U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended: June 30, 1999
-------------
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to
---------------- ----------------
Commission file number: 0-25846
CCF HOLDING COMPANY
----------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Georgia 58-2173616
- ------------------------------ -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification No.)
Organization)
101 North Main Street
Jonesboro, Georgia 30236
-------------------------------
(Address of Principal Executive Offices)
(770) 478-8881
-------------------------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Number of shares outstanding of each of the issuer's classes of common equity:
At July 15, 1999 988,650 shares of the registrant's common stock were
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
<PAGE>
FORM 10-QSB
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements:
Consolidated Balance Sheets as of
June 30, 1999 and December 31, 1998........................1
Consolidated Statements of Income
for the three months and six months ended
June 30, 1999 and June 30, 1998 ...........................2
Consolidated Statements of Comprehensive Income
for the three months and six months ended
June 30, 1999 and June 30, 1998 ..........................3
Consolidated Statements of Cash Flows
for the six months ended
June 30, 1999 and June 30, 1998 ...........................4
Notes to Consolidated Financial Statements ................5
Item 2. Management's Discussion and Analysis or Plan of Operation ...7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .........................................9
Item 2. Changes in Securities......................................9
Item 3. Defaults upon Senior Securities ...........................9
Item 4. Submission of Matters to a Vote
of Security Holders .....................................9
Item 5. Other Information .........................................9
Item 6. Exhibits and Reports on Form 8-K ..........................9
Signatures ..........................................................10
<PAGE>
PART I. FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Balance Sheets
<TABLE>
<CAPTION>
Assets
------
June 30, December 31,
1999 1998
---- ----
(Unaudited) (Audited)
<S> <C> <C>
Cash and due from banks $ 7,465,617 7,275,835
Federal funds sold 10,130,000 2,320,000
Interest-bearing deposits in other financial institutions 451,600 756,687
----------- --------------
Cash and cash equivalents 18,047,217 10,352,522
Investment securities available for sale 33,356,400 29,457,412
Loans, net 132,113,843 121,827,463
Premises and equipment, net 5,448,627 5,422,602
Federal Home Loan Bank stock, at cost 509,800 1,013,200
Accrued interest and dividends receivable 1,195,118 1,114,880
Other assets 1,265,637 671,863
------------ -----------
Total assets $ 191,936,642 169,859,942
============ ===========
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $ 11,974,547 8,501,973
Interest- bearing deposits 63,364,220 44,555,271
Savings accounts 8,079,685 9,089,074
Time deposits less than $100,000 73,889,280 74,388,954
Time deposits greater than $100,000 19,163,318 18,441,449
------------ ------------
Total deposits 176,471,050 154,976,721
Securities sold under agreements to repurchase 1,437,557 1,117,264
Line of credit 750,000 -
Other liabilities 1,467,527 2,139,844
----------- -----------
Total liabilities 180,126,134 158,233,829
----------- -----------
Stockholders' Equity:
Preferred stock, no par value; 1,000,000 shares
authorized; none issued and outstanding - -
Common stock, $.10 par value; 4,000,000 shares
authorized; 988,650 shares issued in 1999 and
990,647 shares issued 1998; outstanding
979,365 in 1999 and 984,662 in 1998 98,869 90,059
Additional paid-in-capital 9,058,640 7,783,384
Retained earnings 3,557,705 4,528,267
Unearned ESOP shares (432,000) (468,000)
Unearned compensation (199,254) (286,339)
Treasury stock, at cost (85,826) (59,777)
Accumulated other comprehensive income (187,626) 38,519
------------ ------------
Total stockholders' equity 11,810,508 11,626,113
------------ ------------
Total liabilities and stockholders' equity $ 191,936,642 169,859,942
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ---------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest and dividend income:
Interest and fees on loans $ 3,012,708 2,581,648 5,980,328 4,958,278
Interest on federal funds sold 116,924 -- 199,380 1
Interest bearing deposits in other financial institutions 20,147 6,133 53,861 28,711
Interest and dividends on taxable investment securities 429,679 386,613 797,347 641,926
----------- ----------- ----------- -----------
Total interest and dividend income 3,579,458 2,974,394 7,030,916 5,628,916
Interest expense:
Deposit accounts 1,833,802 1,652,609 3,600,502 2,942,414
Other borrowings 21,660 27,781 32,437 188,185
----------- ----------- ----------- -----------
Total interest expense 1,855,462 1,680,390 3,632,939 3,130,599
----------- ----------- ----------- -----------
Net interest income 1,723,996 1,294,004 3,397,977 2,498,317
Provision for loan losses 100,000 60,000 220,700 120,000
----------- ----------- ----------- -----------
Net interest income after provision
for loan losses 1,623,996 1,234,004 3,177,277 2,378,317
----------- ----------- ----------- -----------
Other income:
Service charges on deposit accounts 124,451 86,884 244,643 185,449
Gain(loss) on sale of loans (1,983) -- 51,878 --
Gain on sale of fixed assets -- -- 58,359 --
Gain on sale of investments and mortgage-backed
securities 68,201 30,028 68,201 135,417
Other 31,227 23,767 46,739 62,628
----------- ----------- ----------- -----------
Total other income 221,896 140,679 469,820 383,494
----------- ----------- ----------- -----------
Other expenses:
Salaries and employee benefits 840,258 750,619 1,675,301 1,486,996
Occupancy 277,808 177,181 549,185 442,611
Other 375,312 386,497 709,913 684,874
----------- ----------- ----------- -----------
Total other expenses 1,493,378 1,314,297 2,934,399 2,614,481
----------- ----------- ----------- -----------
Income before income taxes 352,514 60,386 712,698 147,330
Income tax expense 123,465 21,561 250,965 51,990
----------- ----------- ----------- -----------
Net income $ 229,049 38,825 461,733 95,340
----------- ----------- ----------- -----------
Basic income per share $ .27 .05 .54 .11
----------- ----------- ----------- -----------
Diluted income per share $ .26 .04 .52 .11
----------- ----------- ----------- -----------
Weighted average shares outstanding - basic 856,516 839,329 856,516 839,543
----------- ----------- ----------- -----------
Weighted average shares outstanding - diluted 892,989 891,349 897,617 889,850
----------- ----------- ----------- -----------
Dividends declared per common share .08 .145 .16 .29
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
CCF HOLDING COMPANY
Consolidated Statement of Comprehensive Income
For the Six Month Ended June 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Earnings $ 229,049 38,825 461,733 95,340
--------- --------- --------- ---------
Other comprehensive income, net of tax:
Unrealized gains on investment
securities available for sale:
Holding gains (losses) arising during
the period, net of taxes of $(60,902),
$20,441, $(112,481) and $107,946 (99,536) 33,407 (183,833) 176,422
Reclassification adjustment for
gain included in earnings, net
of taxes $25,889,$11,399, $25,889,
and $51,404 (42,312) (18,629) (42,312) (84,013)
--------- --------- --------- ---------
Other comprehensive income (loss) (141,848) 14,778 (226,145) 92,409
--------- --------- --------- ---------
Comprehensive income $ 87,201 53,603 235,588 187,749
========= ========= ========= =========
</TABLE>
3
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 461,733 95,340
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Provision for loan losses 220,700 120,000
Depreciation, amortization, and accretion, net 224,501 208,925
Amortization of management stock bonus plan expense 40,386 68,549
ESOP compensation expense 69,250 82,657
Net gain on sale of investment securities and mortgage-backed securities (68,201) (135,417)
Net gain on sale of loans (51,878) --
Net gain on sale of fixed assets (58,359) --
Increase in accrued interest and dividends receivable (80,238) (175,715)
Increase in other assets (593,775) (276,697)
Decrease in other liabilities (749,981) (19,109)
------------ ------------
Net cash used in operating activities (585,862) (31,467)
------------ ------------
Cash flows from investing activities:
Proceeds from maturing investment securities-available for sale 17,753,400 --
Proceeds from sales of investment securities-available for sale 132,656 1,402,995
Purchases of investment securities-available for sale (21,457,551) (14,727,695)
Principal repayments on mortgage-backed securities-available for sale 40,676 220,899
Proceeds from sales of mortgage-backed securities-available for sale -- 1,167,169
