_________________________________________________________________
_________________________________________________________________
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) August 30, 1994
MERIDIAN BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-12364 23-2237529
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Ident. No.)
35 North Sixth Street, Reading, Pennsylvania 19601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 478-2000
N/A
(Former name or former address, if changed since last report.)
_________________________________________________________________
_________________________________________________________________<PAGE>
Item 5. Other Events.
On August 30, 1994, Meridian Bancorp, Inc. ("Meridian")
executed a letter of intent with United Counties Bancorporation
("UCB"), a $1.7 billion bank holding company based in Cranford,
New Jersey, providing for the merger (the "Merger") of UCB with
and into Meridian. The letter of intent provides that each share
of UCB common stock would be exchanged in the Merger for 5.25
shares of Meridian common stock. The Merger will be accounted
for as a pooling of interests and will be a tax-free exchange for
shareholders of UCB. The letter of intent, which expires
November 6, 1994, is subject to the completion of due diligence
examinations by UCB and Meridian and to the execution of a
definitive agreement relating to the Merger. The definitive
agreement would be subject to, among other things, shareholder
and regulatory approval. The letter of intent provides that
Meridian would be entitled to a fee of $12.5 million if the
transaction is not completed under certain circumstances.
The foregoing summary of the letter of intent is qualified
in its entirety by reference to the letter of intent, a copy of
which is set forth as Exhibit 99.1 hereto and is incorporated
herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Letter of intent, dated August 30, 1994, between
Meridian Bancorp, Inc. and United Counties
Bancorporation.
<PAGE>
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.
MERIDIAN BANCORP, INC.
Dated: September 6, 1994
By /s/ David E. Sparks
David E. Sparks
Vice Chairman and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Number
99.1 Letter of intent, dated
August 30, 1994, between
Meridian Bancorp, Inc. and
United Counties Bancorporation.
Exhibit 99.1
[LETTERHEAD OF MERIDIAN BANCORP, INC.]
August 30, 1994
Board of Directors
United Counties Bancorporation
Four Commerce Drive
Cranford, New Jersey 07016
Attention: Eugene H. Bauer, Chairman and Chief Executive Officer
Gentlemen:
The purpose of this letter is to express the intentions of
Meridian Bancorp, Inc. ("Meridian") with respect to a possible
combination with United Counties Bancorporation ("UCB"), and to
set forth the principal terms of such possible transaction.
Meridian's intentions include the following:
1. Merger. Meridian and UCB will merge, with Meridian
surviving the merger (the "Merger"). As of the effective date of
the Merger, United Counties Trust Company ("UCTC") will merge
with and into Meridian Bank, NJ ("Meridian Bank, NJ") (the "Bank
Merger"). Meridian shall, effective as of the effective date of
the Merger, cause Meridian Bank, NJ to relocate its corporate
headquarters to the address of UCB's present corporate
headquarters in New Jersey.
2. Exchange Ratio. On the effective date of the Merger,
Meridian will exchange 5.25 shares of Meridian common stock for
each share of UCB common stock (adjusted for any intervening
stock splits or stock dividends) outstanding on the closing date,
(the "Exchange Ratio").
3. Stock Options. Each option granted under UCB's 1984
and 1989 Incentive Stock Option Plans which is outstanding and
unexercised on the effective date of the Merger, will be
converted into and become an option to acquire that number of
shares of Meridian common stock equal to the number of shares of
UCB common stock covered by the option multiplied by the Exchange
Ratio and the exercise price shall be the present stated exercise
price of such option divided by the Exchange Ratio.
Meridian understands that, at the date hereof, the only
options outstanding are held by certain officers and employees of
UCB, whether or not presently exercisable, for an aggregate of
54,199 shares of UCB's common stock, and there are no other
existing options, calls, warrants, commitments or similar
agreements, contingent or otherwise, obligating UCB to issue or
sell any shares of UCB's common stock or other capital stock or
equivalents.
4. Director/Officers. Two individuals from the Board of
Directors of UCB will be appointed to the Board of Directors of
Meridian as of the effective date of the Merger and Meridian will
cause one other present director of UCB, who will be designated
by UCB and who will be acceptable to Meridian, to be elected to
fill the first vacancy on the Meridian Board of Directors created
by resignation or retirement between the effective date of the
Merger and December 31, 1996. The directors of UCTC who are less
than 69 years of age on the effective date of the Merger will be
appointed directors of Meridian Bank, NJ. The Chairman of UCB
shall be appointed as Chairman and Chief Executive Officer of
Meridian Bank, NJ, as one of the Directors of Meridian, as an
Executive Vice President and a member of the Senior Credit Policy
Committee of Meridian. All current officers of UCTC will retain
their officer titles with Meridian Bank, NJ.
