SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
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) SEPTEMBER 7, 1999
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F&M BANCORP
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
MARYLAND 0-12638 52-1316473
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
110 THOMAS JOHNSON DRIVE, FREDERICK, MARYLAND 21702
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) (301) 694-4000
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ITEM 5. OTHER EVENTS
On September 7, 1999, F&M Bancorp, a Maryland corporation
("F&M"), announced that it had entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Patapsco Valley Bancshares, Inc., a Maryland
corporation ("Patapsco"), pursuant to which F&M will acquire Patapsco (the
"Acquisition"). The Acquisition is intended to constitute a tax-free
reorganization for Federal income tax purposes and to be accounted for as a
pooling-of-interest. The Merger Agreement is attached hereto as Exhibit
2.1 and is incorporated herein by reference in its entirety.
On October 19, 1999, F&M and Patapsco entered into Amendment
No. 1 to the Merger Agreement (the "Amendment No. 1"). The form of the
Amendment No. 1 is attached hereto as Exhibit 2.2 and is incorporated
herein by reference in its entirety.
The press release issued by F&M with respect to the
announcement of the proposed Acquisition is attached hereto as Exhibit 99.1
and is incorporated herein by reference in its entirety. Also attached
hereto as Exhibit 99.2 and incorporated herein by reference is the
presentation provided by F&M to investment analysts on September 7, 1999
with respect to the proposed Acquisition.
The press release and the analyst presentation incorporated
herein by reference contain certain forward looking statements with respect
to the financial condition, results of operations and business of F&M
following the consummation of the Acquisition, including statements
relating to the cost savings, revenue enhancements and other efficiencies
that are expected to be realized as a result of the Acquisition. Factors
that may cause actual results to differ materially from those contemplated
by such forward looking statements include, among others, the following
possibilities: (1) expected cost savings, revenue enhancements or other
efficiencies from the Acquisition cannot be fully realized; (2) deposit
attrition, customer loss or revenue loss following the Acquisition is
greater than expected; (3) competitive pressure in the banking and
financial services industry increases significantly; (4) changes in the
interest rate environment reduce margins; and (5) general economic
conditions, either nationally or in Maryland, are less favorable than
expected.
In accordance with the terms of the Merger Agreement, each
share of Patapsco common stock, par value $0.01 per share ("Patapsco Common
Stock"), outstanding immediately prior to the effective time of the
Acquisition, will be converted into the right to receive 1.18 shares of
common stock, par value $5.00 per share, of F&M ("F&M Common Stock"), with
cash being paid in lieu of fractional share interests.
Consummation of the Acquisition is subject to various
conditions, including (1) the approval of the stockholders of Patapsco, (2)
the approval of the appropriate state and federal bank regulators and other
governmental agencies, (3) the receipt by F&M of letters from F&M's
independent auditors that the Acquisition will qualify for
pooling-of-interests accounting treatment, (4) the receipt by each of F&M
and Patapsco of an opinion of its counsel that the Acquisition will be
treated for federal tax purposes as a reorganization under Section 368 of
the Internal Revenue Code of 1986, as amended, and (5) other customary
conditions to closing.
In connection with the Merger Agreement, F&M and Patapsco
entered into an option agreement (the "Stock Option Agreement"), dated
September 7, 1999. The Stock Option Agreement provides F&M with the right
to purchase a number of shares of Patapsco Common Stock equal to 19.9% of
issued and outstanding Patapsco Common Stock. The price per share of
Patapsco Common Stock payable upon exercise of the option is $27.50. The
option granted under the Stock Option Agreement will become exercisable
only upon the occurrence of certain events, none of which has occurred as
of the date hereof. The option was granted by Patapsco as a condition to
F&M's entering into the Merger Agreement. The Stock Option Agreement is
attached hereto as Exhibit 99.3 and is incorporated herein by reference in
its entirety.
