AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON ________, 1997
REGISTRATION NO. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
FOUR OAKS FINCORP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NORTH CAROLINA 56-2028446
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
6144 U.S. 301 SOUTH
FOUR OAKS, NORTH CAROLINA 27524
(919) 963-2177
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
AYDEN R. LEE, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FOUR OAKS FINCORP, INC.
6144 U.S. 301 SOUTH
FOUR OAKS, NORTH CAROLINA 27524
(919) 963-2177
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------
COPY TO:
BYRON B. KIRKLAND, ESQ.
AMY J. MEYERS, ESQ.
SMITH, ANDERSON, BLOUNT,
DORSETT, MITCHELL & JERNIGAN, L.L.P.
2500 FIRST UNION CAPITOL CENTER
RALEIGH, NORTH CAROLINA 27601
(919) 821-1220
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |X|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Each Class Maximum Maximum
of Securities Amount to Offering Price Aggregate Amount of
to be Registered be Registered(1) Per Share(2) Offering Price(2) Registration
Fee
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value per share. . . . 100,000 shares $ 26.00 $ 2,600,000 $ 787.88
---------------------------------------------------- ------------------- ------------------- ------------------- -------------
</TABLE>
(1) Pursuant to Rule 416(a) promulgated under the Securities Act of 1933,
the number of securities covered by this registration statement shall be
adjusted to cover any additional securities resulting from a stock
split, stock dividend or similar capital adjustment of the registered
securities during the effective period of the registration statement.
(2) The proposed maximum offering price per share of Common Stock has
been calculated with reference to Rule 457(h) on the basis of a recent
price of securities of the same class of $26.00 per share.
<PAGE>
PROSPECTUS
FOUR OAKS FINCORP, INC.
Dividend Reinvestment and Stock Purchase Plan
100,000 Shares of Common Stock
Par Value $1.00 Per Share
The Dividend Reinvestment and Stock Purchase Plan (hereinafter referred
to as the "Plan") of Four Oaks Fincorp, Inc. (the "Company") described herein
provides holders of the Company's Common Stock, par value $1.00 per share (the
"Common Stock"), with a convenient and simple method of investing dividends and
optional cash payments in additional shares of the Company's Common Stock.
Holders of record of shares of the Company's Common Stock are automatically
eligible to participate in the Plan.
Shareholders may enroll in the Plan at any time by completing an
Authorization Card and returning it to Branch Banking and Trust Company which
administers the Plan and serves as an agent (the "Agent") for Plan participants.
Shareholders enrolled in the Plan will remain enrolled unless the shareholder
terminates participation by giving written notice to the Agent as set forth in
the Plan. Shareholders of Four Oaks Bank & Trust Company (the "Bank") on July
1, 1997 who were enrolled in the Bank's dividend reinvestment and stock
purchase plan will be enrolled in the Plan automatically unless the shareholder
instructs otherwise by giving written notice to the Agent at the address
set forth in the Plan.
This Prospectus relates to 100,000 shares of the Company's Common
Stock, par value $1.00 per share, registered for sale to the Agent for the
accounts of Plan participants, which shares are derived from authorized but
unissued shares of Common Stock of the Company. The price at which the shares
subject to this Prospectus are offered to the Agent is determined each quarter
by the Board of Directors of the Company based on an annual appraisal and
trading activity. No brokerage commissions or fees will be charged for purchases
made through the Plan directly from the Company. No underwriter is being used in
connection with this offering.
SEE "RISK FACTOR" ON PAGE 2 FOR A DISCUSSION OF A FACTOR THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is __________________, 1997.
<PAGE>
RISK FACTOR
Limited Market for Common Stock. The Common Stock is not actively
traded and trades involving the Common Stock are negotiated on a best efforts
basis through Morgan, Keegan & Company, Inc., located at 4300 Six Forks Road,
Suite 400, Raleigh, North Carolina 27609 and Legg Mason Wood Walker, Inc.,
located at 3201 Glenwood Avenue, Post Office Box 31048, Raleigh, North Carolina
27622-1048. There can be no assurance that any particular trading price for the
Common Stock is an accurate indication of fair market value.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549, and at the Commission's Regional Offices at 7
World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and copies of
such material may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
Copies of such material also may be obtained from the web site that the
Commission maintains at http://www.sec.gov.
On July 1 1997, the Company became a holding company for
the Bank. Prior to creating a holding company structure, the
Bank filed reports, proxy statements and other information with the Federal
Deposit Insurance Corporation (the "FDIC"). The reports, proxy statements and
other information filed by the Bank with the FDIC can be inspected and copied at
the public reference facilities maintained by the FDIC at 550 - 17th Street,
N.W., Washington, D.C. 20429 at prescribed rates.
