Attached files
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| 8-K - STOCK REPURCHASE PROGRAM - AMERICAN CHURCH MORTGAGE CO | form8k020210.htm |
Exhibit 99.1
February
2, 2010
Re:
Stock Repurchase Program
Dear
American Church Mortgage Company Shareholder:
This letter is to bring to your
attention and summarize a Stock
Repurchase Program just adopted by the Board of Directors of American
Church Mortgage Company (“ACMC” or the “Company”). Recently, the
Board determined that it is in the best interest of shareholders to have an
opportunity to convert their shares of ACMC common stock (“Shares”) into ACMC’s
Series C Secured Investor Certificates (the “Certificates”) at a conversion rate
of $5.00 per Share. The minimum repurchase amount will be for 200
Shares, and repurchases will be in $1,000 increments. Thus, if a shareholder
elects to convert his or her Shares into Certificates, for every 200 Shares
exchanged he or she will receive one $1,000 principal amount Certificate, due in
13 to 20 years paying quarterly interest from 6.25% to 7.25% per year, depending
on the maturity selected. Shareholders may select the
interest rate and the term for their Certificate(s) (subject to availability) on
the enclosed form. Shareholders who own less than 200 shares do not
qualify to participate in the Stock Repurchase Program.
Why did the Board authorize this Stock
Repurchase Program?
The Board has determined that, with the
exception of a very thinly traded market in the Company’s stock in which Shares
traded at prices ranging from $.75 to $3.00 per Share during the last year,
shareholders do not have a viable means of liquidating their
Shares. The Board believes that some shareholders may instead prefer
to own a Certificate that has a specific maturity date, pays a specified rate of
interest, and is senior, secured debt of the Company, collateralized by specific
Company assets. The
Board and Management make no recommendation to shareholders as to whether the
exchange is the right thing to do for each shareholder. Nevertheless, the
Board believes that the exchange program is fair to shareholders and to the
Company, and may be elected by many shareholders who prefer to own Certificates
rather than Shares at this time.
If I elect to exchange my Shares for
Certificates, must I exchange all of my Shares?
Yes. If a shareholder elects
to exchange their Shares for Certificates, they must exchange all Shares of ACMC that they
own, directly or indirectly. Thus, if a person owns Shares in his
name, other Shares in his and his wife’s name, and additional Shares in an IRA,
he must exchange all Shares owned in all three different
registrations. If the shareholder own 215 Shares of ACMC stock and
elects to participate, he would receive one $1,000 Certificate, plus cash of
$5.00 per Share for the odd-lot 15 Shares ($75.00) over the 200 converted
Shares.
Can I just exchange my Shares for
cash?
No. The Program is specifically
intended to exchange Shares for Certificates, with the exception of odd-lots
over 200 Share increments. Thus, Shareholders who own less than 200
shares are not eligible for the Stock Repurchase Program.
Must I make a decision to exchange
now?
No. The Repurchase Program is intended
to remain open until further notice or until 500,000 Shares are exchanged for
Certificates on a first-come, first-served basis. Since the Company does not
know how many shareholders will elect to exchange their Shares, the duration of
the Program cannot be determined. However, the Program may be
terminated by the Board at any time upon 10 days’ notice to
shareholders.
If I wish to exchange my Shares, what
must I do?
If you believe that exchanging your
Shares of ACMC common stock for the Company’s Series C Secured Investor
Certificates is right for you, please complete the enclosed form and return it
in the envelope provided. We will immediately send you a Prospectus
that describes in detail the Series C Secured Investor
Certificates. In addition, we will send a confirmation showing which
Certificate(s) you have selected. You then must mail to us a signed stock power,
your stock certificate(s) (if applicable) and an account
application. You will commence earning interest on your new
Certificate(s) on the effective date of your registration, unless it is within
15 days of the end of a calendar quarter. In such event, you will receive a
dividend on your Shares for that full quarter, and commence earning interest on
your certificate(s) at the beginning of the next quarter.
Are there tax consequences to me if I
exchange my Shares for Certificates?
There probably will be tax consequences
with respect to Shares that are not held in a retirement
account such as an IRA or 401(k). If you paid more than $5.00 for
your ACMC Shares, the process of exchanging them for Certificates at a
conversion rate of $5.00 per Share may give rise to a long or short-term capital
loss for the difference between what you paid for your Shares and the $5.00
exchange rate. Conversely, if you paid less than $5.00 for your Shares, you may
have a capital gain upon exchange. The foregoing is for informational purposes
only, and the Company is not providing you with tax
advice. Accordingly, if tax implications weigh upon your decision, we
advise you to seek competent tax counsel to assist you in this
respect.
Can I change my mind and withdraw
from the Repurchase Program?
Yes. Even
after you have requested to participate, you may withdraw at any time
before we have redeemed your Shares.
If I have other questions, is there
someone I can call to discuss this program further?
Yes. You may certainly call your
securities broker, or you may call the Company at 1-800-815-1175, extension
127.
We
encourage you to carefully consider the Stock Repurchase Program to determine if
an election to convert your Shares into the Company’s Series C Secured Investor
Certificates is in your best interest. If you have further questions,
or wish to receive a Prospectus describing the Series C Certificates, please
contact the Company at 1-800-815-1175, ext. 127.
Very
truly yours,
Board of
Directors
American
Church Mortgage Company
AMERICAN
CHURCH MORTGAGE COMPANY
STOCK
REPURCHASE PROGRAM
RESERVATION
FORM
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«Name»
«Address_1»
«Zip_Combo»
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Shareholder
Number:
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«HOLDER_IDENTIFIER»
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Number
of Shares Certificated:
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«Stock_Certificate»
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|
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Number
of Shares in Book Entry:
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«Book_Entry»
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|
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Total
Number of Shares Owned:
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«Shares»
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Dear
Shareholder:
If you
are interested in exchanging your Shares of American Church Mortgage Company
Common Stock for Series C Secured Investor Certificates, please make your
reservation below. Currently your exchange would be:
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Number
of Shares of Common Stock Currently Owned:
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«Shares»
|
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Number
of Certificates you will receive if you Exchange:
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«Srs_C_Ctfs»
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Cash
for Odd-Lots Shares:
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«Cash»
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PLEASE
MAKE YOUR RESERVATION BELOW.
YOU
MUST SELECT IN $1,000 INCREMENTS:
|
Certificate
Term
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Interest
Rate %
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Amount
Requested
($1,000
Increments):
|
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13
Year
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6.25%
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|
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14
Year
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6.25%
|
|
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15
Year
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6.35%
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|
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16
Year
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6.50%
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|
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17
Year
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6.65%
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|
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18
Year
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6.75%
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19
Year
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7.00%
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20
Year
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7.25%
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|
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Total
Requested (Must Agree to the Amount Shown)
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«Srs_C_Ctfs»
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All
registered owners must sign and date this form below. Please
return in the envelope provided. Upon receipt of this form, we
will send you a Prospectus for your consideration. Please
note: this form is only a reservation form; you will need to complete
additional paperwork for an exchange to occur. If you have
any questions, please contact the Company at 1-800-815-1175 ext.
127.
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_______________________________________ ____________________________________________________
Signature of Owner (Date) Signature of
Co-Owner (if applicable)
(Date)
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This
reservation form is not an offer to sell nor a solicitation of an offer to
buy these securities. Offers may be made only by means of
Prospectus to which reference is made for the complete information
authorized in the sale of these securities including Risk
Factors. Offers and sales may be made only in states where the
Certificates have been registered (or where registration exemptions are
available).
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