As filed with the Securities and Exchange Commission on March 26, 1997
Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FIRST VIRGINIA BANKS, INC.
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(Exact name of registrant as specified in its charter)
Virginia
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(State or Other Jurisdiction of Incorporation or Organization)
(6711)
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(Standard Industrial Classification Code Number)
54-0497561
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(IRS Employer Identification No.)
One First Virginia Plaza
6400 Arlington Boulevard
Falls Church, Virginia 22042-2336
(703) 241-3669
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(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
CHRISTOPHER M. COLE Copy to: WILLIAM R. RAKES
First Virginia Banks, Inc. Gentry, Locke, Rakes & Moore
6400 Arlington Boulevard 10 Franklin Road, S.E.
Falls Church, Virginia 22042-2336 Roanoke, Virginia 24038-0013
(703) 241-4486 (540) 983-9300
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(Name, address, including zip code, telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale of the securities to
the public: As soon as possible after the effective date of the Registration
Statement
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Securities Amount being Proposed Maximum Proposed Maximum Amount of
Being Registered Registered Offering Price Per Aggregate Offering Registration Fee
Share* Price*
<S> <C> <C> <C> <C>
Common Stock
$1 par value 3,624,295 $51,834,866 $187,864,845 $56,928.74
</TABLE>
*Estimated solely for the purpose of determining the registration fee, based
upon the market value of the securities received as of March 24, 1997 in
exchange for the Common Stock issued, computed pursuant to Rule 457(f)(1).
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
Item of Form S-4 Reference to Registration Statement
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<S> <C>
Item 1
Forepart of Registration Statement Facing Page of Registration Statement,
and Outside Front Cover Page of Prospectus Outside Front Cover Page of Prospectus,
and Cross Reference Sheet
Item 2
Inside Front and Outside Bank Cover Pages Table of Contents, Available Information;
of Prospectus Incorporation of Certain Documents by Reference
Item 3
Risk Factors, Ratio of Earnings to Summary; Prospectus Cover Page;
Fixed Charges and Other Information Summary Selected Financial Data and
Per Share Data
Item 4
Terms of the Transaction Summary; The Special Meeting; The Affiliation
Item 5
Pro Forma Financial Information Not Applicable
Item 6
Material Contracts with the Company Being Acquired Summary; The Affiliation
Item 7
Additional Information Required for Reoffering
by Persons and Parties Deemed to be Underwriters Not Applicable
Item 8
Interests of Named Experts and Counsel The Affiliation; Experts; Legal Matters
Item 9
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities Not Applicable
Item 10
Information with Respect to S-3 Registrants Available Information; Incorporation of
Certain Documents by Reference
Item 11
Incorporation of Certain Information by Reference Incorporation of Certain Documents by Reference
Item 12
Information with Respect to S-2 and S-3 Registrants Not Applicable
Item 13
Incorporation by Certain Information by Reference Not Applicable
Item 14
Information with Respect to Registrants Other
than S-3 or S-2 Registrants Not Applicable
<PAGE>
<CAPTION>
CROSS REFERENCE SHEET (Continued)
Item of Form S-4 Reference to Registration Statement
- ---------------- -----------------------------------
<S> <C>
Item 15
Information with Respect to S-3 Companies Available Information; Incorporation of
Certain Documents by Reference
Item 16
Information with Respect to S-2 or S-3 Companies Not applicable
Item 17
Information with Respect to Companies
Other than S-3 or S-2 Companies Not applicable
Item 18
Information if Proxies, Consents or Summary; The Special Meeting; The Affiliation;
Authorizations are to be Solicited Incorporation of Certain Documents by Reference
Item 19
Information if Proxies, Consents or
Authorizations are not to be Solicited
or in an Exchange Offer Not applicable
Item 20
Indemnification of Directors and Officers Part II of Registration Statement
Item 21
Exhibits and Financial Statement Schedules Exhibits; Incorporation of Certain Documents by Reference
Item 22
Undertakings Undertakings
</TABLE>
<PAGE>
[PREMIER LETTERHEAD]
April __, 1997
Dear Fellow Stockholder:
You are cordially invited to attend the Special Meeting of
Stockholders of Premier Bankshares Corporation ("Premier") to be held at the
corporate headquarters of Premier, 29 College Drive, Bluefield, Virginia on
May __, 1997 at 10:00 a.m.
At the Special Meeting you will be asked to consider and vote upon
the proposed affiliation and merger (the "Affiliation") of Premier with and
into First Virginia Banks, Inc. ("First Virginia") pursuant to the Agreement
and Plan of Reorganization dated as of October 29, 1996 between Premier and
First Virginia, and the Related Plan of Merger dated as of October 29, 1996
between Premier and First Virginia (collectively, the "Affiliation
Agreement"). First Virginia is a bank holding company organized under the laws
of Virginia, with assets of approximately $8.236 billion as of December 31,
1996. Headquartered in Falls Church, Virginia, First Virginia engages in the
business of commercial and consumer banking primarily through 17 subsidiary
banks located in Virginia, Tennessee and Maryland.
Under the terms of the Affiliation Agreement, stockholders of Premier
will be entitled to receive .545 shares of common stock of First Virginia for
each share of common stock of Premier held of record on the date the
Affiliation is consummated (the "Effective Date"). Cash will be paid in lieu
of fractional shares of First Virginia common stock.
Details of the proposed Affiliation of Premier with First Virginia
are set forth in the accompanying Proxy Statement-Prospectus, which you are
urged to read carefully in its entirety.
Your Board of Directors has retained Scott & Stringfellow, Inc.
("Scott & Stringfellow") to act as its financial advisor in connection with
the proposed Affiliation. As discussed in the accompanying Proxy
Statement-Prospectus, Scott & Stringfellow has delivered to the Board of
Directors its written opinion dated as of the mailing date of this Proxy
Statement-Prospectus that the consideration to be received by Premier's
stockholders pursuant to the Affiliation Agreement is fair to the stockholders
of Premier from a financial point of view.
Your Board of Directors has approved the Affiliation and the
Affiliation Agreement, and has determined that they are in the best interests
of Premier and its stockholders. Accordingly, the Board of Directors
recommends that you vote FOR the proposal to approve the Affiliation.
<PAGE>
Approval of the Affiliation requires the affirmative vote of the
holders of two-thirds of all outstanding shares of Premier common stock. It is
important that your shares be represented at the Special Meeting, whether or
not you plan to attend the meeting because an abstention or failure to vote
will have the same effect as a vote against the Affiliation. Please complete,
date, sign and return promptly the enclosed proxy card in the enclosed
envelope. You may attend the Special Meeting and vote your shares in person if
you wish, even though you have previously returned your proxy card.
We hope you can attend the Special Meeting, and look forward to
seeing you there.
Sincerely,
James R. Wheeling
President and Chief
Executive Officer
<PAGE>
PREMIER BANKSHARES CORPORATION
29 COLLEGE DRIVE
BLUEFIELD, VIRGINIA 24605
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
May __, 1997
A Special Meeting of Stockholders of PREMIER BANKSHARES CORPORATION
("Premier") will be held at the corporate headquarters of Premier on Friday,
May , 1997 at 10:00 a.m., for the following purposes:
1. To consider and vote on a proposal recommended by the Board
of Directors of Premier to approve the affiliation and
merger of Premier with and into First Virginia Banks, Inc.
("First Virginia"), as provided in and pursuant to the
Agreement and Plan of Reorganization dated as of October 29,
1996 between Premier and First Virginia, and the related
Plan of Merger also dated as of October 29, 1996 between
Premier and First Virginia, copies of which are attached as
Appendix A to the accompanying Proxy Statement-Prospectus.
2. To transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on April __, 1997,
are entitled to notice of and to vote at the Special Meeting and at any and
all adjournments thereof.
By Order of the Board of Directors
James R. Wheeling
President and Chief Executive Officer
Dated: April __, 1997
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YOU ARE REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY
CARD SUBMITTED HEREWITH IN THE RETURN ENVELOPE PROVIDED FOR
YOUR USE. THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT
TO REVOKE THE PROXY OR TO VOTE IN PERSON SHOULD YOU LATER
DECIDE TO ATTEND THE MEETING.
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<PAGE>
PROXY STATEMENT
RELATING TO
SPECIAL MEETING OF STOCKHOLDERS OF
PREMIER BANKSHARES CORPORATION
TO BE HELD ON MAY __, 1997
- - - - - - - - - - - - - - - - - - - -
PROSPECTUS
RELATING TO 3,624,295 SHARES OF
COMMON STOCK OF
FIRST VIRGINIA BANKS, INC.
This Proxy Statement-Prospectus is being furnished to the holders of
shares of Common Stock, par value $2.00 per share ("Premier Common Stock"), of
Premier Bankshares Corporation ("Premier"), a Virginia corporation registered
under the Bank Holding Company Act of 1956, as amended (the "BHCA"), in
connection with the solicitation of proxies by the Board of Directors of
Premier for use at the Special Meeting of Stockholders of Premier to be held
at the corporate headquarters of Premier, 29 College Drive, Bluefield,
Virginia 24605 on Friday, May __, 1997 at 10:00 a.m., and at any and all
adjournments thereof (the "Special Meeting").
This Proxy Statement-Prospectus relates to shares of Common Stock,
par value $1.00 per share ("First Virginia Common Stock"), of First Virginia
Banks, Inc. ("First Virginia"), a Virginia corporation registered under the
BHCA, issuable in connection with the proposed affiliation and merger of
Premier with and into First Virginia (such affiliation and merger are referred
to herein as the "Affiliation"), pursuant to an Agreement and Plan of
Reorganization dated as of October 29, 1996 between Premier and First Virginia
and a related Plan of Merger also dated as of October 29, 1996 between Premier
and First Virginia (collectively, the "Affiliation Agreement"). Upon
consummation of the Affiliation, each outstanding share of Premier Common
Stock will automatically be converted into .545 shares of First Virginia
Common Stock. Cash will be paid in lieu of fractional shares of First Virginia
Common Stock. The date on which the Affiliation is consummated is referred to
herein as the "Effective Date."
This Proxy Statement-Prospectus constitutes (i) a proxy statement for
use in connection with the Special Meeting, at which the stockholders of
Premier will be asked to consider and vote upon a proposal to approve the
Affiliation pursuant to the Affiliation Agreement, and (ii) a prospectus
covering the issuance in connection with the Affiliation of up to 3,624,295
shares of First Virginia Common Stock.
The information presented in this Proxy Statement-Prospectus
concerning Premier has been supplied by Premier and the information concerning
First Virginia has been supplied by First Virginia.
<PAGE>
- - - - - - - - - - - - - - - - - -
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS
ACCOUNTS OR OTHER OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY
OR INSTRUMENTALITY.
THE SECURITIES TO BE ISSUED PURSUANT TO THIS PROXY STATEMENT-PROSPECTUS
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- - - - - - - - - - - - - - - - - -
This Proxy Statement-Prospectus and the accompanying form of proxy
are being furnished to Premier stockholders on or about April __, 1997.
<PAGE>
TABLE OF CONTENTS
AVAILABLE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
SUMMARY
The Special Meeting
First Virginia
Premier
General Description of the Affiliation
Vote Required
Exchange Ratio
Recommendation of the Premier Board of Directors
Opinion of Premier's Financial Advisor
Rights of Dissenting Stockholders
Interests of Certain Persons in the Merger
Conditions to the Affiliation
Regulatory Review and Approvals
Certain Federal Income Tax Consequences
Accounting Treatment
Termination
Stock Option Agreement
Amendment
Effective Date
Comparison of Stockholder Rights
Market Prices
SELECTED FINANCIAL DATA AND PER SHARE DATA
THE SPECIAL MEETING
General
Date, Place and Time
Purpose
Record Date
Vote Required
Voting and Revocation of Proxies
Solicitation of Proxies
BACKGROUND AND RECOMMENDATION OF THE PREMIER BOARD OF DIRECTORS
Background
Recommendation of the Premier Board of Directors
Opinion of Premier's Financial Advisor
THE AFFILIATION
Terms of the Affiliation
Effective Date of the Affiliation
Procedures for Exchange of Certificates
Certain Federal Income Tax Consequences
Accounting Treatment
Conditions to Consummation of the Affiliation
Regulatory Review and Approvals
Conduct of Business Pending the Affiliation
No Solicitation of Acquisition Proposals
Waiver and Amendment
Termination
Stock Option Agreement
Operations After the Effective Date
Interests of Certain Persons in the Affiliation
Effect on Employee Benefit Plans
Resale of First Virginia Common Stock
Rights of Dissenting Stockholders
DESCRIPTION OF FIRST VIRGINIA CAPITAL STOCK
Authorized Capital Stock
Certain Provisions of First Virginia's Articles of Incorporation
and First Virginia's Shareholder Rights Plan
CERTAIN DIFFERENCES IN RIGHTS OF STOCKHOLDERS
Size and Classification of the Board of Directors
Election of Directors
Voting Requirements
Stockholder Power to Call a Special Meeting
Notice of Special Meeting of Stockholders
Authorized Stock
Inspection of Stockholder Lists
Indemnification
Business Combination and Affiliation Statutes
Power to Amend Bylaws
EXPERTS
LEGAL MATTERS
<PAGE>
AVAILABLE INFORMATION
First Virginia and Premier are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and, in accordance therewith, file reports and other information with
the Securities and Exchange Commission (the "Commission"). Proxy statements,
reports and other information concerning First Virginia and Premier can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commissioner's Regional Offices in New York (Seven World Trade Center,
Suite 1300, New York, New York 10048) and Chicago (Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661.) The SEC also maintains a
web site that contains reports, proxy statements, information statements and
other information regarding registrants that file electronically, including
First Virginia and Premier, with the SEC at http:\\www.sec.gov. Such reports,
proxy statements and other information also may be inspected at the offices of
the New York Stock Exchange, 20 Broad Street, New York, N.Y. 10005 for First
Virginia and at the offices of the National Association of Securities Dealers,
Inc. located at 1735 K Street, N.W., Washington, D.C. 20006 for Premier. As
permitted by the Rules and Regulations of the SEC, this Proxy
Statement-Prospectus does not contain all the information set forth in the
Registration Statement on Form S-4, of which this Proxy Statement-Prospectus
is a part, and exhibits thereto (together with the amendments thereto, the
"Registration Statement"), which has been filed by First Virginia with the SEC
under the Securities Act of 1933, as amended (the "1933 Act"), with respect to
First Virginia Common Stock and to which reference is hereby made.
No person has been authorized to give any information or to make any
representation other than as contained herein in connection with the offer
contained in this Proxy Statement-Prospectus, and if given or made, such
information or representation must not be relied upon as having been
authorized by First Virginia or Premier. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities other
than the securities to which it relates, nor does it constitute an offer to or
solicitation of any person in any jurisdiction to whom it would be unlawful to
make such an offer or solicitation. Neither the delivery of this Prospectus
nor the distribution of any of the securities to which this
Proxy Statement-Prospectus relates shall, at any time, imply that the
information herein is correct as of any time subsequent to the date hereof.
This Proxy Statement-Prospectus incorporates documents by reference which are
not presented herein or delivered herewith. In the case of First Virginia,
these documents are available, without charge, upon request from Thomas P.
Jennings, Senior Vice President and Secretary, First Virginia Banks, Inc.,
6400 Arlington Boulevard, Falls Church, Virginia 22042-2336. Mr. Jennings'
telephone number is 703/241-3655. In the case of Premier, these documents are
available upon request from Jan Lutz, Investor Relations Department, Premier
Bankshares Corporation, 29 College Drive, Bluefield, Virginia 24605. Requests
may be directed to Ms. Lutz at (540) 322-2242. In order to ensure timely
delivery of the documents, any request should be made by May, , 1997.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by First Virginia with the Commission
under Section 13(a) or 15(d) of the Exchange Act are hereby incorporated by
reference in this Proxy Statement-Prospectus:
(1) First Virginia's Annual Report on Form 10-K for the year ended
December 31, 1996;
(2) First Virginia's Current Report on Form 8-K as filed on November
14, 1996;
(3) The description of First Virginia's Common Stock which is
contained in its registration statement on Form 8-A as filed on February 23,
1971 under the Exchange Act;
(4) The description of the Rights which is contained in First
Virginia's registration statement on Form 8-A as filed under the Exchange Act
with respect to the Rights on August 1, 1988; and
(5) All documents filed by First Virginia pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date hereof and
prior to the Special Meeting.
The following documents filed by Premier with the Commission under
Section 13(a) or 15(d) of the Exchange Act are hereby incorporated by
reference in this Proxy Statement-Prospectus:
(1) Premier's Annual Report on Form 10-K for the year ended December
31, 1996; and
(2) All documents filed by Premier pursuant to Section 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date hereof and prior to
the Special Meeting.
Any statement contained in any supplement hereto or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purpose of this Proxy Statement-Prospectus to
the extent that a statement contained herein, in any supplement hereto or in
any subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Proxy Statement-Prospectus or any
supplement hereto.
<PAGE>
SUMMARY
The following is a brief summary of certain information contained
elsewhere in this Proxy Statement-Prospectus. This summary should be read in
conjunction with, and is qualified in its entirety by, the remainder of this
Proxy Statement-Prospectus including the information incorporated herein by
reference. Stockholders are urged to review carefully the entire Proxy
Statement-Prospectus, including the Appendices.
The Special Meeting
The Special Meeting of Premier will be held at the corporate
headquarters of Premier, 29 College Drive, Bluefield, Virginia 24605 at 10:00
a.m. local time on May , 1997. Only holders of record of Premier Common Stock
at the close of business on April , 1997 will be entitled to notice of and to
vote at the Special Meeting. Stockholders will be asked to consider and vote
upon the Affiliation pursuant to the Affiliation Agreement which provides for
the affiliation and merger of Premier with and into First Virginia. See "THE
SPECIAL MEETING."
First Virginia
First Virginia is a registered bank holding company organized under
the laws of the Commonwealth of Virginia in October, 1949. As of December 31,
1996, it had assets of approximately $8.236 billion, deposits of $7.043
billion and loans (net of unearned interest) of $5.365 billion.
First Virginia currently owns all of the stock of 17 commercial
banks, 11 of which are domiciled in Virginia, 4 in Maryland and 2 in
Tennessee. First Virginia is engaged in the general commercial and consumer
banking business and provides a full range of banking services to individuals,
businesses and organizations through a network of over 350 branches. The
principal executive office of First Virginia is located at 6400 Arlington
Boulevard, Falls Church, Virginia 22042-2336, telephone number (703) 241-3669.
Premier
Premier is also a bank holding company incorporated under the laws of
the Commonwealth of Virginia and registered under the BHCA. Premier has three
wholly owned banking subsidiaries, Premier Bank-South, N.A. whose main office
is in Wytheville, Virginia; Premier Bank-Central, N.A., which is headquartered
in Honaker, Virginia; and Premier Bank, N.A. which is headquartered in
Tazewell, Virginia. Premier also has a trust company known as Premier Trust
Company. As of December 31, 1996, Premier had assets on a consolidated basis
of approximately $761 million, deposits of $666 million, and loans (net of
unearned interest) of $492 million. The principal executive office of Premier
is located at 29 College Drive, Bluefield, Virginia 24065, telephone number
(540-322-2242).
General Description of the Affiliation
The terms and conditions of the Affiliation are set forth in the
Affiliation Agreement, a copy of which is attached as Appendix A. Subject to
regulatory and Premier stockholder approval and certain other conditions, on
the date on which the Affiliation is consummated, Premier will merge with and
into First Virginia, with First Virginia as the surviving corporation. All
subsidiaries of Premier, including Premier Bank, N.A., Premier Bank-Central,
N.A., Premier Bank-South, N.A., and Premier Trust Company will become
subsidiaries of First Virginia. See "THE AFFILIATION - Terms of the
Affiliation" and "Conditions to Consummation of the Affiliation."
Vote Required
Approval of the Affiliation by Premier stockholders requires the
affirmative vote of two-thirds of the votes entitled to be cast by the holders
of record of shares of Premier Common Stock. Holders of shares of Premier
Common Stock will be entitled to one vote per share on the proposal to approve
the Affiliation. As of the Record Date, there were outstanding and entitled to
vote ______ shares of Premier Common Stock, each share being entitled to one
vote. Premier's directors and executive officers and their affiliates had
voting power with respect to ______ shares or approximately ______ of the
shares of Premier Common Stock outstanding as of the Record Date. See "THE
SPECIAL MEETING."
Approval of the Affiliation by the stockholders of First Virginia is
not required.
Exchange Ratio
If the Affiliation is consummated, stockholders of Premier will be
entitled to receive for each share of Premier Common Stock held of record as
of the Effective Date, .545 shares of First Virginia Common Stock. Premier
stockholders will be entitled to receive cash in lieu of fractional shares of
First Virginia Common Stock, based on the average of the closing prices of
First Virginia Common Stock as reported by The Wall Street Journal under the
heading "New York Stock Exchange - Composite Transactions" or any comparable
heading then in use, for each of the last ten trading days ending on the
Effective Date of the Affiliation. See "THE AFFILIATION - Terms of the
Affiliation."
Recommendation of the Premier Board of Directors
The Board of Directors of Premier believes that the Affiliation and
the Affiliation Agreement are in the best interests of Premier and its
stockholders. In reaching its conclusion to approve the Affiliation and the
Affiliation Agreement, the Premier Board of Directors considered a number of
factors. Among other things, those factors included: the financial terms of
the Affiliation; certain financial and other information concerning First
Virginia, including its financial condition and historical record of strong
profitability, and the pro forma increase in the historical earnings per
share, book value per share and dividends per share that would be received by
Premier Stockholders receiving First Virginia Common Stock pursuant to the
Affiliation (although there can be no assurance that the historical or pro
forma figures are indicative of future earnings, book value or dividends);
other terms of the Affiliation; the opinion of Scott & Stringfellow as to the
fairness, from a financial point of view, of the consideration to be received
by the stockholders of Premier pursuant to the Affiliation Agreement; the
possibility of an affiliation between Premier and certain other financial
institutions; alternative strategic courses available to Premier, including
remaining an independent financial institution; and the similarities in the
business strategies of Premier and First Virginia that, in the view of
Premier's Board of Directors, would improve the opportunity for enhanced
profitability and stockholder value through the Affiliation.
THE PREMIER BOARD OF DIRECTORS RECOMMENDS THAT PREMIER STOCKHOLDERS
VOTE TO APPROVE THE AFFILIATION.
See "BACKGROUND AND RECOMMENDATION OF THE PREMIER BOARD OF DIRECTORS
- Background" and "_ Recommendation of the Board of Directors."
Opinion of Premier's Financial Advisor
Scott & Stringfellow, which has served as financial advisor to
Premier in connection with the Affiliation, will render its written opinion to
Premier's Board of Directors dated as of the mailing date of this Proxy
Statement-Prospectus that the consideration to be received by Premier's
stockholders pursuant to the Affiliation Agreement is fair to the Premier
stockholders from a financial point of view. A copy of this opinion, which
sets forth the assumptions made, matters considered and limits on the review
undertaken, is attached as Appendix B to this Proxy Statement-Prospectus.
Premier stockholders are urged to read the opinion in its entirety. See
"BACKGROUND AND RECOMMENDATION OF THE PREMIER BOARD OF DIRECTORS - Opinion of
Premier's Financial Advisor."
Rights of Dissenting Stockholders
Under Virginia law, holders of Premier's Common Stock entitled to
vote on the Affiliation and the Affiliation Agreement do not have dissenters'
rights.
Interests of Certain Persons in the Merger
Certain members of Premier's management and Board of Directors have
interests in the Affiliation in addition to their interests as stockholders of
Premier. These include, among other things, their continued service as
directors or officers, following the Affiliation, with First Virginia's
subsidiary banks. See "THE AFFILIATION - Interests of Certain Persons in the
Affiliation".
Conditions to the Affiliation
The respective obligations of Premier and First Virginia to
consummate the Affiliation are subject to certain conditions, including, among
other things, the requisite approval of the Affiliation by the stockholders of
Premier, the absence of certain material adverse changes affecting Premier and
its subsidiaries, the absence of certain material adverse changes affecting
First Virginia and its subsidiaries, and the accuracy of, and compliance with,
the respective representations, warranties, obligations and covenants of First
Virginia and Premier in all material respects. Consummation of the Affiliation
is also subject to receiving certain regulatory approvals. See "THE
AFFILIATION - Conditions to Consummation of the Affiliation."
Regulatory Review and Approvals
Consummation of the Affiliation is subject to certain regulatory
approvals by the Bureau of Financial Institutions of Virginia State
Corporation Commission (the "Virginia Bureau") and the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board"). Applications for
such regulatory approvals have been filed with the Virginia State Corporation
Commission and the Federal Reserve Board. See "THE AFFILIATION - Conditions to
Consummation of the Affiliation" and " - Regulatory Review and Approvals."
Certain Federal Income Tax Consequences
It is intended that the Affiliation will qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), for federal income tax purposes. Accordingly, no gain or
loss will be recognized for federal income tax purposes by a Premier
stockholder (except with respect to cash, if any, received in lieu of a
fractional share of First Virginia Common Stock) who exchanges his shares of
Premier Common Stock solely for shares of First Virginia Common Stock pursuant
to the Affiliation. The receipt of an opinion of Gentry, Locke, Rakes & Moore,
counsel to Premier, to the effect that the Affiliation will qualify as a
tax-free reorganization under Section 368(a) of the Code and as to certain
other matters is a condition to Premier's obligation to consummate the
Affiliation. PREMIER STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE AFFILIATION. For a more
complete description of the federal income tax consequences of the
Affiliation, see "THE AFFILIATION - Certain Federal Income Tax Consequences".
Accounting Treatment
The Affiliation is expected to be accounted for as a purchase in
accordance with generally accepted accounting principles. See "THE AFFILIATION
- Accounting Treatment".
Termination
The Affiliation Agreement may be terminated and the Affiliation
abandoned, at any time prior to the Effective Date, under certain
circumstances. See "THE AFFILIATION - Termination."
Stock Option Agreement
As an inducement and a condition of First Virginia entering into the
Affiliation Agreement, Premier and First Virginia entered into a stock option
agreement (the "Option Agreement") pursuant to which Premier granted First
Virginia an option (the "Option") entitling it to purchase up to 1,323,350
shares (representing 19.9% of shares issued and outstanding before giving
effect to the exercise of such Option) of Premier Common Stock under the
circumstance described below, at a cash price per share equal to $20.00,
subject to possible adjustment in certain circumstances. The Option may be
exercised in whole or in part, upon the occurrence of a Purchase Event as
defined in the Stock Option Agreement. The Stock Option Agreement is attached
hereto as Appendix C. See also "THE AFFILIATION-Stock Option Agreement."
Amendment
The Affiliation Agreement may be amended at any time prior to the
Effective Date (without a vote of stockholders) by written agreement approved
by the Boards of Directors of Premier and First Virginia. However, subsequent
to the Special Meeting, no amendment may be made in the exchange ratio which
decreases the consideration to Premier stockholders without the approval of
stockholders holding two-thirds of all issued and outstanding shares of
Premier Common Stock.
Effective Date
The Effective Date of the Affiliation shall be the date specified in
the Articles of Merger filed with the Virginia State Corporation Commission
pursuant to the Virginia Stock Corporation Act.
Comparison of Stockholder Rights
Upon consummation of the Affiliation, Premier stockholders will
become stockholders of First Virginia, which is also a Virginia corporation,
and their rights as stockholders of First Virginia will be governed by
Virginia law, First Virginia's Articles of Incorporation and First Virginia's
By-laws. The rights of Premier stockholders differ from those of the holders
of First Virginia Common Stock in a number of areas, including the purchase
rights attached to each share of First Virginia Common Stock and the
stockholder vote required for extraordinary transactions. See "CERTAIN
DIFFERENCES IN RIGHTS OF STOCKHOLDERS and "DESCRIPTION OF FIRST VIRGINIA
CAPITAL STOCK" for a description of the material differences between the
rights of holders of First Virginia Common Stock and Premier Common Stock and
a description of First Virginia capital stock.
<PAGE>
Market Prices
Premier Common Stock is registered pursuant to Section 12 of the
Exchange Act and approved for quotation on the NASDAQ System. Shares of First
Virginia Common Stock are traded on the New York Stock Exchange. On October
28, 1996, the last trading day prior to the public announcement of the
Affiliation Agreement, the closing price for First Virginia Common Stock on
the New York Stock Exchange was $44.625 per share. On _________, the closing
price for First Virginia Common Stock on the New York Stock Exchange was
$______ per share. Because the market price of First Virginia Common Stock is
subject to fluctuation, the market value of the First Virginia Common Stock
that Premier stockholders will receive pursuant to the Affiliation may
increase or decrease prior to the Effective Date of the Affiliation. Premier
stockholders are urged to obtain current market quotations for First Virginia
Common Stock. The following table shows the prices of First Virginia and
Premier Common Stock as of October 28, 1996 and the equivalent pro forma price
for First Virginia Common Stock as of that date (computed by multiplying the
October 28th closing price of First Virginia Common Stock by .545).
<TABLE>
<CAPTION>
Historical Equivalent
---------------------------- Pro Forma
Premier First Virginia Premier
------- -------------- ----------
<S> <C> <C> <C>
Common Stock.... $19.00 $ 44.625 $24.32
</TABLE>
<PAGE>
SELECTED FINANCIAL DATA AND PER SHARE DATA
The following table sets forth selected financial information and per
share data on the dates and for the periods indicated of (a) Premier, historical
and (b) First Virginia, historical. This table is qualified in its entirety by
the financial statements appearing herein or incorporated by reference herein.
<TABLE>
<CAPTION>
-----------------------------------------------------------------
1996 1995 1994 1993 1992
-----------------------------------------------------------------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Premier Bankshares Corporation (Historical)
Operating Revenue $ 62,161 $ 58,098 $ 52,573 $ 49,546 $ 47,049
Provision for Loan Losses 880 315 1,144 857 1,151
Net Income 10,151 9,211 9,006 9,519 8,260
Net Income Per Share 1.53 1.39 1.35 1.43 1.25
Book Value Per Share (Period-end) 11.81 11.01 9.07 8.99 7.88
Dividends Declared Per Share 0.48 0.43 0.36 0.32 0.28
Total Assets (Period-end) 761,104 762,035 655,193 640,590 546,676
Total Loans, net of unearned income 497,928 405,999 366,704 337,952 306,210
Total Deposits (Period-end) 665,798 661,913 569,410 560,744 480,758
Total Long-term Debt (Period-end) - - 1,900 - 776
First Virginia Banks, Inc. (Historical) (1)
Operating Revenue $ 685,666 $ 663,505 $ 588,342 $ 587,322 $ 602,357
Provision for Loan Losses 17,734 8,341 6,463 6,450 17,355
Net Income 116,341 111,599 113,221 116,024 97,473
Net Income Per Share 3.50 3.28 3.51 3.57 3.02
Book Value Per Share (Period-end) 26.86 25.59 23.68 21.29 18.85
Dividends Declared Per Share 1.445 1.36 1.28 1.13 0.99
Total Assets (Period-end) 8,236,056 8,221,536 7,865,382 7,036,883 6,840,547
Total Loans, net of unearned income 5,364,787 5,038,076 4,997,194 4,018,145 3,782,268
Total Deposits (Period-end) 7,042,650 7,056,107 6,815,841 6,136,389 6,013,746
Total Long-term Debt (Period-end) 3,876 2,710 3,814 1,008 5,227
The pro forma effect of the transaction
contemplated herein would not be material to
First Virginia's financial position as of
December 31, 1996 or the results of
operations for the year then ended.
