SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
C U R R E N T R E P O R T
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
August 29, 1997
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Date of Report (Date Of Earliest Event Reported)
BARNETT BANKS, INC.
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(Exact Name Of Registrant As Specified In Its Charter)
Florida
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(State Or Other Jurisdiction Of Incorporation)
1-7901 59-0560515
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(Commission File Number) (IRS Employer Identification No.)
50 N. Laura Street
Jacksonville, Florida 32202-3638
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(Address Of Principal Executive Offices) (Zip Code)
(904) 791-7720
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(Registrant's Telephone Number, including Area Code)
NOT APPLICABLE
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(Former Name Or Former Address, If Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On August 29, 1997, NationsBank Corporation, a
corporation organized and existing under the laws of the
State of North Carolina ("NationsBank"), and Barnett
Banks, Inc., a corporation organized and existing under
the laws of the State of Florida ("Barnett"), and each
registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended, entered into an
agreement and plan of merger (the "Merger Agreement"),
pursuant to which Barnett will be merged with Nations-
Bank or a wholly-owned, direct or indirect, subsidiary
thereof (the "Merger"). The Board of Directors of both
NationsBank and Barnett approved the Merger Agreement and
the transactions contemplated thereby at their respective
meetings held on August 29, 1997.
In accordance with the terms of the Merger
Agreement, each share of Barnett common stock, par value
$2.00 per share ("Barnett Common Stock"), outstanding
immediately prior to the effective time of the Merger
(the "Effective Time") will be converted into the right
to receive 1.1875 shares (the "Exchange Ratio") of
NationsBank common stock ("NationsBank Common Stock").
Each holder of Barnett Common Stock who would otherwise
be entitled to receive a fractional share of NationsBank
Common Stock (after taking into account all of a
shareholder's certificates) will receive cash, in lieu
thereof, without interest. The Merger Agreement may be
terminated by the Board of Directors of Barnett by giving
notice to NationsBank if both (i) the average closing
price of NationsBank Common Stock for the ten full
trading days ending on the date the Federal Reserve Board
approves the Merger (the "Average Closing Price") is less
than $50.65 and (ii) the number obtained by dividing the
Average Closing Price by $63.3125 (the closing price of
NationsBank Common Stock on August 28, 1997) is less than
the number obtained by (a) dividing the average of the
closing prices of a specified index of bank stocks during
the above-mentioned ten-day period by the closing price
of such index on August 28, 1997 and (b) subtracting
0.15. In the event Barnett gives notice of its intent to
terminate the Merger Agreement pursuant to the conditions
set forth in the preceding sentence, NationsBank may
determine, in its sole discretion, to increase the
Exchange Ratio to eliminate Barnett's right to terminate
the Merger Agreement.
The Merger is intended to constitute a
reorganization under Section 368(a) of the Internal
Revenue Code of 1986, as amended, and to be accounted for
as a pooling-of-interests.
In addition, the Merger Agreement contemplates
that each stock option or other right to purchase shares
of Barnett Common Stock under the stock option and other
stock-based compensation plans of Barnett (each a
"Barnett Plan"), will be converted into and become a
right to purchase shares of NationsBank Common Stock in
accordance with the terms of the Barnett Plan and the
Barnett option or right agreement by which it is
evidenced, except that from and after the Effective Time
(i) the number of shares of NationsBank Common Stock
subject to each Barnett option or right shall be equal to
the number of shares of Barnett Common Stock subject to
such option or right immediately prior to the Effective
Time multiplied by the Exchange Ratio, and (ii) the
exercise price per share of NationsBank Common Stock
purchasable thereunder shall be the number specified in
the Barnett option or right divided by the Exchange
Ratio.
Consummation of the Merger is subject to
various conditions, including: (i) receipt of the
requisite approvals by the shareholders of each of
NationsBank and Barnett of appropriate matters relating
to the Merger Agreement and the Merger; (ii) receipt of
requisite regulatory approvals from the Board of
Governors of the Federal Reserve System and other federal
and state regulatory authorities; (iii) receipt of
opinions as to the tax and accounting treatment of
certain aspects of the Merger; (iv) listing, subject to
notice of issuance, of the NationsBank Common Stock to be
issued in the Merger; and (v) satisfaction of certain
other conditions.
