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): December 5, 2014
Salisbury
Bancorp, Inc.
(Exact
name of registrant as specified in charter)
| Connecticut |
|
000-24751 |
|
06-1514263 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
| |
|
|
|
|
| 5
Bissell Street, Lakeville, Connecticut |
06039 |
| (Address
of principal executive offices) |
(zip
code) |
| |
|
|
|
|
| Registrant’s
telephone number, including area code: (860) 435-9801 |
| |
|
|
|
|
| N/A |
| (Former
Name or Former Address, if Changed Since Last Report) |
Check the appropriate
box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the
following provisions (see General Instructions A.2. below):
☐ Written
communications pursuant to Rule 425 under the Securities Act (17 C.F.R. 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 C.F.R. 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 C.F.R. 240.13e-4(c))
Form
8-K, Current Report
Salisbury Bancorp, Inc.
Section 2. Financial
Information
Item
2.01. Completion of Acquisition or Disposition of Assets
Effective
at the close of business on December 5, 2014 (the “Effective Time”), Salisbury Bancorp, Inc. (“Salisbury”)
(NASDAQ: SAL), the bank holding company of Salisbury Bank and Trust Company (“Salisbury Bank”), successfully completed
the merger (the “Merger”) of Riverside Bank, of Poughkeepsie, New York, (“Riverside”) with Salisbury Bank,
under the terms of the Agreement and Plan of Merger dated March 18, 2014 by and among Salisbury, Salisbury Bank and Riverside
Bank (the “Merger Agreement”).
Pursuant
to the Merger Agreement, each share of Riverside Bank common stock outstanding at the Effective Time of the Merger was converted
into the right to receive 1.350 shares of Salisbury common stock, as specified in the Merger Agreement, with cash to be paid in
lieu of fractional shares.
The
foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to
the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The representations,
warranties and covenants of each party set forth in the Merger Agreement have been made only for purposes of, and were and are
solely for the benefit of the parties to, the Merger Agreement; may be subject to limitations agreed upon by the contracting parties,
including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties
to the Merger Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable
to the contracting parties that differ from those applicable to investors.
Section 5. Corporate
Governance and Management
Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers
At
the Effective Time, John M. Davies, who served as President and Chief Executive Officer of Riverside Bank immediately prior to
the Merger, became President of Salisbury Bank’s New York Region pursuant to the previously disclosed employment Agreement,
dated as of March 18, 2014, between Mr. Davies and Salisbury Bank. As previously disclosed, such employment agreement, which became
effective upon consummation of the Merger and which supersedes his prior employment agreement with Riverside, provides that Mr.
Davies’ initial base salary will be $225,000 per year, payable in installments in accordance with Salisbury Bank’s
normal payroll practices, less such deductions or withholdings as are required by law. Such base salary will be subject to at
least annual evaluations and shall be not less than $225,000. Immediately prior to the effective time of the Merger, Mr. Davies
received an initial cash success bonus of $70,000, which was contingent upon (i) the closing of the Merger at or prior to December
31, 2014, and (ii) as of the effective time, the dollar amount of the gross loan portfolio of Riverside equaling at least 90%
of the dollar amount of the gross loan portfolio of Riverside as of December 31, 2013.
In
addition, Mr. Davies shall be entitled to receive the following cash payments, subject to the vesting requirements set forth below.
Upon the vesting of each award, the cash award shall be paid to Mr. Davies:
- $100,000 awarded in 2015 on the anniversary of the effective
date and fully vested and paid to Mr. Davies in 2016 on the anniversary of the effective date;
- $100,000 awarded in 2016 on the anniversary of the effective
date and fully vested and paid to Mr. Davies in 2018 on the anniversary of the effective date; and
- $100,000 awarded in 2017 on the anniversary of the effective
date and fully vested and paid to Mr. Davies in 2018 on the anniversary of the effective date.
In
order for the foregoing awards to vest and be paid over to Mr. Davies, Mr. Davies must be employed by Salisbury Bank on both the
award date and the vesting date; provided however, that (i) in the event Mr. Davies’ employment is terminated by Salisbury
Bank for any reason other than “cause”, (ii) Mr. Davies terminates his employment with Salisbury Bank for “good
reason” (as defined in the employment agreement), or (iii) there occurs a change in control, then in that case (x) any award
set forth above which has not yet been awarded to Mr. Davies shall be awarded to Mr. Davies, and (y) all such awards shall be
deemed fully vested and paid to Mr. Davies, all as of his termination date or the effective date of such change in control, whichever
is applicable.