Loan originations, net (15,959,697) (17,282,003)
Proceeds from sale of loans 5,504,495 --
Premises and equipment retired -- 296,695
Proceeds from sale of premises and equipment 132,722 --
Purchases of premises and equipment (309,083) (966,375)
------------ ------------
Net cash used in investing activities (14,162,382) (29,888,315)
------------ ------------
Cash flows from financing activities:
Net increase in savings and demand deposit accounts 21,272,134 16,712,943
Net increase in certificates of deposits 222,195 33,994,538
Net increase in securities sold under agreements to repurchase 320,293 1,004,546
Decrease in Federal Home Loan Bank advances -- (18,510,000)
Advances on line of credit 750,000 --
Net increase in advance payments by
borrowers for property taxes and insurance 97,490 205,269
Dividends paid (210,140) (133,709)
Cash paid in lieu of fractional shares (835) (651)
Common stock repurchased (8,198) (51,190)
------------ ------------
Net cash provided by financing activities 22,442,939 33,221,746
------------ ------------
Increase in cash and cash equivalents 7,694,695 3,301,964
Cash and cash equivalents at beginning of period 10,352,522 8,741,316
------------ ------------
Cash and cash equivalents at end of period $ 18,047,217 12,043,280
============ ============
Supplemental disclosure of cash flow information:
Interest paid $ 3,142,878 1,680,390
============ ============
Income taxes paid $ 662,000 15,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
---------------------
The consolidated financial statements for the six month periods ended June 30,
1999 and June 30, 1998 are unaudited and reflect all adjustments (consisting
only of normal recurring accruals) which are, in the opinion of management,
necessary for a fair presentation of the financial position, operating results,
and cash flows for the interim periods. Accordingly, they do not include all
information and disclosures required by generally accepted accounting principles
for complete financial statements.
The results of operations for the six month period ended June 30, 1999 are not
necessarily indicative of the results for the entire year ending December 31,
1999.
2. Accounting Policies
-------------------
Reference is made to the accounting policies of the Company described in the
notes to the consolidated financial statements contained in the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1998 filed with the
Securities and Exchange Commission.
3. Reclassifications
-----------------
Certain amounts in the prior period financial statements have been reclassified
to conform to the presentation used in the current period consolidated financial
statements.
4. Cash Dividend
-------------
On June 18, 1999, the Company declared a cash dividend of $.08 per share to
stockholders of record on July 1, 1999. These dividends were payable on July 15,
1999. For periods ending during 1998, per share cash dividends have been
adjusted for stock dividends.
5. Stock Dividend
--------------
On March 16, 1999, the Company declared a 10% stock dividend per share to
stockholders of record on April 1, 1999. This dividend was payable on April 15,
1999. Cash was paid in lieu of fractional shares at the rate of $14.25 per
share. As a result of the stock dividend, the Company transferred $1,280,827
from retained earnings to additional paid in capital.
6. Earnings per share
------------------
Basic EPS excludes dilution and is computed by dividing net income by weighted
average shares outstanding which includes Management Stock Bonus Plan shares
which have been awarded whether vested or not and exclude unallocated shares
under the Company's employee stock ownership plan until they are committed to be
released for allocation. Diluted EPS is computed by dividing net income by
weighted average shares outstanding plus potential common stock resulting from
dilutive stock options.
All average share and per share data in the accompanying consolidated financial
statements and all share and per share data have been restated to reflect the
10% stock dividend declared in December 1997, which was effected on January 15,
1998 and the 10% stock dividend declared on March 16, 1999, which was effected
on April 15, 1999.
The following is a reconciliation of the amounts used in the computation of both
"basic earnings per share" and "diluted earnings per share".
5
<PAGE>
6. Earnings per share (continued)
------------------------------
<TABLE>
<CAPTION>
For the three months ended June 30, 1999
Per share
Net Earnings Common Shares Amount
------------ ------------- ------
<S> <C> <C> <C>
Basic earnings per share $229,049 856,516 $0.27
Effect of dilutive common stock issuance's:
Stock Options 36,473
-----------------------------------------------------------
Diluted Earnings per share $229,049 892,989 $0.26
===========================================================
</TABLE>
<TABLE>
<CAPTION>
For the three months ended June 30, 1998
Per share
Net Earnings Common Shares Amount
------------ ------------- ------
<S> <C> <C> <C>
Basic earnings per share $38,825 839,329 $0.05
Effect of dilutive common stock issuance's:
Stock Options 52,020
-------------------------------------------------------------
Diluted Earnings per share $38,825 891,349 $0.04
=============================================================
</TABLE>
<TABLE>
<CAPTION>
For the six months ended June 30, 1999
Per share
Net Earnings Common Shares Amount
------------ ------------- ------
<S> <C> <C> <C>
Basic earnings per share $461,733 856,516 $0.54
Effect of dilutive common stock issuance's:
Stock Options 41,101
-----------------------------------------------------------
Diluted Earnings per share $461,733 897,617 $0.51
===========================================================
</TABLE>
<TABLE>
<CAPTION>
For the six months ended June 30, 1998
Per share
Net Earnings Common Shares Amount
------------ ------------- ------
<S> <C> <C> <C>
Basic earnings per share $95,340 839,543 $0.11
Effect of dilutive common stock issuance's:
Stock Options 50,307
------------------------------------------------------------
Diluted Earnings per share $95,340 889,850 $0.11
============================================================
</TABLE>
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
CCF Holding Company (the "Company") may from time to time make written or oral
"forward-looking statements", including statements contained in the Company's
filings with the Securities and Exchange Commission (including this report on
Form 10QSB), in its reports to stockholders and in other communications by the
Company, which are made in good faith by the Company pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward looking statements involve risks and uncertainties, such as
statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in forward
looking statements: the strength of the United States economy in general and the
strength of the local economies in which the Company conducts operations; the
effects of, and changes in, trade, monetary and fiscal policies and laws,
including interest rate policies of the Board of Governors of the Federal
Reserve System, inflation, interest rate and market and monetary fluctuations;
the timely development of and acceptance of new products and services of the
Company and the perceived overall value of these products and services by users,
including the features, pricing and quality compared to competitors' products
and services; the willingness of users to substitute competitors' products and
services for the Company's products and services; the success of the Company in
gaining regulatory approval of its products and services, when required; the
impact of changes in financial services' laws and regulations (including laws
concerning taxes, banking, securities and insurance); technological changes,
acquisitions; changes in consumers spending and saving habits; and the success
of the Company at managing the risks involved in the foregoing.
The Company cautions that these important factors are not exclusive. The Company
does not undertake to update any forward looking statement, whether written or
oral, that may be made from time to time by or on behalf of the Company.
Comparison of Financial Condition at June 30, 1999 and December 31, 1998
Assets - The Company's assets increased by 13%, or $22 million, between December
31, 1998 and June 30, 1999. Loans receivable increased 8.44% to $132.1 million
at June 30, 1999, up $10.3 million from $121.8 million at December 31, 1998. The
Company's loan growth includes approximately $6.4 million in commercial real
estate loans $1.8 million in construction loans and $ 8.9 million in consumer
loans, primarily indirect consumer loans. The growth has been partially offset
by the sale, in January 1999, of $5.4 million in fixed rate mortgage (1 to 4
family dwellings) loans for a net decrease in the mortgage (1 to 4 family
dwellings) loan portfolio of $6.7 million.
