SCHEDULE 14A TEMPLATE
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
GEORGIA BANK FINANCIAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
GEORGIA BANK FINANCIAL CORPORATION
3530 Wheeler Road
Augusta, Georgia 30909
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on April 25, 2001
TO THE SHAREHOLDERS OF GEORGIA BANK FINANCIAL CORPORATION:
You are hereby notified that the 2001 Annual Meeting of Shareholders (the
"Annual Meeting") of Georgia Bank Financial Corporation, a Georgia corporation
(the "Company"), will be held at the offices of the Company located at 3530
Wheeler Road, Augusta, Georgia on April 25, 2001, at 4:00 p.m., Eastern time for
the following purposes:
1. To elect ten (10) directors to serve for a term ending on the date of
the 2002 Annual Meeting of Shareholders or until their respective
successors shall have been elected and qualified;
2. To approve the Georgia Bank Financial Corporation 2000 Long-Term
Incentive Plan;
3. To transact such other business as may properly come before the Annual
Meeting or an adjournment thereof.
Shareholders of record at the close of business on March 28, 2001, are
the only shareholders entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
/s/ Travers W. Paine III
-----------------------------------
Travers W. Paine III
Corporate Secretary
Augusta, Georgia
March 28, 2001
EACH SHAREHOLDER IS URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY
IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. IN THE EVENT A SHAREHOLDER DECIDES TO
ATTEND THE MEETING, HE OR SHE MAY, IF SO DESIRED, REVOKE THE PROXY AND VOTE THE
SHARES IN PERSON. YOUR BOARD RECOMMENDS THAT YOU VOTE IN FAVOR OF THE NOMINEES
FOR DIRECTORS.
GEORGIA BANK FINANCIAL CORPORATION
3530 Wheeler Road
Augusta, Georgia 30909
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To be Held on April 25, 2001
This Proxy Statement is furnished in connection with the solicitation
of proxies for use at the Annual Meeting of Shareholders (the "Meeting") of
Georgia Bank Financial Corporation (the "Company") to be held on April 25, 2001,
at 4:00 p.m., Eastern time and at any adjournment thereof, for the purposes set
forth in this Proxy Statement. The accompanying proxy is solicited by the Board
of Directors of the Company. The Meeting will be held at the principal
executive office of the Company located at 3530 Wheeler Road, Augusta, Georgia,
30909. This Proxy Statement and the accompanying Form of Proxy were first
mailed to shareholders on or about March 29, 2001. The Company's 2000 Summary
Annual Report to Shareholders and Annual Report on Form 10-K for the fiscal year
ended December 31, 2000, accompany this Proxy Statement.
VOTING AND REVOCABILITY OF PROXY APPOINTMENTS
The Company has fixed March 28, 2001, as the record date (the "Record
Date") for determining the shareholders entitled to notice of and to vote at the
Meeting. The Company's only class of stock is its common stock, par value $3.00
per share (the "Common Stock"). At the close of business on the Record Date,
there were outstanding and entitled to vote 2,074,381 shares of the Common Stock
held by approximately 728 shareholders of record, with each share being entitled
to one vote. There are no cumulative voting rights. A majority of the
outstanding shares of the Common Stock represented at the Meeting, in person or
by proxy, will constitute a quorum. In determining whether a quorum exists at
the Meeting for purposes of all matters to be voted on, all votes "for" or
"against," as well as all abstentions (including votes to withhold in certain
cases), will be counted.
All proxies will be voted in accordance with the instructions
contained in the proxies. If no choice is specified, proxies will be voted
"FOR" the election to the Board of Directors of all nominees listed below under
"ELECTION OF DIRECTORS," "FOR" the proposal to "APPROVE THE GEORGIA BANK
FINANCIAL CORPORATION 2000 LONG-TERM INCENTIVE PLAN," and at the proxy holders'
discretion on any other matter that may properly come before the Meeting. Any
shareholder may revoke a proxy given pursuant to this solicitation prior to the
Meeting by delivering an instrument revoking it, by delivering a duly executed
proxy bearing a later date to the Company, or by attending the Meeting and
voting in person. All written notices of revocation or other communications
with respect to revocation of proxies should be addressed as follows: Georgia
Bank Financial Corporation, 3530 Wheeler Road, Augusta, Georgia, 30909,
Attention: Ronald L. Thigpen, Executive Vice President.
The costs of preparing, assembling and mailing the proxy materials and
of reimbursing brokers, nominees, and fiduciaries for the out-of-pocket and
clerical expenses of transmitting copies of the proxy materials to the
beneficial owners of shares held of record will be borne by the Company.
Certain officers and employees of the Company or its subsidiaries, without
additional compensation, may use their personal efforts, by telephone or
otherwise, to obtain proxies in addition to this solicitation by mail. The
Company expects to reimburse brokers, banks, custodians, and other nominees for
their reasonable out-of-pocket expenses in handling proxy materials for
beneficial owners of the Common Stock held in their names.
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PROPOSAL I
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall
consist of not less than five nor more than twenty-five directors, with the
exact number to be determined by the Board of Directors, each having a term of
office of one year and continuing thereafter until his or her successor has been
elected and has qualified. The Board has established ten as the number of
persons to constitute the Board of Directors for the coming year, and has
nominated the following persons to serve for one year and until their successors
are elected and qualified:
Position with Position with
Name Age the Company the Bank (1)
- ---- --- ------------ ------------
William J. Badger 50 Director Director
R. Daniel Blanton 50 President, Chief President, Chief
Executive Officer Executive Officer
and Director and Director
William P. Copenhaver 76 Director Director
Warren A. Daniel 53 Director Director
Edward G. Meybohm 57 Vice Chairman and Chairman of the Board
Director and Director
Travers W. Paine III 53 Corporate Secretary Corporate Secretary
and Director and Director
Robert W. Pollard, Jr. 50 Chairman of the Board, Vice Chairman and
and Director Director
Randolph R. Smith, M.D. 57 Director Director
Ronald L. Thigpen 49 Executive Vice President Executive Vice President
Chief Operating Officer Chief Operating Officer
and Director and Director
John W. Trulock, Jr. 55 Director Director
_____________________
(1) Georgia Bank & Trust Company of Augusta, the Company's commercial banking
subsidiary (the "Bank").
Each of the nominees is currently a director of the Company, and has
been nominated by the Board to serve for an additional term. When properly
executed and returned the enclosed Form of Proxy will be voted as specified
thereon. If any nominee is unable or fails to accept nomination or election
(which is not anticipated), the persons named in the proxy as proxies, unless
specifically instructed otherwise in the proxy, will vote for the election in
his or her stead of such other person as the Company's existing Board of
Directors may recommend. The Bylaws of the Company require that any nominee for
election as a director not nominated by the Board be submitted to the Secretary
of the Company, along with certain information about the nominee, not later than
April 11, 2001. Directors are elected by a plurality of the votes cast by the
holders of the Common Stock at a meeting at which a quorum is present. A
"plurality" means that the individuals who receive the largest number of votes
cast are elected as directors up to the maximum number of directors to be chosen
at the meeting. Consequently, any shares not voted (whether by abstention,
broker non-vote or otherwise) have no impact on the election of directors except
to the extent that the failure to vote for an individual results in another
individual receiving a larger number of votes.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE TEN
NOMINEES PREVIOUSLY NAMED.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY AND THE BANK
No director or executive officer of the Bank or Company is related to
any other director or executive officer, except that Robert W. Pollard, Jr. is
the brother-in-law of R. Daniel Blanton. No director or executive officer
currently serves as an officer or director of any other financial institution.
All directors of the Company will serve until the next annual meeting
of the shareholders of the Company or until their successors are elected and
have qualified. Officers of the Company and the Bank serve at the pleasure of
their respective Board of Directors.
The following additional information has been supplied by the
directors and officers of the Company and Bank.
William J. Badger, a Director of the Bank and the Company since the
organization of each (November 1988 and February 1992, respectively) has been
the President of Howard Lumber Company, a dealer in building materials and
supplies, since 1978. Prior to that time, he served as treasurer and worked in
sales for the company. Mr. Badger received his Bachelor of Arts degree from the
University of Georgia in 1972. He is active in the Kiwanis Club, the
Construction Suppliers Association of Georgia, and the Augusta Builders
Exchange.
James G. Blanchard, Jr. was elected a Director of the Bank in 1996.
Mr. Blanchard is a senior partner in the law firm of Fleming, Blanchard,
Jackson, Ingram & Floyd, PC. He has actively practiced law since 1968. Mr.
Blanchard is a native of Evans, Georgia, and graduated from Georgia Southern
University. He received his law degree from the Cumberland School of Law at
Samford University in Birmingham, Alabama. Mr. Blanchard was an organizing
director of Georgia State Bank in 1970 and continued his service through the
acquisition by Georgia Railroad Bank & Trust Company in 1986. He later served
on the Board of Directors of Citizens Bank & Trust Company of Evans, Georgia.
Mr. Blanchard serves as the attorney for the Columbia County Board of Education,
Associate Judge of the Columbia County Juvenile Court and is City Attorney for
the City of Grovetown, Georgia.
J. Pierce Blanchard, Jr. began his service with the Bank in March,
1994 as Group Vice President and Columbia County Executive. In November, 1995
he was designated as Marketing Officer responsible for business development
activities, branch administration and the overall marketing plan for the Bank.
In October, 1997 Mr. Blanchard was elected Executive Vice President responsible
for business development and branch administration. He was formerly employed as
the President and Chief Executive Officer of Citizens Bank & Trust Company in
Evans, Georgia, from 1989 until March, 1994. He also served with First Union
National Bank and its predecessor, Georgia Railroad Bank & Trust Company from
1979 until 1989. Mr. Blanchard received his Bachelor of Business Administration
degree from Georgia Southern University and is a graduate of the Georgia Banking
School and the Graduate School of Banking of the South at Louisiana State
University. He currently serves as Sergeant at Arms of the Coalition for
Quality Government, Chairman of the Augusta Metro Chamber of Commerce 2001 Total
Resource Campaign and Treasurer of the Shield Club of Greater Augusta, Inc. He
also serves on the Board of Directors of the Senior Citizens Council of Greater
Augusta, CSRA Development Companies and Residential Care Facilities for the
Elderly Authority of Columbia County.
R. Daniel Blanton has been President and Chief Executive Officer of
the Company and the Bank since October, 1997. He has been a Director of the
Company since it was formed and has been a Director of the Bank since June,
1990. Prior to his current position, he held the title of Executive Vice
President and Senior Lending Officer of the Bank and was named Chief Operating
Officer of the Company and the Bank in November, 1995. Mr. Blanton was Vice
President of The Bank of Columbia County in Martinez, Georgia from 1987 to 1988.
From 1986 to 1987, he was self-employed as a real estate developer. From 1976 to
1986, Mr. Blanton served as Senior Vice President and Senior Lending Officer of
Georgia State Bank in Martinez, Georgia. A graduate of Georgia Military
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College, Mr. Blanton received his Bachelor of Science Degree from Clemson
University in 1973 and received further training at the Georgia Banking School
in 1982. He graduated from the Graduate School of Banking of the South at
Louisiana State University in 1985. Mr. Blanton serves on the Board of
Directors of the Family Y, Fore Augusta Foundation, Sacred Heart Cultural
Center, United Way, and the CSRA Regional Development Companies where he also
serves as Chairman of the Loan Review Committee. He is a member of the
Advisory Board at Augusta State University College of Business, the Augusta
Museum of History, Fort Discovery National Science Center, and the Augusta Metro
Chamber of Commerce where he also serves on the Economic Development Council.
Mr. Blanton chairs the Credit Committee for the Georgia Bankers Association and
in May 2001, he will begin serving on its Board of Directors. He is a member
of the Exchange Club of Augusta and the Augusta Symphony League.
W. Marshall Brown, a Director of the Bank since May, 1998, is a
Divisional Vice President with PaineWebber in Augusta, Georgia. Mr. Brown
previously served as Executive Vice President of NationsBank Corporation and
President of NationsBank Richmond County from 1986-1997. He serves on the Board
of Augusta State University Foundation, the Augusta Technical College
Foundation, and is Chairman Elect of the Walton Rehabilitation Hospital
Foundation. He also serves on the board of the Pinnacle Club and is a Trustee
of the Tuttle Newton Home. He earned a Business Administration degree from
Francis Marion University. He is a member of Reid Memorial Presbyterian Church.
William P. Copenhaver, a Director of the Company since its formation
and a Director of the Bank since September, 1991, is a private investor and the
retired Chairman of the Board and President of Columbia Nitrogen Corporation and
Nipro, Inc., positions he held until 1991. Mr. Copenhaver is a graduate of
Virginia Polytechnic Institute and State University and the Harvard University
Business School. He currently serves on the Board of Directors of The Creel
Foundation, Inc. and the Greater Augusta Community Foundation, Inc. A resident
of Augusta since 1971, Mr. Copenhaver is a member of the Augusta National Golf
Club, the West Lake and Augusta Country Clubs, and St. John's Methodist Church.
