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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): December 15, 1998
COMMERCE BANCORP, INC.
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(Exact name of registrant as specified in its charter)
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New Jersey 0-12874 22-2433568
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(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
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Commerce Atrium
1701 Route 70 East
Cherry Hill, New Jersey 08034-5400
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(Address of principal executive offices, including zip code)
609-751-9000
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On December 15, 1998, Commerce Bancorp, Inc. (the "Company") issued a
press release announcing the declaration a 13% increase in its annual cash
dividend rate from $.78 per share to $.88 per share of common stock. The
quarterly dividend of $.22 is payable January 21, 1999 to shareholders of record
January 7, 1999. Additionally, the press release announced the declaration of a
5% stock dividend on the Company's common stock outstanding. The stock dividend
is also payable January 21, 1999 to shareholders of record January 7, 1999,
however, the cash dividend noted above is not payable on the new shares of
common stock created by the 5% stock dividend. A copy of the press release is
attached to this Form 8-K as an Exhibit and is incorporated herein by reference.
On August 12, 1998, the Company reached an agreement to acquire
Community First Banking Company ("CFBC"), Tinton Falls, New Jersey. The
acquisition will be completed by the issuance of the Company's Common Stock
totaling approximately 1.6 million shares. Under the terms of the amended
acquisition agreements by and between CFBC and the Company, each share of
CFBC Common Stock will be converted into a number of shares of the Company's
Common Stock (the "CFBC Exchange Ratio") with cash paid in lieu of fractional
shares. The CFBC Exchange Ratio will be calculated by dividing $28.00 by the
average of the closing sale prices of the Company's Common Stock as quoted on
the New York Stock Exchange ("NYSE") for the five business day period ending on
and excluding the second business day before the acquisition is consummated
(the "Average Price"). However, as a result of the Company's 5% stock dividend
referred to above, the minimum and maximum CFBC Exchange Ratios will be
adjusted as set forth below assuming that the CFBC acquisition is consummated
on or after January 15, 1999. Therefore, a minimum CFBC Exchange Ratio of .644
will apply if the Average Price is above $43.51 and a maximum CFBC Exchange
Ratio of .741 will apply if the Average Price is below $37.80. Furthermore, as a
result of the Company's 5% stock dividend, the Board of Directors of CFBC will
have the right to terminate the acquisition agreements if the Average Price is
below $30.48.
The effects of the Company's 5% stock dividend on the CFBC Exchange
Ratio may be illustrated as follows:
Average Price of the Company's Common Stock CFBC Exchange Ratio
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Greater than $43.51 ....................... 0.644
Betweem $37.80 and $43.51 ................. $28.00 divided by the Average Price
Less than $37.80 .......................... 0.741
Less than $30.48 .......................... 0.741; provided, however that the
CFBC Board will have the right to
terminate the acquisition
agreements
For illustrative purposes, if, hypothetically, the Average Price of the
Company's Common Stock were $46.00, the CFBC Exchange Ratio would be 0.644, and
the holder of 100 shares of CFBC Common Stock would receive 64 shares of the
Company's Common Stock and $18.40 (0.40 x $46.00) with respect to the fractional
share interest.
On September 17, 1998, the Company reached an agreement to acquire
Prestige Financial Corp. ("Prestige"), Flemington, New Jersey. The acquisition
will be completed by the issuance of the Company's Common Stock totaling
approximately 1.9 million shares. Under the terms of the amended acquisition
agreements by and between Prestige and the Company, each share of Prestige
Common Stock will be converted into a number of shares of the Company's Common
Stock (the "Prestige Exchange Ratio") with cash paid in lieu of fractional
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shares. The Prestige Exchange Ratio will be calculated by dividing $16.25 by the
average of the closing sale prices of the Company's Common Stock as quoted on
the NYSE for the five business day period ending on and excluding the second
business day before the acquisition is consummated (the "Average Price").
