<PAGE>
Registration No. 33-
22-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Form S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------
1st FRANKLIN FINANCIAL CORPORATION
A Georgia Corporation I.R.S. Employer No. 58-0521233
213 East Tugalo Street
Post Office Box 880
Toccoa, Georgia 30577
(706) 886-7571
-----------------------
Agent for Service: Copy To:
A. Roger Guimond Dom H. Wyant
213 East Tugalo Street Jones, Day, Reavis & Pogue
Post Office Box 880 3500 One Peachtree Center
Toccoa, Georgia 30577 303 Peachtree Street, N.E.
(706) 886-7571 Atlanta, Georgia 30308-3242
(404) 581-8075
-----------------------
Approximate date of proposed sale to public: From time to time commencing
as soon as possible after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following. X
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following. X
-----------------------
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
class of Amount maximum maximum Amount of
securities to to be offering aggregate registration
be registered registered price per unit offering price fee
- -----------------------------------------------------------------------------
Variable Rate
Subordinated
Debentures.... $20,000,000 100% $20,000,000 $6,897
- -----------------------------------------------------------------------------
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 as the Commission acting
pursuant to said Section 8(a) may determine.
AS FILED WITH SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 16, 1996
<PAGE>
1st FRANKLIN FINANCIAL CORPORATION
Cross Reference Sheet Required by Item 1. of Form S-2
-----------------------------------------------------
Item in Form S-2 Prospectus Caption
---------------- ------------------
Part I
Item 1. Forepart of the Registration Outside Front Cover Page
Statement and Outside
Front Cover Page of
Prospectus
Item 2. Inside Front and Outside Available Information
Back Cover Pages of Incorporation of Certain
Prospectus Documents by Reference
Reports to Security Holders
Item 3. Summary Information, Risk Factors
Risk Factors and Ratio Summary Description of
of Earnings to Fixed Securities Offered
Charges Appendix I
Item 4. Use of Proceeds Use of Proceeds
Item 5. Determination of Offering Price Not Applicable
Item 6. Dilution Not Applicable
Item 7. Selling Security Holders Not Applicable
Item 8. Plan of Distribution Plan of Distribution
Item 9. Description of Securities Description of Variable
to be Registered Rate Subordinated
Debentures
Item 10. Interest of Named Experts and Not Applicable
Counsel
Item 11. Information with Respect to Incorporation of Certain
the Registrant Documents by Reference
Reports to Security Holders
The Company
Item 12. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference
Item 13. Disclosure of Commission Not Applicable
Position on
Indemnification for
Securities Act Liabilities
<PAGE>
1st FRANKLIN FINANCIAL CORPORATION
PROSPECTUS dated February __, 1996
$20,000,000 VARIABLE RATE SUBORDINATED DEBENTURES
_________________________________________________
The Variable Rate Subordinated Debentures (the "Debentures") will be issued
in varying minimum purchase amounts established by 1st Franklin Financial
Corporation (the "Company") each Thursday, on a weekly basis. For each
respective purchase amount, the Company will establish an interest rate and
an interest adjustment period, which may range from one month to four years
("established features"). The established features will be available for the
period from Thursday through the following Wednesday and will be applicable
to all Debentures sold by the Company during that period. At the end of each
interest adjustment period, the interest rate will be adjusted to the current
rate or the holder may request redemption. All other provisions will remain
unchanged for the entire term of the Debenture.
The established features will be published weekly in a newspaper of general
circulation and, in addition, may be obtained from the Company in Toccoa,
Georgia. A Rule 424(b)(2) prospectus supplement setting forth the established
features will be filed weekly with the Securities and Exchange Commission.
The Debentures mature four years from date of issue but may be redeemed by
the holder without penalty at the end of any interest adjustment period.
There is not, nor is there likely to be, a market for these securities.
See "Risk Factors" on page 3 for a discussion of certain
factors that should be considered by prospective purchasers
of the Debentures offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE NOT BANK DEPOSITS NOR BANK OBLIGATIONS AND ARE NOT
INSURED BY THE FDIC.
- -----------------------------------------------------------------------------
Underwriting
Price to Discounts and Proceeds to
Public Commissions (a) Company (b)
Per Debenture. .. . . 100% None 100%
Total . .. . .. . . $20,000,000 None $20,000,000
- -----------------------------------------------------------------------------
(a) None of the securities described above will be underwritten and no
commissions or other remunerations will be paid in connection with
their sale. They will be sold at face value by the Company through its
executive officers.
(b) Before deduction of the Company's expenses, estimated at $41,297.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 16, 1996.
<PAGE>
AVAILABLE INFORMATION
1st Franklin Financial Corporation is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Such reports and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
St., N.W., Washington, D.C. 20549 and at the Commission's Regional Offices or
the public reference offices thereof located at 7 World Trade Center, 13th
Floor, New York, New York 10048 and at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. In addition, copies of such material may be
obtained from the Public Reference Section of the Commission at 450 Fifth
St., N.W., Washington, D.C. 20549 at the rates prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following documents:
(a) The Company's Annual Report on Form 10-K dated as of December 31,
1994 and filed pursuant to Section 15(d) of the Exchange Act with
the Commission.
(b) From the Company's annual report to security holders dated as of
December 31,1994, which is delivered with this Prospectus, the
following:
(i) Description of business furnished in accordance with the
provisions of Rule 14a-3(b)(6) under the Exchange Act;
(ii) Financial statements and information furnished in
accordance with the provisions of Rule 14a-3(b)(1);
(iii) Selected financial data furnished as required by Item 301
of Regulation S-K;
(iv) Supplementary financial data furnished as required by Item
302 of Regulation S-K; and
(v) Management's Discussion and Analysis of Financial Condition
and Results of Operations furnished as required by Item 303
of Regulation S-K.
(c) The Company's Quarterly Reports on Form 10-Q dated as of March
31, 1995 and June 30, 1995 filed pursuant to Section 15(d) of the
Exchange Act with the Commission.
(d) The Company's Quarterly Report on Form 10-Q dated as of September
30, 1995 and the quarterly report to security holders, included
therein, which is delivered with this Prospectus.
Any statement in the documents incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus and the
Registration Statement of which it is a part to the extent that a statement
contained herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as modified or superseded,
to constitute a part of this Prospectus or the Registration Statement of
which it is a part.
Copies of the Forms 10-K and 10-Q (other than exhibits) will be provided
without charge upon request to the Company's Secretary at 213 East Tugalo
Street, Post Office Box 880, Toccoa, Georgia 30577, telephone number (706)
886-7571 or 1-(800)-282-0709.
-2-
<PAGE>
REPORTS TO SECURITY HOLDERS
The Company provides each security holder an annual report containing
financial information that has been examined and reported upon, with an
opinion expressed, by an independent public accountant. Additionally, the
Company provides each security holder a quarterly report containing unaudited
financial information.
RISK FACTORS
The operations of the Company are subject to regulation by federal, state and
local government authorities and are subject to various laws and judicial and
administrative decisions imposing various requirements and restrictions
which, among other things, require that the Company obtain and maintain
certain licenses and qualifications, limit the interest rates, fees and other
charges the Company is allowed to charge, limit or prescribe other terms of
the Company's loans, require specified disclosures to borrowers, govern the
sale and terms of insurance products offered by the Company and the insurers
for which it acts as agent, and define the Company's rights to repossess and
sell collateral. Although the Company believes that it is in compliance in
all material respects with applicable federal, state and local laws, rules
and regulations, there can be no assurance that a change in such laws, or in
the interpretation thereof, will not make the Company's compliance therewith
more difficult or expensive, restrict the Company's ability to originate
loans, further limit or restrict the amount of interest and other charges
earned under such loans, or otherwise adversely affect the business or
prospects of the Company.
The loans made by the Company in the ordinary course of its business are
subject to the interest rate and regulatory provisions of each applicable
state's lending laws and are made at fixed rates which are not adjustable
during the term of the loan. Since the loans are made at fixed interest
rates and are made using the proceeds from the sale of the Company's fixed
and variable rate securities (such as the securities offered hereby), the
Company may experience a decrease in its net interest margin because
increased interest costs cannot be passed on to all of the Company's loan
customers. Net interest margin represents the difference between the amount
the Company earns on loans and investments and the amount the Company pays on
debt securities and other borrowings. An increase in prevailing interest
rates could adversely affect the Company's net interest margin.
Liquidity of the Company is dependent on the sale of its debt securities, the
continued availability of unused bank credit from its lenders and the
collection of its receivables. Numerous investment alternatives have caused
investors to evaluate more critically investment opportunities. The
securities offered hereby will have interest rates and redemption terms which
the Company believes will generate sufficient sales of debt securities to
meet the Company's liquidity requirements. Although all of the Company's
debt securities are subject to redemption prior to maturity at the option of
the holder thereof, management does not anticipate that redemptions will have
a material adverse effect on the Company's liquidity because all of the
subordinated debt securities contain an interest penalty for holders thereof
who request early redemption.
-3-
<PAGE>
The Company has a Credit Agreement with four major banks to meet the
redemption requests of debtholders and other liquidity and operating
requirements of the Company. The Credit Agreement provides for maximum
borrowings of $21,000,000 or 70% of the net finance receivables, whichever is
less. Borrowings are on an unsecured basis at 1/4% above the prime rate of
interest. In addition, there is a commitment fee of 5/8% of the available
line less average borrowings and an agent's fee of 1/8% of the total line.
The Company's right to borrow funds under this Credit Agreement is scheduled
to expire on December 31, 1999, unless extended, on which date the
outstanding balance of all loans pursuant to such Credit Agreement must be
paid in full. The Company intends to seek to extend such Credit Agreement or
enter into a new agreement on similar terms. Although the Company does not
anticipate difficulty in obtaining bank credit in the future on acceptable
terms, no assurance can be given that the terms of a new credit facility
would not be less favorable than the current Credit Agreement.
Another Credit Agreement with a major bank provides for an additional
$2,000,000 for general operating purposes. This agreement provides for
borrowings on an unsecured basis at 1/8% above the prime rate of interest.
There can be no assurances that these Agreements will continue to be
available to the Company at their present amounts, or at all, because each
are subject to periodic reviews by the lenders, which consider the Company's
profitability, economic conditions and other lending criteria in evaluating
whether they will continue the Agreements. The Company's liquidity is
dependent, among other things, on the collection of its receivables. The
Company continually monitors the delinquency status of its receivables and
promptly institutes collection efforts on each delinquent account.
Delinquencies of the Company's consumer finance receivables are likely to be
affected by general economic conditions. Although current economic
conditions have not had a material adverse effect on the Company's ability to
collect its receivables, no assurances can be given regarding future economic
conditions or their effect on the Company's ability to collect its
receivables.
If one or more of the sources of funds discussed above are significantly
curtailed for any reason, the Company's ability to meet its obligations,
including its obligations with respect to the securities offered hereby,
could be adversely affected.
The Debentures will be general, unsecured obligations of the Company and
subordinated in right of payment to all of the Company's Senior Debt (as
defined in "Description of Variable Rate Subordinated Debentures -
Subordination"). The incurrence of additional Senior Debt or secured
obligations is not limited.
In the event of any insolvency or bankruptcy proceeding, or of any
receivership, liquidation, reorganization or other similar proceeding in
connection therewith, relative to the Company or to its creditors, as such,
or to its property, or in the event of any proceeding for voluntary
liquidation, dissolution or other winding up of the Company, whether or not
involving insolvency or bankruptcy, then the holders of Senior Debt shall be
entitled to receive payment in full of all principal and interest on all
Senior Debt before the holders of the Debentures are entitled to receive any
payments.
-4-
<PAGE>
SUMMARY DESCRIPTION OF SECURITIES OFFERED
The following is a summary of the principal features of the
securities being offered hereby. For a detailed discussion, see
"Description of Variable Rate Subordinated Debentures".
Variable Rate Subordinated Debentures
Denominations Established weekly by the Company.
- -----------------------------------------------------------------------------
Indenture Trustee The Debentures will be issued pursuant to an
indenture between the Company and Synovus Trust
Company, an affiliate of Columbus Bank and Trust
Company, as trustee.
