May 20, 1994 Registration No. __________
_________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST NATIONAL BANCORP
(Exact name of Registrant as Specified in its Charter)
GEORGIA 6711 58-1415138
(State or other (Primary Standard) (I.R.S. Employer
jurisdiction of Industrial Classi- Identification
incorporation or fication Code No.)
Number)
303 Jesse Jewell Parkway, Suite 700
P. O. Drawer 937
Gainesville, Georgia 30503
(Registrant's telephone number, including area code)
C. Talmadge Garrison
Senior Vice President
Secretary and Treasurer
First National Bancorp
303 Jesse Jewell Parkway, Suite 700
P. O. Drawer 937
Gainesville, Georgia 30503
(404) 503-2104
(Name, address, and phone number of agent for service)
Copies to:
T. Treadwell Syfan
Stewart, Melvin & Frost
Attorneys at Law
Hunt Tower
200 Main Street
P. O. Box 3280
Gainesville, Georgia 30503
Approximate Date of Commencement of Proposed Offering: As soon as
practical after the effective date of this Registration Statement
(the approximate date being ___________________, 1994).
If the securities being registered on this Form are being offered
in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box.[ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
Being Being Price Per Offering Registration
Registered Registered Share* Price* Fee
Common Stock 521,757 $20.50 $10,696,018.50 $3,688.28
$1.00 par shares
value
*Pursuant to Rule 457(f), based on the market value of Barrow
Bancshares, Inc. common stock that would be converted into the
First National Bancorp common stock (the offered securities)
pursuant to the transactions described herein.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall
become effective on such date a the Commission, acting pursuant to
said Section 8(a), may determine.
[An index of all Exhibits attached hereto is provided at
sequentially numbered page ______]
<PAGE>
FIRST NATIONAL BANCORP
CROSS REFERENCE SHEET
(Pursuant to Item 501(b) of Reg. S-K)
CAPTION OR LOCATION
ITEM NUMBER OF FORM S-4 IN PROSPECTUS
1. Outside Front Cover Page Outside Front Cover
of Prospectus Page of Prospectus
2. Inside Front and Outside Back Available Information;
Cover Pages of Prospectus Incorporation by Reference;
Table of Contents
3. Risk Factors, Ratio of Earnings Introduction; Summary of
to Fixed Charges and Reorganization;
Other Information Per Share Information;
Market and Stock Price
Information; Barrow
Bancshares Selected
Financial Data (Unaudited)
4. Terms of the Transaction Summary of
Reorganization; The
Proposed Reorganization;
Effect of Reorganization
on Shareholders;
Description of Stock;
Federal Income Tax
Consequences
5. Pro Forma Financial Information First Bancorp and Barrow
Bancshares Pro Forma
Condensed Combined
Balance Sheet Information
(Unaudited); First
Bancorp and Barrow
Bancshares Pro Forma
Condensed Combined
Statements of Income
(Unaudited)
6. Material Contacts with the Vote Required to Approve
Company Being Acquired Merger
7. Additional Information Required Not Applicable
for Reoffering by Persons
and Parties Deemed to be
Underwriters
8. Interests of Named Experts Legal Opinion
and Counsel
9. Disclosure of Commission Indemnification
Position of Indemnification
of Securities Act Liabilities
10. Information with Respect to Not Applicable
S-3 Registrants
11. Incorporation of Certain Not Applicable
Information by Reference
12. Information with Respect to Incorporation of Certain
S-2 or S-3 Registrants Documents by Reference
13. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference;
Per Share Information;
Market and Stock Price
Information
14. Information with Respect to Not Applicable
Registrants Other Than S-3
or S-2 Registrants
15. Information with Respect Not Applicable
to S-3 Companies
16. Information with Respect Not Applicable
to S-2 or S-3 Companies
17. Information with Respect Introduction; Summary of
to Companies Other than S-3 the Reorganization; Per
or S-2 Companies Share Information; Market
and Stock Price
Information; Barrow
Bancshares Selected
Financial Data (Unaudited);
Barrow Bancshares Manage-
ment's Discussion and
Analysis of Financial
Condition and Results of
Operations for the Years
Ended December 31, 1993,
1992, and 1991; Barrow
Bancshares, Inc. and
Subsidiary Consolidated
Financial Statements;
Barrow Bancshares Manage-
ment's Discussion and
Analysis of Financial
Condition and Results of
Operations for the Three
Month Periods ended March
31, 1994 and 1993.
<PAGE>
18. Information if Proxies, Introduction; Rights of
Consents or Authorizations Dissenting Shareholders;
are to be Solicited Incorporation of Certain
Documents by Reference;
Barrow Bancshares
Shareholders; Management of
First National Bancorp;
Summary of Reorganization
19. Information if Proxies, Not Applicable
Consents or Authorizations
are not to be Solicited or
in an Exchange Offer
<PAGE>
____________, 1994
Dear Shareholder:
The enclosed packet contains information about the proposed
acquisition of Barrow Bancshares, Inc. by First National Bancorp of
Gainesville, Georgia. The merger has the support of your Board of
Directors, and we respectfully request your vote in its favor.
Enclosed are (1) Notice of Special Meeting of Shareholders;
(2) Proxy; (3) Proxy Statement with appendices; (4) First National
Bancorp's 1993 Annual Report to Shareholders; (5) First National
Bancorp's 1994 Annual Meeting Proxy Statement; and (6) First
National Bancorp's Quarterly Report on Form 10-Q for the Quarter
ended March 31, 1994.
The enclosed Proxy Statement contains a great amount of
information concerning Barrow Bancshares, Inc., First National
Bancorp and the proposed acquisition. We hope you will take the
time to study the Proxy Statement carefully. Feel free to contact
me, or any of our other officers or directors, if you have any
questions or feel we can be of assistance.
It's very important to us that you return your signed Proxy to
Barrow Bancshares, Inc. in time for it to be received not later
than 5:00 P.M. on ____________, ___________, 1994, to ensure that
your shares are represented at the Special Shareholders' Meeting.
As provided in the Proxy Statement, if the merger is approved
you will exchange each share of Barrow Bancshares, Inc. stock held
by you for 1.37 shares of First National Bancorp stock. According
to current quotations on NASDAQ, as of ____________, 1994, the bid
price of First National Bancorp stock was $___________ per share
and the asking price was $_________ per share. Of course, First
National Bancorp stock is subject to market price fluctuations
the same as any other stock which is bought and sold.
If possible, please try to attend the Special Shareholders'
Meeting to be held at the Barrow Bank & Trust Company, 209 North
Broad Street, Winder, Georgia, at ______ A.M. on _______________,
______________, 1994.
For the Board of Directors,
Leeon Pruett,
Chairman of the Board
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF BARROW BANCSHARES, INC.,
WINDER, GEORGIA
A special meeting of shareholders of Barrow Bancshares, Inc.
has been called by the board of directors and will be held at
_______ A.M. on ____________, ___________________, 1994, at the
Barrow Bank & Trust Company, 209 North Broad Street, Winder,
Georgia for the purpose of considering and voting upon:
(1) the proposed merger of Barrow Bancshares, Inc. into
First National Bancorp, as described in the
accompanying Proxy Statement and the Agreement of
Reorganization and Plan of Merger (the
"Reorganization Plan") attached to the Proxy
Statement as Appendix A; and
(2) the transaction of such other business as may properly
come before the meeting or any adjournments thereof.
Management at present knows of no other business to be
presented.
The approval of the merger transaction, which has the support
of your board of directors, requires the affirmative vote of a
majority (190,423 shares) of the 380,845 shares of Barrow
Bancshares, Inc. stock outstanding. We respectfully request your
vote in favor of the merger transaction and ask you to register
your vote on the enclosed Proxy. The Proxy should be completed and
returned to Barrow Bancshares, Inc. as soon as possible, but in any
case no later than 5:00 P.M. on __________, ___________, 1994, the
day before the special meeting of shareholders.
Please read the enclosed Proxy Statement carefully for a
complete discussion of matters relating to the Reorganization Plan
and the Proxy. If the merger transaction is approved, shareholders
of Barrow Bancshares, Inc. who dissent therefrom in accordance with
the procedures set forth in the Georgia Business Corporation Code
(as more fully set forth in Appendix "B" of the Proxy Statement)
shall be entitled to be paid the fair value of their shares of the
common stock of Barrow Bancshares, Inc.
AGAIN, PLEASE COMPLETE, SIGN AND MAIL THE ENCLOSED PROXY
PROMPTLY SUCH THAT IT WILL BE RECEIVED BY BARROW BANCSHARES, INC.
NO LATER THAN 5:00 P.M. ON _______________, ____________, 1994.
YOUR PROXY MAY BE REVOKED, IF YOU CHOOSE, AT ANY TIME PRIOR TO ITS
BEING EXERCISED AT THE SPECIAL MEETING OF SHAREHOLDERS.
Winder, Georgia For the Board of Directors,
________________, 1994
Leeon Pruett,
Chairman of the Board
<PAGE>
PROXY STATEMENT FOR
BARROW BANCSHARES, INC.
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON ________, 1994
FIRST NATIONAL BANCORP
PROSPECTUS
521,757 SHARES OF COMMON STOCK OF FIRST NATIONAL BANCORP WHICH MAY
BE ISSUED IN CONNECTION WITH THE MERGER OF BARROW BANCSHARES, INC.
INTO FIRST NATIONAL BANCORP
=================================================================
FIRST NATIONAL BANCORP HAS FILED A REGISTRATION STATEMENT WITH THE
SECURITIES AND EXCHANGE COMMISSION COVERING THE MAXIMUM OF 521,757
SHARES OF COMMON STOCK OF FIRST NATIONAL BANCORP TO BE ISSUED TO
SHAREHOLDERS OF BARROW BANCSHARES, INC. IN CONNECTION WITH THE
MERGER OF BARROW BANCSHARES, INC. INTO FIRST NATIONAL BANCORP.
THIS PROXY STATEMENT ALSO CONSTITUTES A PROSPECTUS OF FIRST
NATIONAL BANCORP FILED AS PART OF SUCH REGISTRATION STATEMENT.
SEE "THE PROPOSED REORGANIZATION."
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY FIRST NATIONAL BANCORP.
THIS PROXY STATEMENT DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN
OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE
UNLAWFUL. THE DELIVERY OF THIS PROXY STATEMENT AT ANY TIME DOES
NOT IMPLY THAT INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
THE SHARES OF COMMON STOCK OF FIRST NATIONAL BANCORP TO BE ISSUED
IN CONNECTION WITH THE REORGANIZATION HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION; NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROXY STATEMENT DOES NOT RELATE TO ANY RESALES OF COMMON STOCK
OF FIRST NATIONAL BANCORP RECEIVED BY ANY PERSON UPON CONSUMMATION
OF THE MERGER AND NO PERSON IS AUTHORIZED TO MAKE ANY USE OF THIS
PROXY STATEMENT IN CONNECTION WITH ANY SUCH RESALE.
ALL INFORMATION CONTAINED IN THIS PROXY STATEMENT WITH RESPECT TO
FIRST NATIONAL BANCORP AND ITS SUBSIDIARIES WAS SUPPLIED BY THOSE
ENTITIES, AND ALL INFORMATION WITH RESPECT TO BARROW BANCSHARES,
INC. AND ITS SUBSIDIARY WAS SUPPLIED BY BARROW BANCSHARES, INC.
THE DATE OF THIS PROXY STATEMENT IS _____________, 1994.
<PAGE>
AVAILABLE INFORMATION
First National Bancorp is subject to the informational
requirements of the Securities Exchange Act of 1934 and in accordance
therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements and other information filed
by First National Bancorp can be inspected and copied at the public
reference facilities maintained by the Commission at the Commission's
office at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
and at the Commission's Regional Offices in New York (75 Park Place,
14th Floor, New York, New York 10007) and Chicago (Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60621-2511). Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
Additional information regarding First National Bancorp and the
shares of common stock offered hereby is contained in the
Registration Statement and the exhibits relating thereto filed with
the Commission under the Securities Act of 1933, which may be
inspected without charge at the office of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies thereof may be
obtained from the Commission at prescribed rates. This Proxy
Statement does not contain all of the information set forth in the
Registration Statement and exhibits thereto which First National
Bancorp has filed with the Commission under the Securities Act of
1933 and to which reference is hereby made for further information
with respect to First National Bancorp and the securities offered
hereby.
The common stock of First National Bancorp, $1.00 par value per
share, is listed on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") and reports and other
information concerning First National Bancorp can be inspected at the
offices of NASDAQ at NASDAQ Reports Section, 3rd Floor, 1735 K
Street, N.W., Washington, D.C. 20006.
INCORPORATION BY REFERENCE
THIS PROSPECTUS INCORPORATES DOCUMENTS OR PARTS OF DOCUMENTS BY
REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. UPON
WRITTEN OR ORAL REQUEST OF ANY PERSON TO WHOM THIS PROSPECTUS IS
DELIVERED, FIRST NATIONAL BANCORP WILL PROMPTLY FURNISH TO SUCH
PERSON, WITHOUT CHARGE, A COPY OF ANY AND ALL INFORMATION THAT HAS
BEEN INCORPORATED BY REFERENCE HEREIN. SUCH REQUESTS SHOULD BE
DIRECTED TO C. TALMADGE GARRISON, SECRETARY, P.O. DRAWER 937,
GAINESVILLE, GEORGIA 30503 (404-503-2104). IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY ________,
________, 1994.
<PAGE>
PROXY STATEMENT
TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 1
Recent Merger of
First Bancorp . . . . . . . . . . . . . . . . . . . . 3
SUMMARY OF REORGANIZATION. . . . . . . . . . . . . . . . . . 3
Terms of the Agreement of Reorganization
and Plan of Merger. . . . . . . . . . . . . . . . . . 4
Business of the Parties to the
Reorganization. . . . . . . . . . . . . . . . . . . . 4
Reasons for the Reorganization; Recommendation
of Board of Directors . . . . . . . . . . . . . . . . 4
Operations of Bank and First
Bancorp after Reorganization. . . . . . . . . . . . . 5
Regulatory Approval Required. . . . . . . . . . . . . . 5
Vote Required to Approve Merger . . . . . . . . . . . . 5
Rights of Dissenting Shareholders . . . . . . . . . . . 6
Conversion of Barrow Bancshares Stock . . . . . . . . . 6
Right of Termination of the Reorganization
Plan . . .. . . . . . . . . . . . . . . . . . . . . . 6
Effect of Reorganization on Barrow Bancshares
Shareholders. . . . . . . . . . . . . . . . . . . . . 7
Tax Consequences. . . . . . . . . . . . . . . . . . . . 7
Accounting Treatment. . . . . . . . . . . . . . . . . . 7
Expenses of Solicitation and Reorganization . . . . . . 7
PER SHARE INFORMATION. . . . . . . . . . . . . . . . . . . . 8
MARKET AND STOCK PRICE INFORMATION . . . . . . . . . . . . . 10
First Bancorp . . . . . . . . . . . . . . . . . . . . . 10
Barrow Bancshares . . . . . . . . . . . . . . . . . . . 10
Comparison of Stock Prices. . . . . . . . . . . . . . . 11
FIRST BANCORP AND BARROW BANCSHARES PRO
FORMA CONDENSED COMBINED BALANCE SHEET INFORMATION
(UNAUDITED). . . . . . . . . . . . . . . . . . . . . . . . 12
FIRST BANCORP AND BARROW BANCSHARES
PRO FORMA CONDENSED COMBINED STATEMENTS OF
INCOME (UNAUDITED) . . . . . . . . . . . . . . . . . . . . 13
BARROW BANCSHARES
SELECTED FINANCIAL DATA
(UNAUDITED). . . . . . . . . . . . . . . . . . . . . . . . 14
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . 15
<PAGE>
BARROW BANCSHARES SHAREHOLDERS . . . . . . . . . . . . . . .
Principal Shareholders. . . . . . . . . . . . . . . . .
Shares of Management. . . . . . . . . . . . . . . . . .
MANAGEMENT OF FIRST NATIONAL BANCORP . . . . . . . . . . . .
THE PROPOSED REORGANIZATION. . . . . . . . . . . . . . . . .
The Agreement of Reorganization and Plan
of Merger . . . . . . . . . . . . . . . . . . . . . .
Description of the Reorganization . . . . . . . . . . .
Reasons for the Reorganization; Recommendation
of Board of Directors . . . . . . . . . . . . . . . .
Conversion of Barrow Bancshares Stock . . . . . . . . .
Fractional Shares . . . . . . . . . . . . . . . . . . .
Manner of Surrendering Barrow
Bancshares stock. . . . . . . . . . . . . . . . . . .
Issuance of First Bancorp Shares. . . . . . . . . . . .
Source of Funds . . . . . . . . . . . . . . . . . . . .
Shareholder Approval. . . . . . . . . . . . . . . . . .
Conditions of Certain Obligations of
Barrow Bancshares . . . . . . . . . . . . . . . . . .
Conditions of Certain Obligations of
First Bancorp . . . . . . . . . . . . . . . . . . . .
Conditions of Certain Obligations of Both
First Bancorp and Barrow Bancshares . . . . . . . . .
Accounting Treatment. . . . . . . . . . . . . . . . . .
EFFECT OF REORGANIZATION ON
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . .
Preemptive Rights . . . . . . . . . . . . . . . . . . .
Cumulative Voting Rights. . . . . . . . . . . . . . . .
Limitations of Liability of Directors;
Indemnification of Directors, Officers
and Employees . . . . . . . . . . . . . . . . . . . .
Dividend Restrictions . . . . . . . . . . . . . . . . .
Shareholder Voting Rights . . . . . . . . . . . . . . .
Right of First Bancorp and Barrow Bancshares
to Acquire their Own Shares . . . . . . . . . . . . .
Rights of Dissent and Appraisal . . . . . . . . . . . .
State Taxation of Shares of Stock . . . . . . . . . . .
Authorized Capital Stock. . . . . . . . . . . . . . . .
Certain Restrictions on Transfer. . . . . . . . . . . .
Restrictions on Stock of Both Companies . . . . . . . .
Commitments to Subsidiary Banks
by First Bancorp. . . . . . . . . . . . . . . . . . .
Federal Deposit Insurance Corporation
Improvement Act of 1991 . . . . . . . . . . . . . . .
Recent State Banking Legislation. . . . . . . . . . . .
RIGHTS OF DISSENTING
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . .
FEDERAL INCOME TAX
CONSEQUENCES . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF
STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . .
First Bancorp . . . . . . . . . . . . . . . . . . . . .
Barrow Bancshares . . . . . . . . . . . . . . . . . . .
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . .
LEGAL OPINION. . . . . . . . . . . . . . . . . . . . . . . .
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . .
OTHER BUSINESS. . . . . . . . . . . . . . . . . . . . . . .
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . .
BARROW BANCSHARES, INC.
AND SUBSIDIARY CONSOLIDATED FINANCIAL
STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . F-1
BARROW BANCSHARES MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1993,
1992, AND 1991 . . . . . . . . . . . . . . . . . . . . . . F-
BARROW BANCSHARES MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE THREE MONTH PERIODS ENDED
MARCH 31, 1994 AND 1993 . . . . . . . . . . . . . . . . . F-_
APPENDIX A -
Agreement of Reorganization and Plan
of Merger . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B -
Article 13 of the Georgia Business
Corporation Code relating to rights of
dissenting shareholders . . . . . . . . . . . . . . . . B-1
<PAGE>
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS OF
BARROW BANCSHARES, INC.
TO BE HELD __________, 1994
INTRODUCTION
This Proxy Statement is furnished in connection with THE
SOLICITATION BY THE BOARD OF DIRECTORS OF BARROW BANCSHARES, INC.
of proxies for use at the special meeting of the shareholders of
the company to be held at 10:00 A.M. on _______, 1994, at the
Barrow Bank & Trust Company, 209 North Broad Street, Winder,
Georgia. The approximate date of the mailing of this Proxy
Statement to shareholders was ________, 1994.
At the special meeting, shareholders will vote whether to
approve the Agreement of Reorganization and Plan of Merger (the
"Reorganization Plan"). A copy of the Reorganization Plan is
attached hereto as Appendix A. Under the Reorganization Plan,
Barrow Bancshares, Inc. ("Barrow Bancshares") will be merged with
and into First National Bancorp ("First Bancorp") with First
Bancorp being the survivor in the merger and with First Bancorp
thereby acquiring 100% of the outstanding shares of the common
stock of the Barrow Bank & Trust Company ("Bank"), Winder, Georgia.
In the reorganization, each outstanding share of common stock of
Barrow Bancshares will be converted by exchange into 1.37 shares of
common stock of First Bancorp. No fractional shares will be
issued, and, if necessary, a cash payment in lieu of fractional
shares will be made by First Bancorp.
As of April 15, 1994, Barrow Bancshares had authorized
2,000,000 shares of common stock, with 379,757 shares issued and
outstanding to approximately 420 shareholders. This constitutes
Barrow Bancshares' only class of stock under which shares are
issued and outstanding, with each share entitled to notice of and
to one vote at the Barrow Bancshares meeting or any adjournment
thereof. As of April 15, 1994, Barrow Bancshares also has
outstanding employee stock options to purchase 1,088 shares, all of
which are to be exercised prior to consummation of the proposed
merger. Only the Barrow Bancshares shareholders of record at the
close of business on ________, 1994, will be entitled to notice of
and to vote at the special meeting or any adjournment thereof.
<PAGE>
As of April 18, 1994, First Bancorp had authorized 30,000,000
shares of common stock, with 15,892,903 shares issued and
outstanding to approximately 7,000 shareholders (including
approximately 2,200 beneficial owners of shares held by nominees).
This constitutes First Bancorp's only class of stock, with each
share entitled to one vote, except in the case of election of
directors, in which event shareholders have cumulative voting
rights.
Any proxy given by shareholders of Barrow Bancshares pursuant
to this solicitation may be revoked at any time before it is voted
by so notifying the President of Barrow Bancshares in writing prior
to the meeting or by appearance at the meeting and requesting the
right to vote in person, without compliance with any other
formalities.
If the proxy is properly signed and returned by a Barrow
Bancshares shareholder and is not revoked, it will be voted at the
meeting in the manner specified therein. If a shareholder does not
specify how the proxy is to be voted, the proxy will be voted in
accordance with the recommendations of management in favor of the
Reorganization Plan.
Barrow Bancshares and First Bancorp will each pay its own
expenses incurred in connection with this solicitation, including
the fees and expenses of legal counsel and independent auditors and
the printing and filing costs incurred in connection with this
Proxy Statement. In addition to solicitation by mail, directors,
officers and regular employees of Barrow Bancshares may solicit
proxies by telephone, telegram or personal interview, for which
they will receive no compensation in addition to their regular
salaries.
The principal executive offices of Barrow Bancshares are
located at 209 North Broad Street, Winder, Georgia 30680, and the
telephone number at that address is (404) 867-5329. The principal
executive offices of First Bancorp are located at 303 Jesse Jewell
Parkway, Suite 700, Post Office Drawer 937, Gainesville, Georgia
30503, and the telephone number at that address is (404) 503-2000.
First Bancorp, a Georgia corporation, is a multi-bank holding
company formed in 1981 and subject to regulation by the Board of
Governors of the Federal Reserve System, the Georgia Department of
Banking and Finance and the Securities and Exchange Commission. At
the time of First Bancorp's formation, The First National Bank of
Gainesville ("FNBG") became a wholly-owned subsidiary of First
Bancorp. FNBG, which was formed in 1889 as a national banking
association, operates a full service banking, mortgage banking and
trust business in Hall County, Georgia, with a main office, six
full service branches and two stand-alone automated teller machine
locations. The First National Bank of Habersham ("FNBH") became a
wholly-owned subsidiary of First Bancorp in September, 1982. FNBH,
which was formed in 1909, operates a full service banking business
in Habersham County, Georgia, with a main office and two full
service branches. Granite City Bank ("GCB") became a wholly-owned
subsidiary of First Bancorp in August 1984. GCB, which was formed
in 1928, operates a full service banking business in Elbert County,
Georgia, with a main office and two full service branches. Bank of
Clayton ("BOC") became a wholly-owned subsidiary of First Bancorp
in October 1984. BOC, which was formed in 1904, operates a full
service banking business in Rabun County, Georgia, with a main
office and one full service branch. First National Bank of White
County ("FNBW") (formerly The Peoples Bank) in Cleveland, Georgia,
became a wholly-owned subsidiary of First Bancorp in September,
1985. FNBW, which was formed in 1941 (as The Peoples Bank),
operates a full service banking business in White County, Georgia,
with a main office in Cleveland, Georgia and one full service
branch in Helen, Georgia. In 1986, FNBW, formerly a Georgia state
banking institution, was converted to a national bank, and its name
was changed to First National Bank of White County. First National
Bank of Jackson County ("FNBJ") in Jefferson, Georgia, became a
wholly-owned subsidiary of First Bancorp in March 1986. FNBJ,
which was formed in 1908, operates a full service banking business
in Jackson County, Georgia with a main office in Jefferson, Georgia
and one full service branch in Commerce, Georgia. The Citizens
Bank of Toccoa, Georgia ("CBT") became a wholly-owned subsidiary of
First Bancorp in December, 1986. CBT, which was formed in 1951,
operates a full service banking business in Stephens County,
Georgia with a main office and one full service branch in Toccoa,
Georgia. The Bank of Banks County ("BBC") became a wholly-owned
subsidiary of First Bancorp in June, 1987. BBC, which was formed
in 1974, operates a full service banking business in Banks County,
Georgia with the main office in Homer, Georgia and two full-service
branches. First National Bank of Gilmer County ("FNBGC") (formerly
First State Bank of Gilmer County) became a wholly-owned subsidiary
of First Bancorp in December, 1987. FNBGC, which was formed in
1973 (as First State Bank of Gilmer County), operates a full
service banking business in Gilmer County, Georgia, with a main
office in Ellijay, Georgia and one limited-service branch in East
Ellijay, Georgia. On January 1, 1991, FNBGC, formerly a Georgia
state banking institution, was converted to a national bank, and
its name was changed to First National Bank of Gilmer County. On
April 12, 1989 The Peoples Bank of Forsyth County ("PBF") became a
wholly-owned subsidiary of First Bancorp. PBF is a state banking
association, formed in December, 1983, which operates a full-
service banking business in Forsyth County, Georgia, with a main
office and two full service branches. Pickens County Bank ("PCB")
became a wholly-owned subsidiary of First Bancorp on June 30, 1989.
PCB, which was formed in 1976, operates a full service banking
business in Pickens County, Georgia, with its main office located
in Jasper, Georgia. First National Bank of Paulding County
("FNBPC") became a wholly-owned subsidiary of First Bancorp on
January 30, 1992. FNBPC, which was formed in 1922, operates a full
service banking business in Paulding County, Georgia, with its main
office located in Dallas, Georgia and with four full service
branches, one limited service branch and one stand alone ATM
facility. The Citizens Bank, Ball Ground, Georgia ("CBBG") became
a wholly-owned subsidiary of First Bancorp on October 30, 1992.
CBBG, which was formed in 1926, operates a full service banking
business in Cherokee County, Georgia, with its main office located
in Ball Ground, Georgia and with three full service branches. The
Bank of Villa Rica ("VRB"), Villa Rica, Georgia, became a wholly-
owned subsidiary of First Bancorp on May 31, 1993. VRB, which was
formed in 1899, operates a full service banking business in Carroll
County, Georgia, with its only office located in Villa Rica,
Georgia. The Community Bank of Carrollton ("CBC") became a wholly-
owned subsidiary of First Bancorp on August 31, 1993. CBC, which
was formed in 1987, operates a full service banking business in
Carroll County, Georgia, with its only office located in
Carrollton, Georgia. The Commercial Bank, Douglasville, Georgia
("CBD") became a wholly-owned subsidiary of First Bancorp on
February 28, 1994. CBD, which was formed in 1928, operates a full
service banking business in Douglas County, with its main office in
Douglasville, Georgia and with four full service branches and four
limited service branches.
Barrow Bancshares was incorporated in 1989 and became a one
bank holding company shortly thereafter. Barrow Bancshares
currently holds all the shares of the Bank. The Bank is a state
banking association, formed in 1989, which operates a full-service
banking business in Barrow County, Georgia. The main office of the
Bank is located at 209 North Broad Street, Winder, Georgia, and the
building, containing approximately 14,500 square feet of useable
office and banking space, is owned by the Bank. The Bank has one
branch, which is located in Auburn, Georgia. From these offices in
Barrow County, the Bank carries on a full-service banking business
including making secured and unsecured loans to finance commercial
and personal transactions, accepting deposits, and providing
checking and savings accounts primarily for businesses and
residents of Barrow County. The Bank had approximately 32
employees (9 of whom were officers) as of December 31, 1993.
Recent Merger of First Bancorp
First Bancorp on February 28, 1994 acquired by merger with
Metro Bancorp, Inc. ("Metro") The Commercial Bank, Douglasville,
Georgia ("Commercial Bank"), through the exchange of .20 shares of
First Bancorp stock for each of 1,332,209 shares of Metro common
stock and $4.00 in cash for each of 62,418 shares of Metro common
stock. In the merger First Bancorp also paid $2,475,000 for all of
the Metro Series A preferred stock and $1,812,500 for all of the
Metro Series 1992 preferred stock. The Metro common shareholders
are also entitled to be paid additional consideration (not to
exceed $1.00 in value per Metro common share) for their stock in
the event certain classified loans are upgraded or collected. At
December 31, 1993, total assets of Commercial Bank were $140
million, and deposits were $133 million. Commercial Bank had net
loss of $1,639,000 for its fiscal year ended December 31, 1993.
SUMMARY OF REORGANIZATION
The following is a summary of certain features of the proposed
reorganization, which is qualified in its entirety by reference to
the Agreement of Reorganization and Plan of Merger (the
"Reorganization Plan") attached hereto as Appendix A and to the
other textual information and financial data set forth elsewhere in
this Proxy Statement.
Terms of the Agreement of Reorganization and Plan of Merger
Pursuant to the Reorganization Plan, Barrow Bancshares will be
merged with and into First Bancorp in a statutory merger, with
First Bancorp being the surviving corporation in the merger under
its charter and name. The Bank will thereafter be operated as a
wholly-owned subsidiary of First Bancorp, and Barrow Bancshares
will cease to exist. As a result of the merger, each outstanding
share of common stock of Barrow Bancshares (other than shares held
by dissenters) will be converted into 1.37 shares of common stock
of First Bancorp.
Business of the Parties to the Reorganization
First Bancorp currently is a multi-bank holding company with
its subsidiaries being The First National Bank of Gainesville,
First National Bank of Habersham, Granite City Bank in Elberton,
Georgia, Bank of Clayton, First National Bank of White County,
First National Bank of Jackson County, The Citizens Bank in Toccoa,
Georgia, Bank of Banks County, First National Bank of Gilmer
County, The Peoples Bank of Forsyth County, Pickens County Bank,
and First National Bank of Paulding County, the Citizens Bank, Ball
Ground, Georgia, the Bank of Villa Rica, the Community Bank of
Carrollton, and The Commercial Bank, Douglasville, Georgia.
First Bancorp is not engaged in any business other than normal
banking and mortgage banking services provided through its
subsidiaries.
Through its subsidiaries, First Bancorp operates a full-
service banking business in Hall County, Habersham County, Elbert
County, Rabun County, White County, Jackson County, Stephens
County, Banks County, Gilmer County, Forsyth County, Pickens
County, Paulding County, Cherokee County, Carroll County, and
Douglas County, Georgia. These First Bancorp subsidiaries provide
such customary banking services as checking and savings accounts,
various other types of time deposits, safe deposit facilities and
money transfers. They also finance commercial and personal
transactions by making secured and unsecured loans. Through The
First National Bank of Gainesville, First Bancorp performs
corporate, employee benefit and personal trust services and
provides other financial services to its customers, including
permanent residential mortgage loan financing. The First National
Bank of Gainesville engages in various mortgage banking activities
through a division called The Mortgage Source. The First National
Bank of Gainesville also provides data processing services for
banking applications to other banks in the area and services
mortgage loans which are owned by certain outside investors.
Barrow Bancshares is a bank holding company with one wholly-
owned subsidiary, the Bank. The Bank operates a full-service
banking business in Barrow County, Georgia. The Bank provides such
customary banking services as checking and savings accounts,
various other types of time deposits, safe deposit facilities and
money transfers. It also finances commercial and personal
transactions by making secured and unsecured loans and provides
other financial services to its customers.
Reasons for the Reorganization; Recommendation of Board of
Directors
The Board of Directors of Barrow Bancshares has approved the
Reorganization Plan and recommends that the shareholders of Barrow
Bancshares vote in favor of its approval.
In deciding to approve and recommend the Reorganization Plan,
the Board of Directors concluded that the Reorganization Plan
offered shareholders of Barrow Bancshares the opportunity to
exchange, at an equitable exchange ratio and on a tax-free basis,
their current equity investment for a more liquid investment in a
larger, more geographically diversified company, whose business
philosophy and financial and managerial resources should allow for
continued enhancement of shareholder value. See "THE PROPOSED
REORGANIZATION - Reasons for the Reorganization; Recommendation of
Board of Directors." No independent appraisal or opinion was
obtained by the Board of Directors of Barrow Bancshares in
determining or assessing the fairness of the exchange ratio
utilized under the Reorganization Plan.
Operations of Bank and First Bancorp after Reorganization
If the reorganization is consummated, Barrow Bancshares will
no longer exist as a separate corporation, and the Bank will become
a subsidiary of First Bancorp and will continue to operate as a
banking association and to engage in substantially the same
business and activities in which the Bank is presently engaged. It
is contemplated that, at the time of consummation, the officers and
directors of the Bank will remain those who are currently serving
except that a management representative of First Bancorp will be
appointed to serve as a director of the Bank.
If the Reorganization Plan is consummated, the merger would
have the following effect on the balance sheet, income, and shares
outstanding of First Bancorp. The information presented is
provided on a pro forma basis based upon the December 31, 1993,
consolidated financial statements of Barrow Bancshares and of First
Bancorp (including the acquisition of The Commercial Bank,
Douglasville, Georgia, which became a subsidiary on February 28,
1994). Total assets of First Bancorp would increase to
approximately $2.3 billion on a pro forma basis due to the addition
of the assets of Barrow Bancshares and its subsidiary; the Bank's
assets would be approximately 2.4% of the total assets of First
Bancorp after the merger. Total deposits of subsidiaries of First
Bancorp would increase to approximately $1.9 billion on a pro forma
basis due to the addition of the deposits of the Bank; the Bank's
deposits would be approximately 2.5% of the total deposits of First
Bancorp after the merger. The maximum number of First Bancorp
shares outstanding would increase to approximately 16,320,000
shares due to the projected 521,757 shares which would be issued to
Barrow Bancshares shareholders in the merger; the 521,757 shares
would be approximately 3.2% of outstanding shares of First Bancorp
after the merger. The projections of number of shares assume that
no Barrow Bancshares shareholders dissent from the merger and that
100% of the shares of Barrow Bancshares are exchanged for First
Bancorp common stock. See "THE PROPOSED REORGANIZATION."
It is First Bancorp's intent that the board of directors of
the Bank operate as a board mostly made up of directors who are
members of the local community. First Bancorp will continue to be
operated as a bank holding company under the Federal Bank Holding
Company Act of 1956, as amended, and the bank holding company laws
of Georgia, and as a reporting company under the Federal Securities
Exchange Act of 1934.