Mr. Copenhaver previously served on the Board of Directors of Arcadian
Corporation, Georgia Power, LaRoche Chemical, Millhaven Corporation and the
Southern Company.
Warren A. Daniel, a Director of the Bank since July, 1990, has been an
agent for Northwestern Mutual Life Insurance Company since 1978. He is also
President of Group & Benefits Consultants, Inc. Prior to 1978, Mr. Daniel was a
Loan Officer with SunTrust Bank in Augusta. He is a graduate of Richmond
Academy in Augusta and received his Bachelor of Business Administration degree
from the University of Georgia in 1970. Mr. Daniel's professional designations
include Chartered Life Underwriter and Chartered Financial Consultant. He
currently serves as a Director of Howard Lumber and is past Chairman of the
Metro Augusta Chamber of Commerce and is active in other civic and business
organizations
Dr. Shirley A. R. Lewis, a Director of the Bank since August, 1994, is
the President of Paine College in Augusta, Georgia. She earned a Ph.D. in
Education from Stanford University and M.S.W. and B.A. degrees from the
University of California, Berkeley. She also holds a Certificate in African
Studies from the joint program of the University of London and University of
Ghana. Prior to assuming the Presidency at Paine College in 1994, Dr. Lewis
served as Assistant General Secretary of the Black College Fund of the General
Board of Higher Education and Ministry of the United Methodist Church in
Nashville, Tennessee since 1986. She is a past member of the College of
Education Planning Committee for the Africa University in Mutare, Zimbabwe. She
is the author of numerous articles and research memoranda on higher education,
language arts, historically black colleges and universities, and teacher
training. Dr. Lewis participates in a variety of civic, educational and service
activities including the United Negro College Fund, the Association of Governing
Boards, and the National Association of Independent Colleges and Universities.
She is a member of the Board of Directors of the Medical College of Georgia
Research Institute, MCG, Inc., Augusta Rotary Club, and she is a trustee at St.
Mary's College in Notre Dame, Indiana.
Tom C. McLaughlin has served as Group Vice President and Senior
Lending Officer of the Bank since October, 1997. He previously served as Senior
Vice President and Commercial Loan Officer since 1993, and has been with the
Bank since 1991. His career in the financial services industry began in 1970
with C.I.T. Financial in Augusta and continued with that firm until his
employment with Georgia State Bank in December 1983. A native Augustan, Mr.
McLaughlin attended public schools in Richmond County and graduated from
Carlisle Military Academy in 1967. He
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graduated from the Graduate School of Banking of the South at Louisiana State
University in 1997. He is a member of the Kiwanis Club of Augusta.
Edward G. Meybohm has served as Vice Chairman of the Company's Board
of Directors since its formation and is the current Chairman of the Bank's Board
of Directors and the Asset/Liability and Investment Committee of the Bank's
Board. He has been the President of Meybohm Realty, Inc., a real estate
brokerage firm, since 1977. Prior to 1977, Mr. Meybohm worked at Southern
Finance Corporation, where he was employed from 1970. Mr. Meybohm, a native of
Harlem, Georgia, received his Bachelor of Science degree in Education from
Georgia Southern University in 1964. He served as a member of the Board of
Directors of Georgia State Bank, Martinez, Georgia, from November 1983 through
December 1985, when Georgia State Bank merged with Georgia Railroad Bank.
Thereafter, Mr. Meybohm continued to serve on the Columbia County Advisory Board
of Georgia Railroad Bank and its successor, First Union National Bank of
Georgia, until his resignation in June, 1988. Mr. Meybohm is past President of
the Georgia Association of Realtors, a past Chairman of the Metro Augusta
Chamber of Commerce, a past member of the Georgia State Board of Education, and
is active in other civic and business organizations. He is currently a member
of the Board of Governors of Augusta Country Club.
Grey B. Murray, a Director of the Bank since May, 1998, is a native of
Augusta. He is graduate of Richmond Academy and Clemson University. He
currently serves as President of United Brokerage Company, Inc. Mr. Murray has
served on the University Hospital Foundation Board and attends St. Paul's
Episcopal Church.
Travers W. Paine III, a Director and Corporate Secretary of the
Company since its formation and a Director and Corporate Secretary of the Bank
since it was organized, is a partner in the law firm of Paine Little LLP, of
Augusta. After graduating from Richmond Academy in Augusta, Mr. Paine received
his Bachelor of Business Administration and Juris Doctor degrees from the
University of Georgia in 1970 and 1973, respectively. Active in civic, business
and professional organizations, he is a member of the Forum Committee on Health
Law of the American Bar Association and the American Health Lawyers Association.
Mr. Paine is a member of the National Association of Bond Lawyers and is a
former member of the City Council of Augusta. He is a member of the Board of
Directors of numerous closely held companies and non-profit organizations
Robert W. Pollard, Jr. has been a Director of the Company and the Bank
since August, 1994. In April, 1995, he was elected Chairman of the Board of the
Company and Vice Chairman of the Bank. He also serves as Chairman of the
Executive Committee and Compensation Committee of the Company's Board. He is
President of Pollard Lumber Company, Inc., a lumber manufacturer located in
Appling, Georgia. He is a native of Appling, Georgia, and attended Harlem High
School. He also attended the University of Georgia and received his Bachelor of
Science degree in Forest Resources. Mr. Pollard has served on the Board of
Directors of the Southeastern Lumber Manufacturers Association, the Georgia
Forestry Association and as Chairman of the Southern Timber Council. He
currently serves on the Board of Trustees of Westminster Schools and is a member
and Deacon of Kiokee Baptist Church in Appling.
Larry S. Prather, a Director of the Bank since January 1, 1993, was
previously an organizer and member of the Board of Directors of FCS Financial
Corporation and First Columbia Bank. He has been self-employed as the President
and owner of Prather Construction Company, Inc., a utility and grading
contractor, for the past twenty-six years. A native of Columbia County, Mr.
Prather has served as a member of the Columbia County Board of Education, the
Development Authority of Columbia County and as Chairman of the Columbia County
Board of Commissioners. Mr. Prather is a graduate of Harlem High School and the
University of Georgia where he received a Bachelor of Science degree in Business
Administration. He is also a member of Harlem Methodist Church.
Milton Ruben, C.P.A. has served as a Director of the Bank since
November, 1998, has operated various automobile dealerships in Augusta since
1979 and currently owns Milton Ruben Auto Mall. He is a member of the National
Automobile Dealers Association, the Augusta Automobile Dealers Association, and
the Georgia Automobile Dealers Association. He serves as Treasurer for both the
CSRA Chevrolet Advertising Association and the Peach States Life Insurance
Company. Mr. Ruben is a former Zone Representative for the Chevrolet Dealer
Council and now serves as Zone Representative for the Jeep Dealer Council.
Since 1992, he has served on the Board of Directors of Chrysler/Plymouth/Jeep
Southeast Ad Association. Mr. Ruben holds a Bachelor of Business Administration
from Tulane University and a Master of Accountancy With Distinction from the
University of Georgia. Mr. Ruben previously served on the Board of Directors of
the Jewish Community Center, the Augusta Metro Chamber of Commerce and the
University Hospital Foundation.
5
James W. Smith, Jr. has been a Director of the Bank since May, 1998.
He is a native Augustan. He is a graduate of Richmond Academy and the General
Motors Training Center. He is the owner of Smitty's Auto Service/Smith Tire
Company located on Gordon Highway. He retired in 1996 from his auto service
operation which was founded in 1936 and is now a third generation family
business. He has served as President of the Automotive Service Association of
Georgia and is past Treasurer of Automotive Air Group National. Mr. Smith was
the recipient of the 1995 Optimist Club's Service to Mankind Award, the 1996
Automotive Air Group National Man of the Year Award and 1997 Augusta Clean and
Beautiful Visionary Award. Mr. Smith serves on the Board of Directors of the
Metro Augusta Chamber of Commerce as well as the University Hospital Authority
and University Research Board. He is President of Greater Augusta Progress,
Inc. as well as founder of Richmond County's Pride and Progress Committee, a
member of the Hephzibah Agricultural Club, the Christian Business Mens Club and
Augusta South Rotary. He is a member of Hillcrest Baptist Church and serves as
Brotherhood Director and serves on the Church Council and the Budget and Finance
Committee.
Randolph R. Smith, M.D. has been a Director of the Bank and Company
since each was organized and serves as Chairman of the Audit Committee of the
Company's Board. Dr. Smith is a specialist in plastic and reconstructive
surgery and a member of the medical staff of University Hospital in Augusta
where he has served as Chief of Staff and is Chairman of University Health, Inc.
He has practiced medicine in the Augusta area since 1978. Prior to that time,
Dr. Smith served his residency at the Medical College of Georgia in Augusta and
Duke University. He graduated from Richmond Academy in Augusta, received his
Bachelor of Science Degree from Clemson University in 1966 and his M.D. degree
from the Medical College of Georgia in 1970. Dr. Smith was awarded an honorary
doctorate from Clemson in 1997 for his volunteer services in developing
countries. Dr. Smith is an Augusta, Georgia native and is active in civic and
professional associations and has received The Book of Golden Deeds Award from
The Exchange Club of Augusta, The Paul Harris Fellowship award by the Rotary
Club of Augusta, the Civic Endeavor Award by the Richmond County Medical Society
and the Jack A. Raines Humanitarian Award presented by the Medical Association
of Georgia for 1999. He currently serves as Senior Warden at St. Paul's
Episcopal Church and President of the Exchange Club of Augusta.
Edward J. Tarver, a Director of the Bank since May, 1998, is a partner
in the law firm of Hull, Towill, Norman, Barrett & Salley in Augusta, Georgia.
He graduated from Augusta State University and received his J. D. degree in 1991
from the University of Georgia. Mr. Tarver is Chairman Elect of the Augusta
Metro Chamber of Commerce and Chairman of the Board of Trustees of the
Leadership Georgia Foundation. Mr. Tarver serves as Director on the Boards of
the Southeastern Natural Sciences Academy, the University of Georgia National
Alumni Association and the Augusta Chapter of the American Red Cross. He is
past President, legal counsel and current member of the Board of Directors of
the East Georgia Easter Seal Society. He also serves as a member of the Board
of directors and legal counsel for the Southeastern Technology Center, Inc. He
is past Chairman of the St. John Towers Advisory Board, and serves on the
Augusta-Richmond county General Aviation Commission. Mr. Tarver serves on the
Attorney Advisory Committee for the U.S. District Court for Southern District of
Georgia and is an active member of the Georgia Bar Association. As an active
member of the Augusta Bar Association, he has served on the Executive Committee,
the Law Day Committee and the Admissions Committee. He is a member of the
Augusta Exchange Club. Mr. Tarver is a member of Aldersgate United Methodist
Church in Augusta.
Ronald L. Thigpen has served as Executive Vice President and Chief
Operating Officer of the Company and the Bank since October, 1997, having joined
the Company and the Bank as Chief Financial Officer upon the acquisition of FCS
Financial Corporation in December, 1992. He was elected to the Board of
Directors of both the Company and the Bank in April, 1995. He was previously
employed as the President and Chief Executive Officer of FCS Financial
Corporation and First Columbia Bank from January, 1991 to December, 1992. From
1971 through 1990, Mr. Thigpen served First Union National Bank, and its
predecessors Georgia Railroad Bank and Central Bank of Georgia, in a variety of
positions in Augusta, Macon, and Columbus, Georgia. He received his Bachelor of
Business Administration degree from Augusta State University in 1973 and is a
1980 graduate of the Graduate School of Retail Bank Management at the University
of Virginia. He also graduated from the Graduate School of Banking of the South
at Louisiana State University in 1985. He is a member of the Board of Directors
of the University Health Care Foundation, the Golden Harvest Food Bank and the
national Board of Directors of the Financial Managers Society, headquartered in
Chicago,
6
Illinois. Mr. Thigpen is Chairman of the Development Authority of Columbia
County and Vice Chairman of the Augusta Metro Chamber of Commerce Board of
Directors. He also serves on the Augusta Metro Chamber of Commerce Economic
Development Council and the Advisory Board for St. John Towers. Mr. Thigpen is a
member of the Rotary Club of Augusta and a member of the Hephzibah Agricultural
Club. He is a member of Wesley United Methodist Church and serves as Chairman of
the Trustees.