In addition, in connection with the Merger Agreement, certain
stockholders of Patapsco, including the directors and certain executive
officers of Patapsco, holding an aggregate of 300,064.6268 shares of
Patapsco Common Stock (which constituted approximately 21.9% of the
outstanding shares of Patapsco Common Stock as of September 7, 1999)
entered into a voting agreement with F&M, dated as of September 7, 1999
(the "Voting Agreement"), which superseded the voting agreement between F&M
and such stockholders of Patapsco, dated September 7, 1999. Under the
Voting Agreement, each of such stockholders agreed, among other things, to
vote all of its shares of Patapsco Common Stock in favor of the
Acquisition. The form of Voting Agreement is attached hereto as Exhibit
99.4 and is incorporated herein by reference in its entirety.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS
(c) Exhibits
2.1 Form of Agreement and Plan of Merger, dated as of
September 7, 1999, by and between F&M Bancorp and
Patapsco Valley Bancshares, Inc.
2.2 Form of Amendment No. 1, dated as of October 19,
1999, by and between F&M Bancorp and Patapsco Valley
Bancshares, Inc.
99.1 Press Release issued by F&M Bancorp on September 7,
1999
99.2 Analyst Presentation
99.3 Form of Stock Option Agreement, dated September 7,
1999, between Patapsco Valley Bancshares, Inc., as
issuer, and F&M Bancorp, as grantee.
99.4 Form of Voting Agreement, dated as of September 7,
1999, between F&M Bancorp and certain shareholders
of Patapsco, including the directors and certain
executive officers of Patapsco.
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 hereunto duly authorized.
F&M BANCORP
By: /s/ Gordon M. Cooley
_______________________________
Name: Gordon M. Cooley
Title: Secretary and General
Counsel
Date: October 25, 1999
EXHIBIT INDEX
Exhibit
Number Description
2.1 Form of Agreement and Plan of Merger, dated as of
September 7, 1999, by and between F&M Bancorp and
Patapsco Valley Bancshares, Inc.
2.2 Form of Amendment No. 1, dated as of October 19,
1999, by and between F&M Bancorp and Patapsco Valley
Bancshares, Inc.
99.1 Press Release issued by F&M Bancorp on September 7,
1999.
99.2 Analyst Presentation.
99.3 Form of Stock Option Agreement, dated September 7,
1999, between Patapsco Valley Bancshares, Inc.,
as issuer, and F&M Bancorp, as grantee.
99.4 Form of Voting Agreement, dated as of September 7,
1999, between F&M Bancorp and certain shareholders
of Patapsco, including the directors and certain
executive officers of Patapsco.
EXHIBIT 2.2
AMENDMENT NO. 1
AMENDMENT, dated as of October 19, 1999, by and between F&M
Bancorp, a Maryland corporation ("Buyer"), and Patapsco Valley Bancshares,
Inc., a Maryland corporation (the "Company"), to the Agreement and Plan of
Merger, dated as of September 7, 1999 (the "Merger Agreement"), by and
between Buyer and the Company. Capitalized terms that are not otherwise
defined herein shall have the meanings set forth in the Merger Agreement.
WHEREAS, Buyer and Seller desire to amend the Merger Agreement
(a) to provide procedures for handling demands by holders of Company Common
Stock for payment of the fair value of Company Common Stock in lieu of the
merger consideration as contemplated by Sections 3-201 to 3-213 of the
Maryland General Corporation Law and (b) in accordance with a request from
the Federal Reserve Bank to obtain a waiver for the Federal Reserve Bank's
approval of the merger under the Bank Holding Company Act and the Federal
Reserve Board's Regulation Y.
