000. If computer systems are not able to
identify the year 2000, many computer applications could fail or create
incorrect results.
Since we do not intend to begin our banking operations until the second
quarter of 2000, we will not face the same date recognition issues as other
financial institutions that were in operation at January 1, 2000. Futurus
Financial Services, Futurus Bank, or any of their service providers,
correspondents, vendors or clients may, however, experience a disruption of
business resulting from a year 2000 problem occurring after January 1, 2000.
Such a disruption could cause a delay in beginning our banking operations. We
will use software and hardware developed by independent third parties to provide
us with our intended information systems. As a result, we will depend on the
efforts of those vendors to ensure that their data processing systems
accommodate year 2000 information on January 1, 2000 as well as any later year
2000-sensitive date.
We believe most year 2000 issues that could affect our operations will
have surfaced prior to when we begin our banking operations. Consequently, we do
not expect any year 2000 issues to have a material effect on our operations.
ASSOCIATES
When we begin operations, Futurus Bank projects that it will have 13
full-time associates and one part-time associate. We do not expect that Futurus
Financial Services will have any associates who are not also associates of
Futurus Bank.
OFFICES
Futurus Bank will be located on Windward Parkway, one-half mile West of
Georgia Highway 400 in Alpharetta, Georgia. On September 7, 1999, Futurus
Financial Services signed a letter of intent to lease an office building with
approximately 7,100 square feet. The term of the lease will be for 12 years,
with two five-year renewal options. Rent is expected to range from $14,312.50 to
$17,795.79 per month, plus a monthly rental agency fee ranging from $715.63 to
$889.79, over the initial 12-year lease period. Construction of the permanent
facility is expected to begin in the second quarter of 2000 with completion
anticipated in the fourth quarter of 2000. The permanent facility will be a
single-story, contemporary
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style building, and will include four drive-up windows, two of which will
initially be operational, and one automated teller machine. The total
construction cost of the building is estimated at $1.5 million, with Pioneer
Real Estate Development, Inc., as landlord, contributing approximately $450,000
of that amount. Futurus Bank, after being capitalized by Futurus Financial
Services, will contribute the balance of approximately $1.05 million.
Futurus Bank's proposed location will offer high visibility in an area
with significant traffic flow. The Windward area is a central location for
business, residential, leisure and shopping activities and is near Georgia
Highway 400, a major highway serving the community.
In the interim, Futurus Bank will operate out of a temporary facility
located in the Alpharetta Square shopping center at 201 South Main Street,
Alpharetta, Georgia, just south of the Alpharetta Highway (also known as South
Main Street) and Old Milton Parkway intersection, which is approximately three
miles from our proposed permanent location. The rental fee for the temporary
office space will be approximately $1,750 per month for six months with an
additional six-month renewal option. Until we can occupy our permanent office
location, we plan to conduct only limited banking services out of our temporary
facility, which will include making loans and taking deposits.
Until February 1, 2000, the beginning date of Futurus Financial
Services' temporary facility lease, our executive offices were located at 1580
Warsaw Road, Roswell, Georgia. The monthly rental fee for our Warsaw Road
location is $1,055. The corresponding lease agreement will terminate on August
31, 2000. We anticipate that total rental expense associated with the Warsaw
Road location will be $8,440 during 2000.
Although we have no specific plans for expansion, we may expand our
presence in Futurus Bank's market by adding branches in other strategic
locations if deemed appropriate. We realize that by adding new branches, Futurus
Bank may gain new channels through which it can build its deposit base and
solicit new clients. Accordingly, we will carefully evaluate future
opportunities for strategic expansion as they become available.
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<PAGE>
MANAGEMENT
GENERAL
The following table sets forth the number and percentage of outstanding
shares of common stock we expect to be beneficially owned by the organizers and
executive officers after the completion of this offering. All of our organizers
will serve as directors. The addresses of our organizers are the same as the
address of Futurus Financial Services. Prior to the offering, Gregory A. Janicki
purchased one share of common stock for $10.00. We will redeem this share after
the offering. The numbers of shares indicated in the table are based on
"beneficial ownership" concepts as defined by the Securities and Exchange
Commission. Beneficial ownership includes shares that are either owned or may be
acquired within 60 days by the principal, a spouse, minor children and other
relatives residing in the same household, and trusts, partnerships, corporations
or deferred compensation plans which are affiliated with the principal. This
table separately discloses the number of warrants and options that will be
granted to each organizer or executive officer.
<TABLE>
<CAPTION>
SHARES ANTICIPATED TO BE
OWNED FOLLOWING THE
OFFERING WARRANTS AND OPTIONS
------------------------ ----------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT NUMBER
<S> <C> <C> <C>
William M. Butler (1) 5,000 0.5 27,500
C. Parke Day 20,000 1.8 20,000
Nathan E. Hardwick, IV 20,000 1.8 20,000
Michael S. Hug 20,000 1.8 20,000
Deborah M. Janicki (2) 30,000 2.7 30,000
Gregory A. Janicki (2) 30,000 2.7 30,000
Richard W. Stimson 20,000 1.8 20,000
Donald S. Shapleigh, Jr 5,000 0.5 2,500
Danny L. Tesney 20,000 1.8 20,000
Joel P. Weinbach 20,000 1.8 20,000
------- ---- -------
190,000 17.2 210,000
</TABLE>
All Proposed Directors and Executive
Officers as a Group
(10 persons)
- --------------------------------
(1) Mr. Butler will receive options to purchase 25,000 shares of common stock
under our stock incentive plan, as well as warrants to purchase 2,500
shares.
(2) Gregory A. Janicki and Deborah M. Janicki each intends to purchase 30,000
shares of common stock. As husband and wife, they will also be deemed to be
the beneficial owner of each other's shares. Consequently, each will be
deemed to beneficially own 60,000 shares.
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EXECUTIVE OFFICERS AND DIRECTORS OF FUTURUS FINANCIAL SERVICES
The following table sets forth the age of our executive officers and
directors and the positions that they hold with Futurus Financial Services as of
January 1, 2000. Each person listed below as a director has served as a director
of Futurus Financial Services since August 12, 1999. Our president and chief
executive office has served us in this capacity since August 20, 1999. The
president and chief executive officer, chief financial officer and directors of
Futurus Financial Services will also hold these same positions with Futurus
Bank. Futurus Financial Services' articles of incorporation provide for a
staggered board of directors so that, as nearly as possible, one-third of the
directors are elected each year to serve three-year terms. The terms of office
of the classes of directors expire as follows: Class I at the first annual
meeting of shareholders, which we intend to hold in the spring of 2001; Class II
at the second annual meeting of shareholders; and Class III at the third annual
meeting of shareholders. Our executive officers serve at the discretion of the
board of directors. See "Selected Provisions of the Articles of Incorporation
and Bylaws" on page __.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH FUTURUS FINANCIAL SERVICES
- ---- --- ----------------------------------------
<S> <C> <C>
CLASS I DIRECTORS:
William M. Butler 42 Director, President and Chief Executive Officer
C. Parke Day 34 Director, Secretary
Nathan E. Hardwick, IV 34 Director
Michael S. Hug 41 Director
CLASS II DIRECTORS:
Deborah M. Janicki 46 Director
Gregory A. Janicki 47 Chairman of the Board of Directors
Richard W. Stimson 50 Director
CLASS III DIRECTORS:
Donald S. Shapleigh, Jr. 51 Director
Danny L. Tesney 42 Director, Treasurer
Joel P. Weinbach 35 Director
</TABLE>
Each of the directors of Futurus Financial Services is a proposed
director of Futurus Bank. Each of Futurus Bank's proposed directors will, upon
approval of the Office of the Comptroller of the Currency, serve until Futurus
Bank's first shareholders meeting, which will convene shortly after Futurus Bank
receives its charter. Futurus Financial Services, as the sole shareholder of
Futurus Bank, will nominate each proposed director to serve as director of
Futurus Bank at that meeting. After the first shareholders meeting, directors of
Futurus Bank will serve for a term of one year and will be elected by Futurus
Financial Services each year at Futurus Bank's annual meeting of shareholders.
Futurus Bank's officers will be appointed or elected by its board of directors
and will hold office at the will of its board.
Other than Deborah M. Janicki and Gregory A. Janicki, who are husband
and wife, no other director or executive officer has a family relationship
closer than first cousins.
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The following is a biographical summary of each of our directors and
executive officers:
WILLIAM M. BUTLER. Mr. Butler was raised in northern Atlanta and has
spent the majority of his banking career in this market. He is a graduate of
Furman University with a Bachelor of Arts in Economics/Business Administration.
Currently, Mr. Butler is attending the Stonier Graduate School of Banking. Mr.
Butler has been a banker for over 17 years and has served in various management
positions throughout his career. Most recently, Mr. Butler served as senior vice
president and senior lender of Charter Bank & Trust, Marietta, Georgia. In this
position, Mr. Butler was second in command and was responsible for all
commercial lending activity for Charter Bank & Trust, a $165 million community
bank. After joining Charter Bank & Trust in 1997, Mr. Butler was instrumental in
growing the bank's total loans outstanding from $73 million to $98 million and
improving the overall credit quality of the bank's loan portfolio, as measured
by the level of adversely rated assets. Prior to joining Charter Bank & Trust,
Mr. Butler was the vice president of administration with Caldwell-Spartin, a
software company. Mr. Butler's banking experience also includes a position as
division manager with Bank South, Atlanta, Georgia from June 1990 until January
1996 when the bank was acquired by NationsBank Corporation (now Bank of America
Corporation).
C. PARKE DAY. Mr. Day is a real estate developer/investor and principal
owner of Parke Day Properties, LLC, which he founded in 1992. Parke Day
Properties, LLC is located in Norcross, Georgia and the company has been active
in northern Fulton County, Georgia. Prior to his real estate career, Mr. Day
worked as a political campaign field coordinator from 1990 to 1992 and as a
manager for Midway Plantation, Inc. from 1988 to 1989. Mr. Day was born in
Atlanta and raised in Dunwoody, Georgia, and his community involvement includes
the Atlanta Unit of the American Cancer Society, the Dunwoody Baptist Foundation
and the Cecil B. Day Foundation. As a member of the Northern Fulton Chamber of
Commerce, Mr. Day has numerous business and personal contacts in the northern
Fulton County area.
NATHAN E. HARDWICK, IV. Mr. Hardwick is the managing partner of
Jackson & Hardwick, a real estate law firm with offices throughout the
metropolitan Atlanta area. Since joining the firm in 1991, Mr. Hardwick has
been responsible for every business aspect of the firm including bank
accounts and escrow reconciliation. As managing partner, he is currently in
charge of the day-to-day activities including overseeing the firm's eight
offices. Through his firm, and individually, Mr. Hardwick is active in
various community, civic and charitable activities.
MICHAEL S. HUG. Mr. Hug is a registered architect, and is currently the
managing partner of Zaic Hug & Associates, L.L.C., an architectural and interior
design firm located in Alpharetta, Georgia. From 1989 to 1992, Mr. Hug was an
associate architect with Culpepper, McAuliffe & Meaders, Inc. in Atlanta,
Georgia and from 1982 to 1989, he was an associate architect with Smallwood,
Reynolds, Stewart & Stewart, Inc. in Atlanta, Georgia. Throughout his career,
Mr. Hug has been actively involved in various community organizations. As part
of his community involvement, Mr. Hug has been a business partner for Manning
Oaks Elementary School, an assistant baseball coach in Atlanta and Alpharetta,
Georgia, a head soccer coach for YMCA-Buckhead and an assistant pack leader for
a local Cub Scout organization.
DEBORAH M. JANICKI. Ms. Janicki is senior vice president and co-owner
of Real Estate Financial Services, Roswell, Georgia, a mortgage lending company
with offices in metropolitan Atlanta, Georgia, metropolitan Charlotte, North
Carolina, and metropolitan Greenville, South Carolina. Ms. Janicki started Real
Estate Financial Services in 1995 with her husband, Gregory Janicki. Since 1986,
Ms. Janicki has also been president of Northern Suburban Brokers, Inc., a real
estate services firm in Alpharetta, Georgia. From 1992 to 1994, she was a vice
president for New Homes America of Georgia,
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and from 1986 to 1992, she was a broker and owner of RE/MAX Northern Suburban.
Ms. Janicki's community and professional activities include the Georgia
Association of Realtors, Georgia Association of Mortgage Brokers, Student
Venture of Atlanta, Atlanta Residential Young Council of Realtors and RE/MAX of
Georgia Broker/Owner's Council.
GREGORY A. JANICKI. Mr. Janicki is the president and co-owner of Real
Estate Financial Services, Roswell, Georgia, a mortgage lending company with
offices in metropolitan Atlanta, Georgia, metropolitan Charlotte, North
Carolina, and metropolitan Greenville, South Carolina. Mr. Janicki started Real
Estate Financial Services in 1995 with his wife, Deborah Janicki. From 1990 to
1994, Mr. Janicki was vice president and co-owner of First Realty Mortgage
Corporation, a mortgage broker located in Roswell, Georgia. Before 1990, Mr.
Janicki spent ten years with two major corporations in various sales management
and executive positions. Mr. Janicki is author of the book LIFE MASTERY: THE
ULTIMATE POWER OF RELATIONSHIPS, and he is a motivational public speaker and
trainer in the areas of sales and management. Throughout his career, Mr. Janicki
has been actively involved in community activities, including the Student
Venture of Atlanta and Georgia Association of Mortgage Brokers. Mr. Janicki
received a Bachelor of Science Degree in Industrial Technology from the
University of Wisconsin-Stout in 1973.
DONALD S. SHAPLEIGH, JR. Mr. Shapleigh is executive vice president of
sales for Directo, Inc., Norcross, Georgia. Directo is a financial services
company that offers direct deposit payroll services and related financial
products to individuals who do not have bank accounts. Mr. Shapleigh is also a
member of the board of directors of Net.B@nk and Net.B@nk, Inc. Before joining
Directo in 1999, Mr. Shapleigh spent 27 years as a banker in the Atlanta market.
From 1995 to 1999, he was president and chief operating officer of Net.B@nk in
Atlanta; from 1991 to 1994, he was an executive officer for SouthTrust Bank in
Atlanta; and from 1971 to 1991, he served as an executive officer for Bank
South, N.A. in Atlanta. Throughout his career, Mr. Shapleigh has remained active
in community affairs including the United Way, Dunwoody Country Club, Habitat
for Humanity and little league baseball.
RICHARD W. STIMSON. Mr. Stimson is vice president and deputy general
counsel of GTE Corporation with worldwide responsibility for GTE's litigation
and antitrust matters and with executive oversight of GTE's wireless,
air-to-ground and telecommunications services legal activities. He resides in
Alpharetta, Georgia and works out of the GTE Wireless Headquarters located
within Futurus Bank's primary service area. Mr. Stimson has worked for GTE
Corporation for 21 years in various legal and executive capacities. From 1981 to
1983, Mr. Stimson served as chief counsel to Commissioner Anthony Sousa, Federal
Energy Regulatory Commission, Washington, D.C. where he advised on various
national energy matters. Mr. Stimson is admitted to practice law in Michigan,
North Carolina, Indiana and Texas and has been an active participant in the
American Bar Association. Mr. Stimson is a member of Mt. Pisgah United Methodist
Church and has previously been active in the American Cancer Society, the United
Way, the Multiple Sclerosis Society and the Boy Scouts of America.
DANNY L. TESNEY. Mr. Tesney is a residential real estate salesman with
RE/MAX Professional in Suwanee, Georgia and vice president/treasurer and
co-owner of C. Tesney & Associates, Inc., a real estate sales firm also located
in Suwanee, Georgia. Mr. Tesney's charitable work benefits the Children's
Miracle Network and Cystic Fibrosis, and he is presently a member of the Atlanta
Chamber of Commerce.
JOEL P. WEINBACH. Mr. Weinbach is a partner in Silicon Stemcell, a
business incubator located in Columbia, South Carolina that develops
technology-oriented businesses. Presently he is involved with various startup
technology companies, and has invested in numerous companies with Atlanta
operations. In addition, Mr. Weinbach is president of Yieldstar.com, a
yield-management expert system delivered through the internet to the multifamily
housing industry. He formerly owned a
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technology consulting firm with over 300 employees and office locations in North
Carolina, South Carolina, Georgia, Texas and Alabama. He has worked with
numerous banks and credit unions as clients and he has been involved with
designing bank networks, communications systems and information technology
operating procedures. He is a former board member of Windward Technology, an
Atlanta-based systems integrator that was acquired by a public company. Mr.
Weinbach has been a member of the National Board of Advisors for The College of
Math and Science and The College of Social Work at the University of South
Carolina since 1996.
BOARD COMMITTEES
Futurus Financial Services' board of directors has established the
committees described below. The members of each committee will be the same for
Futurus Bank as they are for Futurus Financial Services.
COMPENSATION COMMITTEE. The Compensation Committee establishes
compensation levels for officers of Futurus Financial Services and Futurus Bank,
reviews management organization and development, reviews significant benefit
programs and establishes and administers executive compensation programs,
including our stock incentive plan. The Compensation Committee is chaired by
Richard W. Stimson with Gregory A. Janicki, William M. Butler and Donald S.
Shapleigh, Jr. as members.
EXECUTIVE COMMITTEE. The Executive Committee is authorized, between
meetings of the board of directors, to perform all duties and exercise all
authority of the board except for those duties and authorities specifically
granted to other committees of the board or which are exclusively reserved to
the full board. The committee will make recommendations to the board regarding
matters that are important to the overall management and expansion of Futurus
Financial Services and Futurus Bank, including annual budgets and strategic
business plans. Additionally, this committee will be responsible for
recommending nominations for expired board seats and additional board members.
The Executive Committee is chaired by Gregory A. Janicki with William M. Butler,
Richard W. Stimson and Donald S. Shapleigh, Jr. as members.
LOAN COMMITTEE. The Loan Committee will be responsible for establishing
or approving, in conjunction with management, all major policies and procedures
pertaining to loan policy, including:
- Establishing the loan approval system;
- Approving all loans in excess of a predetermined amount;
- Reviewing all past due reports, rated loan reports, non-accrual
reports and other reports and indicators of overall loan portfolio
quality;
- Establishing measurements for adequacy of the loan loss reserve;
and
- Reviewing any other matters pertaining to the loan portfolio such
as yield and concentrations.
The Loan Committee is chaired by Donald S. Shapleigh, Jr. with Deborah M.
Janicki, Danny L. Tesney, William M. Butler and Michael S. Hug as members.
AUDIT, COMPLIANCE AND CRA COMMITTEE. The principal responsibilities of
this committee are to ensure that the board receives objective information
regarding policies, procedures and controls of Futurus Bank with respect to
auditing, accounting, internal accounting controls and financial reporting.
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The committee will also work to ensure that Futurus Bank is in full compliance
with applicable laws and regulations. Among other things, this will require the
following:
- Recommending the appointment of an independent auditor on an
annual basis;
- Reviewing the independent auditors' report and management's
response;
- Reviewing all reports from regulatory authorities and management's
response;
- Establishing independent reviews and audits;
- Establishing appropriate levels of director and officer insurance
and blanket bond insurance coverage; and
- Reviewing CRA compliance.
The Audit, Compliance and CRA Committee is chaired by Joel P. Weinbach with
Richard W. Stimson and Gregory A. Janicki as members.
ASSET/LIABILITY COMMITTEE. The Asset/Liability Committee will be
responsible for the overall investment strategy of Futurus Financial Services
and Futurus Bank. This will include liquidity management, risk management, net
interest margin management, monitoring deposit level trends and pricing,
monitoring asset level trends and pricing, and portfolio investment decisions.
The Asset/Liability Committee is chaired by C. Parke Day with Joel P. Weinbach,
Danny L. Tesney and Nathan E. Hardwick, IV as members.
MARKETING COMMITTEE. It will be the duty of the Marketing Committee to
seek advice, support and commitment from the entire board of directors regarding
the development of safe and sound banking business through board members'
contacts within the community. We believe that a new bank's success depends on
this commitment, and members of this committee will regularly contact other
board members for their help in introducing high quality potential clients to
Futurus Bank. The Marketing Committee will also serve as a forum to determine
the credit needs of the community. The Marketing Committee is chaired by Gregory
A. Janicki with Michael S. Hug, Deborah M. Janicki, C. Parke Day, William M.
Butler and Nathan E. Hardwick, IV as members.
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EXECUTIVE COMPENSATION
1999 COMPENSATION
The following table shows information for 1999 regarding compensation
for services rendered in all capacities to Futurus Financial Services by its
president and chief executive officer. No executive officer earned more than
$100,000 in salary and bonus in 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------------------------
OTHER ANNUAL
YEAR SALARY ($) BONUS ($) COMPENSATION ($)
---------- -------------- -------------- ----------------------
<S> <C> <C> <C> <C>
William M. Butler, 1999(1) 48,047 -0- -0-(2)
President and Chief
Executive Officer
</TABLE>
- ---------------------------
(1) Reflects the period of time from August 20, 1999 through December 31, 1999,
during which time Mr. Butler was classified as an independent contractor.
(2) We have omitted information on "perks" and other personal benefits because
the aggregate value of these items does not meet the minimum amount
required for disclosure under the Securities and Exchange Commission's
regulations.
EMPLOYMENT AGREEMENT
WILLIAM M. BUTLER. Effective August 20, 1999, Futurus Financial
Services and Futurus Bank entered into a three-year employment agreement with
William M. Butler regarding Mr. Butler's employment as our president and chief
executive officer. Under the terms of the agreement, Mr. Butler will receive a
salary of $120,000 per year, plus benefits, and may be entitled to receive
annual bonus compensation as awarded by the Compensation Committee based on
Futurus Bank's earnings. For Mr. Butler to be eligible for any annual
performance bonuses, Futurus Bank must first:
- Receive a "satisfactory" or better rating by the OCC in its most
current OCC Report of Supervisory Activity with a Uniform
Financial Institution Rating of not less than "2";
- Receive a classification rating of "adequately capitalized" or
better, as defined by OCC regulations;
- Be in operation for more than one year; and
- Become and remain profitable as of its most recent fiscal
year-end.
Once eligible, Mr. Butler may receive an annual performance bonus in an amount
up to 25% of his base salary for meeting or exceeding the board of director's
annual plan for Futurus Bank. Furthermore, based on the same eligibility
criteria, Mr. Butler may receive a separate bonus in an amount equal to 15% of
Futurus Bank's pre-tax profits, up to 25% of his base salary.
Mr. Butler's agreement also provides that Futurus Financial Services
will grant Mr. Butler an incentive stock option to purchase 25,000 shares of
Futurus Financial Services' common stock at an
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exercise price of $10.00 per share. Mr. Butler's option will be issued under our
incentive stock option plan and will generally become exercisable in equal
one-fifth annual increments over a five-year period beginning on the one-year
anniversary after this prospectus becomes effective.
At the end of the initial three-year term of Mr. Butler's agreement,
and at the end of each succeeding 12-month period, the agreement will be
extended for an additional 12-month period unless either of the parties to the
agreement gives notice of his or its intent not to extend the agreement. We will
be obligated to pay Mr. Butler his base salary for 12 months if one of the
following terminating events occurs:
- Mr. Butler becomes permanently disabled;
- Futurus Bank abandons its organizational efforts;
- Futurus Bank terminates Mr. Butler's employment without cause; or
- Mr. Butler terminates his employment for cause.
Additionally, upon a change of control of Futurus Financial Services, Mr. Butler
will be entitled to severance compensation in an amount equal to 12 months of
his base salary if we or our successor terminates his employment other than for
cause. Cause for terminating employment is defined in the agreement.
The agreement also generally provides that, for a period of 18 months
following the termination of Mr. Butler's employment, he will not compete with
Futurus Bank in the banking business nor solicit our clients nor the associates
employed by us. The non-competition and non-solicitation provisions of the
agreement only apply if Mr. Butler terminates his employment without cause or in
connection with a change of control, or if we terminate his employment with
cause.
DIRECTOR COMPENSATION
Our payment of director compensation will depend on various factors,
including our profitability. When deemed appropriate, we anticipate paying cash
director fees of $250 per board of directors meeting attended and $100 per
committee meeting attended. Prior to paying director compensation, we will adopt
director compensation policies that conform to applicable law.
ORGANIZERS' WARRANTS
The organizers intend to purchase a total of 190,000 shares of common
stock in the offering at a price of $10.00 per share. This represents 17.3% of
the shares that will be outstanding after the offering, or 15.0% if the
underwriter's over-allotment option is exercised in full.
Eight of our ten organizers have guaranteed a portion of the $500,000
line of credit with The Bankers Bank, each in the amount of $93,750. In
recognition of the efforts made and financial risks undertaken by the organizers
in organizing Futurus Financial Services and Futurus Bank, we will issue to our
organizers warrants to purchase additional shares of common stock. If an
organizer purchases 20,000 or more shares of common stock in this offering, we
will issue that organizer a warrant to purchase one share of common stock for
each share purchased. If an organizer purchases less than 20,000 shares, we will
issue that organizer a warrant to purchase one share of common stock for every
two shares purchased. Our organizers may purchase up to 185,000 shares through
the exercise of these warrants.
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The warrants will vest in one-third annual increments over a period of three
years beginning on the one-year anniversary of the date of this prospectus. The
warrants will remain exercisable for the ten-year period following the date of
this prospectus. Each warrant will be exercisable at a price of $10.00 per share
subject to adjustment for stock splits, recapitalizations or other similar
events. Additionally, if Futurus Bank's capital falls below the minimum level
determined by the Office of the Comptroller of the Currency, we may be directed
to require our organizers to exercise or forfeit their warrants.
STOCK INCENTIVE PLAN
GENERAL. Futurus Financial Services' 2000 Stock Incentive Plan provides
us with the flexibility to grant incentive stock options and non-qualified stock
options to our organizers, directors, executive officers and other individuals
employed by us for the purpose of giving them a proprietary interest in and
encouraging them to remain involved with Futurus Financial Services or Futurus
Bank. The board of directors has reserved 110,000 shares of common stock, an
amount equal to 10% of the shares of common stock expected to be sold in the
offering, for issuance under the plan. The number of shares reserved for
issuance may be adjusted in the event of a stock split, recapitalization or
similar event as described in the plan.
Mr. Butler will be issued an award under the plan in connection with
the employment agreement that we have entered into with him. See "Executive
Compensation--Employment Agreement" on page __.
ADMINISTRATION. The plan is administered by our Compensation Committee.
The committee members are appointed by the board of directors of Futurus
Financial Services, which considers the standards contained in both Section
162(m) of the Internal Revenue Code and Rule 16(b)(3) under the Securities
Exchange Act when appointing members to the committee. The committee will have
the authority to grant awards under the plan, to determine the terms of each
award, to interpret the provisions of the plan and to make all other
determinations that it may deem necessary or advisable to administer the plan.
The plan permits the committee to grant stock options to eligible
persons. The committee may grant these options on an individual basis or design
a program providing for grants to a group of eligible persons. The committee
determines, within the limits of the plan, the number of shares of common stock
subject to an option, to whom an option is granted, the exercise price and
forfeiture or termination provisions of each option. Unless otherwise permitted
by the committee, a holder of a stock option generally may not transfer the
option during his or her lifetime.
OPTION TERMS. The plan provides for incentive stock options and
non-qualified stock options. The committee will determine whether an option is
an incentive stock option or a non-qualified stock option when it grants the
option, and the option will be evidenced by an agreement describing the material
terms of the option. The maximum number of shares of common stock with respect
to which options may be granted during any one-year period to any participant
may not exceed 75,000.
The committee determines the exercise price of an option. The exercise
price of an incentive stock option may not be less than the fair market value of
the common stock on the date of the grant, or less than 110% of the fair market
value if the participant owns more than 10% of the outstanding common stock of
Futurus Financial Services or its affiliates. When the incentive stock option is
exercised, Futurus Financial Services will be entitled to place a legend on the
certificates representing the shares of common stock purchased upon exercise of
the option to identify them as shares of common stock purchased upon the
exercise of an incentive stock option. The exercise price of non-qualified stock
options may not be less than 85% of the fair market value of the common stock on
the date that the option is awarded, based
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upon any reasonable measure of fair market value. The committee may permit the
exercise price to be paid in cash, by the delivery of previously owned shares of
common stock, through a cashless exercise executed through a broker or by having
a number of shares of common stock otherwise issuable at the time of exercise
withheld. The committee may make cash awards designed to cover tax obligations
of participants that result from the receipt or exercise of a stock option.
The committee will also determine the term of an option, which may not
exceed ten years. Additionally, any incentive stock option granted to a
participant who owns more than 10% of the outstanding common stock of Futurus
Financial Services or its affiliates will not be exercisable more than five
years after the date the option is granted. Subject to any further limitations
in the applicable agreement, if a participant's employment is terminated, an
incentive stock option will expire and become unexercisable no later than three
months after the date of termination of employment. If, however, termination of
employment is due to death or disability, one year may be substituted for the
three-month period. Incentive stock options are also subject to the further
restriction that the aggregate fair market value, determined as of the date of
the grant, of common stock as to which any incentive stock option first becomes
exercisable in any calendar year is limited to $100,000 per recipient. If
incentive stock options covering common stock with a value in excess of $100,000
first become exercisable in any one calendar year, the excess will be
non-qualified options. For purposes of determining which options, if any, have
been granted in excess of the $100,000 limit, options will be considered in the
order they were granted.
TERMINATION OF OPTIONS. The terms of particular options may provide
that they terminate, among other reasons, upon the holder's termination of
employment or other status with Futurus Financial Services or any affiliate,
upon a specified date, upon the holder's death or disability, or upon the
occurrence of a change in control of Futurus Financial Services or Futurus Bank.
An agreement may provide that if the holder dies or becomes disabled, the
holder's estate or personal representative may exercise the option. The
committee may, within the terms of the plan and the applicable agreement,
cancel, accelerate, pay or continue an option that would otherwise terminate for
the reasons discussed above.
CERTAIN REORGANIZATIONS. The plan provides for appropriate adjustment,
as determined by the committee, in the number and kind of shares and the
exercise price subject to unexercised options in the event of any change in the
outstanding shares of common stock by reason of any subdivision or combination
of shares, payment of a stock dividend or other increase or decrease in the
number of outstanding shares effected without the receipt of consideration. In
the event of certain corporate reorganizations, the committee may, within the
terms of the plan and the applicable agreement, substitute, cancel (with or
without consideration), accelerate, remove restrictions or otherwise adjust the
terms of an option.