Premier Bankshares Corporation Equivalent Pro
Forma .545 Shares First Virginia Banks, Inc.(2)
Net Income Per Share 1.88
Book Value Per Share 15.12
Dividends Per Share (Period-end) 0.79
</TABLE>
<PAGE>
NOTES TO SELECTED FINANCIAL DATA AND PER SHARE DATA
(1) All per share information for First Virginia, historical, and Premier,
historical, has been restated to reflect a three-for-two common stock split that
was paid by First Virginia on July 27, 1992 and a four-for-three stock split
paid by Premier On December 14, 1995.
(2) This data reflects the pro forma net income, book value and dividends per
share of .545 shares of the First Virginia Common Stock which would be received
in the affiliation assuming that Premier Common Stock was exchanged for First
Virginia Common Stock. The computations are based on the exchange ratio of .545
shares of First Virginia Common Stock for 1.0 shares of Premier Common Stock.
<PAGE>
THE SPECIAL MEETING
General
This Proxy Statement-Prospectus is being furnished to holders of
shares of Premier Common Stock in connection with the solicitation of proxies
by the Premier Board of Directors for use at the Special Meeting. Each copy of
this Proxy Statement-Prospectus mailed to Premier stockholders is accompanied
by a form of proxy for use at the Special Meeting.
This Proxy Statement-Prospectus is also furnished by First Virginia
to holders of shares of Premier Common Stock as a prospectus in connection
with the issuance by First Virginia of shares of First Virginia Common Stock
to be issued upon consummation of the Affiliation.
Date, Place and Time
The Special Meeting will be held at the corporate headquarters of
Premier, 29 College Drive, Bluefield, Virginia on May , 1997 at 10:00 a.m.
Purpose
At the Special Meeting, Premier stockholders will consider and vote
upon the proposal to approve the Affiliation and transact such other business
as may properly come before the Special Meeting or any adjournments thereof.
Record Date
The Premier Board of Directors has fixed the close of business on
April _________, 1997 as the record date for the determination of Premier
stockholders entitled to receive notice of and to vote at the Special Meeting
(the "Record Date").
Vote Required
As of the Record Date, there were outstanding _________ shares of
Premier Common Stock.
A quorum for the Special Meeting requires the presence in person or
by proxy of holders of a majority of the outstanding shares of Premier Common
Stock. Votes cast by proxy or in person at the Special Meeting will be
tabulated in accordance with Virginia law by the inspectors of election
appointed for the Special Meeting. Abstentions will be treated as present for
purposes of determining the presence of a quorum.
The Affiliation. Approval of the Affiliation by Premier stockholders
requires the affirmative vote of two-thirds of the votes entitled to be cast
by the holders of record of shares of Premier Common Stock. Holders of shares
of Premier Common Stock will be entitled to one vote per share on the proposal
to approve the Affiliation. Abstentions and failures to vote (including broker
non-votes, i.e., proxies from brokers or nominees indicating that such persons
have not received instructions from the beneficial owners or other persons
entitled to vote shares as to a matter with respect to which the brokers or
nominees do not have discretionary power to vote) will have the same effect as
votes against the proposal to approve the Affiliation.
Share Ownership. Premier's directors and executive officers and their
affiliates, had voting power with respect to ________ shares or approximately
__% of the shares of Premier Common Stock outstanding as of the Record Date.
As of December 31, 1996, neither First Virginia nor the trust departments of
First Virginia's subsidiary banks owned or held in any agent or fiduciary
capacity any shares of Premier Common Stock. To First Virginia's best
knowledge, as of December 31, 1996, directors and executive officers of First
Virginia did not own any shares of Premier Common Stock.
Voting and Revocation of Proxies
Shares of Premier Common Stock as to which a proxy properly signed is
received at or prior to the Special Meeting, unless subsequently revoked, will
be voted in accordance with the instructions thereon. If a proxy is signed and
returned without indicating any voting instructions, the shares of Premier
Common Stock represented by the proxy will be voted FOR the proposal to
approve the Affiliation. Any proxy given pursuant to this solicitation may be
revoked by the person giving it at any time before the proxy is voted by the
filing of an instrument revoking it or of a duly executed proxy bearing a
later date with the Secretary of Premier prior to or at the Special Meeting or
by voting in person at the Special Meeting. All written notices of revocation
and other communications with respect to revocation of Premier proxies should
be addressed to: Premier Bankshares Corporation, 29 College Drive, Bluefield,
Virginia 24605, Attention: Ellen Simpson, Secretary. Unless a stockholder
votes or abstains in person at the Special Meeting, attendance at the Special
Meeting will not in and of itself constitute a revocation of a proxy.
The Premier Board of Directors is not aware of any business to be
acted upon at the Special Meeting other than as described herein. If, however,
other matters are properly brought before the Special Meeting, or any
adjournments thereof, the persons appointed as proxies will have discretion to
vote or act thereon according to their best judgment.
Solicitation of Proxies
In addition to solicitation by mail, directors, officers and
employees of Premier, who will not be separately compensated for such
services, may solicit proxies from the stockholders of Premier, respectively,
personally or by telephone or telegram or other forms of communication.
Brokerage houses, nominees, fiduciaries and other custodians will be requested
to forward soliciting materials to beneficial owners of Premier Common Stock
and to obtain authorizations for the execution of proxies; and if they in turn
so request, Premier will reimburse such brokerage houses, nominees,
fiduciaries and other custodians for their reasonable expenses incurred in
doing so.
Premier will bear its own expenses in connection with the
solicitation of proxies for the Special Meeting, except that First Virginia
will pay all printing expenses and filing fees incurred in connection with
this Proxy Statement-Prospectus. See "THE AFFILIATION -- Expenses."
BACKGROUND AND RECOMMENDATION OF THE PREMIER BOARD OF DIRECTORS
Background
Premier, a bank holding company headquartered in Bluefield, Virginia,
has three commercial bank subsidiaries: the 13-office, $236-million Premier
Bank-South, N.A. headquartered in Wytheville and serving Wythe, Roanoke,
Grayson, Pulaski and Montgomery counties and the City of Galax; the 15-office,
$317-million Premier Bank-Central, N.A. operating in Dickenson, Wise,
Buchanan, Russell, Scott and Washington counties headquartered in Honaker; and
the 9-office, $199-million Premier Bank, N.A., headquartered in Tazewell
County.
From time to time, the price of shares of Premier Common Stock traded
in over-the-counter transactions disclosed to Premier lagged the market
performance of common stocks of certain other comparable financial
institutions in the Mid-Atlantic region. The Board of Directors of Premier
monitored the price of Premier Common Stock, and was of the view that for much
of the time since the beginning of 1990 the price did not appropriately
reflect the financial performance of Premier or the underlying value of its
franchise. Premier's Board of Directors attributed the fact to, among other
things, the limited liquidity of Premier Common Stock.
In September of 1996, First Virginia contacted Premier to discuss the
possibility of an affiliation of Premier with First Virginia. After several
meetings with representatives of Premier, First Virginia made an affiliation
proposal by letter dated October 15, 1996. Following consideration of the
proposal, Premier's Board of Directors approved a definitive merger agreement
on October 29, 1996.
The consideration agreed upon was .545 shares of First Virginia
Common Stock for each share of Premier Common Stock (the "Exchange Ratio"), to
be effected as a tax-free exchange. As of October 28, 1996, based on the
closing price of First Virginia Common Stock on that date, the market value of
.545 shares of First Virginia Common Stock was approximately $24.25.
Subsequent increases in the market price of First Virginia stock have
increased this value to as high as $29.98 as of March 11, 1997.
At a meeting of the Board of Directors on October 28, 1996, Scott &
Stringfellow, who the Board had retained as a financial advisor, presented its
financial analysis of the offer of First Virginia, and reported that it would
be able to render an opinion that the proposed consideration to be received by
the stockholders of Premier under the terms of First Virginia's offer as
negotiated was fair from a financial point of view (the "Fairness Opinion").
After considering the advice of its financial advisor and legal counsel at
that meeting, the Board of Directors unanimously approved the proposal of
First Virginia and authorized the execution and delivery of the Affiliation
Agreement. The Affiliation Agreement was signed and delivered by Premier and
First Virginia on October 29, 1996. Certain terms of the Affiliation and the
execution of the Affiliation Agreement were announced in a joint press
released on October 29, 1996. See "Recommendation of the Premier Board of
Directors" and "Opinion of Premier's Financial Advisor."
Recommendation of the Premier Board of Directors
The Premier Board of Directors believes that the Affiliation and the
Affiliation Agreement are in the best interests of Premier and its
stockholders. As explained below, this conclusion is supported by the opinion
of Scott & Stringfellow, its independent financial advisor. In reaching its
conclusion to approve the Affiliation and the Affiliation Agreement, the
Premier Board of Directors considered a number of factors. The Board of
Directors of Premier did not assign any relative or specific weights to the
factors considered. The material factors considered included:
(1) The Financial Terms of the Affiliation. The Board of
Directors of Premier compared the financial terms of the Affiliation
with those in other recent merger transactions involving bank holding
companies of comparable size in the Mid-Atlantic region and in the
United States as a whole. Based on this comparative analysis, and in
view of historical and anticipated trading ranges for First Virginia
Common Stock, the Premier Board of Directors concluded that the
consideration to be received by Premier stockholders represented a
fair multiple of Premier's per share book value and earnings. The
Board of Directors also considered the premium included in the
aggregate consideration to be received by all Premier stockholders
(calculated as the difference between such aggregate consideration
and Premier's total book value at March 31, 1994) as a percentage of
Premier's core deposits. In addition, the Premier Board of Directors
considered that, based on the Exchange Ratio and the Premier Board of
Directors' belief that First Virginia is likely to continue paying
dividends at approximately its current rate, the Affiliation would
result in a substantial increase in the rate of dividends paid per
share to Premier stockholders who receive shares of First Virginia
Common Stock pursuant to the Affiliation, although there can be no
assurance that current dividends are indicative of future dividends.
See "SELECTED FINANCIAL DATA AND PER SHARE DATA" for comparative per
share data and "Opinion of Premier Financial Advisor" for a
discussion of this comparative information.
(2) Certain Financial and Other Information Concerning First
Virginia. The Board of Directors of Premier considered numerous
factors concerning First Virginia, including its financial condition
and consistent historical record of strong profitability, asset
quality and capital adequacy in comparison to other bank holding
companies of comparable size in the Mid-Atlantic region and the
nation. Premier's Board of Directors reviewed First Virginia's
historical earnings per share, book value per share and dividends per
share, and the pro forma increase in the historical earnings per
share, book value per share and dividends per share that would be
received by Premier stockholders' receiving First Virginia Common
Stock pursuant to the Affiliation, although there can be no assurance
that the historical or pro forma figures are indicative of future
earnings, book value or dividends. The Premier Board of Directors
also considered the marketability of First Virginia Common Stock,
which is publicly traded on the New York Stock Exchange, as compared
to Premier's Common Stock, which is traded on NASDAQ.
(3) Other Terms of the Affiliation. Premier's Board of
Directors considered that the Affiliation would qualify as a tax-free
reorganization under the Internal Revenue Code of 1996, as amended
(the "Code"). See "THE AFFILIATION - Certain Federal Income Tax
Consequences." In addition, the Board of Directors of Premier
considered the benefits to the customers and employees of Premier's
subsidiary banks and the communities they serve that would result
from the agreement of First Virginia.
(4) Opinion of Premier's Financial Advisor. The Board of
Directors of Premier considered the opinion of Scott & Stringfellow
as to the fairness, from a financial point of view, of the
consideration to be received by the stockholders of Premier pursuant
to the Affiliation Agreement. See "Opinion of Premier's Financial
Advisor."
(5) Other Possible Affiliation Partners. The Premier Board
of Directors considered the possibility of affiliating with certain
other financial institutions, the prospects of such other possible
affiliation partners, and the likelihood that such other potential
partners would be able to make an affiliation offer on terms
comparable or superior to those of first Virginia's proposal. Based
upon the foregoing considerations, and after consulting with its
financial advisor, the Board of Directors of Premier concluded that
none of the other possible affiliation partners considered by it
would present the advantages that the Affiliation would provide, and
as a result entered into the Affiliation Agreement.
(6) Alternative Strategic Courses Available to Premier. The
Board of Directors of Premier considered other courses Premier could
pursue as an alternative to an affiliation with another financial
institution. These courses included maintaining the independent and
previous strategic course of Premier and seeking growth and enhanced
profitability through the acquisition of other financial
institutions.
(7) Certain Other Considerations. The Premier Board of
Directors considered the similarities between the business strategies
and philosophies of First Virginia and Premier, and was of the view
that these similarities would improve the opportunity for enhanced
profitability and stockholder value through the Affiliation. The
Board of Directors of Premier also considered that First Virginia's
organizational structure of a parent bank holding company providing
central controls and support for affiliate banks with substantial
local autonomy would be likely to allow efficient integration of
Premier's subsidiary banks into First Virginia's organization, thus
serving the interests of Premier's stockholders.
THE PREMIER BOARD OF DIRECTORS RECOMMENDS THAT PREMIER STOCKHOLDERS VOTE TO
APPROVE THE AFFILIATION.
Opinion of Premier's Financial Advisor
The Premier Board of Directors retained the investment banking firm
of Scott & Stringfellow to evaluate the terms of the Affiliation Agreement,
and Scott & Stringfellow has rendered its opinion to the Premier Board of
Directors that the terms of the Merger Agreement are fair from a financial
point of view to the Premier Stockholders. In developing its opinion, Scott &
Stringfellow reviewed and analyzed: (1) the Affiliation Agreement; (2) the
Registration Statement; (3) Premier's audited financial statements for the
three years ended December 31, 1996; (4) information regarding the trading
markets for Premier Common Stock and First Virginia Common Stock and the price
ranges within which the respective stocks have traded; (5) the relationship of
prices paid to relevant financial data such as net worth, earnings, deposits
and assets in certain bank and bank holding company mergers and acquisitions
in Virginia in recent years; and (6) First Virginia's annual reports to
stockholders and its financial statements for the three years ended December
31, 1996. Scott & Stringfellow has discussed with members of Premier's and
First Virginia's management the background of the Affiliation, the reasons and
basis for the Affiliation, and the business and future prospects of Premier
and First Virginia individually and as combined entity. No instructions or
limitations were given or imposed in connection with the scope of or the
examination or investigations made by Scott & Stringfellow in arriving at its
findings. Finally, Scott & Stringfellow has conducted such other studies,
analysis and investigations particularly of the banking industry, and
considered such other information as it deemed appropriate, the material
portion of which is described below. A copy of Scott & Stringfellow's opinion,
which sets forth the assumptions made, matters considered and qualifications
made on the review undertaken, is attached as Appendix B hereto and should be
read in its entirety.
Scott & Stringfellow evaluated the financial terms of the Affiliation
using standard valuation methods, including comparable acquisition analysis,
market comparable analysis, and dilution analysis.
Comparable Acquisition Analysis.
Scott & Stringfellow compared the relationship of prices paid to
relevant financial data such as tangible net worth, assets, deposits and
earnings in 28 bank and bank holding company mergers and acquisitions in
Virginia since January 1, 1993, representing all such transactions known to
Scott & Stringfellow to have occurred during this period involving bank and
bank holding companies with the proposed Affiliation and found the
consideration to be received from First Virginia to be within the relevant
pricing ranges acceptable for such recent transactions. Specifically, based
upon the most recent transactions either closed or announced in Virginia since
January 1, 1993, other than the Merger, the average price to tangible book
value in these transactions was 1.98 times, compared with 2.43 times for the
Affiliation, the average price to earnings ratio was 17.08 times, compared
with 15.39 times for the Affiliation, the average premium to deposits was
21.14% compared with 24.96% for the Affiliation, and the average premium to
assets was 18.68% compared with 21.79% for the Affiliation. For purposes of
computing the information with respect to the Affiliation, $24.32 per share of
consideration for each share of Premier Common Stock was used.
Market Comparable Analysis.
Scott & Stringfellow analyzed the performance and financial condition
of First Virginia relative to the Bank Group, which includes the following
financial institutions: Centura Banks, Inc., CCB Financial Corporation,
Central Fidelity Bank, Inc., First Citizens BancShares, Inc., Crestar
Financial Corporation, F&M National Corporation, Jefferson Bankshares, Inc.,
Signet Banking Corporation, One Valley Bancorp Inc., United Bankshares, Inc.,
and Mercantile Bankshares Corp. Among the financial information compared was
information relating to tangible equity to assets, loans to deposits, net
interest margin, nonperforming assets, total assets, non-accrual loans, and
efficiency ratio. Additional information compared for the trailing
twelve-month period ended March 17, 1997, was (i) price to tangible book value
ratio which was 2.17x for First Virginia, compared to an average of 2.16x for
the Bank Group, (ii) price to earnings ratio which was 14.93x for First
Virginia, compared to an average of 15.37x for the Bank Group, (iii) return on
assets which was 1.43% for First Virginia, compared to an average of 1.22% for
the Bank Group, and (iv) return on equity which was 13.38% for First Virginia,
compared to an average of 13.40% for the Bank Group, and (v) a dividend yield
of 2.87% for First Virginia, compared to an average of 2.84% for the Bank
Group. Overall, in the opinion of Scott & Stringfellow, First Virginia's
operating performance and financial condition were slightly better than the
Bank Group average and First Virginia's market value was reasonable when
compared to the Bank Group. Accordingly, Premier stockholders shall receive
First Virginia Common Stock that is reasonably valued when compared to the
Bank Group.
Dilution Analysis.
Based upon publicly available financial information on Premier and
First Virginia, Scott & Stringfellow considered the effect of the transaction
on the book value, earnings, and market value of Premier and First Virginia.
The immediate effect on First Virginia was to decrease earnings by $0.06 per
share or 1.71% and to increase book value by $0.89 or 3.31%. The effect on
Premier under the same assumptions is to increase earnings $0.35 per share or
22.88%, to increase book value by $3.31 per share or 28.03%, to increase
dividends by $0.31 or 64.58% and to increase the October 28, 1996 market value
of Premier of $19.00 per share to $24.32. This dilution analysis takes into
account the longer term benefits for the combined companies resulting from the
combination. Scott & Stringfellow concluded from this analysis that the
transaction would have a significant positive effect on Premier and the
Premier Stockholders in that, dividends per share, net income per share, and
the market value of First Virginia Common Stock to be received by the Premier
stockholders, after giving effect to the Exchange Ratio, would represent a
substantial increase in the historical dividends per share, net income per
share, and market value of Premier Common Stock, although there can be no
assurance that pro forma amounts are indicative of future results.
The summary set forth above includes the material factors considered,
but does not purport to be a complete description of the presentation by Scott
& Stringfellow to Premier or of the analyses performed by Scott &
Stringfellow. The preparation of a fairness opinion involves various
determinations as to the most appropriate and relevant methods of financial
analysis and the application of those methods to the particular circumstances
and, therefore, such an opinion is not readily susceptible to partial analysis
or summary description. Accordingly, notwithstanding the separate factors
summarized above, Scott & Stringfellow believes that its analysis must be
considered as a whole and that selecting portions of its analyses and the
factors considered by it, without considering all analyses and factors, would
create an incomplete view of the process underlying the preparation of its
opinion. As a whole, these various analyses, contributed to Scott &
Stringfellow's opinion that the terms of the Affiliation Agreement are fair
from a financial point of view to Premier stockholders.
Scott & Stringfellow is a full service investment banking and
brokerage firm headquartered in Richmond, Virginia, that provides a broad
array of services to corporations, financial institutions and state and local
governments. The Financial Institutions Group of Scott & Stringfellow actively
works with financial institutions in Virginia, Maryland, North Carolina, the
District of Columbia, and West Virginia on these and other matters. As part of
its investment banking practice, it is continually engaged in the valuation of
financial institutions and their securities in connection with mergers and
acquisitions, negotiated underwritings, and secondary distribution of listed
and unlisted securities. Scott & Stringfellow was selected by the Premier
Board based upon its expertise and reputation in providing valuation and
merger and acquisition and advisory services to financial institutions.
<PAGE>
THE AFFILIATION
This Proxy Statement-Prospectus describes certain aspects of the
Affiliation Agreement. The description does not purport to be complete and is
qualified in its entirety by reference to the Affiliation Agreement, a copy of
which is attached as Appendix A and is incorporated herein by reference. ALL
STOCKHOLDERS ARE URGED TO READ THE AFFILIATION AGREEMENT IN ITS ENTIRETY.
Terms of the Affiliation
On the date on which the Affiliation is consummated (the "Effective
Date"), the Affiliation will be effected by the merger of Premier with and
into First Virginia, with First Virginia as the surviving corporation. The
Articles of Incorporation and Bylaws of First Virginia as in effect
immediately prior to the Effective Date will govern the surviving corporation
until amended or repealed in accordance with applicable law, and the directors
of First Virginia will be the directors of the surviving corporation.
On the Effective Date, each outstanding share of Premier Common Stock
will automatically be converted into .545 shares of First Virginia Common
Stock (the "Exchange Ratio"). The Exchange Ratio will be proportionately
adjusted for any stock split, stock dividend or other similar capital
adjustments by First Virginia between the date of the Affiliation Agreement
and the Effective Date. No fractional shares of First Virginia Common Stock
will be issued pursuant to the Affiliation. Instead, the Affiliation Agreement
provides that in the case of each Premier stockholder otherwise entitled to
receive a fractional share of First Virginia Common Stock, First Virginia will
pay to the stockholder cash (without interest) in an amount determined by
multiplying the fraction of a share of First Virginia Common Stock the
stockholder would otherwise be entitled to receive by the average of the
closing prices per share of First Virginia Common Stock as reported by The
Wall Street Journal under the heading "New York Stock Exchange - Composite
Transactions" or any comparable heading for each of the last ten trading days
ending on the Effective Date. No such holder shall be entitled to dividends,
voting rights or any other rights of stockholders in respect of any fractional
share.
On the Effective Date, outstanding options to acquire Premier Common
Stock ("Premier Options") shall be converted, based on the Exchange Ratio,
into options to acquire First Virginia Common Stock ("First Virginia
Options"). The exercise price per share of First Virginia Common Stock under a
First Virginia Option shall be equal to the exercise price of Premier Common
Stock under the Premier Option divided by the exchange ratio (rounded up to
the nearest cent).
Effective Date of the Affiliation
As soon as practicable after the fulfillment or waiver of all
conditions precedent to the consummation of the Affiliation contained in the
Affiliation Agreement, Premier and First Virginia will execute and deliver
Articles of Merger (the "Articles"), and will file the Articles with the
Virginia State Corporation Commission (the "SCC"). The Affiliation shall
become effective on such date (the "Effective Date") as set forth in the
Articles as filed with the SCC. There can be no assurance as to whether or
when the Affiliation will occur. See "Conditions to Consummation of the
Affiliation" and "Regulatory Approvals."
Procedures for Exchange of Certificates
Promptly following the Effective Date, First Virginia or the Exchange
Agent will mail to each stockholder of record of Premier a transmittal letter
(the "Transmittal Letter") and instructions for the exchange of Premier stock
certificates for new certificates representing the number of whole shares of
First Virginia Common Stock which each stockholder is entitled to receive
pursuant to the Affiliation. Upon surrender to the Exchange Agent of one or
more certificates formerly representing shares of Premier Common Stock,
together with a properly completed Transmittal Letter, there will be mailed to
the holder a certificate or certificates representing the number of shares of
First Virginia Common Stock into which those shares of Premier Common Stock
were converted, together with a check for the cash amount (without interest)
representing any fractional share of First Virginia Common Stock.
Directors and executive officers of Premier and any other person
constituting an "affiliate" of Premier for purposes of Rule 145 under the
Securities Act of 1933, as amended (the "Securities Act") will be subject to
certain restrictions on the transfer of shares of First Virginia Common Stock
received by them pursuant to the Affiliation.
All shares of First Virginia Common Stock into which shares of
Premier Common Stock are converted pursuant to the Affiliation will be deemed
issued as of the Effective Date. On and after the Effective Date, former
holders of record of Premier Common Stock will be entitled to vote any shares
of First Virginia Common Stock into which their shares have been converted,
regardless of whether they have surrendered their Premier certificates. Until
surrendered in accordance with the procedures described above, certificates
for Premier Common Stock will be deemed for all corporate purposes of First
Virginia to represent the number of whole shares of First Virginia Common
Stock into which the shares of Premier Common Stock formerly represented
thereby were converted. However, no dividend or distribution that becomes
payable to holders of record of First Virginia Common Stock on or after the
Effective Date will be paid to the holder of any Premier certificate until
such holder physically surrenders such certificate, after which First Virginia
will promptly pay all such dividends and distributions payable in respect of
shares of First Virginia Common Stock represented thereby, without interest,
except for any such dividends or distributions paid to any public official or
authority pursuant to any abandoned property or similar law.
PREMIER STOCKHOLDERS WHO DESIRE TO RECEIVE FIRST VIRGINIA COMMON
STOCK FOR THEIR SHARES SHOULD NOT FORWARD THEIR STOCK CERTIFICATES UNTIL THEY
RECEIVE THE TRANSMITTAL LETTER AND INSTRUCTIONS.
Certain Federal Income Tax Consequences
The following is a summary of the material federal income tax
consequences of the Affiliation. This summary is provided for information
purposes only and relates only to Premier's Common Stock held as a capital
asset within the meaning of Section 1221 of the Internal Revenue Code (the
"Code") by persons who are citizens or residents of the United States. This
summary does not discuss the tax consequences to categories of holders
entitled to special treatment under the Code (including, without limitation,
foreign persons, tax-exempt organizations, insurance companies, financial
institutions and dealers in stocks and securities). No rulings will be sought
from the Internal Revenue Service with respect to the federal income tax
consequences of the Affiliation. Premier shareholders are urged to consult
with their own tax advisors as to specific tax consequences to them of the
Affiliation.
A condition to the consummation of the Affiliation is the receipt of
an opinion of Gentry, Locke, Rakes & Moore, counsel to Premier, to the effect
that the Affiliation will be a "reorganization" within the meaning of Section
368(a) of the Code, and accordingly (i) no gain or loss will be recognized by
Premier as a result of the Affiliation, (ii) no gain or loss will be
recognized by Premier's shareholders upon the receipt of First Virginia Common
Stock in exchange for Premier Common Stock in connection with the Affiliation
(except as discussed below with respect to cash received in lieu of a
fractional share of First Virginia Common Stock); (iii) the tax basis of First
Virginia Common Stock (including any fractional share interest) received by a
Premier shareholder in connection with the Affiliation will be the same as the
basis in the Premier Common Stock surrendered in exchange therefor; (iv) the
holding period of First Virginia Common Stock (including any fractional share
interest) received by a Premier shareholder in connection with the Affiliation
will include the holding period of the Premier Common Stock surrendered in
exchange therefor, provided that the Premier Common Stock is held as a capital
asset at the effective time of the Affiliation; and (v) cash received in lieu
of a fractional share of First Virginia Common Stock will be traded as full
payment in exchange for the fractional share.
Gentry, Locke, Rakes & Moore's opinion will be based upon customary
assumptions and representations regarding, among other things, the ownership
of Premier Common Stock, the future ownership of First Virginia Common Stock
and First Virginia's future business plans. One important assumption is that,
at the Effective Date of the Affiliation, there will be no plan or intention
by Premier shareholders to sell or otherwise dispose of more than 20 percent
in the aggregate of the shares of First Virginia Common Stock received in the
Affiliation. For purposes of that assumption, the sale or redemption of any
shares of Premier Common Stock in anticipation of the Affiliation will be
treated as a sale of the number of shares of First Virginia Common Stock that
would have been received in exchange for such shares had they not been sold or
redeemed.
Gentry, Locke, Rakes & Moore's opinion will not be binding on the
Internal Revenue Service or any court. If the Affiliation were determined not
to qualify as a "reorganization" under Section 368(a) of the Code, the
Affiliation would be treated as a taxable sale of assets by Premier and a
taxable sale of stock by its shareholders.
A Premier shareholder who receives cash in lieu of a fractional share
of First Virginia Common Stock in the Affiliation will recognize gain (or
loss) as if the fractional share had been received and then redeemed for the
cash. The amount of gain or loss will equal the difference between the amount
of cash and the shareholder's basis in the fractional share interest. In such
event, any gain or loss recognized will be capital gain (or loss) if the
Premier Common Stock is held by such shareholder as a capital asset at the
effective time of the Merger.
Virginia income tax law conforms to the federal income tax treatment
of transactions such as the Affiliation. Accordingly, the federal income tax
consequences described above will also apply for Virginia income tax purposes.
THE DISCUSSION SET FORTH ABOVE DOES NOT ADDRESS ANY STATE (EXCEPT
VIRGINIA), LOCAL OR FOREIGN TAX ASPECTS OF THE AFFILIATION. THE DISCUSSION IS
BASED ON CURRENTLY EXISTING PROVISIONS OF THE CODE, EXISTING AND PROPOSED
TREASURY REGULATIONS THEREUNDER AND CURRENT ADMINISTRATIVE RULINGS AND COURT
DECISIONS. ALL OF THE FOREGOING ARE SUBJECT TO CHANGE AND ANY SUCH CHANGES
COULD AFFECT THE CONTINUING VALIDITY OF THIS DISCLOSURE. EACH PREMIER
SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR WITH RESPECT TO THE
SPECIFIC TAX CONSEQUENCES OF THE AFFILIATION TO SUCH SHAREHOLDER, INCLUDING
THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
Accounting Treatment
Upon consummation of the Affiliation, the transaction will be
accounted for as a purchase in accordance with generally accepted accounting
principles.
Conditions to Consummation of the Affiliation
The Affiliation will be consummated only if approved by the
affirmative vote of two-thirds of all the votes entitled to be cast by the
holders of record of Premier Common Stock.
The obligations of each of Premier and First Virginia to consummate
the Affiliation are also subject to the satisfaction of certain other
conditions prior to or at the Effective Date, including the following: (i) the
receipt of all necessary regulatory approvals of the Affiliation by the Board
of Governors of the Federal Reserve System (the "Federal Reserve Board") and
the Virginia Bureau and the time period for Department of Justice review has
expired without any intervention or threatened action by that department
having been received; provided, however, that no approval or consent to be
obtained from the Department of Justice, the Federal Reserve Board or the
Virginia Bureau shall have imposed any condition or requirement which would
materially impact the economic or business benefits to First Virginia of the
transactions contemplated herein so as to render inadvisable the consummation
of the Application; (ii) the approval by a majority of the entire Boards of
Directors of Premier and First Virginia; (iii) the effectiveness of the
Registration Statement of which this Proxy Statement-Prospectus is a part and
the absence of a stop order suspending such effectiveness; (iv) the
Affiliation Agreement shall have been submitted to the stockholders of Premier
and approved by an affirmative vote of the holders of two-thirds of all the
outstanding shares of Premier entitled to vote; and (v) Articles of Merger
containing the provisions required by, and executed in accordance with the
Virginia Stock Corporation Act (the "Articles of Merger") shall have been
filed with the SCC. See "Regulatory Review and Approvals".
