Exhibit 10.1

Dear Members of the Board:

The results of the examination of McIntosh State Bank (“Bank”), conducted by the
Georgia Department of Banking and Finance (“Department”) and the Federal Deposit
Insurance Corporation (“FDIC”) as of February 2, 2009, reveal that the condition
of the bank is unsatisfactory, with the deficiencies noted being of such
magnitude that the bank’s operation is considered unsafe and unsound by the
Department.

Accordingly, the Department, in consultation with the FDIC, is issuing this
Order, pursuant to the provisions of Subsection 7-1-91 (d) of the Financial
Institutions Code of Georgia, requiring the Bank to CEASE AND DESIST from the
following enumerated alleged unsafe and unsound practices and to adopt a program
of corrective action as a means to address the deficiencies. The alleged unsafe
and unsound practices are as follows:

 

  1. Operating with inadequate supervision and direction over the financial
affairs of the Bank;

 

  2. Operating with an excessive volume of assets subject to adverse
classification;

 

  3. Operating with an inadequate allowance for loan and lease losses (“ALLL”);

 

  4. Operating with an inadequate level of capital based upon the level of risk
identified;

 

  5. Operating with an excessive volume of credit concentrations which reflect a
lack of diversity in the loan portfolio;

 

  6. Operating with marginal liquidity;

 

  7. Operating with an excessive volume of non earning assets; and

 

  8. Operating in apparent violations of rules, regulations, and policy
statements.

This Order to Cease and Desist (“ORDER”) between the Department and the FDIC
(“Supervisory Authorities”) and the Board of Directors (“Board”) is designed to
bring about correction of the currently identified problems of the bank by the
Board and bank management, without admitting or denying the alleged charges of
unsafe or unsound banking practices. The program of corrective action to be
adopted is as follows, with all time periods contained herein to begin with the
effective date of the ORDER:

BOARD OF DIRECTORS

1. (a) Immediately from the effective date of this ORDER, the Board shall
increase its participation in the affairs of the Bank, assuming full
responsibility for the approval of sound policies and objectives and for the
supervision of all of the Bank’s activities, consistent with the role and
expertise commonly expected for directors of banks of comparable size. This
participation shall include meetings to be held no less frequently than monthly
at which, at a minimum, the following areas shall be reviewed and approved: new,
past due, renewal, insider, charge-off, and recovered loans; operating policies
and policy exceptions; insider transactions; reports of income and expenses;
investment activity; operating policies; and individual committee actions. Board
minutes shall fully document these reviews and approvals, including the names of
any dissenting directors.

 

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(b) Within thirty (30) days from the effective date of this ORDER, the Board
shall establish a Board committee (“Directors’ Committee”), consisting of at
least four members, responsible for ensuring compliance with the ORDER,
overseeing corrective measures with respect to the ORDER, and reporting to the
Board. Three of the members of the Directors’ Committee shall not be officers of
the Bank. The Directors’ Committee shall monitor compliance with this ORDER and,
within thirty (30) days from the effective date of this ORDER, and every thirty
(30) days thereafter, shall submit a written report detailing the Bank’s
compliance with this ORDER to the Board, for review and consideration during its
regularly scheduled meeting. Such report and any discussion related to the
report of the ORDER shall be recorded in the appropriate minutes of the meeting
of the Board and shall be retained in the Bank’s records. Nothing contained
herein shall diminish the responsibility of the entire Board to ensure
compliance with the provisions of this ORDER.

(c) Within thirty (30) days from the effective date of this ORDER, the Bank
shall designate a Board committee to review and approve loans (“Loan
Committee”), with such committee being structured so that a majority of members
are persons who are not actively involved in the Bank’s lending activities.

