WHERE YOU CAN FIND MORE INFORMATION
The Company files annual, quarterly, and current reports, proxy statements, and other information with the Securities and Exchange Commission (the “SEC”). The Company’s SEC filings, including the documents incorporated by reference in this Prospectus, are available to the public over the Internet at the SEC’s website at http://www.sec.gov and in the Investor Information section of the Company’s website at http://www.fouroaksbank.com. Information on the Company’s website is not part of this Prospectus. You may also read and copy any document the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.
The Company has filed a registration statement, of which this Prospectus is a part, covering the securities offered hereby. As allowed by SEC rules, this Prospectus does not contain all of the information and exhibits included in the registration statement. The Company refers you to the information and exhibits included in the registration statement for further information. This Prospectus is qualified in its entirety by such information and exhibits.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows the Company to “incorporate by reference” the information the Company files with it, which means that the Company can disclose important information by referring to those documents. The information incorporated by reference is an important part of this Prospectus, and the information that the Company files later with the SEC will automatically update and supersede the information in this Prospectus. The Company incorporates by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as amended, until the Company sells all of the securities being registered; provided, however, that, unless the Company specifically states otherwise, the Company is not incorporating by reference any information furnished under Items 2.02 or 7.01 of any Current Report on Form 8-K:
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(a)
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The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on March 30, 2017;
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(b)
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The Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2017, as filed with the SEC on May 9, 2017;
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(c)
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The Company’s Current Reports on Form 8-K, as filed with the SEC on February 16, 2017, March 2, 2017, March 8, 2017, March 15, 2017, April 25, 2017, May 4, 2017, and May 24, 2017; and
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(d)
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The description of the Company’s Common Stock contained in the Company’s Registration Statement on Form 8-K12G3 filed on July 2, 1997, and any amendments or reports filed for the purpose of updating such description.
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The Company will provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus is delivered, upon the written or oral request of any such person, a copy of any or all of the reports or documents that are incorporated by reference in this Prospectus, other than exhibits to such information (unless such exhibits are specifically incorporated by reference into the information that this Prospectus incorporates). Requests should be directed to Wanda J. Blow, Corporate Secretary, Four Oaks Fincorp, Inc., P.O. Box 309, Four Oaks, North Carolina 27524 ((919) 963-2177).
Any statement in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
THE COMPANY
The Company was incorporated in North Carolina on February 5, 1997 for the purpose of becoming the holding company for Four Oaks Bank & Trust Company (the “Bank”). The Company’s executive offices are located at 6114 U.S. 301 South, Four Oaks, North Carolina 27609, and its telephone number is (919) 963-2177.
On March 8, 2017, the Company completed a one for five reverse stock split of its authorized, issued, and outstanding Common Stock (the “Reverse Stock Split”). At that time, every five shares of issued and outstanding Common Stock were automatically combined into one issued and outstanding share of Common Stock. No fractional shares were issued in connection with the Reverse Stock Split, and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share. The number of authorized shares of Common Stock was also reduced from 80,000,000 to 16,000,000. All historical share and share-related information presented in this prospectus and in the documents incorporated by reference into this Prospectus has been retroactively adjusted to reflect the decreased number of shares resulting from the Reverse Stock Split.
DESCRIPTION OF THE PLAN
1.
Purpose
The purpose of the Plan is to provide the shareholders of record of the Company’s Common Stock with a simple and convenient method of investing cash dividends and optional cash payments in shares of Common Stock. To the extent that new shares of Common Stock will be purchased from the Company, the Company will receive additional funds to finance the continuing operations of the Company.
2.
Features
Participants in the Plan:
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Will have cash dividends on their shares of Common Stock automatically reinvested in additional shares of Common Stock;
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May elect to make optional cash payments from $20.00 to $2,500.00 per quarter for additional Common Stock purchases;
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Will receive full investment use of funds because the Plan provides for crediting of fractional shares (calculated to four decimal places) and reinvestment in additional shares;
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Will pay no account fees for the reinvestment of dividends or optional cash payments;
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Will receive quarterly statements from the Agent (as defined below) reflecting total dividends and optional cash payments, the price paid for shares purchased, and the total shares held in the participant’s account; and
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Will enjoy safekeeping of shares purchased pursuant to the Plan.
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3.
