SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A1
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 30, 1995
Security Capital Bancorp
(Exact name of registrant as specified in its charter)
North Carolina 0-12359 56-1354694
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
507 West Innes Street
Post Office Box 1387
Salisbury, North Carolina 28145-1387
(Address of principal executive offices)
Registrant's telephone number, including area code: (704) 636-3775
N/A
(Former name or former address, if changed since last report)
PAGE 1 OF 16
Item 1. Changes in Control of Registrant
Not Applicable.
Item 2. Acquisition or Disposition of Assets
Not Applicable.
Item 3. Bankruptcy or Receivership
Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable.
Item 5. Other Events
Security Capital Bancorp ("SCBC") was incorporated as
First Security Financial Corporation ("FSFC"). FSFC was formed
on January 28, 1983 as the holding company for Security Bank
and Trust Company ("Bank"). The corporate reorganization
through which the Bank became a subsidiary of FSFC was
effective on July 12, 1983.
On June 30, 1992, Omni Capital Group, Inc. was merged
with and into FSFC, and on that date FSFC changed its name to
"Security Capital Bancorp."
The following summary describes the characteristics of
the capital stock of SCBC.
General
SCBC's authorized capital stock consists of 25,000,000
shares of Common Stock, no par value, and 5,000,000 shares of
Preferred Stock, no par value. Because SCBC is a bank and
state savings bank holding company, the rights of SCBC to
participate in any distribution of assets of any of its
subsidiaries upon the subsidiary's liquidation or
reorganization or otherwise (and thus the ability of SCBC's
shareholders to benefit directly from such distribution) is
subject to the prior claims of creditors of that subsidiary,
except to the extent that SCBC itself may be a creditor of that
subsidiary with recognized claims. Further, claims on SCBC's
financial institution subsidiaries by creditors other than SCBC
include substantial obligations with respect to deposit
liabilities and may, from time to time, include liabilities on
purchased funds.
Preferred Stock
The Board of Directors of SCBC is authorized to fix the
preferences, limitations and relative rights of the SCBC
Preferred Stock and may establish series of such SCBC Preferred
Stock and determine the variations between series, and may
cause SCBC to issue any such shares without the approval of the
holders of SCBC Common Stock. No SCBC Preferred Stock is
outstanding as of the date hereof. If and when any SCBC
Preferred Stock is issued, the holders of SCBC Preferred Stock
may have a preference over holders of SCBC Common Stock in the
payment of dividends, upon liquidation of SCBC, in respect of
voting rights and in the redemption of the capital stock of
SCBC.
Common Stock
Dividends. The holders of SCBC Common Stock are
entitled to share ratably in dividends when and if declared by
the Board of SCBC from funds legally available therefor.
Voting Rights. Each holder of SCBC Common Stock has
one vote for each share held on matters presented for
consideration by the SCBC shareholders.
Classification of Board of Directors. The Board of
SCBC is divided into three classes, each serving three-year
terms, so that approximately one-third of the directors of SCBC
are elected at each annual meeting of the shareholders of SCBC.
Preemptive Rights. The holders of SCBC Common Stock
have no preemptive rights to acquire any additional shares of
SCBC.
Issuance of Stock. The North Carolina Business
Corporation Act ("NCBCA") permits, and the SCBC Amended and
Restated Articles of Incorporation ("Restated Articles")
authorize, the SCBC Board to issue authorized shares of SCBC
Common Stock, SCBC Preferred Stock and any other authorized
securities without shareholder approval. However, the SCBC
Common Stock is qualified for quotation on the National Market
System of the Nasdaq Stock Market, Inc., the rules of which
currently require shareholder approval of the issuance of
additional shares of SCBC Common Stock under certain
circumstances.
Liquidation Rights. In the event liquidation,
dissolution or winding-up of SCBC, whether voluntary or
involuntary, the holders of SCBC Common Stock will be entitled
to share ratably in any of its assets or funds that are
available for distribution to its shareholders after the
satisfaction of its liabilities (or after adequate provision is
made therefor) and after payment of liquidation preferences of
any outstanding SCBC Preferred Stock.
