<PAGE>
As filed with the Securities and Exchange Commission on March 3, 2000
Registration Statement No.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
---------------
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Georgia 58-1856582
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
3844 Atlanta Highway
Hiram, Georgia 30141
(770) 445-1014
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Angel J. Byrd
3844 Atlanta Highway
Hiram, Georgia 30141
(770) 445-1014
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
with copies to:
T. Kennerly Carroll, Jr.
Miller & Martin LLP
1275 Peachtree Street, N.E.
Suite 700
Atlanta, Georgia 30309
(404) 962-6146
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [X]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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 number of the earlier effective registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
<CAPTION>
Title of each class of Proposed Proposed maximum
securities to be Amount to be maximum offering aggregate offering Amount of
registered registered price per share price registration fee
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $2.50 par
value.................. 400,000 shares $9.25* $3,700,000 $976.80
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>
* Represents average high and low prices reported in the consolidated
reporting system within five (5) business days prior to the date of filing
in accordance with Rule 457(c).
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Prospectus
Community Trust Financial Services Corporation
Dividend Reinvestment and Stock Purchase Plan
This prospectus relates to 400,000 shares of common stock, par value $2.50
per share of Community Trust Financial Services Corporation that may be issued
under our Dividend Reinvestment and Stock Purchase Plan to our shareholders.
The purpose of the plan is to provide you with a convenient method to invest
dividends and optional cash contributions of up to $2,000 per month in
additional shares of our stock.
The plan doesn't represent a change in our dividend policy or a guarantee of
future dividends, which will continue to depend on earnings, financial
requirements and other factors.
The company's common stock isn't listed on any national securities exchange
nor on the Nasdaq Stock Market.
See "Risk Factors" beginning on page 2 for a discussion of certain
information that should be considered by prospective participants in the plan.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The securities offered by this prospectus aren't deposits or savings
accounts and aren't insured by the Federal Deposit Insurance Corporation or any
other governmental agency or instrumentality.
The date of this prospectus is March 3, 2000.
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary......................................................... 1
Community Trust Financial Services Corporation............................ 1
The Offering, the Plan, and Use of Proceeds............................... 1
Risk Factors............................................................... 2
Dividends................................................................. 2
Local Economic Conditions................................................. 2
Government Regulation..................................................... 3
Competition............................................................... 3
No Established Trading Market............................................. 3
Investment Risk........................................................... 3
Interest Rate Risk........................................................ 3
Credit Risk............................................................... 3
Dependence on Key Personnel............................................... 4
Effect of Certain Anti-Takeover Provisions................................ 4
Description of the Plan.................................................... 4
Purpose................................................................... 4
Advantages................................................................ 4
Administration............................................................ 5
Participation............................................................. 5
Purchases................................................................. 6
Optional Cash Contributions............................................... 7
Reports to Participants................................................... 8
Voting Rights............................................................. 9
Federal Income Taxation................................................... 9
Withdrawal of Shares from Plan Accounts................................... 9
Termination of Participation.............................................. 10
Certificates for Shares................................................... 10
Other Information......................................................... 11
Use of Proceeds............................................................ 13
Indemnification............................................................ 13
Experts.................................................................... 14
Legal Matters.............................................................. 14
Incorporation of Certain Information by Reference.......................... 14
Available Information...................................................... 15
</TABLE>
i
<PAGE>
PROSPECTUS SUMMARY
Community Trust Financial Services Corporation
Community Trust Financial Services Corporation is a bank holding company
located in Hiram, Georgia. We own Community Trust Bank which is a state-
chartered full service commercial bank. We provide a wide range of services to
individuals and small to medium-sized businesses in Paulding and Cobb counties
in Georgia. In addition to Community Trust Bank, we own two non-bank
subsidiaries: Metroplex Appraisals, Inc. and Community Loan Company. We have a
49% minority interest in Cash Transactions, L.L.C.
Metroplex Appraisals, Inc. performs appraisals of residential and commercial
properties for financial institutions including Community Trust Bank, mortgage
companies and insurance companies. It's located in Dallas, Georgia. Community
Loan Company is in the consumer finance business with offices in various cities
in Northwest Georgia. Cash Transactions, L.L.C. engages in the business of
providing and selling automated teller machines to retail establishments. It
engages in this business in Georgia, Florida, South Carolina, North Carolina,
Alabama, and Tennessee.
Our principal executive offices are located at 3844 Atlanta Highway, Hiram,
Georgia 30141, and our telephone number is (770) 445-1014. Our Internet address
is: communitytrustbank.com.
The Offering, the Plan, and Use of Proceeds
This prospectus offers securities which are a maximum of 400,000 shares of
our common stock, par value $2.50 per share. The purpose of the offering is to
provide our shareholders with a simple and convenient method of investing cash
dividends and optional cash contributions in additional shares of common stock
through the plan.
The section in this prospectus entitled "Description of the Plan", which
should be reviewed carefully, provides detailed information concerning the
plan.
Shares may be acquired for issuance pursuant to the plan through open market
purchases, through negotiated transactions, or directly from us. The
administrator will make open market purchases, and the purchase price to
participants in the plan will be the actual price paid, including brokerage
commissions. We will receive none of the proceeds from shares acquired for
issuance pursuant to the plan unless these acquisitions involve the purchase of
shares directly from us. To the extent you purchase any shares directly from
us, we will add the proceeds of these sales to the general funds of the company
and these proceeds will be available for our general corporate purposes,
including working capital requirements and contributions to our subsidiaries to
support their anticipated growth and expansion.
<PAGE>
RISK FACTORS
An investment in the shares of common stock offered by this prospectus
involves a degree of risk. In addition to the other information in this
prospectus, the following risk factors should be considered carefully in
evaluating participation in the plan. This prospectus contains certain forward-
looking statements concerning the company's proposed operations, performance
and financial condition. These statements are based upon a number of
assumptions and estimates which are inherently subject to significant
uncertainties, many of which are beyond the control of the company. Actual
results may differ materially from those expressed or implied by these forward-
looking statements. Factors that could cause actual results to differ
materially include, but are not limited to, those set forth below.
Dividends
The plan doesn't represent a change in our dividend policy or a guarantee of
future dividends. In the future, the declaration and payment of dividends on
common stock, if any, will depend upon our earnings and financial condition,
liquidity and capital requirements, the general economic and regulatory climate
and other factors deemed relevant by our board of directors. Further, certain
regulations provide that a bank holding company shouldn't maintain a level of
cash dividends that undermines the bank holding company's ability to serve as a
source of strength to its banking subsidiaries.
There are statutory and regulatory requirements applicable to the payment of
dividends by Community Trust Bank, as well as by us to our shareholders.
Under the regulations of the Georgia Department of Banking and Finance,
Community Trust Bank may not declare dividends out of the retained earnings
without first obtaining the written permission of the Department unless it
meets all of the following requirements:
(a) total classified assets as of the most recent examination of the bank
don't exceed 80% of equity capital (as defined by regulation) plus the
allowance for loan losses as reflected at the examination;
(b) the aggregate amount of dividends declared or anticipated to be
declared in the calendar year doesn't exceed 50% of the net profits
after taxes but before dividends for the previous calendar year;
however, an S-Corporation may pay an additional amount of dividends
without the Department's approval equal to 50% of the income taxes that
the bank would have to pay as a C-Corporation; and
(c) the ratio of equity capital to adjusted assets isn't less than 6%.
The federal banking statutes prohibit federally insured banks from making
any capital distributions (including a dividend payment) if, after making the
distribution, the institution would be "undercapitalized" as defined by
statute. In addition, the relevant federal regulatory agencies also have
authority to prohibit an insured bank from engaging in an unsafe or unsound
practice, as determined by the agency, which could include the payment of
dividends.
Local Economic Conditions
The success of Community Trust Bank and, therefore, our success depends to a
certain extent upon economic and political conditions, both local and national,
as well as governmental monetary policies. Conditions like inflation,
recession, unemployment, high interest rates, short money supply and other
factors beyond our control and Community Trust Bank's control may adversely
affect Community Trust Bank's deposit levels and loan demand and, therefore,
the earnings of Community Trust Bank and our earnings. Additionally, Community
Trust Bank's deposit gathering and lending activities are concentrated in
Paulding County, Georgia and Cobb County, Georgia. As a result, an adverse
change in economic conditions in Paulding County and Cobb County could have a
material adverse effect on the financial condition of Community Trust Bank and
our financial condition.
2
<PAGE>
Govenrnment Regulation
We and Community Trust Bank operate in a highly regulated environment and
are subject to supervision by several governmental regulatory agencies,
including the Board of Governors of the Federal Reserve System, the Georgia
Department of Banking and Finance, the Federal Deposit Insurance Corporation
and the Securities and Exchange Commission. Laws and regulations currently
applicable to us and Community Trust Bank may be changed at any time, and there
is no assurance that these changes won't adversely affect our business and
Community Trust Bank's business.
Competition
The banking industry is highly competitive. In the conduct of certain
aspects of its banking business, Community Trust Bank encounters strong
competition from other commercial banks, savings institutions, credit unions,
mortgage banking firms, consumer finance companies, securities brokerage firms,
insurance companies, money market mutual funds and other financial
institutions. Many of these competitors have substantially greater resources
and lending limits than Community Trust Bank and offer certain services, like
extensive and established branch networks, trust services and international
banking services, that Community Trust Bank doesn't provide.
No Established Trading Market
There is no established public market for the shares of common stock. There
can't be any assurance that an active public market will develop or be
sustained or that if a market develops, investors in common stock will be able
to resell their shares at or above the purchase price. A public trading market
having the desired characteristics of depth, liquidity and orderliness depends
upon the presence in the marketplace of willing buyers and sellers of common
stock at any given time, which presence is dependent upon the individual
decisions of investors over which neither we nor any market maker has any
control.
Investment Risk
The shares of common stock to be issued under the plan are subject to
general investment risk. The stock market has from time to time experienced
price and volume volatility. These market fluctuations may be unrelated to the
operating performance of particular companies whose shares are traded and may
adversely affect the market price of common stock. There can be no assurance
that the market price of common stock won't decline below the price at which
the shares are purchased under the plan.
Interest Rate Risk
Community Trust Bank's earnings depend to a great extent on "rate
differentials," which are the differences between interest income earned on
loans and investments and the interest expense paid on deposits and other
borrowings. These rates are highly sensitive to many factors that are beyond
Community Trust Bank's control, including general economic conditions and the
policies of various governmental and regulatory authorities. Increases in the
federal funds rate by the Federal Reserve Bank usually lead to rising interest
rates, which affect Community Trust Bank's interest income, interest expense
and investment portfolio. Also, governmental policies, like the creation of a
tax deduction for individual retirement accounts, can increase savings and
affect the cost of funds. From time to time, maturities of assets and
liabilities aren't balanced, and a rapid increase or decrease in interest rates
could have an adverse effect on the net interest margin and results of
operations of Community Trust Bank. The nature, timing and effect of any future
changes in federal monetary and fiscal policies on Community Trust Bank and its
results of operations aren't predictable.
