SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 27, 1998
CT COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
North Carolina 0-19179 56-1837282
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
68 Cabarrus Avenue, East, Concord, North Carolina 28025
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 704/782-7000
Not applicable
(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS
On August 27, 1998, the Board of Directors of CT
Communications, Inc. (the "Company") adopted a Rights Agreement
(the "Rights Agreement") and authorized and declared a dividend
of one common share purchase right (a "Right") for each
outstanding share of (i) Voting Common Stock of the Company (the
"Company Voting Common Stock") and (ii) Class B Nonvoting Common
Stock of the Company (individually, the "Company Nonvoting Common
Stock" and together with the Company Voting Common Stock, the
"Company Common Stock"). The dividend is payable (i) on August
28, 1998 to the shareholders of record on that date (the "Record
Date") and (ii) with respect to Company Common Stock issued
thereafter until the Distribution Date (as hereinafter defined)
or the expiration or earlier redemption or exchange of the
Rights.
Except as set forth below, each Right entitles the
registered holder to purchase from the Company, at any time after
the Distribution Date, one share of Company Voting Common Stock
at a price per share of $500, in the event the Right was
distributed with respect to Company Voting Common Stock, or one
share of Company Nonvoting Common Stock at a price per share of
$500, in the event the Right was distributed with respect to
Company Nonvoting Common Stock, in each case subject to
adjustment (each applicable per share purchase price referred to
herein separately and together as the "Purchase Price"). The
description and terms of the Rights are as set forth in the
Rights Agreement.
Initially, the Rights will be attached to all certificates
representing Company Common Stock then outstanding, and no
separate Right Certificates will be distributed. The Rights will
separate from the Company Common Stock upon the earlier to occur
of (i) 10 days after the public announcement of a person's or
group of affiliated or associated persons' (other than L.D.
Coltrane III, Chairman of the Board of the Company, or Michael R.
Coltrane, President and Chief Executive Officer of the Company)
having acquired beneficial ownership of 15% or more of (X) the
outstanding Company Voting Common Stock or (Y) the outstanding
Company Nonvoting Common Stock (such person or group being
hereinafter referred to as an "Acquiring Person"), or (ii) 10
days (or such later date as the Board may determine) following
the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would
result in a person or group's becoming an Acquiring Person (the
earlier of such dates being called the "Distribution Date").
Until the Distribution Date, the Rights will be transferred
with, and only with, the Company Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), new Company Common Stock certificates issued after the
Record Date upon transfer or new issuance of Company Common Stock
will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any
certificates for Company Common Stock outstanding as of the
Record Date, even without such notation or a copy of this Summary
of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Company Common Stock
represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of record
of Company Common Stock as of the close of business on the
Distribution Date (and to each initial record holder of certain
Company Common Stock issued after the Distribution Date), and
such separate Right Certificates alone will evidence the Rights.
The Rights will expire on August 27, 2008 (the "Final
Expiration Date"), unless the Final Expiration Date is extended
or unless the Rights are earlier redeemed or exchanged by the
Company, in each case, as described below.
The Rights initially are not exercisable. In the event that
any person becomes an Acquiring Person (except pursuant to a
tender or exchange offer that is for all outstanding Company
Common Stock at a price and on terms which a majority of certain
members of the Board of Directors determines to be adequate and
in the best interests of the Company, its shareholders and other
relevant constituencies, other than such Acquiring Person, its
affiliates and associates (a "Permitted Offer")), each holder of
a Right will thereafter have the right (the "Flip-In Right") to
receive, upon exercise and payment of the applicable Purchase
Price, Company Common Stock of the applicable class having a
value equal to two times the applicable Purchase Price.
Notwithstanding the foregoing, all Rights that are, or were,
beneficially owned by any Acquiring Person or any affiliate or
associate thereof will be null and void and not exercisable.