Size and Classification of the Board of Directors
Under its Restated Articles, SCBC's Board may not
number less than 9 or more than 30. The number of directors
may be fixed or changed from time to time, within this minimum
and maximum, by SCBC's Board. The Restated Articles and Bylaws
of SCBC also provide that its Board shall be divided into three
classes, with each class containing one-third of the total
number of directors as near as may be.
Shareholder Nominations
The Bylaws of SCBC establish procedures that
must be followed for holders to nominate individuals for
election to the Board of Directors of SCBC. Nominations
may be made by, or at the direction of, SCBC's Board
or may be made at a shareholders' meeting
by any shareholder of SCBC entitled to vote for the
election of directors at such meeting who complies with
certain notice procedures. Nominations by shareholders
must be made pursuant to timely notice in writing to
the Secretary of SCBC. To be timely, a shareholder's
notice must be received at the principal office of SCBC not
less than 50 days nor more than 75 days prior to the
shareholders' meeting; provided, however, that in the event
such applicable shareholders' meeting is not an annual meeting of
shareholders, notice by the shareholder to be timely must be
received no later than the close of business on the tenth day
following the day on which notice of the date of the shareholders'
meeting was mailed or public disclosure of such meeting was made,
whichever first occurs. Such shareholder's notice to the
Secretary shall set forth (a) as to each person whom the
shareholder proposes to nominate for election or re-election as
a director, (i) his name, age, business address and residence
address, (ii) his principal occupation or employment, (iii) the
class and number of shares of capital stock of SCBC which are
beneficially owned by him, and (iv) any other information
relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to
applicable regulations promulgated under the Securities
Exchange Act of 1934 ("1934 Act"); and (b) as to the
shareholder giving the notice (i) the name and record address
of the shareholder and (ii) the class and number of shares of
capital stock of SCBC which are beneficially owned by the
shareholder. SCBC may require any proposed nominee to furnish
such other information as may reasonably be required by SCBC to
determine the eligibility of such proposed nominee to serve as
an SCBC director. No person shall be eligible for election as
a director of SCBC at a shareholders meeting unless nominated
in accordance with these procedures.
Shareholder Meetings
Under the Bylaws of SCBC, a substitute annual meeting
or special meeting of shareholders may be called at any time,
upon not less than 10 nor more than 60 days notice, by or at
the direction of SCBC's Chairman of the Board, its Chief
Executive Officer, its President, a majority of its Board of
Directors, or, at any time, SCBC is not a "public corporation"
under the NCBCA, by any shareholder pursuant to the request of
the holders of at least 10% of all votes entitled to be cast on
any issue at the proposed meeting. SCBC is a "public
corporation."
Amendments of Restated Articles and Bylaws
SCBC's Restated Articles relating to the approval of
"Business Combinations" (discussed below) may be amended only
by the affirmative vote of the holders of 66.67% of SCBC's
outstanding voting shares, and all other provisions may be
amended by the vote of the majority of SCBC's voting shares
present at the shareholders' meeting at which such amendment
proposal is considered. Except with regard to emergency bylaws
which may be adopted and amended by the votes permitted by the
NCBCA, any amendment to the Bylaws of SCBC require a vote of
60% of all directors in office at the time such amendment is
submitted to a vote of the SCBC Board.
Business Combination Provisions
Certain provisions of SCBC's Restated Articles (the
"Fair Price Provisions") limit the ability of a "Related
Person" to effect certain transactions involving SCBC. A
"Related person" is defined in the Restated Articles to mean a
shareholder who beneficially owns,
alone or with his or its associates and affiliates, more
than 10% of the outstanding voting shares of SCBC. Such
transactions, which are referred to below collectively as
a "Business Combination," include any transaction in
connection with a combination, acquisition, merger or
purchase or sale of a substantial portion of the assets
of SCBC or a subsidiary thereof (a purchase or sale of 20%
or more of the total assets of SCBC or a subsidiary as of
the end of the most recent quarterly period being
deemed as "substantial") with, by or into a Related Person
which requires the approval of, or notice to and absence
of objection by, (i) any federal or state regulatory
authority of banks, thrifts or their holding companies,
or (ii) the Federal Trade Commission or the Antitrust
Division of the United States Department of Justice, but
excluding any reorganization, acquisition, merger, purchase
or sale of assets, or combination initiated by SCBC and
not involving a Related Person.