Administration
Computershare Trust Company, N.A. will administer the Plan and serve as agent (the “Agent”) for Plan participants. The Agent keeps records, sends statements of account to each participant, and performs other duties related to the Plan. Shares purchased under the Plan are registered in the name of the Agent, or in the name of its nominee, and credited to the accounts of the participants in the Plan. Questions and communications regarding the Plan should include your account number and should be directed to:
Computershare Trust Company, N.A.
c/o Computershare, Inc.
P.O. Box 43078
Providence, RI 02940
Telephone: (800) 368-5948
www.computershare.com
4.
Participation
a. Eligibility
Any holder of record of the Company’s Common Stock is eligible to participate in the Plan at any time. Beneficial owners of shares of Common Stock whose shares are registered in names other than their own (for example, in the name of a broker, bank, or other nominee) and who wish to participate in the Plan must become owners of record by having the number of shares they wish to enroll in the Plan transferred into their own names. Alternatively, they must make arrangements for the nominees or other holders of record to participate in the Plan on behalf of such beneficial owners.
b. Enrollment in the Plan
An eligible shareholder may join the Plan at any time by completing an Authorization Card and returning it to the Agent at the above address. Authorization Cards may be obtained at any time by contacting the Agent.
For new enrollees, participation will commence with the next dividend payable after receipt of authorization, provided it is received by the Agent by the fifth business day prior to the record date for the dividend. If an Authorization Card is received after the fifth business day prior to the record date established for a particular dividend, the reinvestment of dividends under the Plan will begin with the next succeeding dividend. The Company expects to set quarterly dividend and record payment dates for Common Stock on or about the following dates:
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Approximate Record Date
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Approximate Payment Date
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February 28
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March 8
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May 31
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June 8
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August 31
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September 8
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November 30
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December 8
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To participate in the optional cash payment feature, a personal check drawn on a U.S. bank and made payable to Computershare Trust Company, N.A. should be sent together with the payment form that is attached to the quarterly statement participants receive after their initial dividend has been invested. Cash payments can only be made for participants who have had at least one dividend reinvested pursuant to the Plan, provided, however, that if no dividends are paid by the Company in the first quarter of a participant’s enrollment, such participant will be eligible to make a cash payment in any subsequent quarter.
Shareholders enrolled in the Plan will remain enrolled unless they terminate their participation by giving written notice to the Agent as described below.
5.
Number of Shares Subject to the Plan
Shareholders of record may participate in the Plan with respect to all or any portion of the shares equal to or greater than ten percent of Common Stock registered in their name. If a shareholder wishes to participate in the Plan with less than all of such shareholder’s shares, the shareholder must notify the Agent in writing to that effect. Otherwise, it will be assumed that the shareholder intends to participate in the Plan with respect to all shares owned. Also, if a participant wishes to change the number of shares of Common Stock subject to the Plan, the participant must notify the Agent in writing to that effect. Any such notification received by the Agent after the fifth business day prior to a dividend payment date will not be effective until the next quarter.
6.
Costs
The Agent will provide the service of reinvesting a participant’s dividends paid on the Company’s Common Stock or optional cash payments at no cost to the shareholder. All administrative costs of the Plan will be paid by the Company. No brokerage commissions or fees will be charged for purchases of shares made under the Plan by the Agent directly from the Company out of authorized but unissued shares of the Company. The Company will bear the costs of brokerage commissions or fees incurred as a result of any purchases made under the Plan on the open market. The Company may change or eliminate this policy entirely upon written notice to participants. The reinvestment of dividends does not relieve the participant of any income tax that may be payable on the dividends or on any brokerage commissions or fees paid by the Company.
7.
Purchases Under the Plan
a. Method of Purchase
The Agent automatically will receive the full amount of dividends paid on both the shares held by participants and any additional full or fractional shares acquired under the Plan, as well as any optional cash payments made by participants. The Agent will use these funds to purchase shares of the Company’s Common Stock for Plan participants from the Company’s authorized but unissued shares. Purchases also may be made on any securities exchange where such shares are traded, in the over-the-counter market, or in negotiated transactions.
b. Number of Shares Purchased
The number of shares purchased under the Plan for each participant will depend on the amount of dividends reinvested and optional cash payments made to the participant’s account and the purchase price of Common Stock. Therefore, each participant’s account will be credited with the number of shares, including a fractional share computed to four decimal places, equal to the total amount invested under the Plan by the participant (dividends and optional cash payments), divided by the applicable purchase price per share of Common Stock.
c. Timing of Purchases
The Agent will purchase shares as soon as practicable after cash dividends are paid in the quarters when such payments are made. In other quarters, the Agent generally will purchase shares on the first business day of the quarter.