MANAGEMENT

2. (a) Within sixty (60) days from the effective date of this ORDER, the Bank
shall develop a written analysis and assessment of the Bank’s management and
staffing needs (“management plan”). The Board shall submit this written
management plan in the same time frame to the Supervisory Authorities for review
and comment. The qualifications of management shall be assessed on management’s
ability to comply with the requirements of this ORDER; operate the bank in a
safe and sound manner; comply with applicable laws, regulations and policy
statements; and restore all aspects of the Bank to a safe and sound condition
including management, asset quality, earnings, capital, liquidity, and
sensitivity to market risks. The management plan shall cover the Bank’s
management structure for the purpose of determining those positions considered
to be part of the Bank’s management, defining the responsibilities and duties of
those positions, and judging the adequacy of the overall management structure
and changes needed. At a minimum, the management plan shall include:

(i) The type and number of management positions needed to properly manage and
supervise the affairs of the Bank;

(ii) A clear and concise description of the required experience and level of
compensation for each management position at the bank;

(iii) An evaluation of the Board, each Bank officer, and staff members to
determine whether those individuals possess the ability, experience and other
qualifications required to competently perform present and anticipated duties,
including the ability to provide appropriate oversight of the lending function,
to adhere to established policies and procedures of the Bank, to restore and
maintain the Bank in a safe and sound condition, and to comply with all
requirements of this ORDER. Specifically, this review shall ensure that an
adequate lending staff is in place, with competence in the commercial real
estate (CRE) lending field. Also, the plan shall include an evaluation of the
salary that each officer is receiving when compared to the responsibilities the
individual is performing; and

 

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(iv) Procedures to recruit, hire, or appoint additional or replacement personnel
with the requisite ability, experience, and other qualifications required to
competently perform their assigned duties.

(b) Any management or Board changes needed shall be made within ninety (90) days
of the completion of the management plan. Further, the Bank shall notify the
Supervisory Authorities, in writing, of the resignation or termination of any of
the Bank’s directors or senior executive officers. Additionally, during the life
of this ORDER, the Bank shall notify the Supervisory Authorities in writing when
it proposes to add any individual to the Bank’s board of directors or employ any
individual as a senior executive officer. The notification must be received at
least thirty (30) days before the planned addition or employment is intended to
become effective and shall include a description of the background and
experience of the individual or individuals to be added or employed. The Bank
may not add any individual to its Board or employ any individual as an executive
officer without the approval of the Supervisory Authorities.

(c) Any subsequent modifications to the management plan shall be submitted to
the Supervisory Authorities for review and comment. No more than thirty
(30) days from the receipt of any comment from the Supervisory Authorities, and
after consideration of such comment, the Board shall approve the management plan
modification.

ADVERSELY CLASSIFIED ITEMS

3. (a) Within ten (10) days from the effective date of this ORDER, the Bank
shall eliminate from its books, by charge-off or collection, all assets or
portions of assets adversely classified “Loss” in the February 2,2009 Report of
Examination (Report) that have not been previously charged-off or collected.
Elimination of these assets through proceeds of other loans made by the Bank is
not considered collection for purposes of this Paragraph.

(b) Additionally, while this ORDER remains in effect, the Bank shall, within
thirty (30) days of the receipt of any official Report of Examination of the
Bank from the Department or the FDIC, eliminate from its books, by collection,
charge-off, or other proper entries, the remaining balance of any assets
classified “Loss” and fifty (50) percent of any assets classified “Doubtful”
unless otherwise approved in writing by the Supervisory Authorities.

(c) Within six (6) months from the effective date of this ORDER, the Bank shall
reduce the assets classified “Substandard” as of February 2,2009, that have not
previously been charged off to not more than $58,800,000.

(d) Within twelve (12) months from the effective date of this ORDER, the Bank
shall reduce the assets classified “Substandard” as of February 2,2009, that
have not previously been charged off to not more than $44,100,000.

(e) Within eighteen (18) months from the effective date of this ORDER, the Bank
shall reduce the assets classified “Substandard” as of February 2,2009, that
have not previously been charged off to not more than $30,900,000.

(f) Within twenty-four (24) months from the effective date of this ORDER, the
Bank shall reduce the assets classified “Substandard” as of February 2, 2009,
that have not previously been charged off to not more than $22,900,000.

 

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(g) Within thirty (30) months from the effective date of this ORDER, the Bank
shall reduce the assets classified “Substandard” as of February 2,2009, that
have not previously been charged off to not more than $15,200,000.

