SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
UNDER SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No.2)
COMMERCIAL NATIONAL FINANCIAL CORPORATION
(Name of the Issuer)
COMMERCIAL NATIONAL FINANCIAL CORPORATION
CB MERGER COMPANY
(Names of Persons Filing Statement)
COMMON STOCK
(Title of Class of Securities)
202216107
(Cusip Number of Class of Securities)
JEFFREY S. BARKER Copy to: MATT G. HREBEC
PRESIDENT AND CEO FOSTER, SWIFT, COLLINS & SMITH, P.C.
COMMERCIAL NATIONAL FINANCIAL CORPORATION 313 SOUTH WASHINGTON SQUARE
101 NORTH PINE RIVER LANSING, MI 48933
P.O. BOX 280 (517) 371-8100
ITHACA, MI 48847
(989) 875-4144
(Name, Address and Telephone Numbers of Person Authorized to Receive Notices and
Communications on Behalf of the Persons Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under
the Securities Exchange Act of 1934 ("the Exchange Act").
b. [ ] The filing of a registration statement under the Securities Act
of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [ ]
Check the following box if the filing is a final amendment reporting the results
of the transaction: [ ]
CALCULATION OF FILING FEE
Transaction Valuation Amount of Filing Fee
--------------------- --------------------
$ 8,750,000 (1) $ 1,108.63
(1) The transaction valuation was determined by multiplying $12.50 per
share, the proposed per share cash purchase price for shares that
will be eliminated by the merger, by 700,000 shares, the number that
the issuer estimates will be eliminated by the merger.
[X] Check the box if any part of the fee is offset as provided by
Section 240.0-11(a)(2) and identify the filing with which the
offsetting fee was previously paid. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
Amount Previously Paid: $1,108.63 Filing Party: Commercial National
Form or Registration No.: Preliminary Schedule 14A Financial Corporation
Date Filed: November 23, 2004
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THIS TRANSACTION, PASSED UPON THE
MERITS OR FAIRNESS OF THIS TRANSACTION OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THE DISCLOSURE IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
INTRODUCTION
This Amendment No. 2 to the Rule 13e-3 Transaction Statement on Schedule
13E-3 is filed by Commercial National Financial Corporation, a Michigan
corporation (the "Company") and CB Merger Company, a Michigan corporation ("CB
Merger Co.") pursuant to Section 13(e) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and Rule 13e-3 thereunder in connection with the
proposed merger of the Company and CB Merger Co., a wholly owned subsidiary of
the Company, in which the Company will be the surviving corporation. Upon
approval of an Agreement and Plan of Merger (the "Plan of Merger") by the
Company's shareholders, it is expected that the merger will be effected by the
filing of a certificate of merger with the Michigan Department of Labor and
Economic Growth.
Pursuant to the Plan of Merger, CB Merger Co. will merge with and into the
Company. Each shareholder of the Company who owns fewer than 4,000 shares of
Common Stock immediately before the effective time of the merger will receive
$12.50 per share in cash, without interest, and each shareholder of the Company
who own 4,000 or more shares immediately before the effective time of the merger
will continue to hold the same number of shares after the merger and will not
receive any cash. If the merger is completed, it is expected that the Company
will have fewer than 300 shareholders of its Common Stock and will terminate the
registration of its Common Stock under the Exchange Act.
Filed as Exhibits (a)(1) and (a)(2), respectively, are a Notice of
Special Meeting of Shareholders and Proxy Statement (the "Proxy Statement") and
a form of Proxy that will accompany the Proxy Statement. The Proxy Statement
will be distributed to the Company's shareholders in connection with a Special
Meeting of Shareholders to be held on March 7, 2005 for the purpose of voting on
a proposal to approve the Plan of Merger and a proposal to amend the Company's
Articles of Incorporation.
The Company has securities registered under the Exchange Act and
consequently is subject to Regulation 14A of the Exchange Act. The Company is
filing this Schedule 13E-3 with the Securities and Exchange Commission
simultaneously with a preliminary proxy statement filed by the Company pursuant
to Regulation 14A of the Exchange Act.