In addition, the obligation of First Virginia to consummate the
Affiliation is subject to certain further conditions, unless waived in writing
by First Virginia, including the following: (i) the representations and
warranties of Premier contained in the Affiliation Agreement must be accurate
in all material respects as of the Effective Date, and Premier must have
performed and complied with in all material respects all obligations and
covenants required by the Affiliation Agreement to be performed or complied
with by Premier on or prior to the Effective Date, (ii) the absence of any
material adverse changes affecting Premier and its subsidiaries from September
30, 1996 to the Effective Date that, individually or in the aggregate, would
have a "Material Adverse Effect" on Premier and its subsidiaries (in this
context, "Material Adverse Effect" is defined in the Affiliation Agreement to
mean an event, change or occurrence which, individually or in the aggregate,
is reasonably likely to result in a reduction of the consolidated
stockholders' equity of Premier and its subsidiaries as at September 30, 1996,
or which has a material adverse impact on the ability of Premier to consummate
the Affiliation), (iii) the receipt by First Virginia of a written opinion of
Gentry, Locke, Rakes and Moore, counsel to Premier, dated as of the Effective
Date, covering matters customary in transactions of this type, (iv) no action
or proceeding against First Virginia, Premier or its subsidiaries or against
consummation of the Affiliation shall have been commenced or threatened or any
investigations or inquiries undertaken that might eventuate in such an action
or proceeding, and (v) confirmation by an audit of Premier and its
subsidiaries conducted by First Virginia that the consolidated stockholders'
equity of Premier and its subsidiaries as of September 30, 1996 was not less
than $76.5 million.
The obligation of Premier to consummate the Affiliation is also
subject to certain further conditions, unless waived in writing by Premier,
including the following: (i) the representations and warranties of First
Virginia contained in the Affiliation Agreement must be accurate in all
material respects as of the Effective Date, and First Virginia must have
performed and complied with in all material respects all obligations and
covenants required by the Affiliation Agreement to be performed or complied
with by First Virginia on or prior to the Effective Date, (ii) the absence of
any material adverse changes affecting First Virginia and its subsidiaries
from September 30, 1996 to the Effective Date that, individually or in the
aggregate, would have a "Material Adverse Effect" on First Virginia and its
subsidiaries (in this context, "Material Adverse Effect" is defined in the
Affiliation Agreement to mean an event, change or occurrence which,
individually or in the aggregate, is reasonably likely to result in a
reduction of the consolidated stockholders' equity of First Virginia and its
subsidiaries as of September 30, 1996, or which has a material adverse impact
on the ability of First Virginia to consummate the Affiliation), (iii) the
receipt by Premier of a written opinion of in-house counsel to First Virginia,
dated as of the Effective Date, covering matters customary in transactions of
this type, (iv) no action or proceeding against First Virginia, Premier or its
subsidiaries or against consummation of the Affiliation shall have been
commenced or threatened or any investigations or inquiries undertaken that
might eventuate in such an action or proceeding, and (v) the receipt by
Premier of an opinion from Scott & Stringfellow, dated as of the date the
Premier Board approved their Agreement (and updated as of the mailing date of
this Proxy Statement-Prospectus) that the Affiliation is fair to such
stockholders from a financial point of view; provided, however, that whether
or not the opinion concludes that he Affiliation is fair is not to be
considered a condition precedent to closing by Premier.
Regulatory Review and Approvals
The Affiliation is subject to approval by the Federal Reserve Board
under 3(a) of the BHCA. Under the BHCA, the Federal Reserve Board must
withhold approval of the Affiliation if it finds that the Affiliation would
result in a monopoly or be in furtherance of any combination or conspiracy to
monopolize or attempt to monopolize the business of banking in any part of the
United States. In addition, the Federal Reserve Board may not approve the
Affiliation if it finds that the effect of the Affiliation may be
substantially to lessen competition or tend to create a monopoly, or if the
Affiliation would in any other manner be in restraint of trade unless it finds
that the anticompetitive effects of the Affiliation are clearly outweighed in
the public interests by the probable effect of the transactions in meeting the
convenience and needs of the communities to be served. In ruling upon the
application for approval of the Affiliation, the Federal Reserve Board must
also take into consideration the financial and managerial resources and future
prospects of the existing and proposed institutions and the convenience and
needs of the communities to be served.
First Virginia has filed an application with the Federal Reserve Bank
of Richmond for approval of the Affiliation under the BHCA.
The Affiliation will not be consummated until the 15th day following
the date of Federal Reserve approval, during which time the United States
Department of Justice may challenge the Affiliation on antitrust grounds. The
commencement of an antitrust action would stay the effectiveness of the
Federal Reserve's approval unless a court specifically orders otherwise.
In response to a review made by the United States Department of
Justice and the Federal Reserve Board concerning the competitive aspects of
the Affiliation, First Virginia made certain commitments to both agencies
concerning the divestitures of branches it will make if the Affiliation is
consummated. These divestitures if they are consummated will not be material
to the financial condition or results of operations of First Virginia
following the Effective Date of the Affiliation.
Pursuant to Section 6.1-383.1 of the Virginia Code, First Virginia
has also filed with the Virginia Bureau a notice an application to acquire
Premier. For a period of sixty days following receipt of the application, the
Virginia Bureau will conduct an investigation for the purpose of determining
whether: (1) the proposed acquisition would be detrimental to the safety and
soundness to First Virginia or Premier; (2) First Virginia and its directors
and officers are qualified by character, experience and financial
responsibility to control and operate Premier; and (3) the proposed
acquisition would be prejudicial to the interests of the depositors,
creditors, beneficiaries of fiduciary accounts or shareholders of First
Virginia or Premier. Once the investigation is completed, the Virginia Bureau
has the right to disapprove the application or impose conditions on the
acquisition. If the Virginia Bureau takes no action or its issues a notice of
its intent not to disapprove the application, the acquisition may be
consummated. The Virginia Bureau within 30 days of the filing may disapprove
such an acquisition if it determines that the acquisition could affect
detrimentally the safety or soundness of a Virginia bank. It must approve such
acquisition within 45 days if it determines that the acquisition will not
affect detrimentally the safety or soundness of a Virginia bank.
Conduct of Business Pending the Affiliation
The Affiliation Agreement provides that until the Effective Date,
Premier and its subsidiaries will conduct their operations according to the
ordinary and usual course of business consistent with current practices, use
their best efforts to maintain their business organizations, employees and
advantageous business relationships, and retain their executive officers.
The Affiliation Agreement also provides that until the Effective
Date, Premier and its subsidiaries will not, without First Virginia's prior
written consent, (i) change their charters or bylaws, (ii) adjust, split,
combine or repurchase their stock or grant any stock options or stock
appreciation rights, (iii) pay any dividends or distributions with respect to
their stock, except payment by Premier of quarterly cash dividends on Premier
Common Stock at a rate up to $.14 per share per quarter (provided that Premier
coordinates its dividend record and payment dates with First Virginia), (iv)
enter into any contracts, incur any liabilities, make any capital expenditures
or sell, lease or dispose of any property except in the normal course of
business, (v) increase the compensation, fringe benefits or employee benefits
of any of their directors, officers or employees, except increases and
payments consistent with past practices and current compensation plans or
otherwise not material, or (vi) merge or consolidate (or agree to do so) with
any other corporation.
The Affiliation Agreement also provides that First Virginia, Premier
and its subsidiaries will jointly prepare and file applications for the
necessary regulatory approvals of the Affiliation by the Federal Reserve Board
and the Virginia Bureau. In addition, First Virginia and Premier each agreed
to use its best efforts to secure the requisite regulatory approvals with
respect to the Affiliation from the Federal Reserve Board and the Virginia
Bureau. See "Regulatory Review and Approvals."
Also, under the Affiliation Agreement, Premier agreed to use all
reasonable efforts to obtain the written consents or approvals of all private
third parties whose consent or approval is required, in connection with the
transactions contemplated by the Affiliation Agreement, under the terms of any
lease, mortgage, indenture or other agreement to which Premier or any of its
subsidiaries is a party or by which any of their assets is bound.
No Solicitation of Acquisition Proposals
The Affiliation Agreement provides that, unless and until the
Affiliation Agreement is terminated, Premier and its subsidiaries and
representatives will not (i) solicit or initiate discussions with any person
other than First Virginia concerning any merger, sale of substantial assets,
tender offer, sale of shares of stock or similar transaction involving Premier
or its subsidiaries (collectively, an "Acquisition Proposal"), (ii) provide
any confidential information concerning Premier or its subsidiaries to any
person in connection with an Acquisition Proposal, or (iii) enter into an
agreement with any third party providing for a business combination
transaction, equity investment or sale of significant amount of assets, except
as described below. However, if Premier receives from a third party an
unsolicited Acquisition Proposal and a majority of the full Board of Directors
of Premier determines in good faith, upon advice of legal counsel, that the
Board of Directors has a fiduciary duty to consider the Acquisition Proposal,
then the Board of Directors may do so, and Premier is excused from the
restrictions described in the preceding sentence in regard to that Acquisition
Proposal. In such a case, the Affiliation Agreement provides that Premier will
give written notice to First Virginia of Premier's intention to consider the
Acquisition Proposal and of the material terms thereof at least five days
before responding to the Acquisition Proposal, provided that if the terms of
the Acquisition Proposal require a response by Premier in a shorter period
then Premier will give such written notice to First Virginia within one
business day after Premier's receipt of the Acquisition Proposal and Premier
thereafter may respond to the Acquisition Proposal as it deems appropriate.
Waiver and Amendment
Any provision of the Affiliation Agreement benefitting one party may
be waived by that party against which the waiver would be enforceable, but
only in writing and subject to the requirements of applicable laws and
regulations. In addition, any provision of the Affiliation Agreement may be
amended (without a vote of stockholders) by written agreement approved by the
Boards of Directors of Premier and First Virginia, provided that after the
Special Meeting no amendment may be made in the exchange rate which decreases
the Affiliation Consideration to Premier's stockholders without the approval
of stockholders holding two-thirds of all outstanding shares of Premier Common
Stock.
Termination
The Affiliation Agreement provides that at any time prior to the
Effective Date, notwithstanding the approval of the Affiliation by the
stockholders of Premier, the Affiliation Agreement may be terminated: (i) by
mutual consent of the Boards of Directors of First Virginia and Premier, (ii)
by the Board of Directors of either Premier or First Virginia (provided that
the terminating party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in the Affiliation Agreement)
in the event of a material breach by the other party of any representation or
warranty contained in the Affiliation Agreement which cannot be or has not
been cured within 30 days after the giving of written notice to the breaching
party of such breach, (iii) by the Board of Directors of either First Virginia
or Premier (provided that the terminating party is not then in material breach
of any representation, warranty, covenant or other agreement contained in the
Affiliation Agreement) in the event of a material breach by the other party of
any covenant or agreement contained in the Affiliation Agreement which cannot
be or has not been cured within 30 days after the giving of written notice to
the breaching party of such breach, (iv) by the Board of Directors of either
First Virginia or Premier (provided that the terminating party is not then in
material breach of any representation, warranty covenant or other agreement
contained in the Agreement if (a) the Federal Reserve Board or the Virginia
Bureau denies approval of the Affiliation and the time period for all appeals
or requests for reconsideration has run or (b) the shareholders of Premier
fail to vote their approval of the Agreement and the Merger; or (v) by the
Board of Directors of either Premier or First Virginia in the event the
Affiliation does not become effective within nine months of the date of the
Affiliation Agreement, if the failure to consummate the Affiliation is not
caused by any breach of the Affiliation Agreement by the party electing to
terminate, (vi) by the Board of Directors of either Premier or First Virginia
(provided that the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained in the
Affiliation Agreement) in the event that any of the conditions precedent to
the obligations of such party to consummate the Affiliation cannot be
satisfied or fulfilled within nine months of the date of the Affiliation
Agreement, (vii) by the Board of Directors of First Virginia if the holders of
more than 20% of the outstanding shares of Premier Common Stock file for
appraisal rights under Virginia law, or (viii) by the Board of Directors of
Premier if the average of the closing prices of First Virginia Common Stock as
reported in The Wall Street Journal under the heading "New York Stock
Exchange--Composite Transactions" declines to $34 per share or less for any
period of twenty consecutive business days prior to the Effective Date, or
(ix) by the Board of Directors of First Virginia, at any time prior to the
45th day after execution of the Affiliation Agreement in the event that First
Virginia determines, after its audit of Premier and its subsidiaries, that the
financial condition of Premier and its subsidiaries, taken as a whole as of
the date of the completion of the audit, do not meet the standards described
in Paragraph 6.3 of the Agreement or that a fact or circumstance exists or is
reasonably likely to exist or result which materially and adversely impacts
one or more of the economic benefits to First Virginia of the transactions
contemplated by this Agreement so as to render inadvisable the consummation of
the merger.
In the event of the termination of the Affiliation Agreement pursuant
to the termination provisions thereof, the Affiliation Agreement will become
void and have no effect, except that certain provisions of the Affiliation
Agreement relating to expenses and confidentiality of information obtained
pursuant to the Affiliation Agreement or in connection with the negotiation
thereof will survive such termination. Neither First Virginia nor Premier will
be relieved from liability for any breach of the Affiliation Agreement.
Stock Option Agreement
As an inducement and a condition to First Virginia entering into the
Affiliation Agreement, Premier and First Virginia entered into the Option
Agreement, pursuant to which Premier granted First Virginia an option
entitling it to purchase up to 1,323,350 shares (representing 19.9% of the
shares issued and outstanding before giving effect to the exercise of such
Option) of Premier Common Stock under the circumstances described below, at a
cash price per share equal to $20.00, subject to possible adjustment in
certain circumstances (the "Purchase Price"). This description of the Option
Agreement and the Option does not purport to be complete and is qualified in
its entirety by reference to the Option Agreement, which is filed as an
exhibit hereto and incorporated herein by reference.
Notwithstanding anything to the contrary contained in the Option
Agreement, in no event may the Total Profit (as defined below) of First
Virginia exceed $8 million and, if it otherwise would exceed such amount,
First Virginia, at its sole election, must either (a) reduce the number of
shares of Premier Common Stock subject to the Option, (b) deliver to Premier
for cancellation the shares of Premier Common Stock purchased pursuant to the
Option, (c) pay cash to Premier or any combination thereof, so that First
Virginia will not actually realize Total Profit in excess of $8 million after
taking into account the foregoing actions. In addition, the Option may not be
exercised for a number of shares as would, as of the date of exercise, result
in a Notional Total Profit (as defined below) of more than $8 million;
provided, however, that this limitation will not restrict any exercise of the
Option permitted by the Option Agreement on any subsequent date.
"Total Profit" generally means the aggregate amount (before taxes) of
the following: (a) the amount received by First Virginia pursuant to Premier's
repurchase of the Option (or any portion thereof), (b)(i) the amount received
by First Virginia pursuant to Premier's repurchase of shares of Premier Common
Stock purchased pursuant to the Option, less (ii) the purchase price for such
shares, (c)(i) the net cash amounts received by First Virginia pursuant to the
sale of Premier Common Stock purchased pursuant to the Option (or any other
securities into which such shares may be converted or exchanged) to any
unaffiliated party, less (ii) the purchase price of such shares, and (d) any
amounts received by First Virginia on the transfer of the Option (or any
portion thereof) to any unaffiliated party.
"Notional Total Profit" generally means the Total Profit determined
as of the date of such proposed exercise assuming that the Option were
exercised on such date for such number of shares and assuming that such
shares, together with all other Premier Common Stock purchased pursuant to the
Option held by First Virginia and its affiliates as of such date, were sold
for cash at the closing sale price per share of Premier Common Stock as quoted
on the NASDAQ National Market as of the close of business on the preceding
trading day (less customary brokerage commissions).
Subject to applicable law and regulatory restrictions, First Virginia
may exercise the Option, in whole or in part, if, but only if, a Purchase
Event (as defined below) occurs prior to the Option's termination, provided
that First Virginia, at the time, is not in material breach of the Option
Agreement or the Agreement. As defined in the Option Agreement, "Purchase
Event" means either of the following events:
(a) without First Virginia's written consent, Premier's
authorizing, recommending, publicly proposing, or publicly announcing
an intention to authorize, recommend, or propose or entering into an
agreement with any third party to effect (i) a merger, consolidation,
or similar transaction involving Premier or any of its subsidiaries
(other than transactions solely between Premier's subsidiaries), (ii)
except as permitted by the Agreement, the disposition, by sale,
lease, exchange, or otherwise, of 15% or more of the consolidated
assets of Premier and its subsidiaries or (iii) the issuance, sale,
or other disposition (including by way of merger, consolidation,
share exchange or any similar transaction) of securities representing
15% or more of the voting power of Premier or any of its
subsidiaries; or
(b) any third party's acquiring beneficial ownership, or the
right to acquire beneficial ownership of, or the formation of any
group (as defined under the Exchange Act) that beneficially owns or
has the right to acquire beneficial ownership of, 15% or more of the
outstanding shares of Premier Common Stock.
The Option will terminate upon the earliest of the following:
(a) the Effective Date;
(b) termination of the Agreement in accordance with the
terms thereof prior to the occurrence of a Purchase Event or a
Preliminary Purchase Event (other than a termination of the Agreement
under certain circumstances involving a willful breach by Premier (a
"Default Termination"));
(c) 12 months after termination of the Agreement (other than
pursuant to a Default Termination) following the occurrence of a
Purchase Event or a Preliminary Purchase Event.
As defined in the Option Agreement, "Preliminary Purchase Event" includes
either of the following events:
(a) commencement or filing of a registration statement under
the Securities Act by any third party of a tender offer or exchange
offer to purchase any shares of Premier Common Stock such that, upon
consummation of such offer, such person would own or control 15% or
more of the then-outstanding shares of Premier Common Stock (a
"Tender Offer" or an "Exchange Offer," respectively); or
(b) failure of the stockholders of Premier to approve the
Agreement at the meeting of such stockholders held for the purpose of
voting on the Agreement, the failure to have such meeting or the
cancellation thereof prior to termination of the Agreement, or the
withdrawal or modification by Premier's Board of Directors in a
manner adverse to First Virginia of the recommendation of the Board
of Directors with respect to the Agreement, in each case, after
public announcement that a third party (i) made, or disclosed an
intention to make a proposal to engage in an acquisition transaction,
(ii) commenced a Tender Offer or filed a registration statement under
the Securities Act with respect to an Exchange Offer or (iii) filed
an application or given a notice under certain federal statutes for
approval or consent to engage in an acquisition transaction.
In the event of any change in Premier Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination, exchange
of shares, or similar transaction, the type and number of securities subject
to the Option, and the purchase price therefore, shall be adjusted
appropriately. In the event that any additional shares of Premier Common Stock
are issued after October 29, 1996 (other than pursuant to an event described
in the preceding sentence), the number of shares of Premier Common Stock
subject to the Option will be adjusted so that, after such issuance, it,
together with any shares of Premier Common Stock previously issued pursuant to
the Option Agreement, equals 19.9% of the number of shares then issued and
outstanding, without giving effect to any shares subject to or issued pursuant
to the Option.
Upon the occurrence of a Repurchase Event (as defined below) that
occurs prior to the exercise or termination of the Option, at the request of
First Virginia, delivered within 12 months of the Repurchase Event, Premier
will, subject to regulatory restrictions, be obligated to repurchase the
Option and any shares of Premier Common Stock therefor purchased pursuant to
the Option Agreement at a specified price.
As defined in the Option Agreement, "Repurchase Event" shall occur if
(i) any person (other than First Virginia or any First Virginia subsidiary)
shall have acquired actual ownership or control, or any "group' (as such term
is defined under the Exchange Act) shall have ben formed which has acquired
actual ownership or control of 50% or more of the then-outstanding shares of
Premier Common Stock, or (ii) any of the following transactions is
consummated: (a) Premier consolidates with or merges into any person, other
than First Virginia or one of First Virginia's subsidiaries, and is not the
continuing or surviving corporation of such consolidation or merger; (b)
Premier permits any person, other than First Virginia or one of First
Virginia's subsidiaries, to merge into Premier and Premier shall be the
continuing or surviving corporation, but, in connection with such merger, the
then-outstanding shares of Premier Common Stock shall be changed into or
exchanged for stock or other securities of Premier or any other person or cash
or any other property or the outstanding shares of Premier Common Stock
immediately prior to such merger shall after such merger represent less than
50% of the outstanding shares and share equivalents of the merged company; or
(c) Premier sells or otherwise transfers all or substantially all of its
assets to any person, other than First Virginia or one of First Virginia's
subsidiaries.
In the event that prior to the exercise or termination of the Option,
Premier enters into an agreement to engage in any of the transactions
described in clause (ii) of the definition of Repurchase Event above, the
agreement governing such transaction must make proper provision so that First
Virginia will receive for each share of Premier Common Stock subject to the
option an amount of consideration that would be received by a holder of
Premier Common Stock in such transaction less the Purchase Price.
After the occurrence of a Purchase Event, First Virginia may assign
the Option Agreement and its rights thereunder in whole or in part.
Upon the occurrence of certain events, Premier has agreed to file
with the SEC and to cause to become effective certain registration statements
under the Securities Act with respect to dispositions by First Virginia and
its assigns of all or part of the Option and/or any shares of Premier Common
Stock into which the Option is exercisable.
Operations After the Effective Date
On the date of the Affiliation, the banking subsidiaries of Premier
as well as Premier Trust Company will continue to conduct their respective
businesses as wholly owned subsidiaries of First Virginia. It is First
Virginia's intention that by the end of 1997, Premier Bank-South, N.A. will be
merged into First Virginia Bank-Southwest, Premier Bank, N.A. will be merged
into First Virginia Bank-Clinch Valley and Premier Bank-Central, N.A. will be
merged into First Virginia Bank-Mountain Empire. The current officers and
directors of the Premier banking subsidiaries will continue to serve in their
present capacities until those banks are merged into First Virginia's banking
subsidiaries.
Interests of Certain Persons in the Affiliation
The Affiliation Agreement states that the President of Premier
Bank-Central, N.A. will become the President and Chief Administrative Officer
of First Virginia Bank-Mountain Empire; that the President of Premier
Bank-South, N.A. shall become President of the Wytheville division of First
Virginia Bank-Southwest; and the President of Premier Bank, N.A., shall become
the President and Chief Administrative Officer of First Virginia Bank-Clinch
Valley.
The Affiliation Agreement also states that each member of the Board
of Directors of Premier will become a director of either First Virginia
Bank-Southwest, First Virginia Bank-Clinch Valley or First Virginia
Bank-Mountain Empire.
Premier currently has agreements with Charles C. Paschall, R. Luke
Lively, Jerry Ocheltree, Jackson E. Reasor, Delphie E. Simpson, and John
Robert Buchanan that could be characterized as "change-of-control agreements.
Each of these agreements provides for payment of the executives "annual base
salary" during the three years after the consummation of Premier's merger or
sale, if the executive is (a) not employed by the merged bank in substantially
his same position with compensation at least equal to the compensation being
received at the time of the consummation" of the merger, and (b) this
nonemployment is the result, directly or indirectly, of such merger or sale
and the consequent restructuring of employer-employee relationships. The
agreements for John Robert Buchanan and Delphie Simpson also provide that in
addition to being employed in substantially the same position after the
Affiliation, each must be employed in a specified geographic area. If there is
a change in either requirement and the change results from the merger, then
the merged entity must pay Buchanan or Simpson his/her salary at the time of
the merger for the three years after the merger.
James R. Wheeling, President and Chief Executive Officer of Premier,
has entered into an employment agreement with First Virginia (which is
contingent on consummation of the Affiliate) which supersedes his present
change-of-control agreement with Premier dated September 22, 1993. Under his
new agreement with First Virginia, on the Effective Date of the Affiliation,
Wheeling will be employed by First Virginia Bank-Southwest as President and
Chief Administrative Officer at a base annually salary of $154,000. Subject to
the terms of the Agreement, First Virginia Bank-Southwest is required to
employ Wheeling for a minimum period of three years from the Effective Date of
the Affiliation. The terms of the Agreement provide that Wheeling has the
option of resigning from his position at First Virginia Bank-Southwest during
a thirty (30) day period exactly one year after the Effective Date of the
Affiliation (provided he is still employed with First Virginia Bank-Southwest)
and receiving a lump sum cash payment. If during the thirty (30) day period,
First Virginia receives notice from Wheeling of his intent to resign, First
Virginia must pay Wheeling the highest amount possible, but in no event in
excess of $410,000, which would not subject such payment to excess parachute
treatment under ss. 280G of the Internal Revenue Code. During the three year
period beginning with the Effective Date of the Affiliation, Wheeling also
could receive a cash payment if he is discharged, dies or resigns from his
employment under certain circumstances. The Agreement also includes a
noncompete provision.
Effect on Employee Benefit Plans
Following consummation of the Affiliation, employees of Premier and
its subsidiaries will be eligible to participate in all of First Virginia's
employee benefit programs provided they meet the eligibility requirements of
those programs. Service with Premier and its subsidiaries will be considered
service with First Virginia for purposes of determining eligibility, vesting
and benefits under all such programs, except First Virginia's Post Retirement
Medical Program and as otherwise described below.
With respect to the First Virginia Pension Trust Plan, Premier's
employees will receive credit for their prior service with Premier for
purposes of determining eligibility and vesting under that Plan but not for
determining accrued benefits. Premier's Defined Contribution Plan (which is a
401k Plan) will either be terminated or merged into First Virginia's Employees
Thrift Plan (which is also a 401k Plan) at First Virginia's sole discretion.
With respect to First Virginia's Nonqualified Profit Sharing Plan,
all employees of Premier and its subsidiaries as of the effective date of the
Affiliation shall be eligible to participate in that Plan and to participate
in the benefits for the plan year of which the Affiliation is completed (which
participation in the year of Affiliation will be prorated based on the period
of time during that year that employees of Premier and its subsidiaries are
covered by that Plan). To the extent eligible, Premier employees also may
participate in the benefits under Premier's profit sharing plan for plan year
1996 and plan year 1997. Such benefits for 1997 will be prorated based on the
period of time during that year that Premier's employees participated in that
Plan. Benefits under both the First Virginia Employee Profit Sharing Plan and
the Premier Profit Sharing Plan will not be paid before the end of 1997 to
Premier employees who qualify for benefits under those Plans based on
employment during 1997.
Sick or vacation leave that has been accrued by employees of Premier
and its subsidiaries will not be adversely effected by the Affiliation.
Resale of First Virginia Common Stock
The shares of First Virginia Common Stock issuable to stockholders of
Premier upon consummation of the Affiliation have been registered under the
Securities Act. Such shares may be traded freely and without restriction by
those stockholders not deemed to be "affiliates" of Premier as that term is
defined in the rules promulgated under the Securities Act. "Affiliates" are
generally defined under rules promulgated by the Securities and Exchange
Commission as persons who control, are controlled by or are under common
control with Premier at the time of the Special Meeting. Accordingly,
"affiliates" generally will include directors and executive officers of
Premier. Shares of First Virginia Common Stock received by those stockholders
of Premier who are deemed to be "affiliates" of Premier may be resold without
registration as provided for by Rules 144 and 145, or as otherwise permitted,
under the Securities Act. This Proxy Statement-Prospectus does not cover any
resales of First Virginia Common Stock received by "affiliates" of Premier or
by certain of their family members or related interests.
Premier has agreed in the Affiliation Agreement to furnish to First
Virginia such information as may be necessary to determine those persons who
may be "affiliates" of Premier and to use its best efforts to cause each such
person to enter into a written agreement with First Virginia providing that
such "affiliate" will not resell any shares of First Virginia Common Stock to
be received by such person pursuant to the Affiliation except in compliance
with certain restrictions and the applicable provisions of the Securities Act
and the rules promulgated thereunder.
Rights of Dissenting Stockholders
Under Virginia law, holders of Premier's Common Stock entitled to
vote on the Affiliation and the Affiliation Agreement do not have any
dissenter's rights.
<PAGE>
DESCRIPTION OF FIRST VIRGINIA CAPITAL STOCK
Authorized Capital Stock
First Virginia is authorized to issue 60,000,000 shares of First
Virginia Common Stock and 3,000,000 shares of preferred stock of a par value
of $10.00 per share. As of December 31, 1996, there were approximately
32,408,000 shares of First Virginia Common Stock and 33,951 shares of
convertible preferred stock of First Virginia outstanding (the "First Virginia
Preferred Stock").
Holders of the First Virginia Common Stock are entitled to one vote
per share on all matters presented to the stockholders. There is no provision
for cumulative voting. Subject to the preferential rights of the holders of
the First Virginia Preferred Stock, each holder of First Virginia Common Stock
is entitled to receive a pro rata share of such dividends as may be declared
by the Board of Directors out of the funds available therefor, and to share
ratably in the net assets in event of liquidations. All of the shares of First
Virginia Common Stock and First Virginia Preferred Stock which are issued and
outstanding are fully paid and nonassessable. No holder of any share of First
Virginia Common Stock has any preemptive right to purchase any security which
First Virginia may hereafter issue, and the First Virginia Common Stock is not
subject to any conversion rights, redemption provisions, or sinking fund
provisions. First Virginia is prohibited from redeeming any of the First
Virginia Common Stock if any First Virginia Preferred Stock dividends are in
arrears.
First Virginia Preferred Stock is divided into four series, Series A
through Series D. Series A and B shares are convertible into one and one-half
shares of First Virginia Common Stock and Series C shares are convertible into
one and two-tenths shares of First Virginia Common Stock. These shares may be
redeemed at the option of First Virginia for $10.00 per share. The Series D
shares are convertible into one and one-half shares of First Virginia Common
Stock and are redeemable at the option of First Virginia for $10.08 per share
until March 15, 1995 and for $10.00 per share in each succeeding year
thereafter. Series A shares carry an annual dividend of 5%, whereas Series B
and C carry an annual dividend of 7% and Series D shares carry an annual
dividend of 8%. The First Virginia Preferred Stock, regardless of series, is
voting stock and unless otherwise required by law, each share is entitled to
the same vote as each share of First Virginia Common Stock on all matters
presented to stockholders. In the event of the voluntary dissolution of First
Virginia, the then holders of shares of any of series of First Virginia
Preferred Stock would receive the then redemption price of their shares plus
accrued but unpaid dividends and interest, if any, unless there are
insufficient assets to pay the same in which event they will be paid ratably
in proportion to the amounts to which they are entitled. The same provisions
are applicable in the event of involuntary dissolution except that the holders
of First Virginia Preferred Stock would receive $10.00 per share plus accrued
dividends and interest, if any, rather than the then effective redemption
price.
Certain Provisions of First Virginia's Articles of Incorporation
and First Virginia's Shareholder Rights Plan
First Virginia's Articles of Incorporation contain certain provisions
which are of a type sometimes characterized, and under certain circumstances
could operate, as anti-takeover provisions. These measures include staggered
terms for directors and 80% vote requirements for stockholder approval of
certain actions as described below. These provisions may have the effect of
strengthening the position of incumbent management by making it more difficult
to change the composition of the Board of Directors. In addition, with respect
to a merger or other business combination, the 80% stockholder approval
requirement may make it more difficult for stockholders who might wish to
participate in a tender offer to do so.
First Virginia's Articles of Incorporation (i) classify the Board
into three classes, as nearly equal in number as possible, each of which will
serve for three years, with one class being elected each year; (ii) increase
to 80% the stockholder vote required to approve certain mergers, sales of
assets, liquidations and other significant transactions involving First
Virginia and any beneficial holder of five percent or more of First Virginia's
voting stock unless the transaction is either (a) approved by at least a
majority of the Continuing Directors (as that term is defined in the Articles
of Incorporation), or (b) certain minimum price and procedural requirements
are met; (iii) increase to 80% the stockholder vote required to remove
directors, and (iv) prevent the circumvention of the foregoing provisions by
increasing to 80% the stockholder vote required to repeal or amend the
foregoing provisions of the Articles of Incorporation.
First Virginia's Bylaws include a provision which requires that, in
order to adopt, amend or repeal the Bylaws, an affirmative vote of a majority
of First Virginia's Board of Directors or an affirmative vote of the
stockholders holding 80% of the voting power of First Virginia Common Stock
would be necessary. Under Virginia law, unless other provision is made in the
Articles of Incorporation or Bylaws, a majority of the directors or a majority
of the stockholders present entitled to vote may adopt, amend or repeal the
Bylaws. First Virginia's Bylaws also provide that special meetings of
stockholders may be called at the written request of the holders of 80% of the
voting stock of First Virginia, or a majority of the Continuing Directors.