Purchases will include dividends to be reinvested and optional cash payments as of the date of purchase, as applicable. The Agent will use every reasonable effort to reinvest all dividends promptly after receipt and in no event later than 30 days after receipt unless such investments are restricted by any applicable state or federal securities laws. No interest will be paid on dividends or optional cash payments pending reinvestment.
If for any reason the Agent is precluded from acquiring shares for 90 consecutive days, the Agent will promptly remit all cash dividends and optional cash payments held in the participant’s Plan account to the participant after such 90th day.
d. Purchase Price
The purchase price of original issue shares of Common Stock purchased directly from the Company will be determined once each quarter by the Board of Directors of the Company based on an annual appraisal and trading activity. The appraisal will be conducted by an independent appraisal firm selected by the Board of Directors. The purchase price for the first quarter shall be based on the first such appraisal. Each quarter thereafter, the Board of Directors of the Company shall set the purchase price based on a review of the most recent annual appraisal and trading activity during the preceding quarter. No brokerage commissions or fees will be charged for purchases made through the Plan directly from the Company. Shares purchased on the open market under the Plan will be purchased at the price per share payable to the broker-dealer(s) involved. The Company will bear any brokerage commission or fees incurred in connection with open market purchases.
8.
Optional Cash Payments
a. Method of Payments
Once a participant has received the first Dividend Reinvestment Statement (described below) for dividends reinvested, the participant may elect to make optional cash payments to his account for additional Common Stock purchases, provided, however, that if no dividends are paid by the Company in the first quarter of a participant’s enrollment, such participant will be eligible to make a cash payment in any subsequent quarter. Each optional cash payment must be accompanied by a payment form, which is furnished by the Agent with each Dividend Reinvestment Statement. The Agent will commingle all optional cash payments credited to a participant’s account with cash dividends and optional cash payments credited to all accounts under the Plan, and all such funds will be applied to the purchase of Common Stock as provided above. Optional cash payments received by the fifth business day before a dividend payment date will be combined with cash dividends and invested by the Agent at the time cash dividends are reinvested, and in any event will be invested with funds received by the fifth business day before purchases are made in other quarters, as provided above. Any optional cash payments received by the Agent after the fifth day prior to a dividend payment date or more than 30 days prior to a dividend payment date will be returned to the participant.
The Agent will hold the participants’ optional cash payments in non-interest bearing accounts. No interest will be paid on any optional cash payments for the period following receipt by the Agent but prior to investment. Participants are encouraged to transmit optional cash payments so as to be received by the Agent as close as possible to the fifth day prior to a dividend payment date to avoid unnecessary accumulations of funds.
A participant may obtain a refund of his or her uninvested optional cash payments upon written request to the Agent received not less than two business days prior to the investment of such payments.
A participant is under no obligation to make an optional cash payment in any quarter, and the same amount of money does not need to be sent each quarter.
b. Limitations
Any optional cash payment must not be less than $20.00, and payments may not exceed $2,500.00 per quarter in the aggregate for any participant or for each beneficial owner on whose behalf a participant may be investing. Only one optional cash payment may be made in each quarter by any participant, or by each beneficial owner on whose behalf a participant may be investing, and optional cash payments are only invested quarterly, as provided above. The Company may change the minimum and maximum allowable optional cash payment amounts or eliminate cash payments entirely upon written notice to participants.
Participants may not draw checks or drafts against their Plan accounts in respect of any shares or cash held therein and may not sell, assign, or transfer their accounts.
9.
Share Issuance
Shares issued under the Plan will be done electronically in book-entry form directly to plan participants. The number of shares credited to a participant’s account will be shown on the next statement of account sent to the participant.
10.
Reports to Participants
As soon as practicable after the end of each quarterly period, the Agent will send a statement of account (the “Dividend Reinvestment Statement”) to the participant. The Dividend Reinvestment Statement will include information regarding each purchase and other information regarding the status of the participant’s account as of the date of such statement. The Dividend Reinvestment Statement will provide a record of the cost basis of shares purchased under the Plan and should be retained for tax purposes.
11.
Withdrawals of Shares
Purchased Under the Plan
A participant may withdraw all or any portion of the shares of Common Stock held in the participant’s account under the Plan by notifying the Agent in writing to that effect. Upon notification, the shares withdrawn will be transferred to the participant as non-Plan shares of Common Stock electronically in book-entry form.