Regulatory Approval Required
The merger is subject to the approval of the Georgia
Department of Banking and Finance and the Board of Governors of the
Federal Reserve System. Applications for those approvals have been
filed with these agencies. As of this time, no formal action has
been taken by either of the agencies to approve or disapprove the
transactions. If preliminary approval is granted, final approval
will be subject to, among other things, the approval of the
shareholders of Barrow Bancshares.
Vote Required to Approve Merger
The affirmative vote of a majority (190,423 shares) of the
outstanding shares of Barrow Bancshares common stock entitled to
vote at the special shareholders meeting is required for approval
of the Reorganization Plan. Barrow Bancshares directors, executive
officers, and their affiliates own approximately 44.5% (169,459
shares) of the outstanding shares of Barrow Bancshares. The Board
of Directors of Barrow Bancshares has approved the Reorganization
Plan by the unanimous affirmative vote of the directors and
recommends that shareholders vote in favor of approval. Each
director has also agreed, in a letter agreement with First Bancorp,
to vote his shares in favor of approval of the Reorganization Plan.
The enclosed proxy, if properly executed, duly returned and not
revoked, will be voted in accordance with the instructions
contained therein. If no instructions are given, properly executed
and returned proxies will be voted in favor of the Reorganization
Plan.
No vote is required by the shareholders of First Bancorp to
carry out the merger; First Bancorp directors, executive officers
and their affiliates (in regard to which they do not disclaim
beneficial ownership of shares) own approximately 16% of the
outstanding stock of First Bancorp.
Rights of Dissenting Shareholders
If the reorganization is consummated, shareholders of Barrow
Bancshares who dissent are entitled under Article 13 of the Georgia
Business Corporation Code, and upon compliance with the notice
provisions referred to therein, to receive in cash the value of
their shares. Any shareholder desiring to dissent must deliver to
Barrow Bancshares prior to or at the special shareholders meeting
before the vote is taken a written notice that he intends to demand
payment of the fair value of his shares if the Reorganization Plan
is approved. In addition, a dissenting shareholder must abstain
from voting or must vote against the Reorganization Plan. If the
Reorganization Plan is approved, Barrow Bancshares must send a
written dissenters' notice to dissenting shareholders no later than
ten (10) days after the merger is effectuated. The dissenters'
notice must state where and when the payment demand required of
dissenting shareholders must be sent and where and when stock
certificates must be deposited. The date by which Barrow
Bancshares must receive the payment demand may not be fewer than
thirty (30) nor more than sixty (60) days after the date the
dissenters' notice is sent. A dissenting shareholder sent the
dissenters' notice must send Barrow Bancshares the written payment
demand and deposit his stock certificates with Barrow Bancshares in
accordance with the terms of the dissenters' notice. See "RIGHTS
OF DISSENTING SHAREHOLDERS."
Conversion of Barrow Bancshares Stock
As a result of the merger, each outstanding share of common
stock of Barrow Bancshares (other than shares held by dissenters)
will be converted into 1.37 shares of common stock of First
Bancorp. Fractional shares of First Bancorp common stock will not
be issued in the merger. Any Barrow Bancshares shareholder who
would be entitled to a fraction of a First Bancorp share shall
receive a cash payment in lieu of such fractional share in an
amount determined by multiplying the fraction of a share he would
otherwise be entitled to receive by $20.50.
Right of Termination of the Reorganization Plan
The obligations of First Bancorp to consummate and effect the
merger contemplated by the Reorganization Plan are subject to the
satisfaction of certain conditions. These conditions are fully
described in Paragraph 9 of the Reorganization Plan attached hereto
as Appendix A. The conditions include, but are not necessarily
limited to, certain representations of Barrow Bancshares being
true; no material adverse financial changes in Barrow Bancshares or
its subsidiary; and that the transaction will qualify to be
accounted for using the "pooling of interests" method of
accounting. See the Reorganization Plan for the full text of these
conditions. See also "THE PROPOSED REORGANIZATION - Conditions of
Certain Obligations of First Bancorp."
The obligations of Barrow Bancshares to consummate and effect
the merger contemplated by the Reorganization Plan are subject to
the satisfaction of certain conditions. These conditions are fully
described in Paragraph 8 of the Reorganization Plan attached hereto
as Appendix A. The conditions include, but are not necessarily
limited to, certain representations of First Bancorp being true; no
material adverse financial changes in First Bancorp; and receipt of
an opinion of Stewart, Melvin & House, attorneys-at-law, regarding
certain tax consequences of the reorganization. An additional
condition is that the average selling price of First Bancorp shares
over a fifteen (15) trading day period ending on the Friday
immediately preceding the scheduled date of the Barrow Bancshares
shareholders meeting not be less than $18.00. In the event of the
failure of the latter condition relating to the First Bancorp stock
price, the Board of Directors of Barrow Bancshares, at its option,
will have the right to attempt to renegotiate the exchange ratio in
the merger, to terminate the Reorganization Plan or to proceed with
the Reorganization Plan without modification. See Reorganization
Plan for the full text of these conditions. See also "THE PROPOSED
REORGANIZATION - Conditions of Certain Obligations of Barrow
Bancshares."
The obligations of First Bancorp and Barrow Bancshares under
the Reorganization Plan are, at the option of either of them,
subject to the satisfaction of certain conditions. These
conditions are fully described in Paragraph 10 of the
Reorganization Plan attached as Appendix A. The conditions
include, but are not necessarily limited to, Barrow Bancshares
shareholder approval; satisfaction of all laws, regulations and
directives; and the stock of First Bancorp being the subject of an
effective registration statement under the Federal Securities Act
of 1933. See "THE PROPOSED REORGANIZATION-Conditions of Certain
Obligations of Both First Bancorp and Barrow Bancshares."
The Reorganization Plan may be terminated based on the failure
of the conditions referred to in the Reorganization Plan, or the
failure to consummate the proposed reorganization due to no fault
of the terminating party by August 31, 1994.
Effect of Reorganization on Barrow Bancshares Shareholders
If the reorganization is consummated, the holders of the
common stock of Barrow Bancshares will become holders of First
Bancorp common stock through a stock exchange in a statutory merger
as outlined in the Reorganization Plan. For a comparison of rights
of the shareholders of Barrow Bancshares and First Bancorp and the
effect of receiving cash in the Reorganization, please refer to the
sections entitled "EFFECT OF REORGANIZATION ON SHAREHOLDERS" and
"FEDERAL INCOME TAX CONSEQUENCES."
Tax Consequences
Consummation of the merger is conditioned on Barrow Bancshares
and First Bancorp receiving an opinion from Stewart, Melvin &
House, general counsel to First Bancorp, to the effect that, under
applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), no gain or loss will be recognized for
Federal income tax purposes by Barrow Bancshares, First Bancorp, or
the shareholders of Barrow Bancshares who receive stock of First
Bancorp in connection with the proposed merger (except in
connection with any cash received in lieu of a fractional share)
and to the effect that the merger qualifies as a "reorganization"
under Section 368 of the Code.
Assuming the merger so qualifies for Federal income tax
purposes, (i) a Barrow Bancshares shareholder who receives only
shares of First Bancorp common stock (and cash in lieu of a
fractional share) in the merger will recognize no gain or loss
(except in connection with any such cash received in lieu of a
fractional share); and (ii) a Barrow Bancshares shareholder who
dissents and receives only cash in the merger will recognize gain
or loss with respect to Barrow Bancshares shares surrendered,
subject to the provisions and limitations of Section 302 of the
Code, including the constructive ownership rules of Section 318 of
the Code. Any gain recognized will be taxable either as a dividend
or as capital gain, as discussed herein. The election to exchange
shares for First Bancorp common stock or the election to dissent
and receive cash will affect the tax consequences of the merger to
a Barrow Bancshares shareholder. If the merger qualifies as a
Section 368 reorganization, neither First Bancorp nor Barrow
Bancshares will recognize gain or loss as a result of the merger.
EACH HOLDER OF BARROW BANCSHARES SHARES SHOULD CONSULT HIS OWN TAX
ADVISOR CONCERNING THE TAX CONSEQUENCES OF THE MERGER TO SUCH
HOLDER. See "FEDERAL INCOME TAX CONSEQUENCES."
Accounting Treatment
If the proposed reorganization is consummated, it is
contemplated that the acquisition will be accounted for by First
Bancorp using the "pooling of interests" method of accounting.
Expenses of Solicitation and Reorganization
First Bancorp and Barrow Bancshares will each pay its own
expenses in connection with this solicitation and the transactions
contemplated by the Reorganization Plan including all fees and
expenses of its respective legal counsel and independent auditors.
See the Reorganization Plan attached hereto as Appendix "A".
<PAGE>
PER SHARE INFORMATION
The following table sets forth at the dates and for the
periods indicated historical, pro forma, and equivalent per share
information with respect to book value, net income and cash
dividends declared on First Bancorp and Barrow Bancshares common
stock. The pro forma and equivalent per share information gives
effect to the proposed acquisition of Barrow Bancshares under the
pooling of interests method of accounting. In presenting pro forma
and equivalent per share amounts, First Bancorp data reflects one
share of Barrow Bancshares common stock as 1.37 shares of First
Bancorp common stock for each of the 380,845 shares (379,757 shares
presently outstanding and 1,088 shares to be issued pursuant to options)
of Barrow Bancshares common stock. The pro forma and equivalent share
information assumes that Barrow Bancshares shareholders exchange
100% of their shares for First Bancorp stock. Pro Forma and
equivalent share information is also included giving effect to
First Bancorp's 1994 acquisition of Metro Bancorp, Inc., accounted
for as a purchase. This table should be read in conjunction with
the financial statements of the organizations and the pro forma
condensed combined balance sheet and statements of income
information appearing elsewhere in this Proxy Statement or
incorporated herein by reference.
<TABLE>
<CAPTION>
Cash
Dividends
Book Value Net Income Declared
Per Share Per Share Per Share1
HISTORICAL:
First Bancorp
<S> <C> <C> <C>
At or for the fiscal year
ended December 31, 1993 $ 13.69 $ 1.69 $ 0.705
At or for the fiscal year
ended December 31, 1992 12.43 1.51 0.64
At or for the fiscal year
ended December 31, 1991 11.51 1.34 0.55
At or for the three-month
period ended March 31, 1994 13.71 0.40 0.19
[Table continued on Next Page]
</TABLE>
1 The primary source of funds of First Bancorp to pay
stockholder dividends is dividends from its subsidiary banks. The
subsidiary banks are subject to certain statutory and regulatory
restrictions regarding the payment of dividends. For a discussion
of such restrictions, see Note 14 to consolidated financial
statements on page 52 of First Bancorp's 1993 Annual Report to
Shareholders.
<PAGE>
<TABLE>
<CAPTION>
Cash
Dividends
Book Value Net Income Declared
Per Share Per Share Per Share1
HISTORICAL (CONT'D):
Barrow Bancshares
<S> <C> <C> <C>
At or for the fiscal year
ended December 31, 1993 $ 15.09 $ 2.04 $ 0.34
At or for the fiscal year
ended December 31, 1992 13.38 1.63 0.30
At or for the fiscal year
ended December 31, 1991 12.03 1.10 0.25
At or for the three-month
period ended March 31, 1994 15.52 0.43 --
PRO FORMA:
First Bancorp
At or for the fiscal year
ended December 31, 1993 $ 13.58 $ 1.68 N/A
At or for the fiscal year
ended December 31, 1992 12.31 1.49 N/A
At or for the fiscal year
ended December 31, 1991 11.39 1.32 N/A
At or for the three-month
period ended March 31, 1994 13.63 0.38 N/A
</TABLE>
[Table Continued on Next Page]
1 The primary source of funds of Barrow Bancshares to pay
stockholder dividends is dividends received from the Bank. The
Bank is subject to certain statutory and regulatory restrictions
regarding the payment of dividends. For a discussion of such
restrictions, see Note 10 to consolidated financial statements of
Barrow Bancshares on page F-20 of this Proxy Statement. See
"EFFECT OF REORGANIZATION ON SHAREHOLDERS - Dividends
Restrictions."
<PAGE>
<TABLE>
<CAPTION>
Cash
Dividends
Book Value Net Income Declared
Per Share Per Share Per Share
EQUIVALENT SHARE INFORMATION:
Barrow Bancshares2
<S> <C> <C> <C>
At or for the fiscal year
ended December 31, 1993 $ 18.77 $ 2.30 $ 0.97
At or for the fiscal year
ended December 31, 1992 17.06 2.04 0.88
At or for the fiscal year
ended December 31, 1991 15.80 1.81 0.75
At or for the three-month
period ended March 31, 1994 18.67 0.52 0.26
</TABLE>
2 Equivalent book value and net income per share data for
Barrow Bancshares were determined by multiplying pro forma amounts
for First Bancorp (including the effect of the 1994 acquisition of
Metro Bancorp, Inc., accounted for as a purchase) by the exchange
ratio of 1.37. Equivalent dividends per share data for Barrow
Bancshares were determined by multiplying historical amounts for
First Bancorp by the exchange ratio of 1.37.
<PAGE>
MARKET AND STOCK PRICE INFORMATION
First Bancorp
The following table sets forth the high and low bid quotations
in the over-the-counter market, where First Bancorp's common stock
is traded, for the period from January 1, 1992 to December 31,
1993. The quotations are based upon prices quoted electronically
through the National Association of Securities Dealers Automatic
Quotation System (NASDAQ) and represent quotations between dealers,
not actual transactions, and do not include retail mark-ups, mark-
downs or commissions. The information regarding First Bancorp has
been adjusted for a three-for-two stock split by First Bancorp
effected by the distribution on November 16, 1992 of a stock
dividend of one share of First Bancorp stock for each two shares
outstanding. As of April 18, 1994, there were approximately 4,800
holders of record of First Bancorp common stock, and possibly as
many as 7,000 beneficial owners if shareholders who own stock in
names of investment firms are considered.
<TABLE>
<CAPTION>
BID PRICES
High Low
<S> <C> <C>
________, 1994 $ -
1994
1st Quarter 21.75 20.25
1993
4th Quarter $ 20.50 $ 19.00
3rd Quarter $ 21.75 $ 19.75
2nd Quarter $ 21.00 $ 20.00
1st Quarter $ 21.50 $ 17.50
1992
4th Quarter $ 18.00 $ 16.83
3rd Quarter $ 17.50 $ 15.50
2nd Quarter $ 15.83 $ 15.53
1st Quarter $ 15.83 $ 15.50
</TABLE>
Barrow Bancshares
There is no established public trading market for the
common stock of Barrow Bancshares. Barrow Bancshares is aware of
isolated transactions in its common stock which have occurred
during the last two years in the $13.00 to $15.00 per share range.
However, there can be no assurance that these transactions
reflected bona fide, arm's-length negotiations. There may have
been other trades of which Barrow Bancshares is unaware. As of
April 15, 1994 there were approximately 420 Barrow Bancshares
shareholders.
<PAGE>
Comparison of Stock Prices
A Letter of Intent regarding the acquisition of Barrow
Bancshares by First Bancorp was signed on January 14, 1994, with
public announcement of the merger proposal being made on
January 19, 1994. As of the first business day preceding public
announcement, the closing price of First Bancorp stock was $21.00
per share. As previously stated, there is no established trading
market for Barrow Bancshares stock, but based on management's best
estimate the trading price for Barrow Bancshares stock on the date
preceding public announcement of the merger proposal would have
been $14.70. Provided below is a table comparing the market values
of First Bancorp stock and Barrow Bancshares stock as of the date
preceding public announcement of the proposed merger.
<TABLE>
<CAPTION>
Historical Historical
Market Market Value Value of Barrow
Value per per Barrow Bancshares Share
First Bancorp Bancshares on Equivalent per
Share Share Share Basis1
<S> <C> <C> <C>
As of January $ 21.00 $ 14.70 $ 28.77
19, 1994
</TABLE>
1 Equivalent per share value was determined by multiplying the
historical market value per First Bancorp share by the exchange
ratio of 1.37.
<PAGE>
<PAGE>
FIRST BANCORP AND BARROW BANCSHARES
Pro Forma Condensed Combined Balance Sheet Information
(Unaudited)
First Bancorp has entered into the Reorganization Plan with Barrow Bancshares
which, if consummated, would result in the Bank becoming a subsidiary of
First Bancorp. Under the Reorganization Plan, the 379,757 outstanding common
shares of Barrow Bancshares at March 31, 1994, plus 1,088 shares anticipated
to be issued under options, will be exchanged for 521,757 shares of First
Bancorp common stock. No cash except for fractional shares, will be offered
in the transaction which will be accounted for as a pooling-of-interest. The
following unaudited pro forma combined balance sheet information of First
Bancorp and subsidiaries at March 31, 1994 gives effect to the proposed
acquisition of Barrow Bancshares. The pro forma condensed combined balance
sheet should be read in conjunction with the notes to the pro forma financial
statements and the separate financial statements and related notes of the
respective entities appearing elsewhere or incorporated by reference in this
Proxy Statement.
<TABLE>
<CAPTION>
March 31, 1994
_________________________________________________
Barrow
First Barrow Pro Forma Pro Forma
Bancorp Bancshares Adjustments Combined
_________________________________________________
<S> <C> <C> <C> <C>
Cash and Due from
Banks $ 73,288 $ 3,201 - $ 76,489
Federal funds sold 50,890 1,870 - 52,760
Interest-bearing
deposits in other
financial institutions 53,915 - - 53,915
Investment securities
available for sale 460,156 205 - 460,361
Investment securities
held to maturity 141,333 12,006 - 153,339
Loans, net 1,330,521 35,088 - 1,365,610
Premises and equipment,
net 54,789 2,040 - 56,829
Other assets 81,057 570 - 81,626
__________________________________________________
Total Assets $2,245,949 $54,980 - $2,300,929
==================================================
Deposits $1,836,775 $48,752 - $1,885,527
Federal funds purchased,
securities sold under
agreement 89,830 - 89,830
Long-term debt and other
liabilities 101,803 402 - 102,205
__________________________________________________
Total Liabilities $2,028,408 $49,154 - $2,077,562
__________________________________________________
Common Stock $ 15,870 $ 1,925 -
522(A)
Common Stock, Adjusted (1,925)(A) 16,392
Additional paid-in
capital 61,591 2,204 1,337(A) 65,143
Retained earnings 141,670 1,763 - 143,433
Treasury stock - (66) 66(A) -
Net unrealized holding
gains (losses) on
investment securities
available for sale (1,590) - - (1,590)
Guarantee of indebtedness
of employee stock
ownership plan - - -
__________________________________________________
Total shareholders'
equity $ 217,541 $ 5,826 - $ 223,367
__________________________________________________
__________________________________________________
Total liabilities
and shareholders'
equity $2,245,949 $54,980 - $2,300,929
==================================================
</TABLE>
<PAGE>
FIRST BANCORP AND BARROW BANCSHARES
Pro-Forma Condensed Combined
Statements of Income (Unaudited)
The following unaudited pro forma condensed combined statements of
income of First Bancorp and subsidiaries for each of the years in
the three-year period ended December 31, 1991 and each of the three
month periods ended March 31, 1994 and 1993, give effect to its
proposed acquisition Barrow Bancshares for 521,757 shares of First
Bancorp common stock and the recently completed acquisition of Metro
Bancorp on February 28, 1994. The proposed acquisition of Barrow
Bancshares will be accounted for as a pooling-of-interests and hence
all periods presented reflect combined First Bancorp and Barrow
Bancshares data. The acquisition of Metro Bancorp was accounted for
using the purchase method of accounting. The following unaudited
pro-forma condensed statements of income of First Bancorp and
subsidiaries give effect to Bancorp as if Metro Bancorp was acquired
on January 1, 1994. The pro-forma condensed combined statements of
income should be read in conjunction with the notes to the pro-forma
financial statements and separate financial statements and related
notes of the respective entities appearing elsewhere or incorporated
herein by reference in this Proxy Statement.
<TABLE>
<CAPTION>
Three months ended March 31,
____________________________________________________________________________
1994 1993
___________________________________________________________________ ______
(amounts are presented in thousands, except per share data)
Metro Restated Barrow Pro-
First Metro Pro- First Banc- Forma
Bancorp Bancorp Forma Bancorp Shares Combined
<S> <C> <C> <C> <C> <C> <C> <C>
Interest
income $ 36,421 1,339 (15)(B) 37,745 1,032 38,777 37,158
Interest
expense 14,834 630 (65)(B) 15,399 398 15,797 16,013
Net
interest
income 21,587 709 50 22,346 634 22,980 21,145
Provision
for loan
losses 356 356 - 712 10 722 1,115
Other
income 6,833 450 - 7,283 63 7,346 7,291
[Table Continued on Next Page]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three months ended March 31,
____________________________________________________________________________
1994 1993
___________________________________________________________________ ______
(amounts are presented in thousands, except per share data)
Metro Restated Barrow Pro-
First Metro Pro- First Banc- Forma
Bancorp Bancorp Forma Bancorp Shares Combined
<S> <C> <C> <C> <C> <C> <C> <C>
Other
expenses 19,910 1,104 6(C) 21,054 464 21,518 18,966
34(D)
Income
before
income
taxes and
cumulative
effect of
accounting
change 8,154 (301) 10 7,863 223 8,806 8,355
Income tax
expense 1,871 - 15(E) 1,886 56 1,942 2,361
Income
before
cumulative
effect of
accounting
change 6,283 (301) (5) 5,977 167 6,144 5,994
Cumulative
effect of
accounting
change - - - - - - 160
Net income
(loss) $ 6,283 (301) (5) 5,977 167 6,144 6,154
Net income
per share based
on weighted
average shares
and common share
equivalents $0.38 0.39
Weighted average
number of outstanding
shares and common
share equivalents 16,199 15,826
</TABLE>
<PAGE>
FIRST BANCORP AND BARROW BANCSHARES
Pro-Forma Condensed Combined
Statements of Income (Unaudited)
(Continued)
<TABLE>
<CAPTION>
Years Ended December 31,
_______________________________________________________________________
1993 1992 1991
___________________________________________________________
(amounts are presented in thousands, except per share data)
<S> <C> <C> <C>
Interest
income $151,124 156,473 173,964
Interest
expense 62,921 74,954 99,467
Net
interest
income 88,203 81,519 74,497
Provision
for loan
losses 2,985 11,284 10,015
Other
income 31,877 30,224 26,305
Other
expenses 81,182 68,945 63,548
Income
before
income
taxes and
cumulative
effect of
accounting
change 35,913 31,514 27,239
Income tax
expense 9,419 8,108 6,669
[Table Continued on Next Page]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Years Ended December 31,
___________________________________________________________________________
1993 1992 1991
___________________________________________________________
(amounts are presented in thousands, except per share data)
<S> <C> <C> <C>
Income
before
cumulative
effect of
accounting
change 26,494 23,406 20,570
Cumulative
effect of
accounting
change 160 - -
Net income
(loss) $ 26,654 23,406 20,570
Net income
per share based
on weighted
average shares
and common share
equivalents 1.68 1.49 1.32
Weighted average
number of outstanding
shares and common
share equivalents 15,883 15,681 15,631
</TABLE>
<PAGE>
FIRST BANCORP AND BARROW BANCSHARES
Notes to Unaudited Pro Forma Condensed Combined Balance Sheet
Information and Statements of Income
The following notes describe the pro forma adjustments necessary
to reflect the proposed acquisition of Barrow Bancshares by First
Bancorp and the recently completed acquisition of Metro Bancorp
by First Bancorp as if the Metro Bancorp acquisition had taken
place on January 1, 1994. For purposes of the pro forma financial
information, it has been assumed that all of the 379,757 shares
at March 31, 1994, of Barrow Bancshares common stock, plus 1,088
shares anticipated to be issued under options, will be acquired by
First Bancorp for 521,757 shares of First Bancorp common stock.
The pro forma financial information does not include any additional
First Bancorp stock or cash which First Bancorp may be required to
distribute as additional consideration for the Metro Bancorp stock
acquired by First Bancorp, as set forth in the Reorganization Plan
between First Bancorp and Metro Bancorp.
(A) Reflects the acquisition of the 380,845 outstanding
shares (379,757 shares outstanding at March 31, 1994
and 1,088 shares anticipated to be issued under options)
of Barrow Bancshares by First Bancorp and the
elimination of the common and treasury stock of Barrow
Bancshares.
(B) Reflects the net amortization of the discounts applied to
Metro Bancorp's investment securities and premiums
applied to loans and deposits in adjusting them to
approximate fair value, over the estimated average terms
of the related investment securities, loans, and
deposits.
(C) Reflects the increase in depreciation expense for the
write-up of Metro Bancorp's premises and equipment over
the estimated average lives of the related assets.
(D) Reflects the amortization of the excess of the purchase
price over the net assets acquired of Metro Bancorp over
a 20 year period.
(E) Reflects the income tax effect on the adjustments in (B)
and (C).
<PAGE>
BARROW BANCSHARES
Selected Financial Data
(Unaudited)
(Amounts are presented in thousands, except per share data and ratios)
<TABLE>
<CAPTION>
Three months
ended March 31, Years ended December 31,
_________________ ________________________________________________
1994 1993 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest
income $ 634 592 2,641 2,269 1,809 1,405 1,191
Provision for
loan losses $ 10 0 11 103 145 62 99
Net income $ 167 154 732 576 384 216 232
Net income per
share $ 0 0 2.04 1.63 1.10 0.63 0.69
Cash dividends
declared per
share $ 0 0 0.34 0.30 0.25 -- 0.09
Total assets
(end of period) $54,980 48,266 54,285 47,398 43,180 34,913 30,041
Total long-term
debt (end of
period) $ 89 98 91 100 107 112 117
Total average
stockholders'
equity $ 5,687 4,682 5,031 4,359 3,942 3,652 3,390
Total average
assets $54,853 48,046 50,842 45,289 39,047 32,477 24,519
Ratios:
Net income to
average assets(1) 1.22% 1.28% 1.44% 1.27% 0.98% 0.67% 0.95%
Net income
to average
stockholders'
equity (1) 11.75% 13.16% 14.55% 13.21% 9.74% 5.91% 6.84%
Average
stockholders'
equity to
average assets(1) 9.65% 10.26% 9.90% 9.62% 10.10% 11.24% 13.83%
</TABLE>
(1) Ratios for the three months ended March 31, 1994 and 1993 are annualized.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Proxy
Statement the following documents and information heretofore filed
with the Securities and Exchange Commission:
1. First Bancorp's annual report on Form 10-K for the year
ended December 31, 1993, filed pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act").
2. First Bancorp's quarterly report on Form 10-Q for the
quarter ended March 31, 1994 filed pursuant to the
Exchange Act.
3. All other reports of First Bancorp filed with the
Commission after December 31, 1993 pursuant to Section
13(a) or 15 (d) of the Exchange Act.
4. Consolidated financial statements (including related
notes and report of independent auditors), set forth at
pages 37 through 56 of First Bancorp's 1993 Annual Report
to Shareholders.
5. Market, Stock Price and Dividend Information, Stock Price
Information, and Per Share Dividends and Net Income set
forth at page 35 of First Bancorp's 1993 Annual Report to
Shareholders.
6. Selected Financial Data set forth at page 20 of First
Bancorp's 1993 Annual Report to Shareholders.
7. Supplementary Financial Information set forth at Note 18
on page 56 of First Bancorp's 1993 Annual Report to
Shareholders.
8. Management's Discussion and Analysis of Financial
Condition and Results of Operations and Selected
Statistical Information set forth at pages 19 through 35
of First Bancorp's 1993 Annual Report to Shareholders.
9. Information concerning ownership of First Bancorp Stock
by certain beneficial owners and management set forth at
Item 12 of First Bancorp's annual report on Form 10-K for
the year ended December 31, 1993 and also set forth on
pages 7 through 9 of First Bancorp's 1994 Annual Meeting
Proxy Statement.
10. Information concerning First Bancorp directors and
executive officers set forth at Item 10 of First
Bancorp's annual report on Form 10-K for the year ended
December 31, 1993 and also set forth on pages 2 through
6 of First Bancorp's 1994 Annual Meeting Proxy Statement.
11. Information concerning First Bancorp executive officer
and director compensation set forth at Item 11 of First
Bancorp's annual report on Form 10-K for the year ended
December 31, 1993 and also set forth on pages 9 through
18 of First Bancorp's 1994 Annual Meeting Proxy
Statement.
12. Information concerning certain relationships and related
transactions relating to First Bancorp set forth at Item
13 of First Bancorp's annual report on Form 10-K for the
year ended December 31, 1993 and also set forth on page
19 of First Bancorp's 1994 Annual Meeting Proxy
Statement.
THIS PROXY STATEMENT IS ACCOMPANIED BY FIRST BANCORP'S 1993
ANNUAL REPORT TO SHAREHOLDERS, FIRST BANCORP'S 1994 ANNUAL MEETING
PROXY STATEMENT, AND FIRST BANCORP'S QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1994.
<PAGE>
BARROW BANCSHARES SHAREHOLDERS
Principal Shareholders
The following table sets forth the beneficial owners of Barrow
Bancshares's only outstanding class of common stock, $1.00 par value,
who to Barrow Bancshares' knowledge own beneficially more than five
percent (5%) of Barrow Bancshares' outstanding common stock as of
April 15, 1994. The table also indicates the number and percentage
of total outstanding shares of First Bancorp which such persons would
own if they receive 1.37 First Bancorp shares in the reorganization
in exchange for each share of their Barrow Bancshares stock, assuming
521,757 shares of First Bancorp common stock will be issued.
<TABLE>
<CAPTION>
BARROW BANCSHARES FIRST BANCORP STOCK
COMMON STOCK AS A RESULT OF MERGER
Amount & Amount &
Nature of Nature of
Beneficial Percent Beneficial Percent
Name and Address Ownership of Class Ownership of Class
<S> <C> <C> <C> <C>
William H. Whitley1
35 Oak Ridge
Winder, GA 30680 36,489 9.58% 49,989 .30%
W. Leeon Pruett2
P. O. Box 462
Winder, Georgia 30680 35,100 9.22 48,087 .29
</TABLE>
1 Included in the listing above for W. H. Whitley are 15,872
shares held jointly with his wife and 7,179 shares in his wife's name
to which he has shared voting and investment power.
2 Included in the listing above for W. Leeon Pruett are 15,000
shares held jointly with his wife.
<PAGE>
Shares of Management
The directors and officers of Barrow Bancshares and the common
stock of Barrow Bancshares beneficially owned by them as of April 15,
1994, are set forth in the following table. The table also indicates
the number and percentage of total outstanding shares of First Bancorp
which such persons would own if they receive 1.37 First Bancorp shares
in the reorganization in exchange for each share of their Barrow
Bancshares stock, assuming 521,757 shares of First Bancorp common stock
will be issued.
<TABLE>
<CAPTION>
BARROW BANCSHARES FIRST BANCORP STOCK
COMMON STOCK AS A RESULT OF MERGER
Number Number
of Shares of Shares
Name and Beneficially % of Beneficially % of
Office Owned Class Owned Class
_______________________________________________________________________
<S> <C> <C> <C> <C>
W. T. Dunahoo1
Director 12,500 3.28% 17,125 .10%
Dr. Hugh O. Hodges2
Director 14,474 3.80 19,829 .12
David Jackson
Director 7,500 1.97 10,275 .06
James M. Jett3
Director 16,785 4.41 22,995 .14
Ludger W. Lanthier,4
Jr., Director 19,014 4.99 26,049 .16
Thomas M. Limbach
Director 15,000 3.94 20,550 .13
W. Leeon Pruett5
Director, Chairman 35,100 9.22 48,087 .29
[TABLE CONTINUED ON NEXT PAGE]
</TABLE>
1Shares in the listing above for W. T. Dunahoo are all held
jointly with his wife to which he has shared voting and investment
power.
2Included in the listing above for Dr. Hugh O. Hodges are 486
shares in his wife's name to which he has shared voting and investment
power and 10,000 shares in Family Physicians Pension and Profit Sharing
Plans to which he has shared control.
3Shares in the listing above for James M. Jett are all held
jointly with his wife to which he shares voting and investment power.
4The shares listed above for Ludger W. Lanthier, Jr. include 3,014
shares owned jointly with his wife to which he has shared voting and
investment power.
5Included in the listing above for W. Leeon Pruett are 15,000
shares held jointly with his wife to which he has shared voting and
investment power.
<PAGE>
<TABLE>
<CAPTION>
BARROW BANCSHARES FIRST BANCORP STOCK
COMMON STOCK AS A RESULT OF MERGER
Number Number
of Shares of Shares
Name and Beneficially % of Beneficially % of
Office Owned Class Owned Class
<S> <C> <C> <C> <C>
W. Michael Strickland
Director 668 .18 915 .01
W.H. Whitley6
Director, President &
C.E.O. 36,489 9.58 49,989 .30
Tommy Glenn Thompson7
Executive Vice
President 11,929 3.13 16,342 .10
All Executive Officers
and Directors as a
group 169,459 44.50 232,158 1.41
</TABLE>
6 Included in the listing above for W. H. Whitley are 15,872 shares
held jointly with his wife and 7,179 shares in his wife's name to which
he has shared voting and investment power.
7 Included in this listing above for Tommy Glenn Thompson are 754
shares in his wife's name to which he has shared voting and investment
power.
MANAGEMENT OF FIRST NATIONAL BANCORP
Information, with respect to each person who will serve as a
director or an executive officer of First Bancorp after the
consummation of the Reorganization Plan, set forth in First Bancorp's
Annual Report on Form 10-K for the year ended December 31, 1993, and
also set forth in First Bancorp's 1994 Annual Meeting Proxy Statement,
is hereby incorporated herein by reference. A copy of First Bancorp's
1994 Annual Meeting Proxy Statement accompanies this Proxy Statement.
<PAGE>
THE PROPOSED REORGANIZATION
The Agreement of Reorganization and Plan of Merger
Reference is made to a copy of the Reorganization Plan set forth
in full as Appendix A hereto for a complete statement of terms of
the proposed reorganization. The statements contained herein with
respect to the Reorganization Plan are qualified in their entirety
by reference to Appendix A.
Description of the Reorganization
The Boards of Directors of First Bancorp and Barrow Bancshares
have determined that it is desirable for First Bancorp and Barrow
Bancshares to enter into the Reorganization Plan whereby First
Bancorp will acquire all of the outstanding shares of Barrow
Bancshares in exchange for First Bancorp shares in a statutory
merger.
If the Reorganization Plan is approved, each outstanding share
of common stock of Barrow Bancshares (other than shares held by
dissenters) will be converted by exchange into 1.37 shares of
common stock of First Bancorp.
Under the Reorganization Plan, First Bancorp has the right to
split its stock or to issue stock dividends prior to the
consummation of the reorganization with the approval of Barrow
Bancshares. The Reorganization Plan provides that in such event
the number of shares to be issued to Barrow Bancshares shareholders
will be adjusted proportionately to give the Barrow Bancshares
shareholders the benefit of any such stock split or stock dividend.
First Bancorp currently has no plans to declare any stock split or
stock dividend prior to consummation of the transactions
contemplated by the Reorganization Plan.
If the Reorganization Plan is approved by the shareholders of
Barrow Bancshares and by all regulatory authorities required to
approve the merger, then upon consummation of the reorganization,
Barrow Bancshares will be merged with and into First Bancorp, which
will be the surviving corporation. Such merger will be pursuant to
the applicable provisions of the Business Corporation Code of
Georgia (Official Code of Georgia Annotated, Section 14-2-1101 et
seq.). The Articles of Incorporation of First Bancorp will be the
Articles of Incorporation of the surviving corporation, and the
name of the surviving corporation will be "First National Bancorp."
