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):
DECEMBER 22, 1994BAYBANKS, INC.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
175 FEDERAL STREET, BOSTON, MASSACHUSETTS02110
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
Exhibit Index appears on page 5
ITEM 5. OTHER EVENTS.
On December 22, 1994, BayBanks, Inc. ("BayBanks") and NFS Financial
Corp. ("NFS") entered into an Acquisition Agreement (the "Acquisition
Agreement") pursuant to which BayBanks will acquire NFS (the "Acquisition") for
a combination of cash and BayBanks' common stock, par value $2.00 per share
("BayBanks Stock"). NFS is the New Hampshire-based holding company of NFS
Savings Bank, FSB of Nashua and Plaistow Co-operative Bank, FSB of Plaistow,
N.H. The Acquisition will be effected through a merger of a wholly owned
subsidiary of BayBanks with and into NFS, as a result of which NFS will become
a wholly owned subsidiary of BayBanks and will operate under the BayBanks name.
In accordance with the terms of the Acquisition Agreement, each issued
and outstanding share of NFS common stock, par value $.01 per share ("NFS
Stock"), other than shares as to which dissenters' appraisal rights have been
exercised, will be converted into the right to receive (a) $20.15 in cash and
(b) 0.2038 of a share of BayBanks Stock, subject to adjustment as described
below. In the event that the Acquisition is consummated after September 1, 1995
and NFS's shareholders have approved the Acquisition Agreement prior to such
time, the cash amount payable for each issued and outstanding share of NFS Stock
will be increased by $.005 per day from and including September 1, 1995 until
consummation of the Acquisition.
Under the Acquisition Agreement, if as of the closing date of the
Acquisition the market value of BayBanks Stock (determined in accordance with
the Acquisition Agreement) is less than $43.50 per share, NFS has the right to
terminate the Acquisition Agreement, unless BayBanks agrees to increase the per
share payment for NFS Stock to an aggregate $29.00 per share. The increase in
the per share payment can be through an increase in the cash or BayBanks Stock
portion of the payment, or alternatively, BayBanks may elect to pay all cash at
$29.00 per share. If as of the closing date of the Acquisition the market value
of BayBanks Stock is greater than $63.00 per share, the BayBanks Stock portion
of the per share consideration to be paid for NFS Stock will be reduced so that
the sum of the cash and market value of the BayBanks Stock to be paid for the
NFS Stock equals $33.00. Under the Acquisition Agreement, the market value of
BayBanks Stock as of any day is equal to the average of the closing sale price
of BayBanks Stock, as reported on the Nasdaq National Market on each of the ten
trading days immediately preceding the second business day prior to such day.
The Acquisition Agreement also provides that NFS employee stock options
to acquire up to 204,286 shares of NFS Stock that are outstanding at the time of
the Acquisition will be converted into options to acquire BayBanks Stock based
upon the value of the per share consideration to be received by the holders of
Immediately upon the execution of the Acquisition Agreement, BayBanks
and NFS entered into an Option Agreement (the "Option Agreement") pursuant to
which NFS granted to BayBanks an option (the "Option") to purchase at a price of
$21.50 per share up to 274,266 shares of newly issued NFS Stock, or 9.9% of the
outstanding shares of NFS Stock. The Option is exercisable upon the occurrence
of certain events that create the potential for a third party to acquire NFS.
If the Option becomes exercisable, BayBanks or any permitted transferee of
BayBanks may under certain circumstances require NFS to repurchase the Option
(in lieu of its exercise) for a formula price that under no circumstances shall
exceed $4.5 million.
Completion of the Acquisition is subject to certain conditions,
including (a) approval by the shareholders of NFS, (b) approval by all requisite
regulatory authorities, and (c) other closing conditions customary in a
transaction of this type. The Acquisition Agreement is subject to termination
under certain circumstances, including if the Acquisition is not consummated on
or before December 31, 1995. Under certain circumstances related to termination
of the Acquisition Agreement, NFS is required to pay BayBanks a termination fee
Directors and executive officers of NFS having the right to vote in the
aggregate 129,551 shares of NFS Stock, or approximately 4.7% of the presently
outstanding NFS Stock, have agreed to vote their shares in favor of approval of
the Acquisition and against any other acquisition proposal.
The Acquisition Agreement and Option Agreement are attached hereto as
exhibits and incorporated herein by reference. The foregoing summary of such
exhibits is qualified in its entirety by reference to the complete text of such
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
2(a) Acquisition Agreement By and Between BayBanks, Inc. and NFS
Financial Corp. dated December 22, 1994.
2(b) Option Agreement between BayBanks, Inc. and NFS Financial Corp.
dated December 22, 1994.
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.
Date: December 30, 1994 By: /s/ Michael W. Vasily
Michael W. Vasily
Executive Vice President and Treasurer