This prospectus constitutes a part of a Registration Statement filed by
the Registrant with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus omits certain information contained in
that Registration Statement, and reference is hereby made to that Registration
Statement and the exhibits filed therewith for further information with respect
to the Registrant and the Common Stock offered hereby. Any statements contained
herein concerning the provisions of any document are not necessarily complete,
and, in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(1) Annual Report on Form F-2 of the Bank for the fiscal year
ended December 31, 1996, as amended, filed as Exhibit 99.1 to
the Company's Current Report on Form 8-K(12G3), dated July 1,
1997;
(2) Quarterly Report on Form F-4 of the Bank for the quarter ended
March 31, 1997 filed as Exhibit 99.2 to the Company's Current
Report on Form 8-K(12G3) dated July 1, 1997; and
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(3) The Company's Current Report on Form 8-K(12G3), dated July 1,
1997, which contains a description of the Common Stock.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be part
thereof from the date of filing of such documents.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any and all of the
documents that are incorporated herein by reference, other than exhibits to such
information (unless such exhibits are specifically incorporated by reference
into the information that this prospectus incorporates). Requests should be
directed to the Company, 6144 U. S. 301 South, Four Oaks, North Carolina 27524,
Attention: Wanda C. Jones, telephone (919) 963-2177.
THE COMPANY
The Company was incorporated in North Carolina on February 5, 1997 for
the purpose of becoming the holding company for the Bank. The Company's
executive offices are located at 6144 U.S. 301 South, Four Oaks, North Carolina
27609, and its telephone number is (919) 963-2177.
DESCRIPTION OF THE PLAN
1. PURPOSE
The purpose of the Plan is to provide the shareholders of record of the
Company's Common Stock with a simple and convenient method of investing cash
dividends and optional cash payments in shares of Common Stock. To the extent
that new shares of Common Stock will be purchased from the Company, the Company
will receive additional funds to finance the continuing operations of the
Company.
2. FEATURES
Participants in the Plan:
(bullet) Will have cash dividends on their shares of Common Stock
automatically reinvested in additional shares of Common
Stock;
(bullet) May elect to make optional cash payments from $20.00 to
$500.00 per quarter for additional Common Stock
purchases;
(bullet) Will receive full investment use of funds because the
Plan provides for crediting of fractional shares
(calculated to three decimal places) and reinvestment in
additional shares;
(bullet) Will pay no account fees for the reinvestment of
dividends or optional cash payments;
(bullet) Will receive quarterly statements from the Agent (as
defined below) reflecting total dividends and optional
cash payments, the price paid for shares purchased, and
the total shares held in the participant's account; and
(bullet) Will enjoy safekeeping of shares purchased pursuant to
the Plan, including protection against loss, theft, or
inadvertent destruction of certificates.
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<PAGE>
3. ADMINISTRATION
Branch Banking and Trust Company will administer the Plan and serve as
agent (the "Agent") for Plan participants. The Agent keeps records, sends
statements of account to each participant, and performs other duties related to
the Plan. Shares purchased under the Plan are registered in the name of the
Agent or in the name of its nominee, and credited to the accounts of the
participants in the Plan. Questions and communications regarding the Plan should
include your account number and should be directed to:
Branch Banking and Trust Company
Trust Operations
Post Office Box 2887
Wilson, North Carolina 27894
Telephone: (919) 246-4316
4. PARTICIPATION
A. ELIGIBILITY
Any holder of record of the Company's Common Stock is eligible to
participate in the Plan at any time. Beneficial owners of shares of Common Stock
whose shares are registered in names other than their own (for example, in the
name of a broker, bank, or other nominee) and who wish to participate in the
Plan must become owners of record by having the number of shares they wish to
enroll in the Plan transferred into their names. Alternatively, they must make
arrangements for the nominees or other holders of record to participate in the
Plan on behalf of such beneficial owners.
B. ENROLLMENT IN THE PLAN
An eligible shareholder may join the Plan at any time by completing an
Authorization Card and returning it to the Agent at the above address.
Authorization Cards may be obtained at any time by contacting the Agent.
For new enrollees, participation will commence with the next dividend
payable after receipt of authorization, provided it is received by the Agent by
the fifth business day prior to the record date for the dividend. If an
Authorization Card is received after the fifth business day prior to the record
date established for a particular dividend, the reinvestment of dividends under
the Plan will begin with the next succeeding dividend. The Company expects to
set quarterly dividend and record payment dates for Common Stock on or about the
following dates:
Approximate Record Date Approximate Payment Date
February 28 March 8
May 3 June 8
August 31 September 8
November 30 December 8
To participate in the optional cash payment feature, a check or money
order payable to Branch Banking and Trust Company should be sent together with
the payment form which is attached to the quarterly statement participants
receive after their initial dividend has been invested. Cash payments can only
be made for participants who have had at least one dividend reinvested pursuant
to the Plan.
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<PAGE>
Shareholders enrolled in the Plan will remain enrolled unless they
terminate their participation by giving written notice to the Agent as described
below.