NOW, THEREFORE, in consideration of the foregoing and intending
to be legally bound hereby, the parties hereto agree as follows:
2. Section 1.4(a) of the Merger Agreement is hereby amended in its
entirety to read as follows:
(a) At the Effective Time, subject to Section 2.2(e)
hereof, each share of the common stock, par value $0.01 per share, of
the Company (the "Company Common Stock") issued and outstanding
immediately prior to the Effective Time (other than shares of Company
Common Stock held directly or indirectly by Buyer or the Company or
any of their respective Subsidiaries (as defined below) (except for
Trust Account Shares and DPC Shares, as such terms are defined in
Section 1.4(b) hereof) and other than Dissenting Shares (as such term
is defined in Section 1.4(c) hereof)) shall, by virtue of this
Agreement and without any action on the part of the holder thereof,
be converted into and exchangeable for 1.18 shares (the "Exchange
Ratio") of the common stock, par value $5.00 per share, of Buyer
("Buyer Common Stock"). All of the shares of Company Common Stock
converted into Buyer Common Stock pursuant to this Article I shall no
longer be outstanding and shall automatically be cancelled and shall
cease to exist, and each certificate (each a "Certificate")
previously representing any such shares of Company Common Stock shall
thereafter only represent the right to receive (i) the number of
whole shares of Buyer Common Stock and (ii) the cash in lieu of
fractional shares into which the shares of Company Common Stock
represented by such Certificate have been converted pursuant to this
Section 1.4(a) and Section 2.2(e) hereof. Certificates
previously representing shares of Company Common Stock shall be
exchanged for certificates representing whole shares of Buyer Common
Stock and cash in lieu of fractional shares issued in consideration
therefor upon the surrender of such Certificates in accordance with
Section 2.2 hereof, without any interest thereon. If, between the
date of this Agreement and the Effective Time, the outstanding shares
of Buyer Common Stock shall be changed into a different number or
class of shares by reason of any reclassification, recapitalization,
split-up, combination, exchange of shares or readjustment, or a stock
dividend thereon shall be declared with a record date within said
period, the Exchange Ratio shall be adjusted accordingly.
by adding the phrase "and other than Dissenting Shares (as such term is
defined in Section 14.(c) hereof)" immediately after the phrase "(except
for Trust Account Shares and DPC Shares, as such terms are defined in
Section 1.4(b) hereof)".
4. Section 1.4 of the Merger Agreement is hereby amended by adding
the following subsection (c):
(c) Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock that have not been voted for
adoption of the Merger and with respect to which appraisal rights
shall have been properly demanded in accordance with Section 3-203 of
the MGCL ("Dissenting Shares") shall not be converted into the right
to receive, or be exchangeable for, Buyer Common Stock or cash in
lieu of fractional shares but, instead, the holders thereof shall be
entitled to payment of the appraised value of such Dissenting Shares
in accordance with the provisions of Section 3-202 of the MGCL;
provided, however, that (i) if any holder of Dissenting Shares
withdraws his demand for appraisal or payment of the fair value of
such shares or (ii) if any holder shall become ineligible for such
payment of the fair value of such shares, such holder or holders (as
the case may be) shall forfeit the right to appraisal of such shares
of Company Common Stock and such holder's Dissenting Shares shall
cease to be Dissenting Shares and shall thereupon be deemed to have
been converted into the right to receive, and to have become
exchangeable for, as of the Effective Time, Buyer Common Stock and/or
cash in lieu of fractional shares, without any interest thereon, as
provided in Section 1.4(a) and Article II hereof. The Company shall
give Buyer (A) prompt notice of any written demands for appraisal or
payment of fair value of any Company Common Stock, withdrawals of
such demands and any other documents or instruments served pursuant
to Section 3-203 of the MGCL received by the Company and (B) the
opportunity to direct all negotiations and proceedings with respect
to demands for appraisal or payment of fair value of shares of
Company Common Stock. The Company shall not make any payment with
respect to any demands for appraisal or payment of fair value without
the prior written consent of Buyer and shall not, except with the prior
written consent of Buyer, settle or offer to settle any such demands.