The bylaws of First Bancorp will continue to be the bylaws of the
surviving corporation. The corporate existence of Barrow
Bancshares will end when it is merged into First Bancorp as the
surviving corporation.
It is contemplated that the established office and facilities
of the Bank immediately prior to the merger will remain the
established office and facilities of the Bank, and that the
officers, directors, and employees of the Bank will continue to be
the officers, directors, and employees of the Bank, except that it
is anticipated that a management representative of First Bancorp
will become a director of the Bank.
All rights, privileges, immunities, powers and franchises of
Barrow Bancshares and First Bancorp in and to every type of
property, real, personal and mixed, and chooses in action will be
vested in First Bancorp as the surviving corporation by virtue of
the merger without any deed or other transfer. All property, real,
personal and mixed, including all chooses in action, all debts due
on whatever account and all and every other interest or right
belonging to or due to each of the merging corporations including
all liens, mortgages, security interests and properties held as
collateral for debts owed such organizations will be vested in
First Bancorp as the surviving corporation without further act or
deed; the title to any real estate, or interest therein, vested in
either of the merging corporations will not revert or be in any way
impaired by reason of the merger; and First Bancorp as the
surviving corporation will, thenceforth, be responsible and liable
for all of the liabilities and obligations of Barrow Bancshares and
First Bancorp.
If the Reorganization Plan is approved and consummated, First
Bancorp will have seventeen subsidiary banks: First National Bank
of Jackson County; First National Bank of Habersham; The First
National Bank of Gainesville; Granite City Bank; Bank of Clayton;
First National Bank of White County; The Citizens Bank, Toccoa;
Bank of Banks County; First National Bank of Gilmer County; The
Peoples Bank of Forsyth County; Pickens County Bank; First National
Bank of Paulding County; Citizens Bank, Ball Ground, Georgia; Bank
of Villa Rica; The Community Bank of Carrollton; The Commercial
Bank, Douglasville, Georgia; and the Bank.
Reasons for the Reorganization; Recommendation of Board of
Directors
The Board of Directors of Barrow Bancshares has approved the
Reorganization Plan and recommends that the shareholders of Barrow
Bancshares vote in favor of its approval.
In deciding to approve and recommend the Reorganization Plan,
the Board of Directors considered a number of factors, including,
among others, the fairness of the exchange ratio, the opportunity
to continue their investment in the Bank through the investment in
First Bancorp, the enhancement of the geographic diversity of the
stock investment, the financial condition and performance of First
Bancorp, the tax-free nature of the exchange to the shareholders of
Barrow Bancshares, the market for First Bancorp stock, the local
focus of First Bancorp's management and business philosophy whereby
the Bank would maintain its local identity and be managed by the
current board of directors and management, and the additional
financial and management resources that would be available for
delivery of banking services in Barrow County. All factors were
considered important and no relative or specific weights were
assigned to them.
The Board of Directors of Barrow Bancshares believes that the
proposed exchange ratio of 1.37 shares of First Bancorp stock for
each share of Barrow Bancshares stock, which was negotiated at
arms-length, is fair to the shareholders of Barrow Bancshares. In
assessing the fairness of the exchange ratio, the Board examined
the financial condition and historical performance of First Bancorp
and Barrow Bancshares, the historical trading prices of First
Bancorp stock (and to the extent available, the historical trading
prices for Barrow Bancshares stock), the dividend payment history
of First Bancorp and Barrow Bancshares, and other information.
Based on that information and its analysis, the Board concluded
that the value of the exchange of 1.37 First Bancorp shares for
each share of outstanding common stock of Barrow Bancshares,
represented a fair multiple of the book value, market value and
earnings per share of Barrow Bancshares stock. The Board did not
obtain an independent appraisal or opinion concerning the fairness
of the exchange ratio. See "PER SHARE INFORMATION", "MARKET AND
STOCK PRICE" and other financial information appearing elsewhere in
this Proxy Statement.
The Board of Directors believes that the proposed reorganization
will offer the shareholders of Barrow Bancshares the opportunity to
continue their investment in the Bank through their investment in
First Bancorp, while enhancing the geographic diversity of that
investment. Shareholders of Barrow Bancshares currently own an
equity interest in a $54 million asset one-bank holding company
operating only in Barrow County. Following the proposed
reorganization, the shareholders will own an equity investment in
a $2.3 billion asset multi-bank holding company operating 17 banks
across North Georgia.
The proposed Reorganization Plan allows shareholders of Barrow
Bancshares to exchange their current equity interest for common
stock of First Bancorp without recognizing income for federal
income tax purposes. Income would be recognized upon a subsequent
sale of the First Bancorp stock received if the sales price exceeds
the shareholder's tax basis in the stock sold. See "FEDERAL INCOME
TAX CONSEQUENCES."
The Board of Directors viewed favorably the enhanced investment
liquidity offered by the proposed Reorganization Plan. Unlike
Barrow Bancshares stock, the common stock of First Bancorp is
traded in the over-the-counter market. Subject to certain
restrictions applicable to affiliates, the stock of First Bancorp
should generally be more readily marketable than the stock of
Barrow Bancshares. See "MARKET AND STOCK PRICE INFORMATION."
First Bancorp's business philosophy emphasizes local management
of its subsidiary banks under the direction of a board of directors
comprised primarily of local citizens. Following the proposed
reorganization the Bank anticipates that no significant changes
will be made to the management or board of directors of the Bank.
Banking decisions will continue to be made locally. Centralization
of certain non-retail functions and access to greater financial and
other resources of the First Bancorp organization should allow the
Bank to deliver more efficiently an even greater array of banking
services than currently offered.
THE BOARD OF DIRECTORS OF BARROW BANCSHARES RECOMMENDS THAT
BARROW BANCSHARES SHAREHOLDERS VOTE FOR THE REORGANIZATION PLAN.
Conversion of Barrow Bancshares Stock
Upon consummation of the reorganization, each of the outstanding
shares of common stock of Barrow Bancshares will be converted into
1.37 shares of fully paid and non-assessable common stock of First
Bancorp. Please refer to the preceding section entitled "Reasons
for the Reorganization" for a discussion of how stock values and
prices were arrived at for Barrow Bancshares and First Bancorp
stock. Of course, First Bancorp share prices are subject to market
fluctuations. See "MARKET AND STOCK PRICE INFORMATION".
Owners of five percent or more of Barrow Bancshares common stock
and the Barrow Bancshares directors and officers who are
shareholders of Barrow Bancshares will receive First Bancorp common
stock on the same basis as other shareholders of Barrow Bancshares.
Assuming consummation of the merger and receipt by Barrow
Bancshares shareholders of 1.37 First Bancorp shares for each share
of Barrow Bancshares stock, Barrow Bancshares shareholders would
receive a maximum of 521,757 First Bancorp shares, which would be
approximately 3.2% of the shares of First Bancorp common stock
outstanding immediately after consummation of the Reorganization
Plan. See "Description of the Reorganization."
IF THE REORGANIZATION PLAN IS APPROVED, EACH SHARE OF BARROW
BANCSHARES COMMON STOCK (OTHER THAN SHARES HELD BY DISSENTERS) WILL
BE CONVERTED INTO 1.37 SHARES OF FIRST BANCORP COMMON STOCK AS A
RESULT OF THE MERGER.
Fractional Shares
No fractional shares will be issued. Any shareholder who would
be entitled to a fraction of a First Bancorp share will receive a
cash payment in lieu of such fractional share in an amount
determined by multiplying the fraction of a share he would
otherwise be entitled to receive by $20.50.
Manner of Surrendering Barrow Bancshares Stock
After the effective date of the reorganization, each holder of
a certificate or certificates representing shares of common stock
of Barrow Bancshares (except holders who have filed notice of their
election to dissent from the merger in accordance with applicable
law) will surrender such certificates to First Bancorp, and will
receive in exchange a certificate representing the number of shares
of First Bancorp stock into which such Barrow Bancshares shares
have been converted at the conversion ratio set forth in this Proxy
Statement and in the Reorganization Plan and a First Bancorp check
in payment for any fractional share of First Bancorp stock. After
the effective date, until surrendered, each Barrow Bancshares
certificate, except certificates held by persons who have filed
notice of their election to dissent from the merger in accordance
with applicable law, shall be deemed for all corporate purposes to
evidence the number of whole shares of First Bancorp common stock
into which the Barrow Bancshares stock represented by such
certificate shall have been converted, and such certificates, as
between the holders and First Bancorp shall evidence the holder's
right to receive First Bancorp stock certificates in accordance
with the Reorganization Plan.
PLEASE NOTE, HOWEVER, THAT FIRST BANCORP STOCK CERTIFICATES WILL
NOT BE DISTRIBUTED TO BARROW BANCSHARES SHAREHOLDERS UNTIL THEIR
BARROW BANCSHARES CERTIFICATES HAVE BEEN SURRENDERED TO FIRST
BANCORP, AND DIVIDENDS OR OTHER DISTRIBUTIONS PAYABLE TO BARROW
BANCSHARES SHAREHOLDERS IN RESPECT OF FIRST BANCORP STOCK INTO
WHICH BARROW BANCSHARES STOCK HAS BEEN CONVERTED UNDER THE
REORGANIZATION PLAN WILL BE RETAINED, WITHOUT INTEREST, FOR THE
ACCOUNT OF SUCH SHAREHOLDERS AND WILL NOT BE PAID UNTIL THEIR
BARROW BANCSHARES CERTIFICATES HAVE BEEN SURRENDERED IN EXCHANGE
FOR FIRST BANCORP CERTIFICATES. NO INTEREST WILL BE PAYABLE ON
CASH PAYMENTS TO WHICH BARROW BANCSHARES SHAREHOLDERS MAY BE
ENTITLED, EITHER BEFORE OR AFTER THE EFFECTIVE DATE UNLESS SUCH
CASH PAYMENTS ARE WITHHELD DUE TO THE NEGLIGENCE OR BAD FAITH OF
FIRST BANCORP.
Issuance of First Bancorp Shares
Subject to the terms and conditions of the Reorganization Plan,
First Bancorp will issue to each Barrow Bancshares shareholder
after the effective date of the reorganization, upon surrender of
his Barrow Bancshares stock certificates to First Bancorp
accompanied by properly completed and signed endorsements and
transmittal instructions, certificates representing shares of First
Bancorp stock in accordance with the Reorganization Plan.
Source of Funds
Consummation of the transaction will be almost entirely a stock
for stock exchange with the only cash payments required being those
for fractional shares and those for dissenting shares, if any.
First Bancorp will pay these amounts from internal funds. Barrow
Bancshares currently has approximately $88,000.00 of long-term debt
outstanding, which debt is an obligation of the Bank and will not
be affected by the merger.
Shareholder Approval
Consummation of the Reorganization Plan requires the affirmative
vote of the holders of at least a majority of the outstanding
shares of common stock of Barrow Bancshares. Approval of the
shareholders of First Bancorp is not required.
<PAGE>
Conditions of Certain Obligations of Barrow Bancshares
Under the Reorganization Plan, the obligation of Barrow
Bancshares to consummate and effect the merger contemplated by the
Reorganization Plan is subject to the satisfaction of certain
conditions, including the following:
(a) There shall have been issued an opinion of Stewart,
Melvin & House, counsel to First Bancorp, to the effect that,
under applicable provisions of the Internal Revenue Code of
1986, as amended, no gain or loss will be recognized for
federal income tax purposes by Barrow Bancshares, First
Bancorp or the shareholders of Barrow Bancshares to the extent
that they receive only stock of First Bancorp in connection
with the proposed reorganization. The opinion will not state
that cash received in exchange for fractional shares or in the
exercise of dissenters' rights will be nontaxable.
(b) As of the date of the merger, there shall have occurred
no material adverse change in the financial condition or
results of operations of First Bancorp from that represented
in the consolidated unaudited financial statements of First
Bancorp as of December 31, 1993, which were provided to Barrow
Bancshares prior to execution of the Reorganization Plan, and
there shall not have occurred any loss or damage to any of
First Bancorp's properties or assets which would materially
impair its ability to conduct its business after the merger as
it is now being conducted.
(c) The representations of First Bancorp contained in the
Reorganization Plan shall be true in all material respects as
of the date of the merger.
(d) If the average selling price per share of First Bancorp
stock during the fifteen (15) trading day period ending on
the Friday immediately preceding the scheduled date of the
Barrow Bancshares shareholders meeting is less than $18.00, by
action of its Board of Directors, Barrow Bancshares shall have
the right, at its option,
(i) to terminate the Reorganization Plan;
(ii) to negotiate with First Bancorp for an
exchange ratio in the merger which will
result in a greater number of First
Bancorp shares being issued in the merger;
or
(iii) to proceed with the transactions
contemplated by the Reorganization Plan
in accordance with its terms.
In the event that the Barrow Bancshares Board elects either
(i) or (ii) above, Barrow Bancshares will give notice to First
Bancorp of the election prior to the scheduled date of the
meeting of Barrow Bancshares shareholders. If no such notice
is given by Barrow Bancshares, Barrow Bancshares will be
deemed to have elected (iii) above, the Reorganization Plan
will remain in full force and effect, and the special meeting
of Barrow Bancshares shareholders will proceed as scheduled.
If Barrow Bancshares elects to terminate the Reorganization
Plan pursuant to (i) above, the special meeting of Barrow
Bancshares shareholders will be canceled. If Barrow
Bancshares elects to attempt to negotiate new terms of the
merger pursuant to (ii) above, Barrow Bancshares and First
Bancorp will negotiate in good faith to reach a new mutually
satisfactory exchange ratio as soon as reasonably practicable
and the special meeting of the Barrow Bancshares shareholders
will be postponed and rescheduled at the earliest practicable
date if Barrow Bancshares and First Bancorp are able to come
to agreement on a new exchange ratio. If Barrow Bancshares
and First Bancorp are unable to agree upon a new exchange
ratio, then upon notice from either party to the other to that
effect, the Reorganization Plan will be terminated. If Barrow
Bancshares and First Bancorp are able to agree to a new
exchange ratio, the Reorganization Plan will promptly be
amended, and the parties will proceed with the transactions
contemplated by the Reorganization Plan pursuant to the terms
of the amended agreement, subject to the approval of the
shareholders of Barrow Bancshares and applicable regulatory
authorities and subject to any other conditions of the
Reorganization Plan having been met or waived. If Barrow
Bancshares and First Bancorp are able to agree to a new
exchange ratio, the parties to the Reorganization Plan will
file all necessary or appropriate amendments to regulatory
filings, will prepare appropriate amendments to proxy
materials to be sent to shareholders of Barrow Bancshares
together with notice to the shareholders of the new date of
the shareholders meeting, and will promptly take all other
action which may be necessary to comply with all applicable
laws, rules and regulations. AS NOTED ABOVE, THE BOARD OF
DIRECTORS OF BARROW BANCSHARES HAS THE DISCRETION TO GO
FORWARD WITH THE REORGANIZATION PLAN WITHOUT AMENDMENT EVEN IF
THE AVERAGE SELLING PRICE OF FIRST BANCORP SHARES FOR THE
PERIOD HAS FALLEN BELOW $18.00.
Conditions of Certain Obligations of First Bancorp
Under the Reorganization Plan, the obligation of First Bancorp
to consummate and effect the merger contemplated by the
Reorganization Plan is subject to the satisfaction of certain
conditions, including the following:
(a) The representations of Barrow Bancshares contained in the
Reorganization Plan shall be true in all material respects as
of the date thereof and as of the time of the merger.
(b) Barrow Bancshares shall have performed all agreements and
covenants required by the Reorganization Plan to be performed
by it at or prior to the merger.
(c) As of the proposed date of the merger, there shall have
occurred no material adverse change in the financial condition
or results of operations of Barrow Bancshares and the Bank,
taken as a whole, from that presented in the unaudited
financial statements of Barrow Bancshares and the Bank as of
December 31, 1993, which were provided to First Bancorp prior
to execution of the Reorganization Plan, and there shall not
have occurred any loss or damage to any of their properties or
assets, taken as a whole, which would materially adversely
affect their financial condition, taken as a whole, or impair
their ability to conduct their businesses, taken as a whole,
after the merger as now being conducted.
(d) First Bancorp shall have received an opinion of KPMG Peat
Marwick, in form and substance reasonably satisfactory to the
Board of Directors of First Bancorp to the effect that the
transactions contemplated by the Reorganization Plan may be
accounted for by First Bancorp using the "pooling of
interests" method of accounting.
Conditions of Certain Obligations of Both First Bancorp and Barrow
Bancshares
Under the Reorganization Plan, the obligations of First
Bancorp and Barrow Bancshares to consummate the merger contemplated
by the Reorganization Plan are, at the option of either of them,
subject to the following conditions having been satisfied:
(a) The holders of at least a majority of the shares of
issued and outstanding stock of Barrow Bancshares shall
have voted in favor of the merger at the special meeting
of the shareholders duly called and held with respect
thereto pursuant to proper notice of such meeting
accompanied by a proper proxy statement.
(b) Any and all orders, permits, approvals, licenses or
qualifications from authorities administering federal
laws or laws of any state or other political subdivision
having jurisdiction required for the consummation of the
transaction contemplated by the Reorganization Plan shall
have been obtained. The Reorganization Plan and the sale
or exchange of the shares therein contemplated must be in
compliance with regulations and directives of all
governmental agencies having jurisdiction.
(c) At the time of mailing the Proxy Statements to
shareholders of Barrow Bancshares and thereafter through
the closing date, the First Bancorp stock to be received
by Barrow Bancshares shareholders upon the conversion of
their stock shall be the subject of an effective
registration statement under the Federal Securities Act
of 1933 and shall be duly registered or qualified under
the securities laws of all states in which registration
or qualification is required, or must be exempt
therefrom.
Accounting Treatment
First Bancorp will account for the merger as a pooling-of-
interests transaction in accordance with generally accepted
accounting principles, which, among other things, requires that the
number of shares of Barrow Bancshares stock acquired for cash
pursuant to the exercise of dissenters' rights or in lieu of
fractional shares not exceed 10% of the outstanding shares of
Barrow Bancshares stock. Under this accounting treatment, assets
and liabilities of Barrow Bancshares would be added to those of
First Bancorp at their recorded book values, and the shareholders'
equity of the two companies would be combined in First Bancorp's
consolidated balance sheet. Financial statements of First Bancorp
issued after consummation of the merger will be restated to reflect
the consolidated operations of First Bancorp and Barrow Bancshares
as if the merger had taken place prior to the periods covered by
the financial statements.
EFFECT OF REORGANIZATION ON SHAREHOLDERS
If the proposed reorganization is consummated, the holders of
the common stock of Barrow Bancshares will receive common stock of
First Bancorp, in exchange for their Barrow Bancshares shares. As
has been the case with Barrow Bancshares stock, the rights of
holders of common stock of First Bancorp will be governed by the
provisions of the Georgia Business Corporation Code and Federal and
State laws regulating bank holding companies.
Upon conversion of a shareholder's Barrow Bancshares stock
into First Bancorp stock, the shareholder's percentage of equity
ownership in First Bancorp will be substantially less than his or
her present percentage of equity ownership in Barrow Bancshares.
Shareholders will receive dividend distributions in the form of
cash, stock or other property on each share of Barrow Bancshares
stock converted into shares of First Bancorp stock if, when and in
the form that such dividends are declared by the Board of Directors
of First Bancorp.
After the merger, the former shareholders of Barrow Bancshares
will have no continuing interest in the assets or business of the
Bank except as shareholders of First Bancorp.
Preemptive Rights
First Bancorp Common Stock
Shareholders of First Bancorp do not have the preemptive right
to subscribe for additional shares in proportion to the number of
shares of capital stock owned at the time any increase in
outstanding stock is authorized. Consequently, an offering of
First Bancorp stock, after the reorganization, could result in an
existing shareholder's percentage of ownership being reduced by an
increase in the number of outstanding shares. In addition, shares
of First Bancorp can be issued by authorization of the Board of
Directors of First Bancorp without any approval of the
shareholders, except in certain instances prescribed by the Georgia
Business Corporation Code.
<PAGE>
Barrow Bancshares Common Stock
Like First Bancorp shareholders, shareholders of Barrow
Bancshares do not have the preemptive right to subscribe for
additional shares at the time any increase in outstanding stock is
authorized. Shares of Barrow Bancshares can be issued by
authorization of the Board of Directors of Barrow Bancshares
without any approval of the shareholders, except in certain
instances prescribed by the Georgia Business Corporation Code.
Cumulative Voting Rights
First Bancorp Common Stock
The shareholders of First Bancorp have cumulative voting
rights in the election of directors, that is, the right to vote the
number of shares owned by them for as many persons as there are
directors to be elected, or to accumulate such shares and give one
candidate as many votes as the number of directors to be elected
multiplied by the number of their shares shall equal, or to
distribute them on the same principle among as many candidates as
they shall desire. The purpose of cumulative voting is to allow
minority shareholders a better chance to elect representation on
the Board of Directors which is closer in proportion to their stock
ownership. The voting upon other transactions by the shareholders
of First Bancorp is on the basis of one vote for each share without
any cumulative voting rights.
Barrow Bancshares Common Stock
Shareholders of Barrow Bancshares have no cumulative voting
rights in the election of directors; for all purposes each holder
of record of shares of common stock of Barrow Bancshares is
entitled to one vote for each share of common stock outstanding in
his name on the books of the corporation.
Limitations of Liability of Directors; Indemnification of
Directors, Officers and Employees
First Bancorp
The bylaws of First Bancorp provide for the indemnification of
directors and officers of the corporation. The provisions allow
indemnification of such persons for reasonable expenses and damages
incurred in connection with any action, suit or proceeding, civil
or criminal, to which they shall be made a party by reason of their
being or having been a director, officer or employee. However, no
person shall be indemnified or reimbursed in relation to any matter
in such action, suit or proceeding as to which he shall be finally
adjudged to have been guilty of or liable for gross negligence,
willful misconduct, or criminal acts. First Bancorp's bylaws also
provide for the purchase of insurance for the purpose of such
indemnification. First Bancorp currently provides this insurance
coverage. These indemnification provisions are in addition to
indemnification otherwise provided under the Georgia Business
Corporation Code (O.C.G.A. Section 14-2-851), which is hereinafter
described. The Georgia Business Corporation Code (O.C.G.A. Section
14-2-851), provides that an officer or director may be indemnified
(1) in the case of actions by third persons, if he acted in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in regard to criminal actions,
he had no reasonable cause to believe that his conduct was unlawful
and (2) in the case of actions by or on behalf of the corporation,
if he acted in good faith and in a manner he reasonably believed to
be in the best interests of the corporation unless he has been
adjudged liable for negligence or misconduct in the performance of
his duty to the corporation and the court in which such action is
brought has not determined that he should, nevertheless, be
indemnified.
In addition to the above-described indemnification provisions,
the articles of incorporation of First Bancorp have provisions
limiting the liability of directors.
In response to increasing concern over liability exposure of
corporate officers, directors and employees, the Georgia
Legislature, in 1987, following a trend begun by Delaware and
followed by several other states, passed legislation broadening the
ability of corporations to relieve corporate directors of exposure
to liability.
As permitted by Georgia law, the articles of incorporation of
First Bancorp were amended in 1990 to limit the standards of
conduct required of directors by providing that no director shall
be personally liable to the corporation or its shareholders for
monetary damages for breach of duty of care or other duty as a
director; provided, however, that this provision does not eliminate
or limit the liability of a director:
(a) For any appropriation, in violation of his duties, of any
business opportunity of the corporation;
(b) For acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(c) For the types of liabilities set forth in Official Code
of Georgia Annotated Section 14-2-832 (relating primarily to
improper dividends or other distributions by the corporation);
(d) For any transaction from which the director derives an
improper personal benefit; or
(e) For any liability or expenses related to any action or
omission by a director occurring prior to the adoption of the
amendment.
Further, the right of First Bancorp or its shareholders to seek
injunctive or other equitable relief not involving monetary damages
is not limited by the above provisions.
<PAGE>
Barrow Bancshares
The bylaws of Barrow Bancshares provide for the
indemnification of directors and officers of the corporation. The
provisions allow indemnification of such persons for any liability
and expenses (including attorney's fees) incurred in connection
with any action, suit or proceeding, civil or criminal, to which
they shall be made a party by reason of their being or having been
a director, officer or employee, if such persons 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 had no
reasonable cause to believe their conduct was unlawful and if it is
determined that such persons are entitled to indemnification by the
Board of Directors of Barrow Bancshares or the shareholders of
Barrow Bancshares; provided, however, no such person may be
indemnified in connection with a proceeding in which such person
was adjudged liable to the corporation or in connection with any
proceeding in which he or she was adjudged liable on the basis that
personal benefit was improperly received by him. Barrow
Bancshares' bylaws also provide for the purchase of insurance for
the purpose of such indemnification. Barrow Bancshares currently
provides this insurance coverage.
Expenses incurred in defending any action, suit or proceeding
referred to above may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding as authorized
by the Board of Directors in the specific case upon receipt of a
written affirmation of that person's good faith belief that he or
she has met the standards of conduct set forth in O.C.G.A. Section
14-2-851(a) and receipt of an undertaking by or on behalf of the
director, trustee, officer, employee or agent to repay any such
advances if it is ultimately determined that he or she is not
entitled to indemnification under this part, which undertaking must
be their unlimited general obligation of that person but need not
be secured and may be accepted without reference to the financial
ability of that person to make repayment.
In addition, under the Georgia Business Corporation Code
Barrow Bancshares is permitted to indemnify by specific action by
its board of directors, a director or officer made a party to a
proceeding because he is or was a director or officer against
liability incurred in the proceeding if he acted in a manner he
believed in good faith to be in or not opposed to the best
interests of Barrow Bancshares and, in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was
unlawful. Barrow Bancshares is not permitted to indemnify a
director or officer in connection with a proceeding by or in the
right of Barrow Bancshares in which the director or officer was
adjudged liable to Barrow Bancshares, or in connection with any
other proceeding in which he was adjudged liable on the basis that
personal benefit was improperly received by him. Indemnification
in connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in
connection with the proceeding.
<PAGE>
In addition, to the above-described indemnification
provisions, the articles of incorporation of Barrow Bancshares have
provisions limiting the liability of directors. The provisions are
the same as those contained in the articles of incorporation of
First Bancorp, which are discussed above in the immediately
preceding subsection.
The bylaws of the Bank provide that any person may be
indemnified or reimbursed by the Bank for reasonable expenses
actually incurred in connection with any action, suit or
proceeding, civil or criminal, to which he shall be made a party by
reason of the fact that he is or was a director, trustee, officer,
employee, or agent of the Bank, or that he is or was serving, at
the request of the Bank, as a director, trustee, officer, employee
or agent of another firm, corporation trust or other organization
or enterprise. However, no person may be so indemnified or
reimbursed in relation to any matter in such action, suit or
proceeding as to which he is finally adjudged to have been guilty
of or liable for gross negligence, willful misconduct or criminal
acts in the performance of his duties to the Bank,or to such other
firm, corporation, trust, organization, or enterprise. In
addition, no person may be so indemnified or reimbursed in relation
to any matter in such action, suit, or proceeding which has been
the subject of a compromise settlement, except with the approval of
(i) a court of competent jurisdiction, (ii) the holders of record
of a majority of the outstanding shares of capital stock of the
Bank, or (iii) a majority of the members of the board of directors
then holding office, excluding the votes of any directors who are
parties to the same or substantially the same action, suit or
proceeding.
Expenses incurred in defending any action, suit or proceeding
referred to above may be paid by the Bank in advance of the final
disposition of such action, suit or proceeding as authorized by the
board of directors in the specific case upon receipt of an
undertaking by or on behalf of the director, trustee, officer,
employee or agent to repay such amount unless it shall ultimately
be determined that he is entitled to be indemnified by the Bank as
provided above.
The Bank's bylaws also provide that the corporation, upon the
affirmative vote of a majority of its board of directors, may
purchase and maintain insurance on behalf of any person who is or
was a director, trustee, employee or agent of the Bank or is or was
serving, at the request of the Bank, as a director, trustee,
officer, employee, or agent of another firm, corporation, trust or
other organization or enterprise, against liability asserted
against him and incurred by him in such capacity or arising out of
his status as such, whether or not the Bank would have the power to
indemnify him against such liability under the provisions of the
bylaws. The Bank currently provides this insurance coverage.
The Bank's bylaws provide that the foregoing rights of
indemnification or reimbursement shall not be exclusive of other
rights to which the persons referred to above, or their heirs,
executors, or administrators, may be entitled as a matter of law
and the Bank may indemnify such persons to the extent permitted by
the Financial Institutions Code of Georgia and the Georgia Business
Corporation Code, as such laws may be amended from time to time.
In addition, to the above-described indemnification
provisions, the articles of incorporation of the Bank have
provisions limiting the liability of directors. The provisions are
the same as those contained in the articles of incorporation of
First Bancorp, which are discussed above in the immediately
preceding subsection.
Dividend Restrictions
First Bancorp
Under the Georgia Business Corporation Code, dividends may be
declared and distributed by First Bancorp so long as:
(a) such distribution would not render First Bancorp
unable to pay its debts as they become due in the usual
course of business; or
(b) such distribution would not cause First Bancorp's
total assets to be less than the sum of its total
liabilities plus the amount that would be needed, if
First Bancorp were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are
superior to those receiving the distribution (no
preferential rights presently exist).
The source for payment of dividends by First Bancorp generally
is dividends to First Bancorp from its bank subsidiaries.
Dividends to First Bancorp from its bank subsidiaries are subject
to applicable banking law dividend restrictions, which in the case
of its national bank subsidiaries, would include those restrictions
applicable to national banks. Upon receipt of dividends from its
bank subsidiaries, First Bancorp would then decide upon the
issuance of dividends to its shareholders (including those
shareholders receiving First Bancorp stock pursuant to the
Reorganization Plan) based upon the earnings of all of its
subsidiaries and based upon any decision by the First Bancorp Board
that certain earnings should be retained at the holding company
level.
Barrow Bancshares
Being a Georgia corporation, dividend restrictions applicable
to Barrow Bancshares are the same as those applicable to First
Bancorp. The source of payment of dividends by Barrow Bancshares
generally is dividends from the Bank, which are restricted by
statute and regulation. See Note 10 of the consolidated financial
statements of Barrow Bancshares on page F-20 of this Proxy
Statement. However, assuming the proposed Reorganization Plan is
approved, the merger would affect dividend payments of the Bank in
that allowable dividends declared by its board from time to time
would be paid to First Bancorp along with dividends of First
Bancorp's other subsidiaries which declare dividends.
Shareholder Voting Rights
First Bancorp
A majority vote of the shareholders is required under the
Georgia Business Corporation Code for the approval of certain
mergers and consolidations, for the sale, exchange or lease of
substantially all the assets, or for the dissolution of First
Bancorp. A majority vote of the shareholders is also required to
increase the amount of authorized capital stock of First Bancorp.
However, First Bancorp may enter into merger transactions without
shareholder approval pursuant to Section 14-2-1103 of the Georgia
Business Corporation Code if (i) First Bancorp is the surviving
corporation, (ii) the merger will not effect any change in or
amendment to its articles of incorporation, (iii) each share of
First Bancorp outstanding immediately prior to the effectiveness of
the merger is to remain outstanding and unchanged after the merger,
and (iv) either no new shares of First Bancorp are to be issued or
any new shares of First Bancorp to be issued under the plan of
merger may be issued by the Board of Directors without further
authorization by the shareholders of First Bancorp.
Shares of First Bancorp stock may be issued by authorization
of the Board of Directors of First Bancorp without any approval of
the shareholders, except in certain instances prescribed by the
Georgia Business Corporation Code. Therefore, in most cases the
Board of Directors will be able to issue shares of First Bancorp
stock for any lawful corporate purpose without the approval of the
shareholders, and the shareholders will not have any preemptive
right to acquire such shares in proportion to their ownership
interest in First Bancorp.
As stated above, shareholders of First Bancorp have cumulative
voting rights in the election of directors; otherwise each share is
entitled to one vote on all corporate matters.
Barrow Bancshares
Like First Bancorp, a majority vote of the shareholders is
required under the Business Corporation Code of Georgia for the
sale, exchange or lease of substantially all the assets, to
increase the amount of authorized capital of Barrow Bancshares, or
for the approval of certain mergers, a consolidation or a voluntary
dissolution of Barrow Bancshares.
Like First Bancorp, shares of Barrow Bancshares stock may be
issued by authorization of the Board of Directors of Barrow
Bancshares without any approval of its shareholders, except in
certain instances prescribed by the Georgia Business Corporation
Code.
Like First Bancorp, the articles of incorporation of Barrow
Bancshares may be amended, altered, or repealed from time to time
to the extent, and in the manner prescribed by the laws of the
State of Georgia.
Unlike First Bancorp, Barrow Bancshares shareholders do not
have cumulative voting rights in the election of directors. Each
share of Barrow Bancshares stock is entitled to one vote on all
corporate matters requiring shareholder vote.
Right of First Bancorp and Barrow Bancshares to Acquire their Own
Shares
Under the Georgia Business Corporation Code, both First
Bancorp and Barrow Bancshares have the right to acquire their own
shares by gift, bequest, merger, consolidation, or exchange of its
shares, and by purchase if purchased out of unreserved and
unrestricted earned surplus available therefor.
Rights of Dissent and Appraisal
Under the Georgia Business Corporation Code, the shareholders
of First Bancorp have the right to dissent from certain (but not
all) mergers or consolidations to which First Bancorp is a party,
any sale or other disposition of all or substantially all of the
property and assets of First Bancorp, any amendment of the Articles
of Incorporation which would generally adversely affect a
shareholder regarding his voting rights, dividend rights and rights
upon redemption or liquidation, and any amendment of the Articles
of Incorporation which would result in the payment of cash for a
shareholder's shares, such as a redemption of a class of stock.
The right of dissent of a shareholder of First Bancorp who votes
against any of the above actions and otherwise complies with
applicable legal requirements entitles him to be paid the fair
value of his shares in cash. First Bancorp is required to make an
offer to the dissenting shareholder of what the corporation
believes is the fair value of his shares. If agreement cannot be
reached as to the price to be paid, then First Bancorp is required
to petition the Superior Court of the county where First Bancorp is
located for a determination of the fair value of the shares. The
determination by the Superior Court is final.
Under the Georgia Business Corporation Code, Barrow Bancshares
shareholders have the right to dissent from the same corporate
events as described above regarding First Bancorp. The dissent
process is described in the section titled "RIGHTS OF DISSENTING
SHAREHOLDERS." This dissent process for Barrow Bancshares
shareholders is the same as the dissent process for shareholders of
First Bancorp.
Certain merger transactions, such as that contemplated by the
Reorganization Plan, do not require the consent of shareholders of
First Bancorp and do not trigger dissenters rights of First Bancorp
shareholders.
State Taxation of Shares of Stock
Shares of common stock of Barrow Bancshares, being stock of a
corporation organized under the laws of Georgia, are generally
exempt from personal property taxes in Georgia; shares of common
stock of First Bancorp will generally be exempt from such taxes in
Georgia for the same reason. Under the laws of other
jurisdictions, the shares of common stock of Barrow Bancshares
and/or First Bancorp may not be so exempt. It is suggested that in
connection with voting on the proposed Reorganization Plan,
shareholders may wish to determine whether their status under local
law or state law as applicable to them will be changed.