AMENDMENT AND TERMINATION OF THE PLAN. The board of directors has the
authority to amend or terminate the plan. The board of directors is not required
to obtain shareholder approval to amend or terminate the plan, but may condition
any amendment or termination of the plan upon shareholder approval if it
determines that shareholder approval is necessary or appropriate under tax,
securities, or other laws. The board's action may not adversely affect the
rights of a holder of a stock option without the holder's consent.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion outlines
generally the federal income tax consequences of participation in the plan.
Individual circumstances may vary and each participant should rely on his or her
own tax counsel for advice regarding federal income tax treatment under the
plan.
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- INCENTIVE STOCK OPTIONS. A participant who exercises an incentive
stock option will not be taxed when he or she exercises the option or a portion
of the option. Instead, the participant will be taxed when he or she sells the
shares of common stock purchased upon exercise of the incentive stock option.
The participant will be taxed on the difference between the price he or she paid
for the common stock and the amount for which he or she sells the common stock.
If the participant does not sell the shares of common stock prior to two years
from the date of grant of the incentive stock option and one year from the date
the common stock is transferred to him or her, any gain will be a capital gain,
and we will not be entitled to a corresponding deduction. If the participant
sells the shares of common stock at a gain before that time, the difference
between the amount the participant paid for the common stock and the lesser of
its fair market value on the date of exercise or the amount for which the stock
is sold will be taxed as ordinary income and we will be entitled to a
corresponding deduction. If the participant sells the shares of common stock for
less than the amount he or she paid for the stock prior to the one- or two-year
period indicated, no amount will be taxed as ordinary income, and the loss will
be taxed as a capital loss. Exercise of an incentive stock option may subject a
participant to, or increase a participant's liability for, the alternative
minimum tax.
- NON-QUALIFIED OPTIONS. A participant will not recognize income
upon the grant of a non-qualified option or at any time before the exercise of
the option or a portion of the option. When the participant exercises a
non-qualified option or portion of the option, he or she will recognize
compensation taxable as ordinary income in an amount equal to the excess of the
fair market value of the common stock on the date the option is exercised over
the price paid for the common stock, and Futurus Financial Services will then be
entitled to a corresponding deduction.
Depending upon the time period for which shares of common stock are
held after exercise of a non-qualified option, the sale or other taxable
disposition of shares acquired through the exercise of a non-qualified option
generally will result in a short- or long-term capital gain or loss equal to the
difference between the amount realized on the disposition and the fair market
value of such shares when the non-qualified option was exercised.
Special rules apply to a participant who exercises a non-qualified
option by paying the exercise price, in whole or in part, by the transfer of
shares of common stock to Futurus Financial Services and to a participant who is
subject to the reporting requirements of Section 16 of the Securities Exchange
Act of 1934, as currently in effect.
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RELATED PARTY TRANSACTIONS
We expect to enter into banking and other business transactions in the
ordinary course of business with our directors and officers, including members
of their families and corporations, partnerships or other organizations in which
they have a controlling interest. If these transactions occur, each transaction
will:
- In the case of banking transactions, be on substantially the same
terms, including price or interest rate and collateral, as those
prevailing at the time for comparable transactions with unrelated
parties, and any banking transactions will not be expected to
involve more than the normal risk of collectibility or present
other unfavorable features to Futurus Bank;
- In the case of business transactions, be on terms no less
favorable than could be obtained from an unrelated third party;
and
- In the case of all related party transactions, be approved by a
majority of the directors, including a majority of the directors
who do not have an interest in the transaction.
In addition to transactions in the ordinary course of our business, our
operations have been and will continue to be funded through a line of credit
from The Bankers Bank. The total amount of our line of credit is $500,000, of
which $170,000 was outstanding at December 31, 1999. The loan bears interest at
0.50% below the prime rate, as printed in the Money Rates section of THE WALL
STREET JOURNAL, and is due on August 23, 2000. Eight of our ten organizers have
guaranteed a portion of the line of credit, each in the amount of $93,750. We
plan to repay the line of credit after the close of the offering.
We expect to have a referral relationship with Real Estate Financial
Services, a retail mortgage lending company that is principally owned by two
members of our board of directors, Gregory A. Janicki and Deborah M. Janicki.
Currently, Real Estate Financial Services refers both commercial and consumer
business to various financial institutions. Our proposed referral relationship
with Real Estate Financial Services will satisfy the conditions above and will
be on terms comparable to those of Real Estate Financial Services' existing
relationships with other financial institutions.
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DESCRIPTION OF CAPITAL STOCK OF FUTURUS FINANCIAL SERVICES
COMMON STOCK
Futurus Financial Services' articles of incorporation authorize it to
issue up to 10,000,000 shares of common stock, no par value, of which at least
1,100,000 shares will be issued in this offering. As of the date of this
prospectus, 110,000 shares of common stock, or an amount equal to 10% of the
shares of common stock offered in this prospectus, were reserved for issuance
upon the exercise of stock options to be issued under our stock incentive plan
and 185,000 shares of common stock were reserved for issuance upon the exercise
of the warrants to be issued to the organizers.
All shares of common stock will be entitled to share equally in
dividends from legally available funds, when, as and if declared by the board of
directors. We do not anticipate that Futurus Financial Services will pay any
cash dividends on the common stock in the near future. Upon Futurus Financial
Services' voluntary or involuntary liquidation or dissolution, all shares of
common stock will be entitled to share equally in all of Futurus Financial
Services' assets that are available for distribution to the shareholders. Each
holder of common stock will be entitled to one vote for each share on all
matters submitted to the shareholders. Holders of common stock will not have any
right to acquire authorized but unissued capital stock of Futurus Financial
Services whenever it issues new shares of capital stock. No cumulative voting,
redemption, sinking fund or conversion rights or provisions apply to the common
stock. All shares of the common stock issued in the offering as described in
this prospectus will be fully paid and non-assessable.
PREFERRED STOCK
Futurus Financial Services' Articles of Incorporation also authorize
its board of directors to issue up to 2,000,000 shares of preferred stock, no
par value. The board of directors may determine the terms of the preferred
stock. Preferred stock may have voting rights, subject to applicable law and as
determined by the board of directors. Futurus Financial Services has not issued
any preferred stock and will not issue preferred stock to the organizers except
on the same terms as is offered to all other existing shareholders or to new
shareholders. Although Futurus Financial Services has no present plans to issue
any preferred stock, the ownership and control of Futurus Financial Services by
the holders of the common stock would be diluted if Futurus Financial Services
were to issue preferred stock that had voting rights.
TRANSFER AGENT
The transfer agent and registrar for the common stock is .
------------
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SELECTED PROVISIONS OF THE ARTICLES OF INCORPORATION AND BYLAWS
PROTECTIVE PROVISIONS
GENERAL. Shareholders' rights and related matters are governed by the
Georgia Business Corporation Code and Futurus Financial Services' articles of
incorporation and bylaws. Futurus Financial Services' articles of incorporation
and bylaws contain protective provisions that would have the effect of impeding
an attempt to change or remove Futurus Financial Services' management or to gain
control of Futurus Financial Services in a transaction not supported by its
board of directors. These provisions are discussed in more detail below. In
general, one purpose of these provisions is to assist Futurus Financial
Services' board of directors in playing a role in connection with attempts to
acquire control of Futurus Financial Services. They allow the board of directors
to further and protect Futurus Financial Services' interests, and those of its
shareholders as appropriate under the circumstances, by enhancing the board's
ability to maximize the value to be received by the shareholders upon a sale.
Although Futurus Financial Services' management believes the protective
provisions are beneficial to Futurus Financial Services' shareholders, they also
may tend to discourage some takeover bids. As a result, Futurus Financial
Services' shareholders may be deprived of opportunities to sell some or all of
their shares at prices that represent a premium over prevailing market prices.
On the other hand, defeating undesirable acquisition offers can be a very
expensive and time-consuming process. To the extent that the protective
provisions discourage undesirable proposals, Futurus Financial Services may be
able to avoid those expenditures of time and money.
The protective provisions also may discourage open market purchases by
a potential acquirer. These purchases could increase the market price of the
common stock temporarily, enabling shareholders to sell their shares at a price
higher than that which otherwise would prevail. In addition, the provisions
could decrease the market price of the common stock by making the stock less
attractive to persons who invest in securities in anticipation of price
increases from potential acquisition attempts. The provisions also could make it
more difficult and time consuming for a potential acquirer to obtain control of
Futurus Financial Services by replacing its board of directors and management.
Furthermore, the provisions could make it more difficult for Futurus Financial
Services' shareholders to replace the board of directors or management, even if
a majority of the shareholders believes that replacing them would be in Futurus
Financial Services' best interests. As a result, the protective provisions could
tend to keep the incumbent board of directors and management in place.
Futurus Financial Services' articles of incorporation also contain a
provision that eliminates the potential personal liability of directors for
monetary damages in specific circumstances. In addition, Futurus Financial
Services' bylaws contain certain provisions that provide indemnification for our
directors, agents and the associates employed by us. The protective provisions
and the provisions relating to elimination of liability and indemnification of
directors, agents and our associates are discussed more fully below.
PREFERRED STOCK. The existence of preferred stock could impede a
takeover of Futurus Financial Services without the approval of our board of
directors. This is because the board of directors could issue shares of
preferred stock to persons friendly to current management, which could render
more difficult or discourage any attempt to gain control of Futurus Financial
Services through a proxy contest, tender offer, merger or otherwise. In
addition, the issuance of shares of preferred stock with voting rights may
adversely affect the rights of the holders of common stock and, in various
circumstances, could decrease the market price of the common stock.
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STAGGERED TERMS FOR BOARD OF DIRECTORS. Futurus Financial Services'
board of directors are divided into three classes. Directors serve staggered
terms, which means that roughly one-third of the directors will be elected each
year at Futurus Financial Services' annual meeting of shareholders. The initial
term of the Class I directors expires in 2001, the initial term of the Class II
directors expires in 2002 and the initial term of the Class III directors
expires in 2003. Thereafter, each director will serve for a term of three years.
This means that unless the existing directors were to resign, it would take at
least two annual meetings of Futurus Financial Services' shareholders to replace
a majority of its directors. Any amendment of this provision would require the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of common stock or two-thirds of the entire board of directors.
CHANGE IN NUMBER OF DIRECTORS. Futurus Financial Services' articles of
incorporation provides that any change in the number of directors, as set forth
in its bylaws, would have to be made by the affirmative vote of two-thirds of
the entire board of directors or by the affirmative vote of the holders of at
least two-thirds of the issued and outstanding shares of common stock.
REMOVAL OF DIRECTORS. Futurus Financial Services' articles of
incorporation provide that one or more directors may be removed for cause during
their terms only by the affirmative vote of the holders of a majority of the
issued and outstanding shares of common stock entitled to vote in an election of
directors. Directors may also be removed during their terms without cause only
by the affirmative vote of the holders of two-thirds of the issued and
outstanding shares of common stock entitled to vote in an election of directors.
Any amendment of this provision would require the affirmative vote of the
holders of at least two-thirds of the outstanding shares of common stock or
two-thirds of the entire board of directors.
SUPERMAJORITY VOTING ON SELECTED TRANSACTIONS. Futurus Financial
Services' articles of incorporation, with exceptions, require that any merger or
consolidation involving Futurus Financial Services or any sale or other
disposition of all or substantially all of its assets will require the
affirmative vote of a majority of Futurus Financial Services' directors then in
office and the affirmative vote of the holders of at least two-thirds of the
outstanding shares of common stock. However, if Futurus Financial Services'
board of directors has approved the particular transaction by the affirmative
vote of two-thirds of the entire board, then the applicable provisions of
Georgia law would govern and shareholder approval of the transaction would
require only the affirmative vote of the holders of a majority of the
outstanding shares of common stock entitled to vote on the transaction. Any
amendment of this provision would require the affirmative vote of the holders of
at least two-thirds of the outstanding shares of common stock or two-thirds of
the entire board of directors.
LIMITATIONS ON SELECTED ACQUISITIONS OF VOTING SECURITIES. Under the
Change in Bank Control Act, a person who wishes to acquire (as defined) 10% or
more of a bank holding company's voting securities must file a notice with the
Federal Reserve 60 days prior to the acquisition to give the Federal Reserve an
opportunity to disapprove the proposed acquisition. During our first five years
of operations, our articles of incorporation provide that if a person is
required to file a notice with the Federal Reserve under the Change in Bank
Control Act, then the person must also file a notice with our board of directors
at the same time. Our board of directors also has 60 days to disapprove an
acquisition if it finds, in its sole discretion, that the acquisition would not
be in the best interests of Futurus Financial Services and its shareholders. In
determining what is in the best interests of Futurus Financial Services and its
shareholders, our board of directors is required to give due consideration to
all relevant factors, including the short- and long-term effects of the
acquisition on the associates employed by us, our clients, our shareholders and
our other constituents, and the impact of the acquisition, as perceived by our
board of directors, on its ability to effectively manage Futurus Financial
Services and achieve its strategic objectives. If our board of directors
disapproves the acquisition, which requires the affirmative vote of at least
two-thirds of the directors then in office, and the acquisition is nevertheless
consummated, that
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portion of voting securities held by the acquirer exceeding 10% of our
outstanding voting securities will not be entitled to any voting rights. This
provision will cease to be effective on April 1, 2005. Any amendment of this
provision will require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of common stock or two-thirds of the entire
board of directors.
EVALUATION OF AN ACQUISITION PROPOSAL. Futurus Financial Services'
articles of incorporation provide the factors that the board of directors must
consider in evaluating whether an acquisition proposal made by another party is
in the best interests of Futurus Financial Services and its shareholders. The
term "acquisition proposal" refers to any offer of another party to:
- Make a tender offer or exchange offer for the common stock or any
other equity security of Futurus Financial Services;
- Merge or consolidate Futurus Financial Services with another
corporation; or
- Purchase or otherwise acquire all or substantially all of the
properties and assets owned by Futurus Financial Services.
The board, in evaluating an acquisition proposal, is required to
consider all relevant factors, including:
- The expected social and economic effects of the transaction on the
associates employed by us, our clients and other constituents,
such as our suppliers of goods and services;
- The expected social and economic effects on the communities within
which we operate; and
- The payment being offered by the other corporation in relation to
(a) our current value at the time of the proposal as determined in
a freely negotiated transaction and (b) the board of directors'
estimate of our future value as an independent company at the time
of the proposal.
This requirement is included in Futurus Financial Services' articles of
incorporation because Futurus Bank is charged with providing support to and
being involved with the communities it serves. As a result, the board believes
its obligations in evaluating an acquisition proposal extend beyond evaluating
merely the payment being offered in relation to the market or book value of the
common stock at the time of the proposal.
While the value of what is being offered to shareholders in exchange
for their stock is the main factor when weighing the benefits of an acquisition
proposal, the board believes it is appropriate also to consider all other
relevant factors. For example, the board will evaluate what is being offered in
relation to the current value of Futurus Financial Services at the time of the
proposal as determined in a freely negotiated transaction and in relation to the
board's estimate of the future value of Futurus Financial Services as an
independent concern at the time of the proposal. A takeover bid often places the
target corporation virtually in the position of making a forced sale, sometimes
when the market price of its stock may be depressed. The board believes that
frequently the payment offered in such a situation, even though it may exceed
the value at which shares are then trading, is less than that which could be
obtained in a freely negotiated transaction. In a freely negotiated transaction,
management would have the opportunity to seek a suitable partner at a time of
its choosing and to negotiate for the most favorable price and terms that would
reflect not only Futurus Financial Services' current value, but also its future
value.
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One effect of this provision may be to discourage a tender offer in
advance. Often an offeror consults the board of a target corporation before or
after beginning a tender offer in an attempt to prevent a contest from
developing. In the board's opinion, this provision will strengthen its position
in dealing with any potential offeror that might attempt to acquire Futurus
Financial Services through a hostile tender offer. Another effect of this
provision may be to dissuade shareholders who might be displeased with the
board's response to an acquisition proposal from engaging Futurus Financial
Services in costly litigation.
The articles of incorporation would not make an acquisition proposal
regarded by the board as being in Futurus Financial Services' best interests
more difficult to accomplish. It would, however, permit the board to determine
that an acquisition proposal was not in Futurus Financial Services' best
interests, and thus to oppose it, on the basis of the various factors that the
board deems relevant. In some cases, opposition by the board might have the
effect of maintaining incumbent management.
Any amendment of this provision would require the affirmative vote of
the holders of at least two-thirds of the outstanding shares of common stock or
two-thirds of the entire board of directors.
INDEMNIFICATION
Futurus Financial Services' bylaws contain indemnification provisions
that provide that directors, officers, employed associates and agents of Futurus
Financial Services (collectively, the "insiders") will be indemnified against
expenses that they actually and reasonably incur if they are successful on the
merits of a claim or proceeding. In addition, the bylaws provide that Futurus
Financial Services will advance to its insiders reasonable expenses of any claim
or proceeding so long as the insider furnishes Futurus Financial Services with
(1) a written affirmation of his or her good faith belief that he or she has met
the applicable standard of conduct and (2) a written statement that he or she
will repay any advances if it is ultimately determined that he or she is not
entitled to indemnification.
When a case or dispute is settled or otherwise not ultimately
determined on its merits, the indemnification provisions provide that Futurus
Financial Services will indemnify insiders when they meet the applicable
standard of conduct. The applicable standard of conduct is met if the insider
acted in a manner he or she in good faith believed to be in or not opposed to
Futurus Financial Services' best interests and, in the case of a criminal action
or proceeding, if the insider had no reasonable cause to believe his or her
conduct was unlawful. Futurus Financial Services' board of directors, its
shareholders or independent legal counsel determines whether the insider has met
the applicable standard of conduct in each specific case.
Futurus Financial Services' bylaws also provide that the
indemnification rights contained in the bylaws do not exclude other
indemnification rights to which an insider may be entitled under any bylaw,
resolution or agreement, either specifically or in general terms approved by the
affirmative vote of the holders of a majority of the shares entitled to vote.
Futurus Financial Services can also provide for greater indemnification than is
provided for in the Bylaws if it chooses to do so, subject to approval by its
shareholders. Futurus Financial Services may not, however, indemnify an insider
for liability arising out of circumstances that would cause the insider to
remain liable for his or her actions as described under "--Limitation of
Liability" below.
The indemnification provisions of the bylaws specifically provide that
Futurus Financial Services may purchase and maintain insurance on behalf of any
insider against any liability asserted against and incurred by him or her in his
or her capacity as a director, officer, employed associate or agent whether or
not Futurus Financial Services would have had the power to indemnify against
such liability.
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Futurus Financial Services is not aware of any pending or threatened
action, suit or proceeding involving any of its insiders for which
indemnification from Futurus Financial Services may be sought.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Futurus
Financial Services under the foregoing provisions, or otherwise, Futurus
Financial Services has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
LIMITATION OF LIABILITY
Futurus Financial Services' articles of incorporation eliminate, with
exceptions, the potential personal liability of a director for monetary damages
to Futurus Financial Services and to its shareholders for breach of a duty as a
director. There is no elimination of liability for:
- A breach of duty involving appropriation of a business opportunity
of Futurus Financial Services;
- An act or omission not in good faith or involving intentional
misconduct or a knowing violation of law;
- A transaction from which the director derives an improper material
tangible personal benefit; or
- Any payment of a dividend or approval of a stock repurchase that
is illegal under the Georgia Business Corporation Code.
This provision does not eliminate or limit the right of Futurus Financial
Services or its shareholders to seek injunctive or other equitable relief not
involving monetary damages.
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SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the offering, Futurus Financial Services will have
1,100,000 shares of common stock outstanding, or 1,265,000 if the underwriter
exercises its over-allotment option in full. These shares of common stock will
be freely tradable without restriction, except that "affiliates" of Futurus
Financial Services must comply with the resale limitations of Rule 144 under the
Securities Act. Rule 144 defines an "affiliate" of a company as a person who
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the company. Affiliates of a
company generally include its directors, officers and principal shareholders. A
total of 190,000 shares owned directly or indirectly by our affiliates will not
be available for sale for a period of 180 days after the date of this prospectus
without the underwriter's consent. After the 180-day period, the shares held by
our affiliates will be eligible for sale subject to the resale limitations of
Rule 144 discussed below.
In general, under Rule 144, affiliates will be entitled to sell within
any three-month period a number of shares that does not exceed the greater of:
- 1% of the outstanding shares of common stock; or
- the average weekly trading volume during the four calendar weeks
preceding his or her sale.
Sales under Rule 144 are also subject to certain manner of sale provisions,
notice requirements and the availability of current public information about
Futurus Financial Services. Affiliates will not be subject to the volume
restrictions and other limitations under Rule 144 beginning 90 days after their
status as an affiliate terminates.
Even though Rule 144 would otherwise permit the sale of shares held by
affiliates beginning 90 days after the date of this prospectus, Futurus
Financial Services and the organizers have each agreed with the underwriter that
they will not sell, contract to sell, or otherwise dispose of any shares of
common stock or any securities convertible into or exchangeable for any shares
of common stock for a period of 180 days from the date of this prospectus
without the underwriter's prior written consent except in limited circumstances.
We intend to issue warrants to purchase up to a total of 185,000 shares
of common stock, representing an amount equal to 16.8% of the common stock sold
in the offering. We have also reserved 110,000 shares of common stock,
representing 10% of the common stock sold in the offering, for issuance under
our stock incentive plan. Of this 110,000 reserved shares, 25,000 will be
awarded to Mr. Butler in accordance with the terms of his employment agreement.
We intend to register the shares issuable upon exercise of these warrants and
options. Upon registration, these shares will be eligible for resale in the
public market without restriction by persons who are not affiliates of Futurus
Financial Services, and to the extent they are held by affiliates, under Rule
144 without a holding period.
Prior to the offering, there has been no public market for the common
stock, and we cannot predict the effect, if any, that the sale of shares or the
availability of shares for sale will have on the market price prevailing from
time to time. Nevertheless, sales of substantial amounts of common stock in the
public market could adversely affect prevailing market prices and our ability to
raise equity capital in the future.
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UNDERWRITING
Subject to the terms and conditions of the underwriting agreement among
Futurus Financial Services and the underwriter named below, the underwriter has
agreed to purchase from Futurus Financial Services, and Futurus Financial
Services has agreed to sell to the underwriter, the number of shares of common
stock listed opposite the underwriter's name below.
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF OVER-ALLOTMENT
FIRM SHARES SHARES
----------- ---------------
<S> <C> <C>
Wachovia Securities, Inc.............. 1,100,000 165,000
</TABLE>
The underwriting agreement provides that the underwriter's obligations
are subject to approval of certain legal matters by counsel and to various other
conditions customary in a firm commitment, underwritten public offering. The
underwriter is required to purchase and pay for the shares offered by this
prospectus other than those covered by the over-allotment option described
below.
The underwriting discount that will apply to shares purchased in this
offering by Futurus Financial Services' officers and directors, up to 330,000
shares, will equal 3.5% of the public offering price, or $.35 per share. The
underwriting discount that will apply to all other shares purchased in this
offering will equal 7.5% of the public offering price listed on the cover page
of this prospectus, or $.75 per share.
The underwriter proposes to offer the common stock directly to the
public at the public offering price listed on the cover page of this prospectus
and to securities dealers at that price less a concession not in excess of $__
per share. The underwriter may allow, and the selected dealers may reallow, a
concession not in excess of $__ per share to other brokers and dealers. We
expect that the shares of common stock will be ready for delivery on or about
________________, 2000. After the offering, the offering price and other selling
terms may change.
The public offering price was determined arbitrarily by Futurus
Financial Services and the underwriter after considering several factors. These
factors include prevailing market conditions and the price of comparable
publicly traded companies.
Futurus Financial Services has granted the underwriter an option,
exercisable within 30 days after the date of this prospectus, to purchase up to
165,000 additional shares of common stock to cover over-allotments, if any, at
the public offering price listed on the cover page of this prospectus, less the
applicable 7.5% underwriting discount. The underwriter may purchase these shares
only to cover over-allotments made in connection with this offering.
In addition, Futurus Financial Services has granted to the
underwriter a right of first refusal to serve as exclusive or lead advisor on
all corporate finance transactions undertaken or considered by Futurus
Financial Services for a period of three years after the date of this
prospectus.
The underwriter does not intend to sell shares of common stock to any
account over which it exercises discretionary authority.
Futurus Financial Services and each of our directors and executive
officers has agreed with the underwriter not to sell, contract to sell, or
otherwise dispose of any shares of common stock or any securities that can be
converted into or exchanged for shares of common stock for a period of 180 days
from the date of this prospectus without the underwriter's prior written
consent, except in limited circumstances. The underwriter and its affiliates may
on occasion be a client of, engage in transactions with, and perform services
for Futurus Financial Services or Futurus Bank in the ordinary course of
business.
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Futurus Financial Services has agreed to indemnify the underwriter
against certain liabilities, including liabilities under the Securities Act of
1933, as currently in effect, or to contribute to payments that the underwriter
may be required to make in connection with these liabilities.
In connection with this offering, the underwriter may purchase and sell
common stock in the open market. These transactions may include over-allotment
and stabilizing transactions, and purchases to cover syndicate short positions
created in connection with this offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the common stock, and syndicate short positions involve
the underwriter's sale of a greater number of shares of common stock than it is
required to purchase from Futurus Financial Services in the offering. These
activities may stabilize, maintain or otherwise affect the market price of the
common stock, which may be higher than the price that might otherwise prevail in
the open market. The underwriter may effect these transactions on the Nasdaq OTC
Bulletin Board or otherwise and may discontinue them at any time.
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SUPERVISION AND REGULATION
Both Futurus Financial Services and Futurus Bank will be subject to
extensive state and federal banking regulations that impose restrictions on and
provide for general regulatory oversight of our operations. These laws are
generally intended to protect depositors and not shareholders. The following
discussion describes the material elements of the regulatory framework that will
apply.
FUTURUS FINANCIAL SERVICES
Since Futurus Financial Services will own all of the capital stock of
Futurus Bank, it will be a bank holding company under the federal Bank Holding
Company Act of 1956. As a result, Futurus Financial Services will primarily be
subject to the supervision, examination, and reporting requirements of the Bank
Holding Company Act and the regulations of the Federal Reserve.
ACQUISITIONS OF BANKS. The Bank Holding Company Act requires every bank
holding company to obtain the Federal Reserve's prior approval before:
- Acquiring direct or indirect ownership or control of any voting
shares of any bank if, after the acquisition, the bank holding
company will directly or indirectly own or control more than 5% of
the bank's voting shares;
- Acquiring all or substantially all of the assets of any bank; or
- Merging or consolidating with any other bank holding company.
Additionally, the Bank Holding Company Act provides that the Federal
Reserve may not approve any of these transactions if it would result in or tend
to create a monopoly or, substantially lessen competition or otherwise function
as a restraint of trade, unless the anticompetitive effects of the proposed
transaction are clearly outweighed by the public interest in meeting the
convenience and needs of the community to be served. The Federal Reserve is also
required to consider the financial and managerial resources and future prospects
of the bank holding companies and banks concerned and the convenience and needs
of the community to be served. The Federal Reserve's consideration of financial
resources generally focuses on capital adequacy, which is discussed below.
Under the Bank Holding Company Act, if adequately capitalized and
adequately managed, Futurus Financial Services or any other bank holding company
located in Georgia may purchase a bank located outside of Georgia. Conversely,
an adequately capitalized and adequately managed bank holding company located
outside of Georgia may purchase a bank located inside Georgia. In each case,
however, restrictions may be placed on the acquisition of a bank that has only
been in existence for a limited amount of time or will result in specified
concentrations of deposits. For example, Georgia law prohibits a bank holding
company from acquiring control of a financial institution until the target
financial institution has been incorporated for five years. As a result, no bank
holding company may acquire control of Futurus Financial Services until after
the fifth anniversary date of Futurus Bank's incorporation.
CHANGE IN BANK CONTROL. Subject to various exceptions, the Bank Holding
Company Act and the Change in Bank Control Act, together with related
regulations, require Federal Reserve approval prior to any person or company
acquiring "control" of a bank holding company. Control is conclusively presumed
to exist if an individual or company acquires 25% or more of any class of voting
securities of
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the bank holding company. Control is rebuttably presumed to exist if a person or
company acquires 10% or more, but less than 25%, of any class of voting
securities and either:
- The bank holding company has registered securities under Section
12 of the Securities Act of 1934, or
- No other person owns a greater percentage of that class of voting
securities immediately after the transaction.
We intend to register our common stock under the Securities Exchange Act of
1934. The regulations provide a procedure for challenge of the rebuttable
control presumption.
PERMITTED ACTIVITIES. On November 12, 1999 President Clinton signed the
Gramm-Leach-Bliley Act, which amends the Bank Holding Company Act and greatly
expands the activities in which bank holding companies and affiliates of banks
are permitted to engage. The Act eliminates many federal and state law barriers
to affiliations among banks and securities firms, insurance companies, and other
financial service providers. The provisions of the Act relating to permitted
activities of bank holding companies and affiliates of banks will become
effective on March 11, 2000. Since we do not intend to begin our operations
until May 2000, the following discussion describes the activities in which
Futurus Financial Services will be permitted to engage under the Bank Holding
Company Act, as amended by the Gramm-Leach-Bliley Act.
Generally, if Futurus Financial Services qualifies and elects to become
a financial holding company, which is described below, it may engage in
activities that are:
- Financial in nature;
- Incidental to a financial activity; or
- Complementary to a financial activity and do not pose a
substantial risk to the safety or soundness of depository
institutions or the financial system generally.
In determining whether a particular activity is financial in nature or
incidental or complementary to a financial activity, the Federal Reserve must
consider (1) the purpose of the Bank Holding Company and Gramm-Leach-Bliley
Acts, (2) changes or reasonable expected changes in the marketplace in which
financial holding companies compete and in the technology for delivering
financial services, and (3) whether the activity is necessary or appropriate to
allow financial holding companies to effectively compete with other financial
service providers and to efficiently deliver information and services. The Act
expressly lists the following activities as financial in nature:
- Lending, trust and other banking activities;
- Insuring, guaranteeing, or indemnifying against loss or harm, or
providing and issuing annuities, and acting as principal, agent,
or broker for these purposes, in any state;
- Providing financial, investment, or advisory services;
- Issuing or selling instruments representing interests in pools of
assets permissible for a bank to hold directly;
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- Underwriting, dealing in or making a market in securities;
- Other activities that the Federal Reserve may determine to be so
closely related to banking or managing or controlling banks as to
be a proper incident to managing or controlling banks;
- Foreign activities permitted outside of the United States if the
Federal Reserve has determined them to be usual in connection with
banking operations abroad;
- Merchant banking through securities or insurance affiliates; and
- Insurance company portfolio investments.