6. Section 6.1(r) of the Merger Agreement is hereby amended in its
entirety to read as follows:
(r) without at least 24-hour prior written notice to
Buyer, make or purchase, or commit to make or purchase, any loan or
loans, or extend any line of credit, to any borrower and its
affiliates in an aggregate principal amount greater than $1,000,000
or in an amount which, when aggregated with any existing indebtedness
to the Company and its Subsidiaries and lines of credit from the
Company and its Subsidiaries of such borrower and its affiliates,
would exceed $1,000,000. In addition to such notice, the Company
shall furnish to Buyer, promptly upon its substantial completion, the
information package prepared by the Company's (or such Subsidiary's)
loan committee with respect to such proposed loan requests and any
other information that Buyer may reasonably request; or
8. Each of the parties hereto represents to the other that (a) it has
full corporate power and authority to execute and deliver this Amendment
and to consummate the transactions contemplated hereby, (b) the execution
and delivery of this Amendment by such party have been duly and validly
approved by the Board of Directors of such party and no other corporate
proceedings on the part of such party are necessary in connection with such
Amendment and (c) this Amendment has been duly and validly executed and
delivered by such party and constitutes a valid and binding obligation of
such party, enforceable against such party in accordance with its terms.
10. Except as expressly amended by this Amendment, the Merger
Agreement is hereby ratified and confirmed in all respects.
12. This Amendment may be executed in counterparts, all of which
shall be considered one and the same instrument, each being deemed to
constitute an original, and shall be effective when one or more
counterparts have been signed by each party hereto and delivered to the
other party hereto, which delivery may be made by facsimile transmission.
14. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Maryland, without regard to any
applicable conflicts of law.
16. In the event of any inconsistency between the terms of this
Amendment and the Merger Agreement, this Amendment shall govern.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed, under seal, in counterparts by their duly
authorized officers, all as of the day and year first above written.
F&M BANCORP
By _________________________________
Name: Faye E. Cannon
Title: President & Chief Executive
Officer
Attest:
___________________________
Name: Gordon M. Cooley
Title: Secretary
PATAPSCO VALLEY BANCSHARES, INC.
By ___________________________________
Name: John S. Whiteside
Title: President & Chief Executive
Officer
Attest:
_____________________________
Name: Edwin B. McKee
Title: Secretary
EXHIBIT 99.4
September 7, 1999
F&M Bancorp
110 Thomas Johnson Drive
Frederick, Maryland 21702
Ladies and Gentlemen:
Each of the undersigned ("Stockholder") beneficially owns and
has sole voting power with respect to the number of shares of the common
stock, par value $0.01 per share (the "Shares"), of Patapsco Valley
Bancshares, Inc., a Maryland corporation (the "Company"), indicated
opposite such Stockholder's name below.
Simultaneously with the execution of this letter agreement, F&M
Bancorp, a Maryland corporation ("Buyer"), and the Company are entering
into an Agreement and Plan of Merger (the "Merger Agreement") providing,
among other things, for the merger of the Company with and into Buyer (the
"Merger"). We understand that Buyer has undertaken and will continue to
undertake substantial expenses in connection with the negotiation and
execution of the Merger Agreement and the subsequent actions necessary to
consummate the Merger and the other transactions contemplated by the Merger
Agreement.
In consideration of, and as a condition to, Buyer's entering
into the Merger Agreement, and in consideration of the expenses incurred
and to be incurred by Buyer in connection therewith, as of the date first
written above, Stockholder agrees with Buyer as follows:
1. Stockholder shall vote or cause to be voted for the approval
of the Merger Agreement and the Merger, at any meeting of stockholders of
the Company called for the purpose of voting on the Merger Agreement or the
Merger or any adjournment thereof or in any other circumstance upon which a
vote, consent or other approval with respect to the Merger Agreement or the
Merger is sought, all of the Shares that Stockholder shall be entitled to
so vote, whether such Shares are held by Stockholder on the date of this
letter agreement or are subsequently acquired (whether pursuant to the
exercise of stock options or otherwise). Stockholder hereby waives any
rights of appraisal or rights to dissent from the Merger that Stockholder
may have.
2. Stockholder represents that Stockholder has the complete and
unrestricted power and the unqualified right to enter into and perform the
terms of this letter agreement. Stockholder further represents that this
letter agreement constitutes a valid and binding agreement, enforceable
against Stockholder in accordance with its terms. Stockholder represents
that Stockholder owns the number of Shares indicated opposite Stockholder's
name below, free and clear of any liens, claims, charges or other
encumbrances and restrictions of any kind whatsoever ("Liens"), and has
sole and unrestricted voting power with respect to such Shares.