Authorized Capital Stock
The authorized capital stock of First Bancorp consists of
30,000,000 shares of common stock, $1.00 par value per share, of
which 15,892,903 shares were issued and outstanding as of April 18,
1994. The authorized capital stock of Barrow Bancshares consists
of 2,000,000 shares of authorized common stock, $5.00 par value per
share, with 379,682 shares issued and outstanding as of April 15,
1994 and outstanding employee stock options to purchase 1,163
shares, all of which are to be exercised prior to consummation of
the proposed merger.
Certain Restrictions on Transfer
First Bancorp
The First Bancorp stock which is being offered to Barrow
Bancshares shareholders pursuant to the Reorganization Plan is
being registered pursuant to the Federal Securities Act of 1933,
subject to Securities and Exchange Commission Rule 145 (Reg.
Section 230.145). Subparagraphs (c) and (d) of Rule 145 provide
limitations on the ability of certain persons to re-offer or re-
sell shares acquired in a business combination transaction unless
those securities are subsequently registered under the Securities
Act of 1933 or an exemption from registration is available for the
proposed offer and sale. Under Rule 145(c) any person who is an
"affiliate" of Barrow Bancshares at the time the Reorganization
Plan is submitted to the shareholders who offers the securities of
First Bancorp which are acquired pursuant to the Reorganization
Plan will be deemed to be an underwriter within the meaning of
Section 2(11) of the Securities Act of 1933 and, therefore,
subject to the registration provisions of the 1933 Act. However,
notwithstanding the provisions of Rule 145(c), Rule 145(d) provides
that such person shall not be deemed to be an underwriter if (1)
the securities are sold by such person in accordance with the
provisions of paragraphs (c), (e), (f) and (g) of Rule 144; or (2)
such person is not an affiliate of the issuer of the securities
(First Bancorp), has been the beneficial owner of the securities
for at least two (2) years and meets the requirements of paragraph
(c) of Rule 144; or (3) such person has not been an affiliate of
the issuer of the securities for at least three (3) months and has
been the beneficial owner of the securities for at least three (3)
years. Beneficial ownership of the First Bancorp stock will be
deemed to commence upon acquisition of the shares pursuant to the
Reorganization Plan (not at the time of acquisition of the Barrow
Bancshares stock) and is subject to certain tolling provisions.
Apart from Rule 145, Rule 144 more generally provides that
shares held by "affiliates" of an issuer (First Bancorp) will be
subject to resale restrictions as provided in Rule 144.
An "affiliate" of a corporation is a person that directly or
indirectly controls or is controlled by or is under common control
with the corporation. The term "control" does not require majority
voting control of common stock but rather means the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, by contracts or otherwise. Subject
to the above guidelines, the determination of who is an "affiliate"
is inherently a factual question determined on a case-by-case
basis. Any shareholder holding a significant block of shares, any
director of a company or its subsidiaries or any officer engaged in
significant policy-making functions may be deemed an affiliate
under these rules and should seek the advice of counsel on this
issue prior to engaging in a transaction potentially subject to
these rules.
Paragraphs (c), (e), (f) and (g) of Rule 144 provide the
following conditions to the ability of an affiliate to resell his
shares:
(1) Rule 144(c) requires that there shall be available
adequate current public information with respect to
First Bancorp (First Bancorp has agreed in the
Reorganization Plan that this requirement will be
met);
(2) The amount of the securities sold within any three
(3) month period may not exceed the greater of (i)
one percent (1%) of the shares of Bancorp
outstanding or (ii) the average weekly reported
volume of trading in such securities on all
national exchanges and/or reported through the
automated quotation system of a registered
securities association during the four (4) calendar
weeks preceding the filing of the notice required
by Rule 144 to be filed or, if no such notice is
required, the date of the order to execute the
transaction by the broker or market maker; (As a
result of the reorganization, no Barrow Bancshares
shareholder will receive more than 1% of the
outstanding shares of First Bancorp common stock
following the proposed reorganization); and
(3) The securities must be sold in "brokers'
transactions" within the meaning of Section 4(4) of
the Securities Act of 1933, or in transactions
directly with the "market maker" as that term is
defined in Section 3(a)(38) of the Securities
Exchange Act of 1934, and the person selling the
securities must not solicit or arrange for the
solicitation of orders to buy the securities or
make any payment in connection with the offer or
sale of the securities to any person other than the
broker who executes the order to sell the
securities.
<PAGE>
Restrictions on Stock of Both Companies
The Securities and Exchange Commission has stated that risk
sharing is an essential element in meeting the criteria for pooling
of interests accounting treatment, which is the treatment to be
applied to the merger contemplated by the Reorganization Plan.
Generally, the Commission has stated that it will consider that the
risk sharing will have occurred if no "affiliate" of either company
in a business combination sells or in any other way reduces his
risk relative to any shares of common stock beginning thirty (30)
days prior to the date of consummation of the Reorganization Plan
through such time as financial results covering at least thirty
(30) days of post-merger combined operations have been published.
Thus, no affiliate of First Bancorp of Barrow Bancshares will be
able to sell, transfer or dispose of First Bancorp shares or Barrow
Bancshares shares during the period generally beginning thirty (30)
days prior to the date of consummation of the Reorganization Plan
and ending on the date on which financial results covering at least
thirty (30) days of post-merger combined operations have been
published as described above. Pursuant to the Reorganization Plan,
First Bancorp has agreed to publish such post-merger financial data
within thirty (30) days following the end of the first full
calendar month following consummation of the reorganization.
Commitments to Subsidiary Banks by First Bancorp
Under the Federal Reserve's policy, First Bancorp is expected
to act as a source of financial strength to its subsidiary banks
and to commit resources to support its subsidiary banks in
circumstances when it might not do so absent such policy. In
addition, any capital loans by First Bancorp to any of its
subsidiary banks would also be subordinate in right of payment to
depositors and to certain other indebtedness of such bank.
As a result of the enactment of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), a
depository institution insured by the FDIC can be held liable for
any loss incurred by, or reasonably expected to be incurred by, the
FDIC after August 9, 1989 in connection with (i) the default of a
commonly controlled, FDIC-insured depository institution or (ii)
any assistance provided by the FDIC to a commonly controlled, FDIC-
insured depository institution in danger of default. "Default" is
defined generally as appointment of a conservator or receiver, and
"in danger of default" is defined generally as the existence of
certain conditions indicating that a "default" is likely to occur
in the absence of regulatory assistance. All of First Bancorp's
subsidiary depository institutions are FDIC-insured depository
institutions within the meaning of FIRREA.
Federal Deposit Insurance Corporation Improvement Act of 1991
Section 302 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (FDICIA) requires the FDIC to establish a
risk-based assessment system by July 1, 1993 and to implement it by
January 1, 1994. The FDIC has chosen to implement a risk-based
assessment system effective January 1, 1993, which provides the
FDIC with the opportunity to evaluate the impact and effectiveness
of various components of the risk-based system on a continuous
basis.
Under the final rule, the risk-based assessment system is
designed as a matrix system where each insured depository
institution pays an assessment rate based on the combination of its
capital and supervisory condition. An institution is assigned to
one of three capital categories based on its call report filed for
the period ending six months prior to each semiannual period
(semiannual periods being every January 1 and July 1). The capital
categories are defined in the same way as the capital categories
established to determine if prompt corrective action is needed to
improve the capital of a depository institution.
Institutions are also assigned to one of three supervisory
categories based on supervisory evaluations by the institution's
primary federal regulator and supplemented by other information
including call report data and debt ratings.
FDICIA also provides for the payment of deposit insurance
premiums based on the specific risk category to which each bank is
assigned.
Recent State Banking Legislation
The State of Georgia has allowed regional interstate banking
by permitting banking organizations in certain Southeastern states
to acquire Georgia banking organizations, if Georgia banking
organizations were allowed to acquire banking organizations in
their states (commonly known as the "Southeast Compact"). As a
result of the Southeast Compact, banking organizations in other
Southeastern states have entered the Georgia market through
acquisitions of many Georgia institutions. Those acquisitions were
subject to federal and Georgia approval. Banking organizations
outside of the Southeast Compact were prevented from acquiring
banking institutions in Georgia, and Georgia institutions were
prevented from acquiring banks outside of this region. On March
16, 1994, the Georgia General Assembly passed legislation effective
July 1995 to allow interstate banking, by removing the Southeast
Compact barrier effective July 1995.
RIGHTS OF DISSENTING SHAREHOLDERS
Pursuant to Article 13 of the Georgia Business Corporation
Code, any holder of record of Barrow Bancshares common stock who
objects to the proposed reorganization and who fully complies with
all of the provisions of Article 13 (but not otherwise) shall be
entitled to demand and receive payment of an amount equal to the
"fair value" of all (but not less than all) of his shares of Barrow
Bancshares common stock if the proposed reorganization is
consummated.
<PAGE>
Any shareholder of Barrow Bancshares desiring to receive
payment for the "fair value" of his common stock:
(1) must deliver to Barrow Bancshares prior to the
special meeting of shareholders of Barrow
Bancshares at which the vote will be taken on
the Reorganization Plan, or at the meeting but
before the vote is taken, written notice that
he intends to demand payment of the "fair
value" of his shares if the Reorganization
Plan is effectuated; and
(2) must abstain from voting or must vote against
the Reorganization Plan; and
(3) must, within the period set forth in the
dissenters' notice to him from Barrow
Bancshares of the approval of the
Reorganization Plan, send written payment
demand to Barrow Bancshares and deposit his
stock certificates with Barrow Bancshares in
accordance with the terms of the dissenters'
notice.
A VOTE AGAINST THE REORGANIZATION PLAN ALONE WILL NOT
CONSTITUTE THE SEPARATE WRITTEN NOTICE AND SEPARATE WRITTEN PAYMENT
DEMAND REFERRED TO IN THE PRECEDING PARAGRAPH; ALL THREE CONDITIONS
SET FORTH IN THE PRECEDING PARAGRAPH MUST BE SEPARATELY COMPLIED
WITH. FAILURE TO COMPLY WITH ANY ONE OF THE CONDITIONS WILL CAUSE
A DISSENTING SHAREHOLDER TO LOSE HIS DISSENTER'S RIGHTS.
Any notice required to be given to Barrow Bancshares must be
forwarded to Barrow Bancshares, Inc., 209 North Broad Street, P.O.
Box 724, Winder, Georgia 30680, Attention: President.
If the Reorganization Plan is approved and effectuated, Barrow
Bancshares will promptly send by registered mail to each
shareholder who shall have complied with conditions (1) and (2)
above, written dissenters' notice addressed to the shareholder at
such address as he has furnished Barrow Bancshares in writing, or,
if none, at the shareholder's address as it appears on the records
of Barrow Bancshares. The dissenters' notice will be sent no later
than ten days after the merger is effectuated and will:
(1) state where the payment demand required of the
dissenting shareholder must be sent and where
and when Barrow Bancshares stock certificates
must be deposited; and
(2) set a date by which Barrow Bancshares must
receive the payment demand, which date may not
be fewer than 30 nor more than 60 days after
the date the dissenters' notice is delivered
to the dissenting shareholder; and
(3) be accompanied by a copy of Article 13
(entitled "Dissenters' Rights") of the Georgia
Business Corporation Code.
A shareholder sent the dissenters' notice must send the
written payment demand and deposit his Barrow Bancshares stock
certificates in accordance with the terms of the dissenters'
notice.
If conditions (1), (2) and (3) above required of a dissenting
shareholder are fully complied with, Barrow Bancshares is required
to make a written offer, within ten (10) days after the receipt of
a payment demand, or within ten (10) days after the consummation of
the transaction, whichever is later, to the dissenting shareholder
to purchase all of his shares of Barrow Bancshares common stock at
a price which Barrow Bancshares estimates to be the fair value of
his shares, plus accrued interest.
A dissenter may notify Barrow Bancshares in writing of his own
estimate of the fair value of his shares and amount of interest
due, and demand payment of his estimate of the fair value of his
shares and interest due, if the dissenter believes that the amount
offered by Barrow Bancshares is less than the fair value of his
shares or that the interest due is incorrectly calculated. A
dissenter waives his right to make this demand for payment unless
he notifies Barrow Bancshares of his demand in writing within 30
days after Barrow Bancshares offered payment for his shares.
If Barrow Bancshares and any dissenting shareholder are unable
to agree on the fair value of the shares within sixty (60) days
after receipt of the payment demand by Barrow Bancshares, the
corporation must file a petition for a special proceeding in the
Superior Court of Barrow County, Georgia to determine the fair
value of the shares and accrued interest. If Barrow Bancshares
does not commence the proceeding within the 60 day period, it must
pay each dissenter whose demand remains unsettled the amount
demanded.
THE FOREGOING DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF
THE PROVISIONS OF ARTICLE 13 OF THE GEORGIA BUSINESS CORPORATION
CODE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THAT ARTICLE,
WHICH IS REPRODUCED IN FULL AS APPENDIX "B" TO THIS PROXY
STATEMENT.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the merger is conditioned on First Bancorp and
Barrow Bancshares receiving an opinion from Stewart, Melvin &
House, general counsel to First Bancorp, that the merger will be a
"reorganization" within the meaning of Section 368 of the Internal
Revenue Code of 1986 (the "Code"), and as to certain other tax
consequences of the reorganization. Such opinion shall be in form
and substance satisfactory to the Boards of Directors of Barrow
Bancshares and First Bancorp.
Assuming that the merger will qualify as a reorganization
within the meaning of Section 368(a)(1)(A) of the Code, it will
have the following federal income tax consequences:
1. A Barrow Bancshares shareholder who receives shares of
First Bancorp common stock (and, if applicable, cash in
lieu of a fractional share of First Bancorp common stock)
on the conversion of his Barrow Bancshares shares in the
merger will recognize no gain or loss, except in
connection with any cash received in lieu of a fractional
share of First Bancorp common stock. The tax basis of the
shares of First Bancorp stock received upon the conversion
will be the same as the tax basis of the Barrow Bancshares
shares converted in the merger, except for possible
adjustment due to any cash received in lieu of a
fractional share. If the Barrow Bancshares shares were
held as capital assets, the holding period of the shares
of First Bancorp common stock received, will include the
holding period of the Barrow Bancshares shares converted.
2. A Barrow Bancshares shareholder who dissents and receives
cash as a result of the merger will recognize gain or loss
measured by the difference between the amount of the cash
received and the tax basis of Barrow Bancshares shares
converted, except as described below in Paragraph 5 in the
case of dividend treatment. Such gain or loss will, in
general, be treated as capital gain or loss if the Barrow
Bancshares shares were held as capital assets. However,
a Barrow Bancshares shareholder must take into account the
effects of Sections 302 and 318 of the Code in determining
the consequences of the transaction if he receives only
cash. The effects of Sections 302 and 318 are discussed
in Paragraph 5 below.
3. If a Barrow Bancshares shareholder receives only shares of
First Bancorp common stock and cash in lieu of a
fractional share of First Bancorp common stock in the
merger, the cash will, in general, be treated as received
in exchange for such fractional share and not as a
dividend. Gain or loss recognized as a result of that
exchange will be capital gain or loss if the fractional
share would have been a capital asset if it had been
received by the Barrow Bancshares shareholder.
4. Neither Barrow Bancshares nor First Bancorp will recognize
gain or loss as a result of the merger.
5. Any Barrow Bancshares shareholder who dissents and
receives cash in the merger for the Barrow Bancshares
shares which he actually owns, but who is considered under
the constructive ownership rules of Section 318 of the
Code to own other Barrow Bancshares shares that are
converted into shares of First Bancorp common stock in the
merger, must take into account the provisions of Section
302 of the Code, particularly, the "80% test" described
below, to determine if the distribution of cash in
redemption of his Barrow Bancshares shares as a result of
the merger is to be taxed as a dividend. Under Section
318 of the Code, a shareholder is, for example, considered
to own shares that are directly or indirectly owned by
certain members of his family or by certain related
entities and to own shares with respect to which he holds
options. In general, under the 80% test of Section 302,
the receipt of cash in redemption of Barrow Bancshares
shares as a result of the merger will not be treated as a
dividend for federal income tax purposes if, (1)
immediately after the merger, the holder's percentage
ownership (considering shares owned actually and
constructively under Section 318 of the Code) of the total
number of shares of First Bancorp common stock issued to
holders of Barrow Bancshares shares in the merger is less
than 80% of such shareholder's percentage ownership of
Barrow Bancshares shares immediately before the merger and
(2) if the holder owns immediately after the merger
(actually and constructively under Section 318 of the
Code) less than 50% of the total number of shares of First
Bancorp common stock issued to holders of Barrow
Bancshares shares in the merger. Hence, the receipt of
cash in redemption of stock from a Barrow Bancshares
shareholder who qualifies under the 80% test will be
treated as received in a sale or exchange which results in
capital gain or loss if the Barrow Bancshares shares were
held as capital assets. A Barrow Bancshares shareholder
may fail to qualify under the 80% test described above as
a result of making an election to dissent and receive cash
for all his Barrow Bancshares shares actually owned, if an
election to receive First Bancorp stock is made by other
persons whose Barrow Bancshares shares are considered to
be constructively owned by the shareholder under Section
318 of the Code. Even if a Barrow Bancshares shareholder
fails to meet the 80% test described above, other
exceptions from dividend treatment may be available under
Section 302 of the Code, depending on the facts and
circumstances of the particular case. In the event of
dividend treatment, a taxpayer's basis in his shares does
not reduce the amount of ordinary income attributable to
the transaction.
6. In the case of a corporate shareholder of Barrow
Bancshares, the tax consequences described in Paragraphs
1 through 5 are generally applicable, except that if a
corporate shareholder dissents and receives only cash as
a result of the merger and is treated as having received
a dividend, there is a dividends-received deduction
available for 70% or 80% (depending upon the percentage of
Barrow Bancshares shares owned by the corporate
shareholder) of the dividend amount.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY. EACH HOLDER OF BARROW BANCSHARES
SHARES SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES OF THE MERGER TO SUCH HOLDER, INCLUDING
THE EFFECT OF STATE AND LOCAL TAXES.
DESCRIPTION OF STOCK
First Bancorp
Under First Bancorp's articles of incorporation, it is
authorized to issue up to 30,000,000 shares of common stock, $1.00
par value per share. As of April 18, 1994, there were 15,892,903
shares of common stock issued and outstanding, all of which shares
were duly authorized, validly issued, fully paid and non-
assessable. The shares of common stock which will be issued in
connection with the Reorganization Plan will be validly issued,
fully paid and non-assessable.
Holders of First Bancorp common stock are entitled to
dividends when, as, and if declared by the corporation's Board of
Directors out of funds legally available therefor.
All voting rights are vested in the holders of First Bancorp
common stock, each share being entitled to one vote except in the
election of directors. The shares of common stock of First Bancorp
have cumulative voting rights in the election of directors. The
cumulative voting rights for the election of directors of First
Bancorp were derived from the articles of incorporation and bylaws
of The First National Bank of Gainesville, when First Bancorp was
formed as a one-bank holding company. Cumulative voting rights
have the effect of giving minority interests a greater chance to
elect a director to the board of directors of First Bancorp and
might help preclude a takeover by spreading control of the board
among a greater number of shareholders. There are no other
provisions in First Bancorp's Articles of Incorporation or bylaws
which have an anti-takeover effect.
In the event of liquidation, the holders of the common stock
of First Bancorp will be entitled to receive pro rata any assets
distributable to shareholders in respect of shares held by them.
Holders of the common stock of First Bancorp do not have
preemptive rights to subscribe for additional shares of common
stock issued by First Bancorp. First Bancorp shareholders voted to
eliminate preemptive rights at the annual shareholders' meeting on
March 13, 1985. The common stock has no redemption, sinking fund
or right of conversion provisions applicable thereto.
For additional information see "EFFECT OF REORGANIZATION ON
SHAREHOLDERS."
Barrow Bancshares
Barrow Bancshares is authorized by its articles of
incorporation to issue up to 2,000,000 shares of common stock,
$5.00 par value per share. As of April 15, 1994, there were
379,757 shares validly issued and outstanding, and there were
outstanding employee stock options to purchase 1,088 shares, which
options are to be exercised prior to consummation of the proposed
merger. The outstanding shares of common stock are fully paid and
non-assessable.
Holders of Barrow Bancshares common stock are entitled to
dividends when, as, and if, declared by the corporation's Board of
Directors out of funds legally available therefor.
All voting rights are vested in the holders of Barrow
Bancshares common stock, each share being entitled to one vote. The
shares do not have cumulative voting rights in the election of
directors.
In the event of liquidation, the holders of the common stock
of Barrow Bancshares will be entitled to receive pro rata any
assets distributable to shareholders in respect of shares held by
them.
Holders of common stock of Barrow Bancshares do not have
preemptive rights to subscribe for additional shares of common
stock issued by Barrow Bancshares.
There are no provisions in Barrow Bancshares's articles of
incorporation or bylaws which are intended to have an anti-
takeover effect.
The common stock has no redemption, sinking fund or right of
conversion provisions applicable thereto.
For additional information see "EFFECT OF REORGANIZATION ON
SHAREHOLDERS."
EXPERTS
The consolidated financial statements of First National
Bancorp and subsidiaries as of December 31, 1993 and 1992, and for
each of the years in the three-year period ended December 31, 1993,
incorporated by reference herein, have been so incorporated by
reference herein in reliance upon the report of KPMG Peat Marwick,
independent certified public accountants incorporated by reference
herein, and upon the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements of Barrow Bancshares,
Inc. and subsidiary as of December 31, 1993 and 1992, and for each
of the years in the three-year period ended December 31, 1993,
included herein and elsewhere in the registration statement have
been included herein and elsewhere in the registration statement in
reliance upon the report of Mauldin & Jenkins, independent
auditors, appearing elsewhere herein, and upon the authority of
said firm as experts in accounting and auditing.
LEGAL OPINION
The legality of the shares of common stock of First Bancorp to
be issued in the reorganization and certain other legal matters in
connection with the reorganization will be passed upon by Stewart,
Melvin & Frost, Attorneys-at-Law, Sixth Floor, Hunt Tower, 200 Main
Street, Gainesville, Georgia 30501. W. Woodrow Stewart is a
partner in said firm and is a stockholder and director of First
Bancorp and a director of The First National Bank of Gainesville.
J. Kenneth Nix is also a partner in said firm and is a stockholder
and director of First Bancorp and a director of First National Bank
of White County. In addition, certain partners and associates of
Stewart, Melvin & Frost, including those attorneys in the firm who
have participated in this matter, own substantial shares in First
Bancorp. Stewart, Melvin & Frost serves as general counsel to
First Bancorp, The First National Bank of Gainesville and First
National Bank of White County.
INDEMNIFICATION
The bylaws of First Bancorp provide that any person may be
indemnified or reimbursed by First Bancorp for reasonable expenses
actually incurred in connection with any action, suit, or
proceeding, civil or criminal, to which he shall be made a party by
reason of his being or having been a director, officer, or employee
of First Bancorp or of any firm, corporation, or organization which
he served in any such capacity at the request of First Bancorp.
However, under the bylaws no person may be indemnified or
reimbursed in relation to any matter in such action, suit, or
proceedings as to which he is finally adjudged to have been guilty
of or liable for gross negligence, willful misconduct or criminal
acts in the performance of his duties for First Bancorp. In
addition, the by-laws provide that no person shall be indemnified
or reimbursed in relation to any matter in such action, suit or
proceeding which has been made the subject of a compromise
settlement except with the approval of a court of competent
jurisdiction, or the holders of record of a majority of the
outstanding shares of First Bancorp, or the Board of Directors,
acting by vote of directors not parties to the same or
substantially the same action, suit, or proceeding, constituting a
majority of the whole number of directors. The foregoing right of
indemnification or reimbursement is not exclusive of other rights
to which such person may be entitled as a matter of law.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR
PERSONS CONTROLLING FIRST BANCORP PURSUANT TO THE FOREGOING
PROVISIONS, FIRST BANCORP HAS BEEN INFORMED THAT IN THE OPINION OF
THE SECURITIES AND EXCHANGE COMMISSION SUCH INDEMNIFICATION IS
AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE
UNENFORCEABLE.
IN ADDITION, GEORGIA LAW PROVIDES BROAD DISCRETION TO
DIRECTORS AND SHAREHOLDERS OF CORPORATIONS TO INDEMNIFY OFFICERS,
DIRECTORS AND EMPLOYEES AGAINST LIABILITIES AND EXPENSES OF
DEFENDING CIVIL (AND IN SOME CASES CRIMINAL) MATTERS. SEE O.C.G.A.
SECTION 14-2-851 AND SECTION 14-2-857. SEE "EFFECT OF
REORGANIZATION ON SHAREHOLDERS -- LIMITATIONS OF LIABILITY AND
INDEMNIFICATION OF OFFICERS, DIRECTORS AND EMPLOYEES."
OTHER BUSINESS
Action will be taken on whatever other business may properly
come before the special meeting of Barrow Bancshares shareholders.
Management is not aware of any other business matters to be
considered at the special meeting. If any other matters properly
come before the meeting, the persons named in the enclosed form of
proxy will have discretionary authority to vote all proxies with
respect to such matters and in accordance with the recommendations
of management.
ADDITIONAL INFORMATION
First Bancorp has filed a Registration Statement (herein
together with all amendments thereto called the "Registration
Statement") with the Securities and Exchange Commission,
Washington, D.C., under the Securities Act of 1933, as amended,
with respect to First Bancorp common stock to be issued in the
reorganization. This document does not contain all of the
information set forth in the Registration Statement. For further
information, reference is made to the Registration Statement
including the exhibits filed or incorporated by reference as a part
thereof. The Registration Statement is available for inspection at
no fee at the Commission's public reference room in Washington,
D.C. Copies of the material contained in the Registration
Statement may be obtained from the Commission upon payment of the
fees prescribed in its rules and regulations.
BARROW BANCSHARES, INC.
Winder, Georgia By:____________________________
________, 1994 Leeon Pruett,
Chairman of the Board
FIRST NATIONAL BANCORP
Gainesville, Georgia By:____________________________
________, 1994 Peter D. Miller, President,
C.A.O. and C.F.O.
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL REPORT
DECEMBER 31, 1993
<PAGE>
C O N T E N T S
Page
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Consolidated balance sheets 2
Consolidated statements of income 3
Consolidated statements of stockholders' equity 4
Consolidated statements of cash flows 5 and 6
Notes to consolidated financial statements 7-19
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Barrow Bancshares, Inc.
Winder, Georgia
We have audited the accompanying consolidated balance sheets
of Barrow Bancshares, Inc. and subsidiary as of December 31, 1993 and
1992, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended
December 31, 1993. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of Barrow Bancshares, Inc. and subsidiary as of
December 31, 1993 and 1992, and the results of their operations and
their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting
principles.
s/Mauldin & Jenkins
Atlanta, Georgia
January 21, 1994
- 1 -
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 1993 and 1992
<TABLE>
<CAPTION>
Assets 1993 1992
<S> <C> <C>
Cash and due from banks $ 1,295,645 $ 1,734,434
Investment securities (estimated market value of
$13,643,843 and $10,597,204) (Note 2) 13,298,947 10,407,817
Federal funds sold 500,000 - -
Loans (Note 3) 36,804,935 33,194,897
Less allowance for loan losses (Note 3) 470,582 457,358
Loans, net 36,334,353 32,737,539
Premises and equipment, net (Note 4) 2,076,307 1,969,205
Government Corporation Bank stock, at cost, which
approximates market 204,800 - -
Other assets 574,631 549,368
$54,284,683 $47,398,363
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing demand $ 5,217,499 $ 4,826,613
Interest-bearing demand 9,775,619 8,494,467
Savings 5,474,431 3,292,677
Time, $100,000 and over 7,049,686 5,042,510
Other time 20,723,219 20,210,819
Total deposits $48,240,454 $41,867,086
Long-term debt (Note 6) 91,162 99,582
Other liabilities 206,805 196,820
Federal funds purchased 290,000 630,000
Total liabilities $48,828,421 $42,793,488
Commitments and contingent liabilities
(Note 9)
Stockholders' equity (Note 10)
Common stock, par value $5; 2,000,000 shares
authorized; 371,303 and 354,528 shares issued $ 1,856,515 $ 1,772,640
Capital surplus 2,070,433 1,914,969
Retained earnings 1,595,602 983,554
$ 5,522,550 $ 4,671,163
Less cost of 5,330 shares of treasury stock 66,288 66,288
Total stockholders' equity $ 5,456,262 $ 4,604,875
$54,284,683 $47,398,363
</TABLE>
See Notes to Consolidated Financial Statements.
- 2 -
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Interest income
Interest and fees on loans $3,560,218 $3,305,322 $3,221,441
Interest on investment securities:
Taxable 364,571 558,556 696,987
Nontaxable 291,976 164,999 - -
Interest on deposits in banks - - 4,444 40,144
Interest on Federal funds sold 40,928 19,728 30,223
$4,257,693 $4,053,049 $3,988,795
Interest expense
Interest on deposits $1,605,405 $1,758,885 $2,162,987
Interest on other borrowings (Note 6) 7,699 16,119 17,010
Interest on Federal funds purchased 3,817 9,048 - -
$1,616,921 $1,784,052 $2,179,997
Net interest income $2,640,772 $2,268,997 $1,808,798
Provision for loan losses (Note 3) 11,000 103,000 145,000
Net interest income after
provision for loan losses $2,629,772 $2,165,997 $1,663,798
Other income
Service charges on deposit accounts $ 152,038 $ 131,960 $ 147,212
Securities transactions, net (Note 2) 1,210 64,090 34,787
Other 69,213 69,210 40,087
$ 222,461 $ 265,260 $ 222,086
Other expense
Salaries and employee benefits (Note 7 $ 954,683 $ 835,840 $ 707,633
Equipment expense 140,948 93,655 79,089
Occupancy expense 145,744 142,576 132,910
Other operating expenses 584,343 582,468 461,571
$1,825,718 $1,654,539 $1,381,203
Income before applicable income
taxes $1,026,515 $ 776,718 $ 504,681
Applicable income taxes (Note 8) 295,000 200,300 121,149
Net income $ 731,515 $ 576,418 $ 383,532
Per share of common stock
Net income $ 2.04 $ 1.63 $ 1.10
</TABLE>
See Notes to Consolidated Financial Statements.
- 3 -
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
Common Stock
Shares Par Value
<S> <C> <C>
Balance, December 31, 1990 342,693 $1,713,465
Net income - - - -
Issuance of 9,169 shares of common
stock upon the exercise of options 9,169 45,845
Issuance of 910 shares of common
stock for cash 910 4,550
Purchase of 5,330 shares of common
stock for the treasury - - - -
Dividends on common stock, $.25 per
share - - - -
Balance, December 31, 1991 352,772 $1,763,860
Net income - - - - [TABLE
Issuance of 1,756 shares of common CONT'D
stock upon the exercise of options 1,756 8,780 BELOW]
Dividends on common stock, $.30 per
share - - - -
Balance, December 31, 1992 354,528 $1,772,640
Net income - - - -
Issuance of 16,775 shares of common
stock upon the exercise of options 16,775 83,875
Dividends on common stock, $.34 per
share - - - -
Balance, December 31, 1993 371,303 $1,856,515
</TABLE>
See Notes to Consolidated Financial Statements.
<TABLE>
<CAPTION>
Capital Retained Treasury Stock
Surplus Earnings Shares Cost Total
<C> <C> <C> <C> <C>
$1,841,357 $ 216,397 - - $ - - $3,771,219
- - 383,532 - - - - 383,532
56,035 - - - - - - 101,880
5,460 - - - - - - 10,010
- - - - 5,330 (66,288) (66,288)
- - (88,034) - - - - (88,034)
$1,902,852 $ 511,895 5,330 $ (66,288) $4,112,319
- - 576,418 - - - - 576,418
12,117 - - - - - - 20,897
- - (104,759) - - - - (104,759)
$1,914,969 $ 983,554 5,330 $ (66,288) $4,604,875
- - 731,515 - - - - 731,515
155,464 - - - - - - 239,339
- - (119,467) - - - - (119,467)
$2,070,433 $1,595,602 5,330 $ (66,288) $5,456,262
</TABLE>
- 4 -
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 731,515 $ 576,418 $ 383,532
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation $ 144,592 $ 102,451 $ 91,185
Amortization 4,611 4,611 4,611
Securities transactions, net (1,210) (64,090) (34,787)
Provision for loan losses 11,000 103,000 145,000
Provision for deferred taxes (32,199) (66,793) 17,641
(Increase) decrease in interest
receivable (45,282) (27,879) 12,182
Increase (decrease) in interest
payable 108,355 18,695 (4,908)
Increase (decrease) in taxes
payable (107,202) 148,008 (31,556)
Other prepaids, deferrals and
accruals, net 56,439 162,357 (137,055)
Total adjustments $ 139,104 $ 380,360 $ 62,313
Net cash provided by
operating activities $ 870,619 $ 956,778 $ 445,845
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease (increase) in
interest-bearing deposits, net $ - - $ 398,000 $ (299,000)
Proceeds from sales of investment
securities 406,103 3,284,041 2,871,123
Proceeds from maturities of
investment securities 1,499,636 600,000 1,447,303
Purchase of investment securities (4,795,659) (5,865,189) (5,000,065)
Increase in loans, net (3,607,814) (4,792,348) (5,443,724)
Purchase of premises and equipment (251,694) (215,584) (26,418)
(Increase) decrease in Federal funds
sold, net (500,000) 2,030,000 (1,625,000)
Increase in Government Corporation
Bank stock (204,800) - - - -
Net cash used in investing
activities $(7,454,228) $(4,561,080) $(8,075,781)
</TABLE>
- 5 -
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in deposits, net $ 6,373,368 $ 2,976,296 $ 7,950,036
Cash dividends paid (119,467) (104,759) (88,034)
Repayment of long-term debt (8,420) (7,259) (5,151)
Proceeds from issuance of common
stock 239,339 20,897 111,890
Increase (decrease) in Federal funds
purchased (340,000) 630,000 - -
Purchase of 5,330 shares of common
stock for the treasury - - - - (66,288)
Net cash provided by
financing activities $ 6,144,820 $ 3,515,175 $ 7,902,453
Net increase (decrease) in cash and
due from banks $ (438,789) $ (89,127) $ 272,517
Cash and due from banks at beginning
of year 1,734,434 1,823,561 1,551,044
Cash and due from banks at end of
year $ 1,295,645 $ 1,734,434 $ 1,823,561
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the year for:
Interest $ 1,508,566 $ 1,765,357 $ 2,184,905
Income taxes $ 434,401 $ 119,085 $ 135,064
</TABLE>
See Notes to Consolidated Financial Statements.
- 6 -
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
Barrow Bancshares, Inc. is a one bank holding company whose
business is presently conducted by its wholly-owned
subsidiary, Barrow Bank & Trust Company. The accounting and
reporting policies of the Company conform to generally
accepted accounting principles and with general practices
within the banking industry.
Basis of Presentation
The consolidated financial statements include the accounts
of the Company and its subsidiary. Significant
intercompany transactions and accounts are eliminated in
consolidation. Assets held by the Bank in a fiduciary or
agency capacity are not assets of the Bank and are not
included in the consolidated financial statements.
Investment Securities
Investment securities are those securities which the Bank
has the ability and intent to hold to maturity. These
securities are stated at cost adjusted for amortization of
premiums and accretion of discount, computed by the
interest method. Gains and losses on the sale of
investment securities are computed on the basis of specific
identification of the adjusted cost of each security.
Loans
Loans are stated at the amount of unpaid principal, reduced
by unearned interest. Interest on most loans is credited
to income on a daily basis, based upon the principal amount
outstanding. Interest on some instalment loans is credited
to income based on the sum-of-the-months-digits method, the
results of which are not materially different from
generally accepted accounting principles.