The Merger Agreement and the Merger will be
submitted for approval at meetings of the shareholders of
each of Barnett and NationsBank. Prior to such meetings,
NationsBank will file a registration statement with the
Securities and Exchange Commission registering under the
Securities Act of 1933, as amended, the NationsBank stock
to be issued to the Barnett shareholders in the Merger,
including a prospectus that will also serve as a joint
proxy statement for the shareholders' meetings.
Following consummation of the Merger and the
retirement of Andrew B. Craig III as Chairman of
NationsBank at the 1998 NationsBank Annual Meeting of
Shareholders, Charles E. Rice, Chairman and Chief
Executive Officer of Barnett, will become Chairman of
NationsBank. Hugh L. McColl, Jr., will remain Chief
Executive Officer of NationsBank. In addition, five
current members of the Board of Directors of Barnett,
including Mr. Rice, will be added to the Board of
Directors of NationsBank.
In connection with the Merger Agreement,
NationsBank and Barnett entered into the following Stock
Option Agreements: (i) a stock option agreement dated
August 29, 1997 (the "Barnett Stock Option Agreement"),
pursuant to which Barnett granted to NationsBank an
option to purchase, under certain circumstances, up to
39,379,343 shares of Barnett Common Stock at a price,
subject to certain adjustments, of $54.8125 per share
(the "Barnett Option"); and (ii) a stock option agreement
dated August 29, 1997 (the "NationsBank Stock Option
Agreement"), pursuant to which NationsBank granted to
Barnett an option to purchase, under certain
circumstances, up to 70,654,895 shares of NationsBank
Common Stock at a price subject to certain adjustments,
of $63.3125 per share (the "NationsBank
Option")(collectively, the "Option Agreements" and the
"Options"). Each of the Options is exercisable upon the
occurrence of certain events, none of which has occurred
as of the date hereof. The Barnett Option, if exercised,
would give the holder thereof the right to acquire,
before giving effect to the exercise of the Barnett
Option, 19.9% of the total number of shares of Barnett
Common Stock outstanding. The NationsBank Option, if
exercised, would give the holder thereof the right to
acquire, before giving effect to the exercise of the
NationsBank Option, 10.0% of the total number of shares
of NationsBank Common Stock outstanding. The Option
Agreements were granted by the respective parties as
conditions and inducements to each others' willingness to
enter into the Merger Agreement. Under certain
circumstances, the respective issuers of the Options may
be required to repurchase the Options or the shares
acquired pursuant to the exercise thereof.
In connection with the execution of the Merger
Agreement and the Option Agreements, Barnett amended its
Rights Agreement, dated as of February 21, 1990 (as
amended, the "Rights Agreement"), between Barnett and
First Chicago Trust Company of New York, as rights agent,
to provide that the agreements entered into in connection
with the Merger with NationsBank would not trigger the
rights issued under the Rights Agreement.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS.
(c) Exhibits
99(a) Press Release issued by NationsBank
Corporation and Barnett Banks, Inc.
on August 29, 1997.
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
hereunder duly authorized.
Dated: September 12, 1997
BARNETT BANKS, INC.
By: /s/ Gregory M. Delaney
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Name: Gregory M. Delaney
Title: Controller and Chief
Accounting Officer
EXHIBIT INDEX
Exhibit
Number Description
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99(a) Press Release issued by NationsBank
Corporation and Barnett Banks, Inc. on
August 29, 1997.
NationsBank and Barnett Banks, Inc., to Combine
FOR IMMEDIATE RELEASE
August 29, 1997 - NationsBank Corporation (NYSE: NB) and
Barnett Banks, Inc. (NYSE: BBI), today announced a
definitive agreement for NationsBank to merge the two
companies. The combined company will be the largest
banking franchise in Florida serving more than 3.9
million households. In addition, NationsBank will be the
third largest banking company in the United States with
the second larger market capitalization.
