SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): January 20, 1998
COMMUNITY FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Tennessee 0-28496 62-1626938
(States or other (Commission File Number)(IRS Employer
jurisdiction of Identification No.)
Incorporation)
401 Church Street
Second Floor
Nashville, Tennessee 37219
(Address of principal executive offices)
Registrant's telephone number, including area code: (615) 271-2025
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ITEM 5. OTHER EVENTS
The board of directors of Community Financial Group, Inc. (the
"Company") has declared a dividend of one common share purchase right (a
"Right") for each outstanding share of common stock, no par value (the
"Common Shares"), of the Company. The dividend is payable on February 5,
1998 (the "Record Date"), to the shareholders of record on that date.
Each Right entitles the registered holder to purchase from the Company one
share of the Company's Common Stock at a price of $55.00 per Common Share
(the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Shareholders Rights Agreement (the
"Shareholders Rights Agreement") between the Company and Registrar and
Transfer Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15% or more of the
Common Shares, directly or indirectly, including through the acquisition of
warrants, without the prior approval of the board of directors, including a
majority of "Continuing Directors," as that term is defined in the
Shareholders Rights Agreement, or (ii) 10 business days (or such later date
as may be determined by action of the board of directors before such time
as any person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 15% or more of the
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record Date, by such
Common Share certificate with a copy of a Summary of Rights attached
thereto.
The Shareholders Rights Agreement provides that, until the
Distribution Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the
Shareholders Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Shares 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 Common Shares 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 the Common Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on February 4, 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.
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The Purchase Price payable, and the number of Common Shares or
other securities or property issuable, upon exercise of the 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, the Common Shares, (ii) upon the grant to holders of
the Common Shares of certain rights or warrants to subscribe for or
purchase Common Shares at a price, or securities convertible into Common
Shares with a conversion price, less than the then-current market price of
the Common Shares or (iii) upon the distribution to holders of the Common
Shares of evidences of indebtedness or assets (excluding regular periodic
cash dividends paid out of earnings or retained earnings or dividends
payable in Common Shares) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights and the number of Common Shares
issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock dividend on the
Common Shares payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case, before the
Distribution Date.
If the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or
earning power are sold, proper provision will be made so that each holder
of a Right will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will from the date of the
first public announcement of the Acquiring Person's acquisition have the
right to receive upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right or, if there is an
insufficient number of authorized and unissued Common Shares to allow the
full exercise of the Rights, a package of other securities or property of
the Company and/or cash which the board of directors determines with the
advice of an investment banking firm to be equivalent to such number of
Common Shares.
At any time after any Person becomes an Acquiring Person and
before the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the board of directors of the Company may
exchange the Rights (other than Rights owned by such person or group which
will have become void), in whole or in part, at an exchange ratio of one
Common Share, per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. At the Company's option, fractional Common
Shares may be issued which may, at the election of the Company, be
evidenced by depositary receipts. If fractional Common Shares are not
issued, an adjustment in cash will be made in lieu thereof based on the
market price of the Common Shares on the last trading day before the date
of exercise.
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At any time before the close of business ten days after the date
of the first public announcement of the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of
the outstanding Common Shares, 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"), payable in cash or in shares of the Company's
stock. If, however, there is an Acquiring Person at the time, a majority
of Continuing Directors must concur in the redemption of the Rights. The
redemption of the Rights may be made effective at such time on such basis
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.
The terms of the Rights may be amended by the board of directors
of the Company without the consent of the holders of the Rights, including
an amendment to lower certain thresholds described above to not less than
the greater of (i) the sum of .001% plus the largest percentage of the
outstanding Common Shares then known to the Company to be beneficially
owned by any person or group of affiliated or associated persons and (ii)
10%, except that from and after such time as there is an Acquiring Person
no such amendment may adversely affect the interests of the holders of the
Rights.
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.
The Rights have certain anti-takeover effects. The Rights may
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 Company's Board of Directors prior to the time that the
person or group became an Acquiring Person, since until such time the
Rights may be redeemed by the Company at a price of $0.01 each.
ITEM 7(c) EXHIBITS.The following items are filed as exhibits to this Form
8-K:
Exhibit No. Description of Document
4.1 Rights Agreement dated as of January 21, 1998 between
Community Financial Group, Inc. and Registrar and Transfer
Company, as Rights Agent, including Exhibit A thereto (Form
of Right Certificate and Forms of Assignment and Election to
Purchase) and Exhibit B thereto (Summary of Rights to
Purchase Common Shares). Incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form
8-A filed January 26, 1998.
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4.3 Form of press release announcing the declaration of the
rights. Incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form 8-A filed January
26, 1998.
4.4 Form of letter to shareholders announcing the declaration of
the rights. Incorporated by reference to Exhibit 4.3 to the
Company's Registration Statement on Form 8-A filed January
26, 1998.
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SIGNATURES
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 thereunto duly authorized.
COMMUNITY FINANCIAL GROUP, INC.
Date: January 26, 1998 By:/s/ Mack Linebaugh
Mack Linebaugh
Its: President