Accrual of interest income is discontinued on loans when,
in the opinion of management, collection of such interest
becomes doubtful. Accrual of interest on such loans is
resumed when, in management's judgment, the collection of
interest and principal becomes probable.
- 7 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies (continued)
Loan Fees and Costs
Nonrefundable loan fees and certain direct loan origination
costs are accounted for in accordance with Statement of
Financial Accounting Standards Number 91 (SFAS No. 91),
"Accounting for Nonrefundable Fees and Costs Associated
with Originating or Acquiring Loans and Initial Direct
Costs of Leases". SFAS No. 91 requires these fees and
costs to be deferred and the net amount recognized into
income over the life of the loans as a yield adjustment.
Allowance for Loan Losses
The allowance for loan losses is established through a
provision for loan losses charged to expenses. Loans are
charged against the allowance for loan losses when
management believes that the collectibility of the
principal is unlikely. The allowance is an amount that
management believes will be adequate to absorb possible
losses on existing loans that may become uncollectible
based on evaluations of the collectibility of loans and
prior loan loss experience.
Premises and Equipment
Premises and equipment are stated at cost less accumulated
depreciation, computed principally on the straight-line
method over the following estimated useful lives:
Years
Equipment 5-15
Buildings and improvements 10-40
Automobiles 5
Profit-Sharing Plan
Profit-sharing plan costs will be funded as accrued and are
based on a percentage of individual employee's salary, not
to exceed the amount that can be deducted for Federal
income tax purposes.
Income Taxes
The Company and its subsidiary file a consolidated income
tax return. The subsidiary provides for income taxes based
on its contribution to income taxes (benefits) of the
consolidated group.
- 8 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies (continued)
Income Taxes (continued)
As of January 1, 1993, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes". SFAS No. 109 requires a
balance sheet approach to accounting for income taxes and
requires that deferred tax assets and liabilities be
adjusted in the period of enactment for the effect of an
enacted change in tax laws or rates. The adoption of SFAS
No. 109 had no material effect on the Company's
consolidated financial statements.
Net Income Per Share
Net income per share is calculated on the basis of the
weighted average number of shares outstanding.
Statement of Cash Flows
Cash flows from loans originated by the Bank, deposits,
Federal funds purchased and sold and interest-bearing
deposits in banks are reported net.
Current Accounting Developments
The Financial Accounting Standards Board has issued SFAS
No. 114, "Accounting by Creditors for Impairment of a
Loan", which becomes effective for years beginning after
December 15, 1994, and SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities", which
becomes effective for years beginning after December 15,
1993.
SFAS No. 114 generally requires impaired loans to be
measured on the present value of expected future cash flows
discounted at the loan's effective interest rate, at the
loan's observable market price or at the fair value of the
collateral if the loan is collateral dependent. A loan is
impaired when it is probable the creditor will be unable to
collect all principal and interest payments due in
accordance with terms of the loan agreement. The adoption
of this Statement is not expected to have a material effect
on the Company's consolidated financial statements.
SFAS No. 115 requires that investments in debt and equity
securities be classified as trading securities, securities
available for sale or securities held to maturity. Trading
- 9 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies (continued)
Current Accounting Developments (continued)
securities should be carried at market with any unrealized
gains or losses included in current earnings. Securities
available for sale should be carried at market with any
unrealized gains or losses reported as increases or
decreases in stockholders' equity, net of the related
deferred tax effect. Securities held to maturity should be
carried at amortized cost. The Company will be required to
adopt this Statement as of January 1, 1994. The adoption
of this Statement is not expected to have a material effect
on the Company's consolidated financial statements.
Note 2. Investment Securities
The carrying value and estimated market value of investment
securities are as follows:
<TABLE>
<CAPTION>
- - - - - - - - December 31, 1993 - - - - - - - - - -
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Value Gains Losses Value
<S> <C> <C> <C> <C>
U. S. Treasury and
government agencies $ 5,965,696 $ 71,284 $ (9,542) $ 6,027,438
Municipal securities 6,482,823 299,276 (20,082) 6,762,017
Mortgage-backed securities 850,428 3,960 - - 854,388
$13,298,947 $ 374,520 $ (29,624) $13,643,843
</TABLE>
<TABLE>
<CAPTION>
- - - - - - - - December 31, 1992 - -- - - - - - - -
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Value Gains Losses Value
<S> <C> <C> <C> <C>
U. S. Treasury and
government agencies $ 5,400,887 $ 124,893 $ (9,215) $ 5,516,565
Municipal securities 3,883,860 91,751 (37,281) 3,938,330
Mortgage-backed securities 1,123,070 26,844 (7,605) 1,142,309
$10,408,817 $ 243,488 $ (54,101) $10,597,204
</TABLE>
The carrying value and estimated market value of investment
securities at December 31, 1993, by contractual maturity, are
as follows. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment
penalties.
- 10 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Investment Securities (continued)
<TABLE>
<CAPTION>
Estimated
Carrying Market
Value Value
<S> <C> <C>
Due in one year or less $ 350,118 $ 351,077
Due after one year through
five years 2,791,068 2,799,549
Due after five years through
ten years 4,234,743 4,328,655
Due after ten years 5,072,590 5,310,174
$12,448,519 $12,789,455
Mortgage-backed securities 850,428 854,388
$13,298,947 $13,643,843
</TABLE>
Proceeds from sales of investment securities during 1993,
1992 and 1991 were $406,103, $3,284,041 and $2,871,123,
respectively. Gross gains of $1,210, $64,092 and $35,748 and
gross losses of $ - -, $2 and $961, respectively, were
realized on those sales.
Investment securities with a carrying amount of $4,872,703
and $2,187,648 at December 31, 1993 and 1992, respectively,
were pledged to secure public deposits and for other
purposes.
Note 3. Loans and Allowance for Loan Losses
The composition of loans is summarized as follows:
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
Commercial, financial and
agricultural $13,387,000 $11,190,000
Real estate-construction 6,554,000 7,346,000
Real estate-mortgage 15,452,000 11,798,000
Consumer instalment loans 1,447,000 2,912,000
Other 2,120 3,009
$36,842,120 $33,249,009
Unearned fees and discounts (37,185) (54,112)
Allowance for loan losses (470,582) (457,358)
Loans, net $36,334,353 $32,737,539
</TABLE>
There were no loans on which the accrual of interest had been
discontinued or reduced at December 31, 1993. There was no
significant reduction in interest income associated with
nonaccrual and renegotiated loans during 1993.
- 11 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Loans and Allowance for Loan Losses (continued)
In the normal course of business, the Bank has made loans at
prevailing interest rates and terms to directors and
executive officers of the Bank. The aggregate dollar amount
of these loans, net of participation sold, was $2,617,718 at
December 31, 1993 and $3,676,726 at December 31, 1992.
During 1993, $6,858,894 of loans were made and repayments
totaled $7,917,901. None of the related party loans as of
December 31, 1993 were restructured, nor were any amounts
charged off during 1993. As of December 31, 1993, $3,606,229
of director and executive officer loans were sold to
participating banks.
Changes in the allowance for loan losses are as follows:
<TABLE>
<CAPTION>
December 31,
1993 1992 1991
<S> <C> <C> <C>
Balance, beginning
of year $ 457,358 $ 354,331 $ 254,345
Provision charged
to operations 11,000 103,000 145,000
Loans charged off (295) (4,297) (47,392)
Recoveries 2,519 4,324 2,378
Balance, end of year $ 470,582 $ 457,358 $ 354,331
</TABLE>
Note 4. Premises and Equipment, Net
Major classifications of these assets are summarized as
follows:
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
Land $ 265,773 $ 265,773
Equipment 847,910 638,439
Automobiles 71,998 42,053
Buildings and improvements 1,386,732 1,381,347
$2,572,413 $2,327,612
Accumulated depreciation (496,106) (358,407)
$2,076,307 $1,969,205
</TABLE>
Depreciation expense for the years ended December 31, 1993,
1992 and 1991 was $144,592, $102,451 and $91,185,
respectively.
- 12 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5. Leases
The Company leases certain equipment under a noncancelable
operating lease, which is payable in quarterly instalments of
$6,325 through May 1995. Aggregate future minimum lease
payments under the noncancelable operating lease consisted of
the following at December 31, 1993.
<TABLE>
<C> <C>
1994 $ 26,627
1995 12,651
$ 39,278
</TABLE>
Note 6. Long-Term Debt
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
Note payable to purchase land $ 91,162 $ 99,582
for bank building, due in
monthly instalments including
interest at 8%, secured by
land.
</TABLE>
Aggregate maturities required on long-term debt at
December 31, 1993 are as follows:
<TABLE>
<C> <C>
1994 $ 9,119
1995 9,876
1996 10,695
1997 11,583
1998 12,545
Later years 37,344
$ 91,162
</TABLE>
Note 7. Employee Benefit Plans
The Bank has a contributory 401(K) retirement plan covering
all employees, subject to certain minimum age and service
requirements. The Bank contributed $10,812, $10,229 and
$3,470 to the plan for the years ended December 31, 1993,
1992 and 1991, respectively.
- 13 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7. Employee Benefit Plans (continued)
The Board of Directors has approved an Employee Incentive
Stock Option Plan with 40,000 shares of stock available for
use in the Stock Option Plan. The options are exercisable at
the book value per share on the exercise date or $10 per
share, whichever is greater. A summary of the activity in
this plan follows:
<TABLE>
<CAPTION>
Shares
Options Available
Granted for Grant
<S> <C> <C>
Balance, December 31, 1992 31,369 278
Options granted 278 (278)
Options exercised (16,775) - -
Balance, December 31, 1993 14,872 - -
</TABLE>
Note 8. Income Taxes
The total income taxes in the consolidated statements of
income are as follows:
<TABLE>
<CAPTION>
December 31,
1993 1992 1991
<S> <C> <C> <C>
Current $327,199 $267,093 $103,508
Deferred (32,199) (66,793) 17,641
$295,000 $200,300 $121,149
</TABLE>
The Company's provision for income taxes differs from the
amounts computed by applying the Federal income tax statutory
rates to income before income taxes. A reconciliation of the
differences is as follows:
<TABLE>
<CAPTION>
December 31, December 31, December 31,
1993 1992 1991
Amount Percent Amount Percent Amount Percent
<S> <C> <C> <C> <C> <C> <C>
Tax provision at
statutory rate $349,015 34% $264,084 34% $171,592 34%
Increase (decrease)
resulting from:
Tax-exempt interest (88,319) (9) (49,149) (6) (40,381) (8)
State income taxes 15,495 1 1,355 - - - - - -
Other items, net 18,809 3 (15,990) (2) (10,062) (2)
Provision for income
taxes $295,000 29% $200,300 26% $121,149 24%
</TABLE>
- 14 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8. Income Taxes (continued)
Deferred income taxes arising from temporary differences
between the tax basis and the reported amounts in the
financial statements are as follows:
<TABLE>
<CAPTION>
December 31,
1993 1992 1991
<S> <C> <C> <C>
Accrual to cash adjustment $(64,140) $(33,522) $ 7,954
Provision for loan losses (4,151) (50,068) (29,187)
Depreciation and
amortization 16,164 11,063 11,082
Other 19,928 5,734 27,792
$(32,199) $(66,793) $ 17,641
</TABLE>
Net deferred income tax assets of $65,999 and $33,800 at
December 31, 1993 and 1992, respectively, are included in
other assets. Pursuant to SFAS No. 109, the components of
deferred income taxes at December 31, 1993 are as follows:
<TABLE>
<S> <C>
Deferred tax assets:
Loan loss reserves $143,199
Other 43,728
$186,927
Deferred tax liabilities:
Depreciation and amortization $ 89,717
Accrual to cash adjustment 31,211
$120,928
Net deferred tax assets $ 65,999
</TABLE>
Note 9. Commitments and Contingent Liabilities
In the ordinary course of business, the Bank has entered into
off balance sheet financial instruments which are not
reflected in the consolidated financial statements. These
instruments include commitments to extend credit, standby
letters of credit, guarantees and liability for assets held
in trust. Such financial instruments are recorded in the
financial statements when funds are disbursed or the
instruments become payable. The Bank uses the same credit
and collateral policies for these off balance sheet financial
instruments as it does for instruments that are recorded in
the consolidated financial statements.
- 15 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Commitments and Contingent Liabilities (continued)
Following is an analysis of significant off balance sheet
financial instruments.
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
Loan commitments $6,126,058 $5,637,000
Standby letters of credit 235,583 259,000
$6,361,641 $5,896,000
</TABLE>
Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee. Since
many of the commitment amounts expire without being drawn
upon, the total commitment amounts do not necessarily
represent future cash requirements. The credit risk involved
in issuing these financial instruments is essentially the
same as that involved in extending loans to customers. The
amount of collateral obtained, if deemed necessary by the
Bank, upon extension of credit, is based on management's
credit evaluation of the customer. Collateral held varies
but may include real estate and improvements, marketable
securities, accounts receivable, inventory, equipment and
personal property.
The Bank does not anticipate any material losses as a result
of the commitments and contingent liabilities.
The nature of the business of the Bank is such that it
ordinarily results in a certain amount of litigation. In the
opinion of management and counsel for the Company and the
Bank, there is no litigation in which the outcome will have a
material adverse effect on the consolidated financial
statements.
- 16 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10. Stockholders' Equity
At December 31, 1993, the Bank's capital ratios were
considered adequate based on regulatory minimum capital
requirements. The minimum capital requirements and the
actual capital ratios for the Bank at December 31, 1993 are
as follows:
<TABLE>
<CAPTION>
Regulatory
Actual Requirement
<S> <C> <C>
Leverage capital ratio 10.31% 4.00%
Risk based capital ratios:
Core capital 14.29% 4.00%
Total capital 15.54% 8.00%
</TABLE>
The primary source of funds available to the Parent Company
is the payment of dividends by the subsidiary bank. Banking
regulations limit the amount of dividends that may be paid
without prior approval of the Bank's regulatory agency.
Approximately $371,730 are available to be paid as dividends
by the bank subsidiary at December 31, 1993.
Note 11. Concentrations of Credit
Most of the Bank's loans, commitments and standby letters of
credit have been granted to customers in the Bank's market
area. The Bank's investment portfolio may also include state
and municipal securities of governmental entities within the
Bank's market area. The concentrations of credit by type of
loan are also set forth in Note 3. Standby letters of credit
are granted primarily to commercial borrowers of the Bank.
The Bank, as a matter of policy, does not generally extend
credit to any single borrower or group of related borrowers
in excess of 25% of the Bank's combined capital stock and
capital surplus accounts which amounted to approximately
$875,000 at December 31, 1993.
- 17 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 12. Business Combination
On January 18, 1994, the Board of Directors of the Company
signed a letter of intent agreeing to a merger with First
National Bancorp of Gainesville, Georgia. Under this letter,
the stockholders of the Company will receive 1.37 shares of
First National Bancorp stock for each share of the Company's
common stock they own. This merger is contingent upon the
execution of a definitive merger agreement, approval by the
stockholders and approval by the appropriate Federal and
state regulatory authorities.
Note 13. Condensed Financial Information of Barrow Bancshares, Inc.
(Parent Company Only)
<TABLE>
<CAPTION>
Condensed Balance Sheets
December 31, 1993 and 1992
1993 1992
<S> <C> <C>
Assets
Cash $ 210,356 $ 9,266
Investment in subsidiary 5,241,295 4,586,387
Other assets 4,611 9,222
Total assets $5,456,262 $4,604,875
Stockholders' equity $5,456,262 $4,604,875
</TABLE>
<TABLE>
<CAPTION>
Condensed Statements of Income
Years Ended December 31, 1993, 1992 and 1991
1993 1992 1991
<S> <C> <C> <C>
Income, dividends
from subsidiary $ 88,551 $ 34,058 $ 85,145
Expense
Employee benefits $ - - $ - - $ 10,010
Interest - - - - 25
Amortization 4,611 4,611 4,611
Other expense 7,333 6,911 1,093
Total expense $ 11,944 $ 11,522 $ 15,739
Income before income
tax credits and equity
in undistributed earnings
of subsidiary $ 76,607 $ 22,536 $ 69,406
Income tax credits - - - - 5,351
Income before equity
in undistributed
earnings of subsidiary $ 76,607 $ 22,536 $ 69,406
Equity in undistri-
buted earnings of
subsidiary 654,908 553,882 308,775
Net income $ 731,515 $ 576,418 $ 383,532
</TABLE>
- 18 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13. Condensed Financial Information of Barrow Bancshares, Inc.
(Parent Company Only) (continued)
<TABLE>
<CAPTION>
Condensed Statements of Cash Flows
Years Ended December 31, 1993, 1992 and 1991
1993 1992 1991
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income $ 731,515 $ 576,418 $ 383,532
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Undistributed earnings
of subsidiary $(654,908) $(553,882) $(308,775)
Amortization 4,611 4,611 4,611
Other prepaids, defferals
and accruals, net - - 5,351 (5,350)
Total adjustments $(650,297) $(543,920) $(309,514)
Net cash provided by operating
activities $ 81,218 $ 32,498 $ 74,018
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance
of common stock $ 239,339 $ 20,897 $ 111,890
Purchase of common
stock for the treasury - - - - (66,288)
Cash dividends paid (119,467) (104,759) (88,034)
Net cash provided by (used in)
financing activities $ 119,872 $ (83,862) $ (42,432)
Net increase (decrease) in cash $ 201,090 $ (51,364) $ 31,586
Cash at beginning of year 9,266 60,630 29,044
Cash at end of year $ 210,356 $ 9,266 $ 60,630
- 19 -
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, 1994 and 1993
(unaudited)
</TABLE>
<TABLE>
<CAPTION>
Assets
1994 1993
<S> <C> <C>
Cash and due from banks $ 3,201,275 $ 1,025,971
Investment securities (estimated
market value of $12,306,000
and $10,802,000 12,006,006 10,544,271
Federal funds sold 1,870,000 1,860,000
Loans 35,570,059 32,803,585
Less allowance for loans losses 481,926 458,022
__________ __________
Loans, net 35,088,133 32,345,563
Premises and equipment, net 2,039,712 1,965,115
Government Corporation Bank
stock, at cost, which
approximates market 204,900
Other assets 569,708 524,884
___________ ___________
$54,979,734 $48,265,804
Liabilities and Stockholders'
Equity
Deposits
Non-interest-bearing demand $ 6,240,910 $ 4,371,317
Interest-bearing demand 10,076,974 8,546,692
Savings 5,380,166 3,659,291
Time, $100,000 and over 6,360,107 5,642,510
Other time 20,693,771 21,124,424
___________ ____________
Total deposits 48,751,928 43,344,234
Long-term debt 88,950 97,539
Other liabilities 312,720 36,326
___________ ___________
Federal funds purchased
Total liabilities 49,153,598 43,478,099
Commitments and contingent
liabilities (Note 9)
Stockholders' equity 1,925,435 1,782,825
Common stock, par value $5;
2,000,000 shares authorized;
385,087 and 356,656 shares
issued 2,204,239 1,931,367
Capital surplus 1,762,748 1,139,801
__________ __________
Retained earnings 5,892,422 4,853,993
Less cost of 5,330 shares of
treasury stock 66,288 66,288
__________ __________
Total stockholders' equity 5,826,134 4,787,705
___________ ___________
$54,979,732 $48,265,804
</TABLE>
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1994 and 1993
(unaudited)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Interest income
Interest and fees on loans $ 842,728 $ 822,458
Interest on investment
securities:
Taxable 89,152 95,120
Non-taxable 90,391 61,931
Interest on deposits in banks
Interest on Federal funds sold 9,437 8,478
__________ _________
1,031,708 987,987
__________ _________
Interest expense
Interest on deposits 395,083 391,289
Interest on other borrowings 1,818 1,987
Interest on Federal funds sold 549 2,718
__________ _________
397,450 395,994
__________ _________
Net interest income 634,259 591,993
Provision for loans losses 10,000
Net interest income after
provision for loan losses 624,259 591,993
Other income
Service charges on deposit 47,882 33,151
accounts
Securities transactions, net 1,044
Other 15,057 14,077
_________ __________
62,939 48,272
Other expense _________ __________
Salaries and employee benefits 228,341 223,998
Equipment expense 43,430 34,448
Occupancy expense 50,724 32,533
Other operating expenses 141,957 140,605
_________ __________
464,452 431,584
_________ __________
Income before applicable
income taxes 222,746 208,681
Applicable income taxes 55,600 54,600
__________ __________
Net income $ 167,146 $154,081
__________ __________
Per share of common stock
Net income $ 0.43 $ 0.43
__________ __________
</TABLE>
<PAGE>
BARROW BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1994 and 1993
(unaudited)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 167,146 $ 154,081
__________ __________
Adjustments to reconcile net income to
net each cash provided by operating
activities:
Depreciation 38,859 35,771
Amortization 1,153
Securities transactions, net (1,044)
Provision for loan losses 10,000
Increase in interest receivable 47,000 81,000
Increase in interest payable 21,828 44,926
Increase (decrease) in taxes payable 41,063 (212,789)
Other prepaids, deferrals and accruals, net (36,666) (95,145)
Total adjustments 122,084 (146,128)
___________ __________
Net cash provided by operating 289,230 7,953
activities ___________ __________
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investment
securities 1,758,641 1,321,546
Purchase of investment securities (465,700) (1,458,000)
(Increase) decrease in loans, net 1,234,878 405,415
Purchase of premises and equipment, net 36,595 4,000
(Increase) decrease in Federal funds sold, net (1,370,000) (1,860,000)
___________ ____________
Net cash used in investing activities 1,194,414 (1,587,039)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in deposits, net 511,474 1,477,148
Cash dividends paid - -
Repayment of long-term debt (2,212) (2,461)
Proceeds from issuance of common stock 202,724 25,936
Increase (decrease) in Federal funds purchased (290,000) (630,000)
_________ __________
Net cash provided by financing activities 421,986 870,623
Net increase (decrease) in cash and due
from banks 1,905,620 (708,463)
Cash and due from banks at beginning of year 1,295,645 1,734,434
__________ ___________
Cash and due from banks at end of year $3,201,265 $1,025,071
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 377,141 $ 441,339
Income taxes $ 21,300 $ 159,339
</TABLE>
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Years Ended December 31, 1993, 1992, and 1991
The following is a discussion of Barrow Bancshare's financial condition
as of December 31, 1993 and December 31, 1992 and the results of its
operations for the years ended December 31, 1993, 1992, and 1991
respectfully. The following should be read in conjunction with the financial
statements of Barrow Bancshares contained in this Proxy Statement and other
financial information contained herein.
Results of Operations
Barrow Bancshares, reported net income of $732,000 for the year ended
December 31, 1993, an increase of $155,000 or 27% over 1992. Earnings
increased primarily as a result of higher net interest income and a lower
loan loss provision expense which were partially offset by a decrease in
other income and an increase in other expenses.
For the year ended 1993, net interest income increased $372,000 or 16%
compared to 1992. The provision for loan loss expense decreased $92,000 or
89% to $11,000 in 1993 from $103,000 in 1992. Other income decreased $43,000
during 1993 compared to 1992 and other expense increased $171,000 during 1993
compared to 1992.
Asset growth of $6,886,000 or 15% in 1993 was primarily funded by
deposit growth of $6,373,000 or 15% in 1993. The deposits were used to fund
additional loans and investments. Loans increased $3,610,000 or 11% in 1993
over 1992 while investments increased $2,891,000 or 28% in 1993 over 1992.
The following table summarizes the results of operations of Barrow
Bancshares, on a consolidated basis for the years ended December 31, 1993,
1992, and 1991.
<TABLE>
<CAPTION>
Years Ended December 31
(Amounts in thousands, except ratios
and per share data)
<S> <C> <C> <C>
1993 1992 1991
Income Statement Data:
Net interest income $2,641 2,269 1,809
Provision for loan losses 11 103 145
Other Income 222 265 222
Other expense 1,826 1,655 1,381
Net income 732 576 384
Return on average assets 1.44% 1.27% .98%
Return on average equity 14.55% 13.21% 9.74%
</TABLE>
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Years Ended December 31, 1993, 1992, and 1991
Net Interest Income
Net interest income in 1993 increased 16% or $372,000 over 1992.
Interest income increased $205,000 or 5% during 1993 while interest expense
decreased 9% or $167,000. Interest income increased due to a growing loan
portfolio and interest expense decreased due to the declining interest rate
environment and due to the continued maturity of high priced fixed rate
deposits. Net interest income was also aided by the continued repricing of
both the loan and investment portfolios at a slower rate than deposit
repricing.
Other Income
Other income of $222,000 decreased $43,000 or 16% in 1993 from 1992.
This decrease is primarily the result of $1,000 in securities gains in 1993
compared to $64,000 in securities gains in 1992. The decrease in securities
gains was partially offset by a $20,000 increase in service charges on
deposit accounts, due to the growth in average noninterest bearing deposits.
Other Expenses
Other expenses of $1,826,000 in 1993 increased $171,000 or 10% over
1992. The increase is the result of increased salary and employee benefits
expense of $119,000 and increased equipment expense of $47,000 relating to
depreciation of newly acquired equipment resulting from the opening of a
branch banking office. The increase in salary and employee benefits expense
was due to normal salary increase and the addition of new employees.
Occupancy and other operating expenses in 1993 remained comparable to 1992.
Income Taxes
During 1993 income tax expense was $295,000 compared to $200,000 in
1992. The company's provision for income taxes differs from the amounts
computed by applying the statutory rates because of tax-exempt interest
income, no state income taxes, and other miscellaneous items. The effective
income tax rates for 1993 and 1992 were 28.7% and 25.8% respectively.
The cumulative effect of a change in the accounting for income taxes,
due to the implementation of Statement of Financial Accounting Standards
(SFAS) No. 109, "Accounting for Income Taxes" during the year ended December
31, 1993 was considered immaterial to the consolidated financial statements.
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Years Ended December 31, 1993, 1992, and 1991
Allowance for Loan Losses
The allowance for loan losses approximated 1.28% of outstanding loans at
December 31, 1993 compared to 1.38% at December 31, 1992 due to increased
loans in 1993. The allowance increased to $471,000 at December 31, 1993 from
$457,000 at December, 1992. The Bank experienced net recoveries on loans of
approximately $3,000 for the year ended December 31, 1993.
Management believes that the allowance for loan losses is adequate to
provide for potential loan losses, based on information available and
conditions prevailing at the date of determination of the allowance.
However, management's judgment is based upon a number of assumptions about
future events, which are believed to be reasonable, but which may or may not
prove valid. Although management believes the allowance for loan losses is
adequate, there can be no assurance that charge-offs in future periods will
not exceed the allowance for loan losses or that additional increases in the
allowance for loan losses will not be required.
Specific reserves have been established for specifically identified
problem loans where management considers losses to be likely. A general
reserve has been established by management to provide for loans considered to
be potential problems as well as for future problem loans which are currently
unidentified.
Barrow Bancshares has allocated the allowance for loan losses according to
the amount deemed to be reasonably necessary to provide for the possibility
of losses being incurred within the categories of loans set forth in the
table below. The amount of such components of the allowance for loan losses
at December 31, 1993 and the ratio of loans in each category to the
outstanding loan balance are presented below:
<TABLE>
<CAPTION>
Commercial Real
financial, and Estate Consumer
agricultural Loans Loans Total
(dollar amounts are presented in thousand)
<S> <C> <C> <C> <C>
Allowance for
loan Losses $300 147 24 471
Ratio of loans
in each category 36% 60% 4% 100
</TABLE>
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Years Ended December 31, 1993, 1992, and 1991
Asset Quality
The following table summarizes nonperforming assets and allowances for
loan losses data as of December 31, 1993 and December 31, 1992:
<TABLE>
<CAPTION>
December 31, 1993 December 31, 1992
Amount % of Loans Amount % of Loans
(Amounts in thousands, except percentages)
<S> <C> <C> <C> <C>
Non-accrual loans $ - -% $ - -%
Restructured loans-not in
compliance with modified
terms - - - -
Other real estate owned - - 8 .02
Total nonperforming assets $ - -% 8 .02%
Loans past due 90 days or
more and still accruing
interest $28 .08% $ - -%
Allowance for loan losses
to period end loans 1.28% 1.38%
</TABLE>
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Years Ended December 31, 1993, 1992, and 1991
The following table summarizes loan balances at the end of 1993 and
1992, average loans outstanding during the year, and changes in the allowance
for loan losses arising from loans charged off by loan category, recoveries
on loans previously charged off by loan category, and additions to the
allowance which have been charged to operating expense.
<TABLE>
<CAPTION>
Years ended December 31,
1993 1992
(dollar amounts are presented in thousands)
<S> <C> <C>
Amount of net loans outstanding
at end of year $36,334 32,738
Average amount of net loans
outstanding 34,500 30,400
Allowance for loan loses at
beginning of year 457 354
Loans charged off - (4)
Recoveries of loans previously charged off: 3 4
Net loans charged off (recovered) (3) -
Provision for loan losses 11 103
Allowance for loan losses, end of year $471 457
Ratio of net loans charged off to
average net loans outstanding - % - %
</TABLE>
Liquidity and Interest Rate Sensitivity
Liquidity management involves the ability to meet the cash flow
requirements of customers who may be either depositors wanting to withdraw
funds or borrowers needing assurance that sufficient funds will be available
to meet their credit needs and the ability to fund these commitments.
Interest rate sensitivity management seeks to maintain consistent and
acceptable net interest spreads and to enhance growth of net interest income
through periods of changing interest rates.
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Years Ended December 31, 1993, 1992, and 1991
Barrow Bancshares seeks to meet day-to-day liquidity needs through
management of the cash and federal funds accounts. Short-term liquidity is
maintained by the management of funds invested in short-term instruments such
as federal funds sold. Long-term liquidity is maintained through the
management of investment securities and the loan portfolio in conjunction
with adding to the core deposit base through the procurement of additional
funds from depositors or through money market instruments.
Capital Resources and Adequacy
There are various measures of capital adequacy for banks and bank
holding companies such as risk-based capital guidelines and the leverage
ratio. At December 31, 1993, the Bank's regulatory capital and the required
minimums under existing regulations are as follows:
<TABLE>
<CAPTION>
Actual Required
Capital Minimium
Amount
<S> <C> <C>
Tier 1 risk-based 16.97% 4.00%
Total risk-based 19.22% 8.00%
Primary Capital 5,600,000
Total Capital 5,800,000
</TABLE>
Inflation
Inflation impacts the growth in total assets in the banking industry and
causes a need to increase equity capital at higher than normal rates to meet
capital adequacy requirements. Barrow Bancshares copes with the effects of
inflation through effectively managing its interest rate sensitivity gap
position, by periodically reviewing and adjusting its pricing of services to
consider current costs, and through retainage of net income.
Recent Accounting Pronouncements
During May 1993, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 114, "Accounting by Creditors for Impairment of a Loan" and
SFAS No.115, "Accounting for Certain Investments in Debt and Equity
Securities."
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Years Ended December 31, 1993, 1992, and 1991
SFAS No. 114 requires impaired loans to be measured based on the present
value of expected future cash flows, discounted at the loan's effective
interest rate, or at the loan's observable market price, or the fair value of
the collateral if the loan is collateral dependent, beginning in 1995. SFAS
No. 114 may be adopted prior to 1995. Barrow Bancshares has not yet
determined the actual impact of SFAS No. 114 on its financial statements or
made a determination of whether it will adopt SFAS No. 114 prior to 1995, but
the effect, if any, is expected to be nominal as there are no currently
recognized impaired loans.
SFAS No. 115 requires investments to be classified in three categories;
held-to-maturity securities (reported at amortized cost), trading securities
(reported at fair value) and available-for-sale securities (reported at fair
value). Unrealized gains or losses on trading securities are included in
earnings. Unrealized gains or losses on available-for-sale securities are
excluded from earnings and reported in a separate component of shareholders'
equity, net of income taxes. SFAS No. 115 is effective beginning in 1994.
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
For the Period Ended March 31, 1994 and 1993
The following is a discussion of Barrow Bancshares'
financial condition as of March 31, 1994 and March 31, 1993 and
the results of its operations for the period ended March 31, 1994
and 1993. The following should be read in conjunction with the
financial statements of Barrow Bancshares contained in this Proxy
Statement and other financial information contained herein.
Results of Operations
Barrow Bancshares, reported net income of $167,000 for the
quarter ended March 31, 1994, an increase of $13,000, or 8%, over
1993. Earnings increased primarily as a result of higher
interest income which was partially offset by an increase in loan
loss provision and other non interest income.
For the quarter ended March 31, 1994, net interest income
increased $44,000, or 4%, compared to March 31, 1993. The
provision for loan losses for the 1994 first quarter was $10,000
compared to no provision being made in the first quarter of 1993.
Other income decreased $15,000 during first quarter 1994 compared
to first quarter 1993 and other expense increased $33,000 during
first quarter 1994 compared to 1993.
Asset growth of $6,714,000 or 14% between March 31, 1994 and
March 31, 1993, was primarily funded by deposit growth of
$5,408,000 or 13%. The deposits were used to fund additional
loans and investments. Loans increased $2,743,000 or 8% between
these periods while investments increased $1,462,000 or 14%.
The following table summarizes the results of operations of
Barrow Bancshares, on a consolidated basis for the periods ended
March 31, 1994 and March 31, 1993.
<TABLE>
<CAPTION>
For the period ended March 31,
(Amounts in thousands, except ratios
and per share data)
1994 1993
<S> <C> <C>
Income Statement Data:
Net interest income $634 592
Provision for loan losses 10 -
Other Income 63 48
Other expense 464 432
Net income 167 154
Return on average assets 1.22% 1.28%
Return on average equity 11.75% 13.16%
</TABLE>
Net Interest Income
For the quarter ended March 31, 1994, net interest income
increased $43,000, or 4%, compared to March 31, 1993. Interest
and fees on loans increased $20,000 and interest on securities
increased $22,000 over the same period ended March 31, 1993.
Interest expense remained stable, when compared to first quarter
1993. Net interest income was aided by the continued repricing of
both the loan and investment portfolios at a slower rate than
deposit repricing.
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
For the Period Ended March 31, 1994 and 1993
Loan Loss Provision
A $10,000 expense to provision for loan loss was made during
the first quarter of 1994, while no provision occurred during the
first quarter of 1993.
Other Income
Other income increased $15,000, or 30%, to $63,000 for the
first quarter of 1994, from the $48,000 reported at March 31,
1993, primarily due to an increase in service charges on deposit
accounts and deposit growth. There were no gains or losses on
securities during first quarter 1994, while $1,000 was realized
during the first quarter of 1993.
Other Expenses
Other expense amounted to $464,000 in the first quarter of
1994 compared to $432,000 in 1993, which was a 7% increase. While
employee related expenses increased slightly, equipment and
occupancy expenses increased $27,000, or 41%, over amounts
recorded during first quarter 1993 due to a new branch location
being opened.
Income Taxes
Income tax expense was $56,000 for first quarter 1994
compared to $55,000 in 1992. The company's provision for income
taxes differs from the amounts computed by applying the statutory
rates because of tax-exempt interest income, no state income
taxes, and other miscellaneous items. The effective income tax
rates for the first quarters ended in 1994 and 1993 were 25.0%
and 26.2%, respectively.
The cumulative effect of a change in the accounting for
income taxes, due to the implementation of Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes" during the year ended December 31, 1993 was considered
immaterial to the consolidated financial statements.