5. NUMBER OF SHARES SUBJECT TO THE PLAN
Shareholders of record may participate in the Plan with respect to all
or any portion of the shares of Common Stock registered in their name. If a
shareholder wishes to participate in the Plan with less than all of such
shareholder's shares, the shareholder must notify the Agent in writing to that
effect. Otherwise, it will be assumed that the shareholder intends to
participate in the Plan with respect to all shares owned. Also, if a participant
wishes to change the number of shares of Common Stock subject to the Plan, the
participant must notify the Agent in writing to that effect. Any such
notification received by the Agent after the fifth business day prior to a
dividend payment date will not be effective until the next quarter.
6. COSTS
The Agent will provide the service of reinvesting a participant's
dividends paid on the Company's Common Stock or optional cash payments at no
cost to the shareholder. All administrative costs of the Plan will be paid by
the Company. No brokerage commissions or fees will be charged for purchases of
shares made under the Plan by the Agent directly from the Company, out of
authorized but unissued shares of the Company. The Company presently intends to
bear the costs of brokerage commissions or fees incurred as a result of any
purchases made under the Plan on the open market. The Company may change or
eliminate this policy entirely upon written notice to participants. The
reinvestment of dividends does not relieve the participant of any income tax
that may be payable on the dividends or on any brokerage commissions or fees
paid by the Company.
7. PURCHASES UNDER THE PLAN
A. METHOD OF PURCHASE
The Agent automatically will receive the full amount of dividends paid
on both the shares held by participants and any additional full or fractional
shares acquired under the Plan, as well as any optional cash payments made by
participants. The Agent will use these funds to purchase shares of the Company's
Common Stock for Plan participants from the Company's authorized but unissued
shares. Purchases also may be made on any securities exchange where such shares
are traded, in the over-the-counter market, or in negotiated transactions.
B. NUMBER OF SHARES PURCHASED
The number of shares purchased under the Plan for each participant will
depend on the amount of dividends reinvested and optional cash payments made to
the participant's account, and the purchase price of the Common Stock.
Therefore, each participant's account will be credited with the number of
shares, including a fractional share computed to three decimal places, equal to
the total amount invested under the Plan by the participant (dividends and
optional cash payments), divided by the applicable purchase price per share of
the Common Stock.
C. TIMING OF PURCHASES
The Agent will purchase shares as soon as practicable after cash
dividends are paid in the quarters when such payments are made. In other
quarters, the Agent generally will purchase shares on the first business day of
the quarter. Purchases will include dividends to be reinvested and optional cash
payments as of the date of purchase, as applicable. The Agent will use every
reasonable effort to reinvest all dividends promptly after receipt
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<PAGE>
and in no event later than 30 days after receipt unless such investments are
restricted by any applicable state or federal securities laws. No interest will
be paid on dividends or optional cash payments pending reinvestment.
If for any reason the Agent is precluded from acquiring shares for 90
consecutive days, the Agent will promptly remit all cash dividends and optional
cash payments held in the participant's Plan account to the participant after
such 90th day.
D. PURCHASE PRICE
The purchase price of original issue shares of Common Stock purchased
directly from the Company will be determined once each quarter by the Board of
Directors of the Company based on an annual appraisal and trading activity. The
appraisal will be conducted by an independent appraisal firm selected by the
Board of Directors. The purchase price for the first quarter shall be based on
the first such appraisal. Each quarter thereafter, the Board of Directors of the
Company shall set the purchase price based on a review of the most recent annual
appraisal and trading activity during the preceding quarter. No brokerage
commissions or fees will be charged for purchases made through the Plan directly
from the Company. Shares purchased on the open market under the Plan will be
purchased at the price per share payable to the broker-dealer(s) involved. The
Company presently intends to bear any brokerage commission or fees incurred in
connection with open market purchases.
8. OPTIONAL CASH PAYMENTS
A. METHOD OF PAYMENTS
Once a participant has received the first Dividend Reinvestment
Statement (described below) for dividends reinvested, the participant may elect
to make optional cash payments to his account for additional Common Stock
purchases. Each optional cash payment must be accompanied by a payment form,
which is furnished by the Agent with each Dividend Reinvestment Statement. The
Agent will commingle all optional cash payments credited to a participant's
account with cash dividends and optional cash payments credited to all accounts
under the Plan, and all such funds will be applied to the purchase of Common
Stock as provided above. Optional cash payments received by the fifth business
day before a dividend payment date will be combined with and invested by the
Agent at the time cash dividends are reinvested, and in any event will be
invested with funds received by the fifth business day before purchases are made
in other quarters, as provided above. Any optional cash payments received by the
Agent after the fifth day prior to a dividend payment date will be invested in
the next quarter.
The Agent will hold the participants' optional cash payments in
non-interest bearing accounts. No interest will be paid on any optional cash
payments for the period following receipt by the Agent but prior to investment.
Participants are encouraged to transmit optional cash payments so as to be
received by the Agent as close as possible to the fifth day prior to a dividend
payment date to avoid unnecessary accumulations of funds.
A participant may obtain a refund of his or her uninvested optional
cash payments upon written request to the Agent received not less than two
business days prior to the investment of such payments.
