EXHIBIT 10.2
THE WARRANTS EVIDENCED BY THIS WARRANT AGREEMENT AND THE SHARES PURCHASABLE
HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED, NOR WILL ANY ASSIGNEE OR ENDORSEE
HEREOF BE RECOGNIZED AS AN OWNER HEREOF BY THE BANK FOR ANY PURPOSE, UNLESS AN
EXEMPTION OR A REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE SECURITIES
ACT OF 1933 AND SUCH STATE SECURITIES LAWS SHALL BE ESTABLISHED TO THE
SATISFACTION OF THE BANK.
GWINNETT COMMUNITY BANK
STOCK WARRANT AGREEMENT
, 1999
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Duluth, Georgia
Shares
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Warrants to purchase ______ shares of common stock (the "Shares") of
GWINNETT COMMUNITY BANK, a Georgia banking corporation (the "Bank"), are hereby
granted to _____________________________ (the "Warrant Holder") at the price
determined as herein provided, subject to the following terms and conditions:
1. EXERCISE PRICE. The exercise price per Share subject to the
warrants granted in this agreement (the "Warrants") shall be $10.00 (the
"Exercise Price").
2. EXERCISE OF WARRANTS. The Warrants may be exercised in whole
or in part at any time after vesting of the Warrants as provided herein but
before the Expiration Date as defined below, subject to Section 4 and the
following conditions:
(A) VESTING OF WARRANTS. The Warrants shall vest annually
in three equal installments beginning on the first anniversary of the
Bank's opening for business and ending on the third anniversary of the
Bank's opening for business.
(B) EXPIRATION OF WARRANT TERM. The Warrants will expire
on the earlier of 60 days after the termination of the Warrant Holder's
service as a director, officer or employee of the Bank or the tenth
anniversary of the Bank's opening for business (the "Expiration Date").
(C) METHOD OF EXERCISE. The Warrants shall be exercisable
by a written notice delivered to the Secretary of the
Bank which shall:
(i) State the owner's election to exercise the
Warrants, the number of Shares with respect to which warrants
are being exercised, his address and Social Security Number;
(ii) Contain such representations and agreements
as to the holder's investment intent with respect to such
Shares as may be required by the Bank's counsel;
(iii) Be signed by the owner; and
(iv) Be in writing and be accompanied by this
Stock Warrant Agreement.
(D) PAYMENT. Payment of the purchase price of any Shares
with respect to which the Warrants are being exercised shall be by
certified or bank cashier's check, or by personal check drawn on funds
on deposit with the Bank.
(E) REGISTRATION. The certificate or certificates for
Shares as to which the Warrants are being exercised shall be registered
in the name of the owner.
(F) PARTIAL EXERCISE. In the event of a partial exercise
of the Warrants, the Bank shall either issue a new agreement for the
balance of the stock subject to this Stock Warrant Agreement after such
partial exercise, or it shall conspicuously note hereon the date and
number of Shares granted pursuant to such exercise and the number of
Shares thereafter covered by this Stock Warrant Agreement.
(G) RESTRICTIONS ON EXERCISE. The Warrants may not be
exercised (i) if the issuance of the Shares upon such exercise would
constitute a violation of any applicable federal or state securities
law or other law or regulation or (ii) unless the Bank (or any
successor) or the holder hereof, as applicable, obtains any approval or
other clearance from any federal or state governmental agency or body
which the Bank determines to be necessary or advisable, including,
without limitation, any applicable state or federal banking regulatory
agency. As a condition to the exercise of the Warrants, the Bank may
require the person exercising the Warrant to make any representation or
warranty to the Bank as may be required to comply with any applicable
law or regulation, including without limitation the Securities Act of
1933, the Georgia Securities Act of 1973 and any other applicable state
securities law.
