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<P align="center"><FONT size="4"><B>SECURITIES AND EXCHANGE COMMISSION</B>
</FONT>

<DIV align="center"><FONT size="3"><B>Washington, D.C. 20549</B>
</FONT></DIV>
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<P align="center"><FONT size="5"><B>Form&nbsp;S-8</B>
</FONT>

<DIV align="center"><FONT size="3"><B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
</FONT></DIV>
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<P align="center"><FONT size="6"><B>Texas Capital Bancshares, Inc.</B>
</FONT>

<DIV align="center"><FONT size="2"><I>(Exact Name of Registrant as Specified in its Charter)</I>
</FONT></DIV>
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    <TD align="center" valign="top"><FONT size="2"><B>Delaware</B><BR>
<I>(State or Other Jurisdiction of<BR>
Incorporation or Organization)</I></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
<B>75-2679109</B><BR>
<I>(I.R.S. Employer<BR>
Identification Number)</I></FONT></TD>
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<P align="center"><FONT size="2"><B>2100 McKinney Avenue, Suite&nbsp;900<BR>
Dallas, Texas 75201<BR>
(214)&nbsp;932-6600</B><BR>
<I>(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant&#146;s Principal Executive Offices)</I>
</FONT>

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<P align="center"><FONT size="2">Texas Capital Bancshares, Inc. 1999 Omnibus Stock Plan<BR>
Texas Capital Bancshares, Inc. 2000 Employee Stock Purchase Plan
</FONT>
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<P align="center"><FONT size="2"><B>Joseph M. Grant, Chief Executive Officer<BR>
2100 McKinney Avenue, Suite&nbsp;900<BR>
Dallas, Texas 75201<BR>
(214)&nbsp;932-6600</B>
</FONT>

<P align="center"><FONT size="2"><I>(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)</I>
</FONT>

<P align="center"><FONT size="2"><B>Copy to: Fred S. Stovall, Esq.<BR>
Patton Boggs LLP<BR>
2001 Ross Avenue, Suite&nbsp;3000<BR>
Dallas, Texas 75201<BR>
(214)&nbsp;758-1515</B>
</FONT>

<P align="center"><FONT size="2"><B>CALCULATION OF REGISTRATION FEE</B>
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    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Proposed</B></FONT></TD>
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    <TD nowrap align="center"><FONT size="1"><B>Title of Securities to</B></FONT></TD>
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    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Amount to be</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offering Price per</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Aggregate</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Amount of</B></FONT></TD>
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    <TD nowrap align="center"><FONT size="1"><B>be Registered</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Registered (1)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Share (2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offering Price (2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Registration Fee</B></FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Common Stock, par
value $.01 per
share</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,261,786</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">12.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">40,772,325</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,298.48</FONT></TD>
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<P align="left"><FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Registration Statement covers (i)&nbsp;3,101,786 shares of common stock that may be issued from time to time pursuant
to the 1999 Omnibus Stock Plan, as amended, and (ii)&nbsp;160,000 shares of common stock pursuant to the 2000 Employee Stock
Purchase Plan.
</FONT>
<P align="left"><FONT size="2">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Solely for the purpose of calculating the registration fee, the offering price per share and the aggregate offering
price have been calculated pursuant to Rules&nbsp;457(c) and 457(h) of the Securities Act of 1933, as amended, based upon the
average of the high and low prices for a share of common stock as reported by the Nasdaq National Market on October&nbsp;2,
2003.
</FONT>

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<P align="center"><FONT size="2"><B>EXPLANATORY NOTE</B>
</FONT>

<P align="left"><FONT size="2">This Registration Statement on Form&nbsp;S-8 (this &#147;Registration Statement&#148;)
registers:
</FONT>
<P>
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    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Shares of our common stock underlying options that have been or may
be issued to certain of our employees and directors under our 1999
Omnibus Stock Plan, as amended (the &#147;1999 Plan&#148;);</FONT></TD>
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<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Shares of our common stock that have been or may be purchased by
certain of our employees under our 2000 Employee Stock Purchase Plan
(the &#147;2000 Plan&#148;); and</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Certain resales of shares of our common stock that may be issued or
may have been issued under either the 1999 Plan or the 2000 Plan.</FONT></TD>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Registration Statement contains two parts. The first part contains a
prospectus prepared in accordance with Part I of Form&nbsp;S-3 pursuant to General
Instruction C to Form&nbsp;S-8. The prospectus may be used for reoffers or resales
of the shares that have been acquired by selling stockholders. The second part
contains information required in the Registration Statement under Part II of
Form&nbsp;S-8.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information specified in Part I of Form&nbsp;S-8 is not being filed with
the Securities and Exchange Commission (the &#147;Commission&#148;) as permitted by the
Note in Part I of Form&nbsp;S-8. This information will be sent or given to
participating employees as specified in Rule&nbsp;428(b)(1) of the Securities Act of
1933, as amended (the &#147;Securities Act&#148;). These document(s) and the documents
incorporated by reference herein pursuant to Item&nbsp;3 of Part II hereof, taken
together, constitute a prospectus that meets the requirements of Section&nbsp;10(a)
of the Securities Act.
</FONT>
<P align="center"><FONT size="2">2</FONT>
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<P align="center"><FONT size="2">PROSPECTUS
</FONT>

<P align="center"><FONT size="2">TEXAS CAPITAL BANCSHARES, INC.
</FONT>

<P align="center"><FONT size="2">COMMON STOCK
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to an offering of 3,261,786 shares of Texas
Capital Bancshares, Inc. common stock, which may be offered from time to time
by the selling stockholders identified under the caption &#147;Selling Stockholders&#148;
in this prospectus for their own accounts. The selling stockholders will
receive all of the proceeds from any sales of the shares of our common stock
offered under this prospectus. Although we will not receive any proceeds from
the selling stockholders&#146; sale of shares of our common stock offered under this
prospectus, we will receive proceeds from any cash exercises of the options
held by selling stockholders under the 1999 Plan. All proceeds received as a
result of the exercise of those options will be used as working capital for our
operations.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of our common stock issued to the selling stockholders are
being registered to permit the selling stockholders to sell the shares from
time to time in the public market. The selling stockholders may sell the
shares of common stock on the Nasdaq National Market, in negotiated
transactions, or through a combination of these methods, at prevailing market
prices or at privately negotiated prices either directly or through agents or
broker-dealers, or through any other means described in the section &#147;Plan of
Distribution&#148; beginning on page 18.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is quoted on the Nasdaq National Market under the symbol
&#147;TCBI.&#148; On October&nbsp;2, 2003, the last reported sale price of our common stock
was $12.80 per share. Our address is 2100 McKinney Avenue, Suite&nbsp;900, Dallas,
Texas 75201 and our telephone number is (214)&nbsp;932-6600.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Investing in our common stock involves risks. See &#147;Risk Factors&#148;
beginning on page 6.</B>
</FONT>

<P align="left"><FONT size="2">NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOT ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
</FONT>
<P align="center"><FONT size="2">The date of this prospectus is
October&nbsp;2, 2003.
</FONT>

<P align="center"><FONT size="2">3</FONT>
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<TR><TD colspan="9"><A HREF="#000">THE COMPANY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">SELLING STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">PLAN OF DISTRIBUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">INTEREST OF NAMED EXPERTS AND COUNSEL</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">WHERE YOU CAN FIND MORE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">INCORPORATION OF DOCUMENTS BY REFERENCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">EXHIBIT INDEX</A></TD></TR>
<TR><TD colspan="9"><A HREF="d09391exv5w1.htm">EX-5.1 Opinion and Consent of Patton Boggs LLP</A></TD></TR>
<TR><TD colspan="9"><A HREF="d09391exv23w1.htm">EX-23.1 Consent of Ernst & Young LLP</A></TD></TR>
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<P align="center"><FONT size="2"><B>TABLE OF CONTENTS</B>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">The Company</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Risk Factors</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cautionary Statement Regarding Forward Looking Statements</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD align="right"><FONT size="2">14</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Use of Proceeds</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Selling Shareholders</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Plan of Distribution</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest of Named Experts and Counsel</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Where You Can Find More Information</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Incorporation of Documents by Reference</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18</FONT></TD>
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<P align="center"><FONT size="2">4</FONT>
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<P align="center"><FONT size="2"><B>THE COMPANY</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through our bank, Texas Capital Bank, we provide a wide range of banking
services, primarily to the middle market business and high net worth individual
segments of the Texas economy. We currently operate banking centers in our
core markets, which are the greater Dallas/Fort Worth, Austin, Houston and San
Antonio metropolitan areas. In addition, we also operate BankDirect, an
Internet banking division of our bank.
</FONT>

<P align="center"><FONT size="2">5</FONT>
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<DIV align="left"><A NAME="001"></A></DIV>
<P align="center"><FONT size="2"><B>RISK FACTORS</B>
</FONT>

<P align="left"><FONT size="2"><I>Before you invest in our common stock, you should understand the high degree of
risk involved. You should consider carefully the following risks and other
information in this prospectus before you decide to purchase shares of our
common stock. The following risks and uncertainties are not the only ones we
face. There may be additional risks that we do not currently know of or that
we currently deem immaterial based on the information available to us. If any
of these risks actually occur, our business, financial condition and operating
results could be adversely affected. As a result, the trading price of our
common stock could decline, perhaps significantly and you could lose part or
all of your investment.</I>
</FONT>
<P align="left"><FONT size="2"><B>Risks Related to Our Business</B>
</FONT>
<P align="left"><FONT size="2"><B><I>Our business strategy includes significant growth plans, and if we fail to
manage our growth effectively as we pursue our expansion strategy, it could
negatively affect our operations</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to develop our business by pursuing a significant growth
strategy. Our prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in significant growth stages
of development. In order to execute our growth strategy successfully, we must,
among other things:
</FONT>

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    <TD width="96%"><FONT size="2">identify and expand into suitable markets;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">build our customer base;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">maintain credit quality;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">attract sufficient deposits to fund our anticipated loan growth;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">attract and retain qualified bank management in each of our targeted markets;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">identify and pursue suitable opportunities for opening new banking locations; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">maintain adequate regulatory capital.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Failure to manage our growth effectively could have a material adverse
effect on our business, future prospects, financial condition or results of
operations, and could adversely affect our ability to successfully implement
our business strategy.
</FONT>

<P align="left"><FONT size="2"><B><I>We have a history of net operating losses</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we have generated operating profits for each fiscal quarter since
March 2001, we incurred significant losses during our initial years of
operations and cannot guarantee that we will be able to sustain profitability.
Our losses were attributable in large part to expenses incurred in forming our
business, establishing our operations and growing our business, which were
funded with equity capital. We cannot assure you that our revenues will
continue to be sufficient to cover our expenses or that capital will be
available to us on satisfactory terms, or at all, to fund any shortfall between
these costs and revenues. Consequently, if we are unable to generate profits
on a consistent basis, our ability to compete effectively could be adversely
affected.
</FONT>

<P align="left"><FONT size="2"><B><I>We have a limited operating history and as a result our financial performance
to date may not be a reliable indicator of whether our business strategy will
be successful</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We did not commence significant operations with our current management and
begin implementing our current strategy until December 1998, and our operations
prior to that date were very limited. We have a very limited historical basis
upon which to rely for gauging our business performance
</FONT>

<P align="center"><FONT size="2">6</FONT>
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<P align="left"><FONT size="2">under normalized
operations. Our prospects are subject to the risks and uncertainties
frequently encountered by companies in their early stages of development,
including the risk that we will not be able to implement our business plan or
that our business plan will prove to be unprofitable. Accordingly, our
financial performance to date may not be representative of our long-term future
performance or indicative of whether our business strategy will be successful.
</FONT>
<P align="left"><FONT size="2"><B><I>We may not be able to find suitable acquisition candidates</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to make acquisitions that will complement or expand our
business. However, we believe that there are a limited number of banks that
will meet our acquisition criteria and, consequently, we cannot assure you that
we will be able to identify suitable candidates for acquisitions. In addition,
even if suitable candidates are identified, we expect to compete with other
potential bidders for such businesses, many of which may have greater financial
resources than we have. Our failure to find suitable acquisition candidates,
or successfully bid against other competitors for acquisitions, could adversely
affect our ability to successfully implement our business strategy.
</FONT>

<P align="left"><FONT size="2"><B><I>We may be unable to manage our growth due to acquisitions, which could have an
adverse effect on our financial condition or results of operations</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that a portion of our growth will come from acquisitions of
banks and other financial institutions. Such acquisitions involve risks of
changes in results of operations or cash flows, unforeseen liabilities relating
to the acquired institution or arising out of the acquisition, asset quality
problems of the acquired entity and other conditions not within our control,
such as adverse personnel relations, loss of customers because of change of
identity, deterioration in local economic conditions and other risks affecting
the acquired institution. In addition, the process of integrating acquired
entities will divert significant management time and resources. We cannot
assure you that we will be able to integrate successfully or operate profitably
any financial institutions we may acquire. We may experience disruption and
incur unexpected expenses in integrating acquisitions. There can be no
assurance that any such acquisitions will enhance our business, results of
operations, cash flows or financial condition, and such acquisitions may have
an adverse effect on our results of operations, particularly during periods in
which the acquisitions are being integrated into our operations.
</FONT>