A participant is under no obligation to make an optional cash payment
in any quarter, and the same amount of money does not need to be sent each
quarter.
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B. LIMITATIONS
Any optional cash payment must not be less than $20.00, and payments
may not exceed $500.00 per quarter in the aggregate for any participant or for
each beneficial owner on whose behalf a participant may be investing. Optional
cash payments may be made at any time; however, only one optional cash payment
may be made in each calendar month by any participant, or by each beneficial
owner on whose behalf a participant may be investing, and optional cash payments
are only invested quarterly, as provided above. The Company may change the
minimum and maximum allowable optional cash payment amounts or eliminate cash
payments entirely upon written notice to participants.
Participants may not draw checks or drafts against their Plan accounts
in respect of any shares or cash held therein and may not sell, assign, or
transfer their accounts.
9. CERTIFICATES FOR SHARES
Normally, certificates for shares of Common Stock purchased under the
Plan will not be issued directly to participants. Shares will be held by or
through the Agent, providing protection against loss, theft, or inadvertent
destruction. The number of shares credited to a participant's account will be
shown on the next statement of account sent to the participant. The participant,
however, may obtain from the Agent certificates for full shares upon receipt by
the Agent of a written request from the participant. Any request for issuance of
a certificate received by the Agent less than five days prior to the record date
for a dividend payment shall become effective only after dividends paid for such
record date have been reinvested. Also, the Agent generally processes requests
for certificates only once each month, on or about the l5th day of each month.
No certificate will be issued for a fractional share, although dividends on a
fractional interest in a share will be credited to the participant's account.
10. REPORTS TO PARTICIPANTS
As soon as practicable after the end of each quarterly period, the
Agent will send a statement of account (the "Dividend Reinvestment Statement")
to the participant. The Dividend Reinvestment Statement will include information
regarding each purchase and other information regarding the status of the
participant's account as of the date of such statement. The Dividend
Reinvestment Statements will provide a record of the cost basis of shares
purchased under the Plan and should be retained for tax purposes.
11. WITHDRAWALS OF SHARES PURCHASED UNDER THE PLAN
A participant may withdraw all or any portion of the full shares of
Common Stock held in the participant's account under the Plan by notifying the
Agent in writing to that effect. A certificate for the full shares withdrawn
will be issued in the name of the participant and mailed to him. No certificate
will be issued for a fractional share interest.
Withdrawals of some or all of the full shares in a participant's
account will not terminate the participant's enrollment in the Plan.
12. TERMINATION OF PARTICIPATION
A participant may terminate his account by notifying the Agent in
writing to that effect. Any notice of termination received by the Agent less
than five days prior to the record date for a dividend payment shall become
effective only after dividends paid for such record date have been reinvested.
Upon termination, the Agent will issue to the participant a certificate for the
number of full shares of Common Stock and a check for any fractional
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share in the participant's account. The Agent generally issues such certificates
and checks only once each month, on or about the 15th day of each month.
13. OTHER FEATURES
A. STOCK SPLITS, STOCK DIVIDENDS, AND RIGHTS OFFERINGS
Stock splits or stock dividends on shares held in a participant's
account will be credited to the account based on the number of shares (including
fractional share interests) held in the account on the record date for such
dividend or split. The Agent will report the amount of dividends received on
shares or fractional shares held in each account.
In the event the Company offers rights or warrants to purchase
additional shares of Common Stock or other securities to the holders of Common
Stock, such rights or warrants will be made available to participants based on
the number of shares, including fractional share interests to the extent
feasible, held in their accounts on the record date established for determining
the holders of Common Stock entitled to such rights or warrants.
B. VOTING OF SHARES PURCHASED UNDER THE PLAN
All full and fractional shares credited to a participant's account
under the Plan will be added to the shares registered in the participant's name
on the shareholder records of the Company. The participant will receive one
proxy covering the total of such shares, which proxy shall be voted as the
participant directs; or, if the participant so elects, the participant may vote
all of such shares in person at the shareholders' meeting.
14. FEDERAL INCOME TAX CONSEQUENCES
Dividends and other distributions by the Company to shareholders
generally will be taxed as ordinary dividend income. Participants who acquire
additional shares of Common Stock through the Plan directly from the Company
with reinvested cash dividends will be treated for federal income tax purposes
as having received a taxable stock distribution. As a result, an amount equal to
the fair market value on the investment date of the shares acquired directly
from the Company with reinvested cash dividends will be treated as a dividend
paid to participants. The tax basis of the shares acquired directly from the
Company with such reinvested dividends also will equal the fair market value of
the shares on the investment date.
Participants who acquire additional shares of Common Stock through the
Plan through open market purchases made with reinvested cash dividends will be
deemed to have received a taxable dividend equal to the amount of the cash
dividend reinvested plus the amount of any brokerage fees paid by the Company
with respect to such additional shares. The participant's tax basis in these
shares acquired on the open market will equal the purchase price of the shares
plus any brokerage fees paid with respect to the shares.