- -----------------------------------------------------------------------------
Interest Rate Weekly offering rate, compounded daily, for
each established amount.
- -----------------------------------------------------------------------------
Interest Adjustment Rate adjusted at the end of each interest
adjustment period to the current interest
rate, compounded daily.
- -----------------------------------------------------------------------------
Payment of Interest Interest will be earned daily and will be
payable at any time at the holder's request.
- -----------------------------------------------------------------------------
Maturity Four years from date of issue but may be redeemed
at the end of any interest adjustment period
without penalty.
- -----------------------------------------------------------------------------
Redemption by Holder At the end of any interest adjustment period
without penalty; redemption at any other time
subject to an interest penalty.
- -----------------------------------------------------------------------------
Redemption by Company The Company may redeem prior to maturity upon 30
days written notice to holder for a price equal to
principal plus interest accrued to date of
redemption.
- -----------------------------------------------------------------------------
Extension of Maturity Maturity of each Debenture is automatically
extended on its original terms for one
additional four-year term subject to Interest
Adjustment. Holder may prevent such extension
by redeeming the Debenture within 15 days
after maturity. The Company will notify
holders 30 days in advance of maturity date.
- -----------------------------------------------------------------------------
Compound Interest Debentures are offered at interest rates which are
compounded daily. Examples of annualized effective
yields for daily compounded rates are set forth
below:
Example Effective
Nominal Annual
Rates Yield
5.0% 5.13%
6.0 6.18
7.0 7.25
8.0 8.33
9.0 9.42
-5-
<PAGE>
THE COMPANY
1st Franklin Financial Corporation has been engaged in the consumer finance
business since 1941, particularly in making and servicing direct cash, real
estate and sales finance loans. The business is operated through 89 branch
offices in Georgia, 24 in Alabama and 15 in South Carolina. The Company
funds its loan demand through a combination of debt securities and a Credit
Agreement with four major banks. This Agreement provides for borrowings on
an unsecured basis up to $21,000,000 or 70% of the net finance receivables
(as defined by the Agreement), whichever is less. The amount of unused
borrowings under this Credit Agreement at a recent date is set forth on
Appendix I.
On the basis of total capital funds employed (common stockholder's equity and
subordinated debt), American Banker, a financial services publication,
recently ranked the Company as the 52nd largest finance company in the United
States.
USE OF PROCEEDS
Net proceeds from sales of the securities offered hereby, after payment of
estimated expenses of $41,297, will be placed in the general treasury of the
Company as sales are made. No segregation of proceeds will be made, but the
Company will use the net proceeds for the redemption of senior and
subordinated securities as such debtholders request redemption over the next
two years. Such subordinated securities include debentures of the same
series as the Debentures offered hereby; such senior securities include
senior demand notes of the Company, which are sold in varying principal
amounts and at various interest rates. Any proceeds not used for redemptions
will be used to repay bank borrowings and repay amounts outstanding under the
Company's commercial paper program as such amounts come due, make additional
finance receivables and for general operating purposes.
PLAN OF DISTRIBUTION
The Debentures will be offered by the Company through its executive officers.
No selling commissions or other remunerations will be paid directly or
indirectly to any officers, directors or employees of the Company in
connection with the sale of the Debentures. All purchase proceeds from sales
of the Debentures will be placed in the general treasury of the Company.
(See "Use of Proceeds") All offering expenses, including registration fees,
printing, advertising, postage and professional fees, will be paid by the
Company.
The offering is to be conducted by the Company through its executive officers
and there is no assurance that all of the securities offered herein will be
sold. The offering, however, is not made contingent upon any minimum amount
of securities being sold.
The Debentures will be sold and redeemed at the Company's executive office
located at 213 East Tugalo Street, Post Office Box 880, Toccoa, Georgia
30577. The telephone number is (706) 886-7571 or 1-(800)-282-0709.
-6-
<PAGE>
DESCRIPTION OF VARIABLE RATE SUBORDINATED DEBENTURES
General
- -------
In January 1995, Columbus Bank and Trust Company (the prior trustee under the
Variable Rate Indenture) transferred its trust operations to its new separate
trust company affiliate named Synovus Trust Company, which has thereby become
the Trustee (hereinafter called the "Trustee") under the Variable Rate
Indenture. All references to the Trustee in this Prospectus and the
Registration Statement of which it is a part shall be deemed to refer to
Synovus Trust Company unless the context otherwise requires. The Company has
been informed that counsel to Columbus Bank and Trust Company believes that
pursuant to applicable banking regulations and by agreement with the Company,
Columbus Bank and Trust Company remains responsible to holders of Debentures
for all actions of Synovus Trust Company as if performed by Columbus Bank and
Trust Company itself. The following statements with respect to the
Debentures are subject to the detailed provisions of the Variable Rate
Indenture. Whenever any particular article or section of the Variable Rate
Indenture is referred to, the statement made in connection with such
reference is qualified in its entirety by such reference.
The Debentures are registered and issued without coupons in Series form. Any
amount of any Series may be issued. There is no limit on the principal
amount of Debentures of any Series, or of all Series issuable under the
Variable Rate Indenture. The dollar amount of Debentures outstanding under
the Variable Rate Indenture as of a recent date is set forth on Appendix I.
The Company and the Trustee may amend the Variable Rate Indenture to limit
the principal amount of a particular Series or to allow additional Series of
Debentures with no limitations as to the maximum amount of any increase or to
the number of increases which may be made. The Company may change the
interest rates and the maturities of the Debentures offered herein and of any
subsequent Series which may be offered, provided that no such change shall
affect any Debenture of any Series issued prior to the date of change.
The Debentures are direct obligations of the Company, but are not secured.
Principal and interest are payable at the executive office of the Company in
Toccoa, Georgia. The Debentures are executed by the Company and
authenticated and delivered to the purchaser by the Trustee upon written
order of the Company.
Established Features of Series 1 Debentures
- -------------------------------------------
The Variable Rate Subordinated Debentures Series 1 ("Series 1 Debentures")
offered herein are issued and dated as of the date when purchased. The
interest rate for a Series 1 Debenture is compounded daily and payable at any
time at the holder's request. The Series 1 Debentures mature four years from
date of issue, and may be extended for one additional four-year term as
described under "Extension After Maturity".
Each Thursday, on a weekly basis, the Company establishes various minimum
purchase amounts with varying interest rates and interest adjustment periods
("established features") for each respective minimum purchase amount. The
purchase amount and the interest adjustment period thereby established are
maintained for the term of the Series 1 Debenture. The interest rate at
which the Series 1 Debenture is sold is set only for the initial interest
adjustment period. The Company anticipates that it will offer the Series 1
Debentures with interest rate adjustment periods ranging from one month to
four years.
At the end of each interest adjustment period, the Company will notify the
holder by mail of the new interest rate which will be the same interest rate
that is applicable to all new Series 1 Debentures being offered during the
same week and at the same terms. The new interest rate will be determined by
the Company, in its discretion, based on general market rates of interest.
If the holder elects to retain the Series 1 Debenture at the new rate, no
action is required of the holder as the new rate will become effective as of
the first day of the interest adjustment period. If the holder elects not to
accept the new rate, the holder can redeem the Series 1 Debenture without
penalty at the end of the interest adjustment period. See "Redemption at
Request of Holder Prior to Maturity".
-7-
<PAGE>
Debentures with the current established features are available for the period
from Thursday through the following Wednesday. The current established
features are applicable to all Series 1 Debentures sold by the Company during
that period. The Company publishes this information in a newspaper of
general circulation and, in addition, such information may be obtained
directly from the Company's executive offices in Toccoa, Georgia.
Subordination
- -------------
The payment of the principal of and interest on the Debentures is subordinate
in right of payment, as set forth in Article Ten of the Variable Rate
Indenture, to all Senior Debt of the Company.
The term "Senior Debt" means all indebtedness of the Company outstanding at
any time except debt of the Company that by its terms is not senior in right
of payment to the Debentures, and indebtedness represented by the Company's
outstanding Debentures, all of which are pari passu.
The indebtedness evidenced by the Debentures shall, in case the Debentures
are declared due and payable before their expressed maturity because of the
occurrence of a default under the Variable Rate Indenture, be entitled to
payment only after there shall have been paid in full all principal and
interest on such Senior Debt. Likewise, in the event of any insolvency or
bankruptcy proceeding, or of any receivership, liquidation, reorganization or
other similar proceeding in connection therewith, relative to the Company or
to its creditors, as such, or to its property, or in the event of any
proceeding for voluntary liquidation, dissolution or other winding up of the
Company, whether or not involving insolvency or bankruptcy, then the holders
of Senior Debt shall be entitled to receive payment in full of all principal
and interest on all Senior Debt before the holders of the Debentures are
entitled to receive any payments.
The amount of the Company's Senior Debt outstanding at a recent date is set
forth in Appendix I.
Redemption by Company Prior to Maturity
- ---------------------------------------
The Company may redeem any Debenture of any Series at any time prior to
maturity for a redemption price equal to the principal amount plus any unpaid
interest thereon to date of redemption. The Company will notify
Debentureholders whose Debentures are to be redeemed not less than 30 nor
more than 60 days prior to the date fixed for redemption. In the event the
entire Series is not called for redemption, the redemption call shall be made
pro rata.
Redemption at Request of Holder Prior to Maturity
- -------------------------------------------------
At the request of the holder, the Company will redeem any Series 1 Debenture
at the end of any interest adjustment period for a redemption price equal to
the principal amount plus any unpaid interest thereon to date of redemption.
At the request of the holder, the Company may, at its option, redeem any
Series 1 Debenture during any interest adjustment period for a price equal to
the principal amount plus interest at one-half the stated rate on the Series
1 Debenture.
If the holder dies before maturity, the Company may, at its option, redeem
any Series 1 Debenture for a redemption price equal to the principal amount
plus any unpaid interest thereon to date of redemption. Historically, the
Company has honored all such request for early redemption.
All redemptions will be made at the Company's executive offices in Toccoa,
Georgia, either in person or by mail.
-8-
<PAGE>
Extension After Maturity
------------------------
The maturity of a Series 1 Debenture will be automatically extended from the
original maturity date for a period equal to the original term of such Series
1 Debenture unless the holder submits the Series 1 Debenture for redemption
within 15 days after its maturity or the Company tenders the amount due the
holder within 15 days after maturity. In the event of such an extension, all
provisions of the Series 1 Debenture will remain unchanged with the exception
of the interest rate which will be changed in accordance with the interest
adjustment provision. If the Company does not elect to tender payment, it
will notify the holder of this extension provision at least 30 days prior to
the maturity date.
Restrictions Upon the Company
- -----------------------------
There are no restrictions in the Variable Rate Indenture against the issuance
of additional securities or the incurring of additional debt including Senior
Debt and secured obligations.
Modification of the Variable Rate Indenture
- -------------------------------------------
The Variable Rate Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than two-thirds of
the outstanding principal amount of the Debentures, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating
any of the provisions of the Variable Rate Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of such
Debentures; provided, however, that no such supplemental indenture shall
change the fixed maturity of any Debenture, reduce the principal amount
thereof, reduce the rate, change the time of payment of interest thereon,
reduce the amount of Debentures whose holders must consent to an amendment,
or make any changes regarding the Variable Rate Indenture that relate to
waiver of default, the rights of holders to receive payments, and the
requirements of consent of the Debentureholders, without the consent of the
holder of each Debenture so affected.
The Company and the Trustee may amend the Variable Rate Indenture to allow
the issuance of additional amounts of a particular Series or additional
Series of Debentures without the consent of the Debentureholders. There are
no limitations as to the maximum amount of any increase or to the number of
increases which may be made. The Company may change the interest rates and
the maturities of the Debentures offered hereby and of any subsequent Series
which may be offered without entering into a supplemental indenture, provided
that no such change will affect any Debenture of any Series issued prior to
the date of change.