<P align="left"><FONT size="2"><B><I>We are dependent upon key personnel</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our success depends to a significant extent upon the performance of
certain key employees, the loss of whom could have an adverse effect on our
business. Our key employees include Joseph M. Grant, our Chairman of the Board
of Directors and Chief Executive Officer, George F. Jones, Jr., the President
and Chief Executive Officer of our bank, and C. Keith Cargill, our bank&#146;s
Executive Vice President and Chief Lending Officer. Although we have entered
into employment agreements with these employees, we cannot assure you that we
will be successful in retaining these key employees.
</FONT>

<P align="left"><FONT size="2"><B><I>Our operations are significantly affected by interest rate levels</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our profitability is dependent to a large extent on our net interest
income, which is the difference between interest income we earn as a result of
interest paid to us on loans and investments and interest we pay to third
parties such as our depositors and those from whom we borrow funds. Like most
financial institutions, we are affected by changes in general interest rate
levels, which are currently at relatively low levels, and by other economic
factors beyond our control. Interest rate risk can result from mismatches
between the dollar amount of repricing or maturing assets and liabilities and
from mismatches in the timing
and rate at which our assets and liabilities reprice. Although we have
implemented strategies which we believe reduce the potential effects of changes
in interest rates on our results of operations, these strategies may not always
be successful. In addition, any substantial and prolonged increase in market
interest rates could reduce our customers&#146; desire to borrow money from us or
adversely affect their ability to repay their outstanding loans by increasing
their credit costs since most of our loans have adjustable interest rates that
reset periodically. Any of these events could adversely affect our results of
operations or financial condition.
</FONT>

<P align="center"><FONT size="2">7</FONT>
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<P align="left"><FONT size="2"><B><I>We must effectively manage our credit risk</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are risks inherent in making any loan, including risks with respect
to the period of time over which the loan may be repaid, risks resulting from
changes in economic and industry conditions, risks inherent in dealing with
individual borrowers and risks resulting from uncertainties as to the future
value of collateral. The risk of nonpayment of loans is inherent in commercial
banking. Although we attempt to minimize our credit risk by carefully
monitoring the concentration of our loans within specific industries and
through prudent loan application approval procedures, we cannot assure you that
such monitoring and approval procedures will reduce these lending risks.
Moreover, as we expand our operations into new geographic markets, our credit
administration and loan underwriting policies will need to be adapted to the
local lending and economic environments of these new markets. We cannot assure
you that our credit administration personnel, policies and procedures will
adequately adapt to any new geographic markets.
</FONT>

<P align="left"><FONT size="2"><B><I>There are material risks involved in commercial lending that could adversely
affect our business</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generally invest a greater proportion of our assets in commercial loans
than other banking institutions of our size, which typically invest a greater
proportion of their assets in loans secured by single-family residences.
Commercial loans generally involve a higher degree of credit risk than
residential mortgage loans due, in part, to their larger average size and
generally less readily-marketable collateral. Due to their size and the nature
of their collateral, losses incurred on a small number of commercial loans
could have a material adverse impact on our financial condition and results of
operations. In addition, unlike residential mortgage loans, commercial loans
generally depend on the cash flow of the borrower&#146;s business to service the
debt. Furthermore, a significant portion of our loans are dependent for
repayment largely on the liquidation of assets securing the loan, such as
inventory and accounts receivable. These loans carry incrementally higher
risk, since their repayment is often dependent solely on the financial
performance of the borrower&#146;s business. Our business plan calls for continued
efforts to increase our assets invested in commercial loans. An increase in
non-performing loans could cause operating losses, impaired liquidity and the
erosion of our capital, and could have a material adverse effect on our
business, financial condition or results of operations.
</FONT>

<P align="left"><FONT size="2"><B><I>If the value of real estate in our core Texas markets were to decline
materially, a significant portion of our loan portfolio could become
under-collateralized, which would have a material adverse effect on us</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market value of real estate, particularly real estate held for
investment, can fluctuate significantly in a short period of time as a result
of market conditions in the geographic area in which the real estate is
located. If the value of the real estate serving as collateral for our loan
portfolio were to decline materially, a significant part of our loan portfolio
could become under-collateralized. As of June&nbsp;30, 2003, approximately 41% of
the collateral for the loans in our portfolio consisted of real estate. Of the
real estate that collateralizes the loans in our portfolio, approximately
one-third of the properties are real estate owned and occupied by businesses to
which we have extended loans and the remaining two-thirds is real estate held
for investment by the borrower. If the loans that are collateralized by real
estate become troubled during a time when market conditions are declining or
have declined, then we may not be able to realize the amount of security that
we anticipated at the time of originating the loan, which could have a material
adverse effect on our provision for loan losses and our operating results and
financial condition.
</FONT>

<P align="left"><FONT size="2"><B><I>We may be responsible for environmental claims and other related costs of
property we acquire through foreclosure, which could adversely affect our
profitability</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A significant portion of our loan portfolio is secured by real property.
In the course of our business, we may acquire properties that secure loans as a
result of foreclosure. There is a risk that hazardous or toxic waste could be
found on such properties. In such event, we could be held responsible for the
cost of cleaning up or removing such waste, and such cost could significantly
exceed the value of the underlying properties and adversely affect our
profitability. To date, we have not been required to perform any investigation
or clean up activities with respect to, nor have we been subject to any
</FONT>


<P align="center"><FONT size="2">8</FONT>
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<P align="left"><FONT size="2">environmental claims on, any loans held in our loan portfolio or other
properties we acquired. Although we have a policy that requires us to perform
an environmental review before initiating any foreclosure action on real
property, there can be no assurance that this will be sufficient to detect all
potential environmental hazards.
</FONT>
<P align="left"><FONT size="2"><B><I>Our financial condition and results of operations would be adversely affected
if our allowance for loan losses is not sufficient to absorb actual losses</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Experience in the banking industry indicates that a portion of our loans
will become delinquent, some of which may only be partially repaid or may never
be repaid at all. Despite our underwriting criteria, we experience losses for
reasons beyond our control, such as general economic conditions. Although we
believe that our allowance for loan losses is maintained at a level adequate to
absorb any inherent losses in our loan portfolio, these estimates of loan
losses are inherently subjective and their accuracy depends on the outcome of
future events. We may need to make significant and unanticipated increases in
our loss allowances in the future, which would materially affect our results of
operations in that period.
</FONT>

<P align="left"><FONT size="2"><B><I>Bank regulators may require us to increase our allowance for loan losses, which
could have a negative effect on our financial condition and results of
operations</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal regulators, as an integral part of their respective supervisory
functions, periodically review our allowance for loan losses. The regulatory
agencies may require us to increase our provision for loan losses or to
recognize further loan charge-offs based upon their judgments, which may be
different from ours. Any increase in the allowance for loan losses required by
these regulatory agencies could have a negative effect on our financial
condition and results of operations.
</FONT>

<P align="left"><FONT size="2"><B><I>Lack of seasoning of our loan portfolio may increase the risk of credit
defaults in the future</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most of the loans in our loan portfolio were originated within the past
four years, and approximately 49% were originated within the past 18&nbsp;months.
In general, loans do not begin to show signs of credit deterioration or default
until they have been outstanding for some period of time, a process referred to
as &#147;seasoning.&#148; As a result, a portfolio of older loans will usually behave
more predictably than a newer portfolio. Because our loan portfolio is
relatively new, the current level of delinquencies and defaults may not be
representative of the level that will prevail when the portfolio becomes more
seasoned, which is likely to be somewhat higher than current levels.
</FONT>

<P align="left"><FONT size="2"><B><I>Until our portfolio becomes more seasoned, we must rely in part on the
historical loan loss experience of other financial institutions and the
experience of our management in determining our allowance for loan losses, and
this may not be comparable to our loan portfolio</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because most of our loans in our loan portfolio were originated relatively
recently, our loan portfolio does not provide an adequate history of loan
losses for our management to rely upon in establishing our allowance for loan
losses. We therefore rely to a significant extent upon other financial
institutions&#146; histories of loan losses and their allowance for loan losses, as
well as our management&#146;s estimates based on their experience in the banking
industry, when determining our allowance for loan losses. There is no
assurance that the history of loan losses and the reserving policies of other
financial
institutions and our management&#146;s judgment will result in reserving
policies that will be adequate for our business and operations or applicable to
our loan portfolio.
</FONT>

<P align="left"><FONT size="2"><B><I>Our business faces unpredictable economic conditions</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General economic conditions impact the banking industry. The credit
quality of our loan portfolio necessarily reflects, among other things, the
general economic conditions in the areas in which we conduct our business. Our
continued financial success depends somewhat on factors beyond our control,
including:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">national and local economic conditions;</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">9</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the supply and demand for investable funds;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">interest rates; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">federal, state and local laws affecting these matters.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any substantial deterioration in any of the foregoing conditions could
have a material adverse effect on our financial condition and results of
operations, which would likely adversely affect the market price of our common
stock. Further, with the exception of our BankDirect customers which comprised
19% of our total deposits as of June&nbsp;30, 2003, our bank&#146;s customer base is
primarily commercial in nature, and our bank does not have a significant branch
network or retail deposit base. In periods of economic downturn, business and
commercial deposits may tend to be more volatile than traditional retail
consumer deposits and, therefore, during these periods our financial condition
and results of operations could be adversely affected to a greater degree than
those competitors that have a larger retail customer base.
</FONT>

<P align="left"><FONT size="2"><B><I>Our business is concentrated in Texas and a downturn in the economy of Texas
may adversely affect our business</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substantially all of our business is located in Texas. As a result, our
financial condition and results of operations may be affected by changes in the
Texas economy. A prolonged period of economic recession or other adverse
economic conditions in Texas may result in an increase in nonpayment of loans
and a decrease in collateral value.
</FONT>

<P align="left"><FONT size="2"><B><I>We compete with many larger financial institutions which have substantially
greater financial resources than we have</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Competition among financial institutions in Texas is intense. We compete
with other bank holding companies, state and national commercial banks, savings
and loan associations, consumer finance companies, credit unions, securities
brokerages, insurance companies, mortgage banking companies, money market
mutual funds, asset-based non-bank lenders and other financial institutions.
Many of these competitors have substantially greater financial resources,
lending limits and larger branch networks than we do, and are able to offer a
broader range of products and services than we can. Failure to compete
effectively for deposit, loan and other banking customers in our markets could
cause us to lose market share, slow our growth rate and may have an adverse
effect on our financial condition and results of operations.
</FONT>

<P align="left"><FONT size="2"><B><I>Our future profitability depends, to a significant extent, upon revenue we
receive from our middle market business customers and their ability to meet
their loan obligations</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2003, a substantial majority of our loan portfolio was
comprised of loans to our middle market business customers. For the six month
period ended June&nbsp;30, 2003, a significant portion of our total interest and
non-interest income was derived from middle market business customers. We
expect that our future profitability will depend, to a significant extent, upon
revenue we receive from middle market business customers, and their ability to
continue to meet existing loan obligations. As a result,
adverse economic conditions or other factors adversely affecting this
market segment may have a greater adverse effect on us than on other financial
institutions that have a more diversified customer base.
</FONT>

<P align="left"><FONT size="2"><B><I>We compete in an industry that continually experiences technological change,
and we may have fewer resources than many of our competitors to continue to
invest in technological improvements</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial services industry is undergoing rapid technological changes,
with frequent introductions of new technology-driven products and services. In
addition to improving the ability to serve customers, the effective use of
technology increases efficiency and enables financial institutions to reduce
costs. Our future success will depend, in part, upon our ability to address
the needs of our customers by using technology to provide products and services
that will satisfy customer demands for convenience, as
</FONT>

<P align="center"><FONT size="2">10</FONT>
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<P align="left"><FONT size="2">well as to create
additional efficiencies in our operations. Many of our competitors have
substantially greater resources to invest in technological improvements. We
may not be able to effectively implement new technology-driven products and
services or be successful in marketing these products and services to our
customers.
</FONT>
<P align="left"><FONT size="2"><B><I>System failure or breaches of our network security could subject us to
increased operating costs as well as litigation and other liabilities</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The computer systems and network infrastructure we use could be vulnerable
to unforeseen problems. Our operations are dependent upon our ability to
protect our computer equipment against damage from fire, power loss,
telecommunications failure or a similar catastrophic event. Any damage or
failure that causes an interruption in our operations could have an adverse
effect on our financial condition and results of operations. In addition, our
operations are dependent upon our ability to protect the computer systems and
network infrastructure utilized by us against damage from physical break-ins,
security breaches and other disruptive problems caused by the Internet or other
users. Such computer break-ins and other disruptions would jeopardize the
security of information stored in and transmitted through our computer systems
and network infrastructure, which may result in significant liability to us and
deter potential customers. Although we, with the help of third-party service
providers, intend to continue to implement security technology and establish
operational procedures to prevent such damage, there can be no assurance that
these security measures will be successful. In addition, advances in computer
capabilities, new discoveries in the field of cryptography or other
developments could result in a compromise or breach of the algorithms we and
our third-party service providers use to protect customer transaction data. A
failure of such security measures could have an adverse effect on our financial
condition and results of operations.
</FONT>

