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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): March 27, 1997
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PROVIDENT COMPANIES, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-11834 62-1598430
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
One Fountain Square, Chattanooga, Tennessee 37402
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(Addresses of Principal Executive Offices, including Zip Code)
(615) 755-1011
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(Registrant's Telephone Number, including Area Code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 27, 1997, Provident Companies, Inc. ("Provident" or the
"Company") completed the acquisition of The Paul Revere Corporation ("Paul
Revere"). The acquisition was effected by means of the merger of Patriot
Acquisition Corporation ("Newco"), a wholly owned subsidiary of Provident, with
and into Paul Revere, pursuant to an Amended and Restated Agreement and Plan of
Merger, dated as of April 29, 1996 (the "Merger Agreement") by and among Paul
Revere, Newco and Provident.
In accordance with the terms of the Merger Agreement, at the effective
time of the Merger, (a) each share of the $1.00 par value common stock of Paul
Revere (the "Paul Revere Common Stock") (other than shares held by Textron Inc.
("Textron")) was canceled and extinguished and converted into the right to
receive, at the election of the holder of such share, either (i) $26.00 in
cash, without interest thereon (the "Cash Consideration"), (ii) 0.767 of a
share of the $1.00 par value common stock of Provident (the "Provident Common
Stock") (the "Stock Consideration"), or (iii) $20.00 in cash plus 0.177 of a
share of Provident Common Stock (the "Mixed Consideration"), and (b) each share
of Paul Revere Common Stock held by Textron was converted into the right to
receive $20.00 in cash plus 0.1578 of a share of Provident Common Stock (the
"Textron Consideration" and, together with the Cash Consideration, the Stock
Consideration and the Mixed Consideration, the "Merger Consideration").
Provident will fund the required cash payments to be made to Paul Revere
shareholders with the proceeds of the Zurich Common Stock Investment (as
described below) and borrowings under its existing line of credit.
In connection with the Merger, pursuant to an Amended and Restated Voting
Agreement, dated as of April 29, 1996, by and between Provident and Textron
(the "Textron Voting Agreement"), and an Agreement, dated as of March 27, 1997,
by and between Provident and Textron (the "Textron Agreement"), Textron has,
prior to or at the effective time of the Merger, among other things, (i)
contributed $121.0 million in cash to Paul Revere, (ii) contributed or agreed to
contribute to Paul Revere certain other assets having a value of approximately
$15 million, (iii) paid to Provident an additional $25 million in cash, (iv)
agreed to reimburse Paul Revere for certain severance costs, and (v) agreed to
pay to Provident certain proceeds from sales of Provident Common Stock received
by Textron in the Merger. In addition, Textron has agreed, pursuant to a
Standstill Agreement, dated as of April 29, 1996, with Provident (the
"Standstill Agreement"), to certain restrictions on the voting and disposition
of the shares of Provident Common Stock received by it in the Merger. Pursuant
to a Registration Rights Agreement, dated as of April 29, 1996, between
Provident and Textron (the "Textron Registration Rights Agreement"), Provident
has granted to Textron certain rights to require the shares of Provident Common
Stock received by Textron in the Merger be registered under the Securities Act
of 1933, as amended (the "Securities Act"), in order to facilitate resales of
such shares by Textron.
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The foregoing is qualified in its entirety by reference to the Merger
Agreement, the Textron Voting Agreement, the Textron Agreement, the Standstill
Agreement and the Textron Registration Rights Agreement, which are hereby
incorporated by reference herein.
Also on March 27, 1997, pursuant to an Amended and Restated Common Stock
Purchase Agreement, dated as of May 31, 1996 (the "Zurich Purchase Agreement"),
between Provident and Zurich Insurance Company ("Zurich"), Provident
consummated the sale of 9,523,810 shares of Provident Common Stock to Zurich
for $300.0 million in cash, which proceeds will be used to fund a portion of
the cash payments required to be made to Paul Revere shareholders in the
Merger. Pursuant to an Amended and Restated Relationship Agreement, dated as
of May 31, 1996 (the "Relationship Agreement"), Zurich has agreed to certain
restrictions on the acquisition of shares of Provident Common Stock and is
permitted, subject to certain limitations, to designate up to two persons to be
nominated to serve as directors of Provident. Pursuant to an Amended and
Restated Registration Rights Agreement, dated as of May 31, 1996 (the "Zurich
Registration Rights Agreement"), Provident has granted to Zurich certain rights
to require the shares of Textron Common Stock acquired by Zurich be registered
under the Securities Act in order to facilitate resales of such shares by
Zurich.
