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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): July 19, 2000
FIRST CHARTER CORPORATION
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(Exact Name of Registrant as Specified in Charter)
North Carolina 0-15829 56-1355866
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
22 Union Street North, Concord, North Carolina 28026-0228
(Address of Principal Executive Offices, including Zip Code)
Registrant's telephone number, including area code: (704) 786-3300
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On July 19, 2000, First Charter Corporation (the "Company") entered
into a Stockholder Protection Rights Agreement pursuant to which it will
distribute one right (a "Right") for each outstanding share of the Company's
Common Stock, no par value per share (the "Common Stock"), to shareholders of
record at the close of business on August 9, 2000 and for each share of Common
Stock issued by the Company thereafter and prior to the Separation Time (as
described below). At the Separation Time each Right entitles the registered
holder to purchase from the Company one one-thousandth (1/1,000th) of a share (a
"Unit") of Series X Junior Participating Preferred Stock, no par value per share
(the "Preferred Stock"), at a purchase price of $80.00 per Unit (the "Exercise
Price"), subject to adjustment. The description and terms of the Rights are set
forth in the Stockholder Protection Rights Agreement between the Company and
Registrar and Transfer Company (the "Rights Agent"), dated July 19, 2000 (the
"Rights Agreement").
Separation Time
Initially, the Rights will be transferable only with the shares of
Common Stock with respect to which they were distributed. Until the Separation
Time, the Rights will be evidenced by the certificates representing the shares
of outstanding Common Stock with which they are associated, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Common Stock and the Separation Time will occur upon the earlier of (i) ten
business days following public announcement by the Company that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
obtained the right to acquire, or otherwise obtained beneficial ownership of 15%
or more of the then-outstanding shares of Common Stock, or (ii) ten business
days following the commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 15% or more of the
then-outstanding shares of Common Stock. An Acquiring Person does not include
(a) any person who is a beneficial owner of 15% or more of the Common Stock on
July 19, 2000 (the date of adoption of the Rights Agreement), unless such person
or group shall thereafter acquire beneficial ownership of additional Common
Stock and fails to reduce its beneficial ownership of Common Stock to previous
levels, or (b) a person who acquires beneficial ownership of 15% or more of the
Common Stock without any intention to affect control of the Company and who
thereafter promptly divests sufficient shares so that such person ceases to be
the beneficial owner of 15% or more of the Common Stock. In addition, the
Company, any wholly-owned subsidiary of the Company and any employee stock
ownership or other employee benefit plan of the Company or a wholly-owned
subsidiary of the Company shall not be an Acquiring Person.
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Transfer of Rights and Certificates
Until the Separation Time, (i) the Rights will be evidenced by Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after August 9, 2000
will bear a legend incorporating the Rights Agreement by reference, and (iii)
the surrender for transfer of any certificates representing outstanding Common
Stock will also constitute the surrender for transfer of the Rights associated
with the Common Stock represented by such certificate.
Promptly after the Separation Time, Rights Certificates will be mailed
to holders of record of Common Stock as of the close of business on the date
when the Separation Time occurs (other than holders of Rights that are or were
beneficially owned by an Acquiring Person or an affiliate or associate thereof
or by any transferee of any of the foregoing, which Rights shall be void) and,
thereafter, the separate Rights Certificates alone will represent the Rights.
Exercise of Rights for Common Stock
If a Flip-In Date occurs (i.e., the close of business ten business days
following a public announcement by the Company that a person has become an
Acquiring Person), and if the Company has not redeemed the Rights as described
below, then a Right entitles the holder thereof to acquire shares of Common
Stock (rather than Preferred Stock) having a value equal to twice the Right's
exercise price. Instead of issuing shares of Common Stock upon exercise of a
Right following a Flip-In Date, the Company may substitute therefor shares of
Preferred Stock at a ratio of one one-thousandth of a share of Preferred Stock
for each share of Common Stock so issuable. In the event there are not
sufficient treasury shares or authorized but unissued shares of Common Stock or
Preferred Stock to permit exercise in full of the Rights, the Company may
substitute debt or equity securities or other assets (or a combination thereof).
