Unassociated Document
UNITED
STATES
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: March
10, 2008
Date
of
earliest event reported: March
9, 2008
___________
VILLAGE
BANK AND TRUST FINANCIAL CORP.
(Exact
name of registrant as specified in its charter)
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Virginia
(State
or other jurisdiction
of
incorporation)
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0-50765
(Commission
File Number)
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16-1694602
(IRS
Employer
Identification
No.)
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1231
Alverser Drive, P.O. Box 330, Midlothian, Virginia
(Address
of principal executive offices)
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23113
(Zip
Code)
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Registrant’s
telephone number, including area code: (804)
897-3900
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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x |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement.
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On
March
10, 2008, Village Bank and Trust Financial Corp. (the “Company”) and River City
Bank (“River City”) announced their entry into an Agreement and Plan of
Reorganization and Merger (the “Merger Agreement”). The Merger Agreement,
entered into on March 9, 2008, which has been approved by the boards of
directors of all parties, sets forth the terms and conditions of the merger
of
River City with and into Village Bank, a wholly owned subsidiary of the Company
(the “Merger”). Thomas W. Winfree will continue to serve as President and Chief
Executive Officer of the Company and Village Bank. The headquarters of the
Company will not change as a result of the Merger. As specified in the Merger
Agreement, at the effective time of the Merger, the board of directors of the
Company will be increased to twelve and will include four new members who
currently serve as directors of River City.
Under
the
terms of the Merger Agreement, the shareholders of River City will receive,
for
each share of River City common stock that they own immediately prior to the
effective time of the Merger, either $11 per share in cash or 1 share of common
stock of the Company (the “Exchange Ratio”). Pursuant to the terms of the Merger
Agreement, shareholders of River City will have the opportunity to elect to
receive cash, shares of common stock of the Company, or a combination of both
subject to the allocation and proration procedures set forth in the Merger
Agreement. The allocation and proration procedures are intended to ensure that,
in the aggregate, 20% of the total Merger Consideration (as defined in the
Merger Agreement) will be cash and 80% will be common stock of the Company.
The
Merger is intended to qualify as a tax free reorganization under Section 368(a)
of the Internal Revenue Code of 1986, as amended.
In
addition, at the effective time of the Merger, each outstanding option to
purchase shares of River City common stock under any of River City’s stock plans
shall vest pursuant to its terms and shall be converted into an option to
acquire the number of shares of Company common stock equal to the number of
shares of common stock underlying the option multiplied by the Exchange Ratio
(each, a “Replacement Option”). The exercise price per share (rounded to the
nearest whole cent) of each Replacement Option shall equal the exercise price
per share for the shares of River City Bank common stock pursuant to such River
City stock option divided by the Exchange Ratio.
Consummation
of the Merger is subject to a number of customary conditions including the
approval of the Merger by the shareholders of each of River City, the Company
and Village Bank and the receipt of all required regulatory approvals. The
Merger is expected to be completed in the third quarter of 2008. The Merger
Agreement contains customary termination provisions including that either the
Company or River City may terminate the Merger Agreement in the event the Merger
is not consummated by December 31, 2008. In addition, River City may terminate
the Merger Agreement in the event the Average Closing Price of Company common
stock (as defined in the Merger Agreement) declines below a defined amount.
The
termination of the Merger Agreement will, in certain circumstances, obligate
River City to pay the Company a termination fee of $600,000 to $1 million
depending on the triggering event or the Company to pay River City a termination
fee of $600,000, depending on the triggering event.
A
copy of
the Merger Agreement is being filed as Exhibit 2.1 to this report and is
incorporated by reference into this Item 1.01. The description of the
Merger Agreement above is a summary, does not purport to be complete and is
qualified in its entirety by reference to the Merger Agreement. The Merger
Agreement has been included to provide information regarding the terms of the
Merger. It is not intended to provide any other factual information about the
Company. Such information can be found in the other public filings that the
Company makes with the Securities and Exchange Commission, which are available
without charge at www.sec.gov.
The
Merger Agreement contains representations and warranties the parties made to
each other. The assertions embodied in those representations and warranties
by
the Company are qualified by information in the confidential disclosure
schedules attached to the Merger Agreement. While the Company does not believe
that these schedules contain information that securities laws require it to
disclose publicly, other than information that has already been so disclosed,
the disclosure schedules do contain information that modifies, qualifies and
creates exceptions to the representations and warranties set forth in the
attached Merger Agreement. Accordingly, the representations and warranties
should not be relied on as characterizations of the actual state of facts,
since
they may be modified in important part by the underlying disclosure
schedules.
Important
Additional Information Will be Filed with the SEC
This
communication is being made in respect of the proposed Merger. In connection
with the proposed Merger, the Company plans to file with the SEC a registration
statement on Form S-4 to register the shares of Company common stock to be
issued to the shareholders of River City in the transaction. The registration
statement will include a joint proxy statement/prospectus which will be mailed
to the shareholders of the Company and River City seeking their approval of
the
Merger. In addition, each of the Company and River City may file other relevant
documents concerning the proposed Merger with the SEC.