<P align="left"><FONT size="2"><B><I>Our success in the Internet banking market will largely depend on our ability
to implement services competitive with similar services offered by other
financial institutions</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The success of our Internet banking products and services will depend in
large part on our ability to implement and maintain the appropriate technology.
This includes our ability to provide services competitive with banks that are
already using the Internet. If we are unable to implement and maintain the
appropriate technology efficiently, it could affect our results of operations
and our ability to compete with financial institutions.
</FONT>

<P align="left"><FONT size="2"><B><I>Our success in attracting and retaining retail consumer deposits depends on our
ability to offer competitive rates and services</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2003, approximately 19% of our total deposits came from
retail consumer customers through BankDirect, our Internet banking facility.
The market for Internet banking is extremely competitive and allows retail
consumer customers to access financial products and compare interest rates from
numerous financial institutions located across the U.S. As a result, Internet
retail consumers are more sensitive to interest rate levels than retail
consumers who bank at a branch office. Our future success in retaining and
attracting retail consumer customers depends, in part, on our ability to offer
competitive rates and services.
</FONT>

<P align="left"><FONT size="2"><B><I>We could be adversely affected by changes in the regulation of the Internet</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to conduct, and the cost of conducting, business may also be
adversely affected by a number of legislative and regulatory proposals
concerning the Internet, which are currently under consideration by federal,
state, local and foreign governmental organizations. These proposals include,
but are not limited to, the following matters:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">on-line content;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">user privacy;</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">11</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">taxation;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">access charges;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">liability for third-party activities; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">regulatory and supervisory authority.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moreover, it is uncertain how existing laws relating to these issues will
be applied to the Internet. The adoption of new laws or the application of
existing laws could decrease the growth in the use of the Internet, which could
in turn decrease the demand for our services, increase our cost of doing
business or otherwise have an adverse effect on our business, financial
condition and results of operations. Furthermore, government restrictions on
Internet content could slow the growth of Internet use and decrease acceptance
of the Internet as a communications and commercial medium and thereby have an
adverse effect on our financial condition and results of operations.
</FONT>

<P align="left"><FONT size="2"><B>Risks Related to Our Industry</B>
</FONT>

<P align="left"><FONT size="2"><B><I>We are subject to significant government regulation</I></B></FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We operate in a highly regulated environment and are subject to
supervision and regulation by a number of governmental regulatory agencies,
including the Federal Reserve System, or Federal Reserve, the Office of the
Comptroller of the Currency, or OCC, and the Federal Deposit Insurance
Corporation, or FDIC. Regulations adopted by these agencies, which are
generally intended to provide protection for depositors and customers rather
than for the benefit of stockholders, govern a comprehensive range of matters
relating to ownership and control of our shares, our acquisition of other
companies and businesses, permissible activities for us to engage in,
maintenance of adequate capital levels and other aspects of our operations.
The bank regulatory agencies possess broad authority to prevent or remedy
unsafe or unsound practices or violations of law. In addition, future
legislation and government policy, including with respect to bank deregulation
and interstate expansion, could adversely affect the banking industry as a
whole, including our results of operations. For example, new legislation or
regulation may limit the manner in which we may conduct our business, including
our ability to offer new products, obtain financing, attract deposits, make
loans and achieve satisfactory interest spreads.
</FONT>

<P align="left"><FONT size="2"><B><I>Recent legislation will change the way financial institutions conduct their
business; we cannot predict the effect it will have upon us</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Gramm-Leach-Bliley Financial Modernization Act was signed into law on
November&nbsp;12, 1999. Among other things, the Modernization Act repeals
restrictions on banks affiliating with securities firms and insurance
companies. It also permits bank holding companies that become financial
holding companies to engage in additional financial activities, including
insurance and securities underwriting and agency activities, merchant banking
and insurance company portfolio investment activities. The
Modernization Act may have the result of increasing the competition we
face from larger banks and other companies. It is not possible to predict the
full effect that the Modernization Act will have on us.
</FONT>

<P align="left"><FONT size="2"><B>Risks Related to an Investment in Our Common Stock</B>
</FONT>

<P align="left"><FONT size="2"><B><I>The future trading price of our stock may fluctuate</I></B></FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market price of our common stock may also be subject to significant
fluctuations in response to our future operating results and other factors,
including market conditions. In recent years, the stock market has experienced
extreme price and volume fluctuations that have often been unrelated or
disproportionate to the operating performances and prospects of individual
companies.
</FONT>

<P align="center"><FONT size="2">12</FONT>
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<P align="left"><FONT size="2"><B><I>Future sales of our common stock could depress the price of our common stock</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales of a substantial number of shares of our common stock in the public
market by our stockholders after this offering, or the perception that these
sales are likely to occur, could cause the market price of our common stock to
decline. We currently have 24,814,282 outstanding shares of our common stock.
There are currently approximately 10.5&nbsp;million shares that may be traded,
without restriction, in the public market. Upon the expiration of lock-up
agreements entered into by our directors, officers, the selling stockholders
and certain other significant stockholders in connection with the initial
public offering of our common stock, which agreements expire on February&nbsp;28,
2004, approximately 13.0&nbsp;million additional shares will be eligible for sale in
the public market, subject, in the case of our affiliates, to the volume
restrictions of Rule&nbsp;144.
</FONT>

<P align="left"><FONT size="2"><B><I>Our existing management will maintain significant control over us following the
offering</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immediately following this offering, our current executive officers and
directors will beneficially own approximately 13.9% of the outstanding shares
of our common stock. These percentages may increase to the extent that the
executive officers and directors elect to purchase shares in the future.
Accordingly, our current executive officers and directors will be able to
influence, to a significant extent, the outcome of all matters required to be
submitted to our stockholders for approval (including decisions relating to the
election of directors), the determination of day-to-day corporate and
management policies and other significant corporate activities.
</FONT>

<P align="left"><FONT size="2"><B><I>We have not historically paid, and do not presently intend to pay, cash
dividends</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not paid any cash dividends on our common stock to date and do not
intend to pay cash dividends on our common stock in the foreseeable future. We
intend to retain earnings to finance operations and the expansion of our
business. Therefore, any gains from your investment in our common stock must
come from an increase in its market price.
</FONT>

<P align="left"><FONT size="2"><B><I>We will be restricted in our ability to pay dividends to our stockholders</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a holding company with no independent sources of revenue and would
likely rely upon cash dividends and other payments from our bank to fund the
payment of future cash dividends, if any, to our stockholders. Payment of
dividends by the bank to us would be subject to the prior approval of the OCC
if the total of all dividends declared by the bank in any calendar year exceeds
the sum of the bank&#146;s net profits for that year and its retained net profits
for the preceding two calendar years, less any required transfers to surplus.
In addition, federal law also prohibits a national bank from paying dividends
if it is, or such dividend payments would cause it to become, undercapitalized.
At June&nbsp;30, 2003, our bank was prohibited by these laws from paying any
dividends to us without the OCC&#146;s prior approval. If the bank is restricted
from paying cash dividends to us, we would likely not be able to pay cash
dividends to our stockholders.
</FONT>

<P align="left"><FONT size="2"><B><I>Anti-takeover provisions of our certificate of incorporation, bylaws and
Delaware law may make it more difficult for you to receive a change in control
premium</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain provisions of our certificate of incorporation and bylaws could
make a merger, tender offer or proxy contest more difficult, even if such
events were perceived by many of our stockholders as beneficial to their
interests. These provisions include advance notice for nominations of
directors and stockholders&#146; proposals. In addition, our certificate of
incorporation authorizes the issuance of &#147;blank check&#148; preferred stock with
such designations, rights and preferences as may be determined from time to
time by our board of directors. Accordingly, our board of directors is
empowered, without stockholder approval (unless otherwise required by the rules
of any stock exchange on which our common stock is then listed), to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
our common stock. In the event of such issuance, the preferred stock could be
utilized, under certain circumstances, as a method of discouraging, delaying or
preventing a change in control. Although we have no present intention to issue
any shares of our preferred stock, there can be no assurance that we will not
do so in the future. In addition, as a
</FONT>

<P align="center"><FONT size="2">13</FONT>
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<P align="left"><FONT size="2">Delaware corporation, we are subject to
Section&nbsp;203 of the Delaware General Corporation Law which, in general, prevents
an interested stockholder, defined generally as a person owning 15% or more of
a corporation&#146;s outstanding voting stock, from engaging in a business
combination with our company for three years following the date that person
became an interested stockholder unless certain specified conditions are
satisfied.
</FONT>
<P align="left"><FONT size="2"><B><I>There are substantial regulatory limitations on changes of control</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With certain limited exceptions, federal regulations prohibit a person or
company or a group of persons deemed to be &#147;acting in concert&#148; from, directly
or indirectly, acquiring more than 10% (5% if the acquiror is a bank holding
company) of any class of our voting stock or obtaining the ability to control
in any manner the election of a majority of our directors or otherwise direct
the management or policies of our company without prior notice or application
to and the approval of the Federal Reserve. Accordingly, prospective investors
need to be aware of and comply with these requirements, if applicable, in
connection with any purchase of shares of our common stock.
</FONT>

<!-- link1 "CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="002"></A></DIV>
<P align="center"><FONT size="2"><B>CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Registration Statement includes &#147;forward-looking statements&#148; based on
our current expectations, assumptions, estimates and projections about our
business and our industry. They include, but are not limited to, statements
relating to:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">future revenues, expenses and profitability; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the future development and expected growth of our business.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You can identify forward-looking statements by the use of words such as
&#147;may,&#148; &#147;should,&#148; &#147;will,&#148; &#147;could,&#148; &#147;estimates,&#148; &#147;predicts,&#148; &#147;potential,&#148;
&#147;continue,&#148; &#147;aims,&#148; &#147;anticipates,&#148; &#147;believes,&#148; &#147;plans,&#148; &#147;expects,&#148; &#147;future&#148; and
&#147;intends&#148; and similar expressions. This information does not guarantee future
performance and is subject to risks, uncertainties and other factors, some of
which are beyond our control and difficult to predict and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. In evaluating forward-looking statements, you
should carefully consider the risks and uncertainties described in &#147;Risk
Factors&#148; and elsewhere in this Registration Statement. The forward-looking
statements reflect our view only as of the date of this Registration Statement,
and we do not assume any obligation to update or correct these forward-looking
statements except to the extent we are required to do so by applicable law.
All forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by the cautionary statements
and risk factors contained throughout this Registration Statement.
</FONT>

<P align="center"><FONT size="2">14</FONT>
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<!-- link1 "USE OF PROCEEDS" -->
<DIV align="left"><A NAME="003"></A></DIV>
<P align="center"><FONT size="2"><B>USE OF PROCEEDS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of the shares of our common stock being offered by means of this
prospectus will be sold by selling stockholders, who will receive all proceeds
from any sales. We will not receive any proceeds from the sale of our shares
by the selling stockholders. We will, however, receive proceeds from any cash
exercises of the options by the selling stockholders under the 1999 Plan. All
proceeds received as a result of the exercise of these options will be used as
working capital for our operations. In addition, other than the completion and
filing of this Registration Statement, we will not participate in the
reoffering or resale of the shares of common stock by the selling stockholders.
</FONT>









