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 30, 2009
CORNERSTONE FINANCIAL CORPORATION
(Exact Name of Issuer as Specified in Charter)
NEW JERSEY 80-0282551
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
300 WEST ROUTE 38
MOORESTOWN, NEW JERSEY 08057
(Address of Principal Executive Offices)
(856) 439-0300
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
Table of Contents
Item 2.01 - Completion of Acquisition or Disposition of Assets
Item 9.01 - Financial Statements and Exhibits.
ITEM 2.01 - COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On January 30, 2008, Cornerstone Financial Corporation (the "Company")
became the bank holding company of Cornerstone Bank, a New Jersey state
chartered bank (the "Bank") pursuant to the Plan of Acquisition of all the
Outstanding Stock of the Bank by the Company, dated as of July 17, 2008 (the
"Plan"). The Plan was approved by the Company's Board of Directors, and the
Bank's Board of Directors on July 17, 2008. The Plan was adopted by a two-thirds
majority of the Bank's shareholders on October 28, 2008. The Plan was approved
by the New Jersey Department of Banking and Insurance on August 15, 2008. The
Plan was approved by the Federal Reserve Bank of Philadelphia as of December 30,
2008.
The Company was incorporated by the Company's Board of Directors in
accordance with the New Jersey Business Corporation Act (the "NJBCA") on July
17, 2008 pursuant to the provisions of the Plan for the sole purpose of becoming
the Bank's holding company. Accordingly, at the closing of the Plan, one hundred
(100%) percent of the issued and outstanding shares of the Bank's common stock
is held by the Company. The members of the Board of Directors of the Bank also
serve as the Board of Directors of the Company.
The Plan was effectuated through a contribution of each outstanding
share of Bank's common stock, $5.00 par value per share, in exchange for one
share of the common stock, no par value, of the Company in a transaction
qualifying under Section 351 of the Internal Revenue Code of 1986. The Company
did not engage in any activities, other than activities of an organizational
nature, or issue any shares of its common stock, prior to the closing of the
Plan.
As a result of the foregoing, the Company has become the successor issuer
to the Bank pursuant to Rule 12g-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Prior to the closing of the Plan, the
Bank was required to file reports, proxy statements and other information with
the Federal Deposit Insurance Corporation (the "FDIC") under the Exchange Act.
Such information filed by the Bank with the FDIC is available for inspection at
the offices of the FDIC's Accounting and Securities Disclosure Section located
at Room F-6043, 550 17th Street, N.W., Washington, DC 20429. Copies of those
filings may also be obtained by contacting the FDIC's Accounting and Securities
Disclosure Section at (202) 898-8913 or by facsimile at (202) 898-8505.
This current report on Form 8-K, among other things, serves as notice that
the Company is the successor issuer to the Bank pursuant to Rule 12g-3 pursuant
to the Exchange Act. Pursuant to paragraph (a) of Rule 12g-3, the Company's
class of common stock is deemed to be registered under Section 12(g) of the
Exchange Act.
DESCRIPTION OF CAPITAL STOCK
CAPITAL STRUCTURE
The Bank's Certificate of Incorporation currently provides for an
authorized capitalization consisting of 7,000,000 shares of common stock, par
value $5.00 per share.
The Holding Company's certificate of incorporation provides for an
authorized capitalization consisting of 10,000,000 shares of common stock,
without par value. Upon the closing of the Plan the Company has 1,655,767 shares
of common stock outstanding.
LIQUIDATION RIGHTS
In the event of liquidation, dissolution or winding up of the Company,
holders of the Company's common stock are entitled to receive, on a pro rata per
share basis, any assets distributable to stockholders, after the payment of
debts and liabilities and after the distribution to holders of any outstanding
shares hereafter issued which have prior rights upon liquidation.
DIVIDEND RIGHTS
The holders of the Holding Company's common stock will be entitled to
dividends, when, as, and if declared by the Holding Company's Board of
Directors, subject to the restrictions imposed by New Jersey law. The only
statutory limitation applicable to the Company is that dividends may not be paid
if the Company is insolvent.
However, as a practical matter, unless the Company expands its
activities, its only source of income will be the Bank. Pursuant to the Banking
Act, dividends may be paid by the Bank if, after the payment of the dividend,
the capital stock of the Bank will be unimpaired and either the Bank will have a
surplus of not less than 50% of its capital stock or the payment of the dividend
will not reduce the Bank's surplus. The payment of dividends is also dependent
upon the Bank's ability to maintain adequate capital ratios pursuant to
applicable regulatory requirements. Therefore, the dividend restrictions
applicable to the Bank described in this paragraph will continue to impact the
Company's ability to pay dividends.
The amount and form of dividends that may be declared by the Holding
Company in the future will depend upon many factors, including future earnings,
capital requirements and business conditions.
VOTING RIGHTS
Under New Jersey law and the Company's Certificate of Incorporation,
each share of the Company's common stock also will be entitled to one vote per
share. Cumulative voting is not permitted.
While generally the voting rights of the stockholders are the same in
the Company as they are in the Bank, there are several material differences.
Among other things, the Banking Act requires the affirmative vote of two-thirds
of the outstanding shares to approve a merger or consolidation. Under New Jersey
corporate law, the affirmative vote of a majority of the votes cast is required
to approve any merger, consolidation or disposition of substantially all of the
Holding Company's assets.
PREEMPTIVE RIGHTS
Pursuant to New Jersey law, stockholders may have preemptive rights if
these rights are provided in the certificate of incorporation. However, the
Certificate of Incorporation of the Company does not provide for preemptive
rights.
APPRAISAL RIGHTS
Under New Jersey law, dissenting stockholders of the Company will have
appraisal rights (subject to the broad exception set forth in the next sentence)
upon certain mergers or consolidations. However, appraisal rights for
stockholders of the Holding Company are not available in any transaction if
shares of the corporation are listed for trading on a national securities
exchange or held of record by more than 1,000 holders. In addition, appraisal
rights are not available to stockholders of an acquired corporation if, as a
result of the transaction, shares of the acquired corporation are exchanged for
any of the following: (i) cash; (ii) any securities listed on a national
securities exchange or held of record by more than 1,000 holders; or (iii) any
combination of the above. New Jersey law also provides that a corporation may
grant appraisal rights in other types of transactions or regardless of the
consideration received by providing for such rights in its Certificate of
Incorporation. The Holding Company Certificate of Incorporation does not provide
appraisal rights beyond those called for under New Jersey law.
ITEM 9.01 - FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
3(i) Articles of Incorporation
3(ii) By-laws
10(a) Employment Agreement with Keith Winchester dated February 15, 1999
10(b) The Bank's Stock Option Plan dated May 8, 2000
10(c) Director Fee Deferral and Death Benefit Plan dated December 30, 2005,
as amended by Amendment No.1 to the Director Fee Deferral and Death
Benefit Plan dated June 20, 2007
10(d) Employment Agreement with George W. Matteo, Jr. dated January 10, 2008
10(e) Plan of Acquisition of all the Outstanding Stock of the Bank by the
Company, dated as of July 17, 2008
10(f) Amended and Restated Non-Qualified Deferred Compensation Plan dated
September 9, 2008
21 Subsidiaries of the Registrant
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.
CORNERSTONE FINANCIAL CORPORATION
Date: February 2, 2009 By: George W. Matteo, Jr.
-------------------------------------
George W. Matteo, Jr.
President and Chief Executive Officer