INVESTORS
AND SECURITY HOLDERS OF THE COMPANY AND RIVER CITY ARE URGED TO READ THE
REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS
INCLUDED WITHIN THE REGISTRATION STATEMENT AND ANY OTHER DOCUMENTS TO BE FILED
WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY, RIVER CITY AND THE PROPOSED
TRANSACTION. Investors and security holders may obtain free copies of these
documents (when available) through the website maintained by the SEC at
http://www.sec.gov.
Free
copies of the joint proxy statement/prospectus (when available) also may be
obtained by directing a request by telephone or mail to Village Bank and Trust
Financial Corp., 1231 Alverser Drive, P.O. Box 330, Richmond, Virginia 23113,
Attention: Investor Relations (telephone: (804) 897-3900) or River City Bank,
6127 Mechanicsville Turnpike, P.O. Box 600, Suite 10, Mechanicsville, Virginia
23111, Attention: Investor Relations (telephone: (804) 730-4100) or by accessing
the Company’s website at http://www.villagebank.com
under
“Investor Relations” or River City’s website at http://www.rivercitybank.org
under
“Investor Relations.” The information on the Company’s and River City’s websites
is not, and shall not be deemed to be, a part of this report or incorporated
into other filings either company makes with the SEC or the Board of Governors
of the Federal Reserve System, as applicable.
The
Company and River City and their respective directors, executive officers and
members of management may be deemed to be participants in the solicitation
of
proxies from the shareholders of the Company and/or River City in connection
with the Merger. Information about the directors and executive officers of
the
Company is set forth in the proxy statement for the Company’s 2007 annual
meeting of shareholders filed with the SEC on April 20, 2007. Information about
the directors and executive officers of River City is set forth in the proxy
statement, dated April 27, 2007, for River City’s 2007 annual meeting of
shareholders, as filed with the Board of Governors of the Federal Reserve System
on Schedule 14A. Additional information regarding these participants in the
proxy solicitation and their direct and indirect interests, by security holdings
or otherwise, will be contained in the joint proxy statement/prospectus and
other relevant materials to be filed with the SEC or the Board of Governors
of
the Federal Reserve System, as applicable, when they become
available.
A
copy of
the joint press release announcing the Merger Agreement and a script of an
announcement of the Merger to the employees of the Company are being filed
as
Exhibits 99.1 and 99.2, respectively, to this report.
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Item
5.02
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Departure
of Directors or Principal Officers; Election of Directors; Appointment
of
Principal Officers.
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On
March
9, 2008, William D. Stegeman, age 48, and Village Bank entered into a two-year
employment agreement (the “Employment
Agreement”)
which
will become effective upon the consummation of the Merger. The Employment
Agreement provides, among other things, that Mr. Stegeman will receive an annual
salary of $131,000 and will serve as a Senior Vice President of Village Bank
upon the consummation of the Merger. Mr. Stegeman is currently the President
and
Chief Executive Officer of River City and has significant experience serving
in
senior bank management positions. The Employment Agreement contains a change
of
control provision which, in certain circumstances, would pay Mr. Stegeman two
times his salary and bonus received during the twelve months ending with the
termination of Mr. Stegeman’s employment with Village Bank upon a change of
control of Village Bank. Until the Merger is consummated, neither Mr. Stegeman
nor Village Bank will have any obligations to the other under the Employment
Agreement. If the Merger is not consummated, then on the date the Merger
Agreement terminates, the Employment Agreement will also terminate.
A
copy of
Mr. Stegeman’s Employment Agreement, dated March 9, 2008, is attached hereto as
Exhibit 10.1 and is incorporated into this Item 5.02 by reference.
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Item
9.01
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Financial
Statements and Exhibits.
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(d) Exhibits.
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Exhibit
No.
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Description
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2.1
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Agreement
and Plan of Reorganization and Merger, dated as of March 9, 2008,
by and
among Village Bank and Trust Financial Corp., Village Bank and River
City
Bank
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10.1
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Employment
Agreement, dated March 9, 2008, by and between Village Bank and William
D.
Stegeman
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99.1
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Press
Release dated March 10, 2008
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99.2
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Script
of an Announcement of the Merger to employees of the Company made
March
10, 2008
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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VILLAGE
BANK AND TRUST FINANCIAL CORP.
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(Registrant)
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Date:
March 10, 2008
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By:
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/s/
C. Harril Whitehurst, Jr.
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C.
Harril Whitehurst, Jr.
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Senior
Vice President and CFO
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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2.1
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Agreement
and Plan of Reorganization and Merger, dated as of March 9, 2008,
by and
among Village Bank and Trust Financial Corp., Village Bank and
River City
Bank
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10.1
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Employment
Agreement, dated March 9, 2008, by and between Village Bank and
William D.
Stegeman
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99.1
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Press
Release dated March 10, 2008
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99.2
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Script
of an Announcement of the Merger to employees of the Company made
March
10, 2008
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