Southern National Corp. will pay $6.4 million to the chairman of United Carolina Bancshares in exchange for his retirement when the two companies merge in July, Southern National's proxy said.
The proxy for a vote on the deal said Southern National also has a 10- year noncompete contract with E. Rhone Sasser that prohibits the 60-year- old executive from engaging in the banking and financial services industry in the Carolinas, Virginia, and contiguous states.
Mr. Sasser, a 29-year veteran of Whiteville, N.C.-based United Carolina, has served as chairman of the $4.9 billion-asset bank since 1986 and as chief executive officer since 1983. He had expressed a desire to remain with the merged company, but Southern National officials rejected that idea.
"He wanted to remain with the bank, but he agrees that it is in our best interest that he not be with us," said Robert Denham, a Southern National spokesman. "We have our own chairman. When we bring on the UCB employees, we want them to know who the chairman is. We don't want any distractions."
With the exception of Mr. Sasser, the entire United Carolina executive management team will take positions with Southern National, Mr. Denham said.
Mr. Sasser could not be reached for comment. He is to remain chairman and chief executive until the sale to Southern National closes July 1.
Paul Stock, executive vice president of the North Carolina Bankers Association, said Mr. Sasser is well known and highly regarded in the state's banking industry. "He has been a mainstay of eastern North Carolina banking for years," Mr. Stock said.
Despite Mr. Sasser's position in the industry, the decision to move forward without him is a sound one, according to analysts.
"There has to be a clear surviving culture and strategy for acquisitions to go smoothly and to be integrated quickly and effectively," said Anthony R. Davis of Dean Witter Reynolds.
Southern National, which has about $21.2 billion of assets, announced the $985 million stock acquisition of United Carolina in November. The arrangement with Mr. Sasser marks just the latest in a series of steps Southern National is taking to prepare United Carolina for a smooth transition this summer and a systems conversion in the fall.
Last week, the company disclosed plans to close United Carolina's operations center in Monroe, N.C., and lay off its 250 employees. The operations center is less than an hour outside Charlotte, N.C., where Southern National operates a similar facility that employs more than 400. Southern National said it would close the Monroe facility in early 1998.
Overall, Southern National plans to cut about 1,000 positions to gain efficiencies from the acquisition. The bulk of the cuts are expected to come from United Carolina's 1,300 full-time employees.
Southern National officials said that it plans to redeploy many United Carolina workers within the Southern National system. The company is evaluating those individuals now. Because of a hiring freeze instituted last year, Southern National should have several hundred slots open from attrition and early retirements, Mr. Denham said.