On July 27, 1988 the Board of Directors of First Virginia adopted a
Shareholder Rights Plan and declared a distribution of one right for each
outstanding share of First Virginia Common Stock. The Shareholder Rights Plan
is designed to protect shareholders against unsolicited attempts to acquire
control of First Virginia whether through accumulation of shares in the open
market or tender offers that do not offer what the Board believes to be an
adequate price to all stockholders.
The Shareholder Rights Plan provides for the distribution of one
Stock Purchase Right (a "Right") as a dividend for each outstanding share of
First Virginia Common Stock. Initially, the Rights are represented by and
trade in tandem with the common stock certificates and the Rights are not
exercisable. Each Right, when triggered, will entitle stockholders to buy
$180.00 worth of capital stock of First Virginia for $90.00. The First
Virginia Board of Directors determines the exercise price of the Rights.
Purchased stock may be in the form of preferred stock of First Virginia or, at
the election of First Virginia's Board of Directors, First Virginia Common
Stock or a combination of preferred stock and First Virginia Common Stock. The
Rights may be exercised only if a person or group acquires 20% or more of all
outstanding shares of First Virginia Common Stock or announces a tender offer
that would result in the ownership of 20% or more of all outstanding shares of
First Virginia Common Stock. At such time, the Rights will begin to trade
independently from the First Virginia Common Stock. At no time do the Rights
have any voting power.
Under certain circumstances involving the acquisition of 20% or more
of all outstanding shares of First Virginia Common Stock, all Rights holders
except the acquiror may purchase, at the exercise price, capital stock of
First Virginia at a discounted price. If First Virginia merges with an
acquiror that has acquired 20% or more of the outstanding shares of First
Virginia Common Stock without Board approval of such stock acquisition, all
Rights holders except the acquiror may purchase the shares of First Virginia
Common Stock held by the acquiror at a similar discount.
The Rights will expire on August 8, 1998. First Virginia Common Stock
certificates issued after August 8, 1988 (including those issued to Premier
stockholders pursuant to the Affiliation) contain or will contain a legend
evidencing the existence of the Rights applicable to those shares.
Each share of First Virginia Common Stock issued to a Premier
stockholder in exchange for Premier Common Stock pursuant to the Affiliation
will be subject to the Shareholder Rights Plan and will carry with it a Right
as described above.
The Rights have certain antitakeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire First
Virginia (other than pursuant to a "permitted offer" as that term is defined
in the Shareholder Rights Plan or with First Virginia's prior approval)
without conditioning the offer on the Rights being redeemed or substantially
all the Rights being acquired. However, the Rights should not interfere with
any merger or other business combination approved by First Virginia (other
than with an Acquiring Person as that term is defined under the Shareholder
Rights Plan) because the Rights are redeemable under those circumstances at a
nominal cost.
<PAGE>
CERTAIN DIFFERENCES IN RIGHTS OF STOCKHOLDERS
First Virginia is a Virginia corporation subject to the provisions of
the Virginia Stock Corporation Act (the "VSCA"). Premier is also a Virginia
corporation subject to the provisions of VSCA. Stockholders of Premier, whose
rights are governed by Premier's Articles of Incorporation and By-Laws and by
the VSCA, will upon consummation of the Affiliation, become stockholders of
First Virginia. The rights of Premier's stockholders as stockholders of First
Virginia will then be governed by the Articles of Incorporation and Bylaws of
First Virginia and by the VSCA.
Set forth below are certain differences between the rights of Premier
stockholders under Premier's Articles of Incorporation and By-Laws, on the one
hand, and the rights of First Virginia stockholders under First Virginia's
Articles of Incorporation and Bylaws on the other hand, including with respect
to, among other matters, (i) indemnification of directors, officers, employees
and agents, and (ii) limitation of personal liability of directors. This
summary does not purport to be a complete discussion of, and is qualified in
its entirety by reference to the VSCA, the Articles of Incorporation and
By-Laws of Premier, and the Articles of Incorporation and Bylaws of First
Virginia.
Size and Classification of the Board of Directors
Premier's Articles of Incorporation provide for the number of
directors to be not less than five, no more than 25, as is fixed from time to
time pursuant to the By-Laws. Premier's Articles of Incorporation divide the
Board of Directors into three classes, with each class being elected for
successive three-year terms. At present, Premier's Board of Directors is
comprised of three classes consisting of an aggregate of 12 directors.
First Virginia's Articles of Incorporation provide for the number of
directors to be 15 unless otherwise fixed by the Bylaws, provided that the
number of directors shall not be less than three nor more than thirty. The
Board of Directors of First Virginia is also divided into three classes, each
of which is elected for successive three-year terms. First Virginia's Bylaws
currently provide for 15 directors divided into three classes as nearly equal
in number as possible.
Election of Directors
Directors of both Premier and First Virginia are elected by a
majority of votes cast at a meeting of stockholders, duly called and at which
a quorum is present. The By-Laws of Premier provides that directors may be
removed by the vote of a majority of all the shares of common stock at the
time outstanding and having voting power at any meeting of stockholders. First
Virginia's Articles of Incorporation provide that directors may only be
removed by the vote of 80% of the stockholders entitled to vote on such
action.
Vacancies on Premier's Board of Directors created by removal may be
filled by a majority of all the shares of common stock at the time outstanding
and having voting power at any meeting of stockholders. Any vacancy of two or
fewer arising among the Directors may be filled by the remaining Directors
unless sooner filled by the stockholders. First Virginia's Articles of
Incorporation provide that vacancies, whether created by death, resignation,
retirement, disqualification or removal of a director or by increase in size
of the Board, may be filled by the majority of directors then in office
provided that directors may only fill up to two vacancies resulting from an
increase in the size of the Board of Directors.
Under First Virginia's Bylaws, a director must own in his sole name
and have in his personal possession or control capital stock of First Virginia
having an aggregate par value of not less than $1,000. Under Premier's
By-Laws, directors must be stockholders of Premier.
Voting Requirements
Pursuant to the VSCA and First Virginia's Articles of Incorporation,
a plan of merger or exchange (except in certain circumstances as described
below) or a transaction involving the sale of all or substantially all of
First Virginia's assets requires the vote of more than two-thirds of all votes
entitled to be cast on such transaction by each voting group entitled to vote
on the transaction, if (i) the proposed action has been approved and
recommended by a majority of the directors then in office, (ii) the proposed
action involves only First Virginia and a subsidiary of First Virginia or
(iii) certain price conditions set forth in the Articles of Incorporation are
met. The affirmative vote of holders of eighty percent (80%) of the
outstanding shares entitled to vote is required if none of the conditions
described above is met. Pursuant to First Virginia's Articles of
Incorporation, except as otherwise provided in Articles V, X, and XI, the
Articles of Incorporation may be amended by vote of a majority of all votes
entitled to be case by each voting group entitled to vote on the amendment.
Since Premier's Articles of Incorporation and Bylaws do not provide
voting requirements in cases of mergers, shares exchanges or the sale of all
or substantially all of Premier's assets, the voting requirements of the VSCA
would apply. The VSCA requires that a plan of merger or share exchange or the
sale of all or substantially all of the assets of a corporation must be
approved by each voting group entitled to vote on the plan by more than
two-thirds of all the votes entitled to be cast by that voting group. Upon
consummation of the Affiliation, former Premier stockholders who receive First
Virginia Common Stock will be subject to the rules applicable to First
Virginia, pursuant to which any of the transactions described immediately
above will require the approval of 80% of the outstanding shares of First
Virginia Common Stock, unless one of the conditions is met.
The VSCA does not require a stockholder vote of the surviving
Virginia corporation in a merger if (i) the merger agreement does not amend
the existing articles of incorporation of the surviving corporation such that
the amendment would otherwise require shareholder approval, (ii) each
outstanding share of capital stock of the surviving corporation before the
merger is unchanged after the merger, and (iii) the number of voting or
participating shares to be issued by the surviving corporation in the merger
does not exceed 20% of the voting or participating shares, respectively,
outstanding immediately prior to the merger.
Stockholder Power to call a Special Meeting
Under Premier's By-Laws, special meetings of the stockholders shall
be held whenever called by the Chairman of the Board, the President, or by at
least three of the Directors, or by stockholders holding at least 20 percent
of the number of shares of common stock entitled to vote then outstanding.
Under First Virginia's Bylaws, special meetings of the stockholders can be
called by the president or secretary only at the written request of a majority
of the directors, provided that, if as of the date of the request for such
special meeting there is a Related Person (as defined in Article X of the
Articles of Incorporation), such majority shall include a majority of the
Continuing Directors (also as defined in Article X of the Articles of
Incorporation), or by the holders of eighty percent (80%) of the voting power
of all of the then outstanding shares of capital stock of First Virginia
entitled to vote generally in the election of directors. Upon consummation of
the Affiliation, no individual or group of former Premier stockholders who
become holders of First Virginia Common Stock solely as a result of the
Affiliation will own a sufficient number of shares of First Virginia Common
Stock to call a special meeting of stockholders of First Virginia.
Notice of Special Meeting of Stockholders
Pursuant to First Virginia's Bylaws, notice of any special meeting of
First Virginia stockholders must be mailed not less than 10 days, nor more
than 60 days prior to the date fixed for the meeting. In the case of a special
meeting called for the purposes of acting on an amendment to the Articles of
Incorporation or plan of merger or similar transaction, notice shall be given
not less than 25 days nor more than 60 days before the date of the meeting.
Under Premier's By-Laws, notice for a special meeting of holders of
Premier Common Stock must be provided not less than 10 days nor more than 50
days before the meeting. Notice of a stockholder's meeting to act on an
amendment to the Articles of Incorporation, a reduction of stated capital, or
a plan of merger or consolidation must be provided not less than 25 days nor
more than 50 days before the date of such meeting.
Authorized Stock
First Virginia's Articles of Incorporation authorize the issuance of
up to 60,000,000 shares of common stock and 3,000,000 shares of preferred
stock. As of December 31, 1996, there were approximately 32,408,000 shares of
First Virginia Common Stock and 64,700 shares of First Virginia Preferred
Stock outstanding. Premier's Articles of Incorporation authorize the issuance
of 10,000,000 shares of common stock and 2,000,000 shares of preferred stock.
Currently, no preferred stock of Premier is outstanding. As of December 31,
1996, there were 6,650,083 shares of Premier Common Stock outstanding.
Inspection of Stockholder Lists
Under the VSCA, a stockholder of a corporation may inspect a list of
that corporation's stockholders during the 10-day period prior to any
stockholder meeting at the corporation's principal place of business or at the
office of its transfer agent. Stockholders of record for at least six months
or who hold at least 5% of all the outstanding shares may inspect the
corporation's stockholder list at any time, provided that the appropriate
request is made.
Indemnification
Under the VSCA, a Virginia corporation may indemnify a director or
officer against liability if the director or officer conducted himself in good
faith and believed that his official conduct was in the best interests of the
corporation and all other non-official conduct was not opposed to the
corporation's best interests, or in the case of a criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. A corporation may not
indemnify a director or officer in connection with a proceeding in which the
director or officer is adjudged liable on the basis that he received an
improper personal benefit. A director or officer also cannot be indemnified in
connection with a proceeding by or in the right of the corporation in which
the director or officer adjudged liable to the corporation. In addition, under
the VSCA, any corporation may indemnify, including an indemnity with respect
to a proceeding by or in the right of the corporation, and my provide for
advances or reimbursement of expenses, to any director, officer, employee or
agent that is authorized by the articles of incorporation or any bylaw
approved by the stockholders or any resolution adopted, before or after the
subject event, by the stockholders except an indemnity against (i) willful
misconduct or (ii) a knowing violation of criminal law. To the fullest extent
permitted by the VSCA, First Virginia's Articles of Incorporation require
indemnification of all directors, advisory directors and officers of First
Virginia, and permit indemnification of employees and agents of First Virginia
and directors, advisory director, officers, employees and agents of
subsidiaries and affiliates of First Virginia. Subject to the statutory
exceptions, First Virginia's Articles of Incorporation eliminate liability of
any director, advisory director or officer of First Virginia in connection
with a proceeding by or in the right of the corporation or by or on behalf of
its stockholders, unless the director, advisory director or officer engaged in
wilful misconduct or knowingly violated any criminal or securities law.
To the fullest extent permitted by the VSCA, Premier's Articles of
Incorporation require indemnification of all directors, officers, and
employees. Premier's Articles of Incorporation eliminate liability of any
officer or director of Premier in connection with any proceeding brought by or
in the right of Premier or by or on behalf of its stockholder.
Business Combination and Affiliation Statutes
The VSCA provides for restrictions on "affiliated transactions"
(including, among other various transactions, mergers, share exchanges, sales,
leases, or other dispositions of material assets, issuances of securities,
dissolutions, and similar transactions) with an "interested shareholder"
(generally the beneficial owner of more than 10% of any class of the
corporation's outstanding voting shares). During the three years following the
date a shareholder becomes an interested shareholder, any affiliated
transaction with the interested shareholder must be approved both a majority
of the "disinterested directors" (those directors who were directors before
the interested shareholder became an interested shareholder or who were
recommended for election by a majority of disinterested directors) and by the
affirmative vote of the holders of two-thirds of the corporation's voting
shares other than shares beneficially owned by the interested shareholder. The
foregoing requirements do not apply to affiliated transactions if, among other
things, a majority of the disinterested directors approve the interested
shareholder's acquisition of voting shares making such person an interested
shareholder prior to such acquisition. Beginning three years after the
shareholder becomes an interested shareholder, the corporation may engage in
an affiliated transaction with the interested shareholder if (i) the
transaction is approved by the holders of two-thirds of the corporation's
voting shares, other than shares beneficially owned by the interested
shareholder, (ii) the affiliated transaction has been approved by a majority
of the disinterested directors, or (iii) subject to certain additional
requirements, in the affiliated transaction the holders of each class or
series of voting shares will receive consideration meeting specified fair
price and other requirements designed to insure that all stockholders receive
fair and equivalent consideration, regardless of when they tender shares.
The First Virginia Articles of Incorporation provide that a "business
combination" (as defined therein) shall require only the affirmative vote
otherwise required by law if (i) it has been approved by a majority of First
Virginia's directors (including a majority of all "Continuing Directors," as
that term is defined in the Articles of Incorporation); or (ii) the business
combination is solely between First Virginia and a subsidiary; or (iii)
certain price conditions and procedures are satisfied. Premier has no
analogous provision regarding business combinations.
Power to Amend Bylaws
The Articles of Incorporation of First Virginia provide that the
power to adopt, alter, amend or repeal the Bylaws of First Virginia is vested
in the Board of Directors except that the stockholders may adopt new bylaws,
or alter, amend or repeal the Bylaws by the affirmative vote of holders of not
less than 80% of the voting power of all of the then outstanding shares of
capital stock of First Virginia entitled to vote generally in the election of
directors.
Premier has no analogous provision in its Articles of Incorporation
or By-Laws. However, under the VSCA, Premier's Board of Directors or
stockholders may amend or repeal Premier's Bylaws. In the case of the
stockholders, this action could be taken at any stockholder meeting at which
there is a quorum, if, with respect to a voting group, the votes cast favoring
the action exceeds the votes cast opposing it.
<PAGE>
EXPERTS
The consolidated financial statements of First Virginia included in
First Virginia's Annual Report (Form 10-K) for the year ended December 31,
1996, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
The consolidated financial statements included in this Proxy
Statement-Prospectus by reference to the Annual Report (Form 10-K) of Premier
for the three years ended December 31, 1996 have been audited by Persinger &
Company, L.L.C., independent certified public accountants, whose reports
thereon are incorporated herein by reference in reliance upon the report of
said firm and upon the authority of said firm as experts in auditing and
accounting.
LEGAL MATTERS
The validity of the securities offered in connection with the
Affiliation will be passed upon for First Virginia by Christopher M. Cole,
Vice President and Assistant General Counsel of First Virginia. Certain legal
matters in connection with the Affiliation will be passed upon for Premier by
Gentry, Locke, Rakes & Moore, Roanoke, Virginia. In addition, certain tax
matters will be passed upon by Gentry, Locke, Rakes & Moore.
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
between
FIRST VIRGINIA BANKS, INC.
and
PREMIER BANKSHARES CORPORATION
October 29, 1996
<PAGE>
INDEX
ARTICLE 1. THE MERGER
1.1 The Merger
1.2 Effective Date and Closing Date
1.3 Dissenting Premier Stockholders
1.4 Employee Benefits
1.5 Merger of Premier's Subsidiary Banks
1.6 Agreement with James R. Wheeling
1.7 Execution of Stock Option Agreement
1.8 Certain Definitions
ARTICLE II. EVENTS PRECEDING EFFECTIVENESS.
2. Events
ARTICLE III. REPRESENTATIONS AND WARRANTIES.
3.1 Representations and Warranties of Premier
(a) Organization and Authority
(b) Capital Structure
(c) Corporate Authority
(d) Subsidiaries
(e) Financial Statements
(f) Absence of Undisclosed Liabilities
(g) No Material Adverse Changes
(h) Tax Matters
(i) Property
(j) Litigation
(k) Contracts and Commitments
(l) Accuracy of Information Supplied
(m) Employee Benefit Plans
(n) Defined Benefit and Deferred Contribution Plans
(o) Environmental Matters
(p) Loan Portfolio
(q) Compliance with Laws
(r) Insurance
(s) Applicable Takeover Laws
(t) Charter Provisions
(u) Investment Advisers
3.2 Representations and Warranties of First Virginia
(a) Organization, Standing and Power
(b) Capital Structure
(c) Authority
(d) Financial Statements
(e) No Material Adverse Change
(f) Accuracy of Information Supplied
(g) First Virginia Common Stock to be Issued
(h) Litigation
ARTICLE IV. CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE DATE
4.1 Conduct of the Business of Premier and its
Subsidiaries Prior to the Effective Date
4.2 Forbearances
4.3 No Solicitation
4.4 Compliance with Tax-Free Provisions
4.5 Access and Information
4.6 Confidentiality
4.7 Consents
4.8 Meeting of Premier Stockholders
4.9 Affiliates of Premier
4.10 Insurance Applications
4.11 Applications to the Virginia State Corporation
Commissioner
4.12 Federal Reserve Applications
4.13 Changes Requested by First Virginia
ARTICLE V. COVENANTS OF FIRST VIRGINIA.
5.1 Issuance of Stock and Payment of Cash
5.2 Stock Adjustments
5.3 Preparation of Registration Statement
5.4 Application to the Virginia State Corporation
Commission
5.5 Federal Reserve Applications
ARTICLE VI. CONDITIONS PRECEDENT TO FIRST VIRGINIA'S OBLIGATIONS
HEREUNDER
6.1 Representations, Warranties
6.2 No Adverse Changes
6.3 Audit of Premier and its Subsidiaries
6.4 Legal Opinion
6.5 Events Preceding the Effective Date
6.6. No Adverse Proceedings
ARTICLE VII. CONDITIONS PRECEDENT TO PREMIER'S OBLIGATIONS
HEREUNDER.
7.1 Representations, Warranties and Covenants
7.2 Events Preceding the Effective Date
7.3 No Adverse Proceedings or Events
7.4 No Adverse Changes
7.5. Legal Opinion
7.6 Fairness Opinion
ARTICLE VIII. TAX OPINION AND RESTRICTIONS CONCERNING THE
RESALE OF FIRST VIRGINIA COMMON STOCK BY
AFFILIATES OF PREMIER
8.1 Tax Opinion
8.2 Restrictions on Affiliates
ARTICLE IX. TERMINATION, AMENDMENT AND SURVIVAL OF
REPRESENTATIONS.
9.1 Amendment
9.2 Termination
9.3 Survival of Representations and Covenants
9.4 Expenses
9.5 Notices
9.6 Entire Agreement in Effect
9.7 General
9.8 Governing Law
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated
this 29th day of October, 1996 by and between FIRST VIRGINIA BANKS, INC.
("First Virginia"), a Virginia corporation with its main office at 6400
Arlington Boulevard, Falls Church, Virginia 22042-2336 and PREMIER BANKSHARES
CORPORATION ("Premier"), a Virginia corporation and a registered bank holding
company, with its main office at 29 College Drive, Bluefield, Virginia
24605-1199 (First Virginia and Premier each being referred to herein as a
"Party" and collectively referred to herein as "Parties").
W I T N E S E T H:
WHEREAS, the Boards of Directors of First Virginia and Premier deem
it advisable and in the best interests of the Parties and their stockholders
that Premier be acquired by First Virginia through a merger (the "Merger") of
Premier with and into First Virginia pursuant to a Plan of Merger in the form
attached hereto as Exhibit A (the "Plan of Merger"); and
WHEREAS, as an inducement for First Virginia to enter into this
Agreement, Premier and First Virginia are entering into a Stock Option
Agreement simultaneously with the execution and delivery of this Agreement
pursuant to which Premier is granting to First Virginia an option to purchase
shares of Premier Common Stock; and
WHEREAS, the Parties desire to provide for certain undertakings,
conditions, warranties, representations and covenants in connection with the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements, representations and warranties herein contained, the
Parties agree as follows:
ARTICLE 1.
THE MERGER
1.1 The Merger. Upon performance of all covenants and obligations of
the Parties contained in this Agreement and upon the terms and conditions
contained herein, on the Effective Date of the Merger, Premier shall be merged
with and into First Virginia, pursuant to the Plan of Merger, the terms of
which are incorporated herein by reference to the same extent as if fully set
forth herein. The Plan of Merger provides for the terms of the Merger, the
mode of carrying the same into effect and the basis and manner of converting
the outstanding shares of Premier Common Stock, $2.00 par value per share (the
"Premier Common Stock") into shares of First Virginia Common Stock, $1.00 par
value per share (the "First Virginia Common Stock"). As a result of the
Merger, each share of Premier Common Stock outstanding on the Effective Date
(other than "Dissenting Shares" as hereinafter defined) will be converted into
.545 shares of First Virginia Common Stock, proportionately adjusted for any
stock split, stock dividends or other similar capital adjustments between the
date of this Agreement and the Effective Date. No fractional shares of First
Virginia Common Stock shall be issued to Premier stockholders. In lieu
thereof, each Premier stockholder shall receive upon surrender of his Premier
Common Stock an amount in cash equal to the amount of any fractional share he
would otherwise be entitled to receive multiplied by the average of the
closing prices per share of First Virginia Common Stock as reported by The
Wall Street Journal under the heading "New York Stock Exchange--Composite
Transactions" or any comparable heading then in use, for each of the last ten
trading days ending on the Effective Date of the Merger.
On the Effective Date of the Merger, outstanding options to acquire
Premier Common Stock ("Premier Options") shall be converted, based on the
exchange ratio stated above, into options to acquire First Virginia Common
Stock ("First Virginia Options"). The exercise price per share of First
Virginia Common Stock under a First Virginia Option shall be equal to the
exercise price of Premier Common Stock under the Premier Option divided by the
exchange ratio (rounded up to the nearest cent). All remaining Premier Options
that were granted in 1995 and that are still outstanding and have not been
vested as of the Effective Date shall become fully vested as of the Effective
Date of the Merger in accordance with the terms and conditions of the Plan.
Premier Options granted in 1996 shall vest in accordance with the vesting
schedule in effect at the time those options were issued. First Virginia
acknowledges that the Premier Options issued to directors in 1996 will fully
vest prior to the Effective Date of the Merger in accordance with the Plan.
1.2 Effective Date and Closing Date. The Effective Date of the Merger
shall be the date specified in the Articles of Merger filed with the Virginia
State Corporation Commission pursuant to the Virginia Stock Corporation Act.
The Closing Date shall be the date when all documents, including officers'
certificates, legal opinions, shareholder resolutions and agreements shall be
exchanged between the parties hereto. The Closing Date shall be a date
mutually agreed to by First Virginia and Premier but in any case shall be on
or after the date of Premier's Special Meeting of Stockholders called to
consider the Merger.
1.3 Dissenting Premier Stockholders. Notwithstanding anything in this
Agreement to the contrary, shares of Premier Common Stock which are issued and
outstanding immediately prior to the Effective Date of the Merger and which
are held by a stockholder who has exercised in accordance with applicable law
the right (to the extent such right is available by law) to demand and receive
payment of the fair value of his shares of Premier Common Stock ("Dissenting
Shares" and the holders of Dissenting Shares being "Dissenting Stockholders")
pursuant to the Virginia Stock Corporation Act ("VSCA") shall not be converted
into or be exchangeable for the right to receive the consideration provided in
Section 1.1 of this Agreement, unless and until such holder shall fail to
perfect his right to receive payment of such fair value or shall have
effectively withdrawn or lost such right. If such holder shall have so failed
to perfect his right to receive payment of such fair value or shall have
effectively withdrawn or lost such right, each of his shares of Premier Common
Stock shall thereupon be deemed to have been converted into, at the Effective
Date of the Merger, the right to receive shares of First Virginia Common Stock
as provided in Paragraph 1.1. Prior to the Effective Date, Premier shall
comply with all notice and other provisions of the VSCA and shall keep First
Virginia fully advised thereof and shall give First Virginia prompt notice of
any demands received from Dissenting Stockholders and the opportunity to
participate in all negotiations and proceedings with respect to any such
demands. Premier shall not, except with the prior written consent of First
Virginia, voluntarily make any payment with respect to or settle any such
demands for payment.
1.4 Employee Benefits. Employees of Premier and its subsidiaries
(each subsidiary of Premier is hereinafter referred to as "Subsidiary" or
collectively as the "Subsidiaries") will be eligible to participate in all of
First Virginia's employee benefit programs, provided they meet the eligibility
requirements of those programs. Except for First Virginia's Post Retirement
Medical Program, service with Premier and its Subsidiaries shall be considered
service with First Virginia for purposes of eligibility, vesting and benefits
under all these programs except as otherwise provided in paragraphs (a) and
(c) below.
(a) Premier's employees will receive credit under the First
Virginia Pension Trust Plan for their prior service with Premier for purposes
of determining eligibility and vesting, but not for determining accrued
benefits.
(b) Premier's Defined Contribution Plan (which is a 401k
plan) will either be terminated or merged into the Employees Thrift Plan of
First Virginia Banks, Inc. at First Virginia's sole discretion.
(c) With respect to First Virginia's Nonqualified Employee
Profit Sharing Plan, all employees of Premier and its Subsidiaries as of the
Effective Date of the Merger shall be eligible to participate in that plan and
to participate in the benefits for the plan year in which the Merger is
completed (which participation in the year of Merger will be pro-rated based
on the period of time during that year that employees of Premier and its
Subsidiaries are covered by that plan). To the extent eligible, Premier
employees also may participate in the benefits under Premier's profit sharing
plan for plan year 1996 (provided that the determination of the amount of such
benefits and how such benefits are paid by Premier for plan year 1996 is
consistent with the determination of the amount and how the benefits were paid
in 1995) and plan year 1997. Such benefits for 1997 will be prorated based on
the period of time during that year that they participated in the Plan.
Benefits under both the First Virginia Employee Profit Sharing Plan and the
Premier profit sharing plan will not be paid before the end of 1997 to Premier
employees who qualify for benefits under those plans based on employment
during 1997.
(d) Premier's executive officers may receive bonuses for
calendar year 1996 under Premier's executive cash bonus plan provided that the
total amount of such bonuses does not exceed $240,000 in the aggregate.
Premier shall not pay its executive officers any bonuses for the period of
time from January 1, 1997 until the Effective Date of the Merger. In lieu
thereof, Premier's executives will be considered First Virginia executives
under First Virginia's discretionary bonus program for the full calendar year
of 1997 and may, at the discretion of First Virginia's Compensation Committee,
receive bonuses for that year.
(e) Any sick or vacation leave that has been accrued by any
employee of Premier or its subsidiaries as of the Effective Date shall not be
disturbed.
1.5 Merger of Premier's Subsidiary Banks. Following the effective
date of the Merger, each of Premier's subsidiary banks shall be merged into a
First Virginia subsidiary bank in their current geographic area or remain as a
separate First Virginia member bank. The President of Premier and the
Presidents of Premier Bank, N.A. and Premier Bank-Central, N.A. shall each
become President and Chief Administrative Officer of one of the merged (or
separate) banks while the Chief Executive Officers of those First Virginia
subsidiary banks involved in the mergers with the Premier subsidiary banks
will become Chairmen and Chief Executive Officers of the merged banks. The
President of Premier Bank-South, N.A. shall become President of the Wytheville
division of First Virginia Bank-Southwest. Each of the current members of the
Board of Directors of Premier will become a director of one of the merged
banks.
1.6 Agreement with James R. Wheeling. Simultaneously with the
execution of this Agreement by the Parties and as a condition thereto, James
R. Wheeling shall execute and deliver to First Virginia a three year
Employment Agreement superseding his existing Change-in-Control Agreement with
Premier.
1.7 Execution of Stock Option Agreement. Immediately after the
execution of this Agreement by the Parties and as a condition thereto, Premier
is executing and delivering to First Virginia a Stock Option Agreement under
which First Virginia will have the option to purchase shares of Premier Common
Stock.
1.8 Certain Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
(a) "material" means material to Premier or First Virginia
(as the case may be) and its respective subsidiaries, taken as a whole, and
determined in light of the facts and circumstances of the matter in question;
provided, that any specific monetary amount stated in this Agreement with
respect to materiality shall determine materiality in that instance.
(b) "Material Adverse Effect," with respect to a Party,
means an event, change or occurrence which, individually or in the aggregate
with any other event, change or circumstance, (i) is reasonably likely to
result in a reduction in the consolidated stockholders' equity of such Party
and its subsidiaries, taken as a whole, as reflected in the consolidated
balance sheet of such person as of September 30, 1996, or (ii) which has a
material adverse impact on the ability of such Party and its subsidiaries to
consummate the Merger contemplated by this Agreement.
(c) "person" includes an individual, corporation,
partnership, limited liability company, association, trust or unincorporated
organization.
(d) "to the knowledge of" or "to the best of the knowledge
of" Premier or First Virginia or similar phrases includes the knowledge of the
current directors and the current executive officers after due inquiry
(including the knowledge of the chief executive officer and chief financial
officer after due inquiry) of Premier or First Virginia, as the case may be.
ARTICLE II.
EVENTS PRECEDING EFFECTIVENESS.
2. Events. On or before the Effective Date the following shall have
occurred:
(a) a majority of the entire Boards of Directors of First
Virginia and Premier shall have approved this Agreement;
(b) the Federal Reserve shall have approved the merger of
Premier into First Virginia pursuant to the Bank Holding Company Act and the
acquisition of all of Premier's Subsidiaries and the time period for
Department of Justice review has expired without any intervention or
threatened action by that department having been received;
(c) the Bureau of Financial Institutions of the Virginia
State Corporation Commission shall have approved the Merger pursuant to the
provisions of the Code of Virginia;
provided, however, that no approval or consent to be obtained pursuant to
Section 2(b) or 2(c) shall have imposed any condition or requirement which
would materially impact the economic or business benefits to First Virginia of
the transactions contemplated herein so as to render inadvisable the
consummation of the Merger;
(d) a registration statement on Form S-4 containing the
proxy statement for Premier shall have been filed with the Securities and
Exchange Commission (the "SEC") pertaining to the shares of First Virginia
Common Stock to be issued in connection with this Agreement and the Plan of
Merger (the "Registration Statement"), the Registration Statement shall have
become effective, and no stop order shall have been entered with regard to
such Registration Statement;
(e) this Agreement and the Plan of Merger shall have been
submitted to the stockholders of Premier and approved by an affirmative vote
of the holders of at least two-thirds of all the outstanding shares of Premier
entitled to vote; and
(f) Articles of Merger containing the provisions required
by, and executed in accordance with the Virginia Stock Corporation Act (the
"Articles of Merger"), shall have been filed with the Virginia State
Corporation Commission.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES.