(h) The requirements of Subparagraphs 3(a), 3(b), 3(c), 3(d), 3(e), 3(f) and
3(g) of this ORDER are not to be construed as standards for future operations
and, in addition to the foregoing, the Bank shall eventually reduce the total of
all adversely classified assets. Reduction of these assets through proceeds of
other loans made by the Bank is not considered collection for the purpose of
this Paragraph. As used in Subparagraphs 3(c), 3(d), 3(e), 3(f) and 3(g) the
word “reduce” means:

(i) to collect;

(ii) to charge-off; or

(iii) to sufficiently improve the quality of assets adversely classified to
warrant removing any adverse classification, as determined by the Supervisory
Authorities.

NO ADDITIONAL CREDIT

4. (a) Beginning with the effective date of this ORDER, the Bank shall not
extend, directly or indirectly, any additional credit to, or for the benefit of,
any borrower who has a loan or other extension of credit from the Bank that has
been charged off or classified, in whole or in part, “Loss” or “Doubtful” and is
uncollected. The requirements of this Paragraph shall not prohibit the Bank from
renewing (after collection in cash of interest due from the borrower) any credit
already extended to the borrower. However, the certification required in
Subparagraph 4( c )(i), (ii), and (iii) would apply to such a renewal.

(b) Additionally, during the life of this ORDER, the Bank shall not extend,
directly or indirectly, any additional credit to, or for the benefit of, any
borrower who has a loan or other extension of credit from the Bank that has been
classified, in whole or in part, “Substandard” and is uncollected.

(c) Subparagraph 4(b) shall not apply if the Bank’s failure to extend further
credit to a particular borrower would be detrimental to the best interests of
the Bank. Prior to extending additional credit pursuant to this Subparagraph,
either in form of a renewal, extension, or further advance of funds, such
additional credit shall be approved by a majority of the board of directors, or
a designated committee thereof, who shall certify, in writing:

(i) why the failure of the Bank to extend such credit would be detrimental to
the best interests of the Bank;

(ii) that the Bank’s position would be improved thereby; and

(iii) how the Bank’s position would be improved.

The signed certification shall be made a part of the minutes of the board of
directors or designated committee, and a copy of the signed certification shall
be retained in the borrower’s credit file.

 

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For purposes of this Paragraph, “additional credit” shall include financing of
any fees or interest due that are added to a loan in conjunction with a
refinancing (including notes having “balloon” features), and any restructuring
(including any action that constitutes a change in terms, such as payment
extensions).

PLANS FOR REDUCING/IMPROVING CLASSIFIED ASSETS

5. Within ninety (90) days of the effective date of this ORDER, the Bank shall
review and, if necessary, revise its specific plans and proposals to effect the
reduction and/or improvement of any lines of credit which are adversely
classified by the Supervisory Authorities as of the date of the Report and which
aggregate $1,000,000 or more as of that date. The plans shall identify, at a
minimum, the cause(s) of the borrower’s problems, the bank’s current lien
position and collateral values, the proposed exit strategy, and an estimate of
any potential loss exposure. Such plans shall thereafter he monitored and
progress reports thereon resubmitted by the Bank at 90-day intervals
concurrently with the other reporting requirements set forth in Paragraph 16 of
this ORDER. The Bank shall submit the plans and proposals to the Supervisory
Authorities within ninety (90) days from the effective date of this ORDER.

LOAN REVIEW PROGRAM

6. Within sixty (60) days of the effective date of this ORDER, the Bank shall
enhance the internal loan review program to provide for the timely
identification and categorization of problem credits.

ALLOWANCE FOR LOAN AND LEASE LOSSES

7. The Bank shall maintain an adequate ALLL. In complying with this Paragraph,
the Board shall review the adequacy of the ALLL within twenty-one (21) days
after the end of each calendar quarter and make appropriate provisions. Such
review, at a minimum, shall take into consideration the results of the Bank’s
most recent regulatory examination, loan review, net loan loss history, level of
nonperforming loans, concentrations within the loan portfolio, the overall
composition of the loan portfolio, internal and/or external loan reviews, an
estimate of potential loss exposure of significant credits, and present and
prospective economic conditions. A deficiency in the ALLL shall be remedied in
the calendar quarter it is discovered, prior to submitting the Reports of
Condition and Income, by a charge to current operating earnings. The minutes of
the Board meeting at which such review is undertaken shall indicate the results
of the review. The method used for computing the ALLL shall be consistent with
outstanding regulatory guidance and Generally Accepted Accounting Principles
(GAAP) and be satisfactory to the Supervisory Authorities as determined at
subsequent examinations and/or visitations. A written record shall be
maintained, indicating the methodology utilized, and the review shall be
included in the minutes of the Board.