<P align="center"><FONT size="2">15</FONT>




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<!-- link1 "SELLING STOCKHOLDERS" -->
<DIV align="left"><A NAME="004"></A></DIV>
<P align="center"><FONT size="2"><B>SELLING STOCKHOLDERS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information with respect to the beneficial
ownership of our common stock held, as of October&nbsp;2, 2003, by, and the number
of shares of common stock being offered by, each stockholder who is selling
shares pursuant to this prospectus, other than certain persons who are not our
affiliates, each of whom may sell up to 1,000 shares of our common stock
pursuant to this prospectus. Beneficial ownership is determined under the
rules of the Commission and generally includes voting or investment power with
respect to securities. Unless otherwise noted, to our knowledge, the selling
stockholder has sole voting and investment power as to the shares shown,
subject to community property laws where applicable.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="41%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Shares Beneficially Owned</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Shares Beneficially Owned</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Before</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>After</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>the Offering</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>the Offering(1)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Maximum Number of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percentage (2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Shares to be Offered</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percentage (2)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">William Alton</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Ronald Baker</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Chris Cowan</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mary Cunningham</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,507</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,507</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Nancy Denton</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,060</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,860</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Craig Dixon</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,913</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,913</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">David Folz</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">David Frase</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,754</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,754</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">David Fraser</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,892</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,892</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Carla Gaither</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,259</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,259</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Karen Green</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Laurie Griffith</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Raleigh Hortenstine III (3)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">244,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">190,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">John Hudgens</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mark Johnson</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,840</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,840</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert Kraus</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Barry Kromann</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,502</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,502</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">David Lundgren</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Jack Lynch</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Grant Maples</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,030</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,030</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Terry McCarter</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27,963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert McDaniel</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Michelle Mudrone</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,040</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,040</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Tonya Murphy</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Michael Palmer</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,543</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,543</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Joe Price</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,066</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,066</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Kathryn Ramzy</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">William Rapp</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,394</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,394</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Michael Robnett</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,129</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Larry Shaw</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Peter Stringer</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Daniel Strodel</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Greg Studer</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Stanley Tucker</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,168</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,368</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Maryann Weaver</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,065</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,065</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gary Worthy</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">* Denotes less than 1% of the outstanding shares of common stock</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">1.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Assumes sales of all of the shares offered; however, the Selling
Stockholders may or may not sell any of the offered shares.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Applicable percentage of ownership for each selling shareholder is based
on 24,814,282 shares of common stock outstanding as of October&nbsp;2, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Mr.&nbsp;Hortenstine was the President of Texas Capital Bancshares, Inc. until
April&nbsp;15, 2003.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">16</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<!-- link1 "PLAN OF DISTRIBUTION" -->
<DIV align="left"><A NAME="005"></A></DIV>
<P align="center"><FONT size="2"><B>PLAN OF DISTRIBUTION</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each selling stockholder may sell his or her shares of common stock for
value from time to time under this prospectus in one or more transactions on
the Nasdaq National Market, in negotiated transactions or in a combination of
such methods of sale, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at prices otherwise
negotiated. The selling stockholders may effect such transactions by selling
the shares of common stock to or through broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the selling stockholders and/or the purchasers
of the shares of common stock for whom such broker-dealers may act as agent
(which compensation may be less than or in excess of customary commissions).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each selling stockholder and any broker-dealer that participates in the
distribution of the shares of common stock may be deemed to be an &#147;underwriter&#148;
within the meaning of Section&nbsp;2(11) of the Securities Act, and any commissions
received by them and any profit on the resale of the shares sold by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
All selling and other expenses incurred by the selling stockholders will be
borne by the selling stockholders. We will pay all other expenses in
connection with this offering, including without limitation any expenses of
registration of the common stock, and will not receive any proceeds from sales
of any shares of common stock by the selling stockholders.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have notified the selling stockholders of the need to deliver a copy of
this prospectus in connection with any sale of the shares of common stock
pursuant to this prospectus.
</FONT>

<!-- link1 "INTEREST OF NAMED EXPERTS AND COUNSEL" -->
<DIV align="left"><A NAME="006"></A></DIV>
<P align="center"><FONT size="2"><B>INTEREST OF NAMED EXPERTS AND COUNSEL</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have retained Patton Boggs LLP on a regular basis to perform legal
services for us, including acting as our counsel in connection with the
preparation of this Registration Statement. Larry A. Makel, a member of our
board of directors, is a partner in the law firm Patton Boggs LLP. As of July
31, 2003, partners of Patton Boggs LLP beneficially owned, in the aggregate,
229,584 shares, or 1.07% of our issued and outstanding common stock.
</FONT>

<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->
<DIV align="left"><A NAME="007"></A></DIV>
<P align="center"><FONT size="2"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed a registration statement on Form&nbsp;S-8 with the Securities and
Exchange Commission under the Securities Act to allow the selling stockholders
to resell the common stock offered by means of this prospectus. This
prospectus, which is a part of the Registration Statement does not contain all
of the information set forth in the Registration Statement and the accompanying
exhibits and schedules. For further information about us and our common stock,
we refer you to the Registration Statement and the accompanying exhibits and
schedules. Statements contained in this prospectus regarding the contents of
any contract or other documents to which we refer are not necessarily complete.
In each instance, reference is made to the copy of the contract or document
filed as an exhibit to the Registration Statement, and each statement is
qualified in all respects by that reference. We are subject to the information
and periodic reports requirements of the Securities and Exchange Act of 1934,
as amended (the &#147;Exchange Act&#148;). In accordance with those requirements, we
file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Copies of the
Registration Statement and the accompanying schedules and exhibits and any
other documents that we file may be inspected without charge at the public
reference facilities maintained by the Securities and Exchange Commission at
Room&nbsp;1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of these
materials may be obtained at prescribed rates from the Public Reference Room of
the Securities and Exchange Commission at Room&nbsp;1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330. The Securities and Exchange Commission maintains a website
that contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the Securities and Exchange
Commission. The address of the site is www.sec.gov.
</FONT>

<P align="center"><FONT size="2">17</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>



<!-- link1 "INCORPORATION OF DOCUMENTS BY REFERENCE" -->
<DIV align="left"><A NAME="008"></A></DIV>
<P align="center"><FONT size="2"><B>INCORPORATION OF DOCUMENTS BY REFERENCE</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Annual Report on Form&nbsp;10-K for the fiscal year ended December&nbsp;31,
2002, our Prospectus filed pursuant to Rule&nbsp;424(b) of the Securities Act dated
August&nbsp;13, 2003, Quarterly Reports on Form&nbsp;10-Q for the quarters ended March
31, 2003 and June&nbsp;30, 2003, and Current Reports on Form&nbsp;8-K dated March&nbsp;21,
2003, April&nbsp;23, 2003, June&nbsp;12, 2003, August&nbsp;4, 2003 and August&nbsp;18, 2003 filed
pursuant to Section&nbsp;13 of the Exchange Act, are incorporated by reference
herein.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents we file pursuant to Sections&nbsp;13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date hereof and prior to the filing of a
post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference into this Registration Statement and to be part
hereof from the date of filing of such documents. The information contained in
the documents we incorporate by reference is considered a part of this
prospectus. Additionally, because information concerning us, whether contained
in this prospectus or in a document incorporated by reference, will be amended
or superceded by more current information contained in later filed documents,
the information that we file with the Commission after the date of this
prospectus will update and supercede older information contained in, or
incorporated by reference into, this prospectus.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will provide without charge to each person to whom this prospectus is
delivered, upon request, a copy of any documents incorporated into this
prospectus by reference. Requests for copies of such documents should be
directed to Texas Capital Bancshares, Inc., 2100 McKinney Avenue, Suite&nbsp;900,
Dallas, Texas 75201, telephone (214)&nbsp;932-6600, Attention: Investor Relations.
</FONT>

<P align="center"><FONT size="2">18</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>



<P align="center"><FONT size="2"><B>PART II</B>
</FONT>

<P align="center"><FONT size="2"><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>
</FONT>

<P align="center"><FONT size="2"><B>INCORPORATION OF DOCUMENTS BY REFERENCE</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Annual Report on Form&nbsp;10-K for the fiscal year ended December&nbsp;31,
2002, our Prospectus filed pursuant to Rule&nbsp;424(b) of the Securities Act dated
August&nbsp;13, 2003, Quarterly Reports on Form&nbsp;10-Q for the quarters ended March
31, 2003 and June&nbsp;30, 2003, and Current Reports on Form&nbsp;8-K dated March&nbsp;21,
2003, April&nbsp;23, 2003, June&nbsp;12, 2003, August&nbsp;4, 2003 and August&nbsp;18, 2003 filed
pursuant to Section&nbsp;13 of the Exchange Act, are incorporated by reference
herein.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents we have filed pursuant to Sections&nbsp;13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date hereof and prior to the filing of a
post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference into this Registration Statement and to be part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part hereof.
</FONT>

<P align="center"><FONT size="2"><B>INTEREST OF NAMED EXPERTS AND COUNSEL</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have retained Patton Boggs LLP on a regular basis to perform legal
services for us, including acting as our counsel in connection with the
preparation of this Registration Statement. Larry A. Makel, a member of our
board of directors, is a partner in the law firm Patton Boggs LLP. As of July
31, 2003, partners of Patton Boggs LLP beneficially owned, in the aggregate,
229,584 shares, or 1.07% of our issued and outstanding common.
</FONT>

<P align="center"><FONT size="2"><B>INDEMNIFICATION OF DIRECTORS AND OFFICERS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145 of the Delaware General Corporation Law permits a corporation,
under specified circumstances, to indemnify its directors, officers, employees
or agents against expenses (including attorneys&#146; fees), judgments, fines and
amounts paid in settlements actually and reasonably incurred by them in
connection with any action, suit or proceeding brought by third parties by
reason of the fact that they were or are directors, officers, employees or
agents of the corporation, if such directors, officers, employees or agents
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent
that the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;102(b)(7) of the Delaware General Corporation Law provides that a
certificate of incorporation may contain a provision eliminating or limiting
the personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director; provided, that
such provision shall not eliminate or limit the liability of a director:</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">for any breach of the director&#146;s duty of loyalty to the corporation or its stockholders;</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">19</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">for acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">under Section&nbsp;174 (relating to liability for unauthorized acquisitions or redemptions
of, or dividends on, capital stock) of the Delaware General Corporation Law; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">for any transaction from which the director derived an improper personal benefit.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our certificate of incorporation provides that we shall, to the fullest
extent permitted by the Delaware General Corporation Law, indemnify all persons
who we may indemnify under Delaware law and contains provisions permitted by
Section&nbsp;102(b)(7) of the Delaware General Corporation Law.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our certificate of incorporation and bylaws provide that:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">we are required to indemnify our directors and officers, subject to very limited exceptions;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">we may indemnify other employees and agents, subject to very limited exceptions;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">we are required to advance expenses, as incurred, to our directors and officers in
connection with a legal proceeding, subject to very limited exceptions; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">we may advance expenses, as incurred, to our employees and agents in connection with a
legal proceeding.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have obtained an insurance policy providing for indemnification of
officers and directors and certain other persons against liabilities and
expenses incurred by any of them in certain stated proceedings and conditions.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The indemnification provisions in our certificate of incorporation and
bylaws may be sufficiently broad to permit indemnification of our directors and
officers for liabilities arising under the Securities Act.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into indemnification agreements with each of our directors
and officers, which may be broader than the specific indemnification provisions
contained in our certificate of incorporation, bylaws or under Delaware law.
These indemnification agreements may require us, among other things, to
indemnify our officers and directors against liabilities that may arise by
reason of their status or service as directors or officers. These
indemnification agreements also may require us to advance any expenses incurred
by our directors or officers as a result of any proceeding against them as to
which they could be indemnified. As of the date of this filing, there is no
pending litigation or proceeding involving any of our directors, officers,
employees or agents in which indemnification by us is sought, nor are we aware
of any threatened litigation or proceeding that may result in a claim for
indemnification. We have purchased a policy of directors&#146; and officers&#146;
liability insurance that insures our directors and officers against the cost of
defense, settlement or payment of a judgment in certain circumstances.
</FONT>

<P align="center"><FONT size="2"><B>EXEMPTION FROM REGISTRATION CLAIMED</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The options issued to certain of our employees prior to September 2000
were issued in transactions exempt from registration pursuant to Rule&nbsp;701 under
the Securities Act. After September 2000, we sold restricted shares of our
common stock to be reoffered and resold pursuant to this Registration Statement
to certain employees in transactions exempt from registration pursuant to
Section&nbsp;4(2) of the Securities Act. We believe that such transactions did not
constitute a public offering as a result of (1)&nbsp;the highly limited nature of
the offering, (2)&nbsp;our pre-existing relationship with our employees that
purchased
such shares at the time of the transactions and (3)&nbsp;the extensive information
regarding our business operations and financial condition available at the time
of the transactions.
</FONT>

<P align="center"><FONT size="2">20</FONT>
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<P align="center"><FONT size="2"><B>EXHIBITS</B>
</FONT>

<P align="left"><FONT size="2">The following documents are filed as exhibits to this Registration Statement:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Form of Common Stock Certificate, which is incorporated by reference to
Exhibit&nbsp;4.1 to the third amendment to our registration statement on Form
S-3 dated July&nbsp;31, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Texas Capital Bancshares, Inc. 1999 Omnibus Stock Plan, which is
incorporated by reference to Exhibit&nbsp;4.1 to our registration statement on
Form&nbsp;10 dated August&nbsp;24, 2000</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Texas Capital Bancshares, Inc. 2000 Employee Stock Purchase Plan, which
is incorporated by reference to Exhibit&nbsp;4.2 to our registration statement
on Form&nbsp;10 dated August&nbsp;24, 2000</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">5.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion and Consent of Patton Boggs LLP</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Ernst &#038; Young LLP</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Patton Boggs LLP (included in Exhibit&nbsp;5.1)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">24.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Power of Attorney (included on signature page hereto)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2"><B>UNDERTAKINGS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant hereby undertakes:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(i)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="89%"><FONT size="2">To include any prospectus required by Section
10(a)(3) of the Securities Act;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(ii)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information in the Registration
Statement. To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
the high end of the maximum offering range may be reflected
in the form of prospectus filed with the Securities and
Exchange Commission pursuant to Rule&nbsp;424(b) 9f, in the
aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set
forth in the &#147;Calculation of Registration Fee&#148; table in the
effective registration statement.; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(iii)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form&nbsp;S-8 and the information required to be
included in a post-effective amendment by those paragraphs is
</FONT>
<P align="center"><FONT size="2">21</FONT>
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<P align="left"><FONT size="2">contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section&nbsp;13 or 15(d) of the Exchange Act that are incorporated by
reference to the Registration Statement.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant&#146;s annual report pursuant to Section&nbsp;13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan&#146;s annual
report pursuant to Section&nbsp;15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to the directors, officers and controlling
persons of the registrant pursuant to the foregoing provision, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by final adjudication of such issue.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;We will submit, in a timely manner, the 1999 Plan and the 2000 Plan to
the Internal Revenue Service (the &#147;IRS&#148;) to determine if the 1999 Plan and the
2000 Plan qualify under Section&nbsp;401 of the Internal Revenue Code. In the event
the IRS determines that either the 1999 Plan or the 2000 Plan does not
currently qualify under Section&nbsp;401 of the Internal Revenue Code, we will make
any changes the IRS requires in order to cause the 1999 Plan and the 2000 Plan
to qualify under Section&nbsp;401 of the Internal Revenue Code.
</FONT>