Federal funds sold increased $7.8 million from $2.3 million at December 31, 1998
to $10.1 million at June 30, 1999. Other assets increased $594,000 from December
31, 1998 to June 30, 1999. This increase was largely due to an increase of
$280,000 in the dealer reserve account, associated with the indirect lending
function and an increase of $200,000 in prepaid expenses for annual maintenance
contracts and annual insurance premiums.
Liabilities - Total deposits during the six months ended June 30, 1999 grew to
$176.5 million, an increase of $21.5 million from $155.0 million at December 31,
1998. Deposit growth was primarily in transaction accounts with a $3.5 million
increase in non-interest bearing accounts and a $18.8 million increase in
interest bearing accounts. The Bank continues to stress transaction account
growth in its marketing strategy.
Other liabilities decreased $672,000 during the period. This decrease is
primarily due to payment of $342,000 for income taxes due for the year ending
1998. Additionally, the overnight balance in the official check account
decreased by $394,000.
The Company opened and drew $750,000 on a line of credit of $1,000,000. These
funds were downstreamed to the Bank as a capital infusion.
Stockholders' Equity - Stockholders' equity increased $184,000 or 1.6%, from
December 31, 1998 to June 30, 1999. This increase was the result of the
Company's net income, Employee stock ownership plan allocations, management
stock bonus plan expense, partially offset by the change in unrealized losses on
securities available for sale. The Company also declared two quarterly dividends
totaling $157,000 which partially offset the increase in stockholders equity.
The ratio of stockholders' equity as a percentage of total assets decreased to
6.15% at June 30, 1999 from 6.84% at December 31, 1998. Book value per share
increased from $11.73 at December 31, 1998 to $11.95 at June 30, 1999.
7
<PAGE>
Liquidity - The Bank's liquidity was 19.8% on June 30, 1999. In addition to the
customary means of meeting liquidity needs, the Bank had $10.1 million in
Federal Funds sold available and unused lines of credit totaling $18.5 million.
Comparison of Operating Results for the Three Months and Six Months Ended June
30, 1999 and 1998
Net Income - The Company's net income of $229,049 for the three month period
ending June 30, 1999 increased by $190,224, from $38,825 over the same three
month period ending June 30, 1998. Income of $461,733 for the six-month period
ended June 30, 1999 increased by $366,393 or 384%, from a net income of $95,340
for the six month period ending June 30, 1998. The change in net income was
primarily due to an increase of net interest income, generated through loan
growth and interest on securities.
Net Interest Income - Net interest income for the three-month period ended June
30, 1999 increased $429,992 or 33.23% from $1,294,004 in 1998 to $1,723,996 for
the same period in 1999. For the six month periods ending June 30, 1999 and June
30, 1998 net interest income increased $899,660 or 36.01%. The increase in the
average balance of loans receivable during the six-month period ended June 30,
1999, of $20 million resulted in a $1.02 million or 20.6% increase in interest
income from loans to $5.98 million from $4.96 million, respectively. Investment
securities and federal funds sold interest income increased $354,800 from June
30, 1998 to June 30, 1999, to $997,000 from $642,000. Interest expense increased
$502,340 to $3.63 million for the six-month period ended June 30, 1999 from
$3.13 million for the same period in 1998. This increase is the result of the
increased balance in interest bearing deposits during the six months ended June
30, 1999.
Provision for Loan Losses - The Bank's provision for loan losses increased for
the six month period ended June 30, 1999 compared to the same period in 1998,
increasing to $220,700 from $120,000. At June 30, 1999 the allowance for
non-mortage loan losses to the non-mortage loan portfolio was 1.00%. Management
periodically evaluates the adequacy of the allowance for loan losses, including
an evaluation of past loan loss experience, current economic conditions, volume,
growth and collateral of the loan portfolio. Management also reviews classified
assets, including those loans and assets listed as non-performing. Currently,
management believes that its allowance for loan losses is adequate. However,
there can be no assurances that further additions will not be needed. Management
will continue to monitor and adjust the allowance as necessary in future periods
based on growth in the loan portfolio, loss experience which has been minimal,
and the continued expected changing mix of loans in the loan portfolio. Loans
internally classified as Substandard for the period ending June 30, 1999 totaled
$548,958 and for the period ending December 31, 1998 substandard loans totaled
$786,762. Loans classified as doubtful totaled $86,822 for the period ending
June 30, 1999, there were no loans classified as doubtful at December 31, 1998.
Non accrual loans decreased from $111,536 at December 31, 1998 to $38,292 at
June 30, 1999. Charge offs during the period ending June 30, 1999 totaled
$21,279.
Other Income - Service charges on deposit accounts increased 43.2% from $86,884
at June 30, 1998 to $124,451 for the period ending June 30, 1999. During the six
month period ending June 30, 1999, service charge income on deposit accounts had
increased to $244,643. This represented an increase of 31.92% over the same
period ending June 30, 1998. This increase is attributed to the rising number of
transaction accounts. Other income includes a gain on the sale of mortgage loans
of $53,861 during the first quarter of 1999. Fixed rate Fannie Mae qualified
mortgage loans were sold to Fannie Mae with servicing retained. Additionally, a
gain of $58,359 was booked during the first quarter related to the sale of a
building in Riverdale Georgia. This office was closed in 1996.
Other Expenses - Other expenses for the three month period ended June 30, 1999
increased 13.63% from $1.3 million for the three-month period ended June 30,
1998 to $1.49 million for the same period in 1999, an increase of $179,000. For
the six month period ending June 30, 1999, other expenses increased by 12.24% or
$319,918. Salaries and employee benefits increased to $1.68 million for the six
month period ended June 30, 1999 compared to $1.49 million during the same
six-month period in 1998, an increase of $188,305. Occupancy expenses increased
by $107,574. This included an increase of $56,600 for processing the growing
number of transaction accounts from the period ending June 30, 1998 to the same
six month period ending June 30, 1999.
Year 2000 - The Bank has developed a Business Interruption Plan and a
Contingency Plan which were approved by the Board of Directors prior to the June
30, 1999 deadline as required by the regulators. The Bank's plans cover those
areas deemed mission critical including those systems certified as Year 2000
compliant.
Costs associated with the Year 2000 project have been negligible and have mostly
been absorbed in the expansion expenses taking place over the last 24 months.
The new technologies and processing systems installed during that period were
certified Year 2000 compliant at management's insistence, as they were added.
8
<PAGE>
Year 2000 (continued)
All credit customers with balances outstanding or commitments exceeding $100,000
have been evaluated for their Year 2000 compliance efforts. There have been no
credit risks noted through the period ending June 30, 1999. All new loans
exceeding the $100,000 threshold require an indemnity from the customer
regarding issues relating to the millennium date change.
The Company will monitor uncertainties related to the Year 2000 issues by
continuing to request an update on all critical and important vendors through
the remainder of 1999. If any concerns are identified related to any critical
vendor, the contingency plans will be implemented immediately to assure
continued service the Bank's customers.
The Year 2000 liquidity plan has been developed to included projected cash needs
and sources of the funds that could be required during the century rollover.
Funds will be available from maturing discount notes and a lines of credit with
correspondent banks.
Successful and timely completion of the Year 2000 project is based on
management's best estimates derived from various assumptions of future events,
which are inherently uncertain, including the progress and results of testing
plans and the readiness of all vendors, suppliers and customers. The electrical
provider that the Company uses has asserted that they are Year 2000 compliant.