Credit Risk
The greatest risk facing lenders generally is credit risk, that is, the risk
of losing principal and interest due to a borrower's failure to perform
according to the terms of the loan agreement. In addition, because a
3
<PAGE>
substantial portion of our loan portfolio consists of real estate loans,
construction loans and acquisition and development loans, any conditions
adversely affecting local real estate markets, could have a significant adverse
effect on our level of nonperforming loans and on the value of the collateral
securing a substantial portion of our loan portfolio.
Dependence on Key Personnel
Our continued success is dependent to a large extent upon the services of
Ronnie L. Austin, President of the company. Even though Mr. Austin has an
employment agreement with us through December 31, 2002, if the services of Mr.
Austin were to become unavailable for any reason, our operations could be
adversely affected. The successful development of our business will depend, in
part, on our ability to attract and retain qualified officers and employees,
including a successor to Mr. Austin.
Effect of Certain Anti-Takeover Provisions
Our bylaws and the federal and state banking laws under which we operate
contain certain provisions which could delay or impede the removal of incumbent
directors and could make more difficult a merger, tender offer or proxy contest
involving our company, even if that type of a transaction would be beneficial
to the interests of our stockholders, or could discourage a third party from
attempting to acquire control of our company. In particular, the classification
of our board of directors and banking laws and regulations which require prior
regulatory approval with respect to a change in control of our company could
have the effect of delaying or preventing a change in control of our company.
DESCRIPTION OF THE PLAN
The following is a description of the plan in question and answer form. You
may find a copy of the plan as Exhibit 4.2 of the registration statement. In
the event of any inconsistency between that plan and the following description,
the plan will control.
Purpose
1. What is the purpose of the plan?
The purpose of the plan is to provide you with a convenient and economical
method of investing cash dividends payable upon your common stock and optional
cash contributions in additional shares of common stock. To the extent that you
purchase the additional shares directly from us under the plan, we will receive
additional funds for our general corporate purposes.
Advantages
2. What are the advantages of the plan?
Participants in the plan may:
. Automatically reinvest all or a portion of their common stock cash
dividends, without payment of a service charge or brokerage commission,
in common stock at the fair market value of the common stock for
original issue and treasury shares. However, for purchases of shares in
the open market, brokerage fees will be charged.
. Invest additional cash, not less than $50 and up to $2,000 per month.
(See Questions 13 through 16.)
. Invest the full amount of cash dividends and optional cash
contributions, since fractional share interests may be held under the
plan.
4
<PAGE>
. Avoid safekeeping and record keeping requirements and costs through the
free custodial service and reporting provisions of the plan.
Administration
3. Who administers the plan for participants?
Registrar and Transfer Company will administer the plan as agent for the
participants. In this capacity, the administrator will send periodic statements
of account to participants and perform other administrative duties relating to
the plan. The administrator will hold shares purchased for a participant under
the plan and will register the shares in its name or the name of its nominee.
For any notices, questions or other communications relating to the plan, the
participant should include the participant's account number and should address
these items to:
Community Trust Financial Services Corporation
Dividend Reinvestment and Stock Purchase Plan
c/o Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
Participants who have questions regarding the plan also may contact the
administrator by telephoning toll free at 1-800-368-5948.
Participation
4. Who is eligible to participate in the plan?
Record holders of common stock of the company, who reside in Georgia, will
be eligible to participate in the plan, except as determined by our board of
directors from time to time. The right to participate in the plan isn't
transferable to another person apart from a transfer of a participant's
underlying shares of common stock. Beneficial owners whose shares are
registered in the name of a nominee, like a brokerage firm or securities
depository, may not participate in the plan unless these shares are transferred
into the record name of the beneficial owner or appropriate arrangements are
made with the nominee.
Subject to the limitations in the paragraph immediately above and without
limiting the generality of this statement, participants in the plan may make
optional cash contributions of not less than $50.00 per payment and up to
$2,000.00 per month. See Question 14 below.
5. How does an eligible shareholder become a participant in the plan?
Any eligible shareholder may join the plan at any time by completing and
signing the authorization card included with this prospectus and returning it
to the administrator. If the shares are registered in more than one name, all
registered shareholders must sign the authorization card. An eligible
shareholder may obtain additional authorization cards at any time from the
administrator. The administrator must receive a properly completed
authorization card at least five business days before a dividend record date in
order for the dividends payable on that date to be reinvested in our common
stock under the plan. If the administrator doesn't receive an authorization
card from a shareholder at least five business days before the record date
established for that particular dividend, the reinvestment of dividends will
begin with the payment of dividends following the next dividend record date if
at that time the shareholder is still a record holder of our common stock.
You may become a participant in the plan at any time by completing an
authorization card and returning it to: Registrar and Transfer Company, 10
Commerce Drive, Cranford, New Jersey, 07016. If you don't want to participate
in the plan, you don't need to do anything and you will continue to receive
your usual cash dividends, if, as and when dividends are declared. If you have
elected to participate in the plan, you may
5
<PAGE>
terminate your participation in the plan at any time by informing the
administrator in writing that you want to terminate your participation.
6. What are a shareholder's participation options?
A participant may elect full reinvestment or partial reinvestment of cash
dividends on shares registered in his or her name. If you choose partial
reinvestment, you must designate on the authorization card the number of whole
shares for which you wish to reinvest dividends. Dividends paid on all other
shares registered in the participant's name will be paid in cash. If you elect
to participate in the plan you may also make optional cash payments which will
be invested through the plan as explained in Questions 13 through 16 of this
prospectus.
Purchases
7. How are shares of common stock acquired under the plan?
If you participate in the plan, we will pay to the administrator dividends
on your common stock that you have designated to be reinvested and dividends
with respect to stock held by the administrator for your benefit under the
plan. See Question 11. The dividends paid to the administrator won't include
any applicable taxes that we may be required to withhold. The administrator
will pool these cash dividends together with all optional cash contributions
received. The administrator will use the funds to purchase shares of our common
stock on the open market for the plan accounts of the participants.
Alternatively, the administrator may acquire shares directly from us or
pursuant to certain negotiated transactions. A combination of the foregoing
methods may be utilized as we direct. In any event, each participant's account
will be credited with a pro rata share of these purchased shares. Shares
purchased from us will be our authorized but unissued shares of our common
stock and shares held in treasury.
8. When will shares of common stock be purchased under the plan?
In months in which a dividend payment is made, purchases of shares with
reinvested dividends and purchases of shares with optional cash contributions
will be made as of each dividend payment date or as soon as practicable after
that date. Historically, we have declared regular, annual cash dividends to
shareholders of record in the first quarter of each fiscal year; however, with
implementation of the plan, the board of directors anticipates paying dividends
on a quarterly basis. In months in which a dividend payment is not made,
purchases of shares made with optional cash contributions will be made on the
tenth day of every month (or the next business day) or as soon as practicable
after the purchase date. Optional cash contributions must be received at least
five business days prior to a purchase date to be used to purchase shares on
that purchase date. Participants may obtain the return of any optional cash
contributions at any time prior to two business days before a purchase date. No
interest will be paid on any funds received under the plan.
Purchases of common stock in the open market or in negotiated transactions
may occur over one or more trading days.
9. What will be the price of stock purchased under the plan?
For purchases of shares of common stock on the open market or in negotiated
transactions, the purchase price will be the participant's pro rata share of
the prices actually paid for the shares, including brokerage commissions, if
any, at the time these purchases are made. For shares of common stock that the
administrator purchases directly from us, the purchase price will be the fair
market value of the stock as of the applicable purchase date. In the event of
purchases of common stock from us and in the open market and/or in negotiated
transactions, the purchase price per share of common stock to be charged to
each participant will be based upon the weighted averages of the prices of all
shares purchased.
If the common stock is listed on an established organized stock exchange,
the fair market value will be the closing price per share for the common stock
on such stock exchange on the applicable date or, if no sale of the
6
<PAGE>
common stock occurred on such stock exchange on that date, the closing price
per share for the common stock on such stock exchange on the preceding day on
which a sale of common stock occurred. If the common stock is listed in the
NASDAQ National Market System, the fair market value will be the average of the
highest and lowest trading prices per share for the common stock on the
applicable date or, if no trade of the common stock occurred in the National
Market System on that date, the average of the highest and lowest trading
prices per share for the common stock on the preceding day on which the common
stock was traded in the National Market System. If our common stock isn't
listed on an established stock exchange or in the NASDAQ National Market System
but is quoted by NASDAQ, the fair market value will be the average of the
closing dealer bid and asked prices per share for the common stock quoted by
NASDAQ on the applicable date or, if no such bid and asked prices are quoted by
NASDAQ on that date, the average of the closing dealer bid and asked prices per
share for the common stock quoted by NASDAQ on the preceding day on which such
prices were quoted by NASDAQ. If our common stock isn't listed or traded on an
established stock exchange or in the NASDAQ National Market System, or quoted
by NASDAQ, the fair market value of the stock will be the average of the lowest
bid and highest asked quoted prices per share of the common stock on the
applicable date as reported by one or more brokerage firms which then make a
market in our common stock. If there are no bid and asked quotations on that
date, the quoted per share price (or average quoted per share prices, if
several) reported on the applicable date, whether bid or asked, will be used.
10. How many shares will be purchased for participants?
The number of shares that will be purchased for each participant will depend
upon the amount of cash dividends to be reinvested for the participant, the
amount of any optional cash contributions and the fair market value or actual
trading price of the shares purchased. Each participant's account will be
credited with the whole and fractional shares (calculated to four decimal
places) equal to the pro rata amount invested for the respective participant,
divided by the applicable purchase price per share. The applicable purchase
price per share will be the total amount of dividends invested divided by the
total shares purchased.
11. Will dividends on shares in participants' accounts be used to purchase
shares?
Yes. Dividends subsequently paid on shares that have been purchased under
the plan will also be used to purchase our common stock, therefore compounding
each participant's investment. Fractional shares held under the plan for a
participant's account will receive dividends in the same way as a whole share,
but in proportion to the size of the fractional share. No interest will be paid
on dividends pending reinvestment.
12. Are there any expenses to participants in connection with purchases under
the plan?
Participants will incur no brokerage commissions or service charges for
purchases of original issue shares and shares held in treasury made under the
plan.
However, we may elect to direct the administrator to purchase shares of
common stock in the open market. If shares are purchased in the open market,
there will be no charges to participants other than ordinary brokerage fees.
Optional Cash Contributions
13. Who will be eligible to make optional cash contributions?
Optional cash contributions may be made only by shareholders who are
participants under the plan. See Question 4.
14. What are the limitations on optional cash contributions?
The same amount of money doesn't need to be sent each month, and a
participant is under no obligation to make an optional cash contribution in any
month. Any optional cash contributions, however, must not be
7
<PAGE>
less than $50 per payment, nor may these payments by any participant aggregate
more than $2,000 in any calendar month, subject to our right from time to time
to change these amounts or to eliminate optional cash contributions upon giving
participants in the plan not less than 30 days prior written notice of the
effective date of this change; provided, that this change won't occur more
often than once every three months.
Optional cash contributions will be returned to a participant upon written
request received by the administrator at any time prior to two business days
before the next purchase date.
Optional cash contributions don't constitute deposits or savings accounts
and aren't insured by the Federal Deposit Insurance Corporation or any other
governmental agency or instrumentality. Under no circumstances will interest be
paid on optional cash contributions.