<P align="center"><FONT size="2">22</FONT>
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<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="009"></A></DIV>
<P align="center"><FONT size="2"><B>SIGNATURES</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that its meets all of the
requirements for filing on Form&nbsp;S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Dallas, Texas on the 2<SUP>nd</SUP> day of October 2003.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="69%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" valign="top" align="left"><FONT size="2">Texas Capital Bancshares, Inc.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/ Joseph M. Grant</FONT></TD>
</TR>
<TR>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Joseph M. Grant</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Chief Executive Officer</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Each person whose signature appears below appoints Joseph M. Grant and George
F. Jones, Jr., individually, as true and lawful attorneys-in-fact and agents,
with full power of substitution to sign any amendments (including
post-effective amendments) to this Registration Statement and to each
registration statement amended hereby, and to file the same, with all exhibits
and other related documents, with the Commission, with full power and authority
to perform any necessary or appropriate act in connection with the
amendment(s).
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Signature</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Title</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Date</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Joseph M. Grant<BR>
<HR size="1" noshade>
Joseph M. Grant</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Chairman of the Board of<BR>
Directors and<BR>
Chief Executive Officer<BR>
(principal executive officer)
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ George F. Jones, Jr.<BR>
<HR size="1" noshade>
George F. Jones, Jr.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
President and Chief Executive<BR>
Officer of Texas Capital<BR>
Bank, N.A. and Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Gregory B. Hultgren<BR>
<HR size="1" noshade>
Gregory B. Hultgren</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Executive Vice President and<BR>
Chief Financial Officer<BR>
(principal accounting officer)
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Leo Corrigan III<BR>
<HR size="1" noshade>
Leo Corrigan III</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ James R. Erwin<BR>
<HR size="1" noshade>
James R. Erwin</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD align="center" valign="top"><FONT size="2"><HR size="1" noshade>
Frederick B. Hegi, Jr.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ James R. Holland, Jr.<BR>
<HR size="1" noshade>
James R. Holland, Jr.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Larry A. Makel<BR>
<HR size="1" noshade>
Larry A. Makel</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">23</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Signature</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Title</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Date</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD align="center" valign="top"><FONT size="2"><HR size="1" noshade>
Walter W. McAllister III</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Lee Roy Mitchell<BR>
<HR size="1" noshade>
Lee Roy Mitchell</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Steve Rosenberg<BR>
<HR size="1" noshade>
Steve Rosenberg</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ John C. Snyder<BR>
<HR size="1" noshade>
John C. Snyder</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Robert W. Stallings<BR>
<HR size="1" noshade>
Robert W. Stallings</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ James Cleo Thompson, Jr.<BR>
<HR size="1" noshade>
James Cleo Thompson, Jr.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Ian J. Turpin<BR>
<HR size="1" noshade>
Ian J. Turpin</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">October&nbsp;2, 2003</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">24</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "EXHIBIT INDEX" -->
<DIV align="left"><A NAME="010"></A></DIV>
<P align="center"><FONT size="2"><B>EXHIBIT INDEX</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Form of Common Stock Certificate, which is incorporated by reference to
Exhibit&nbsp;4.1 to the third amendment to our registration statement on Form
S-3 dated July&nbsp;31, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Texas Capital Bancshares, Inc. 1999 Omnibus Stock Plan, which is
incorporated by reference to Exhibit&nbsp;4.1 to our registration statement on
Form&nbsp;10 dated August&nbsp;24, 2000</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Texas Capital Bancshares, Inc. 2000 Employee Stock Purchase Plan, which
is incorporated by reference to Exhibit&nbsp;4.2 to our registration statement
on Form&nbsp;10 dated August&nbsp;24, 2000</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">5.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion and Consent of Patton Boggs LLP</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Ernst &#038; Young LLP</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Patton Boggs LLP (included in Exhibit&nbsp;5.1)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">24.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Power of Attorney (included on signature page hereto)</FONT></TD>
</TR>
</TABLE>
</CENTER>