Despite the best efforts of management to address this issue, the vast number of
external entities that have direct and indirect business relationships with the
Company, such as customers, vendors, payment systems providers and other
financial institutions, makes it impossible to assure that a failure to achieve
compliance by one or more of these entities would not have material adverse
impact on operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
NONE
Item 2. Changes in Securities and Use of Proceeds.
NONE
Item 3. Defaults upon Senior Securities.
NONE
Item 4. Submission of Matters to a Vote of Security Holders.
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) 10.4 Change in Control Agreements with other executive officers.
(These agreements are in addition to other agreements previously
filed.)
(b) None.
9
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CCF HOLDING COMPANY
Date: August 11, 1999 BY:\s\ David B. Turner
------------------------------
David B. Turner
President and
Chief Executive Officer
Date: August 11, 1999 BY:\s\ Mary Jo Rogers
------------------------------
Mary Jo Rogers
Sr. Vice President and
Chief Financial Officer
EXHIBIT 10.4
<PAGE>
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into this
1st day of January, 1999 ("Effective Date"), by and between Heritage Bank (the
"Bank") and Nancy McClellan (the "Employee").
WHEREAS, the Employee is currently employed by the Bank as Vice President
and is experienced in all phases of the financial services industry and the
business of the Bank; and
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of the Bank and Employee if the Bank should undergo a change in
control (as defined hereinafter in the Agreement) after the Effective Date.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed in the capacity as the Vice
President of the Bank. The Employee shall render such administrative and
management services to the Bank and CCF Holding Company ("Parent") as are
currently rendered and as are customarily performed by persons situated in a
similar executive capacity. The Employee's other duties shall be such as the
President or the Board of Directors for the Bank (the "Board of Directors" or
"Board") may from time to time reasonably direct, including normal duties as an
officer of the Bank and the Parent.
2. Term of Agreement. The term of this Agreement shall be for the period
commencing on the Effective Date and ending twelve (12) months thereafter
("Term"). The Term of this Agreement may be extended for up to an additional one
year period beyond the then effective expiration date upon a determination and
resolution of the Board of Directors that the performance of the Employee has
met the requirements and standards of the Board, and that the Term of such
Agreement shall be extended.
3. Termination of Employment in Connection with or Subsequent to a Change
----------------------------------------------------------------------
in Control.
-----------
(a) Notwithstanding any provision herein to the contrary, in the event of
the involuntary termination of Employee's employment under this Agreement,
absent Just Cause, in connection with, or within twelve (12) months after, any
Change in Control of the Bank or Parent, Employee shall be paid an amount equal
to 100% of the taxable compensation paid to Employee by the Bank for the twelve
month period prior to the date of termination of employment (whether said
amounts were received or deferred by the Employee)
1
<PAGE>
and the costs associated with maintaining coverage under the Bank's medical and
dental insurance reimbursement plans similar to that in effect on the date of
termination of employment for a period of one year thereafter. Said sum shall be
paid, at the option of Employee, either in one (1) lump sum within thirty (30)
days of such termination discounted to the present value of such payment using
as the discount rate the "prime rate" as published in the Wall Street Journal
Eastern Edition as of the date of such payment minus 100 basis points, or in
periodic payments over the next 12 months, and such payments shall be in lieu of
any other future payments which the Employee would be otherwise entitled to
receive. Notwithstanding the forgoing, all sums payable hereunder shall be
reduced in such manner and to such extent so that no such payments made
hereunder when aggregated with all other payments to be made to the Employee by
the Bank or the Parent shall be deemed an "excess parachute payment" in
accordance with Section 280G of the Internal Revenue Codes of 1986, as amended
(the "Code") and be subject to the excise tax provided at Section 4999(a) of the
Code. The term "Change in Control" shall mean: (i) the execution of an agreement
for the sale of all, or a material portion, of the assets of the Bank or the
Parent; (ii) the execution of an agreement for a merger or recapitalization of
the Bank or the Parent or any merger or recapitalization whereby the Bank or the
Parent is not the surviving entity; (iii) a change in control of the Bank or the
Parent, as otherwise defined or determined by the Office of Thrift Supervision
or regulations promulgated by it; or (iv) the acquisition, directly or
indirectly, of the beneficial ownership (within the meaning of that term as it
is used in Section 13(d) of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder) of twenty-five percent (25%) or more of
the outstanding voting securities of the Bank or the Parent by any person,
trust, entity or group. The term "person" means an individual other than the
Employee, or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the contrary
except as provided at Sections 4(b), 4(c), 4(d), 4(e) and 5, Employee may
voluntarily terminate his employment under this Agreement within twenty-four
months following a Change in Control of the Bank or Parent, and Employee shall
thereupon be entitled to receive the payment and benefits described in Section
3(a) of this Agreement, upon the occurrence, or within ninety (90) days
thereafter, of any of the following events, which have not been consented to in
advance by the Employee in writing: (i) if Employee would be required to move
his personal residence or perform his principal executive functions more than
thirty-five (35) miles from the Employee's primary office as of the signing of
this Agreement; (ii) if in the organizational structure of the Bank or Parent,
2
<PAGE>
Employee would be required to report to a person or persons other than the
President; (iii) if the Bank or Parent should fail to maintain the Employee's
base compensation in effect as of the date of the Change in Control and existing
employee benefits plans, including material fringe benefit, stock option and
retirement plans, except to the extent that such reduction in benefit programs
is part of an overall adjustment in benefits for all employees of the Bank or
Parent and does not disproportionately adversely impact the Employee; (iv) if
Employee would be assigned duties and responsibilities other than those normally
associated with his position as referenced at Section 1, herein; or (v) if
Employee's responsibilities or authority have in any way been materially
diminished or reduced.
4. Other Changes in Employment Status.
----------------------------------
(a) Except as provided for at Section 3, herein, the Board of Directors may
terminate the Employee's employment at any time with or without Just Cause
within its sole discretion. This Agreement shall not be deemed to give Employee
any right to be retained in the employment or service of the Bank, or to
interfere with the right of the Bank to terminate the employment of the Employee
at any time. The Employee shall have no right to receive compensation or other
benefits for any period after termination for Just Cause. Termination for "Just
Cause" shall include termination because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of the
Agreement.
(b) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.
(c) If the Bank is in default (as defined in Section 3(x)(1) of FDIA) all
obligations under this Agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.
(d) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank: (i) by the Director of the Office of Thrift
Supervision ("Director of OTS"), or his or her designee, at the time that the
Federal Deposit
3
<PAGE>
Insurance Corporation ("FDIC") or the Resolution Trust Corporation enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of FDIA; or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her designee approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined by the Director of the OTS
to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(e) Notwithstanding anything herein to the contrary, any payments made to
the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 USC ?1828(k) and any regulations promulgated
thereunder.
5. Suspension of Employment. If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(3) and (g)(1)), the Bank's obligations under the Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may within its discretion
(i) pay the Employee all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate any of its obligations which were
suspended.
6. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Bank which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank.
(b) The Employee shall be precluded from assigning or delegating his rights
or duties hereunder without first obtaining the written consent of the Bank.
7. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by
both parties, except as herein otherwise specifically provided.
8. Applicable Law. This agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or
otherwise, by the laws of the State of Georgia, except to the extent
that Federal law shall be deemed to apply.
9. Severability. The provisions of this Agreement shall be
4
<PAGE>
deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof.
10. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Bank, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extend that the parties may otherwise reach a mutual
settlement of such issue. The Bank shall reimburse Employee for all reasonable
costs and expenses, including reasonable attorneys' fees, arising from such
dispute, proceedings or actions, following the delivery of the decision of the
arbitrator finding in favor of the Employee. Further, the settlement of the
dispute to be approved by the Board of the Bank or the Parent may include a
provision for the reimbursement by the Bank or Parent to the Employee for all
reasonable costs and expenses, including reasonable attorneys' fees, arising
from such dispute, proceedings or actions, or the Board of the Bank or the
Parent may authorize such reimbursement of such reasonable costs and expenses by
separate action upon a written action and determination of the Board following
settlement of the dispute.
11. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
first hereinabove written.
5
<PAGE>
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into this
19th day of April, 1999 ("Effective Date"), by and between Heritage Bank (the
"Bank") and Tommy Segers (the "Employee").
WHEREAS, the Employee is currently employed by the Bank as Senior Vice
President and is experienced in all phases of the financial services industry
and the business of the Bank; and
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of the Bank and Employee if the Bank should undergo a change in
control (as defined hereinafter in the Agreement) after the Effective Date.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed in the capacity as the Senior Vice
President of the Bank. The Employee shall render such administrative and
management services to the Bank and CCF Holding Company ("Parent") as are
currently rendered and as are customarily performed by persons situated in a
similar executive capacity. The Employee's other duties shall be such as the
President or the Board of Directors for the Bank (the "Board of Directors" or
"Board") may from time to time reasonably direct, including normal duties as an
officer of the Bank and the Parent.
2. Term of Agreement. The term of this Agreement shall be for the period
commencing on the Effective Date and ending twelve (12) months thereafter
("Term"). The Term of this Agreement may be extended for up to an additional one
year period beyond the then effective expiration date upon a determination and
resolution of the Board of Directors that the performance of the Employee has
met the requirements and standards of the Board, and that the Term of such
Agreement shall be extended.
3. Termination of Employment in Connection with or Subsequent to a Change
----------------------------------------------------------------------
in Control.
-----------
(a) Notwithstanding any provision herein to the contrary, in the event of
the involuntary termination of Employee's employment under this Agreement,
absent Just Cause, in connection with, or within twelve (12) months after, any
Change in Control of the Bank or Parent, Employee shall be paid an amount equal
to 100% of the taxable compensation paid to Employee by the Bank for the twelve
month period prior to the date of termination of employment (whether said
amounts were received or deferred by the Employee)
1
<PAGE>
and the costs associated with maintaining coverage under the Bank's medical and
dental insurance reimbursement plans similar to that in effect on the date of
termination of employment for a period of one year thereafter. Said sum shall be
paid, at the option of Employee, either in one (1) lump sum within thirty (30)
days of such termination discounted to the present value of such payment using
as the discount rate the "prime rate" as published in the Wall Street Journal
Eastern Edition as of the date of such payment minus 100 basis points, or in
periodic payments over the next 12 months, and such payments shall be in lieu of
any other future payments which the Employee would be otherwise entitled to
receive. Notwithstanding the forgoing, all sums payable hereunder shall be
reduced in such manner and to such extent so that no such payments made
hereunder when aggregated with all other payments to be made to the Employee by
the Bank or the Parent shall be deemed an "excess parachute payment" in
accordance with Section 280G of the Internal Revenue Codes of 1986, as amended
(the "Code") and be subject to the excise tax provided at Section 4999(a) of the
Code. The term "Change in Control" shall mean: (i) the execution of an agreement
for the sale of all, or a material portion, of the assets of the Bank or the
Parent; (ii) the execution of an agreement for a merger or recapitalization of
the Bank or the Parent or any merger or recapitalization whereby the Bank or the
Parent is not the surviving entity; (iii) a change in control of the Bank or the
Parent, as otherwise defined or determined by the Office of Thrift Supervision
or regulations promulgated by it; or (iv) the acquisition, directly or
indirectly, of the beneficial ownership (within the meaning of that term as it
is used in Section 13(d) of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder) of twenty-five percent (25%) or more of
the outstanding voting securities of the Bank or the Parent by any person,
trust, entity or group. The term "person" means an individual other than the
Employee, or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the contrary
except as provided at Sections 4(b), 4(c), 4(d), 4(e) and 5, Employee may
voluntarily terminate his employment under this Agreement within twenty-four
months following a Change in Control of the Bank or Parent, and Employee shall
thereupon be entitled to receive the payment and benefits described in Section
3(a) of this Agreement, upon the occurrence, or within ninety (90) days
thereafter, of any of the following events, which have not been consented to in
advance by the Employee in writing: (i) if Employee would be required to move
his personal residence or perform his principal executive functions more than
thirty-five (35) miles from the Employee's primary office as of the signing of
this Agreement; (ii) if in the organizational structure of the Bank or Parent,
2
<PAGE>
Employee would be required to report to a person or persons other than the
President; (iii) if the Bank or Parent should fail to maintain the Employee's
base compensation in effect as of the date of the Change in Control and existing
employee benefits plans, including material fringe benefit, stock option and
retirement plans, except to the extent that such reduction in benefit programs
is part of an overall adjustment in benefits for all employees of the Bank or
Parent and does not disproportionately adversely impact the Employee; (iv) if
Employee would be assigned duties and responsibilities other than those normally
associated with his position as referenced at Section 1, herein; or (v) if
Employee's responsibilities or authority have in any way been materially
diminished or reduced.
4. Other Changes in Employment Status.
----------------------------------
(a) Except as provided for at Section 3, herein, the Board of Directors may
terminate the Employee's employment at any time with or without Just Cause
within its sole discretion. This Agreement shall not be deemed to give Employee
any right to be retained in the employment or service of the Bank, or to
interfere with the right of the Bank to terminate the employment of the Employee
at any time. The Employee shall have no right to receive compensation or other
benefits for any period after termination for Just Cause. Termination for "Just
Cause" shall include termination because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of the
Agreement.
(b) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.
(c) If the Bank is in default (as defined in Section 3(x)(1) of FDIA) all
obligations under this Agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.
(d) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank: (i) by the Director of the Office of Thrift
Supervision ("Director of OTS"), or his or her designee, at the time that the
Federal Deposit
3
<PAGE>
Insurance Corporation ("FDIC") or the Resolution Trust Corporation enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of FDIA; or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her designee approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined by the Director of the OTS
to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(e) Notwithstanding anything herein to the contrary, any payments made to
the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 USC ?1828(k) and any regulations promulgated
thereunder.
5. Suspension of Employment. If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(3) and (g)(1)), the Bank's obligations under the Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may within its discretion
(i) pay the Employee all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate any of its obligations which were
suspended.
6. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Bank which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank.
(b) The Employee shall be precluded from assigning or delegating his rights
or duties hereunder without first obtaining the written consent of the Bank.
7. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by
both parties, except as herein otherwise specifically provided.
8. Applicable Law. This agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or
otherwise, by the laws of the State of Georgia, except to the extent
that Federal law shall be deemed to apply.
9. Severability. The provisions of this Agreement shall be
4
<PAGE>
deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof.
10. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Bank, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extend that the parties may otherwise reach a mutual
settlement of such issue. The Bank shall reimburse Employee for all reasonable
costs and expenses, including reasonable attorneys' fees, arising from such
dispute, proceedings or actions, following the delivery of the decision of the
arbitrator finding in favor of the Employee. Further, the settlement of the
dispute to be approved by the Board of the Bank or the Parent may include a
provision for the reimbursement by the Bank or Parent to the Employee for all
reasonable costs and expenses, including reasonable attorneys' fees, arising
from such dispute, proceedings or actions, or the Board of the Bank or the
Parent may authorize such reimbursement of such reasonable costs and expenses by
separate action upon a written action and determination of the Board following
settlement of the dispute.
11. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
first hereinabove written.
5
<PAGE>
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into this
1st day of January, 1999 ("Effective Date"), by and between Heritage Bank (the
"Bank") and Mary Jo Rogers (the "Employee").
WHEREAS, the Employee is currently employed by the Bank as Senior Vice
President and is experienced in all phases of the financial services industry
and the business of the Bank; and
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of the Bank and Employee if the Bank should undergo a change in
control (as defined hereinafter in the Agreement) after the Effective Date.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed in the capacity as the Senior Vice
President of the Bank. The Employee shall render such administrative and
management services to the Bank and CCF Holding Company ("Parent") as are
currently rendered and as are customarily performed by persons situated in a
similar executive capacity. The Employee's other duties shall be such as the
President or the Board of Directors for the Bank (the "Board of Directors" or
"Board") may from time to time reasonably direct, including normal duties as an
officer of the Bank and the Parent.
2. Term of Agreement. The term of this Agreement shall be for the period
commencing on the Effective Date and ending twelve (12) months thereafter
("Term"). The Term of this Agreement may be extended for up to an additional one
year period beyond the then effective expiration date upon a determination and
resolution of the Board of Directors that the performance of the Employee has
met the requirements and standards of the Board, and that the Term of such
Agreement shall be extended.
3. Termination of Employment in Connection with or Subsequent to a Change
----------------------------------------------------------------------
in Control.
-----------
(a) Notwithstanding any provision herein to the contrary, in the event of
the involuntary termination of Employee's employment under this Agreement,
absent Just Cause, in connection with, or within twelve (12) months after, any
Change in Control of the Bank or Parent, Employee shall be paid an amount equal
to 100% of the taxable compensation paid to Employee by the Bank for the twelve
month period prior to the date of termination of employment (whether said
amounts were received or deferred by the Employee)
1
<PAGE>
and the costs associated with maintaining coverage under the Bank's medical and
dental insurance reimbursement plans similar to that in effect on the date of
termination of employment for a period of one year thereafter. Said sum shall be
paid, at the option of Employee, either in one (1) lump sum within thirty (30)
days of such termination discounted to the present value of such payment using
as the discount rate the "prime rate" as published in the Wall Street Journal
Eastern Edition as of the date of such payment minus 100 basis points, or in
periodic payments over the next 12 months, and such payments shall be in lieu of
any other future payments which the Employee would be otherwise entitled to
receive. Notwithstanding the forgoing, all sums payable hereunder shall be
reduced in such manner and to such extent so that no such payments made
hereunder when aggregated with all other payments to be made to the Employee by
the Bank or the Parent shall be deemed an "excess parachute payment" in
accordance with Section 280G of the Internal Revenue Codes of 1986, as amended
(the "Code") and be subject to the excise tax provided at Section 4999(a) of the
Code. The term "Change in Control" shall mean: (i) the execution of an agreement
for the sale of all, or a material portion, of the assets of the Bank or the
Parent; (ii) the execution of an agreement for a merger or recapitalization of
the Bank or the Parent or any merger or recapitalization whereby the Bank or the
Parent is not the surviving entity; (iii) a change in control of the Bank or the
Parent, as otherwise defined or determined by the Office of Thrift Supervision
or regulations promulgated by it; or (iv) the acquisition, directly or
indirectly, of the beneficial ownership (within the meaning of that term as it
is used in Section 13(d) of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder) of twenty-five percent (25%) or more of
the outstanding voting securities of the Bank or the Parent by any person,
trust, entity or group. The term "person" means an individual other than the
Employee, or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the contrary
except as provided at Sections 4(b), 4(c), 4(d), 4(e) and 5, Employee may
voluntarily terminate his employment under this Agreement within twenty-four
months following a Change in Control of the Bank or Parent, and Employee shall
thereupon be entitled to receive the payment and benefits described in Section
3(a) of this Agreement, upon the occurrence, or within ninety (90) days
thereafter, of any of the following events, which have not been consented to in
advance by the Employee in writing: (i) if Employee would be required to move
his personal residence or perform his principal executive functions more than
thirty-five (35) miles from the Employee's primary office as of the signing of
this Agreement; (ii) if in the organizational structure of the Bank or Parent,
2
<PAGE>
Employee would be required to report to a person or persons other than the
President; (iii) if the Bank or Parent should fail to maintain the Employee's
base compensation in effect as of the date of the Change in Control and existing
employee benefits plans, including material fringe benefit, stock option and
retirement plans, except to the extent that such reduction in benefit programs
is part of an overall adjustment in benefits for all employees of the Bank or
Parent and does not disproportionately adversely impact the Employee; (iv) if
Employee would be assigned duties and responsibilities other than those normally
associated with his position as referenced at Section 1, herein; or (v) if
Employee's responsibilities or authority have in any way been materially
diminished or reduced.
4. Other Changes in Employment Status.
----------------------------------
(a) Except as provided for at Section 3, herein, the Board of Directors may
terminate the Employee's employment at any time with or without Just Cause
within its sole discretion. This Agreement shall not be deemed to give Employee
any right to be retained in the employment or service of the Bank, or to
interfere with the right of the Bank to terminate the employment of the Employee
at any time. The Employee shall have no right to receive compensation or other
benefits for any period after termination for Just Cause. Termination for "Just
Cause" shall include termination because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of the
Agreement.
(b) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.
(c) If the Bank is in default (as defined in Section 3(x)(1) of FDIA) all
obligations under this Agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.
(d) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank: (i) by the Director of the Office of Thrift
Supervision ("Director of OTS"), or his or her designee, at the time that the
Federal Deposit
3
<PAGE>
Insurance Corporation ("FDIC") or the Resolution Trust Corporation enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of FDIA; or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her designee approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined by the Director of the OTS
to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(e) Notwithstanding anything herein to the contrary, any payments made to
the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 USC ?1828(k) and any regulations promulgated
thereunder.
5. Suspension of Employment. If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(3) and (g)(1)), the Bank's obligations under the Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may within its discretion
(i) pay the Employee all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate any of its obligations which were
suspended.
6. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Bank which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank.
(b) The Employee shall be precluded from assigning or delegating his rights
or duties hereunder without first obtaining the written consent of the Bank.
7. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by
both parties, except as herein otherwise specifically provided.
8. Applicable Law. This agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or
otherwise, by the laws of the State of Georgia, except to the extent
that Federal law shall be deemed to apply.
9. Severability. The provisions of this Agreement shall be
4
<PAGE>
deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof.
10. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Bank, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extend that the parties may otherwise reach a mutual
settlement of such issue. The Bank shall reimburse Employee for all reasonable
costs and expenses, including reasonable attorneys' fees, arising from such
dispute, proceedings or actions, following the delivery of the decision of the
arbitrator finding in favor of the Employee. Further, the settlement of the
dispute to be approved by the Board of the Bank or the Parent may include a
provision for the reimbursement by the Bank or Parent to the Employee for all
reasonable costs and expenses, including reasonable attorneys' fees, arising
from such dispute, proceedings or actions, or the Board of the Bank or the
Parent may authorize such reimbursement of such reasonable costs and expenses by
separate action upon a written action and determination of the Board following
settlement of the dispute.
11. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
first hereinabove written.
5
<PAGE>
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into this
1st day of January, 1999 ("Effective Date"), by and between Heritage Bank (the
"Bank") and Edith W. Stevens (the "Employee").