In accordance with General Instruction F to Schedule 13E-3, the
information set forth in the Proxy Statement (including the appendices thereto)
is here incorporated by reference in response to Items 1-14 of Schedule 13E-3,
in the manner and to the extent specified below. In addition, the Company has
incorporated by reference certain financial information contained in its Annual
Report on Form 10-K and Quarterly Report on Form 10-Q as specified below. CB
Merger Co. was organized exclusively for the purposes of the merger. It is
controlled entirely by the Company and its directors and officers are directors
and officers of the Company. It has engaged in no independent analysis of the
merger. CB Merger Co. expressly adopts (to the extent relevant) the disclosures,
conclusions and analyses of the Company.
All parenthetical references under the various Items contained in this
Schedule 13E-3 are references to the corresponding Items contained in Regulation
M-A under the Exchange Act.
THIS SCHEDULE 13E-3 CONTAINS FORWARD-LOOKING STATEMENTS. The
forward-looking statements are based on management's beliefs, assumptions,
current expectations, estimates and projections about the Plan of Merger,
the merger, the Company itself, the economy and the banking industry
itself. Words such as "anticipates," "believes," "estimates," "expects,"
"forecasts," "intends," "is likely," "plans," "predicts," "projects,"
variations of such words and similar expressions (whether contained in
this Schedule 13E-3 or incorporated into this schedule by reference) are
intended to identify such forward-looking statements. These statements are
not guarantees of future performance and involve certain risks,
uncertainties and assumptions ("risk factors") that are difficult to
predict with regard to timing, extent, likelihood, and degree of
occurrence. Actual results and outcomes may materially differ from what
may be expressed or forecasted. Risk factors include, but are not limited
to, changes in banking laws and regulations; changes in securities and tax
laws; changes in governmental and regulatory policy; changes in the
national and local economy; changes in costs and other assumptions used in
forecasting management's expectations concerning the costs and cost
savings associated with the merger; the ability of the Company to
implement effectively the merger; and the ability to and speed with which
the Company may achieve all cost savings anticipated from the merger.
These are representative of the risk factors that could cause a difference
between an ultimate actual outcome and a forward-looking statement.
TRANSACTION STATEMENT
ITEM 1. SUMMARY TERM SHEET.
The section captioned "SUMMARY TERM SHEET" in the Proxy Statement (pages 2
and 3) is here incorporated by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) Name and address. The "Notice of Special Meeting of Shareholders" and
section captioned "INFORMATION ABOUT COMMERCIAL AND ITS AFFILIATES - General" in
the Proxy Statement (pages 32 and 33) are here incorporated by reference.
(b) Securities. The section captioned "INFORMATION ABOUT COMMERCIAL AND
ITS AFFILIATES - Description of Common Stock" in the Proxy Statement (page 38)
is here incorporated by reference.
(c) Trading market and price. The section captioned "INFORMATION ABOUT
COMMERCIAL AND ITS AFFILIATES - Market for Common Stock and Dividend
Information" in the Proxy Statement (pages 37 and 38) is here incorporated by
reference.
(d) Dividends. The section captioned "INFORMATION ABOUT COMMERCIAL AND ITS
AFFILIATES - Market for Common Stock and Dividend Information" in the Proxy
Statement (pages 37 and 38) is here incorporated by reference.
(e) Prior public offerings. None.
(f) Prior stock purchases. The section captioned "INFORMATION ABOUT
COMMERCIAL AND ITS AFFILIATES - Stock Repurchases" in the Proxy Statement (page
37) is here incorporated by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) Name and address. The "Notice of Special Meeting of Shareholders" and
sections captioned "INFORMATION ABOUT COMMERCIAL AND ITS AFFILIATES - General"
and "Directors and Executive Officers" in the Proxy Statement (page 32, and
pages 33-35, respectively) are here incorporated by reference.
(b) Business and background of entities. Not applicable.