Participants in the Plan will not realize any taxable income at the
time of investment of optional cash payments in additional shares of Common
Stock acquired directly from the Company. The tax basis of shares purchased
directly from the Company with an optional cash payment will be the fair market
value of the shares on the investment date.
Participants who acquire additional shares of Common Stock through open
market purchases made with optional cash payments will be treated as receiving a
cash dividend equal to the amount of any brokerage fees paid by the Company with
respect to such shares. The tax basis of shares purchased on the open market
with an
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optional cash payment will equal the purchase price of the shares, plus
any brokerage fees paid by the Company with respect to such shares.
The holding period of shares of Common Stock acquired through the Plan,
whether purchased with reinvested dividends or optional cash payments, will
begin on the day following the investment date.
Participants in the Plan will not realize any taxable income when they
receive certificates for full shares credited to their accounts, whether upon
their written requests for such certificates, upon full shares credited to their
account, or upon withdrawal from or termination of participation in the Plan.
Participants, however, will realize taxable gain or loss (which, for most
participants, will be capital gain or loss) when full shares acquired under the
Plan are sold or exchanged by participants and when participants receive a cash
payment for a fractional share credited to their account. The amount of such
gain or loss will be the difference between the amount that a participant
receives for his shares or fractional share (net of brokerage commissions and
other costs of sale) and the tax basis thereof.
For foreign participants who elect to have their cash dividends
reinvested and whose dividends are subject to United States income tax
withholding, and any other participants for whom federal income tax withholding
on dividends is required, an amount equal to the cash dividends payable to such
participants, less the amount of tax required to be withheld, will be applied to
the purchase of Common Stock through the Plan.
THE FOREGOING IS INTENDED ONLY AS A GENERAL DISCUSSION OF THE CURRENT
FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN. IT DOES NOT
INCLUDE A DISCUSSION OF STATE AND LOCAL INCOME TAX CONSEQUENCES OF PARTICIPATION
IN THE PLAN. FOR SPECIFIC INFORMATION ON THE TAX CONSEQUENCES OF PARTICIPATION
IN THE PLAN, INCLUDING ANY FUTURE CHANGES IN APPLICABLE LAW OR INTERPRETATION
THEREOF, PARTICIPANTS SHOULD CONSULT THEIR OWN TAX ADVISORS.
15. CHANGE AND TERMINATION OF THE PLAN; INTERPRETATION OF THE PLAN
The Company reserves the right to change, suspend, or terminate the
Plan at any time. Participants shall be notified of any such change, suspension,
or termination. Any question of interpretation arising under the Plan will be
determined by the Company. The Plan and all transactions in connection with the
Plan will be governed by and construed in accordance with the laws of the State
of North Carolina.
USE OF PROCEEDS
The Company will use proceeds from the sales of shares of Common Stock
to the Agent pursuant to the Plan for general corporate purposes. The Company
will not receive any proceeds from sales of shares of Common Stock pursuant to
the Plan which the Agent purchases in market or negotiated transactions. The
principal reasons for the offering are to provide a means by which the Agent can
purchase shares with reinvested dividends without having to go into the
marketplace, to allow Plan participants to avoid brokerage charges which are
incurred on market purchases, and to provide the Company with a means of raising
capital for general corporate purposes.
PLAN OF DISTRIBUTION
The Common Stock which is the subject of this Prospectus is offered by
the Company for purchase by the Agent pursuant to the Plan described herein, the
terms of which provide for the purchase of some securities on the open market or
through negotiated transactions, as well as from the Company. No underwriter
will be used, and no fees or expenses, including brokerage commissions,
resulting from purchases of shares on the
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open market or through negotiated transactions, will be paid by shareholders in
connection with this offering or the Plan.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 55-8-50 through 55-8-58 of the North Carolina Business
Corporation Act permit a corporation to indemnify its directors, officers,
employees or agents under either or both a statutory or nonstatutory scheme of
indemnification. Under the statutory scheme, a corporation may, with certain
exceptions, indemnify a director, officer, employee or agent of the corporation
who was, is, or is threatened to be made, a party to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative, or investigative, because of the fact that such person was a
director, officer, agent or employee of the corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. This indemnity may include the obligation to
pay any judgment, settlement, penalty, fine (including an excise tax assessed
with respect to an employee benefit plan) and reasonable expenses incurred in
connection with a proceeding (including counsel fees), but no such
indemnification may be granted unless such director, officer, agent or employee
(i) conducted himself in good faith, (ii) reasonably believed (1) that any
action taken in his official capacity with the corporation was in the best
interest of the corporation or (2) that in all other cases his conduct at least
was not opposed to the corporation's best interest, and (iii) in the case of any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. Whether a director has met the requisite standard of conduct for the
type of indemnification set forth above is determined by the board of directors,
a committee of directors, special legal counsel or the shareholders in
accordance with Section 55-8-55. A corporation may not indemnify a director
under the statutory scheme in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the corporation or
in connection with a proceeding in which a director was adjudged liable on the
basis of having received an improper personal benefit.
