Item 1.01
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Entry into a Material Definitive Agreement
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On January 29, 2013, Virginia Commerce Bancorp, Inc., a Virginia corporation (the
Company
) entered into an Agreement and Plan of Reorganization (the
Merger
Agreement
) with United Bankshares, Inc., a West Virginia corporation (
United
), pursuant to which the Company will merge with and into a wholly-owned subsidiary of United, with the United subsidiary surviving the merger
(the
Merger
). Pursuant to the Merger Agreement, Virginia Commerce Bank, a Virginia corporation and wholly-owned subsidiary of the Company (
Virginia Commerce Bank
) and United Bank, Uniteds wholly-owned
subsidiary bank (
United Bank
), will enter into a separate Agreement and Plan of Merger (the
Bank Merger Agreement
) pursuant to which Virginia Commerce Bank will be merged with and into United Bank, with United
Bank surviving, subsequent to consummation of the Merger (the
Bank Merger
). Both the Merger and the Bank Merger are intended to constitute tax-free reorganizations. The Merger Agreement and the consummation of the transactions
contemplated thereby, including the Merger and the Bank Merger, have been approved by the Board of Directors of each of the Company and United, and, as applicable, by the Company, as sole shareholder of Virginia Commerce Bank.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each holder of a share of common stock
of the Company (other than United and its subsidiaries, in each case except for shares held by them in a fiduciary capacity or as a result of debts previously contracted) shall receive in respect thereof 0.5442 shares (the
Exchange
Ratio
) of common stock of United (the
Merger Consideration
).
In addition, at the effective time
of the Merger, each outstanding option to purchase shares of common stock of the Company, whether vested or unvested as of the date of the Merger shall vest pursuant to their terms and shall be converted into an option (each, a
Replacement
Option
) to acquire, on the same terms and conditions as were applicable under such option of the Company, the number of shares of common stock of United equal to (a) the number of shares of common stock of the Company subject to the
option multiplied by (b) the Exchange Ratio. The exercise price per share of each Replacement Option shall equal (y) the exercise price per share of common stock of the Company that was purchasable pursuant to such option divided by
(z) the Exchange Ratio (rounded up to the next whole cent).
At the effective time of the Merger, each warrant originally
issued by the Company in connection with an offering of trust preferred securities (each, a
TRUPs Warrant
) which is then outstanding and unexercised shall cease to represent a right to acquire common stock of the Company and shall
be converted automatically into a warrant to purchase shares of common stock of United (the
Surviving TRUPs Warrant
) in an amount and at an exercise price determined as follows: (i) the number of shares of common stock of
United to be subject to the Surviving TRUPs Warrant will be equal to the product of the number of shares of common stock of the Company subject to the original TRUPs Warrant and the Exchange Ratio (provided that any fractional shares of common stock
of United resulting from such multiplication shall be rounded down to the next whole share); and (ii) the exercise price per share of common stock of United under the Surviving TRUPs Warrant shall be equal to the exercise price per share of the
common stock of the Company under the original TRUPs Warrant divided by the Exchange Ratio (provided that if the exercise price resulting from such division results in a fractional cent, the exercise price shall be rounded up to the next cent).
At the effective time of the consummation of the Merger, each warrant originally issued to the United States Department of
Treasury (the
Treasury
) in connection with the Companys participation in the Troubled Asset Relief Program Capital Purchase Program (each, a
Treasury Warrant
) which is then outstanding and unexercised
shall cease to represent a right to acquire common stock of the Company and shall be converted automatically into a warrant to purchase shares of common stock of United (each, a
Surviving Treasury Warrant
) in an amount and at an
exercise price determined as follows: (i) the number of shares of common stock of United to be subject to the Surviving Treasury Warrant will be equal to the product of the number of shares of common stock of the Company subject to the original
Treasury Warrant and the Exchange Ratio, rounded to the nearest one-hundredth of a share; and (ii) the exercise price per share of common stock of United under the Surviving Treasury Warrant shall be equal to the quotient of the exercise price
per share of common stock of the Company under the original Treasury Warrant divided by the Exchange Ratio, rounded to the nearest one-tenth of a cent.
The Merger Agreement contains customary representations, warranties and covenants from both the Company and United. Among other covenants, the Company has agreed: (i) to convene an appropriate
meeting of
its stockholders to consider and vote upon, among other things, the approval of the Merger Agreement and the Merger, (ii) that, subject to certain exceptions, the board of directors of the
Company will recommend the adoption and approval of the Merger and the Merger Agreement by its stockholders, and (iii) not to solicit or encourage inquiries or proposals with respect to, or, subject to certain exceptions, engage in any
negotiations concerning, or provide any confidential information to, or have any discussions with any person relating to, any third-party acquisition proposals.
Completion of the Merger is subject to various customary conditions, including, among others: (i) approval of the Merger and the Merger Agreement by the stockholders of the Company and approval of
the Merger and the issuance of the Merger Consideration by the stockholders of United, (ii) receipt of required regulatory approvals, (iii) the absence of legal impediments to the Merger, and (iv) the absence of certain material
adverse changes or events.
The Merger Agreement contains certain termination rights for the Company and United, as the case
may be. The Merger Agreement further provides that, upon termination of the Merger Agreement under certain circumstances, the Company will be required to pay to United a termination fee of $20,000,000.
In connection with the Companys entry into the Merger Agreement, each of the Companys and Virginia Commerce Banks
directors will sign a Support Agreement. The Support Agreement requires the directors, in their capacities as stockholders of the Company, to, except in certain circumstances, vote their respective shares in favor of the Merger Agreement and the
Merger, to the extent such director has sole voting power or sole dispositive power over such shares.
The foregoing
description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
The Merger Agreement has been included to provide security holders with information regarding its terms. It is not intended to provide
factual information about the parties or any of their respective subsidiaries or affiliates. The representations, warranties and covenants of each party as set forth in the Merger Agreement were made only for purposes of that agreement and as of
specific dates, are solely for the benefit of the parties to the Merger Agreement, may be subject to limitations, qualification and exceptions agreed upon or to be agreed upon by the parties (including being qualified by confidential disclosures),
may have been made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the parties that differ from
those applicable to investors. Investors should not rely on the representations, warranties, or covenants or any description thereof as characterizations of the actual state of facts or condition of the parties or any of their respective
subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in
public disclosures.
Additional Information and Where to Find It
In connection with the Merger, United will file with the SEC a registration statement on Form S-4 that will include a proxy statement of
the Company and a proxy statement and prospectus of United, as well as other relevant documents concerning the proposed transaction. Stockholders are urged to read the registration statement and the joint proxy statement/prospectus regarding the
Merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. You will be able to obtain a free copy of the joint
proxy statement/prospectus, as well as other filings containing information about the Company and United at the SECs Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from the Company by
accessing the Companys website at www.vcbonline.com under the tab About VCB, then under the heading Investor Relations. You will also be able to obtain these documents, free of charge, from Uniteds website at
www.ubsi-inc.com under the tab Investor Relations.
United, the Company and their respective directors,
executive officers, and certain other members of management and employees of United, the Company and their respective subsidiaries may be deemed to be
participants in the solicitation of proxies from stockholders of the Company in connection with the Merger. Information about the directors and executive officers of United is set forth in
Uniteds proxy statement filed with the SEC on April 4, 2012. Information about the directors and executive officers of the Company is set forth in the Companys proxy statement filed with the SEC on March 14, 2012. Additional
information regarding the interests of such participants will be included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.