(c) Business and background of natural persons. The section captioned
"INFORMATION ABOUT COMMERCIAL AND ITS AFFILIATES - Directors and Executive
Officers" in the Proxy Statement (pages 33-35) is here incorporated by
reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) Mergers or similar transactions. The sections captioned "THE
TRANSACTION - Material Terms," "SPECIAL FACTORS - Reasons for the Merger" and
"Effects of the Merger" and "MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF
MERGER" in the Proxy Statement (pages 20-24, 6, and 28-30 respectively) are here
incorporated by reference.
(c) Different terms. The section captioned "SPECIAL FACTORS - Effects of
the Merger" in the Proxy Statement (page 7) is here incorporated by reference.
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(d) Appraisal rights. The section captioned "DISSENTERS' RIGHTS" in the
Proxy Statement (pages 26-28) is here incorporated by reference.
(e) Provisions for unaffiliated security holders. The section captioned
"SPECIAL FACTORS - Fairness; Recommendation of Board of Directors - Alternatives
Considered" in the Proxy Statement (pages 10-15) is here incorporated by
reference.
(f) Eligibility for listing or trading. Not applicable.
ITEM 5. PAST CONTACTS, TRANSACTION, NEGOTIATIONS AND AGREEMENTS.
(a) - (c) and (e) The section captioned "INFORMATION ABOUT COMMERCIAL AND
ITS AFFILIATES - Past Contacts, Transactions, Negotiations and Agreements" in
the Proxy Statement (page 35) is here incorporated by reference.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(b) Use of securities acquired. The section captioned "INFORMATION ABOUT
COMMERCIAL AND ITS AFFILIATES - Use of Securities Acquired and Plans or
Proposals" in the Proxy Statement (pages 35 and 36) is here incorporated by
reference.
(c) Plans. (1) and (7-8) The sections captioned "THE TRANSACTION - Certain
Consequences of the Merger" and "Termination of Exchange Act Registration" and
"INFORMATION ABOUT COMMERCIAL AND ITS AFFILIATES - Use of Securities Acquired
and Plans or Proposals" and "Market for Common Stock and Dividend Information"
in the Proxy Statement (pages 24, 25 and 26, 35 and 36, and 37 and 38,
respectively) are here incorporated by reference.
(2-6) None.
ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.
(a) Purposes. The section captioned "SPECIAL FACTORS - Reasons for the
Merger" in the Proxy Statement (page 6) is here incorporated by reference.
(b) Alternatives. The section captioned "SPECIAL FACTORS - Fairness;
Recommendation of Board of Directors - Alternatives Considered" in the Proxy
Statement (pages 14 and 15) is here incorporated by reference.
(c) Reasons. The section captioned "SPECIAL FACTORS - Reasons for the
Merger" in the Proxy Statement (page 6) is here incorporated by reference.
(d) Effects. The sections captioned "SPECIAL FACTORS - Effects of the
Merger," "THE TRANSACTION - Termination of Exchange Act Registration" and
"MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF MERGER" in the Proxy Statement
(pages 7, 25 and 26, and 28-30, respectively) are here incorporated by
reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) Fairness. The section captioned "SPECIAL FACTORS - Fairness;
Recommendation of Board of Directors" in the Proxy Statement (pages 10-15) is
here incorporated by reference.
(b) Factors considered in determining fairness. The section captioned
"SPECIAL FACTORS - Fairness; Recommendation of Board of Directors" in the Proxy
Statement (pages 10-15) is here incorporated by reference.
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(c) Approval of security holders. The section captioned "SPECIAL FACTORS -
Fairness; Recommendation of Board of Directors" in the Proxy Statement (pages
10-15) is here incorporated by reference.
(d) Unaffiliated representative. The section captioned "SPECIAL FACTORS -
Fairness; Recommendation of Board of Directors - Alternatives Considered" in the
Proxy Statement (pages 10-15) is here incorporated by reference.
(e) Approval of Directors. The section captioned "SPECIAL FACTORS -
Fairness; Recommendation of Board of Directors" in the Proxy Statement (pages
10-15) is here incorporated by reference.
(f) Other offers. Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.
