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
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Date of Report (Date of earliest event reported): December 20, 1999
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CAMDEN NATIONAL CORPORATION
(Exact name of Registrant as specified in charter)
Maine 01-28190 01-0413282
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
Two Elm Street, Camden, Maine 04843
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(Address of principal executive offices) (Zip Code)
(207) 236-8821
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(Registrant's telephone number, including area code)
Item 2 - Acquisition or Disposition of Assets
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Acquisition of KSB Bancorp, Inc. After the close of business on December
20, 1999, following receipt of all required regulatory and stockholder
approvals, Camden National Corporation, a Maine corporation ("Camden"),
completed the acquisition of KSB Bancorp, Inc., a Delaware corporation ("KSB"),
pursuant to the terms and conditions of an Agreement and Plan of Merger, dated
as of July 27, 1999 (the "Merger Agreement"), by and among Camden, Camden
Acquisition Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary
of Camden, KSB and Kingfield Savings Bank, a Maine chartered stock savings bank
and wholly-owned subsidiary of KSB. The acquisition was effected by a series of
transactions resulting in the merger of KSB with and into Camden (the "Merger"),
with Camden as the surviving corporation.
Pursuant to the Merger Agreement, holders of KSB common stock, par value
$.01 per share ("KSB Common Stock"), are entitled to receive, for each such
share held by them on December 20, 1999 at 5:01 p.m. (the "Effective Time"),
1.136 shares of Camden common stock, no par value ("Camden Common Stock"). Any
holder of KSB Common Stock who would otherwise be entitled to receive an amount
of cash equal to the product of such fraction and $_____, subject to applicable
withholding taxes.
Approximately [1.5] million shares of Camden common stock will be issued in the
Merger, bringing the total number of Camden shares outstanding to approximately
[8] million.
In addition, at the Effective Time, all outstanding and unexercised options
to purchase shares of KSB Common Stock were automatically converted into options
to purchase shares of Camden Common Stock. Camden has assumed all of the KSB
options subject to the terms and conditions of KSB's stock option plans under
which the assumed KSB options were granted. The number of shares of Camden
Common Stock purchasable upon exercise of any KSB option is equal to the number
of shares of KSB Common Stock that were purchasable prior to the Effective Time
multiplied by the exchange ratio of 1.136, rounding to the nearest whole share,
and the per share exercise price of each KSB option was adjusted by dividing the
per share exercise price of each KSB option by the exchange ratio of 1.136,
rounding to the nearest cent.
The Merger will be accounted for as a pooling of interests under generally
accepted accounting principles. A copy of the press release announcing the
effectiveness of the Merger is filed as Exhibit 99.5 hereto.
Board of Directors. As of the Effective Time, the following persons, who
were immediately prior to the Effective Time serving as members of the board of
directors of KSB, became members of the board of directors of Camden:
Name Term
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Winfield F. Robinson 2002
Theodore C. Johanson 2001
Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits
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(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Financial statements of the
business acquired are included as Exhibits 99.1 and 99.2 hereto.
(b) PRO FORMA FINANCIAL INFORMATION. Unaudited pro forma financial information
for the three years ended December 31, 1998, 1997 and 1996, and as of and
for the three months ended September 30, 1999, are included as Exhibit 99.3
and Exhibit 99.4, respectively, hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Company has duly caused this report to be filed on its behalf by
the undersigned thereunto duly authorized.
CAMDEN NATIONAL CORPORATION
Dated: December 30, 1999 By: /s/ Robert W. Daigle
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Name: Robert W. Daigle
Title: President and
Chief Executive Officer
NOTES TO THE UNAUDITED PRO FORMA
CONDENSED COMBINING BALANCE SHEET
Note 1. Basis of Presentation
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The pro forma information presented is not necessarily indicative of the
results of operations or the combined financial position that would have
resulted had the merger been consummated at the beginning of the periods
indicated, nor is it necessarily indicative of the results of operations in
future periods or the future financial position of the combined company.
Under generally accepted accounting principles, the transaction will be
accounted for as a pooling of interests and, as such, the assets and liabilities
of KSB will be combined with those of Camden at book value. In addition, the
statements of income of KSB will be combined with the statements of income of
Camden as of the earliest period presented. The unaudited pro forma combining
statements of income give effect to the merger as if the merger occurred at the
beginning of the earliest period presented. The unaudited pro forma combining
balance sheet assumes the merger was consummated on September 30, 1999.
Note 2. Accounting Policies and Financial Statement Classifications
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The accounting policies of both companies are in the process of being
reviewed for consistency. As a result of this review, certain conforming
accounting adjustments may be necessary. The nature and extent of these
adjustments have not been determined but are not expected to be significant.