To qualify to become a financial holding company, our depository
institution subsidiaries must be well capitalized and well managed and must have
a Community Reinvestment Act rating of at least "satisfactory." Additionally, we
must file an election with the Federal Reserve to become a financial holding
company and provide the Federal Reserve with 30 days written notice prior to
engaging in a permitted financial activity. Although we do not have any
immediate plans to file an election with the Federal Reserve to become a
financial holding company, one of the primary reasons we selected the holding
company structure was to have increased flexibility. Accordingly, if deemed
appropriate in the future, we may elect to become a financial holding company.
Under the Bank Holding Company Act, a bank holding company, which has
not qualified or elected to become a financial holding company, is generally
prohibited from engaging in or acquiring direct or indirect control of more than
5% of the voting shares of any company engaged in nonbanking activities unless,
prior to the enactment of the Gramm-Leach-Bliley Act, the Federal Reserve found
those activities to be so closely related to banking as to be a proper incident
to the business of banking. Activities that the Federal Reserve has found to be
so closely related to banking as to be a proper incident to the business of
banking include:
- factoring accounts receivable;
- acquiring or servicing loans;
- leasing personal property;
- conducting discount securities brokerage activities;
- performing selected data processing services;
- acting as agent or broker in selling credit life insurance and
other types of insurance in connection with credit transactions;
and
- performing selected insurance underwriting activities.
Despite prior approval, the Federal Reserve may order a bank holding
company or its subsidiaries to terminate any of these activities or to terminate
its ownership or control of any subsidiary when it has reasonable cause to
believe that the bank holding company's continued ownership, activity or control
constitutes a serious risk to the financial safety, soundness, or stability of
any of its bank subsidiaries.
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<PAGE>
SUPPORT OF SUBSIDIARY INSTITUTIONS. Under Federal Reserve policy,
Futurus Financial Services is expected to act as a source of financial strength
for Futurus Bank and to commit resources to support Futurus Bank. This support
may be required at times when, without this Federal Reserve policy, Futurus
Financial Services might not be inclined to provide it. In addition, any capital
loans made by Futurus Financial Services to Futurus Bank will be repaid only
after its deposits and various other obligations are repaid in full. In the
unlikely event of Futurus Financial Services' bankruptcy, any commitment by it
to a federal bank regulatory agency to maintain the capital of Futurus Bank will
be assumed by the bankruptcy trustee and entitled to a priority of payment.
FUTURUS BANK
Since Futurus Bank will be charted as a national bank, it will
primarily be subject to the supervision, examination and reporting requirements
of the National Bank Act and the regulations of the Office of the Comptroller of
the Currency. The Office of the Comptroller of the Currency will regularly
examine Futurus Bank's operations and has the authority to approve or disapprove
mergers, the establishment of branches and similar corporate actions. The Office
of the Comptroller of the Currency also has the power to prevent the continuance
or development of unsafe or unsound banking practices or other violations of
law. Additionally, Futurus Bank's deposits will be insured by the FDIC to the
maximum extent provided by law. Futurus Bank will also be subject to numerous
state and federal statutes and regulations that will affect its business,
activities and operations.
BRANCHING. National banks are required by the National Bank Act to
adhere to branching laws applicable to state banks in the states in which they
are located. Under current Georgia law, Futurus Bank may open branch offices
throughout Georgia with the prior approval of the Office of the Comptroller of
the Currency and the Georgia Department of Banking and Finance. In addition,
with prior regulatory approval, Futurus Bank will be able to acquire branches of
existing banks located in Georgia. Futurus Bank and any other national or
state-chartered bank generally may branch across state lines by merging with
banks in other states if allowed by the applicable states' laws. Georgia law,
with limited exceptions, currently permits branching across state lines through
interstate mergers.
Under the Federal Deposit Insurance Act, states may "opt-in" and allow
out-of-state banks to branch into their state by establishing a new start-up
branch in the state. Currently, Georgia has not opted-in to this provision.
Therefore, interstate merger is the only method through which a bank located
outside of Georgia may branch into Georgia. This provides a limited barrier of
entry into the Georgia banking market, which protects us from an important
segment of potential competition. However, because Georgia has elected not to
opt-in, our ability to establish a new start-up branch in another state may be
limited. Many states that have elected to opt-in have done so on a reciprocal
basis, meaning that an out-of-state bank may establish a new start-up branch
only if their home state has also elected to opt-in. Consequently, until Georgia
changes its election, the only way we will be able to branch into states that
have elected to opt-in on a reciprocal basis will be through interstate merger.
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 financial institutions. Under this
system, the federal banking regulators have established five capital categories
(well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized) in which all institutions are
placed. Federal banking regulators are required to take various 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 depends 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
57
<PAGE>
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 various 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. The regulations also establish procedures for downgrading an
institution and a lower capital category based on supervisory factors other than
capital.
FDIC INSURANCE ASSESSMENTS. The FDIC has adopted a risk-based
assessment system for insured depository institutions that takes into account
the risks attributable to different categories and concentrations of assets and
liabilities. The system assigns an institution to one of three capital
categories: (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 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. Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In addition, the FDIC imposes assessments of 3.7 cents per $100 of deposits 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 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.
COMMUNITY REINVESTMENT ACT. The Community Reinvestment Act requires
that, in connection with examinations of financial institutions within their
respective jurisdictions, the Federal Reserve, the FDIC, or the Office of the
Comptroller of the Currency, shall evaluate the record of each financial
institution in meeting the credit needs of its local community, including low
and moderate income neighborhoods. These facts are also considered in evaluating
mergers, acquisitions, and applications to open a branch or facility. Failure to
adequately meet these criteria could impose additional requirements and
limitations on Futurus Bank. Under the Gramm-Leach-Bliley Act, banks with
aggregate assets of not more than $250 million will be subject to a Community
Reinvestment Act examination only once every 60 months if the bank receives an
outstanding rating, once every 48 months if it receives a satisfactory rating
and as needed if the rating is less than satisfactory. Additionally, banks will
be required to publicly disclose the terms of various Community Reinvestment
Act-related agreements.
OTHER REGULATIONS. Interest and other charges collected or contracted
for by Futurus Bank are subject to state usury laws and federal laws concerning
interest rates. Futurus Bank's loan operations are also subject to federal laws
applicable to credit transactions, such as:
- The federal Truth-In-Lending Act, governing disclosures of credit
terms to consumer borrowers;
58
<PAGE>
- The Home Mortgage Disclosure Act of 1975, requiring financial
institutions to provide information to enable the public and
public officials to determine whether a financial institution is
fulfilling its obligation to help meet the housing needs of the
community it serves;
- The Equal Credit Opportunity Act, prohibiting discrimination on
the basis of race, creed or other prohibited factors in extending
credit;
- The Fair Credit Reporting Act of 1978, governing the use and
provision of information to credit reporting agencies;
- The Fair Debt Collection Act, governing the manner in which
consumer debts may be collected by collection agencies; and
- The rules and regulations of the various federal agencies charged
with the responsibility of implementing these federal laws.
The deposit operations of Futurus Bank are subject to:
- The Right to Financial Privacy Act, which imposes a duty to
maintain confidentiality of consumer financial records and
prescribes procedures for complying with administrative subpoenas
of financial records; and
- The Electronic Funds Transfer Act and Regulation E issued by the
Federal Reserve to implement that act, which govern automatic
deposits to and withdrawals from deposit accounts and customers'
rights and liabilities arising from the use of automated teller
machines and other electronic banking services.
CAPITAL ADEQUACY
Futurus Financial Services and Futurus Bank will be required to comply
with the capital adequacy standards established by the Federal Reserve, in the
case of Futurus Financial Services, and the Office of the Comptroller of the
Currency, in the case of Futurus Bank. The Federal Reserve has established a
risk-based and a leverage measure of capital adequacy for bank holding
companies. Futurus Bank is also subject to risk-based and leverage capital
requirements adopted by the Office of the Comptroller of the Currency, which are
substantially similar to those adopted by the Federal Reserve for bank holding
companies.
The risk-based capital standards are designed to make regulatory
capital requirements more sensitive to differences in risk profiles among banks
and bank holding companies, to account for off-balance-sheet exposure, and to
minimize disincentives for holding liquid assets. Assets and off-balance-sheet
items, such as letters of credit and unfunded loan commitments, are assigned to
broad risk categories, each with appropriate risks weights. The resulting
capital ratios represent capital as a percentage of total risk-weighted assets
and off-balance-sheet items.
The minimum guideline for the ratio of total capital to risk-weighted
assets is 8%. Total capital consists of two components, Tier 1 Capital and Tier
2 Capital. Tier 1 Capital generally consist of common stock, minority interests
in the equity accounts of consolidated subsidiaries, noncumulative perpetual
preferred stock, and a limited amount of cumulative perpetual preferred stock,
less goodwill and
59
<PAGE>
other specified intangible assets. Tier 1 Capital must equal at least 4% of
risk-weighted assets. Tier 2 Capital generally consists of subordinated debt,
other preferred stock, and a limited amount of loan loss reserves. The total
amount of Tier 2 Capital is limited to 100% of Tier 1 Capital.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and other specified
intangible assets, of 3% for bank holding companies that meet specified
criteria, including having the highest regulatory rating and implementing the
Federal Reserve's risk-based capital measure for market risk. All other bank
holding companies generally are required to maintain a leverage ratio of at
least 4%. The guidelines also provide that bank holding companies experiencing
internal growth, as will be the case for Futurus Financial Services, or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels. Furthermore, the Federal Reserve has
indicated that it will consider a bank holding company's Tier 1 Capital leverage
ratio, after deducting all intangibles and other indicators of capital strength
in evaluating proposals for expansion or new activities.
We are also subject to capital guidelines issued by our respective
primary regulators, which provide for minimum ratios of total capital to total
assets.
Failure to meet capital guidelines could subject a bank or bank holding
company to a variety of enforcement remedies, including issuance of a capital
directive, the termination of deposit insurance by the FDIC, a prohibition on
accepting brokered deposits, and other restrictions on its business. As
described above, significant additional restrictions can be imposed on
FDIC-insured depository institutions that fail to meet applicable capital
requirements. See "--Prompt Corrective Action" on page __.
PAYMENT OF DIVIDENDS
Futurus Financial Services is a legal entity separate and distinct from
Futurus Bank. The principal sources of Futurus Financial Services' cash flow,
including cash flow to pay dividends to its shareholders, are dividends that
Futurus Bank pays to its sole shareholder, Futurus Financial Services. Statutory
and regulatory limitations apply to Futurus Bank's payment of dividends to
Futurus Financial Services as well as to Futurus Financial Services' payment of
dividends to its shareholders.
Futurus Bank is required by federal law to obtain the prior approval of
the Office of the Comptroller of the Currency for payments of dividends if the
total of all dividends declared by our board of directors in any year will
exceed (1) the total of Futurus Bank's net profits for that year, plus (2)
Futurus Bank's retained net profits of the preceding two years, less any
required transfers to surplus.
The payment of dividends by Futurus Financial Services and Futurus Bank
may also be affected by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines. If, in the opinion of the Office
of the Comptroller of the Currency, Futurus Bank were engaged in or about to
engage in an unsafe or unsound practice, the Office of the Comptroller of the
Currency could require, after notice and a hearing, that Futurus Bank stop or
refrain engaging in the practice. The federal banking agencies have indicated
that paying dividends that deplete a depository institution's capital base to an
inadequate level would be an unsafe and unsound banking practice. Under the
Federal Deposit Insurance Corporation Improvement Act of 1991, a depository
institution may not pay any dividend if payment would cause it to become
undercapitalized or if it already is undercapitalized. Moreover, the federal
agencies have issued policy statements that provide that bank holding companies
and insured banks should generally only pay dividends out of current operating
earnings. See "--Prompt Corrective Action" on page __.
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<PAGE>
RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES
Futurus Financial Services and Futurus Bank are subject to the
provisions of Section 23A of the Federal Reserve Act. Section 23A places limits
on the amount of:
- A bank's loans or extensions of credit to affiliates;
- A bank's investment in affiliates;
- Assets a bank may purchase from affiliates, except for real and
personal property exempted by the Federal Reserve;
- The amount of loans or extensions of credit to third parties
collateralized by the securities or obligations of affiliates; and
- A bank's guarantee, acceptance or letter of credit issued on
behalf of an affiliate.
The total amount of the above transactions is limited in amount, as to
any one affiliate, to 10% of a bank's capital and surplus and, as to all
affiliates combined, to 20% of a bank's capital and surplus. In addition to the
limitation on the amount of these transactions, each of the above transactions
must also meet specified collateral requirements. Futurus Bank must also comply
with other provisions designed to avoid the taking of low-quality assets.
Futurus Financial Services and Futurus Bank are also subject to the
provisions of Section 23B of the Federal Reserve Act which, among other things,
prohibits an institution from engaging in the above transactions with affiliates
unless the transactions are on terms substantially the same, or at least as
favorable to the institution or its subsidiaries, as those prevailing at the
time for comparable transactions with nonaffiliated companies.
Futurus Bank is also subject to restrictions on extensions of credit to
its executive officers, directors, principal shareholders and their related
interests. These extensions of credit (1) must be made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with third parties, and (2) must not involve more
than the normal risk of repayment or present other unfavorable features.
PRIVACY
Financial institutions are required to disclose their policies for
collecting and protecting confidential information. Customers generally may
prevent financial institutions from sharing personal financial information with
nonaffiliated third parties except for third parties that market the
institutions' own products and services. Additionally, financial institutions
generally may not disclose consumer account numbers to any nonaffiliated third
party for use in telemarketing, direct mail marketing or other marketing through
electronic mail to consumers.
PROPOSED LEGISLATION AND REGULATORY ACTION
New regulations and statutes are regularly proposed that contain
wide-ranging proposals for altering the structures, regulations and competitive
relationships of the nation's financial institutions. We cannot predict whether
or in what form any proposed regulation or statute will be adopted or the extent
to which our business may be affected by any new regulation or statute.
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<PAGE>
EFFECT OF GOVERNMENTAL MONETARY POLICES
Our earnings are affected by domestic economic conditions and the
monetary and fiscal policies of the United States government and its agencies.
The Federal Reserve's monetary policies have had, and are likely to continue to
have, an important impact on the operating results of commercial banks through
its power to implement national monetary policy in order, among other things, to
curb inflation or combat a recession. The monetary policies of the Federal
Reserve affect the levels of bank loans, investments and deposits through its
control over the issuance of United States government securities, its regulation
of the discount rate applicable to member banks and its influence over reserve
requirements to which member banks are subject. We cannot predict the nature or
impact of future changes in monetary and fiscal policies.
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<PAGE>
LEGAL MATTERS
Powell, Goldstein, Frazer & Murphy LLP, Atlanta, Georgia will pass upon
the validity of the shares of common stock offered by this prospectus for
Futurus Financial Services. Smith Helms Mulliss & Moore, LLP, Charlotte, North
Carolina is acting as counsel for the underwriter in connection with legal
matters relating to the shares of common stock offered by this prospectus.
EXPERTS
Futurus Financial Services' audited financial statements at December
31, 1999, and for the period from August 12, 1999 through December 31, 1999,
included in this prospectus have been included in reliance on the report of
Porter Keadle Moore, LLP, independent certified public accountants, given on the
authority of that firm as experts in accounting and auditing.
REPORTS TO SHAREHOLDERS
Upon the effective date of the Registration Statement on Form SB-2 that
registers the shares of common stock offered by this prospectus with the
Securities and Exchange Commission, Futurus Financial Services will be subject
to the reporting requirements of the Securities Exchange Act, which include
requirements to file annual reports on Form 10-KSB and quarterly reports on Form
10-QSB with the Securities and Exchange Commission. This reporting obligation
will exist for at least one year and will continue for successive fiscal years,
except that these reporting obligations may be suspended for any subsequent
fiscal year if at the beginning of such year the common stock is held of record
by less than 300 persons.
At any time that Futurus Financial Services is not a reporting company,
it will furnish its shareholders with annual reports containing audited
financial information for each fiscal year on or before the date of the annual
meeting of shareholders as required by Rule 80-6-1-.05 of the Georgia Department
of Banking and Finance. Futurus Financial Services' fiscal year ends on December
31. Additionally, Futurus Financial Services will also furnish such other
reports as it may determine to be appropriate or as otherwise may be required by
law.
ADDITIONAL INFORMATION
Futurus Financial Services has filed with the Securities and Exchange
Commission a Registration Statement on Form SB-2 under the Securities Act with
respect to the shares of common stock offered by this prospectus. This
prospectus does not contain all of the information contained in the Registration
Statement. For further information with respect to Futurus Financial Services
and the common stock, we refer you to the Registration Statement and the
exhibits to it. The Registration Statement may be examined and copied at the
public reference facilities maintained by the Securities and Exchange Commission
at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549
and at the regional offices of the Securities and Exchange Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and Seven World Trade Center, 13th Floor, New York, New York 10048.
You may read and copy our registration statement, and any other materials filed
by us with the Securities and Exchange Commission, at the Securities and
Exchange Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may also obtain information on the operation of the
Public Reference Room by calling 1-800-SEC-0330. The Securities and Exchange
Commission also maintains a Web site (http://www.sec.gov) that contains
registration statements, reports, proxy and information statements and other
information regarding registrants, such as Futurus Financial Services, that file
electronically with the Securities and Exchange Commission.
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<PAGE>
Futurus Financial Services and the organizers have filed various
applications with the FDIC, the Federal Reserve, the Georgia Department of
Banking and Finance and the Office of the Comptroller of the Currency. These
applications and the information they contain are not incorporated into this
prospectus. You should rely only on information contained in this prospectus and
in the related Registration Statement in making an investment decision. To the
extent that other available information not presented in this prospectus,
including information available from Futurus Financial Services and information
in public files and records maintained by the FDIC, the Federal Reserve, the
Georgia Department of Banking and Finance and the Office of the Comptroller of
the Currency, is inconsistent with information presented in this prospectus or
provides additional information, that information is superseded by the
information presented in this prospectus and should not be relied on.
Projections appearing in the applications are based on assumptions that the
organizers believe are reasonable, but as to which they can make no assurances.
Futurus Financial Services specifically disaffirms those projections for
purposes of this prospectus and cautions you against relying on them for
purposes of making an investment decision.
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<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Certified Public Accountants...................................... F-2
Balance Sheet as of December 31, 1999................................................... F-3
Statement of Operations for the Period from August 12, 1999 (inception)
to December 31, 1999................................................................. F-4
Statement of Changes in Stockholders' Deficit for the Period from August 12, 1999
(inception) to December 31, 1999..................................................... F-5
Statement of Cash Flows for the Period from August 12, 1999 (inception)
to December 31, 1999................................................................. F-6
Notes to Financial Statements........................................................... F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Futurus Financial Services, Inc.
We have audited the accompanying balance sheet of Futurus Financial Services,
Inc. (a development stage corporation) as of December 31, 1999, and the related
statements of operations, changes in stockholder's deficit and cash flows for
the period from August 12, 1999 (inception) to December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Futurus Financial Services,
Inc. as of December 31, 1999 and the results of its operations and its cash
flows from August 12, 1999 (inception) to December 31, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Futurus
Financial Services, Inc. will continue as a going concern. As discussed in note
1 to the financial statements, the Company is in the organization stage and has
not commenced operations. Also, as discussed in note 3, the Company's future
operations are dependent on obtaining capital through an initial stock offering
and obtaining the necessary final regulatory approvals. These factors and the
expense associated with development of a new banking institution raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are described in note 3. The
financial statements do not include any adjustments relating to the
recoverability of reported asset amounts or the amount of liabilities that might
result from the outcome of this uncertainty.
Atlanta, Georgia
January 4, 2000
F-2
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash $ 6,559
Other assets 15,595
---------
$ 22,154
=========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Accounts payable and accrued expenses $ 35,710
Note payable - line of credit 170,000
---------
Total liabilities 205,710
Stockholder's deficit:
Preferred stock, no par value, 2,000,000 shares authorized;
no shares issued or outstanding --
Common stock, no par value, 10,000,000 shares authorized;
1 share issued and outstanding 10
Deficit accumulated during the development stage (183,566)
----------
Total stockholder's deficit (183,556)
----------
$ 22,154
=========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<S> <C>
Expenses:
Legal and consulting $ 90,795
Officer compensation 48,047
Regulatory fees 15,000
Other operating 29,724
--------
Net loss $183,566
========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
DURING THE
PREFERRED COMMON DEVELOPMENT
STOCK STOCK STAGE TOTAL
----- ----- ----- -----
<S> <C> <C> <C> <C>
Issuance of common stock to organizer $ -- 10 -- 10
Net loss -- -- (183,566) (183,566)
--------- -------- -------- --------
Balance, December 31, 1999 $ -- 10 (183,566) (183,556)
========= ======== ======== ========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $(183,566)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in other assets (15,595)
Increase in accounts payable and accrued expenses 35,710
---------
Net cash used in operating activities (163,451)
---------
Cash flows from financing activities:
Sale of organization share of common stock 10
Proceeds from note payable 170,000
---------
Net cash provided by financing activities 170,010
---------
Net increase in cash 6,559
Cash at beginning of period --
---------
Cash at end of period $ 6,559
=========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,249
=========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Futurus Financial Services, Inc. (the Company) was incorporated for the
purpose of becoming a bank holding company. The Company intends to acquire
100% of the outstanding common stock of Futurus Bank, N.A. (the Bank)
(Proposed), which will operate in northern Fulton county in the
metropolitan Atlanta, Georgia area. The organizers of the Bank filed a
joint application to charter the Bank with the Office of the Comptroller
of Currency and the Federal Deposit Insurance Corporation on October 15,
1999. Provided that the application is timely approved and necessary
capital is raised, it is expected that operations will commence in the
second quarter of 2000.
Operations through December 31, 1999 relate primarily to expenditures by
the organizers for incorporating and organizing the Company. All
expenditures by the organizers are considered expenditures of the Company.
The Company plans to raise approximately $11,000,000 through an offering
of its common stock at $10 per share, of which $8,500,000 will be used to
capitalize the Bank. The organizers and directors expect to subscribe for
a minimum of approximately $1,900,000 of the Company's stock.
In connection with the Company's formation and initial offering, warrants
to purchase shares of common stock at $10.00 per share will be issued to
the organizing stockholders. Organizing stockholders who purchase 20,000
or more shares of common stock in the initial offering will receive
warrants to purchase one share of common stock for each share they
purchase. Organizing stockholders who purchase less than 20,000 shares in
the initial offering will receive warrants to purchase one share of common
stock for every two shares they purchase. The warrants are exercisable on
each of the three succeeding anniversaries of the date of opening of the
Bank at the initial offering price of $10.00 per share and expire ten
years after the date of grant. The Company also intends to reserve 110,000
shares for the issuance of options under an employee incentive stock
option plan.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION COSTS
Costs incurred for the organization of the Company and the Bank
(consisting principally of legal, accounting, consulting and incorporation
fees) are being expensed as incurred.
DEFERRED OFFERING EXPENSES
Costs incurred in connection with the stock offering, consisting of
direct, incremental costs of the offering, are being deferred and will be
offset against the proceeds of the stock sale as a charge to additional
paid in capital.
PRE-OPENING EXPENSES Costs incurred for overhead and other operating
expenses are included in the current period's operating results.
PROFORMA NET LOSS PER COMMON SHARE
Proforma net loss per common share is calculated by dividing net loss by
the minimum number of common shares (1,100,000), which would be
outstanding should the offering be successful, as prescribed in Staff
Accounting Bulletin Topic 1:B. The proforma net loss per share for the
period ended December 31, 1999 was $.17 per share.
F-7
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(3) LIQUIDITY AND GOING CONCERN CONSIDERATIONS
The Company incurred a net loss of $183,566 for the period from August 12,
1999 (inception) to December 31, 1999. At December 31, 1999, liabilities
exceeded assets by $183,556.
At December 31, 1999, the Company is funded by a line of credit from a
bank. Management believes that the current level of expenditures is well
within the financial capabilities of the organizers and adequate to meet
existing obligations and fund current operations, but obtaining final
regulatory approvals and commencing banking operations is dependent on
successfully completing the stock offering.
To provide permanent funding for its operation, the Company is currently
offering 1,100,000 shares of its no par value common stock at $10 per
share in an initial public offering. Costs related to the organization and
registration of the Company's common stock will be paid from the gross
proceeds of the offering. The share issued, which is outstanding at
December 31, 1999, will be redeemed concurrently with the consummation of
the offering.
(4) LINE OF CREDIT
Organization, offering and pre-opening costs incurred prior to the opening
for business will be funded under a $500,000 line of credit. The terms of
the existing line of credit, which is guaranteed by most of the
organizers, include a maturity of August 23, 2000 and interest, payable
quarterly, calculated at one-half percent below the prime interest rate.
(5) PREFERRED STOCK
Shares of preferred stock may be issued from time to time in one or more
series as established by resolution of the Board of Directors of the
Company. Each resolution shall include the number of shares issued,
preferences, special rights and limitations as determined by the Board.
(6) COMMITMENTS
The Company has entered into an employment agreement with its President
and Chief Executive Officer, providing for an initial term of three years
commencing August 20, 1999. The agreement provides for a base salary, an
incentive bonus based on the Company's performance, stock options, and
other perquisites commensurate with his employment.
The Company has entered into an agreement whereby it will receive
marketing services including logo development, branch design consultation
and introductory collateral. The Company has committed to pay a total of
$50,000 for these services, of which $20,000 has been paid as of December
31, 1999.
The Company has entered into an operating lease agreement for its
temporary corporate office. The lease agreement expires on August 31, 2000
and requires minimum payments totaling $8,440 in 2000.
In connection with its proposed issuance of common stock as described in
note 1, the Company plans to enter into an underwriting agreement with an
investment banker. The estimated fee to be paid to the investment banker
upon successful completion of the offering is $749,000.
F-8
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(7) INCOME TAXES
The following summarizes the sources and expected tax consequences of
future taxable deductions which comprise the net deferred taxes at
December 31, 1999:
<TABLE>
<S> <C>
Deferred tax assets:
Pre-opening expenses $ 68,809
Operating loss carryforwards 873
--------
Total gross deferred tax assets 69,682
Less valuation allowance (69,682)
--------
Net deferred taxes $ --
========
</TABLE>
The future tax consequences of the differences between the financial
reporting and tax basis of the Company's assets and liabilities resulted
in a net deferred tax asset. A valuation allowance was established for the
net deferred tax asset, as the realization of these deferred tax assets is
dependent on future taxable income.
F-9
<PAGE>
================================================================================
PROSPECTIVE INVESTORS MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. NO ONE HAS AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS
WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THIS
PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF
THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR
ANY SALE OF THESE SECURITIES.
_________________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................................
Factors..................................................................
Cautionary Statement About Forward-
Looking Statements...................................................
Use of Proceeds..........................................................
Capitalization...........................................................
Dividends...............................................................
Management's Discussion and Analysis
of Financial Condition and Plan of
Operations...........................................................
Proposed Business of Futurus Financial
Services and Futurus Bank............................................
Management...............................................................
Executive Compensation...................................................
Related Party Transactions...............................................
Description of Capital Stock of
Futurus Financial Services...........................................
Selected Provisions of the Articles
of Incorporation and Bylaws..........................................
Shares Eligible for Future Sale..........................................
Underwriting.............................................................
Supervision and Regulation...............................................
Legal Matters............................................................
Experts..................................................................
Reports to Shareholders..................................................
Additional Information...................................................
Index to Financial Statements.........................................F-1
</TABLE>
UNTIL _________ 2000 (40 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT BUY, SELL OR TRADE THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
================================================================================
1,100,000 SHARES
FUTURUS FINANCIAL
SERVICES, INC.
A PROPOSED BANK HOLDING
COMPANY
FOR
FUTURUS BANK, N.A.
(PROPOSED)
COMMON STOCK
_____________
PROSPECTUS
_____________
WACHOVIA SECURITIES, INC.
_________________, 2000
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Consistent with the applicable provisions of the laws of Georgia, the
Registrant's bylaws provide that the Registrant shall have the power to
indemnify its directors, officers, employees and agents against expenses
(including attorneys' fees) and liabilities arising from actual or threatened
actions, suits or proceedings, whether or not settled, to which they become
subject by reason of having served in such role if such director, officer,
employee or agent acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Registrant and,
with respect to a criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. Advances against expenses shall be made
so long as the person seeking indemnification agrees to refund the advances if
it is ultimately determined that he or she is not entitled to indemnification. A
determination of whether indemnification of a director, officer, employee or
agent is proper because he or she met the applicable standard of conduct shall
be made (1) by the board of directors of the Registrant, (2) in certain
circumstances, by independent legal counsel in a written opinion or (3) by the
affirmative vote of a majority of the shares entitled to vote, but shares owned
by or are under voting control of directors who are at the time parties to the
proceeding may not vote on the determination.
In addition, the Registrant's articles of incorporation, subject to
exceptions, eliminates the potential personal liability of a director for
monetary damages to the Registrant and to the shareholders of the Registrant for
breach of a duty as a director. There is no release of liability for (1) a
breach of duty involving appropriation of a business opportunity of the
Registrant, (2) an act or omission involving intentional misconduct or a knowing
violation of law, (3) a transaction from which the director derives an improper
material tangible personal benefit or (4) as to any payment of a dividend or
approval of a stock repurchase that is illegal under the Georgia Business
Corporation Code. The articles of incorporation do not eliminate or limit the
right of the Registrant or its shareholders to seek injunctive or other
equitable relief not involving monetary damages.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses, other than underwriting discounts and commissions,
of the sale of the Registrant's common stock, no par value, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee ......... $ 3,829
National Association of Securities Dealers, Inc. Filing Fee.. 1,950
Blue Sky Fees and Expenses .................................. 10,000
Legal Fees and Expenses ..................................... 75,000
Accounting Fees and Expenses ................................ 2,500
Printing and Engraving Expenses ............................. 40,000
Miscellaneous ............................................... 1,721
--------
Total ................................................. $135,000
========
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On December 31, 1999, the Registrant issued to Gregory A. Janicki, in a
private placement, one share of the Registrant's Common Stock, no par value, for
an aggregate price of $10.00 in connection with the organization of the Company.
The sale to Mr. Janicki was exempt from registration under the Securities Act
pursuant to Section 4(2) of the Act because it was a transaction by an issuer
that did not involve a public offering.