3. MERGER; DILUTION. In the event that the number of outstanding
Shares shall be changed into or exchanged for a different number of Shares or
class of stock of the Bank, or if the stock of another corporation shall be
issued in exchange for the Shares, by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend or otherwise,
then the total number of Shares subject to the Warrants or the price payable for
Shares under the Warrants shall be adjusted as follows:
(a) In case the Bank shall at any time after the date of
this agreement (i) declare a dividend on the Shares in shares of its
capital stock, (ii) subdivide the outstanding Shares, (iii) combine the
outstanding Shares into a smaller number of Shares, or (iv) issue any
shares of its capital stock by reclassification of the Shares
(including any such reclassification in connection with a consolidation
or merger in which the Bank is the continuing corporation), the
Exercise Price, and the number and kind of shares receivable upon
exercise, in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or
reclassification, shall be proportionately adjusted so that the holder
of any Warrant exercised after such time shall be entitled to receive
the aggregate number and kind of shares which, if such Warrant had been
exercised immediately prior to such time, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. Such adjustment shall be
made successively whenever any event listed above shall occur.
(b) In case the Bank shall issue rights or warrants to
all holders of Shares entitling them (for a period expiring within 45
days after the record date for the determination of shareholders
entitled to receive such rights or warrants) to subscribe for or
purchase Shares (or securities convertible into Shares) at a price per
Share (or having a conversion price per Share, if a security
convertible into Shares) less than the current market price per Share
(as defined in
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subsection (d)) on such record date, the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the
number of Shares outstanding on such record date plus the number of
Shares which the aggregate offering price of the total number of Shares
so to be offered (or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of Shares
outstanding on such record date plus the number of additional Shares to
be offered for subscription of purchase (or into which the convertible
securities so to be offered are initially convertible). Such adjustment
shall become effective at the close of business on such record date;
however, to the extent that Shares (or securities convertible into
Shares) are not delivered after the expiration of such rights or
warrants, the Exercise Price shall be readjusted (but only with respect
to Warrants exercised after such expiration) to the Exercise Price
which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made upon the basis of
delivery of only the number of Shares (or securities convertible into
Shares) actually issued. In case any subscription price may be paid in
a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good
faith by the Board of Directors of the Bank. Shares owned by or held
for the account of the Bank or any majority-owned subsidiary shall not
be deemed outstanding for the purpose of any such computation.
(c) In case the Bank shall distribute to all holders of
Shares (including any such distribution made in connection with a
consolidation or merger in which the Bank is the continuing
corporation) evidences of its indebtedness or assets (other than cash
dividends or distributions and dividends payable in Shares) or
subscription rights or warrants (excluding those referred to in
subsection (b)), the Exercise Price shall be adjusted by multiplying
the Exercise Price in effect immediately prior to the record date for
the determination of shareholders entitled to receive such distribution
by a fraction, the numerator of which shall be the current market price
per Share (as defined in subsection (d)) on such record date, less the
fair market value (as determined by the Board of Directors of the Bank,
whose determination shall be conclusive; provided, however, that the
fair market value of such evidence of indebtedness, asset, subscription
right or warrant that is to be distributed per Share shall not equal or
exceed the current market price per Share) the evidences of
indebtedness or assets so to be distributed or for such subscription
rights or warrants applicable to one Share, and the denominator of
which shall be such current market price per Share.
(d) For the purposes of any computation hereunder, the
current market price per Share shall be as determined by the Board of
Directors of the Bank as of the date indicated.
(e) No adjustment in the Exercise Price shall be required
if the amount of such adjustment shall be less than twenty-five cents
per Share; provided, however, that any adjustments which by reason of
this subsection (e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations hereunder shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
(f) In any case in which this Stock Warrant Agreement
shall require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the Bank may elect
to defer until the occurrence of such event issuing to the holder of
any Warrant exercised after such record date the Shares, if any,
issuable upon such exercise over and above the Shares, if any, issuable
upon such exercise on the basis of the Exercise Price in effect prior
to such adjustment; provided, however, that the Bank shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional Shares upon the occurrence of
the event requiring such adjustment.
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(g) Unless the Bank shall have exercised its election as
provided in subsection (h) upon each adjustment of the Exercise Price
as a result of the calculations made in subsections (a), (b) or (c)
hereunder, each Warrant outstanding prior to the making of the
adjustment in the Exercise Price shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of Shares
(calculated to the nearest hundredth) obtained by: (A) multiplying the
number of Shares purchasable upon exercise of a Warrant prior to
adjustment of the number of Shares, by the Exercise Price in effect
prior to adjustment of the Exercise Price; and (B) dividing the product
so obtained by the Exercise Price in effect after such adjustment of
the Exercise Price.