Note 3. Merger and Restructuring-Related Charges
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The following table provides detail of the estimated charges by type, post-
tax:
Estimated
Type of Cost Costs (in thousands)
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Personnel $ 165
Technology and operations 300
Facilities 65
Transaction cost and other 1,600
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Total $2,130
Personnel-related costs consist primarily of charges related to employee
severance, termination of certain employee benefit plans and employee assistance
costs for separated employees. Technology and operations costs include
accelerated depreciation in excess of normal scheduled depreciation and certain
liabilities that will be incurred as a result of the elimination of duplicate
systems. Facilities charges consist of lease termination costs and other
facilities-related exit costs, as well as accelerated depreciation in excess of
normal depreciation, resulting from consolidation of duplicate headquarters and
operational facilities.
These charges have not been reflected in the Unaudited Pro Forma Combining
Statement of Income since they are nonrecurring. The unaudited pro forma
financial information does not give effect to any cost savings in connection
with the pending acquisition.
The unaudited pro forma financial information presented herein does not
reflect the impact of any divestitures that may be required as part of the
combination.
Note 4. Pro Forma Adjustments
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Pro forma adjustments to accrued expenses and other liabilities and
retained earnings reflect the $2.4 million merger and restructuring-related
charge and a $270,000 reduction in the deferred tax liability for the
anticipated tax benefit of such charge. For additional information on the
merger-and restructuring-related charges see Note 3.
Note 5. Stock Repurchase Plan
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Camden has had a stock repurchase plan seeking to repurchase stock since
September 1996. The original plan was to seek to repurchase up to five percent
of its outstanding shares. On October 13, 1998, the Camden Board modified the
plan to increase to $6 million the maximum amount of outstanding shares to be
repurchased during the subsequent twelve month period. During the period since
May 1, 1997, a date two years prior to the Company's discussions with KSB, the
Company repurchased 274,682 shares. (See Note 7).
Note 6. Stock Exchange
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The pro forma stockholders' equity accounts of Camden have been adjusted to
reflect the issuance of shares of Camden common stock in exchange for all of the
outstanding shares of KSB common stock, and the retirement of KSB's treasury
stock.
The 1,481,800 shares of Camden common stock expected to be issued pursuant
to the acquisition of KSB are based upon 1,304,401 net KSB shares outstanding as
of August 31, 1999 and the exchange ratio of 1.136 shares of Camden common stock
for each share of KSB common stock.
Note 7. Stock Reissuance
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In connection with the merger, Camden expects to reissue approximately
125,000 shares of common stock pursuant to a registration statement on Form S-3
under the Securities Act of 1933, as amended. This share reissuance is required
for the proposed transaction to be accounted for as pooling of interests in
accordance with GAAP. There can be no assurances that the estimated share
reissuance will be more than or less than this estimate. The unaudited Pro Forma
Combining Balance Sheets have been adjusted to reflect this transaction.
All issuances are assumed to occur on June 30, 1999, at Camden's closing
price of $20.875 per share and are assumed to be issued from treasury shares
with an average book value of $17.90 per share as of June 30, 1999.
EXHIBIT INDEX
Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated as of July 27, 1999, by and
among Camden National Corporation, Camden Acquisition
Subsidiary, Inc., KSB Bancorp, Inc., and Kingfield Savings
Bank. (Incorporated by reference to the Current Report on Form
8-K filed by Camden National Corporation on August 9, 1999.)
23.1 Consent of Berry, Dunn, McNeil & Parker, LLC relating to the
financial statements of Camden and KSB.
99.1 Financial Statements of KSB Bancorp, Inc. at and for the
periods ended December 31, 1998. (Incorporated by reference to
the Annual Report on Form 10-KSB filed by KSB Bancorp, Inc. on
March 31, 1999.)
99.2 Unaudited Financial Statements of KSB Bancorp, Inc. at and for
the period ended September 30, 1999. (Incorporated by reference
to the Quarterly Report on Form 10-QSB filed by KSB Bancorp,
Inc. on November 15, 1999.)
99.3 Unaudited Pro Forma Financial Information as of and for the
three years ended December 31, 1998, 1997 and 1996.
(Incorporated by reference to the Registration Statement on
Form S-4 filed by Camden National Corporation on October 5,
1999.)
99.4 Unaudited Pro Forma Financial Information as of and for the
three months ended September 30, 1999.
99.5 Press Release of Camden National Corporation, dated
December 20, 1999.