Under the Fair Price Provisions, a Business Combination
must (i) be approved by the holders of at least 66.67% of the
outstanding voting securities of SCBC, or (ii) comply with the
price and disclosure requirements described in the following
paragraph, in which case a Business Combination must be
approved by the affirmative vote of a majority of the
outstanding voting shares of SCBC entitled to vote on such
matter, or (iii) be approved by at least two-thirds of the
"Continuing Directors," which consist of those SCBC directors
who are unaffiliated with the Related Person and were directors
of SCBC before the Related Person became a Related Person, and
any successor of a Continuing Director who is unaffiliated with
the Related Person and is recommended to join the SCBC Board by
a majority of the Continuing Directors. These approval
provisions are less stringent than those contained in the North
Carolina Shareholder Protection Act (described below), which is
applicable to SCBC.
Under the price and disclosure requirements of the Fair
Price Provisions, (i) the aggregate consideration to be
received per share of SCBC Common Stock in the Business
Combination by SCBC's shareholders, other than the Related
Person, must not be less than the highest price per share paid
by such Related Person in acquiring its holdings of SCBC Common
Stock, (ii) the consideration to be received by SCBC's
shareholders, other than the Related Person, in the Business
Combination shall be in the same form and of the same kind,
except as to an SCBC shareholder who agrees otherwise, as the
consideration paid by the Related Person in acquiring any SCBC
Common Stock already owned by it (provided, if the Related
Person paid varying forms of consideration, the form of
consideration paid to SCBC's shareholders in the Business
Combination shall either be cash or the form used by the
Related Person to acquire the largest number of shares of SCBC
Common Stock previously acquired by it), and (iii) a proxy
statement in conformity with the 1934 Act, and the regulations
thereunder, shall be mailed to all SCBC shareholders and shall
contain (A) any recommendations as to the advisability or
inadvisability of such Business Combination which the
Continuing Directors choose to make and (B) the opinion of
reputable financial advisors as to the fairness of the terms of
the Business Combinations from the point of view of all SCBC
shareholders (other than the Related Person).
The Fair Price Provisions are designed to discourage
attempts to take over SCBC in nonnegotiated transactions
utilizing two-tier pricing tactics, which typically involve the
accumulation of a substantial block of the target corporation's
stock followed by a merger
or other reorganization of the acquired company on terms
determined by the purchaser. In such two-step takeover
attempts, the purchaser generally pays cash to acquire a
controlling interest in a company and acquires the remaining
equity interest by paying the remaining shareholders a
price lower than that paid to acquire the
controlling interest, often utilizing noncash consideration.
Although federal and state securities laws and
regulations require that disclosure be made to such
shareholders of the terms of such a transaction, these laws
provide no assurance that the financial terms of such a
transaction will be fair to shareholders or that the
shareholders can effectively prevent its consummation. The
Fair Price Provisions are intended to address some of the
effects of these gaps in federal and state securities law and
to prevent some of the potential inequities of two-step
takeover attempts by encouraging negotiations with
shareholders. Negotiated transactions may result in more
favorable terms to SCBC's shareholders because of such factors
as timing of all the transactions, tax effects on the
shareholders, and the fact that the nature and amount of the
consideration paid to all shareholders will be negotiated by
the parties at arm's-length rather than dictated by the
purchaser.
The Fair Price Provisions are designed to protect those
SCBC shareholders who have not tendered or otherwise sold their
shares to a Related Person in the initial step of a takeover
attempt to which the requisite majority of SCBC's shareholders
or Continuing Directors is not receptive by assuring that at
least the same price and form of consideration are paid to such
shareholders as were paid in the initial step of the
acquisition.
Constituencies
Under the SCBC Related Articles, SCBC's Board of
Directors, when evaluating any offer of a "person" which owns
10% or more of SCBC's outstanding Common Stock to make a tender
or exchange offer for any equity security of SCBC, to merger or
consolidate SCBC with another corporation, or to purchase or
otherwise acquire all or substantially all of the assets of
SCBC, shall, in connection with the exercise of its judgment in
determining what is in the best interests of SCBC and its
shareholders, give due consideration to (i) the social and
economic effects of the acceptance of such offer on SCBC's
depositors, borrowers, other customers, and employees, and on
the communities in which SCBC or any of its subsidiaries
operates or is located, and (ii) the ability of SCBC and its
subsidiaries to fulfill the objectives of a bank and state
savings bank holding company and financial institutions,
respectively, under applicable federal and state statutes and
regulations.