John W. Trulock, Jr., a Director of the Company and the Bank since
April, 1995, is a native Augustan. He attended Augusta State University and is
a graduate of the University of Georgia, Athens, Georgia. Mr. Trulock has
served as an agent for Massachusetts Mutual Life Insurance Company in Augusta
since 1981. Mr. Trulock is a past President of the Exchange Club of Augusta,
the Augusta State University Alumni Association, Garden City Lions Club, and
Boys Club of Augusta as well as past Chairman of the Augusta State University
Foundation. He is a member of Covenant Presbyterian Church where he has served
as Deacon, Elder, and Trustee.
DIRECTOR COMPENSATION
Directors of the Company and the Bank who are not employees of the
Company or the Bank receive a fee for their service on the Boards of the Company
and the Bank equal to $100 for each such Board meeting attended. In addition
non-employee Directors are paid a $100 fee for each Company or Bank Board
committee meeting attended. Directors who are Company or Bank employees receive
no compensation for their service on the Company and Bank Boards or their
committees.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors has an Executive Committee, Audit
Committee, and Compensation Committee.
The Executive Committee is responsible for making recommendations to
the Board on a variety of matters, including the nomination of individuals for
election to the Company's Board of Directors. During 2000, the Executive
Committee's members included: Robert W. Pollard, Jr., Chairman, R. Daniel
Blanton, William P. Copenhaver, Edward G. Meybohm, Travers W. Paine III, Dr.
Randolph R. Smith and Ronald L. Thigpen. The Executive Committee held six
meetings during 2000.
The Audit Committee meets, at a minimum, quarterly prior to the
regular Bank Board meeting and functions as a joint committee of the Company and
the Bank. The Company's internal auditor meets with and presents a report to
this Committee. The Chairman of the Audit Committee makes a report to the full
Board of Directors at the next scheduled meeting. The Audit Committee has the
responsibility of reviewing the Company's consolidated financial statements,
evaluating internal accounting control, reviewing reports of regulatory
authorities, and determining that all audits and examinations required by law
are properly performed. The Committee recommends to the Board the appointment
of the Company's independent auditors for the next fiscal year, reviews and
approves the internal auditors' audit program, and reviews with the independent
auditors the results of the annual audit and management's response thereto.
Please see "Audit Committee Report" for additional information. During 2000,
the Company's Audit Committee members were Dr. Randolph R. Smith, Chairman,
William J. Badger, James G. Blanchard, Jr., W. Marshall Brown and Edward J.
Tarver. The Audit Committee met four times during 2000.
The Compensation Committee is responsible for making recommendations
to the Company Board to assure that competitive and fair compensation is
provided to the officers and employees in order to recruit and retain quality
personnel. This Committee also functions as a joint committee of both the
Company and Bank Boards of Directors. This Committee periodically reviews and
revises salary ranges and total compensation programs for officers and employees
using an outside consultant to recommend salary ranges based upon current
surveys of peer group market salaries for specific jobs. During 2000, the
Compensation Committee was comprised of the following members: Robert W.
Pollard, Jr., Chairman, W. Marshall Brown, William P. Copenhaver, Warren A.
Daniel, Edward G. Meybohm and Travers W. Paine III. The Compensation Committee
held four meetings during 2000. See "Compensation Committee Report" for
additional information.
7
The full Board of Directors of the Company held three meetings, and
the Board of Directors of the Bank held twelve meetings, during the year ended
December 31, 2000. All of the Directors of the Company attended at least 75% of
such meetings and the meetings of each committee on which they served.
PROPOSAL II
APPROVAL OF THE GEORGIA BANK FINANCIAL CORPORATION
2000 LONG-TERM INCENTIVE PLAN
2000 Long-Term Incentive Plan
The Board of Directors approved the Georgia Bank Financial Corporation
2000 Long-Term Incentive Plan (the "Plan") on December 13, 2000. The Plan is
being submitted for approval by our shareholders at the Meeting so that
incentive stock options may be awarded and so that certain awards made under the
Plan my be fully deductible without regard for the deduction limits of Section
162(m) of the Internal revenue Code of 1986, as amended (the "Code").
The aggregate number of shares of common stock which may be granted to
participants pursuant to awards under the Plan may not exceed 100,000. As of
March 28, 2001, there were 87,500 shares of common stock remaining available for
awards under the Plan, approximately 187 employees, officers and directors
eligible to participate in the Plan, and two persons holding outstanding awards
representing 12,500 shares of common stock. The following summary is qualified
by reference to the full text of the Plan, which is attached to this Proxy
Statement as Appendix A.
----------
The purpose of the Plan is to promote our success and enhance our
value by linking the personal interests of our employees, officers, directors
and consultants to those of our shareholders, and by providing participants with
an incentive for outstanding performance. The Plan authorizes the granting of
awards in the form of options to purchase shares of common stock. The maximum
number of shares of common stock with respect to one or more options that may be
granted during any one calendar year under the Plan to any one person is 10,000;
but we may increase that limit by 10,000 shares in the case of an award made to
a person in connection with his or her initial employment.
Administration
The Plan is administered by the Compensation Committee of the Board of
Directors. The committee has the authority to designate participants; determine
the type or types of options to be granted to each participant and the number,
terms and conditions thereof; establish, adopt or revise any rules and
regulations as it may deem advisable to administer the Plan; and make all other
decisions and determinations that may be required under the Plan. The Board of
Directors may at any time administer the Plan. If it does so, it will have all
the powers of the committee.
Awards
Stock Options. The committee is authorized to grant incentive stock
options or non-qualified stock options under the Plan. The terms of an
incentive stock option must meet the requirements of Section 422 of the Code.
All options will be evidenced by a written award agreement with the participant,
which will include any provisions specified by the committee. However, the
exercise price of an option may not be less than the fair market value of the
underlying stock on the date of grant and no option may have a term of more than
10 years.
Limitations on Transfer, Beneficiaries. No award will be assignable
or transferable by a participant other than by will or the laws of descent and
distribution or, except in the case of an incentive stock option, pursuant to a
qualified domestic relations order, provided, however, that the committee may
(but need not) permit other transfers where the committee concludes that such
transferability does not result in accelerated taxation, does not cause any
8
option intended to be an incentive stock option to fail to qualify as such, and
is otherwise appropriate and desirable, taking into account any factors deemed
relevant, including without limitation, any state or federal tax or securities
laws or regulations applicable to transferable awards. A participant may, in
the manner determined by the committee, designate a beneficiary to exercise the
rights of the participant and to receive any distribution with respect to any
award upon the participant's death.
Acceleration Upon Certain Events. Upon a participant's death,
disability or retirement, all of his or her outstanding options will become
fully exercisable. Any of his or her options will thereafter continue or lapse
in accordance with the other provisions of the Plan and the award agreement.
Unless otherwise provided in an award agreement, upon the occurrence of a change
in control of the company (as defined in the plan), all outstanding options will
become fully vested; provided, however that such acceleration will not occur if,
in the opinion of our accountants, such acceleration would preclude the use of
pooling of interest accounting treatment for a change in control transaction
that would otherwise qualify for such accounting treatment and is contingent
upon qualifying for such accounting treatment. In addition, the committee may
in its discretion declare any or all awards to be fully vested. The committee
may discriminate among participants or among awards in exercising such
discretion.
Termination and Amendment
The Board of Directors or the committee may, at any time and from time
to time, terminate, amend or modify the Plan without shareholder approval; but
they may condition any amendment on the approval of our shareholders if such
approval is necessary under tax, securities or other applicable laws, policies
or regulations. No termination or amendment of the Plan may adversely affect
any award previously granted under the Plan without the written consent of the
participant and, unless approved by the shareholders or permitted by the anti-
dilution provisions of the Plan, the exercise price of an outstanding option may
not be reduced.
Certain Federal Tax Effects of the Grant, Exercise and Transfer of Options
Nonqualified Stock Options. There will be no federal income tax
consequences to the optionee or to us upon the grant of a nonqualified stock
option under the Plan. When the optionee exercises a nonqualified option,
however, he or she will realize ordinary income in an amount equal to the excess
of the fair market value of the common stock received upon exercise of the
option at the time of exercise over the exercise price, and we will be allowed a
corresponding deduction, subject to applicable limitations under Code Section
162(m). Any gain that the optionee realizes when he or she later sells or
disposes of the option shares will be short-term or long-term capital gain,
depending on how long the shares were held.
Incentive Stock Options. There typically will be no federal income
tax consequences to the optionee or to us upon the grant or exercise of an
incentive stock option. If the optionee holds the option shares for the required
holding period of at least two years after the date the option was granted or
one year after exercise, the difference between the exercise price and the
amount realized upon sale or disposition of the option shares will be long-term
capital gain or loss, and we will not be entitled to a federal income tax
deduction. If the optionee disposes of the option shares in a sale, exchange,
or other disqualifying disposition before the required holding period ends, he
or she will realize taxable ordinary income in an amount equal to the excess of
the fair market value of the option shares at the time of exercise over the
exercise price, and we will be allowed a federal income tax deduction equal to
such amount, subject to applicable limitations under Code Section 162(m). While
the exercise of an incentive stock option does not result in current taxable
income, the excess of the fair market value of the option shares at the time of
exercise over the exercise price will be an item of adjustment for purposes of
determining the optionee's alternative minimum taxable income.
Transfers of Options. The committee may, but is not required to,
permit the transfer nonqualified stock options granted under the Plan. Based on
current tax and securities regulations, such transfers, if permitted, are likely
to be limited to gifts to members of the optionee's immediate family or certain
entities controlled by the optionee or such family members. The following
paragraphs summarize the likely income, estate, and gift tax consequences to the
optionee, us, and any transferees, under present federal tax regulations, upon
the transfer and exercise of such options.
9
Federal Income Tax. There will be no federal income tax consequences
to the optionee, us, or the transferee upon the transfer of a nonqualified stock
option. However, the optionee will recognize ordinary income when the
transferee exercises the option, in an amount equal to the excess of the fair
market value of the option shares upon the exercise of such option over the
exercise price, and we will be allowed a corresponding deduction, subject to
applicable limitations under Code Section 162(m). The gain, if any, realized
upon the transferee's subsequent sale or disposition of the option shares will
constitute short-term or long-term capital gain to the transferee, depending on
the transferee's holding period. The transferee's basis in the stock will be
the fair market value of such stock at the time of exercise of the option.
Federal Estate and Gift Tax. If an optionee transfers a nonqualified
stock option to a transferee during the optionee's life but before the option
has become exercisable, the optionee will not be treated as having made a
completed gift for federal gift tax purposes until the option becomes
exercisable. However, if the optionee transfers a fully exercisable option
during the optionee's life, he or she will be treated as having made a completed
gift for federal gift tax purposes at the time of the transfer. If the optionee
transfers an option to a transferee by reason of death, the option will be
included in the decedent's gross estate for federal estate tax purpose. The
value of such option for federal estate or gift tax purposes may be determined
using a "Black-Scholes" or other appropriate option pricing methodology, in
accordance with IRS requirements.
Awards under the Plan will be made at the discretion of the committee.
Therefore, it is not presently possible to determine the benefits or amounts
that will be received by any person or groups pursuant to the Plan in the
future.
Stockholder Vote Required to Approve the Plan
The affirmative vote of the holders of a majority of the shares of
common stock present or represented by proxy and entitled to vote at the Meeting
on this proposal will constitute approval of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
PLAN.
10
NEW PLAN BENEFITS
Georgia Bank Financial Corporation
2000 Long-Term Incentive Plan
Name and Position Dollar Value ($) Number of Units
Ronald L. Thigpen
Executive Vice President and
Chief Operating Officer $42,188(1) 7,500
Executive Group $70,312(1) 12,500
Non-Executive Director Group $ 0 0
Non-Executive Officer and Employee Group
(1) The dollar value of the above options is equal to the difference between
the option exercise price and fair market value of our common stock on December
31, 2000 (which was $30.00), multiplied by the number of shares underlying the
options.
COMPENSATION OF EXECUTIVE OFFICERS
Under rules established by the Securities and Exchange Commission, the
Company is required to provide certain data and information regarding the
compensation and benefits provided to its chief executive officer and other
executive officers, including the four other most highly compensated executive
officers who receive more than $100,000 in compensation. For purposes hereof,
only Mr. R. Daniel Blanton, the Company's Chief Executive Officer and Mr. Ronald
L. Thigpen, the Company's Chief Operating Officer are compensated at this level.
The disclosure requirements include the use of tables and a report explaining
the rationale and considerations that led to executive compensation decisions.
The Compensation Committee has prepared the following report for inclusion in
this Proxy Statement in response to those requirements.
The Compensation Committee recommends to the Company Board of
Directors payment amounts and bonus award levels for executive officers of the
Company and the Bank. The following report reflects the compensation philosophy
of the Company and the Bank as endorsed by the Company's Board of Directors and
the Compensation Committee and resulting actions taken by the Company for the
reporting periods shown in the compensation table.