CAPITAL

8. (a) Within sixty (60) days from the effective date of this ORDER, the Board
shall submit to the Supervisory Authorities a revised Capital Plan based on the
significant change in the risk

 

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profile of the institution. Specifically, the Capital Plan shall address the
increase in classified assets, current earnings projections, and any projections
of shrinkage of the bank’s total assets. Also, the Capital Plan shall detail how
Bank plans to meet and maintain the minimum risk-based capital requirements for
a well-capitalized bank, as described in Part 325 of the FDIC Rules and
Regulations, 12 C.F.R. Part 325. Additionally, statutory requirements for the
holding of brokered deposits shall be considered in the Capital Plan. Further,
the Capital Plan shall identify sources of additional capital and provide for
the injection of such capital as necessary in order to maintain compliance with
capital ratios required in this ORDER.

(b) Within sixty (60) days from the effective date of this ORDER, the Bank shall
maintain Tier 1 capital in such an amount as to equal or exceed eight
(8) percent of the Bank’s total assets and total risk based capital in such an
amount as to equal or exceed ten (10) percent of the Bank’s total risk weighted
assets. Additionally, within sixty (60) days from the effective date of this
ORDER, the Bank shall develop and adopt a plan for achieving and maintaining the
aforementioned Tier 1 capital and total risk based capital levels during the
life of this ORDER. The plan shall be submitted to the Supervisory Authorities
for review and approval.

(c) The level of Tier 1 capital to be maintained during the life of this ORDER
pursuant to Subparagraph 8(b) shall be in addition to a fully funded ALLL, the
adequacy of which shall be satisfactory to the Supervisory Authorities as
determined at subsequent examinations and/or visitations.

(d) Any increase in Tier 1 capital necessary to meet the requirements of
Paragraph 8 of this ORDER may be accomplished by the following:

(i) the sale of common stock; or

(ii) the sale of noncumulative perpetual preferred stock; or

(iii) the direct contribution of cash by the board of directors, shareholders,
and/or parent holding company; or

(iv) any other means acceptable to the Supervisory Authorities; or

(v) any combination of the above means.

Any increase in Tier 1 capital necessary to meet the requirements of Paragraph 8
of this ORDER may not be accomplished through a deduction from the Bank’s ALLL.

(e) If all or part of the increase in Tier 1 capital required by this paragraph
is accomplished by the sale of new securities, the Board shall adopt and
implement a plan for the sale of such additional securities, including the
voting of any shares owned or proxies held or controlled by them in favor of the
plan. Should the implementation of the plan involve a public distribution of the
Bank/Bank Holding Company’s securities (including a distribution limited only to
the existing shareholders), the Bank/Bank Holding Company shall prepare offering
materials fully describing the securities being offered, including an accurate
description of the financial condition of the Bank/Bank Holding Company and the
circumstances giving rise to the offering, and any other material disclosures
necessary to comply with federal securities laws. Prior to the implementation of
the plan and, in any event, not less than 20 days prior to the dissemination of
such materials, the plan and any materials used in the sale of the securities
shall be submitted to the FDIC, Division of Supervision and Consumer Protection,
Accounting and Securities Disclosure Section, 550 17th Street, N.W., Room
F-6066, Washington, D.C. 20429 and

 

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to the Commissioner, Georgia Department of Banking and Finance, 2990 Brandywine
Road, Suite 200, Atlanta, Georgia 30341-5565 for review. Any changes requested
to be made in the plan or materials shall be made prior to their dissemination.
If the increase in Tier 1 capital is provided by the sale of noncumulative
perpetual preferred stock, then all terms and conditions of the issue, including
but not limited to those terms and conditions relative to interest rate and
convertibility factor, shall be presented to the Supervisory Authorities for
prior approval.