Allowance for Loan Losses
The allowance for loan losses approximated 1.35% of
outstanding loans at March 31, 1994 compared to 1.40% at March
31, 1993 with the ratio decreasing slightly due to increased
loans in 1994. The allowance increased to $482,000 at March 31,
1994 from $458,000 at March 31, 1993. The Bank experienced net
recoveries on loans of approximately $1,000 for the quarter ended
March 31, 1994.
Management believes that the allowance for loan losses is
adequate to provide for potential loan losses, based on
information available and conditions prevailing at the date of
determination of the allowance. However, management's judgment
is based upon a number of assumptions about future events, which
are believed to be reasonable, but which may or may not prove
valid. Although management believes the allowance for loan
losses is adequate, there can be no assurance that charge-offs in
future periods will not exceed the allowance for loan losses or
that additional increases in the allowance for loan losses will
not be required.
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
For the Period Ended March 31, 1994 and 1993
Specific reserves have been established for specifically
identified problem loans where management considers losses to be
likely. A general reserve has been established by management to
provide for loans considered to be potential problems as well as
for future problem loans which are currently unidentified.
Barrow Bancshares has allocated the allowance for loan losses
according to the amount deemed to be reasonably necessary to
provide for the possibility of losses being incurred within the
categories of loans set forth in the table below. The amount of
such components of the allowance for loan losses at March 31,
1994 and the ratio of loans in each category to the outstanding
loan balance are presented below:
<TABLE>
<CAPTION>
Commercial Real
Financial, & Estate Consumer
agricultural Loans Loans Total
<S> <C> <C> <C> <C>
Allowance for
Loan Losses $300 $158 $24 $482
Ration of Loans
in each category 36% 60% 4% 100%
</TABLE>
Asset Quality
The following table summarizes nonperforming assets and
allowances for loan losses data as of March 31, 1994 and March 31,
1993:
<TABLE>
<CAPTION>
March 31, 1994 March 31, 1993
Amount % of Loans Amount % of Loans
(Amounts in thousands, except percentages)
<S> <C> <C> <C> <C>
Non-accrual loans $ - - % $ - - %
Restructured loans-not in
compliance with modified
terms - - - -
Other real estate owned - - - -
Total nonperforming assets $ - - % 8 .02%
Loans past due 90 days or
more and still accruing
interest $ - - % $ - - %
Allowance for loan losses
to period end loans 1.35% 1.40%
</TABLE>
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
For the Period Ended March 31, 1994 and 1993
The following table summarizes loan balances at March 31,
1994 and 1993, average loans outstanding during the year, and
changes in the allowance for loan losses arising from loans
charged off by loan category, recoveries on loans previously
charged off by loan category, and additions to the allowance
which have been charged to operating expense.
<TABLE>
<CAPTION>
For the period ended March 31
1994 1993
(dollar amounts are presented in thousands)
<S> <C> <C>
Amount of net loans
outstanding at end
of quarter $35,088 $32,346
Average amount of
net loans outstanding 35,700 32,500
Allowance for loan
loses at beginning
of quarter 471 457
Loans charged off - 0
Recoveries of loans
previously charged off: 1 1
Net loans charged
off (recovered) (1) (1)
Provision for loan losses 10 0
Allowance for loan
losses, end of quarter $482 $458
Ratio of net loans
charged off to average
net loans outstanding -% -%
</TABLE>
Liquidity and Interest Rate Sensitivity
Liquidity management involves the ability to meet the cash
flow requirements of customers who may be either depositors
wanting to withdraw funds or borrowers needing assurance that
sufficient funds will be available to meet their credit needs and
the ability to fund these commitments. Interest rate sensitivity management
seeks to maintain consistent and acceptable net interest spreads and to
enhance growth of net interest income through periods of changing interest
rates.
Barrow Bancshares seeks to meet day-to-day liquidity needs through
management of the cash and federal funds accounts. Short-term liquidity is
maintained by the management of funds invested in short-term instruments such
as federal funds sold. Long-term liquidity is maintained through the
management of investment securities and the loan portfolio in conjunction
with adding to the core deposit base through the procurement of additional
funds from depositors or through money market instruments.
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
For the Period Ended March 31, 1994 and 1993
Capital Resources and Adequacy
There are various measures of capital adequacy for banks and bank
holding companies such as risk-based capital guidelines and the leverage
ratio. At March 31, 1994, the Bank's regulatory capital and the required
minimums under existing regulations are as follows:
<TABLE>
<CAPTION>
Actual Required
Capital Minimum
Amount
<S> <C> <C>
Tier 1 risk-based 18.43% 4.00%
Total risk-based 19.68% 8.00%
Primary Capital $5,826,000
Total Capital $6,221,000
</TABLE>
Inflation
Inflation impacts the growth in total assets in the banking industry and
causes a need to increase equity capital at higher than normal rates to meet
capital adequacy requirements. Barrow Bancshares copes with the effects of
inflation through effectively managing its interest rate sensitivity gap
position, by periodically reviewing and adjusting its pricing of services to
consider current costs, and through retainage of net income.
Recent Accounting Pronouncements
During May, 1993, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 114, "Accounting by Creditors for Impairment of a Loan" and
SFAS No. 115, "Accounting for Certain Investment in Debt and Equity
Securities."
SFAS No. 114 requires impaired loans to be measured based on the present
value of expected future cash flows, discounted at the Loan's effective
interest rate, or at the loan's observable market price, or the fair value of
the collateral if the loan is collateral dependent, beginning in 1995. SFAS
No. 114 may be adopted prior to 1995. Barrow Bancshares has not yet
determined the actual impact of SFAS No. 114 on its financial statements or
made a determination of whether it will adopt SFAS No. 114 prior to 1995, but
the effect, if any, is expected to be nominal as there are no currently
recognized impaired loans.
<PAGE>
Barrow Bancshares
Management's Discussion and Analysis
of Financial Condition and Results of Operations
For the Period Ended March 31, 1994 and 1993
SFAS No. 115 requires investments to be classified in three categories;
held-to-maturity securities (reported at amortized cost), trading securities
(reported at fair market value) and available-for-sale securities (reported
at fair value). Unrealized gains or losses on trading securities are
included in earnings. Unrealized gains or losses on available-for-sale
securities are excluded from earnings and reported in a separate component of
shareholders' equity, net of income taxes. SFAS No. 115 is effective
beginning in 1994.
<PAGE>
APPENDIX A
AGREEMENT OF REORGANIZATION
AND
PLAN OF MERGER
THIS AGREEMENT OF REORGANIZATION AND PLAN OF MERGER
(hereinafter referred to as the "Agreement"), dated as of
March 15, 1994, between FIRST NATIONAL BANCORP, a Georgia
corporation (hereinafter sometimes referred to as "Bancorp"), and
BARROW BANCSHARES, INC. (hereinafter sometimes referred to as
"Barrow"), a Georgia corporation.
W I T N E S S E T H:
WHEREAS, Bancorp is a multiple bank holding company operating
in North Georgia;
WHEREAS, Barrow is a one-bank holding company which owns all
of the outstanding stock of Barrow Bank & Trust Company, a state
banking association located in Barrow County, Georgia (hereinafter
sometimes referred to as the "Bank");
WHEREAS, the Boards of Directors of Bancorp and Barrow deem it
desirable to enter into this Agreement providing for Barrow to be
merged into Bancorp, with Bancorp being the surviving corporation
and with the result that Bank shall thereafter be a wholly-owned
subsidiary of Bancorp, with shareholders of Barrow receiving shares
of Bancorp in exchange for their Barrow shares; and
WHEREAS, the parties believe that the merger will broaden
capital and money markets available to Bank and Bancorp, enable the
parties to compete more effectively with other banks in the area,
and give the shareholders of Barrow an interest in a more
diversified enterprise and securities in a more widely held
company;
NOW, THEREFORE, in consideration of their mutual promises, the
parties enter into this Agreement of Reorganization. Paragraphs 1
through 3 shall constitute the plan of merger between Barrow and
Bancorp as contemplated by the Georgia Business Corporation Code,
O.C.G.A. Section 14-2-1101 et seq. and any successor provisions thereto.
1. Agreement to Merge.
(a) On the Merger Date, as hereinafter defined, Barrow
shall be merged into Bancorp, which shall be the survivor
(hereinafter sometimes referred to as the "Surviving
Corporation"). Such merger shall be pursuant to the
applicable provisions of the Georgia Business Corporation
Code (O.C.G.A. Section 14-2-1101 et seq.) and any successor
provisions thereto.
(b) The articles of incorporation of Bancorp shall be
the articles of incorporation of the Surviving
Corporation. The bylaws of Bancorp shall be the bylaws
of the Surviving Corporation. The name "First National
Bancorp" shall be the name of the Surviving Corporation.
(c) The board of directors and officers of Bancorp shall
continue to be the board of directors and officers of the
Surviving Corporation.
(d) The corporate existence of Barrow and Bancorp shall
be merged into and continued in Bancorp as the Surviving
Corporation. The established offices and facilities of
Barrow and Bancorp immediately prior to the merger shall
remain the established offices and facilities of the
Surviving Corporation.
(e) All rights, properties and privileges of every kind
or character of Barrow and Bancorp shall be transferred
to or vested in Bancorp as the Surviving Corporation by
virtue of such merger without any deed, assignment or
other transfer. Bancorp, as the Surviving Corporation,
shall by virtue of the merger be responsible and liable
for all of the liabilities and obligations of both Barrow
and Bancorp.
<PAGE>
2. Conversion of Barrow Stock.
(a) On the Merger Date, the outstanding shares of common
stock of Barrow shall be converted into the following
rights:
(i) At the time of the merger described in subparagraph
1(a), each share of outstanding Barrow stock shall be
converted into 1.37 shares of Bancorp common
stock;provided, however, that the foregoing conversion
ratio may be subject to adjustment pursuant to
subparagraph 2(b) and 2(c).
(ii) Fractional shares of Bancorp common stock will not
be issued in the merger. Any Barrow shareholder who
would be entitled to a fraction of a Bancorp share shall
receive cash payment in lieu of such fractional share in
an amount determined by multiplying the fraction of a
share he would otherwise be entitled to receive by
$20.50; provided, however, that the foregoing amount
shall be subject to adjustment pursuant to the provisions
of subparagraph 2(b) and 2(c)
(b) In the event that prior to the Merger Date, Bancorp
declares any stock split or stock dividend, any reverse
stock split or combination, or any similar transaction
where the record date for such transaction precedes the
Merger Date (or such later date that the holders of
record of shares of Barrow common stock would be deemed
to be the holders of record of shares of Bancorp common
stock as a result of the Merger) the number of shares of
Bancorp stock to be received by shareholders of Barrow
and the amount to be paid for fractional shares shall be
proportionately and appropriately adjusted.
(c) (i) If the average of the daily closing price
(average of bid and ask price) per share of Bancorp stock
("Bancorp Closing Price") during the fifteen (15) trading
day period ending on the Friday immediately preceding the
scheduled date of the Barrow shareholders meeting called
to consider this Agreement shall have been less than
$18.00, then Barrow, by action of its board of directors,
shall have the right, at its option,
(A) to terminate this Agreement;
(B) to negotiate with Bancorp for an exchange ratio in
the merger which will result in a greater number of
Bancorp shares being issued in the merger; or
(C) to proceed with the transactions contemplated by
this Agreement in accordance with its terms.
In the event that Barrow elects either (A) or (B) above,
Barrow shall give written notice to Bancorp of Barrows'
election prior to the meeting of Barrow shareholders. If
no such notice is given by Barrow, Barrow shall be deemed
to have elected (C) above, this Agreement shall remain in
full force and effect, and the meeting of Barrow
shareholders shall proceed as scheduled. If Barrow
elects to terminate this Agreement pursuant to (A) above,
the meeting of Barrow shareholders shall be cancelled.
If Barrow elects to attempt to negotiate new terms of the
merger pursuant to (B) above, Barrow and Bancorp shall
negotiate in good faith to reach a new mutually
satisfactory exchange ratio as soon as reasonably
practicable and the meeting of Barrow shareholders shall
be postponed and rescheduled at the earliest practicable
date if Barrow and Bancorp are able to come to agreement
on a new exchange ratio. If Barrow and Bancorp are able
to agree upon a new exchange ratio, then upon the notice
from either party to the other to that effect, this
Agreement shall be promptly amended, and the parties
shall proceed with the transactions contemplated by this
Agreement pursuant to the terms of the amended Agreement.
In such event, the parties shall file all necessary or
appropriate amendments to regulatory filings, shall
prepare appropriate amendments to proxy materials to be
sent to shareholders of Barrow together with notice to
the shareholders of the new date of the shareholders
meeting, and shall promptly take all other action which
may be necessary to comply with all applicable laws,
rules and regulations.
(ii) For purposes of this subparagraph (c) all stock
prices shall be adjusted, as necessary, to remove the
effect, if any, of any stock splits, stock dividends,
reverse stock splits, or other matters of a similar
nature arising during and between the periods of price
determination.
3. Manner of Surrendering Barrow Stock. Following
consummation of the merger, each Barrow shareholder, except any
shareholder who has filed notice of his election to dissent from
the merger in accordance with applicable law, shall receive in
exchange for his stock a certificate representing the number of
shares of Bancorp stock into which such shares have been converted
at the conversion ratio set forth in Paragraph 2 and a Bancorp
check in settlement for a fractional share of Bancorp stock, if
any. After the Merger Date (as hereafter defined), until
surrendered as provided herein, each Barrow certificate, except
certificates held by persons who have filed notice of their
election to dissent from the merger in accordance with applicable
law, shall be deemed for all corporate purposes to evidence the
number of whole shares of Bancorp common stock into which the stock
represented by such certificate shall have been converted as
provided in Paragraph 2, and such certificates, as between the
holders and Bancorp, shall evidence the holder's right to receive
Bancorp stock certificates and cash in accordance with this
Agreement; provided, however, that Bancorp stock certificates will
not be issued to shareholders until their certificates have been
surrendered to Mellon Securities Trust Company, as the exchange
agent, and dividends, interest or other distributions payable to
shareholders in respect of Bancorp stock into which Barrow stock
has been converted shall be retained, without interest, for the
account of such shareholders and shall not be paid until their
certificates have been surrendered in exchange for Bancorp
certificates.
4. Representations of Bancorp. As an inducement to Barrow
to enter into this Agreement, Bancorp hereby represents and
warrants to Barrow as follows:
(a) Bancorp is a Georgia corporation duly organized,
validly existing and in good standing under the laws of
the State of Georgia. Bancorp has the corporate power
and authority to carry on its business as now conducted
and to own, lease and operate its assets, properties and
businesses. Bancorp has in effect all material federal,
state and local governmental authorizations necessary for
it to own or lease its properties and assets and to carry
on its business as now conducted.
(b) Exhibit 22.1 of Bancorp's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993, will list
all active Bancorp subsidiaries as of the date of this
Agreement (the "Subsidiaries"). Each of the Subsidiaries
is either a national banking association or a state
banking corporation duly organized, validly existing, and
in good standing under the laws of the jurisdiction in
which it is organized or incorporated; has the corporate
power and authority necessary for it to own or lease its
properties and assets and to carry on its business as now
being conducted; and has all material federal, state and
local governmental authorizations necessary for it to own
or lease its properties and assets and to carry on its
business as now conducted. Bancorp owns 100% of the
issued and outstanding equity securities of each of its
Subsidiaries, free and clear of any liens, encumbrances
or restrictions whatsoever, except for the pledge of
First National Bank of Habersham stock, Granite City Bank
stock, and a portion of The First National Bank of
Gainesville stock to secure a loan from Trust Company
Bank. Neither Bancorp nor any of its Subsidiaries has
outstanding any subscriptions, warrants, rights, options
or other agreements or commitments obligating any of its
Subsidiaries to issue any additional shares of equity
securities or obligating Bancorp to sell any shares of
the equity securities of any of its Subsidiaries.
(c) Bancorp has 30,000,000 authorized shares of common
stock, $1.00 par value each, of which 15,574,084 shares
were outstanding as of February 4, 1994. No outstanding
shares of Bancorp common stock have been issued in
violation of the preemptive rights of any person, or in
violation of any federal or state securities laws such
that it would have a material adverse effect on the
business, properties, operations, prospects, or assets,
or on the condition, financial or otherwise, of Bancorp.
As of the date of this Agreement, Bancorp does not have
outstanding any subscriptions, warrants, rights, options
or other agreements or commitments obligating Bancorp to
issue shares of its capital stock except the following:
(i) Any shares of Bancorp which may be issued from time
to time by Bancorp pursuant to any of its employee stock
option plans and incentive stock option agreements
providing for the potential grant of options for selected
key employees of Bancorp and/or any subsidiary thereof
for the purchase of Bancorp stock; and
(ii) Any shares of Bancorp which may be issued from time
to time pursuant to the First National Bancorp Dividend
Reinvestment Plan which allows shareholders of Bancorp to
elect to receive shares of Bancorp in lieu of cash
dividends.
(iii) 366,382 shares of Bancorp which potentially may be
issued to common shareholders and the Series A preferred
shareholder of Metro Bancorp, Inc. in exchange for their
Metro Bancorp, Inc. stock in the merger of Metro Bancorp,
Inc. into Bancorp (the merger was approved by the Metro
Bancorp, Inc. shareholders on February 22, 1994 and will
be effected on February 28, 1994.
(d) The execution of this Agreement and the transactions
contemplated hereby have been authorized by all necessary
corporate action of Bancorp, and this Agreement is a
valid and legally binding obligation of Bancorp
enforceable in accordance with its terms, subject to any
bankruptcy or moratorium laws now or hereafter in effect.
Neither the execution and delivery of this Agreement, nor
the consummation of the transactions provided for herein
in the manner herein provided will violate any material
agreement to which Bancorp or any of its Subsidiaries is
a party or is bound; nor will the actions described
violate any law, order or decree or any provision of the
articles of incorporation or bylaws of Bancorp or any of
its Subsidiaries. Bancorp has full power,authority and
legal right to enter into this Agreement and, upon
receipt of approval by the appropriate regulatory
authorities governing banks and bank holding companies,
to consummate the transactions provided for herein.
There is no pending or, to the best of Bancorp's
knowledge, threatened litigation which would in any way
impair the ability of Bancorp to fulfill its obligations
under this Agreement.
(e) Bancorp has a class of securities registered
pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "1934 Act") and has delivered (or
will deliver within the next 60 days) to Barrow copies
of:
(i) its Annual Report on Form 10-K for its fiscal year
ended December 31, 1993 (and those portions of its 1993
Annual Report to Shareholders incorporated therein by
reference), filed pursuant to Section 13 of the 1934 Act;
(ii) the Proxy Statement for its Annual Meeting of
Shareholders to be held April 20, 1994, filed pursuant to
Section 14 of the 1934 Act; and
(iii) its Current Report on Form 8-K dated January 14,
1994, filed pursuant to Section 13 of the 1934 Act.
These reports and proxy statement include all regular and
periodic reports and proxy statements required to be
filed by Bancorp with the Securities and Exchange
Commission ("SEC") since January 1, 1994 and are herein
collectively called the "Bancorp SEC Reports". The
Bancorp SEC Reports taken together correctly describe,
among other things, the business, operations and
principal properties of Bancorp and its Subsidiaries in
accordance with the requirements of the applicable report
form. As of the respective dates of filing, none of the
Bancorp SEC Reports contained or will contain any untrue
statement of material fact or omitted to state any
material fact necessary to make the statements therein
not misleading. The financial statements contained or to
be contained in the Bancorp SEC Reports have been or will
be prepared in accordance with generally accepted
accounting principles consistently applied and present or
will present fairly the consolidated financial condition
of Bancorp and its Subsidiaries as of the dates thereof
and the consolidated results of their operations for the
periods covered thereby.
(f) Since the date of its latest published financial
statements to be included in the Bancorp SEC Reports,
there have not been any changes in the condition of
Bancorp or any of its Subsidiaries, any contracts entered
into by Bancorp or any of its Subsidiaries, or other
changes in the operations of Bancorp or any of its
Subsidiaries which, in either case, would have a material
adverse effect on the condition or results of operations
of Bancorp and its Subsidiaries, taken as a whole.
(g) The shares of Bancorp common stock to be issued to
shareholders of Barrow pursuant to this Agreement and the
merger will, when issued according to the terms of this
Agreement, be validly issued, fully paid, and non-
assessable.
5. Covenants of Bancorp.
(a) From the date of this Agreement until the Merger
Date or until this Agreement is terminated by the parties
as herein provided, Bancorp covenants as follows:
(i) Except as otherwise provided herein or consented to
in writing by Barrow (which consent will not be
unreasonably withheld), Bancorp will conduct its
operations and will cause each of its Subsidiaries to
conduct its operations in accordance with its ordinary
course of business consistent with past practice, and
shall use and shall cause each of its Subsidiaries to
use, its best efforts to maintain and preserve its
business, organization, employees and good relationships
with its shareholders and its customers and others having
business dealings with it.
(ii) Bancorp will use its best efforts to cause its
officers and employees to furnish Barrow such information
and operating data and other information as to its
business and properties, as Barrow shall from time to
time reasonably request to facilitate the filing of
regulatory applications, preparation of documents and
investigations made necessary or appropriate by this
Agreement.
(iii) Except as otherwise provided herein or consented
to in writing by Barrow (which consent will not be
unreasonably withheld), Bancorp will assure that neither
Bancorp nor any of its Subsidiaries will:
(1) amend its articles of incorporation or bylaws or
change in any manner the rights of its common stock or
other securities or the character of its business, except
as referred to in subparagraph 4(c) above;
(2) incur any obligation or liability, direct or
indirect, absolute or contingent, other than those
incurred in the ordinary course of business on reasonable
terms;
(3) issue or sell or commit to issue or sell any
additional shares of common stock or securities
convertible into shares of common stock of Bancorp for
consideration (in the case of convertible securities on
a fully converted basis) of less than $18.00 per share of
common stock, other than pursuant to existing options
issued under its employee stock option plans, other than
pursuant to its existing dividend reinvestment plan, and
other than in the merger with Metro Bancorp, Inc.;
(4) except in the ordinary course of business, mortgage
pledge or otherwise encumber any of its properties or
assets;
(5) sell or transfer any of its properties or assets, or
cancel, release or assign any indebtedness owed to it or
any claim held by it, except in the ordinary course of
business; or
(6) pay any dividends or make other distributions or
payments in respect of capital stock of Bancorp, except
for dividends at times and in amounts consistent with
past practice.
(b) Bancorp agrees to promptly take such action as may
reasonably be requested by Barrow to timely carry out the
terms of this Agreement in accordance with its terms and
in accordance with all applicable laws, rules and
regulations relating to banks, bank holding companies or
securities regulation.
(c) Without limiting the generality of subparagraph
5(b), Bancorp covenants to cause the Proxy Statement
(hereinafter referred to) to contain such information
relating to Bancorp as will assure that the Proxy
Statement (hereinafter referred to) shall not contain any
untrue statement of material fact relating to Bancorp or
omit to state any material fact relating to Bancorp
required to be stated therein or necessary in order to
make the statements made therein, in light of the
circumstances under which they are made, not misleading.
(d) Bancorp represents and warrants that it has
securities registered pursuant to Section 12 of the 1934
Act, has been subject to the reporting requirements of
Section 13 of the 1934 Act for a period of at least 90
days, and has filed all the reports required to be filed
thereunder during the twelve months preceding the date of
this Agreement. Bancorp covenants that it will continue
to be subject to the reporting requirements of Section 13
of the 1934 Act and file all reports required to be filed
thereunder for the period beginning on the date of this
Agreement and ending three years following the Merger
Date.
(e) Within 30 days following the end of the first full
calendar month after the Merger Date, Bancorp shall
prepare and file with the SEC a Current Report on Form
8-K containing the financial results of post-Merger
combined operations of Bancorp, Barrow and Bank meeting
the requirements of SEC Accounting Series Releases Nos.
130 and 135.
(f) Bancorp agrees to use its best efforts to prepare
and file all regulatory applications and securities
legislations required to consummate the transaction as
soon as possible.
6. Representations of Barrow. As an inducement to Bancorp
to enter into this Agreement, Barrow hereby represents and warrants
to Bancorp as follows:
(a) Bank is a state banking association duly organized
and validly existing under the laws of the State of
Georgia. Bank has been in existence and continuously
operating or incorporated as a bank for a period of five
years or more. The authorized capital stock of Bank
consists solely of 2,000,000 shares of common stock,
$5.00 par value per share, of which 340,581 shares are
validly issued and outstanding, fully paid and non-
assessable. Bank does not have any other class of equity
securities outstanding or have outstanding any
subscriptions, warrants, rights, options or other
agreements or commitments obligating Bank to issue shares
of its common stock or any other equity security. One
hundred percent (100%) of the outstanding shares of
common stock of Bank and all other outstanding equity
securities of Bank, if any, are owned by Barrow free and
clear of any liens, encumbrances or restrictions
whatsoever.
(b) Barrow is a Georgia corporation duly organized,
validly existing and in good standing under the laws of
the State of Georgia. Barrow (i) is duly authorized by
all applicable federal, state and local laws, rules and
regulations and (ii) has proper power and authority under
its articles of incorporation, bylaws and other corporate
documents to operate as a bank holding company and to own
100% of the equity securities of Bank. The authorized
capital stock of Barrow consists solely of 2,000,000
shares of common stock $5.00 par value, of which 385,012
shares are validly issued and outstanding, fully paid and
non-assessable as of February 4, 1994 (including 5,330
shares which have been purchased as treasury stock, but
which have not been retired). Also, there are currently
option agreements outstanding which may require the
issuance of 1,163 shares of Barrow common stock prior to
consummation of the merger. No outstanding shares of
Barrow common stock have been issued in violation of the
preemptive rights of any person, or in violation of any
federal or state securities laws such that it would have
a material adverse effect on the business, properties,
operations, prospects, or assets, or in the condition,
financial or otherwise, of Barrow and Bank. Barrow does
not have outstanding any other shares or any
subscriptions, warrants, rights, options or other
agreements or commitments obligating Barrow to issue
shares of its common stock or any other equity
securities, except for stock options to purchase 1,163
shares of Barrow stock.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary
corporate action on the part of the board of directors of
Barrow, having been approved by the affirmative,
unanimous vote of the members of the board of directors
of Barrow; but the merger must be submitted to the Barrow
shareholders for their approval. This Agreement is a
valid and legally binding obligation of Barrow,
enforceable according to its terms, subject to any
bankruptcy or moratorium laws now or hereafter in effect.
Neither the execution and delivery of this Agreement, nor
the consummation of the transactions provided for herein
in the manner herein provided will violate any material
agreement to which Barrow or Bank is a party or is bound;
nor will the actions described violate any law, order or
decree or any provision of the articles of incorporation
or bylaws of Barrow or Bank. Barrow has full power,
authority and legal right to enter into this Agreement
and, upon the receipt of approval by the appropriate
regulatory authorities governing banks and bank holding
companies and upon the affirmative vote of more than 50%
of the total outstanding shares of Barrow, to consummate
the transactions provided for herein. There is no
pending or, to the best of Barrow's knowledge, threatened
litigation which would in any way impair the ability of
Barrow to fulfill its obligations under this Agreement.
(d) Barrow has delivered to Bancorp copies of the
consolidated year-end financial statements of Barrow and
Bank, as of December 31, 1991, December 31, 1992, and
December 31, 1993. Said financial statements for the
years ending December 31, 1992, December 31, 1991, and
December 31, 1990 are true, correct and complete, have
been prepared in accordance with generally accepted
accounting principles consistently followed throughout
the periods indicated, and fairly present the
consolidated financial condition of Barrow and Bank as of
the date of said statement.
(e) Except as reflected or referred to in the
consolidated financial statements of Barrow and Bank
(including the notes thereto) at December 31, 1993, there
were no material liabilities or obligations of Barrow or
Bank whether liquidated or unliquidated, accrued,
absolute, contingent or otherwise, which were required to
be reflected in the consolidated financial statements of
Barrow and Bank as of December 31, 1993, in accordance
with generally accepted accounting principles.
(f) Since December 31, 1993, there have not been (i) any
changes in the assets, liabilities, or business of Barrow
or Bank other than changes in the ordinary course of
business, none of which has been, individually or in the
aggregate, materially adverse to the financial condition
and results of operations of Barrow and Bank, taken as a
whole; (ii) any increase in the compensation payable or
to become payable by Barrow or Bank to any of its
directors, officers, employees, or agents, or any bonus
payment; (iii) any labor dispute, or any event or
condition of any character specific to Barrow and Bank,
materially adversely affecting the business or prospects
of Barrow and Bank, taken as a whole; or (iv) any
redemption, purchase or other transaction involving
shares of Barrow or Bank to which Barrow or Bank or, to
the best of Barrow's knowledge, any "affiliate" of Barrow
or Bank has been a party. For purposes of this
Agreement, the term "affiliate" shall mean any person
included within the definition of that term under any
Federal securities laws, rules or regulations.
(g) Neither this Agreement nor any of the documents
furnished pursuant to this Agreement by Barrow to Bancorp
or any of its representatives, taken as a whole, is or
will be false or misleading, or contains or will contain
any material misstatement of fact, or omits or will omit
to state any material fact required to be stated to make
the statements therein not misleading.
(h) Barrow and Bank have prepared and filed, or will
prepare and file, with the appropriate government
authorities all federal, state and local tax returns
(including, without limitation, income, franchise, sales
and use, property, payroll and withholding tax returns
and information returns) required to be filed by them on
or prior to the Closing Date. To the best of the
knowledge of Barrow, such returns reflect all tax
liabilities of Barrow and/or Bank for the periods in
question, and Barrow and/or Bank has paid or caused to be
paid all taxes shown to be due on such tax returns and on
all assessments received by them to the extent that such
assessments have become due.
(i) Barrow and Bank have good and marketable title to
the properties (real and personal) and assets reflected
in the consolidated December 31, 1993 financial statement
(except as sold or otherwise disposed of in the ordinary
course of business for a fair consideration since the
date of said statement), free and clear of all liens,
claims and encumbrances, except (i) liens for taxes not
yet due and payable, and (ii) easements, rights of way
and restrictions which are of record and which do not
materially affect the present use and occupancy of the
property by Barrow and Bank.
(j) There is no litigation, proceeding or governmental
investigation pending, or to the best of Barrow's
knowledge, threatened, against or relating to Barrow or
Bank, or their properties or business, or the
transactions contemplated by this Agreement, which will
have any material adverse effect on the business,
properties, operations, prospects, or assets, or on the
condition, financial or otherwise, of Barrow or Bank,
taken as a whole, nor is there any fact known to Barrow
which it should reasonably believe would be the basis for
any such action.
(k) Barrow is not subject to the reporting requirements
of Section 13(a) or 15(d) of the 1934 Act, and its common
stock is not registered under Section 12 of the 1934 Act.
7. Covenants of Barrow.
(a) From the date of this Agreement until the Merger
Date or until this Agreement is terminated by the parties
as herein provided, Barrow covenants as follows:
(i) Except as otherwise provided herein or consented
to in writing by Bancorp (which consent will not be
unreasonably withheld), Barrow and Bank will each conduct
its operations in accordance with its ordinary course of
business consistent with past practice and shall use its
best efforts to maintain and preserve its business,
organization, employees and good relationships with its
shareholders and with its customers and others having
business dealings with it.
(ii) Barrow and Bank will each use its best efforts to
cause its officers and employees to furnish to Bancorp
such financial and operating data and other information
as to its business and properties as Bancorp shall from
time to time reasonably request to facilitate the filing
of regulatory applications, preparation of documents and
investigations made necessary or appropriate by this
Agreement.
(iii) Except as otherwise provided herein or consented
to in writing by Bancorp (which consent will not be
unreasonably withheld), Barrow will assure that neither
Barrow nor Bank will:
(1) amend its articles of incorporation or bylaws, or
merge or consolidate with or into any other corporation
or permit any other corporation to merge into it, or
change in any manner the rights of its common stock or
other securities or the character of its business;
(2) incur any obligation or liability, direct or
indirect, absolute or contingent, other than those
incurred in the ordinary course of business on reasonable
terms;
(3) except in the ordinary course of business, incur any
indebtedness for borrowed money or assume, guarantee,
endorse or otherwise become responsible for the
obligations of any other individual, firm or corporation,
or make any loans or advances to any other individual,
firm or corporation;
(4) issue or sell any additional shares of common stock
(including treasury shares), securities convertible into
shares of common stock or any other equity securities or
options or other commitments for the issuance of shares
of stock or such securities, except pursuant to presently
outstanding stock options to purchase Barrow shares.
(5) except in the ordinary course of business, mortgage,
pledge or otherwise encumber any of its properties or
assets;
(6) sell or transfer any of its properties or assets, or
cancel, release or assign any indebtedness owed to it or
any claim held by it, except in the ordinary course of
business;
(7) make or commit to make any investments of a capital
nature which individually or in the aggregate exceed
$25,000;
(8) except in the ordinary course of business, enter
into or terminate or amend any material contract or
agreement or make any material change in any of its
material leases, contracts, arrangements, plans or other
legally binding arrangements;
(9) increase in any manner the compensation of any of
its directors, officers or employees, or pay or agree to
pay any pension or retirement allowance not required by
any existing plan or agreement to any such persons, or
commit itself to any pension, retirement or profit-
sharing plan or agreement or employment agreement with or
for the benefit of any officer, employee or other person;
(10) cancel or terminate any of its current insurance
policies or any of the coverage thereunder unless
simultaneously with such termination or cancellation,
replacement policies substantially similar to those
cancelled or terminated are in full force and effect; or
(11) pay any dividends or make other distributions or
payments in respect of its stock.
(iv) Barrow shall use its best efforts to assure that
Barrow, Bank, each member of the board of directors of
Barrow and Bank and each of the executive officers of
Barrow and Bank shall actively support the merger, shall
recommend the merger to the shareholders of Barrow, shall
actively solicit proxies of shareholders of Barrow to be
voted in favor of the merger, and shall urge all
shareholders of Barrow to vote in favor of the merger.
In addition, Barrow shall use its best efforts to assure
that Barrow, Bank, each member of the board of directors
of Barrow and Bank and each of the officers of Barrow and
Bank shall take such action as is necessary or
appropriate to cause the merger to be timely consummated
in accordance with the terms of this Agreement. In
addition, upon execution hereof Barrow shall cause each
member of the board of directors of Barrow to execute a
letter agreement in favor of Bancorp obligating such
board member to vote his Barrow shares in favor of the
merger. In addition, Barrow shall use its best efforts
to assure that members of the board of directors of
Barrow and Bank and their affiliates shall not sell,
transfer or dispose of any Barrow stock from the date
hereof through the date of consummation of the Merger and
that such board members and their affiliates shall not
sell, transfer or dispose of Bancorp common stock
received in the merger until after the date on which
Bancorp publishes financial results covering at least 30
days of post-merger combined operations. Notwithstanding
any of the foregoing, however, the directors of Barrow
and Bank shall not be obligated to take or not to take
any action that they shall be advised in writing by
counsel may be contrary to their fiduciary duties as
directors of Barrow or Bank.
(v) Neither Barrow, nor Bank, nor any of their officers,
nor any member of their board of directors, will enter
into negotiations or discussions for the purpose of
selling or exchanging any shares or assets of Barrow or
Bank, or for the purpose of causing the merger or
consolidation of Barrow or Bank into or with any other
entity; provided, however, that the directors of Barrow
and Bank shall not be obligated to take or not to take
any action that they shall be advised in writing by
counsel may be contrary to their fiduciary duties as
directors of Barrow or Bank.