Events of Default and Notice Thereof
- ------------------------------------
An Event of Default is defined by the Variable Rate Indenture to mean any of
the following: (a) failure to pay principal upon any Debenture when the same
becomes due; (b) failure to pay interest upon any Debenture when the same
becomes due and the Default continues for 30 days; (c) failure, after notice
from the Trustee or from the holders of at least 25% in principal amount of
the Debentures of the affected Series, to observe or perform within 30 days
any of the covenants contained in the Variable Rate Indenture or Debentures;
or (d) the occurrence of certain events of bankruptcy, insolvency or
reorganization.
The Variable Rate Indenture provides that the Trustee shall, within 90 days
after the occurrence thereof, give the registered holders of the Debentures
notice of any existing default known to the Trustee, but, except in case of
a default in the payment of principal or interest, the Trustee may withhold
such notice if and for so long as the Trustee in good faith determines that
the withholding of such notice is in the interest of such holders.
-9-
<PAGE>
Rights on Default
- -----------------
The Trustee by notice to the Company, or the holders of at least 25% in
principal amount of the Debentures of the affected Series, may declare the
principal of and accrued interest on all Debentures due upon the happening of
any of the Events of Default specified in the Variable Rate Indenture, but
the holders of a majority of the outstanding principal amount of such
Debentures may waive any default and rescind such declaration if the default
is cured within the 30 day period, except a default in the payment of the
principal of or interest on any Debenture or a default on Senior Debt. The
holders of a majority of the outstanding principal amount of the Debentures
of the affected Series may direct the time, method and place of conducting
any proceeding for any remedy available to, or exercising any power or trust
conferred upon, the Trustee, but the Trustee may decline to follow any
direction that conflicts with law, provisions of the Variable Rate Indenture,
or is unduly prejudicial to the rights of the other Debentureholders or would
involve the Trustee in personal liability. Holders may not institute any
proceeding to enforce the Variable Rate Indenture unless the Trustee refuses
to act for 60 days after request from the holders of at least 25% in
principal amount of the Debentures of the affected Series and during such 60
day period the holders of a majority in principal amount do not give the
Trustee a direction inconsistent with the request, and tender to the Trustee
of satisfactory indemnity. Nevertheless, any holder may enforce the payment
of the principal of and interest on the holder's Debenture when due.
Concerning the Trustee
- ----------------------
The Trustee does not have any other business relationship with the Company.
The Trustee maintains its principal corporate trust office in Columbus,
Georgia.
Evidence to be Furnished Trustee
- --------------------------------
The Variable Rate Indenture provides that, as evidence of compliance with the
conditions precedent provided for in the Variable Rate Indenture relating to
any action to be taken by the Trustee upon the application or demand of the
Company, the Company shall furnish to the Trustee an officer's certificate
and an opinion of counsel stating that all such conditions precedent have
been met. Within 120 days after the end of each fiscal year, the Company
shall file with the Trustee an officer's certificate stating whether or not,
to the best knowledge of the signers, the Company is in default in the
performance of any covenant, agreement or condition contained in the Variable
Rate Indenture and, if so, specifying each such default, and, with respect to
each, the action taken or proposed to be taken by the Company to remedy such
default.
LEGAL OPINION
The validity of the securities offered hereby has been passed upon for the
Company by Jones, Day, Reavis & Pogue, 3500 One Peachtree Center, 303
Peachtree Street, N.E., Atlanta, Georgia 30308-3242.
-10-
<PAGE>
1st FRANKLIN FINANCIAL CORPORATION
Appendix I to Prospectus
Information as of September 30, 1995
1. Ratio of Earnings to Fixed Charges (page 3):
Sept. 30 December 31
-------- ---------------------------------------------
1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ----
2.28 2.73 2.58 2.31 2.04 1.95
2. Unused borrowings under the $21,000,000 Credit
Agreement (page 6): $21,000,000
3. Debentures outstanding under Indenture (page 7): $29,390,467
4. Senior Debt (as defined under the caption "Description
of Variable Rate Subordinated Debentures -
Subordination") outstanding (page 8): $89,465,718
A more current Appendix I, if appropriate, will be attached to the cover page
of this Prospectus as a supplement. If attached, that supplemental Appendix
I supersedes this information.
-11-
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in the Prospectus in connection
with the offering contained herein, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities covered by this Prospectus in
any State to any person to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor any sale hereunder
shall, under any circumstances, create an implication that there has been no
change in the facts herein set forth since the date hereof.
TABLE OF CONTENTS
Available Information . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . 2
Reports to Security Holders . . . . . . . . . . . . . 3
Risk Factors. . . . . . . . . . . . . . . . . . . . . 3
Summary Description of Securities Offered . . . . . . 5
The Company . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . 6
Plan of Distribution. . . . . . . . . . . . . . . . . 6
Description of Variable Rate Subordinated Debentures. 7
Legal Opinion . . . . . . . . . . . . . . . . . . . . 10
Appendix I. . . . . . . . . . . . . . . . . . . . . . 11
$20,000,000
Variable Rate Subordinated Debentures -
Series 1
-12-
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
The expenses to be incurred in the issuance and distribution of the
securities being registered are estimated as follows:
Filing Fee - Securities and Exchange
Commission. . . . . . . . . . . . . . $ 6,897
Registration Fees in States. . . . . . . . 3,000
Legal Fees and Expenses. . . . . . . . . . 15,000
Accounting Fees. . . . . . . . . . . . . . 5,000
Printing Cost. . . . . . . . . . . . . . . 1,000
Advertising. . . . . . . . . . . . . . . . 2,400
Trustee's Fees . . . . . . . . . . . . . . 6,000
Postage and Miscellaneous. . . . . . . . . 2,000
-------
Total . . . . . . . . . . . . . . . . $41,297
=======
Item 15. Indemnification of Directors and Officers
- ----------------------------------------------------
The registrant has, pursuant to the authority granted in Section 14-2-
851 of the Official Code of Georgia Annotated, agreed to indemnify any
officer or director of the registrant against any expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually or reasonably incurred by him in any action, suit or
proceeding brought or threatened to be brought against him by reason of
the fact that he is or was an officer or director of the registrant if
he acted in a manner he reasonable believed to be in or not opposed to
the best interests of the registrant, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
Item 16. Exhibits
- -------------------
4. (a) The Variable Rate Indenture dated October 31, 1984 between
the registrant and The First National Bank of Gainesville,
Trustee. (Incorporated by reference to Exhibit 4(a) to the
registrant's Registration Statement on Form S-2,
Registration No. 2-94191.)
(b) Form of Variable Rate Subordinated Debenture.
(Incorporated by reference to Exhibit 4(b) to the
registrant's Registration Statement on Form S-2,
Registration No. 33-25180.)
(c) Agreement of Resignation, Appointment and Acceptance dated
as of May 28, 1993 between the registrant, the First
National Bank of Gainesville, and Columbus Bank and Trust
Company. (Incorporated herein by reference to Exhibit 4(c)
to the registrant's Post-Effective Amendment No. 1 dated
June 8, 1993 to the Registration Statement on Form S-2,
Registration No. 33-49151.)
(d) Modification of Indenture dated March 29, 1995.
(Incorporated herein by reference to Exhibit 4(b) to the
registrant's Form 10-K for the year ended December 31,
1994, No. 2-27985.)
5. Opinion of Counsel (to be filed by amendment).
II-1
<PAGE>
10. (a) Credit Agreement dated May, 1993 between the registrant and
SouthTrust Bank of Georgia, N.A..(Incorporated by reference
to Exhibit 10(a) to the registrant's Form 10-K for the year
ended December 31, 1993, No. 2-27985.)
(b) Revolving Credit Agreement dated October 1, 1985 as amended
November 10, 1986; March 1, 1988; August 31, 1989 and May
1, 1990, among the registrant and the banks named therein
(Incorporated by reference to Exhibit 10 to the
registrant's Form SE dated November 9, 1990.)
(c) Fifth Amendment to Revolving Credit Agreement dated April
23, 1992. (Incorporated by reference to Exhibit 10(c) to
the Registrant's Form SE dated November 5, 1992.)
(d) Sixth Amendment to Revolving Credit Agreement dated July
20, 1992. (Incorporated by reference to Exhibit 10(d) to
the Registrant's Form SE dated November 5, 1992.)
(e) Seventh Amendment to Revolving Credit Agreement dated June
20, 1994. (Incorporated by reference to Exhibit 10(e) to
the registrant's Registration Statement on from S-2,
Registration No. 33-56299.)
11. Computation of Earnings per Share is self-evident from the
Consolidated Statement of Income and Retained Earnings in the
Registrant's Annual Report to Security Holders for the fiscal
year ended December 31, 1994. (Incorporated by reference to
exhibit 11 to the registrant's Form 10-K for the year ended
December 31, 1994.)
12. Computation of Ratio of Earnings to Fixed Charges.
13. (a) Annual Report to securities holders for the year ended
December 31, 1994. (Incorporated by reference to Exhibit
13 to the registrant's Form 10-K for the year ended
December 31, 1994, No. 2-27985.)
(b) Form 10-Q for the period ended September 30, 1995.
(Incorporated by reference to registrant's Form 10-Q for
the period ended September 30, 1995, No. 2-27985.)
23. (a) Consent of Independent Public Accountants.
(b) Consent of Counsel (set forth in Exhibit 5, to be filed by
amendment).
24. Power of Attorney (included on signature page hereto)
25. Form T-1 as to the eligibility and qualification of Synovus Trust
Company, Trustee, under the indenture dated as of October 31,
1984 (modified March 29, 1995) between the registrant and Synovus
Trust Company, an affiliate of Columbus Bank and Trust Company.
25.1-P A copy of the Charter and/or Articles of Incorporation of
the Columbus Bank and Trust Company, (Incorporated by
reference to Exhibit 25.1 of the registrant's Form SE dated
June 8, 1993, filed pursuant to continuing hardship
exemption.)
25.1-1 A copy of the Charter and/or Articles of Incorporation of
the Synovus Trust Company.
25.4-P Copy of the bylaws of Columbus Bank and Trust, as now in
effect. (Incorporated by reference to Exhibit 25.4 of the
registrant's Form SE dated June 8, 1993, filed pursuant to
continuing hardship exemption.)
25.4-1 Copy of the bylaws of SynovusTrust Company, as now in
effect.
II-2
<PAGE>
Item 17. Undertakings
- ------------------------
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement: (i) to include any prospectus required by
section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; (iii) to include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
(iv) to file weekly with the Securities and Exchange
Commission a Rule 424(b)(2) prospectus supplement setting
forth the established features (as defined in the
prospectus).
(2) that, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes 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.
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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Toccoa, State of Georgia, on
February 16, 1996.
1st FRANKLIN FINANCIAL CORPORATION
s/ Ben F. Cheek, III
--------------------
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ben F. Cheek, III and A. Roger Guimond, and
each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
registration statement and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and their
substitutes, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, and
their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement or amendment thereto has been signed by the following persons in
the capacities and on the dates indicated:
Signature Title Date
s/ Ben F. Cheek, III Chairman of the Board; February 16, 1996
- ----------------------- Principal Executive Officer; -----------------
Director
s/ T. Bruce Childs President February 16, 1996
- ----------------------- -----------------
s/ A. Roger Guimond Vice President; February 16, 1996
- ----------------------- Principal Financial Officer; -----------------
Principal Accounting Officer
s/ Richard Acree Director February 16, 1996
- ----------------------- -----------------
s/ Mrs. Lorene M. Cheek Director February 16, 1996
- ----------------------- -----------------
s/ Jack Stovall Director February 16, 1996
- ----------------------- -----------------
s/ Robert E. Thompson Director February 16, 1996
- ----------------------- -----------------
II-4
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit
4. (a) The Variable Rate Indenture dated October 31, 1984
between the registrant and The First National Bank
of Gainesville, Trustee. (Incorporated by reference
to Exhibit 4(a) to the registrant's Registration
Statement No. 2-94191.)
(b) Form of Variable Rate Subordinated Debenture.
(Incorporated by reference to Exhibit 4(b) to the
registrant's Registration Statement on Form S-2,
Registration No. 33-25180.)