WHEREAS, the Employee is currently employed by the Bank as Senior Vice
President and is experienced in all phases of the financial services industry
and the business of the Bank; and
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of the Bank and Employee if the Bank should undergo a change in
control (as defined hereinafter in the Agreement) after the Effective Date.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed in the capacity as the Senior Vice
President of the Bank. The Employee shall render such administrative and
management services to the Bank and CCF Holding Company ("Parent") as are
currently rendered and as are customarily performed by persons situated in a
similar executive capacity. The Employee's other duties shall be such as the
President or the Board of Directors for the Bank (the "Board of Directors" or
"Board") may from time to time reasonably direct, including normal duties as an
officer of the Bank and the Parent.
2. Term of Agreement. The term of this Agreement shall be for the period
commencing on the Effective Date and ending twelve (12) months thereafter
("Term"). The Term of this Agreement may be extended for up to an additional one
year period beyond the then effective expiration date upon a determination and
resolution of the Board of Directors that the performance of the Employee has
met the requirements and standards of the Board, and that the Term of such
Agreement shall be extended.
3. Termination of Employment in Connection with or Subsequent to a Change
----------------------------------------------------------------------
in Control.
-----------
(a) Notwithstanding any provision herein to the contrary, in the event of
the involuntary termination of Employee's employment under this Agreement,
absent Just Cause, in connection with, or within twelve (12) months after, any
Change in Control of the Bank or Parent, Employee shall be paid an amount equal
to 100% of the taxable compensation paid to Employee by the Bank for the twelve
month period prior to the date of termination of employment (whether said
amounts were received or deferred by the Employee)
1
<PAGE>
and the costs associated with maintaining coverage under the Bank's medical and
dental insurance reimbursement plans similar to that in effect on the date of
termination of employment for a period of one year thereafter. Said sum shall be
paid, at the option of Employee, either in one (1) lump sum within thirty (30)
days of such termination discounted to the present value of such payment using
as the discount rate the "prime rate" as published in the Wall Street Journal
Eastern Edition as of the date of such payment minus 100 basis points, or in
periodic payments over the next 12 months, and such payments shall be in lieu of
any other future payments which the Employee would be otherwise entitled to
receive. Notwithstanding the forgoing, all sums payable hereunder shall be
reduced in such manner and to such extent so that no such payments made
hereunder when aggregated with all other payments to be made to the Employee by
the Bank or the Parent shall be deemed an "excess parachute payment" in
accordance with Section 280G of the Internal Revenue Codes of 1986, as amended
(the "Code") and be subject to the excise tax provided at Section 4999(a) of the
Code. The term "Change in Control" shall mean: (i) the execution of an agreement
for the sale of all, or a material portion, of the assets of the Bank or the
Parent; (ii) the execution of an agreement for a merger or recapitalization of
the Bank or the Parent or any merger or recapitalization whereby the Bank or the
Parent is not the surviving entity; (iii) a change in control of the Bank or the
Parent, as otherwise defined or determined by the Office of Thrift Supervision
or regulations promulgated by it; or (iv) the acquisition, directly or
indirectly, of the beneficial ownership (within the meaning of that term as it
is used in Section 13(d) of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder) of twenty-five percent (25%) or more of
the outstanding voting securities of the Bank or the Parent by any person,
trust, entity or group. The term "person" means an individual other than the
Employee, or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the contrary
except as provided at Sections 4(b), 4(c), 4(d), 4(e) and 5, Employee may
voluntarily terminate his employment under this Agreement within twenty-four
months following a Change in Control of the Bank or Parent, and Employee shall
thereupon be entitled to receive the payment and benefits described in Section
3(a) of this Agreement, upon the occurrence, or within ninety (90) days
thereafter, of any of the following events, which have not been consented to in
advance by the Employee in writing: (i) if Employee would be required to move
his personal residence or perform his principal executive functions more than
thirty-five (35) miles from the Employee's primary office as of the signing of
this Agreement; (ii) if in the organizational structure of the Bank or Parent,
2
<PAGE>
Employee would be required to report to a person or persons other than the
President; (iii) if the Bank or Parent should fail to maintain the Employee's
base compensation in effect as of the date of the Change in Control and existing
employee benefits plans, including material fringe benefit, stock option and
retirement plans, except to the extent that such reduction in benefit programs
is part of an overall adjustment in benefits for all employees of the Bank or
Parent and does not disproportionately adversely impact the Employee; (iv) if
Employee would be assigned duties and responsibilities other than those normally
associated with his position as referenced at Section 1, herein; or (v) if
Employee's responsibilities or authority have in any way been materially
diminished or reduced.
4. Other Changes in Employment Status.
----------------------------------
(a) Except as provided for at Section 3, herein, the Board of Directors may
terminate the Employee's employment at any time with or without Just Cause
within its sole discretion. This Agreement shall not be deemed to give Employee
any right to be retained in the employment or service of the Bank, or to
interfere with the right of the Bank to terminate the employment of the Employee
at any time. The Employee shall have no right to receive compensation or other
benefits for any period after termination for Just Cause. Termination for "Just
Cause" shall include termination because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of the
Agreement.
(b) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.
(c) If the Bank is in default (as defined in Section 3(x)(1) of FDIA) all
obligations under this Agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.
(d) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank: (i) by the Director of the Office of Thrift
Supervision ("Director of OTS"), or his or her designee, at the time that the
Federal Deposit
3
<PAGE>
Insurance Corporation ("FDIC") or the Resolution Trust Corporation enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of FDIA; or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her designee approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined by the Director of the OTS
to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(e) Notwithstanding anything herein to the contrary, any payments made to
the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 USC ?1828(k) and any regulations promulgated
thereunder.
5. Suspension of Employment. If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(3) and (g)(1)), the Bank's obligations under the Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may within its discretion
(i) pay the Employee all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate any of its obligations which were
suspended.
6. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Bank which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank.
(b) The Employee shall be precluded from assigning or delegating his rights
or duties hereunder without first obtaining the written consent of the Bank.
7. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by
both parties, except as herein otherwise specifically provided.
8. Applicable Law. This agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or
otherwise, by the laws of the State of Georgia, except to the extent
that Federal law shall be deemed to apply.
9. Severability. The provisions of this Agreement shall be
4
<PAGE>
deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof.
10. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Bank, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extend that the parties may otherwise reach a mutual
settlement of such issue. The Bank shall reimburse Employee for all reasonable
costs and expenses, including reasonable attorneys' fees, arising from such
dispute, proceedings or actions, following the delivery of the decision of the
arbitrator finding in favor of the Employee. Further, the settlement of the
dispute to be approved by the Board of the Bank or the Parent may include a
provision for the reimbursement by the Bank or Parent to the Employee for all
reasonable costs and expenses, including reasonable attorneys' fees, arising
from such dispute, proceedings or actions, or the Board of the Bank or the
Parent may authorize such reimbursement of such reasonable costs and expenses by
separate action upon a written action and determination of the Board following
settlement of the dispute.
11. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
first hereinabove written.
5
<PAGE>
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into this
eighth day of July, 1999 ("Effective Date"), by and between Heritage Bank (the
"Bank") and Jack Bowdoin (the "Employee").
WHEREAS, the Employee is currently employed by the Bank as Senior Vice
President and is experienced in all phases of the financial services industry
and the business of the Bank; and
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of the Bank and Employee if the Bank should undergo a change in
control (as defined hereinafter in the Agreement) after the Effective Date.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed in the capacity as the Senior Vice
President of the Bank. The Employee shall render such administrative and
management services to the Bank and CCF Holding Company ("Parent") as are
currently rendered and as are customarily performed by persons situated in a
similar executive capacity. The Employee's other duties shall be such as the
President or the Board of Directors for the Bank (the "Board of Directors" or
"Board") may from time to time reasonably direct, including normal duties as an
officer of the Bank and the Parent.
