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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) November 29,
2000
FIRST LIBERTY BANK CORP.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-133312 23-2275242
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Ident. No.)
645 Washington Ave., P.O. Box 39, Jermyn, PA 18433-0039
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (570)876-6500
N/A
(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On November 29, 2000, First Liberty Bank Corp. ("First
Liberty") entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Community Bank System, Inc., a bank
holding company based in DeWitt, New York ("CBSI"). Pursuant to
the Merger Agreement, subject to the satisfaction of a number of
conditions, First Liberty will merge (the "Merger") with and
into CBSI, with CBSI being the surviving corporation, to create
a bank holding company with consolidated assets of approximately
$2.8 billion (assuming the completion of the pending merger
between CBSI's bank subsidiary, Community Bank, N.A. ("Community
Bank"), and The Citizens National Bank of Malone). Following
the Merger, CBSI expects to merge First Liberty's bank
subsidiary, First Liberty Bank & Trust ("First Liberty Bank"),
with and into Community Bank, with Community Bank being the
continuing bank.
Community Bank, a national banking association, operates
67 banking offices primarily in northern New York. At
September 30, 2000, without regard to its pending transaction
with The Citizens National Bank of Malone, CBSI had
approximately $1.97 billion in total assets, $1.46 billion in
total deposits, $1.07 billion in total net loans and
shareholders' equity of $121.98 million. CBSI common stock is
registered pursuant to Section 12(b) of the Securities Exchange
Act of 1934, as amended (File No. 0-11716). Accordingly, CBSI
files reports, statements and other information with the SEC,
which contain additional information concerning CBSI. These
reports, statements and other information are available from the
SEC. CBSI common stock is listed on the New York Stock Exchange
under the symbol "CBU."
Under the Merger Agreement, each share of First Liberty
common stock issued and outstanding at the time the Merger is
consummated will be converted into 0.56 of a share of CBSI
common stock and cash in lieu of fractional shares, if any.
CBSI also agreed to assume outstanding stock options to purchase
shares of First Liberty common stock. Based on the number of
shares of First Liberty common stock and stock options issued
and outstanding on November 29, 2000, CBSI will issue
approximately 3.6 million shares of its common stock and assume
options to purchase approximately 44,000 shares of its common
stock upon consummation of the Merger. The Merger is intended
to constitute a tax-free reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, and to
qualify for accounting treatment as a pooling of interests.
Based on the November 28, 2000 closing price of CBSI common
stock as reported on the New York Stock Exchange, and including
the options to be assumed, the transaction is valued at
approximately $86.7 million.
In the Merger Agreement, CBSI agreed to elect three of the
current directors of First Liberty, Saul Kaplan, Peter A. Sabia
and Harold Kaplan, to the Board of Directors of CBSI, one
director to serve in each existing class of the CBSI Board.
Subject to certain limitations, CBSI also agreed to renominate
these individuals for at least one additional three-year term
after expiration of their initial terms and to recommend their
re-election by CBSI stockholders. Each of Messrs. Kaplan and
Sabia will also serve on the Community Bank Board of Directors
at any time that they are serving as CBSI directors.
Following completion of the Merger, CBSI will establish a
nine-member Advisory Board to advise CBSI and Community Bank on
matters relating to markets served by First Liberty. The
Advisory Board will consist of Sanford A. Belden, President and
Chief Executive Officer of CBSI, and the following eight members
of First Liberty's Board of Directors: Michael A.
Barbetti, C.P.A., Joseph P. Coviello, Esquire, William M. Davis,
Fred J. Gentile, Robert T. Kelly, C.P.A., William K.
Nasser, Jr., C.P.A., Thomas G. Speicher, and Norman E.
Woodworth.
It is a condition to closing that each of Steven R. Tokach
and Joseph R. Solfanelli, executive officers of First Liberty,
enters into a three-year employment agreement with CBSI and
Community Bank, pursuant to which Mr. Tokach will serve as
President and Chief Executive Officer of the division of
Community Bank operating in the market areas in Pennsylvania
previously served by the First Liberty Bank, and Mr. Solfanelli
will serve as Executive Vice President and Chief Legal Officer
of such division. In addition, William M. Davis, President of
First Liberty and First Liberty Bank, is expected to serve as a
consultant to Community Bank to assist in the integration of the
two companies and to promote the business of Community Bank in
the market areas formerly served by First Liberty.
In connection with the execution and delivery of the Merger
Agreement, First Liberty granted CBSI a stock option to acquire,
under certain conditions, up to 19.9% of the issued and
outstanding shares of common stock of First Liberty. In
addition, each director and executive officer of First Liberty
has entered into an agreement which requires him to vote in
favor of the approval of the Merger Agreement and the Merger all
of the shares of First Liberty common stock that he is entitled
to vote.
Consummation of the Merger is subject to a number of
conditions, including the receipt of regulatory approvals and
the approval of the respective stockholders of First Liberty and
CBSI. Subject to the satisfaction of all conditions, the
parties are working to complete the Merger in the second quarter
of 2001.
The foregoing descriptions of and references to all of the
above-mentioned agreements are qualified in their entirety by
reference to the complete texts of the agreements that are
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated
November 29, 2000, by and between Community
Bank System, Inc. and First Liberty Bank
Corp. (Incorporated herein by reference to
Exhibit 2.1 of the Current Report on
Form 8-K filed by Community Bank System,
Inc. on December 6, 2000.)
99.1 Form of Voting Agreement, dated November 29,
2000, by and between Community Bank System,
Inc. and directors and executive officers of
First Liberty Bank Corp. (Incorporated
herein by reference to Exhibit 99.1 of the
Current Report on Form 8-K filed by
Community Bank System, Inc. on December 6,
2000.)
99.2 Stock Option Agreement, dated November 29,
2000, by and between Community Bank System,
Inc. and First Liberty Bank Corp.
(Incorporated herein by reference to
Exhibit 99.2 of the Current Report on
Form 8-K filed by Community Bank System,
Inc. on December 6, 2000.)
99.3 Joint Press Release, dated November 29,
2000, issued by Community Bank System, Inc.
and First Liberty Bank Corp.
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.
FIRST LIBERTY BANK CORP.
Dated: December 6, 2000
/s/ William M. Davis
William M. Davis,
President
EXHIBIT INDEX
Exhibit
Number Description
99.3 Joint press release, dated November 29, 2000, of
Community Bank System, Inc. and Liberty Bank Corp.