15. How does the optional cash contribution option work?
An optional cash contribution may be made by enclosing a check or money
order payable to "Registrar and Transfer Company, Agent" with the participant's
account number and social security or federal taxpayer identification number,
together with an authorization card or with an optional cash contribution form
provided at the bottom of a plan account statement referred to in Question 17
below and mailing them to the administrator. If any participants have the same
social security or federal tax identification number, the maximum amount which
all of these participants may invest as optional cash contributions each month
is limited to the maximum amount that one participant may so voluntarily invest
each month. Optional cash contributions must be received at least five business
days prior to each monthly purchase date. (See Question 8.)
16. May participants have cash contributions to the plan withdrawn from a
checking or savings account?
An automatic cash investment service is now available for participants. The
service is a convenient, no-cost method through which participants may make
optional cash contributions to the plan by having money automatically withdrawn
from a checking or savings account each month and held in the participant's
account until the applicable purchase date.
Through the plan's automatic deduction feature, participants may elect to
invest additional funds in our common stock through optional cash
contributions, processed through electronic funds transfer and withdrawn
automatically from a participant's predesignated bank account. To invest
additional funds by automatic deduction, participants must first complete and
sign an automatic deduction form and return the form to Registrar and Transfer
Company. Automatic deduction forms are available upon request from the
administrator. Once the automatic monthly deduction option is initiated, funds
will be drawn from the participant's designated bank account on or about five
business days preceding the purchase date of each month and will be invested in
our common stock beginning on the purchase date.
Automatic deduction forms will be processed and will become effective as
promptly as practicable. Participants may change the designated account for
automatic deduction or discontinue this feature by written instruction to the
administrator.
Reports to Participants
17. What reports will be sent to participants in the plan?
As soon as practicable after each purchase made under the plan on behalf of
a participant, the participant will receive a statement showing the amount
invested, the purchase price, the number of shares purchased, and other
information regarding the status of the participant's account as of the date of
the statement. Each
8
<PAGE>
participant is responsible for retaining these statements in order to establish
the cost basis of his or her shares purchased under the plan for tax purposes.
Voting Rights
18. How will a participant's shares be voted at meetings of shareholders?
For each meeting of our shareholders, each participant will receive proxy
materials which will enable him or her to vote shares credited to his or her
plan account. Participants will vote shares in their plan accounts just as they
vote shares registered in their own names directly or by proxy.
Federal Income Taxation
19. What are the federal income tax consequences of participating in the plan?
Participants in the plan will have the same federal income tax consequences
relating to cash dividends on their shares as any other holder of common stock.
A plan participant will be treated for federal income tax purposes as having
received on each dividend payment date the full amount of the cash dividend
payable on that dividend payment date with respect to shares registered in the
plan participant's name and shares held for the plan participant's account
under the plan, even though this amount is not received by the plan participant
in cash. The holding period for the plan shares will begin the day after the
date the shares are acquired.
A participant won't realize any taxable income when he or she receives
certificates for whole shares credited to his or her account under the plan,
either upon a request for the certificates or upon termination of the plan.
However, a participant who receives, upon withdrawal from or termination of the
plan, a cash payment for the sale of plan shares or for a fractional share
interest held for the participant's account will realize gain or loss measured
by the difference between the amount of the cash received and the participant's
basis in the shares or fractional share.
The above is intended only as a general discussion of the current federal
income tax consequences of participation in the plan. Participants should
consult their own tax advisors to determine particular tax consequences,
including state tax consequences, which may result from participation in the
plan and any subsequent disposal of shares acquired pursuant to the plan.
Withdrawal of Shares from Plan Accounts
20. How may a participant withdraw shares purchased under the plan?
A participant may withdraw all or a portion of the whole shares of common
stock credited to his or her account by notifying the administrator in writing
to that effect and by specifying in the notice the number of shares to be
withdrawn. Certificates for whole shares of common stock withdrawn from the
plan will be registered in the name of the participant and issued to the
participant as soon as practicable after the administrator's receipt of the
notice of withdrawal but no later than 30 days after the administrator's
receipt of the notice. No certificates for fractional shares will be issued
under any circumstance. If the request to withdraw shares isn't received at
least five business days before the record date for a cash dividend payment,
any amount paid on the dividend payment date will be reinvested pursuant to the
plan and the withdrawal request will be processed as soon as practicable after
the dividend payment date.
Any shares remaining in a participant's account after withdrawal of a
portion of shares under the plan will continue to be held by the administrator
with dividends on these shares continuing to be reinvested under the plan. See
Question 11.
9
<PAGE>
21. May a participant elect to have the withdrawn shares sold?
Yes, a participant may request the administrator to sell, for a fee of
$10.00 per sale plus proportional brokerage fees and commissions, if any, the
shares being withdrawn from his or her account under the plan. Participants
should specify in their notice of withdrawal the number of shares to be sold.
See the answer to Question 23.
Termination of Participation
22. How does a participant terminate participation in the plan?
A participant may terminate his or her participation in the plan at any time
by sending written notice to the administrator. If the request to terminate
participation isn't received at least five business days before the record date
for a cash dividend payment, any amount paid on the dividend payment date will
be reinvested pursuant to the plan and the termination request will be
processed as soon as practicable after the dividend payment date. We may also
terminate a participant's participation in the plan by giving written notice to
that effect to a participant at any time; however, if the notice is given
between a dividend record date and payment date, the termination won't be
effective insofar as that dividend is concerned. When a participant terminates
his or her participation in the plan or we terminate his or her participation
under the plan, the administrator will deliver to the participant:
. one or more certificates for whole shares credited to the participant's
account under the plan;
. a check representing any uninvested dividends and optional cash
contributions held by the administrator for the participant under the
plan; and
. a check in lieu of the issuance of any fractional share credited to the
participant's account based on the then current net price or market
value per share of our common stock.
The administrator will deliver these items to the participant as soon as
practicable after but no later than 30 days after either the date the
administrator receives a termination notice from a participant or the date of
mailing of a notice of termination from us.
23. May a participant request shares to be sold?
Yes. A participant who is terminating participation in the plan may request
in writing that all of the shares in his or her account be sold. Each person in
whose name the plan account appears must sign this request. If a sale is
requested, for a fee of $10.00 per sale plus proportional brokerage fees and
commissions, if any, the administrator will execute a sale order for these
shares and provide for the sale of these shares as soon as practicable after
receipt of the request but no later than 30 days after receipt of the request.
Further, the administrator will deliver to the participant a check for the
proceeds of the sale, less any brokerage commissions, applicable withholding
taxes and transfer taxes incurred in connection with the sale.
Certificates for Shares
24. Will certificates be issued for shares purchased under the plan?
Generally not. Certificates for shares purchased for a participant's account
under the plan won't be issued unless the participant:
. requests in writing that the administrator issue a certificate;
. withdraws shares from his or her plan account; or
. terminates his or her participation in the plan and doesn't request his
or her shares to be sold on his or her behalf.
10
<PAGE>
25. In whose name will shares be registered when certificates are issued to
participants?
Certificates will be issued in the name or names that appear on the
participant's account under the plan. If a participant requests a certificate
to be registered in a name other than that shown on the account, the request
must be signed by all persons in whose names the account appears, with
signatures Medallion guaranteed and accompanied by any other documentation as
the administrator may require.
Other Information
26. May a participant pledge shares held under the plan or transfer rights
under the plan?
Generally, no. Except as provided in the plan, shares credited to a
participant's account under the plan may not be pledged or assigned, nor may
any rights or interests under the plan be transferred, pledged or assigned, and
any purported pledge, assignment or transfer will be void.
If a participant wishes to transfer the ownership of all or part of the
participant's shares under the plan to another person, whether by gift, private
sale, or otherwise, the participant may effect this transfer by mailing a
properly completed share transfer form or an executed stock power form to the
administrator. Transfers must be made in whole share amounts. Requests for
transfer are subject to the same requirements as for transfer of stock
certificates generally, including the requirement of a Medallion stamp
guarantee on the stock power form and the share transfer form. Share transfer
forms and stock power forms are available from the administrator.
Once shares under the plan are transferred, the transferee must obtain an
authorization card from the administrator to enroll the shares in the plan.
Transferred shares will not be automatically enrolled in the plan. The
transferee may send the authorization card to the administrator at the same
time as the transferor submits the share transfer form or the stock power form
to effectuate the transfer.
27. What happens if a participant sells or transfers all of the shares of
common stock registered in his or her name?
A participant who no longer has shares of our common stock held of record in
his or her name may continue to participate in the plan with respect to shares
under the plan as long as the administrator holds any shares in the
participant's account under the plan.
28. What happens if we declare a stock dividend or a stock split?
If we declare a stock dividend or effect a stock split, any shares resulting
from the stock dividend or stock split with respect to common stock in a
participant's account will be adjusted to give effect to the split and the
number of shares available for issuance under the plan will likewise be
adjusted.
Any shares of stock resulting from a stock dividend or stock split with
respect to a participant's shares under the plan will be added to the
participant's account as additional shares under the plan. Stock dividends or
shares resulting from a stock split that are distributable with respect to
shares held of record in a participant's name will be mailed directly to the
participant in the same way as distributions to our shareholders who aren't
participating in the plan.
29. May the plan be modified or terminated?
Yes. We reserve the right to amend, supplement, suspend, modify or terminate
the plan at any time. Participants will receive notice of any suspension,
termination or material modification of the plan and in all events will have
the right to withdraw from the plan. Any suspension, termination or material
amendment of the plan will not become effective until 30 days after notice is
mailed to the participants. We also reserve the right to terminate, at our sole
discretion, any shareholder's participation in the plan at any time. We may
adopt
11
<PAGE>
and amend rules and regulations from time to time to facilitate the
administration of the plan and we have the right to replace the administrator
at any time.
30. What are the liabilities of the company or the administrator under the
plan?
We and the administrator won't be liable for any act taken in good faith or
for any good faith omission to act, including, without limitation, any claims
of liability:
. arising out of failure to terminate a participant's account upon his or
her death, and
. with respect to the terms upon or prices at which shares of our common
stock are purchased or sold, the times when or the manner in which these
purchases or sales are made, the decision whether to purchase the shares
of common stock on the open market or from us, fluctuations in the
market value of the common stock, and
. with respect to any matters relating to the operation or management of
the plan.
Each participant bears the risk of loss and the benefits of gain from market
price changes with respect to all shares. Neither we nor the administrator can
guarantee that shares purchased under the plan will, at any particular time, be
worth more or less than their purchase price. Each participant should recognize
that neither we nor the administrator can provide any assurance of a profit or
protection against loss on any shares purchased under the plan.
31. How does the plan's share safekeeping feature work?
At the time of enrollment in the plan, or at any later time, participants
may use the plan's share safekeeping service to deposit any common stock
certificates in their possession with the administrator. Shares deposited will
be transferred into the name of the administrator or its nominee and credited
to the participant's account under the plan. Then, these shares will be treated
in the same manner as shares purchased through the plan. By using the plan's
share safekeeping service, participants no longer bear the risk associated with
loss, theft or destruction of share certificates.
