Notes:

The company will provide for the reclassification of shares (the “Reclassification”) of their common stock held by each shareholder of record, as reflected on the books of the Company, of fewer than 2,000 shares of common stock into newly designated shares of Series AAA Preferred Stock, on the basis of one share of Series AAA Preferred Stock for each share of common stock held by such shareholder (such amendment subject to shareholder vote, together with an amendment establishing the terms of the Series AAA Preferred Stock, collectively, the "Articles of Amendment"). All other shares of common stock will remain outstanding and be unaffected by the Reclassification. No cash will be paid to shareholders as consideration for their shares—only shares of Series AAA Preferred Stock will be issued. Dissenters’ rights are available, however, and shareholders who exercise those rights as described in the enclosed proxy statement will be entitled to receive cash for their shares.

The Series AAA Preferred Stock has a liquidation value of $16.24 per share.

Terms of the Series AAA Preferred Stock to be Issued in the Reclassification: Upon approval of the Reclassification, the Board of Directors will designate 500,000 shares of our authorized Preferred Stock as the “Series AAA Preferred Stock,” which will be reserved for issuance in connection with the Reclassification. If the Reclassification is not approved by our shareholders, we do not intend to file articles of amendment solely to designate the Series AAA Preferred Stock. The proposed terms of the Series AAA Preferred Stock are set forth in Appendix A and principally provide as follows:
•Rank: The Series AAA Preferred Stock ranks senior to our common stock and junior to each of our Series A and Series B Preferred Stock with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company. The relative rights and preferences of the Series AAA Preferred Stock may be subordinated to the relative rights and preferences of holders of subsequent issues of other series or classes of stock and equity securities designated by the Board of Directors. Like the common stock and Series A and Series B Preferred Stock, the Series AAA Preferred Stock is junior to indebtedness issued from time to time by the Company, including notes and debentures.
•Voting Rights. Unlike the common stock, the Series AAA Preferred Stock will not have voting rights except under very limited circumstances. Except as provided by law, holders of Series AAA Preferred Stock are entitled to vote only upon proposals for a business combination resulting in the transfer of a majority of our outstanding stock or of all or substantially all of the Company’s assets (a “Change in Control”) and upon which holders of our common stock are entitled to vote. For those matters on which holders of Series AAA Preferred Stock are entitled to vote, such holders have the right to one vote for each share held, and are entitled to receive notice of any shareholders’ meeting held to act upon such matters in accordance with our bylaws. When voting on a proposed Change in Control, the holders of Series AAA Preferred Stock will vote together with the holders of common stock and not as a separate class.
•Dividend Rights: Holders of Series AAA Preferred Stock are entitled to a 10% preference in the distribution of cash dividends in relation to holders of our common stock, when and if declared and paid by SouthCrest, so that holders of the Series AAA Preferred Stock are entitled to receive dividends for each share of Preferred Stock held in a amount not less than 110% of the per-share amount paid to holders of common stock, prior to the receipt of dividends by the holders of common stock. The dividend rights of the Series AAA Preferred Stock are junior to the dividend rights of each of the Series A and Series B Preferred Stock. Holders of Series AAA Preferred Stock will not have a right to receive dividends solely because of the payment of dividends to the holders of either the Series A or Series B Preferred Stock, but will be entitled to dividends in the event that the dividends are declared and paid on SouthCrest’s common stock. Any dividends on the Series AAA Preferred Stock waived will not accumulate to future periods and will not represent a contingent liability of SouthCrest. SouthCrest is and will remain subject to extensive regulations regarding its ability to pay cash dividends, and cash dividends paid on the Series AAA Preferred Stock and the common stock, if any, will be paid at the sole discretion of our Board of Directors and we may, subsequent to the Reclassification, elect not to pay dividends on our equity securities, including the Series AAA Preferred Stock and the common stock. See “—Market for Common Stock and Dividends” for more information regarding our dividend policies.
•Conversion: The shares of Series AAA Preferred Stock will automatically convert into shares of common stock on a share-for-share basis in the event that the Company registers its shares with the SEC in the future. Neither the holders of Series AAA Preferred Stock nor SouthCrest will have the right to otherwise cause the conversion of shares of Series AAA Preferred Stock.
•Treatment Upon Change of Control: The shares of Series AAA Preferred Stock will have a right to the same consideration, on a share-for-share basis, as holders of common stock in the event of a Change of Control.
•Liquidation Rights: Holders of Series AAA Preferred Stock are entitled to a preference over holders of our common stock in the distribution of assets of SouthCrest in the unlikely event of any liquidation, dissolution or winding-up of SouthCrest, whether voluntary or involuntary, equal to the greater of book value per share at the time of payment, the amount per share to be paid to common shareholders, or $16.24 per share out of funds legally available therefor. The Series AAA Preferred Stock will rank junior to each of our Series A and Series B Preferred Stock with respect to rights on liquidation, dissolution or winding up of SouthCrest. Only after distributions have been made in full satisfaction of the rights of the holders of Series A and Series B Preferred Stock will any distribution be made to holders of the Series AAA Preferred Stock.
•Perpetual Stock: The Series AAA Preferred Stock is perpetual stock, which means stock that does not have a maturity date, cannot be redeemed at the option of the holder, and has no other provisions that will require future redemption of the issue.
•No Preemptive Rights: Holders of Series AAA Preferred Stock do not have any preemptive rights to purchase any additional shares of Series AAA Preferred Stock or shares of any other class of capital stock that we may issue in the future.
•Antidilution Adjustments: If the number of our outstanding shares of common stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or any other company, by reason of any merger, consolidation, liquidation, reclassification, recapitalization, stock split up, combination of shares or stock dividend, an appropriate adjustment shall be made by the Board of Directors in the number and relative terms of the Series AAA Preferred Stock.

They anticipate that the Reclassification will be effected in the third or fourth quarter of 2009.

Treatment of holders in "street name": "As a result, you can avoid reclassification of your shares by placing your shares into “street name,” provided that Cede & Co. will continue to hold 2,000 or more shares at the effective time of the Reclassification."

Final results: "The Articles of Amendment to the Company’s Articles of Incorporation providing for the reclassification of shares (the “Reclassification”) of the Company’s common stock held by shareholders who are the record holders of fewer than 2,000 shares of common stock into shares of the Company’s Series AAA Preferred Stock were approved by the Company’s shareholders on December 10, 2009, and became effective on December 14, 2009, upon the filing of the Articles of Amendment with the Georgia Secretary of State. Subject to the perfection of dissenters’ rights, as described below, as a result of the Reclassification, approximately 201,991 shares of the Company common stock held by approximately 361 shareholders of record were reclassified into shares of the Series AAA Preferred Stock of the Company, on the basis of one share of Series AAA Preferred Stock for each share of common stock. After the Reclassification, the number of outstanding shares of the Company’s common stock was approximately 3,729,537 and the number of common shareholders of record was approximately 224. Additionally, after the Reclassification, the number of outstanding shares of the Company Series AAA Preferred Stock was approximately 201,991 and the number of Series AAA shareholders of record was approximately 361. The Company has received preliminary notices that indicate the intent of up to 8 holders of record of up to 60,241 shares of the Company’s common stock to exercise statutory dissenters’ rights under state law with respect to the Reclassification."