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sv8
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Texas Capital Bancshares, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
75-2679109
(I.R.S. Employer
Identification Number)
2100 McKinney Avenue, Suite 900
Dallas, Texas 75201
(214) 932-6600
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)
Texas Capital Bancshares, Inc. 1999 Omnibus Stock Plan
Texas Capital Bancshares, Inc. 2000 Employee Stock Purchase Plan
Joseph M. Grant, Chief Executive Officer
2100 McKinney Avenue, Suite 900
Dallas, Texas 75201
(214) 932-6600
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copy to: Fred S. Stovall, Esq.
Patton Boggs LLP
2001 Ross Avenue, Suite 3000
Dallas, Texas 75201
(214) 758-1515
CALCULATION OF REGISTRATION FEE
Proposed
Proposed
Maximum
Maximum
Title of Securities to
Amount to be
Offering Price per
Aggregate
Amount of
be Registered
Registered (1)
Share (2)
Offering Price (2)
Registration Fee
Common Stock, par
value $.01 per
share
3,261,786
$
12.50
$
40,772,325
$
3,298.48
(1)     This Registration Statement covers (i) 3,101,786 shares of common stock that may be issued from time to time pursuant
to the 1999 Omnibus Stock Plan, as amended, and (ii) 160,000 shares of common stock pursuant to the 2000 Employee Stock
Purchase Plan.
(2)     Solely for the purpose of calculating the registration fee, the offering price per share and the aggregate offering
price have been calculated pursuant to Rules 457(c) and 457(h) of the Securities Act of 1933, as amended, based upon the
average of the high and low prices for a share of common stock as reported by the Nasdaq National Market on October 2,
2003.
Table of Contents
EXPLANATORY NOTE
This Registration Statement on Form S-8 (this "Registration Statement")
registers:
•
Shares of our common stock underlying options that have been or may
be issued to certain of our employees and directors under our 1999
Omnibus Stock Plan, as amended (the "1999 Plan");
•
Shares of our common stock that have been or may be purchased by
certain of our employees under our 2000 Employee Stock Purchase Plan
(the "2000 Plan"); and
•
Certain resales of shares of our common stock that may be issued or
may have been issued under either the 1999 Plan or the 2000 Plan.
This Registration Statement contains two parts. The first part contains a
prospectus prepared in accordance with Part I of Form S-3 pursuant to General
Instruction C to Form S-8. The prospectus may be used for reoffers or resales
of the shares that have been acquired by selling stockholders. The second part
contains information required in the Registration Statement under Part II of
Form S-8.
The information specified in Part I of Form S-8 is not being filed with
the Securities and Exchange Commission (the "Commission") as permitted by the
Note in Part I of Form S-8. This information will be sent or given to
participating employees as specified in Rule 428(b)(1) of the Securities Act of
1933, as amended (the "Securities Act"). These document(s) and the documents
incorporated by reference herein pursuant to Item 3 of Part II hereof, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act.
2
Table of Contents
PROSPECTUS
TEXAS CAPITAL BANCSHARES, INC.
COMMON STOCK
This prospectus relates to an offering of 3,261,786 shares of Texas
Capital Bancshares, Inc. common stock, which may be offered from time to time
by the selling stockholders identified under the caption "Selling Stockholders"
in this prospectus for their own accounts. The selling stockholders will
receive all of the proceeds from any sales of the shares of our common stock
offered under this prospectus. Although we will not receive any proceeds from
the selling stockholders' sale of shares of our common stock offered under this
prospectus, we will receive proceeds from any cash exercises of the options
held by selling stockholders under the 1999 Plan. All proceeds received as a
result of the exercise of those options will be used as working capital for our
operations.
The shares of our common stock issued to the selling stockholders are
being registered to permit the selling stockholders to sell the shares from
time to time in the public market. The selling stockholders may sell the
shares of common stock on the Nasdaq National Market, in negotiated
transactions, or through a combination of these methods, at prevailing market
prices or at privately negotiated prices either directly or through agents or
broker-dealers, or through any other means described in the section "Plan of
Distribution" beginning on page 18.
Our common stock is quoted on the Nasdaq National Market under the symbol
"TCBI." On October 2, 2003, the last reported sale price of our common stock
was $12.80 per share. Our address is 2100 McKinney Avenue, Suite 900, Dallas,
Texas 75201 and our telephone number is (214) 932-6600.
Investing in our common stock involves risks. See "Risk Factors"
beginning on page 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOT ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this prospectus is
October 2, 2003.
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THE COMPANY
RISK FACTORS
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
USE OF PROCEEDS
SELLING STOCKHOLDERS
PLAN OF DISTRIBUTION
INTEREST OF NAMED EXPERTS AND COUNSEL
WHERE YOU CAN FIND MORE INFORMATION
INCORPORATION OF DOCUMENTS BY REFERENCE
SIGNATURES
EXHIBIT INDEX
EX-5.1 Opinion and Consent of Patton Boggs LLP
EX-23.1 Consent of Ernst & Young LLP
Table of Contents
TABLE OF CONTENTS
Page
The Company
5
Risk Factors
6
Cautionary Statement Regarding Forward Looking Statements
14
Use of Proceeds
15
Selling Shareholders
16
Plan of Distribution
17
Interest of Named Experts and Counsel
17
Where You Can Find More Information
17
Incorporation of Documents by Reference
18
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THE COMPANY
Through our bank, Texas Capital Bank, we provide a wide range of banking
services, primarily to the middle market business and high net worth individual
segments of the Texas economy. We currently operate banking centers in our
core markets, which are the greater Dallas/Fort Worth, Austin, Houston and San
Antonio metropolitan areas. In addition, we also operate BankDirect, an
Internet banking division of our bank.
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RISK FACTORS
Before you invest in our common stock, you should understand the high degree of
risk involved. You should consider carefully the following risks and other
information in this prospectus before you decide to purchase shares of our
common stock. The following risks and uncertainties are not the only ones we
face. There may be additional risks that we do not currently know of or that
we currently deem immaterial based on the information available to us. If any
of these risks actually occur, our business, financial condition and operating
results could be adversely affected. As a result, the trading price of our
common stock could decline, perhaps significantly and you could lose part or
all of your investment.
Risks Related to Our Business
Our business strategy includes significant growth plans, and if we fail to
manage our growth effectively as we pursue our expansion strategy, it could
negatively affect our operations
We intend to develop our business by pursuing a significant growth
strategy. Our prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in significant growth stages
of development. In order to execute our growth strategy successfully, we must,
among other things:
•
identify and expand into suitable markets;
•
build our customer base;
•
maintain credit quality;
•
attract sufficient deposits to fund our anticipated loan growth;
•
attract and retain qualified bank management in each of our targeted markets;
•
identify and pursue suitable opportunities for opening new banking locations; and
•
maintain adequate regulatory capital.
Failure to manage our growth effectively could have a material adverse
effect on our business, future prospects, financial condition or results of
operations, and could adversely affect our ability to successfully implement
our business strategy.
We have a history of net operating losses
Although we have generated operating profits for each fiscal quarter since
March 2001, we incurred significant losses during our initial years of
operations and cannot guarantee that we will be able to sustain profitability.
Our losses were attributable in large part to expenses incurred in forming our
business, establishing our operations and growing our business, which were
funded with equity capital. We cannot assure you that our revenues will
continue to be sufficient to cover our expenses or that capital will be
available to us on satisfactory terms, or at all, to fund any shortfall between
these costs and revenues. Consequently, if we are unable to generate profits
on a consistent basis, our ability to compete effectively could be adversely
affected.
We have a limited operating history and as a result our financial performance
to date may not be a reliable indicator of whether our business strategy will
be successful
We did not commence significant operations with our current management and
begin implementing our current strategy until December 1998, and our operations
prior to that date were very limited. We have a very limited historical basis
upon which to rely for gauging our business performance
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under normalized
operations. Our prospects are subject to the risks and uncertainties
frequently encountered by companies in their early stages of development,
including the risk that we will not be able to implement our business plan or
that our business plan will prove to be unprofitable. Accordingly, our
financial performance to date may not be representative of our long-term future
performance or indicative of whether our business strategy will be successful.
We may not be able to find suitable acquisition candidates
We intend to make acquisitions that will complement or expand our
business. However, we believe that there are a limited number of banks that
will meet our acquisition criteria and, consequently, we cannot assure you that
we will be able to identify suitable candidates for acquisitions. In addition,
even if suitable candidates are identified, we expect to compete with other
potential bidders for such businesses, many of which may have greater financial
resources than we have. Our failure to find suitable acquisition candidates,
or successfully bid against other competitors for acquisitions, could adversely
affect our ability to successfully implement our business strategy.
We may be unable to manage our growth due to acquisitions, which could have an
adverse effect on our financial condition or results of operations
We believe that a portion of our growth will come from acquisitions of
banks and other financial institutions. Such acquisitions involve risks of
changes in results of operations or cash flows, unforeseen liabilities relating
to the acquired institution or arising out of the acquisition, asset quality
problems of the acquired entity and other conditions not within our control,
such as adverse personnel relations, loss of customers because of change of
identity, deterioration in local economic conditions and other risks affecting
the acquired institution. In addition, the process of integrating acquired
entities will divert significant management time and resources. We cannot
assure you that we will be able to integrate successfully or operate profitably
any financial institutions we may acquire. We may experience disruption and
incur unexpected expenses in integrating acquisitions. There can be no
assurance that any such acquisitions will enhance our business, results of
operations, cash flows or financial condition, and such acquisitions may have
an adverse effect on our results of operations, particularly during periods in
which the acquisitions are being integrated into our operations.
We are dependent upon key personnel
Our success depends to a significant extent upon the performance of
certain key employees, the loss of whom could have an adverse effect on our
business. Our key employees include Joseph M. Grant, our Chairman of the Board
of Directors and Chief Executive Officer, George F. Jones, Jr., the President
and Chief Executive Officer of our bank, and C. Keith Cargill, our bank's
Executive Vice President and Chief Lending Officer. Although we have entered
into employment agreements with these employees, we cannot assure you that we
will be successful in retaining these key employees.
Our operations are significantly affected by interest rate levels
Our profitability is dependent to a large extent on our net interest
income, which is the difference between interest income we earn as a result of
interest paid to us on loans and investments and interest we pay to third
parties such as our depositors and those from whom we borrow funds. Like most
financial institutions, we are affected by changes in general interest rate
levels, which are currently at relatively low levels, and by other economic
factors beyond our control. Interest rate risk can result from mismatches
between the dollar amount of repricing or maturing assets and liabilities and
from mismatches in the timing
and rate at which our assets and liabilities reprice. Although we have
implemented strategies which we believe reduce the potential effects of changes
in interest rates on our results of operations, these strategies may not always
be successful. In addition, any substantial and prolonged increase in market
interest rates could reduce our customers' desire to borrow money from us or
adversely affect their ability to repay their outstanding loans by increasing
their credit costs since most of our loans have adjustable interest rates that
reset periodically. Any of these events could adversely affect our results of
operations or financial condition.
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We must effectively manage our credit risk
There are risks inherent in making any loan, including risks with respect
to the period of time over which the loan may be repaid, risks resulting from
changes in economic and industry conditions, risks inherent in dealing with
individual borrowers and risks resulting from uncertainties as to the future
value of collateral. The risk of nonpayment of loans is inherent in commercial
banking. Although we attempt to minimize our credit risk by carefully
monitoring the concentration of our loans within specific industries and
through prudent loan application approval procedures, we cannot assure you that
such monitoring and approval procedures will reduce these lending risks.
Moreover, as we expand our operations into new geographic markets, our credit
administration and loan underwriting policies will need to be adapted to the
local lending and economic environments of these new markets. We cannot assure
you that our credit administration personnel, policies and procedures will
adequately adapt to any new geographic markets.
There are material risks involved in commercial lending that could adversely
affect our business
We generally invest a greater proportion of our assets in commercial loans
than other banking institutions of our size, which typically invest a greater
proportion of their assets in loans secured by single-family residences.
Commercial loans generally involve a higher degree of credit risk than
residential mortgage loans due, in part, to their larger average size and
generally less readily-marketable collateral. Due to their size and the nature
of their collateral, losses incurred on a small number of commercial loans
could have a material adverse impact on our financial condition and results of
operations. In addition, unlike residential mortgage loans, commercial loans
generally depend on the cash flow of the borrower's business to service the
debt. Furthermore, a significant portion of our loans are dependent for
repayment largely on the liquidation of assets securing the loan, such as
inventory and accounts receivable. These loans carry incrementally higher
risk, since their repayment is often dependent solely on the financial
performance of the borrower's business. Our business plan calls for continued
efforts to increase our assets invested in commercial loans. An increase in
non-performing loans could cause operating losses, impaired liquidity and the
erosion of our capital, and could have a material adverse effect on our
business, financial condition or results of operations.
If the value of real estate in our core Texas markets were to decline
materially, a significant portion of our loan portfolio could become
under-collateralized, which would have a material adverse effect on us
The market value of real estate, particularly real estate held for
investment, can fluctuate significantly in a short period of time as a result
of market conditions in the geographic area in which the real estate is
located. If the value of the real estate serving as collateral for our loan
portfolio were to decline materially, a significant part of our loan portfolio
could become under-collateralized. As of June 30, 2003, approximately 41% of
the collateral for the loans in our portfolio consisted of real estate. Of the
real estate that collateralizes the loans in our portfolio, approximately
one-third of the properties are real estate owned and occupied by businesses to
which we have extended loans and the remaining two-thirds is real estate held
for investment by the borrower. If the loans that are collateralized by real
estate become troubled during a time when market conditions are declining or
have declined, then we may not be able to realize the amount of security that
we anticipated at the time of originating the loan, which could have a material
adverse effect on our provision for loan losses and our operating results and
financial condition.
We may be responsible for environmental claims and other related costs of
property we acquire through foreclosure, which could adversely affect our
profitability
A significant portion of our loan portfolio is secured by real property.
In the course of our business, we may acquire properties that secure loans as a
result of foreclosure. There is a risk that hazardous or toxic waste could be
found on such properties. In such event, we could be held responsible for the
cost of cleaning up or removing such waste, and such cost could significantly
exceed the value of the underlying properties and adversely affect our
profitability. To date, we have not been required to perform any investigation
or clean up activities with respect to, nor have we been subject to any
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environmental claims on, any loans held in our loan portfolio or other
properties we acquired. Although we have a policy that requires us to perform
an environmental review before initiating any foreclosure action on real
property, there can be no assurance that this will be sufficient to detect all
potential environmental hazards.
Our financial condition and results of operations would be adversely affected
if our allowance for loan losses is not sufficient to absorb actual losses
Experience in the banking industry indicates that a portion of our loans
will become delinquent, some of which may only be partially repaid or may never
be repaid at all. Despite our underwriting criteria, we experience losses for
reasons beyond our control, such as general economic conditions. Although we
believe that our allowance for loan losses is maintained at a level adequate to
absorb any inherent losses in our loan portfolio, these estimates of loan
losses are inherently subjective and their accuracy depends on the outcome of
future events. We may need to make significant and unanticipated increases in
our loss allowances in the future, which would materially affect our results of
operations in that period.
Bank regulators may require us to increase our allowance for loan losses, which
could have a negative effect on our financial condition and results of
operations
Federal regulators, as an integral part of their respective supervisory
functions, periodically review our allowance for loan losses. The regulatory
agencies may require us to increase our provision for loan losses or to
recognize further loan charge-offs based upon their judgments, which may be
different from ours. Any increase in the allowance for loan losses required by