Participants who wish to deposit their common stock certificates with the
administrator must mail their requests and their certificates to the
administrator. The certificates shouldn't be endorsed. It is recommended that
participants use registered, insured mail when mailing certificates to the
administrator.
32. May residents of states other than Georgia participate in the plan?
No. Only residents of Georgia may participate in the plan.
33. How will the plan be interpreted?
The laws of Georgia, and applicable state and federal securities laws will
govern and construe the plan, the authorization card, and the participants'
accounts. We will determine any question of interpretation arising under the
plan pursuant to applicable state and federal law and the rules and regulations
of all regulatory authorities, and this determination will be final and binding
upon all participants and the administrator. We or, with its consent, the
administrator, may adopt rules and regulations from time to time to facilitate
the administration of the Plan. Where used in the plan, the plural will include
the singular and, unless the context otherwise clearly requires, the singular
will include the plural. The headings of the various paragraphs contained in
the plan are for convenience only and won't affect the interpretation or
meaning of the provisions of the plan.
12
<PAGE>
Use of Proceeds
The principal reason for the offering of our common stock is to provide you
an opportunity and a method to invest cash dividends and optional cash
contributions in additional shares of common stock through the plan. Shares may
be acquired for issuance pursuant to the plan through open market purchases,
through negotiated transactions, or directly from us. The administrator will
make open market purchases, and the purchase price to participants in the plan
will be the actual price paid, including brokerage commissions. We will receive
none of the proceeds from shares acquired for issuance pursuant to the plan
unless these acquisitions involve the purchase of shares directly from us. To
the extent you purchase any shares directly from us, we will add the proceeds
of these sales to the general funds of the company and these proceeds will be
available for our general corporate purposes, including working capital
requirements and contributions to our subsidiaries to support their anticipated
growth and expansion.
Indemnification
The Official Code of Georgia Annotated provides for indemnification of our
directors and officers in certain circumstances. In addition, the Official Code
of Georgia Annotated grants to us the power to indemnify our directors and
officers against liability for certain of their acts.
Our bylaws provide for indemnification of our directors and officers to the
fullest extent authorized by the Official Code of Georgia Annotated against
liability for certain of their acts. Our bylaws provide that each person who is
or was a director, officer, employee or agent of the company or who is or was
serving, at the request of the company, as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise will be indemnified by the company to the full extent permitted or
authorized by the present and future laws of the State of Georgia, against any
liability, cost, payment or expense asserted against him or paid or incurred by
him in his capacity as a director, officer, employee or agent, whether
asserted, paid or incurred during or after his service as a director, officer,
employee or agent.
Our articles of incorporation provide that a director of the company won't
be personally liable to the company or its shareholders for monetary damages
for breach of duties as a director, except to the extent this elimination of
liability is prohibited by the Official Code of Georgia Annotated for:
. any appropriation, in violation of a director's duties of any business
opportunity of the company,
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
. in respect of certain unlawful dividend payments or stock redemptions or
repurchases, or
. any transaction from which the director derived an improper personal
benefit.
Any repeal or modification of this provision by the shareholders of the company
won't adversely affect any right or protection of a director of the company
existing at the time of the repeal or modification. The effect of this
provision is to eliminate the rights of the company and its shareholders
(through shareholders' derivative suits on behalf of the company) to recover
monetary damages against a director for breach of fiduciary duty as a director
(including breaches resulting from grossly negligent behavior) except in the
situations described above.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
company pursuant to the foregoing provisions, or otherwise, the company has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
13
<PAGE>
Experts
The audited consolidated financial statements incorporated by reference in
this prospectus have been audited by Porter Keadle Moore, LLP, independent
public accountants, as indicated in their report with respect to the audited
consolidated financial statements, and are incorporated by reference in this
prospectus in reliance upon the authority of the firm as experts in giving
these reports.
Legal Matters
Certain legal matters, including, among other things, the validity of the
shares of common stock offered by this prospectus, have been passed upon by
Miller & Martin LLP, counsel to the company.
No person has been authorized to give any information or to make any
representations other than as contained or incorporated by reference in this
prospectus, and if given or made, this information or representation must not
be relied upon as having been authorized by the company. Neither the delivery
of this prospectus nor any sale under this prospectus will under any
circumstances create any implication that there has been no change in the
affairs of the company since any of the dates as of which information is
furnished in this prospectus or since the date of the prospectus. This
prospectus doesn't constitute an offer to sell, or a solicitation of an offer
to buy, any of the securities offered by this prospectus in any jurisdiction to
any person to whom it is unlawful to make this offer.
Incorporation of Certain Information by Reference
The following documents, which we filed with the Commission pursuant to the
Securities Exchange Act of 1934, are incorporated by reference in this
registration statement:
. The company's Annual Report on Form 10-KSB for its fiscal year ended
December 31, 1998;
. The company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1999;
. The company's Quarterly Report on Form 10-QSB for the quarter ended June
30, 1999;
. The company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1999;
. The company's Current Report dated May 5, 1999 on Form 8-K filed with
the Securities and Exchange Commission on June 9, 1999;
. The company's Current Report dated December 14, 1999 on Form 8-K filed
with the Securities and Exchange Commission on December 20, 1999;
. The company's Current Report dated February 15, 2000 on Form 8-K filed
with the Securities and Exchange Commission on February 23, 2000; and
. Description of the company's $2.50 par value common stock is contained
at page 59 of the prospectus of Community Trust Financial Services
Corporation, relating to 294,118 shares of its common stock issued which
is part of the Registration Statement under the Securities and Exchange
Act of 1934 on Form S-2/A filed with the Securities and Exchange
Commission on May 11, 1998 (File Number 333-49463).
All documents subsequently filed by the company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
termination of the offering will be deemed to be incorporated by reference into
this prospectus and will be part of this prospectus from the date of filing of
the document. Any statement contained in this prospectus or in a document
incorporated or deemed to be incorporated in this prospectus by reference will
be deemed to be modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus or in any subsequently
filed document which also is, or is
14
<PAGE>
deemed to be, incorporated in this prospectus by reference modifies or
supersedes such statement. Any statement so modified or superseded won't be
deemed to constitute a part of this prospectus, except as modified or
superseded.
The company will provide, upon written or oral request, without charge, to
each person, including any beneficial owner, to whom a prospectus is delivered,
a copy of any or all of the information that has been incorporated by reference
in the prospectus but not delivered with the prospectus. Requests for these
copies should be directed to: Community Trust Financial Services Corporation,
3844 Atlanta Highway, Hiram, Georgia 30141, Attn: Angel J. Byrd, (770) 445-
1014.
Available Information
The company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended and, in accordance with those requirements,
files reports and other information with the Securities and Exchange
Commission. Reports, proxy and information statements that the company filed
with the Commission pursuant to the informational requirements of the Exchange
Act and any other materials the company filed with the Commission may be
inspected and copied by the public at the Commission's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: Midwest Regional Office, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and Northeast Regional Office, 7 World
Trade Center, Suite 1300, New York, New York 10048. Copies of this material may
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The Commission maintains an Internet web site
that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission--
http://www.sec.gov. Also, reports, proxy statements and other information
concerning the company may also be inspected at our offices located at 3844
Atlanta Highway, Hiram, Georgia 30141.
The company has filed with the Commission a registration statement on Form
S-3, together with all amendments and exhibits to the registration statement,
under the Securities Act of 1933, as amended and the rules promulgated under
the Securities Act of 1933, with respect to the common stock offered by this
prospectus. This prospectus, which is part of the registration statement,
doesn't contain all of the information set forth in the registration statement
and in the exhibits to the registration statement, and reference to the
registration statement and exhibits is made by this prospectus. Each statement
made in this prospectus referring to a document filed as an exhibit to the
registration statement is qualified by reference to the exhibit for a complete
statement of its terms and conditions. Any interested party may inspect the
registration statement without charge at the public reference facilities of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and may obtain
copies of all or any part of it from the Commission upon payment of the fees
prescribed by the Commission.
15
<PAGE>
----------------
Community Trust Financial Services Corporation
Dividend Reinvestment
and Stock
Purchase Plan
400,000 Shares
Common Stock
----------------
Prospectus
----------------
March 3, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
SEC Registration Fee(s).......................................... $ 976.80
State Filing Fee(s).............................................. $ 250.00
Costs of Printing and Engraving*................................. $10,000.00
Legal Fees and Expenses.......................................... $15,000.00
Accounting Fees and Expenses..................................... $ 1,350.00
----------
Total.......................................................... $27,576.80
==========
</TABLE>
- --------
*Estimated
Item 15. Indemnification of Directors and Officers
Georgia Corporate Law
Official Code of Georgia Annotated (S)(S)14-2-850 through 14-2-859 set forth
provisions pertaining to indemnification of and insurance for directors,
officers, employees and agents of a corporation:
14-2-850. Part Definitions.
As used in this part, the term:
(1) "Corporation" includes any domestic or foreign predecessor entity of a
corporation in a merger or other transaction in which the predecessor's
existence ceased upon consummation of the transaction.
(2) "Director" or "officer" means an individual who is or was a director or
officer, respectively, of a corporation or who, while a director or
officer of the corporation, is or was serving at the corporation's
request as a director, officer, partner, trustee, employee, or agent of
another domestic or foreign corporation, partnership, joint venture,
trust, employee benefit plan, or other entity. A director or officer is
considered to be serving an employee benefit plan at the corporation's
request if his or her duties to the corporation also impose duties on,
or otherwise involve services by, the director or officer to the plan
or to participants in or beneficiaries of the plan. Director or officer
includes, unless the context otherwise requires, the estate or personal
representative of a director or officer.
(3) "Disinterested director" means a director who at the time of a vote
referred to in subsection (c) of Code Section 14-2-853 or a vote or
selection referred to in subsection (b) or (c) of Code Section 14-2-855
or subsection (a) of Code Section 14-2-856 is not:
(A) A party to the proceeding; or
(B) An individual who is a party to a proceeding having a familial,
financial, professional, or employment relationship with the
director whose indemnification or advance for expenses is the
subject of the decision being made with respect to the proceeding,
which relationship would, in the circumstances, reasonably be
expected to exert an influence on the director's judgment when
voting on the decision being made.
(4) "Expenses" includes counsel fees.
(5) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an
employee benefit plan), or reasonable expenses incurred with respect to
a proceeding.
II-1
<PAGE>
(6) "Official capacity" means:
(A) When used with respect to a director, the office of director in a
corporation; and
(B) When used with respect to an officer, as contemplated in Code
Section 14-2-857, the office in a corporation held by the officer.
Official capacity does not include service for any other domestic or foreign
corporation or any partnership, joint venture, trust, employee benefit plan, or
other entity.
(7) "Party" means an individual who was, is, or is threatened to be made a
named defendant or respondent in a proceeding.
(8) "Proceeding" means any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, arbitrative, or
investigative and whether formal or informal.
14-2-851. Authority to Indemnify.
(a) Except as otherwise provided in this Code section, a corporation
may indemnify an individual who is a party to a proceeding because
he or she is or was a director against liability incurred in the
proceeding if:
(1) Such individual conducted himself or herself in good faith; and
(2) Such individual reasonably believed:
(A) In the case of conduct in his or her official capacity, that
such conduct was in the best interests of the corporation;
(B) In all other cases, that such conduct was at least not
opposed to the best interests of the corporation; and
(C) In the case of any criminal proceeding, that the individual
had no reasonable cause to believe such conduct was
unlawful.