Pursuant
to the employment agreement, Salisbury Bank also granted to Mr. Davies 3,000 shares of restricted Salisbury common stock at the
effective time of the Merger, which shall vest at a rate of 750 shares on the effective date and on each of the subsequent three
anniversaries of the effective date, provided Mr. Davies is still employed by Salisbury Bank on such anniversary date; provided
however, that (i) in the event Mr. Davies’ employment is terminated by Salisbury Bank for any reason other than “cause”,
(ii) Mr. Davies terminates his employment with Salisbury Bank for good reason, or (iii) there occurs a change in control, then
in that case any unvested shares of restricted stock then held by Mr. Davies shall be deemed fully vested as of his termination
date or the effective date of such change in control, whichever is applicable.
The
agreement also provides for change in control protection. In the event of Mr. Davies’ involuntary termination of employment
for reasons other than cause or a voluntary termination of employment for good reason occurring on or after a change in control,
he shall be entitled to the following:
(a) A
lump sum cash payment equal to two (2.0) times his annual rate of base salary in effect on the date of termination or, if greater,
his average annual base salary rate for the twelve (12) month period ending on the last day of the calendar month immediately
prior to the date of such termination. Such amount shall be paid to Mr. Davies within sixty (60) days following his separation
from service.
(b) Life
insurance coverage and non-taxable medical and dental coverage, at no cost to Mr. Davies, that is substantially comparable (and
on substantially the same terms and conditions) to the coverage maintained by Salisbury Bank for Mr. Davies immediately prior
to his date of termination. Such life insurance and non-taxable medical and dental coverage shall be provided by Salisbury Bank
to Mr. Davies for two (2) years following his separation from service and subject to the same terms and conditions as other benefits
provided under the employment agreement. If, as the result of any change in, or interpretation of, the laws applicable to the
continued welfare benefits to be provided under the employment agreement, such benefits are deemed illegal or subject to penalties,
then Salisbury Bank shall, to the extent permitted under such laws, pay to Mr. Davies a cash lump sum payment reasonably estimated
to be equal to the amount of welfare benefits (or the remainder of such amount) that Mr. Davies is no longer permitted to receive
in-kind. Such lump sum payment shall be required to be within sixty (60) days following Mr. Davies’ separation from service,
or if later, within sixty (60) days following a determination that such payment would be illegal or subject to penalties.
(c) Unpaid
compensation and benefits, and unused vacation, accrued through the date of his termination of employment. Mr. Davies shall also
be entitled to be reimbursed by Salisbury Bank for final expenses that he reasonably and necessarily incurred on behalf of Salisbury
Bank prior to his termination of employment, provided that Mr. Davies submits expense reports and supporting documentation of
such expenses in accordance with Salisbury Bank’s expense reimbursement policies in effect at that time. Such reimbursement
payment(s) shall be made no later than the time required by applicable law (or, if earlier, by Salisbury Bank or Salisbury’s
policy, practice, or rule), but in no event later than the sixtieth (60th) day following Mr. Davies’ date of termination.
“Change
in control” shall mean (i) a change in the ownership of Salisbury or Salisbury Bank, (ii) a change in the effective control
of Salisbury or Salisbury Bank, or (iii) a change in the ownership of a substantial portion of the assets of Salisbury or Salisbury
Bank, as described below.
(i) A
change in the ownership of a corporation occurs on the date that any one person, or more than one person acting as a group (as
defined in Treasury Regulation §1.409A-3(i)(5)(v)(B)), acquires ownership of stock of Salisbury or Salisbury Bank that, together
with stock held by such person or group, constitutes more than fifty (50) percent of the total fair market value or total voting
power of the stock of such corporation. For these purposes, a change in ownership will not be deemed to have occurred if no stock
of Salisbury or Salisbury Bank is outstanding.
(ii) A
change in the effective control of Salisbury or Salisbury Bank occurs on the date that either (A) any one person, or more than
one person acting as a group (as defined in Treasury Regulation §1.409A-3(i)(5)(vi)(D)) acquires (or has acquired during
the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of
Salisbury or Salisbury Bank possessing thirty (30) percent or more of the total voting power of the stock of Salisbury or Salisbury
Bank, or (B) a majority of the members of Salisbury’s or Salisbury Bank’s board of directors is replaced during any
twelve (12)-month period by directors whose appointment or election is not endorsed by a majority of the members of Salisbury’s
or Salisbury Bank’s board of directors prior to the date of the appointment or election, provided that this definition of
a change in control is inapplicable where a majority shareholder of the entity that experiences the change in control is another
corporation.