Meridian will also maintain the existing membership of
the two regional Boards of Directors of UCTC on the date of this
letter until at least December 31, 1996, at the same fee schedule
existing on the date of this letter.
Meridian will, for a period of six years following the
effective date of the Merger, indemnify and provide insurance for
persons who served as directors and officers of UCB or any UCB
subsidiary prior to the effective date with respect to
liabilities and claims (and related expenses) made against them
resulting from their service as such prior to the effective date,
in accordance with and subject to Meridian's articles of
incorporation and bylaws and applicable provisions of law to the
same extent it is obligated thereunder to provide indemnification
to its own officers and directors. Meridian will also, from and
after the effective date of the Merger, provide persons who
served as directors or officers of UCB or any UCB subsidiary
insurance against liabilities and claims (and related expenses)
made against them resulting from their service as such prior to
the effective date of the Merger.
5. Tax and Accounting. The Merger is intended to be tax-
free to the shareholders of UCB and is intended to constitute a
pooling-of-interests for financial accounting purposes.
6. Merger Agreement. The terms and conditions of the
Merger will be set forth in a definitive plan and agreement of
merger which we will negotiate. In connection with the
negotiation of such definitive merger agreement, Meridian, UCB
and their respective representatives will be entitled to review
the business, assets, properties, liabilities, and financial
condition of the other party. Execution of a definitive merger
agreement will be conditioned upon each party's satisfaction with
the results of its due diligence review. These due diligence
reviews shall have been completed no later than 66 days from the
date of execution of this letter. Within 5 business days of a
request for information by UCB, Meridian will provide information
to UCB.
7. Terms of Merger Agreement. Terms and conditions of the
definitive merger agreement shall include, but not be limited to:
(a) Usual and customary representations, warranties,
and covenants of the parties, including, without limitation,
a covenant of UCB restricting the solicitation of, or,
subject to a normal and usual fiduciary out, response to,
other indications of interest or proposals to acquire UCB or
UCTC or their assets or liabilities.
(b) The definitive merger agreement shall include
provisions permitting UCB to increase dividends from the
date of execution of the definitive merger agreement through
the effective date of the merger equivalent to those of
Meridian but not exceeding bank regulatory restrictions on
dividends applicable to UCB, and in such a manner as to
preserve a pooling-of-interests basis for financial
accounting purposes. As an example, Meridian's present
dividend rate is $1.36 per share per annum, or $0.34 per
share per quarter. Hence, upon consummation of the
execution of the definitive merger agreement UCB
shareholders could receive dividends of $7.14 per share per
annum, or $1.785 per share per quarter. Consequently,
subject to the "pooling of interests" and bank regulatory
restrictions, UCB will be entitled to declare dividends at
the rate of $1.785 per quarter per share or proportionately
thereof per month, as may be adjusted from time to time to
the closing.
(c) Conditions which must be satisfied before the
parties will be obligated to complete the Merger, include,
without limitation, (i) approval by the shareholders of UCB
and Meridian, if necessary, (ii) approval, by necessary
government regulatory authorities, of the Merger and the
Bank Merger, (iii) receipt of opinions by Meridian and by
UCB from their respective investment bankers to the effect
that the transaction is fair to Meridian and UCB,
respectively, from a financial point of view, and
(iv) receipt by UCB and Meridian of an opinion of counsel
that the transaction is tax free to UCB and Meridian and
their respective shareholders and receipt by Meridian of a
letter from its independent certified public accountants to
the effect that the transaction can be accounted for as a
pooling-of-interests. The definitive merger agreement shall
also provide that UCB shall have the right to terminate the
agreement on the closing date if the average market value of
a share of Meridian common stock is then less than $27.00
over a usual and ordinary time period as close as
practicable to the closing date (as adjusted for stock
splits or stock dividends).
8. Affiliate Letter. UCB will use its best efforts to
cause each director, executive officer and other affiliate of
UCB, prior to or simultaneously with the execution of the
definitive agreement, to execute a letter agreeing (i) to vote
all shares over which they have sole or shared voting power in
favor of the Merger, and (ii) to avoid taking action which would
adversely affect the ability of Meridian to utilize pooling of
interests accounting. Such letter will also include appropriate
nonsolicitation provisions.
9. Employment Contracts. Meridian will honor existing
employment contracts known to it.