(f) In complying with the provisions of this paragraph, the Bank shall provide
to any subscriber and/or purchaser of the Bank’s securities, a written notice of
any planned or existing development or other changes which are materially
different from the information reflected in any offering materials used in
connection with the sale of Bank securities. The written notice required by this
paragraph shall be furnished within ten (10) days from the date such material
development or change was planned or occurred, whichever is earlier, and shall
be furnished to every subscriber and/or purchaser of the Bank’s securities who
received or was tendered the information contained in the Bank’s original
offering materials.

(g) For the purposes of this ORDER, the terms “Tier 1 capital” and “total
assets” shall have, the meanings ascribed to them in Part 325 of the FDIC’s
Rules and Regulations, 12 C.F.R. §§ 325.2(v) and 325.2(x), respectively.

CONCENTRATIONS OF CREDIT

9. (a) Within sixty (60) days from the effective date of this ORDER, the Bank
shall review and, if necessary, revise its written plan detailing appropriate
strategies for managing acquisition, development and construction (AD C) and
commercial real estate (CRE) concentration levels, including a contingency plan
to reduce or mitigate concentrations given current adverse market conditions. If
the contingency plan includes selling or securitizing such loans, management
shall include an assessment of the marketability of the portfolio in the plan.
The Board shall submit this written ADC/CRE plan in the same time frame to the
Supervisory Authorities for review and comment. The Bank shall submit its
written plan to the Supervisory Authorities within sixty (60) days from the
effective date of this ORDER.

(b) Within sixty (60) days from the effective date of this ORDER, the Bank shall
perform a risk segmentation analysis with respect to the Concentrations of
Credit listed on Page 32 of the Report. Concentrations should be stratified as
the Board deems appropriate, but shall include concentrations identified by
industry, geographic distribution, underlying collateral, direct or indirect
extensions of credit to or for the benefit of any borrowers dependent upon the
performance of a single developer or builder, and other asset groups that are
considered economically related. The Board should refer to the Joint Guidance on
Concentrations in Commercial Real Estate Lending, Sound Risk Management
Practices, for information regarding risk segmentation analysis.

FUNDS MANAGEMENT

10. (a) Within thirty (30) days from the effective date of this ORDER, the Bank
shall perform an assessment of the Bank’s liquidity needs and plans for ensuring
such needs are met on an ongoing basis. The Bank shall review the adequacy of
its asset liability management (ALM) practices in light of the change in the
Bank’s overall financial condition. The assessment shall

 

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take into consideration the Bank’s loan, investment, operating, and budget
policies as well as the bank’s liquidity contingency plan. In addition, the Bank
shall develop a plan for reducing its volatile liability dependence and brokered
deposits.

(b) Within thirty (30) days of the effective date of this ORDER, the Bank shall
develop or revise, adopt and implement a written liquidity contingency plan. The
written liquidity contingency plan shall incorporate the applicable guidance
contained in Financial Institution Letter (FIL) 84-2008 dated August 26,2008,
entitled Liquidity Risk Management. Such plan and its implementation shall be in
a form and manner acceptable to the Supervisory Authorities as determined at
subsequent examinations and/or visitations.

BROKERED DEPOSITS

11. Beginning with the effective date of this ORDER, and so long as this ORDER
is in effect, the Bank shall not accept, renew, or rollover brokered deposits
without obtaining a brokered deposit waiver approved by the FDIC pursuant to
section 29 of the Act, 12 U.S.C. § 1831 f. For purposes of this ORDER, brokered
deposits are defined as described in section 337.6(a)(2) of the FDIC’s Rules and
Regulations, 12 C.F.R. § 337.6(a)(2) to include any deposits funded by third
party agents or nominees for depositors, including deposits managed by a trustee
or custodian when each individual beneficial interest is entitled to or asserts
a right to federal deposit Insurance.

STRATEGIC PLAN/EARNINGS

12. Within sixty (60) days from the effective date of this ORDER, the Bank shall
submit to the Supervisory Authorities a written strategic business plan that
covers three (3) years for improving the earnings and overall financial
condition of the Bank. The plan, at a minimum, shall provide for or describe:

(a) The identification of major areas including, at a minimum, asset growth,
loan portfolio and deposit mix, market focus, earnings projections, capital
needs, and liquidity management, and means by which the Board will seek to
improve the Bank’s operating performance;

(b) Management, lending, and earnings objectives, appropriate to the Bank’s
condition, and specific strategies for achieving such objectives;

(c) A realistic and comprehensive budget;

(d) A description of the operating assumptions that form the basis for, and
adequately support, major projected income and expense components and provisions
needed to establish and maintain an adequate ALLL; and

(e) A budget review process incorporating the use of pro forma income statements
and analysis of budgeted versus actual income and expense, with significant
deviations from budgeted projections being analyzed in writing.