The foregoing is qualified in its entirety by reference to the Zurich
Purchase Agreement, the Relationship Agreement, and the Zurich Registration
Rights Agreement, which are hereby incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS.
A. Financial Statements of Businesses Acquired
Financial statements of Paul Revere for the years ended December 31, 1996
and 1995, with auditors' report thereon, are incorporated herein by reference to
Exhibit 99.1 of Provident's Current Report on Form 8-K (File No. 1-11834),
dated on March 27, 1997.
B. Pro Forma Financial Information
Pro forma financial information reflecting consummation of the Merger are
incorporated herein by reference to Exhibit 99.2 of Provident's Current Report
on Form 8-K (File No. 1-11834), dated March 27, 1997.
C. Exhibits
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2.1 Amended and Restated Agreement and Plan of Merger, dated as of
April 29, 1996, by and among Provident Companies, Inc., Patriot
Acquisition Corporation, and The Paul Revere Corporation
(incorporated by reference from the Company's Quarterly Report
on Form 10-Q (File No. 1-11834) for the quarter ended September
30, 1996).
3.1 Amended and Restated Certificate of Incorporation, incorporated
by reference to Exhibit 3.1 of the Company's Form 10-K for the
fiscal year ended 1995, as amended by Certificate of Amendment
(incorporated by reference from the Company's Annual Report on
Form 10-K (File No. 1-11834) for the year ended December 31,
1996).
10.1 Amended and Restated Voting Agreement, dated as of April 29, 1996,
by and between Provident Companies, Inc. and Textron Inc.
(incorporated by reference from the Company's Quarterly Report
on Form 10-Q (File No. 1-11834) for the quarter ended September
30, 1996).
10.2 Amended and Restated Separation Agreement, dated as of April 29,
1996, by and among Provident Companies, Inc., The Paul Revere
Corporation and Textron Inc. (incorporated by reference from the
Company's Quarterly Report on Form 10-Q (File No. 1-11834) for
the quarter ended September 30, 1996).
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10.3 Registration Rights Agreement, dated as of April 29, 1996, by and
between Provident Companies, Inc. and Textron Inc. (incorporated
by reference from the Company's Current Report on Form 8-K
(File No. 1-11834), dated April 29, 1996).
10.4 Standstill Agreement, dated as of April 29, 1996, by and between
Provident Companies, Inc. and Textron Inc. (incorporated by
reference from the Company's Current Report on Form 8-K (File
No. 1-11834), dated April 29, 1996).
10.5 Agreement, dated as of March 27, 1997, by and between Provident
Companies, Inc. and Textron Inc.
10.6 Amended and Restated Common Stock Purchase Agreement, dated as of
May 31, 1996, by and between Provident Companies, Inc. and Zurich
Insurance Company (incorporated by reference from the Company's
Annual Report on Form 10-K (File No. 1-11834) for the year ended
December 31, 1996).
10.7 Amended and Restated Registration Rights Agreement, dated as of
May 31, 1996, by and between Provident Companies, Inc. and Zurich
Insurance Company (incorporated by reference from the Company's
Annual Report on Form 10-K (File No. 1-11834) for the year ended
December 31, 1996).
10.8 Amended and Restated Relationship Agreement, dated as of May 31,
1996, by and between Provident Companies, Inc. and Zurich
Insurance Company (incorporated by reference from the Company's
Annual Report on Form 10-K (File No. 1-11834) for the year ended
December 31, 1996).
10.9 Credit Agreement between Provident and a consortium of financial
institutions with the Chase Manhattan Bank as Administrative
Agent, relating to a revolving loan in the aggregate
amount of $800 million maturing on July 30, 2001 (incorporated
by reference from the Company's Annual Report on Form 10-K (File
No. 1-11834) for the year ended December 31, 1996).
23.1 Consent of Ernst & Young, LLP.
99.1 Audited financial statements of The Paul Revere Corporation for
the years ended December 31, 1996 and 1995, with auditors report
thereon. (incorporated by reference from the Company's Current
Report on Form 8-K (File No. 1-11834), dated March 27, 1997).
99.2 Pro forma financial information reflecting consummation of the
acquisition of The Paul Revere Corporation by Provident Companies,
Inc. (incorporated by reference from the Company's Current
Report on Form 8-K (File No. 1-11834), dated March 27, 1997).