(b) A director's conduct with respect to an employee benefit plan for a
purpose he or she believed in good faith to be in the interests of
the participants in and beneficiaries of the plan is conduct that
satisfies the requirement of subparagraph (a)(2)(B) of this Code
section.
(c) The termination of a proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent is
not, of itself, determinative that the director did not meet the
standard of conduct described in this Code section.
(d) A corporation may not indemnify a director under this Code section:
(1) In connection with a proceeding by or in the right of the
corporation, except for reasonable expenses incurred in
connection with the proceeding if it is determined that the
director has met the relevant standard of conduct under this
Code section; or
(2) In connection with any proceeding with respect to conduct for
which he or she was adjudged liable on the basis that personal
benefit was improperly received by him or her, whether or not
involving action in his or her official capacity.
However,
(a) A corporation may not indemnify a director under Code Section 14-2-
851 unless authorized thereunder and a determination has been made
for a specific proceeding that indemnification of the director is
permissible in the circumstances because he or she has met the
relevant standard of conduct set forth in Code Section 14-2-851.
II-2
<PAGE>
(b) The determination shall be made:
(1) If there are two or more disinterested directors, by the board
of directors by a majority vote of all the disinterested
directors (a majority of whom shall for such purpose constitute
a quorum) or by a majority of the members of a committee of two
or more disinterested directors appointed by such a vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this
subsection; or
(B) If there are fewer than two disinterested directors,
selected by the board of directors (in which selection
directors who do not qualify as disinterested directors may
participate); or
(3) By the shareholders, but shares owned by or voted under the
control of a director who at the time does not qualify as a
disinterested director may not be voted on the determination.
(c) Authorization of indemnification or an obligation to indemnify and
evaluation as to reasonableness of expenses shall be made in the
same manner as the determination that indemnification is
permissible, except that if there are fewer than two disinterested
directors or if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under
subparagraph (b) (2) (B) of this Code section to select special
legal counsel. OCGA (S)14-2-855.
Georgia law requires mandatory indemnification of a director "who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which he or she was a party because he or she was a director of the corporation
against reasonable expenses incurred by the director in connection with the
proceeding." OCGA (S)14-2-852.
Georgia law allows a corporation to advance funds to pay for expenses
incurred by a director who is a party to a proceeding because he or she is a
director:
14-2-853. Advance for expenses.
(a) A corporation may, before final disposition of a proceeding,
advance funds to pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding because he or
she is a director if he or she delivers to the corporation:
(1) A written affirmation of his or her good faith belief that he or
she has met the relevant standard of conduct described in Code
Section 14-2-851 or that the proceeding involves conduct for
which liability has been eliminated under a provision of the
articles of incorporation as authorized by paragraph (4) of
subsection (b) of Code Section 14-2-202; and
(2) His or her written undertaking to repay any funds advanced if it
is ultimately determined that the director is not entitled to
indemnification under this part.
(b) The undertaking required by paragraph (2) of subsection (a) of this
Code section must be an unlimited general obligation of the
director but need not be secured and may be accepted without
reference to the financial ability of the director to make
repayment.
(c) Authorizations under this Code section shall be made:
(1) By the board of directors:
(A) When there are two or more disinterested directors, by a
majority vote of all the disinterested directors (a majority
of whom shall for such purpose constitute a quorum) or by a
majority of the members of a committee of two or more
disinterested directors appointed by such a vote; or
II-3
<PAGE>
(B) When there are fewer than two disinterested directors, by
the vote necessary for action by the board in accordance
with subsection (c) of Code Section 14-2-824, in which
authorization directors who do not qualify as disinterested
directors may participate; or
(2) By the shareholders, but shares owned or voted under the control
of a director who at the time does not qualify as a
disinterested director with respect to the proceeding may not be
voted on the authorization.
Georgia law allows a director who is a party to a proceeding because he or
she is a director to apply for indemnification or advances for expenses from a
court:
14-2-854. Court-ordered indemnification and advances for expenses.
(a) A director who is a party to a proceeding because he or she is a
director may apply for indemnification or advance for expenses to
the court conducting the proceeding or to another court of
competent jurisdiction. After receipt of an application and after
giving any notice it considers necessary, the court shall:
(1) Order indemnification or advance for expenses if it determines
that the director is entitled to indemnification under this
part; or
(2) Order indemnification or advance for expenses if it determines,
in view of all the relevant circumstances, that it is fair and
reasonable to indemnify the director or to advance expenses to
the director, even if the director has not met the relevant
standard of conduct set forth in subsections (a) and (b) of Code
Section 14-2-851, failed to comply with Code Section 14-2-853,
or was adjudged liable in a proceeding referred to in paragraph
(1) or (2) of subsection (d) of Code Section 14-2-851, but if
the director was adjudged so liable, the indemnification shall
be limited to reasonable expenses incurred in connection with
the proceeding.
(b) If the court determines that the director is entitled to
indemnification or advance for expenses under this part, it may
also order the corporation to pay the director's reasonable
expenses to obtain court-ordered indemnification or advance for
expenses.
Under certain circumstances, shareholder approved indemnification is
allowed, without regard to certain limitations found in the OCGA sections of
the part pertaining to indemnification:
14-2-856. Shareholder approved indemnification.
(a) If authorized by the articles of incorporation or a bylaw,
contract, or resolution approved or ratified by the shareholders by
a majority of the votes entitled to be cast, a corporation may
indemnify or obligate itself to indemnify a director made a party
to a proceeding including a proceeding brought by or in the right
of the corporation, without regard to the limitations in other Code
sections of this part, but shares owned or voted under the control
of a director who at the time does not qualify as a disinterested
director with respect to any existing or threatened proceeding that
would be covered by the authorization may not be voted on the
authorization.
(b) The corporation shall not indemnify a director under this Code
section for any liability incurred in a proceeding in which the
director is adjudged liable to the corporation or is subjected to
injunctive relief in favor of the corporation:
(1) For any appropriation, in violation of the director's duties, of
any business opportunity of the corporation;
(2) For acts or omissions which involve intentional misconduct or a
knowing violation of law;
II-4
<PAGE>
(3) For the types of liability set forth in Code Section 14-2-832;
or
(4) For any transaction from which he or she received an improper
personal benefit.
(c) Where approved or authorized in the manner described in subsection
(a) of this Code section, a corporation may advance or reimburse
expenses incurred in advance of final disposition of the proceeding
only if:
(1) The director furnishes the corporation a written affirmation of
his or her good faith belief that his or her conduct does not
constitute behavior of the kind described in subsection (b) of
this Code section; and
(2) The director furnishes the corporation a written undertaking,
executed personally or on his or her behalf, to repay any
advances if it is ultimately determined that the director is not
entitled to indemnification under this Code section.
Section 14-2-857 of the OCGA pertains to the indemnification of officers,
employees and agents:
14-2-857 Indemnification of officers, employees, and agents.
(a) A corporation may indemnify and advance expenses under this part to
an officer of the corporation who is a party to a proceeding
because he or she is an officer of the corporation:
(1) To the same extent as a director; and
(2) If he or she is not a director, to such further extent as may be
provided by the articles of incorporation, the bylaws, a
resolution of the board of directors, or contract except for
liability arising out of conduct that constitutes:
(A) Appropriation, in violation of his or her duties, of any
business opportunity of the corporation;
(B) Acts or omissions which involve intentional misconduct or a
knowing violation of law;
(C) The types of liability set forth in Code Section 14-2-832;
or
(D) Receipt of an improper personal benefit.
(b) The provisions of paragraph (2) of subsection (a) of this Code
section shall apply to an officer who is also a director if the
sole basis on which he or she is made a party to the proceeding is
an act or omission solely as an officer.
(c) An officer of a corporation who is not a director is entitled to
mandatory indemnification under Code Section 14-2-852, and may
apply to a court under Code Section 14-2-854 for indemnification or
advances for expenses, in each case to the same extent to which a
director may be entitled to indemnification or advances for
expenses under those provisions.
(d) A corporation may also indemnify and advance expenses to an
employee or agent who is not a director to the extent, consistent
with public policy, that may be provided by its articles of
incorporation, bylaws, general or specific action of its board of
directors, or contract.
Section 14-2-858 of the OCGA allows a corporation to purchase and maintain
insurance for directors, officers, employees and agents:
14-2-858 Insurance.
A corporation may purchase and maintain insurance on behalf of an
individual who is a director, officer, employee, or agent of the
corporation or who, while a director, officer, employee, or agent of the
corporation, serves at the corporation's request as a director, officer,
partner, trustee, employee, or agent
II-5
<PAGE>
of another domestic or foreign corporation, partnership, joint venture,
trust, employee benefit plan, or other entity 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 or advance expenses to him or her
against the same liability under this part.
Also note that:
(a) A corporation may, by a provision in its articles of incorporation
or bylaws or in a resolution adopted or a contract approved by its
board of directors or shareholders, obligate itself in advance of
the act or omission giving rise to a proceeding to provide
indemnification or advance funds to pay for or reimburse expenses
consistent with this part. Any such obligatory provision shall be
deemed to satisfy the requirements for authorization referred to in
subsection (c) of Code Section 14-2-853 or subsection (c) of Code
Section 14-2-855. Any such provision that obligates the corporation
to provide indemnification to the fullest extent permitted by law
shall be deemed to obligate the corporation to advance funds to pay
for or reimburse expenses in accordance with Code Section 14-2-853
to the fullest extent permitted by law, unless the provision
specifically provides otherwise.
(b) Any provision pursuant to subsection (a) of this Code section shall
not obligate the corporation to indemnify or advance expenses to a
director of a predecessor of the corporation, pertaining to conduct
with respect to the predecessor, unless otherwise specifically
provided. Any provision for indemnification or advance for expenses
in the articles of incorporation, bylaws, or a resolution of the
board of directors or shareholders, partners, or, in the case of
limited liability companies, members or managers of a predecessor
of the corporation or other entity in a merger or in a contract to
which the predecessor is a party, existing at the time the merger
takes effect, shall be governed by paragraph (3) of the subsection
(a) of Code Section 14-2-1106.
(c) A corporation may, by a provision in its articles of incorporation,
limit any of the rights to indemnification or advance for expenses
created by or pursuant to this part.
(d) This part does not limit a corporation's power to pay or reimburse
expenses incurred by a director or an officer in connection with
his or her appearance as a witness in a proceeding at a time when
he or she is not a party.
(e) Except as expressly provided in Code Section 14-2-857, this part
does not limit a corporation's power to indemnify, advance expenses
to, or provide or maintain insurance on behalf of an employee or
agent. OCGA (S)14-2-859.