(b) Barrow agrees to promptly cause Mauldin & Jenkins
to conduct, at Bank's expense, any certified audits of
Barrow and Bank which are required to comply with any
laws, rules or regulations applicable to the transactions
contemplated by this Agreement, including (without
limitation) those required to complete any registration
of Bancorp securities under Federal Securities Laws, and
to assure pooling of interests treatment for the
transaction, and to permit said accountants to make such
other accounting and/or credit examination of the books,
records, financial statements and loan portfolio of
Barrow and Bank which they deem necessary to complete the
audits.
(c) Barrow shall cause to be furnished to each of its
shareholders a proxy statement (hereinafter sometimes
referred to as the "Proxy Statement") prepared by Bancorp
with the assistance of Barrow and Bank relating to the
meeting of Barrow shareholders called to act upon this
Agreement, which Bancorp covenants will contain
information that would be required to be contained in the
proxy statement of Barrow if it were subject to Section
14(a) of the 1934 Act and which Bancorp covenants will
comply with all applicable securities laws, rules or
regulations, all applicable regulations of the Federal
Reserve Board, the Federal Deposit Insurance Corporation,
the Comptroller of the Currency, the Georgia Department
of Banking and Finance and any other laws, rules or
regulations applicable to the transactions contemplated
by this Agreement. Barrow shall promptly provide to
Bancorp all information relating to Barrow and Bank as
Bancorp shall request to aid in the preparation of the
Proxy Statement, and Barrow covenants that such
information, taken as a whole, shall be true, complete
and correct, and shall not contain any untrue statement
of material fact or omit to state any material fact
required to be stated therein or necessary in order to
make the statements made therein, in light of the
circumstances under which they are made, not misleading.
In addition, Barrow shall promptly furnish to Bancorp
such additional data and information as may be requested
by Bancorp for the timely preparation of a registration
statement (the "Registration Statement") covering the
registration of securities of Bancorp to be issued in the
transaction contemplated by this Agreement.
(d) Barrow agrees to promptly submit this Agreement to
its shareholders for adoption, at a special meeting
thereof which shall be called and held at least twenty
(20) business days after the delivery to its shareholders
of the prospectus and Proxy Statement contained in the
Registration Statement submitted by Bancorp but, unless
consented to by Bancorp, not more than forty-five (45)
days after the effective date of the Registration
Statement. Barrow shall solicit proxies from its
shareholders for the purpose of voting on the adoption of
this Agreement and shall mail to each of its shareholders
an appropriate and timely notice of such meeting, a form
of proxy and a prospectus and Proxy Statement. Barrow
consents to the use of the Proxy Statement by Bancorp in
connection with the registration under the Securities Act
of 1933 of the Bancorp shares to be issued in the merger.
The notice, Proxy Statement, proxy and any other
materials sent to shareholders shall in all respects be
in form and substance reasonably satisfactory to Bancorp
and Barrow.
(e) Upon the approval of this Agreement by the greater
of (i) the holders of a majority of the outstanding
Barrow common shares or (ii) the holders of the minimum
number of shares required by the articles of
incorporation of Barrow, Barrow, upon request of Bancorp,
will execute in duplicate and return to Bancorp for
filing with the Georgia Secretary of State articles of
merger prepared by Bancorp containing such information as
may be required by Georgia law and as may be consistent
with this Agreement.
(f) Barrow shall take such action, shall cause the Bank
to take such action, and shall use its reasonable best
efforts to cause the officers, directors and other
affiliates of both Barrow and Bank to take such action,
as may be necessary to assure that the transactions
contemplated by this Agreement may be accounted for by
Bancorp using the "pooling of interests" method of
accounting.
(g) Barrow shall promptly take such action and shall
cause the Bank to take such action as may be reasonably
requested by Bancorp to timely carry out the terms of
this Agreement in accordance with its terms and in
accordance with all applicable laws, rules and
regulations.
(h) Barrow agrees to cause the holders of Barrow stock
options to agree in writing on or before March 15, 1994,
that their options shall expire on the Merger Date.
8. Conditions to Obligations of Barrow. The obligations of
Barrow hereunder shall, at its option, be subject to the
satisfaction of the following conditions:
(a) There shall have been issued an opinion of Stewart,
Melvin & House, counsel to Bancorp, in form and substance
reasonably satisfactory to Barrow, to the effect that,
under applicable provisions of the Internal Revenue Code
of 1986, as amended, no gain or loss will be recognized
for federal income tax purposes by Barrow, Bancorp or the
shareholders of Barrow to the extent they receive stock
of Bancorp in connection with the proposed
reorganization. Said opinion will not state that cash
received in exchange for fractional shares or in the
exercise of dissenters' rights will be non-taxable.
(b) As of the Closing Date, there shall have occurred no
material adverse change in the financial condition or
results of operations of Bancorp, taken as a whole, from
that represented in the consolidated unaudited financial
statements of Bancorp as of December 31, 1993, which have
been previously provided Barrow, and there shall not have
occurred any loss or damage to any of its properties or
assets which would materially impair its ability to
conduct its business after the merger substantially as it
is now being conducted.
(c) The representations and warranties of Bancorp
contained in this Agreement shall be true in all material
respects as of the date hereof and as of the Closing Date
with the same effect as though such representations and
warranties have been made on and as of the Closing Date,
except for any such representations and warranties made
as of a specified date, which shall be true and correct
in all material respects as of such date.
(d) Bancorp shall have performed, at or prior to the
Closing Date, all agreements and covenants required by
this Agreement to be performed by it.
(e) Bancorp shall have delivered to Barrow:
(i) a certificate executed by the Chairman or the
President of Bancorp dated as of the Closing Date, and
certifying in such detail as Barrow may reasonably
request to the fulfillment of the conditions specified in
subparagraphs 8(b), 8(c) and 8(d) hereof; and
(ii) duly adopted resolutions of the Board of Directors
of Bancorp, certified by the Secretary or an Assistant
Secretary of Bancorp as of the Closing Date, authorizing
and approving the execution of this Agreement on behalf
of Bancorp and the consummation of the transactions
contemplated herein.
9. Conditions to Obligations of Bancorp. The obligations of
Bancorp to consummate and effect the merger contemplated by this
Agreement shall, at the option of Bancorp, be subject to the
satisfaction of the following conditions:
(a) The representations and warranties of Barrow
contained in this Agreement shall be true in all material
respects as of the date hereof and as of the Closing Date
with the same effect as though all such representations
and warranties have been made on and as of the Closing
Date, except for any such representations and warranties
made as of a specified date, which shall be true and
correct in all material respects as of such date.
(b) Barrow shall have performed, at or prior to the
Closing Date, all agreements and covenants required by
this Agreement to be performed by it.
(c) As of the Closing Date, there shall have occurred no
material adverse change in the financial condition or
results of operations of Barrow and Bank, taken as a
whole, from that presented in the consolidated financial
statements of Barrow and Bank as of December 31, 1993,
which have previously been delivered to Bancorp, and
there shall not have occurred any loss or damage to any
of the properties, assets or business of Barrow and Bank,
taken as a whole, which would materially adversely affect
their financial condition, taken as a whole, or impair
the ability of either of them to conduct their business,
taken as a whole, after the Merger as now being
conducted.
(d) Bancorp shall have received an opinion of KPMG Peat
Marwick, in form and substance reasonably satisfactory to
the board of directors of Bancorp to the effect that the
transactions contemplated by this Agreement may be
accounted for by Bancorp using the "pooling of interests"
method of accounting.
(e) Barrow shall have delivered to Bancorp:
(i) a certificate executed by the Chairman or the
President of Barrow, dated as of the Closing Date and
certifying in such detail as Bancorp may reasonably
request to the fulfillment of the conditions specified in
subparagraphs 9(a), 9(b) and 9(c) hereof; and
(ii) duly adopted resolutions of the Board of Directors
and the shareholders of Barrow, certified by the
Secretary or an Assistant Secretary of Barrow as of the
Closing Date, authorizing and approving the execution of
this Agreement on behalf of Barrow and the consummation
of the transactions contemplated herein.
10. Conditions to Obligations of Bancorp and Barrow. The
obligations of Bancorp and Barrow to consummate the transactions
contemplated hereby are, at the option of either of them, subject
to the following conditions having been satisfied:
(a) The holders of the greater of (i) a majority of the
issued and outstanding stock of Barrow or (ii) the
minimum number of shares required under the articles of
incorporation of Barrow shall have been voted in favor of
the merger at the special meeting of the shareholders
duly called and held with respect thereto pursuant to
proper notice of such meeting accompanied by proper proxy
solicitation and disclosure documents.
(b) Any and all orders, permits, approvals, licenses or
qualifications from authorities administering federal
laws or laws of any state or other political subdivision
having jurisdiction, required for the consummation of the
transaction contemplated by this Agreement shall have
been obtained. This Agreement and the exchange of the
shares herein contemplated shall be in compliance with
the regulations and directives of all governmental
agencies having jurisdiction.
(c) At the time of mailing the Proxy Statement to
shareholders and thereafter through the Closing Date, the
Bancorp stock to be received by Barrow shareholders upon
the conversion of their stock shall be the subject of an
effective registration statement (subject to no stop
order) under the Securities Act of 1933 and shall be duly
registered or qualified under the securities laws of all
states in which registration or qualification is
required, or shall be exempt therefrom.
11. Closing; Notice of Closing; Merger Date.
(a) The closing of the merger shall be held on or before
the last day of the month during which the later of the
following occurs: (i) the special meeting of Barrow
shareholders to adopt this Agreement as set forth in
subparagraph 7(d) of this Agreement, or (ii) the receipt
of all applicable regulatory approvals which are required
prior to consummation of the reorganization (and the
running of any mandatory waiting periods required by such
approvals or by law), provided all conditions set forth
herein have been satisfied or waived; which date is
herein sometimes referred to as the "Closing Date";
provided, however, that the Closing Date shall not be
later than the close of business on August 31, 1994 (the
"Termination Date"). If the conditions to this Agreement
have not been satisfied or waived by the Closing Date,
then this Agreement may be terminated pursuant to
Paragraph 12. The closing shall be held at the offices
of Bancorp or any other mutually agreeable location. At
the closing, the parties shall execute and deliver such
instruments, documents and certificates as are required
by this Agreement and as are necessary or appropriate to
close the transaction contemplated hereby.
(b) The Merger Date shall be the date designated as such
in articles of merger or a certificate of merger to be
filed by Bancorp with the Georgia Secretary of State
pursuant to Georgia law. The parties contemplate that
the Merger Date shall be the same day as the Closing
Date.
12. Termination.
(a) This Agreement may be terminated by either Bancorp
or Barrow upon written notice to the other party if (i)
there is a failure of any of the conditions set forth in
Paragraph 10 hereof to be satisfied by the Closing Date
or (ii) the Closing shall not have occurred, due to no
fault of the terminating party, on or before the
Termination Date. This Agreement may be terminated by
Bancorp upon written notice to Barrow if (i) there is a
failure of any of the conditions set forth in Paragraph
9 hereof to be satisfied by the Closing Date, or (ii)
there is a material breach by Barrow of any
representation, warranty or agreement contained herein
which cannot be or has not been cured within 30 days
after the giving of written notice thereof by Bancorp to
Barrow, or (iii) such termination is allowed under
subparagraph 2(d) hereof. This Agreement may be
terminated by Barrow upon written notice to Bancorp if
(i) there is a failure of any of the conditions of
Paragraph 8 hereof to be satisfied by the Closing Date,
(ii) there is a material breach by Bancorp of any
representation, warranty or agreement contained herein
which cannot be or has not been cured within 30 days
after the giving of written notice thereof by Barrow to
Bancorp, or (iii) such termination is allowed under
subparagraph 2(c) hereof.
(b) Any notice of termination shall state the basis for
such termination. Upon termination as herein provided,
this Agreement shall be void and of no further force and
effect and no party hereto shall have any obligation or
liability to the others hereunder, except that (i) the
provisions of subparagraphs 13(f), 13(h), and 13(i) shall
survive any such termination, and (ii) a termination
based on a material breach of this Agreement shall not
relieve the breaching party from liability for an uncured
intentional and willful breach of a representation,
warranty or agreement giving rise to such termination.
13. Miscellaneous.
(a) Any of the terms or conditions of this Agreement may
be waived at any time by any party hereto for whose
benefit the term or condition applies, by action of its
Board of Directors, evidenced by a certificate signed by
its Chairman or President or other duly authorized
person.
(b) Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this
Agreement may be amended (including amendments changing
the Closing Date) or supplemented at any time by action
taken by the Boards of Directors of Bancorp and Barrow.
(c) This Agreement, the Plan of Merger and the
instruments referred to herein constitute the entire
contract among the parties and supersede all other
understandings with respect to the subject matter hereof.
(d) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original,
but all of which together shall be deemed one and the
same agreement and shall become binding on the parties
hereto when one or more counterparts has been signed by
each of the parties and delivered to the other parties.
(e) This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their successors
and assigns.
(f) Barrow and Bancorp each represent to the other that
no business broker assisted the representing party in the
negotiations leading to the execution of this Agreement.
Each party agrees to indemnify the other and hold and
save it harmless from any claim or demand for commissions
or other compensation by any broker, finder or similar
agent claiming to have been employed by or on behalf of
such party.
(g) This Agreement has been negotiated, executed and
delivered in the State of Georgia and shall be governed
by, construed and enforced in accordance with the laws of
the State of Georgia, except where federal law supersedes
state law.
(h) Bancorp and Barrow shall each pay its own expenses
in connection with the merger, including the fees and
expenses of its respective counsel and accountants. Any
certified audit of Barrow or Bank, if required, shall be
the responsibility of Bank; provided that if the Merger
is not consummated for any reason other than a violation
of a representation or covenant of Barrow set forth in
Paragraph 6 or 7, Bancorp shall reimburse Bank for or
hold Bank harmless against claims for the fees and
expenses of KPMG Peat Marwick. Notwithstanding the
foregoing, if this Agreement is terminated by either
party because of a willful and intentional breach by the
other of any representation, warranty or agreement
contained herein (and if the terminating party shall not
have been in breach in any material respect of any
representation, warranty or agreement contained herein),
then the breaching party shall pay all costs and expenses
of the other party incurred in connection with this
Agreement. Nothing contained in this subparagraph 13(h)
shall constitute or be deemed to constitute liquidated
damages for the willful and intentional breach by a party
of the terms of this Agreement or otherwise limit the
rights of the nonbreaching party.
(i) If the transactions contemplated herein are not
consummated, each party and its representatives shall
treat all information obtained from the other, and not
otherwise known to such party or already in the public
domain, as confidential, and each party shall return to
the other all copies made of material belonging to the
other party.
(j) All notices, requests and other communications shall
be in writing and shall be deemed to have been duly given
at the time delivered or mailed to the parties at the
following addresses:
(i) Barrow:
Mr. William H. Whitley
President and C.E.O.
Barrow Bank & Trust Company
614 North Broad Street
P.O. Box 724
Winder, Georgia 30680
(ii) Bancorp:
Mr. C. Talmadge Garrison
Secretary and Treasurer
303 Jesse Jewell Parkway
Suite 700
P. O. Drawer 937
Gainesville, Georgia 30503
<PAGE>
IN WITNESS WHEREOF, the parties hereto, pursuant to the
authority given by their respective Boards of Directors have caused
this Agreement to be duly executed under seal as of the date first
written above.
FIRST NATIONAL BANCORP
By: s/Peter D. Miller
Peter D. Miller,
President, C.A.O. & C.F.O.
(CORPORATE SEAL)
Attest: s/C. Talmadge Garrison
C. Talmadge Garrison
Secretary and Treasurer
BARROW BANCSHARES, INC.
By: s/W. Leeon Pruett
Title: Chairman
(CORPORATE SEAL)
Attest: s/W. H. Whitley
Title: President
<PAGE>
APPENDIX B
ARTICLE 13
DISSENTERS' RIGHTS
Part 1
RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
14-2-1301. Definitions.
As used in this article, the term:
(1) "Beneficial shareholder" means the person who is a
beneficial owner of shares held in a voting trust
or by a nominee as the record shareholder.
(2) "Corporation" means the issuer of shares held by a
dissenter before the corporate action, or the
surviving or acquiring corporation by merger or
share exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to
dissent from corporate action under Code Section
14-2-1302 and who exercises that right when and in
the manner required by Code Sections 14-2-1320
through 14-2-1327.
(4) "Fair value," with respect to a dissenter's shares,
means the value of the shares immediately before
the effectuation of the corporate action to which
the dissenter objects, excluding any appreciation
or depreciation in anticipation of the corporate
action.
(5) "Interest" means interest from the effective date
of the corporation action until the date of
payment, at a rate that is fair and equitable under
all the circumstances.
(6) "Record shareholder" means the person in whose name
shares are registered in the records of a
corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee
certificate on file with corporation.
(7) "Shareholder" means the record shareholder or the
beneficial shareholder.
14-2-1302. Right to dissent
(a) A record shareholder of the corporation is entitled
to dissent from, and obtain payment of the fair value of
his shares in the event of, any of the following
corporate actions:
(1) Consummation of a plan of merger to which the
corporation is a party:
(A) If the approval of the shareholders of the
corporation is required for the merger by Code
Section 14-2-1103 or the articles of incorporation
and the shareholder is entitled to vote on the
merger; or
(B) If the corporation is a subsidiary that is
merged with its parent under Code Section 14-2-
1104;
(2) Consummation of a plan of share exchange to which
the corporation is a party as the corporation whose
share will be acquired, if the shareholder is
entitled to vote on the plan;
(3) Consummation of a sale or exchange of all or
substantially all of the property of the
corporation if a shareholder vote is required on
the sale or exchange pursuant to Code Section 14-2-
1202, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by
which all or substantially all of the net proceeds
of the sale will be distributed to the shareholders
within one year after the date of sale;
(4) An amendment of the articles of incorporation that
materially and adversely affects rights in respect
of a dissenter's shares because it:
(A) Alters or abolishes a preferential right of
the shares;
(B) Creates, alters, or abolishes a right in
respect of redemption, including a provision
respecting a sinking fund for the redemption or
repurchase, of the shares;
(C) Alters or abolishes a preemptive right of the
holder of the shares to acquire shares or other
securities;
<PAGE>
(D) Excludes or limits the right of the shares to
vote on any matter, or to cumulate votes, other
than a limitation by dilution through issuance of
shares or other securities with similar voting
rights;
(E) Reduces the number of shares owned by the
shareholder to a fraction of a share if the
fractional share so created is to be acquired for
cash under Code Section 14-2-604; or
(F) Cancels, redeems, or repurchases all or part
of the shares of the class; or
(5) Any corporate action taken pursuant to a share-
holder vote to the extent that Article 9 of this
chapter, the articles of incorporation, bylaws, or
a resolution of the board of directors provides
that voting or nonvoting shareholders are entitled
to dissent and obtain payment for their shares.
(b) A shareholder entitled to dissent and obtain payment
for his shares under this article may not challenge the
corporate action creating his entitlement unless the
corporate action fails to comply with procedural
requirements of this chapter or the articles of
incorporation or bylaws of the corporation or the vote
required to obtain approval of the corporate action was
obtained by fraudulent and deceptive means, regardless of
whether the shareholder has exercised dissenter's rights.
(c) Notwithstanding any other provision of this article,
there shall be no right of dissent in favor of the holder
of shares of any class or series which, at the record
date fixed to determine the shareholders entitled to
receive notice of and to vote at a meeting at which a
plan of merger or share exchange or a sale or exchange of
property or an amendment of the articles of incorporation
is to be acted on, were either listed on a national
securities exchange or held of record by more than 2,000
shareholders, unless:
(1) In the case of a plan of merger or share exchange,
the holders of shares of the class or series are
required under the plan of merger or share exchange
to accept for their shares anything except shares
of the surviving corporation or another publicly
held corporation which at the effective date of the
merger or share exchange are either listed on a
national securities exchange or held of record by
more than 2,000 shareholders, except for scrip or
cash payments in lieu of fractional shares; or
(2) The articles of incorporation or a resolution of
the board of directors approving the transaction
provides otherwise.
14-2-1303. Dissent by nominees and beneficial owners.
A record shareholder may assert dissenters' rights as to
fewer than all the shares registered in his name only if
he dissents with respect to all shares beneficially owned
by any one beneficial shareholder and notifies the
corporation in writing of the name and address of each
person on whose behalf he asserts dissenters' rights.
The rights of a partial dissenter under this Code section
are determined as if the shares as to which he dissents
and his other shares were registered in the names of
different shareholders.
PART 2
PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
RESEARCH REFERENCES
14-2-1320. Notice of dissenters' rights.
(a) If proposed corporate action creating dissenters'
rights under Code Section 14-2-1302 is submitted to a
vote at a shareholders' meeting, the meeting notice must
state that shareholders are or may be entitled to assert
dissenters' rights under this article and be accompanied
by a copy of this article.
(b) If corporate action creating dissenters' rights
under Code Section 14-2-1302 is taken without a vote of
shareholders, the corporation shall notify in writing all
shareholders entitled to assert dissenters' rights that
the action was taken and send them the dissenters' notice
described in Code Section 14-2-1322.
14-2-1321. Notice of intent to demand payment.
(a) If proposed corporate action creating dissenters'
rights under Code Section 14-2-1302 is submitted to a
vote at a shareholders' meeting, a record shareholder who
wishes to assert dissenter's rights:
<PAGE>
(1) Must deliver to the corporation before the vote is
taken written notice of his intent to demand
payment for his shares if the proposed action is
effectuated; and
(2) Must not vote his shares in favor of the proposed
action.
(b) A record shareholder who does not satisfy the
requirements of subsection (a) of this Code section is
not entitled to payment for his shares under this
article.
14-2-1322. Dissenters' notice.
(a) If proposed corporate action creating dissenters'
rights under Code Section 14-2-1302 is authorized at a
shareholders' meeting, the corporation shall deliver a
written dissenters' notice to all shareholders who
satisfied the requirements of Code Section 14-2-1321.
(b) The dissenters' notice must be sent no later than
ten days after the corporate action was taken and must:
(1) State where the payment demand must be sent and
where and when certificates for certificated share
must be deposited;
(2) Inform holders of uncertificated shares to what
extent transfer of the shares will be restricted
after the payment demand is received;
(3) Set a date by which the corporation must receive
the payment demand, which date may not be fewer
than 30 nor more than 60 days after the date the
notice required in subsection (a) of this Code
section is delivered; and
(4) Be accompanied by a copy of this article.
14-2-1323. Duty to demand payment.
(a) A record shareholder sent a dissenters' notice
described in Code Section 14-2-1322 must demand payment
and deposit his certificates in accordance with the terms
of the notice.
(b) A record shareholder who demands payment and
deposits his shares under subsection (a) of this Code
section retains all other rights of a shareholder until
these rights are canceled or modified by the taking of
the proposed corporate action.
(c) A record shareholder who does not demand payment or
deposit his share certificates where required, each by
the date set in the dissenters' notice, is not entitled
to payment for his shares under this article.
14-2-1324. Share restrictions.
(a) The corporation may restrict the transfer of
uncertificated shares from the date the demand for their
payment is received until the proposed corporate action
is taken or the restrictions released under Code Section
14-2-1326.
(b) The person for whom dissenters' rights are asserted
as to uncertificated shares retains all other rights of
a shareholder until these rights are canceled or modified
by the taking of the proposed corporate action.
14-2-1325. Offer of payment.
(a) Except as provided in Code Section 14-2-1327, within
ten days of the later of the date the proposed corporate
action is taken or receipt of a payment demand, the
corporation shall offer to pay each dissenter who
complied with Code Section 14-2-1323 the amount the
corporation estimates to be the fair value of his shares,
plus accrued interest.
(b) The offer of payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a
fiscal year ending not more than 16 months before
the date of payment, an income statement for that
year, a statement of changes in shareholders'
equity for that year, and the latest available
interim financial statements, if any;
(2) A statement of the corporation's estimate of the
fair value of the shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand
payment under Code Section 14-2-1327; and
(5) A copy of this article.
(c) If the shareholder accepts the corporation's offer
by written notice to the corporation within 30 days after
the corporation's offer, payment for his shares shall be
made within 60 days after the making of the offer or the
taking of the proposed corporate action, whichever is
later.
14-2-1326. Failure to take Action.
(a) If the corporation does not take the proposed action
within 60 days after the date set for demanding payment
and depositing share certificates, the corporation shall
return the deposited certificates and release the
transfer restrictions imposed on uncertificated shares.
(b) If, after returning deposited certificates and
releasing transfer restrictions, the corporation takes
the proposed action, it must send a new dissenters'
notice under Code Section 14-2-1322 and repeat the
payment demand procedure.
14-2-1327. Procedure if shareholder dissatisfied with payment
or offer.
(a) A dissenter may notify the corporation in writing of
his own estimate of the fair value of his shares and
amount of interest due, and demand payment of his
estimate of the fair value of his shares and interest
due, if:
(1) The dissenter believes that the amount offered
under Code Section 14-2-1325 is less than the fair
value of his shares or that the interest due is
incorrectly calculated; or
(2) The corporation, having failed to take the proposed
action, does not return the deposited certificates
or release the transfer restrictions imposed on
uncertificated share within 60 day after the date
set for demanding payment.
(b) A dissenter waives his right to demand payment under
this Code section unless he notifies the corporation of
his demand in writing under subsection (a) of this Code
section within 30 days after the corporation offered
payment for his shares, as provided in Code Section 14-2-
1325.
(c) If the corporation does not offer payment within the
time set forth in subsection (a) of Code Section 14-2-
1325.
(1) The shareholder may demand the information required
under subsection (b) of Code Section 14-2-1325, and
the corporation shall provide the information to
the shareholder within ten days after receipt of a
written demand for the information; and
(2) The shareholder may at any time, subject to the
limitations period of Code Section 14-2-1332,
notify corporation of his own estimate of the fair
value of his shares and the amount of interest due
and demand payment of his estimate of the fair
value of his shares and interest due.
PART 3
JUDICIAL APPRAISAL OF SHARES
14-2-1330. Court action.
(a) If a demand for payment under Code Section 14-2-1327
remains unsettled, the corporation shall commence a
proceeding within 60 days after receiving the payment
demand and petition the court to determine the fair value
of the shares and accrued interest. If the corporation
does not commence the proceeding within the 60 day
period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.
(b) The corporation shall commence the proceeding, which
shall be a nonjury equitable valuation proceeding, in the
superior court of the county where a corporation's
registered office is located. If the surviving
corporation is a foreign corporation without a registered
office in this state, it shall commence the proceeding in
the county in this state where the registered office os
the domestic corporation merged with or whose shares were
acquired by the foreign corporation was located.
(c) The corporation shall make all dissenters, whether
or not residents of this state, whose demands remain
unsettled parties to the proceeding, which shall have the
effect of an action quasi in rem against their shares.
The corporation shall serve a copy of the petition in the
proceeding upon each dissenting shareholder who is a
resident of this state in the manner provided by law for
the service of a summons and complaint, and upon each
nonresident dissenting shareholder either by registered
or certified mail and publication, or in any other manner
permitted by law.
(d) The jurisdiction of the court in which the
proceeding is commenced under subsection (b) of this Code
section is plenary and exclusive. The court may appoint
one or more persons as appraisers to receive evidence and
recommend decision on the question of fair value. The
appraisers have the powers described in the order
appointing them or in any amendment to it. Except as
otherwise provided in this chapter, Chapter 11 of Title
9, known as the "Georgia Civil Practice Act," applies to
any proceeding with respect to dissenters' right under
this chapter.
(e) Each dissenter made a party to the proceeding is
entitled to judgment for the amount which the court finds
to be the fair value of his shares, plus interest to the
date of judgment.
14-2-1331. Court costs and counsel fees.
(a) The court in an appraisal proceeding commenced under
Code Section 14-2-1330 shall determine all costs of the
proceeding, including the reasonable compensation and
expenses of appraisers appointed by the court, but not
including fees and expenses of attorneys and experts for
the respective parties. The court shall assess the costs
against the corporation, except that the court may assess
the costs against all or some of the dissenters, in
amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily,
vexatiously, or not in good faith in demanding payment
under Code Section 14-2-1327.
(b) The court may also assess the fees and expenses of
attorneys and experts for the respective parties, in
amounts the court finds equitable:
(1) Against the corporation and in favor of any or all
dissenters if the court finds the corporation did
not substantially comply with the requirements of
Code Sections 14-2-1320 through 14-2-1327; or
(2) Against either the corporation or a dissenter, in
favor of any other party, if the court finds that
the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or in good
faith with respect to the rights provided by this
article.
(c) If the court finds that the services of attorneys
for any dissenter were of substantial benefit to other
dissenters similarly situated, and that the fees for
those services should not be assessed against the
corporation, the court may award to these attorneys
reasonable fees to be paid out of the amounts awarded the
dissenters who were benefitted.
14-2-1332. Limitation of actions.
No action by any dissenter to enforce dissenters' rights
shall be brought more than three years after the
corporate action was taken, regardless of whether notice
of the corporate action and of the right to dissent was
given by the corporation in compliance with the
provisions of Code Section 14-2-1320 and Code Section 14-
2-1322.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The bylaws of First Bancorp provide that any person may be
indemnified or reimbursed by First Bancorp for reasonable expenses
actually incurred in connection with any action, suit or
proceeding, civil or criminal, to which he shall be made a party by
reason of his being or having been a director, officer or employee
of First Bancorp or of any firm, corporation or organization which
he served in any such capacity at the request of First Bancorp.
However, under the bylaws, no person may be indemnified or
reimbursed in relation to any matter in such action, suit or
proceeding as to which he is finally adjudged to have been guilty
of or liable for gross negligence, willful misconduct or criminal
acts in the performance of his duties for First Bancorp. In
addition, the bylaws provide that no person shall be indemnified or
reimbursed in relation to any matter in such action, suit or
proceeding which has been made the subject of a compromise
settlement except with the approval of a court of competent
jurisdiction, or the holders of record of a majority of the
outstanding shares of First Bancorp, or the Board of Directors,
acting by vote of directors not parties to the same or
substantially the same action, suit or proceeding, constituting a
majority of the whole number of directors. The foregoing right of
indemnification or reimbursement is not exclusive of other rights
to which such person may be entitled as a matter of law.
In addition, Georgia law provides broad authority to directors
and shareholders of corporations to indemnify officers, directors
and employees against liabilities and expenses of defending civil
(and in some cases criminal) matters. See Official Code of Georgia
Annotated Section 14-2-851, et seq.
In addition to the above-described indemnification provisions,
the articles of incorporation of First Bancorp have provisions
limiting the liability of directors.
In response to increasing concern over liability exposure of
corporate officers, directors and employees, the Georgia
Legislature, in 1987, following a trend begun by Delaware and
followed by several other states, passed legislation broadening the
ability of corporations to relieve corporate directors of exposure
to liability.
As permitted by Georgia law, the articles of incorporation of
First Bancorp were amended in 1990 to limit the standards of
conduct required of directors by providing that no director shall
be personally liable to the corporation or its shareholders for
monetary damages for breach of duty of care or other duty as a
director; provided, however, that this provision does not eliminate
or limit the liability of a director:
(a) For any appropriation, in violation of his duties,
of any business opportunity of the corporation;
<PAGE>
(b) For acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of
law;
(c) For the types of liabilities set forth in Official
Code of Georgia Annotated Section 14-2-832 (relating
primarily to improper dividends or other distributions by
the corporation);
(d) For any transaction from which the director derives
an improper personal benefit; or
(e) For any liability or expenses related to any action
or omission by a director occurring prior to the adoption
of the amendment.
Further, the right of First Bancorp or its shareholders to seek
injunctive or other equitable relief not involving monetary damages
is not limited by the above provisions.
In general, the effect of the above-referenced statute, the
Articles of First Bancorp and of the bylaws of First Bancorp is
that First Bancorp will indemnify its directors, officers and
employees for reasonable expenses and damages actually incurred in
connection with any action, suit or proceeding, civil or criminal,
to which they shall be made a party by reason of their being or
having been directors, officers, or employees of the corporation,
provided that such persons are not finally adjudged to have been
guilty of or liable for gross negligence, willful misconduct or
criminal acts in the performance of their duties for First Bancorp.
The bylaws also provide that First Bancorp may purchase insurance
for the purpose of indemnifying its directors, officers and other
employees to the extent that such indemnification is allowed under
the bylaws. Pursuant to the bylaws, the corporation has purchased
insurance to indemnify its officers and directors.
Item 21. Exhibits Filed.
See Index of Exhibits at sequentially numbered page ____ and
Exhibits immediately following the index.
Item 22. Undertakings.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, 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 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 Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby further undertakes as follows:
(a) That prior to any public reoffering of the
securities hereunder through the use of a prospectus
which is a part of this registration statement, by any
person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the registrant undertakes
that such reoffering prospectus will contain the
information called for by Item 7 of Form S-4 with respect
to the securities to be so offered, in addition to the
information called for by the other items of Form S-4.
(b) That every prospectus (i) that is filed pursuant to
paragraph (a) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of
the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part
of an amendment to the registration statement and will
not be used until such amendment is effective, and that,
for purposes 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.
The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom
the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements
of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report
that is specifically incorporated by reference in the prospectus to
provide such interim financial information.
The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the
prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within
one (1) business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed
subsequent to the effective date of the registration statement
through the date of responding to the request.
The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement
when it became effective.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the
City of Gainesville, State of Georgia, this 12th day of May, 1994.
FIRST NATIONAL BANCORP
By: s/Richard A. McNeece
Richard A. McNeece, Chairman
and C.E.O.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature
1. Principal Executive Officer
s/Richard A. McNeece Director, Chairman and
Richard A. McNeece C.E.O.
May 12, 1994
Date
2. Principal Financial Officer
s/Peter D. Miller Director, President,
Peter D. Miller C.A.O. and C.F.O.
May 12, 1994
Date
3. Principal Accounting Officer
s/C. Talmadge Garrison Senior Vice President
C. Talmadge Garrison and Secretary
May 12, 1994
Date
<PAGE>
4. Other Directors
s/Richard L. Shockley Director and Vice
Richard L. Shockley Chairman of the Board
May 12, 1994
Date
s/Jane Wood Banks Director
Jane Wood Banks
May 12, 1994
Date
s/Thomas S. Cheek Director
Thomas S. Cheek
May 12, 1994
Date
s/John A. Ferguson, Jr. Director
John A. Ferguson, Jr.
May 12, 1994
Date
s/James H. Harris, Jr. Director
James H. Harris, Jr.
May 12, 1994
Date
s/Ray C. Jones Director
Ray C. Jones
May 12, 1994
Date
s/Arthur J. Kunzer, Jr. Director
Arthur J. Kunzer, Jr.
May 12, 1994
Date
s/W. L. Lester Director
W.L. Lester
May 12, 1994
Date
s/Loy D. Mullinax Director
Loy D. Mullinax
May 12, 1994
Date
s/ J. Kenneth Nix, Sr. Director
J. Kenneth Nix, Sr.
May 12, 1994
Date
s/Edwin C. Poss Director
Edwin C. Poss
May 12, 1994
Date
s/Paul J. Reeves Director
Paul J. Reeves
May 12, 1994
Date
s/A. Roy Roberts, Jr. Director
A. Roy Roberts, Jr.
May 12, 1994
Date
s/Harold L. Smith Director
Harold L. Smith
May 12, 1994
Date
s/W. Woodrow Stewart Director
W. Woodrow Stewart
May 12, 1994
Date
_______________________________ Director
Bobby M. Thomas
_______________________________
Date
<PAGE>
s/James A. Walters Director
James A. Walters
May 12, 1994
Date
s/M.G. West Director
M. G. West
May 12, 1994
Date
s/J. Michael Womble Director
J. Michael Womble
May 12, 1994
Date
s/Joe Wood, Jr. Director
Joe Wood, Jr.