(c) Agreement of Resignation, Appointment and Acceptance
dated as of May 28, 1993 between the registrant, The
First National Bank of Gainesville, and Columbus
Bank and Trust Company. (Incorporated herein by
reference to Exhibit 4(c) to the registrant's Post
Effective Amendment No. 1, dated June 8, 1993, to
the Registration Statement on Form S-2, Registration
No. 33-49151.)
(d) Modification of Indenture dated March 29, 1995.
(Incorporated herein by reference to Exhibit 4(b) to
the registrant's Form 10-K for the year ended
December 31, 1994, No. 2-27985.)
10. (a) Credit Agreement dated May, 1993 between the
registrant and SouthTrust Bank of Georgia, N.A..
(Incorporated by reference to Exhibit 10(a) to the
registrant's Form 10-K for the year ended December
31,1993, No. 2-27985.)
(b) Revolving Credit Agreement dated October 1, 1985 as
amended November 10, 1986; March 1,1988; August 31,
1989 and May 1, 1990, among the registrant and the
banks named therein, (Incorporated by reference to
Exhibit 10 to the registrant's Form SE dated
November 9, 1990.)
(c) Fifth Amendment to Revolving Credit Agreement dated
April 23, 1992. (Incorporated by reference to
Exhibit 10(c) to the Registrant's Form SE dated
November 5, 1992.)
(d) Sixth Amendment to Revolving Credit Agreement dated
July 20, 1992. (Incorporated by reference to Exhibit
10(d) to the Registrant's Form SE dated November 5,
1992.)
(e) Seventh Amendment to Revolving Credit Agreement
dated June 20, 1994. (Incorporated by reference to
Exhibit 10(e) to the registrant's Registration
Statement on from S-2, Registration No. 33-56299.)
11. Computation of Earnings per Share is self-evident from the
Consolidated Statement of Income and Retained Earnings in the
Registrant's Annual Report to Security Holders for the fiscal
year ended December 31, 1994. (Incorporated by reference to
exhibit 11 to the registrant's Form 10-K for the year ended
December 31, 1994.)
<PAGE>
12. Computation of Ratio of Earnings to Fixed Charges
13. (a) Annual Report to the securities holders for the year
ended December 31, 1994. (Incorporated by reference
to Exhibit 13 to the registrant's Form 10-K for the
year ended December 31, 1994, No. 2-27985.)
(b) Form 10-Q for the period ended September 30, 1995.
(Incorporated by reference to registrant's Form 10-Q
for the period ended September 30, 1995, No. 2-
27985.)
23. (a) Consent of Arthur Andersen LLP
24. Power of Attorney (included on signature page, hereto)
25. Form T-1 as to the eligibility and qualification of Synovus Trust
Company, Trustee, under the indenture dated as of October 31,
1984 (modified March 29, 1995) between the registrant and Synovus
Trust Company, an affiliate of Columbus Bank and Trust Company.
25.1-P A copy of the Charter and/or Articles of Incorporation of
the Trustee. (Incorporated by reference to Exhibit 25.1 of
the registrant's Form SE dated June 8, 1993, filed pursuant
to continuing hardship exemption.)
25.1-1 A copy of the Charter and/or Articles of Incorporation of
the Synovus Trust Company.
25.4-P Copy of the bylaws of Columbus Bank and Trust Company, as
now in effect. (Incorporated by reference to Exhibit 25.4
of the registrant's Form SE dated June 8, 1993, filed
pursuant to continuing hardship exemption.)
25.4-1 Copy of the bylaws of SynovusTrust Company, as now in
effect.
<PAGE>
<PAGE>
Exhibit 12
CALCULATION OF
RATIO OF EARNINGS TO FIXED CHARGES
Nine
Months
Ended Year Ended
Sept. 30 December 31
-------- --------------------------------------------
1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ----
Income Before
Income Taxes. . . $7,936 $10,319 $ 8,322 $ 6,177 $ 5,199 $ 4,856
Interest on
Indebtedness. . . 5,864 5,556 4,910 4,423 4,733 4,875
Portion of rents
representative of
the interest
factor. . . . . . 330 419 362 304 257 230
------- ------- ------- ------- ------- --------
Earnings as
Adjusted . $14,130 $16,294 $13,594 $10,904 $10,189 $ 9,961
======= ======= ======= ======= ======= ========
Interest on
Indebtedness. . . $5,864 $5,556 $4,910 $ 4,423 $ 4,733 $ 4,875
Portion of rents
representative of
the interest
factor. . . . . . 330 419 362 304 257 230
------- ------ ------ ------- ------- --------
Fixed Charges. . $6,194 $5,975 $5,272 $ 4,727 $ 4,990 $ 5,105
======= ====== ====== ======= ======= ========
Ratio of Earnings
to Fixed Charges. 2.28 2.73 2.58 2.31 2.04 1.95
==== ==== ==== ==== ==== ====
<PAGE>
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated February 23,
1995 included in the Company's Form 10-K and Annual Report for the year ended
December 31, 1994 and to all references to our Firm included in this
Registration Statement.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 16, 1996
<PAGE>
<PAGE>
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM T - 1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility
of a Trustee pursuant to Section 305(b)(2) _____
----------------------------------
SYNOVUS TRUST COMPANY
(Exact Name of Trustee as Specified in its Charter)
Georgia 58-2146977
(Jurisdiction of Incorporation or (I.R.S. Employer
Organization if not a National Bank) Indentification No.)
P.O. Box 120, Columbus, Georgia 31902-0120
(Address of Principal Executive Office) (Zip Code)
Ms. Alice H. Stagg
Vice President and Trust Officer
Synovus Trust Company
Post Office Box 120
Columbus, Georgia 31902-0120
(706) 649-2245
(Name, Address and Telephone No. of Agent for Service)
----------------------------------
1st FRANKLIN FINANCIAL CORPORATION
(Exact Name of Obligor as Specified in its Charter)
Georgia 58-0521233
(State or other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
213 East Tugalo Street
Toccoa, Georgia 30577
(Address of Principal Executive Offices) (Zip Code)
----------------------------------
Variable Rate Subordinated Debentures
Due Four Years From Date of Issuance
(Title of the Indenture Securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Georgia Department of Banking and Finance
2990 Brandywine Road
Suite 200
Atlanta, Georgia 30041
Federal Deposit Insurance Corporation
Marquis Tower One
Suite 1700
Atlanta, Georgia 30303
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust
powers.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe such
affiliation.
None
Item 3. Voting Securities of the Trustee. *
Item 4. Trusteeships under Other Indentures. *
Item 5. Interlocking Directorates and Similar Relationships with the
Obligor or Underwriters. *
Item 6. Voting Securities of the Trustee Owned by the Obligor or its
Officials. *
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials. *
Item 8. Securities of the Obligor Owned or Held by the Trustee. *
Item 9. Securities of Underwriters Owned or Held by the Trustee. *
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor. *
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or more of the Voting Securities of the
Obligor. *
_______________
* Not Applicable pursuant to General Instruction B.
<PAGE>
Item 12. Indebtedness of the Obligor to the Trustee. *
Item 13. Defaults by the Obligor.
There has been no default with respect to the securities under the
Indenture, or any other indenture or series under which (i) the
Trustee is a trustee, and (ii) any other securities, or certificates
of interest or participation in any other securities, of 1st
Franklin Financial Corporation are outstanding.
Item 14. Affiliations with the Underwriters. *
Item 15. Foreign Trustee. *
Item 16. List of Exhibits.
(1) A copy of the Charter and/or Articles of Incorporation of the
Columbus Bank and Trust Company. (Incorporated herein by
reference to Exhibit 25.1 of the registrant's Form SE dated
June 8, 1993, filed pursuant to continuing hardship exemption.)
(1-1) A copy of the Charter and/or Articles of Incorporation of the
Trustee.
(2) Not applicable.
(3) Not applicable.
(4) Copy of the Bylaws of the Columbus Bank and Trust Company, as
now in effect. (Incorporated herein by reference to
Exhibit 25.4 of the Registrant's Form SE dated June 8, 1993,
filed pursuant to continuing hardship exemption.)
(4-1) Copy of the Bylaws of the Synovus Trust Company.
(5) Not Applicable.
(6) The consent of the Trustee required by Section 321(b) of the
Act, filed as Exhibit 25.6.
(7) Copy of the latest Report of Condition of Columbus Bank and
Trust Company published pursuant to law or the requirements
of its supervising or examining authority, filed as
Exhibit 25.7.
___________________
* Not Applicable pursuant to General Instruction B.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Synovus Trust Company, a corporation organized and existing under the laws of
Georgia, has duly caused this statement of eligibility and qualification to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Columbus, and the State of Georgia, on the 15th day of February,
1996.
SYNOVUS TRUST COMPANY
By: Alice H. Stagg
--------------------------------
Title: Vice President and Trust Officer
<PAGE>
<PAGE>
Exhibit 25.1-1
ARTICLES OF INCORPORATION
OF
SYNOVUS TRUST COMPANY
1.
The name of the corporation is Synovus Trust Company.
2.
The object of the corporation is pecuniary gain, the corporation shall
operate as solely a trust company, and the purpose or purposes for which the
corporation is organized include the transaction of all lawful business for
which a trust company may be incorporated under the Financial Institutions
Code of Georgia, provided, however, that the corporation shall only be
authorized to engage in activities permissible for a trust company subsidiary
of a state chartered commercial bank in Georgia.
3.
The corporation shall have perpetual duration.
4.
The maximum number of shares of capital stock that the corporation shall be
authorized to have outstanding at any time shall be 10,000 shares of common
stock, $1.00 par value.
5.
The initial registered office of the corporation shall be 1148 Broadway,
Columbus, Georgia 31901, and the initial registered agent of the corporation
shall be George G. Flowers.
6.
The location of the corporation will be in Muscogee County, Georgia and
the initial mailing address will be P.O. Box 120, Columbus, Georgia 31901.
<PAGE>
7.
The initial Board of Directors of the corporation shall consist of 11
members, whose names and addresses are as follows:
Place of Residence and
Name and Occupation Citizenship Post Office Address
- ------------------- ----------- -------------------
Samuel M. Welborn, III U.S.A. P.O. Box 50
President 10011 Chattsworth Road
Columbus Bank and Trust Company Midland, Georgia 31820
James H. Blanchard U.S.A. 6200 Mountainview Drive
Chairman & CEO Columbus, Georgia 31904
Synovus Financial Corp.
James D. Yancey U.S.A. 6049 Roundhill Court
Vice Chairman Columbus, Georgia 31904
Synovus Financial Corp.
Gardiner W. Garrard, Jr. U.S.A. 6551 Green Island Drive
President Columbus, Georgia 31904
The Jordan Company
George C. Woodruff, Jr. U.S.A. #55 Waterway Court
Real Estate Developer Cataula, Georgia 31804
Charles W. Burgin U.S.A. 2727 Lynda Lane
Chairman of the Board Columbus, Georgia 31906
The Burgin Co.
John S. Avant U.S.A. 2015 Springdale Dr.
Dentist Columbus, Georgia 31906
Marvin R. Schuster U.S.A. 70 Holland Rd.
Chairman of the Board Cataula, GA 31804
Schuster Enterprises, Inc.
Walter M. Deriso, Jr. U.S.A. 403 Byron Plantation Road
President Albany, Georgia 31707
Security Bank and Trust Company
Frederick D. Jefferson U.S.A. 1307 Lovers Lane
President & CEO Thomasville, Georgia 31792
Commercial Bank
George G. Flowers U.S.A. 2843 Roswell Lane
Vice President Columbus, Georgia 31906
Columbus Bank and Trust Company
<PAGE>
8.
No director shall be personally liable to the corporation or its
shareholders for monetary damages for any breach of duty of care or other
duty. Notwithstanding the foregoing, a director shall be liable to the
extent provided by applicable law: (i) for the appropriation in violation of
his duties of any business opportunity of the corporation; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for any action for which the director
could be found liable pursuant to Section 14-2-832 of the Official Code of
Georgia Annotated, or any amendment thereto or successor provision thereto;
or (iv) for any transaction from which the director derived an improper
personal benefit. No amendment to or repeal of this provision shall apply to
or have any effect on the liability or alleged liability of any director of
the corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.