3.1 Representations and Warranties of Premier. Premier represents and
warrants to First Virginia, to the best of the knowledge of Premier, the
following:
(a) Organization and Authority. Premier is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Virginia. Each of Premier's Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of the jurisdiction in
which it is incorporated. Each has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. Premier and its Subsidiaries have delivered to First Virginia
complete and correct copies of (1) their charters and all amendments thereto
to the date hereof and (2) their Bylaws as amended to the date hereof.
(b) Capital Structure.
(1) As of the date of this Agreement, the authorized
capital stock of Premier consists of 10,000,000 shares of Common Stock, $2.00
par value per share. As of the date hereof, 6,650,083 shares of Premier Common
Stock were outstanding, all of which were validly issued, fully paid and
nonassessable. Premier has authorized Preferred Stock but there are no shares
of Preferred Stock outstanding. Except for options held by employees and
directors pursuant to stock option plans and except for the stock option
granted to First Virginia pursuant to the Stock Option Agreement of even date
hereof, no other options to purchase Premier Common Stock have been issued.
(2) Other than the options mentioned above in
subparagraph 3.1(b((1), Premier has no commitments to issue or sell any such
shares or any securities or obligations convertible into or exchangeable for
such shares, or given any person the right to subscribe for or acquire any
such shares and no securities or obligations representing such rights are
outstanding.
(c) Corporate Authority. The execution of this Agreement and
the Plan of Merger and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of
Premier. This Agreement and the Plan of Merger are valid and binding
obligations of Premier and no further corporate authorization on the part of
Premier is necessary to consummate the transactions contemplated hereby or
thereby except the approval of the stockholders of Premier pursuant to
applicable law. Except as otherwise disclosed in writing to First Virginia,
neither the execution and delivery of this Agreement and the Plan of Merger
nor the consummation in accordance with the terms of the transactions
contemplated hereby and thereby nor compliance by Premier or any of its
Subsidiaries with any provision hereof or thereof will (i) conflict with or
result in a breach of any provision of their charters or bylaws or give rise
to any right of termination, cancellation or acceleration under any of the
terms, conditions or provisions of any material note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which
Premier or any of its Subsidiaries is a party or by which Premier and its
Subsidiaries or any of their properties or assets may be bound (ii) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
Premier or its Subsidiaries or any of their properties or assets in any
instance in which such violation would have a Material Adverse Effect. Except
as otherwise disclosed in writing to First Virginia, no consent is required in
connection with the execution and delivery by Premier of this Agreement or the
Plan of Merger except for the consents, approvals, and satisfaction of
conditions hereinafter set forth and consummation by Premier and its
Subsidiaries of the transactions contemplated hereby.
(d) Subsidiaries. Premier owns all the issued and
outstanding shares of Premier Bank-Central, Premier Bank, N.A., Premier
Bank-South, N.A., Premier Trust Company, Premier Bank Services Corporation and
Professional Financial Services of Virginia, Inc. Premier has and will have on
the Effective Date no other subsidiaries. However, Premier has pending the
acquisition of Big Stone Gap Bank and Trust Company which will be merged into
Premier Bank-Central, N.A. prior to the Effective Date.
(e) Financial Statements. Premier has delivered to First
Virginia its 1995 Annual Report to Stockholders and Form 10-K and Premier has
also delivered its Quarterly Report on Form 10-Q for the period ended
September 30, 1996 which includes (1) Unaudited Consolidated Balance Sheet as
of September 30, 1996 and Audited Consolidated Balance Sheet as of December
31, 1995; (2) Unaudited Consolidated Statements of Changes in Stockholders'
Equity for the nine months ended September 30, 1996 and 1995; (3) Unaudited
Consolidated Statement of Income for the nine months ended September 30, 1996
and 1995 and (4) the Unaudited Consolidated Statements of Cash Flow for the
nine months ended September 30, 1996 and 1995 together with the Notes to those
Consolidated Statements (the "Financial Statements"). Subject to required
yearend adjustments and the absence of certain footnote information in the
unaudited statements, the Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated or as more particularly set
forth therein. The Unaudited Consolidated Balance Sheets included as a part of
the Financial Statements present fairly as of September 30, 1996 the
consolidated financial position and assets and liabilities of Premier. The
Unaudited Consolidated Statements of Income present fairly the consolidated
results of operations of Premier for the periods indicated.
(f) Absence of Undisclosed Liabilities. Except to the extent
reflected or reserved against in the Financial Statements or as disclosed in
writing to First Virginia, neither Premier nor any of its Subsidiaries as of
the date of this Agreement has any liabilities or obligations of any nature
(other than contingent liabilities that have been disclosed in writing to
First Virginia) that would have a Material Adverse Affect or any liabilities
in the nature of employment contracts with, or agreements to pay bonuses to
any of its directors, officers or employees, other than liabilities or
obligations incurred in the ordinary course of business, none of which
liabilities or obligations would have, individually or in the aggregate, a
Material Adverse Effect on Premier and its Subsidiaries.
(g) No Material Adverse Changes. Since September 30, 1996,
there has been no material adverse change in the assets or liabilities or in
the business or condition (financial or otherwise) of Premier or its
Subsidiaries that would have, individually or in the aggregate, a Material
Adverse Effect on Premier and its Subsidiaries, which has not been previously
disclosed to First Virginia.
(h) Tax Matters. Premier and its Subsidiaries have filed all
tax returns required to be filed for each of the five years ended December 31,
1995, and have paid or set up an adequate reserve for the payment of all taxes
required to be paid in respect of the periods covered by such returns and have
set up an adequate reserve for the payment of all income, property, sales,
employment, franchise or other taxes anticipated to be payable in respect of
the period subsequent to the last of said periods and for the payment of all
other taxes, except where the failure to do so would not have a Material
Adverse Effect. Premier and its Subsidiaries will not have any material
liability for any such taxes in excess of the amounts so paid or the reserve
so established and Premier and its Subsidiaries are not delinquent in the
payment of any material tax assessment or governmental charge. No material
deficiencies for any tax assessment or governmental charge have been proposed,
asserted or assessed against Premier and its Subsidiaries which would not be
covered by existing reserves and, as of the date of this Agreement, no
requests for waivers for the time to assess any such taxes are pending. All of
the Premier's Subsidiaries have timely filed all information returns for
customers required to be filed by the IRS and to the best of its knowledge,
has complied with all IRS requirements regarding the certification of taxpayer
identification numbers of customers and backup withholding, except where
failure to do so would not have, individually or in the aggregate, a Material
Adverse Effect on Premier and its Subsidiaries.
(i) Property.
(1) Premier and its Subsidiaries own all operating
real properties reflected as owned by them in the Financial Statements free
and clear of all mortgages, liens, pledges, charges or encumbrances of any
nature whatsoever (collectively, "Encumbrances") that are material to the
financial condition, results of operations or business of Premier and its
Subsidiaries taken as a whole, except (i) liens for current taxes not yet due
and payable, (ii) mortgages, deeds of trust or other Encumbrances reflected in
the Financial Statements, (iii) such imperfections of title, easements and
other Encumbrances as do not materially detract from or interfere with the
present use of such operating real properties subject thereto or affected
thereby, (iv) Encumbrances incurred in the ordinary course of business after
the date of this Agreement with the written consent of First Virginia which
shall not be unreasonably withheld, and (v) Encumbrances disclosed in writing
to First Virginia.
(2) As of the date of this Agreement, substantially
all tangible real or personal property and assets material to the business
operation or financial condition of Premier and its Subsidiaries on a
consolidated basis which are owned by them or in which any of them has an
interest (other than a security interest) are in substantially good operating
condition and repair, ordinary wear and tear excepted.
(3) All leases material to Premier and its
Subsidiaries on a consolidated basis pursuant to which Premier and its
Subsidiaries lease real property are valid and effective in accordance with
their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws, and there is not, under any such leases, any
material existing default by Premier and its Subsidiaries or any event which
with notice or lapse of time or both would constitute such a material default.
(j) Litigation. Other than as has been set forth to First
Virginia in writing, neither Premier nor any of its Subsidiaries is a party to
any pending or, to the best of Premier's knowledge and belief, threatened
claim, action, suit, investigation or proceeding, nor is subject to any order,
judgment or decree except for matters which in the aggregate will not have and
cannot reasonably be expected to have a Material Adverse Effect on Premier and
its Subsidiaries. Except as previously disclosed in writing to First Virginia,
neither Premier nor any of its Subsidiaries is subject to any agreement,
memorandum or understanding or similar arrangement with any regulatory
authority restricting its operations or requiring that certain actions be
taken, and, neither Premier nor any of its Subsidiaries has received any
notification from any governmental or regulatory authority, or the staff
thereof, asserting that it is not in compliance with any statutes, regulations
or ordinances which such authority enforces, noncompliance with which could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Premier and its Subsidiaries. For the purposes of this
paragraph, a threatened claim shall mean any claim which has been actually and
overtly asserted against Premier or its Subsidiaries in a written
communication delivered to an officer of Premier.
(k) Contracts and Commitments. Except as reflected in the
Financial Statements or as previously disclosed in writing to First Virginia,
neither Premier nor its Subsidiaries has as of the date hereof and, except to
the extent consented to in writing by First Virginia, will not have on the
Effective Date:
(1) any bonus, stock option plans, deferred
compensation plans, profit-sharing, retirement arrangements or other fringe
benefit plans (other than those terminable at will by Premier or a Subsidiary)
nor any outstanding calls, commitments or agreements of any character
requiring the issuance of shares of its capital stock;
(2) any debt obligations for borrowed money
(including guaranties or agreements to acquire such debt obligations of
others) except for debt obligations incurred or acquired in the ordinary
course of its banking business;
(3) any outstanding loans for any person other than
those made in the ordinary course of Premier's banking business;
(4) any outstanding loan participations with any of
its directors, officers, stockholders or employees;
(5) any agreement for services or for the purchase
or disposition of any equipment or supplies except those incurred in the
ordinary course of business;
(6) any lease of personal property with annual
rentals aggregating $50,000 or more;
(7) any agreement or contract with any third party
for the provision of data processing or other services to Premier or its
Subsidiaries which involves payment by Premier or its Subsidiaries of more
than $5,000 per month and which (i) has more than six months to run from the
date of this Agreement or (ii) may not be canceled by Premier or its
Subsidiaries as appropriate on 180 days notice or less without penalty; and
(8) any outstanding loans to its officers,
directors, significant stockholders (collectively "insiders"), or to firms,
partnerships or corporations in which any insiders are partners, executive
officers, directors or significant stockholders or to any entity which would
be a "related interest" of an insider as defined in 12 C.F.R. Section 215.2(1)
made at rates of interest more favorable or involving greater risks of
collectibility than similar loans made to outsiders.
(l) Accuracy of Information Supplied. As of their respective
filing dates, Premier's Annual Reports on Form 10-K for the fiscal years ended
December 31, 1995 and 1994 and proxy statement for 1996, and any other filings
made from and after the date hereof with the SEC pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (such filings being
collectively referred to herein as the "Premier Filings") complied in all
material respects with the regulations of the SEC, and none of the Premier
Filings, as of the respective dates thereof, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein not misleading. The
information which has been or will be supplied by Premier to First Virginia
for inclusion in the Registration Statement or any amendment thereto
pertaining to the transactions contemplated hereby (the "Registration
Statement") filed with the Securities and Exchange Commission ("the "SEC") or
the Prospectus contained therein (the "Prospectus"), at the time the
Registration Statement becomes effective will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein in order to make the statements not misleading, provided that
information as of a later date shall be deemed to modify information of an
earlier date.
(m) Employee Benefit Plans. Premier and its Subsidiaries
have filed with the appropriate governmental authority, as to each employee
benefit plan subject to the Employee Retirement Income Security Act of 1974
("ERISA"), a true and correct copy of (i) the most recent annual report (Form
5500, 5500-C or 5500-R, as appropriate) filed with the Internal Revenue
Service ("IRS"), (ii) each IRS favorable determination letter or opinion
letter for each such Plan, as applicable, (iii) such Plan documents, (iv) each
such Plan, (v) each applicable Summary Plan Description, and (vi) the most
recent actuarial report or valuation relating to each tax-qualified Deferred
Compensation Plan that was delivered to Premier or one of its Subsidiaries by
the actuary or recordkeeper for such Plan.
(n) Defined Benefit and Deferred Contribution Plans. With
respect to each defined benefit and defined contribution plan that Premier
and/or its Subsidiaries have: (i) each plan substantially complies in all
material respects with all applicable provisions of ERISA; (ii) all material
reporting and disclosure requirements of ERISA imposed upon each plan have
been substantially complied with, (iii) each plan has not engaged in any
material transaction prohibited by Title I of ERISA or Section 4975 of the
Internal Revenue Code of 1986 as amended (the "Code") for which an exemption
is not applicable; (iv) the minimum funding standards in Section 302 of ERISA
and Section 412 of the Code, do not apply with respect to each plan; (v) no
material contributions to each plan from Premier are currently past due; (vi)
each plan is not subject to any partial plan terminations; (vii) each plan
does not have any material property (other than shares of Premier Common
Stock) which does not have a readily ascertainable value; (viii) each plan
does not own any employer security or real property as defined in ERISA
Section 407 (other than shares of Premier Common Stock); (ix) no proceedings,
investigation, filing, or other matters are pending before the IRS, the
Department of Labor, the Pension Benefit Guaranty Corporation, or other public
or quasi-public body in connection with the plan except for such matters as
may have been instituted by Premier by virtue of the Merger contemplated by
this Agreement or which if adversely determined or resolved would not have a
Material Adverse Effect on Premier and its Subsidiaries; and (x) each plan is
qualified in all material respects under Section 401(a) and other applicable
provisions of the Code.
(o) Environmental Matters. For purposes of this subsection,
the following term shall have the indicated meaning:
"Environmental Law" means any federal, state or
local law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, order,
judgment, decree, injunction or agreement with any
governmental entity relating to (i) the protection,
preservation or restoration of the environment (including,
without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface
soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Substances. The
term "Environmental Law" includes without limitation (i) the
Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. ss. 9601, et seq; the
Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss. 6901, et seq; the Clean Air Act, as amended, 42
U.S.C. ss. 7401, et seq; the Federal Water Pollution Control
act, as amended, 33 U.S.C. ss. 1251, et seq; the Toxic
Substances Control Act, as amended, 15 U.S.C.ss. 9601, et
seq; the Emergency Planning and Community Right to Know Act,
42 U.S.C. ss. 11001, et seq; the Safe Drinking Water Act, 42
U.S.C. ss. 300f, et seq; and all comparable state and local
laws, and (ii) any common law (including without limitation
common law that may impose strict liability) that may impose
liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of or exposure to
any Hazardous Substance.
Except as otherwise disclosed in writing to First Virginia, neither
Premier, any of its Subsidiaries, nor any properties owned or operated by
Premier or any of its Subsidiaries or in which such entity has a security
interest, has been or is in violation of or liable under any Environmental
Law, except for such violations or liabilities that are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
Premier and its Subsidiaries. To the best knowledge of Premier after due
inquiry, there are no actions, suits or proceedings, or demands, claims,
notices or investigations (including without limitation notices, demand
letters or requests for information from any environmental agency) instituted,
pending or threatened relating to the liability of any properties owned or
operated by Premier or any of its Subsidiaries or in which such entity has a
security interest under any Environmental Law, except for liabilities or
violations that would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(p) Loan Portfolio. Except as disclosed in writing to First
Virginia, each loan outstanding on the books of Premier's subsidiary banks
(hereinafter referred to as the "Banks" or individually as the "Bank") is in
all respects what it purports to be, was made in the ordinary course of
business, was not known to be uncollectible at the time it was made, and was
made substantially in accordance with the respective Bank's standard loan
policies as in effect at the time made. The records of the Banks regarding all
loans outstanding on its books are accurate in all material respects. The
reserves for possible loan losses (subject to yearend adjustments) on the
outstanding loans of the Banks and the reserves for the real estate owned by
the Banks as reflected in the Financial Statements, have been established in
accordance with generally accepted accounting principles and with the
requirements of the OCC, and in the best judgment of the management of the
Banks, are adequate to absorb all known and anticipated loan losses in the
loan portfolio of the Banks, and any losses associated with other real estate
owned or held by the Banks. Except for those loans disclosed to First
Virginia, no loan in excess of $100,000 has been classified as of the date
hereof by the Banks or regulatory examiners as "Other Loans Specifically
Mentioned", "Substandard", "Doubtful" or "Loss". Except as has been disclosed
to First Virginia, each loan reflected as an asset on the Financial Statements
is the legal, valid and binding obligation of the obligor and any guarantor,
subject to bankruptcy, insolvency, reorganization, moratorium and similar
laws, and no defense, offset or counterclaim has been asserted with respect to
any such loan.
(q) Compliance with Laws. Except as previously disclosed in
writing to First Virginia, neither Premier nor any of its Subsidiaries (i) is
in violation of any law, order or permit applicable to its business, except
for violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect or (ii) has received any notification or
communication from any agency or federal, state or local government or any
regulatory authority or the staff thereof (a) asserting that either Premier or
its Subsidiaries is not in compliance with any law or order which such
governmental authority or regulatory authority enforces, which noncompliance
could reasonably be expected to have a Material Adverse Effect; or (b)
threatening to revoke any material permits, or (c) requiring either Premier or
its Subsidiaries (1) to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment or memorandum of
understanding or (2) to adopt any Board resolution or similar undertaking
which restricts materially the conduct of its business, or in any manner
relates to its capital adequacy, its management, or the payment of dividends.
(r) Insurance. Premier and its Subsidiaries are presently
insured, and since December 31, 1995 have been insured, for reasonable amounts
with financially sound and reputable insurance companies, against such risks
as companies engaged in a similar business would, in accordance with good
business practice, customarily be insured. All of the insurance policies and
bonds maintained by Premier and its Subsidiaries are in full force and effect,
Premier and its Subsidiaries are not in material default thereunder, and all
material claims thereunder have been filed in due and timely fashion, except
where the failure to make any such claim or to have such insurance or bond
coverage would not have, individually or in the aggregate, a Material Adverse
Effect on Premier and its Subsidiaries. Premier and its Subsidiaries have no
knowledge of any material inaccuracy in any application for such policies or
binders, any failure to pay premiums when due or any similar state of facts
that might form the basis for termination of any such insurance. Premier and
its Subsidiaries have no knowledge of any state of facts or of the occurrence
of any event that is reasonably likely to form the basis for any claim against
it not fully covered (except to he extent of any applicable deductible) by the
policies or binders referred to above except claims that would not have a
Material Adverse Effect.
(s) Applicable Takeover Laws. Premier has taken all
necessary action to exempt the transactions contemplated by this Agreement
from any applicable Virginia or federal takeover law.
(t) Charter Provisions. Premier has taken all action so that
the entering into this Agreement and the consummation of the Merger and the
other transactions contemplated by this Agreement will be exempt from any
change in control or anti-takeover provisions of the Charter, Bylaws, or other
governing instruments of Premier or any of its Subsidiaries and will not
restrict or impair the ability of First Virginia to vote, or otherwise to
exercise the rights of a stockholder with respect to, shares of any of
Premier's Subsidiaries that may be acquired or controlled by First Virginia.
(u) Investment Advisers. Premier has retained no other
investment adviser or investment banker or broker in connection with the
Merger except for Scott & Stringfellow who Premier has retained to do a
fairness opinion and to render certain investment advisory services for a
total fee of no more than $250,000 (inclusive of all expenses).
3.2 Representations and Warranties of First Virginia. First Virginia
represents and warrants to Premier, to the best of the knowledge of First
Virginia, as follows:
(a) Organization, Standing and Power. First Virginia is a
corporation duly organized, validly existing and in good standing under the
laws of the Commonwealth of Virginia, has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly registered as a bank holding
company under the Bank Holding Company Act.
(b) Capital Structure. As of September 30, 1996, and as
shown by the 1996 Third Quarter Report to Stockholders, the authorized capital
stock of First Virginia consisted of 60,000,000 shares of Common Stock, par
value $1.00 per share, of which approximately 32,686,547 shares were issued
and outstanding as of such date and 3,000,000 shares of Preferred Stock, par
value $10.00 per share, of which 65,518 shares were issued and outstanding at
such date. As of September 30, 1996, 593,637 shares of Common Stock were
reserved: 95,325 for the conversion of Preferred Stock and 498,312 for stock
options and stock appreciation rights and 387,977 for bank acquisitions. As of
the date hereof and as of the Effective Date, all outstanding shares of
capital stock of First Virginia have been validly issued and are fully paid
and nonassessable.
(c) Authority. The execution and delivery of this Agreement
and the Plan of Merger and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Board of Directors of
First Virginia, no approval of the stockholders of First Virginia is required
to consummate the transaction herein and therein, and this Agreement and the
Plan of Merger are valid and binding obligations of First Virginia. Neither
the execution and delivery of this Agreement and the Plan nor the consummation
of the transactions contemplated hereby or thereby, nor compliance by First
Virginia with any of the provisions hereof or thereof will (i) conflict with
or result in a breach of any provision of First Virginia's Articles of
Incorporation or Bylaws, or a default or give rise to any right of
termination, cancellation or acceleration under any of the terms, conditions
or provisions of any material note, bond, mortgage, indenture, license,
agreement or other instrument, or violation to which First Virginia is a party
or by which it or any of its properties or assets may be bound in any instance
in which such right of termination, cancellation or acceleration if exercised
would have a Material Adverse Effect, or (ii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to First Virginia
or any of its properties or assets in any instance in which such violation
would have a Material Adverse Effect. Except for consents the lack of which
would not have a Material Adverse Effect, no consent or approval by any
governmental authority is required for the execution and delivery by First
Virginia of this Agreement and the Plan of Merger except for the approval of
all the applicable regulatory agencies and meeting of conditions hereinafter
set forth, the consummation by First Virginia of the transactions contemplated
hereby and thereby.
(d) Financial Statements. The consolidated financial
statements of First Virginia contained in First Virginia's 1996 Third Quarter
Report to Stockholders and heretofore delivered by it to Premier have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods indicated, all as more
particularly set forth in the notes to such financial statements. Each of the
balance sheets contained in such statements presents fairly as of its date the
consolidated financial condition and assets and liabilities of First Virginia.
The income statements, statements of stockholders' equity and statements of
changes in financial position contained in such statements present fairly the
consolidated results of operations of First Virginia for the periods
indicated.
(e) No Material Adverse Change. Since the date of the
financial statements described in Section 3.2(d) above, there has been no
material adverse change in the assets or liabilities or in the business or
condition (financial or otherwise), results of operations or prospects of
First Virginia that would have, individually or in the aggregate, a Material
Adverse Effect on First Virginia and its Subsidiaries.
(f) Accuracy of Information Supplied. As of their respective
filing dates, First Virginia's Annual Reports on Form 10-K for the fiscal
years ended December 31, 1995 and 1994 and proxy statement dated March 11,
1996, and any other filings made from and after the date hereof with the SEC
pursuant to the Exchange Act (such filings being collectively referred to
herein as the "First Virginia Filings") complied in all material respects with
the regulations of the SEC, and none of the First Virginia Filings, as of the
respective dates thereof, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein not misleading. The information which has
been or will be supplied by First Virginia for inclusion in the proxy
statement to be distributed to the stockholders of Premier (the "Proxy
Statement") in respect of the Merger or any amendment or supplement thereto
will not contain any untrue statement of a material fact nor omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein not misleading; provided, that information of a later
date shall be deemed to modify information of an earlier date.
(g) First Virginia Common Stock to be Issued. Each share of
First Virginia Common Stock issued in connection with the consummation of the
Merger to stockholders of Premier will be validly issued, fully paid and
nonassessable.
(h) Litigation. Except as reflected in the First Virginia
Filings, there are no actions, proceedings or investigations pending or, to
the best of First Virginia's knowledge and belief, threatened against First
Virginia or any First Virginia subsidiary which, if adversely determined,
would have a Material Adverse Effect on the financial conditions or operations
of First Virginia and its subsidiaries. Neither First Virginia nor any of its
bank subsidiaries is subject to any agreement, memorandum of understanding or
similar arrangement with any regulatory authority restricting its operations
or requiring that certain actions be taken, and, neither First Virginia nor
any of its bank subsidiaries has received any notification from any
governmental or regulatory authority, or the staff thereof, asserting that it
is not in compliance with any statutes, regulations or ordinances which such
authority enforces, noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on First
Virginia and its Subsidiaries.
ARTICLE IV.
CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE DATE.
4.1 Conduct of the Business of Premier and its Subsidiaries Prior to
the Effective Date. During the period from the date of this Agreement to the
Effective Date, Premier and its Subsidiaries shall conduct their operations
according to the ordinary and usual course of business consistent with current
practices and use their best efforts to maintain and preserve their business
organizations, employees and advantageous business relationships and retain
the services of their executive officers.
4.2 Forbearances.
During the period from the date of this Agreement to the
Effective Date, neither Premier nor its Subsidiaries shall without the prior
written consent of First Virginia:
(i) make any changes to their Charters or Bylaws;
(ii) adjust, split, combine or reclassify its Common Stock;
make, declare or pay any dividend (except that Premier may declare or pay its
normal dividend at a quarterly rate of $.14 per share on its regular quarterly
payment dates, provided that Premier coordinates its dividend record and
payment dates with First Virginia so that no Premier shareholder receives a
dividend both from First Virginia and Premier for the same period) or make any
other distribution on, or directly or indirectly redeem, purchase or otherwise
acquire, any shares of their capital stock or any securities or obligations
convertible into or exchangeable for any shares of their capital stock, or
issue (except upon the exercise of a Premier option or First Virginia's
option), sell, pledge, encumber or authorize the issuance of any additional
shares of Premier stock, or grant any stock options or stock appreciation
rights or give any person any right or warrant to acquire any shares of their
capital stock except for the stock option granted to First Virginia pursuant
to the Stock Option Agreement of even date hereof;
(iii) enter any contract or commitment or incur or agree to
incur any liability or make any capital expenditures except in the normal
course of business;
(iv) except as provided in Paragraph 1.6, increase in any
manner the compensation or fringe benefits of any of their directors,
officers, agents or employees or pay any pension or retirement allowance not
required by any existing plan or agreement to any such directors, officers,
agents or employees or become a party to, amend or commit itself to any
pension, retirement, profit sharing, welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee or officer or
other person other than payments consistent with past practices and current
incentive compensation plans, increases which are not material and other
increases consented to by First Virginia in writing;
(v) sell, assign, lease or otherwise transfer or dispose of
any asset, property or equipment except in the normal course of business; or
(vi) merge or consolidate or agree to merge or consolidate
with or into any other corporation, or acquire directly or indirectly, control
over any corporation;
provided, however, that notwithstanding anything stated in Section 4.2 above
to the contrary, that Premier shall have the right (a) to amend any stock
option plan to provide for the immediate vesting of the Premier Options
granted in 1995 at the holder's option, (b) to pay executive cash bonuses and
nonexecutive profit sharing plan benefits as provided under Section 1.4., and
(c) to pay up to $4,000,000 to the shareholders of Big Stone Gap and Trust
Company pursuant to the terms of that acquisition.
4.3 No Solicitation. Unless and until this Agreement shall have been
terminated pursuant to its terms, from and after the date hereof neither
Premier nor its Subsidiaries nor any of their executive officers, directors,
or agents shall, directly or indirectly, encourage, solicit or initiate
discussions or negotiations with any person (other than First Virginia)
concerning any merger, sale of substantial assets, tender offer, sale of
shares of stock or similar transaction involving Premier or its Subsidiaries
(an "Acquisition Proposal") or disclose, directly or indirectly, to any person
in connection with an Acquisition Proposal any information not customarily
disclosed to the public concerning Premier or its Subsidiaries, afford to any
other person access to the properties, books or records of Premier or its
Subsidiaries in connection with an Acquisition Proposal or otherwise assist
any person preparing to make or who has made such an Acquisition Proposal, or
enter into any agreement with any third party providing for a business
combination transaction, equity investment or sale of significant amount of
assets, except in a situation in which a majority of the full Board of
Directors of Premier has determined in good faith, upon advice of counsel,
that such Board has a fiduciary duty to consider and respond to a bona fide
Acquisition Proposal by a third party (which Acquisition Proposal was not
directly or indirectly solicited by Premier or its Subsidiaries or any of
their respective officers, directors, representatives, agents or affiliates
after the date of this Agreement) and provides written notice of its intention
to consider such Acquisition Proposal and the material terms thereof to First
Virginia at least five days before responding to the Acquisition Proposal
provided, however, that if such Acquisition Proposal by its terms requires a
response in a shorter period, Premier shall provide such notice within one
business day after it receives the Acquisition Proposal and may thereafter
respond in an appropriate fashion. Premier and its Subsidiaries will promptly
communicate to First Virginia the identity of the offeror and the terms of any
Acquisition Proposal which it may receive in respect to any of the foregoing
transactions.
4.4 Compliance with Tax-Free Provisions. Neither Premier nor First
Virginia shall take any action prior to or after the Effective Date of the
Merger which would disqualify the Merger as a tax free reorganization under
Section 368(a) of the Internal Revenue Code of 1986 as amended.
4.5 Access and Information. Premier and its Subsidiaries will permit
First Virginia to audit their books and records and First Virginia will advise
Premier of the results of the audit within 45 days of the date of this
Agreement. Such audit may include an examination of loan files, accounts
receivable and accounts payable, tax returns, agreements, schedule of assets
owned, investment portfolio and all other items deemed necessary by First
Virginia. Premier and First Virginia will give to the officers, accountants,
counsel and authorized representatives of the other Party access to its
properties, books and records and those of its Subsidiaries and will furnish
the other Party with such additional financial and operating data and other
information as to its business and properties and those of its Subsidiaries as
the other Party may from time to time request. Premier and its Subsidiaries
and their officers and directors will cooperate with First Virginia and its
representatives and counsel in the preparation of any documents or other
materials which may be required in connection with the applications to the
Federal Reserve Bank of Richmond and the Virginia State Corporation Commission
and First Virginia's registration statement on Form S-4 as filed with the SEC
or in connection with any other documents or materials required by any
governmental agency, stock exchange or association of securities dealers.
First Virginia will cooperate with and furnish such information to, and cause
its directors and officers and those of its subsidiaries to cooperate with and
furnish such information to, Premier as it may request in connection with the
preparation of the proxy statement for the special meeting of the stockholders
of Premier to consider the Merger. First Virginia shall return the results of
its audit review to Premier's Board of Directors if First Virginia terminates
this Agreement pursuant to Paragraph 9.2(g).
4.6 Confidentiality. First Virginia and Premier shall cause its
advisers and agents to maintain the confidentiality of all confidential
information furnished to it by the other party concerning its and its
subsidiaries' businesses, operations, and financial positions and shall not
use such information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Date of the Merger, each party shall promptly return all documents
and copies thereof, and all work papers containing confidential information
received from the other party. In the event that either Premier or First
Virginia should violate any of the terms of this paragraph, they agree that
the party who is not in violation would have an inadequate remedy at law for
such violation and may, therefore, seek an injunction without the necessity of
bond, to prevent or halt any violation hereof and the parties hereto agree not
to raise any defense that the party who is not in violation of this paragraph
has an adequate remedy at law. Premier and First Virginia further acknowledge
and agree that in the event of a violation of the terms and conditions of this
paragraph that the party who is not in violation shall have any and all
remedies available at law or equity and shall not be limited to the remedy of
injunctive relief.