99.3 Press release announcing completion of Provident's acquisition of
The Paul Revere Corporation dated March 27, 1997.
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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.
PROVIDENT COMPANIES, INC.
(REGISTRANT)
/s/ Susan N. Roth
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Name: Susan N. Roth
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Title: Corporate Secretary
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Date: March 27, 1997
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EXHIBIT 10.5
AGREEMENT
AGREEMENT dated as of March 27th, 1997 by and between Textron Inc., a
Delaware corporation ("Textron") and a stockholder of The Paul Revere
Corporation, a Massachusetts corporation ("Paul Revere"), Provident Companies,
Inc., a Delaware corporation ("Provident"), and Patriot Acquisition
Corporation, a Massachusetts corporation and a wholly owned subsidiary of
Provident ("Newco").
WHEREAS, Paul Revere, Provident and Newco have entered into an Amended
and Restated Agreement and Plan of Merger dated as of April 29, 1996 (the
"Merger Agreement") providing for the merger (the "Merger") of Newco with and
into Paul Revere pursuant to the terms and conditions of the Merger Agreement;
and
WHEREAS, in order to induce Provident to enter into the Merger
Agreement, Textron entered into an Amended and Restated Voting Agreement dated
as of April 29, 1996 (the "Voting Agreement") pursuant to which Textron agreed
to the matters set forth therein; and
WHEREAS, in order to further induce Provident to consummate the
transactions contemplated thereby;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereby
agree as follows.
1. Certain Severance Costs.
Textron shall promptly reimburse Paul Revere, on an after-tax basis,
for (i) the severance allowance paid by Paul Revere to Richard L. Mucci,
Executive Vice President and Operating Officer of Paul Revere, as a result of
the termination of employment of Mr. Mucci following the consummation of the
Merger pursuant to Section II.a. of the Executive Employment Agreement made as
of January 6, 1996 between Paul Revere and Mr. Mucci, and (ii) amounts paid to
Mr. Mucci in respect of 4,000 stock appreciation rights ("SARs") having an
exercise price of $21.875 and 11,500 performance share units ("PSUs")
representing a right to receive $414,115, which SARs and PSUs became or will
become exercisable or payable as a result of the transactions contemplated by
the Merger Agreement.
2. Executive Aircraft Upgrade; Usage Prior to Closing.
In lieu of the Cessna Citation III (Aircraft Serial No. 60-0127) to be
provided by Textron to Paul Revere pursuant to the terms of the first sentence
of Section 4(b) of the Voting Agreement, Textron agrees to contribute to Paul
Revere at or prior to the effective date of the Merger a Cessna Citation V
(Aircraft Serial No. C650-0247), free and clear of all liens, which aircraft
may be exchanged by Paul Revere or Provident for a Cessna Citation VII
(Aircraft Serial No. C650-7057), also free and clear of all liens and without
additional payment from Paul Revere or Provident, as soon as the same becomes
available to Textron for such transfer, which is
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currently anticipated to be no later than October 15, 1997, and in the event
that such Citation VII does not become available for transfer by such date, a
comparable aircraft at the earliest opportunity thereafter. Textron further
agrees that neither Paul Revere nor Provident shall be liable for or have any
responsibility with respect to payments resulting from the usage of aircraft
provided by Textron to Paul Revere or Provident prior to the effective date of
the Merger. Except to the extent modified by this Section 2, the provisions of
Section 4(b) of the Voting Agreement shall remain in full force and effect,
unaffected by this Agreement.