11
Summary Compensation Table
Annual Compensation
Long Term
Annual Compensation Compensation
---------------------------- ------------
Awards
------------
Securities
Underlying
Name and Year Salary Bonus Options/ All Other
Principal Position SARs (#) Compensation(8)
- ----------------------------- --------- ---------- --------------- ----------- ------------------
R. Daniel Blanton 2000 $140,000 $44,282(1) -0- $6,400
President & 1999 140,000 82,660(2) -0- 6,400
Chief Executive Officer 1998 120,000 34,800(3) -0- 6,300
Ronald L. Thigpen 2000 $120,000 $37,956(4) 7,500 (7) $6,331
Executive Vice President & 1999 120,000 76,280(5) -0- 6,400
Chief Operating Officer 1998 100,000 29,000(6) -0- 5,291
________________________
(1) A cash incentive of $44,282 was paid to Mr. Blanton in February, 2001
relating to 2000 performance objectives.
(2) A bonus of $38,000 was paid to Mr. Blanton based upon the gain in the equity
investment in Towne Services, Inc. and a cash incentive of $44,660 was paid
relating to 1999 performance objectives.
(3) This cash incentive amount was paid to Mr. Blanton in February 1999
relating to 1998 performance objectives.
(4) A cash incentive amount of $37,956 was paid to Mr. Thigpen in February, 2001
relating to 2000 performance objectives.
(5) A bonus of $38,000 was paid to Mr. Thigpen based upon the gain in the equity
investment in Towne Services, Inc. and a cash incentive of $38,280 was paid
relating to 1999 performance objectives.
(6) This cash incentive amount was paid to Mr. Thigpen in February 1999 relating
to 1998 performance objectives.
(7) Mr. Thigpen was granted (subject to shareholder approval of the 2000 Long-
Term Incentive Plan) options for the purchase of 7500 shares.
(8) Reflects the annual 401(k) contribution of the Company.
Options/SAR Grants in Last Fiscal Year
Individual Grants
Potential realizable
value at assumed
annual rates of stock
Percent of total price appreciation
Options/SARs granted For option term
Options/SARs to employees in Exercise or base 5% 10%
Name Granted (#) fiscal year price ($SH) Expiration date ($) (2) ($) (2)
(a) (b) (c) (d) (e) (f) (g)
- --------------------------------------------------------------------------------------------------------------------------
R. Daniel Blanton -0- -0- -0- ---
Ronald L. Thigpen 7,500 51.7% $24.375 7/25/2010 115,172 290,672
(1) Options vest over five years (vesting will accelerate upon a "change in
control" as defined in the 2000 Long-Term IncentivePlan).
(2) In accordance with the rules of the SEC, the table sets forth the
hypothetical gains that would exist for the options at the end of their ten
year terms, based on assumed annual rates of compounded stock price
appreciation of 5% and 10%. Actual gains, if any, on option exercises, are
dependent upon the future performance of our common stock.
12
Aggregated Fiscal Year-End Option/SAR Values
Number of Options/SARs Value of Options/SARs
at FY-End (#) at FY-End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable(1)
- --------------------------------------------------------------------------------------
R. Daniel Blanton
President & 0/5,750 $0/$83,749
Chief Executive Officer
Ronald L. Thigpen
Executive Vice President & 0/13,250 $0/$125,937
Chief Operating Officer
(1) The value of the options listed above is equal to the difference between
the option exercise price and the fair market value of our common stock on
December 31, 2000 (which was $30.00) multiplied by the number of shares
underlying the options.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
Employment Agreement with Mr. Blanton. During 2000, the Company entered
into an Employment Agreement with Mr. Blanton, President and Chief Executive
Officer of the Company, effective January 1, 2000. The Employment Agreement is
for a term of three years and is renewable annually for additional terms of
three years each year upon approval of the Compensation Committee. The base
salary is set by the Compensation Committee annually. During 2000, the Company
paid Mr. Blanton a base salary of $140,000 under this agreement and will pay him
a base salary of $147,000 for 2001.
Pursuant to the Employment Agreement, Mr. Blanton will also be entitled to
an annual incentive award in an amount to be determined by the Compensation
Committee and will be eligible to participate in the Company's Long-Term
Incentive Plan. In the event of a change in control (as defined in the
Employment Agreement), Mr. Blanton will be entitled to a cash payment equal to
two times his average base salary plus cash bonuses paid during the first five
years. The amount of such payments may be limited, to the extent any such
payment would not otherwise be deductible to the Company as a result of Section
280G of the Internal Revenue Code. Mr. Blanton will also be entitled to deferred
compensation of at least $120,000 annually, commencing upon retirement at age
65.
In the event that Mr. Blanton's employment is terminated as a result of his
death or permanent disability, the Company will pay his estate, or him, as the
case may be, an amount equal to six months of his then current base salary. If
Mr. Blanton's employment is terminated by the Company without "cause" (as
defined in the Employment Agreement) he will be entitled to continue to receive
his base salary for the longer of two years, or the remaining term of the
Agreement. He will also be entitled to continuing medical coverage during such
period, at the Company's expense. If, following a change in control, Mr. Blanton
is (i) required to relocate a distance greater than 50 miles, (ii) required to
accept a reduction in his "total annual compensation" (as defined in the
Employment Agreement), or (iii) is required to perform duties or occupy a
position other than that described in the Employment Agreement, he will be
entitled to resign and to receive continuation payments of his total annual
compensation and medical insurance benefits for a period equal to the greater of
two years or the remaining term of the Employment Agreement. The Employment
Agreement contains restrictive covenants related to noncompetition,
nonsolicitation and confidentiality.
Employment Agreement with Mr. Thigpen. The Company has also entered into an
Employment Agreement with Mr. Thigpen, Executive Vice President and Chief
Operating Officer. The Employment Agreement is for a term
13
of three years and is renewable annually for additional terms of three years
each upon approval of the Compensation Committee. The base salary is set by the
Compensation Committee annually. During 2000, the Company paid Mr. Thigpen a
base salary of $120,000 under this agreement and will pay him a base salary of
$127,000 for 2001.
Pursuant to the Employment Agreement, Mr. Thigpen will also be entitled to
an annual incentive award in an amount to be determined by the Compensation
Committee and will be eligible to participate in the Company's Long-Term
Incentive Plan. In the event of a change in control (as defined in the
Employment Agreement), Mr. Thigpen will be entitled to a cash payment equal to
two times his average base salary plus cash bonuses paid during the last five
years. The amount of such payments may be limited, to the extent any such
payment would not otherwise be deductible to the Company as a result of Section
280G of the Internal Revenue Code. Mr. Thigpen will also be entitled to deferred
compensation of at least $120,000 annually, commencing upon retirement at age
65.
In the event that Mr. Thigpen's employment is terminated as a result of his
death or permanent disability, the Company will pay his estate, or him, as the
case may be, an amount equal to six months of his then current base salary. If
Mr. Thigpen's employment is terminated by the Company without "cause" (as
defined in the Employment Agreement) he will be entitled to continue to receive
his base salary for the longer of two years, or the remaining term of the
Agreement. He will also be entitled to continuing medical coverage during such
period, at the Company's expense. If, following a change in control, Mr. Thigpen
is (i) required to relocate a distance greater than 50 miles, (ii) required to
accept a reduction in his "total annual compensation" (as defined in the
Employment Agreement), or (iii) is required to perform duties or occupy a
position other than that described in the Employment Agreement, he will be
entitled to resign and to receive continuation payments of his total annual
compensation and medical insurance benefits for a period equal to the greater of
two years or the remaining term of the Employment Agreement. The Employment
Agreement contains restrictive covenants related to noncompetition,
nonsolicitation and confidentiality.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee in 2000 were Robert W. Pollard,
Jr., W. Marshall Brown, William P. Copenhaver, Warren A. Daniel, Edward G.
Meybohm and Travers W. Paine III. There were no interlocks with respect to the
Compensation Committee in 2000.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following graph compares the yearly percentage change in cumulative
shareholder return on Georgia Bank Financial Corporation Stock with the
cumulative total return of the Standard & Poor's 500 Index and SNL Less than
500M Southeast Index for the last five years (assuming a $100 investment on
December 31, 1995).
Comparison of Five Year Cumulative Total Return
Georgia Bank Financial Corp, S&P 500 and SNL Bank Index
1995 1996 1997 1998 1999 2000
--------------------------------------------
GBFC 100.00 110.00 125.00 184.00 194.00 233.00
S & P 100.00 122.86 163.86 210.64 254.97 231.74
SNL Less than $500M Southeast Index 100.00 128.71 219.41 200.34 185.44 178.90
14
COMPENSATION COMMITTEE REPORT
Overview
The Compensation Committee is composed entirely of individuals who are
outside directors and functions as a joint committee of the Company and Bank
Board of Directors. The Compensation Committee fully supports the Company's
philosophy that the relationship between pay and individual performance is
fundamental to a compensation program. Pay for performance relating to executive
officer compensation is composed of base salary, annual cash incentives, stock
options and long-term stock appreciation rights. The administration of executive
officer compensation is based not only on individual performance and
contributions, but also total Company performance relative to profitability
measures and shareholder interests. The Compensation Committee makes
recommendations to the Board to assure that competitive and fair compensation is
provided to the officers and employees in order to recruit and retain quality
personnel. The Compensation Committee periodically reviews and revises salary
ranges and total compensation programs for officers and employees and uses an
outside consultant to recommend salary ranges based upon current surveys of peer
group market salaries for specific jobs. The peer group that the Company
analyzes in determining officer and employee compensation is similarly situated
banking organizations in the Southeast ranging in asset size of $300 million to
$500 million and other banks that are direct competitors with the Company in its
markets.
Base Salary and Increases
In establishing executive officer salaries and increases, the Compensation
Committee considers individual performance, the relationship of base pay to the
existing salary market and increases in responsibility. The decision to increase
base pay is recommended by the Chief Executive Officer and considered and
approved by the Compensation Committee. It is further ratified by the full Board
of Directors. Information regarding salaries paid by other financial
institutions is obtained through formal salary surveys and other means and is
used in the decision process to ensure competitiveness with the Company's peers
and competitors.
The Company's general philosophy is to provide base pay competitive with
other banks and bank holding companies of similar size in the Southeast.
The Compensation Committee formally reviews the compensation paid to
executive officers in January of each year. Changes in base salary and the
awarding of cash incentives are based on overall financial performance and
profitability of the Company as compared to the Company's financial performance
objectives, and the performance of the individual.
Annual Cash Incentives
In 1997, the Company implemented an annual cash incentive program for
officers and key managers. The Company utilizes cash incentives to better align
pay with individual and Company performance. Funding for the cash incentives is
dependent on the Company attaining performance thresholds for net income. The
performance objectives promote a group effort by all officers and key managers.
Once these thresholds are attained, the Compensation Committee, based in part
upon recommendations of the Chief Executive Officer, may consider and approve
awards to those officers and key managers who have made superior contributions
to Company profitability as measured and reported against the individual
performance goals established at the beginning of the year. The full Board of
Directors ratifies the awards approved by the Compensation Committee. This
philosophy assists in overall better control of expenses associated with salary
increases by reducing the need for significant annual base salary increases as a
reward for past performance, and places more emphasis on annual profitability
and the potential rewards associated with future performance. Over time, it is
anticipated that an increasing amount of the total earnings of all officers and
key managers will be based on incentive compensation as opposed to automatic
increases in base salaries. Market information regarding salaries is used to
establish competitive rewards that are adequate to motivate strong individual
performance during the year.
15
Long-Term Incentive
The Company established in 1997, a Long-Term Incentive Plan designed to
motivate sustained high levels of individual performance and align the interests
of key officers with those of the Company's shareholders by rewarding capital
appreciation and earnings growth. Upon recommendation by the Chief Executive
Officer, and subject to approval by the Compensation Committee, stock
appreciation rights may be awarded annually to those key officers whose
performance during the year has made a significant contribution to the Company's
long-term growth. Generally, stock appreciation rights are not grants or
issuances of Company stock, but rather constitute a right to receive an amount
of money in the future that is based upon the appreciation in the market value
of the Company's common stock. The value of the stock appreciation rights are
established at the end of a five-year period and the grantee vests in such
rights value over a ten year period. This ten year vesting period is intended
to promote long-term employment and continued contribution by those key
officers. Since the inception of this program, the Company has awarded 40,538
stock appreciation rights. All base prices per share and rights amounts have
been adjusted to reflect the 15% stock dividend paid by the Company on August
28, 1999.
The Company proposes the approval of the 2000 Long-Term Incentive Plan in
order to enhance and improve the level of long term benefits available to
employees. By further linking the personal interest of employees to those of
shareholders, the Company is able to offer a competitive benefit program
comparable to similarly sized financial institutions.
