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) February 21, 1995
Community Bank System, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-11716 16-1213679
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(State of (Commission File Number) (IRS Employer
incorporation) Identification No.)
5790 Widewaters Parkway, Dewitt, New York 13214
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(Address of principal executive offices) (Zip Code)
(315) 445-2282
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(Registrant's telephone number,
including area code)
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(Former name or former address, if changed since last report)
Exhibit Index is on Page 7
Page 1 of 7
Items 1-4. Not Applicable.
Item 5. Other Events.
On February 21, 1995, the Board of Directors of Community Bank System,
Inc., a Delaware corporation (the "Company"), declared a dividend payable
February 24, 1995 of one right (a "Right") for each outstanding share of common
stock, par value $1.25 per share ("Common Stock"), of the Company held of record
at the close of business on February 21, 1995 (the "Record Time"), or issued
thereafter and prior to the Separation Time (as hereinafter defined). The Rights
will be issued pursuant to a Stockholder Protection Rights Agreement, dated as
of February 21, 1995 (the "Rights Agreement"), between the Company and Community
Bank, National Association, a national banking association, as Rights Agent (the
"Rights Agent"). Each Right entitles its registered holder to purchase from the
Company, after the Separation Time, one share of Common Stock for $85.00 (the
"Exercise Price"), subject to adjustment.
The Rights will be evidenced by the Common Stock certificates until the
close of business on the earlier of (either, the "Separation Time") (i) the
tenth day (or such later date as the Board of Directors of the Company may from
time to time fix by resolution adopted prior to the Separation Time that would
otherwise have occurred) after the date on which any Person (as defined in the
Rights Agreement) (other than the Company, a majority-owned subsidiary of the
Company or an employee stock ownership or other employee benefit plan of the
Company or a majority-owned subsidiary of the Company) commences a tender or
exchange offer which, if consummated, would result in such Person's becoming the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock (any
Person having such Beneficial Ownership being referred to as an "Acquiring
Person") and (ii) the first date (the "Flip-in Date") of public announcement by
the Company or an Acquiring Person that an Acquiring Person has become such,
other than as a result of a Flip-over Transaction or Event (as defined below);
provided that if the foregoing results in the Separation Time being prior to the
Record Time, the Separation Time shall be the Record Time and provided further
that if a tender or exchange offer referred to in clause (i) is cancelled,
terminated or otherwise withdrawn prior to the Separation Time, such offer shall
be deemed never to have been made. The Rights Agreement provides that, until the
Separation Time, the Rights will be transferred with and only with the Common
Stock. Common Stock certificates issued after the Record Time but prior to the
Separation Time shall evidence one Right for each share of Common Stock
represented thereby and shall contain a legend incorporating by reference the
terms of the Rights Agreement (as such may be amended from time to time).
Notwithstanding the absence of the aforementioned legend, certificates
evidencing shares of Common Stock outstanding at the Record Time shall also
evidence one Right for each share of Common Stock evidenced thereby. Promptly
following the Separation Time, separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of record of Common Stock at
the Separation Time.
The Rights will not be exercisable until the Business Day (as defined in
the Rights
Page 2 of 7
Agreement) following the Separation Time. The Rights will expire on
the earliest of (i) the Exchange Time (as defined below), (ii) the close of
business on February 21, 2005 and (iii) the date on which the Rights are
redeemed as described below (in any such case, the "Expiration Time").
The Exercise Price and the number of Rights outstanding, or in certain
circumstances the securities purchasable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution in the event of a
Common Stock dividend on, or a subdivision or a combination into a smaller
number of shares of, Common Stock, or the issuance or distribution of any
securities or assets in respect of, in lieu of or in exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date occurs, the
Company shall take such action as shall be necessary to ensure and provide that
each Right (other than Rights beneficially owned by the Acquiring Person or any
affiliate or associate thereof, which Rights shall become void) shall constitute
the right to purchase from the Company, upon the exercise thereof in accordance
with the terms of the Rights Agreement, that number of shares of Common Stock of
the Company having an aggregate Market Price, on the date of the public
announcement of an Acquiring Person's becoming such (the "Stock Acquisition
Date") that gave rise to the Flip-in Date, equal to twice the Exercise Price for
an amount in cash equal to the then current Exercise Price. In addition, the
Board of Directors of the Company may, at its option, at any time after a
Flip-in Date and prior to the time that an Acquiring Person becomes the
Beneficial Owner of more than 50% of the outstanding shares of Common Stock,
elect to exchange all (but not less than all) of the then outstanding Rights
(other than Rights Beneficially Owned by the Acquiring Person or any affiliate
or associate thereof, which Rights become void) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of the Separation Time (the "Exchange Ratio"). Immediately upon such
action by the Board of Directors (the "Exchange Time"), the right to exercise
the Rights will terminate and each Right will thereafter represent only the
right to receive a number of shares of Common Stock equal to the Exchange Ratio.