May 12, 1994
Date
<PAGE>
EXHIBIT INDEX
SEQUENTIAL
PAGE
NUMBER
2.1 Agreement of Reorganization and Plan
of Merger between First National
Bancorp and Barrow Bancshares, Inc.
(included herein as Appendix A to
the Proxy Statement and incorporated
by reference)............................ Incorporated
by Reference
3.1. Articles of Incorporation of First
National Bancorp, as amended
(incorporated by reference in this
Registration Statement from
Exhibit 3.1 of First National Bancorp's
Registration Statement No. 33-64590
on Form S-4)............................. Incorporated
by Reference
3.2. Bylaws of First National Bancorp
currently in effect (incorporated
by reference in this Registration
Statement from Exhibit 3.2 of First
National Bancorp's Registration
Statement No. 33-64590 on Form S-4)...... Incorporated
by Reference
5. Opinion of Messrs. Stewart, Melvin &
House, Attorneys re: Validity of
Securities...............................
8. Opinion of Messrs. Stewart, Melvin &
Frost, Attorneys, re: Tax Aspects of
Reorganization .......................... Incorporated
by Reference
<PAGE>
SEQUENTIAL
PAGE
NUMBER
10.1 1988 Employee Stock Option Plan of
First National Bancorp (incorporated
by reference in this Registration
Statement from such document filed
on as an exhibit to First National
Bancorp's Registration Statement
No. 33-24985 on Form S-8)................ Incorporated
by Reference
10.2 1990 Employee Stock Option Plan of
First National Bancorp and Amendment
thereto dated July 17, 1991
(incorporated herein by reference to
such document filed as Exhibit 3.1 of
First National Bancorp's Registration
Statement No. 33-64590 on Form S-4)...... Incorporated
by Reference
10.3 1993 Employee Stock Option Plan of
First National Bancorp dated
April 26, 1993 (incorporated herein
by reference to such document filed
as Exhibit 10.11 of First National
Bancorp's Registration Statement
No. 33-64590 on Form S-4)............... Incorporated
by Reference
10.4 First National Bancorp Incentive
Compensation Plan (incorporated by
reference to Exhibit 10.12 of
Registration Statement No. 33-64590
on Form S-4)............................. Incorporated
by Reference
10.5 Change of Control Agreement, dated
June 23, 1992, between First National
Bancorp and Richard A. McNeece
(incorporated herein by reference to
such document filed as Exhibit 10.7 of
First National Bancorp's Registration
Statement No. 33-50422 on Form S-4)...... Incorporated
by Reference
<PAGE>
SEQUENTIAL
PAGE
NUMBER
10.6 Change of Control Agreement, dated
June 16, 1992, between First National
Bancorp and Peter D. Miller
(incorporated herein by reference to
such document filed as Exhibit 10.8
of First National Bancorp's
Registration Statement No. 33-50422
on Form S-4)............................. Incorporated
by Reference
10.7 Change of Control Agreement, dated
June 16, 1992, between First National
Bancorp and C. Talmadge Garrison
(incorporated herein by reference
to such document filed as Exhibit 10.9
of First National Bancorp's
Registration Statement No. 33-50422
on Form S-4)............................. Incorporated
by Reference
10.8 Change of Control Agreement, dated
June 24, 1992, between First National
Bancorp and Richard D. White
(incorporated herein by reference to
such document filed as Exhibit 10.10
of First National Bancorp's
Registration Statement No. 33-50422
on Form S-4)............................. Incorporated
by Reference
10.9 Change of Control Agreement, dated
June 16, 1992, between First National
Bancorp and Bryan F. Bell (incorporated
herein by reference to such document
filed as Exhibit 10.9 to First National
Bancorp's Annual Report on Form 10-K
for the year ended December 31, 1993,
SEC File No. 0-10657).................... Incorporated
by Reference
10.10 First National Bancorp Performance-
Based Restricted Stock Plan
approved by the shareholders on
April 20, 1994...........................
<PAGE>
SEQUENTIAL
PAGE
NUMBER
11. Statement re computation of per share
earnings (incorporated by reference
to First National Bancorp's Annual
Report on Form 10-K for the year
ended December 31, 1993, SEC File
No. 0-10657). . . . . . . . . . . . . . . Incorporated
by Reference
13.1 1993 Annual Report to
Security Holders (incorporated
by reference to First National
Bancorp's 1993 Annual Report
of Security Holders, SEC
File No. -010657. . . . . . . . . . . . . Incorporated
by Reference
13.2 First National Bancorp's
Quarterly Report on Form 10-Q
for the quarter end March 31,
1994 (incorporated by reference
to such Quarterly Report on Form
10-Q, SEC File No. 0-10657) . . . . . . . Incorporated
by Reference
21. Subsidiaries of the Registrant. . . . . .
23.1 Consent of KPMG Peat Marwick. . . . . . .
23.2 Consent of Mauldin & Jenkins. . . . . . .
23.3 Consent of Stewart, Melvin & Frost. . . .
99.1 First National Bancorp's Annual Report
on Form 10-K for the year ended
December 31, 1993 (incorporated by
reference to such Annual Report on
Form 10-K, SEC File No. 0-10657). . . . . Incorporated
by Reference
99.2 First National Bancorp 1994 Annual
Meeting Proxy Statement (incorporated
by reference to such Proxy Statement,
SEC File No. 0-10657) . . . . . . . . . . Incorporated
by Reference
<PAGE>
Exhibit 5
May 16, 1994
First National Bancorp
303 Jesse Jewell Parkway
Suite 700
P.O. Box 937
Gainesville, Georgia 30503
Re: Registration Statement on Form S-4 covering 521,757
shares of First National Bancorp to be issued in
connection with the acquisition of Barrow Bancshares,
Inc.
Ladies and Gentlemen:
At your request, we have participated as counsel for First
National Bancorp, a Georgia corporation (the "Company"), in the
preparation of the above-referenced Registration Statement (the
"Registration Statement"), relating to the proposed issuance of
521,757 shares (the "Shares") of the Company's common stock, $1.00
par value per share, in connection with the merger of Barrow
Bancshares, Inc. into First National Bancorp under the terms of the
Agreement of Reorganization and Plan of Merger described in the
Registration Statement.
In connection with the preparation of the Registration
Statement, we have examined originals or copies of such corporate
records, documents and other instruments relating to the
authorization and issuance of the Shares as we have deemed relevant
under the circumstances.
On the basis of the foregoing, it is our opinion that:
(1) The Company is duly organized and incorporated and is
validly existing under the laws of the State of Georgia, with an
authorized capitalization consisting of 30,000,000 shares of common
stock, $1.00 par value per share.
(2) The issuance of the Shares has been duly authorized by
the Board of Directors of the Company, and when the Shares are
issued pursuant to the terms and provisions of the Agreement of
Reorganization and Plan of Merger described in the Registration
Statement, the Shares will be legally and validly issued, fully
paid and non-assessable.
Very truly yours,
STEWART, MELVIN & FROST
By: s/T. Treadwell Syfan
Partner
<PAGE>
Exhibit 8
May 16, 1994
Barrow Bancshares, Inc.
209 North Broad Street
P.O. Box 724
Winder, Georgia 30680
First National Bancorp
303 Jesse Jewell Parkway
Suite 700
P. O. Box 937
Gainesville, Georgia 30503
Ladies and Gentlemen:
You have asked for our opinion in regard to the income tax
consequences, under the Internal Revenue Code of 1986, as amended
(the "Code"), of the proposed issuance of a maximum of 521,757
shares of common stock of First National Bancorp, a Georgia
corporation ("First Bancorp"), in connection with the merger of
Barrow Bancshares, Inc., a Georgia corporation ("Barrow
Bancshares"), into First Bancorp in a statutory merger pursuant to
the laws of the State of Georgia and pursuant to the terms of the
Agreement of Reorganization and Plan of Merger between the parties
to the reorganization. In rendering this opinion we have assumed
the following:
(i) First Bancorp is a corporation organized under the
laws of the State of Georgia and operates as a bank
holding company pursuant to the Federal Bank Holding
Company Act of 1956, as amended (the "BHCA"). First
Bancorp has authorized 30,000,000 shares of $1.00 par
value common stock of which approximately 15,892,903
shares were issued and outstanding as of April 18, 1994.
First Bancorp presently has 16 wholly-owned subsidiaries,
The First National Bank of Gainesville, First National
Bank of Habersham, Granite City Bank, Bank of Clayton,
The First National Bank of White County, The First
National Bank of Jackson County, The Citizens Bank of
Toccoa, Bank of Banks County, First State Bank of Gilmer
County, The Peoples Bank of Forsyth County, Pickens
County Bank, and First National Bank of Paulding County,
Citizens Bank, Ball Ground, Georgia, Bank of Villa Rica,
The Community Bank of Carrollton, and The Commercial
Bank, Douglasville, Georgia.
<PAGE>
(ii) Barrow Bancshares is organized as a Georgia business
corporation and operates as a bank holding company
pursuant to the BHCA. Barrow Bancshares has authorized
2,000,000 shares of $5.00 par value voting common stock,
with 379,757 shares issued and outstanding as of
April 15, 1994 and with outstanding employee stock
options to purchase 1,088 shares. These shares
constitute all of the outstanding shares of Barrow
Bancshares.
(iii) Barrow Bancshares will be merged with and into
First Bancorp under the applicable laws of the State of
Georgia. By operation of law, Barrow Bancshares will
transfer all of its assets and liabilities to First
Bancorp. First Bancorp will be the surviving
corporation, and the separate corporate existence of
Barrow Bancshares will cease. Each share of Barrow
Bancshares will be exchanged for 1.37 shares of First
Bancorp common stock. No fractional shares of First
Bancorp stock will be issued in the proposed transaction.
(iv) Dissenting shareholders of Barrow Bancshares will be
able to exercise their rights pursuant to the provisions
of the Georgia Business Corporation Code. The value of
the shares of any dissenting shareholder of Barrow
Bancshares will be ascertained in accordance with the
provisions of O.C.G.A. Section 14-2-1320, et seq.
It is assumed that the following additional representations
have been made or will be made by the parties to the reorganization
in connection with the proposed transaction:
(a) The fair market value of First Bancorp stock to be
received by the shareholders of Barrow Bancshares will, in each
instance, be approximately equal to the fair market value of the
Barrow Bancshares stock surrendered in exchange therefor.
(b) The management of Barrow Bancshares knows of no plan or
intention on the part of the Barrow Bancshares shareholders to sell
or otherwise dispose of the First Bancorp stock received in the
transaction which would reduce their holdings thereof to a number
of shares having, in the aggregate, a value, as of the date of the
reorganization, less than 50% of the total value of all the
formerly outstanding stock of Barrow Bancshares as of the same
date. For purposes of this assumption, stock of Barrow Bancshares
surrendered by dissenters in the exchange for cash will be treated
as outstanding stock.
(c) Taking into account amounts to be paid by Barrow
Bancshares for its reorganization expenses and dissenters, First
Bancorp will hold, after the merger, at least 90% of the fair
market value of its net assets and at least 70% of the fair market
value of its gross assets, and First Bancorp will hold at least 90%
of the fair market value of the net assets and at least 70% of the
fair market value of the gross assets of Barrow Bancshares.
<PAGE>
(d) Barrow Bancshares has no outstanding warrants, options,
convertible securities or any other type of right pursuant to which
any person could acquire stock in Barrow Bancshares.
(e) First Bancorp has no plan or intention to sell or
otherwise dispose of any of the assets which it will receive in the
transaction.
(f) First Bancorp will operate the Barrow Bank & Trust
Company, Winder, Georgia in a substantially unchanged manner as a
wholly-owned subsidiary.
(g) First Bancorp has no plan or intention to redeem or
otherwise reacquire any of its stock issued in the proposed
transaction.
(h) First Bancorp and Barrow Bancshares will each pay its own
expenses incurred in the transaction, and each shareholder of
Barrow Bancshares will pay his own expenses incurred, if any.
(i) No parties to the transaction are investment companies
within the meaning of Section 368(a)(2)(F)(iii) of the Code.
(j) First Bancorp does not presently own, directly or
indirectly, nor has it owned within the preceding five years,
directly or indirectly, any of the stock of Barrow Bancshares.
(k) First Bancorp, and Barrow Bancshares are each
corporations within the meaning of Section 7701(a)(3) of the Code.
Based upon our understanding of the transaction and on the
representations set forth above, we are of the following opinion:
(1) Provided that the proposed merger of Barrow Bancshares
with and into First Bancorp qualifies as a statutory merger under
the applicable laws of the State of Georgia and provided that (a)
after the transaction First Bancorp will hold substantially all of
its assets and substantially all of the assets of Barrow Bancshares
and (b) in the transaction the Barrow Bancshares shareholders will
exchange an amount of Barrow Bancshares stock constituting more
than 50% of Barrow Bancshares stock for First Bancorp voting common
stock, the proposed transaction will constitute a reorganization
within the meaning of Section 368(a)(1)(A) of the Code. As used
herein, "substantially all" means at least 90% of the fair market
value of the net assets and at least 70% of the fair market value
of the gross assets of First Bancorp and Barrow Bancshares. First
Bancorp, and Barrow Bancshares will each be a "party to a
reorganization" within the meaning of Section 368(b).
(2) No gain or loss will be recognized to First Bancorp upon
the receipt of the assets of Barrow Bancshares and the assumption
by First Bancorp of the liabilities of Barrow Bancshares in the
merger.
<PAGE>
(3) No gain or loss will be recognized to Barrow Bancshares
upon the transfer of its assets and liabilities to First Bancorp in
the merger.
(4) No gain or loss will be recognized to the shareholders of
Barrow Bancshares upon the receipt of First Bancorp voting common
stock in exchange for their shares of Barrow Bancshares common
stock.
(5) The basis of the shares of First Bancorp voting common
stock received by a Barrow Bancshares shareholder will, in each
instance, be the same as the basis of the shares of the Barrow
Bancshares common stock surrendered in exchange therefor.
(6) The basis of the Barrow Bancshares assets received by
First Bancorp will, in each instance, be the same as Barrow
Bancshares' basis in the assets.
(7) The holding period of the shares of First Bancorp voting
common stock received by the Barrow Bancshares shareholders will
include the period during which the stock of Barrow Bancshares
surrendered in exchange therefor was held, provided that the shares
of Barrow Bancshares common stock were held as capital assets on
the date of the exchange.
(8) The holding period of the assets of Barrow Bancshares in
the hands of First Bancorp will include the period during which
such assets were held by Barrow Bancshares.
(9) Where cash is received by a shareholder of Barrow
Bancshares who dissents in exchange for the surrender of his common
stock, the cash will be treated as being received by the
shareholder as a distribution in redemption of his stock, subject
to the provisions and limitations of Section 302 of the Code.
(10) A Barrow Bancshares shareholder who dissents and receives
cash in redemption of his Barrow Bancshares shares as a result of
the merger will, in general, recognize gain or loss measured by
the difference between the amount of the cash received and the tax
basis of the Barrow Bancshares shares converted. Under Section 302
of the Code, such gain or loss will, in general, be treated as
capital gain or loss if the Barrow Bancshares shares were held as
capital assets. However, a Barrow Bancshares shareholder must take
into account certain provisions of Sections 302 and 318 of the Code
in determining the consequences of the transaction if he receives
only cash. Any Barrow Bancshares shareholder who receives only
cash as a result of the merger upon redemption of the Barrow
Bancshares shares which he actually owns, but who is considered
under constructive ownership rules of Section 318 of the Code to
own other Barrow Bancshares shares that are converted into shares
of First Bancorp common stock in the merger, must take into account
the provisions of Section 302 of the Code, particularly, the "80%
test" described below, to determine if the cash which he receives
is to be taxed as a dividend. Under Section 318 of the Code a
shareholder is, for example, considered to own shares that are
directly or indirectly owned by certain members of his family or by
certain related entities and to own shares with respect to which he
holds options. In general, under the 80% test of Section 302, cash
received by a Barrow Bancshares shareholder in redemption of his
Barrow Bancshares shares as a result of the merger will not be
treated as a dividend for federal income tax purposes if,
immediately after the merger, the holder's percentage ownership
(considering shares owned actually and constructively) of the total
number of shares of First Bancorp stock issued to holders of Barrow
Bancshares shares in the merger is less than 80% of such
shareholder's percentage ownership of Barrow Bancshares shares
immediately before the merger. Hence, cash received by a Barrow
Bancshares shareholder who "qualifies" under the 80% test will be
taxed as capital gain or loss if the Barrow Bancshares shares were
held as capital assets.
(11) A Barrow Bancshares shareholder may fail to qualify under
the 80% test described above as a result of receiving cash for all
his Barrow Bancshares shares actually owned, if other persons whose
Barrow Bancshares shares are considered to be constructively owned
by the shareholder under Section 318 of the Code receive First
Bancorp stock in the merger.
(12) If a Barrow Bancshares shareholder fails to meet the 80%
test described above, other exceptions from dividend treatment may
be available depending on the facts and circumstances of the
particular case.
(13) In the event of dividend treatment of cash received, a
shareholder will not be able to use his basis in his shares to
offset the amount includable in income. Therefore, the total
amount of cash received would be includable in income.
No opinion is expressed as to the tax treatment of any
conditions existing at the time of, or effects resulting from, the
transaction that are not specifically covered by the above opinion.
Very truly yours,
STEWART, MELVIN & FROST
By: s/T. Treadwell Syfan
Partner
<PAGE>
EXHIBIT 10.10
FIRST NATIONAL BANCORP PERFORMANCE-BASED
RESTRICTED STOCK PLAN
1. Purpose. The First National Bancorp Performance-Based
Restricted Stock Plan (the "Plan") is intended to provide
incentives to certain key employees of First National Bancorp
("Bancorp") and The First National Bank of Gainesville ("FNB"),
namely, the current Bancorp CEO and Chairman, the current Bancorp
President and Chief Financial and Administrative Officer and the
current FNB President, by providing them with opportunities to
acquire common stock of Bancorp pursuant to awards (the "Awards")
described herein.
2. Administration of Plan. The Compensation Committee of
the Bancorp Board of Directors shall supervise and administer the
Plan. Any questions of interpretation of the Plan or of any Awards
issued under the Plan shall be determined by the Compensation
Committee and such determination shall be final and binding upon
all persons. The Plan may not be amended or terminated without
approval of the Bancorp Board of Directors, and, if required by law
or by resolution of the Bancorp Board of Directors, the approval of
the Bancorp shareholders. The Plan provisions may not be amended
more than once during any six-month period, unless such amendment
is for purposes of comporting with changes in the Internal Revenue
Code, the Employee Retirement Security Act of 1974 (but only to the
extent such statute is applicable to the Plan), or any rules or
regulations promulgated under such statutes. Any determination of
the Compensation Committee under the Plan may be made without
notice or meeting of the Compensation Committee by a writing signed
by a majority of the Committee members.
3. Participants. The participants under the Plan (the
"Participants") shall be the individuals who hold the offices of
the Bancorp CEO and Chairman, the Bancorp President and Chief
Financial and Administrative Officer and the FNB President, as of
the Effective Date of the Plan, as defined herein.
4. Shares Reserved Under the Plan. There is hereby reserved
for issuance as Awards under the Plan an aggregate of 90,000 shares
of the common stock, par value $1.00, of Bancorp, plus sufficient
shares of such stock to award the Additional Shares described in
Paragraph 9(c) herein. Any shares which are granted but are
thereafter forfeited pursuant to restrictions on the shares shall
not again be reissued as Awards or Additional Shares under this
Plan, the intent being that only the current officers of Bancorp
and FNB who are designated as Participants in Paragraph 3 shall be
permitted to receive any Awards or Additional Shares under the
Plan.
5. Awards. Awards will consist of Common Stock transferred
to Participants, with applicable restrictions, as a bonus for
service rendered to the Company or FNB without other payment
therefor. Awards shall be made pursuant to Restricted Stock
Agreements that contain terms consistent with the terms of the Plan
and shall be made in the amounts and at the times specified by the
formula in Paragraph 8 below. No Awards will be made under the
Plan with respect to any "Award Threshhold," as defined in
Paragraph 8(a) hereof, which is attained after December 31, 1999.
6. Adjustment Provisions. If Bancorp shall at any time
change the number of issued shares of new Common Stock without new
consideration to Bancorp (by stock dividends, stock splits,
combinations or exchanges of shares, recapitalization, or similar
capital adjustment), the total number of shares reserved for
issuance under the Plan, the number of shares covered by each
outstanding Award, and the number of Additional Shares as defined
in Paragraph 9(c), shall be adjusted so that the value of each such
Award and such Additional Shares shall not be changed.
7. Nontransferability. Each Award and Additional Shares
granted under the Plan to a Participant shall not be transferable
by him otherwise than by will or the laws of descent and
distribution until all restrictions on such Award and Additional
Shares have lapsed or are otherwise no longer applicable pursuant
to the terms of the Plan. A Participant's death prior to the date
on which he would otherwise be entitled to be granted Award(s)
hereunder shall terminate the Participant's rights to any Awards
which may be granted hereunder after the Participant's death.
Provided, however, if the Participant is living on the date on
which he would be entitled to be granted an Award, but he dies
prior to the date the award is actually granted, the Participant's
Award shall be granted to his estate.
8. Formula For Awards. Awards shall be made to the
Participants specified in Paragraph 3 based upon the performance of
the stock price of Bancorp stock in accordance with the following
formulae:
(a) An "Award Threshhold" occurs the first time Bancorp stock
has traded for an "Average Trading Price" which is at least equal
to a "Threshold Trigger Price" for a period of sixty consecutive
calendar days, with a separate computation period for purposes of
determining the "Average Trading Price" beginning on each date said
Threshhold Trigger Price is attained. Awards shall be made to the
Participants based upon the "Award Threshholds" which have been
attained.
(b) Definitions - For purposes of the Plan, the following
terms are defined:
(1) "Average Trading Price" means the average of the trading
prices of Bancorp stock determined by adding the "Trading Price"
for each day of any sixty consecutive day period specified in
Paragraph 8(a), and dividing said sum by sixty (60).
(2) The "Trading Price" of Bancorp stock for any day shall be
the average of the bid and asked prices for Bancorp stock as quoted
on NASDAQ (or the closing trading price on any subsequent national
exchange on which the Company stock may be listed) as of the end of
such day. The Trading Price for any Saturday, Sunday, national
holiday, or other day on which NASDAQ (or subsequent national
exchange) is not open for trading shall be the same as the Trading
Price for Bancorp stock on the last day prior to such date on which
the NASDAQ (or subsequent national exchange) was open for trading.
(3) The "Threshhold Trigger Prices" shall mean Trading Prices
of $29.00 per share, $33.00 per share, and $37.00 per share. Such
Threshhold Trigger Prices shall be equitably adjusted by the
Compensation Committee to reflect changes in the Trading Price
caused solely by reason of stock dividends, stock splits,
combinations or exchanges of shares, recapitalization, or similar
capital adjustments.
(c) Awards shall be made to the Participants when Award
Threshholds have been met, as determined under Paragraph 8(a), as
follows:
<TABLE>
<CAPTION>
Award Threshhold Price Participant Shares Awarded
<S> <C> <C>
$29.00 CEO, Chairman 13,333
President, CFO 10,000
FNB President 6,666
$33.00 CEO, Chairman 13,333
President, CFO 10,000
FNB President 6,667
$37.00 CEO, Chairman 13,334
President, CFO 10,000
FNB President 6,667
</TABLE>
(d) Provided, however, in the event that a transaction in
which Bancorp is to be acquired is approved by Bancorp's Board of
Directors, or any person makes a tender offer to the Bancorp
shareholders to acquire more than fifty percent (50%) of all
Bancorp shares, during any computation period for determining
whether an Award Threshhold has been met, and an Award Threshhold
is met prior to consummation of the acquisition transaction or
completion of the tender offer, no Award shall be made based on
such Award Threshhold until immediately prior to the consummation
of the acquisition transaction, or, in the case of a tender offer,
until the tender offer has been successfully completed (i.e., the
tender offeror has acquired more than fifty percent (50%) of all
Bancorp stock). Award Shares to which a Participant is entitled
immediately prior to the consummation of an acquisition transaction
shall be converted into the consideration paid by the entity which
acquires Bancorp, on the same basis that Bancorp shares generally
are converted in such acquisition transaction. In the event that
the acquisition transaction is not consummated for any reason, or
if the tender offer fails, then no Award shall be made under the
Plan until an Award Threshhold has been attained (in the same
manner as prescribed in Paragraph 8(a)) during any sixty (60)
consecutive calendar day period commencing on or after the date it
is finally determined that the acquisition transaction will not be
consummated or that the tender offer has failed, as applicable.
(e) Provided, however, that no Awards will be made in any
event if the Award Threshhold is attained after December 31, 1999.
9. Restrictions Applicable to Awards. Each Award to a
Participant hereunder shall be subject to the following
restrictions:
(a) All or a portion of the Awards and Additional Shares, as
defined below, issued to a Participant will be forfeited if the
Participant does not own the targeted level of Bancorp stock
ownership required for such Participant by the First National
Bancorp Target Ownership Plan dated January 19, 1994 (the "Target
Plan")(without regard to the January 1, 1994 deadline applicable to
the Target Plan) as of the date vesting would otherwise occur under
subsection (b) hereof. All of the Award Shares and Additional
Shares shall be forfeited if the targeted ownership is not attained
by the date vesting occurs under subsection (b), unless vesting
occurs pursuant to subparagraphs (i)-(iv) of subsection (b). If
vesting occurs pursuant to subparagraph (i)-(iv) of subsection (b),
the number of Award Shares and Additional Shares which shall be
forfeited by the Participant will be the number of Bancorp shares
by which the Participant failed to meet the required ownership
under the Target Plan. All stock certificates issued to the
Participant evidencing the Awards and Additional Shares which are
forfeited under this provision will be cancelled and Participant
shall have no rights of ownership in such stock after January 1,
1999. For purposes of the Plan, in determining the required level
of ownership under the Target Plan as of any date vesting occurs
under the Plan, the Participant's compensation which is considered
under the formula for share ownership in the Target Plan shall be
his compensation as of the date vesting occurs under the Plan.
(b) Each Award, and all Additional Shares attributable to
such Award, granted to a Participant will be forfeited if the
Participant leaves the active employment of Bancorp or FNB, other
than for the reasons specified below, prior to the earlier of (1)
age 65 or (2) completion of eight years of service from the date
the Award Threshhold applicable to such Award was attained. At
such time as the earlier of conditions (1) or (2) in the preceding
sentence has occurred, the forfeiture restrictions applicable to
such Award shall lapse and be of no further effect. Provided,
however, that the above forfeiture restrictions shall also lapse
and be of no further effect when and if a Participant leaves the
active employment of Bancorp or FNB by reason of: (i) the
Participant's death, (ii) the Participant's disability entitling
the Participant to disability benefits under Social Security or
under any disability plan sponsored by Bancorp or FNB, (iii) any
Change of Control, as defined in the Participant's Change of
Control Agreement with Bancorp or FNB, or (iv) any involuntary
termination of Participant which is not a Termination for Cause as
defined in Paragraph 2(h) of the Participant's Change of Control
Agreement with Bancorp or FNB, whether or not a Change of Control
has occurred at the time the Participant is involuntarily
terminated by Bancorp or FNB.
(c) A Participant shall not be entitled to receive any cash
dividends on shares which are the subject of an Award hereunder (or
cash dividends on any Additional Shares awarded herein) until all
restrictions on said shares have lapsed. All cash dividends on
shares which are the subject of an Award shall be reinvested in
Bancorp stock (the "Additional Shares"), and the Additional Shares
shall be awarded to the Participant, subject to the same
restrictions applicable to the Award shares from which the
dividends used to purchase the Additional Shares arose. Cash
dividends on Additional Shares shall also be reinvested in Bancorp
stock and be awarded as Additional Shares. If the Award shares are
forfeited hereunder, then the Participant will not be entitled to
receive any of the Additional Shares attributable to such Award
shares; that is, the right to receive Additional Shares will also
be forfeited. When all restrictions applicable to an Award have
lapsed, then all restrictions shall be deemed to have lapsed with
respect to the Additional Shares which are attributable to the
Award shares on which restrictions have lapsed (except the
restriction under subparagraph (f) below which applies separately
to all Award shares and Additional Shares).
(d) Stock certificates representing Awards or Additional
Shares issued hereunder shall be issued in the Participant's name
and be held by an escrow agent designated by the Compensation
Committee, but shall not be delivered to the Participant until all
restrictions on such shares are no longer applicable. If a
forfeiture occurs as described herein, the stock certificates will
be delivered by the escrow agent to the Compensation Committee
which will then have the shares cancelled.
(e) A Participant shall have full voting rights on all shares
which are the subject of an Award hereunder, and on all Additional
Shares, unless said shares are forfeited as provided herein, at all
times after the Award or the award of such Additional Shares has
been made.
(f) Notwithstanding anything to the contrary herein, Award
shares and Additional Shares must be held not less than six months
from the date of award of such shares to the Participant before
such shares may be sold by the Participant.
(g) Stock certificates issued as Awards or Additional Shares
hereunder shall each contain a legend which states as follows:
"The shares represented by this certificate are subject to
certain restrictions under the First National Bancorp
Performance-Based Restricted Stock Plan (the "Plan") dated
January 19, 1994, and may not be transferred by the owner
hereof until the restrictions have lapsed or are no longer
applicable pursuant to the terms of the Plan."
10. Section 83(b) Elections and Withholding. The Restricted Stock
Agreements shall require each Participant to notify the
Compensation Committee if and when the Participant makes any
election under Section 83(b) of the Internal Revenue Code upon the
issuance of an Award or Additional Shares hereunder. Each
Participant shall agree in his respective Restricted Stock
Agreement(s) that Bancorp or FNB, as applicable, shall have the
right to require the Participant to remit to Bancorp or FNB, or
withhold from other amounts payable to the Participant, an amount
sufficient to satisfy all federal, state and local withholding tax
requirements applicable to each Award or Additional Shares
hereunder, whether or not an election under Section 83(b) is made
when the Award is made.
11. Governing Law. This Plan shall be governed by the laws of the
State of Georgia. Notwithstanding anything herein to the contrary,
Bancorp's obligation to issue or deliver certificates evidencing
the Award shares shall be subject to all applicable laws, rules and
regulations and to such approvals by any government agencies or
national securities exchanges as may be required.
12. Tenure. A Participant's right, if any, to continue to serve
Bancorp or FNB as an officer, employee or otherwise, shall not be
enlarged or otherwise affected by his designation as a Participant
under the Plan.
13. Approval of Shareholders of Bancorp. This Plan must be
approved by the affirmative votes of a majority of the shares of
Bancorp present, or represented, and entitled to vote at the annual
shareholders' meeting of Bancorp shareholders to be held in 1994.
14. Effective Date of Plan. The Effective Date of the Plan is
January 1, 1994. The date of adoption of the Plan by the Bancorp
Board of Directors is January 19, 1994.
<PAGE>
Exhibit 21
LIST OF SUBSIDIARIES
OF REGISTRANT
1. The First National Bank of Gainesville
111 Green Street, S.E., Gainesville, Georgia 30501
2. First National Bank of Habersham
138 Front Street, S.E., Cornelia, Georgia 30531
3. Granite City Bank
125 Heard Street, S.E., Elberton, Georgia 30635
4. Bank of Clayton
E. Savannah Street, Clayton, Georgia 30525
5. First National Bank of White County
North Main Street, Cleveland, Georgia 30528
6. First National Bank of Jackson County
121 Lee Street, Jefferson, Georgia 30549
7. The Citizens Bank
303 E. Doyle Street, Toccoa, Georgia 30577
8. Bank of Banks County
Highway 441 South, P. O. Drawer B, Homer, Georgia 30547
9. First National Bank of Gilmer County
75 South Main Street, Ellijay, Georgia 30540
10. The Peoples Bank of Forsyth County
515 Atlanta Highway, Cumming, Georgia 30130
11. Pickens County Bank
606 Church Street, Jasper, Georgia 30143
12. First National Bank of Paulding County
160 Confederate Avenue, P. O. Box 108, Dallas, Georgia 30132
13. Citizens Bank, Ball Ground, Georgia
2995 Canton Highway, Ball Ground, Georgia 30107
14. Bank of Villa Rica
549 West Bankhead Highway, Villa Rica, Georgia 30107
15. The Community Bank of Carrollton
777 South Park Street, Carrollton, Georgia 30117
16. The Commercial Bank, Douglasville, Georgia
6636 Church Street, Douglasville, Georgia 30134
All of the above listed subsidiaries are organized under the laws
of the United States in the case of National banks and under the
laws of the State of Georgia in the case of State chartered banks.
<PAGE>
ACCOUNTANT'S CONSENT EXHIBIT 23.1
The Board of Directors
First National Bancorp
We consent to the use of our report incorporated herein by
reference and to the reference to our firm under the heading
"Experts" in the Registration Statement and prospectus.
s/KPMG Peat Marwick
KPMG PEAT MARWICK
Atlanta, Georgia
May 16, 1994
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the use of our report dated January 21, 1994
relating to the consolidated financial statements of Barrow
Bancshares, Inc. and Subsidiary included in the Registration
Statement on Form S-4 and to the reference to our firm under the
caption "Experts" in the Registration Statement on Form S-4.
s/Mauldin & Jenkins
MAULDIN & JENKINS
Atlanta, Georgia
May 16, 1994
<PAGE>
CONSENT OF COUNSEL EXHIBIT 23.3
To the Board of Directors
First National Bancorp
We hereby consent to the filing of our opinions regarding
validity of shares and tax consequences as exhibits to the
Registration Statement to which this consent is attached and
further consent to the use of our name under the heading "Legal
Opinion" in the Registration Statement and the Prospectus which is
a part thereof.
Very truly yours,
STEWART, MELVIN & FROST
By: s/T. Treadwell Syfan
Partner
Date: May 16, 1994
<PAGE>
BARROW BANCSHARES, INC.
209 NORTH BROAD STREET
WINDER, GEORGIA 30680
PROXY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints ______________________, __________
____________, ____________________, or any of them (with full power
to act alone and to appoint a substitute), as Proxies, and hereby
authorizes them to represent and to vote, as designated below, all
the shares of common stock of Barrow Bancshares, Inc. held of
record by the undersigned on ___________, 1994 at the special
meeting of shareholders to be held at the main office of Barrow
Bank & Trust Company at _______ A.M. on _________, 1994, or any
adjournment thereof.
1. To vote as indicated below on the proposal to merge Barrow
Bancshares, Inc. into First National Bancorp as outlined in the
Proxy Statement dated the ____ day of _______, 1994 under the terms
and conditions as more fully provided in the Agreement of
Reorganization and Plan of Merger attached to the Proxy Statement
as Appendix A.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder.
If no direction is made, this proxy will be voted FOR Proposal 1.
Please sign exactly as name When shares are held by joint
appears below tenants both should sign. When
__________________________ signing as attorney, as executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by President or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
Dated:_____________________ ____________________________________
Signature
PLEASE MARK, SIGN, DATE AND ____________________________________
RETURN THIS PROXY PROMPTLY, Signature if held jointly
USING THE ENCLOSED ENVELOPE