Section 401(k) Plan
The Bank has an employee savings plan that qualifies as a deferred salary
arrangement under Section 401(k) of the Internal Revenue Code of 1986, as
amended. Under this plan, participating employees may defer a portion of their
pre-tax earnings, up to the Internal Revenue Service annual contribution limit.
The Bank has the obligation under the employee savings plan to make an annual
contribution of 3% of annual compensation of all eligible employees. The Bank
has the option to make additional annual discretionary contributions to the
plan. For the year ended December 31, 2000, the Bank contributed $173,378 to
the plan, which represented 4% of the annual compensation of all eligible
employees.
2000 Performance; Chief Executive Officer Compensation
The Company's performance for the most recent five-year period has improved
each year, and the Company exceeded its asset growth and profitability goals for
2000. In addition, the Company also continued to excel in non-financial
performance areas, as the Company successfully addressed its policy objectives
relating to customers, employees and communities.
Mr. Blanton's compensation awards in 2000 were based upon the Compensation
Committee's assessment of the Company's financial and non-financial performance
and Mr. Blanton's individual performance. Mr. Blanton was named President and
Chief Executive Officer of the Company and Bank in October, 1997. Prior to
being named Chief Executive Officer, Mr. Blanton served as Executive Vice
President and Chief Operating Officer of the Company and Bank. Based on Mr.
Blanton's responsibilities, achievement and individual performance, the
Company's performance and the compensation paid to chief executive officers of
peer banks and bank holding companies, Mr. Blanton received a salary of $140,000
in 2000. In addition, based on the factors discussed herein, Mr. Blanton earned
a cash incentive payment of $44,282 for 2000.
$1 Million Deduction Limit
At this time, the Company does not appear to be at risk of losing
deductions under the $1 million deduction limit on executive pay established
under Section 162(m) of the Internal Revenue Code of 1986. As a result, the
Compensation Committee has not established a policy regarding this limit.
Nevertheless, in designing the 2000 Long-Term Incentive Plan, the Compensation
Committee has taken steps which ensure that awards under that plan will be fully
deductible.
16
Summary
In summary, the Compensation Committee believes that the compensation
program of the Company is reasonable and competitive with compensation paid by
other financial institutions of similar size. The program is designed to reward
managers for superior individual, Company and share value performance. The
compensation program incorporates a shareholder point of view in several
different ways. The Compensation Committee monitors the various guidelines that
make up the program and may adjust them, as it deems appropriate to continue to
meet Company and shareholder objectives.
Robert W. Pollard, Jr., Chairman W. Marshall Brown William P. Copenhaver
Edward G. Meybohm Warren A. Daniel Travers W. Paine III
17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 1, 2001,
with respect to the directors, executive officers and certain other members of
the Company's and Bank's management and any shareholder of the Company known to
the Company to own 5% or more of the Company's Common Stock:
Position(s) with the Company Number of Shares Percentage of
Name and Address and the Bank (1) Beneficially Owned (2) Ownership (3)
- -------------------------- ---------------------------------------------------------------------------
William J. Badger Director 30,932 (4) 1.49%
P. O. Box 1039
Evans, Georgia 30809
J. Pierce Blanchard, Jr. Executive Vice President - 1,507 (5) 0.07%
3530 Wheeler Road Branch Administration
Augusta, Georgia 30909 of the Bank
James G. Blanchard, Jr. Director of the Bank 21,440 (6) 1.03%
461 Greene Street
Augusta, Georgia 30901
R. Daniel Blanton Director, President and Chief 160,254 (7) 7.73%
3530 Wheeler Road Executive Officer
Augusta, Georgia 30909
W. Marshall Brown Director of the Bank 2,061 0.10%
633 Berckman Road
Augusta, Georgia 30904
William P. Copenhaver Director 20,841 1.00%
3531 Interlachen Road
Martinez, Georgia 30907
Warren A. Daniel Director 10,464 (8) 0.50%
P. O. Box 14445
Augusta, Georgia 30919
Dr. Shirley A. R. Lewis Director of the Bank -- --
1235 Fifteenth Street
Augusta, Georgia 30901
Tom C. McLaughlin Group Vice President 962 0.05%
3530 Wheeler Road and Senior Lending
Augusta, Georgia 30909 Officer of the Bank
Edward G. Meybohm Vice Chairman of the 100,796 (9) 4.86%
3519 Wheeler Road Board of the Company
Augusta, Georgia 30909 and Chairman of the
Board of the Bank
Grey B. Murray Director of the Bank 575 0.03%
496 Laney-Walker Blvd.
Augusta, Georgia 30901
18
Travers W. Paine III Corporate Secretary 33,434 (10) 1.61%
945 Broad Street and Director
Suite 220
Augusta, Georgia 30901
Robert W. Pollard, Jr. Chairman of the Board 177,237 (11) 8.54%
5863 Washington Road of the Company, Vice
Applying, Georgia 30802 Chairman of the Board
of the Bank
Larry S. Prather Director of the Bank 11,305 (12) 0.54%
Box 70
Harlem, Georgia 30814
Milton Ruben Director of the Bank 1,150 0.06%
3514 Washington Road
Augusta, Georgia 30907
James W. Smith, Jr. Director of the Bank 460 0.02%
1423/1417 Gordon Highway
Augusta, Georgia 30901
Randolph R. Smith, MD Director 114,440 (13) 5.52%
811 Thirteenth Street
Suite 28, Bldg. 3
Augusta, Georgia 30901
Edward J. Tarver Director of the Bank -- --
700 SunTrust Bank Building
801 Broad Street
Augusta, Georgia 30901
Ronald L. Thigpen Director, Executive 6,636 (14) 0.32%
3530 Wheeler Road Vice President and
Augusta, Georgia 30909 Chief Operating Officer
John W. Trulock, Jr. Director 451 .02%
5-B George C. Wilson Court
Augusta, Georgia 30909
All executive officers and directors 694,945 33.50%
of the Company and Bank as a group
(20 persons)
Other Beneficial Owners of Greater than 5% of the Company's Common Stock
- ------------------------------------------------------------------------
Jennie F. Pollard 367,115 17.70%
5795 Washington Road
Appling, GA 30802
Levi A. Pollard 146,005 (15) 7.04%
3310 Scotts Ferry Road
Appling, Georgia 30802
___________________
1. Each person holds the offices and directorships listed with both the
Company and the Bank unless otherwise noted.
2. Information relating to beneficial ownership of Common Stock by directors
is based upon information furnished by each person using "beneficial
ownership" concepts set forth in the rules of the Securities and Exchange
Commission ("SEC") under the Securities and Exchange Act of 1934, as
amended. Under such rules, a person is deemed to be a "beneficial owner" of
a security if that person has or
19
shares "voting power," which includes the power to vote or direct the
voting of such security, or "investment power," which includes the power to
dispose of or to direct the disposition of such security. The person is
also deemed to be a beneficial owner of any security of which that person
has right to acquire beneficial ownership within 60 days. Under such rules,
more than one person may be deemed to be a beneficial owner of the same
securities, and a person may be deemed to be a beneficial owner of
securities as to which he or she may disclaim any beneficial ownership.
Accordingly, nominees are named as beneficial owners of shares as to which
they may disclaim any beneficial interest. Except as indicated in other
notes to this table describing special relationships with other persons and
specifying shared voting or investment power, directors possess sole voting
and investment power with respect to all shares of Common Stock set forth
opposite their names.
3. Based on 2,074,381 shares issued and outstanding.
4. Includes 2,950 held in Mr. Badger's IRA and 840 shares held by Mrs. Badger.
5. Includes 1,355 shares held in Mr. Blanchard's IRA and 152 shares held
jointly with Mr. Blanchard's wife.
6. Includes 16,949 shares in a Profit Sharing Plan of which Mr. Blanchard is a
beneficiary, 2,202 shares in Mr. Blanchard's wife in an IRA, 529 shares
held jointly with Mr. Blanchard's wife and 1760 shares held in his IRA.
7. Includes 115 shares held in Mr. Blanton's IRA, 73,465 shares held by Mr.
Blanton's wife, 2,709 shares held jointly with Mr. Blanton's wife, 37,379
shares held in trust by Mr. Blanton's wife, as trustee, for their minor
children, and 3,754 shares held in Mr. Blanton's children's name.
8. Includes 2,645 shares held in Mr. Daniel's IRA.
9. Includes 1,207 in an IRA and 25,259 shares owned by a pension and profit
sharing plan as to which Mr. Meybohm is a beneficiary.
10. Includes 1,454 shares held by Mr. Paine's wife, 1,642 shares held by his
minor children, 11,034 shares held by Mr. Paine in his IRA and 1,150 shares
held in Augusta Green Inc.
11. Includes 1,408 shares held by Mr. Pollard's wife and 48,033 shares held in
trust for their minor children, 638 shares held by Mr. Pollard's child, and
3,216 shares held in Mr. Pollard's IRA.
12. Includes 1,150 shares held in an IRA, 6,388 shares held by Prather
Construction Co. Profit Sharing Plan, as to which Mr. Prather is a trustee
and beneficiary.
13. Includes 28,554 shares held in a pension and profit sharing plan as to
which Dr. Smith is a beneficiary
14. Includes 4,396 shares held in Mr. Thigpen's IRA and 460 shares held jointly
with Mr. Thigpen's wife.
15. Includes 17,825 shares held in trust for Mr. Pollard's children.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and the Bank have had, and expect to have in the future,
banking and other business transactions in the ordinary course of business with
directors and officers of the Company and Bank and their related interests,
including corporations, partnerships or other organizations in which such
officers or directors have a controlling interest, on substantially the same
terms (including price, or interest rates and collateral) as those prevailing at
the time for comparable transactions with unrelated parties. Such transactions
have not and will not involve more than the normal risk of collectability nor
present other unfavorable features to the Company or the Bank.
Loans outstanding to officers, directors and affiliates totaled $6,455,929
and aggregated 18.8% of the Company's shareholders' equity at December 31, 2000.
Deposit accounts with officers, directors and affiliates of the Company and the
Bank totaled $5,153,000 at December 31, 2000.
The law firm of Paine Little LLP, in which Mr. Paine is a partner, serves
as legal counsel to the Company and Bank in connection with a variety of
matters. Such services have been, and will continue to be, provided at rates
less than or equal to the prevailing rates in the Augusta area for comparable
services from unrelated parties. This representation has been approved by the
Board of Directors of the Company and Bank, with Mr. Paine abstaining. During
2000, the Bank paid approximately $15,000 in the normal course of business to
Paine Little LLP.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board is responsible for providing independent,
objective oversight of the Company's accounting functions and internal controls.
The Audit Committee is composed of five directors, each of whom is independent
as such term is defined by Rule 4200 of the National Association of Securities
Dealers' listing standards. The Audit Committee operates under a written charter
approved by the Board of Directors. A copy of the charter is attached to this
Proxy Statement as Appendix B.
----------
Management is responsible for the Company's internal controls and financial
reporting process. The independent accountants are responsible for performing an
independent audit of the Company's consolidated
20
financial statements in accordance with generally accepted auditing standards
and to issue a report thereon. The Audit Committee's responsibility is to
monitor and oversee these processes.
In connection with these responsibilities, the Audit Committee met with
management and the independent accountants to review and discuss the Company's
consolidated financial statements as of, and for the year ended, December 31,
2000. The Audit Committee also discussed with the independent accountants the
matters required by Statement on Auditing Standards No. 61 (Communications with
Audit Committees). The Audit Committee also received written disclosures from
the independent accountants required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees), and the Audit Committee
discussed with the independent accountants that firm's independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the representations
of management and the independent accountants, the Audit Committee recommended
that the Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K as of and for the year
ended December 31, 2000, to be filed with the Securities and Exchange
Commission.
Randolph R. Smith, M.D., Chairman William J. Badger James G. Blanchard,Jr.
W. Marshall Brown Edward J. Tarver
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, and
regulations of the Securities and Exchange Commission thereunder require the
Company's executive officers and directors and persons who own more than ten
percent of the Company's Common Stock, as well as certain affiliates of such
persons, to file reports of initial ownership of the Company's Common Stock and
changes in such ownership with the Securities and Exchange Commission. Executive
officers, directors and persons owning more than ten percent of the Company's
Common Stock are required by Securities and Exchange Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by it and written
representations that no other reports were required for those persons, the
Company believes that, during the fiscal year ended December 31, 2000, all
filing requirements applicable to its executive officers, directors, and owners
of more than ten percent of the Company's Common Stock were complied with in a
timely manner.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
KPMG LLP, Atlanta, Georgia, acted as the Company's principal independent
certified public accountants for the fiscal year ended December 31, 2000. On
February 21, 2001 KPMG LLP was appointed by the Board of Directors to act as the
Company's independent certified public accountants for the current fiscal year
ending December 31, 2001. The Board of Directors knows of no direct or material
indirect financial interest by KPMG LLP in Georgia Bank Financial Corporation or
of any connection between KPMG LLP and the Company, in any capacity as promoter,
underwriter, voting trustee, director, officer, shareholder or employee.