In addition, the Company, upon the action of the Board of Directors may, after a
Flip-In Date and prior to the time that an Acquiring Person becomes the
beneficial owner of more than 50% of the Common Stock, elect to exchange all
outstanding Rights (other than Rights that have become void) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right, as
adjusted. Notwithstanding any of the foregoing, Rights that are, or (under
certain circumstances set forth in the Rights Agreement) were, beneficially
owned by any person on or after the date such person becomes an Acquiring Person
will be null and void.
In addition, the Rights Agreement provides that if an Acquiring Person
controls the Company's Board of Directors, then the Company shall not enter into
an agreement with respect to, consummate or permit to occur any: (i)
consolidation, merger or share exchange if either the Acquiring Person or an
affiliate or associate of the Acquiring Person is a party to the transaction or
the terms of the transaction are not the same for the Acquiring Person as for
the other holders of Common Stock; or (ii) sale or transfer of a
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majority of the Company's assets, unless the Company enters into an agreement
for the benefit of the holders of the Rights providing that upon consummation of
such transaction each Right shall constitute the right to purchase stock in the
acquiring entity having a value equal to twice the exercise price of the Rights
for an amount in cash equal to the exercise price of the Rights.
Exercise Period
The Rights are not exercisable until the Separation Time and will
expire at the close of business on July 19, 2010 unless earlier exchanged or
redeemed by the Company as described below.
Redemption of Rights
At any time until the close of business on the Flip-In Date, the
Company may, upon the action of the Board of Directors elect to redeem the
Rights at a price of $0.01 per right. The Board of Directors may condition
redemption of the Rights upon the occurrence of a specified future time or
event.
Adjustments
The exercise price payable and the number of Rights outstanding are
subject to adjustment from time to time to prevent dilution in the event of a
stock dividend, stock split or reverse stock split, or other recapitalization
which would change the number of shares of Common Stock outstanding.
If prior to the Separation Time, the Company distributes securities or
assets in exchange for Common Shares (other than regular cash dividends or a
dividend paid solely in Common Shares) whether by dividend, reclassification, or
otherwise, the Corporation shall make such adjustments, if any, in the Exercise
Price, number of Rights and otherwise as the Board of Directors deems
appropriate.
Amendments
Any provisions of the Rights Agreement may be amended at any time prior
to the close of business on the Flip-In Date without the approval of holders of
the Rights, and thereafter, the Rights Agreement may be amended without approval
of the Rights holders in any way which does not materially adversely affect the
interests of the Rights holders generally or to cure an ambiguity or to correct
or supplement any provision which may be inconsistent with any other provision
or otherwise defective.
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Rights Prior to Exercise
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. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable.
Effect of the Rights
The Rights may 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 Board of Directors of the Company unless
the offer is conditioned on a substantial number of Rights being acquired.
However, the Rights should not interfere with any merger, statutory share
exchange or other business combination approved by a majority of the Board of
Directors since the Rights may be redeemed by the Company upon resolution of the
Board of Directors at any time on or prior to the close of business ten business
days after announcement by the Company that a person has become an Acquiring
Person. Thus, the Rights are intended to encourage persons who may seek to
acquire control of the Company to initiate such an acquisition through
negotiations with the Board of Directors. However, the effect of the Rights may
be to discourage a third party from making a partial tender offer or otherwise
attempting to obtain a substantial equity position in the equity securities of,
or seeking to obtain control of, the Company. To the extent any potential
acquirors are deterred by the Rights, the Rights may have the effect of
preserving incumbent management in office.
Documents and Effect of This Summary
A copy of the Rights Agreement is included as an Exhibit to this
Report. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
No financial statements are required to be filed as part of this
Report. The following exhibits are filed as part of this Report:
EXHIBIT NO. DESCRIPTION
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99.1 Stockholder Protection Rights Agreement, dated July 19, 2000,
between First Charter Corporation and Registrar and Transfer
Company, as Rights Agent
99.2 Press Release, dated July 21, 2000
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST CHARTER CORPORATION
By: /s/ Lawrence M. Kimbrough
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Lawrence M. Kimbrough
President and Chief Executive Officer
Dated: July 21, 2000
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