However, as a result of the Company's 5% stock dividend referred to above, the
minimum and maximum Prestige Exchange Ratios will be adjusted as set forth below
assuming that the Prestige acquisition is consummated on or after January 15,
1999. Therefore, a minimum Prestige Exchange Ratio of .397 will apply if the
Average Price is above $40.95 and a maximum Prestige Exchange Ratio of .461 will
apply if the Average Price is below $35.24. Furthermore, as a result of the
Company's 5% stock dividend, the Board of Directors of Prestige will have the
right to terminate the merger agreement if the Average price is below $31.43.
The effects of the Company's 5% stock dividend on the Prestige Exchange
Ratio may be illustrated as follows:
Average Price of the Company's Common Stock Prestige Exchange Ratio
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Greater than $40.95 ....................... 0.397
Betweem $35.24 and $40.95 ................. $16.25 divided by the Average Price
Less than $35.24 .......................... 0.461
Less than $31.43 .......................... 0.461; provided, however that the
Prestige Board will have the
right to terminate the
acquisition agreements
For illustrative purposes, if, hypothetically, the Average Price of the
Company's Common Stock were $46.00, the Prestige Exchange Ratio would be 0.397,
and the holder of 100 shares of Prestige Common Stock would receive 39 shares of
the Company's Common Stock and $32.20 (0.70 x $46.00) with respect to the
fractional share interest.
It is currently anticipated that both of the CFBC and Prestige
acquisitions will be consummated on or after January 15, 1999. Therefore, since
neither CFBC nor Prestige shareholders will be shareholders of the Company as of
the January 7, 1999 record date, they will not be entitled to receive either the
cash or 5% stock dividend from the Company. However, as noted above, pursuant to
the terms and conditions set forth in the agreements with respect to each of the
CFBC and Prestige acquisitions, the amount of the Company's Common Stock to be
received per share of either CFBC or Prestige Common Stock will be adjusted as
set forth above.
As of December 15, 1998, the closing sale price of the Company's Common
Stock on the NYSE was $48.19.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
c. Exhibits:
Exhibit No. Description
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99.1 Press Release dated December 15, 1998.
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.
COMMERCE BANCORP, INC.
By: /s/ Thomas J. Sukay
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Thomas J. Sukay
Senior Vice President
Dated: December 18, 1998
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EXHIBIT 99.1
CONTACTS
Vernon W. Hill, II C. Edward Jordan, Jr.
Chairman and President Executive Vice President
(609) 751-9000
COMMERCE BANCORP RAISES
CASH DIVIDEND 13% AND
DECLARES A 5% STOCK DIVIDEND
December 15, 1998 -- Cherry Hill, New Jersey -- Commerce Bancorp, Inc.
(NYSE Symbol: CBH) declared a 13% increase in its annual cash dividend rate from
$.78 per share to $.88 per share of common stock, it was announced today by
Vernon W. Hill, II, Chairman of the multi-bank holding company based here. Said
Hill, "this increase reflects the Company's continued earnings progress made in
1998 and shows our confidence in earnings prospects for 1999 which includes our
recently consummated and pending acquisitions." The quarterly dividend of $.22
is payable January 21, 1999 to shareholders of record January 7, 1999.
Additionally, the Company announced the declaration of a 5% stock
dividend on the Company's common stock outstanding, marking the Company's 21st
consecutive annual stock dividend payment. The dividend is also payable January
21, 1999, to shareholders of record January 7, 1999. The cash dividend noted
above is not payable on the new common shares created by the 5% stock dividend.
Commerce Bancorp, Inc. is a pro-forma $5.5 billion multi-bank holding
company headquartered in Cherry Hill, New Jersey with 100 banking offices. Its
three banking subsidiaries are Commerce Bank, N.A., Cherry Hill, New Jersey,
Commerce Bank/Pennsylvania, N.A., Philadelphia, Pennsylvania, Commerce
Bank/Shore, N.A., Toms River, New Jersey, and Commerce Bank/North, Ramsey, New
Jersey.
The Company's pending acquisitions of Community First Banking Company
(NASDAQ Symbol: CFST), headquartered in Tinton Falls, New Jersey, and Prestige
Financial Corporation (NASDAQ Symbol: PRFN), based in Flemington, New Jersey,
are both expected to be consummated in January 1999.