3. Proceeds of Sales of Provident Stock.
(a) Subject to compliance with applicable federal and state
securities laws and the provisions of the Standstill Agreement, dated as of
April 29, 1996, between Provident and Textron (the "Standstill Agreement"),
Textron hereby agrees to use its reasonable efforts to sell for cash all shares
of the common stock of Provident ("Provident Common Stock") received by Textron
in the Merger (including any equity securities received as a dividend or other
distribution thereon, the "Shares") as soon as practicable after the effective
date of the Merger, provided that the per share proceeds to Textron from any
sale are not less than the Threshold Price (as defined below). Provident and
Textron agree that by execution and delivery of this Agreement, Textron hereby
requests that Provident effect the registration of all of the Shares under the
Securities Act of 1933, as amended (the "1933 Act"), in accordance with the
terms of the Registration Rights Agreement dated as of April 29, 1996 by and
between Textron and Provident (the "Registration Rights Agreement"), and, in
connection therewith, Provident agrees to effect the registration under the
1933 Act of all of the Shares at the earliest possible date.
(b) Upon each sale of Shares, Textron shall promptly pay Provident
an amount per Share equal to the difference (the "Appreciation") between the
per share proceeds to Textron (after subtracting all commissions and other
costs of sale) from such sale and $38.00 (appropriately adjusted for
subdivisions, combinations, splits and other adjustments in the Provident
Common Stock after the effective date of the Merger, the "Threshold Price");
provided, however, that Textron shall have no obligation pursuant to this
paragraph 3(b) until, and only to the extent that, the Appreciation received by
Textron in respect of all such sales exceeds, in the aggregate, $20 million
(the "Textron Appreciation").
(c) In the event that Textron has not sold all of the Shares
within 11 months after the date of this Agreement, Provident shall have the
right, which may be exercised from time to time at Provident's discretion, to
repurchase some or all of the Shares then held by Textron at a purchase price
per Share equal to the Threshold Price; provided, that until such time as
Textron has realized the entire Textron Appreciation, the purchase price
payable by Provident for each Share purchased by Provident pursuant to this
paragraph 3(c) shall equal, if higher than the Threshold Price, the average of
closing prices for the Provident Common Stock as reported on the New York Stock
Exchange, Inc. Composite Transactions for the ten (10) consecutive Trading Days
(as defined in the Merger Agreement) ending on the fifth Trading Day before the
day on which such Shares are purchased by Provident (and such average will be
adjusted for any stock dividend, split, combination or reclassification that
took effect during such ten (10) Trading Day period). At the closing of each
such purchase (which shall occur on such date as may be specified
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by Provident within ten Trading Days after delivery to Textron of notice of
Provident's exercise of such right), Textron will deliver to Provident the
Shares being purchased by Provident against payment of the purchase price
therefor by delivery of a certified check or a wire transfer in the proper
amount and shall warrant that it has sole record and beneficial ownership of
such Shares and that the same are then free and clear of all liens.
(d) In the event that Provident shall enter into an agreement: (i)
to consolidate with or merge into any person and shall not be the continuing or
surviving corporation of such consolidation or merger; (ii) to permit any
person to merge into Provident and Provident shall be the continuing or
surviving corporation, but, in connection with such merger, the
then-outstanding shares of Provident Common Stock shall be changed into or
exchanged for stock or other securities of Provident or any other person or
cash or any other property or the outstanding shares of Provident Common Stock
immediately prior to such merger shall after such merger represent less than
50% of the outstanding shares and share equivalents of the merged company; or
(iii) to sell or otherwise transfer all or substantially all of its assets to
any person, then, and in each such case, (x) if such transaction shall result
in the Shares being converted into the right to receive a cash payment from any
person, such conversion shall be deemed to be a sale of the Shares for purposes
of paragraph 3(b) hereof and Textron shall pay to Provident such portion of the
Appreciation realized by Textron as exceeds the Textron Appreciation and (y)
if such transaction shall result in the Shares being converted into the right
to receive consideration other than cash, Provident shall be entitled to
exercise the right to repurchase the Shares pursuant to paragraph 3(c) at any
time after entry into such agreement and, from and after consummation of the
transaction contemplated by such agreement, the provisions of this paragraph 3
shall apply, with appropriate adjustments, to any securities into which the
Shares are converted and, as applicable, references in this paragraph 3 to
"Shares," "Provident," and "Threshold Price" shall be deemed to be references
to the securities into which the Shares have been converted (the "Substitute
Securities"), each issuer of the Substitute Securities (each a "Substitute
Issuer"), and an amount per Substitute Security as corresponds to the Threshold
Price (the "Substitute Threshold Price"), respectively.
4. Scheduling of Closing.
Provided the Closing (as defined in the Merger Agreement) occurs not
later than the close of business on the date hereof, Provident and Newco hereby
waive all conditions to their obligations to effect the Merger set forth in the
Merger Agreement other than the conditions set forth in Sections 7.1(b) and
Section 7.2(d) and Provident and Newco agree to use their respective reasonable
efforts to cause the Closing to occur not later than the close of business on
the date hereof.
5. Miscellaneous.
(a) Notwithstanding the provisions of Section 7(a) of the Voting
Agreement, the parties agree that, if the Merger occurs, the provisions of
Sections 4, 5 and 6 of the Voting Agreement shall survive termination of the
Voting Agreement. Except as expressly provided herein, nothing in this
Agreement shall be deemed to modify, amend, or supersede in any respect
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any of the provisions of the Voting Agreement, the Registration Rights
Agreement, the Standstill Agreement or the Amended and Restated Separation
Agreement, dated as of April 29, 1996, by and among, Textron, Paul Revere and
Provident.