(a) - (c) The section captioned "SPECIAL FACTORS - Opinion of Financial
Advisor" in the Proxy Statement (pages 15-20) is here incorporated by reference.
ITEM 10. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
(a) Source of funds. The section captioned "THE TRANSACTION - Financing of
the Merger" in the Proxy Statement (pages 24 and 25) is here incorporated by
reference.
(b) Conditions. Not applicable.
(c) Expenses. The section captioned "THE TRANSACTION - Financing of the
Merger" in the Proxy Statement (pages 24 and 25) is here incorporated by
reference.
(d) Borrowed funds. The section captioned "THE TRANSACTION - Financing of
the Merger" in the Proxy Statement (pages 24 and 25) is here incorporated by
reference.
ITEM 11. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The section captioned "INFORMATION ABOUT COMMERCIAL AND ITS
AFFILIATES - Voting Securities and Principal Holders" in the Proxy Statement
(pages 36 and 37) is here incorporated by reference.
ITEM 12. THE SOLICITATION OR RECOMMENDATION.
(d) and (e) The section captioned "INTERESTS OF CERTAIN PERSONS" in the
Proxy Statement (page 26) is here incorporated by reference.
ITEM 13. FINANCIAL STATEMENTS.
(a) and (b) The sections captioned "SELECTED FINANCIAL DATA" and "PRO
FORMA FINANCIAL STATEMENTS" in the Proxy Statement (pages 41-47) are here
incorporated by reference. In addition, the audited financial statements in the
Company's Annual Report on Form 10-K as of and for the year ended December 31,
2003 (filed as Exhibit 13; pages 24-44), and unaudited interim financial
statements in the Company's Quarterly Report on Form 10-Q as of and for the
quarters ended March 31, 2004, June 30, 2004 and September 30, 2004, are here
incorporated by reference. The information incorporated by reference may be
accessed electronically at the SEC's website at http://www.sec.gov.
ITEM 14. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
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(a) and (b) The section captioned "ADDITIONAL SPECIAL MEETING INFORMATION
- Solicitation of Proxies" in the Proxy Statement (pages 31 and 32) is here
incorporated by reference.
ITEM 15. ADDITIONAL INFORMATION.
(b) None.
ITEM 16. EXHIBITS.
(a)(1) Notice of Special Meeting of Shareholders and Definitive
Proxy Statement of Commercial National Financial Corporation
for March 7, 2005, Special Meeting of Shareholders (filed
with the SEC on February 15, 2005, and here incorporated by
reference).
(a)(2) Form of Proxy for March 7, 2005, Special Meeting of Shareholders.
(b) Term sheet for issuance of Trust Preferred Securities with
Cohen Bros. & Co. Trust Preferred Funding. (Previously filed as
Exhibit(b) to the Company's Schedule 13E-3 filed November 23,
2004. Here incorporated by reference.)
(c)(1) Valuation Opinion and Report of Donnelly Penman & Partners.
(Previously filed as Exhibit(c)(1) to the Company's Schedule
13E-3 filed November 23, 2004. Here incorporated by reference.)
(c)(1.1) Draft Valuation Opinion and Report of Donnelly Penman & Partners
(as of November 3, 2004). (Previously filed as Exhibit (c)(1.1)
to the Company's Schedule 13E-3 filed January 14, 2005. Here
incorporated by reference.)
(c)(2) Fairness Opinion of Donnelly Penman & Partners (the form of
opinion appears at Appendix C to Exhibit (a)(1), and is here
incorporated by reference).
(f) Description of Dissenters' Rights and Procedures for Exercise
(included in the Proxy Statement filed as Exhibit (a)(1), and
here incorporated by reference).
(x) Consent of Independent Accountant.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
COMMERCIAL NATIONAL FINANCIAL CORPORATION
/s/ Jeffrey S. Barker
------------------------------------
Jeffrey S. Barker, President and CEO
February 15, 2005
CB MERGER COMPANY
/s/ Jeffrey S. Barker
------------------------------------
Jeffrey S. Barker, President and CEO
February 15, 2005
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