(iii) A
change in a substantial portion of Salisbury’s or Salisbury Bank’s assets occurs on the date that any one person or
more than one person acting as a group (as defined in Treasury Regulation §1.409A-3(i)(5)(vii)(C)) acquires (or has acquired
during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) assets from Salisbury
or Salisbury Bank that have a total gross fair market value equal to or more than forty (40) percent of the total gross fair market
value of (A) all of the assets of Salisbury or Salisbury Bank, or (B) the value of the assets being disposed of, either of which
is determined without regard to any liabilities associated with such assets.
The
employment agreement also includes typical confidentiality and non-compete and non-solicitation provisions.
Also
upon the Effective Time, Todd Rubino, who served as the Executive Vice President and Chief Lending Officer of Riverside Bank immediately
prior to the Merger, became Vice President, Senior Lender of the New York Region of Salisbury Bank pursuant to the previously
disclosed employment agreement, dated as of March 18, 2014, between Mr. Rubino and Salisbury Bank. Such employment agreement,
which supersedes his prior change in control agreement with Riverside, and which was effective upon consummation of the Merger,
provides that Mr. Rubino’s initial base salary will be $147,000 per year. Such base salary shall be evaluated at least annually
and shall be not less than $147,000. Immediately prior to the effective time of the Merger, Mr. Rubino received an initial cash
success bonus of $40,000, which was contingent upon (i) the closing of the Merger at or prior to December 31, 2014, and (ii) as
of the effective time, the dollar amount of the gross loan portfolio of Riverside equaling at least 90% of the dollar amount of
the gross loan portfolio of Riverside as of December 31, 2013.
Mr.
Rubino will also be entitled to receive the following cash payments, subject to the vesting requirements set forth below:
- $43,334 awarded on the effective date and fully vested
and paid to Mr. Rubino in 2015 on the anniversary of the effective date;
- $43,334 awarded in 2015 on the anniversary of the effective
date and fully vested and paid to Mr. Rubino in 2016 on the anniversary of the effective date; and
- $43,334 awarded in 2016 on the anniversary of the effective
date and fully vested and paid to Mr. Rubino in 2017 on the anniversary of the effective date.
In order for the foregoing
awards to vest and be paid over to Mr. Rubino, Mr. Rubino must be employed by Salisbury Bank on both the award date and the vesting
date; provided however, that (i) in the event Mr. Rubino’s employment is terminated by Salisbury Bank for any reason other
than “Cause”, (ii) Mr. Rubino terminates his employment with Salisbury Bank for “good reason” (as defined
in the employment agreement), or (iii) there occurs a Change in Control, then in that case (x) any award set forth above which
has not yet been awarded to Mr. Rubino shall be awarded to Mr. Rubino, and (y) all such awards shall be deemed fully vested and
paid to Mr. Rubino, all as of his termination date or the effective date of such Change in Control, whichever is applicable.
Pursuant
to the employment agreement, Salisbury Bank granted to Mr. Rubino 2,000 shares of restricted Company common stock at the Effective
Time of the Merger, which shall vest at a rate of 500 shares on the effective date and on each of the subsequent three anniversaries
of the effective date, provided Mr. Rubino is still employed by Salisbury Bank on such anniversary date; provided however, that
(i) in the event Mr. Rubino’s employment is terminated by Salisbury Bank for any reason other than “Cause”,
(ii) Mr. Rubino terminates his employment with Salisbury Bank for “good reason”, or (iii) there occurs a change in
control, then in that case any unvested shares of restricted stock then held by Mr. Rubino shall be deemed fully vested as of
his termination date or the effective date of such change in control, whichever is applicable.
The
agreement also provides for change in control protection. In the event of Mr. Rubino’s involuntary termination of employment
for reasons other than Cause or a voluntary termination of employment for Good Reason occurring on or after a Change in Control,
Mr. Rubino shall be entitled to the following:
(a) A
lump sum cash payment equal to Mr. Rubino’s annual rate of base salary in effect on Mr. Rubino’s date of termination
or, if greater, Mr. Rubino’s average annual base salary rate for the twelve (12) month period ending on the last day of
the calendar month immediately prior to the date of such termination. Such amount shall be paid to Mr. Rubino within sixty (60)
days following Mr. Rubino’s separation from service.
(b) Life
insurance coverage and non-taxable medical and dental coverage, at no cost to Mr. Rubino, that is substantially comparable (and
on substantially the same terms and conditions) to the coverage maintained by the Bank for Mr. Rubino immediately prior to his
date of termination. Such life insurance and non-taxable medical and dental coverage shall be provided by Salisbury Bank to Mr.
