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): April 9, 1997
Public Service Company of North Carolina, Incorporated
(Exact Name of Registrant as Specified in its Charter)
North Carolina 1-11429 56-0233140
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation File Number) Identification No.)
400 Cox Road, P.O. Box 1398, Gastonia, North Carolina 28053-1398
(Address of Principal Executive Offices) (Zip Code)
(704) 864-6731
Registrant's Telephone Number
Including Area Code
N/A
Former Name or Former Address, if Changed Since Last Report
Exhibit Index is on Page 9
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Item 5. Other Events.
I. Adoption of Rights Plan
On April 9, 1997, the Board of Directors of Public Service
Company of North Carolina, Incorporated (the "Company") declared a dividend
distribution of one Right for each outstanding share of Common Stock to
stockholders of record at the close of business on April 28, 1997 (the "Record
Date"). Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Cumulative Preferred Stock, par value
$25 per share (the "Preferred Stock"), at a Purchase Price of $55.00, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and First Union National
Bank of North Carolina, as Rights Agent.
By Order issued April 8, 1997, the North Carolina Utilities
Commission authorized PSNC to reserve for issuance under the Rights Agreement,
up to 1,500,000 shares of preferred stock and to issue that preferred stock in
the future in accordance with the terms of the Rights Agreement.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
and a Distribution Date will occur upon the earli er of (i) ten (10) days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or ob tained the right
to acquire, beneficial ownership of fifteen percent (15%) or more of the
outstanding shares of Common Stock or, with respect to persons that benefi
cially own ten percent (10%) or more of the outstanding shares of Common Stock
on April 9, 1997, such person has
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acquired, or obtained the right to acquire, beneficial ownership of twenty
percent (20%) or more of the out standing shares of Common Stock (the "Stock
Acquisition Date"), other than as a result of repurchases of stock by the
Company, or (ii) ten (10) business days (or such later date as the Board shall
determine) following the commencement of a tender offer or exchange offer that
would result in a person or group becoming an Acquiring Person. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorpo rating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. Pursuant to the Rights Agreement,
the Company reserves the right to require prior to the occurrence of a
Triggering Event (as defined below) that, upon any exercise of Rights, a number
of Rights be exercised so that only whole shares of Preferred Stock will be
issued.
The Rights are not exercisable until the Distribution Date and
will expire at the close of busi ness on April 9, 2007, unless earlier redeemed
or ex changed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
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In the event that a person becomes an Acquir ing Person
(except pursuant to an offer for all out standing shares of Common Stock that
the independent directors determine to be fair to and otherwise in the best
interests of the Company and its stockholders), each holder of a Right will
thereafter have the right to receive, upon exercise, at the option of the Board
of Directors, (i) Common Stock, the issuance of which has been preapproved by
the North Carolina Utilities Commis sion (the "Commission"), (ii) one
one-hundredths of a share of Series A Cumulative Preferred Stock, the issu ance
of which has been preapproved by the Commission, and/or (ii) cash, property or
other securities of the Company, each of (i), (ii) and (iii) having a value
equal to two times the exercise price of the Right. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances speci fied in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void. However, Rights are not exercisable following the occurrence of the event
set forth above until such time as the Rights are no longer redeemable by the
Company as set forth below.
For example, at an exercise price of $100 per Right, each
Right not owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder to
purchase $200 worth of Common Stock (or other consider ation, as noted above)
for $100. Assuming that the Common Stock had a per share value of $20.00 at such
time, the holder of each valid Right would be entitled to purchase ten shares of
Common Stock for $100.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation
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(other than a merger which follows an offer described in the second preceding
paragraph), or (ii) fifty percent (50%) or more of the Company's assets, cash
flow or earning power is sold or transferred, each holder of a Right (except
Rights which previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the exercise price of the Right. The events
set forth in this para graph and in the second preceding paragraph are referred
to as the "Triggering Events."
At any time after a person becomes an Acquir ing Person and
prior to the acquisition by such person or group of fifty percent (50%) or more
of the outstand ing Common Stock, the Board may exchange the Rights (other than
Rights owned by such person or group which have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, or one one-hun dredths
of a share of Preferred Stock (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).
At any time until ten (10) days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (payable in cash, Common Stock or other consider
ation deemed appropriate by the Board). Immediately upon the action of the Board
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $.01 re demption price. The
foregoing notwithstanding, the Rights generally may not be redeemed for one
hundred eighty (180) days following a change in a majority of the Board as a
result of a proxy contest.
Until a Right is exercised, the holder there
of, as such, will have no rights as a stockholder of the
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Company, including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon the circum
stances, recognize taxable income in the event that the Rights become
exercisable for Common Stock, Preferred Stock or other consideration of the
Company or for common stock of the acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended
by the Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity, to make changes which do not adversely affect the interests of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment may be made at such time as the
Rights are not redeem able.
The Rights Agreement, dated as of April 9, 1997, between the
Company and First Union National Bank of North Carolina, as Rights Agent,
specifying the terms of the Rights and including the form of the Certificate of
Designation, Preferences and Rights setting forth the terms of the Preferred
Stock as an exhibit thereto, the press release announcing the declaration of the
Rights and a form of letter to the Company's stockholders describing the Rights
are attached hereto as exhibits and are incorporated herein by reference. The
foregoing description of the Rights is qualified in its entirety by reference to
such exhibits.
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Item 7. Financial Statements and Exhibits.
4 Rights Agreement, dated as of April 9, 1997, between Public
Service Company of North Caro lina, Incorporated and First
Union National Bank of North Carolina, as Rights Agent, in
cluding all exhibits thereto, incorporated herein by reference
to Exhibit 1 to the Com pany's Registration Statement on Form
8-A dated April 10, 1997.
20(a) Press Release of the Company dated April 9, 1997, incorporated herein
by reference to Ex hibit 2 to the Company's Registration State ment on
Form 8-A dated April 10, 1997.
20(b) Form of letter to the Company's stockholders describing the Rights,
incorporated herein by reference to Exhibit 3 to the Company's
Registration Statement on Form 8-A dated April 10, 1997.
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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 under signed thereto duly authorized.
Public Service Company of
North Carolina, Incorporated
Date: April 10, 1997 By:s/Jack G. Mason
Name: Jack G. Mason
Title:Vice President
Treasurer and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description Page
4 Rights Agreement, dated as of
April 9, 1997, between Public
Service Company of North
Caroli na, Incorporated and
First Union National Bank of
North Carolina, as Rights
Agent, including all exhibits
thereto, incorporated herein
by reference to Exhibit 1 to
the Company's Registration
Statement on Form 8-A dated
April 10, 1997. N/A
20(a) Press Release of the Company
dated April 10,1997, incorp-
orated herein by reference to
Exhibit 2 to the Company's
Registration Statement on Form
8-A dated April 10, 1997. N/A
20(b) Form of letter to the
Company's stockholders
describing the Rights,
incorporated herein by
reference to Exhibit 3 to the
Company's Registration
Statement on Form 8-A dated
April 10, 1997. N/A
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