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 - JUNE 29, 2006
CODORUS VALLEY BANCORP, INC.
(Exact name of registrant as specified in its charter)
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PENNSYLVANIA 23-2428543
(STATE OR OTHER JURISDICTION 0-15536 (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) COMMISSION FILE NUMBER IDENTIFICATION NO.)
105 LEADER HEIGHTS ROAD
YORK, PENNSYLVANIA 17405-2887
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE AND ZIP CODE)
(717) 747-1519
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Check the appropriate box below if the Form 8-K filing 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 (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.133-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On June 28, 2006, Codorus Valley Bancorp, Inc. (the "Company")
completed a private placement of $7,000,000 in aggregate principal amount of
floating rate preferred securities (the "Trust Preferred Securities") through a
newly formed Delaware trust affiliate CVB Statutory Trust No. 2 (the "Trust").
The Trust Preferred Securities mature on July 7, 2036, are redeemable at the
Company's option beginning after five years, and require quarterly distributions
by the Trust to the holders of the Trust Preferred Securities. Distributions
will be payable quarterly at a variable interest rate equal to the 3-month
London Interbank Offered Rate ("LIBOR") rate plus 1.54% per annum. The Trust
simultaneously issued all of the Trust's issued and outstanding common
securities (the "Common Securities") to the Company for a purchase price of
$217,000.
The Trust used the proceeds from the sale of the Trust Preferred
Securities together with the sale of the proceeds from the sale of the Common
Securities to purchase $7,217,000 in aggregate principal amount of the Company's
unsecured floating rate junior subordinated debt securities due July 7, 2036
issued by the Company (the "Junior Subordinated Debt Securities"). The net
proceeds to the Company from the sale of the Junior Subordinated Debt Securities
will be used by the Company for general corporate purposes.
The Junior Subordinated Debt Securities were issued pursuant to an
Indenture (the "Indenture") dated June 28, 2006 between the Company, as issuer,
and Wells Fargo Bank, National Association, as trustee. The terms of the Junior
Subordinated Debt Securities are substantially the same as the terms of the
Trust Preferred Securities. The interest payments on the Junior Subordinated
Debt Securities paid by the Company will be used by the Trust to pay the
quarterly distributions to the holders of the Trust Preferred Securities. The
Indenture permits the Company to defer interest payments on the Junior
Subordinated Debt Securities (in which case the Trust will be entitled to defer
distributions otherwise due on the Trust Preferred Securities) for up to 20
consecutive quarters, provided there is no event of default (as described in
more detail below). During an extension period, the Company may not make certain
distributions or payments as set forth in the Indenture.
The Junior Subordinated Debt Securities are subordinated to the prior
payment of any other indebtedness of the Company that, by its terms, is not
similarly subordinated. The Trust Preferred Securities will be recorded as a
long-term liability on the Company's balance sheet; however, for regulatory
purposes the Trust Preferred Securities will be treated as Tier 1 or Tier 2
capital under the rulings of the Company's primary regulator, the Federal
Reserve Board.
The Junior Subordinated Debt Securities mature on July 7, 2036, but
may be redeemed at the Company's option at any time commencing after July 7,
2011 or at any time upon certain special events, such as a change in the
regulatory capital treatment of
the Junior Subordinated Debt Securities, the Trust being deemed an "Investment
Company" under the Investment Company Act of 1940, as amended, or occurrence of
certain adverse tax events. Except upon the occurrence of the certain events
described above, the Company may redeem the Junior Subordinated Debt Securities
at their aggregate principal amount, plus accrued interest, if any.
The Junior Subordinated Debt Securities may be declared immediately
due and payable at the election of the trustee or holders of 25% of aggregate
principal amount of the outstanding Junior Subordinated Debt Securities upon the
occurrence of an event of default. An event of default generally means:
- Default in the payment of any interest when due that continues
unremedied for a period of 30 days, except in the case of an election
by the Company to defer payments of interest for up to 20 consecutive
quarters (which does not constitute an event of default);
- Default in the payment of the principal amount of the Junior
Subordinated Debt Securities at maturity;
- Default in the payment of any interest following the deferral of
interest payments by the Company for 20 consecutive quarters;
- Default in the Company's performance, or breach, of any covenant or
warranty in the Indenture which is not cured within 90 days;
- Institution of bankruptcy or similar proceedings by or against the
Company; or
- Liquidation or winding up of the Trust, other than as contemplated in
the Indenture.
The Company has also entered into a Guarantee Agreement pursuant to
which it has agreed to irrevocably and unconditionally guarantee, with respect
to the Trust Preferred Securities and to the extent not paid by the Trust,
accrued and unpaid distributions on the Trust Preferred Securities and the
redemption price payable to the holders of the Trust Preferred Securities, in
each case to the extent the Trust has funds available.
The terms of the Trust Preferred Securities are governed by an Amended
and Restated Declaration of Trust (the "Declaration") dated as of June 28, 2006,
by and among the Company, Wells Fargo Bank, National Association, as
institutional trustee, and the Administrators named therein.
The foregoing description is qualified in its entirety by reference to
the full text of the Declaration, a copy of which is attached hereto as Exhibit
10.1, the Indenture, a copy of which is attached hereto as Exhibit 10.2, and the
Guarantee Agreement, a copy of which is attached hereto as Exhibit 10.3.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
The information required by this Item is included in Item 1.01 above, which is
incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits.
Exhibit 10.1. Amended and Restated Declaration of Trust of CVB Statutory
Trust No. 2, dated as of June 28, 2006, among Codorus Valley Bancorp, Inc.,
as sponsor, the Delaware and institutional trustee named therein, and the
administrators named therein.
Exhibit 10.2. Indenture, dated as of June 28, 2006, between Codorus Valley
Bancorp, Inc., as issuer, and the trustee named therein, relating to the
Junior Subordinated Debt Securities due 2036.
Exhibit 10.3 Guarantee Agreement, dated as of June 28, 2006, between
Codorus Valley Bancorp, Inc. and the guarantee trustee named therein.
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.
CODORUS VALLEY BANCORP, INC.
Dated: June 29, 2006 /s/ Larry J. Miller
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Larry J. Miller
President and Chief Executive Officer
(Principal Executive Officer)
EXHIBIT INDEX
Exhibit 10.1. Amended and Restated Declaration of Trust of CVB Statutory Trust
No. 2, dated as of June 28, 2006, among Codorus Valley Bancorp, Inc., as
sponsor, the Delaware and institutional trustee named therein, and the
administrators named therein.
Exhibit 10.2. Indenture, dated as of June 28, 2006, between Codorus Valley
Bancorp, Inc., as issuer, and the trustee named therein, relating to the Junior
Subordinated Debt Securities due 2036.
Exhibit 10.3 Guarantee Agreement, dated as of June 28, 2006, between Codorus
Valley Bancorp, Inc. and the guarantee trustee named therein.