Representatives of KPMG LLP will be present at the 2001 Annual Meeting and will
have the opportunity to make a statement if they desire to do so and to respond
to appropriate questions.
Audit Fees
The aggregate fees billed by KPMG LLP for professional services rendered
for the audit of the Company's annual consolidated financial statements for the
fiscal year ending December 31, 2000 and for the quarterly reviews of the
consolidated financial statements included in the Company's Forms 10-Q filed
during 2000 were $87,000.
21
Financial Information Systems Design and Implementation Fees
No fees were billed by KPMG LLP for services rendered to the Company during
the fiscal year ending December 31, 2000, in connection with operating, or
supervising the operation of, the Company's information system or managing the
Company's local area network and designing or implementing a hardware or
software system that aggregates source data underlying the Company's financial
statements or generates information that is significant to the Company's
financial statements.
All Other Fees
The aggregate fees billed by KPMG LLP for services rendered to the Company
during the fiscal year ending December 31, 2000, other than those services
described above, were $46,350.
Audit Committee Review
The Company's Audit Committee has reviewed the services rendered and the
fees billed by KPMG LLP for the fiscal year ending December 31, 2000. The Audit
Committee has determined that the services rendered and the fees billed for the
year ended December 31, 2000 that were not related to the audit of the Company's
consolidated financial statements are compatible with the independence of KPMG
LLP as the Company's independent accountants.
SHAREHOLDERS' PROPOSALS FOR 2002 ANNUAL MEETING
Proposals of shareholders intended to be presented at the Company's 2002
Annual Meeting of Shareholders should be submitted to the Secretary of the
Company by certified mail, return receipt requested, and must be received by the
Company at its offices in Augusta, Georgia, on or before November 30, 2001 to be
eligible for inclusion in the Company's proxy statement and form of proxy for
that meeting.
OTHER MATTERS
Management of the Company is not aware of any other matter to be presented
for action at the Meeting other than those mentioned in the Notice of Annual
Meeting of Shareholders and referred to in this Proxy Statement. If any other
matters come before the Meeting, it is the intention of the persons named in the
enclosed Proxy to vote on such matters in accordance with their judgment.
Pursuant to Section 2.13 of the Company's Bylaws, any matter to be presented for
action other than those approved by the Board of Directors, the Chairman of the
Board or the President must be submitted to the Secretary of the Company by
April 11, 2001.
A copy of the Company's 2000 Annual Report on Form 10-K is included
herewith and is also available without charge (except for exhibits) upon written
request to Georgia Bank Financial Corporation, 3530 Wheeler Road, Augusta,
Georgia, 30909, Attention: Ronald L. Thigpen, Executive Vice President.
By Order of the Board of Directors
/s/ Travers W. Paine III
-----------------------------------
Augusta, Georgia Travers W. Paine III
March 28, 2001 Corporate Secretary
22
APPENDIX A
GEORGIA BANK FINANCIAL CORPORATION
2000 LONG-TERM INCENTIVE PLAN
ARTICLE 1
PURPOSE
1.1 GENERAL. The purpose of the Georgia Bank Financial Corporation 2000
-------
Long-Term Incentive Plan (the "Plan") is to promote the success, and enhance the
value, of Georgia Bank Financial Corporation (the "Corporation"), by linking the
personal interests of its employees and officers to those of Corporation
shareholders and by providing such persons with an incentive for outstanding
performance. The Plan is further intended to provide flexibility to the
Corporation in its ability to motivate, attract, and retain the services of
employees and officers upon whose judgment, interest, and special effort the
successful conduct of the Corporation's operation is largely dependent.
Accordingly, the Plan permits the grant of incentive options from time to time
to selected employees and officers.
ARTICLE 2
EFFECTIVE DATE
2.1 EFFECTIVE DATE. The Plan shall be effective as of the date upon which
--------------
it shall be approved by the Board (the "Effective Date"). However, the Plan
shall be submitted to the shareholders of the Corporation for approval within 12
months of the Board's approval thereof. No Incentive Stock Options granted under
the Plan may be exercised prior to approval of the Plan by the shareholders and
if the shareholders fail to approve the Plan within 12 months of the Board's
approval thereof, any Incentive Stock Options previously granted hereunder shall
be automatically converted to Non-Qualified Stock Options without any further
act. In the discretion of the Committee, Options may be made to Covered
Employees which are intended to constitute qualified performance-based
compensation under Code Section 162(m).
ARTICLE 3
DEFINITIONS
3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
-----------
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Section 1.1 unless a clearly different meaning is required by the
context. The following words and phrases shall have the following meanings:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Cause" as a reason for a Participant's termination of employment
shall have the meaning assigned such term in the employment agreement, if
any, between such Participant and the Corporation or an affiliated company,
provided, however that if there is no such employment agreement in which
such term is defined, "Cause" shall mean any of the following acts by the
Participant, as determined by the Board: gross neglect of duty, prolonged
absence from duty without the consent of the Corporation, intentionally
engaging in any activity that is in conflict with or adverse to the
business or other interests of the Corporation, or willful misconduct,
misfeasance or malfeasance of duty which is reasonably determined to be
detrimental to the Corporation.
(c) "Change of Control" means and includes the occurrence of any one
of the following events:
(i) individuals who, at the Effective Date, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a
director after the Effective Date and whose election or nomination for
election was approved by a vote of at least a majority of the
Incumbent Directors then on the Board (either by a specific vote or by
approval of the proxy statement of the Corporation in which such
person is
named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however, that no
-------- -------
individual initially elected or nominated as a director of the
Corporation as a result of an actual or threatened election contest
(as described in Rule 14a-11 under the 1934 Act ("Election Contest")
or other actual or threatened solicitation of proxies or consents by
or on behalf of any "person" (as such term is defined in Section
3(a)(9) of the 1934 Act and as used in Section 13(d)(3) and 14(d)(2)
of the 1934 Act) other than the Board ("Proxy Contest"), including by
reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest, shall be deemed an Incumbent Director;
(ii) any person becomes a "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of securities of
the Corporation representing 50% or more of the combined voting power
of the Corporation's then outstanding securities eligible to vote for
the election of the Board (the "Company Voting Securities"); provided,
--------
however, that the event described in this paragraph (ii) shall not be
-------
deemed to be a Change in Control of the Corporation by virtue of any
of the following acquisitions: (A) any acquisition by a person who is
on the Effective Date the beneficial owner of 50% or more of the
outstanding Company Voting Securities, (B) an acquisition by the
Corporation which reduces the number of Company Voting Securities
outstanding and thereby results in any person acquiring beneficial
ownership of more than 50% of the outstanding Company Voting
Securities; provided, that if after such acquisition by the
-------- ----
Corporation such person becomes the beneficial owner of additional
Company Voting Securities that increases the percentage of outstanding
Company Voting Securities beneficially owned by such person, a Change
in Control of the Corporation shall then occur, (C) an acquisition by
any employee benefit plan (or related trust) sponsored or maintained
by the Corporation or any Parent or Subsidiary, (D) an acquisition by
an underwriter temporarily holding securities pursuant to an offering
of such securities, or (E) an acquisition pursuant to a Non-Qualifying
Transaction (as defined in paragraph (iii)); or
(iii) the consummation of a reorganization, merger,
consolidation, statutory share exchange or similar form of corporate
transaction involving the Corporation that requires the approval of
the Corporation's shareholders, whether for such transaction or the
issuance of securities in the transaction (a "Reorganization"), or the
sale or other disposition of all or substantially all of the
Corporation's assets to an entity that is not an affiliate of the
Corporation (a "Sale"), unless immediately following such
Reorganization or Sale: (A) more than 50% of the total voting power of
(x) the corporation resulting from such Reorganization or the
corporation which has acquired all or substantially all of the assets
of the Corporation (in either case, the "Surviving Corporation"), or
(y) if applicable, the ultimate parent corporation that directly or
indirectly has beneficial ownership of 100% of the voting securities
eligible to elect directors of the Surviving Corporation (the "Parent
Corporation"), is represented by the Corporation Voting Securities
that were outstanding immediately prior to such Reorganization or Sale
(or, if applicable, is represented by shares into which such Company
Voting Securities were converted pursuant to such Reorganization or
Sale), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company
Voting Securities among the holders thereof immediately prior to the
Reorganization or Sale, (B) no person (other than (x) the Corporation,
(y) any employee benefit plan (or related trust) sponsored or
maintained by the Surviving Corporation or the Parent Corporation, or
(z) a person who immediately prior to the Reorganization or Sale was
the beneficial owner of 25% or more of the outstanding Company Voting
Securities) is the beneficial owner, directly or indirectly, of 50% or
more of the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation), and (C) at least a
majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Reorganization or Sale
were Incumbent Directors at the time of the Board's approval of the
execution of the initial agreement providing for such Reorganization
or Sale (any Reorganization or Sale which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a
"Non-Qualifying Transaction"); or
(iv) approval by the shareholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(e) "Committee" means the committee of the Board described in Article
4.
(f) "Corporation" means Georgia Bank Financial Corporation, a Georgia
corporation.
(g) "Covered Employee" means a covered employee as defined in Code
Section 162(m)(3).
(h) "Disability" shall mean any illness or other physical or mental
condition of a Participant that renders the Participant incapable of
performing his customary and usual duties for the Corporation, or any
medically determinable illness or other physical or mental condition
resulting from a bodily injury, disease or mental disorder which, in either
case, has lasted or can reasonably be expected to last for at least 180
days out of a period 365 consecutive days. The Committee may require such
medical or other evidence as it deems necessary to judge the nature and
permanency of the Participant's condition. Notwithstanding the above, with
respect to an Incentive Stock Option, Disability shall mean Permanent and
Total Disability as defined in Section 22(e)(3) of the Code.
(i) "Effective Date" has the meaning assigned such term in Section
2.1.
(j) "Fair Market Value", on any date, means (i) if the Stock is
listed on a securities exchange or is traded over the Nasdaq National
Market, the closing sales price on such exchange or over such system on
such date or, in the absence of reported sales on such date, the closing
sales price on the immediately preceding date on which sales were reported,
or (ii) if the Stock is not listed on a securities exchange or traded over
the Nasdaq National Market, the mean between the bid and offered prices as
quoted by Nasdaq for such date, provided that if it is determined that the
fair market value is not properly reflected by such Nasdaq quotations, Fair
Market Value will be determined by such other method as the Committee
determines in good faith to be reasonable.
(k) "Incentive Stock Option" means an Option that is intended to meet
the requirements of Section 422 of the Code or any successor provision
thereto.
(l) "Non-Qualified Stock Option" means an Option that is not an
Incentive Stock Option.
(m) "Option" means a right granted to a Participant under Article 7
of the Plan to purchase Stock at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a Non-
Qualified Stock Option.
(n) "Option Agreement" means any written agreement, contract, or
other instrument or document evidencing an Option.
(o) "Parent" means a corporation which owns or beneficially owns a
majority of the outstanding voting stock or voting power of the
Corporation. Notwithstanding the above, with respect to an Incentive Stock
Option, Parent shall have the meaning set forth in Section 424(e) of the
Code.
(p) "Participant" means a person who, as an employee or officer of
the Corporation or any Parent or Subsidiary, has been granted an Option
under the Plan.
(q) "Plan" means the Georgia Bank Financial Corporation 2000 Long-
Term Incentive Plan, as amended from time to time.
(r) "Retirement" means a Participant's termination of employment with
the Corporation, Parent or Subsidiary after attaining any normal or early
retirement age specified in any pension, profit sharing or other retirement
program sponsored by the Corporation, or, in the event of the
inapplicability thereof with respect to the person in question, as
determined by the Committee in its reasonable judgment.
(s) "Stock" means the $3.00 par value common stock of the Corporation
and such other securities of the Corporation as may be substituted for
Stock pursuant to Article 9.
(t) "Subsidiary" means any corporation, limited liability company,
partnership or other entity of which a majority of the outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Corporation. Notwithstanding the above, with respect to an Incentive Stock
Option, Subsidiary shall have the meaning set forth in Section 424(f) of
the Code.
(u) "1933 Act" means the Securities Act of 1933, as amended from time
to time.
(v) "1934 Act" means the Securities Exchange Act of 1934, as amended
from time to time.