In the event that, at any time following the Distribution
Date, (i) the Company is acquired in a merger or other business
combination transaction in which the holders of all of the
outstanding Company Voting Common Stock immediately prior to the
consummation of the transaction are not the holders of all of the
surviving corporation's voting power, or (ii) more than 50% of
the Company's assets or earning power is sold or transferred,
then each holder of a Right (except Rights which have previously
been voided as set forth above) shall thereafter have the right
(the "Flip-Over Right") to receive, upon exercise and payment of
the applicable Purchase Price, common stock of the acquiring
company having a value equal to two times the applicable Purchase
Price. If a transaction would otherwise result in a holder's
having a Flip-In as well as a Flip-Over Right, then only the
Flip-Over Right will be exercisable; if a transaction results in
a holder's having a Flip-Over Right subsequent to a transaction
resulting in a holder's having a Flip-In Right, a holder will
have Flip-Over Rights only to the extent such holder's Flip-In
Rights have not been exercised.
The Purchase Price payable, and the number of shares of
Company Common Stock or other securities or property issuable,
upon exercise of Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of Company
Common Stock, (ii) upon the grant to holders of Company Common
Stock of certain rights or warrants to subscribe for or purchase
Company Common Stock at a price, or securities convertible into
Company Common Stock with a conversion price, less than the then
current market price of Company Common Stock, or (iii) upon the
distribution to holders of Company Common Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in
Company Common Stock) or of subscription rights or warrants
(other than those referred to above). However, no adjustment in
the Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1%. No fractional shares of
Company Common Stock will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of
Company Common Stock on the last trading day prior to the date of
exercise.
At any time prior to the earlier to occur of (i) the
Distribution Date and (ii) the Final Expiration Date, the Board
of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at
such time on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will
be to receive the Redemption Price in cash.
At any time after any person becomes an Acquiring Person and
prior to the acquisition by such person or group of Company
Voting Common Stock representing 50% or more of the then
outstanding Company Voting Common Stock, the Board of Directors
of the Company may exchange the Rights (other than Rights which
have become null and void), in whole or in part, at an exchange
ratio of one share of such applicable kind of Company Common
Stock per Right (subject to adjustment).
All of the provisions of the Rights Agreement may be amended
prior to the Distribution Date by the Board of Directors of the
Company, without the consent of the holders of the Rights, for
any reason it deems appropriate. After the Distribution Date,
the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring
Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement. Without
limiting the foregoing, prior to the time any person becomes an
Acquiring Person, the Board of Directors is also authorized, as
it deems appropriate, to lower the thresholds required to become
an Acquiring Person to not less than the greater of (i) any
percentage greater than the largest percentage then held by any
shareholder other than L.D. Coltrane III or Michael R. Coltrane,
or (ii) 10%.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
Although the distribution of the Rights will not be taxable
to shareholders of the Company, shareholders may, depending upon
the circumstances, recognize taxable income should the Rights
become exercisable or upon the occurrence of certain events
thereafter.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Company on terms not approved by the
Company's Board of Directors. The Rights should not interfere
with any merger or other business combination approved by the
Board of Directors because the Rights may be redeemed by the
Company at the Redemption Price prior to the date that is 10 days
after the public announcement that a person or group has become
the beneficial owner of 15% or more of a class of the Common
Stock.
The Rights Agreement, dated as of August 27, 1998, between
the Company and First Union National Bank, as Rights Agent,
specifying the terms of the rights, which includes as Exhibit A-1
the form of Right Certificate (Voting Common Shares) and as
Exhibit A-2 the form of Right Certificate (Nonvoting Common
Shares), is attached hereto as Exhibit 4.1 and is incorporated
herein by reference. The foregoing description of the Rights is
qualified by reference to such exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
4.1 Rights Agreement dated as of August 27, 1998
between CT Communications, Inc. and First Union
National Bank, which includes as Exhibit A-1
the form of Right Certificate (Voting Common
Shares) and as Exhibit A-2 the form of Right
Certificate (Nonvoting Common Shares).
Incorporated by reference to Exhibit 4.1 to the
Registrant's Form 8-A filed on August 28, 1998.
99 News Release dated August 28, 1998.
[Signature on next page]
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this registration
statement to be signed on its behalf of the undersigned, thereto duly
authorized.
CT COMMUNICATIONS, INC.