(h) The Bank may elect on or after the date of any
adjustments of the Exercise Price to adjust the number of Warrants, in
substitution for any adjustment in the number of Shares purchasable
upon the exercise of a Warrant as provided in subsection (g). Each of
the Warrants outstanding after such adjustment of the number of
Warrants shall be exercisable for one Share. Each Warrant held of
record prior to such adjustment of the number of Warrants shall become
that number of Warrants (calculated to the nearest hundredth) obtained
by dividing the Exercise Price in effect prior to adjustment of the
Exercise Price by the Exercise Price in effect after adjustment of the
Exercise Price. The Bank shall notify the holders of Warrants of its
election to adjust the number of Warrants indicating the record date
for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the
Exercise Price is adjusted or any day thereafter, but shall be at least
10 days later than the date of the notice. Upon each adjustment of the
number of Warrants pursuant to this subsection (h) the Bank shall, as
promptly as practicable, cause to be distributed to holders of record
of Warrants on such record date, Warrant agreements evidencing the
additional Warrants to which such holders shall be entitled as a result
of such adjustment, or, at the option of the Bank, shall cause to be
distributed to such holders of record in substitution and replacement
for the Warrant agreements held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Bank, new
Warrant agreements evidencing all the Warrants to which such holders
shall be entitled after such adjustment.
(i) In case of any capital reorganization of the Bank, or
of any reclassification of the Shares (other than a reclassification of
the Shares referred to in subsection (a)) or in case of the
consolidation of the Bank with any other corporation or the sale of the
properties and assets of the Bank as, or substantially as, an entirety
to any other corporation or entity, each Warrant shall after such
capital reorganization, reclassification of Shares, consolidation,
merger or sale be exercisable, upon the terms and conditions specified
in this agreement, for the number of Shares of stock or other
securities, assets or cash to which a holder of the number of Shares
purchasable (at the time of such capital reorganization,
reclassification of Shares, consolidation, merger or sale) upon
exercise of such Warrant would have been entitled upon such capital
reorganization, reclassification of Shares, consolidation, merger or
sale; and in any such case, if necessary, the provisions set forth
hereunder with respect to the rights and interests thereafter of the
holders of the Warrants shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any Shares of stock or
other securities, assets or cash thereafter deliverable on the exercise
of the Warrants. The subdivision or combination of Shares at any time
outstanding into a greater or lesser number of Shares shall not be
deemed to be a reclassification of the Shares for the purposes of this
paragraph. The Bank shall not effect any such consolidation, merger or
sale, unless prior to or simultaneously with the consummation thereof
the successor corporation (of other than the Bank) resulting from such
consolidation or merger or the corporation purchasing such assets or
other appropriate corporation or entity shall assume the obligation to
deliver to the holder of each Warrant such shares of stock, securities,
assets or cash as, in accordance with the foregoing provisions, such
holders may be entitled to purchase and the other obligations under
this Stock Warrant Agreement.
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4. MANDATORY EXERCISE; TERMINATION.
(a) If the Bank is required by its primary state or federal
regulator, due to its failure to meet capital requirements imposed upon the
Bank, to increase its capital, then pursuant to the procedures in subsections
(b) and (c) below, the Warrant Holder shall have the option of either (i)
exercising all or such part of the Warrants as designated by the Bank pursuant
to subsection (b) below or (ii) allowing the Warrants to be automatically
terminated pursuant to subsection (c) below.
(b) When the Bank is required to increase its capital described in
subsection (a) above, the Bank shall send a notice (the "Notice") to the Warrant
Holder (i) specifying the number of Shares relating to the Warrants for which
the Warrants must be exercised (the "Number") (if less than all Shares relating
to Warrants held by all holders of Warrants of the Bank under stock warrant
agreements substantially similar to this Stock Warrant Agreement are required by
the Bank, pursuant to similar notice, to be so exercised, the Bank shall specify
a number of Shares relating to the Warrants that reflects the proportionate
number of Shares subject to the Warrants in comparison to all of the Shares
subject to Warrants held by all such warrant holders as a group); (ii)
specifying the date prior to which the Warrants must be totally or partially
exercised, as the case may be (the "Deadline"); and (iii) stating that the
failure of the Warrant holder to exercise the Warrants shall result in the
automatic termination of the Warrants.