II-1
<PAGE>
ITEM 27. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
1.1 Underwriting Agreement*
3.1 Articles of Incorporation, as amended and restated*
3.2 Bylaws
4.1 Specimen Common Stock Certificate*
4.2 See Exhibits 3.1 and 3.2 for provisions of the Articles of
Incorporation and Bylaws defining rights of holders of the Common
Stock
5.1 Legal Opinion of Powell, Goldstein, Frazer & Murphy LLP*
10.1 Lease Agreement by and among Futurus Financial Services, Inc. and
Pioneer Real Estate Development, Inc. dated _____________, 2000
(main office)*
10.2 Lease Agreement by and among Futurus Financial Services, Inc. and
Daniel B. Cawart d/b/a Alpharetta Square Shopping Center dated
______________, 2000 (temporary facility)*
10.3 Promissory Note dated August 23, 1999 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty
10.4 Form of Futurus Financial Services, Inc. Organizers' Warrant
Agreement
10.5 Futurus Financial Services, Inc. 2000 Stock Incentive Plan
10.6 Project Development and Construction Agreement dated September 28,
1999 and accepted October 2, 1999 by and between Futurus Financial
Services, Inc. and KDA Financial, Inc.
10.7 Project Agreement dated November 30, 1999 by and between Futurus
Financial Services, Inc. and The Compass Group d/b/a Stern
Marketing Group
10.8 Amended and Restated Employment Agreement dated February __, 2000
by and among Futurus Bank, N.A. (Proposed), Futurus Financial
Services, Inc. and William M. Butler*
23.1 Consent of Porter Keadle Moore, LLP
23.2 Consent of Powell, Goldstein, Frazer & Murphy LLP (contained in
Exhibit 5.1)*
24.1 Power of Attorney (included on page II-4)
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
- ---------------
* To be filed by amendment.
ITEM 28. UNDERTAKINGS.
The Registrant hereby undertakes to provide to the underwriter at the
closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to foregoing provisions, or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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
II-2
<PAGE>
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.
The undersigned Registrant hereby undertakes as follows:
(a) (1) To file, during any period in which it offers or
sells securities, a post-effective amendment to this
Registration Statement to:
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or
events which, individually or together,
represent a fundamental change in the
information set forth in the Registration
Statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar
value of securities offered would not exceed
that which was registered) and any deviation
from the low or high end of the estimated
maximum offering range may be reflected in
the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and
price represent no more than a 20% change in
the maximum aggregate offering price set
forth in the "Calculation of Registration
Fee" table in the effective Registration
Statement;
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act,
treat each post-effective amendment as a new
registration statement of the securities offered, and
the offering of the securities at that time to be the
initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities being registered
that remain unsold at the end of the offering.
The Registrant hereby undertakes as follows:
(b) (1) For determining any liability under the Securities
Act, to treat the information omitted from the form
of prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant under
Rule 424(b)(1), or (4) or 497(h) under the Securities
Act as part of this Registration Statement as of the
time the Commission declared it effective.
(2) For determining any liability under the Securities
Act, to treat each post-effective amendment that
contains a form of prospectus as a new registration
statement for the securities offered in the
Registration Statement, and that offering of the
securities at that time as the initial bona fide
offering of those securities.
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing on Form SB-2 and authorized this
Registration Statement to be signed on its behalf by the undersigned in the City
of Alpharetta, State of Georgia, on February 9, 2000.
FUTURUS FINANCIAL SERVICES, INC.
By: /s/ WILLIAM M. BUTLER
----------------------------------------
William M. Butler
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gregory A. Janicki and William M. Butler
their respective attorneys-in-fact, with the power of substitution, for him or
her in any and all capacities, to sign any and all amendments to this
Registration Statement (including post-effective amendments) and any
Registration Statement filed pursuant to Rule 462(b) of the Securities Act of
1933, as amended, and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorneys-in-fact, or their
respective substitute or substitutes, may do or cause to be done by virtue
hereof.
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William M. Butler President and Chief Executive February 9, 2000
- ------------------------------------------------ Officer, Director*
William M. Butler
/s/ C. Parke Day Secretary, Director February 9, 2000
- ------------------------------------------------
C. Parke Day
/s/ Nathan E. Hardwick, IV Director February 9, 2000
- ------------------------------------------------
Nathan E. Hardwick, IV
/s/ Michael S. Hug Director February 9, 2000
- ------------------------------------------------
Michael S. Hug
/s/ Deborah M. Janicki Director February 9, 2000
- ------------------------------------------------
Deborah M. Janicki
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Gregory A. Janicki Chairman of the Board of February 9, 2000
- ------------------------------------------------ Directors
Gregory A. Janicki
/s/ Donald S. Shapleigh, Jr. Director February 9, 2000
- ------------------------------------------------
Donald S. Shapleigh, Jr.
/s/ Richard W. Stimson Director February 9, 2000
- ------------------------------------------------
Richard W. Stimson
Treasurer, Director
- ------------------------------------------------
Danny L. Tesney
/s/ Joel P. Weinbach Director February 9, 2000
- ------------------------------------------------
Joel P. Weinbach
</TABLE>
* Principal executive, financial and accounting officer.
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
1.1 Underwriting Agreement*
3.1 Articles of Incorporation, as amended and restated*
3.2 Bylaws
4.1 Specimen Common Stock Certificate*
4.2 See Exhibits 3.1 and 3.2 for provisions of the Articles of
Incorporation and Bylaws defining rights of holders of the Common
Stock
5.1 Legal Opinion of Powell, Goldstein, Frazer & Murphy LLP*
10.1 Lease Agreement by and among Futurus Financial Services, Inc. and
Pioneer Real Estate Development, Inc. dated _____________, 2000
(main office)*
10.2 Lease Agreement by and among Futurus Financial Services, Inc. and
Daniel B. Cawart d/b/a Alpharetta Square Shopping Center dated
______________, 2000 (temporary facility)*
10.3 Promissory Note dated August 23, 1999 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty
10.4 Form of Futurus Financial Services, Inc. Organizers' Warrant
Agreement
10.5 Futurus Financial Services, Inc. 2000 Stock Incentive Plan
10.6 Project Development and Construction Agreement dated September 28,
1999 and accepted October 2, 1999 by and between Futurus Financial
Services, Inc. and KDA Financial, Inc.
10.7 Project Agreement dated November 30, 1999 by and between Futurus
Financial Services, Inc. and The Compass Group d/b/a Stern
Marketing Group
10.8 Amended and Restated Employment Agreement dated February __, 2000
by and among Futurus Bank, N.A. (Proposed), Futurus Financial
Services, Inc. and William M. Butler*
23.1 Consent of Porter Keadle Moore, LLP
23.2 Consent of Powell, Goldstein, Frazer & Murphy LLP (contained in
Exhibit 5.1)*
24.1 Power of Attorney (included on page II-4)
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE>
EXHIBIT 3.2
BYLAWS
OF
FUTURUS FINANCIAL SERVICES, INC.
<PAGE>
BYLAWS
OF
FUTURUS FINANCIAL SERVICES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE ONE - OFFICES ............................... 1
ARTICLE TWO - SHAREHOLDERS' MEETINGS ................ 1
2.1 Annual Meeting
2.2 Special Meetings ....................... 1
2.3 Place .................................. 1
2.4 Notice ................................. 1
2.5 Quorum ................................. 1
2.6 Proxies; Required Vote ................. 2
2.7 Presiding Officer and Secretary......... 2
2.8 Shareholder List ....................... 2
2.9 Action in Lieu of Meeting .............. 2
ARTICLE THREE - DIRECTORS ........................... 2
3.1 Management ............................. 2
3.2 Number of Directors .................... 2
3.3 Vacancies .............................. 3
3.4 Election of Directors .................. 3
3.5 Removal ................................ 3
3.6 Resignation ............................ 3
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
3.7 Compensation .......................................................................... 3
3.8 Honorary and Advisory Directors ....................................................... 3
3.9 Nomination of Directors ............................................................... 4
ARTICLE FOUR - COMMITTEES .......................................................................... 4
4.1 Executive Committee ................................................................... 4
4.2 Other Committees ...................................................................... 5
4.3 Removal ............................................................................... 6
ARTICLE FIVE - MEETINGS OF THE BOARD OF DIRECTORS .................................................. 6
5.1 Time and Place ........................................................................ 6
5.2 Regular Meetings ...................................................................... 6
5.3 Special Meetings ...................................................................... 6
5.4 Content and Waiver of Notice .......................................................... 6
5.5 Quorum; Participation by Telephone .................................................... 6
5.6 Action in Lieu of Meeting ............................................................. 7
5.7 Interested Directors and Officers ..................................................... 7
ARTICLE SIX - OFFICERS, AGENTS AND EMPLOYEES ....................................................... 7
6.1 General Provisions .................................................................... 7
6.2 Powers and Duties of the Chairman of the Board and the President ...................... 8
6.3 Powers and Duties of Vice Presidents .................................................. 8
6.4 Powers and Duties of the Secretary .................................................... 8
6.5 Powers and Duties of the Treasurer .................................................... 8
6.6 Appointment, Powers and Duties of Assistant Secretaries ............................... 9
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
6.7 Appointment, Powers and Duties of Assistant Treasurers ................................. 9
6.8 Delegation of Duties ................................................................... 9
ARTICLE SEVEN - CAPITAL STOCK ....................................................................... 9
7.1 Certificates ........................................................................... 9
7.2 Shareholder List ....................................................................... 10
7.3 Transfer of Shares ..................................................................... 10
7.4 Record Dates ........................................................................... 10
7.5 Registered Owner ....................................................................... 10
7.6 Transfer Agent and Registrars .......................................................... 11
7.7 Lost Certificates ..................................................................... 11
7.8 Fractional Shares or Scrip ............................................................. 11
ARTICLE EIGHT - BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS ........................................ 11
8.1 Inspection of Books and Records ....................................................... 11
8.2 Seal .................................................................................. 12
8.3 Annual Statements ..................................................................... 12
ARTICLE NINE - INDEMNIFICATION ..................................................................... 12
9.1 Authority to Indemnify ................................................................ 12
9.2 Mandatory Indemnification ............................................................. 13
9.3 Advances for Expenses ................................................................. 13
9.4 Court-ordered Indemnification and Advances for Expenses ............................... 13
9.5 Determination of Indemnification ...................................................... 13
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
9.6 Authorization of Indemnification ...................................................... 14
9.7 Other Rights ......................................................................... 14
9.8 Insurance ............................................................................. 14
9.9 Continuation of Expenses .............................................................. 14
ARTICLE TEN - NOTICES: WAIVERS OF NOTICE .......................................................... 15
10.1 Notices .................................................................................. 15
10.2 Waivers of Notice ........................................................................ 15
ARTICLE ELEVEN - EMERGENCY POWERS .................................................................. 15
11.1 Bylaws ................................................................................... 15
11.2 Lines of Succession ...................................................................... 15
11.3 Head Office .............................................................................. 15
11.4 Period of Effectiveness ................................................................. 16
11.5 Notices .................................................................................. 16
11.6 Officers as Directors Pro Tempore ........................................................ 16
11.7 Liability of Officers, Directors and Agents .............................................. 16
ARTICLE TWELVE - CHECKS, NOTES, DRAFTS, ETC. ....................................................... 16
ARTICLE THIRTEEN - AMENDMENTS ...................................................................... 16
</TABLE>
iv
<PAGE>
BYLAWS
OF
FUTURUS FINANCIAL SERVICES, INC
ARTICLE ONE
OFFICES
The corporation shall at all times maintain its principal office in
Alpharetta, Georgia, its registered office in the State of Georgia and its
registered agent at that address, but it may have other offices located within
or outside the State of Georgia as the Board of Directors may determine.
ARTICLE TWO
SHAREHOLDERS' MEETINGS
2.1 ANNUAL MEETING. A meeting of shareholders of the corporation shall
be held annually, within six (6) months after the end of each fiscal year of the
corporation. The annual meeting shall be held at such time and place, and on
such date, as the Directors shall determine from time to time and as shall be
specified in the notice of the meeting.
2.2 SPECIAL MEETINGS. Special meetings of the shareholders may be
called at any time by the corporation's Board of Directors, its President, or by
the corporation upon the written request of any one or more shareholders owning
an aggregate of not less than twenty-five percent (25%) of the outstanding
capital stock of the corporation. Special meetings shall be held at such a time
and place and on such date as shall be specified in the notice of the meeting.
2.3 PLACE. Annual or special meetings of shareholders may be held
within or without the State of Georgia.
2.4 NOTICE. Notice of annual or special shareholders meetings stating
the place, day and hour of the meeting shall be given in writing not less than
ten nor more than sixty (60) days before the date of the meeting, either mailed
to the last known address or personally given to each shareholder. Notice of any
special meeting of shareholders shall state the purpose or purposes for which
the meeting is called. The notice of any meeting at which amendments to or
restatements of the articles of incorporation, merger or share exchange of the
corporation, or the disposition of corporate assets requiring shareholder
approval are to be considered shall state such purpose, and shall further comply
with all requirements of law. Notice of a meeting may be waived by an instrument
in writing executed before or after the meeting. The waiver need not specify the
purpose of the meeting or the business transacted, unless one of the purposes of
the meeting concerns a plan of merger or share exchange, in which event the
waiver shall comply with the further requirements of law concerning such
waivers. Attendance at such meeting in person or by proxy shall constitute a
waiver of notice thereof.
2.5 QUORUM. At all meetings of shareholders a majority of the
outstanding shares of stock shall constitute a quorum for the transaction of
business, and no resolution or business shall be
<PAGE>
transacted without the favorable vote of the holders of a majority of the shares
represented at the meeting and entitled to vote. A lesser number may adjourn
from day to day, and shall announce the time and place to which the meeting is
adjourned.
2.6 PROXIES; REQUIRED VOTE. At every meeting of the shareholders,
including meetings of shareholders for the election of Directors, any
shareholder having the right to vote shall be entitled to vote in person or by
proxy, but no proxy shall be voted after eleven months from its date, unless
said proxy provides for a longer period. Each shareholder shall have one vote
for each share of stock having voting power, registered in his or her name on
the books of the corporation. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders, except as otherwise
provided by law, by the articles of incorporation or by these bylaws.
2.7 PRESIDING OFFICER AND SECRETARY. At every meeting of shareholders,
the Chairman or the President, or if such officers shall not be present then the
person appointed by one of them, shall preside. The Secretary or an Assistant
Secretary, or if such officers shall not be present, the appointee of the
presiding officer of the meeting, shall act as secretary of the meeting.
2.8 SHAREHOLDER LIST. The officer or agent having charge of the stock
transfer books of the corporation shall produce for inspection of any
shareholder at, and continuously during, every meeting of the shareholders, a
complete alphabetical list of shareholders showing the address and share
holdings of each shareholder. If the record of shareholders readily shows such
information, it may be produced in lieu of such a list.
2.9 ACTION IN LIEU OF MEETING. Any action to be taken at a meeting of
the shareholders of the corporation, or any action that may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing setting forth the action so taken shall be signed by those persons who
would be entitled to vote at a meeting those shares having voting power to cast
not less than the minimum number (or numbers, in the case of voting by class) of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote were present and voted.
ARTICLE THREE
DIRECTORS
3.1 MANAGEMENT. Subject to these bylaws, or any lawful agreement
between the shareholders, the full and entire management of the affairs and
business of the corporation shall be vested in the Board of Directors, which
shall have and may exercise all of the powers that may be exercised or performed
by the corporation.
3.2 NUMBER OF DIRECTORS. The Board of Directors shall consist of not
less than five (5) nor more than twenty-five (25) members. The number of
Directors may be fixed or changed from time to time, within the minimum and
maximum, by the shareholders by the affirmative vote of two-thirds of the issued
and outstanding shares of the corporation entitled to vote in an election of
Directors, or by the Board of Directors by the affirmative vote of two-thirds of
all Directors then in office.
-2-
<PAGE>
3.3 VACANCIES. The Directors, even though less than a quorum, may fill
any vacancy on the Board of Directors, including a vacancy created by an
increase in the number of Directors. Such appointment by the Directors shall
continue until the expiration of the term of the Director whose place has become
vacant, or, in the case of an increase in the number of Directors, until the
next meeting of the shareholders.
3.4 ELECTION OF DIRECTORS. The Board of Directors shall be divided into
three (3) classes, Class I, Class II and Class III, which shall be nearly equal
in number as possible. Each Director in Class I shall be elected to an initial
term of one (1) year, each Director in Class II shall be elected to an initial
term of two (2) years and each Director in Class III shall be elected to an
initial term of three (3) years, and each Director shall serve until the
election and qualification of his or her successor or until his or her earlier
resignation, death or removal from office. Upon the expiration of the initial
terms of office for each Class of Directors, the Directors of each Class shall
be elected for terms of three (3) years, to serve until the election and
qualification of their successors or until their earlier resignation, death or
removal from office. No person shall be eligible to stand for election as a
Director, nor may be elected as a Director, if such person is seventy (70) years
of age or greater at the time of such election.
3.5 REMOVAL. Any Director may be removed from office, at a meeting with
respect to which notice of such purpose is given, with cause, only upon the
affirmative vote of the holders of a majority of the issued and outstanding
shares of the corporation. Any Director may be removed from office, at a meeting
with respect to which notice of such purpose is given, without cause, only upon
the affirmative vote of two-thirds of the holders of a majority of the issued
and outstanding shares of the corporation.
3.6 RESIGNATION. Any Director may resign at any time either orally at
any meeting of the Board of Directors or by so advising the Chairman of the
Board or the President or by giving written notice to the corporation. A
Director who resigns may postpone the effectiveness of his or her resignation to
a future date or upon the occurrence of a future event specified in a written
tender of resignation. If no time of effectiveness is specified therein, a
resignation shall be effective upon tender. A vacancy shall be deemed to exist
at the time a resignation is tendered, and the Board of Directors or the
shareholders may, then or thereafter, elect a successor to take office when the
resignation by its terms becomes effective.
3.7 COMPENSATION. Directors may be allowed such compensation for their
services as Directors as may from time to time be fixed by resolution of the
Board of Directors.
3.8 HONORARY AND ADVISORY DIRECTORS. When a Director of the corporation
retires under the retirement policies of the corporation as established from
time to time by the Board of Directors, the Board of Directors may appoint such
retiring Director to be an Honorary Director, Director Emeritus, or member of an
advisory board established by the Board of Directors. The Board of Directors of
the corporation also may appoint any individual an Honorary Director, Director
Emeritus, or member of any advisory board established by the Board of Directors.
Any individual appointed an Honorary Director, Director Emeritus, or member of
an advisory board as provided by this Section 3.8 may be compensated as provided
in Section 3.7, but such individual may not vote at
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any meeting of the Board of Directors or be counted in determining a quorum as
provided in Section 5.5 and shall not have any responsibility or be subject to
any liability imposed upon a Director, or otherwise be deemed a Director.
3.9 NOMINATION OF DIRECTORS.
(a) Only persons who are nominated in accordance with the
procedures set forth in these bylaws shall be eligible for election as
Directors. Nominations of persons for election to the Board of Directors of the
corporation may be made at any meeting of shareholders at which Directors are to
be elected only (i) by or at the direction of the Board of Directors or (ii) by
any shareholder of the corporation entitled to vote for the election of
Directors at the meeting who complies with the notice procedures set forth in
this Section. The Board of Directors shall act as a nominating committee to
select the management nominees for election as Directors.
(b) Nominations, other than those management nominees made by
or at the direction of the Board of Directors, shall be made by timely notice in
writing to the Secretary of the corporation. To be timely, a shareholder's
notice shall be delivered or mailed to and received at the principal executive
offices of the corporation not less than 30 days prior to the date of the
meeting; provided, however, that in the event that less than 40 days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting is mailed or such public disclosure was made.
Such shareholder's notice shall set forth (i) as to each person whom the
shareholder proposes to nominate for election or reelection as a Director, all
information relating to such person as required to be disclosed in solicitation
of proxies for election of Directors pursuant to Regulation 14A under the
Securities and Exchange Act of 1934, as amended (including such person's written
consent to being named in a proxy statement as a nominee and to serving as a
Director if elected); and (ii) as to the shareholder giving the notice (A) the
name and address, as they appear on the books of the corporation, of such
shareholder and (B) the class and number of shares of the corporation's capital
stock that are beneficially owned by such shareholder. At the request of the
Board of Directors any person nominated by the Board of Directors for election
as a Director shall furnish to the Secretary of the corporation that information
required to be set forth in a shareholder's notice of nomination which pertains
to the nominee. No person shall be eligible for election as a Director of the
corporation unless nominated in accordance with the provisions of this Section.
The officer presiding at the meeting shall, if the facts so warrant, determine
and declare to the meeting that a nomination was not made in accordance with the
provisions of this Section and the defective nomination shall be disregarded.
ARTICLE FOUR
COMMITTEES
4.1 EXECUTIVE COMMITTEE. (a) The Board of Directors may, by resolution
adopted by a majority of the entire Board, designate an Executive Committee
consisting of one or more Directors. Each Executive Committee member shall hold
office until the first meeting of the Board of Directors
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after the annual meeting of shareholders and until the member's successor is
elected and qualified, or until the member's death, resignation or removal, or
until the member shall cease to be a Director.
(b) During the intervals between the meetings of the Board of
Directors, the Executive Committee may exercise all the authority of the Board
of Directors; provided, however, that the Executive Committee shall not have the
power to amend or repeal any resolution of the Board of Directors that by its
terms shall not be subject to amendment or repeal by the Executive Committee,
and the Executive Committee shall not have the authority of the Board of
Directors in reference to (i) the amendment of the articles of incorporation or
bylaws of the corporation; (ii) the adoption of a plan of merger or
consolidation; (iii) the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the corporation; or (iv) a
voluntary dissolution of the corporation or the revocation of any such voluntary
dissolution.
(c) The Executive Committee shall meet from time to time on
call of the Chairman of the Board or the President or of any two or more members
of the Executive Committee. Meetings of the Executive Committee may be held at
such place or places, within or without the State of Georgia, as the Executive
Committee shall determine or as may be specified or fixed in the respective
notices or waivers of such meetings. The Executive Committee may fix its own
rules of procedure, including provision for notice of its meetings. It shall
keep a record of its proceedings and shall report these proceedings to the Board
of Directors at the meeting thereof held next after they have been taken, and
all such proceedings shall be subject to revision or alteration by the Board of
Directors except to the extent that action shall have been taken pursuant to or
in reliance upon such proceedings prior to any such revision or alteration.
(d) The Executive Committee shall act by majority vote of
its members; provided, however, that contracts or transactions of and by the
corporation in which officers or Directors of the corporation are interested
shall require the affirmative vote of a majority of the disinterested members of
the Executive Committee at a meeting of the Executive Committee at which the
material facts as to the interest and as to the contract or transaction are
disclosed or known to the members of the Executive Committee prior to the vote.
(e) Members of the Executive Committee may participate in
committee proceedings by means of conference telephone or similar communications
equipment by means of which all persons participating in the proceedings can
hear each other, and such participation shall constitute presence in person at
such proceedings.
(f) The Board of Directors, by resolution adopted in
accordance with paragraph (a) of this section, may designate one or more
Directors as alternate members of the Executive Committee who may act in the
place and stead of any absent member or members at any meeting of said
committee.
4.2 OTHER COMMITTEES. The Board of Directors, by resolution adopted by
a majority of the entire Board, may designate one or more additional committees,
each committee to consist of one or more of the Directors of the corporation,
which shall have such name or names and shall have and may exercise such powers
of the Board of Directors, except the powers denied to the Executive Committee,
as may be determined from time to time by the Board of Directors. Such
committees
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shall provide for their own rules of procedure, subject to the same restrictions
thereon as provided above for the Executive Committee.
4.3 REMOVAL. The Board of Directors shall have power at any time to
remove any member of any committee, with or without cause, and to fill vacancies
in and to dissolve any such committee.
ARTICLE FIVE
MEETINGS OF THE BOARD OF DIRECTORS
5.1 TIME AND PLACE. Meetings of the Board of Directors may be held at
any place either within or without the State of Georgia.
5.2 REGULAR MEETINGS. Regular meetings of the Board of Directors may be
held without notice at such time and place, within or without the State of
Georgia, as shall be determined by the Board of Directors from time to time.
5.3 SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called by the Chairman of the Board or the President on not less than one (1)
day's notice by mail, telegram, cablegram, personal delivery, telephone, or
e-mail (provided the recipient has an e-mail address) to each Director and shall
be called by the Chairman of the Board or the President in like manner and on
like notice on the written request of any two or more Directors. Any such
special meeting shall be held at such time and place, within or without the
State of Georgia, as shall be stated in the notice of the meeting.
5.4 CONTENT AND WAIVER OF NOTICE. No notice of any meeting of the Board
of Directors need state the purposes thereof. Notice of any meeting may be
waived by an instrument in writing executed before or after the meeting.
Attendance in person at any such meeting shall constitute a waiver of notice
thereof unless the director at the beginning of the meeting (or promptly upon
his or her arrival) objects to holding the meeting or transacting business at
the meeting and does not thereafter vote for or assent to action taken at the
meeting.
5.5 QUORUM; PARTICIPATION BY TELEPHONE. At all meetings of the Board of
Directors, the presence of a majority of the authorized number of Directors
shall be necessary and sufficient to constitute a quorum for the transaction of
business. Directors may participate in any meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
by means of such communications equipment shall constitute the presence in
person at such meeting. Except as may be otherwise specifically provided by law,
the articles of incorporation or these bylaws, all resolutions adopted and all
business transacted by the Board of Directors shall require the affirmative vote
of a majority of the Directors present at the meeting. In the absence of a
quorum, a majority of the Directors present at any meeting may adjourn the
meeting from time to time until a quorum is present. Notice of any adjourned
meeting need only be given by announcement at the meeting at which the
adjournment is taken.
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5.6 ACTION IN LIEU OF MEETING. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if a written consent thereto is signed by all members
of the Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of the proceedings of the Board of
Directors and upon compliance with any further requirements of law pertaining to
such consents.
5.7 INTERESTED DIRECTORS AND OFFICERS. An interested Director or
officer is one who is a party to a contract or transaction with the corporation
or who is an officer or Director of, or has a financial interest in, another
corporation, partnership or association which is a party to a contract or
transaction with the corporation. Contracts and transactions between the
corporation and one or more interested Directors or officers shall not be void
or voidable solely because of the involvement or vote of such interested persons
as long as (a) the contract or transaction is approved in good faith by the
Board of Directors or appropriate committee by the affirmative vote of a
majority of disinterested Directors, even if the disinterested Directors be less
than a quorum, at a meeting of the Board or committee at which the material
facts as to the interested person or persons and the contract or transaction are
disclosed or known to the Board or committee prior to the vote; or (b) the
contract or transaction is approved in good faith by the shareholders after the
material facts as to the interested person or persons and the contract or
transaction have been disclosed to them; or (c) the contract or transaction is
fair as to the corporation as of the time it is authorized, approved or ratified
by the Board, committee or shareholders. Interested Directors may be counted in
determining the presence of a quorum at a meeting of the Board or committee
which authorizes the contract or transaction.
ARTICLE SIX
OFFICERS, AGENTS AND EMPLOYEES
6.1 GENERAL PROVISIONS. The officers of the corporation shall be a
President and a Secretary, and may include a Treasurer, Chairman of the Board,
one or more Vice Presidents, one or more Assistant Secretaries, and one or more
Assistant Treasurers. The officers shall be elected by the Board of Directors at
the first meeting of the Board of Directors after the annual meeting of the
shareholders in each year or shall be appointed as provided in these bylaws. The
Board of Directors may elect other officers, agents and employees, who shall
have such authority and perform such duties as may be prescribed by the Board of
Directors. All officers shall hold office until the meeting of the Board of
Directors following the next annual meeting of the shareholders after their
election or appointment and until their successors shall have been elected or
appointed and shall have qualified. Any two or more offices may be held by the
same person. Any officer, agent or employee of the corporation may be removed by
the Board of Directors with or without cause. Removal without cause shall be
without prejudice to such person's contract rights, if any, but the election or
appointment of any person as an officer, agent or employee of the corporation
shall not of itself create contract rights. The compensation of officers, agents
and employees elected by the Board of Directors shall be fixed by the Board of
Directors or by a committee thereof, and this power may also be delegated to any
officer, agent or employee as to persons under his or her direction or control.
The Board of Directors may require any officer, agent or employee to give
security for the faithful performance of his or her duties.
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6.2 POWERS AND DUTIES OF THE CHAIRMAN OF THE BOARD AND THE PRESIDENT.
The powers and duties of the Chairman of the Board and the President, subject to
the supervision and control of the Board of Directors, shall be those usually
appertaining to their respective offices and whatever other powers and duties
are prescribed by these bylaws or by the Board of Directors.
(a) The CHAIRMAN OF THE BOARD shall preside at all
meetings of the Board of Directors and at all meetings of the shareholders. The
Chairman of the Board shall perform such other duties as the Board of Directors
may from time to time direct, but shall not participate in any major
policy-making functions of the corporation other than in his or her capacity as
a director.
(b) The PRESIDENT shall, unless otherwise provided by the
Board of Directors, be the chief executive officer of the corporation. The
President shall have general charge of the business and affairs of the
corporation and shall keep the Board of Directors fully advised. The President
shall employ and discharge employees and agents of the corporation, except such
as shall be elected by the Board of Directors, and he or she may delegate these
powers. The President shall have such powers and perform such duties as
generally pertain to the office of the President, as well as such further powers
and duties as may be prescribed by the Board of Directors. The President may
vote the shares or other securities of any other domestic or foreign corporation
of any type or kind which may at any time be owned by the corporation, may
execute any shareholders' or other consents in respect thereof and may in his or
her discretion delegate such powers by executing proxies, or otherwise, on
behalf of the corporation. The Board of Directors, by resolution from time to
time, may confer like powers upon any other person or persons.
6.3 POWERS AND DUTIES OF VICE PRESIDENTS. Each Vice President shall
have such powers and perform such duties as the Board of Directors or the
President may prescribe and shall perform such other duties as may be prescribed
by these bylaws. In the absence or inability to act of the President, unless the
Board of Directors shall otherwise provide, the Vice President who has served in
that capacity for the longest time and who shall be present and able to act,
shall perform all duties and may exercise any of the powers of the President.
The performance of any such duty by a Vice President shall be conclusive
evidence of his or her power to act.