ARTICLE 4
ADMINISTRATION
4.1 COMMITTEE. The Plan shall be administered by a committee (the
---------
"Committee") appointed by the Board (which Committee shall consist of two or
more directors) or, at the discretion of the Board from time to time, the Plan
may be administered by the Board. It is intended that the directors appointed to
serve on the Committee shall be "non-employee directors" (within the meaning of
Rule 16b-3 promulgated under the 1934 Act) and "outside directors" (within the
meaning of Code Section 162(m) and the regulations thereunder). However, the
mere fact that a Committee member shall fail to qualify under either of the
foregoing requirements shall not invalidate any Option made by the Committee
which Option is otherwise validly made under the Plan. The members of the
Committee shall be appointed by, and may be changed at any time and from time to
time in the discretion of, the Board. During any time that the Board is acting
as administrator of the Plan, it shall have all the powers of the Committee
hereunder, and any reference herein to the Committee (other than in this Section
4.1) shall include the Board.
4.2 ACTION BY THE COMMITTEE. For purposes of administering the Plan, the
-----------------------
following rules of procedure shall govern the Committee. A majority of the
Committee shall constitute a quorum. The acts of a majority of the members
present at any meeting at which a quorum is present, and acts approved
unanimously in writing by the members of the Committee in lieu of a meeting,
shall be deemed the acts of the Committee. Each member of the Committee is
entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Corporation or
any Parent or Subsidiary, the Corporation's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Corporation to assist in the administration of the Plan.
4.3 AUTHORITY OF COMMITTEE. Except as provided below, the Committee has
----------------------
the exclusive power, authority and discretion to:
(a) Designate Participants;
(b) Determine the type or types of Options to be granted to each
Participant;
(c) Determine the number of Options to be granted and the number of
shares of Stock to which an Option will relate;
(d) Determine the terms and conditions of any Option granted under
the Plan, including but not limited to, the exercise price, grant price, or
purchase price, any restrictions or limitations on the Option, any schedule
for lapse of forfeiture restrictions or restrictions on the exercisability
of an Option,
and accelerations or waivers thereof, based in each case on such
considerations as the Committee in its sole discretion determines;
(e) Accelerate the vesting, exercisability or lapse of restrictions
of any outstanding Option, based in each case on such considerations as the
Committee in its sole discretion determines;
(f) Determine whether, to what extent, and under what circumstances
an Option may be settled in, or the exercise price of an Option may be paid
in, cash, Stock, other Options, or other property, or an Option may be
canceled, forfeited, or surrendered;
(g) Prescribe the form of each Option Agreement, which need not be
identical for each Participant;
(h) Decide all other matters that must be determined in connection
with an Option;
(i) Establish, adopt or revise any rules and regulations as it may
deem necessary or advisable to administer the Plan;
(j) Make all other decisions and determinations that may be required
under the Plan or as the Committee deems necessary or advisable to
administer the Plan; and
(k) Amend the Plan or any Option Agreement as provided herein; and
(l) Adopt such modifications, procedures, and subplans as may be
necessary or desirable to comply with provisions of the laws of non-U.S.
jurisdictions in which the Corporation or any Parent or Subsidiary may
operate, in order to assure the viability of the benefits of Options
granted to participants located in such other jurisdictions and to meet the
objectives of the Plan.
Not withstanding the above, the Board or the Committee may expressly
delegate to a special committee consisting of one or more directors who are also
officers of the Corporation some or all of the Committee's authority under
subsections (a) through (g) above with respect to those eligible Participants
who, at the time of grant are not, and are not anticipated to be become, either
(i) Covered Employees or (ii) persons subject to the insider trading rules of
Section 16 of the 1934 Act.
4.4. DECISIONS BINDING. The Committee's interpretation of the Plan, any
-----------------
Options granted under the Plan, any Option Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1. NUMBER OF SHARES. Subject to adjustment as provided in Section 9.1,
----------------
the aggregate number of shares of Stock reserved and available for Options shall
be 100,000.
5.2. LAPSED OPTIONS. To the extent that an Option is canceled, terminates,
--------------
expires, is forfeited or lapses for any reason, any shares of Stock subject to
the Option will again be available for the grant of an Option under the Plan.
5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Option may
-----------------
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
5.4. LIMITATION ON OPTIONS. Notwithstanding any provision in the Plan to
---------------------
the contrary (but subject to adjustment as provided in Section 9.1), the maximum
number of shares of Stock with respect to one or more Options that may be
granted during any one calendar year under the Plan to any one Participant shall
be 10,000; provided, however, that in connection with his or her initial
employment with the Company, a Participant
may be granted Options with respect to up to an additional 10,000 shares of
Stock, which shall not count against the foregoing annual limit.
ARTICLE 6
ELIGIBILITY
6.1. GENERAL. Options may be granted only to individuals who are employees
-------
or officers of the Corporation or a Parent or Subsidiary.
ARTICLE 7
STOCK OPTIONS
7.1. GENERAL. The Committee is authorized to grant Options to Participants
-------
on the following terms and conditions:
(a) EXERCISE PRICE. The exercise price per share of Stock under an
--------------
Option shall be determined by the Committee, provided that the exercise
price for any Option shall not be less than the Fair Market Value as of the
date of the grant.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine
-------------------------------
the time or times at which an Option may be exercised in whole or in part,
subject to Section 7.1(e). The Committee also shall determine the
performance or other conditions, if any, that must be satisfied before all
or part of an Option may be exercised or vested. The Committee may waive
any exercise or vesting provisions at any time in whole or in part based
upon factors as the Committee may determine in its sole discretion so that
the Option becomes exerciseable or vested at an earlier date. The
Committee may permit an arrangement whereby receipt of Stock upon exercise
of an Option is delayed until a specified future date.
(c) PAYMENT. The Committee shall determine the methods by which the
-------
exercise price of an Option may be paid, the form of payment, including,
without limitation, cash, shares of Stock, or other property (including
"cashless exercise" arrangements or "attestation" of shares previously
owned), and the methods by which shares of Stock shall be delivered or
deemed to be delivered to Participants; provided that if shares of Stock
are used to pay the exercise price of an Option (either by attestation or
actual delivery), such shares must have been held by the Participant for at
least six months. Payment of the exercise price of an Option may be made
in a single payment or transfer, in installments, or on a deferred basis,
in each case determined in accordance with rules adopted by, and at the
discretion of, the Committee.
(d) EVIDENCE OF GRANT. All Options shall be evidenced by a written
-----------------
Option Agreement between the Corporation and the Participant. The Option
Agreement shall include such provisions, not inconsistent with the Plan, as
may be specified by the Committee.
(e) EXERCISE TERM. In no event may any Option be exercisable for more
-------------
than ten years from the date of its grant.
7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options
-----------------------
granted under the Plan must comply with the following additional rules:
(a) EXERCISE PRICE. The exercise price per share of Stock shall be
--------------
set by the Committee, provided that the exercise price for any Incentive
Stock Option shall not be less than the Fair Market Value as of the date of
the grant.
(b) EXERCISE. In no event may any Incentive Stock Option be
--------
exercisable for more than ten years from the date of its grant.
(c) LAPSE OF OPTION. An Incentive Stock Option shall lapse under the
---------------
earliest of the following circumstances; provided, however, that the
Committee may, prior to the lapse of the Incentive
Stock Option under the circumstances described in paragraphs (3), (4) and
(5) below, provide in writing that the Option will extend until a later
date, but if an Option is exercised after the dates specified in paragraphs
(3), (4) and (5) below, it will automatically become a Non-Qualified Stock
Option:
(1) The Incentive Stock Option shall lapse as of the option
expiration date set forth in the Option Agreement.
(2) The Incentive Stock Option shall lapse ten years after it is
granted, unless an earlier time is set in the Option Agreement.
(3) If the Participant terminates employment for any reason
other than as provided in paragraph (4) or (5) below, the Incentive
Stock Option shall lapse, unless it is previously exercised, three
months after the Participant's termination of employment; provided,
however, that if the Participant's employment is terminated by the
Corporation for cause (as determined by the Corporation), the
Incentive Stock Option shall (to the extent not previously exercised)
lapse immediately.
(4) If the Participant terminates employment by reason of his
Disability, the Incentive Stock Option shall lapse, unless it is
previously exercised, one year after the Participant's termination of
employment.
(5) If the Participant dies while employed, or during the three-
month period described in paragraph (3) or during the one-year period
described in paragraph (4) and before the Option otherwise lapses, the
Option shall lapse one year after the Participant's death. Upon the
Participant's death, any exercisable Incentive Stock Options may be
exercised by the Participant's beneficiary, determined in accordance
with Section 8.5.
Unless the exercisability of the Incentive Stock Option is accelerated
as provided in Article 8, if a Participant exercises an Option after
termination of employment, the Option may be exercised only with respect to
the shares that were otherwise vested on the Participant's termination of
employment.
(d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value
----------------------------
(determined as of the time an Option is made) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a
Participant in any calendar year may not exceed $100,000.00.
(e) TEN PERCENT OWNERS. No Incentive Stock Option shall be granted to
------------------
any individual who, at the date of grant, owns stock possessing more than
ten percent of the total combined voting power of all classes of stock of
the Corporation or any Parent or Subsidiary unless the exercise price per
share of such Option is at least 110% of the Fair Market Value per share of
Stock at the date of grant and the Option expires no later than five years
after the date of grant.
(f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Option of an Incentive
-------------------------------------
Stock Option may be made pursuant to the Plan after the day immediately
prior to the tenth anniversary of the Effective Date.
(g) RIGHT TO EXERCISE. During a Participant's lifetime, an Incentive
-----------------
Stock Option may be exercised only by the Participant or, in the case of
the Participant's Disability, by the Participant's guardian or legal
representative.
(h) DIRECTORS. The Committee may not grant an Incentive Stock Option
---------
to a non-employee director. The Committee may grant an Incentive Stock
Option to a director who is also an employee of the Corporation or Parent
or Subsidiary but only in that individual's position as an employee and not
as a director.
ARTICLE 8
OTHER PROVISIONS APPLICABLE TO OPTIONS
8.1. LIMITS ON TRANSFER. No right or interest of a Participant in any
------------------
Option may be pledged, encumbered, or hypothecated to or in favor of any party
other than the Corporation or a Parent or Subsidiary, or shall be subject to any
lien, obligation, or liability of such Participant to any other party other than
the Corporation or a Parent or Subsidiary. No Option shall be assignable or
transferable by a Participant other than by will or the laws of descent and
distribution or pursuant to a domestic relations order that would satisfy
Section 414(p)(1)(A) of the Code if such Section applied to an Option under the
Plan; provided, however, that the Committee may (but need not) permit other
transfers where the Committee concludes that such transferability is appropriate
and desirable, taking into account any factors deemed relevant, including
without limitation, any state or federal tax or securities laws or regulations
applicable to transferable Options.
8.2. BENEFICIARIES. Notwithstanding Section 8.1, a Participant may, in the
-------------
manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Option upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Option Agreement applicable to the
Participant, except to the extent the Plan and Option Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If no beneficiary has been designated or survives the
Participant, the Participant's estate shall be deemed to be the beneficiary.
Subject to the foregoing, a beneficiary designation may be changed or revoked by
a Participant at any time provided the change or revocation is filed with the
Committee.
8.3. STOCK CERTIFICATES. All Stock issuable under the Plan is subject to
------------------
any stop-transfer orders and other restrictions as the Committee deems necessary
or advisable to comply with federal or state securities laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate or issue instructions to the transfer
agent to reference restrictions applicable to the Stock.
8.4. ACCELERATION UPON DEATH, DISABILITY OR RETIREMENT. Notwithstanding
-------------------------------------------------
any other provision in the Plan or any Participant's Option Agreement to the
contrary, upon the Participant's death or Disability during his employment, or
upon the Participant's Retirement, all of the Participant's outstanding Options
shall become fully exercisable. Any Option shall thereafter continue or lapse in
accordance with the other provisions of the Plan and the Option Agreement.
8.5. ACCELERATION UPON A CHANGE IN CONTROL. Except as otherwise provided
-------------------------------------
in the Option Agreement, upon the occurrence of a Change in Control, all
outstanding Options shall become fully exercisable; provided, however that such
acceleration will not occur if, in the opinion of the Corporation's accountants,
such acceleration would preclude the use of "pooling of interest" accounting
treatment for a Change in Control transaction that (a) would otherwise qualify
for such accounting treatment, and (b) is contingent upon qualifying for such
accounting treatment.
8.6. ACCELERATION UPON CERTAIN EVENTS NOT CONSTITUTING A CHANGE IN
-------------------------------------------------------------
CONTROL. In the event of the occurrence of any circumstance, transaction or
- -------
event not constituting a Change in Control (as defined in Section 3.1) but which
the Board deems to be, or to be reasonably likely to lead to, an effective
change in control of the Corporation of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of the 1934 Act, the Committee
may in its sole discretion declare all outstanding Options to be fully
exercisable as of such date as the Committee may, in its sole discretion,
declare, which may be on or before the consummation of such transaction or
event.