Rubino for one year following Mr. Rubino’s separation from service and subject to the same terms and conditions as the benefits
provided under the employment agreement. If as the result of any change in, or interpretation of, the laws applicable to the continued
welfare benefits to be provided under the employment agreement, such benefits are deemed illegal or subject to penalties, then
Salisbury Bank shall, to the extent permitted under such laws, pay to Mr. Rubino a cash lump sum payment reasonably estimated
to be equal to the amount of welfare benefits (or the remainder of such amount) that Mr. Rubino is no longer permitted to receive
in-kind. Such lump sum payment shall be required to be within sixty (60) days following Mr. Rubino’s separation from service,
or if later, within sixty (60) days following a determination that such payment would be illegal or subject to penalties.
(c) Unpaid
compensation and benefits, and unused vacation, accrued through the date of Mr. Rubino’s termination of employment. Mr.
Rubino shall also be entitled to be reimbursed by Salisbury Bank for final expenses that Mr. Rubino reasonably and necessarily
incurred on behalf of Salisbury Bank prior to Mr. Rubino’s termination of employment, provided that Mr. Rubino submits expense
reports and supporting documentation of such expenses in accordance with Salisbury Bank’s expense reimbursement policies
in effect at that time. Such reimbursement payment or payments shall be made no later than the time required by applicable law
(or, if earlier, by Salisbury Bank or Salisbury policy, practice or rule), but in no event later than the sixtieth (60th) day
following Mr. Rubino’s date of termination.
“Change
in control” under Mr. Rubino’s agreement is defined in the same manner as under Mr. Davies’ employment agreement
described above.
Also
upon the Effective Time, as previously disclosed and pursuant to the terms of the Merger Agreement, Salisbury and Salisbury Bank
have increased their respective boards of directors by five (5) directors, which include the following individuals (the “New
Directors”): Charles M. Andola, Michael D. Gordon and Polly Diane Hoe, each of whom was a member of the board of directors
of Riverside Bank immediately prior to the Merger; and George E. Banta and Rudolph P. Russo.
There
are no transactions or proposed transactions, to which Salisbury is or was to be a party and in which the New Directors have a
direct or indirect material interest that are required to be disclosed under Item 404(a) of Regulation S-K.
Effective
upon the Effective Time, the five (5) New Directors of Salisbury and Salisbury Bank were placed in the Board classes set forth
below and appointed to the Board Committees set forth below:
- Charles M. Andola – Class of 2017; ALCO/Investment
Committee; Executive Committee; Loan Committee; Nominating and Governance Committee
- George E. Banta – Class of 2017; Audit Committee;
Marketing and Site Development Committee; Loan Committee (Alternate)
- Michael D. Gordon – Class of 2016; Human Resources
(HR) and Compensation Committee; Loan Committee; Marketing and Site Development Committee
- Polly Diane Hoe – Class of 2016; Audit Committee;
Human Resources (HR) and Compensation Committee; Trust Committee; Loan Committee (Alternate)
- Rudolph P. Russo – Class of 2015; ALCO/Investment
Committee; Trust Committee; Loan Committee (Alternate)
Section 8. Other
Events
Item
8.01. Other Events
On
December 8, 2014, Salisbury issued a press release announcing the completion of the Merger. A copy of the press release is attached
hereto as Exhibit 99.1 and incorporated herein by reference.
Section 9. Financial Statements
and Exhibits
Item 9.01. Financial Statements
and Exhibits.
| (a) | Financial
Statements of Businesses Acquired.
|
| | The
required financial statements of Riverside Bank, the business acquired, will be filed
by amendment to this Current Report on Form 8-K (this “Report”) no later
than February 13, 2015.
|
| (b) | Pro Forma
Financial Information.
|
| | Required
pro forma financial information will be filed by amendment to this Report no later than
February 13, 2015.
|
| 2.1 | Agreement
and Plan of Merger, dated as of March 18, 2014, by and among Salisbury Bancorp, Inc.,
Salisbury Bank and Trust Company, and Riverside Bank (incorporated herein by reference
to Exhibit 2.1 to Salisbury’s Current Report on Form 8-K filed on March 19, 2014)* |
| 99.1 | Press
Release dated December 8, 2014. |
*The
schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
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 hereto duly authorized.
Dated:
December 8, 2014 |
By: |
/s/
Richard J. Cantele, Jr. |
|
|
Richard
J. Cantele, Jr. |
| |
|
President
and Chief Executive Officer |