6.4 POWERS AND DUTIES OF THE SECRETARY. The Secretary shall have charge
of the minutes of all proceedings of the shareholders and of the Board of
Directors and shall keep the minutes of all their meetings at which he or she is
present. Except as otherwise provided by these bylaws, the Secretary shall
attend to the giving of all notices to shareholders and Directors. He or she
shall have charge of the seal of the corporation, shall attend to its use on all
documents the execution of which on behalf of the corporation under its seal is
duly authorized and shall attest the same by his or her signature whenever
required. The Secretary shall have charge of the record of shareholders of the
corporation, of all written requests by shareholders that notices be mailed to
them at an address other than their addresses on the record of shareholders, and
of such other books and papers as the Board of Directors may direct. Subject to
the control of the Board of Directors, the Secretary shall have all such powers
and duties as generally are incident to the position of Secretary or as may be
assigned to the Secretary by the President or the Board of Directors.
6.5 POWERS AND DUTIES OF THE TREASURER. The Treasurer shall have charge
of all funds and securities of the corporation, shall endorse the same for
deposit or collection when necessary and
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deposit the same to the credit of the corporation in such banks or depositaries
as the Board of Directors may authorize. The Treasurer may endorse all
commercial documents requiring endorsements for or on behalf of the corporation
and may sign all receipts and all commercial documents requiring endorsements
for or on behalf of the corporation and may sign all receipts and vouchers for
payments made to the corporation. The Treasurer shall have all such powers and
duties as generally are incident to the position of Treasurer or as may be
assigned to the Treasurer by the President or by the Board of Directors.
6.6 APPOINTMENT, POWERS AND DUTIES OF ASSISTANT SECRETARIES. Assistant
Secretaries may be appointed by the President or elected by the Board of
Directors. In the absence or inability of the Secretary to act, any Assistant
Secretary may perform all the duties and exercise all the powers of the
Secretary. The performance of any such duty shall be conclusive evidence of the
Assistant Secretary's power to act. An Assistant Secretary shall also perform
such other duties as the Secretary or the Board of Directors may assign to him
or her.
6.7 APPOINTMENT, POWERS AND DUTIES OF ASSISTANT TREASURERS. Assistant
Treasurers may be appointed by the President or elected by the Board of
Directors. In the absence or inability of the Treasurer to act, an Assistant
Treasurer may perform all the duties and exercise all the powers of the
Treasurer. The performance of any such duty shall be conclusive evidence of the
Assistant Treasurer's power to act. An Assistant Treasurer shall also perform
such other duties as the Treasurer or the Board of Directors may assign to him
or her.
6.8 DELEGATION OF DUTIES. In case of the absence of any officer of the
corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors (or in the case of Assistant Secretaries or
Assistant Treasurers only, the President) may confer for the time being the
powers and duties, or any of them, of such officer upon any other officer or
elect or appoint any new officer to fill a vacancy created by death,
resignation, retirement or termination of any officer. In such latter event such
new officer shall serve until the next annual election of officers.
ARTICLE SEVEN
CAPITAL STOCK
7.1 CERTIFICATES. (a) The interest of each shareholder shall be
evidenced by a certificate or certificates representing shares of the
corporation which shall be in such form as the Board of Directors may from time
to time adopt and shall be numbered and shall be entered in the books of the
corporation as they are issued. Each certificate representing shares shall set
forth upon the face thereof the following:
(i) the name of this corporation;
(ii) that the corporation is organized under the laws of the
State of Georgia;
(iii) the name or names of the person or persons to whom the
certificate is issued;
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(iv) the number and class of shares, and the designation of the
series, if any, which the certificate represents; and
(v) if any shares represented by the certificate are nonvoting
shares, a statement or notation to that effect; and, if the
shares represented by the certificate are subordinate to
shares of any other class or series with respect to
dividends or amounts payable on liquidation, the certificate
shall further set forth on either the face or back thereof a
clear and concise statement to that effect.
(b) Each certificate shall be signed by the President or
a Vice President and the Secretary or an Assistant Secretary and may be sealed
with the seal of the corporation or a facsimile thereof. If a certificate is
countersigned by a transfer agent or registered by a registrar, other than the
corporation itself or an employee of the corporation, the signature of any such
officer of the corporation may be a facsimile. In case any officer or officers
who shall have signed, or whose facsimile signature or signatures shall have
been used on, any such certificate or certificates shall cease to be such
officer or officers of the corporation, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the corporation, such certificate or certificates may nevertheless be delivered
as though the person or persons who signed such certificate or certificates or
whose facsimile signatures shall have been used thereon had not ceased to be
such officer or officers.
7.2 SHAREHOLDER LIST. The corporation shall keep or cause to be kept a
record of the shareholders of the corporation which readily shows, in
alphabetical order or by alphabetical index, and by classes or series of stock,
if any, the names of the shareholders entitled to vote, with the address of and
the number of shares held by each. Said record shall be presented and kept open
at all meetings of the shareholders.
7.3 TRANSFER OF SHARES. Transfers of stock shall be made on the books
of the corporation only by the person named in the certificate, or by power of
attorney lawfully constituted in writing, and upon surrender of the certificate,
or in the case of a certificate alleged to have been lost, stolen or destroyed,
upon compliance with the provisions of Section 7.8 of these bylaws.
7.4 BENEFICIAL OWNERSHIP LIMITATION. No Person or entity shall be
permitted to obtain, acquire, purchase, convert, or otherwise come into
possession or control of a beneficial ownership interest, as defined by rules
promulgated by the Securities and Exchange Commission, that shall cause such
person's or entity's beneficial ownership in any class(es) of stock of the
corporation, then issued and outstanding, to equal or exceed five percent
without first obtaining the affirmative vote of two-thirds of the holders of a
majority of the issued and outstanding shares of the corporation. To the extent
that any person or entity fails to comply with this Section 7.4, that portion of
beneficial ownership held in violation of this Section 7.4 shall be disregarded
by the corporation, including, but not limited to, any voting rights arising
from such beneficial ownership.
7.5 RECORD DATES. For the purpose of determining shareholders entitled
to notice of or to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive payment of any
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dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may fix in advance a date as the record
date for any such determination of shareholders, such date to be not more than
seventy (70) days and, in case of a meeting of shareholders, not less than ten
(10) days, prior to the date on which the particular action requiring such
determination of shareholders is to be taken.
7.6 REGISTERED OWNER. The corporation shall be entitled to treat the
holder of record of any share of stock of the corporation as the person entitled
to vote such share, to receive any dividend or other distribution with respect
to such share, and for all other purposes and accordingly shall not be bound to
recognize any equitable or other claim or interest in such share on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by law.
7.7 TRANSFER AGENT AND REGISTRARS. The Board of Directors may appoint
one or more transfer agents and one or more registrars and may require each
stock certificate to bear the signature or signatures of a transfer agent or a
registrar or both.
7.8 LOST CERTIFICATES. Any person claiming a certificate of stock to be
lost, stolen or destroyed shall make an affidavit or affirmation of the fact in
such manner as the Board of Directors may require and, if the Directors so
require, shall give the corporation a bond of indemnity in form and amount and
with one or more sureties satisfactory to the Board of Directors, whereupon an
appropriate new certificate may be issued in lieu of the certificate alleged to
have been lost, stolen or destroyed.
7.9 FRACTIONAL SHARES OR SCRIP. The corporation may, when and if
authorized so to do by its Board of Directors, issue certificates for fractional
shares or scrip in order to effect share transfers, share distributions or
reclassifications, mergers, consolidations or reorganizations. Holders of
fractional shares shall be entitled, in proportion to their fractional holdings,
to exercise voting rights, receive dividends and participate in any of the
assets of the corporation in the event of liquidation. Holders of scrip shall
not, unless expressly authorized by the Board of Directors, be entitled to
exercise any rights of a shareholder of the corporation, including voting
rights, dividend rights or the right to participate in any assets of the
corporation in the event of liquidation. In lieu of issuing fractional shares or
scrip, the corporation may pay in cash the fair value of fractional interests as
determined by the Board of Directors; and the Board of Directors may adopt
resolutions regarding rights with respect to fractional shares or scrip as it
may deem appropriate, including without limitation the right for persons
entitled to receive fractional shares to sell such fractional shares or purchase
such additional fractional shares as may be needed to acquire one full share, or
sell such fractional shares or scrip for the account of such persons.
ARTICLE EIGHT
BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS
8.1 INSPECTION OF BOOKS AND RECORDS. (a) Any person who shall be the
holder of record of, or authorized in writing by the holders of record of, at
least two percent (2%) of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof,
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shall have the right to examine in person or by agent or attorney, at any
reasonable time or times, for any proper purpose, the books and records of
account, minutes and record of shareholders and to make extracts therefrom.
(b) A shareholder may inspect and copy the records
described in the immediately preceding paragraph only if (i) his or her demand
is made in good faith and for a proper purpose that is reasonably relevant to
his or her legitimate interest as a shareholder; (ii) the shareholder describes
with reasonable particularity his or her purpose and the records he or she
desires to inspect; (iii) the records are directly connected with the stated
purpose; and (iv) the records are to be used only for that purpose.
(c) If the Secretary or a majority of the corporation's
Board of Directors or Executive Committee members find that the request is
proper, the Secretary shall promptly notify the shareholder of the time and
place at which the inspection may be conducted.
(d) If said request is found by the Secretary, the Board
of Directors or the Executive Committee to be improper, the Secretary shall so
notify the requesting shareholder on or prior to the date on which the
shareholder requested to conduct the inspection. The Secretary shall specify in
said notice the basis for the rejection of the shareholder's request.
(e) The Secretary, the Board of Directors and the
Executive Committee shall at all times be entitled to rely on the corporate
records in making any determination hereunder.
8.2 SEAL. The corporate seal shall be in such form as the Board of
Directors may from time to time determine. In the event it is inconvenient to
use such a seal at any time, the signature of the corporation followed by the
word "Seal" enclosed in parentheses or scroll shall be deemed the seal of the
corporation.
8.3 ANNUAL STATEMENTS. Not later than four (4) months after the close
of each fiscal year, and in any case prior to the next annual meeting of
shareholders, the corporation shall prepare:
(a) A balance sheet showing in reasonable detail the
financial condition of the corporation as of the close of its fiscal year, and
(b) A profit and loss statement showing the results of
its operations during its fiscal year. Upon written request, the corporation
promptly shall mail to any shareholder of record a copy of its most recent
balance sheet and profit and loss statement.
ARTICLE NINE
INDEMNIFICATION
9.1 AUTHORITY TO INDEMNIFY. The corporation shall indemnify or obligate
itself to indemnify an individual made a party to a proceeding because he or she
is or was a director, officer, employee or agent of the corporation (or was
serving at the request of the corporation as a director, officer or employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise) for
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reasonable expenses, judgments, fines, penalties and amounts paid in settlement
(including attorneys' fees), incurred in connection with the proceeding if the
individual acted in manner he or she believed in good faith to be in or not
opposed to the best interests of the corporation and, in the case of any
criminal proceeding, he or she had no reasonable cause to believe his or her
conduct was unlawful. The termination of a proceeding by judgment, order,
settlement, or conviction, or upon a plea of NOLO CONTENDERE or its equivalent
is not, of itself, determinative that the director, officer, employee or agent
did not meet the standard of conduct set forth above. Indemnification permitted
under this action in connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in connection with the
proceeding.
9.2 MANDATORY INDEMNIFICATION. The extent that a director, officer,
employee or agent of the corporation has been successful, on the merits or
otherwise, in the defense of any proceeding to which he or she was a party, or
in defense of any claim, issue, or matter therein , because he or she is or was
a director, officer, employee or agent of the corporation, the corporation shall
indemnify the director, employee or agent against reasonable expenses incurred
by him or her in connection therewith.
9.3 ADVANCE FOR EXPENSES. The corporation shall pay for or reimburse
the reasonable expenses incurred by a director, officer, employee or agent of
the corporation who is a party to a proceeding in advance of final disposition
of the proceeding if (a) he or she furnishes the corporation written affirmation
of his or her good faith belief that he or she has met the standard of conduct
set forth in Section 9.1 of this section, and (b) he or she furnishes the
corporation a written undertaking, executed personally or on his or her behalf,
to repay any advances if it is ultimately determined that he or she is not
entitled to indemnification. The undertaking required by this section must be an
unlimited general obligation but need not be secured and may be accepted without
reference to financial ability to make repayment.
9.4 COURT-ORDERED INDEMNIFICATION AND ADVANCES FOR EXPENSES. A
director, officer, employee or agent of the corporation who is a party to a
proceeding may apply for indemnification or advances for expenses to the court
conducting the proceeding or to another court of competent jurisdiction.
9.5 DETERMINATION OF INDEMNIFICATION. Except as provided in Section 9.2
and except as may be ordered by the court, the corporation may not indemnify a
director, officer, employee or agent under Section 9.1 unless authorized
thereunder and a determination has been made in the specific case that
indemnification of the director, officer, employee or agent is permissible in
the circumstances because he or she has met the standard of conduct set forth in
Section 9.1. The determination shall be made:
(a) By the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the proceedings;
(b) If a quorum cannot be obtained, by majority vote of a
committee duly designated by the board of directors (in which designation
directors who are parties may participate), consisting solely of two or more
directors not at the time parties to the proceeding;
-13-
<PAGE>
(c) By special legal counsel:
(i) Selected by the board of directors or its committee in
the manner prescribed in paragraph (a) or (b) of this section; or
(ii) If a quorum of the board of directors cannot be
obtained and a committee cannot be designated, selected by
majority vote of the full board of directors (in which selection
directors who are parties may participate); or
(d) By the shareholders, but shares owned by or voted under
the control of directors who are at the time parties to the proceeding may not
be voted on the determination.
9.6 AUTHORIZATION OF INDEMNIFICATION. Authorization of indemnification
or an obligation to indemnify and evaluation as the reasonableness of expenses
shall be made in the same manner as the determination that indemnification is
permissible, except that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to reasonableness of expenses
shall be made by those entitled under subsection (c) of Section 9.5 to select
counsel.
9.7 OTHER RIGHTS. The indemnification and advancement of expenses
provided by or granted pursuant to this Article Nine shall not be deemed
exclusive of any other rights, in respect of indemnification or otherwise, to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, resolution, agreement or contract either specifically or in
general terms approved by the affirmative vote of the holders of a majority of
the shares entitled to vote thereon taken at a meeting the notice of which
specified that such bylaw, resolution or agreement would be placed before the
stockholders, both as to action by a director, trustee, officer, employee or
agent in his or her official capacity and as to action in another capacity while
holding such office or position; except that no such other rights, in respect to
indemnification or otherwise, may be provided or granted to a director, trustee,
officer, employee, or agent pursuant to this Section 9.7 by the corporation for
liability for (a) any appropriation, in violation of his or her duties, of any
business opportunity of the corporation; (b) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (c) the
types of liability set forth in Section 14-2-832 of the Georgia Business
Corporation Code dealing with illegal or unauthorized distributions of corporate
assets, whether as dividends or in liquidation of the corporation or otherwise;
or (d) any transaction from which the director derived an improper material
tangible personal benefit.
9.8 INSURANCE. The corporation may purchase and maintain insurance on
behalf of an individual who is or was a director, officer, employee, or agent of
the corporation or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise against liability asserted against or incurred by him or her in that
capacity or arising from his or her status as a director, officer, employee, or
agent whether or not the corporation would have power to indemnify him or her
against the same liability under this Article Nine.
9.9 CONTINUATION OF EXPENSES. The indemnification and advancement of
expenses provided by or granted pursuant to this Article Nine shall continue as
to a person who has ceased to be a
-14-
<PAGE>
director, trustee, officer, employee, or agent and shall inure to the benefit of
the heirs, executors, and administrators of such a person.
ARTICLE TEN
NOTICES: WAIVERS OF NOTICE
10.1 NOTICES. Except as otherwise specifically provided in these
bylaws, whenever under the provisions of these bylaws notice is required to be
given to any shareholder, Director or officer, it shall not be construed to mean
personal notice, but such notice may be given by personal notice, by e-mail
(provided the recipient has an e-mail address), by telegram or cablegram, or by
mail by depositing the same in the post office or letter box in a postage
prepaid sealed wrapper, addressed to such shareholder, Director or officer at
such address as appears on the books of the corporation, and such notice shall
be deemed to be given at the time when the same shall be thus sent or mailed.
10.2 WAIVERS OF NOTICE. Except as otherwise provided in these bylaws,
when any notice is required to be given by law, by the articles of incorporation
or by these bylaws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. In the case of a shareholder, such waiver of notice may be
signed by the shareholder's attorney or proxy duly appointed in writing.
ARTICLE ELEVEN
EMERGENCY POWERS
11.1 BYLAWS. The Board of Directors may adopt emergency bylaws, subject
to repeal or change by action of the shareholders, which shall, notwithstanding
any provision of law, the articles of incorporation or these bylaws, be
operative during any emergency in the conduct of the business of the corporation
resulting from an attack on the United States or on a locality in which the
corporation conducts its business or customarily holds meeting of its Board of
Directors or its shareholders, or during any nuclear or atomic disaster, or
during the existence of any catastrophe, or other similar emergency condition,
as a result of which a quorum of the Board of Directors or a standing committee
thereof cannot readily be convened for action. The emergency bylaws may make any
provision that may be practical and necessary for the circumstances of the
emergency.
11.2 LINES OF SUCCESSION. The Board of Directors, either before or
during any such emergency, may provide, and from time to time modify, lines of
succession in the event that during such an emergency any or all officers or
agents of the corporation shall for any reason be rendered incapable of
discharging their duties.
11.3 HEAD OFFICE. The Board of Directors, either before or during any
such emergency, may (effective during the emergency) change the head office or
designate several alternative head offices or regional offices, or authorize the
officers to do so.
-15-
<PAGE>
11.4 PERIOD OF EFFECTIVENESS. To the extent not inconsistent with any
emergency bylaws so adopted, these bylaws shall remain in effect during any such
emergency and upon its termination, the emergency bylaws shall cease to be
operative.
11.5 NOTICES. Unless otherwise provided in emergency bylaws, notice of
any meeting of the Board of Directors during any such emergency may be given
only to such of the Directors as it may be feasible to reach at the time, and by
such means as may be feasible at the time, including publication, radio or
television.
11.6 OFFICERS AS DIRECTORS PRO TEMPORE. To the extent required to
constitute a quorum at any meeting of the Board of Directors during any such
emergency, the officers of the corporation who are present shall, unless
otherwise provided in emergency bylaws, be deemed, in order of rank and within
the same rank in order of seniority, Directors for such meeting.
11.7 LIABILITY OF OFFICERS, DIRECTORS AND AGENTS. No officer, Director,
agent or employee acting in accordance with any emergency bylaw shall be liable
except for willful misconduct. No officer, Director, agent or employee shall be
liable for any action taken by him or her in good faith in such an emergency in
furtherance of the ordinary business affairs of the corporation even though not
authorized by the bylaws then in effect.
ARTICLE TWELVE
CHECKS, NOTES, DRAFTS, ETC.
Checks, notes, drafts, acceptances, bills of exchange and other orders
or obligations for the payment of money shall be signed by such officer or
officers or person or persons as the Board of Directors by resolution shall from
time to time designate.
ARTICLE THIRTEEN
AMENDMENTS
The bylaws of the corporation may be altered or amended and new bylaws
may be adopted by the shareholders at any annual or special meeting of the
shareholders or by the Board of Directors at any regular or special meeting of
the Board of Directors; provided, however, that, if such action is to be taken
at a meeting of the shareholders, notice of the general nature of the proposed
change in the bylaws shall be given in the notice of meeting. The shareholders
may provide by resolution that any bylaw provision repealed, amended, adopted,
or altered by them may not be repealed, amended, adopted or altered by the Board
of Directors. Except as otherwise provided in the articles of incorporation,
action by the shareholders with respect to bylaws shall be taken by an
affirmative vote of a majority of all shares entitled to elect Directors, and
action by the Board of Directors with respect to bylaws shall be taken by an
affirmative vote of a majority of all Directors then holding office.
-16-
<PAGE>
EXHIBIT 10.3
PROMISSORY NOTE
<TABLE>
<CAPTION>
- ------------------------ ----------- ----------- --------- ------- ------------ ---------- -------- -----------
PRINCIPAL $500,000.00 LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
08-23-1999 08-23-2000 JKG
- ---------------------------------------------------------------------------------------------------------------
Reference in the shaded area are for lender's use only and do not limit the applicability of this document to
any particular loan or item.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Borrower: Futurus Financial Services, Inc. Lender: THE BANKERS BANK
1570 Holcomb Bridge Road, Suite 120 2410 PACES FERRY ROAD
Roswell, GA 30076 600 PACES SUMMIT
ATLANTA, GA 30339
===============================================================================================================
Principal Amount: $500,000.00 Initial Rate: 7.500% Date of Note: August 23, 1999
</TABLE>
PROMISE TO PAY. FUTURUS FINANCIAL SERVICES, INC. ("BORROWER") PROMISES TO PAY
TO THE BANKERS BANK ("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED
STATES OF AMERICA, THE PRINCIPAL AMOUNT OF FIVE HUNDRED THOUSAND & 00/100
DOLLARS ($500,000.00) OR SO MUCH AS MAY BE OUTSTANDING, TOGETHER WITH
INTEREST ON THE UNPAID OUTSTANDING PRINCIPAL BALANCE OF EACH ADVANCE.
INTEREST SHALL BE CALCULATED FROM THE DATE OF EACH ADVANCE UNTIL REPAYMENT OF
EACH ADVANCE.
PAYMENT. BORROWER WILL PAY THIS LOAN IN ONE PAYMENT OF ALL OUTSTANDING
PRINCIPAL PLUS ALL ACCRUED UNPAID INTEREST ON AUGUST 23, 2000. IN ADDITION,
BORROWER WILL PAY REGULAR QUARTERLY PAYMENTS OF ACCRUED UNPAID INTEREST
BEGINNING NOVEMBER 23, 1999, AND ALL SUBSEQUENT INTEREST PAYMENTS ARE DUE ON
THE SAME DAY OF EACH QUARTER AFTER THAT. Borrower will pay Lender at Lender's
address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will
be applied first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is the Prime rate as
published in the Money Rates section of the Wall Street Journal. (the
"Index"). If two or more rates exist, then the highest rate will prevail.
Lender will tell Borrower the current Index rate upon Borrower's request.
Borrower understands that Lender may make loans based on other rates as well.
The interest rate change will not occur more often than each day. THE INDEX
CURRENTLY IS 8.000% PER ANNUM. THE INTEREST RATE TO BE APPLIED TO THE UNPAID
PRINCIPAL BALANCE OF THIS NOTE WILL BE AT A RATE OF 0.500 PERCENTAGE POINTS
UNDER THE INDEX, RESULTING IN AN INITIAL ANNUAL RATE OF SIMPLE INTEREST OF
7.500%. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to
make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.
LATECHARGE. If a payment is 15 DAYS OR MORE LATE, Borrower will be charged
$100.00.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b)Borrower breaks any promise
Borrower has made to Lender, or Borrower falls to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Any representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf is false or
misleading in any material respect either now or at the time made or
furnished. (d) Borrower becomes insolvent, a receiver is appointed for any
part of Borrower's property, Borrower makes an assignment for the benefit of
creditors, or any proceeding is commenced either by Borrower or against
Borrower under any bankruptcy or insolvency laws. (a) Any creditor tries to
take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with
Lender. (f) Any guarantor dies or any of the other events described in this
default section occurs with respect to any guarantor of this Note. (g) A
material adverse change occurs in Borrower's financial condition, or Lender
believes the prospect of payment or performance of the Indebtedness is
impaired. (h) Lender in good faith deems itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, increase the variable interest rate on this
Note 3.000 percentage points. The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender
that amount. This includes, subject to any limits under applicable law,
Lender's, costs of collection, including court costs and fifteen percent
(15%) of the principal plus accrued interest as attorneys' fees, if any sums
owing under this Note are collected by or through an attorney-at-law, whether
or not there is a lawsuit, and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO
LENDER AND ACCEPTED BY LENDER in THE STATE OF GEORGIA. SUBJECT TO THE
PROVISIONS ON ARBITRATION, THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of twenty dollars
($20.00) or five percent (5%) of the face amount of the check, whichever is
greater, if Borrower makes a payment on Borrower's loan and the check or
preauthorized charge with which Borrower pays is later dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's
accounts with Lender (whether checking, savings, or some other account),
including without limitation all accounts held jointly with someone else and
all accounts Borrower may open in the future, excluding however all IRA and
Keogh accounts, and all trust accounts for which the grant of a security
interest would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on
this Note against any and all such accounts.
<PAGE>
08-23-1999 PROMISSORY NOTE PAGE 2
LOAN NO (CONTINUED)
================================================================================
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note, as well as directions for payment from Borrower's accounts,
may be requested orally or in writing by Borrower or by an authorized person.
Lender may, but need not, require that all oral requests be confirmed in
writing. The following party or parties are authorized to request advances
under the line of credit until Lender receives from Borrower at Lender's
address shown above written notice of revocation of their authority: GREG
JANICKI, ORGANIZER. Borrower agrees to be liable for all sums either: (a)
advanced in accordance with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid principal
balance owing on this Note at any time may be evidenced by endorsements on
this Note or by Lender's internal records, including daily computer
print-outs. Lender will have no obligation to advance funds under this Note
if: (a) Borrower or any guarantor is in default under the terms of this Note
or any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (b) Borrower
or any guarantor ceases doing business or is insolvent; (c) any guarantor
seeks, claims or otherwise attempts to limit, modify or revoke such
guarantor's guarantee of this Note or any other loan with Lender; (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (e) Lender in good faith deems itself
insecure under this Note or any other agreement between Lender and Borrower.
ARBITRATION. LENDER AND BORROWER AGREE THAT ALL DISPUTES, CLAIMS AND
CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR CLASS IN NATURE,
ARISING FROM THIS NOTE OR OTHERWISE, INCLUDING WITHOUT LIMITATION CONTRACT
AND TORT DISPUTES, SHALL BE ARBITRATED PURSUANT TO THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION, UPON REQUEST OF EITHER PARTY. No act to take or
dispose of any collateral securing this Note shall constitute a waiver of
this arbitration agreement or be prohibited by this arbitration agreement.
This includes, without limitation, obtaining injunctive relief or a temporary
restraining order; invoking a power of sale under any deed of trust or
mortgage; obtaining a writ of attachment or imposition of a receiver; or
exercising any rights relating to personal property, including taking or
disposing of such property with or without judicial process pursuant to
Article 9 of the Uniform Commercial Code. Any disputes, claims, or
controversies concerning the lawfulness or reasonableness of any act, or
exercise of any right, concerning any collateral securing this Note,
including any claim to rescind, reform, or otherwise modify any agreement
relating to the collateral securing this Note, shall also be arbitrated,
provided however that no arbitrator shall have the right or the power to
enjoin or restrain any act of any party. Judgment upon any award rendered by
any arbitrator may be entered in any court having jurisdiction. Nothing in
this Note shall preclude any party from seeking equitable relief from a court
of competent jurisdiction. The statute of limitations, estoppel, waiver,
laches, and similar doctrines which would otherwise be applicable in an
action brought by a party shall be applicable in any arbitration proceeding,
and the commencement of an arbitration proceeding shall be deemed the
commencement of an action for these purposes. The Federal Arbitration Act
shall apply to the construction, interpretation, and enforcement of this
arbitration provision.
ACCRUAL METHOD. interest will be calculated on an Actual/360 basis.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law,
waive presentment, demand for payment, protest and notice of dishonor. Upon
any change in the terms of this Note, and unless otherwise expressly stated
in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties waive any right to require Lender to take action against any other
party who signs this Note as provided in O.C.G.A. Section 10-7-24 and agree
that Lender may renew or extend (repeatedly and for any length of time) this
loan, or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender's security interest in the collateral; and
take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this
loan without the consent of or notice to anyone other than the party with
whom the modification is made.
IN WITNESS WHEREOF, THIS NOTE HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED,
WHO ACKNOWLEDGES A COMPLETED COPY HEREOF.
BORROWER:
Futurus Financial Services, Inc.
By: /s/ Greg Janicki (SEAL)
------------------------------------
Greg Janicki, Organizer
LENDER:
THE BANKERS BANK
By: /s/ Jack Gardner
-------------------------------------
Authorized Officer
================================================================================
Variable Rate. Line of Credit. LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver.
3.24a(c) 1999 CFI ProServices, Inc. All rights reserved. [GA-D20 E3.24
FUTURUS.LN C1.OVL]
<PAGE>
<TABLE>
<CAPTION>
COMMERCIAL GUARANTY
- ------------------ ---------- ----------- --------- --------- ------------ ---------- -------------- ------------
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER JKG INITIALS
- -----------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to
any particular loan or item.
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Borrower: Futurus Financial Services, Inc. Lender: THE BANKERS BANK
1570 Holcomb Bridge Road, Suite 120 2410 PACES FERRY ROAD
Roswell, GA 30076 600 PACES SUMMIT
ATLANTA, GA 30339
Guarantor:
=================================================================================================================
</TABLE>
AMOUNT OF GUARANTY. The principal amount of this Guaranty is Ninety Three
Thousand Seven Hundred Fifty & 00/100 Dollars ($93,750.00).
GUARANTY. In consideration of the sum of Five Dollars ($5.00) and other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged by Guarantor and to induce Lender to make loans or otherwise
extend credit to Borrower, or to renew or extend in whole or in part any
existing indebtedness of Borrower to Lender, or to make other financial
accommodations to Borrower, ____________________("Guarantor") absolutely and
unconditionally guarantees and promises to pay to THE BANKERS BANK ("Lender")
or its order, in legal tender of the United States of America, the
indebtedness (as that term is defined below) of Futurus Financial Services,
Inc. ("Borrower") to Lender on the terms and conditions set forth in this
Guaranty.
DEFINITIONS. The following words shall have the following meanings when used
in this Guaranty:
BORROWER. The word "Borrower" means Futurus Financial Services, Inc.
GUARANTOR. The word "Guarantor" means.
GUARANTY. The word "Guaranty" means this Guaranty made by
Guarantor for the benefit of Lender dated August 23, 1999.
INDEBTEDNESS. The word "Indebtedness" means the Note, including (a) all
principal, (b) all interest, (c) all late charges, (d) all loan fees
and loan charges, and (e) all collection costs and expenses relating to
the Note or to any collateral for the Note. Collection costs and
expenses include without limitation of all of Lender's attorneys' fees
and Lender's legal expenses, including court costs and fifteen percent
(15%) of the principal plus accrued interest as attorneys' fees, if any
sums owing under this Guaranty are collected by or through an
attorney-at-law, whether or not suit is instituted, and attorneys' fees
and legal expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services.
LENDER. The word "Lender" means THE BANKERS BANK, its successors and
assigns.