Under terms of the agreement, NationsBank will pay a
fixed exchange ration of 1.1875 shares of its stock for
each outstanding share of Barnett stock. Based on the
NationsBank closing price on August 28, 1997, this
exchange ration represents a price of $75.18 for each
Barnett share, resulting in a purchase price of
approximately $15.5 billion, following the issuance of
245 million shares. The transaction is expected to close
some time in the first quarter of 1998.
The transaction is expected to be accretive to
NationsBank earnings by 1999.
The stock-for-stock transaction will be accounted for on
a pooling-of-interest basis, enabling Barnett
shareholders to exchange their shares for NationsBank
shares on a tax-free basis.
"This merger vaults us to a commanding position in the
best growth markets in the United States," said Hugh L.
McColl, Jr., chief executive officer of NationsBank. "It
reinforces our position as the banking industry's premier
growth franchise and creates a powerful, diversified
financial services organization providing unmatched
convenience and value to millions of individuals and
small businesses."
The Florida bank on a stand-alone basis will be the 10th
largest bank in the United States and will be
headquarters in Jacksonville.
"This is the right merger at the right time for both our
companies," said Charles E. Rice, chairman of Barnett
Banks, Inc. "By combining our market strengths and
managerial talents we can take full advantage of
developments in technology, the ongoing consolidation in
our industry and the changing financial services
landscape to create superior shareholder value today and
into the next century."
Rice will become chairman of NationsBank Corporation
following the retirement of current Chairman Andy Craig
at the 1998 annual meeting. McColl will remain chief
executive officer of NationsBank Corporation. Also,
Allen L. Lastinger Jr., who currently serves as president
and chief operating officer of Barnett Banks, Inc., will
be named chairman and chief operating officer of
NationsBank Florida and be the executive responsible for
all banking activities in Florida. Alex Sink, currently
president of NationsBank Florida, will remain president
of the newly combined companies and, along with
Lastinger, will be responsible for all activities
relating to the transition.
Following the merger, NationsBank will have assets of
approximately $290 billion, loans of $180 billion,
deposits of $168 billion and shareholder's equity of $24
billion.
NationsBank projects $915 million in annual cost savings
from the merger, fully realized by 1999. This represents
a 55 percent reduction in the expense base of Barnett
after disposition. These cost savings will come in the
areas of delivery systems, vendor leverage and business
line and facility consolidation.
The merger will create an unmatched banking franchise in
Florida. It will provide customers with the largest
number of banking centers and Automated Teller Machines
(ATMs) in the state. The two companies are national
leaders in several product lines, generating $7.5 billion
in automobile loans and $3 billion in home equity loans
in 1996.
NationsBank and Barnett also are among the largest
lenders to small businesses in the state, including SBA-
guaranteed small business loans. Small business
customers will continue to have their needs met by
bankers who work in local markets.
The companies also are leaders in community development
and investment initiatives and have excellent Community
Reinvestment Act track records. Following the merger,
NationsBank also will continue and expand Barnett's "Take
Stock in Children" program, which provides scholarships
and mentoring to at-risk children.
Five current members of Barnett's board of directors,
including Rice, will be added to the NationsBank
Corporation Board of Directors.
The merger has been unanimously approved by the boards of
both companies. It is subject to the approval of Barnett
and NationsBank shareholders and the appropriate
regulatory authorities. In addition, this will not
impact the acquisition of Montgomery Securities by
NationsBank.
NationsBank, headquartered in Charlotte, N.C., has
primary retail and commercial banking operations in 16
states and the District of Columbia. As of June 30,
1997, NationsBank had total assets of $240 billion. With
$44 billion in assets, Barnett Banks, Inc., is the
leading financial institution in Florida and ranked in
the top 25 in the United States. The company provides a
comprehensive line of banking and related financial
services to consumers and businesses.
Editor's Note: A conference call for media is scheduled
for 4 p.m. (EDT). The number to call is (913) 749-9448,
ID# NB929
Contact for NationsBank:
Scott Scredon 404-607-5249
Fred Hannon 704-386-9535
Sheryl McAlister 704-386-3150
Dick Stilley 704-386-8135
Contact for Barnett:
Jerri Franz 904-791-5455