9.
The name, place of residence and post office address of the incorporator
is Garilou Page, 1075 Whisperwood Drive, Columbus, Georgia 31907.
IN WITNESS WHEREOF, I have hereunto executed these Articles of
Incorporation this 15th day of December, 1994.
s/ Garilou Page
---------------
Incorporator
<PAGE>
<PAGE>
Exhibit 25.4-1
January 3, 1995
BYLAWS OF
SYNOVUS TRUST COMPANY
<PAGE>
BYLAWS OF
SYNOVUS TRUST COMPANY
TABLE OF CONTENTS
Page
ARTICLE ONE Offices
1.1 Registered Office 4
1.2 Satellite Offices 4
ARTICLE TWO Shareholders' Meetings
2.1 Place of Meeting 4
2.2 Annual Meeting 4
2.3 Substitute Annual Meetings 4
2.4 Special Meetings 4
2.5 Notice of Meetings 5
2.6 Quorum 5
2.7 Voting of Shares 5
2.8 Proxies 6
2.9 Presiding Officer 6
2.10 Adjournments 6
2.11 Action of Shareholders Without a Meeting 7
ARTICLE THREE The Board of Directors
3.1 General Powers 7
3.2 Requirements 7
3.3 Number, Election and Term of Office 7
3.4 Oath of Directors 8
3.5 Removal 8
3.6 Vacancies 8
3.7 Compensation 8
3.8 Committees of the Board of Directors 8
Trust Administration Committee 9
Compensation Committee 9
3.9 Advisory Directors 9
3.10 Emeritus Directors 9
-1-
<PAGE>
ARTICLE FOUR Meetings of the Board of Directors
4.1 Regular Meetings 11
4.2 Special Meetings 11
4.3 Place of Meetings 11
4.4 Notice of Meetings
4.5 Quorum 11
4.6 Vote Required for Action 11
4.7 Action by Directors Without a Meeting 12
ARTICLE FIVE Notice and Waiver
5.1 Procedure 12
5.2 Waiver 12
ARTICLE SIX Officers
6.1 Number 12
6.2 Election and Term 13
6.3 Compensation 13
6.4 Removal 13
6.5 Chairman of the Board 13
6.6 President 13
6.7 Officer in Place of President 14
6.8 Secretary 14
6.9 Bonds 14
6.10 Reimbursement 14
ARTICLE SEVEN Dividends
7.1 Time and Conditions of Declaration 14
7.2 Share Dividends - Treasury Shares 14
7.3 Share Dividends - Unissued Shares 15
7.4 Share Splits 15
ARTICLE EIGHT Shares
8.1 Authorization and Issuance of Shares 15
8.2 Share Certificates 15
8.3 Rights of Bank with Respect to Registered Owners 16
8.4 Transfer of Shares 16
8.5 Duty of Bank to Register Transfer 16
8.6 Lost, Stolen or Destroyed Certificates 16
8.7 Fixing of Record Date 16
8.8 Record Date If None Fixed 17
-2-
<PAGE>
ARTICLE NINE Indemnification
9.1 Indemnification 17
9.2 Payment of Expenses in Advance 17
9.3 Insurance 17
9.4 Rights Not Exclusive 18
ARTICLE TEN Emergency Operations
10.1 General 18
10.2 Meeting of the Board of Directors 18
10.3 Interim Administration 19
10.4 Interim Office 19
ARTICLE ELEVEN Miscellaneous
11.1 Inspection of Books and Records 19
11.2 Fiscal Year 19
11.3 Seal 20
11.4 Annual Statements 20
11.5 Contracts, Checks, Drafts, Reports, Etc. 20
11.6 Fiduciary Files 20
11.7 Trust Investments 20
11.8 Legal Restrictions 20
ARTICLE TWELVE Amendments
12.1 Power to Amend Bylaws 20
12.2 Conditions 21
12.3 Inspection 21
12.4 Filing 21
-3-
<PAGE>
BYLAWS OF
SYNOVUS TRUST COMPANY
ARTICLE ONE
Offices
1.1 Registered Office. The company shall maintain a registered office
in the county in the State of Georgia where the company is authorized
to conduct its general business. Unless the Board of Directors
designates otherwise, the company's main office shall be its
registered office.
1.2 Satellite Offices. In addition to its registered office, the company
also may have satellite offices at such other place or places as the
Board of Directors may from time to time select, or as the business
of the company may require or make desirable, subject to the
financial institutions laws of the State of Georgia.
ARTICLE TWO
Shareholders' Meetings
2.1 Place of Meetings. Meetings of the shareholders of the company may
be held at any place within (or without) the State of Georgia, as
set forth in the notice thereof, or, in the event of a meeting held
pursuant to a waiver of notice as set forth in the waiver, or, if no
place is specified, at the registered office of the company.
2.2 Annual Meetings. The annual meeting of the shareholders of the
company shall be held on the fourth Tuesday in January; provided,
that if said day is a legal holiday, then such annual meeting shall
be held on the next succeeding business day, for the purpose of
electing directors and transacting any and all business that may
properly come before the meeting. The Board of Directors may
postpone any annual meeting, for not more than seven (7) days, for
cause, upon not less than ten (10) days' written notice to all
shareholders entitled to vote at such meeting.
2.3 Substitute Annual Meetings. If the annual meeting is not held on
the day designated in Section 2.2, any business, including the
election of directors, which might properly have been acted upon at
such annual meeting, may be transacted at any subsequent meeting
held pursuant to these bylaws or held pursuant to a court order
requiring a substitute annual meeting.
2.4 Special meetings. Special meetings of shareholders or a special
meeting in lieu of the annual meeting of shareholders shall be called
by the company upon the written request of the holders of twenty-five
percent (25%) or more of all the shares of capital stock of the
company entitled to vote in an election of directors. Special
meetings of the shareholders or a special meeting in lieu of the
annual meeting of shareholders may be called at any time by the
President, Chairman of the Board of Directors, or the Board of
Directors.
-4-
<PAGE>
2.5 Notice of Meetings. Unless waived as contemplated in Section 5.2, or
by attendance at the meeting, either in person or by proxy, for any
purpose other than to object to the transaction of business, a
written or printed notice of any and each shareholders' meeting
stating the place, day and hour of the meeting shall be delivered
not less than ten (10) days, nor more than fifty (50) days before the
date thereof, either personally, by mail, or by telegram, charges
thereof, either personally, by mail, or by telegram, charges prepaid,
by or at the direction of the President, the Secretary, or the
officer or persons calling the meeting, to each shareholder of
record entitled to vote at such meeting. In the case of an annual
or a special meeting in lieu of an annual meeting, the notice of the
meeting need not state the purpose or purposes of the meeting unless
the purpose or purposes constitute a matter which the Financial
Institutions Code of Georgia requires to be stated in the notice of
the meeting. In the case of a special meeting, the notice of the
meeting shall state the general nature of the business to be
transacted.
2.6 Quorum. At all meetings of the shareholders, the presence in person
or by proxy of the holders of more than one-half of the shares
outstanding and entitled to vote shall constitute a quorum. If a
quorum is present, a majority of the shares represented at the
meeting and entitled to vote on the subject matter shall determine
any matter coming before the meeting unless a different vote is
required by the Financial Institutions Code of Georgia, by the
Charter or Articles of Incorporation of the company or by these
bylaws. The shareholders at a meeting at which a quorum is once
present may continue to transact business at the meeting or at any
adjournment thereof, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum. If a meeting cannot be
organized for lack of a quorum, those shareholders present may
adjourn the meeting to such time and place as they may determine.
In the case of a meeting for the election of directors which is
twice adjourned for lack of a quorum, those present at the second
such adjourned meetings, of which notice has been given in writing
to shareholders, shall constitute a quorum for the election of
directors without regard to the other quorum requirements of the
Financial Institutions Code of Georgia, the Charter or Articles of
Incorporation of the company, or these bylaws.
2.7 Voting of Shares. Each outstanding share having voting rights shall
be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders. The Chairman of the Board of Directors,
any Vice Chairman, the President, any Executive Vice President, the
Secretary or Treasurer of Synovus Financial Corp. shall be deemed to
have authority to vote the shares owned by Synovus Financial Corp.
and to execute proxies and written waivers and consents in relation
thereto, unless, before a vote is taken or a waiver of consent is
acted upon, it is made to appear by a certified copy of the bylaws
or resolution of the Board of Directors of Synovus Financial Corp.
that such authority does not exist or is vested in some other
officer or person. In the absence of such certification, a person
presenting himself at a meeting as one of such officers of Synovus
Financial Corp. shall be prima facie deemed to be duly elected,
qualified and acting as such officer and to be fully authorized, and
in case of conflicting representation, Synovus Financial Corp. shall
be deemed to be represented by its senior officer, in the order first
stated above. Voting on all matters shall be by voice vote or by
show of hands unless any qualified voter, prior to the voting on any
matter, demands vote by ballot, in which case each ballot shall
state the name of the shareholder voting and the number of shares
voted by him, and if such ballot be cast by proxy, it shall also
state the name of such proxy.
-5-
<PAGE>
2.8 Proxies. A shareholder entitled to vote pursuant to Section 2.7 may
vote in person or by proxy executed in writing by the shareholder or
by proxy executed in writing by shareholder or by his attorney in
fact and filed with the Secretary of the company on or before the
date of such meeting. A proxy shall not be valid after eleven (11)
months from the date of its execution, unless otherwise expressly
stated therein. If the validity of any proxy is questioned, it must
be submitted to the secretary of the shareholders' meeting or, to a
proxy officer or committee, if appointed by the person presiding at
the meeting for examination. The secretary of the meeting, or if
appointed, the proxy officer or committee, shall determine the
validity or invalidity of any proxy submitted and referenced by the
secretary in the minutes of the meeting to the regularity of a proxy
shall be received as prima facie evidence of the facts stated for the
purpose of establishing the presence of a quorum at such meeting and
for all other purposes.
2.9 Presiding Officer. The Chairman of the Board of Directors or, in the
absence of the Chairman of the Board of Directors, the Vice Chairman
of the Board of Directors, or in the absence of the Vice Chairman of
the Board of Directors, the President, shall serve as chairman of all
meetings of shareholders unless some other person is elected to
serve as chairman by a majority vote of the shares represented at the
meeting. The chairman of the meeting shall appoint such persons as
he deems required to assist with the meeting.
2.10 Adjournments. Any meetings of the shareholders, whether or not a
quorum is present, may be adjourned by the holders of a majority of
the voting shares represented at the meeting to reconvene at a
specific time and place. Except as otherwise provided by
Section 2.6, it shall not be necessary to give any notice of the
reconvened meeting or of the business to be transacted, if the time
and place of the reconvened meeting are announced at the meeting
which was adjourned. At any such reconvened meeting, any business
may be transacted which could have been transacted at the meeting
which was adjourned.
-6-
<PAGE>
2.11 Action of Shareholders Without a Meeting. Any action required by the
Financial Institutions Code of Georgia to be taken at a meeting of
the shareholders, or any action which may be taken at a meeting of
the shareholders, may be taken without a meeting if a written
consent, setting forth the action so taken, shall be signed by each
of the shareholders entitled to vote with respect to the subject
matter thereof. Upon filing with the officer of the company having
custody of its books and records, such consent shall have the same
force and effect as a unanimous vote of the shareholders at a
special meeting called for the purpose of considering the action
authorized.
ARTICLE THREE
The Board of Directors
3.1 General Powers. The business and affairs of the company shall be
managed by the Board of Directors. In addition to the powers and
authority expressly conferred upon it by these bylaws, the Board of
Directors may exercise all such powers of the company and do all
such lawful acts and things as are not by law, any legal agreement
among shareholders, the Charter or Articles of Incorporation, or
these bylaws directed or required to be exercised or performed by
the shareholders.