The plan shall consist of short and long-term goals designed to improve the
condition of the Bank and strategies for achieving those goals. The plan shall
be in a form and manner acceptable to the Supervisory Authorities as determined
at subsequent examinations and/or visitations.

 

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VIOLATIONS

13. Within sixty (60) days from the effective date of this ORDER, the Bank shall
take all necessary steps consistent with sound banking practices to eliminate
and/or correct all apparent violations of regulations and contraventions of
policy cited in the Report. In addition, the Bank shall take all necessary steps
to ensure future compliance with all applicable laws, regulations, and
statements of policy.

DIRECTORS’ FEES, CASH DIVIDENDS AND BONUSES

14. The Bank shall not, directly or indirectly, pay fees to the Bank’s directors
including, but not limited to, reimbursement of expenses or payment of
indebtedness without the prior written approval of the Supervisory Authorities.
Further, the Bank shall not pay cash dividends or bonuses without the prior
written consent of the Supervisory Authorities.

NOTICE TO SHAREHOLDERS

15. Following the effective date of this ORDER, the Bank shall send to its
shareholders or otherwise furnish a description of this ORDER in conjunction
with the Bank’s next shareholder communication and also in conjunction with its
notice or proxy statement preceding the Bank’s next shareholder meeting. The
description shall fully describe the ORDER in all material respects. The
description and any accompanying communication, statement, or notice shall be
sent to the Supervisory Authorities at least twenty (20) days prior to the
dissemination to shareholders. Any changes requested to be made by the
Supervisory Authorities shall be made prior to the dissemination of the
description, communication, notice, or statement.

PROGRESS REPORTS

16. Within thirty (30) days of the end of the first calendar quarter following
the effective date of this ORDER, and within thirty (30) days of the end of each
calendar quarter thereafter, the Bank shall furnish written progress reports to
the Supervisory Authorities detailing the form and manner of any actions taken
to secure compliance with this ORDER and the results thereof. Such reports may
be discontinued when the corrections required by this ORDER have been
accomplished and the Supervisory Authorities have released the Bank in writing
from making further reports.

 

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This ORDER shall become effective immediately upon the date of its issuance. The
provisions of this ORDER shall remain effective and enforceable except to the
extent that, and until such time as, any provisions of this ORDER shall have
been modified, terminated, suspended, or set aside by the Supervisory
Authorities.

This Order is issued under the provision of Section 7-1-91(d) of the Financial
Institutions Code of Georgia.

This the 23rd day of October, 2009.

 

/s/ Robert M. Braswell

Robert M. Braswell Commissioner Georgia Department of Banking and Finance

The undersigned, as Regional Director of the Federal Deposit Insurance
Corporation, acknowledges this Cease and Desist Order issued by the Georgia
Department of Banking and Finance and considers its acceptance as representing a
commitment to the Federal Deposit Insurance Corporation from the Board of
Directors of McIntosh State Bank, Jackson, Georgia, to comply with the terms of
this Agreement.

 

/s/ Doreen R. Eberley

Doreen R. Eberley Acting Regional Director Federal Deposit Insurance Corporation

 

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Without admitting or denying the alleged charges of unsafe or unsound banking
practices, the undersigned Directors of McIntosh State Bank, Jackson, Georgia,
acknowledge receipt of and agree to make a good faith effort to comply with the
terms and conditions of this ORDER.

 

/s/ George C. Barber

   

/s/ William K. Malone

George C. Barber     William K. Malone

/s/ John L. Carter

   

/s/ William T. Webb

John L. Carter     William T. Webb

/s/ D. Keith Fortson

   

/s/ Thurman L. Willis, Jr.

D. Keith Fortson     Thurman L. Willis, Jr.

/s/ J. Paul Holmes, Jr.

    J. Paul Holmes, Jr.