10. Employees and Employee Benefits. Meridian will honor
and discharge the obligations of UCTC under UCTC's Benefit
Equalization Plan. Meridian will honor and discharge the
obligations of UCTC to its retirees under its post-retirement
health care and life insurance plan. Meridian will honor and
discharge the obligations of UCTC to its employees who are not
retired under its post-retirement health care and life insurance
plan.
To the extent that any jobs of employees of UCB are
eliminated or terminated after the Merger, Meridian will endeavor
to offer employment to such persons at their then current
location or at other Meridian locations where employment is then
available. Any UCB employee who is terminated will be offered
severance in accordance with Meridian's severance policy as it
relates to current Meridian employees which is substantially
similar to the plan of UCTC.
The UCB Profit Sharing Plan shall be terminated as of
the later of (i) December 31, 1994, or (ii) the effective date of
the Merger. The annual UCB contribution for the calendar year in
which the closing occurs, shall be pro rated to the date of
termination according to the formula set forth in the Plan and
paid by UCTC to the Plan as soon as practicable after the
effective date of the Merger. In addition, prior to the
termination of the UCB Profit Sharing Plan, it will be amended,
effective as of the first day of the plan year in which the
Effective Date occurs, to modify the definition of "Adjusted Net
Operating Earnings," so as not to include as an expense the costs
incurred by UCB and its subsidiaries which are directly
attributable to the Merger.
Except for the termination of UCB's Profit Sharing
Plan, the employee benefit plans, arrangements and related
policies of UCB, UCTC and Meridian shall initially be unaffected
by the Merger. Following the Merger, Meridian will review such
plans, arrangements and policies with a view toward consolidating
the same to the extent feasible and economical. UCB and Meridian
contemplate that, subject to Internal Revenue Service and Pension
Benefit Guaranty Corporation approval, the defined benefit
pension plans of UCTC and Meridian will be merged as soon as
administratively feasible. To the extent former employees of UCB
or a UCB Subsidiary become participants in a plan of Meridian,
they will be given past service credit for eligibility,
participation, and vesting purposes, but not for benefit accrual
purposes.
The definitive agreement will provide that former
employees of UCB, and the UCB Subsidiaries will receive
compensation (including benefits) no less favorable, in the
aggregate, than the compensation (including benefits) to which
they were entitled at the date of this letter of intent. If such
compensation (including benefits) are not as favorable in the
aggregate, Meridian will based upon input from UCB provide
salary, bonus, benefits or some combination thereof to make them
no less favorable.
11. Effective Date. Meridian anticipates that it may take
up to nine months to complete the transaction. Meridian and UCB
shall use their best efforts to close the Merger as soon as
practicable.
12. Access. Each party will reasonably cooperate with the
other and will supply such information and data as either party
or any other party may reasonably request, and will provide
reasonable access to its management consultant, agents and
independent accountants, in connection with the due diligence
reviews referred to herein. Each party may utilize third parties
in connection with its due diligence review, provided that such
third parties are reasonably acceptable to the other party.
13. Confidentiality. Each party will use its best efforts
to hold (and to cause its representatives and the third parties
referred to herein to hold) in strictest confidence all
confidential or other non-public information acquired from the
other in the course of negotiating the definitive merger
agreement, in carrying out any matter contemplated hereby or
thereby, and in performing any related due diligence reviews.
Neither Meridian nor UCB will, without the consent of the other,
disclose any confidential or other non-public information of the
other party to any third party except as may be required by law.
In the event the Merger is not completed and is no longer under
discussion, each party will promptly return all documents and
other written information obtained from the other party in the
course of such discussions, negotiations and investigations and
will not retain copies thereof or use any such information for
any other purpose. This paragraph will not apply to information
available from public records or information independently
developed or acquired by a party from external sources.
14. Stock Option; No Solicitation; Termination Fee.
Meridian has advised UCB that it is unwilling to
execute this letter of intent without the provisions of this
Section 14.
(a) Concurrently with the execution of the definitive
agreement UCB will grant to Meridian an option to acquire up to
318,000 shares of UCB common stock at $120 per share subject to
certain conditions.
(b) So long as this letter of intent remains in
effect, neither UCB, UCTC nor any of their officers or directors,
nor any person acting on its or their behalf, will solicit offers
or indications of interest from any person other than Meridian
with respect to the merger, or sale of shares of capital stock or
sale of substantial assets or liabilities not in the ordinary
course of business involving UCB or UCTC (an "Acquisition
Transaction").