4.7 Consents. From the date of this Agreement to the Effective Date,
Premier will use all reasonable efforts to obtain the written consents or
approvals of all private third parties whose consent or approval is required
with regard to the transactions contemplated by this Agreement, under the
terms of any lease, mortgage, indenture or other agreement to which Premier or
any of its Subsidiaries is a party or by which any of their assets is bound.
4.8 Meeting of Premier Stockholders. Premier will duly call and will
convene a meeting of its stockholders to act upon the transactions
contemplated hereby as soon as practicable, will recommend approval of this
Agreement to its stockholders, and will use its best efforts to obtain a
favorable vote thereon. The calling and holding of such meetings and all
transactions, documents and information related thereto will be in compliance
with all applicable laws. The proxy statement for the stockholders' meeting of
Premier will be contained in the Registration Statement.
4.9 Affiliates of Premier. Premier will promptly (a) furnish to First
Virginia and its counsel such information as may be necessary to determine
those persons who may be deemed to be affiliates of Premier within the meaning
of Rule 144 and Rule 145 under the Securities Act of 1933 and (b) use their
best efforts to obtain from any person who may be deemed to be such an
affiliate such undertakings and agreements substantially in the form of
Exhibit B, attached.
4.10 Insurance Applications. Premier and its Subsidiaries agree to
complete and deliver to First Virginia within 30 days from the date of this
Agreement the insurance applications necessary to include insurance coverage
for the Subsidiaries' property, casualty and fidelity risks and include
liability coverage for the Subsidiaries' directors and officers under First
Virginia's directors and officers liability insurance policy.
4.11 Applications to the Virginia State Corporation Commissioner.
Premier and its Subsidiaries, jointly with First Virginia, will prepare and
file with the Virginia State Corporation Commission applications requesting
approval for First Virginia to acquire both Premier and its Subsidiaries
pursuant to the provisions of Virginia law and will use their best efforts to
secure favorable action by the State Corporation Commission on such
applications.
4.12 Federal Reserve Applications. Premier and its Subsidiaries,
jointly with First Virginia, will prepare and file with the Federal Reserve,
applications requesting approval for the Merger and will use its best efforts
to secure favorable action by the Federal Reserve on such applications.
4.13 Changes Requested by First Virginia. At the request of First
Virginia, on the last business day prior to the Effective Date of the Merger
Premier shall, and Premier shall cause each of its Subsidiaries to, establish
such additional accruals, reserves and charge-offs, through appropriate
entries in its accounting books and records, as may be necessary to conform
the accounting and credit loss reserve practices and methods of Premier and
its Subsidiaries to those of First Virginia (as such practices and methods are
to be applied from and after the Effective Date of the Merger) and to First
Virginia's plans with respect to the conduct of the business of Premier and
the Banks following the Effective Date of the Merger. Any such accruals,
reserves and charge-offs shall not be deemed to cause any representation and
warranty of Premier to not be true and accurate as of the Effective Date of
the Merger.
ARTICLE V.
COVENANTS OF FIRST VIRGINIA.
5.1 Issuance of Stock and Payment of Cash. First Virginia will issue
and deliver or cause to be delivered the shares of First Virginia Common Stock
as called for by Paragraph 1.1 of this Agreement.
5.2 Stock Adjustments. Nothing in this Agreement shall limit the
right of First Virginia to issue or agree to issue any of its stock or other
securities in any manner and for any consideration permitted by law prior to
or after the Effective Date; provided, however, that if First Virginia takes
any action which establishes prior to the Effective Date a record date or an
effective date for a stock dividend on its common stock, a split-up, any
combination of its common stock, or any distribution on shares of its common
stock other than cash dividends, First Virginia will take all such action as
shall be necessary in order that the Premier Common Stock will be converted in
the Merger into additional shares of First Virginia Common Stock which would
have been delivered to the holders of Premier Common Stock if the Merger had
been made effective immediately before such record or effective date;
provided, however, that there shall be no adjustment of First Virginia Common
Stock by reason of First Virginia issuing or agreeing to issue, on such terms
as it may determine, First Virginia Common Stock for cash or property, in
exchange for shares of stock of any other corporation or on account of mergers
or consolidations before, after or simultaneously with the consummation of the
Merger.
5.3 Preparation of Registration Statement. First Virginia will
prepare the Registration Statement and any amendments thereto, file the
Registration Statement with the SEC, use its best efforts to secure its
effectiveness and promptly after the effective date of the Registration
Statement, mail and deliver copies of the proxy statement contained therein to
the Premier stockholders for use by its management to solicit proxies for use
at its stockholder's meetings.
5.4 Application to the Virginia State Corporation Commission. First
Virginia, jointly with Premier, will prepare and file with the Virginia State
Corporation Commission an application requesting approval for First Virginia
to acquire Premier and its Subsidiaries and will use its best efforts to
secure favorable action by the Virginia State Corporation Commission on such
application.
5.5 Federal Reserve Applications. First Virginia will prepare and
file with the Federal Reserve, applications requesting approval for the Merger
and will use its best efforts to secure favorable action by the Federal
Reserve on such applications.
ARTICLE VI.
CONDITIONS PRECEDENT TO FIRST VIRGINIA'S OBLIGATIONS HEREUNDER.
Unless waived in writing by First Virginia in its sole discretion,
all obligations of First Virginia hereunder to effect the Merger shall be
subject to the fulfillment prior to or at the Effective Date of the following
conditions:
6.1 Representations, Warranties. The representations and warranties
of Premier herein contained shall be true in all material respects as of the
Effective Date, shall be deemed made again at and as of the Effective Date and
shall be true in all material respects as if so made again; Premier shall have
performed all of the obligations and complied with all of the covenants
required by this Agreement to be performed or complied with by it on or prior
to the Effective Date in all material respects and First Virginia shall
receive from Premier officers' certificates in such detail as First Virginia
may reasonably request dated the day of the Effective Date and signed by the
president, cashier or secretary to the foregoing effect.
6.2 No Adverse Changes. There shall not have been any material
adverse changes in the financial position, results of operations, assets,
liabilities or business of Premier and its Subsidiaries, taken as a whole,
from September 30, 1996, the date of the Financial Statements referred to in
Paragraph 3.1(e) above, to the Effective Date, which changes, individually or
in the aggregate, have or constitute a Material Adverse Effect on Premier and
its Subsidiaries.
6.3 Audit of Premier and its Subsidiaries. The audit of Premier and
its Subsidiaries conducted pursuant to Paragraph 4.5 shall reflect
stockholders' equity of Premier and its Subsidiaries on a consolidated basis
of not less than $76.5 million, which was Premier's stockholders' equity as of
September 30, 1996. For purposes of the audit and this Agreement, consolidated
stockholders' equity shall be determined in accordance with generally accepted
accounting principles applied on a consistent basis with Premier's prior
financial statements. Deductions shall be made for any reserve required to
reflect assets at their fair values and to provide for any liabilities that
should be reflected as of the date of the audit.
6.4 Legal Opinion. First Virginia shall have received a written
opinion from outside counsel to Premier, in form reasonably satisfactory to
First Virginia, which shall cover matters customary in transactions of this
nature.
6.5 Events Preceding the Effective Date. Each of the events set forth
in Paragraphs 2(a)-2(f) shall have occurred.
6.6. No Adverse Proceedings. No action or proceeding against First
Virginia, Premier or its Subsidiaries or the consummation of the transactions
contemplated by this Agreement shall have been instituted or threatened or any
investigations or inquiries undertaken that might eventuate in any such action
or proceeding.
ARTICLE VII.
CONDITIONS PRECEDENT TO PREMIER'S OBLIGATIONS HEREUNDER.
Unless waived in writing by Premier in its sole discretion, all
obligations of Premier hereunder to effect the Merger shall be subject to the
fulfillment prior to or at the Effective Date of the following conditions:
7.1 Representations, Warranties and Covenants. The representations
and warranties of First Virginia herein contained shall be true in all
material respects as of the Effective Date, shall be deemed made again at and
as of the Effective Date and shall be true in all material respects as if so
made again. First Virginia shall have performed all obligations and complied
with all covenants required by this Agreement to be performed or complied with
by it on or prior to the Effective Date in all material respects and Premier
shall have received from First Virginia an officer's certificate in such
detail as Premier may reasonably request dated the Effective Date and signed
by its president, cashier or secretary to the foregoing effect.
7.2 Events Preceding the Effective Date. Each of the events set forth
in Paragraphs 2(a)-2(f) shall have occurred.
7.3 No Adverse Proceedings or Events. No action or proceeding against
Premier or its Subsidiaries or First Virginia or the consummation of the
transactions contemplated by this Agreement shall have been instituted or
threatened or any investigations or inquiries undertaken that might eventuate
in any such action or proceeding.
7.4 No Adverse Changes. There shall not have been any material
adverse change in the financial position, results of operations, assets,
liabilities or business of First Virginia and its Subsidiaries taken as a
whole from September 30, 1996 to the Effective Date, which changes,
individually or in the aggregate, have or constitute a Material Adverse
Effect; provided, however, that a merger or acquisition or the announcement of
a merger or acquisition involving First Virginia or a subsidiary of First
Virginia and requiring the issuance of First Virginia Common or Preferred
Stock or cash will not be considered for purposes of this section as an
"adverse change" in the financial position, results of operations, assets,
liabilities or business of First Virginia.
7.5. Legal Opinion. Premier shall have received a written opinion,
dated as of the Effective Date, of in-house counsel to First Virginia, in form
reasonably satisfactory to Premier, which shall cover matters customary in
transactions of this nature; and furthermore, that Premier shall have received
a written tax opinion from counsel opining to the matters referred to Section
8.1 herein.
7.6 Fairness Opinion. Premier shall have received an opinion from
Scott & Stringfellow dated as of the date the Premier Board approved this
Agreement (and updated as of the mailing date for proxy materials for Premiers
meeting of stockholders to approve the Merger), that the Merger is fair to
such stockholders from a financial point of view; provided, however, that
whether or not the opinion concludes that the Merger transaction is fair shall
not be considered a condition precedent to Closing by Premier.
ARTICLE VIII.
TAX OPINION AND RESTRICTIONS CONCERNING THE RESALE OF FIRST
VIRGINIA COMMON STOCK BY AFFILIATES OF PREMIER
8.1 Tax Opinion. First Virginia and Premier agree to jointly obtain a
tax opinion (the "Tax Opinion") which opinion may be relied on by Premier and
its stockholders to the effect that:
(a) the Merger will constitute a reorganization within the
meaning of Code Section 368(a)(1)(A) and Premier and First Virginia will each
be "a party to a reorganization" within the meaning of Code Section 368(b);
(b) no gain or loss will be recognized by Premier or First
Virginia upon the transfer of Premier's assets to First Virginia pursuant to
the Merger and the assumption by First Virginia of the liabilities of Premier
pursuant to the Merger;
(c) the gain, if any, realized by a holder of shares of
Premier Common Stock upon receipt of shares of First Virginia Common Stock
and/or cash in exchange for shares of Premier Common Stock pursuant to the
Merger will be recognized but not in excess of the amount of cash received;
and no loss will be recognized by those Premier stockholders who exchange
their shares of Premier Common Stock for shares of First Virginia Common Stock
pursuant to the Merger; and
(d) the basis of First Virginia Common Stock to be received
by Premier stockholders will be the same as the basis of Premier Common Stock
surrendered in exchange therefor and the holding period of the First Virginia
Common Stock to be received by Premier stockholders will include the period
during which Premier Common Stock surrendered in exchange therefor was held
provided the Premier Common Stock was held as a capital asset by such Premier
stockholder at the Effective Date.
8.2 Restrictions on Affiliates. Each of the executive officers and
directors of Premier shall, prior to or on the Effective Date, execute and
deliver to First Virginia a written representation substantially in the form
of Exhibit B of this Agreement to the effect that no disposition will be made
by that person of any shares of First Virginia Common Stock received after the
Effective Date except within the limits and in accordance with the applicable
provisions of Paragraph C, E, F, and G of Rule 144 under the Securities Act of
1933.
ARTICLE IX.
TERMINATION, AMENDMENT AND SURVIVAL OF REPRESENTATIONS.
9.1 Amendment. This Agreement and the Plan of Merger attached hereto
may be amended at any time prior to the Effective Date; provided that any such
amendment is in writing and is approved by the Board of Directors of each of
the parties hereto and provided, further, that subsequent to the meeting in
which this Agreement is approved by stockholders of Premier, no amendment
shall be made in the exchange rate which decreases the consideration to
Premier's stockholders without the approval of stockholders holding two-thirds
of all issued and outstanding shares of Premier Common Stock.
9.2 Termination. Notwithstanding any other provision to the contrary
of this Agreement, and notwithstanding the approval of this Agreement by the
stockholders of Premier, this Agreement and the Plan of Merger may be
terminated and the Merger abandoned (without any obligation by First Virginia
or Premier to renegotiate the Agreement) at any time prior to the Effective
Date:
(a) By mutual consent of the Board of Directors of First
Virginia and the Board of Directors of Premier; or
(b) By the Board of Directors of either Premier or First
Virginia (provided that the terminating Party is not then in material breach
of any representation, warranty, covenant, or other agreement contained in
this Agreement) in the event of a material breach by the other Party of any
representation or warranty contained in this Agreement which cannot be or has
not been cured within thirty (30) days after the giving of written notice to
the breaching Party of such breach; or
(c) By the Board of Directors of either First Virginia or
Premier (provided that the terminating Party is not then in material breach of
any representation, warranty, covenant or other agreement contained in this
Agreement) in the event of a material breach by the other Party of any
covenant or agreement contained in this Agreement which cannot be or has not
been cured within thirty (30) days after the giving of written notice to the
breaching Party of such breach; or
(d) By the Board of Directors of either First Virginia or
Premier (provided that the terminating Party is not then in material breach of
any representation, warranty, covenant or other agreement contained in the
Agreement) if (i) the Federal Reserve Board or the Virginia State Corporation
Commission deny approval of the Merger and the time period for all appeals or
requests for reconsideration has run or (ii) the shareholders of Premier fail
to vote their approval of the Agreement and the Merger; or
(e) By the Board of Directors of either Premier or First
Virginia in the event the Merger should not become effective within nine
months of the date of this Agreement, in each case only if the failure to
consummate the Merger is not caused by any breach of the Agreement by the
Party electing to terminate; or
(f) By the Board of Directors of either Premier or First
Virginia (provided that the terminating Party is not then in material breach
of any representation, warranty, covenant or other agreement contained in this
Agreement) in the event that any of the conditions precedent to the
obligations of such Party to consummate the Merger cannot be satisfied or
fulfilled within nine months of the date of this Agreement; or
(g) By the Board of Directors of First Virginia, at any time
prior to the 45th day after execution of this Agreement in the event that
First Virginia determines, after its audit of Premier and its Subsidiaries
referred to in Paragraph 4.5, that the financial conditions of Premier and its
Subsidiaries, taken as a whole as of the date of completion of the audit, do
not meet the standards described in Paragraph 6.3 or that a fact or
circumstance exists or is reasonably likely to exist or result which
materially and adversely impacts one or more of the economic benefits to First
Virginia of the transactions contemplated by this Agreement so as to render
inadvisable the consummation of the Merger; or
(h) By the Board of Directors of First Virginia if more than
20% of the holders of Premier Common Stock file for appraisal rights under
Virginia law; or
(i) By the Board of Directors of Premier if the average of
the closing prices of First Virginia Common Stock as reported in The Wall
Street Journal under the heading "New York Stock Exchange --Composite
Transactions" or any comparable heading then in use declines to $34 per share
or less for any period of twenty consecutive business days prior to the
Effective Date.
In the event of the termination of this Agreement and the Plan of Merger and
the abandonment of the Merger pursuant to this Paragraph 9.2, other than the
provisions of Paragraphs 4.6 and 9.4 which shall survive such termination,
this Agreement and the Plan of Merger shall become void and have no effect,
without any liability on the part of either Party or its directors, officers
or stockholders. Notwithstanding the foregoing, nothing contained in this
Paragraph 9.2 shall relieve either Party from liability for any breach of this
Agreement.
9.3 Survival of Representations and Covenants. The respec-tive
warranties, representations, obligations and agreements of the Parties hereto
shall survive the Effective Date of the Merger.
9.4 Expenses. Whether or not the transactions herein are consummated,
First Virginia shall pay for all of its expenses and fees in connection with
this Agreement and the Merger provided for herein and Premier shall pay for
all of its expenses and fees including (a) all of their legal expenses and
fees, and (b) all the expenses and fees of their advisors, including but not
limited to their investment banker, their counsel and their accountant, in
connection with the Merger.
9.5 Notices. All notices, requests, demands and other communications
under or connected with this Agreement shall be in writing and (a) if to First
Virginia shall be addressed to First Virginia Banks, Inc. 6400 Arlington
Boulevard, Falls Church, Virginia 22042-2336, Attention: Barry J. Fitzpatrick,
Chairman, President and Chief Executive Officer, with copies to its counsel,
Christopher M. Cole, Vice President and Assistant General Counsel and (b) if
to Premier shall be addressed to Premier Bankshares Corporation, James R.
Wheeling, President and Chief Executive Officer, P.O. Box 1199, Bluefield,
Virginia 24605, with copies to its counsel, William R. Rakes, Esquire, Gentry,
Locke, Rakes and Moore, 10 Franklin Road, S.E., P.O. Box 40013, Roanoke,
Virginia 24038-0013.
9.6 Entire Agreement in Effect. This Agreement, including Exhibits A
and B, is intended by the Parties to and does constitute the entire agreement
of the Parties with respect to the transactions contemplated hereunder. This
Agreement including the Plan of Merger attached hereto supersedes any and all
other prior understandings and agreements between the Parties hereto and it
may not be changed, waived, discharged or terminated orally but only in
writing by a party against which enforcement of the change, waiver, or
discharge or termination is sought.
9.7 General. The paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement and the Plan of Merger
attached hereto may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, all of which shall become one and
the same instrument. This Agreement and the Plan of Merger attached hereto
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors; it shall not be assigned.
9.8 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Virginia.
<PAGE>
IN WITNESS WHEREOF, First Virginia and Premier have caused this
Agreement to be duly executed by their respective chairmen or presidents and
their respective seals to be hereunto affixed and attested by their respective
cashiers or secretaries thereunto duly authorized as of the date first written
above.
ATTEST: FIRST VIRGINIA BANKS, INC.
/s/Thomas P. Jennings By /s/Barry J. Fitzpatrick
---------------------------- ----------------------------------------
Thomas P. Jennings, Barry J. Fitzpatrick, Chairman,
Senior Vice President and President and Chief Executive
Secretary Officer
ATTEST: PREMIER BANKSHARES CORPORATION
/s/Ellen Simpson By /s/James R. Wheeling
---------------------------- ----------------------------------------
Ellen Simpson, James R. Wheeling
Corporate Secretary President and Chief Executive
Officer
<PAGE>
EXHIBIT A
PLAN OF MERGER
OF
PREMIER BANKSHARES CORPORATION
INTO
FIRST VIRGINIA BANKS, INC.
1. The Parties. Premier Bankshares Corporation, a Virginia
corporation ("Premier") shall merge with and into First Virginia Banks, Inc.
(the "Merger"), a Virginia corporation ("First Virginia") (collectively
referred to herein as the "Constituent Corporations"). First Virginia shall be
(as is hereinafter called when reference is made to it at and after the
consummation of the Merger) the Surviving Corporation. The name of the
Surviving Corporation shall be First Virginia Banks, Inc. The Merger shall
become effective at a time specified in the Articles of Merger filed with the
Virginia State Corporation Commission (the "Effective Date").
2. Articles of Incorporation; Bylaws. At the Effective Date, the
Articles of Incorporation and Bylaws of the Surviving Corporation shall be the
Articles of Incorporation and Bylaws of First Virginia as in effect
immediately prior to the Effective Date.
3. Effect of the Merger on Capital Stock, Assets, Liabilities and
Capitalization of Premier and First Virginia.
3.1 Conversion of Stock of Premier. At the Effective Date,
each issued and outstanding share of Premier Common Stock other than treasury
shares shall by virtue of the Merger and without any action by the holder
thereof be converted in accordance with the provisions of Section 3.2 hereof,
into shares of First Virginia Common Stock which shall be validly issued,
fully paid and nonassessable or cash. Each share of the Common Stock of the
Surviving Corporation which shall be issued and outstanding prior to the
Merger shall continue to be issued and outstanding.
3.2 Conversion Rate. At the Effective Date of the Merger:
(a) Conversion of Stock. Each share of Premier Common Stock which is
issued and outstanding as of the Effective Date of the Merger (other than
shares exchanged for cash and Dissenting Shares) shall, and without any action
by the holder thereof, be converted into .545 shares of First Virginia Common
Stock, proportionately adjusted for any stock split, stock dividends or other
similar capital adjustments between the date of the Agreement and Plan of
Reorganization between the Parties hereto (the "Agreement") and the Effective
Date of the Merger by First Virginia. No fractional shares of First Virginia
Common Stock shall be issued to Premier stockholders. In lieu thereof, each
Premier stockholder shall receive upon surrender of his Premier Common Stock
an amount in cash equal to the amount of any fractional share he would
otherwise be entitled to receive multiplied by the average of the closing
prices per share of First Virginia Common Stock as reported in The Wall Street
Journal under the heading "New York Stock Exchange--Composite Transactions" or
any comparable heading then in use, for each of the last ten trading days
ending on the Effective Date of the Merger.
(b) After the Effective Date of the Merger, each holder of a
certificate for theretofore outstanding shares of Premier Common Stock, upon
surrender of such certificate to the exchange agent designated by First
Virginia (the "Exchange Agent"), and a letter of transmittal which shall be
mailed to each holder of a certificate for theretofore outstanding shares of
Premier Common Stock by the Exchange Agent promptly following the Effective
Date of the Merger, shall be entitled to receive in exchange therefor a
certificate or certificates representing the number of full shares of First
Virginia Common Stock for which shares of Premier Common Stock theretofore
represented by the certificate or certificates so surrendered shall have been
exchanged as provided in the Agreement and this Plan of Merger. Until so
surrendered, each outstanding certificate which, prior to the Effective Date
of the Merger, represented Premier Common Stock, will be deemed evidence of
the right to receive either the number of full shares of First Virginia Common
Stock into which the number of shares of Premier Common Stock formerly
represented thereby may be converted in accordance with the exchange ratio
provided above; and after the Effective Date of the Merger will be deemed for
all corporate purposes of First Virginia to evidence ownership of the number
of full shares of First Virginia Common Stock into which the shares of Premier
Common Stock formerly represented thereby were converted.
With respect to shares of First Virginia Common Stock into which
shares of Premier Common Stock are converted pursuant to the Merger, until
such outstanding certificates formerly representing Premier Common Stock are
surrendered, no dividend payable to holders of record of First Virginia Common
Stock for any period as of any date subsequent to the Effective Date of the
Merger shall be paid to the holder of such outstanding certificates in respect
thereof. After the Effective Date of the Merger, there shall be no further
registry transfer on the records of Premier of shares of Premier Common Stock.
If a certificate representing such shares is presented to First Virginia, it
shall be cancelled and exchanged for a certificate representing shares of
First Virginia Common Stock as herein provided. Upon surrender of certificates
of Premier Common Stock in exchange for First Virginia Common Stock, there
shall be paid to the record holder of the certificates of First Virginia
Common Stock issued in exchange therefor (i) the amount of dividends
theretofore paid with respect to such full shares of First Virginia Common
Stock as of any date subsequent to the Effective Date of the Merger which have
not been paid to a public official pursuant to abandoned property laws and
(ii) at the appropriate payment date the amount of dividends with a record
date after the Effective Date of the Merger but prior to surrender and a
payment date subsequent to surrender. No interest shall be payable with
respect to such dividends upon surrender of outstanding certificates. Subject
to the immediately preceding two sentences, whenever a dividend or other
distribution is declared by First Virginia on First Virginia Common Stock, the
record date for which is on or after the Effective Date of the Merger, the
declaration shall include dividends or other distributions on all shares of
First Virginia Common Stock issuable pursuant to the Merger as provided above,
whether or not certificates for those shares of First Virginia Common Stock
have then been issued as provided above.
Options outstanding on the Effective Date of the Merger to acquire
Premier Common Stock ("Premier Options") shall be converted, based on the
exchange ratio, into options to acquire First Virginia Common Stock ("First
Virginia Options"). The exercise price per share of First Virginia Common
Stock under a First Virginia Option shall be equal to the exercise price of
Premier Common Stock under the Premier Option divided by the exchange ratio
(rounded up to the nearest cent).
3.3 Dissenting Premier Shares. Notwithstanding anything in
this Plan of Merger to the contrary, shares of Premier Common Stock which are
issued and outstanding immediately prior to the Effective Date of the Merger
and which are held by a stockholder who exercised in accordance with
applicable law the right (to the extent such right is available by law) to
demand and receive payment of the fair value of his shares of Premier Common
Stock pursuant to Virginia law (the "Dissenting Shares") shall be canceled and
shall not be converted into or be exchangeable for the right to receive the
consideration provided in Section 3.2 of this Plan of Merger, but the holders
thereof shall be entitled to payment of the fair market value of such shares
in accordance with Virginia law subject to the procedures and conditions
specified under Virginia law unless and until such holder shall fail to
perfect his right to dissent or shall have effectively withdrawn or lost such
right as the case may be. If such holder shall have failed to perfect or shall
have effectively withdrawn or lost such right, his shares of Premier Common
Stock shall thereupon be deemed at the Effective Date of the Merger to have
been converted into the right to receive the consideration provided in Section
3.2 of this Plan of Merger.
3.4 Assets. The Surviving Corporation shall possess all the
rights, interest, privileges, immunities, powers, franchises, concessions,
certificates of authority of a public as well as a private nature of each of
First Virginia and Premier and all property, real and personal, and every
interest therein, and all debts and other obligations due on whatever account,
and all other choses in action and all and every interest of, or belonging to,
or due to each of First Virginia and Premier and the title to all real estate
or any interest therein, vested in either of Premier or First Virginia, shall
not revert or be in any way impaired by reason of the Merger.
3.5 Liabilities. The Surviving Corporation shall be liable
for liabilities of Premier and all valid debts, liabilities, duties and
obligations of Premier shall thenceforth attach to the Surviving Corporation
and may be enforced against it to the same extent as if said debts,
liabilities, duties and obligations had been originally incurred or contracted
by it and neither the rights of creditors nor any liens upon the property of
either Premier or First Virginia shall be impaired by the Merger.
4. Board of Directors and Officers. From and after the Effective
Date, the directors of the Surviving Corporation shall be the directors of
First Virginia immediately prior to the Effective Date and the officers of the
Surviving Corporation shall be the officers of First Virginia immediately
prior to the Effective Date.
5. Conditions. Consummation of the Merger is subject to the following
conditions:
(i) approving vote of the holders of more than two-thirds of the
outstanding shares of Premier Common Stock entitled to vote; (ii) the approval
of the Merger by the Board of Directors of the Federal Reserve System and the
State Corporation Commission of Virginia; and (iii) the satisfaction of all
other conditions to the Merger as contained in the Agreement.
6. Termination and Abandonment. This Plan of Merger may be terminated
and the Merger abandoned as provided in Paragraph 9.2 of the Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Plan of
Merger as of the 29th day of October, 1996.
ATTEST: FIRST VIRGINIA BANKS, INC.
/s/Thomas P. Jennings By /s/Barry J. Fitzpatrick
---------------------------- ----------------------------------------
Thomas P. Jennings, Barry J. Fitzpatrick, Chairman,
Senior Vice President and President and Chief Executive
Secretary Officer
ATTEST: PREMIER BANKSHARES CORPORATION
/s/Ellen Simpson By /s/James R. Wheeling
---------------------------- ----------------------------------------
Ellen Simpson, James R. Wheeling
Corporate Secretary President and Chief Executive
Officer
<PAGE>
EXHIBIT B
TO: PRINCIPAL OFFICERS, DIRECTORS, AND STOCKHOLDERS OF
PREMIER BANKSHARES CORPORATION
Re: Restrictions on Resale of First Virginia Common Stock
The Federal Securities Laws impose certain limitations on the resale
of securities of publicly owned companies acquired by principal officers and
directors in merger-type transactions. We are required to note these
restrictions in the proxy statement and to receive your acknowledgment and
agreement to these restrictions.
As to the acquisition of Premier Bankshares Corporation ("Premier")
by First Virginia, these restrictions, in summary, are as follows:
For a period of two years from the date of the acquisition, any
principal officer or director of Premier may not resell, in any three-month
period, more than approximately 320,000 shares of First Virginia Common Stock
acquired pursuant to the merger. In addition, such securities must be sold in
brokers' transactions or in a transaction with a market maker. A broker's
transaction is defined as a transaction in which a broker (i) does no more
than execute the order to sell the security, receiving no more than the
customary broker's commission and (ii) neither solicits nor arranges for the
solicitation of orders to buy the security in anticipation of or in connection
with the transaction. A more detailed description of these restrictions is as
follows:
Although the issuance of securities of First Virginia Banks, Inc. in
the proposed merger will be registered under the Securities Act and will be
issued in compliance with any applicable state laws relating to securities,
any public reoffering or sale of such securities by any person who is an
"affiliate" of Premier at the time the Agreement is submitted to a vote of
Premier stockholders and who thus could be deemed an "underwriter" will, under
current law, require either (i) the further registration under the Securities
Act of the securities of First Virginia to be sold or (ii) compliance with
Rule 145 under the Securities Act (as described below) or (iii) the
availability of another exemption from such registration. An "affiliate" is
defined as a "controlling person", which could mean, generally, a stockholder
owning 10% or more of Premier's stock or a director or principal officer of
Premier. Compliance with Rule 145 requires compliance with certain of the
provisions of Rule 144 under the Securities Act. Under such provisions,
"affiliates" are only able to sell, in any three-month period, the greater of
(i) 1% of the securities of the class outstanding as shown by First Virginia's
most recent report or statement, (ii) the average weekly reported volume of
trading in those securities on all national securities exchanges and reported
through the national quotation system of a registered securities association
(i.e., NASDAQ), or (iii) to the extent such figures are available, the average
weekly volume of trading in the securities reported through the consolidated
transaction reporting system mandated by Rule 17a-15 under the Securities
Exchange Act of 1934 for the same four-week period. In addition, if an
"affiliate" acts in concert with another person for the purpose of any such
sales, the sales of all persons acting in concert would be limited in the
aggregate to such maximum number of securities in any three-month period. Two
additional requirements of Rule 144 which must be satisfied in complying with
Rule 145 are that (1) First Virginia must have been current for a period of
twelve months prior to the sale in the filing of all reports required by the
Securities and Exchange Commission (a condition which First Virginia presently
fulfills and which it will endeavor to fulfill in the future), and (2) First
Virginia securities must be sold in brokers' transactions or in a transaction
directly with a market maker in the First Virginia security involved. A
broker's transaction is defined as a transaction in which a broker (i) does no
more than execute the order to sell the security, receiving no more than the
customary broker's commission and (ii) neither solicits nor arranges for the
solicitation of orders to buy the security in anticipation of or in connection
with the transaction.
If you have any questions about these restrictions either at present
or in the future, please feel free to contact me.
Please acknowledge your receipt of and agreement to these
restrictions by signing a copy of this letter and returning it to me.