Articles of Incorporation
The articles of incorporation of the company provide circumstances under
which the liability of a director may be limited or eliminated. Article XII of
the articles of incorporation provides:
No director of the corporation shall be personally liable to the
corporation or to any shareholder of the corporation for any monetary
damages for any breach of the director's duty of care or any other duty
owed to the corporation or its shareholders as a director, except to the
extent such elimination of liability is prohibited by the Georgia Business
Corporation Code for: (i) any appropriation, in violation of a director's
duties, of any business opportunity of the corporation; (ii) acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) the types of liability set forth in Section
14-2-154 of the Georgia Business Corporation Code as now in effect; or (iv)
any transaction from which the director derived an improper personal
benefit. If the Georgia Business Corporation Code is amended after approval
by the shareholders of this Article to authorize corporate action further
limiting the personal liability of directors, then the liability of a
director of the corporation shall be limited to the fullest extent
permitted by the Georgia Business Corporation Code, as so amended. Any
repeal or
II-6
<PAGE>
modification of the foregoing paragraph by the shareholders of the
corporation shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or
modification. This provision shall not eliminate or limit the liability of
a director for any act or omission occurring prior to the date of this
amendment.
Bylaws
The bylaws of the company set forth provisions pertaining to circumstances
under which directors, officers, employees or agents may be insured or
indemnified against liability which they may incur in those capacities. Section
6.1 of the bylaws provides:
Each person who is or was a director, officer, employee, or agent of the
corporation (including the heirs, executors, administrators, or estate of
such person) or who is or was serving, at the request of the corporation,
as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise shall by right be
indemnified by the corporation, to the full extent permitted or authorized
by the present and future laws of the State of Georgia, against any
liability, cost, payment, or expense asserted against him or paid or
incurred by him in his capacity as such a director, officer, employee, or
agent, whether asserted, paid, or incurred during or after his service as
such a director, officer, employer, or agent. The corporation may purchase
and maintain, at its expense, insurance to protect itself and any such
person against any such liability, cost, payment, or expense. The foregoing
right of indemnification shall not be deemed exclusive of any other right
to which those indemnified or seeking indemnification may be entitled both
as to action in their official capacities and as to action in another
capacity while holding such offices, and the corporation may provide such
additional rights to its directors, officers, employees, and agents.
Item 16. Exhibits
The following exhibits are filed as part of or incorporated by reference in
the registration statement:
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<C> <S>
Articles of Incorporation of Community Trust Financial Services
3.1* Corporation
3.2 Bylaws of Community Trust Financial Services Corporation (filed as
Exhibit 3.2 to the company's Annual Report on Form 10-KSB for the year
ended December 31, 1997)
4.1 The rights of security holders are defined in the Articles of
Incorporation and Bylaws provided in Exhibits 3.1 and 3.2 respectively
Community Trust Financial Services Corporation Dividend Reinvestment
4.2 and Stock Purchase Plan
Form of Dividend Reinvestment and Stock Purchase Plan Authorization
4.3 Card
5 Opinion and Consent of Miller & Martin LLP
23.1 Consent of Miller & Martin LLP (contained in Exhibit 5)
23.2 Consent of Porter Keadle Moore, LLP
24 Powers of Attorney (included on page II-9)
99 Form of Letter to Shareholders
</TABLE>
- --------
* Incorporated in this registration statement by reference to the exhibit of
the same number in the company's Registration Statement on Form S-4, as
amended (File Number 33-37601).
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-7
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high 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 twenty percent
(20%) change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are
not set forth in the prospectus, to deliver, or cause to be delivered
to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hiram, State of Georgia, on the 25th day of
February, 2000.
Community Trust Financial
Services Corporation
/s/ Ronnie L. Austin
By: _________________________________
Ronnie L. Austin
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ronnie L. Austin as his true and lawful
attorney-in-fact and agent, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, with either having full authority to sign any and all amendments to
this registration statement, and to file the same, with exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite or necessary
to be done regarding the aforesaid, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that either of
said attorney-in-fact and agent, or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement, has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ronnie L. Austin President, Chief Executive February 25, 2000
______________________________________ Officer and Director
Ronnie L. Austin
/s/ Angel J. Byrd Principal Financial and February 24, 2000
______________________________________ Accounting Officer
Angel J. Byrd
Director
______________________________________
George Berry
Director
______________________________________
R. Alan Bullock
/s/ Bobbie P. Cooper Director February 25, 2000
______________________________________
Bobbie P. Cooper
/s/ Danny Drummond Director February 25, 2000
______________________________________
Danny Drummond
/s/ J. Calvin Earwood Director February 24, 2000
______________________________________
J. Calvin Earwood
Director
______________________________________
W.A. Foster III
/s/ Tommie R. Graham, Jr. Director February 24, 2000
______________________________________
Tommie R. Graham, Jr.
</TABLE>
II-9
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
Articles of Incorporation of Community Trust Financial Services
3.1* Corporation
3.2 Bylaws of Community Trust Financial Services Corporation (filed as
Exhibit 3.2 to the company's Annual Report on Form 10-KSB for the year
ended December 31, 1997)
4.1 The rights of security holders are defined in the Articles of
Incorporation and Bylaws provided in Exhibits 3.1 and 3.2 respectively
4.2 Community Trust Financial Services Corporation Dividend Reinvestment
and Stock Purchase Plan
Form of Dividend Reinvestment and Stock Purchase Plan Authorization
4.3 Card
5 Opinion and Consent of Miller & Martin LLP
23.1 Consent of Miller & Martin LLP (contained in Exhibit 5)
23.2 Consent of Porter Keadle Moore, LLP
24 Powers of Attorney (included on page II-9)
99 Form of Letter to Shareholders
</TABLE>
- --------
* Incorporated in this registration statement by reference to the exhibit of
the same number in the company's Registration Statement on Form S-4, as
amended (File Number 33-37601).
<PAGE>
EXHIBIT 4.2
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
1. DEFINITIONS
For purposes of this Plan:
(a) "Account" shall mean the account held by the Plan Administrator for a
Participant to which his or her Plan Shares are credited.
(b) "Authorization Card" shall mean the form or other document prescribed
by the Plan Administrator as the required evidence of an election by an eligible
shareholder of the Corporation to participate in the Plan.
(c) "Corporation" shall mean Community Trust Financial Services
Corporation.
(d) "Dividend" shall mean a dividend payable by the Corporation in cash
with respect to its Stock. Dividends are paid on Stock when and as declared by
the Corporation's Board of Directors.
(e) "Fair Market Value" shall mean the value of a share of Stock as of the
applicable date determined by the Plan Administrator as follows:
(i) If the Stock is listed on an established organized stock exchange,
the Fair Market Value shall be the closing price per share for the Stock on
such stock exchange on the applicable date or, if no sale of the Stock
occurred on such stock exchange on that date, the closing price per share
for the Stock on such stock exchange on the preceding day on which a sale
of Stock occurred.
(ii) If the Stock is not listed on an established stock exchange but
is listed in the National Market System of the Association of Securities
Dealers Automated Quotation System ("NASDAQ"), the Fair Market Value shall
be the average of the highest and lowest trading prices per share for the
Stock on the applicable date or, if no trade of the Stock occurred in said
National Market System on that date, the average of the highest and lowest
trading prices per share for the Stock on the preceding day on which the
Stock was traded in said National Market System.
<PAGE>
(iii) If the Stock is not listed on an established stock exchange or
in the NASDAQ National Market System but is quoted by NASDAQ, the Fair
Market Value shall be the average of the closing dealer bid and asked
prices per share for the Stock quoted by NASDAQ on the applicable date or,
if no such bid and asked prices are quoted by NASDAQ on that date, the
average of the closing dealer bid and asked prices per share for the Stock
quoted by NASDAQ on the preceding day on which such prices were quoted by
NASDAQ.
(iv) If the Stock is not listed on an established stock exchange or in
the NASDAQ National Market System, or quoted by NASDAQ, the Fair Market
Value shall be the average of the lowest bid and highest asked prices per
share for the Stock quoted on the applicable date by one or more brokerage
firms which then make a market in the Stock or, in the absence of any such
bid and asked prices quoted on such date, the quoted per share price (or
average of the quoted per share prices, if several), whether bid or asked,
for the Stock reported on the applicable date.
(f) "Participant" shall mean a shareholder of the Corporation who is
participating in the Plan.
(g) "Plan" shall mean this Dividend Reinvestment and Stock Purchase Plan.
(h) "Plan Administrator" shall mean Registrar and Transfer Company, or such
other administrator as the Corporation may, in its sole discretion, from time to
time select.
(i) "Plan Shares" shall mean the shares of Stock, whole and fractional,
that are held by the Plan Administrator for the benefit of the Participants
under the Plan.
(j) "Stock" shall mean the common stock of the Corporation, having a par
value of $2.50 per share.
(k) "Share Transfer Form" shall mean the form by which a Participant may
effect the transfer of the ownership of all or part of the Participant's Plan
Shares to another person.
(l) "Stock Power Form" shall mean the form by which one may execute a stock
power.
2
<PAGE>
2. PURPOSE
To provide the shareholders of record of the Corporation with a convenient
method to invest Dividends with respect to its Stock and optional cash
contributions in additional shares of its Stock as hereinafter provided.
3. ADMINISTRATION
The Plan shall be administered by the Plan Administrator. All Plan Shares
will be registered in the name of the Plan Administrator, or its nominee, as
agent for the Participants and will be credited to the respective Accounts of
the Participants. The Corporation may adopt and amend rules and regulations
regarding administration of the Plan and has the right to replace the Plan
Administrator at any time.
4. ELIGIBILITY AND PARTICIPATION
All holders of record of Stock, who reside in Georgia, are and shall be,
eligible to participate in the Plan, except as otherwise determined from time to
time by the Board of Directors of the Corporation. A Participant may elect full
reinvestment or partial reinvestment of Dividends on shares registered in his or
her name. Dividends paid on all other shares registered in the Participant's
name will be paid in cash. A beneficial owner whose shares of Stock are
registered in a name other than his or her own must become a shareholder of
record by having all or a part of such shares transferred into his or her own
name or appropriate arrangements must be made with the nominee in order to
participate in the Plan. The right to participate in the Plan is not
transferable to another person apart from a transfer of a Participant's
underlying shares of the Stock.
5. ENROLLMENT
Any eligible shareholder of record of the Corporation may enroll in the
Plan at any time by completing and signing an Authorization Card and returning
it to the Plan Administrator. If a shareholder chooses partial reinvestment,
the shareholder must designate on the Authorization Card the number of whole
shares for which the Participant wishes to reinvest Dividends. Where such shares
are registered in more than one name (i.e., joint tenants, trustees, etc.) all
registered holders must sign. Authorization Cards may be obtained at any time by
written request to Registrar and Transfer Company, 10 Commerce Drive, Cranford,
New Jersey 07016, or by telephoning toll free at 1-800-368-5948. If an
Authorization Card requesting reinvestment of Dividends is received by the Plan
Administrator at least five business days before the record date established for
a particular Dividend, reinvestment will commence with that Dividend. If an
Authorization Card is not received from a shareholder at least five business
days before the record date established for that particular Dividend, the
reinvestment of Dividends will begin with the payment of Dividends following the
next Dividend record date if at that time the shareholder is still a record
holder of Stock.
3
<PAGE>
As long as the Plan Administrator is holding any Plan Shares in a
Participant's Account, a Participant may continue to participate in the Plan
with respect to such Plan Shares, even if the Participant holds of record no
shares of Stock in his or her name.
