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) December 16, 1998
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Susquehanna Bancshares, Inc.
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-10674 23-2201716
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
26 North Cedar Street, Lititz, Pennsylvania 17543
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (717) 626-4721
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Not Applicable
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(Former Name or Address, if Changed Since Last Report)
Item 5. Other Events.
On December 16, 1998, Susquehanna Bancshares, Inc., a Pennsylvania business
corporation registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended ("Susquehanna"), consummated the transactions
contemplated in the Agreement and Plan of Affiliation dated April 13, 1998 (the
"Affiliation Agreement") between and among Susquehanna, Susquehanna Bancshares
West, Inc., a Pennsylvania business corporation and a wholly-owned subsidiary of
Susquehanna ("Susquehanna West"), Cardinal Bancorp, Inc., a Pennsylvania
business corporation registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended ("Cardinal"), and the First American National
Bank of Pennsylvania, a national banking association and a wholly-owned
subsidiary of Cardinal ("FANBP"). A copy of the Affiliation Agreement was
attached to Susquehanna's Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on July 2, 1998, and amended on August 5,
1998, August 6, 1998 and December 15, 1998. A copy of the Press Release
announcing the consummation of the transaction contemplated in the Affiliation
Agreement is filed as an exhibit to this Current Report on Form 8-K.
The following is a summary of the transaction consummated pursuant to the
Affiliation Agreement. This summary is qualified in its entirety by reference
to the full text of the Affiliation Agreement, which is incorporated herein by
reference.
General
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Pursuant to the Affiliation Agreement, Susquehanna West merged with and into
Cardinal (the "Merger"), with Cardinal as the surviving entity (sometimes
referred to as the "Surviving Corporation"), as a result of which Cardinal
became a direct wholly-owned subsidiary of Susquehanna, and FANBP became a
second-tier subsidiary of Susquehanna. The name of the Surviving Corporation is
"Susquehanna Bancshares West, Inc."
At 11:59 p.m. on December 16, 1998 (the "Effective Time"): (i) the articles of
incorporation and bylaws of Susquehanna West in effect immediately prior to the
Effective Time became the articles of incorporation and bylaws of the Surviving
Corporation, and (ii) the directors and officers of Susquehanna West immediately
prior to the Effective Time became the directors and officers of the Surviving
Corporation. At and immediately following the Effective Time, the directors of
FANBP consisted of the persons who were the directors of FANBP immediately prior
to the Effective Time. Susquehanna may recommend for appointment to the FANBP
board up to two other persons (who are reasonably acceptable to the FANBP board)
to be elected to the FANBP board, to hold office until the next annual meeting
of FANBP. Additionally, Clyde R. Morris (who was Chairman of the Cardinal board
immediately prior to consummation of the Merger) shall become a member of
Susquehanna's board of directors effective as of December 16, 1998. In
accordance with the Affiliation Agreement and resolutions adopted on April 15,
1998 by Susquehanna's board, Susquehanna has also agreed that upon expiration of
Mr. Morris's term, Susquehanna's board will nominate and recommend to
Susquehanna's shareholders, at the subsequent annual meeting of shareholders,
the election to Susquehanna's board of directors of a member of FANBP's board of
directors who meets the eligibility requirements for directors of Susquehanna
(such person to be proposed by the FANBP board and agreed to by Susquehanna,
which agreement shall not be unreasonably withheld).
Exchange Ratio; Exchange
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As consideration for all of the outstanding capital stock of Cardinal,
Susquehanna exchanged the outstanding Cardinal common stock, par value $.50 per
share (the "Cardinal Common Stock"), for common stock of Susquehanna, par value
$2.00 per share (the "Susquehanna Common Stock"), at the exchange rate (the
"Exchange Ratio") provided in the Affiliation Agreement.