In addition to, and separate and apart from the indemnification
described above under the statutory scheme, Section 55-8-57 of the North
Carolina Business Corporation Act permits a corporation to indemnify or agree to
indemnify any of its directors, officers, employees or agents against liability
and expenses (including attorney's fees) in any proceeding (including
proceedings brought by or on behalf of the corporation) arising out of their
status as such or their activities in any of the foregoing capacities, provided
a corporation may not indemnify or agree to indemnify a person against liability
or expenses he may incur on account of his activities which were, at the time
taken, known or believed by him to be clearly in conflict with the best
interests of the corporation. Accordingly, the Company may indemnify its
directors, officers and employees in accordance with either the statutory or the
non-statutory standard.
Sections 55-8-52 and 55-8-56 of the North Carolina Business Corporation
Act require a corporation, unless its articles of incorporation provide
otherwise, to indemnify a director or officer who has been wholly successful, on
the merits or otherwise, in the defense of any proceeding to which such director
or officer was a party. Unless prohibited by the articles of incorporation, a
director or officer also may make application and obtain court-ordered
indemnification if the court determines that such director or officer is fairly
and reasonably entitled to such indemnification as provided in Sections 55-8-54
and 55-8-56.
Finally, Section 55-8-57 of the North Carolina Business Corporation Act
provides that a corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
corporation against certain liabilities incurred by such persons, whether or not
the corporation is otherwise authorized by the North Carolina Business
Corporation Act to indemnify such party.
As permitted by North Carolina law, Article IX of the Bylaws of the
Company provides for the indemnification of directors and officers, within the
limitations permitted by law. In addition, the Board of
10
<PAGE>
Directors of the Company may provide such indemnification for the employees and
agents of the Company as it deems appropriate.
As permitted by North Carolina law, Article 6 of the Company's Articles
of Incorporation also provides for the limitation of the personal liability of
directors from monetary damages for breach of any duty as a director provided
that the limitation of liability does not apply to (i) acts or omissions that
the director at the time of such breach knew or believed were clearly in
conflict with the best interests of the Company; (ii) any liability under North
Carolina Business Corporation Act Section 55-8-33; (iii) any transaction from
which the director derived an improper personal benefit.
The Company has purchased a standard directors' and officers' liability
policy which will, subject to certain limitations, indemnify the Company, its
officers and directors for damages they become legally obligated to pay as a
result of any negligent act, error or omission committed by directors or
officers while acting in their capacities as such.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed 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.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed
upon for the Company by Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan,
L.L.P., 2500 First Union Capitol Center, Raleigh, North Carolina 27601.
EXPERTS
The financial statements of the Bank at and for the year
ended December 31, 1996 incorporated by reference from the Bank's Annual Report
on Form F-2, as amended, filed as Exhibit 99.1 to the Company's Current Report
on Form 8-K(12G3), dated July 1, 1997, have been audited by Coopers & Lybrand
L.L.P., independent accountants, as set forth in their report thereon included
therein and incorporated herein by reference. The financial statements of the
Bank at and for the two years in the period ended December 31,
1995 incorporated by reference from the Bank's Annual Report on Form F-2
as amended, filed as Exhibit 99.2 to the Company's current report on
Form 8-K(12G3), dated July 1, 1997, have been audited by Daniel G. Matthews
& Associates, Inc., independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such reports given upon the authority of such firms as
experts in accounting and auditing.
11
<PAGE>
No person has been authorized to give any information or to make any
representations not contained or incorporated by reference in this Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the Company since
the date hereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities offered hereby in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or solicitation. This
Prospectus should be retained for future reference and read in conjunction with
the Plan.
TABLE OF CONTENTS
Risk Factor 2
Available Information 2
Incorporation of Documents by Reference 2
The Company 3
Description of the Plan 3
Purpose 3
Features 3
Administration 4
Participation 4
Number of Shares Subject to the Plan 5
Costs 5
Purchases Under the Plan 5
Optional Cash Payments 6
Certificates for Shares 7
Reports to Participants 7
Withdrawals of Shares
Purchased Under the Plan 7
Termination of Participation 7
Other Features 8
Federal Income Tax Consequences 8
Change and Termination of the Plan;
Interpretation of the Plan 9
Use of Proceeds 9
Plan of Distribution 9
Indemnification of Directors and Officers 10
Legal Matters 11
Experts 11
FOUR OAKS FINCORP, INC.
DIVIDEND
REINVESTMENT
AND STOCK
PURCHASE PLAN
Common Stock
--------------
PROSPECTUS
--------------
August ____, 1997
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table shows the estimated expenses in connection with the
offering of shares described in the Registration Statement. The Company will pay
said expenses.