8.7. ACCELERATION FOR ANY OTHER REASON. Regardless of whether an event has
---------------------------------
occurred as described in Section 8.5 or 8.6 above, the Committee may in its sole
discretion at any time determine that all or a portion of a Participant's
Options shall become fully or partially exercisable as of such date as the
Committee may, in its sole discretion, declare. The Committee may discriminate
among Participants and among Options granted to a Participant in exercising its
discretion pursuant to this Section 8.7.
8.8 EFFECT OF ACCELERATION. If an Option is accelerated under Section 8.5
----------------------
or 8.6, the Committee may, in its sole discretion, provide (i) that the Option
will expire after a designated period of time after such acceleration to the
extent not then exercised, (ii) that the Option will be settled in cash rather
than Stock, (iii) that the Option will be assumed by another party to the
transaction giving rise to the acceleration or otherwise be equitably converted
in connection with such transaction, or (iv) any combination of the foregoing.
The Committee's determination need not be uniform and may be different for
different Participants whether or not such Participants are similarly situated.
8.9. TERMINATION OF EMPLOYMENT. Whether military, government or other
-------------------------
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A termination of
employment shall not occur in (i) a circumstance in which a Participant
transfers from the Corporation to one of its Parents or Subsidiaries, transfers
from a Parent or Subsidiary to the Corporation, or transfers from one Parent or
Subsidiary to another Parent or Subsidiary, or (ii) in the discretion of the
Committee as specified prior to such occurrence, in the case of a spin-off, sale
or disposition of the Participant's employer from the Corporation or any Parent
or Subsidiary.
ARTICLE 9
CHANGES IN CAPITAL STRUCTURE
9.1. GENERAL. In the event of a corporate transaction involving the
-------
Corporation (including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
authorization limits under Section 5.1 and Section 5.4 shall be adjusted
proportionately, and the Committee may adjust Options to preserve the benefits
or potential benefits of the Options. Action by the Committee may include: (i)
adjustment of the number and kind of shares which may be delivered under the
Plan; (ii) adjustment of the number and kind of shares subject to outstanding
Options; (iii) adjustment of the exercise price of outstanding Options; and (iv)
any other adjustments that the Committee determines to be equitable. Without
limiting the foregoing, in the event a stock dividend or stock split is declared
upon the Stock, the authorization limits under Section 5.1 and Section 5.4 shall
be increased proportionately, and the shares of Stock then subject to each
Option shall be increased proportionately without any change in the aggregate
purchase price therefor.
ARTICLE 10
AMENDMENT, MODIFICATION AND TERMINATION
10.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee
---------------------------------------
may, at any time and from time to time, amend, modify or terminate the Plan
without shareholder approval; provided, however, that the Board or Committee may
condition any amendment or modification on the approval of shareholders of the
Corporation if such approval is necessary or deemed advisable with respect to
tax, securities or other applicable laws, policies or regulations.
10.2 OPTIONS PREVIOUSLY GRANTED. At any time and from time to time, the
--------------------------
Committee may amend, modify or terminate any outstanding Option without approval
of the Participant; provided, however, that, subject to the terms of the
applicable Option Agreement, such amendment, modification or termination shall
not, without the Participant's consent, reduce or diminish the value of such
Option determined as if the Option had been exercised, vested, cashed in or
otherwise settled on the date of such amendment or termination; and provided
further that the original term of any Option may not be extended and, except as
otherwise provided in the anti-dilution provision of the Plan, the exercise
price of any Option may not be reduced. No termination, amendment, or
modification of the Plan shall adversely affect any Option previously granted
under the Plan, without the written consent of the Participant.
ARTICLE 11
GENERAL PROVISIONS
11.1. NO RIGHTS TO OPTIONS. No person shall have any claim to be granted
--------------------
any Option under the Plan, and neither the Corporation nor the Committee is
obligated to treat Participants or eligible Participants uniformly.
11.2. NO SHAREHOLDER RIGHTS. No Option gives the Participant any of the
---------------------
rights of a shareholder of the Corporation unless and until shares of Stock are
in fact issued to such person in connection with such Option.
11.3. WITHHOLDING. The Corporation or any Parent or Subsidiary shall have
-----------
the authority and the right to deduct or withhold, or require a Participant to
remit to the Corporation, an amount sufficient to satisfy federal, state, and
local taxes (including the Participant's FICA obligation) required by law to be
withheld with respect to any taxable event arising as a result of the Plan. With
respect to withholding required upon any taxable event under the Plan, the
Committee may, at the time the Option is granted or thereafter, require or
permit that any such withholding requirement be satisfied, in whole or in part,
by withholding from the Option shares of Stock having a Fair Market Value on the
date of withholding equal to the minimum amount (and not any greater amount)
required to be withheld for tax purposes, all in accordance with such procedures
as the Committee establishes.
11.4. NO RIGHT TO EMPLOYMENT OR OTHER STATUS. Nothing in the Plan or any
--------------------------------------
Option Agreement shall interfere with or limit in any way the right of the
Corporation or any Parent or Subsidiary to terminate any Participant's
employment or status as an officer at any time, nor confer upon any Participant
any right to continue as an employee or officer of the Corporation or any Parent
or Subsidiary.
l1.5. UNFUNDED STATUS OF OPTIONS. The Plan is intended to be an "unfunded"
--------------------------
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant pursuant to an Option, nothing contained in the Plan
or any Option Agreement shall give the Participant any rights that are greater
than those of a general creditor of the Corporation or any Parent or Subsidiary.
11.6. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
------------------------------
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the
Corporation or any Parent or Subsidiary unless provided otherwise in such other
plan.
11.7. EXPENSES. The expenses of administering the Plan shall be borne by
--------
the Corporation and its Parents or Subsidiaries.
11.8. TITLES AND HEADINGS. The titles and headings of the Sections in the
-------------------
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
11.9. GENDER AND NUMBER. Except where otherwise indicated by the context,
-----------------
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
11.10. FRACTIONAL SHARES. No fractional shares of Stock shall be issued and
-----------------
the Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up.
11.11. GOVERNMENT AND OTHER REGULATIONS. The obligation of the Corporation
--------------------------------
to make payment of options in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Corporation shall be under no obligation to
register under the 1933 Act, or any state securities act, any of the shares of
Stock issued in connection with the Plan. The shares issued in connection with
the Plan may in certain circumstances be exempt from registration under the 1933
Act, and the Corporation may restrict the transfer of such shares in such manner
as it deems advisable to ensure the availability of any such exemption.
11.12. GOVERNING LAW. To the extent not governed by federal law, the Plan
--------------
and all Option Agreements shall be construed in accordance with and governed by
the laws of the State of Georgia.
11.13. ADDITIONAL PROVISIONS. Each Option Agreement may contain such other
---------------------
terms and conditions as the Committee may determine; provided that such other
terms and conditions are not inconsistent with the provisions of this Plan.
The foregoing is hereby acknowledged as being the Georgia Bank Financial
Corporation 2000 Long-Term Incentive Plan as adopted by the Board on December
13, 2000.
GEORGIA BANK FINANCIAL CORPORATION
By: /s/ Robert W. Pollard, Jr.
---------------------------------------
As its: Chairman of the Board
APPENDIX B
CHARTER OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
. Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
. Monitor the independence and performance of the Company's independent
auditors and internal auditing department.
. Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board of
Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to
the independent auditors as well as anyone in the organization. The Audit
Committee has the ability to retain, at the company's expense, special
legal, accounting, or other consultants or experts it deems necessary in
the performance of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of Rule 4200 of the
National Association of Securities Dealers listing standards. The Audit
Committee shall be comprised of three or more directors as determined by
the Board, each of whom shall be independent non-executive directors, free
from any relationship that would interfere with the exercise of his or her
independent judgment. All members of the Committee shall have a basic
understanding of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the Committee
shall have accounting or related financial management expertise.
Audit Committee members shall be appointed by the Board on recommendation
of the Nominating Committee. If an Audit Committee Chair is not designated
or present, the members of the Committee may designate a Chair by majority
vote of the Committee membership.
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. The Audit Committee Chair shall prepare and/or
approve an agenda in advance of each meeting. The Committee should meet
privately in executive session at least annually with management, the
director of the internal auditing department, the independent auditors, and
as a committee to discuss any matters that the Committee or each of these
groups believe should be discussed. In addition, the Committee, or at least
its Chair, should communicate with management and the independent auditors
quarterly to review the Company's financial statements and significant
findings based upon the auditors limited review procedures.
III. Audit Committee Responsibilities and Duties
Review Procedures
1. Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.
2. Review the Company's annual audited consolidated financial statements
prior to filing or distribution. Review should include discussion of
significant accounting principles, practices and judgements with
management and independent auditors.
3. In consultation with the management, the independent auditors, and the
internal auditors, consider the integrity of the Company's financial
reporting process and controls. Discuss significant financial risk
exposures and the steps management has taken to monitor, control, and
report such exposures. Review significant findings prepared by the
independent auditors and the internal auditing department together
with management's responses.
4. Review with financial management and the independent auditors the
Company's quarterly financial results prior to the release of earnings
and/or the Company's quarterly consolidated financial statements prior
to filing or distribution. Discuss any significant changes to the
Company's accounting principles and any items required to be
communicated by the independent auditors in accordance with SAS 61
(see item 9). The Chair of the committee may represent the entire
Audit Committee for purposes of this review.
Independent Auditors
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall review
the independence and performance of the auditors and annually
recommend to the Board of Directors the appointment of the independent
auditors or approve any discharge of auditors when circumstances
warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company that could impair the auditors independence.
8. Review the independent auditors audit plan - discuss scope, staffing,
locations, reliance upon management and internal audit, and general
audit approach.
9. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters required
to be communicated to audit committees in accordance with AICPA SAS
61.
10. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.
Internal Audit Department and Legal Compliance
11. Review the audit plan, changes in plan, activities, organizational
structure, and qualifications of the internal audit department, as
needed.
12. Review the appointment, performance, and replacement of the senior
internal audit executive.
13. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
14. On at least an annual basis, review with the Company's counsel, any
legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations, and inquiries received from
regulators or governmental agencies.
Other Audit Committee Responsibilities
15. Establish, review, and update periodically a Code of Ethical Conduct
and ensure that management has established a system to enforce this
Code.
16. Review financial and accounting personnel succession planning within
the Company.
17. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be included in
the Company's annual proxy statement.
18. Perform any other activities consistent with this Charter, the
Company's by-laws, and governing laws, as the Committee or the Board
deems necessary or appropriate.
19. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
GEORGIA BANK FINANCIAL CORPORATION
3530 Wheeler Road
Augusta, Georgia 30909
PROXY SOLICITED BY
THE BOARD OF DIRECTORS OF GEORGIA BANK FINANCIAL CORPORATION
FOR THE 2001 ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2001
The undersigned hereby appoints J. Pierce Blanchard, Jr. and Tom C.
McLaughlin, and each of them, with full power of substitution, proxies to vote
the shares of stock which the undersigned could vote if personally present at
the 2000 Annual Meeting of Shareholders of Georgia Bank Financial Corporation
to be held at 4:00 p.m., on April 25, 2001 at the principal offices of the
Company, 3530 Wheeler Road, Augusta, Georgia, or at any adjournment thereof.
(1) Election of Directors:
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY TO VOTE
(except as marked to the contrary) for all nominees listed below:
William J. Badger Warren A. Daniel Travers W. Paine III
R. Daniel Blanton Robert W. Pollard, Jr. Randolph R. Smith, M.D.
William P. Copenhaver Edward G. Meybohm Ronald L. Thigpen
John W. Trulock, Jr.
(Instruction: To withhold authority to vote for any individual nominee,
strike a line through that nominee's name)
CONTINUED ON REVERSE
(2) Approval of the Georgia Bank Financial Corporation 2000 Long-Term
Incentive Plan
[_] FOR [_] AGAINST [_] ABSTAIN
(3) In their discretion, upon such other matters as may properly come before
the meeting.
[_] FOR [_] AGAINST [_] ABSTAIN
This proxy will be voted in accordance with the direction of the undersigned
as marked. If no direction is given, this proxy will be voted "FOR" the
nominees listed and "FOR" the proposal to approve the Georgia Bank Financial
Corporation 2000 Long-Term Incentive Plan.
Dated: , 2001
--------------------
---------------------------------
---------------------------------
Signature(s) of Shareholder
Please sign exactly as name
appears hereon. If shares are
held jointly each shareholder
should sign. Agents, executors,
administrators, guardians,
trustees, etc. should use full
title. If the shareholder is a
corporation, please sign full
corporate name by an authorized
officer.
Please fill in, date and sign the proxy and return in the enclosed postpaid
envelope.