UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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) January 20, 2005
----------------------------
Chester Valley Bancorp Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 0-18833 23-2598554
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
100 E. Lancaster Avenue, Downingtown, PA 19335
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 269-9700
-----------------------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2 below):
[X] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 240.14d-2(b))
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
------------------------------------------
As previously disclosed, on January 20, 2005, Chester Valley Bancorp Inc.
("Chester Valley") and Willow Grove Bancorp, Inc. ("Willow Grove") announced
that they had entered into an Agreement and Plan of Merger, dated as of January
20, 2005 (the "Merger Agreement"), which sets forth the terms and conditions
pursuant to which Chester Valley will be merged with and into Willow Grove (the
"Merger").
The Merger Agreement provides, among other things, that as a result of the
Merger each outstanding share of common stock of Chester Valley, par value $1.00
per share ("Chester Valley Common Stock"), (subject to certain exceptions) will
be converted into the right to receive either $27.09 in cash or 1.4823 shares of
common stock of Willow Grove, par value $0.01 per share ("Willow Grove Common
Stock"), plus cash in lieu of any fractional share interest, subject to the
election and allocation procedures set forth in the Agreement which are intended
to ensure that approximately 64.8% of the outstanding shares of Chester Valley
Common Stock will be converted into the right to receive Willow Grove Common
Stock and 35.2% of the outstanding shares of Chester Valley Common Stock will be
converted into the right to receive cash. Outstanding Chester Valley stock
options will, at the election of the option holder, be cancelled in exchange for
a cash payment per option share based on the difference between $27.09 and the
applicable option exercise price, or converted into options to purchase an
equivalent number of shares of Willow Grove Common Stock, adjusted based on a
1.4823 per share exchange ratio.
Consummation of the Merger is subject to a number of customary conditions,
including but not limited to (i) the approval of the Agreement by the
shareholders of both Willow Grove and Chester Valley and (ii) the receipt of
requisite regulatory approvals of the Merger and the proposed merger of Chester
Valley's banking subsidiary, First Financial Bank ("First Financial"), with and
into Willow Grove's banking subsidiary, Willow Grove Bank, following
consummation of the Merger. The Merger is intended to qualify as a
reorganization for federal income tax purposes, such that the shares of Chester
Valley exchanged for Willow Grove Common Stock will be issued to Chester Valley
shareholders on a tax-free basis.
In addition, directors of each of Chester Valley and Willow Grove entered
into a Shareholder Agreement with Willow Grove and Chester Valley, respectively
(the "Shareholder Agreements"), pursuant to which each such person agreed, among
other things, to vote his or her shares of Chester Valley Common Stock or Willow
Grove Common Stock, as the case may be, in favor of the Merger Agreement at a
meeting of shareholders of Chester Valley and Willow Grove, respectively, to be
called to consider and approve the Merger Agreement.
The Merger Agreement provides that, upon the effective time of the Merger,
the size of Willow Grove's Board of Directors will be increased from ten to
seventeen directors, seven of whom will have been chosen by the current Board of
Directors of Chester Valley. Donna M. Coughey, the current President and Chief
Executive Officer of Chester Valley and First Financial will become President
and Chief Executive Officer of Willow Grove and Willow Grove Bank. Willow Grove
and Willow Grove Bank have entered into an employment agreement, effective as of
the effective time of the Merger, which provides for the terms of Ms. Coughey's
employment with Willow Grove and Willow Grove Bank and will supersede her
existing agreement with Chester Valley and First Financial. As a result of the
Merger Agreement and in order to implement the previously announced retirement
plans of Frederick A. Marcell Jr., the President and Chief Executive Officer of
Willow Grove and Willow Grove Bank, Willow Grove and Willow Grove Bank have
entered into a Retirement and Severance Agreement with Mr. Marcell which will
have the effect of terminating Mr. Marcell's employment agreement upon the
consummation of the Merger. Willow Grove's current Vice-Chairman, Rosemary C.
Loring, will become Chairman of Willow Grove when its current Chairman, William
W. Langan relinquishes that position (which is scheduled to occur on June 30,
2005). Willow Grove Bank also entered into new employment agreements with First
Financial executives G. Richard Bertolet, Matthew D. Kelly and Colin Maropis,
each of whom will, as of the effective time of the Merger, become Executive Vice
Presidents with Willow Grove Bank (the "Executive Vice President Agreements").
2
The Merger Agreement contains certain termination rights for each of Willow
Grove and Chester Valley and further provides that, upon termination of the
Merger Agreement under specified circumstances, Chester Valley may be required
to pay to Willow Grove a termination fee of $6 million.
The foregoing summary of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full Merger
Agreement, a copy of which (including the forms of Shareholder Agreements which
are attached as Exhibits A and B thereto) is filed as Exhibit 2.1 and
incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(a) Not applicable.
(b) Not applicable.
(c) The following exhibits are included with this Report:
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger, dated January 20,
2005, by and between Chester Valley Bancorp Inc.
and Willow Grove Bancorp, Inc. (including the forms
of Shareholder Agreements attached thereto as
Exhibits A and B)
99.1 Press Release, dated January 20, 2005, announcing
execution of the Merger Agreement*
--------------
* Previously filed.
3
SIGNATURES
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.
CHESTER VALLEY BANCORP INC.
By: /s/ Donna M. Coughey
--------------------------------------------
Name: Donna M. Coughey
Title: President and Chief Executive Officer
Date: January 26, 2005