FlowLayout encima de GridLayout no funciona

Estoy tratando de crear un juego de ahorcados y hasta ahora todo va bien, pero el diseño no parece encajar en su lugar. El alfabeto se supone que termina en unaFlowLayout ¡ordene en la parte superior de la imagen del ahorcado con los botones "Reiniciar", "Ayuda" "Agregar nueva palabra" y "Salir" en la parte inferior! ¿Qué estoy haciendo mal?

import java.awt.*;
import java.awt.event.*;
import javax.swing.*;
import java.io.*;

public class Hangman extends JFrame
{
    int i = 0;
    static JPanel panel;
    static JPanel panel2;
    static JPanel panel3;

    public Hangman()
    {
        JButton[] buttons = new JButton[26];

        panel = new JPanel(new FlowLayout());
        panel2 = new JPanel();
        panel3 = new JPanel();

        JButton btnRestart = new JButton("Restart");
        btnRestart.addActionListener(new ActionListener(){
            public void actionPerformed(ActionEvent e)
            {

            }
        });

        JButton btnNewWord = new JButton("Add New Word");
        btnNewWord.addActionListener(new ActionListener(){
            public void actionPerformed(ActionEvent e)
            {
                try
                {
                    FileWriter fw = new FileWriter("Words.txt", true);
                    PrintWriter pw = new PrintWriter(fw, true);

                    String word = JOptionPane.showInputDialog("Please enter a word: ");

                    pw.println(word);
                    pw.close();
                }
                catch(IOException ie)
                {
                    System.out.println("Error Thrown" + ie.getMessage());
                }
            }
        });

        JButton btnHelp = new JButton("Help");
        btnHelp.addActionListener(new ActionListener(){
            public void actionPerformed(ActionEvent e)
            {
                String message = "The word to guess is represented by a row "
                   + "of dashes, giving the number of letters and category of "
                   + "the word. \nIf the guessing player suggests a letter "
                   + "which occurs in the word, the other player writes it "
                   + "in all its correct positions. \nIf the suggested "
                   + "letter does not occur in the word, the other player "
                   + "draws one element of the hangman diagram as a tally mark."
                   + "\n"
                   + "\nThe game is over when:"
                   + "\nThe guessing player completes the word, or guesses "
                   + "the whole word correctly"
                   + "\nThe other player completes the diagram";
               JOptionPane.showMessageDialog(null,message, "Help",JOptionPane.INFORMATION_MESSAGE);
            }
        });

        JButton btnExit = new JButton("Exit");
        btnExit.addActionListener(new ActionListener(){
            public void actionPerformed(ActionEvent e)
            {
                System.exit(0);
            }
        });

        ImageIcon icon = new ImageIcon("D:\\Varsity College\\Prog212Assign1_10-013803\\images\\Hangman1.jpg");
        JLabel label = new JLabel();
        label.setIcon(icon);
        String  b[]=  {"A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"};
        for(i = 0; i < buttons.length; i++)
        {
            buttons[i] = new JButton(b[i]);

            panel.add(buttons[i]);
        }
        panel2.add(label);

        panel3.add(btnRestart);
        panel3.add(btnNewWord);
        panel3.add(btnHelp);
        panel3.add(btnExit);
    }

    public static void main(String[] args) 
    {
        Hangman frame = new Hangman();
        frame.add(panel, BorderLayout.NORTH);
        frame.add(panel2, BorderLayout.CENTER);
        frame.add(panel3, BorderLayout.SOUTH);
        frame.pack();
        frame.setVisible(true);
    }
}

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