(b) This Agreement shall be deemed a contract under, and for all
purposes shall be construed in accordance with, the laws of the Commonwealth of
Massachusetts, without reference to its conflict of law principles.
(c) If any provision of this Agreement or the application of such
provision to any person or circumstances shall be held invalid or unenforceable
by a court of competent jurisdiction, such provision or application shall be
unenforceable only to the extent of such invalidity or unenforceability, and
the remainder of such provision held invalid or unenforceable and the
application of such provision to persons or circumstances, other than the party
as to which it is held invalid, and the remainder of this Agreement, shall not
be affected.
(d) This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
TEXTRON INC.
By /s/ Stephen L. Key
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Executive Vice President and Chief
Financial Officer
PROVIDENT COMPANIES, INC.
By /s/ Susan N. Roth
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Vice President, Secretary and Counsel
PATRIOT ACQUISITION CORPORATION
By /s/ Susan N. Roth
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Secretary and Clerk
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EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Form 8-K of Provident
Companies, Inc. and Subsidiaries of our report dated January 23, 1997 with
respect to the consolidated financial statements of The Paul Revere Corporation
for the year ended December 31, 1996.
We also consent to the incorporation by reference in the Registration
Statements (Form S-8 No. 33-47551, Form S-8 No. 33-88108 and Form S-8 No.
33-62231) pertaining to the Provident Life and Accident Insurance Company
MoneyMaker, a Long-Term 401(K) Retirement Savings Plan, the Provident Life and
Accident Insurance Company Stock Option Plan of 1994 and the Provident Life and
Accident Insurance Company Employee Stock Purchase Plan of 1995 and in the
Registration Statement (Form S-3 No. 333-17849) of our report dated January 27,
1997 with respect to the consolidated financial statements incorporated herein
by reference.
/s/ Ernst & Young LLP
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ERNST & YOUNG LLP
Boston, Massachusetts
March 27, 1997
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EXHIBIT 99.3
PRESS RELEASE
PROVIDENT
PROVIDENT COMPANIES, INC.
1 FOUNTAIN SQUARE
CHATTANOOGA, TN 87402
MARCH 27, 1997 CONTACT: Thomas A.H. White
(423) 755-8996
PROVIDENT COMPLETES ACQUISITION OF PAUL REVERE
CHATTANOOGA, Tenn. -- Provident Companies, Inc. (NYSE: PVT) today
announced that it has completed its acquisition of The Paul Revere Corporation
(NYSE:PRL).
"We are extremely pleased to complete the acquisition of Paul Revere,"
said J. Harold Chandler, Provident's chairman, president and chief executive
officer. "This transaction, along with out recent acquisition of GENEX
Services, Inc., significantly enhances our ability to grow revenues and
earnings and to provide value to our customers and shareholders."
Under the terms of the transaction, Paul Revere will become a wholly
owned subsidiary of Provident Companies, Inc. Paul Revere's public
shareholders may elect to receive for each Paul Revere share i) $26.00 in cash;
or ii) a combination of $20.00 in cash and 0.177 shares of Provident common
stock; or iii) 0.767 shares of Provident common stock. Yesterday's closing
price for Provident common stock was $55.50, compared to $31.50 on April 26,
1996, the last trading day before the transaction was announced. Paul Revere
common shareholders will receive instructions on making their elections
shortly.
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PROVIDENT
Textron, Inc. (NYSE:TXT), which owns approximately 83.3% of Paul
Revere's 45 million outstanding common shares, will receive $20.00 in cash and
0.1578 shares of Provident common stock for each Paul Revere share.
Textron and Provident also announced an additional agreement by which,
under certain circumstances, Textron will pay to Provident a portion of the
proceeds from the sale of Provident stock received by Textron in the
acquisition. This agreement between Textron and Provident does not affect Paul
Revere's public shareholders.
Separately, Provident completed its transaction with the Zurich
Insurance Group. Zurich and certain related entities made a $800 million
common stock investment in Provident, representing approximately 14 percent of
the equity of the company, in connection with Provident's acquisition of Paul
Revere.
Provident Companies, Inc., through its subsidiaries, is a provider of
disability, life, and related coverages to the individual and employee benefits
marketplaces.
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