In this paper, for steady-state northward interplanetary magnetic field (IMF) with ∣BY∣ ~ BZ, we describe a new merging sequence that results in polar cap bifurcation and accompanying paired exchange cells in the ionospheric convection pattern. Although the IMF is northward, it reconnects with the closed geomagnetic field on the dayside high-latitude magnetopause, creating two types of open geomagnetic field lines. For the first type the neutral point and the foot point are in the same hemisphere; for the second type the neutral point and the foot point are in opposite hemispheres. The latter type of field lines slips on the magnetopause in the azimuthal direction opposite to the normal BY- associated flux transport and forms an overdraped tail lobe. The ionospheric signature of this overdraped lobe is the appearance of an open magnetic flux island inside the dawn/dusk plasma sheet (i.e., polar cap bifurcation). For BY > 0 the island emerges in the duskside (dawnside) plasma sheet in the northern (southern) ionosphere and conversely for BY 0 the pair is located in the noon-dusk and midnight-dawn (dawn-noon and dusk-midnight) quadrants of the northern (southern) ionosphere; for BY < 0 a mirror image with respect to the noon-midnight meridian applies to the convection pattern. We demonstrate observational evidence that supports this model.