NOTE. The word "Note" means the promissory note or credit agreement
dated August 23, 1999, IN THE ORIGINAL PRINCIPAL AMOUNT OF $500,000.00
from Borrower to Lender, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and substitutions
for the promissory note or agreement. Notice to Guarantor: THE NOTE
EVIDENCES A REVOLVING LINE OF CREDIT FROM LENDER TO BORROWER.
RELATED DOCUMENTS. The word "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guarantees, security agreements,
security deeds, mortgages, deeds of trust, and all other instruments,
agreements and documents, whether now or hereafter existing, executed
in connection with the Indebtedness.
MAXIMUM LIABILITY. THE MAXIMUM LIABILITY OF GUARANTOR UNDER THIS GUARANTY
SHALL NOT EXCEED AT ANY ONE TIME THE SUM OF THE PRINCIPAL AMOUNT OF
$93,750.00, PLUS ALL INTEREST THEREON, PLUS ALL OF LENDER'S COSTS, EXPENSES,
AND ATTORNEYS' FEES INCURRED IN CONNECTION WITH OR RELATING TO (A) THE
COLLECTION OF THE INDEBTEDNESS, (B) THE COLLECTION AND SALE OF ANY COLLATERAL
FOR THE INDEBTEDNESS OR THIS GUARANTY, OR (C) THE ENFORCEMENT OF THIS
GUARANTY. ATTORNEYS' FEES INCLUDE, WITHOUT LIMITATION, ATTORNEYS' FEES
WHETHER OR NOT THERE IS A LAWSUIT, AND IF THERE IS A LAWSUIT, ANY FEES AND
COSTS FOR TRIAL AND APPEALS.
The above limitation on liability is not a restriction on the amount of the
Indebtedness of Borrower to Lender, either in the aggregate or at any one
time. If Lender presently holds one or more guaranties, or hereafter receives
additional guaranties from Guarantor, the rights of Lender under all
guaranties shall be cumulative. This Guaranty shall not (unless specifically
provided below to the contrary) affect or invalidate any such other
guaranties. The liability of Guarantor will be the aggregate liability of
Guarantor under the terms of this Guaranty and any such other unterminated
guaranties.
NATURE OF GUARANTY. Guarantor intends to guarantee at all times the
performance and prompt payment when due, whether at maturity or earlier by
reason of acceleration or otherwise, of all Indebtedness within the limits
set forth in the preceding section of this Guaranty. THIS GUARANTY COVERS A
REVOLVING LINE OF CREDIT AND GUARANTOR UNDERSTANDS AND AGREES THAT THIS
GUARANTEE SHALL BE OPEN AND CONTINUOUS UNTIL THE LINE OF CREDIT IS TERMINATED
AND THE INDEBTEDNESS IS PAID IN FULL, AS PROVIDED BELOW.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor
or to Borrower, and will continue in full force until all Indebtedness shall
have been fully and finally paid and satisfied and all other obligations of
Guarantor under this Guaranty shall have been performed in full. Release of
any other guarantor or termination of any other guaranty of the Indebtedness
shall not affect the liability of Guarantor under this Guaranty. A revocation
received by Lender from any one or more Guarantors shall not affect the
liability of any remaining Guarantors under this Guaranty. THIS GUARANTY
COVERS A REVOLVING LINE OF CREDIT AND IT IS SPECIFICALLY ANTICIPATED THAT
FLUCTUATIONS WILL OCCUR IN THE AGGREGATE AMOUNT OF INDEBTEDNESS OWING FROM
BORROWER TO LENDER. GUARANTOR SPECIFICALLY ACKNOWLEDGES AND AGREES THAT
FLUCTUATIONS IN THE AMOUNT OF INDEBTEDNESS, EVEN TO ZERO DOLLARS ($0.00),
SHALL NOT CONSTITUTE A TERMINATION OF THIS GUARANTY. GUARANTOR'S LIABILITY
UNDER THIS GUARANTY SHALL TERMINATE ONLY UPON (a) TERMINATION IN WRITING BY
BORROWER AND LENDER OF THE LINE OF CREDIT, (b) PAYMENT OF THE INDEBTEDNESS IN
FULL IN LEGAL TENDER, AND (c) PAYMENT IN FULL IN LEGAL TENDER OF ALL OTHER
OBLIGATIONS OF GUARANTOR UNDER THIS GUARANTY.
<PAGE>
08-23-1999 COMMERCIAL GUARANTY PAGE 2
LOAN NO (CONTINUED)
================================================================================
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without
notice or demand and without lessening Guarantor's liability under this
Guaranty, from time to time: (a) to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower,
or otherwise to extend additional credit to Borrower; (b) to alter,
compromise, renew, extend, accelerate, or otherwise change one or more times
the time for payment or other terms of the Indebtedness or any part of the
Indebtedness, including increases and decreases of the rate of interest on
the Indebtedness; extensions may be repeated and may be for longer than the
original loan term; (c) to take and hold security for the payment of this
Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail
or decide not to perfect, and release any such security, with or without the
substitution of new collateral; (d) to release, substitute, agree not to sue,
or deal with any one or more of Borrower's sureties, endorsers, or other
guarantors on any terms or in any manner Lender may choose; (e) to determine
how, when and what application of payments and credits shall be made on the
Indebtedness; (f) to apply such security and direct the order or manner of
sale thereof, including without limitation, any nonjudicial sale permitted by
the terms of the controlling security agreement or deed of trust, as Lender
in its discretion may determine; (g) to sell, transfer, assign, or grant
participations in all or any part of the Indebtedness; and (h) to assign or
transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants
to Lender that (a) no representations or agreements of any kind have been
made to Guarantor which would limit or qualify in any way the terms of this
Guaranty; (b) this Guaranty is executed at Borrower's request and not at the
request of Lender; (c) Guarantor has full power, right and authority to enter
into this Guaranty; (d) the provisions of this Guaranty do not conflict with
or result in a default under any agreement or other instrument binding upon
Guarantor and do not result in violation of any law, regulation, court decree
or order applicable to Guarantor; (e) Guarantor has not and will not, without
the prior written consent of Lender, sell, lease, assign, encumber,
hypothecate, transfer, or otherwise dispose of all or substantially all of
Guarantor's assets, or any interest therein; (f) upon Lender's request,
Guarantor will provide to Lender financial and credit information in form
acceptable to Lender, and all such financial information which currently has
been, and all future financial information which will be provided to Lender
is and will be true and correct in all material respects and fairly present
the financial condition of Guarantor as of the dates the financial
information is provided; (g) no material adverse change has occurred in
Guarantor's financial condition since the date of the most recent financial
statements provided to Lender and no event has occurred which may materially
adversely affect Guarantor's financial condition; (h) no litigation, claim,
investigation, administrative proceeding or similar action (including those
for unpaid taxes) against Guarantor is pending or threatened; (i) Lender has
made no representation to Guarantor as to the creditworthiness of Borrower;
and (j) Guarantor has established adequate means of obtaining from Borrower
on a continuing basis information regarding Borrower's financial condition.
Guarantor agrees to keep adequately informed from such means of any facts,
events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice
of any kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any collateral held by
Lender from Borrower, any other guarantor, or any other person; (e) to give
notice of the terms, time, and place of any public or private sale of
personal property security held by Lender from Borrower or to comply with any
other applicable provisions of the Uniform Commercial Code; (f) to pursue any
other remedy within Lender's power; or (g) to commit any act or omission, of
any kind, or at any time, with respect to any matter whatsoever.
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in
favor of Lender and Borrower, and their respective successors, any claim or
right to payment Guarantor may now have or hereafter have or acquire against
Borrower, by subrogation or otherwise, so that at no time shall Guarantor be
or become a "creditor" of Borrower within the meaning of 11 U.S.C. Section
547(b), or any successor provision of the Federal bankruptcy laws.
Guarantor also waives any and all rights or defenses arising by reason of (a)
the provisions of O.C.G.A. Section 10-7-24 concerning Guarantor's right to
require Lender to take action against Borrower or any "one action" or
"anti-deficiency" law or any other law which may prevent Lender from bringing
any action, including a claim for deficiency, against Guarantor, before or
after Lender's commencement or completion of any foreclosure action, either
judicially or by exercise of a power of sale; (b) any election of remedies by
Lender which destroys or otherwise adversely affects Guarantor's subrogation
rights or Guarantor's rights to proceed against Borrower for reimbursement,
including without limitation, any loss of rights Guarantor may suffer by
reason of any law limiting, qualifying, or discharging the Indebtedness; (c)
any disability or other defense of Borrower, of any other guarantor, or of
any other person, or by reason of the cessation of Borrower's liability from
any cause whatsoever, other than payment in full in legal tender, of the
Indebtedness; (d) any right to claim discharge of the Indebtedness on the
basis of unjustified impairment of any collateral for the Indebtedness; (e)
any statue of limitation, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding Indebtedness of Borrower
to Lender which is not barred by any applicable statute of limitations; or
(f) any defenses given to guarantors at law or in equity other than actual
payment and performance of the Indebtedness. If payment is made by Borrower,
whether voluntarily or otherwise, or by any third party, on the Indebtedness
and thereafter Lender is forced to remit the amount of that payment to
Borrower's trustee in bankruptcy or to any similar person under any federal
or state bankruptcy law or law for the relief of debtors, the Indebtedness
shall be considered unpaid for the purpose of enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar right, whether
such claim, demand or right may be asserted by the Borrower, the Guarantor,
or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor's full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy
or law. If any such waiver is determined to be contrary to any applicable law
or public policy, such waiver shall be effective only to the extent permitted
by law or public policy.
<PAGE>
08-23-1999 COMMERCIAL GUARANTY PAGE 3
LOAN NO (CONTINUED)
================================================================================
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender
by law, Lender shall have, with respect to Guarantor's obligations to Lender
under this Guaranty and to the extent permitted by law, a contractual
possessory security interest in and a right of setoff against, and Guarantor
hereby assigns, conveys, delivers, pledges, and transfers to Lender all of
Guarantor's right, title and interest in and to, all deposits, moneys,
securities and other property of Guarantor now or hereafter in the possession
of or on deposit with Lender, whether held in a general or special account or
deposit, whether held jointly with someone else, or whether held for
safekeeping or otherwise, excluding however all IRA, Keogh, and trust
accounts. Every such security interest and right of setoff may be exercised
without demand upon or notice to Guarantor. No security interest or right of
setoff shall be deemed to have been waived by any act or conduct on the part
of Lender or by any neglect to exercise such right of setoff or to enforce
such security interest or by any delay in so doing. Every right of setoff and
security interest shall continue in full force and effect until such right of
setoff or security interest is specifically waived or released by an
instrument in writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter
created, shall be prior to any claim that Guarantor may now have or hereafter
acquire against Borrower, whether or not Borrower becomes insolvent.
Guarantor hereby expressly subordinates any claim Guarantor may have against
Borrower, upon any account whatsoever, to any claim that Lender may now or
hereafter have against Borrower. In the event of insolvency and consequent
liquidation of the assets of Borrower, through bankruptcy, by an assignment
for the benefit of creditors, by voluntary liquidation, or otherwise, the
assets of Borrower applicable to the payment of the claims of both Lender and
Guarantor shall be paid to Lender and shall be first applied by Lender to the
Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender
all claims which it may have or acquire against Borrower or against any
assignee or trustee in bankruptcy of Borrower; provided however, that such
assignment shall be effective only for the purpose of assuring to Lender full
payment in legal tender of the Indebtedness. If Lender so requests, any notes
or credit agreements now or hereafter evidencing any debts or obligations of
Borrower to Guarantor shall be marked with a legend that the same are subject
to this Guaranty and shall be delivered to Lender. Guarantor agrees, and
Lender hereby is authorized, in the name of Guarantor, from time to time to
execute and file financing statements and continuation statements and to
execute such other documents and to take such other actions as Lender deems
necessary or appropriate to perfect, preserve and enforce its rights under
this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this Guaranty:
AMENDMENTS. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Guaranty. No alteration of or amendment
to this Guaranty shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
APPLICABLE LAW. This Guaranty has been delivered to Lender and accepted
by Lender in the State of Georgia. Subject to the provisions on
arbitration, this Guaranty shall be governed by and construed in
accordance with the laws of the State of Georgia.
ARBITRATION. LENDER AND GUARANTOR AGREE THAT ALL DISPUTES, CLAIMS AND
CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR CLASS IN
NATURE, ARISING FROM THIS GUARANTY OR OTHERWISE, INCLUDING WITHOUT
LIMITATION CONTRACT AND TORT DISPUTES, SHALL BE ARBITRATED PURSUANT TO
THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION, UPON REQUEST OF
EITHER PARTY. No act to take or dispose of any Collateral shall
constitute a waiver of this arbitration agreement or be prohibited by
this arbitration agreement. This includes, without limitation,
obtaining injunctive relief or a temporary restraining order; invoking
a power of sale under any deed of trust or mortgage; obtaining a writ
of attachment or imposition of a receiver; or exercising any rights
relating to personal property, including taking or disposing of such
property with or without judicial process pursuant to Article 9 of the
Uniform Commercial Code. Any disputes, claims, or controversies
concerning the lawfulness or reasonableness of any act, or exercise of
any right, concerning any Collateral, including any claim to rescind,
reform, or otherwise modify any agreement relating to the Collateral,
shall also be arbitrated, provided however that no arbitrator shall
have the right or the power to enjoin or restrain any act of any party.
Judgment upon any award rendered by any arbitrator may be entered in
any court having jurisdiction. Nothing in this Guaranty shall preclude
any party from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver, laches, and
similar doctrines which would otherwise be applicable in an action
brought by a party shall be applicable in any arbitration proceeding,
and the commencement of an arbitration proceeding shall be deemed the
commencement of an action for these purposes. The Federal Arbitration
Act shall apply to the construction, interpretation, and enforcement of
this arbitration provision.
ATTORNEYS' FEES; EXPENSES: Guarantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's
legal expenses, incurred in connection with the enforcement of this
Guaranty. Lender may pay someone else to help enforce this Guaranty,
and Guarantor shall pay the costs and expenses of such enforcement.
Costs and expenses include all costs and expenses of collection,
including fifteen percent (15%) of the principal plus accrued interest
as attorneys' fees, if any sums owing under this Guaranty are collected
by or through an attorney-at-law, whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(and including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services. Guarantor also shall pay all court costs and such additional
fees as may be directed by the court.
NOTICES. All notices required to be given by either party to the other
under this Guaranty shall be in writing, may be sent by telefacsimile
(unless otherwise required by law), and shall be effective when
actually delivered or when deposited with a nationally recognized
overnight courier, or when deposited in the United States mail, first
class postage prepaid, addressed to the party to whom the notice is to
be given at the address shown above or to such other addressee as
either party may designate to the other in writing. If there is more
than one Guarantor, notice to any Guarantor will constitute notice to
all Guarantors. For notice purposes, Guarantor agrees to keep Lender
informed at all times of Guarantor's current address.
INTERPRETATION. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall
be deemed to have been used in the plural where the context and
construction so require; and where there is more than one Borrower
named in this Guaranty or when this Guaranty is executed by more than
one Guarantor, the words "Borrower" and "Guarantor" respectively shall
mean all and any one or more of them. The words "Guarantor" "Borrower"
and "Lender" include the heirs, successors, assigns, and transferees of
each of them. Caption headings in this Guaranty are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Guaranty. If a court of competent jurisdiction finds
any provision of this Guaranty to be invalid or unenforceable as to any
person or circumstance, such finding shall not render that provision
invalid or unenforceable as to any other persons or circumstances, and
all provisions of this Guaranty in all other respects shall remain
valid and enforceable. If any one or more of Borrower or Guarantor are
corporations or partnerships, it is not necessary for Lender to inquire
into the powers of Borrower or Guarantor or of the officers, directors,
partners, or agents acting or purporting to act on their behalf, and
any Indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed under this Guaranty.
<PAGE>
08-23-1999 COMMERCIAL GUARANTY PAGE 4
LOAN NO (CONTINUED)
================================================================================
WAIVER. Lender shall not be deemed to have waived any rights under this
Guaranty unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Guaranty shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this Guaranty.
No prior waiver by Lender, nor any course of dealing between Lender and
Guarantor, shall constitute a waiver of any of Lender's rights or of
any of Guarantor's obligations as to any future transactions. Whenever
the consent of Lender is required under this Guaranty, the granting of
such consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required and in
all cases such consent may be granted or withheld in the sole
discretion of Lender.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED AUGUST 23, 1999.
IN WITNESS WHEREOF, THIS GUARANTY HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED,
WHO ACKNOWLEDGES A COMPLETED COPY HEREOF.
GUARANTOR:
X_______________________________(SEAL)
Signed, Sealed and Delivered in the presence of:
X_______________________________
Unofficial Witness
________________________________
Notary Public ___________County
(NOTARY SEAL)
My Commission expires: _______________________
LENDER:
THE BANKERS BANK
By: _______________________________
Authorized Officer
================================================================================
LASER PRO, REG. U.S. Pat. & T.M. Off., Ver. 3-24a(c) 1999 CFI ProServices, Inc.
All rights reserved. (GA-E320 E3.24 F3-24 FUTURUS, LN C1.OVL)
<PAGE>
EXHIBIT 10.4
FORM OF
WARRANT AGREEMENT
THIS AGREEMENT is made and entered into as of the __ day of _________,
2000, by and between FUTURUS FINANCIAL SERVICES, INC., a Georgia corporation
(the "Corporation"), and _________________________ (the "Warrant Holder").
W I T N E S S E T H
WHEREAS, the Warrant Holder has served as an organizer in the formation
of the Corporation and the formation and establishment of Futurus Bank (the
"Bank"), the wholly-owned subsidiary of the Corporation; and
WHEREAS, the Warrant Holder has purchased __________ shares of the
Corporation's common stock, no par value per share (the "Common Stock"), at a
price of $10.00 per share; and
WHEREAS, the Warrant Holder will provide services to the Corporation as
a director of the Corporation; and
WHEREAS, the Corporation, in recognition of the financial risk
undertaken by the Warrant Holder in organizing the Bank and the Corporation and
in order to encourage the Warrant Holder's continued involvement in the
successful operation of the Corporation and the Bank, desires to issue to the
Warrant Holder the right to acquire additional shares of the Corporation's
Common Stock.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. GRANT OF WARRANT. Subject to the terms, restriction, limitations and
conditions stated herein, the Corporation hereby grants to the Warrant Holder
the right (the "Warrant") to purchase all or any part of an aggregate of
_______________ shares of the Common Stock, subject to adjustment in accordance
with Section 7 hereof.
2. TERM.
(a) The term for the exercise of the Warrant begins at 9:00
a.m., Eastern Time, on the first anniversary of the date that the
Corporation first issues its common stock (the "Issue Date") and ends
at 5:00 p.m., Eastern Time, on the earlier of the tenth anniversary of
the issuance date (the "Expiration Time"). The Warrant will vest in
annual one-third (1/3) increments over a period of three years,
beginning on the first anniversary of the
<PAGE>
Issue Date. The vested portion of the Warrant may be exercised in
whole, or from time to time in part, at any time prior to the
Expiration Time.
(b) Notwithstanding any other provision of this Agreement, if
the Bank's capital falls below the minimum requirements as determined
by the primary federal or state regulator of the Corporation or the
Bank (the "Regulator"), the Regulator may direct the Corporation to
require the Warrant Holder to exercise or forfeit his or her Warrant.
The Corporation will notify the Warrant Holder within 45 days from the
date the Regulator notifies the Corporation in writing that the Warrant
Holder must exercise or forfeit this Warrant. The Corporation will
cancel the Warrant if not exercised within 21 days of the Corporation's
notification to the Warrant Holder. The Corporation agrees to comply
with any Regulator's request that the Corporation invoke its right to
require the Warrant Holder to exercise or forfeit his or her Warrant
under the circumstances stated above.
3. PURCHASE PRICE. The price per share to be paid by the Warrant Holder
for the shares of Common Stock subject to this Warrant shall be $10.00, subject
to adjustment as set forth in Section 6 hereof (such price, as adjusted,
hereinafter called the "Purchase Price").
4. EXERCISE OF WARRANT. The Warrant may be exercised by the Warrant
Holder by delivery to the Corporation, at the address of the Corporation set
forth under Section 10(a) hereof or such other address as to which the
Corporation advises the Warrant Holder pursuant to Section 10(a) hereof, of the
following:
(a) Written notice of exercise specifying the number of shares
of Common Stock with respect to which the Warrant is being exercised;
and
(b) A cashier's or certified check payable to the Corporation
for the full amount of the aggregate Purchase Price for the number of
shares as to which the Warrant is being exercised.
5. ISSUANCE OF SHARES. Upon receipt of the items set forth in Section
4, and subject to the terms hereof, the Corporation shall cause to be delivered
to the Warrant Holder stock certificates for the number of shares specified in
the notice to exercise, such share or shares to be registered under the name of
the Warrant Holder. Notwithstanding the foregoing, the Corporation shall not be
required to issue or deliver any certificate for shares of Common Stock
purchased upon the exercise of the Warrant or any portion thereof prior to the
fulfillment of the following conditions:
(a) The admission of such shares for listing on all stock
exchanges on which the Common Stock is then listed;
(b) The completion of any registration or other qualification of
such shares which the Corporation shall deem necessary or advisable
under any federal or state law or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental
regulatory body;
2
<PAGE>
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency or body, which the Corporation
shall determine to be necessary or advisable; or
(d) The lapse of such reasonable period of time following the
exercise of the Warrant as the Corporation may from time to time
establish for reasons of administrative convenience.
The Corporation shall have no obligation to obtain the fulfillment of
these conditions; provided, however, the Warrant Holder shall have one full
calendar year after these conditions have been fulfilled to exercise his or her
Warrant, notwithstanding any other provision herein.
6. ANTIDILUTION, ETC.
(a) If, prior to the Expiration Time, the Corporation shall
subdivide its outstanding shares of Common Stock into a greater number
of shares, or declare and pay a dividend of its Common Stock payable in
additional shares of its Common Stock, the Purchase Price as then in
effect shall be proportionately reduced, and the number of shares of
Common Stock then subject to exercise under the Warrant (and not
previously exercised) shall be proportionately increased.
(b) If, prior to the Expiration Time, the Corporation shall
combine its outstanding shares of the Common Stock into a smaller
number of shares, the Purchase Price, as then in effect, shall be
proportionately increased, and the number of shares of Common Stock
then subject to exercise under the Warrant (and not previously
exercised), shall be proportionately reduced.
7. REORGANIZATION, RECLASSIFICATION, CONSOLIDATION OR MERGER. If, prior
to the Expiration Time, there shall be any reorganization or reclassification of
the Common Stock (other than a subdivision or combination of shares provided for
in Section 6 hereof), or any consolidation or merger of the Corporation with
another entity, the Warrant Holder shall thereafter be entitled to receive,
during the term hereof and upon payment of the Purchase Price, the number of
shares of stock or other securities or property of the Corporation or of the
successor entity (or its parent company) resulting from such consolidation or
merger, as the case may be, to which a holder of the Common Stock, deliverable
upon the exercise of this Warrant, would have been entitled upon such
reorganization, reclassification, consolidation or merger; and in any case,
appropriate adjustment (as determined by the Board of Directors of the
Corporation in its sole discretion) shall be made in the application of the
provisions herein set forth with respect to the rights and interest thereafter
of the Warrant Holder to the end that the provisions set forth herein (including
the adjustment of the Purchase Price and the number of shares issuable upon the
exercise of this Warrant) shall thereafter be applicable, as near as may
reasonably be practicable, in relation to any shares or other property
thereafter deliverable upon the exercise hereof.
8. NOTICE OF ADJUSTMENTS. Upon any adjustment provided for in Section
6 or Section 7 hereof, the Corporation, within thirty (30) days thereafter,
shall give written notice thereof to the Warrant Holder at the address set forth
under Section 10(a) hereof or such other address as the Warrant Holder may
advise the Corporation pursuant to Section 10(a) hereof, which notice shall
3
<PAGE>
state the Warrant Price as adjusted and the increased or decreased number of
shares purchasable upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation of each.
9. TRANSFER AND ASSIGNMENT.
(a) During Warrant Holder's lifetime, this Warrant and any
rights thereunder shall be exercisable only by the Warrant Holder (or
by the Warrant Holder's guardian or legal representative, should one be
appointed). Except assignments or transfers made by will or under the
laws of descent and distribution, this Warrant or any rights thereunder
may not be assigned, transferred, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of this Warrant
excepted as provided for in this Section 9 shall be null and void and
without legal effect.
(b) Shares of Common Stock acquired by exercise of the Warrant
granted hereby may not be transferred or sold unless the transfer is
exempt from further regulatory approval or otherwise permissible under
applicable law, including state and federal securities laws, and will
bear a legend to this effect.
10. MISCELLANEOUS.
(a) All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed
to have been duly given when delivered by hand, telegram or facsimile
transmission, or if mailed, by postage prepaid first class mail, on the
third business day after mailing, to the following address (or at such
other address as a party may notify the other hereunder):
To the Corporation:
Futurus Financial Services, Inc.
__________ Windward Parkway
Alpharetta, Georgia 30004
Attention: William M. Butler, President
To the Warrant Holder:
____________________________________
____________________________________
____________________________________
(b) The Corporation covenants that it has reserved and will keep
available, solely for the purpose of issue upon the exercise hereof, a
sufficient number of shares of Common Stock to permit the exercise
hereof in full.
4
<PAGE>
(c) No holder of this Warrant, as such, shall be entitled to
vote or receive dividends with respect to the shares of Common Stock
subject hereto or be deemed to be a shareholder of the Corporation for
any purpose until such Common Stock has been issued.
(d) This Warrant Agreement shall constitute the entire agreement
contemplated by the Corporation and the Warrant Holder and may be
amended only by an instrument in writing executed by the party against
whom enforcement of the amendment is sought.
(e) This Warrant may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute one and
the same instrument.
(f) This Warrant shall be governed by and construed and enforced
in accordance with the laws of the State of Georgia.
[The remainder of this page is intentionally left blank.]
5
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto, and the Warrant Holder has executed this Warrant under seal, all as of
the day and year first above written.
FUTURUS FINANCIAL SERVICES, INC.
By: _______________________________________
William M. Butler
President and Chief Executive Officer
WARRANT HOLDER
_____________________________________(SEAL)
Print Name: ______________________________
6
<PAGE>
EXHIBIT 10.5
FUTURUS FINANCIAL SERVICES, INC.
2000 STOCK INCENTIVE PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 1 DEFINITIONS..........................................................1
1.1 DEFINITIONS.........................................................1
SECTION 2 THE STOCK INCENTIVE PLAN.............................................4
2.1 PURPOSE OF THE PLAN.................................................4
2.2 STOCK SUBJECT TO THE PLAN...........................................4
2.3 ADMINISTRATION OF THE PLAN..........................................4
2.4 ELIGIBILITY AND LIMITS..............................................5
SECTION 3 TERMS OF STOCK INCENTIVES............................................5
3.1 GENERAL TERMS AND CONDITIONS........................................5
3.2 TERMS AND CONDITIONS OF OPTIONS.....................................6
(A) OPTION PRICE........................................................7
(B) OPTION TERM.........................................................7
(C) PAYMENT.............................................................7
(D) CONDITIONS TO THE EXERCISE OF AN OPTION.............................7
(E) TERMINATION OF INCENTIVE STOCK OPTION...............................8
(F) SPECIAL PROVISIONS FOR CERTAIN SUBSTITUTE OPTIONS...................8
3.3 TREATMENT OF AWARDS UPON TERMINATION OF SERVICE.....................8
SECTION 4 RESTRICTIONS ON STOCK................................................8
4.1 ESCROW OF SHARES....................................................8
4.2 RESTRICTIONS ON TRANSFER............................................9
SECTION 5 GENERAL PROVISIONS...................................................9
5.1 WITHHOLDING.........................................................9
5.2 CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION......................9
5.3 CASH AWARDS........................................................10
5.4 COMPLIANCE WITH CODE...............................................10
5.5 RIGHT TO TERMINATE SERVICE.........................................10
5.6 RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS...............11
5.7 NON-ALIENATION OF BENEFITS.........................................11
5.8 TERMINATION AND AMENDMENT OF THE PLAN..............................11
5.9 STOCKHOLDER APPROVAL...............................................11
5.10 CHOICE OF LAW......................................................11
</TABLE>
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FUTURUS FINANCIAL SERVICES, INC.
2000 STOCK INCENTIVE PLAN
SECTION 1 DEFINITIONS
1.1 DEFINITIONS. Whenever used herein, the masculine pronoun shall be
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:
(a) "BANK" means Futurus Bank, N.A., a national bank.
(b) "BOARD OF DIRECTORS" means the board of directors of the
Company.
(c) "CAUSE" has the same meaning as provided in the employment
agreement between the Participant and the Company or affiliate(s) on the date of
Termination of Service, or if no such definition or employment agreement exists,
"Cause" means conduct amounting to (1) fraud or dishonesty against the Company
or affiliate(s), (2) Participant's willful misconduct, repeated refusal to
follow the reasonable directions of the Board of Directors or knowing violation
of law in the course of performance of the duties of Participant's service with
the Company or affiliate(s), (3) repeated absences from work without a
reasonable excuse, (4) repeated intoxication with alcohol or drugs while on the
Company or affiliate(s)' premises during regular business hours, (5) a
conviction or plea of guilty or NOLO CONTENDERE to a felony or a crime involving
dishonesty, or (6) a breach or violation of the terms of any agreement to which
Participant and the Company or affiliate(s) are party.
(d) "CHANGE IN CONTROL" means any one of the following events
which may occur after the date the Stock Incentive is granted:
(1) the acquisition by any person or persons acting in
concert of the then outstanding voting securities of either the Bank or the
Company, if, after the transaction, the acquiring person (or persons) owns,
controls or holds with power to vote fifty percent (50%) or more of any class of
voting securities of either the Bank or the Company, as the case may be;
(2) within any twelve-month period the persons who were
directors of either the Bank or the Company immediately before the beginning of
such twelve-month period (the "Incumbent Directors") shall cease to constitute
at least a majority of such board of directors; provided that any director who
was not a director as of the beginning of such twelve-month period shall be
deemed to be an Incumbent Director if that director were elected to such board
of directors by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors; and
provided further that no director whose initial assumption of office is in
connection with an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act
of 1934) relating to the election of directors shall be deemed to be an
Incumbent Director;
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(3) a reorganization, merger or consolidation, with respect
to which persons who were the stockholders of either the Bank or the Company, as
the case may be, immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than fifty percent (50%)
of the combined voting power entitled to vote in the election of directors of
the reorganized, merged or consolidated company's then outstanding voting
securities; or
(4) the sale, transfer or assignment of all or substantially
all of the assets of the Company and its subsidiaries to any third party.