Withdrawals of some or all of the shares in a participant’s account will not terminate the participant’s enrollment in the Plan.
12.
Termination of Participation
A participant may terminate his account by notifying the Agent in writing to that effect. Any notice of termination received by the Agent less than five days prior to the record date for a dividend payment shall become effective only after dividends paid for such record date have been reinvested. Upon termination, the Agent will transfer shares back into the Company's common stock class.
13.
Other
Features
a. Stock Splits, Stock Dividends, and Rights Offerings
Stock splits or stock dividends on shares held in a participant’s account will be credited to the account based on the number of shares (including fractional share interests) held in the account on the record date for such dividend or split. The Agent will report the amount of dividends received on shares or fractional shares held in each account.
In the event the Company offers rights or warrants to purchase additional shares of Common Stock or other securities to the holders of Common Stock, such rights or warrants will be made available to participants based on the number of shares, including fractional share interests to the extent feasible, held in their accounts on the record date established for determining the holders of Common Stock entitled to such rights or warrants.
b. Voting of Shares Purchased Under the Plan
All full and fractional shares credited to a participant’s account under the Plan will be added to the shares registered in the participant’s name on the shareholder records of the Company. The participant will receive one proxy covering the total of such shares, which proxy shall be voted as the participant directs; or, if the participant so elects, the participant may vote all of such shares in person at the shareholders’ meeting.
14.
Federal Income Tax Consequences
Dividends and other distributions by the Company to shareholders generally will be taxed as ordinary dividend income. Participants who acquire additional shares of Common Stock through the Plan directly from the Company with reinvested cash dividends will be treated for federal income tax purposes as having received a taxable stock distribution. As a result, an amount equal to the fair market value on the dividend payment date of the shares acquired directly from the Company with reinvested cash dividends will be treated as a dividend paid to participants. The tax basis of the shares acquired directly from the Company with such reinvested dividends also will equal the fair market value of the shares on the investment date.
Participants who acquire additional shares of Common Stock through the Plan through open market purchases made with reinvested cash dividends will be deemed to have received a taxable dividend equal to the amount of the cash dividend reinvested plus the amount of any brokerage fees paid by the Company with respect to such additional shares. The participant’s tax basis in these shares acquired on the open market will equal the purchase price of the shares plus any brokerage fees paid with respect to the shares.
Participants in the Plan should not realize any taxable income at the time of investment of optional cash payments in additional shares of Common Stock acquired directly from the Company although it is possible that such participants may be treated as having received a taxable dividend to the extent the fair market value of such Common Stock on the investment date exceeds the amount of the optional cash payment. The tax basis of shares purchased directly from the Company with an optional cash payment will be equal to the optional cash payment plus any amount treated as a taxable dividend pursuant to the preceding sentence.
Participants who acquire additional shares of Common Stock through open market purchases made with optional cash payments will be treated as receiving a cash dividend equal to the amount of any brokerage fees paid by the Company with respect to such shares. The tax basis of shares purchased on the open market with an optional cash payment will equal the purchase price of the shares, plus any brokerage fees paid by the Company with respect to such shares.
The holding period of shares of Common Stock acquired through the Plan, whether purchased with reinvested dividends or optional cash payments, will begin on the day following the investment date.
Participants in the Plan will not realize any taxable income when they receive full shares credited to their accounts upon withdrawal from or termination of participation in the Plan. Participants, however, will realize taxable gain or loss (which, for most participants, will be capital gain or loss) when full shares acquired under the Plan are sold or exchanged by participants and when participants receive a cash payment for a fractional share credited to their account. The amount of such gain or loss will be the difference between the amount that a participant receives for his shares or fractional share (net of brokerage commissions and other costs of sale) and the tax basis thereof.
For foreign participants who elect to have their cash dividends reinvested and whose dividends are subject to United States income tax withholding, and any other participants for whom federal income tax withholding on dividends is required, an amount equal to the cash dividends payable to such participants, less the amount of tax required to be withheld, will be applied to the purchase of Common Stock through the Plan.
THE FOREGOING IS INTENDED ONLY AS A GENERAL DISCUSSION OF THE CURRENT FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN. IT DOES NOT INCLUDE A DISCUSSION OF STATE AND LOCAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN. FOR SPECIFIC INFORMATION ON THE TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN, INCLUDING ANY FUTURE CHANGES IN APPLICABLE LAW OR INTERPRETATION THEREOF, PARTICIPANTS SHOULD CONSULT THEIR OWN TAX ADVISORS.