(c) Regardless of whether all or less than all of the number of
Shares relating to the Warrants are specified in the Notice, if the Warrant
Holder does not exercise the Warrants with respect to at least the number of
shares specified in, and otherwise pursuant to the terms of, the Notice, the
Stock Warrant Agreement shall be automatically terminated on the Deadline,
without further act or action by the Warrant Holder or the Bank, and the Warrant
Holder shall deliver this Stock Warrant Agreement to the Bank for cancellation.
If the Number is less than the total number of Shares that are then subject to
exercise under the Warrants and the Warrant Holder exercises the Warrants
pursuant to the terms of the Notice, the Bank shall comply with Section 2(e)
hereof.
5. RESTRICTIONS ON TRANSFERABILITY OF COMMON STOCK; COMPLIANCE
WITH THE SECURITIES ACT OF 1933.
(a) The Common Stock issued upon exercise of the Warrant shall not
be transferable except upon the conditions hereinafter specified, which
conditions are intended to insure compliance with the provisions of the
Securities Act of 1933 (or any similar federal statute at the time in effect)
and applicable state securities or blue sky laws in respect of the transfer of
the Common Stock.
(b) Each certificate for shares of Common Stock issued upon
exercise of the Warrant shall bear a legend reading substantially as follows:
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER (A) THE GEORGIA SECURITIES ACT OF 1973 (THE "GEORGIA
ACT"), (B) ANY OTHER STATE SECURITIES LAW OR (C) THE FEDERAL SECURITIES
ACT OF 1933 (THE "FEDERAL ACT"). NO SUCH SECURITIES OR ANY PART THEREOF
MAY BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR
TRANSFERRED EXCEPT (1) IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER THE GEORGIA ACT, ANY OTHER APPLICABLE STATE
SECURITIES LAW, AND THE FEDERAL ACT, OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION
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STATEMENT UNDER THE GEORGIA ACT, ANY OTHER APPLICABLE STATE SECURITIES
LAW, AND THE FEDERAL ACT, OR (3) IN A TRANSACTION WHICH, IN THE OPINION
OF COUNSEL SATISFACTORY TO THE BANK'S COUNSEL, IS OTHERWISE IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW AND THE FEDERAL
ACT.
(c) The Warrant Holder acknowledges that he has no right to
require the Bank or any other person or entity to (i) register under the
Securities Act of 1933 or any state securities or blue sky law any shares of
Common Stock issued upon exercise of these Warrants, or (ii) satisfy the
conditions of Rule 144 or any other rule or provision with respect to the public
sale of such Common Stock.
6. TRANSFER AND ASSIGNMENT. This Warrant Agreement and all rights
hereunder are neither assignable nor transferable by the Warrant Holder without
the Bank's prior written consent and the delivery by the Warrant Holder to the
Bank of an opinion of counsel in form and substance satisfactory to the Bank
stating that such transfer or assignment is in compliance with the Securities
Act of 1933, the Georgia Securities Act of 1973, and any other applicable state
securities law. More particularly, but without limiting the generality of the
foregoing, these Warrants may not be assigned, transferred (except as
aforesaid), pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process.
Any attempted assignment, transfer, pledge, hypothecation or other disposition
of the Warrant or this Warrant Agreement contrary to the provisions hereof shall
be without legal effect.
7. STOCK WARRANT PLAN. The Warrants granted under this Stock
Warrant Agreement have been granted in consideration of the payment of the sum
of $10.00 per investment unit. The investment unit consists of one Share and a
Warrant to purchase one Share. The Bank has allocated the purchase price of the
investment unit as follows: $10.00 for each Share and $0 for each Warrant to
purchase one Share.
GWINNETT COMMUNITY BANK
BY:
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[Name], President
ATTEST:
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[Name], Secretary
(BANK SEAL)
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