(e) "COMPANY" means Futurus Financial Services, Inc., a
corporation organized under the laws of the State of Georgia as a bank holding
company.
(f) "CODE" means the Internal Revenue Code of 1986, as amended.
(g) "COMMITTEE" means the committee appointed by the Board of
Directors to administer the Plan pursuant to Plan Section 2.3. The members of
the Committee shall consist solely of at least two members of the Board of
Directors who are both "outside directors" as defined in Treasury Regulations
Section 1.162-27(e) as promulgated by the Internal Revenue Service and
"non-employee directors" as defined in Rule 16b-3(b)(3) as promulgated under the
Exchange Act.
(h) "DISABILITY" has the same meaning as provided in the
long-term disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or affiliate for the Participant. If no long-term
disability plan or policy was ever maintained on behalf of the Participant or,
if the determination of Disability relates to an Incentive Stock Option,
Disability shall mean that condition described in Code Section 22(e)(3), as
amended from time to time. In the event of a dispute, the determination of
Disability shall be made by the board of directors and shall be supported by
advice of a physician competent in the area to which such Disability relates.
(i) "DISPOSITION" means any conveyance, sale, transfer,
assignment, pledge or hypothecation, whether outright or as security, inter
vivos or testamentary, with or without consideration, voluntary or involuntary.
(j) "FAIR MARKET VALUE" refers to the determination of value of a
share of Stock. If the Stock is actively traded on any national securities
exchange or any Nasdaq quotation or market system, Fair Market Value shall mean
the closing price at which sales of Stock shall have been sold on the most
recent trading date immediately prior to the date of determination, as reported
by any such exchange or system selected by the Committee on which the shares of
Stock are then traded. If the shares of Stock are not actively traded on any
such exchange or system, Fair Market Value shall mean the arithmetic mean of the
bid and asked prices for the shares of Stock on the most recent trading date
within a reasonable period prior to the determination date as reported by such
exchange or system. If there are no bid and asked prices within a reasonable
period or if the shares of Stock are not traded on any exchange or system as of
the determination date, Fair Market Value shall mean the fair market value of a
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share of Stock as determined by the Committee taking into account such facts and
circumstances deemed to be material by the Committee to the value of the Stock
in the hands of the Participant; provided that, for purposes of granting awards
other than Incentive Stock Options, Fair Market Value of a share of Stock may be
determined by the Committee by reference to the average market value determined
over a period certain or as of specified dates, to a tender offer price for the
shares of Stock (if settlement of an award is triggered by such an event) or to
any other reasonable measure of fair market value and provided further that, for
purposes of granting Incentive Stock Options, Fair Market Value of a share of
Stock shall be determined in accordance with the valuation principles described
in the regulations promulgated under Code Section 422.
(k) "INCENTIVE STOCK OPTION" means an incentive stock option, as
defined in Code Section 422, described in Plan Section 3.2.
(l) "NON-QUALIFIED STOCK OPTION" means a stock option, other than
an option qualifying as an Incentive Stock Option, described in Plan Section
3.2.
(m) "OPTION" means a Non-Qualified Stock Option or an Incentive
Stock Option.
(n) "OVER 10% OWNER" means an individual who at the time an
Incentive Stock Option is granted owns Stock possessing more than 10% of the
total combined voting power of the Company or one of its Parents or
Subsidiaries, determined by applying the attribution rules of Code Section
424(d).
(o) "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, with respect to
Incentive Stock Options, at the time of granting of the Incentive Stock Option,
each of the corporations other than the Company owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in the chain.
(p) "PARTICIPANT" means an individual who receives a Stock
Incentive hereunder.
(q) "PLAN" means the Futurus Financial Services, Inc. 2000 Stock
Incentive Plan.
(r) "STOCK" means the Company's common stock, no par value.
(s) "STOCK INCENTIVE AGREEMENT" means an agreement between the
Company and a Participant or other documentation evidencing an award of a Stock
Incentive.
(t) "STOCK INCENTIVES" means, collectively, Incentive Stock
Options and Non-Qualified Stock Options.
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(u) "SUBSIDIARY" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, with respect
to Incentive Stock Options, at the time of the granting of the Incentive Stock
Option, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.
(v) "TERMINATION OF SERVICE" means the termination of the
service relationship, whether employment or otherwise, between a Participant and
the Company and any affiliates, regardless of the fact that severance or similar
payments are made to the Participant for any reason, including, but not by way
of limitation, a termination by resignation, discharge, death, Disability or
retirement. The Committee shall, in its absolute discretion, determine the
effect of all matters and questions relating to Termination of Service,
including, but not by way of limitation, the question of whether a leave of
absence constitutes a Termination of Service, or whether a Termination of
Service is for Cause.
SECTION 2 THE STOCK INCENTIVE PLAN
2.1 PURPOSE OF THE PLAN. The Plan is intended to (a) provide
incentives to officers, employees, directors and organizers of the Company to
stimulate their efforts toward the continued success of the Company and to
operate and manage the business in a manner that will provide for the long-term
growth and profitability of the Company; (b) encourage stock ownership by
officers, employees, directors and organizers by providing them with a means to
acquire a proprietary interest in the Company by acquiring shares of Stock; and
(c) provide a means of obtaining and rewarding key personnel.
2.2 STOCK SUBJECT TO THE PLAN. Subject to adjustment in accordance
with Section 5.2, 110,000 shares of Stock (the "Maximum Plan Shares") are hereby
reserved exclusively for issuance pursuant to Stock Incentives. At such time as
the Company becomes subject to Section 16 of the Exchange Act, at no time shall
the Company have outstanding Stock Incentives subject to Section 16 of the
Exchange Act and shares of Stock issued in respect of Stock Incentives in excess
of the Maximum Plan Shares. The shares of Stock attributable to the nonvested,
unpaid, unexercised, unconverted or otherwise unsettled portion of any Stock
Incentive that is forfeited or cancelled or expires or terminates for any reason
without becoming vested, paid, exercised, converted or otherwise settled in full
shall not again be available for purposes of the Plan. If, after grant, the
exercise price of an Option is reduced, the transaction shall be treated as the
cancellation of the Option and the grant of a new Option.
2.3 ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee. The Committee shall have full authority in its discretion to
determine the officers, employees, directors and organizers of the Company or
its affiliates to whom Stock Incentives shall be granted and the terms and
provisions of Stock Incentives subject to the Plan. Subject to the provisions of
the Plan, the Committee shall have full and conclusive authority to interpret
the Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the respective Stock Incentive
Agreements and to make all other determinations necessary or advisable for the
proper administration of the Plan. The Committee's determinations under the Plan
need not be uniform and may be made by it
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selectively among persons who receive, or are eligible to receive, awards under
the Plan (whether or not such persons are similarly situated). The Committee's
decisions shall be final and binding on all Participants. Each member of the
Committee shall serve at the discretion of the Board of Directors and the Board
of Directors may from time to time remove members from or add members to the
Committee. Vacancies on the Committee shall be filled by the Board of Directors.
The Committee shall select one of its members as chairman and shall
hold meetings at the times and in the places as it may deem advisable. Acts
approved by a majority of the Committee in a meeting at which a quorum is
present, or acts reduced to or approved in writing by a majority of the members
of the Committee, shall be the valid acts of the Committee.
2.4 ELIGIBILITY AND LIMITS. Stock Incentives may be granted only to
officers, employees, directors and organizers of the Company or any affiliate;
provided, however, that an Incentive Stock Option may only be granted to an
employee of the Company or any Subsidiary. In the case of Incentive Stock
Options, the aggregate Fair Market Value (determined as of the date an Incentive
Stock Option is granted) of stock with respect to which stock options intended
to meet the requirements of Code Section 422 become exercisable for the first
time by an individual during any calendar year under all plans of the Company
and its Parents and Subsidiaries shall not exceed $100,000; provided further,
that if the limitation is exceeded, the Incentive Stock Option(s) which cause
the limitation to be exceeded shall be treated as Non-Qualified Stock Option(s).
Pursuant to Section 162(m) of the Code and the regulations thereunder, for
compensation to be treated as qualified performance based compensation, the
maximum number of shares of Stock with respect to which Options may be granted
during any one year period to any employee may not exceed 75,000, subject to
adjustment in accordance with Section 5.2.
SECTION 3 TERMS OF STOCK INCENTIVES
3.1 GENERAL TERMS AND CONDITIONS.
(a) The number of shares of Stock as to which a Stock Incentive
shall be granted shall be determined by the Committee in its sole discretion,
subject to the provisions of Section 2.2, as to the total number of shares
available for grants under the Plan. If a Stock Incentive Agreement so provides,
a Participant may be granted a new Option to purchase a number of shares of
Stock equal to the number of previously owned shares of Stock tendered in
payment of the Exercise Price (as defined below) for each share of Stock
purchased pursuant to the terms of the Stock Incentive Agreement.
(b) Each Stock Incentive shall be evidenced by a Stock Incentive
Agreement in such form and containing such terms, conditions and restrictions as
the Committee may determine is appropriate. Each Stock Incentive Agreement shall
be subject to the terms of the Plan and any provision in a Stock Incentive
Agreement that is inconsistent with the Plan shall be null and void.
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(c) The date a Stock Incentive is granted shall be the date on
which the Committee has approved the terms of, and satisfaction of any
conditions applicable to, the grant of the Stock Incentive and has determined
the recipient of the Stock Incentive and the number of shares covered by the
Stock Incentive and has taken all such other action necessary to complete the
grant of the Stock Incentive.
(d) The Committee may provide in any Stock Incentive Agreement
(or subsequent to the award of a Stock Incentive but prior to its expiration or
cancellation, as the case may be) that, in the event of a Change in Control, the
Stock Incentive shall or may be cashed out on the basis of any price not greater
than the highest price paid for a share of Stock in any transaction reported by
any market or system selected by the Committee on which the shares of Stock are
then actively traded during a specified period immediately preceding or
including the date of the Change in Control or offered for a share of Stock in
any tender offer occurring during a specified period immediately preceding or
including the date the tender offer commences; provided that, in no case shall
any such specified period exceed three (3) months (the "Change in Control
Price"). For purposes of this Subsection, Options shall be cashed out on the
basis of the excess, if any, of the Change in Control Price (but not more than
the Fair Market Value of the Stock on the date of the cash-out in the case of
Incentive Stock Options) over the Exercise Price with or without regard to
whether the Option may otherwise be exercisable only in part.
(e) Any Stock Incentive may be granted in connection with all or
any portion of a previously or contemporaneously granted Stock Incentive.
Exercise or vesting of a Stock Incentive granted in connection with another
Stock Incentive may result in a pro rata surrender or cancellation of any
related Stock Incentive, as specified in the applicable Stock Incentive
Agreement.
(f) Unless otherwise permitted by the Committee with respect to
Non-Qualified Stock Options, Stock Incentives shall not be transferable or
assignable except by will or by the laws of descent and distribution and shall
be exercisable, during the Participant's lifetime, only by the Participant; in
the event of the Disability of the Participant, by the legal representative of
the Participant; or in the event of the death of the Participant, by the
personal representative of the Participant's estate or if no personal
representative has been appointed, by the successor in interest determined under
the Participant's will.
(g) No Stock Incentive shall have a term that extends beyond the
tenth anniversary of the date the Stock Incentive was granted.
3.2 TERMS AND CONDITIONS OF OPTIONS. Each Option granted under the
Plan shall be evidenced by a Stock Incentive Agreement. At the time any Option
is granted, the Committee shall determine whether the Option is to be an
Incentive Stock Option or a Non-Qualified Stock Option, and the Option shall be
clearly identified as to its status as an Incentive Stock Option or a
Non-Qualified Stock Option. At the time any Incentive Stock Option is exercised,
the Company shall be entitled to place a legend on the certificates representing
the shares of Stock purchased pursuant to the Option to clearly identify them as
shares of Stock purchased upon exercise of an Incentive Stock Option. An
Incentive Stock Option may only be granted within
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ten (10) years from the earlier of the date the Plan is adopted by the Board of
Directors or approved by the Company's stockholders.
(a) OPTION PRICE. Subject to adjustment in accordance with
Section 5.2 and the other provisions of this Section 3.2, the exercise price
(the "Exercise Price") per share of Stock purchasable under any Option shall be
as set forth in the applicable Stock Incentive Agreement. With respect to each
grant of an Incentive Stock Option to a Participant who is not an Over 10%
Owner, the Exercise Price per share shall not be less than the Fair Market Value
on the date the Option is granted. With respect to each grant of an Incentive
Stock Option to a Participant who is an Over 10% Owner, the Exercise Price shall
not be less than 110% of the Fair Market Value on the date the Option is
granted. With respect to each grant of a Non-Qualified Stock Option, the
Exercise Price per share shall be no less than 85% of the Fair Market Value.
(b) OPTION TERM. The term of an Option shall be as specified in
the applicable Stock Incentive Agreement; provided, however that any Incentive
Stock Option granted to a Participant who is not an Over 10% Owner shall not be
exercisable after the expiration of ten (10) years after the date the Option is
granted and any Incentive Stock Option granted to an Over 10% Owner shall not be
exercisable after the expiration of five (5) years after the date the Option is
granted.
(c) PAYMENT. Payment for all shares of Stock purchased pursuant
to the exercise of an Option shall be made in any form or manner authorized by
the Committee in the Stock Incentive Agreement or by amendment thereto,
including, but not limited to, cash or, if the Stock Incentive Agreement
provides, (1) by delivery to the Company of a number of shares of Stock which
have been owned by the holder for at least six (6) months prior to the date of
exercise having an aggregate Fair Market Value of not less than the product of
the Exercise Price multiplied by the number of shares the Participant intends to
purchase upon exercise of the Option on the date of delivery; (2) in a cashless
exercise through a broker; or (3) by having a number of shares of Stock
withheld, the Fair Market Value of which as of the date of exercise is
sufficient to satisfy the Exercise Price. In its discretion, the Committee also
may authorize (at the time an Option is granted or thereafter) Company financing
to assist the Participant as to payment of the Exercise Price on such terms as
may be offered by the Committee in its discretion. Payment shall be made at the
time that the Option or any part thereof is exercised, and no shares shall be
issued or delivered upon exercise of an Option until full payment has been made
by the Participant. The holder of an Option, as such, shall have none of the
rights of a stockholder.
(d) CONDITIONS TO THE EXERCISE OF AN OPTION. Each Option granted
under the Plan shall be exercisable by whom, at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement; provided, however, that subsequent to
the grant of an Option, the Committee, at any time before complete termination
of such Option, may accelerate the time or times at which such Option may be
exercised in whole or in part, including, without limitation, upon a Change in
Control and may permit the Participant or any other designated person to
exercise the Option, or
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any portion thereof, for all or part of the remaining Option term
notwithstanding any provision of the Stock Incentive Agreement to the contrary.
(e) TERMINATION OF INCENTIVE STOCK OPTION. With respect to an
Incentive Stock Option, in the event of the Termination of Service of a
Participant, the Option or portion thereof held by the Participant which is
unexercised shall expire, terminate, and become unexercisable no later than the
expiration of three (3) months after the date of Termination of Service;
provided, however, that in the case of a holder whose Termination of Service is
due to death or Disability, one (1) year may be substituted for such three (3)
month period. For purposes of this Subsection (e), Termination of Service of the
Participant shall not be deemed to have occurred if the Participant is employed
by another corporation (or a parent or subsidiary corporation of such other
corporation) which has assumed the Incentive Stock Option of the Participant in
a transaction to which Code Section 424(a) is applicable.
(f) SPECIAL PROVISIONS FOR CERTAIN SUBSTITUTE OPTIONS.
Notwithstanding anything to the contrary in this Section 3.2, any Option issued
in substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in accordance
with such Code Section and the regulations thereunder and may contain such other
terms and conditions as the Committee may prescribe to cause such substitute
Option to contain as nearly as possible the same terms and conditions (including
the applicable vesting and termination provisions) as those contained in the
previously issued option being replaced thereby.
3.3 TREATMENT OF AWARDS UPON TERMINATION OF SERVICE. Except as
otherwise provided by Plan Section 3.2(e), any award under this Plan to a
Participant who suffers a Termination of Service may be cancelled, accelerated,
paid or continued, as provided in the Stock Incentive Agreement or, in the
absence of such provision, as the Committee may determine. The portion of any
award exercisable in the event of continuation or the amount of any payment due
under a continued award may be adjusted by the Committee to reflect the
Participant's period of service from the date of grant through the date of the
Participant's Termination of Service or such other factors as the Committee
determines are relevant to its decision to continue the award.
SECTION 4 RESTRICTIONS ON STOCK
4.1 ESCROW OF SHARES. Any certificates representing the shares of
Stock issued under the Plan shall be issued in the Participant's name, but, if
the Stock Incentive Agreement so provides, the shares of Stock shall be held by
a custodian designated by the Committee (the "Custodian"). Each applicable Stock
Incentive Agreement providing for transfer of shares of Stock to the Custodian
shall appoint the Custodian as the attorney-in-fact for the Participant for the
term specified in the applicable Stock Incentive Agreement, with full power and
authority in the Participant's name, place and stead to transfer, assign and
convey to the Company any shares of Stock held by the Custodian for such
Participant, if the Participant forfeits the shares under the terms of the
applicable Stock Incentive Agreement. During the period that the Custodian holds
the shares subject to this Section, the Participant shall be entitled to all
rights, except as provided
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in the applicable Stock Incentive Agreement, applicable to shares of Stock not
so held. Any dividends declared on shares of Stock held by the Custodian shall,
as the Committee may provide in the applicable Stock Incentive Agreement, be
paid directly to the Participant or, in the alternative, be retained by the
Custodian until the expiration of the term specified in the applicable Stock
Incentive Agreement and shall then be delivered, together with any proceeds,
with the shares of Stock to the Participant or to the Company, as applicable.
4.2 RESTRICTIONS ON TRANSFER. The Participant shall not have the right
to make or permit to exist any Disposition of the shares of Stock issued
pursuant to the Plan except as provided in the Plan or the applicable Stock
Incentive Agreement. Any Disposition of the shares of Stock issued under the
Plan by the Participant not made in accordance with the Plan or the applicable
Stock Incentive Agreement shall be void. The Company shall not recognize, or
have the duty to recognize, any Disposition not made in accordance with the Plan
and the applicable Stock Incentive Agreement, and the shares so transferred
shall continue to be bound by the Plan and the applicable Stock Incentive
Agreement.
SECTION 5 GENERAL PROVISIONS
5.1 WITHHOLDING. The Company shall deduct from all cash distributions
under the Plan any taxes required to be withheld by federal, state or local
government. Whenever the Company proposes or is required to issue or transfer
shares of Stock under the Plan, the Company shall have the right to require the
recipient to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares. A Participant may pay the
withholding tax in cash, by tendering shares of Stock which have been owned by
the holder for at least six (6) months prior to the date of exercise or, if the
applicable Stock Incentive Agreement provides, a Participant may elect to have
the number of shares of Stock he is to receive reduced by the smallest number of
whole shares of Stock which, when multiplied by the Fair Market Value of the
shares of Stock determined as of the Tax Date (defined below), is sufficient to
satisfy federal, state and local, if any, withholding taxes arising from
exercise or payment of a Stock Incentive (a "Withholding Election"). A
Participant may make a Withholding Election only if both of the following
conditions are met:
(a) The Withholding Election must be made on or prior to the date
on which the amount of tax required to be withheld is determined (the "Tax
Date") by executing and delivering to the Company a properly completed notice of
Withholding Election as prescribed by the Committee; and
(b) Any Withholding Election made will be irrevocable; however,
the Committee may, in its sole discretion, disapprove and give no effect to the
Withholding Election.
5.2 CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION.
(a) The number of shares of Stock reserved for the grant of
Options and the number of shares of Stock reserved for issuance upon the
exercise or payment, as applicable, of each outstanding Option, and the Exercise
Price of each outstanding Option shall be
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proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a subdivision or combination of shares or the
payment of an ordinary stock dividend in shares of Stock to holders of
outstanding shares of Stock or any other increase or decrease in the number of
shares of Stock outstanding effected without receipt of consideration by the
Company.
(b) In the event of any merger, consolidation, extraordinary
dividend (including a spin-off), reorganization or other change in the corporate
structure of the Company or its Stock or tender offer for shares of Stock, the
Committee, in its sole discretion, may make such adjustments with respect to
awards and take such other action as it deems necessary or appropriate to
reflect or in anticipation of such merger, consolidation, extraordinary dividend
(including a spin-off), reorganization, other change in corporate structure or
tender offer, including, without limitation, the substitution of new awards, the
termination or adjustment of outstanding awards, the acceleration of awards or
the removal of restrictions on outstanding awards, all as may be provided in the
applicable Stock Incentive Agreement or, if not expressly addressed therein, as
the Committee subsequently may determine in the event of any such merger,
consolidation, extraordinary dividend (including a spin-off), reorganization or
other change in the corporate structure of the Company or its Stock or tender
offer for shares of Stock. Any adjustment pursuant to this Section 5.2 may
provide, in the Committee's discretion, for the elimination without payment
therefor of any fractional shares that might otherwise become subject to any
Stock Incentive.
(c) The existence of the Plan and the Stock Incentives granted
pursuant to the Plan shall not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification, reorganization or
other change in its capital or business structure, any merger or consolidation
of the Company, any issue of debt or equity securities having preferences or
priorities as to the Stock or the rights thereof, the dissolution or liquidation
of the Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding.
5.3 CASH AWARDS. The Committee may, at any time and in its discretion,
grant to any holder of a Stock Incentive the right to receive, at such times and
in such amounts as determined by the Committee in its discretion, a cash amount
which is intended to reimburse such person for all or a portion of the federal,
state and local income taxes imposed upon such person as a consequence of the
receipt of the Stock Incentive or the exercise of rights thereunder.
5.4 COMPLIANCE WITH CODE. All Incentive Stock Options to be granted
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all Incentive Stock Options granted hereunder shall be construed in
such manner as to effectuate that intent.
5.5 RIGHT TO TERMINATE SERVICE. Nothing in the Plan or in any Stock
Incentive Agreement shall confer upon any Participant the right to continue as
an officer, employee, director or organizer of the Company or affect the right
of the Company to terminate the Participant's service at any time.
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5.6 RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS. Each Stock
Incentive is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such Stock Incentive upon any securities exchange or under
any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Stock Incentive or the purchase or delivery
of shares thereunder, the delivery of any or all shares pursuant to such Stock
Incentive may be withheld unless and until such listing, registration or
qualification shall have been effected. If a registration statement is not in
effect under the Securities Act of 1933 or any applicable state securities laws
with respect to the shares of Stock purchasable or otherwise deliverable under
Stock Incentives then outstanding, the Committee may require, as a condition of
exercise of any Option or as a condition to any other delivery of Stock pursuant
to a Stock Incentive, that the Participant or other recipient of a Stock
Incentive represent, in writing, that the shares received pursuant to the Stock
Incentive are being acquired for investment and not with a view to distribution
and agree that the shares will not be disposed of except pursuant to an
effective registration statement, unless the Company shall have received an
opinion of counsel that such disposition is exempt from such requirement under
the Securities Act of 1933 and any applicable state securities laws. The Company
may include on certificates representing shares delivered pursuant to a Stock
Incentive such legends referring to the foregoing representations or
restrictions or any other applicable restrictions on resale as the Company, in
its discretion, shall deem appropriate.
5.7 NON-ALIENATION OF BENEFITS. Other than as specifically provided
with regard to the death of a Participant, no benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge; and any attempt to do so shall be void. No such
benefit shall, prior to receipt by the Participant, be in any manner liable for
or subject to the debts, contracts, liabilities, engagements or torts of the
Participant.
5.8 TERMINATION AND AMENDMENT OF THE PLAN. The Board of Directors at
any time may amend or terminate the Plan without stockholder approval; provided,
however, that the Board of Directors may condition any amendment on the approval
of stockholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws. No such termination or
amendment without the consent of the holder of a Stock Incentive shall adversely
affect the rights of the Participant under such Stock Incentive.
5.9 STOCKHOLDER APPROVAL. The Plan must be submitted to the
stockholders of the Company for their approval within twelve (12) months before
or after the adoption of the Plan by the Board of Directors. If such approval is
not obtained, any Stock Incentive granted hereunder will be void.
5.10 CHOICE OF LAW. The laws of the State of Georgia shall govern the
Plan, to the extent not preempted by federal law.
[Signatures on following page]
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Plan to be executed as
of this 21st day of January, 2000.
FUTURUS FINANCIAL SERVICES, INC.
By: /s/ William M. Butler
----------------------------------------
Title: President & Chief Executive Officer
------------------------------------
ATTEST:
/s/ C. Parke Day
- ----------------------------
Secretary
[SEAL]
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EXHIBIT 10.6
KDA FINANCIAL PROJECT DEVELOPMENT AND
CONSTRUCTION AGREEMENT
This Agreement is between: FUTURUS FINANCIAL SERVICES, INC.
1580 WARSAW ROAD
ROSWELL, GEORGIA 30076
(hereinafter referred to as "Owner") and KDA FINANCIAL, INC., MARIETTA, GEORGIA
(hereinafter referred to as "KDA", "Consultant", "Architect", and "Construction
Manager" as the context requires).
Owner engages KDA to: PLAN, DESIGN, EQUIP, FURNISH AND
INSTALL A NEW MAIN OFFICE AT THE SOUTHWEST CORNER
OF WINDWARD PARKWAY AND JORDAN COURT IN ALPHARETTA,
GEORGIA.
Under the following terms & conditions:
I. PHASE I: CONSULTING AND SCHEMATIC DESIGN
KDA, through its agents and employees shall render Consulting and Architectural
services as set forth hereinafter.
A. Analyze Owner's organization to include services, operations, existing
facility(ies), departmentalization, space utilization, work flow, equipment
and the utilization and function of all personnel.
B. In addition to the above, the following review and analysis will be done:
- Determine Owner's preferences in facility type and architectural style.
- Review and determine facility needs, personnel and space requirements.
- Determine whether special equipment may be required.
- Establish budgetary considerations with the Owner.
- Analyze growth patterns of the institution and the community.
- Review traffic patterns along with proposed transportation improvements
that may impact the project.
C. Based on the analysis and investigation, KDA will prepare a written
architectural program consisting of those above-mentioned components which
shall be used by the design team to develop the Schematic Design solution
that includes:
1. Site Plan.
2. Floor Plan and Function.
3. Exterior Concept.
D. Based on the design solution, KDA shall develop a "Budget Estimate of
Construction Cost" (See Section IV.A.) for the project to include the
following:
- Site Work.
- Building Work.
- Interior Work.
- Security Equipment.
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E. KDA shall make diligent effort in the development of the above and present
the design solution and cost to the Owner within a maximum of sixty (60) days
from the date of contract and receipt of all information required from the
Owner.
II. PHASE II: DESIGN DEVELOPMENT
With Owner's approval of the Schematic Design and Budget identified in Phase I
above, and with written authorization for KDA to continue the design process,
KDA and the architect shall proceed with the Design Development Phase (Phase
II).
A. The Design Development Phase shall consist of the following as required:
- Detailed Site Plan.
- Floor plan(s) and Function.
- Exterior Elevations.
- Reflected Ceiling Plan(s).
- Preliminary Engineering Documents (structural, mechanical and
electrical).
- Typical Wall Sections.
- Security System Considerations.
- Furniture Floor Plan(s).
- Written Scope of Work to include both General Work and Interior Work.
- Exterior Rendering(s).
- Interior Rendering(s).
- Estimate of Construction Cost (See Section IV.B.).
- Interior Finish and Sample Boards.
B. Concurrent with, and included in the above, KDA shall prepare a design
solution for the interior areas of the facility illustrating functional
planning, special equipment requirements, interior decorating, lighting,
furnishings and finishes.
C. KDA shall prepare the Estimate of Construction Cost (See Section IV.B.)
which shall be confirmed in writing and guaranteed per Phase II. (See
Section II.D.1.,D.2. & D.3) This Estimate of Construction Cost shall
include:
1. The cost of construction including subcontract work; interior work;
reproduction of documents; any required renderings; all costs
associated with civil, soils, environmental or other construction
tests, surveys or consulting fees required by the owner or any
governmental agency; permit fees; materials; tools; tool rentals;
supplies; equipment; utilities; premiums for worker's compensation and
comprehensive general liability insurance; reasonable superintendent
travel and living expense; wages, salaries and benefits of any KDA
field personnel engaged at the project or owner location; reasonable
travel expenses to the project by the consultant, designer, architect,
engineers, project development or project management personnel;
subcontractor and vendor guarantee; material handling; shipping; and
any other project related expenses that may be incurred in the
development and construction of the project. There will also be
included in the estimate of construction cost, KDA's construction
management overhead expense and fee for the project.
2. Items for which a definite cost cannot be established shall be
identified in the Estimate of Construction Cost as an "Allowance" (See
Section IV.D.). The Estimate of Construction Cost will be adjusted up
or down based on the actual cost incurred for such items.
3. Estimate of Construction Cost WILL NOT INCLUDE the following items:
a. Cost of real estate.
b. Business machines, ATM's, telephone systems, music systems or
similar equipment.
c. Consulting, architectural and engineering fees.
d. Sales, use, privilege, value added taxes or similar levies.
e. Performance and Payment Bonds.
f. Reimbursable Expenses as defined in Section V. D. 1. - 2.
g. Interior plantscaping.
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<PAGE>
D. Guaranteed Cost
1. KDA guarantees that the Final Construction Cost shall not exceed the
Estimate of Construction Cost (as defined in Section IV.B. & C.), plus
changes in the work authorized by the Owner, and allowance item
adjustments affecting the final cost of the project, by more than ten
percent (10%).
2. Should the final construction cost be less than the estimate of
construction cost, a savings will result. KDA shall be paid an
incentive equal to twenty percent (20%) of the savings for the first
ten percent (10%) and the owner shall receive eighty percent (80%) of
the savings for the first ten percent (10%). The owner shall receive
any and all savings exceeding the first ten percent (10%).
3. Should the final construction cost exceed the estimate of construction
cost, an overage will result. KDA shall absorb twenty percent (20%) of
the overage for the first ten percent (10%) and the owner shall pay
eighty percent (80%) of the overage for the first ten percent (10%).
Any overage exceeding the first ten percent (10%) shall be absorbed by
KDA.