Statutory Provisions
The North Carolina Shareholder Protection Act (the
"Shareholder Protection Act") requires the affirmative vote of
95% of the voting shares of a corporation to approve a business
combination with another entity that is the beneficial owner,
directly or indirectly, of more than 20% of the voting shares
of the corporation or with an affiliate of the corporation
which at any time has been a 20% holder of such voting shares,
unless the transaction was approved by the corporation's
stockholders prior to such entity's acquisition
of 20% or more of the voting stock. A business
combination includes any transaction with another entity
that involves a merger or consolidation or a sale or
lease of all or any substantial part of the corporation's
assets to such entity, or a purchase or lease of assets
having a value of more than $5,000,000 in e x change
for securities of such entity. The 95% vote
requirement does not apply if certain fair price and
procedural requirements are satisfied. The Shareholder
Protection Act applies only to a "public corporation,"
which, under the NCBCA, is a corporation that has a class
of stock registered under the 1934 Act. SCBC has not
adopted a bylaw or charter provision electing not to be
subject to the Shareholder Protection Act and thus, it is
subject to the Act.
The North Carolina Control Share Acquisition Act (the
"Control Share Act") generally denies voting rights to those
shares acquired in an acquisition which gives a stockholder
effective voting control at one of three specified levels,
unless the right to vote such shares is approved by a majority
of "disinterested stockholders" of the corporation. Shares
acquired in an acquisition which brings the total voting power
of that stockholder to levels of 20%, 33.3% or more than 50% of
the outstanding voting power are control shares. The owner of
the control shares, officers of the corporation and directors
employed by the corporation are interested stockholders with
respect to the granting of voting shares to control shares.
The decision to grant voting rights to the control stockholder
must be voted upon at the next annual stockholders' meeting,
after the acquiring person files certain requests and other
information with the corporation. If voting rights are granted
to the control shares, other stockholders may have their shares
redeemed by the corporation at their fair value. The Control
Share Act does not apply to acquisitions of stock pursuant to a
merger or tender offer approved by the corporation's board.
The Control Share Act applies only to a "covered corporation,"
which, under the NCBCA, is a corporation with a class of stock
registered under the 1934 Act and which has not adopted a bylaw
opting out of the coverage of the Control Share Act. SCBC has
not adopted any such bylaw provision and thus is subject to the
Control Share Act.
Indemnification and Liability Limitation
SCBC's Bylaws provide that each present and former
director and officer of SCBC and its subsidiaries, and each
SCBC director or officer who, at the request of SCBC, served as
a director, officer, trustee or administrator of any other
entity, including any employee benefit plan of SCBC or its
subsidiaries, shall be indemnified and reimbursed for any
expenses, damages, costs, and payments, including (without
limitation) expenses of defense, including attorneys' and
experts' fees, and the amount of any judgment, money decree,
excise tax, fine, penalty, or settlement for which he or she
becomes liable by reason of, or any liabilities incurred in
consequence of, any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative to which such person is, or is threatened to be
made a party, to the full extent permitted by the NCBCA.
SCBC's Bylaws also reflect certain provisions of the NCBCA
applicable to indemnification (e.g., expense advances,
procedures to determine the right of a director, officer or
other person to indemnification, and the scope of the terms
"proceedings," "expenses," and "liabilities).
The SCBC Restate Articles provide that no director of
SCBC shall have personal liability arising out of any action
whether by or in the right of SCBC or otherwise for monetary
damages of more than $5,000 for any breach of duty as a
director, provided that this limitation of liability does not
apply in certain circumstances set forth in the NCBCA.
Item 6. Resignations of Registrant's Directors
Not Applicable.
Item 7. Financial Statements and Exhibits
Not Applicable.
Item 8. Change in Fiscal Year
Not Applicable.
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 hereunto duly authorized.
SECURITY CAPITAL BANCORP
Date: January 30, 1995 By: /c/ David B. Jordan
David B. Jordan, Vice Chairman and
Chief Executive Officer