Very truly yours,
Christopher M. Cole
Vice President and Assistant
General Counsel
CMC:
ACKNOWLEDGED AND AGREED:
________________________
(Name and date)
<PAGE>
APPENDIX B
April __, 1997
Board of Directors
Premier Bankshares Corporation
29 College Drive
Bluefield, Virginia 24605-1199
Gentlemen:
You have asked us to render our opinion relating to the fairness,
from a financial point of view, to the shareholders of Premier Bankshares
Corporation ("Premier") of the terms of an Agreement and Plan of
Reorganization by and between First Virginia Banks, Inc. ("FVB") and Premier
dated October 28, 1996, (the "Merger Agreement"). The Merger Agreement
provides for the merger of Premier with and into FVB (the "Merger") and
further provides that each share of Common Stock of Premier which is issued
and outstanding immediately prior to the Effective Date of the Merger shall be
exchanged for .545 shares of FVB Common Stock (the "Exchange Ratio").
In developing our opinion, we have, among other things, reviewed and
analyzed: (1) the Merger Agreement; (2) Premier's audited financial statements
for the three years ended December 31, 1996; (3) information regarding the
trading market for the common stocks of Premier and FVB and the price ranges
within which the respective stocks have traded; (4) the relationship of prices
paid to relevant financial data such as net worth, assets, deposits and
earnings in certain bank and bank holding company mergers and acquisitions in
Virginia in recent years; and (5) FVB's audited annual reports to shareholders
and its financial statements for the three years ended December 31, 1996. We
have discussed with members of management of Premier and future prospects of
Premier and FVB individually and as a combined entity. Finally, we have
conducted such other studies, analyses and investigations, particularly of the
banking industry, and considered such other information as we deemed
appropriate.
In conducting our review and arriving at our opinion, we have relied
upon and assumed the accuracy and completeness of the information furnished to
us by or on behalf of Premier and FVB. We have not attempted independently to
verify such information, nor have we made any independent appraisal of the
assets of Premier or FVB. We have taken into account our assessment of general
economic, financial market and industry conditions as they exist and can be
evaluated at the date hereof, as well as our experience in business valuation
in general.
On the basis of our analyses and review and in reliance on the
accuracy and completeness of the information furnished to us and subject to
the conditions noted above, it is our opinion that, as of the date hereof the
terms of the Merger Agreement are fair from a financial point of view to the
shareholders of Premier Common Stock.
Very truly yours,
SCOTT & STRINGFELLOW, INC.
By: __________________________
Gary S. Penrose
Managing Director
Financial Institutions Group
<PAGE>
APPENDIX C
STOCK OPTION AGREEMENT
BETWEEN FIRST VIRGINIA BANKS, INC.
AND PREMIER BANKSHARES CORPORATION
<PAGE>
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into
as of October 29, 1996, by and between PREMIER BANKSHARES CORPORATION, a
Virginia corporation ("Issuer"), and FIRST VIRGINIA BANKS, INC., a Virginia
corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that certain Agreement
and Plan of Reorganization, dated as of October 29, 1996 (the "Merger
Agreement"), providing for, among other things, the merger of Issuer with and
into Grantee, with Grantee as the surviving entity; and
WHEREAS, as a condition and inducement to Grantee's execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, and intending to be legally bound hereby, Issuer and Grantee agree
as follows:
1. Defined Terms. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
2. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option")
to purchase up to 1,323,350 shares (as adjusted as set forth herein, the
"Option Shares," which shall include the Option Shares before and after any
transfer of such Option Shares) of common stock, $2.00 par value per share
("Issuer Common Stock"), of Issuer at a purchase price per Option Share
(subject to adjustment as set forth herein, the "Purchase Price") equal to
$20.00.
3. Exercise of Option.
(a) Provided that (i) Grantee or Holder (as hereinafter defined),
as applicable, shall not be in material breach of its agreements or covenants
contained in this Agreement or the Merger Agreement, and (ii) no preliminary
or permanent injunction or other order against the delivery of shares covered
by the Option issued by any court of competent jurisdiction in the United
States shall be in effect, Holder may exercise the Option, in whole or in
part, at any time and from time to time following the occurrence of a Purchase
Event; provided that the Option shall terminate and be of no further force and
effect upon the earliest to occur of (A) the Effective Date, (B) termination
of the Merger Agreement in accordance with the terms thereof prior to the
occurrence of a Purchase Event or a Preliminary Purchase Event (other than a
termination of the Merger Agreement by Grantee pursuant to (i) Section 9.2(b)
thereof (but only if such termination was a result of a willful breach by
Issuer) or (ii) Section 9.2(c) thereof (each a "Default Termination")), (C) 12
months after a Default Termination, and (D) 12 months after any termination of
the Merger Agreement (other than a Default Termination) following the
occurrence of a Purchase Event or a Preliminary Purchase Event; provided
further, that any purchase of shares upon exercise of the Option shall be
subject to compliance with applicable law, including, without limitation, the
Bank Holding Company Act of 1956, as amended (the "BHC Act"). The term
"Holder" shall mean the holder or holders of the Option from time to time, and
which initially is the Grantee. The rights set forth in Section 8 shall
terminate when the right to exercise the Option terminates (other than as a
result of a complete exercise of the Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the following
events subsequent to the date of this Agreement:
(i) without Grantee's prior written consent, Issuer shall
have authorized, recommended, publicly proposed or publicly announced
an intention to authorize, recommend or propose, or entered into an
agreement with any person (other than Grantee or any Subsidiary of
Grantee) to effect an Acquisition Transaction (as defined below). As
used herein, the term Acquisition Transaction shall mean (A) a merger,
consolidation or similar transaction involving Issuer or any of its
Subsidiaries (other than transactions solely between Issuer's
Subsidiaries), (B) the disposition, by sale, lease, exchange or
otherwise, of Assets of Issuer or any of its Subsidiaries representing
in either case 15% or more of the consolidated assets of Issuer and its
Subsidiaries, or (C) the issuance, sale or other disposition of
(including by way of merger, consolidation, share exchange or any
similar transaction) securities representing 15% or more of the voting
power of Issuer or any of its Subsidiaries (any of the foregoing, an
"Acquisition Transaction"); or
(ii) any person (other than Grantee or any Subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) of or the
right to acquire beneficial ownership of, or any "group" (as such term
is defined under the Exchange Act), other than a group of which Grantee
or any of its Subsidiaries of Grantee is a member, shall have been
formed which beneficially owns or has the right to acquire beneficial
ownership of, 15% or more of the then-outstanding shares of Issuer
Common Stock.
(c) As used herein, a "Preliminary Purchase Event" means any of
the following events:
(i) any person (other than Grantee or any Subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2
under the Exchange Act), or shall have filed a registration statement
under the Securities Act with respect to, a tender offer or exchange
offer to purchase any shares of Issuer Common Stock such that, upon
consummation of such offer, such person would own or control 15% or
more of the then-outstanding shares of Issuer Common Stock (such an
offer being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively); or
(ii) the holders of Issuer Common Stock shall not have
approved the Merger Agreement at the meeting of such stockholders held
for the purpose of voting on the Merger Agreement, such meeting shall
not have been held or shall have been canceled prior to termination of
the Merger Agreement, or Issuer's Board of Directors shall have
withdrawn or modified in a manner adverse to Grantee the recommendation
of Issuer's Board of Directors with respect to the Merger Agreement, in
each case after it shall have been publicly announced that any person
(other than Grantee or any Subsidiary of Grantee) shall have (A) made,
or disclosed an intention to make, a proposal to engage in an
Acquisition Transaction, (B) commenced a Tender Offer or filed a
registration statement under the Securities Act with respect to an
Exchange Offer, or (C) filed an application (or given a notice),
whether in draft or final form, under any federal or state statute or
regulation (including a notice filed under the HSR Act and an
application or notice filed under the BHC Act, the Bank Merger Act, or
the Change in Bank Control Act of 1978) seeking the Consent to an
Acquisition Transaction from any federal or state governmental or
regulatory authority or agency.
As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) In the event Holder wishes to exercise the Option, it shall
send to Issuer a written notice (the date of which being herein referred to as
the "Notice Date") specifying (i) the total number of Option Shares it intends
to purchase pursuant to such exercise and (ii) a place and date not earlier
than three business days nor later than 15 business days from the Notice Date
for the closing (the "Closing") of such purchase (the "Closing Date"). If
prior Consent of any governmental or regulatory agency or authority is
required in connection with such purchase, Issuer shall cooperate with Holder
in the filing of the required notice or application for such Consent and the
obtaining of such Consent and the Closing shall occur immediately following
receipt of such Consents (and expiration of any mandatory waiting periods).
(e) Notwithstanding any other provision of this Agreement to the
contrary, in no event shall:
(i) Holder's (taking into account all other Holders) Total
Profit (as defined below) exceed $8.0 million and, if it otherwise
would exceed such amount, Holder, at its sole election, shall either
(A) reduce the number of shares of Issuer Common Stock subject to the
Option, (B) deliver to Issuer for cancellation Option Shares previously
purchased by Holder, (C) pay cash to Issuer, or (D) any combination of
the foregoing, so that Holder's actually realized Total Profit shall
not exceed $8.0 million after taking into account the foregoing
actions; and
(ii) the Option be exercised for a number of shares of
Issuer Common Stock as would, as of the date of exercise, result in a
Notional Total Profit (as defined below) of more than $8.0 million;
provided, that nothing in this clause (ii) shall restrict any exercise
of the Option permitted hereby on any subsequent date.
As used in this Agreement, the term "Total Profit" shall mean the aggregate
sum (prior to the payment of taxes) of the following: (i) the amount received
by Holder pursuant to Issuer's repurchase of the Option (or any portion
thereof) pursuant to Section 8; (ii) (x) the amount received by Holder
pursuant to Issuer's repurchase of Option Shares pursuant to Section 8, less
(y) Holder's purchase price for such Option Shares; (iii) (x) the net cash
amounts received by Holder pursuant to the sale of Option Shares (or any other
securities into which such Option Shares shall be converted or exchanged) to
any unaffiliated person, less (y) Holder's purchase price of such Option
Shares; and (iv) any amounts received by Grantee on the transfer of the Option
(or any portion thereof) to any unaffiliated person.
As used in this Agreement, the term "Notional Total Profit" with respect to
any number of shares of Issuer Common Stock as to which Holder may propose to
exercise the Option shall be the Total Profit determined as of the date of
such proposed exercise, assuming that the Option were exercised on such date
for such number of shares and assuming that such shares, together with all
other Option Shares held by Holder and its affiliates as of such date, were
sold for cash at the closing sale price per share of Issuer Common Stock as
quoted on the Nasdaq National Market (or, if Issuer Common Stock is not then
quoted on the Nasdaq National Market System ("Nasdaq National Market"), the
highest bid price per share as quoted on the principal trading market or
securities exchange on which such shares are traded as reported by a
recognized source chosen by Holder) as of the close of business on the
preceding trading day (less customary brokerage commissions).
4. Payment and Delivery of Certificates.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of
Option Shares to be purchased on such Closing Date, and (ii) present and
surrender this Agreement to the Issuer at the address of the Issuer specified
in Section 13(f) hereof.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a), (i) Issuer shall deliver to Holder (A) a certificate or
certificates representing the Option Shares to be purchased at such Closing,
which Option Shares shall be free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever and subject to no pre-emptive rights, and
(B) if the Option is exercised in part only, an executed new agreement with
the same terms as this Agreement evidencing the right to purchase the balance
of the shares of Issuer Common Stock purchasable hereunder, and (ii) Holder
shall deliver to Issuer a letter agreeing that Holder shall not offer to sell
or otherwise dispose of such Option Shares in violation of applicable federal
and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read substantially as
follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF OCTOBER
___, 1996. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER
HEREOF WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST
THEREFOR.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Holder shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or an
opinion of counsel in form and substance reasonably satisfactory to Issuer and
its counsel, to the effect that such legend is not required for purposes of
the Securities Act.
5. Representations and Warranties of Issuer. Issuer hereby represents
and warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals referred to
herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Issuer. This Agreement has
been duly executed and delivered by Issuer.
(b) Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from
the date hereof until the obligation to deliver Issuer Common Stock
upon the exercise of the Option terminates, will have reserved for
issuance, upon exercise of the Option, the number of shares of Issuer
Common Stock necessary for Holder to exercise the Option, and Issuer
will take all necessary corporate action to authorize and reserve for
issuance all additional shares of Issuer Common Stock or other
securities which may be issued pursuant to Section 7 upon exercise of
the Option. The shares of Issuer Common Stock to be issued upon due
exercise of the Option, including all additional shares of Issuer
Common Stock or other securities which may be issuable pursuant to
Section 7, upon issuance pursuant hereto, shall be duly and validly
issued, fully paid, and nonassessable, and shall be delivered free and
clear of all liens, claims, charges, and encumbrances of any kind or
nature whatsoever, including any preemptive rights of any stockholder
of Issuer.
6. Representations and Warrants of Grantee. Grantee hereby represents
and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals or consents
referred to herein, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Grantee.
This Agreement has been duly executed and delivered by Grantee.
(b) This Option is not being, and any Option Shares or other
securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered
or exempt from registration under the Securities Laws.
7. Adjustment upon Changes in Capitalization, etc.
(a) In the event of any change in Issuer Common Stock by reason
of a stock dividend, stock split, split-up, recapitalization, combination,
exchange of shares or similar transaction, the type and number of shares or
securities subject to the Option, and the Purchase Price therefor, shall be
adjusted appropriately, and proper provision shall be made in the agreements
governing such transaction so that Holder shall receive, upon exercise of the
Option, the number and class of shares or other securities or property that
Holder would have received in respect of Issuer Common Stock if the Option had
been exercised immediately prior to such event, or the record date therefor,
as applicable. If any additional shares of Issuer Common Stock are issued
after the date of this Agreement (other than pursuant to an event described in
the first sentence of this Section 7(a)), the number of shares of Issuer
Common Stock subject to the Option shall be adjusted so that, after such
issuance, it, together with any shares of Issuer Common Stock previously
issued pursuant hereto, equals 19.9% of the number of shares of Issuer Common
Stock then issued and outstanding, without giving effect to any shares subject
to or issued pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement: (i)
to consolidate with or merge into any person, other than Grantee or one of its
Subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger; (ii) to permit any person, other than Grantee or one
of its Subsidiaries, to merge into Issuer and Issuer shall be the continuing
or surviving corporation, but, in connection with such merger, the
then-outstanding shares of Issuer Common Stock shall be changed into or
exchanged for stock or other securities of Issuer or any other person or cash
or any other property or the outstanding shares of Issuer Common Stock
immediately prior to such merger shall after such merger represent less than
50% of the outstanding shares and share equivalents of the merged company; or
(iii) to sell or otherwise transfer all or substantially all of its assets to
any person, other than Grantee or one of its Subsidiaries, then, and in each
such case, the agreement governing such transaction shall make proper
provisions so that upon the consummation of any such transaction and upon the
terms and conditions set forth herein, Holder shall receive for each Option
Share with respect to which the Option has not been exercised an amount of
consideration in the form of and equal to the per share amount of
consideration that would be received by the holder of one share of Issuer
Common Stock less the Purchase Price (and, in the event of an election or
similar arrangement with respect to the type of consideration to be received
by the holders of Issuer Common Stock, subject to the foregoing, proper
provision shall be made so that Holder would have the same election or similar
rights as would the holder of the number of shares of Issuer Common Stock for
which the Option is then exercisable).
(c) Issuer shall not enter into any agreement of the type
described in Section 7(b) unless the other party thereto consents to provide
the funding required for Issuer to pay the Section 8 Repurchase Consideration.
8. Repurchase at the Option of Holder.
(a) Subject to the last sentence of Section 3(a), at the request
of Holder at any time commencing upon the first occurrence of a Repurchase
Event (as defined in Section 8(d)) and ending 12 months immediately
thereafter, Issuer shall repurchase from Holder the Option and all shares of
Issuer Common Stock purchased by Holder pursuant hereto with respect to which
Holder then has beneficial ownership. The date on which Holder exercises its
rights under this Section 8 is referred to as the "Request Date." Such
repurchase shall be at an aggregate price (the "Section 8 Repurchase
Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for any
shares of Issuer Common Stock acquired by Holder pursuant to the Option
with respect to which Holder then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (y) the
Purchase Price (subject to adjustment pursuant to Section 7),
multiplied by the number of shares of Issuer Common Stock with respect
to which the Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7) paid (or,
in the case of Option Shares with respect to which the Option has been
exercised but the Closing Date has not occurred, payable) by Holder for
each share of Issuer Common Stock with respect to which the Option has
been exercised and with respect to which Holder then has beneficial
ownership, multiplied by the number of such shares.
(b) If Holder exercises its rights under this Section 8, Issuer
shall, within ten business days after the Request Date, pay the Section 8
Repurchase Consideration to Holder in immediately available funds, and
contemporaneously with such payment Holder shall surrender to Issuer the
Option and the certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Holder then has beneficial
ownership, and Holder shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all
liens, claims, charges and encumbrances of any kind whatsoever.
Notwithstanding the foregoing, to the extent that prior notification to or
Consent of any governmental or regulatory agency or authority is required in
connection with the payment of all or any portion of the Section 8 Repurchase
Consideration, Holder shall have the ongoing option to revoke its request for
repurchase pursuant to Section 8, in whole or in part, or to require that
Issuer deliver from time to time that portion of the Section 8 Repurchase
Consideration that it is not then so prohibited from paying and promptly file
the required notice or application for Consent and expeditiously process the
same (and each party shall cooperate with the other in the filing of any such
notice or application and the obtaining of any such Consent). If any
governmental or regulatory agency or authority disapproves of any part of
Issuer's proposed repurchase pursuant to this Section 8, Issuer shall promptly
give notice of such fact to Holder. If any governmental or regulatory agency
or authority prohibits the repurchase in part but not in whole, then Holder
shall have the right (i) to revoke the repurchase request or (ii) to the
extent permitted by such agency or authority, determine whether the repurchase
should apply to the Option and/or Option Shares and to what extent to each,
and Holder shall thereupon have the right to exercise the Option as to the
number of Option Shares for which the Option was exercisable at the Request
Date less the sum of the number of shares covered by the Option in respect of
which payment has been made pursuant to Section 8(a)(ii) and the number of
shares covered by the portion of the Option (if any) that has been
repurchased. Holder shall notify Issuer of its determination under the
preceding sentence within five business days of receipt of notice of
disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 8 shall terminate on the date of
termination of this Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable Price" means
the highest of (i) the highest price per share of Issuer Common Stock paid for
any such share by the person or groups described in Section 8(d)(i), (ii) the
price per share of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger or other business combination transaction
described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or (iii) the highest
closing sales price per share of Issuer Common Stock quoted on the Nasdaq
National Market (or if Issuer Common Stock is not quoted on the Nasdaq
National Market, the highest bid price per share as quoted on the principal
trading market or securities exchange on which such shares are traded as
reported by a recognized source chosen by Holder) during the 60 business days
preceding the Request Date; provided, however, that in the event of a sale of
less than all of Issuer's Assets, the Applicable Price shall be the sum of the
price paid in such sale for such assets and the current market value of the
remaining assets of Issuer as determined by an independent nationally
recognized investment banking firm selected by Holder and reasonably
acceptable to Issuer (which determination shall be conclusive for all purposes
of this Agreement), divided by the number of shares of the Issuer Common Stock
outstanding at the time of such sale. If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in
good faith by an independent nationally recognized investment banking firm
selected by Holder and reasonably acceptable to Issuer, which determination
shall be conclusive for all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i) any
person (other than Grantee or any Subsidiary of Grantee) shall have acquired
actual ownership or control, or any "group" (as such term is defined under the
1934 Act) shall have been formed which shall have acquired actual ownership or
control, of 50% or more of the then-outstanding shares of Issuer Common Stock,
or (ii) any of the transactions described in Section 7(b)(i), 7(b)(ii) or
7(b)(iii) shall be consummated.
(e) In connection with the application of the provisions of this
Section 8, Grantee acknowledges (i) that Issuer's ability to fund the Section
8 Repurchase Consideration in accordance with the provisions of this Section 8
may be dependent upon the payment by Issuer's Subsidiaries of a capital
distribution or distributions ("Capital Distribution") to Issuer and that any
such Capital Distribution will be subject to the prior approval of the Federal
Reserve Board and the principal federal and state regulatory agencies having
jurisdiction over Issuer's Subsidiary banks, and (ii) that, unless there has
been an agreement of the type described in Section 7(b), Issuer's obligations
under this Section 8 do not impose on Issuer an obligation to otherwise
finance the payment of the Section 8 Repurchase Consideration through the
incurrence of indebtedness or the issuance of capital instruments or
securities by Issuer in either case sufficient in amount to satisfy the
payment of the Section 8 Repurchase Consideration. Accordingly, Issuer shall
not be deemed to be in breach of this Section 8 if, after making its best
efforts to obtain regulatory authorization for a Capital Distribution required
to pay the Section 8 Repurchase Consideration, it is unable to do so.
9. Registration Rights.
(a) Following termination of the Merger Agreement, Issuer shall,
subject to the conditions of subparagraph (c) below, if requested by any
Holder, including Grantee and any permitted transferee ("Selling Holder"), as
expeditiously as possible prepare and file a registration statement under the
Securities Laws if necessary in order to permit the sale or other disposition
of any or all shares of Issuer Common Stock or other securities that have been
acquired by or are issuable to Selling Holder upon exercise of the Option in
accordance with the intended method of sale or other disposition stated by
Holder in such request, including, without limitation, a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other
securities for sale under any applicable state securities laws.
(b) If Issuer at any time after the exercise of the Option
proposes to register any shares of Issuer Common Stock under the Securities
Laws in connection with an underwritten public offering of such Issuer Common
Stock, Issuer will promptly give written notice to Holder of its intention to
do so and, upon the written request of Holder given within 30 days after
receipt of any such notice (which request shall specify the number of shares
of Issuer Common Stock intended to be included in such underwritten public
offering by Selling Holder), Issuer will cause all such shares, the holders of
which shall have requested participation in such registration, to be so
registered and included in such underwritten public offering; provided, that
Issuer may elect to not cause any such shares to be so registered (i) if the
underwriters in good faith object for valid business reasons, or (ii) in the
case of a registration solely to implement a dividend reinvestment or similar
plan, an employee benefit plan or a registration filed on Form S-4 or any
successor form, or a registration filed on a form which does not permit
registrations of resales; provided, further, that such election pursuant to
clause (i) may only be made two times. If some but not all the shares of
Issuer Common Stock, with respect to which Issuer shall have received requests
for registration pursuant to this subparagraph (b), shall be excluded from
such registration, Issuer shall make appropriate allocation of shares to be
registered among Selling Holders and any other person (other than Issuer or
any person exercising demand registration rights in connection with such
registration) who or which is permitted to register their shares of Issuer
Common Stock in connection with such registration pro rata in the proportion
that the number of shares requested to be registered by each Selling Holder
bears to the total number of shares requested to be registered by all persons
then desiring to have Issuer Common Stock registered for sale.
(c) Issuer shall use all reasonable efforts to cause each
registration statement referred to in subparagraph (a) above to become
effective and to obtain all consents or waivers of other parties which are
required therefor and to keep such registration statement effective, provided,
that Issuer may delay any registration of Option Shares required pursuant to
subparagraph (a) above for a period not exceeding 90 days provided Issuer
shall in good faith determine that any such registration would adversely
affect an offering or contemplated offering of other securities by Issuer, and
Issuer shall not be required to register Option Shares under the Securities
Laws pursuant to subparagraph (a) above:
(i) prior to the earliest of (A) termination of the Merger
Agreement pursuant to Section 9.2 thereof, (B) failure to obtain the
requisite stockholder approval pursuant to the Merger Agreement, and
(C) a Purchase Event or a Preliminary Purchase Event;
(ii) on more than two occasions;
(iii) more than once during any calendar year;
(iv) within 90 days after the effective date of a
registration referred to in subparagraph (b) above pursuant to which
the Selling Holders concerned were afforded the opportunity to register
such shares under the Securities Laws and such shares were registered
as requested; and
(v) unless a request therefor is made to Issuer by Selling
Holders holding at least 25% or more of the aggregate number of Option
Shares then outstanding.
In addition to the foregoing, Issuer shall not be required
to maintain the effectiveness of any registration statement after the
expiration of 120 days from the effective date of such registration statement.
Issuer shall use all reasonable efforts to make any filings, and take all
steps, under all applicable state securities laws to the extent necessary to
permit the sale or other disposition of the Option Shares so registered in
accordance with the intended method of distribution for such shares, provided,
that Issuer shall not be required to consent to general jurisdiction or
qualify to do business in any state where it is not otherwise required to so
consent to such jurisdiction or to so qualify to do business.
(d) Except where applicable state law prohibits such payments,
Issuer will pay all expenses (including without limitation registration fees,
qualification fees, blue sky fees and expenses (including the fees and
expenses of its counsel), accounting expenses, printing expenses, expenses of
underwriters, excluding discounts and commissions but including liability
insurance if Issuer so desires or the underwriters so require, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to subparagraph (a) or (b) above (including
the related offerings and sales by Selling Holders) and all other
qualifications, notifications or exemptions pursuant to subparagraph (a) or
(b) above. Underwriting discounts and commissions relating to Option Shares
and any other expenses incurred by such Selling Holders in connection with any
such registration shall be borne by such Selling Holders.
(e) In connection with any registration under subparagraph (a) or
(b) above Issuer hereby indemnifies the Selling Holders, and each underwriter
thereof, including each person, if any, who controls such holder or
underwriter within the meaning of Section 15 of the Securities Act, against
all expenses, losses, claims, damages and liabilities caused by any untrue
statement of a material fact contained in any registration statement or
prospectus or notification or offering circular (including any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such expenses,
losses, claims, damages or liabilities of such indemnified party are caused by
any untrue statement or alleged untrue statement that was included by Issuer
in any such registration statement or prospectus or notification or offering
circular (including any amendments or supplements thereto) in reliance upon
and in conformity with, information furnished in writing to Issuer by such
indemnified party expressly for use therein, and Issuer and each officer,
director and controlling person of Issuer shall be indemnified by such Selling
Holder, or by such underwriter, as the case may be, for all such expenses,
losses, claims, damages and liabilities caused by any untrue, or alleged
untrue, statement, that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon, and in conformity with,
information furnished in writing to Issuer by such holder or such underwriter,
as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this
subparagraph (e) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this subparagraph (e), such indemnified
party shall notify the indemnifying party in writing of the commencement of
such action, but the failure so to notify the indemnifying party shall not
relieve it of any liability which it may otherwise have to any indemnified
party under this subparagraph (e). In case notice of commencement of any such
action shall be given to the indemnifying party as above provided, the
indemnifying party shall be entitled to participate in and, to the extent it
may wish, jointly with any other indemnifying party similarly notified, to
assume the defense of such action at its own expense, with counsel chosen by
it and satisfactory to such indemnified party. The indemnified party shall
have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be paid by the indemnified party
unless (i) the indemnifying party either agrees to pay the same, (ii) the
indemnifying party falls to assume the defense of such action with counsel
satisfactory to the indemnified party, or (iii) the indemnified party has been
advised by counsel that one or more legal defenses may be available to the
indemnifying party that may be contrary to the interest of the indemnified
party, in which case the indemnifying party shall be entitled to assume the
defense of such action notwithstanding its obligation to bear fees and
expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this subparagraph
(e) is unavailable to a party otherwise entitled to be indemnified in respect
of any expenses, losses, claims, damages or liabilities referred to herein,
then the indemnifying party, in lieu of indemnifying such party otherwise
entitled to be indemnified, shall contribute to the amount paid or payable by
such party to be indemnified as a result of such expenses, losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative benefits received by Issuer, all Selling Holders and the underwriters
from the offering of the securities and also the relative fault of Issuer, all
Selling Holders and the underwriters in connection with the statements or
omissions which resulted in such expenses, losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
amount paid or payable by a party as a result of the expenses, losses, claims,
damages and liabilities referred to above shall be deemed to include any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim; provided, that in no case
shall any Selling Holder be responsible, in the aggregate, for any amount in
excess of the net offering proceeds attributable to its Option Shares included
in the offering. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any obligation by any holder to indemnify shall be several
and not joint with other holders.
In connection with any registration pursuant to subparagraph (a)
or (b) above, Issuer and each Selling Holder (other than Grantee) shall enter
into an agreement containing the indemnification provisions of this
subparagraph (e).
(f) Issuer shall comply with all reporting requirements and will
do all such other things as may be necessary to permit the expeditious sale at
any time of any Option Shares by Holder in accordance with and to the extent
permitted by any rule or regulation promulgated by the SEC from time to time,
including, without limitation, Rules 144 and 144A. Issuer shall at its expense
provide Holder with any information necessary in connection with the
completion and filing of any reports or forms required to be filed by them
under the Securities Laws, or required pursuant to any state securities laws
or the rules of any stock exchange.
(g) Issuer will pay all stamp taxes in connection with the
issuance and the sale of the Option Shares and in connection with the exercise
of the Option, and will save Holder harmless, without limitation as to time,
against any and all liabilities, with respect to all such taxes.
10. Quotation; Listing. If Issuer Common Stock or any other securities
to be acquired upon exercise of the Option are then authorized for quotation
or trading or listing on the Nasdaq National Market or any other securities
exchange or any automated quotations system maintained by a self-regulatory
organization, Issuer, upon the request of Holder, will promptly file an
application, if required, to authorize for quotation or trading or listing the
shares of Issuer Common Stock or other securities to be acquired upon exercise
of the Option on the Nasdaq National Market or any other securities exchange
or any automated quotations system maintained by a self-regulatory
organization and will use its best efforts to obtain approval, if required, of
such quotation or listing as soon as practicable.
11. Division of Option. This Agreement (and the Option granted hereby)
are exchangeable, without expense, at the option of Holder, upon presentation
and surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of
Issuer Common Stock purchasable hereunder. The terms "Agreement" and "Option"
as used herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft
or destruction) of reasonably satisfactory indemnification, and upon surrender
and cancellation of this Agreement, if mutilated, Issuer will execute and
deliver a new Agreement of like tenor and date. Any such new Agreement
executed and delivered shall constitute an additional contractual obligation
on the part of Issuer, whether or not the Agreement so lost, stolen, destroyed
or mutilated shall at any time be enforceable by anyone.
12. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 9, each of
the parties hereto shall bear and pay all costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability.
This Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties hereto (other than any transferees of the Option Shares or
any permitted transferee of this Agreement pursuant to Section 12(h)) any
rights or remedies hereunder. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or a federal or
state governmental or regulatory agency or authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court
or regulatory agency determines that the Option does not permit Holder to
acquire, or does not require Issuer to repurchase, the full number of shares
of Issuer Common Stock as provided in Sections 3 and 8 (as adjusted pursuant
to Section 7), it is the express intention of Issuer to allow Holder to
acquire or to require Issuer to repurchase such lesser number of shares as may
be permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Virginia without regard to any
applicable conflicts of law rules, except to the extent that the federal laws
of the United States shall govern.
(e) Descriptive Headings. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(with confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set forth in the Merger
Agreement(or at such other address for a party as shall be specified by like
notice).
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the
same agreement and shall become effective when both counterparts have been
signed, it being understood that both parties need not sign the same
counterpart.
(h) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without
the prior written consent of the other party, except that Grantee may assign
this Agreement to a wholly owned Subsidiary of Grantee and Grantee may assign
its rights hereunder in whole or in part after the occurrence of a Purchase
Event. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
(i) Further Assurances. In the event of any exercise of the
Option by Holder, Issuer and Holder shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.