Upon written approval by the Owner of the Design Development and
Confirmation of Estimate of Construction Cost (Exhibit I attached), and
with the Owner's authorization to proceed, KDA shall perform Phase III of
this agreement.
III. PHASE III: CONSTRUCTION DOCUMENTS AND CONSTRUCTION MANAGEMENT
A. Construction Documents
1. Prepare Construction Documents for the project consisting of working
drawings and specifications setting forth in detail and prescribing the
work to be accomplished and the materials, workmanship, finishes and
equipment required for the architectural, interiors, structural,
security systems and equipment, mechanical, electrical and site work.
2. Expedite the Construction Documents and such other documents as
Construction Manager may deem necessary to permit the earliest
reasonable start of construction.
3. Include in Construction Documents appropriate General Conditions which
define the duties, rights, responsibilities and relationship of all
parties.
4. Warrant the Construction Documents to be in compliance with existing
laws, building regulations and ordinances in force where the project is
located.
B. KDA Responsibilities
1. Total responsibility for the performance of all work necessary for the
satisfactory completion of the project in accordance with the
Construction Documents.
2. Replacement of work found to be defective within one ( 1 ) year
following substantial completion of the project.
3. Incorporate into the documents any changes in the work authorized in
writing, by the Owner.
4. Furnish all labor, materials, tools, equipment and services required to
perform all work as defined in the Construction Documents.
5. Secure bids or quotations for materials, services and subcontracts for
general work and determine the most acceptable suppliers or
subcontractors. If the Owner elects to use a subcontractor or supplier
other than the low qualified bidder that KDA recommends, KDA shall be
entitled to a change order from the Owner to compensate KDA for any
increase in cost that is the result of using the Owner's preferred
subcontractor or material supplier.
6. Prepare and issue all purchase orders, subcontracts and any other
construction related documents.
7. Furnish and install interior work from KDA's own sources (See Section
IV.E.).
8. Provide a competent superintendent and other project related employees
to direct and coordinate the work.
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9. Prepare job payrolls and related government reports.
10. Maintain proper records and keep an accurate and detailed account of
all transactions resulting from the performance of the work.
11. Maintain Worker's Compensation and Comprehensive General Liability
insurance.
12. Prepare and issue checks for payment of the work, drawn on the Owner's
Construction account, detailing each item to be paid.
13. Upon completing the work, provide the Owner with a detailed final
statement of cost called Final Billing (IV.G.).
14. Furnish all working drawings and specifications required of the
construction work.
15. Assist Owner in normal filing of documents for approval of authorities
governing construction. Should an inordinate amount of time be required
to gain such approvals, KDA shall submit to the Owner in advance, a
statement of anticipated cost and such cost shall be a reimbursable
expense.
16. Make periodic and timely inspections of the work to insure compliance
with the intent of the Construction Documents.
17. Check and approve shop drawings, samples, schedules and other
submittals for compliance with the design intent of the construction
documents, review laboratory tests, prepare change orders, make
periodic inspections, assemble written guarantees and maintenance
manuals and secure the Certificate of Substantial Completion.
C. Owner's Responsibilities
1. Designate and empower a representative who has the express authority to
bind the Owner with respect to all matters requiring the Owner's
approval or authorization, who will be reasonably available to render
decisions promptly and furnish information expeditiously so as to avoid
delay in the work.
2. Inform KDA of any special requirements, contemplated changes in
operations, new or expanded services, provide historical data and
anticipated growth projections, identify preferences, if any, regarding
architectural style, materials, colors and finish quality.
3. Furnish, at Owner's expense, a Certified Land Survey, Subsurface Soil
Investigation and Analysis, and such other tests as may be required by
law or for the construction of the project. The type survey and type
soil test will, however, be recommended with proposals solicited and
reviewed by KDA. KDA shall recommend a preferred vendor to the Owner
based on KDA's analysis of the proposals, and include the projected
costs for this work in the estimate of construction.
4. Be responsible for the accuracy of above mentioned data and information
furnished.
5. Select and furnish legal services required for the normal progress of
the work and same shall be paid by the Owner.
6. Establish a Construction Account at an institution of Owner's choice at
the start of construction work and deposit funds necessary to cover
properly supported costs, as incurred.
7. Maintain complete liability insurance against loss or damage by theft,
vandalism, malicious mischief, fire, windstorm or other casualty for
all work incorporated in the building and project, and all materials on
or about the premises or in storage, and all interior work items
incorporated in the building or in off-site storage. The type of
coverage as described is generally referred to as "builders risk" or
"all risk" insurance. Owner should consider obtaining Owner's
protective liability insurance for the project to provide coverage that
may be outside the scope of coverage identified above.
8. Promptly notify KDA in writing of any observed defects in construction.
9. Promptly make all payments required by this Agreement.
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IV: TERMS USED IN THIS AGREEMENT
The following terms are used in this agreement and are further explained as
follows:
A. Budget Estimate of Construction Cost: KDA shall prepare an initial Estimate
of Construction Cost based upon the scope of the work as identified in the
initial or preliminary stage, Schematic Design (Phase I). Such an estimate
is expected to be accurate only to the extent of known conditions and
details identified at the time.
B. Estimate of Construction Cost: At the Design Development Phase (Phase II),
substantially greater information has been developed by the architect,
consulting engineers, the interior designer and construction manager.
Certain value engineering has been performed as well, to determine the most
acceptable and cost effective construction methods to be used and their
relative cost. The Estimate of Construction Cost, as identified in Phase
II, shall become a Guaranteed Estimate and shall be presented to the Owner
in the form of a Confirmation of Estimate of Construction Cost (Exhibit I,
attached). The Estimate of Construction Cost and the Guaranteed Cost,
agreed to by the parties, shall only be adjusted by change order, signed by
both parties or by adjustments to allowance items (see Section IV.D.).
C. Guaranteed Cost: The Estimate of Construction Cost (See Section IV.B.
above) shall become a guaranteed cost according to the incentive for
savings or overage. The Guaranteed Cost shall be formally issued when both
parties sign the Confirmation of Estimate of Construction Cost and KDA is
directed to commence with Phase III, Construction Documents and
Construction Management. The incentive, outlined in the Guaranteed Cost
provision (Section II.D.) is determined by comparing the Final Construction
Cost against the Estimate of Construction Cost established in Phase II and
contained in the Confirmation of Estimate of Construction Cost (Exhibit I).
D. Allowances: Construction cost allowances are items of work that cannot be
accurately specified or selected at the time that design documents are
prepared due to complete information not being available. A reasonable
budget is established for each of these allowance items. The final cost of
these allowance items adjusts the Estimate of Construction Cost (See
Section IV.B.) in full (either up or down) depending on whether the final
cost is greater than or lesser than the budget established for the
allowance item in the Estimate of Construction Cost and identified on the
Confirmation of Estimate of Construction Cost (Exhibit I).
E. Interior Work: Interior work is herein defined, as compared to general
work, as the interior finishes of the building or facility, including floor
covering, wallcovering, painting, moveable furniture, art work,
accessories, custom cabinet work, interior signage, special lighting, and
window treatments. Interior work is stated as a separate line item in all
Estimates of Cost prepared by KDA and shall be provided to the project at a
lump sum price, agreed to in advance by the parties, and shall be secured
from KDA's own sources. KDA's term "interior work" includes specifying,
procuring, receiving, delivering, on site supervision, and installing such
goods, to include their cost, shipping, handling, tax and labor to install
under one contract and KDA guarantees the goods, materials and workmanship
of the "interior work."
F. Insurance: KDA is responsible for and provides Worker's Compensation and
General Liability Insurance and shall be reimbursed. The Owner provides
Builder's Risk Insurance and should obtain Owner's Protective Liability
Insurance. All insurance provided by KDA is considered a cost of the work
and is paid for through the job. Insurance provided by the Owner is not
considered a cost of the work.
G. Final Billing: After the completion of the job and the receipt of payment
of all outstanding bills, KDA shall prepare a final accounting for the
project called its "final billing" and any credits or adjustments due KDA
or the Owner will be made at this time. The final actual cost of
construction shall be the actual amount paid for all cost of construction
(II.C.1. & C.2.).
H. Final construction cost: the final actual cost of construction is the
actual amount paid for all costs of construction (II.C.1.& C.2)
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V: KDA'S FEES AND FURTHER CONTRACT PROVISIONS
A. KDA's Design Fee:
The fee for professional services rendered by KDA in the design of the
Owner's project are as follows and such fees are not included in any
Estimates of Construction Costs. For all consulting, architectural,
engineering, Interior Design Review and Coordination, and Estimating
services, a 9% fee, based on Final Construction Cost shall be due. The fee
shall be paid as follows:
1. Upon completion of the Schematic Design phase (Phase I), 15% of the
design fee, computed on the Budget Estimate of Construction Cost (Phase
I. D.) shall be due.
2. Upon completion of the Design Development phase (Phase II), 50% of the
design fee, computed on the Estimate of Construction Cost (Phase II.
C.), less previous payments, shall be due. If the Design Development
phase extends beyond 30 days, KDA shall be paid this fee monthly in
proportion to the Design Development phase services performed.
3. Upon completion of the Construction Documents phase (Phase III), 95% of
the design fee, computed on the Estimate of Construction Cost developed
by KDA in Phase II, less previous payments, shall be due. If the
Construction Documents phase extends beyond 30 days, KDA shall be paid
this fee monthly in proportion to the Construction Documents phase
services performed.
4. Upon completion of construction, 100% of the design fee, computed on
the Final Construction Cost of the project, less previous payments,
shall be due. KDA shall be paid this fee monthly in equal payments,
based on the estimated construction time, so that upon completion of
construction, 100% of the design fee will have been paid.
B. Construction Management Overhead and Fee
1. For Construction Management services furnished to the project, KDA
shall be paid 10% for Construction Management overhead expenses
included within the Estimate of Construction Cost for the project
(II.C.1 & C.2.). KDA shall be paid a 5% fee included within the
Estimate of Construction Cost for the project. KDA's Construction
Management overhead expense and fee will be billed and paid as a
percentage of the agreed Confirmation of Estimate of Construction Cost
(Exhibit I), which overhead expense and fee will later be adjusted
based on actual Final Construction Cost.
Timing of Payments
a.) KDA's Overhead expense and fee payments shall be made as follows:
Twenty-five percent (25%) due thirty (30) days after approval of
Construction Documents, or start of construction, whichever occurs
first, and in equal monthly payments thereafter based on estimated
construction time.
b.) Interior work payments set out in the Confirmation of Estimate of
Construction Cost shall be paid as follows: Twenty-five percent
(25%) due thirty (30) days after approval of Construction
Documents, or start of construction, whichever comes first, and
monthly thereafter in equal payments based on estimated
construction time.
2. In the event the Owner adds work which increases scope and the cost of
the Project, the Estimate of Construction Cost (IV.B.) will be
increased by the total cost of the change plus the overhead expense and
fee described in Section V.B.1.
3. In the event a deductive change order is agreed to, the Estimate of
Construction Cost will be decreased by the total of the estimated cost
of the deleted work, plus KDA's fee on the estimated cost of the
deducted work.
4. In the event the actual Final Construction Cost is less than the
Estimate of Construction Cost (IV.B.), the overhead expense and fee
shall be adjusted to reflect the actual final Construction Cost.
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C. Additional Services
Owner may request the following Additional Services which shall be paid for
by the Owner; however, prior to the Additional Services being rendered, KDA
and the Owner shall reach a mutual agreement as to the cost of the
additional service. These costs will be billed separately and are not a
part of the guaranteed maximum cost nor are these items part of any
estimates and are to be paid separately by the Owner:
1. Making alternative site evaluation studies of prospective sites.
2. Preparing documents for alternate bids for tenant or rental layouts.
3. Revising documents previously approved by Owner.
4. Preparing documents for change orders requiring extensive modifications
of the work.
5. Obtaining any necessary or applicable permits requiring extensive or
unusual effort shall entitle KDA to payment for additional services at
a mutually agreed price. This work, if required, is not reflected in
KDA's cost estimates or basic fees.
6. Cost of models or additional renderings requested by Owner.
D. Reimbursable Expenses
The following costs, expenses, and activities may become necessary during
the course of the engagement. KDA shall provide an estimate of such cost to
the Owner in advance of incurring any such cost or expense and shall gain
Owner's approval prior to proceeding. These costs will be billed separately
and are not part of the guaranteed maximum cost nor are these items part of
any estimates. They are to be paid separately by the Owner.
1. Special Engineering Consultant Fees for other than normal structural,
mechanical, and electrical engineering services.
2. All sales, use, privilege, value added, or similar taxes or levies and
premiums for performance and payment bonds if required by Owner. (See
G. below).
E. Expenses Incurred Prior to Construction
Costs incurred prior to the start of construction will be billed by KDA and
paid for by the owner as incurred. The costs may include: permits by local
building officials; reasonable travel expenses; boundary and topographical
survey; civil engineering; environmental surveys and subsurface soils
survey. These expenses will be included within the Estimate of Construction
Cost.
F. Indemnity
KDA shall indemnify, protect and hold Owner, its Directors, Officers and
employees harmless from any and all damages to persons or property arising
out of the negligence of KDA, resulting from or incurred in connection with
the execution of the work described in this Agreement.
G. Taxes
Neither the Fees for KDA services, nor the Estimate of Construction Cost
include any sales, value added, use, excise, school, privilege, or any
similar taxes or levies. Owner agrees to reimburse KDA for such taxes, if
any, for which either becomes legally responsible as a direct result of
fulfilling this Agreement. It should further be noted that premiums for
performance and payment bonds are not included in the Estimate of
Construction Cost but same shall be paid by the Owner, if required.
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H. Ownership of Documents
At any time prior to the parties agreeing on the Estimate of Construction
Cost (in Phase II of the Agreement) the Owner may elect not to proceed
further under this Agreement. Such election must be given in writing. In
the event the Owner elects not to proceed (before an agreement is reached
based on the Confirmation of Estimate of Construction Cost), all documents,
including design documents having been prepared by KDA and the Architect,
shall be considered instruments of service and shall remain exclusively the
property of KDA and the Architect. Without the written consent of KDA and
the Architect, said documents shall not be used in any manner, in whole or
in part, on this project or any other project. Moreover, in the event after
the completion of Phase I or Phase II (Schematic Design or Design
Development) the Owner decides not to go forward with the project, the
Owner is nevertheless obligated to pay for the services rendered in
accordance with the compensation paragraph (V.A.1. and 2.). Until the
parties have mutually agreed upon the Estimate of Construction Cost, either
party shall have the right to unilaterally terminate this Agreement.
I. Execution of Agreement by Owner
The undersigned officer of the Owner represents that he or she is
authorized to enter into this Contract on behalf of the Owner.
J. Acceptance
This Agreement is subject to final acceptance by the President or Secretary
of KDA at the offices of KDA in Marietta, Georgia, and the date of such
acceptance shall be the date of this Agreement.
K. Exclusivity
The Owner hereby acknowledges that KDA is committed to investing material,
technical and personnel resources in developing a design solution and cost
estimate for the Owner's project. In consideration, the Owner agrees to
work exclusively with KDA during the development of the project, or until
such time as the Owner terminates in writing the services of KDA. Should
the design solution and cost estimate submitted in the development phases
be approved, the Owner intends to authorize KDA to proceed into Phase III,
Construction Documents and Construction Management.
L. Applicable Law/Dispute Resolution
The law of the State where the project is located shall apply to all
interpretation of this Agreement. The parties do further agree that in the
event they have a dispute involving items of work or issues of $30,000 or
less, the parties do mutually agree to seek to resolve their differences by
pursuing mediation through the use of a professional mediator mutually
agreed upon by the parties. If the matter is not resolved after the
conclusion of the mediation, any single or cumulative disputes remaining
between the parties that have a value of $30,000 or less shall be resolved
by arbitration under the rules and auspices of the American Arbitration
Association, and the ruling by the Arbitration Association shall be binding
on both parties. That American Arbitration Association office located
closest to the project shall be utilized for such an arbitration. The
parties will split all mediation and arbitration filing fees and costs. For
claims in excess of $30,000 the parties may seek a remedy in any
appropriate court whose jurisdiction covers the site of the project.
M. Confidentiality
It is understood that certain confidential and proprietary information
regarding the Owner's business shall be gained by KDA while working for the
Owner in the preparation of Phase I, as well as through the design and
construction of facilities. KDA agrees to exercise reasonable care in
maintaining the confidentiality of all information gained through this
relationship.
N. Scope of Agreement
This Agreement represents the entire understanding between Owner and KDA
and supersedes all prior Agreements, understandings and negotiations. This
Agreement may be modified only in writing. Owner and KDA understand, agree,
and acknowledge that this Agreement has been freely negotiated by the
parties, and that in any controversy, dispute, arbitration, or contest over
the meaning, interpretation, validity or enforceability of this Agreement;
or any of its terms and conditions, there shall be no interference,
presumption or conclusion drawn whatsoever against either party by virtue
of the party having drafted this Agreement or any portion thereof.
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The following Addendum is a part of this Agreement:
ADDENDUM NO. 1
This Agreement shall not be assigned by either of the parties without the
written consent of the other party and shall be binding on and inure to the
benefit of the successors, executors, administrators and heirs of the
parties.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals to this
Agreement on the dates shown below, in triplicate.
APPROVED
FUTURUS FINANCIAL SERVICES, INC.
ROSWELL, GEORGIA
BY: /s/ William M. Butler
--------------------------------
William M. Butler, President & CEO
DATE: September 28, 1999
------------------------------
Corporate Seal:
Accepted at Marietta, Georgia this 2nd day of October, 1999.
KDA FINANCIAL, INC.
MARIETTA, GEORGIA
BY: /s/ Dennis W. Hastings
--------------------------
Dennis W. Hastings, President
DATE: October 2, 1999
------------------------
Corporate Seal:
Issued: 9/15/99 Reissued 9/17/99
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CONFIRMATION OF
ESTIMATE OF CONSTRUCTION
In accordance with the requirements of the PROJECT DEVELOPMENT AND CONSTRUCTION
AGREEMENT between________________________________ and KDA Financial, Inc., dated
__________, the ESTIMATE OF CONSTRUCTION COST IS.
ALLOWANCES:
The estimated cost shown above includes the following items on an allowance
basis:
<TABLE>
<CAPTION>
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ITEM ALLOWANCE ITEM ALLOWANCE
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- --------------------------------------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
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</TABLE>
INTERIOR WORK:
Construction Manager shall furnish and install the Interior Work for the sum of
$______________________, which is included in the Estimate of Construction set
forth above.
TIME OF COMPLETION:
It is intended that the project will be substantially completed, ready for
occupancy by Owner _______________after receipt of Permit, subject to strikes,
lock-outs, Acts of God and other causes not the sole and direct fault of the
Construction Manager. For this purpose, the Construction Manager shall act
promptly to establish a Work Program under which the project will proceed with
all possible speed, consistent with reasonable cost, good workmanship and
safety.
WORK TO BE DONE:
The work to be done is that defined by the Plans and Specifications dated
_____________________________approved by Owner on _________________________.
These Plans and Scope of Work, as approved, are incorporated in this Agreement
by reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
duplicate, on the dates shown below.
Approved and Accepted this _______ day of _________________________, 1999.
KDA FINANCIAL, INC. OWNER
BY: BY:
------------------------------- -------------------------------
TITLE: TITLE:
---------------------------- ----------------------------
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ADDENDUM NO. 1
This Addendum will modify the Project Development and Construction Agreement
dated
September 28, 1999 (the "Agreement") between FUTURUS FINANCIAL SERVICES, INC.
("Owner") and KDA FINANCIAL, INC., Marietta, Georgia ("KDA").
I. Section III.B.15. Change the first sentence to read, "KDA will perform
the normal filing of documents for approval of authorities governing
construction, upon receipt of any required data from Owner."
II. Section II.B. Add a Paragraph 18 that reads, "The Architect will
conduct monthly field visits. The Architect will forward to the Owner a
copy of the field visit report after each visit."
III. Section V.C. Add the following sentences that read, "KDA will develop,
with the Owner's assistance, a pro-forma of identifiable project
related costs including operating costs generally included in rental
rate (taxes, janitorial, etc.) not covered within the KDA scope of work
to assist the Owner in identifying the total rental cost of the
facility."
IV. Delete Section V.H. Add the following Paragraph titled "Termination and
Assignment": "At any time prior to the parties agreeing on the Estimate
of Construction Cost (in Phase II of the Agreement) the Owner may elect
not to proceed further under this agreement. Such an election must be
given in writing. If requested by the Owner, KDA agrees to assign its
contractual agreement with the Architect to the Owner to provide
Architectural and Engineering Services for the project. This assignment
would be made on the condition that the Owner shall:
A. Pay immediately any earned fees due the Architect and KDA not paid
to date by the Owner.
B. Retain the Architect and/or KDA throughout the completion of
construction phase services, or agree to indemnify the Architect
and/or KDA against misuse of, or changes to, the Architect and/or
KDA documents.
C. Acknowledge the Architect and KDA's plans and specifications are
instruments of service.
11
<PAGE>
D. Not assign the rights to the Architect and KDA's plans and
specifications to anyone without the Architect and KDA's written
consent.
E. Accept the terms and conditions of KDA's agreement with the
Architect.
FUTURUS FINANCIAL SERVICES, INC., OWNER KDA FINANCIAL, INC.
BY: /s/ William M. Butler BY: /s/ Dennis W. Hastings
------------------------------- --------------------------
William M. Butler, President & CEO Dennis W. Hastings, President
DATE: September 28, 1999 DATE: October 2, 1999
---------------------------- ------------------------
12
<PAGE>
EXHIBIT 10.7
PROJECT AGREEMENT
This Project Agreement ("Agreement") is made on this 18th day of November, 1999
by and between The Compass Group dba Stern Marketing Group, a California
corporation ("SMG") with its principal place of business at 819 Bancroft Way,
Berkeley, California 94710, and Futurus Financial Services, Inc. ("Client") with
its principal place of business at 1580 Warsaw Road, Roswell, GA, 90076. In
consideration of the mutual promises set forth herein, Client and SMG agree as
follows:
PROJECT NAME: LOGO DEVELOPMENT, BRANCH DESIGN CONSULTATION AND INTRODUCTORY
COLLATERAL
PROJECT DESCRIPTION
1. SMG agrees to create, design, deliver, and produce in accordance with the
following specifications:
Project Description Design and develop Client's logo; provide design and
consultation on branch design; create and develop
introductory collateral as a sales-tool for bank
officers
Deliverables
LOGO DESIGN
Direct the design of Client's logo consistent with Client's target market,
business objectives and brand strategy. SMG will:
/X/ Prepare creative brief to serve as the foundation for logo design.
/X/ Design, develop and present up to three (3) alternative black and white
logo concept directions, including design of the visual graphic (icon)
and/or typography of brand name.
/X/ Refine one (1) selected black and white logo design based on Client
approval of one concept direction.
/X/ Create and present three (3) alternative color comprehensives of
approval black and white logo design for Client review and selection.
/X/ Produce mechanical artwork of approved color logo design for
production.
<PAGE>
DESIGN CONSULTATION
Provide review and consultation services to support client's development of its
flagship store. SMG will:
/X/ Review architect's preliminary drawings and make design commendations
based upon Client's business objectives, its target market and the
culture of the community.
/X/ Provide second and third round review and recommendations to help
Client's architect prepare for plan submission to the city for
approval.
/X/ Propose retail merchandising enhancement concepts for inclusion into
the developing flagship branch.
SALES SUPPORT COLLATERAL
Provide sales support marketing services to help build awareness, interest and
revenue. SMG will:
/X/ Develop and recommend a sales tool concept direction targeted to
business owners and business decision makers.
/X/ Develop concept based upon Client feedback and approval.
/X/ Direct copywriting and graphic development of sales tool as
appropriate. Present to Client for final approval.
/X/ Manage production of final approved design. Manage delivery to Client.
PROJECT FEE
2. As and for the total Project Fee, Client agrees to pay to SMG for the usage
rights granted herein, the sum of $50,000 . Not included is the cost of travel
outside the San Francisco Bay Area, deliveries, and any applicable federal,
state, and/or local taxes. Deliveries and any travel expenses outside the San
Francisco Bay Area will be billed at cost, with each progress billing.
Fees exclude cost of design, production, production mechanicals or materials,
prototypes, models, copies of presentation boards and/or materials, fixtures,
furniture, signage, display materials, packaging, original photography, original
illustration, logo design, copywriting photography or illustration usage fees
and/or buyout fees. Such additional costs will be billed with each progress
billing.
For retail design consultation services, it is Client's responsibility to direct
architect to review all design recommendations to meet any federal, state,
and/or local codes, building and/or developer requirements. Tellerline
operations and back office space design is responsibility of architect. Costs of
any actual design drawings, construction,
<PAGE>
construction supervision, fixtures, furnishings and /or production, models or
prototypes are outside the scope of this project and are not included. Fees are
for retail design consultation services and do not include land surveyors,
engineering, landscaping, or other consultants.
Original concept presentation boards remain the property of SMG. Copies will be
made available for Client's use as requested and billed to Client at cost.
Client agrees to allow photography and/or videotape to be taken at SMG's
expense. Photography, videotapes and/or samples relating to project may used by
SMG for promotional purposes.
3. The sum of $20,000 or 40 % of the Project Fee is due from Client to SMG on
November 18, 1999. The balance of the Project Fee, plus any additional costs, is
due and payable as follows:
$ 20,000 or 40% of the Project Fee Due upon delivery of final logo design
$ 10,000 or 20% of the Project Fee Due upon delivery of collateral concept
It is anticipated that the project, with the exception of project reviews and
approval meetings, will be completed with much of the work being done via
telephone, conference call, facsimile, email, regular mail, and, as required,
overnight courier service.
4. Alterations or changes represent work performed or to be performed by SMG in
addition to the original project description stated in paragraph 1. Any such
alterations or changes shall be confirmed in writing by SMG, except that SMG's
invoices to Client may include, and Client shall be obligated to pay, additional
fees or expenses verbally authorized by Client to process work promptly. Client
shall offer SMG the first opportunity to make any such alterations or changes.
5. Client knows and understands that SMG will contract for certain project
support services, and in so doing, SMG has relied on the promises of Client as
set forth herein.
6. If Client terminates or cancels the project without cause, Client shall
immediately reimburse SMG for any and all project expenses as of the date of
termination or cancellation, and for the full Project Fee due as of the date of
termination or cancellation.
ESTIMATED PROJECT COMPLETION
7. SMG estimates that the following phases shall be completed at the following
estimated times:
Deliverable Estimated Completion Date
Logo Design January 30, 2000
Store Design Consultation March 15, 2000
Collateral Design March 15, 2000
<PAGE>
Completion dates are estimated by SMG and predicated in part on timely receipt
of all information and materials to be supplied by Client. If work is postponed
at the request of Client, SMG will provide to Client new estimated completion
dates within ten (10) working days of the resumption of the postponed work.
Every attempt will be made by SMG to meet the estimated completion dates, but
unforeseen or unavoidable delays not caused by SMG shall not constitute a breach
of this Agreement. A progress payment in the amount of one-half (1/2) of the
next scheduled Project Fee shall be made by Client for each such delay not
caused by SMG, which exceed forty-five (45) days.
TERMS AND CONDITIONS
8. Conditioned on Client's payment of the applicable portion of the Project
Fee, Client shall have the following rights in and to the creations, designs and
production materials of SMG:
For Use As Futurus Bank
For The Territory Unlimited
For The Time Period Unlimited
If Client wishes to make any additional usage of SMG's creations, designs, and
production materials, Client agrees to first seek written permission from SMG
and to make such payments to SMG as are agreed to between Client and SMG at that
time. If Client and SMG are unable to agree on such payments, there shall be no
additional usage.
9. SMG shall receive a credit, acknowledgment or indication of attribution with
usage, as appropriate.
10. Any and all liabilities which occur during or as a result of the execution
of the project which are not the result of gross negligence by SMG shall be the
responsibility of Client. Client also agrees to indemnify and hold harmless SMG
against any and all claims, costs and expenses, including attorney's fees, due
to matter included in the project at the request of Client for which no
copyright permission or privacy release was requested or obtained, or for usage
which exceeds the uses allowed by any such permission or release.
11. Client and SMG, respectively, warrant that any signature to this Agreement
on their behalf is competent and authorized to execute this Agreement on their
behalf and on behalf of Client's and SMG's respective agents, employees, and
associates.
12. With the sole exception of the Mutual Nondisclosure Agreement dated NOVEMBER
18TH, 1999 which is incorporated by this reference, this Agreement contains the
entire agreement between the parties hereto. This Agreement may be modified, if
at all, only in writing executed by both parties, which refers expressly to this
Agreement. The waiver of a term or condition of this Agreement shall not
constitute or be interpreted as
<PAGE>
a future waiver of any such term or condition. Except as expressly contained in
the Mutual Nondisclosure Agreement and this Agreement, each party hereby
covenants, warrants and acknowledges to the other party that it in no way relied
on any other inducement, promise, representation or inference made by any other
party.
13. This Agreement and all matters pertaining to the validity, construction,
enforcement, interpretation or effect of this Agreement shall be governed by and
construed under the laws of the State of California.
14. If any party to this Agreement institutes a lawsuit against any other party
to this Agreement to enforce or interpret any term of this Agreement, the
prevailing party in the dispute or lawsuit shall be entitled to collect its
reasonable attorneys' fees, costs and expenses as part of any dispositive
decision, order or judgment.
15. Because of the unique nature of the services to be rendered, this Agreement,
and any duties or obligations hereunder, shall not be assignable by Client or
SMG without the prior written consent of the other. Subject to this provision
regarding assignment, this Agreement shall be binding on the legal
representatives, successors, and assigns of Client.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
For Futurus Financial Services, Inc. The Compass Group
dba Stern Marketing Group
By /s/ William M. Butler By /s/ Charlene Y. Stern
---------------------------- -------------------------------
Name (print): William M. Butler Charlene Y. Stern
Title: President President/Chief Executive Officer
Date: November 30, 1999 Date: November 30, 1999
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 4, 2000, accompanying the financial
statements of Futurus Financial Services, Inc. included in the Form SB-2
Registration Statement and Prospectus. We consent to the use of the
aforementioned report in this Form SB-2 Registration Statement and Prospectus
and to the use of our name as it appears under the caption "Experts."
PORTER KEADLE MOORE, LLP
Atlanta, Georgia
February 7, 2000
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<PERIOD-START> AUG-12-1999
<PERIOD-END> DEC-31-1999
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0
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<NET-INCOME> (183,566)
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