2. Term of Agreement. The term of this Agreement shall be for the period
commencing on the Effective Date and ending twelve (12) months thereafter
("Term"). The Term of this Agreement may be extended for up to an additional one
year period beyond the then effective expiration date upon a determination and
resolution of the Board of Directors that the performance of the Employee has
met the requirements and standards of the Board, and that the Term of such
Agreement shall be extended.
3. Termination of Employment in Connection with or Subsequent to a Change
----------------------------------------------------------------------
in Control.
-----------
(a) Notwithstanding any provision herein to the contrary, in the event of
the involuntary termination of Employee's employment under this Agreement,
absent Just Cause, in connection with, or within twelve (12) months after, any
Change in Control of the Bank or Parent, Employee shall be paid an amount equal
to 100% of the taxable compensation paid to Employee by the Bank for the twelve
month period prior to the date of termination of employment (whether said
amounts were received or deferred by the Employee)
1
<PAGE>
and the costs associated with maintaining coverage under the Bank's medical and
dental insurance reimbursement plans similar to that in effect on the date of
termination of employment for a period of one year thereafter. Said sum shall be
paid, at the option of Employee, either in one (1) lump sum within thirty (30)
days of such termination discounted to the present value of such payment using
as the discount rate the "prime rate" as published in the Wall Street Journal
Eastern Edition as of the date of such payment minus 100 basis points, or in
periodic payments over the next 12 months, and such payments shall be in lieu of
any other future payments which the Employee would be otherwise entitled to
receive. Notwithstanding the forgoing, all sums payable hereunder shall be
reduced in such manner and to such extent so that no such payments made
hereunder when aggregated with all other payments to be made to the Employee by
the Bank or the Parent shall be deemed an "excess parachute payment" in
accordance with Section 280G of the Internal Revenue Codes of 1986, as amended
(the "Code") and be subject to the excise tax provided at Section 4999(a) of the
Code. The term "Change in Control" shall mean: (i) the execution of an agreement
for the sale of all, or a material portion, of the assets of the Bank or the
Parent; (ii) the execution of an agreement for a merger or recapitalization of
the Bank or the Parent or any merger or recapitalization whereby the Bank or the
Parent is not the surviving entity; (iii) a change in control of the Bank or the
Parent, as otherwise defined or determined by the Office of Thrift Supervision
or regulations promulgated by it; or (iv) the acquisition, directly or
indirectly, of the beneficial ownership (within the meaning of that term as it
is used in Section 13(d) of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder) of twenty-five percent (25%) or more of
the outstanding voting securities of the Bank or the Parent by any person,
trust, entity or group. The term "person" means an individual other than the
Employee, or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the contrary
except as provided at Sections 4(b), 4(c), 4(d), 4(e) and 5, Employee may
voluntarily terminate his employment under this Agreement within twenty-four
months following a Change in Control of the Bank or Parent, and Employee shall
thereupon be entitled to receive the payment and benefits described in Section
3(a) of this Agreement, upon the occurrence, or within ninety (90) days
thereafter, of any of the following events, which have not been consented to in
advance by the Employee in writing: (i) if Employee would be required to move
his personal residence or perform his principal executive functions more than
thirty-five (35) miles from the Employee's primary office as of the signing of
this Agreement; (ii) if in the organizational structure of the Bank or Parent,
2
<PAGE>
Employee would be required to report to a person or persons other than the
President; (iii) if the Bank or Parent should fail to maintain the Employee's
base compensation in effect as of the date of the Change in Control and existing
employee benefits plans, including material fringe benefit, stock option and
retirement plans, except to the extent that such reduction in benefit programs
is part of an overall adjustment in benefits for all employees of the Bank or
Parent and does not disproportionately adversely impact the Employee; (iv) if
Employee would be assigned duties and responsibilities other than those normally
associated with his position as referenced at Section 1, herein; or (v) if
Employee's responsibilities or authority have in any way been materially
diminished or reduced.
4. Other Changes in Employment Status.
----------------------------------
(a) Except as provided for at Section 3, herein, the Board of Directors may
terminate the Employee's employment at any time with or without Just Cause
within its sole discretion. This Agreement shall not be deemed to give Employee
any right to be retained in the employment or service of the Bank, or to
interfere with the right of the Bank to terminate the employment of the Employee
at any time. The Employee shall have no right to receive compensation or other
benefits for any period after termination for Just Cause. Termination for "Just
Cause" shall include termination because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of the
Agreement.
(b) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.
(c) If the Bank is in default (as defined in Section 3(x)(1) of FDIA) all
obligations under this Agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.
(d) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank: (i) by the Director of the Office of Thrift
Supervision ("Director of OTS"), or his or her designee, at the time that the
Federal Deposit
3
<PAGE>
Insurance Corporation ("FDIC") or the Resolution Trust Corporation enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of FDIA; or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her designee approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined by the Director of the OTS
to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(e) Notwithstanding anything herein to the contrary, any payments made to
the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 USC ?1828(k) and any regulations promulgated
thereunder.
5. Suspension of Employment. If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(3) and (g)(1)), the Bank's obligations under the Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may within its discretion
(i) pay the Employee all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate any of its obligations which were
suspended.
6. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Bank which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank.
(b) The Employee shall be precluded from assigning or delegating his rights
or duties hereunder without first obtaining the written consent of the Bank.
7. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by
both parties, except as herein otherwise specifically provided.
8. Applicable Law. This agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or
otherwise, by the laws of the State of Georgia, except to the extent
that Federal law shall be deemed to apply.
9. Severability. The provisions of this Agreement shall be
4
<PAGE>
deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof.
10. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Bank, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extend that the parties may otherwise reach a mutual
settlement of such issue. The Bank shall reimburse Employee for all reasonable
costs and expenses, including reasonable attorneys' fees, arising from such
dispute, proceedings or actions, following the delivery of the decision of the
arbitrator finding in favor of the Employee. Further, the settlement of the
dispute to be approved by the Board of the Bank or the Parent may include a
provision for the reimbursement by the Bank or Parent to the Employee for all
reasonable costs and expenses, including reasonable attorneys' fees, arising
from such dispute, proceedings or actions, or the Board of the Bank or the
Parent may authorize such reimbursement of such reasonable costs and expenses by
separate action upon a written action and determination of the Board following
settlement of the dispute.
11. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
first hereinabove written.
5
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 7,466
<INT-BEARING-DEPOSITS> 452
<FED-FUNDS-SOLD> 10,130
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 33,356
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 133,263
<ALLOWANCE> 1,149
<TOTAL-ASSETS> 191,937
<DEPOSITS> 176,471
<SHORT-TERM> 2,188
<LIABILITIES-OTHER> 1,467
<LONG-TERM> 0
0
0
<COMMON> 99
<OTHER-SE> 11,712
<TOTAL-LIABILITIES-AND-EQUITY> 191,937
<INTEREST-LOAN> 5,980
<INTEREST-INVEST> 797
<INTEREST-OTHER> 253
<INTEREST-TOTAL> 7,031
<INTEREST-DEPOSIT> 3,601
<INTEREST-EXPENSE> 3,633
<INTEREST-INCOME-NET> 3,398
<LOAN-LOSSES> 221
<SECURITIES-GAINS> 68
<EXPENSE-OTHER> 2,934
<INCOME-PRETAX> 713
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 462
<EPS-BASIC> .54
<EPS-DILUTED> .52
<YIELD-ACTUAL> 3.80
<LOANS-NON> 109
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 636
<ALLOWANCE-OPEN> 943
<CHARGE-OFFS> 15
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,149
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