3.2 Requirements. Each director of the company shall be a United States
citizen, and at least sixty percent (60%) of the directors of the
company shall (1) reside in the State of Georgia, and (2) reside in
the county in which the registered office of the company is located,
or within forty (40) miles of any office of the company authorized to
offer a complete trust service. Each director of the company shall
maintain on file with company a financial statement on forms
prescribed by the Department of Banking and Finance. Such financial
statement shall be revised annually, but in no event shall the
statement on file be more than eighteen (18) months old. At the
discretion of the Board of Directors, such financial statements
may be maintained in sealed envelopes available for inspection only
by company regulatory examiners.
3.3 Number, Election and Term of Office. The Board of Directors of the
company shall consist of not less than five (5), nor more than
twenty-five (25) persons, with the exact number within such minimum
and maximum figures to be fixed and determined from time to time by
resolution of the Board of Directors or by resolution of the
shareholders. The Board of Directors may increase or decrease the
number of directors by not more than two (2) in any one year, so
long as such increase or decrease does not place the number of
directors at less than five (5), nor more than twenty-five (25).
Except as provided in Section 3.6, the directors shall be elected by
the affirmative vote of a majority of the shares represented at the
annual meeting or special meeting in lieu of the annual meeting or
special meeting of shareholders. Each director, except in the case
of his earlier death, resignation, retirement, disqualification, or
removal, shall serve until the next succeeding annual meeting and
thereafter until his successor shall have been elected and qualified.
-7-
<PAGE>
3.4 Oath of Directors. Before assuming office, each director shall take
an oath that he shall diligently and honestly perform his duties in
the administration of the company, that he will not permit a willful
violation of the law by the company and that he meets the eligibility
requirements of the Financial Institutions Code of Georgia, the
company's Charter or Articles of Incorporation and these bylaws.
Such oath or affirmation shall be signed by the director and filed
with the Georgia Department of Banking and Finance.
3.5 Removal. The entire Board of Directors or any individual director
may be removed from office with or without cause by the affirmative
vote of the holders of a majority of the shares entitled to vote at
an election of directors. In addition, the Board of Directors may
remove a director from office if such director is adjudicated an
incompetent by a court, if he is convicted of a felony, if he does
not within sixty (60) days of his election, accept the office in
writing or by attendance at a meeting of the Board of Directors and
fulfill any other requirements for holding the office of director, or
if he fails to attend regular meetings of the Board of Directors for
six (6) consecutive meetings without having been excused by the Board
of Directors.
3.6 Vacancies. A vacancy occurring in the Board of Directors, whether
caused by removal or otherwise and including vacancies resulting from
an increase in the number of directors, may be filled for the
unexpired term, and until the shareholders shall have elected a
successor, by the affirmative vote of a majority of the directors
remaining in office though less than a quorum of the Board of
Directors. A certified copy of the resolution of the Board of
Directors so selecting a new director to fill a vacancy in the Board
of Directors shall be filed immediately with the Georgia Department
of Banking and Finance.
3.7 Compensation. Directors may receive such compensation for their
services as directors, including their services upon committees of
the Board of Directors, as may from time to time be fixed by vote of
the Board of Directors.
3.8 Committees of the Board of Directors. At the annual meeting of the
Board of Directors or at such other times as may be desired, the
Chairman of the Board of Directors, on behalf of and with the
approval of the Board of Directors, shall designate and appoint from
among the members of the Board of Directors the two committees
identified in the subparagraphs below, which shall possess the
powers and be charged with the responsibilities identified in said
subparagraphs. The Chairman of the Board shall be eligible to be
designated and appointed to serve as a member of any and all
committees of the Board of Directors. The Chairman of the Board
shall serve as an ex-officio and non-voting member of any of the
committees of the Board of Directors to which he is not otherwise
designated and appointed as a member.
-8-
<PAGE>
Trust Administration Committee: The Trust Administration Committee shall
consist of the Chairman of the Board of the company, who shall be Chairman
of the Committee, and at least three (3) other directors. The Trust
Administration Committee shall meet monthly, at times to be fixed by the
committee, and shall also meet at such other times as it may be called
into session by the Chairman of the Committee, or any member thereof. The
Trust Administration Committee shall possess the power and be charged with
the responsibility to review investments, purchase and sale transactions,
corpus encroachments and similar matters with respect to trust accounts.
During the intervals between meetings of the Board of Directors, the Trust
Administration Committee shall possess and may exercise any and all powers
of the Board of Directors in the management and direction in the business
and affairs of the company in all cases in which specific direction shall
not have been given by the Board of Directors.
Compensation Committee: The Compensation Committee shall consist of at
least three (3) directors. The Compensation Committee shall possess the
power and be charged with the responsibility to evaluate the remuneration
of officers and members of the Board of Directors of the company and the
compensation and fringe benefit plans to which officers, employees and
directors of the company are eligible to participate in and to recommend
to the Board of Directors whether or not it should modify, alter, amend,
terminate or approve such remuneration, compensation and fringe benefit
plan.
3.9 Advisory Directors. The Board of Directors of the company may at its
annual meeting, or from time to time thereafter, appoint any
individual to serve as a member of an Advisory Board of Directors of
the company. Any individual appointed to serve as a member of an
Advisory Board of Directors of the company shall be entitled to
attend all meetings of the Board of Directors and may participate in
any discussion thereat, but such individual may not vote at any
meeting of the Board of Directors or be counted in determining a
quorum as provided in Section 4.5. It shall be the duty of members
of the Advisory Board of Directors and officers of the company at
such times and places and in such groups and committees as may be
determined from time to time by the Board of Directors, but such
individuals shall not have any responsibility or be subject to any
liability imposed upon a director or in any manner otherwise deemed
a director. The same compensation paid to directors for their
services as directors shall be paid to members of an Advisory Board
of Directors of the company for their services as advisory directors.
Each member of the Advisory Board of Directors except in the
case of his earlier death, resignation, retirement, disqualification
or removal, shall serve until the next succeeding annual meeting of
the Board of Directors and thereafter until his successor shall have
been appointed.
3.10 Emeritus Directors. When a member of the Board of Directors or the
Advisory Board of Directors of the company attains seventy (70) years
of age (except for a member of the Board of Directors or the Advisory
Board of Directors of the company who is, upon the attainment of age
seventy (70), then serving as an executive officer, including
Chairman of the Board or Chairman of the Executive Committee of the
company or its parent corporation), such director shall
automatically, at his option, either (i) retire from the Board of
Directors or the Advisory Board of Directors of the company, as the
case may be; or (ii) be appointed as a member of the Emeritus Board
of Directors of the company. A member of the Board of Directors
or the Advisory Board of Directors of the company, who is, upon the
attainment of age seventy (70), then serving as an executive officer,
including Chairman of the Board or Chairman of the Executive
Committee, of the company or its parent corporation, may, at his
option, either: (a) continue his service as a member of the Board
-9-
<PAGE>
of Directors or the Advisory Board of Directors of the company, as
the case may be; or (b) be appointed as a member of the Emeritus
Board of Directors of the company. A member of the Board of
Directors or the Advisory Board of Directors of the company who
retires from his principal occupation prior to his attainment of
seventy (70) years of age, may, at the option of the Board of
Directors, either continue his service as a member of the Board of
Directors or the Advisory Board of Directors of the company, as the
case may be; or be appointed as a member of the Emeritus Board of
Directors of the company. Members of the Emeritus Board of Directors
of the company shall be appointed annually by the Chairman of the
Board of Directors of the company at the Annual Meeting of the Board
of Directors of the company, or from time to time thereafter. Each
member of the Emeritus Board of Directors of the company, except in
the case of his earlier death, resignation, retirement,
disqualification or removal, shall serve until the next succeeding
Annual Meeting of the Board of Directors of the company. Any
individual appointed as a member of the Emeritus Board of Directors
of the company may, but shall not be required to, attend meetings of
the Board of Directors of the company and may participate in any
discussions thereat, but such individual may not vote at any meeting
of the Board of Directors of the company or be counted in determining
a quorum at any meeting of the Board of Directors of the company, as
provided in Section 5 of Article III of the bylaws of the company.
It shall be the duty of the members of the Emeritus Board of
Directors of the company to serve as goodwill ambassadors of the
company, but such individuals shall not have any responsibility
or be subject to any liability imposed upon a member of the Board of
Directors of the company or in any manner otherwise be deemed to be a
member of the Board of Directors of the company. Each member of the
Emeritus Board of Directors of the company shall be paid such
compensation as may be set from time to time by the Chairman of the
Board of Directors of the company and shall remain eligible to
participate in any Director Stock Purchase Plan maintained by, or
participated in, from time to time by the company according to the
terms and conditions thereof.
-10-
<PAGE>
ARTICLE FOUR
Meetings of the Board of Directors
4.1 Regular Meetings. An annual organizational meeting of the Board of
Directors shall be held on the day of and immediately following the
annual meeting of the shareholders of the company. In the event the
annual shareholders' meeting is not held as provided by Sections 2.4
or 2.11, such annual meeting shall be held as herein provided for
regular meetings. In addition, regular meetings of the Board of
Directors shall be held on the fourth Tuesday of March, June,
September and December during the calendar year; provided, however,
that any quarterly meeting may be changed to any other day during the
same quarter upon notice to the directors as provided in Section 4.4
for special meetings of the Board.
4.2 Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Chairman of the Board, the
President or by any two directors in office at that time.
4.3 Place of Meetings. The Board of Directors may hold its meetings at
any place within (or without) the State of Georgia as it may from
time to time establish for regular meetings, or as set forth in the
notice of special meetings, or in the event of a meeting held
pursuant to waiver of notice, as set forth in the waiver.
4.4 Notice of Meetings. No notice shall be required for any regular
meetings of the Board of Directors of the company; however, if
notice is desired to be given for any regular meeting of the Board
of Directors of the company, it shall be given or waived in the
manner herein provided for notice of special meetings of the Board
of Directors of the company. Unless waived as contemplated in
Section 5.2, the President or Secretary of the company, or any
director thereof shall give notice to each director of each special
meeting stating the time and place of the meeting. Notice of any
special meeting shall be given to each director personally or by
mail, telegram or cablegram addressed to him at his last known
address, at least one day prior to the meeting. Attendance by a
director at a meeting shall constitute a waiver of notice of such
meeting, except where a director attends a meeting for the express
purpose of objecting to the transaction of business because the
meeting is not lawfully called.
4.5 Quorum. At meetings of the Board of Directors, more than one-half of
the directors then in office shall be necessary to constitute a
quorum for the transaction of business.
4.6 Vote Required for Action. Except as otherwise provided in these
bylaws, by the company's Charter or Articles of Incorporation, or by
law, each director shall have one vote and the act of a majority of
the directors present at a meeting at which a quorum is present at
the time shall be the act of the Board of Directors.
-11-
<PAGE>
4.7 Action by Directors Without a Meeting. Any action which may be taken
at any meeting of the Board of Directors, or at any meeting of a
committee of directors may be taken without a meeting if a written
consent thereto shall be signed by all directors, or all members of
the committee, as the case may be, and if such written consent is
filed with the minutes of the proceedings of the Board or the
committee. Such consent shall have the same force and effect as a
unanimous vote of the Board of Directors or the committee.
ARTICLE FIVE
Notice and Waiver
5.1 Procedure. Whenever these bylaws require notice to be given to any
shareholder or director, the notice shall be given as prescribed in
Sections 2.5 or 4.4, whichever is applicable. Whenever notice is
given to a shareholder or director by mail, the notice shall be sent
by depositing the same in a post office or letter box in a postage
prepaid, sealed envelope, addressed to the shareholder or director at
his last known business or home address, and such notice shall be
deemed to have been given at the time the same is deposited in the
United States Mail.
5.2 Waiver. Except as limited by the Financial Institutions Code of
Georgia, whenever any notice is required to be given to any
shareholder or director by law, by the Charter or Articles of
Incorporation, or these bylaws, a waiver thereof in writing, signed
by the director or shareholder entitled to such notice, or by the
proxy of such shareholder, whether before or after the meeting to
which the waiver pertains, shall be deemed equivalent thereto;
provided, however, that no such waiver shall apply by its terms to
more than one required notice.