these regulatory agencies could have a negative effect on our financial
condition and results of operations.
Lack of seasoning of our loan portfolio may increase the risk of credit
defaults in the future
Most of the loans in our loan portfolio were originated within the past
four years, and approximately 49% were originated within the past 18 months.
In general, loans do not begin to show signs of credit deterioration or default
until they have been outstanding for some period of time, a process referred to
as "seasoning." As a result, a portfolio of older loans will usually behave
more predictably than a newer portfolio. Because our loan portfolio is
relatively new, the current level of delinquencies and defaults may not be
representative of the level that will prevail when the portfolio becomes more
seasoned, which is likely to be somewhat higher than current levels.
Until our portfolio becomes more seasoned, we must rely in part on the
historical loan loss experience of other financial institutions and the
experience of our management in determining our allowance for loan losses, and
this may not be comparable to our loan portfolio
Because most of our loans in our loan portfolio were originated relatively
recently, our loan portfolio does not provide an adequate history of loan
losses for our management to rely upon in establishing our allowance for loan
losses. We therefore rely to a significant extent upon other financial
institutions' histories of loan losses and their allowance for loan losses, as
well as our management's estimates based on their experience in the banking
industry, when determining our allowance for loan losses. There is no
assurance that the history of loan losses and the reserving policies of other
financial
institutions and our management's judgment will result in reserving
policies that will be adequate for our business and operations or applicable to
our loan portfolio.
Our business faces unpredictable economic conditions
General economic conditions impact the banking industry. The credit
quality of our loan portfolio necessarily reflects, among other things, the
general economic conditions in the areas in which we conduct our business. Our
continued financial success depends somewhat on factors beyond our control,
including:
•
national and local economic conditions;
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•
the supply and demand for investable funds;
•
interest rates; and
•
federal, state and local laws affecting these matters.
Any substantial deterioration in any of the foregoing conditions could
have a material adverse effect on our financial condition and results of
operations, which would likely adversely affect the market price of our common
stock. Further, with the exception of our BankDirect customers which comprised
19% of our total deposits as of June 30, 2003, our bank's customer base is
primarily commercial in nature, and our bank does not have a significant branch
network or retail deposit base. In periods of economic downturn, business and
commercial deposits may tend to be more volatile than traditional retail
consumer deposits and, therefore, during these periods our financial condition
and results of operations could be adversely affected to a greater degree than
those competitors that have a larger retail customer base.
Our business is concentrated in Texas and a downturn in the economy of Texas
may adversely affect our business
Substantially all of our business is located in Texas. As a result, our
financial condition and results of operations may be affected by changes in the
Texas economy. A prolonged period of economic recession or other adverse
economic conditions in Texas may result in an increase in nonpayment of loans
and a decrease in collateral value.
We compete with many larger financial institutions which have substantially
greater financial resources than we have
Competition among financial institutions in Texas is intense. We compete
with other bank holding companies, state and national commercial banks, savings
and loan associations, consumer finance companies, credit unions, securities
brokerages, insurance companies, mortgage banking companies, money market
mutual funds, asset-based non-bank lenders and other financial institutions.
Many of these competitors have substantially greater financial resources,
lending limits and larger branch networks than we do, and are able to offer a
broader range of products and services than we can. Failure to compete
effectively for deposit, loan and other banking customers in our markets could
cause us to lose market share, slow our growth rate and may have an adverse
effect on our financial condition and results of operations.
Our future profitability depends, to a significant extent, upon revenue we
receive from our middle market business customers and their ability to meet
their loan obligations
At June 30, 2003, a substantial majority of our loan portfolio was
comprised of loans to our middle market business customers. For the six month
period ended June 30, 2003, a significant portion of our total interest and
non-interest income was derived from middle market business customers. We
expect that our future profitability will depend, to a significant extent, upon
revenue we receive from middle market business customers, and their ability to
continue to meet existing loan obligations. As a result,
adverse economic conditions or other factors adversely affecting this
market segment may have a greater adverse effect on us than on other financial
institutions that have a more diversified customer base.
We compete in an industry that continually experiences technological change,
and we may have fewer resources than many of our competitors to continue to
invest in technological improvements
The financial services industry is undergoing rapid technological changes,
with frequent introductions of new technology-driven products and services. In
addition to improving the ability to serve customers, the effective use of
technology increases efficiency and enables financial institutions to reduce
costs. Our future success will depend, in part, upon our ability to address
the needs of our customers by using technology to provide products and services
that will satisfy customer demands for convenience, as
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well as to create
additional efficiencies in our operations. Many of our competitors have
substantially greater resources to invest in technological improvements. We
may not be able to effectively implement new technology-driven products and
services or be successful in marketing these products and services to our
customers.
System failure or breaches of our network security could subject us to
increased operating costs as well as litigation and other liabilities
The computer systems and network infrastructure we use could be vulnerable
to unforeseen problems. Our operations are dependent upon our ability to
protect our computer equipment against damage from fire, power loss,
telecommunications failure or a similar catastrophic event. Any damage or
failure that causes an interruption in our operations could have an adverse
effect on our financial condition and results of operations. In addition, our
operations are dependent upon our ability to protect the computer systems and
network infrastructure utilized by us against damage from physical break-ins,
security breaches and other disruptive problems caused by the Internet or other
users. Such computer break-ins and other disruptions would jeopardize the
security of information stored in and transmitted through our computer systems
and network infrastructure, which may result in significant liability to us and
deter potential customers. Although we, with the help of third-party service
providers, intend to continue to implement security technology and establish
operational procedures to prevent such damage, there can be no assurance that
these security measures will be successful. In addition, advances in computer
capabilities, new discoveries in the field of cryptography or other
developments could result in a compromise or breach of the algorithms we and
our third-party service providers use to protect customer transaction data. A
failure of such security measures could have an adverse effect on our financial
condition and results of operations.
Our success in the Internet banking market will largely depend on our ability
to implement services competitive with similar services offered by other
financial institutions
The success of our Internet banking products and services will depend in
large part on our ability to implement and maintain the appropriate technology.
This includes our ability to provide services competitive with banks that are
already using the Internet. If we are unable to implement and maintain the
appropriate technology efficiently, it could affect our results of operations
and our ability to compete with financial institutions.
Our success in attracting and retaining retail consumer deposits depends on our
ability to offer competitive rates and services
As of June 30, 2003, approximately 19% of our total deposits came from
retail consumer customers through BankDirect, our Internet banking facility.
The market for Internet banking is extremely competitive and allows retail
consumer customers to access financial products and compare interest rates from
numerous financial institutions located across the U.S. As a result, Internet
retail consumers are more sensitive to interest rate levels than retail
consumers who bank at a branch office. Our future success in retaining and
attracting retail consumer customers depends, in part, on our ability to offer
competitive rates and services.
We could be adversely affected by changes in the regulation of the Internet
Our ability to conduct, and the cost of conducting, business may also be
adversely affected by a number of legislative and regulatory proposals
concerning the Internet, which are currently under consideration by federal,
state, local and foreign governmental organizations. These proposals include,
but are not limited to, the following matters:
•
on-line content;
•
user privacy;
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•
taxation;
•
access charges;
•
liability for third-party activities; and
•
regulatory and supervisory authority.
Moreover, it is uncertain how existing laws relating to these issues will
be applied to the Internet. The adoption of new laws or the application of
existing laws could decrease the growth in the use of the Internet, which could
in turn decrease the demand for our services, increase our cost of doing
business or otherwise have an adverse effect on our business, financial
condition and results of operations. Furthermore, government restrictions on
Internet content could slow the growth of Internet use and decrease acceptance
of the Internet as a communications and commercial medium and thereby have an
adverse effect on our financial condition and results of operations.
Risks Related to Our Industry
We are subject to significant government regulation
We operate in a highly regulated environment and are subject to
supervision and regulation by a number of governmental regulatory agencies,
including the Federal Reserve System, or Federal Reserve, the Office of the
Comptroller of the Currency, or OCC, and the Federal Deposit Insurance
Corporation, or FDIC. Regulations adopted by these agencies, which are
generally intended to provide protection for depositors and customers rather
than for the benefit of stockholders, govern a comprehensive range of matters
relating to ownership and control of our shares, our acquisition of other
companies and businesses, permissible activities for us to engage in,
maintenance of adequate capital levels and other aspects of our operations.
The bank regulatory agencies possess broad authority to prevent or remedy
unsafe or unsound practices or violations of law. In addition, future
legislation and government policy, including with respect to bank deregulation
and interstate expansion, could adversely affect the banking industry as a
whole, including our results of operations. For example, new legislation or
regulation may limit the manner in which we may conduct our business, including
our ability to offer new products, obtain financing, attract deposits, make
loans and achieve satisfactory interest spreads.
Recent legislation will change the way financial institutions conduct their
business; we cannot predict the effect it will have upon us
The Gramm-Leach-Bliley Financial Modernization Act was signed into law on
November 12, 1999. Among other things, the Modernization Act repeals
restrictions on banks affiliating with securities firms and insurance
companies. It also permits bank holding companies that become financial
holding companies to engage in additional financial activities, including
insurance and securities underwriting and agency activities, merchant banking
and insurance company portfolio investment activities. The
Modernization Act may have the result of increasing the competition we
face from larger banks and other companies. It is not possible to predict the
full effect that the Modernization Act will have on us.
Risks Related to an Investment in Our Common Stock
The future trading price of our stock may fluctuate
The market price of our common stock may also be subject to significant
fluctuations in response to our future operating results and other factors,
including market conditions. In recent years, the stock market has experienced
extreme price and volume fluctuations that have often been unrelated or
disproportionate to the operating performances and prospects of individual
companies.
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Future sales of our common stock could depress the price of our common stock
Sales of a substantial number of shares of our common stock in the public
market by our stockholders after this offering, or the perception that these
sales are likely to occur, could cause the market price of our common stock to
decline. We currently have 24,814,282 outstanding shares of our common stock.
There are currently approximately 10.5 million shares that may be traded,
without restriction, in the public market. Upon the expiration of lock-up
agreements entered into by our directors, officers, the selling stockholders
and certain other significant stockholders in connection with the initial
public offering of our common stock, which agreements expire on February 28,
2004, approximately 13.0 million additional shares will be eligible for sale in
the public market, subject, in the case of our affiliates, to the volume
restrictions of Rule 144.
Our existing management will maintain significant control over us following the
offering
Immediately following this offering, our current executive officers and
directors will beneficially own approximately 13.9% of the outstanding shares
of our common stock. These percentages may increase to the extent that the
executive officers and directors elect to purchase shares in the future.
Accordingly, our current executive officers and directors will be able to
influence, to a significant extent, the outcome of all matters required to be
submitted to our stockholders for approval (including decisions relating to the
election of directors), the determination of day-to-day corporate and
management policies and other significant corporate activities.
We have not historically paid, and do not presently intend to pay, cash
dividends
We have not paid any cash dividends on our common stock to date and do not
intend to pay cash dividends on our common stock in the foreseeable future. We
intend to retain earnings to finance operations and the expansion of our
business. Therefore, any gains from your investment in our common stock must
come from an increase in its market price.
We will be restricted in our ability to pay dividends to our stockholders
We are a holding company with no independent sources of revenue and would
likely rely upon cash dividends and other payments from our bank to fund the
payment of future cash dividends, if any, to our stockholders. Payment of
dividends by the bank to us would be subject to the prior approval of the OCC
if the total of all dividends declared by the bank in any calendar year exceeds
the sum of the bank's net profits for that year and its retained net profits
for the preceding two calendar years, less any required transfers to surplus.
In addition, federal law also prohibits a national bank from paying dividends
if it is, or such dividend payments would cause it to become, undercapitalized.
At June 30, 2003, our bank was prohibited by these laws from paying any
dividends to us without the OCC's prior approval. If the bank is restricted
from paying cash dividends to us, we would likely not be able to pay cash
dividends to our stockholders.
Anti-takeover provisions of our certificate of incorporation, bylaws and
Delaware law may make it more difficult for you to receive a change in control
premium
Certain provisions of our certificate of incorporation and bylaws could
make a merger, tender offer or proxy contest more difficult, even if such
events were perceived by many of our stockholders as beneficial to their
interests. These provisions include advance notice for nominations of
directors and stockholders' proposals. In addition, our certificate of
incorporation authorizes the issuance of "blank check" preferred stock with
such designations, rights and preferences as may be determined from time to
time by our board of directors. Accordingly, our board of directors is
empowered, without stockholder approval (unless otherwise required by the rules
of any stock exchange on which our common stock is then listed), to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
our common stock. In the event of such issuance, the preferred stock could be
utilized, under certain circumstances, as a method of discouraging, delaying or
preventing a change in control. Although we have no present intention to issue
any shares of our preferred stock, there can be no assurance that we will not
do so in the future. In addition, as a
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Delaware corporation, we are subject to
Section 203 of the Delaware General Corporation Law which, in general, prevents
an interested stockholder, defined generally as a person owning 15% or more of
a corporation's outstanding voting stock, from engaging in a business
combination with our company for three years following the date that person
became an interested stockholder unless certain specified conditions are
satisfied.
There are substantial regulatory limitations on changes of control
With certain limited exceptions, federal regulations prohibit a person or
company or a group of persons deemed to be "acting in concert" from, directly
or indirectly, acquiring more than 10% (5% if the acquiror is a bank holding
company) of any class of our voting stock or obtaining the ability to control
in any manner the election of a majority of our directors or otherwise direct
the management or policies of our company without prior notice or application
to and the approval of the Federal Reserve. Accordingly, prospective investors
need to be aware of and comply with these requirements, if applicable, in
connection with any purchase of shares of our common stock.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This Registration Statement includes "forward-looking statements" based on
our current expectations, assumptions, estimates and projections about our
business and our industry. They include, but are not limited to, statements
relating to:
•
future revenues, expenses and profitability; and
•
the future development and expected growth of our business.
You can identify forward-looking statements by the use of words such as
"may," "should," "will," "could," "estimates," "predicts," "potential,"
"continue," "aims," "anticipates," "believes," "plans," "expects," "future" and
"intends" and similar expressions. This information does not guarantee future
performance and is subject to risks, uncertainties and other factors, some of
which are beyond our control and difficult to predict and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. In evaluating forward-looking statements, you
should carefully consider the risks and uncertainties described in "Risk
Factors" and elsewhere in this Registration Statement. The forward-looking