(c) So long as this letter of intent remains in
effect, neither UCB, UCTC nor any of their officers, directors,
nor any person acting on their behalf, shall respond to,
encourage or hold discussions or negotiations with, or provide
any information to, any person (other than Meridian) concerning
any "Acquisition Transaction". Notwithstanding the foregoing,
UCB may enter into discussions or negotiations or provide any
information in connection with a possible Acquisition Transaction
if the Board of Directors of UCB, after consulting with counsel,
determines in the exercise of its fiduciary responsibilities that
such discussions or negotiations should be commenced or such
information should be furnished. UCB will promptly communicate
to Meridian the terms of any proposal, whether written or oral,
which it may receive in respect of any such Acquisition
Transaction, the fact that it is having discussions or
negotiations with a third party about an Acquisition Transaction
or the fact that a third party has expressed an interest in a
possible Acquisition Transaction.
(d) If between the date of this letter and the date of
the execution of the definitive agreement, or if no definitive
agreement is executed, between the date of this letter and the
close of business on November 6, 1994:
(i) a person other than Meridian enters into a
written agreement or a written letter of intent with UCB
involving an Acquisition Transaction, or
(ii) a financially responsible person, other than
Meridian, makes a bona fide proposal to effect such
Acquisition Transaction, or
(iii) a financially responsible person, other
than Meridian, communicates, directly or indirectly, an
indication of interest in an Acquisition Transaction to UCB
or UCTC or any of their directors or officers, or any person
acting on its or their behalf, or
(iv) the covenants set forth in paragraph 14(b)
or 14(c) are breached or UCB enters into discussions or
negotiations or provides any information in connection with
a possible Acquisition Transaction as permitted by
paragraph 14(c)
and if such Acquisition Transaction closes by December 31, 1995,
then, in consideration of the value to UCB of the Meridian
proposal and to compensate Meridian for the time and expense
incurred in connection with the Meridian proposal, UCB shall pay,
or cause to be paid, to Meridian, on the closing date of such
Acquisition Transaction, in cash, $12.5 million.
15. Fees and Expense. Each of Meridian and UCB agrees to
bear its own respective costs and expenses incurred in connection
with the transactions contemplated herein, including, without
limitation, legal, accounting, investment banking, and other
professional fees and expenses.
16. Prohibition on Sales of Stock. Beginning with the
execution of this letter of intent, UCB will not issue or sell
any shares of its common stock, other than pursuant to the
exercise of presently outstanding incentive stock options, or
issue or sell any other capital stock, options, calls, warrants,
or other securities, or enter into any commitments or similar
agreements obligating UCB to issue or sell any shares of UCB's
common stock or other capital stock or equivalents, except to
Meridian.
17. Termination of Letter of Intent. Meridian and UCB will
commence negotiation of a definitive merger agreement, to be
executed after the completion of the due diligence review. This
letter of intent will terminate upon execution by Meridian and
UCB of the definitive merger agreement, or at the close of
business on November 6, 1994 if the parties have not entered into
the definitive merger agreement by that time and date.
18. Press Releases. Meridian and UCB and their respective
officers, directors, employees and agents will cooperate with
each other in good faith, consistent with their respective legal
obligations, in the preparation and distribution of any and all
press releases, announcements and other public disclosures
concerning this letter of intent, the status of negotiations
leading to the definitive merger agreement and the execution of
the definitive merger agreement. Neither party will make a
public announcement concerning this letter of intent without
first giving the other party reasonable opportunity to review and
comment on such announcement.
_________________________
Except for the provisions of paragraphs 12, 13, 14, 16, and
18 and the last sentence of this letter, this letter of intent
shall not be binding upon either party. Except as specified
above, a binding agreement shall arise only upon execution of a
definitive merger agreement. Nevertheless, if the foregoing
expression of Meridian's understandings and intentions also
expresses those of UCB, please so indicate by signing the
enclosed copy of this letter and returning it by no later than
midnight on August 30, 1994. Execution of this letter may be
evidenced by facsimile signatures of the parties. Each party
represents and warrants that execution and delivery of this
letter of intent and the Stock Option Agreement has been
authorized by appropriate corporate action.
Sincerely,
MERIDIAN BANCORP, INC.
/s/ Samuel A. McCullough
Samuel A. McCullough, Chairman and
Chief Executive Officer
Accepted and approved
this 30th day of August, 1994.
UNITED COUNTIES BANCORPORATION
By/s/ Eugene H. Bauer
Eugene H. Bauer, Chairman
and Chief Executive Officer