In the event that prior to the Expiration Time the Company enters into,
consummates or permits to occur a transaction or series of transactions on or
after the Stock Acquisition Date in which, directly or indirectly, (A) the
Company shall consolidate or merge with any other Person or (B) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer) assets (i) aggregating more than 50% of the assets
(measured by either book value or fair market value) or (ii) generating more
than 50% of the operating income or cash flow, of the Company and its
subsidiaries (taken as a whole) to any other Person (other than the Company or
one or more of its wholly owned subsidiaries) or to two or more such Persons
which are affiliated or otherwise acting in concert or (C) any Acquiring Person
shall (i) obtain, with or without consideration, over any period of 12
consecutive calendar months, any additional shares of any class of capital stock
of the Company or any of its
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Subsidiaries equal in the aggregate to more than 1% of the outstanding
shares of such class, or securities exercisable or exchangeable for or
convertible into more than 1% of the outstanding shares of any class of capital
stock of the Company or any of its Subsidiaries (in each case other than as part
of a pro rata distribution to all holders of such stock or pursuant to the
exercise of rights or warrants, or the conversion or exchange of securities,
issued pro rata in such a distribution), (ii) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, to, from, or
with, as the case may be, the Company or any of its Subsidiaries, over any
period of 12 consecutive calendar months, assets (x) having an aggregate fair
market value of more than $15,000,000 or (y) on terms and conditions less
favorable to the Company than the Company would be able to obtain through
arm's-length negotiations with an unaffiliated third party, (iii) receive any
compensation for services from the Company or any of its Subsidiaries, other
than compensation for full-time employment as a regular employee at rates in
accordance with the Company's (or its Subsidiaries') past practices, or (iv)
receive the benefit, directly or indirectly (except proportionately as a
shareholder), over any period of 12 consecutive calendar months, of any loans,
advances, guarantees, pledges, insurance, reinsurance or other financial
assistance or any tax credits or other tax advantage provided by the Company or
any of its Subsidiaries involving an aggregate principal amount in excess of
$5,000,000 or an aggregate cost or transfer of benefits from the Company or
any of its Subsidiaries in excess of $5,000,000 or, in any case, on terms and
conditions less favorable to the Company than the Company would be able to
obtain through arm's-length negotiations with a third party, or (D) as a result
of any reclassification of securities (including any reverse stock split), or
recapitalization, of the Company, or any merger or consolidation of the Company
with any of its Subsidiaries or any other transaction or series of transactions
(whether or not with or into or otherwise involving an Acquiring Person), the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Company or any of its Subsidiaries which is
directly or indirectly owned by any Acquiring Person is increased by more than
1%, then the Company shall take such action as shall be necessary to ensure, and
shall not enter into, consummate or permit to occur such Flip-over Transaction
or Event until it shall have entered into a supplemental agreement with the
Person engaging in such Flip-over Transaction or Event (the "Flip-over Entity"),
for the benefit of the holders of the Rights, providing, that upon consummation
or occurrence of the Flip-over Transaction or Event (i) each Right shall
thereafter constitute the right to purchase from the Flip-over Entity, upon
exercise thereof in accordance with the terms of the Rights Agreement, that
number of shares of common stock of the Flip-over Entity having an aggregate
Market Price on the date of consummation or occurrence of such Flip-over
Transaction or Event equal to twice the Exercise Price for an amount in cash
equal to the then current Exercise Price and (ii) the Flip-over Entity shall
thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to the Rights Agreement. For purposes of the
foregoing description, the term "Acquiring Person" shall include any Acquiring
Person and its Affiliates and Associates (other than the Company, a wholly owned
Subsidiary of the Company or an employee stock ownership or other employee
benefit plan of the Company or a wholly owned Subsidiary of the Company),
counted together as a single Person (a "Flip-over Transaction or Event").
Page 4 of 7
The Board of Directors of the Company may, at its option, at any time prior
to the Flip-in Date, redeem all (but not less than all) the then outstanding
Rights at a price (calculated to the nearest one one-hundredth of a cent) equal
to the Exercise Price, as in effect at the Redemption Time, divided by 8500
(initially $.01 per Right) (the "Redemption Price"), as provided in the Rights
Agreement. Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash for
each Right so held.
The holders of Rights will, solely by reason of their ownership of Rights,
have no rights as stockholders of the Company, including, without limitation,
the right to vote or to receive dividends.
The Rights will not prevent a takeover of the Company. The Rights, however,
may have certain anti-takeover effects. The Rights may cause substantial
dilution to a person or group that acquires 15% or more of the Common Stock
unless the Rights are first redeemed by the Board of Directors of the Company.
Nevertheless, the Rights should not interfere with a transaction that is in the
best interests of the Company and its stockholders on or prior to the Flip-in
Date, because the Rights can be redeemed before the consummation of such
transaction.
As of February 21, 1995 there were 2,788,150 shares of Common Stock issued
(of which all shares were outstanding and no shares were held in treasury). As
long as the Rights are attached to the Common Stock, the Company will issue one
Right with each new share of Common Stock so that all such shares will have
Rights attached.
The Rights Agreement (which includes as Exhibit A the forms of Rights
Certificate and Election to Exercise) is attached hereto as an exhibit and is
incorporated herein by reference. The foregoing description of the Rights is
qualified in its entirety by reference to the Rights Agreement and such exhibits
thereto.
Item 6. Not Applicable.
Item 7. Exhibits.
(4) Rights Agreement, which includes as Exhibit A the forms of Rights
Certificate and Election to Exercise.
(28) Press release, dated February 21, 1995, issued by the Company.
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SIGNATURE
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 BANK SYSTEM, INC.
By /s/ SANFORD A. BELDEN
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Name: Sanford A. Belden
Title: President and CEO
Date: February 27, 1995
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EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
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(4) Stockholder Protection Rights Agreement,
dated as of February 21, 1995 (the "Rights
Agreement"), between Community Bank System, Inc.
(the "Company") and Community Bank, National
Association, as Rights Agent, including as
Exhibit A the forms of Rights Certificate and
of Election to Exercise.
(28) Press release, dated February 21, 1995,
issued by the Company.
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