ARTICLE SIX
Officers
6.1 Number. The officers of the company shall consist of a Chairman of
the Board of Directors, a President (who shall be a director), and a
Secretary. In addition, the Board of Directors may from time to time
elect or provide for the appointment of such other officers,
assistant officers or associate officers as it deems necessary or
proper for the efficient management of the company, or as shall
otherwise be required by law or regulation, including, but not
limited to, one or more Chairman of the Board Emeritus, a Vice
Chairman of the Board, one or more Executive Vice Presidents, one or
more Senior Vice Presidents, one or more Vice Presidents, one or more
Assistant Presidents, one or more Assistants to the President, a
Comptroller, one or more Assistant Comptrollers, one or more
Assistant Secretaries, one or more Trust, Investment and Trust
Operations Officers, one or more Associate Trust, Investment and
Trust Operations Officers, one or more Assistant Trust, Investment
and Trust Operations Officers, one or more Auditing Officers, one or
more Assistant Auditing Officers, one or more EDP Auditing Officers,
one or more Personnel Officer; and one or more Marketing Officers.
An individual may hold more than one office except that the same
individual shall not be both President and Secretary. The Board of
Directors shall have the power to establish and specify the duties
for all officers of the company.
-12-
<PAGE>
6.2 Election and Term. All officers shall be elected by the Board of
Directors and shall serve at the will of the Board of Directors and
until their successors have been elected and have qualified, or until
their earlier death, resignation, removal, retirement or
disqualification.
6.3 Compensation. The compensation of all officers of the company shall
be fixed by the Board of Directors, upon the recommendation of the
Compensation Committee.
6.4 Removal. Any officer elected by the Board of Directors may be
removed by the Board of Directors with or without any cause whenever
in its judgement the best interests of the company will be served
thereby without prejudice to any contract right of such officer.
The company shall immediately inform the Department of Banking and
Finance of the State of Georgia in writing of the names of any
officers removed. In the event of the vacancy of any office, the
Board of Directors may fill the vacancy at either a regular meeting
or a special meeting called for such purpose.
6.5 Chairman of the Board. The Chairman of the Board of Directors shall
preside and act as chairman at all meetings of the shareholders and
the Board of Directors and shall perform such other duties as the
Board of Directors may from time to time direct.
6.6 President. The President shall be the chief executive officer of the
company and shall have general control and supervision over the
business and affairs of the company He shall see that all orders and
resolutions of the Board of Directors are carried into effect. In
the absence of the Chairman of the Board of Directors and the Vice
Chairman of the Board of Directors (if any), the President shall
preside and act as chairman of all meetings of the shareholders and
the Board of Directors. The President may, from time to time,
appoint, dismiss and fix the compensation of the agents, clerks and
employees of the company as he may deem advisable for the conduct of
the business and affairs of the company and may prescribe the duties
of each individual, subject to the provisions of these bylaws; and
he may delegate to any officer of the company the authority to
appoint, to fix the compensation of, to prescribe the duties of, and
to dismiss such clerks, agents and employees. He also shall perform
such other duties as may be delegated to him from time to time
by the Board of Directors.
-13-
<PAGE>
6.7 Officer in Place of President. The Board of Directors shall have the
power and authority to designate who, in the absence or disability of
the President, or at the direction of the President, shall perform
the duties and exercise the powers of the President.
6.8 Secretary. The Secretary shall keep accurate records of the acts and
proceedings of all meetings of shareholders, directors and committees
of directors. He shall have authority to give all notices required
by law or these bylaws. He shall be custodian of the corporate seal,
books, records, contracts and other documents. The Secretary may
affix the company's seal to any lawfully executed documents requiring
it and shall sign such instruments as may require his signature. He
also shall perform such other duties as may be delegated to him from
time to time by the Board of Directors.
6.9 Bonds. Any director who is authorized to handle money or negotiable
assets on behalf of the company and all officers and employees having
the care, custody, control or handling of any funds of the company
shall be bonded by a regularly incorporated surety company authorized
to do business in the State of Georgia, and the company may pay the
cost of such bonds. The form, amount and surety of such bonds shall
be approved by the Board of Directors and shall be subject to any
additional requirements of the Department of Banking and Finance of
the State of Georgia.
6.10 Reimbursement. Any payments made to an officer of the company
including, but not limited to, salary, commission, bonus or
reimbursement of expenses incurred by him, which shall be disallowed
in whole or in part as a deductible expense by the Internal Revenue
Service, shall be reimbursed by such officer to the company to the
full extent of such disallowance. It shall be the duty of the Board
of Directors to enforce payment of each such amount disallowed.
ARTICLE SEVEN
Dividends
7.1 Time and Conditions of Declarations. Dividends upon the outstanding
shares of the company may be declared by the Board of Directors at
any regular or special meeting and paid in cash or property only out
of the retained earnings of the company, only when the company meets
the paid-in capital and/or appropriated net earnings requirements of
the Financial Institutions Code of Georgia, and only in compliance
with the regulations of the Department of Banking and Finance of the
State of Georgia regarding payment of dividends.
7.2 Share Dividends - Treasury Shares. Dividends may be declared by the
Board of Directors and paid in the shares of the company out of any
treasury shares that have been reacquired out of the capital funds of
the company.
-14-
<PAGE>
7.3 Share Dividends - Unissued Shares. Dividends may be declared by the
Board of Directors and paid in the authorized but unissued shares of
the company out of any retained earnings of the company; provided
that such shares shall be issued at not less than the par value
thereof, there shall be transferred to capital stock at the time such
dividend is paid an amount of retained earnings at least equal to the
aggregate par value of the shares to be issued as a dividend, and
after payment of the dividend the company shall continue to maintain
the paid-in capital and/or appropriated retained earnings
requirements of the Financial Institutions Code of Georgia.
7.4 Share Splits. A split or division of the issued shares of any class
into a greater number of shares of the same class without increasing
the capital stock of the company shall not be construed to be a share
dividend within the meaning of this Article.
ARTICLE EIGHT
Shares
8.1 Authorization and Issuance of Shares. The par value and the maximum
number of shares of any class of the company which may be issued and
outstanding shall be set forth from time to time in the Charter or
Articles of Incorporation of the company. The Board of Directors may
increase or decrease the number of issued and outstanding shares of
the company within the maximum number of shares authorized by the
Charter or Articles of Incorporation and the minimum capitalization
requirements of the Charter or Articles of Incorporation of Georgia
law upon obtaining prior approval of such increase or decrease from
the Department of Banking and Finance.
8.2 Share Certificates. The interest of each shareholder in the company
shall be evidenced by a certificate or certificates representing
shares of the company which shall be in such form as the Board of
Directors may from time to time adopt in accordance with Georgia law.
Share certificates shall be consecutively numbered, shall be in
registered form, and shall indicate the date of issue and all such
information shall be entered on the company's books. Each
certificate shall be signed by the President, or a Vice President,
and the Secretary, or any Assistant Secretary, and shall be sealed
with the seal of the company or a facsimile thereof; provided,
however, that where such certificate is signed by a transfer agent,
or registered by a registrar, other than the company itself, or any
employee of the company, the signatures of such officers may be
facsimiles. In case any officer or officers who shall have been
signed or whose facsimile signature shall have been placed upon a
share certificate shall have ceased for any reason to be such officer
or officers of the company before such certificate is issued, such
certificate may be issued by the company with the same effect as if
the person or persons who signed such certificate or whose facsimile
signatures shall have been used thereon had not ceased to be such
officer or officers.
-15-
<PAGE>
8.3 Rights of Company with Respect to Registered Owners. Prior to due
presentation for transfer of registration of its shares, the company
may treat the registered owner of the shares as the person
exclusively entitled to vote such shares, to receive any dividend
or other distribution with respect to such shares, and for all other
purposes; and the company shall not be bound to recognize any
equitable or other claim to interest in such shares on the part of
any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
8.4 Transfer of Shares. Transfers of shares shall be made upon the stock
transfer books of the company only upon direction of the person
registered in such stock transfer books as the owner of the shares.
8.5 Duty of Company to Register Transfer. Notwithstanding any of the
provisions of Section 8.4 of these bylaws, the company is under a
duty to register the transfers of its shares only if:
(a) the share certificate is endorsed by the appropriate person or
persons; and
(b) reasonable assurance is given that these endorsements are
genuine and effective; and
(c) the company has no duty to inquire into adverse claims or has
discharged any such duty; and
(d) any applicable law relating to the collection of taxes has been
complied with; and
(e) the transfer is in fact rightful or is to a bona fide purchaser.
8.6 Lost, Stolen, or Destroyed Certificates. Any person claiming a share
certificate to be lost, stolen, or destroyed shall make an affidavit
or affirmation of the fact in such manner as the Board of Directors
may require and shall give the company a bond of indemnity in form
and amount, and with one or more sureties satisfactory to the Board
of Directors, as the Board of Directors may require, whereupon an
appropriate new certificate may be issued in lieu of the one alleged
to have been lost, stolen, or destroyed.
8.7 Fixing of Record Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors may fix in advance
a date as the record date, such date to be not more than fifty (50)
days (and, in the case of a shareholders' meeting, not less than
ten (10) days prior to the date on which the particular action,
requiring such determination of shareholders, is to be taken.
-16-
<PAGE>
8.8 Record Date If None Fixed. If no record date is fixed as provided in
Section 8.7 of these bylaws, then the record date for any
determination of shareholders which may be proper or required by law
shall be the date on which notice is mailed in the case of a
shareholders' meeting, or the date on which the Board of Directors
adopts a resolution declaring a dividend in the case of a payment of
a dividend.
ARTICLE NINE
Indemnification
9.1 Indemnification. Any person, his heirs, executors, or
administrators, may be indemnified or reimbursed by the company for
reasonable expense 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 company, or that he is or was
serving, at the request of the company, as a director, trustee,
officer, employee, or agent of another firm, corporation, trust, or
other organization or enterprise; provided, however, that no person
shall be so indemnified or reimbursed in relation to any matter in
such action, suit, or proceeding as to which he shall finally be
adjudged to have been guilty of or liable for gross negligence,
willful misconduct or criminal acts in the performance of his duties
to the company, or to such other firm, corporation, trust,
organization, or enterprise; and provided further, that no person
shall 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 company, 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.
9.2 Payment of Expenses in Advance. Expenses incurred in defending any
action, suit, or proceeding referred to above may be paid by the
company 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 company as provided above.
9.3 Insurance. The company, 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, officer, employee or
agent of the company, or is or was serving, at the request of the
company, 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 any
such capacity or arising out of his status as such, whether or not
the company would have the power to indemnify him against such
liability under the foregoing provisions of these bylaws.
-17-
<PAGE>
9.4 Rights not Exclusive. 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 company
may indemnify such persons to the extent permitted by the Finance
Institutions Code of Georgia and the Georgia Business Corporation
Code, as such laws may be amended from time to time.
ARTICLE TEN
Emergency Operation
10.1 General. In the event of an emergency declared by the President of
the United States or the person performing his functions, or an
emergency declared by the Governor of the State of Georgia or the
person performing his functions, the officers and employees of this
company shall continue to conduct the affairs of the company under
such guidance from the directors as may be available except as
matters which by statute or regulation require specific approval of
the Board of Directors and subject to conformance with any
governmental directives during the emergency. In the absence of a
plan of operation formulated by the Board of Directors providing for
conducting the business of the company during the time emergencies
exist, the following provisions shall govern the operations of the
company notwithstanding any other provisions of these bylaws to the
contrary. Provided, further, that all operations shall be consistent
with all State and Federal laws governing emergency operations.
10.2 Meeting of the Board of Directors. The Board of Directors shall meet
as soon as practicable at the time and place within the State of
Georgia, or, if no place within the State of Georgia can be utilized
promptly, without the State of Georgia, as designated by the Chairman
of the Board of Directors, the President, the officer designated
pursuant to Section 6.7, or any two directors. Any director may
waive notice of such meeting.
If it shall be determined at such meeting that there are less than
five (5) directors then capable of serving, the directors present at
such meeting, shall, by majority vote, appoint a sufficient number of
persons to fill the vacancies existing in the Board of Directors to
bring the total number of directors to not less than five (5).