6. OPTIONAL CASH CONTRIBUTIONS
Any eligible shareholder of record who is enrolled in the Plan and who is
eligible to participate in accordance with the provisions of the Plan may also
elect to make optional cash contributions by enclosing a check or money order
with the executed Authorization Card (for new Participants) or by forwarding a
check or money order to the Plan Administrator with a payment form that will
accompany each statement of account. Checks and money orders shall be made
payable to Registrar and Transfer Company, Agent, and should include the
Participant's Account number and social security or federal taxpayer
identification number. If any Participants have the same social security or
federal taxpayer identification number, the maximum amount which all such
Participants may invest as optional cash contributions each month is limited to
the maximum amount that one Participant may so voluntarily invest each month. In
addition, any eligible shareholder of record who is enrolled in the Plan and who
is eligible to participate in accordance with the provisions of the Plan may
also elect to make optional cash contributions by having money automatically
withdrawn from a Participant's predesignated checking or savings account. To
invest additional funds by automatic deduction, Participants must first complete
and sign an Automatic Deduction Form and return the form to the Plan
Administrator. The amount of such optional cash contribution may not be less
than fifty dollars ($50.00) per payment or total more than two thousand dollars
($2,000.00) per month, subject to the right of the Corporation from time to time
to change such amounts or to eliminate optional cash contributions upon giving
Participants in the Plan not less than 30 days prior written notice of the
effective date of such change; provided, however, any such change shall not
occur more often than once every three months.
Optional cash contributions will be returned to a Participant upon written
request received by the Plan Administrator at any time prior to two business
days before the next purchase date.
Optional cash contributions do not constitute deposits or savings accounts
and are not insured by the Federal Deposit Insurance Corporation or any other
governmental agency or instrumentality. Under no circumstances will interest be
paid on optional cash contributions.
7. PURCHASES
On each date that Dividends are payable, the Corporation will pay to the
Plan Administrator the Dividends payable with respect to the Stock of the
Participants for which the Participants have designated to be reinvested in
Stock under the Plan, and Dividends with respect to their Plan Shares, less any
applicable withholding taxes. The Plan Administrator will use the amount of the
available Dividends so received from the Corporation, together with optional
cash contributions received from Participants, to purchase Stock for the
Accounts of the Participants. The Plan Administrator may: (i) purchase Stock
from the Corporation; (ii) purchase the Stock in
4
<PAGE>
the open market; (iii) arrange for the purchase of Stock in negotiated
transactions; or (iv) employ a combination of the foregoing, as directed from
time to time by the Corporation. Stock purchased from the Corporation will be
its authorized but unissued shares of Stock or Stock held in treasury.
In months in which a Dividend payment is made, purchases of Stock with
reinvested Dividends and purchases of Stock with optional cash contributions
will be made as of each Dividend payment date or as soon as practicable after
that date. In months in which a Dividend payment is not made, purchases of Stock
made with optional cash contributions will be made on the tenth day of every
month (or the next business day) or as soon as practicable after the purchase
date. Optional cash contributions must be received at least five business days
prior to a purchase date to be used to purchase shares on that purchase date.
Participants may obtain the return of any optional cash contributions at any
time prior to two business days before a purchase date. No interest will be paid
on any funds received under the Plan. Purchases of Stock in the open market or
in negotiated transactions may occur over one or more trading days.
The purchase price of Stock purchased from the Corporation under the Plan
shall be the Fair Market Value of the Stock as of the purchase date. The
purchase price of Stock purchased under the Plan in the open market and/or in
negotiated transactions will be the Participant's pro rata share of the actual
costs, including any brokerage commissions, incurred by the Plan Administrator
for such purchases. In the event of purchases of Stock from the Corporation and
in the open market and/or in negotiated transactions, the purchase price per
share of Stock to be charged to each Participant will be based upon the weighted
averages of the prices of all shares purchased. Each Participant's Account will
be credited with the number of whole and fractional shares, calculated to four
(4) decimal places, equal to the pro rata amount to be invested for the
Participant divided by the applicable purchase price. The applicable purchase
price per share will be the total amount of Dividends invested divided by the
total shares purchased.
8. DIVIDENDS ON PLAN SHARES
As the record holder of the Plan Shares held in Participants' Accounts
under the Plan, the Plan Administrator will receive Dividends, less any
applicable withholding taxes, payable with respect to all Plan Shares held on
each Dividend record date. The Plan Administrator will credit such Dividends to
Participants' Accounts on the basis of the Plan Shares held in each Account, and
will reinvest such Dividends in Stock under the Plan. No interest will be paid
on Dividends pending reinvestment.
9. COSTS
Participants will incur no brokerage commissions or service charges for
purchases of original issue shares of Stock and shares of Stock held in treasury
made under the Plan. However, the Corporation may elect to direct the Plan
Administrator to purchase shares of Stock in the open market. If shares are
purchased in the open market, there would be no charges to Participants other
than ordinary brokerage fees.
5
<PAGE>
10. REPORTS TO PARTICIPANTS
As soon as practicable after each purchase made under the Plan on behalf of
a Participant, the Participant will receive a statement showing the amount
invested, the purchase price, the number of shares purchased, and other
information regarding the status of the Participant's Account as of the date of
such statement. Each Participant is responsible for retaining these statements
in order to establish the cost basis of his shares purchased under the Plan for
tax purposes.
11. VOTING OF PLAN SHARES
For each meeting of the Corporation's shareholders, each Participant will
receive proxy materials which will enable him or her to vote the Plan Shares
credited to his or her Account. Participants will vote shares in their Account
just as they vote shares registered in their own names directly or by proxy.
12. WITHDRAWAL OF PLAN SHARES
A Participant may withdraw all or a portion of the whole Plan Shares in his
or her Account by notifying the Plan Administrator in writing to that effect and
specifying in the notice the number of shares to be withdrawn. If the request to
withdraw Plan Shares is not received at least five business days before the
record date for a cash Dividend payment, any amount paid on the Dividend payment
date will be reinvested pursuant to the Plan and the withdrawal request will be
processed as soon as practicable after the Dividend payment date. Certificates
for whole shares of Stock so withdrawn will be registered in the name of the
Participant and issued to the Participant as soon as practicable after the Plan
Administrator's receipt of the notice of withdrawal, but no later than thirty
(30) days after the Plan Administrator's receipt of such notice. Certificates
for fractional shares of Stock will not be issued under any circumstance.
Participants may request the Plan Administrator to sell, for a fee of ten
dollars ($10.00) per sale plus proportional brokerage fees and commissions, if
any, the Plan Shares that are being withdrawn from their Accounts. Participants
shall make such a request to sell their Plan Shares that are being withdrawn by
specifying in the notice of withdrawal the number of shares to be sold. The Plan
Administrator will execute a sale order for such shares as soon as practicable
after receipt of the notice, but no later than thirty (30) days after receipt of
the notice, and will deliver to the Participant a check for the proceeds of the
sale, less any brokerage commissions, applicable withholding taxes and transfer
taxes incurred. A request for Plan Shares to be sold must be signed by each
person in whose name the Account appears.
Any Plan Shares remaining in a Participant's Account after withdrawal of a
portion of the Plan Shares will continue to be held for the Participant by the
Plan Administrator, with Dividends on such Plan Shares continuing to be
reinvested under the Plan.
6
<PAGE>
13. TERMINATION OF PARTICIPATION
Participation in the Plan may be terminated by a Participant at any time by
giving written notice thereof to the Plan Administrator. If the request to
terminate participation in the Plan is not received at least five business days
before the record date for a cash Dividend payment, any amount paid on the
Dividend payment date will be reinvested pursuant to the Plan and the
termination request will be processed as soon as practicable after the Dividend
payment date. The Corporation in its sole discretion at any time may send
written notice to a Participant, with a copy sent to the Plan Administrator, by
which the Participant's participation in the Plan is terminated; however, if the
notice is given between a Dividend record date and payment date, such
termination will not be effective insofar as that Dividend is concerned.
As soon as practicable after, but no later than thirty (30) days after
either the date on which any such notice of Plan termination is received by the
Plan Administrator from the Participant or the date of mailing of a notice of
Plan termination from the Corporation (the "Termination Date"), the Plan
Administrator will deliver to the Participant: (a) one or more certificates for
all whole Plan Shares held in the Participant's Account, (b) a check
representing any Dividends and optional cash contributions held by the Plan
Administrator for the Participant that have not been invested, and (c) a check
in lieu of the issuance of any fractional share of Stock credited to the
Participant's Account, equal to (i) the proceeds from the sale of such
fractional share on the open market, less any brokerage commissions, and
applicable withholding taxes and transfer taxes incurred, or (ii) the fractional
share multiplied by the Fair Market Value of the Stock as of the Termination
Date.
In the alternative, a Participant may request in writing delivered to the
Plan Administrator, that all of the Plan Shares in the Participant's Account be
sold. A request for Plan Shares to be sold must be signed by all persons in
whose names the Account appears. If such a sale is requested, for a fee of ten
dollars ($10.00) per sale plus proportional brokerage fees and commissions, if
any, the Plan Administrator will execute a sale order providing for the sale of
such Plan Shares as soon as practicable after its receipt of the request, but no
later than thirty (30) days after its receipt of such request, and will deliver
to the Participant a check for the proceeds of the sale, less any brokerage
commissions, applicable withholding taxes and transfer taxes incurred.
14. STOCK CERTIFICATES
Unless a request is made in writing to the Plan Administrator, Participants
will not be issued certificates for shares held in custody by the Plan
Administrator. Certificates will, however, be issued to Participants upon
withdrawal of Plan Shares or upon termination of participation in the Plan where
the Participant does not request that his or her Plan Shares be sold and will be
registered in the name or names in which the Participant's Account is
maintained. If a Participant requests a certificate to be registered in a name
other than that shown on the Account, such request must be signed by all persons
in whose names the Account is registered, with signatures Medallion guaranteed,
and be accompanied by such other documentation as the
7
<PAGE>
Plan Administrator may require. Certificates representing fractional share
interests will not be issued under any circumstances.
15. SHARE SAFEKEEPING
At the time of enrollment in the Plan, or at any later time, Participants
may use the Plan's share safekeeping service to deposit any Stock certificates
in their possession with the Plan Administrator. Shares deposited will be
transferred into the name of the Plan Administrator or its nominee and credited
to the Participant's Account under the Plan. Thereafter, such shares will be
treated in the same manner as shares purchased through the Plan. By using the
Plan's share safekeeping service, Participants no longer bear the risk
associated with loss, theft or destruction of share certificates.
Participants who wish to deposit their Stock certificates with the Plan
Administrator must mail their requests and their certificates to the Plan
Administrator. The certificates should not be endorsed. It is recommended that
Participants use registered, insured mail when mailing certificates to the Plan
Administrator.
16. ASSIGNMENT, PLEDGE AND TRANSFER
Except as provided herein, Participants may not pledge or assign Plan
Shares credited to their Accounts, or pledge, assign or transfer any of their
rights or interests under the Plan, and any such purported pledge, assignment or
transfer shall be void and of no force or effect.