3. Notwithstanding anything herein to the contrary, the
agreements contained herein shall remain in full force and effect until the
earlier of (a) the consummation of the Merger and (b) the termination of
the Merger Agreement in accordance with Article IX thereof.
4. This letter agreement is to be governed by the laws of the
State of Maryland, without giving effect to the principles of conflicts of
laws thereof. If any provision hereof is deemed unenforceable, the
enforceability of the other provisions hereof shall not be affected.
5. Stockholder signs solely in his or her individual capacity
with respect to his or her beneficial ownership of Shares and makes no
agreement or understanding herein in any other capacity, including his or
her capacity as a director of the Company.
6. Stockholder acknowledges and agrees that Buyer could not be
made whole by monetary damages in the event of any default by Stockholder
of the terms and conditions set forth in this Agreement. It is accordingly
agreed and understood that Buyer, in addition to any other remedy that it
may have at law or in equity, shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and specifically to
enforce the terms and provisions hereof in any action instituted in any
court of the United States or in any state having appropriate jurisdic
tion.
7. This Agreement may be executed in two or more counterparts,
each of which shall be considered an original but all of which together
shall constitute the same instrument.
8. Nothing contained herein shall be deemed to modify,
supersede or in any manner limit any other restrictions on the transfer of
the Shares imposed by any other agreement between Stockholder and Buyer,
except that this Agreement supersedes the letter agreement, dated September
7, 1999, among each of the undersigned and Buyer.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
Please confirm our agreement with you by signing a copy of this
letter.
Director, Executive Number of
Officer or Stockholder Shares Signatures
- - - ---------------------- --------- ----------
John F. Feezer, III (individual 2,386.5050 ____________________
Kevin P. Huffman 1,927.5880 ____________________
Eugene W. Iager, Sr. 41,298.8598 ____________________
Euguene W. Iager, Jr.
MD Uniform Gift to Minor A 5,572.9177
----------------------
Eugene W. Iager, Sr.
Custodian
Amy E. Iager
MD Uniform Gift to Minor A 5,956.3700
----------------------
Eugene W. Iager, Sr.
Custodian
Charles B. Iager, Jr. 18,059.7982
- - - -----------------------
Judith Elizabeth Iager 1,970.0568
- - - -----------------------
Mark E. Iager 12,667.0000
- - - -----------------------
Mary Katherine Iager 1,518.3994
- - - -----------------------
Matthew E. Iager 12,730.9355
- - - -----------------------
Michael Charles Iager 12,411.9274
- - - ----------------------
Nathan A. Riggs Iager
MD Uniform Gift to Minor A 5,952.0626
- - - ----------------------
Eugene W. Iager, Sr.
Custodian
Tanya L. Iager
MD Uniform Gift to Minor A 5,956.3700
- - - ----------------------
Eugene W. Iager, Sr.
Custodian
Richard H. Pettingill 102.1271 ____________________
Ronald L. Eyre 802.5298 ____________________
Fred T. Lewis 16,963.4913 ____________________
Howard E. Harrison, III 1,544.5130 ____________________
John S. Whiteside 39,757.8626 ____________________
Dennis W. Miller 0 ____________________
Edwin B. McKee 1,092.3204 ____________________
Barbara M. Broczkowski 0 ____________________
Bernard G. Malinowski 13,611.0010 ____________________
John F. Feezer, Jr. 28,975.2550 ____________________
Beulah M. Feezer 42,720.0000 ____________________
WW Services Limited
Partnership 19,225.8996
- - - ---------------------
John F. Feezer, Jr.
General Partner
- - - ---------------------
John F. Feezer, III
General Partner
Westminster Warehousing
Services, Inc. 6,860.8366
- - - ----------------------
John F. Feezer, Jr.
President
Agreed to and Accepted as of this
7th day of September, 1999
F&M BANCORP
By:__________________________
Name:
Title:
