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 1, 1996
UNITED CAROLINA BANCSHARES CORPORATION
(Exact name of registrant as specified in its charter)
North Carolina 05583 56-0954530
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
127 Webster Street, Whiteville, North Carolina 28472
(Address, including zip code, of principal executive office)
(910) 642-5131
(Registrant's telephone number, including area code)
Item 5. Other Events.
On November 1, 1996, Southern National Corporation ("SNC") and
United Carolina Bancshares Corporation ("UCB") entered into an Agreement and
Plan of Reorganization (the "Agreement"), pursuant to which UCB will be acquired
by SNC. The Boards of Directors of SNC and UCB approved the Agreement and the
transactions contemplated thereby at separate meetings held on November 1, 1996.
In accordance with the terms of the Agreement, SNC will acquire
UCB pursuant to a merger (the "Merger") of a newly created, wholly owned
subsidiary of SNC to be organized under the laws of the State of North Carolina
with and into UCB, with UCB as the surviving entity resulting from the Merger.
Upon consummation of the Merger, each share of the $4.00 par
value common stock of UCB ("UCB Common Stock") (excluding shares held by any
dissenting shareholders) issued and outstanding at the effective time of the
Merger (as described in the Agreement, the "Effective Time") shall be converted
into and exchanged for 1.135 shares (the "Exchange Ratio") of the $5.00 par
value common stock of SNC ("SNC Common Stock").
In addition, at the Effective Time, all rights with respect to
UCB Common Stock, pursuant to stock options granted by UCB under the existing
stock plans of UCB, which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become rights with respect to SNC
Common Stock on a basis that reflects the Exchange Ratio.
The Merger is intended to constitute a tax-free transaction
under the Internal Revenue Code of 1986, as amended, and be accounted for as a
pooling of interests.
Consummation of the Merger is subject to various conditions,
including: (i) receipt of the approval by the shareholders of UCB of appropriate
matters relating to the Agreement and the Merger required to be approved under
applicable law; (ii) receipt of the approval by the shareholders of SNC of the
issuance of shares of SNC Common Stock pursuant to the Merger as required to be
approved under applicable law; (iii) receipt of all regulatory approvals
required in connection with the transactions contemplated by the Agreement,
provided that no regulatory approval may impose any condition or requirement
(other than previously contemplated divestitures or conditions or restrictions
caused by other acquisitions by SNC) which, in the reasonable opinion of SNC,
would so materially adversely affect the business or economic benefits of the
Merger as to render consummation of the Merger inadvisable or unduly burdensome;
(iv) receipt of an opinion of counsel as to the tax-free nature of certain
aspects of the Merger; (v) receipt by SNC of letters, dated as of the filing
date of the registration statement to be filed with the Securities and Exchange
Commission (the "Commission"), in connection with the Merger and as of the
Effective Time, from Arthur Andersen LLP to the effect that the Merger will
qualify for pooling-of-interests accounting treatment; (vi) the representations
and warranties of the respective parties shall be true and accurate under the
standards set forth in the Agreement; (vii) the parties shall have
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performed in all material respects all obligations and complied in all material
respects with all covenants required by the Agreement; (viii) UCB shareholders
holding not more than 9.0% of the outstanding shares of UCB Common Stock shall
have given written notice of their intent to demand payment for their shares and
shall not have voted for the Merger, pursuant to Article 13 of the North
Carolina Business Corporation Act; and (ix) satisfaction of certain other
conditions.
The Merger may be terminated by the parties under certain
circumstances including on the basis of (i) a material breach of any covenant or
agreement contained in the Agreement; (ii) an inaccuracy of any representation
or warranty of the other party, which inaccuracy would provide the nonbreaching
party the ability to refuse to consummate the Merger under the applicable
standard set forth in the Agreement; (iii) the inability to satisfy or fulfill
the conditions precedent to consummation of the Agreement prior to the closing
date; (iv) the failure to obtain the requisite regulatory approvals; (v) the
failure to obtain the requisite shareholder approvals; and (vi) the failure to
consummate the Merger by September 30, 1997.