If a Participant wishes to transfer the ownership of all or part of the
Participant's Plan Shares to another person, whether by gift, private sale, or
otherwise, the Participant may effect such transfer by mailing a properly
completed Share Transfer Form or an executed Stock Power Form to the Plan
Administrator. Transfers must be made in whole share amounts. Requests for
transfer are subject to the same requirements as for transfer of Stock
certificates generally, including the requirement of a Medallion stamp guarantee
on the Stock Power Form and the Share Transfer Form. Share Transfer Forms and
Stock Power Forms are available from the Plan Administrator.
Once Plan Shares are transferred, the transferee must obtain an
Authorization Card from the Plan Administrator to enroll the shares in the Plan.
Transferred shares will not be automatically enrolled in the Plan. The
transferee may send the Authorization Card to the Plan Administrator at the same
time as the transferor submits the Share Transfer Form or the Stock Power Form
to effectuate the transfer.
17. STOCK DIVIDENDS, SPLITS AND OFFERINGS
Any shares of capital stock resulting from a stock dividend or stock split
by the Corporation with respect to the Plan Shares of a Participant shall be
added to the Participant's Account with the Plan Administrator as additional
Plan Shares. Stock dividends or shares
8
<PAGE>
resulting from a stock split that are distributable with respect to shares of
Stock held of record in a Participant's name will be mailed directly to the
Participant in the same manner as are such distributions to the Corporation's
shareholders who are not participating in the Plan.
In the event of any change in the Stock held by the Plan Administrator
under the Plan as a result of a stock split, reverse stock split, stock dividend
or similar transaction, the number of Plan Shares shall be appropriately
adjusted. Also, the total shares available for issuance pursuant to the Plan
will be adjusted to reflect the stock split, stock dividend or similar
transaction.
In the event of any "rights" or similar offering by the Corporation of any
of its capital stock, the Plan Shares credited to a Participant's Account shall
be treated as shares of Stock held of record by the Participant in his or her
name for purposes of such offering.
18. AMENDMENT, SUSPENSION OR TERMINATION OF PLAN
The Corporation may amend, supplement, suspend, modify or terminate the
Plan at any time without the approval of the Participants. Notice of any
suspension, termination or material amendment of the Plan shall be sent to all
Participants, who shall in all events have the right to withdraw from the Plan.
Any such suspension, termination or material amendment of the Plan shall not
become effective until thirty (30) days after notice is mailed to the
Participants.
19. INTERPRETATION OF PLAN
The Plan, the Authorization Card, and the Participants' Accounts shall be
governed by and construed in accordance with the laws of Georgia, and applicable
state and federal securities laws. Any question of interpretation arising under
the Plan shall be determined by the Corporation pursuant to applicable state and
federal law and the rules and regulations of all regulatory authorities, and
such determination shall be final and binding upon all Participants and the Plan
Administrator. The Corporation or, with its consent, the Plan Administrator, may
adopt rules and regulations from time to time to facilitate the administration
of the Plan. Where used in this Plan, the plural shall include the singular and,
unless the context otherwise clearly requires, the singular shall include the
plural. The headings of the various paragraphs contained in this Plan are for
convenience only and shall not affect the interpretation or meaning of the
provisions of the Plan.
20. NO LIABILITY OF CORPORATION OR PLAN ADMINISTRATOR
Neither the Corporation nor the Plan Administrator, nor their respective
directors, officers or employees, shall be liable for any act taken in good
faith or for any good faith omission to act, including without limitation, any
claim of liability (a) arising out of failure to terminate a Participant's
Account upon such Participant's death prior to receipt by the Plan Administrator
of notice in writing of such death, and (b) with respect to the prices at or
terms upon which shares of Stock are purchased or sold, the times when or the
manner in which such purchases or sales are made, the decision whether to
purchase shares of Stock on the open market or from the
9
<PAGE>
Corporation, fluctuations in the Fair Market Value of the Stock, and (c) with
respect to any matters relating to the operation or management of the Plan. The
Corporation nor the Plan Administrator shall have any duties, responsibilities
or liabilities except such as are expressly set forth hereunder.
Each Participant bears the risk of loss and the benefits of gain from
market price changes with respect to all shares. Neither the Corporation nor the
Plan Administrator can guarantee that shares purchased under the Plan will, at
any particular time, be worth more or less than their purchase price. Each
Participant should recognize that neither the Corporation nor the Plan
Administrator can provide any assurance of a profit or protection against loss
on any shares purchased under the Plan.
21. NOTICES, CONTACT INFORMATION FOR THE PLAN ADMINISTRATOR AND THE CORPORATION
For any notices, questions, or other communications relating to the Plan,
the Participant should include the Participant's Account number and address
these items to the Plan Administrator.
To contact the Plan Administrator or the Corporation, write or telephone as
follows:
The Plan Administrator:
Community Trust Financial Services Corporation Dividend Reinvestment and
Stock Purchase Plan c/o Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
1-800-368-5948 (between 9:00 a.m. and 5:00 p.m., eastern time)
The Corporation:
Community Trust Financial Services Corporation
Attn: Angel J. Byrd
3844 Atlanta Highway
Hiram, Georgia, 30141
(770) 445-1014 (between 9:00 a.m. and 4:00 p.m., eastern time)
The foregoing Dividend Reinvestment and Stock Purchase Plan of and for
Community Trust Financial Services Corporation approved and adopted by the Board
of Directors of said Corporation on February 15, 2000, to become and be
effective on and as of that date.
10
<PAGE>
EXHIBIT 4.3
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
Dividend Reinvestment and Stock Purchase Plan
AUTHORIZATION CARD
This will confirm that I (we) have received the Prospectus describing the
Community Trust Financial Services Corporation Dividend Reinvestment and Stock
Purchase Plan (the "Plan") and agree to the terms and conditions of the Plan as
set forth in the Prospectus.
I (We) hereby appoint Registrar and Transfer Company, or such other
corporation as may succeed it pursuant to the Plan (or any modification
thereof), as my (our) agent (the "Plan Administrator"), to act as such upon and
subject to the terms and conditions of the Plan as set forth in the Prospectus.
I (We) hereby authorize Community Trust Financial Services Corporation (the
"Company") to pay the Plan Administrator for my (our) account under the Plan,
cash dividends payable in respect of common stock of the Company (the "Common
Stock") registered in my (our) name(s), for which I (We) designate to be
reinvested, as indicated below.
I (We) hereby authorize the Plan Administrator, as provided in the Plan, to
apply cash dividends, as indicated below, on shares held by the Plan
Administrator for me (us) under the Plan, as well as any optional cash
contributions made by me (us) as provided in the Plan, to the purchase of
additional Common Stock for my (our) account under the Plan. I (We) may
terminate this authorization and appointment at any time by so notifying the
Plan Administrator in writing of my (our) withdrawal from the Plan.
Please enroll me (us) in the Plan as indicated below:
Check one block only:
[ ] Full Dividend Reinvestment:
I (we) wish to apply dividends on all shares of the Common Stock
registered in my (our) name and any optional cash contributions I (we)
may make to the purchase of additional shares.
[ ] Partial Dividend Reinvestment:
I (we) wish to apply the dividends on ________ whole shares registered
in my (our) name and any optional cash contributions I (we) may make
to the purchase of additional shares.
--------------------------------------------
Shareholder Name (Please Print)
Date:
----------------------- --------------------------------------------
Shareholder Signature
(If Joint Account):
Shareholder Name (Please Print)
Date:
----------------------- --------------------------------------------
Shareholder Signature
Shareholder: Please sign exactly as name appears on stock certificate. Mail to:
Community Trust Financial Services Corporation
Dividend Reinvestment and Stock Purchase Plan
c/o Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
(If you are submitting an optional cash contribution with this Authorization
Card, please note that there is a minimum and maximum purchase amount. Please
make your check or money order payable to Registrar and Transfer Company, Agent
and enter your plan account number and your social security number or taxpayer
identification number thereon.)
THIS IS NOT A PROXY
<PAGE>
EXHIBIT 5
[LETTERHEAD OF MILLER & MARTIN, LLP APPEARS HERE]
March 1, 2000
Community Trust Financial Services Corporation
3844 Atlanta Highway
P.O. Box 1700
Hiram, Georgia 30141
Re: Community Trust Financial Services Corporation Dividend
Reinvestment and Stock Purchase Plan
Ladies and Gentlemen:
This opinion is given in connection with the filing by Community Trust
Financial Services Corporation, a corporation organized under the laws of the
State of Georgia (the "Company"), with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, of a Registration Statement on
Form S-3 (the "Registration Statement") with respect to the registration of
400,000 shares of $2.50 par value Common Stock of the Company ("Company Common
Stock") which may be issued under the Community Trust Financial Services
Corporation Dividend Reinvestment and Stock Purchase Plan (the "Plan").
In rendering this opinion, we have examined such corporate records and
documents as we have deemed relevant and necessary as the basis for the opinion
set forth herein, including the Articles of Incorporation and Bylaws of the
Company and certain resolutions of the Board of Directors of the Company
relating to the Plan.
Based on the foregoing, it is our opinion that the shares of Company Common
Stock to be issued in accordance with the terms of the Plan, upon receipt in
full by the Company of the consideration prescribed for each share pursuant to
the Plan, will be duly authorized, validly issued, fully paid and nonassessable
under the Georgia Business Corporation Code in effect on this date.
<PAGE>
Community Trust Financial Services Corporation
March 1, 2000
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Sincerely,
MILLER & MARTIN LLP
/s/ T. Kennerly Carroll, Jr.
----------------------------------------------
T. Kennerly Carroll, Jr.
2
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 5, 1999, accompanying the consolidated
financial statements incorporated by reference in the Annual Report of Community
Trust Financial Services Corporation on Form 10-KSB for the year ended December
31, 1998. We hereby consent to the incorporation by reference of said report in
the Registration Statement of Community Trust Financial Services Corporation on
Form S-3.
/s/ PORTER KEADLE MOORE, LLP
Atlanta, Georgia
March 1, 2000
<PAGE>
EXHIBIT 99
COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
3844 Atlanta Highway
P.O. Box 1700
Hiram, Georgia 30141
Telephone: (770) 445-1014
Facsimile: (770) 443-3088
-------------------------
Dear Shareholder:
Community Trust Financial Services Corporation (the "Company") is pleased
to provide its Dividend Reinvestment and Stock Purchase Plan (the "Plan") to
you. Enclosed is a Prospectus describing the details of the Plan in a question
and answer format.
Your participation in the Plan is completely voluntary. If you would like
to participate in the Plan, return the enclosed Authorization Card. If you
decide not to participate in the Plan, no action is necessary, and you will
continue to receive your dividends.
If you elect to participate in the Plan, cash dividends paid on shares
registered in your name for which you designate to be reinvested will
automatically reinvest to purchase additional shares of the Company's common
stock. A participant in the Plan may also obtain additional shares of common
stock by making optional cash contributions. Participants will receive
statements showing the transactions to their accounts.
I encourage you to review the accompanying Prospectus which gives the
details of the Plan and should answer most questions. If you have any
additional questions, please call Registrar and Transfer Company, the Plan
administrator, at 1-800-368-5948.
Very truly yours,
______________________________
Ronnie L. Austin
President and Chief Executive Officer