statements reflect our view only as of the date of this Registration Statement,
and we do not assume any obligation to update or correct these forward-looking
statements except to the extent we are required to do so by applicable law.
All forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by the cautionary statements
and risk factors contained throughout this Registration Statement.
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USE OF PROCEEDS
All of the shares of our common stock being offered by means of this
prospectus will be sold by selling stockholders, who will receive all proceeds
from any sales. We will not receive any proceeds from the sale of our shares
by the selling stockholders. We will, however, receive proceeds from any cash
exercises of the options by the selling stockholders under the 1999 Plan. All
proceeds received as a result of the exercise of these options will be used as
working capital for our operations. In addition, other than the completion and
filing of this Registration Statement, we will not participate in the
reoffering or resale of the shares of common stock by the selling stockholders.
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SELLING STOCKHOLDERS
The following table sets forth information with respect to the beneficial
ownership of our common stock held, as of October 2, 2003, by, and the number
of shares of common stock being offered by, each stockholder who is selling
shares pursuant to this prospectus, other than certain persons who are not our
affiliates, each of whom may sell up to 1,000 shares of our common stock
pursuant to this prospectus. Beneficial ownership is determined under the
rules of the Commission and generally includes voting or investment power with
respect to securities. Unless otherwise noted, to our knowledge, the selling
stockholder has sole voting and investment power as to the shares shown,
subject to community property laws where applicable.
Shares Beneficially Owned
Shares Beneficially Owned
Before
After
the Offering
the Offering(1)
Maximum Number of
Name
Number
Percentage (2)
Shares to be Offered
Number
Percentage (2)
William Alton
2,240
*
2,240
—
Ronald Baker
1,477
*
1,477
—
Chris Cowan
3,563
*
3,563
—
Mary Cunningham
2,507
*
2,507
—
Nancy Denton
11,060
*
7,860
3,200
*
Craig Dixon
2,913
*
2,913
—
David Folz
33,775
*
14,775
19,000
*
David Frase
2,754
*
2,754
—
David Fraser
2,892
*
2,892
—
Carla Gaither
1,259
*
1,259
—
Karen Green
2,200
*
2,200
—
Laurie Griffith
1,948
*
1,948
—
Raleigh Hortenstine III (3)
244,500
54,100
190,400
*
John Hudgens
1,542
*
1,542
—
Mark Johnson
2,840
*
2,840
—
Robert Kraus
1,600
*
1,600
—
Barry Kromann
4,502
*
4,502
—
David Lundgren
1,454
*
1,454
—
Jack Lynch
1,515
*
1,515
—
Grant Maples
3,030
*
3,030
—
Terry McCarter
27,963
*
12,963
15,000
*
Robert McDaniel
1,000
*
1,000
—
Michelle Mudrone
5,040
*
5,040
—
Tonya Murphy
3,600
*
1,600
—
Michael Palmer
1,543
*
1,543
—
Joe Price
5,066
*
2,000
3,066
*
Kathryn Ramzy
2,750
*
2,750
—
William Rapp
1,394
*
1,394
—
Michael Robnett
13,629
*
9,129
4,500
*
Larry Shaw
1,200
*
1,200
—
Peter Stringer
1,001
*
1,001
—
Daniel Strodel
7,575
*
7,575
—
Greg Studer
16,000
*
16,000
—
Stanley Tucker
1,168
*
4,368
—
Maryann Weaver
1,065
*
1,065
—
Gary Worthy
2,117
*
2,117
—
* Denotes less than 1% of the outstanding shares of common stock
1.
Assumes sales of all of the shares offered; however, the Selling
Stockholders may or may not sell any of the offered shares.
2.
Applicable percentage of ownership for each selling shareholder is based
on 24,814,282 shares of common stock outstanding as of October 2, 2003.
3.
Mr. Hortenstine was the President of Texas Capital Bancshares, Inc. until
April 15, 2003.
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PLAN OF DISTRIBUTION
Each selling stockholder may sell his or her shares of common stock for
value from time to time under this prospectus in one or more transactions on
the Nasdaq National Market, in negotiated transactions or in a combination of
such methods of sale, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at prices otherwise
negotiated. The selling stockholders may effect such transactions by selling
the shares of common stock to or through broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the selling stockholders and/or the purchasers
of the shares of common stock for whom such broker-dealers may act as agent
(which compensation may be less than or in excess of customary commissions).
Each selling stockholder and any broker-dealer that participates in the
distribution of the shares of common stock may be deemed to be an "underwriter"
within the meaning of Section 2(11) of the Securities Act, and any commissions
received by them and any profit on the resale of the shares sold by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
All selling and other expenses incurred by the selling stockholders will be
borne by the selling stockholders. We will pay all other expenses in
connection with this offering, including without limitation any expenses of
registration of the common stock, and will not receive any proceeds from sales
of any shares of common stock by the selling stockholders.
We have notified the selling stockholders of the need to deliver a copy of
this prospectus in connection with any sale of the shares of common stock
pursuant to this prospectus.
INTEREST OF NAMED EXPERTS AND COUNSEL
We have retained Patton Boggs LLP on a regular basis to perform legal
services for us, including acting as our counsel in connection with the
preparation of this Registration Statement. Larry A. Makel, a member of our
board of directors, is a partner in the law firm Patton Boggs LLP. As of July
31, 2003, partners of Patton Boggs LLP beneficially owned, in the aggregate,
229,584 shares, or 1.07% of our issued and outstanding common stock.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-8 with the Securities and
Exchange Commission under the Securities Act to allow the selling stockholders
to resell the common stock offered by means of this prospectus. This
prospectus, which is a part of the Registration Statement does not contain all
of the information set forth in the Registration Statement and the accompanying
exhibits and schedules. For further information about us and our common stock,
we refer you to the Registration Statement and the accompanying exhibits and
schedules. Statements contained in this prospectus regarding the contents of
any contract or other documents to which we refer are not necessarily complete.
In each instance, reference is made to the copy of the contract or document
filed as an exhibit to the Registration Statement, and each statement is
qualified in all respects by that reference. We are subject to the information
and periodic reports requirements of the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"). In accordance with those requirements, we
file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Copies of the
Registration Statement and the accompanying schedules and exhibits and any
other documents that we file may be inspected without charge at the public
reference facilities maintained by the Securities and Exchange Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of these
materials may be obtained at prescribed rates from the Public Reference Room of
the Securities and Exchange Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330. The Securities and Exchange Commission maintains a website
that contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the Securities and Exchange
Commission. The address of the site is www.sec.gov.
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INCORPORATION OF DOCUMENTS BY REFERENCE
Our Annual Report on Form 10-K for the fiscal year ended December 31,
2002, our Prospectus filed pursuant to Rule 424(b) of the Securities Act dated
August 13, 2003, Quarterly Reports on Form 10-Q for the quarters ended March
31, 2003 and June 30, 2003, and Current Reports on Form 8-K dated March 21,
2003, April 23, 2003, June 12, 2003, August 4, 2003 and August 18, 2003 filed
pursuant to Section 13 of the Exchange Act, are incorporated by reference
herein.
All documents we file pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date hereof and prior to the filing of a
post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference into this Registration Statement and to be part
hereof from the date of filing of such documents. The information contained in
the documents we incorporate by reference is considered a part of this
prospectus. Additionally, because information concerning us, whether contained
in this prospectus or in a document incorporated by reference, will be amended
or superceded by more current information contained in later filed documents,
the information that we file with the Commission after the date of this
prospectus will update and supercede older information contained in, or
incorporated by reference into, this prospectus.
We will provide without charge to each person to whom this prospectus is
delivered, upon request, a copy of any documents incorporated into this
prospectus by reference. Requests for copies of such documents should be
directed to Texas Capital Bancshares, Inc., 2100 McKinney Avenue, Suite 900,
Dallas, Texas 75201, telephone (214) 932-6600, Attention: Investor Relations.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
INCORPORATION OF DOCUMENTS BY REFERENCE
Our Annual Report on Form 10-K for the fiscal year ended December 31,
2002, our Prospectus filed pursuant to Rule 424(b) of the Securities Act dated
August 13, 2003, Quarterly Reports on Form 10-Q for the quarters ended March
31, 2003 and June 30, 2003, and Current Reports on Form 8-K dated March 21,
2003, April 23, 2003, June 12, 2003, August 4, 2003 and August 18, 2003 filed
pursuant to Section 13 of the Exchange Act, are incorporated by reference
herein.
All documents we have filed pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date hereof and prior to the filing of a
post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference into this Registration Statement and to be part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part hereof.
INTEREST OF NAMED EXPERTS AND COUNSEL
We have retained Patton Boggs LLP on a regular basis to perform legal
services for us, including acting as our counsel in connection with the
preparation of this Registration Statement. Larry A. Makel, a member of our
board of directors, is a partner in the law firm Patton Boggs LLP. As of July
31, 2003, partners of Patton Boggs LLP beneficially owned, in the aggregate,
229,584 shares, or 1.07% of our issued and outstanding common.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits a corporation,
under specified circumstances, to indemnify its directors, officers, employees
or agents against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlements actually and reasonably incurred by them in
connection with any action, suit or proceeding brought by third parties by
reason of the fact that they were or are directors, officers, employees or
agents of the corporation, if such directors, officers, employees or agents
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent
that the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Section 102(b)(7) of the Delaware General Corporation Law provides that a
certificate of incorporation may contain a provision eliminating or limiting
the personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director; provided, that
such provision shall not eliminate or limit the liability of a director:
•
for any breach of the director's duty of loyalty to the corporation or its stockholders;
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•
for acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law;
•
under Section 174 (relating to liability for unauthorized acquisitions or redemptions
of, or dividends on, capital stock) of the Delaware General Corporation Law; or
•
for any transaction from which the director derived an improper personal benefit.
Our certificate of incorporation provides that we shall, to the fullest
extent permitted by the Delaware General Corporation Law, indemnify all persons
who we may indemnify under Delaware law and contains provisions permitted by
Section 102(b)(7) of the Delaware General Corporation Law.
Our certificate of incorporation and bylaws provide that:
•
we are required to indemnify our directors and officers, subject to very limited exceptions;
•
we may indemnify other employees and agents, subject to very limited exceptions;
•
we are required to advance expenses, as incurred, to our directors and officers in
connection with a legal proceeding, subject to very limited exceptions; and
•
we may advance expenses, as incurred, to our employees and agents in connection with a
legal proceeding.
We have obtained an insurance policy providing for indemnification of
officers and directors and certain other persons against liabilities and
expenses incurred by any of them in certain stated proceedings and conditions.
The indemnification provisions in our certificate of incorporation and
bylaws may be sufficiently broad to permit indemnification of our directors and
officers for liabilities arising under the Securities Act.
We have entered into indemnification agreements with each of our directors
and officers, which may be broader than the specific indemnification provisions
contained in our certificate of incorporation, bylaws or under Delaware law.
These indemnification agreements may require us, among other things, to
indemnify our officers and directors against liabilities that may arise by
reason of their status or service as directors or officers. These
indemnification agreements also may require us to advance any expenses incurred
by our directors or officers as a result of any proceeding against them as to
which they could be indemnified. As of the date of this filing, there is no
pending litigation or proceeding involving any of our directors, officers,
employees or agents in which indemnification by us is sought, nor are we aware
of any threatened litigation or proceeding that may result in a claim for
indemnification. We have purchased a policy of directors' and officers'
liability insurance that insures our directors and officers against the cost of
defense, settlement or payment of a judgment in certain circumstances.
EXEMPTION FROM REGISTRATION CLAIMED
The options issued to certain of our employees prior to September 2000
were issued in transactions exempt from registration pursuant to Rule 701 under
the Securities Act. After September 2000, we sold restricted shares of our
common stock to be reoffered and resold pursuant to this Registration Statement
to certain employees in transactions exempt from registration pursuant to
Section 4(2) of the Securities Act. We believe that such transactions did not
constitute a public offering as a result of (1) the highly limited nature of
the offering, (2) our pre-existing relationship with our employees that
purchased
such shares at the time of the transactions and (3) the extensive information
regarding our business operations and financial condition available at the time
of the transactions.
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EXHIBITS
The following documents are filed as exhibits to this Registration Statement:
Exhibit
Number
Exhibit
4.1
Form of Common Stock Certificate, which is incorporated by reference to
Exhibit 4.1 to the third amendment to our registration statement on Form
S-3 dated July 31, 2003
4.2
Texas Capital Bancshares, Inc. 1999 Omnibus Stock Plan, which is
incorporated by reference to Exhibit 4.1 to our registration statement on
Form 10 dated August 24, 2000
4.3
Texas Capital Bancshares, Inc. 2000 Employee Stock Purchase Plan, which
is incorporated by reference to Exhibit 4.2 to our registration statement
on Form 10 dated August 24, 2000
5.1
Opinion and Consent of Patton Boggs LLP
23.1
Consent of Ernst & Young LLP
23.2
Consent of Patton Boggs LLP (included in Exhibit 5.1)
24.1
Power of Attorney (included on signature page hereto)
UNDERTAKINGS
The registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i)
To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii)
To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information in the Registration
Statement. To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
the high end of the maximum offering range may be reflected
in the form of prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424(b) 9f, in the
aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.; and
(iii)
To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-8 and the information required to be
included in a post-effective amendment by those paragraphs is
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contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by
reference to the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to the directors, officers and controlling
persons of the registrant pursuant to the foregoing provision, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by final adjudication of such issue.
(d) We will submit, in a timely manner, the 1999 Plan and the 2000 Plan to
the Internal Revenue Service (the "IRS") to determine if the 1999 Plan and the
2000 Plan qualify under Section 401 of the Internal Revenue Code. In the event
the IRS determines that either the 1999 Plan or the 2000 Plan does not
currently qualify under Section 401 of the Internal Revenue Code, we will make
any changes the IRS requires in order to cause the 1999 Plan and the 2000 Plan
to qualify under Section 401 of the Internal Revenue Code.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that its meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Dallas, Texas on the 2
nd
day of October 2003.
Texas Capital Bancshares, Inc.
By:
/s/ Joseph M. Grant
Joseph M. Grant
Chief Executive Officer
Each person whose signature appears below appoints Joseph M. Grant and George
F. Jones, Jr., individually, as true and lawful attorneys-in-fact and agents,
with full power of substitution to sign any amendments (including
post-effective amendments) to this Registration Statement and to each
registration statement amended hereby, and to file the same, with all exhibits
and other related documents, with the Commission, with full power and authority
to perform any necessary or appropriate act in connection with the
amendment(s).
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature
Title
Date
/s/ Joseph M. Grant
Joseph M. Grant
Chairman of the Board of
Directors and
Chief Executive Officer
(principal executive officer)
October 2, 2003
/s/ George F. Jones, Jr.
George F. Jones, Jr.
President and Chief Executive
Officer of Texas Capital
Bank, N.A. and Director
October 2, 2003
/s/ Gregory B. Hultgren
Gregory B. Hultgren
Executive Vice President and
Chief Financial Officer
(principal accounting officer)
October 2, 2003
/s/ Leo Corrigan III
Leo Corrigan III
Director
October 2, 2003
/s/ James R. Erwin
James R. Erwin
Director
October 2, 2003
Frederick B. Hegi, Jr.
Director
/s/ James R. Holland, Jr.
James R. Holland, Jr.
Director
October 2, 2003
/s/ Larry A. Makel
Larry A. Makel
Director
October 2, 2003
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Signature
Title
Date
Walter W. McAllister III
Director
/s/ Lee Roy Mitchell
Lee Roy Mitchell
Director
October 2, 2003
/s/ Steve Rosenberg
Steve Rosenberg
Director
October 2, 2003
/s/ John C. Snyder
John C. Snyder
Director
October 2, 2003
/s/ Robert W. Stallings
Robert W. Stallings
Director
October 2, 2003
/s/ James Cleo Thompson, Jr.
James Cleo Thompson, Jr.
Director
October 2, 2003
/s/ Ian J. Turpin
Ian J. Turpin
Director
October 2, 2003
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EXHIBIT INDEX
Exhibit
Number
Exhibit
4.1
Form of Common Stock Certificate, which is incorporated by reference to
Exhibit 4.1 to the third amendment to our registration statement on Form
S-3 dated July 31, 2003
4.2
Texas Capital Bancshares, Inc. 1999 Omnibus Stock Plan, which is
incorporated by reference to Exhibit 4.1 to our registration statement on
Form 10 dated August 24, 2000
4.3
Texas Capital Bancshares, Inc. 2000 Employee Stock Purchase Plan, which
is incorporated by reference to Exhibit 4.2 to our registration statement
on Form 10 dated August 24, 2000
5.1
Opinion and Consent of Patton Boggs LLP
23.1
Consent of Ernst & Young LLP
23.2
Consent of Patton Boggs LLP (included in Exhibit 5.1)
24.1
Power of Attorney (included on signature page hereto)