Securities and Exchange Commission Registration Fee.. $ 788
Accountants' Fee and Expenses........................ $ 4,000
Company's Counsel Fees and Expenses.................. $10,000
Printing and Engraving Expenses...................... $ 2,000
Miscellaneous Expenses............................... $ 1,000
----------
Total.............................. $17,788
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Sections 55-8-50 through 55-8-58 of the North Carolina Business
Corporation Act permit a corporation to indemnify its directors, officers,
employees or agents under either or both a statutory or nonstatutory scheme of
indemnification. Under the statutory scheme, a corporation may, with certain
exceptions, indemnify a director, officer, employee or agent of the corporation
who was, is, or is threatened to be made, a party to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative, or investigative, because of the fact that such person was a
director, officer, agent or employee of the corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. This indemnity may include the obligation to
pay any judgment, settlement, penalty, fine (including an excise tax assessed
with respect to an employee benefit plan) and reasonable expenses incurred in
connection with a proceeding (including counsel fees), but no such
indemnification may be granted unless such director, officer, agent or employee
(i) conducted himself in good faith, (ii) reasonably believed (1) that any
action taken in his official capacity with the corporation was in the best
interest of the corporation or (2) that in all other cases his conduct at least
was not opposed to the corporation's best interest, and (iii) in the case of any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. Whether a director has met the requisite standard of conduct for the
type of indemnification set forth above is determined by the board of directors,
a committee of directors, special legal counsel or the shareholders in
accordance with Section 55-8-55. A corporation may not indemnify a director
under the statutory scheme in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the corporation or
in connection with a proceeding in which a director was adjudged liable on the
basis of having received an improper personal benefit.
In addition to, and separate and apart from the indemnification
described above under the statutory scheme, Section 55-8-57 of the North
Carolina Business Corporation Act permits a corporation to indemnify or agree to
indemnify any of its directors, officers, employees or agents against liability
and expenses (including attorney's fees) in any proceeding (including
proceedings brought by or on behalf of the corporation) arising out of their
status as such or their activities in any of the foregoing capacities, provided
a corporation may not indemnify or agree to indemnify a person against liability
or expenses he may incur on account of his activities which were, at the time
taken, known or believed by him to be clearly in conflict with the best
interests of the corporation. Accordingly, the Company may indemnify its
directors, officers and employees in accordance with either the statutory or the
non-statutory standard.
Sections 55-8-52 and 55-8-56 of the North Carolina Business Corporation
Act require a corporation, unless its articles of incorporation provide
otherwise, to indemnify a director or officer who has been wholly successful, on
the merits or otherwise, in the defense of any proceeding to which such director
or officer was a
II-1
<PAGE>
party. Unless prohibited by the articles of incorporation, a director or officer
also may make application and obtain court-ordered indemnification if the court
determines that such director or officer is fairly and reasonably entitled to
such indemnification as provided in Sections 55-8-54 and 55-8-56.
Finally, Section 55-8-57 of the North Carolina Business Corporation Act
provides that a corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
corporation against certain liabilities incurred by such persons, whether or not
the corporation is otherwise authorized by the North Carolina Business
Corporation Act to indemnify such party.
As permitted by North Carolina law, Article IX of the Bylaws of the
Company provides for the indemnification of directors and officers, within the
limitations permitted by law. In addition, the Board of Directors of the Company
may provide such indemnification for the employees and agents of the Company as
it deems appropriate.
As permitted by North Carolina law, Article 6 of the Company's Articles
of Incorporation also provides for the limitation of the personal liability of
directors from monetary damages for breach of any duty as a director provided
that the limitation of liability does not apply to (i) acts or omissions that
the director at the time of such breach knew or believed were clearly in
conflict with the best interests of the Company; (ii) any liability under North
Carolina Business Corporation Act Section 55-8-33; (iii) any transaction from
which the director derived an improper personal benefit.
The Company has purchased a standard directors' and officers' liability
policy which will, subject to certain limitations, indemnify the Company, its
officers and directors for damages they become legally obligated to pay as a
result of any negligent act, error or omission committed by directors or
officers while acting in their capacities as such.
ITEM 16. EXHIBITS
The following exhibits are filed as a part of this Registration
Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
<S> <C>
4.1(1) Articles of Incorporation of Four Oaks Fincorp, Inc.
4.2(1) Bylaws of Four Oaks Fincorp, Inc.
4.3(1) Specimen Common Stock Certificate
5 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.
23.1 Consent of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. (included as Exhibit 5
hereto)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Daniel G. Matthews & Associates, Inc.
24 Powers of Attorney (included on the signature page hereof)
</TABLE>
- - --------------------
(1) Exhibit to the Company's current report on Form 8-K(12G3) dated July 1,
1997 as filed with the Securities and Exchange Commission and
incorporated herein by reference.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(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 of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this 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.
(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) of this section do not apply if the
information required to be included in a
post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to
section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Four Oaks, State of North Carolina, on July 31,
1997.
FOUR OAKS FINCORP, INC.
BY: /s/ Ayden R. Lee, Jr.
NAME: Ayden R. Lee, Jr.