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At the Effective Time of the Merger, all of the 990,000 shares of Cardinal
Common Stock which were issued and outstanding were converted into the right to
receive a total of 2,027,520 shares of Susquehanna Common Stock at an Exchange
Ratio of 2.048 shares of Susquehanna Common Stock for each share of Cardinal.
An additional 192,512 shares of Susquehanna Common Stock were registered and
reserved to fund the Cardinal Options (discussed below). The Exchange Ratio was
based on the average price per share of Susquehanna Common Stock before closing
of $21.25. The average price per share of Susquehanna Common Stock before
closing was determined by adding the price at which Susquehanna Common Stock was
reported to have closed by the Nasdaq Stock Market over the period of 10
business days ending on the second business day preceding the date set for the
Closing, and dividing such total by 10.
Note that if the average price per share of Susquehanna Common Stock before
closing had been greater than $26.67 per share, Cardinal could have terminated
the Affiliation Agreement upon written notice within one business day of such
determination. While the Affiliation Agreement gave Susquehanna the right to
terminate the Affiliation Agreement if the average price per share of
Susquehanna Common Stock before closing was less then $22.67 per share,
Susquehanna chose not to exercise such right. The Affiliation Agreement also
provided that if the Merger was not consummated by December 31, 1998, then
either party could have terminated the Affiliation Agreement. Because the
Merger was consummated on December 16, 1998, this provision was not applicable.
The shares of common stock of Susquehanna West and FANBP issued and outstanding
immediately prior to the Effective Time remain outstanding and unchanged after
the Merger, and now constitute all of the issued and outstanding shares of the
capital stock of the Surviving Corporation and FANBP, respectively. Presently,
the Surviving Corporation owns all of the capital stock of FANBP and Susquehanna
owns all of the shares of the Surviving Corporation.
Within five business days after the Effective Time, Susquehanna shall cause to
be sent to each person who immediately prior to the Effective Time was a holder
of record of Cardinal Common Stock, transmittal materials and instructions for
surrendering certificates for Cardinal Common Stock in exchange for the number
of whole shares of Susquehanna Common Stock to which such person is entitled
pursuant to the Exchange Ratio.
No certificates for fractional shares of Susquehanna Common Stock will be
issued; rather, Susquehanna will furnish to any holder of Cardinal Common Stock
entitled to a fractional share a check for an amount of cash equal to the
fraction of a share of Susquehanna Common Stock represented by the certificates
so surrendered in accordance with the Exchange Ratio.
Cardinal Options
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At the Effective Time, all options outstanding and disclosed to Susquehanna in
accordance with the terms of the Affiliation Agreement (collectively, the
"Cardinal Options") remained outstanding and shall continue to do so for the
remainder of their terms and in accordance with the terms of the respective
Cardinal Options. At the Cardinal Effective Time, the Cardinal Options were, by
virtue of the Merger and without any action on the part of Cardinal or the
holder of any of the Cardinal Options, whether the same were vested or
exercisable, assumed by Susquehanna and now constitute an option to acquire, on
the same terms and conditions as were applicable under such assumed Cardinal
Options, a number of shares of Susquehanna Common Stock equal to the product of
the Exchange Ratio and the number of shares of Cardinal Common Stock subject to
such Cardinal Options. The option exercise price per share of Susquehanna
Common Stock shall be equal to the option exercise price per share of Cardinal
Common Stock divided by the Exchange Ratio (the option price per share, as so
determined, being rounded upward to the nearest full cent).
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Item 7. Financial Statements and Exhibits.
(c) Exhibits. Reference is made to the Exhibit Index annexed hereto
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and made a part hereof.
SIGNATURES
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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.
SUSQUEHANNA BANCSHARES, INC.
Date: December 22, 1998 By: /s/ Robert S. Bolinger
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Robert S. Bolinger
President and Chief Executive
Officer
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EXHIBIT INDEX
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Exhibit
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99 Press Release of the Registrant, Dated December 17, 1998, Regarding
Consummation of the Merger
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