Under the Agreement, SNC also has the right to terminate the Agreement
at any time prior to January 10, 1997, if SNC determines in its sole good faith
judgment, through review of information disclosed to it by UCB or discovered
during performance of SNC's due diligence review or otherwise, that the
financial condition, results of operations, business or business prospects of
UCB is materially different from SNC's reasonable expectations with respect
thereto based on information that has been disclosed by UCB in its filings with
the Commission since January 1, 1996 and SNC's knowledge of the operations of
banks.
UCB also has the right to terminate the Agreement at any time during the
ten-day period commencing two days after the "Determination Date," as defined,
if either: (A) the "Average Closing Price" of SNC Common Stock is less than
$27.00; or (B) both of the following conditions are satisfied (i) the Average
Closing Price of SNC Common Stock is less than $28.50 and (ii) (a) the quotient
obtained by dividing the Average Closing Price by $33.50 (such number being
referred to herein as the "SNC Ratio") shall be less than (b) the quotient
obtained by dividing the "Index Price" on the Determination Date by the Index
Price on the "Starting Date" and subtracting 0.15 from the quotient. SNC has the
right to elect to adjust the Exchange Ratio in accordance with the terms of the
Agreement, and thereby eliminate UCB's right to terminate the Agreement.
For purposes of the Agreement, the Average Closing Price shall mean the
average of the daily last sales prices of SNC Common Stock as reported on the
New York Stock Exchange, Inc. ("NYSE") (as reported by The Wall Street Journal
or, if not reported thereby, another authoritative source as chosen by SNC) for
the ten consecutive full trading days in which such shares are traded on the
NYSE ending at the close of trading on the Determination Date. For purposes of
the Agreement, the Determination Date shall mean the date on which the consent
of the Board of Governors of the Federal Reserve System shall be received.
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For purposes of the Agreement, the Index Price shall mean the weighted
average of the closing prices of the companies composing the index group
referred to the Agreement (the "Index Group"). For purposes of the Agreement,
the Starting Date shall mean November 1, 1996.
In connection with executing the Agreement, SNC and UCB entered into two
stock option agreements. Under the first such stock option agreement (the "SNC
Stock Option Agreement"), UCB granted to SNC an option to purchase up to
4,828,960 shares of UCB Common Stock, at a purchase price of $30.50 per share,
upon certain terms and in accordance with certain conditions. Under the second
such stock option agreement (the "UCB Stock Option Agreement"), SNC granted to
UCB an option to purchase up to 10,806,121 shares of SNC Common Stock, at a
purchase price of $34.625 per share, upon certain terms and in accordance with
certain conditions.
The Agreement and the Merger will be submitted for approval at a meeting
of the shareholders of UCB. Similarly, the issuance of shares of SNC Common
Stock pursuant to the Merger will be submitted for approval at a meeting of the
shareholders of SNC. Prior to either shareholders meeting, SNC will file a
registration statement with the Commission registering, under the Securities Act
of 1933, as amended, the shares of SNC Common Stock to be issued in exchange for
the outstanding shares of UCB Common Stock. Such shares of stock of SNC will be
offered to the UCB shareholders pursuant to a prospectus that will also serve as
a joint proxy statement for the separate meetings of the shareholders of UCB and
SNC, respectively.
For additional information regarding the Agreement, the SNC Stock
Option Agreement, and the UCB Stock Option Agreement, reference is made to the
copies of those documents which are incorporated herein by reference and
included as Exhibits to this Current Report on Form 8-K. The foregoing
discussion is qualified in its entirety by reference to such documents.
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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.
UNITED CAROLINA BANCSHARES CORPORATION
(Registrant)
By: /s/ E. Rhone Sasser
E. Rhone Sasser
Chairman of the Board and Chief Executive Officer
Date: November 8, 1996
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INDEX TO EXHIBITS
Sequential
Exhibit Page No.
2.1 Agreement and Plan of Reorganization, dated as of November 1,
1996, by and between Southern National Corporation and United
Carolina Bancshares Corporation .
2.2 Stock Option Agreement, dated as of November 1, 1996,
issued by United Carolina Bancshares Corporation to
Southern National Corporation
2.3 Stock Option Agreement, dated as of November 1, 1996,
issued by Southern National Corporation to
United Carolina Bancshares Corporation
99.1 Text of joint press release, dated November 4, 1996, issued by
United Carolina Bancshares Corporation and Southern National
Corporation
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