TITLE: President, Chief Executive Officer
and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ayden R. Lee, Jr. and Nancy S. Wise and
each of them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this registration statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully for all intents and purposes as
he or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on July 31,
1997 in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
/s/ Ayden R. Lee, Jr. President, Chief Executive Officer and Director
Ayden R. Lee, Jr.
/s/ Nancy S. Wise Senior Vice President, Chief Financial
Nancy S. Wise Officer (Principal accounting and financial officer)
/s/ M. S. Canaday Director
M. S. Canaday
____________________________ Director
Harold J. Sturdivant
/s/ Paula Canaday Bowman Director
Paula Canaday Bowman
/s/ William J. Edwards Director
William J. Edwards
/s/ Percy Y. Lee Director
Percy Y. Lee
/s/ Warren L. Grimes Director
Warren L. Grimes
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
4.1(1) Articles of Incorporation of Four Oaks Fincorp, Inc.
4.2(1) Bylaws of Four Oaks Fincorp, Inc.
4.3(1) Specimen Common Stock Certificate
5 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P.
23.1 Consent of Smith, Anderson, Blount, Dorsett, Mitchell
& Jernigan, L.L.P. (included as Exhibit 5 hereto)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Daniel G. Matthews & Associates, Inc.
24 Powers of Attorney (included on the signature page hereof)
- - --------------------
(1) Exhibit to the Company's current report on Form 8-K(12G3) dated July 1,
1997 as filed with the Securities and Exchange Commission and
incorporated herein by reference.
<PAGE>
EXHIBIT 5
Opinion of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.
[SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P. LETTERHEAD]
August 12, 1997
Four Oaks Fincorp, Inc.
6144 U. S. 301 South
Four Oaks, North Carolina 27524
Ladies and Gentlemen:
As counsel for Four Oaks Fincorp, Inc. (the "Company"), we furnish the
following opinion in connection with the proposed issuance by the Company of up
to 100,000 shares in the aggregate of its common stock, $1.00 par value per
share (the "Common Stock"), pursuant to the Four Oaks Fincorp, Inc. Dividend
Reinvestment and Stock Purchase Plan (the "Plan"). These securities are the
subject of a registration statement to be filed by the Company with the
Securities and Exchange Commission on Form S-3 (the "Registration Statement")
under the Securities Act of 1933, as amended (the "1933 Act"), to which this
opinion is to be attached as an exhibit.
We have examined the articles of incorporation and bylaws of the
Company, the minutes of meetings of its Board of Directors, and such other
corporate records of the Company and other documents and have made such
examinations of law as we have deemed relevant for purposes of this opinion. We
also have received a certificate of an officer of the Company, dated of even
date herewith, relating to issuance of the Common Stock pursuant to the Plan.
Based on such examination and such certificate, it is our opinion that the
100,000 shares of Common Stock of the Company, which are being registered
pursuant to the Registration Statement, may be legally issued in accordance with
the Company's articles of incorporation and bylaws, and when so issued and duly
delivered against payment therefor pursuant to the Plan as described in the
Registration Statement, such shares will be legally issued, fully paid, and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement that you are about to file with the Securities and
Exchange Commission. Such consent shall not be deemed to be an admission that
this firm is within the category of persons whose consent is required under
Section 7 of the 1933 Act or the regulations promulgated pursuant to the 1933
Act.
Sincerely yours,
/s/ SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN, L.L.P.
SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN, L.L.P.
<PAGE>
EXHIBIT 23.2
Consent of Coopers & Lybrand L.L.P.
[COOPERS & LYBRAND L.L.P. LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement of Four Oaks Fincorp, Inc. on Form S-3 (File No. 333- ) of
our report dated February 28, 1997 on our audit of the financial statements of
Four Oaks Bank & Trust Company as of December 31, 1996 and for the year
then ended, which report has been included in the Annual Report of Four Oaks
Bank & Trust Company on Form F-2 which has been included as an exhibit to
Form 8-K of Four Oaks Fincorp, Inc. filed on July 2, 1997 pursuant to the
Securities Exchange Act of 1934. We also consent to the reference to our firm
under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Raleigh, North Carolina
August 12, 1997
<PAGE>
EXHIBIT 23.3
Consent of Daniel G. Matthews & Associates, Inc.
[DANIEL G. MATTHEWS & ASSOCIATES LETTERHEAD]
July 22, 1997
Four Oaks Bank & Trust Company
P. O. Box 309
Four Oaks, NC 27524
Re: Consent of Daniel G. Matthews & Associates, Inc.
We consent to the incorporation by reference in the Registration Statement (Form
S-3) pertaining to the Four Oaks Fincorp, Inc. Dividend Reinvestment Plan of our
report dated February 20, 1996, with respect to the consolidated financial
statements of Four Oaks Bank & Trust Company, incorporated by reference in its
Annual Report (Form F-2) for the year ended December 31, 1996 filed with the
Federal Deposit Insurance Corporation.
/s/ Daniel G. Matthews & Associates, Inc.
DANIEL G. MATTHEWS & ASSOCIATES, INC.
Smithfield, North Carolina