As soon as a majority of such Board of Directors, consisting of not
less that five (5) members, can be assembled at the meeting required
by this Section 10.2 or any adjournment thereof, which adjournment
can be effected at any time by a majority vote of those in
attendance, the Board of Directors as then constituted shall
(i) appoint such officers as may be required to transact the
business of the company to succeed the then appointed or acting
officers who have been incapacitated as a result of the emergency,
and (ii) designate and authorize temporary relocation and
establishment of the main office and any satellite office of the
company which may have become wholly or partially unusable as a
result of the emergency conditions at any other office of the
company, or other location in the State of Georgia, and (iii) at its
discretion, authorize the entry of the company into an agreement with
any other bank or trust company authorized to exercise trust powers
in the State of Georgia (the "other company") whereby the company
shall act as agent for the other company or the other company shall
act as agent for the company and perform temporarily any and all
operations and functions thereof.
-18-
<PAGE>
10.3 Interim Administration. Until such time as the meeting of the Board
of Directors required by Section 10.2 can be held and action taken by
it, and in the event either the President or the officer of the
company designated pursuant to Section 6.7 cannot be located or is
unable to continue normal executive duties, all perfunctory matters
ordinarily performed by the President may be performed by any
Executive Vice President if such officer or officers have been
designated, and if not, by any Senior Vice President if such officer
or officers have been designated, and if not, any Vice President if
such officer or officers have been designated, and if not, by the
Secretary of the company.
10.4 Interim Office. Until such time as the meeting required by
Section 10.2 can be held and action taken by the Board of Directors
as then constituted, and in the event that because of damage or
disaster the main office or any satellite office of the company
becomes wholly or partially unusable, such main office or satellite
office shall be relocated at any other branch or location designated
by the Acting President.
The Acting President shall notify the State and Federal regulatory
authorities of any such relocation of its main office, or satellite
offices as promptly as possible.
ARTICLE ELEVEN
Miscellaneous
11.1 Inspection of Books and Records. The Board of Directors shall have
power to determine which accounts, books and records of the company
shall be open to the inspection of shareholders, except such
accounts, books, and records that are specifically open to inspection
by law, and the Board of Directors shall have power to fix reasonable
rules and regulations not in conflict with the applicable laws for
the inspection of accounts, books and records which by law or by
determination of the Board of Directors shall be open to inspection.
11.2 Fiscal Year. The fiscal year of the company shall be the calendar
year.
-19-
<PAGE>
11.3 Seal. The corporate seal shall be in such form as the Board of
Directors may from time to time determine.
11.4 Annual Statements. The company shall prepare such financial
statements showing the results of its operations during its fiscal
year as shall be required by Regulations of the Department of Banking
and Finance of the State of Georgia.
11.5 Contracts, Checks, Drafts, Reports, etc. Such of the officers or
employees of the company as may from time to time be designated by
the Board of Directors shall have power and authority to sign
contracts, deeds, mortgages, pledges, promissory notes, transfers
and other written instruments, checks, drafts and like instruments
and to endorse checks, bills of exchange, orders, drafts and vouchers
made payable or endorsed to the company, whether in its own right or
in any fiduciary capacity. No officer or employee, however, may on
behalf of the company, execute or deliver any check, draft or other
like instrument in favor of himself. Provided, further, any officer
elected by the Board of Directors may sign reports to the Department
of Banking and Finance and such other State and Federal agencies as
may be filed, unless otherwise required by law or regulation. In
addition to the powers granted to the Board of Directors to designate
from time to time certain officers and employees of the banks to
sign contracts, checks, drafts and like instruments and other
instruments as set forth in this paragraph, the officers identified
in the subparagraphs hereinbelow shall be authorized to sign the
documents identified in said subparagraphs.
(1) All transfers of stock or other securities requiring an endorsement,
sold or transferred by the company in a fiduciary, agency or
representative capacity, shall be signed by any one of the following
officers and attested by any other officer of the company with the
corporate seal of the company affixed thereto: the President, any
Vice President, any Trust Officer, any Investment Officer, any Trust
Operations Officer, any Associate Trust, Investment or Trust
Operations or any Assistant Trust, Investment or Trust Operations
Officer.
(2) All transfers of stock or other securities requiring an endorsement,
sold or transferred by the company when held by the company for its
own account, shall be valid and binding when signed by any one of the
following officers and attested by any other officer of the company
with the corporate seal of the company affixed thereto: the
President, any Vice President, any Trust Officer, any Investment
Officer, any Trust Operations Officer, any Associate Trust,
Investment or Trust Operations Officer or any Assistant Trust,
Investment or Trust Operations Officer.
(3) The President, any Vice President, any Trust Officer, any Investment
Officer, any Trust Operations Officer, any Associate Trust,
Investment or Trust Operations Officer, or any Assistant Trust,
Investment or Trust Operations Officer of the company shall be
authorized to execute notes, bonds or any other like written
instruments that may be deemed necessary and proper for the conduct
of the business of the company in any capacity in which the company
may be acting as executor, administrator, guardian, trustee or in any
other fiduciary, agency or representative capacity including, but not
limited to, the execution of documents to surrender notes, bonds or
other evidences of indebtedness and accept payments thereof.
-20-
<PAGE>
11.6 Fiduciary Files. There shall be maintained by the company all
fiduciary records necessary to assure that its fiduciary
responsibilities have been properly undertaken and discharged.
11.7 Trust Investments. Funds held in a fiduciary capacity shall be
invested according to the instrument establishing the fiduciary
relationship and local law. Where such instrument does not specify
the character and class of investments to be made and does not vest
in the company a discretion in the matter, funds held pursuant to
such instrument shall be invested in investments in which corporate
fiduciaries may invest under local law.
11.8 Legal Restrictions. All matters covered in these bylaws shall be
subject to such restrictions as shall be imposed on this company by
State and Federal laws and regulations.
ARTICLE TWELVE
Amendments
12.1 Power to Amend Bylaws. The Board of Directors and the shareholders
shall have power to alter, amend or repeal these bylaws or adopt new
bylaws, and any bylaws adopted by the Board of Directors may be
altered, amended or repealed, and new bylaws adopted, by the
shareholders. The shareholders may prescribe that any bylaw or
bylaws adopted by them shall not be altered, amended or repealed, by
the Board of Directors.
12.2 Conditions. Action taken by the shareholders with respect to bylaws
shall be taken by an affirmative vote of a majority of all shares
entitled to elect directors, and action by the Board of Directors
with respect to bylaws shall be taken by an affirmative vote of a
majority of all directors then holding office.
12.3 Inspection. A copy of the bylaws, with all amendments thereto,
shall at all times be kept in a convenient place in the main office
of the company, and shall be open to inspection by all shareholders
during business hours. The directors may furnish a copy of the
bylaws, and all amendments thereto, to all shareholders, provided
that all amendments and alterations by the Board of Directors shall
be furnished to the shareholders at the first meeting of the
shareholders thereafter.
-21-
<PAGE>
12.4 Filing. A copy of the bylaws and all amendments, upon ratification
by the shareholders or directors, shall be filed with the Department
of Banking and Finance of the State of Georgia within forty-five (45)
days of ratification.
-22-
<PAGE>
<PAGE>
EXHIBIT 25.6
FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939 in connection with the proposed issuance of $20,000,000 Variable Rate
Subordinated Debentures of 1st Franklin Financial Corporation, Synovus Trust
Company hereby consents that reports of examinations by Federal, State,
Territorial or District Authorities may be furnished by such authority to
the Securities and Exchange Commission upon request therefor. It is
understood that the foregoing consent is subject to the non-disclosure
provisions of said Section 321(b).
SYNOVUS TRUST COMPANY
By: s/ Alice H. Stagg
--------------------------------
Title: Vice President and Trust Officer
Dated: February 15, 1996
--------------------------------
<PAGE>
<PAGE>
EXHIBIT 25.7
Legal Title of Bank: Columbus Bank and Trust Company Call Date: 12/31/95
Address: PO Box 120 ST-BK: 13-0890
City, State, Zip: Columbus, GA 31902
Page RC-1
FDIC Certificate No: 00873
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC -- Balance Sheet
Dollar Amounts in Thousands
ASSETS
1 Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1). . 79,591
b. Interest-bearing balances(2) . . . . . . . . . . . . . . 2,000
2. Securities:
a. Held-to-maturity securities. . . . . . . . . . . . . . . 42,719
b. Available-for-sale securities. . . . . . . . . . . . . . 197,179
3. Federal funds sold and securities purchased under agreements to resell
a. Federal funds sold . . . . . . . . . . . . . . . . . . . 0
b. Securities purchased under agreements to resell. . . . . 0
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income . . 1,033,931
b. LESS: Allowance for loan and lease losses. . 15,742
c. LESS: Allocated transfer risk reserve. . . . 0
d. Loans and leases, net of unearned income,
allowance, and reserve . . . . . . . . . . . . . . . . . . 1,018,189
5. Assets held in trading accounts. . . . . . . . . . . . . . . 0
6. Premises and fixed assets (including capitalized leases) . . 86,202
7. Other real estate owned. . . . . . . . . . . . . . . . . . . 816
8. Investments in unconsolidated subsidiaries and
associated companies. . . . . . . . . . . . . . . . . . . 4,507
9. Customers' liability to this bank on acceptances outstanding 0
10. Intangible assets. . . . . . . . . . . . . . . . . . . . . . 3,240
11. Other assets . . . . . . . . . . . . . . . . . . . . . . . . 144,178
12. Total assets . . . . . . . . . . . . . . . . . . . . . . . . 1,578,621
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
Legal Title of Bank: Columbus Bank and TrustCompany Call Date: 12/31/95
Address: PO Box 120 ST-BK: 13-0890
City, State, Zip: Columbus, GA 31902 Page RC-2
FDIC Certificate No: 00873
Schedule RC -- Continued
Dollar Amounts in Thousands
LIABILITIES
13. Deposits:
a. In domestic offices. . . . . . . . . . . . . . . . . . . . 1,098,940
(1) Noninterest-bearing(1) . . . . . . . . . . . 248,122
(2) Interest-bearing . . . . . . . . . . . . . . 850,818
b. In foreign offices, Edge and Agreement subsidiaries and IBF's
(1) Noninterest-bearing. . . . . . . . . . . . . . . . . . /////////
(2) Interest-bearing . . . . . . . . . . . . . . . . . . . /////////
14. Federal Funds purchased and securities sold under
agreements to repurchase
a. Federal funds purchased. . . . . . . . . . . . . . . . . . 114,434
b. Securities sold under agreements to repurchase . . . . . . 14,693
15. a. Demand notes issued to the U.S. Treasury . . . . . . . . 3,844
b. Trading liabilities. . . . . . . . . . . . . . . . . . . . 0
16. Other borrowed money:
a. With original maturity of one year or less . . . . . . . . 26,427
b. With original maturity of more than one year . . . . . . . 348
17. Mortgage indebtedness and obligations under capitalized leases 583
18. Bank's liability on acceptances executed and outstanding . . 0
19. Subordinated notes and debentures. . . . . . . . . . . . . . 0
20. Other liabilities. . . . . . . . . . . . . . . . . . . . . . 91,995
21. Total liabilities (sum of items 13 through 20) . . . . . . . 1,351,264
22. Limited-life preferred stock and related surplus . . . . . . 0
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus. . . . . . . . 0
24. Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 3,154
25. Surplus (exclude all surplus related to preferred stock) . . 68,516
26. a. Undivided profits and capital reserves . . . . . . . . . 155,048
b. Net unrealized holding gains (losses) on
available-for-sale securities . . . . . . . . . . . . . . 639
27. Cumulative foreign currency translation adjustments. . . . . /////////
28. Total equity capital (sum of items 23 through 27). . . . . . 227,357
29. Total liabilities, limited-life preferred stock,
and equity capital . . . . . . . . . . . . . . . . . . . . . 1,578,621
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external auditors as of any date during
1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may
be required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
<PAGE>