August 28, 1998 By: /s/ MICHAEL R. COLTRANE
Michael R. Coltrane,
President and Chief
Executive Officer
CT COMMUNICATIONS, INC.
Press Release
For Immediate Release
CT COMMUNICATIONS, INC. ADOPTS SHAREHOLDER RIGHTS PLAN
CHARLOTTE, N.C., August 28, 1998 -- The Board of Directors of CT
Communications, Inc., has adopted a Shareholder Rights Plan
designed to insure that shareholders of the Company receive fair
and equal treatment in the event of a takeover of the Company and
to guard against partial tender offers and other abusive takeover
tactics. The Plan was not adopted in response to any effort to
acquire control of the Company, and the Board of Directors is not
aware of any such effort.
Michael R. Coltrane, President and Chief Executive Officer of the
Company, stated, "The Shareholder Rights Plan is intended to
encourage anyone seeking to acquire the Company to negotiate
directly with our Board of Directors prior to attempting a
takeover. Although the Plan will not prevent a takeover of the
Company, the Rights are intended to provide an appropriate and
reasonable means of safeguarding the interests of all
shareholders and to enable all shareholders of the Company to
realize the long-term value of their investment in the Company."
Under the Plan, each holder of Voting Common Stock of the Company
and each holder of Class B Nonvoting Common Stock of the Company
of record at the close of business on August 28, 1998, will
automatically receive a distribution of one Right for each share
of Common Stock held. In addition, one Right will be delivered
with each share of Voting Common Stock and Class B Nonvoting
Common Stock issued after August 28, 1998. The Rights
distribution is not taxable to the shareholders or the Company,
has no dilutive effect, will not affect the Company's reported
earnings per share and will not change the way in which the
Company's shares are traded.
Each Right will entitle its holder to purchase (i) one share of
Voting Common Stock of the Company for a purchase price of
$500, in the event the Right was distributed with respect to
Voting Common Stock, or (ii) one share of Class B Nonvoting
Common Stock of the Company for a purchase price of $500, in the
event the Right was distributed with respect to Class B Nonvoting
Common Stock.
If a person or group, excluding L.D. Coltrane III, Chairman of
the Board of the Company, or Michael R. Coltrane, President and
Chief Executive Officer, acquires 15% or more of the Company's
outstanding Voting Common Stock or Class B Nonvoting Common Stock
or commences a tender or exchange offer that results in such
level of ownership, then each Right (other than the Rights owned
by such person or group) will entitle its holder to purchase, at
the applicable purchase price, shares of the applicable class of
Common Stock of the Company having a value equal to twice the
applicable purchase price of the Rights.
In addition, if a person or group, other than L.D. Coltrane III
or Michael R. Coltrane, acquires 15% or more of the Company's
outstanding Voting Common Stock or Class B Nonvoting Common Stock
and the Company either merges into another entity, another entity
merges into the Company, or the Company sells 50% or more of its
assets or earning power to another entity, each Right (other than
those owned by the acquiror) will entitle its holder to purchase,
upon payment of the applicable purchase price, shares of stock of
the surviving entity which has a value equal to twice the
applicable purchase price of the Rights.
Furthermore, at any time after any person or group, other than
L.D. Coltrane III or Michael R. Coltrane, acquires 15% or more of
the Company's outstanding Voting Common Stock or Class B
Nonvoting Common Stock, but before any such person or group
beneficially owns 50% of either class of stock, the Board of
Directors may require that all or a portion of the outstanding
Rights be exchanged for Common Stock of the Company on a pro rata
basis at the rate of one share of the applicable class per
outstanding Right of the same class.
The Board of Directors may also redeem the Rights at a price of
$.01 per Right at any time prior to a specified period of time
after a person or group, excluding L.D. Coltrane III and Michael
R. Coltrane, becomes the owner of 15% or more of the Company's
Voting Common Stock or Class B Nonvoting Common Stock. The
Rights will expire on August 27, 2008, unless redeemed earlier.
Additional details of the Plan will be outlined in a letter that
will be mailed to the Company's shareholders on or about
September 21, 1998.
CT Communications, Inc. is a holding company providing
telecommunications services and communications systems and
products in North Carolina through its various subsidiaries.
