UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of
The Securities Exchange Act of 1934
Date of Report: November 15, 1996
WASHINGTON NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-7369 36-2663225
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
300 Tower Parkway, Lincolnshire, Illinois 60069
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 793-3000
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Item 5. Other Events
Washington National Corporation today announced it has signed
a definitive agreement to merge with PennCorp Financial
Group, Inc. (NYSE: PFG). The transaction, valued at approximately
$400 million, is subject to approval by Washington National and
PennCorp Financial shareholders and certain regulatory agencies,
and is expected to be completed during the first quarter of 1997.
The consideration for the transaction will be PennCorp Financial
Group common stock and cash. The transaction is intended to be a
tax free merger with respect to PennCorp Financial common stock
received.
Under the agreement, the holder of each outstanding share of
Washington National common stock will be entitled to receive
$29.50 in the form of cash, subject to the cash limitation
described below, or shares of PennCorp Financial common stock, or
a combination of cash and shares of PennCorp Financial common
stock. The aggregate purchase price is subject to a reduction of
up to $3 million (approximately $.23 per share) depending on the
price obtained in a sale of Washington National's commercial
mortgage portfolio. Approximately $73 million of cash
consideration will be available on a pro-rata basis to those
Washington National Corporation common stock shareholders who
elect to receive cash for their shares. In addition,
approximately $27 million will be used to purchase shares held by
a Washington National pension plan, to redeem the shares of
Washington National Corporation's $2.50 convertible preferred
stock (which will be redeemed prior to the close of this
transaction), and to retire outstanding Washington National
Corporation options and shares of restricted stock. Additionally,
two Washington National board members will be named to the
PennCorp Financial board of directors.
The amount of PennCorp Financial common stock received in the
merger will depend on the average closing price of PennCorp
Financial common stock during the 20 trading days ending on the
third trading day prior to the closing. If the average closing
price is between $31.66 and $38.69 per share, the value of
PennCorp Financial common stock received will remain at $29.50
(subject to the above adjustment). If the average closing price
is between $28.14 and $31.66, the amount of PennCorp Financial
common stock received will be the same as for a price of $31.66.
If the average closing price is below $28.14, the transaction may
be terminated by Washington National unless PennCorp Financial
provides additional shares to maintain the value at the same
level as for an average closing price of PennCorp Financial
common stock of $28.14. If the average closing price is between
$38.69 and $42.21 per share, the amount of PennCorp Financial
common stock received will be the same as for a price of $38.69.
If the average closing price is greater than $42.21, the
transaction may be terminated by PennCorp Financial unless
Washington National agrees to adjust the number of shares of
PennCorp Financial common stock to maintain the value at the same
level as for an average closing price of $42.21.
Pending regulatory filings, both companies expect to mail proxy
statements to shareholders and hold shareholder meetings to vote
on the transaction as soon as practicable. A fee of $10 million
(approximately $.75 per share) is payable under certain
conditions by Washington National if its Board of Directors
decides to modify or terminate the agreement, including
acceptance of an unsolicited acquisition proposal from a third
party.
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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.
Washington National Corporation
(Registrant)
Date: November 15, 1996 By: /s/ Joan K. Cohen
Joan K. Cohen, Vice President
Controller and Treasurer