(j) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such equitable relief and that this provision is
without prejudice to any other rights that the parties hereto may have for any
failure to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
ATTEST: PREMIER BANKSHARES CORPORATION
By: /s/Ellen Simpson By: /s/James R. Wheeling
Corporate Secretary President and Chief
Executive Officer
[CORPORATE SEAL]
ATTEST: FIRST VIRGINIA BANKS, INC.
By: /s/Thomas P. Jennings By: /s/Barry J. Fitzpatrick
Senior Vice President Chairman, President and
and Secretary Chief Executive Officer
[CORPORATE SEAL]
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN THE PROSPECTUS; UNDERTAKINGS
Item 20. Indemnification
Article 10 of the VSCA allows, in general, for indemnification, in
certain circumstances, by a Virginia corporation of any person threatened with
or made a party to any action, suit or proceeding by reason of the fact that
he or she is, or was, a director, officer, employee or agent of such
corporation. Indemnification is also authorized with respect to a criminal
action or proceeding where the person had no reasonable cause to believe that
his or her conduct was unlawful. Article 9 of the VSCA provides limitations on
damages payable by officers and directors, except in cases of willful
misconduct or knowing violation of the criminal law.
Article VI of First Virginia's Articles of Incorporation mandates the
indemnification of directors, advisory directors and officers as a result of
liability incurred by them in proceedings instituted against them by third
parties or by or on behalf of First Virginia itself, relating to the manner in
which they perform their duties unless they have been guilty of willful
misconduct or a knowing violation of criminal law. Subsection (a) of Article
VI provides that First Virginia may contract in advance to provide such
indemnification. Under Article VI, the procedures for determining whether
indemnification must be made will be as provided under the Virginia Stock
Corporation Act ("Corporation Act"). The Corporation Act provides that this
determination must be made (1) by a majority vote of a quorum consisting of
disinterested directors; (2) if such quorum is not available, by a majority
vote of a committee designated by the Board of Directors consisting solely of
two or more disinterested directors; (3) by special legal counsel selected (i)
by the Board or its committee as in (1) or (2) above or, if none such, (ii) by
a majority of the full Board; or (4) by the stockholders, but shares of or
controlled by interested directors may not be voted on the determination.
Subsection (b) of Article VI requires the advancement of expenses
reasonably incurred by a director, advisory director or officer in a
proceeding upon receipt of an undertaking from him to repay the amounts
advanced if it is ultimately determined that he is not entitled to
indemnification. If, however, a determination has been made that the director,
advisory director or officer is not entitled to be indemnified, expenses need
not be advanced.
Subsection (c) of Article VI authorizes First Virginia to provide
indemnification and make advances and reimbursements for expenses to other
persons including directors, advisory directors and officers of its
subsidiaries and employees and agents of First Virginia and its subsidiaries,
to the same extent or a lesser extent than is required to indemnify directors,
advisory directors and officers of First Virginia. First Virginia may also
contract in advance to provide such indemnification.
Subsection (d) of Article VI provides that in any proceeding brought by
a stockholder in the right of First Virginia or brought by or on behalf of
shareholders of First Virginia, no damages may be assessed against a director,
advisory director or officer of First Virginia arising out of a single
transaction, occurrence, or course of conduct. This elimination of liability
is not applicable if the director, advisory director or officer engages in
willful misconduct or a knowing violation of criminal law or of any federal or
state securities law.
First Virginia maintains a Directors and Officers Liability Insurance Policy
issued by Federal Insurance Company (part of the Chubb Group of Insurance
Companies) in the aggregate annual amount of $20 million. This policy provides
coverage up to 100% of its face amount, subject to deductible amounts. In
general, the policy insures (i) First Virginia's directors and officers and
those of its affiliates against loss by reason of their wrongful acts, and/or
(ii) First Virginia against claims against the directors and officers by
reason of their wrongful acts for which First Virginia is required to
indemnify or pay, all as such terms are defined in the policies and subject to
the terms and conditions contained therein.
Item 21. Exhibits and Financial Statements Schedule
2 Agreement and Plan of Reorganization dated October 29, 1996 and
Plan of Merger dated October 29, 1996 (included as Appendix A to
the Proxy Statement-Prospectus).
3 Restated Articles of Incorporation and Bylaws of First Virginia
Banks, Inc. (incorporated herein by reference to Exhibit (3) of
First Virginia's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 in the case of First Virginia's Restated
Articles of Incorporation, and, in the case of Bylaws,
incorporated by reference to Exhibit (3) of First Virginia's
Annual Report on Form 10-K for the fiscal year ended December 31,
1996.)
4 Instruments defining the rights of security holders, including
indentures. (With respect to First Virginia Common Stock and
First Virginia's Preferred Stock, the rights of security holders
are described in the Restated Articles of Incorporation and
Bylaws which are incorporated herein by reference to Exhibit 3 of
First Virginia's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996. Also incorporated herein is the Rights
Agreement dated July 29, 1988 between First Virginia Banks, Inc.
and American Security Bank, N.A. which is incorporated herein by
reference to First Virginia's Registration Statement on Form 8-A
dated August 1, 1988).
5 Opinion of Christopher M. Cole, Vice President and Assistant
General Counsel (filed herewith).
8 Form of Opinion to be provided as to certain tax matters by
Gentry, Locke, Rakes & Moore, (filed herewith).
10 Employment Agreement with James R. Wheeling.
21 Subsidiaries (filed herewith). A list of subsidiaries other than
banks is not filed herein because such subsidiaries, considered
in the aggregate, would not constitute a significant subsidiary.
Each of the banks is incorporated in Virginia with the exception
of First Virginia Bank-Maryland, Farmers Bank of Maryland,
Atlantic Bank and The Caroline County Bank which are incorporated
in Maryland, and Tri-City Bank and Trust Company, and First
Vantage Bank-Tennessee, which are incorporated in Tennessee.
23(a) Consent of Ernst & Young LLP.
23(b) Consent of Persinger & Co.
23(c) Consent of Christopher M. Cole regarding his opinion concerning
the legality of securities (included with his opinion as Exhibit
5).
23(d) Consent of Gentry, Locke, Rakes & Moore (included with its
opinion as Exhibit 8).
23(e) Consent of Scott & Stringfellow.
24 Power of Attorney.
99 Form of Proxy for Special Meeting of Stockholders of Premier
Item 22. Undertakings
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended
("Securities Act"), each filing of the Registrant's Annual Report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be deemed to be
a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of First Virginia pursuant to provisions of the Code of Virginia or the
Articles of Incorporation or Bylaws of First Virginia or resolutions of First
Virginia's shareholders adopted pursuant thereto, or otherwise, First Virginia
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by First
Virginia of expenses incurred or paid by a director, officer or controlling
person of First Virginia in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person of
First Virginia in connection with the securities being registered, First
Virginia will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the Proxy
Statement-Prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form,
within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the Registration Statement through the date of responding to the
request.
(d) The undersigned Registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the County of Fairfax
and State of Virginia on the 26th day of March, 1997.
FIRST VIRGINIA BANKS, INC.
By /s/ Barry J. Fitzpatrick
------------------------------------
Barry J. Fitzpatrick, Chairman
of the Board, President and
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on March 26, 1997.
SIGNATURE and TITLE
*
------------------------------------------------
Barry J. Fitzpatrick, Chairman of
the Board, President and Principal
Executive Officer
*
------------------------------------------------
Richard F. Bowman, Principal Financial Officer
and Principal Accounting Officer
------------------------------------------------
E. Cabell Brand
*
------------------------------------------------
Edward L. Breeden, III, Director
*
------------------------------------------------
Paul H. Geithner, Jr., Director
*
------------------------------------------------
L.H. Ginn, III, Director
------------------------------------------------
Gilbert R. Giordano, Director
------------------------------------------------
T. Keister Greer, Director
*
------------------------------------------------
Elsie C. Gruver, Director
*
------------------------------------------------
Edward M. Holland, Director
------------------------------------------------
Eric C. Kendrick, Director
------------------------------------------------
John B. Melvin, Director
------------------------------------------------
W. Lee Phillips, Jr., Director
------------------------------------------------
Josiah P. Rowe, III
*
------------------------------------------------
Robert H. Zalokar, Director
*
------------------------------------------------
Albert F. Zettlemoyer, Director
*By /s/ Christopher M. Cole
Christopher M. Cole
(Attorney-in-Fact)**
--------------------------
**By authority of Power of Attorney filed with this Registration Statement on
Form S-4.
<PAGE>
EXHIBIT INDEX
EXHIBITS
- --------
2 Agreement and Plan of Reorganization dated October 29, 1996 and Plan of
Merger dated October 29, 1996 (included as Appendix A to the Proxy
Statement-Prospectus).
3 Restated Articles of Incorporation and Bylaws of First Virginia Banks,
Inc. (in the case of the Restated Articles of Incorporation,
incorporated herein by reference to Exhibit (3) of First Virginia's
Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
and in the case of the Bylaws, incorporated by reference to Exhibit (3)
of First Virginia's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.)
4 Instruments defining the rights of security holders, including
indentures. (With respect to First Virginia Common Stock and First
Virginia's Preferred Stock, the rights of security holders are
described in the Restated Articles of Incorporation and Bylaws which
are incorporated herein by reference to Exhibit (3) of First Virginia's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996.
Also incorporated herein is the Rights Agreement dated July 29, 1988
between First Virginia Banks, Inc. and American Security Bank, N.A.
which is incorporated herein by reference to First Virginia's
Registration Statement on Form 8-A dated August 1, 1988).
5 Opinion of Christopher M. Cole, Vice President and Assistant General
Counsel (filed herewith).
8 Form of Opinion to be provided as to certain tax matters by Gentry,
Locke, Rakes & Moore (filed herewith).
10 Employment Agreement with James R. Wheeling.
21 Subsidiaries (filed herewith). A list of subsidiaries other than banks
is not filed herein because such subsidiaries, considered in the
aggregate, would not constitute a significant subsidiary. Each of the
banks is incorporated in Virginia with the exception of First Virginia
Bank-Maryland, Farmers Bank of Maryland, Atlantic Bank and The Caroline
County Bank, which are incorporated in Maryland, and Tri-City Bank and
Trust Company, and First Vantage Bank-Tennessee, which are incorporated
in Tennessee.
23(a) Consent of Ernst & Young LLP.
23(b) Consent of Persinger & Company. L.L.C.
23(c) Consent of Christopher M. Cole regarding his opinion concerning the
legality of securities (included with his opinion as Exhibit 5).
23(d) Consent of Gentry, Locke, Rakes & Moore (included with its opinion as
Exhibit 8).
23(e) Consent of Scott & Stringfellow, Inc.
24 Power of Attorney.
99 Form of Proxy for Special Meeting of Stockholders of Premier
EXHIBIT 5
March 26, 1997
First Virginia Banks, Inc.
6400 Arlington Boulevard
Falls Church, Virginia 22042-2336
Re: Registration Statement for Proposed Affiliation of
Premier with First Virginia Banks, Inc.
Ladies and Gentlemen:
In connection with the proposed offering of 3,624,295 shares of Common
Stock, par value $1.00 per share, of First Virginia Banks, Inc., pursuant to
the above-described Registration Statement on Form S-4, I have examined such
corporate records, certificates and other documents and such questions of law
as I considered necessary or appropriate for purposes of preparation and
filing of this opinion.
On the basis of such examination, it is my opinion that the shares of
Common Stock on being issued with respect to the affiliation of Premier
Bankshares Corporation with First Virginia Banks, Inc. will be legally issued,
fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to said
Registration Statement and to the reference to me under the caption "Legal
Opinion" in the prospectus included therein.
Very truly yours,
/s/ CHRISTOPHER M. COLE
Christopher M. Cole
Vice President and
Assistant General Counsel
EXHIBIT 8
, 1997
Board of Directors
Premier Bankshares Corporation
P.O. Box 1199
Bluefield, VA 24605-1199
Re: Merger of Premier Bankshares Corporation with and into
First Virginia Banks, Inc.
Dear Sirs:
We have acted as counsel for Premier Bankshares Corporation
("Premier"), a Virginia corporation and registered bank holding company in
connection with the Agreement and plan of Reorganization, dated as of October
29, 1996 (the "Affiliation Agreement"), between First Virginia Banks, Inc.,
also a registered bank holding company ("First Virginia") and Premier,
providing for the merger of Premier into First Virginia with First Virginia to
be the surviving corporation (the "Affiliation"). Unless otherwise specified,
all capitalized terms have the meaning assigned to them in the Proxy Statement
of Premier dated April , 1997.
In connection with this opinion, we have reviewed the Affiliation
Agreement and such other documents which we deem appropriate. For purposes of
this opinion, we have assumed (i) the authenticity of all documents submitted
to us as originals, (ii) the conformity to the originals of all documents
submitted as certified or photostatic copies and the authenticity of the
originals of such copies, (iii) the genuineness of signatures not witnessed by
us, (iv) the legal capacity of natural persons, and (v) the due authorization,
execution and delivery of all documents and the validity and binding affect of
such documents. We have further assumed that at the Effective Date of the
Affiliation, there will be no plan or intention by Premier shareholders to
sell or otherwise dispose of more than 20 percent in the aggregate of the
shares of First Virginia common stock received in the Affiliation. For
purposes of this assumption, the sale or redemption of any shares of Premier
common stock in anticipation of the Affiliation wil be treated as a sale of
the number of shares of First Virginia common stock that would have been
received in exchange for such shares had they not been sold or redeemed.
Our opinion of the federal and Virginia income tax consequences of the
Affiliation is:
1. Premier and First Virginia would each be "a party to a
reorganization" within the meaning of Section 368(b)(2) and the flush
paragraph of Section 368(b) of the Internal Revenue Code of 1986 (hereinafter
cited only by section).
2. A "plan of reorganization", as that term is used in Section 361(a),
would exist.
3. The Affiliation would qualify as a "reorganization" within the
meaning of Section 368(a)(1)(A) and 368(a)(2)(D).
4. No gain or loss will be recognized by Premier on (a) the transfer of
its assets in constructive exchange for First Virginia Common Stock or (b) the
constructive distribution of First Virginia shares to the Premier
stockholders.
5. The shareholders of Premier would exchange their stock in Premier
for the stock of First Virginia without the recognition of taxable gain or
loss by virtue of Section 354(a)(1). Such exchange would cause the
shareholders of Premier to have the same basis and holding period for their
First Virginia stock as they had for the stock of Premier by virtue of
Sections 358(a) and 1223(1).
6. The disposition of fractional shares will be taxable to the affected
stockholder pursuant to Section 302(a).
Except as set forth above, we express no opinion as to the tax consequences to
any party, whether Federal, state, local or foreign, of the Affiliation or of
any transactions related to the Affiliation. This opinion is being furnished
to you and is solely for your benefit in connection with the Affiliation, and
may not be relied upon for any other purpose, or quoted or relied upon by any
other person, firm, corporation, or other entity for any purpose without our
prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement to be filed with the Securities and Exchange Commission
on Form S-4 by First Virginia Banks, Inc. in connection with this transaction.
We also consent to the use of our name under the caption "Legal Matters" in
the prospectus and proxy statement contained in the Registration Statement.
Very truly yours,
GENTRY, LOCKE, RAKES & MOORE
Bruce C. Stockburger
EXHIBIT 10
AGREEMENT
THIS AGREEMENT is made this 26th day of November, 1996 by and between
FIRST VIRGINIA BANKS, INC., a Virginia bank holding corporation, (hereinafter
"First Virginia"), and JAMES R. WHEELING, (hereinafter "Wheeling").
WHEREAS, Wheeling is President and Chief Executive Officer of Premier
Bankshares Corporation (hereinafter "Premier");
WHEREAS, Premier has entered into an Agreement with Wheeling dated
September 22, 1993 (hereinafter, the "Change-in-Control Agreement")
concerning, among other things, Wheeling's status in the event that Premier
shall be merged with another institution or entity;
WHEREAS, Premier has entered into an Agreement and Plan of
Reorganization with First Virginia whereby Premier shall be merged into First
Virginia; and
WHEREAS, First Virginia and Wheeling wish to establish a new set of
terms which will govern Wheeling's employment relationship with First Virginia
and/or one or more of its subsidiaries or affiliates beginning on the
Effective Date of the Merger of Premier into First Virginia, which shall be
contingent on the consummation of the Merger and shall then be in lieu of and
supersede the Change-in-Control Agreement between Premier and Wheeling dated
September 22, 1993;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises set forth hereinbelow, the adequacy of which is hereby acknowledged,
First Virginia and Wheeling do hereby agree as follows:
1. On the Effective Date of the Merger of Premier with First Virginia,
First Virginia shall cause Wheeling to be employed by its wholly owned
subsidiary, First Virginia Bank-Southwest, as President and Chief
Administrative Officer at a base annual salary of $154,000.00. Subject to the
terms of this Agreement, First Virginia shall cause First Virginia
Bank-Southwest to so employ Wheeling for a minimum period of three years from
the Effective Date of the Merger.
For a minimum period of three years, provided Wheeling continues to be
employed by First Virginia Bank-Southwest, First Virginia shall cause First
Virginia Bank-Southwest to pay Wheeling at least a minimum base salary of
$154,000.00 and to assume Premier's split dollar insurance obligations with
respect to Wheeling's present split dollar insurance. The base salary shall be
paid in accordance with First Virginia Bank-Southwest's payroll policies and
procedures. As an officer of First Virginia Bank-Southwest, Wheeling will be
able to participate in First Virginia's Short Term and Long Term Disability
Plans in accordance with the terms and conditions of those Plans commencing at
the Effective Date of the Merger. On or before the Effective Date of the
Merger, First Virginia also shall cause Wheeling to become a director of that
Bank, subject to the same terms, duties, responsibilities and conditions as
other directors of that Bank. Consistent with First Virginia's policies and
procedures and to the same extent that other similarly situated executives at
First Virginia are entitled to such benefits, Wheeling will be provided with
an automobile, will be reimbursed for relocation expenses if he is relocated
and will be reimbursed for country club dues and, if his employer requires
that he move his club membership or if he is relocated, an initiation fee.
Wheeling shall be relocated to Roanoke, Virginia within one year of the date
that Premier Bank-South, N.A. converts all of its system processing to First
Virginia's data processing system following its merger with First Virginia
Bank-Southwest.
2. During a thirty-day period beginning exactly one year after the
Effective Date of the Merger of Premier with First Virginia, and provided
Wheeling still is employed with First Virginia Bank-Southwest, Wheeling shall
have the option of resigning from his position at First Virginia
Bank-Southwest. If, during the thirty-day period, or any time prior thereto,
First Virginia receives written notice from Wheeling of his intent to resign
during that thirty-day period, First Virginia shall pay Wheeling within ten
days after the payment amount has been determined (but no later than thirty
days after his resignation) the highest amount possible, but in no event in
excess of $410,000, which would not subject such payment to excess parachute
treatment under Section 280G of the Internal Revenue Code ("hereinafter
referred to as the "Severance Amount"); provided, however, that the Severance
Amount shall be $410,000 if the net amount available to Wheeling after such
payment, and after accounting for income and excise taxes on such payment,
exceeds the net amount available to Wheeling, after accounting for income
taxes, if the payment were reduced below $410,000 to the highest amount that
would not be subject to excess parachute treatment under Section 280G. For
purposes herein, income taxes shall be determined at the highest marginal
rates in effect at the time of payment, and calculations of the payment amount
and after-tax net amounts shall be made by a public accounting firm mutually
agreeable to Wheeling and First Virginia.
3. During the three-year period beginning with the Effective Date of
the Merger of Premier with First Virginia, Wheeling shall not be discharged
except for cause as defined herein below. If, during the first year of such
period, Wheeling is (a) discharged other than for cause, (b) dies while an
employee, or (c) resigns from his employment because (i) he is demoted from
his position as President and Chief Administrative Officer of First Virginia
Bank-Southwest other than for cause, (ii) his salary is reduced below
$154,000.00 other than for cause, or (iii) First Virginia causes him to be
moved to: (A) a location other than Roanoke, Virginia or (B) some location
other than Roanoke not mutually agreed to by Wheeling and First Virginia, or
(C) any location other than where Wheeling currently resides at any time prior
to July, 1997, (such a resignation due to the reasons stated in paragraph
3(c)(iii)(A), 3(c)(iii)(B) and 3(c)(iii)(C) above is hereinafter referred to a
"Covered Termination"), then First Virginia shall pay to Wheeling (or, in the
case of his death, to his estate or other beneficiary designated in writing by
Wheeling and agreeable to First Virginia) an amount equal to the sum of (a)
$410,000 and (b) one twelfth of $154,000 times the number of whole and partial
months that remain from the date of such discharge, death or resignation to
the end of the first year.
If, during the second and third years of the three year period,
Wheeling is (x) discharged for some reason other than for cause, (y) dies
while an employee, or (z) resigns and his resignation is a Covered
Termination, then First Virginia shall pay to Wheeling (or, in the case of
death, to his estate or other beneficiary designated in writing by Wheeling
and agreeable to First Virginia) an amount equal to one-twenty-fourth (1/24)
of $410,000 times the unexpired number of whole and partial months that remain
from the date of such discharge, death or resignation to the end of the
three-year period; provided, however, that such amount shall be reduced to an
amount which would not subject such payment to excess parachute treatment
under Section 280G of the Internal Revenue Code unless the net amount of the
unreduced payment available to Wheeling, after accounting for income and
excise taxes on the unreduced payment, would exceed the net amount of the
reduced payment available to Wheeling after accounting for income taxes on the
reduced payment. For purposes hereof, income taxes shall be determined at the
highest marginal rates in effect at the time of payment, and calculations of
the payment amount and after-tax net amounts shall be made by a public
accounting firm mutually agreeable to Wheeling and First Virginia.
Any payment pursuant to this paragraph shall be made within ten days
after the payment amount has been determined but, in no event, later than
thirty days after his discharge, death or resignation.
"Cause," as used hereinabove, shall mean any of the following:
(i) fraud or gross misconduct;
(ii) a further violation of a rule, regulation, policy, code of
conduct or directive of First Virginia or his employer after having received
notice, consultation or reasonable warning about a prior violation thereof;
(iii) continued negligence in the performance of assigned duties
after having received notice, consultation or reasonable warning about a prior
occurrence of such negligence, which duties shall include but not be limited
to those duties set forth hereinbelow.
4. Among Wheeling's duties are loyalty and devotion of his best efforts
full time to the performance of his duties for his employer, giving proper
time and attention to furthering First Virginia's business. This duty shall
include not directly or indirectly engaging in any business which would
detract from Wheeling's ability to apply his best efforts to the performance
of his duties and not usurping any business opportunities of First Virginia.
5. Wheeling recognizes and acknowledges that in the course of
Wheeling's employment, it will be necessary for Wheeling to acquire
information that could include information concerning sales, products,
customers, prospective customers, computer programs, system documentation,
hardware and software products, manuals, processes, methods and other
confidential or proprietary information relating to First Virginia's affairs.
Wheeling acknowledges that the confidential information is the property of
First Virginia and its subsidiaries and affiliates and that the use,
misappropriation or disclosure of such information would constitute a breach
of trust and could cause irreparable harm to First Virginia. Wheeling also
acknowledges that it is essential for the proper protection of the business of
First Virginia that Wheeling be restrained from soliciting or inducing any
employees of First Virginia or its subsidiaries and affiliates from leaving
their employment and from hiring or attempting to hire any such employee. For
the three-year period beginning with the Effective Date of the Merger of
Premier and First Virginia, Wheeling covenants and agrees not to engage in
such a breach of trust or engage in any practice which could cause such harm
to First Virginia and its subsidiaries and affiliates. Upon the termination of
Wheeling's employment with First Virginia Bank-Southwest or any other
subsidiary or affiliate of First Virginia for any reason, Wheeling shall
promptly deliver to First Virginia all correspondence, manuals, letters,
notes, reports, programs, proposals and any other documents concerning the
customers, products or processes used by First Virginia and its subsidiaries
and affiliates.
6. For the three-year period beginning with the Effective Date of the
Merger of Premier and First Virginia, whether or not employed by First
Virginia or a subsidiary or affiliate of First Virginia, Wheeling shall not
compete in Southwestern Virginia (as that region is defined below) with First
Virginia or any of First Virginia's subsidiaries or affiliates, or be employed
by any financial institution, corporation, firm, or organization in
Southwestern Virginia which competes with First Virginia or any of its
subsidiaries or affiliates or directly or indirectly solicit loans,
commitments for loans, deposits, trust services, insurance services, or any
other type of business engaged in by Premier or First Virginia (or any of
their subsidiaries or affiliates) to or with any person, firm or corporation
with whom First Virginia or Premier (or any of their subsidiaries) conducted
any type of business on or after February 15, 1996. For purposes of this
paragraph 6, Southwestern Virginia shall include the following counties of
Virginia plus the cities located within those county boundaries: Roanoke,
Giles, Franklin, Montgomery, Henry, Patrick, Floyd, Pulaski, Bland, Wythe,
Carroll, Grayson, Smyth, Tazewell, Buchanan, Russell, Washington, Scott,
Dickenson, Wise and Lee.
7. Wheeling acknowledges that the remedies at law for Wheeling's breach
of this Agreement will be inadequate and that First Virginia shall be entitled
to injunctive relief against Wheeling in the event of any such breach in
addition to any other remedy or damages available. Wheeling acknowledges that
the restrictions contained in this Agreement are reasonable. If, however, a
court of competent jurisdiction shall hold any restriction to be unreasonable
as to time, geographic area, activities or otherwise, such restrictions shall
be deemed to be reduced to the extent necessary to make them reasonable, in
the opinion of such court.
8. If the Merger between Premier and First Virginia is consummated,
Wheeling covenants and represents that he will not attempt to enforce or seek
benefits from Wheeling's Change-in-Control Agreement with Premier dated
September 22, 1993.
9. This Agreement shall terminate if, for any reason, the Merger
between Premier and First Virginia is never consummated and the Agreement and
Plan of Reorganization is terminated.
10. At the request of either party, any controversy or claim arising
out of or relating to this Agreement, or the breach thereof, shall be settled
by arbitration administered by the American Arbitration Association under its
National Rules for the Resolution of Employment Disputes, and judgment upon
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Notwithstanding the above, if the arbitrator(s) find
that First Virginia has violated paragraph 3 herein, the arbitrator(s) shall
award Wheeling no more and no less than the amount to which Wheeling would be
entitled if, as of the date Wheeling is no longer employed by First Virginia
or a subsidiary thereof, Wheeling had been discharged other than for cause.
11. This Agreement shall be governed by and in accordance with the laws
of the Commonwealth of Virginia and may be amended with the mutual consent of
the parties hereto. In the event of any breach of this Agreement by Wheeling,
First Virginia or any subsidiary of First Virginia may institute and prosecute
proceedings in any court of competent jurisdiction either in law or in equity
to obtain damages for any breach of this Agreement or to enforce the specific
performance thereof by Wheeling.
<PAGE>
WITNESS the following signatures and seals as of the date and year
first above written.
ATTEST: FIRST VIRGINIA BANKS, INC.
/s/ Christopher M. Cole By: /s/ Barry J. Fitzpatrick (SEAL)
----------------------- -----------------------------
CHRISTOPHER M. COLE BARRY J. FITZPATRICK
Vice President and Chairman, President and Chief
Assistant Secretary Executive Officer
WITNESS:
/s/ Janice Lutz /s/ James R. Wheeling (SEAL)
----------------------- -----------------------------
JAMES R. WHEELING
EXHIBIT 21
BANKING SUBSIDIARIES OF FIRST VIRGINIA BANKS, INC.
1. First Virginia Bank
2. First Virginia Bank-Blue Ridge
3. First Virginia Bank-Colonial
4. First Virginia Bank-Commonwealth
5. First Virginia Bank of Tidewater
6. First Virginia Bank-Clinch Valley
7. First Virginia Bank-Franklin County
8. First Virginia Bank-Highlands
9. First Virginia Bank-Piedmont
10. First Virginia Bank-Southwest
11. First Virginia Bank-Mountain Empire
12. Tri-City Bank and Trust Company
13. First Vantage Bank-Tennessee
14. First Virginia Bank-Maryland
15. Farmers Bank of Maryland
16. Atlantic Bank
17. The Caroline County Bank
EXHIBIT 23(a)
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and the related Proxy Statement-Prospectus
of First Virginia Banks, Inc. for the registration of 3,624,295 shares of its
common stock and to the incorporation by reference therein of our report dated
January 21, 1997, with respect to the consolidated financial statements of
First Virginia Banks, Inc. inccluded in its Annual Report (Form 10-K) for the
year ended December 31, 1996, filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Washington, D.C.
March 26, 1997
<PAGE>
EXHIBIT 23(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-4 of our report dated January 15, 1997, with respect to
the consolidated financial statements of Premier Bankshares Corporation
incorporated by reference in its Annual Report on Form 10-K for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
Persinger & Company, L.L.C.
Beckley, West Virginia
March 26, 1997
<PAGE>
EXHIBIT 23(e)
CONSENT OF SCOTT & STRINGFELLOW
We consent to the use, quotation and summarization in the Registration
Statement on Form S-4 of our fairness opinion dated _________________, 1997,
rendered to the Board of Directors of Premier Bankshares Corporation in
connection with the merger of Premier Bankshares Corporation with and into
First Virginia Banks, Inc. and to the use of our name, and the statements with
respect to us, appearing in the Registration Statement.
Scott & Stringfellow, Inc.
Gary S. Penrose
Managing Director
Financial Institutions Group
Richmond, Virginia
March 26, 1997
EXHIBIT 24
POWER OF ATTORNEY
We, the undersigned Directors and Officers of First Virginia Banks,
Inc. ("First Virginia"), hereby constitute and appoint on this 12th day of
March, 1997, Thomas P. Jennings and Christopher M. Cole, and each of them,
with power of substitution, our true and lawful attorneys-in-fact with full
power to sign for us, in our names and in the capacities indicated below, a
Registration Statement on Form S-4 and all amendments thereto (including
Post-Effective Amendments), for the purpose of registering under the
Securities Act of 1933, as amended, up to 3,624,295 shares of First Virginia
Common Stock to be issued in connection with the merger of Premier Bankshares
Corporation into First Virginia.
Name Title
---- -----
/s/ Barry J. Fitzpatrick Chairman of the Board, President
------------------------------ and Chief Executive Officer
Barry J. Fitzpatrick
------------------------------ Director
E. Cabell Brand
/s/ Edward L. Breeden, III Director
------------------------------
Edward L. Breeden, III
/s/ Paul H. Geithner, Jr. Director
------------------------------
Paul H. Geithner, Jr.
/s/ L.H. Ginn, III Director
------------------------------
L. H. Ginn, III
------------------------------ Director
Gilbert R. Giordano
------------------------------ Director
T. Keister Greer
/s/ Elsie C. Gruver Director
------------------------------
Elsie C. Gruver
/s/ Edward M. Holland Director
------------------------------
Edward M. Holland
------------------------------ Director
Eric C. Kendrick
------------------------------ Director
John B. Melvin
------------------------------ Director
W. Lee Phillips, Jr.
------------------------------ Director
Josiah P. Rowe, III
/s/ Robert H. Zalakar Director
------------------------------
Robert H. Zalokar
/s/ Albert F. Zettlemoyer Director
------------------------------
Albert F. Zettlemoyer
/s/ Richard F. Bowman Senior Vice President and
------------------------------ Chief Financial Officer
Richard F. Bowman
EXHIBIT 99
PREMIER BANKSHARES CORPORATION
This proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints William R. Rakes and Jay Robert
Buchanan and each of them, Proxies of the undersigned, with power of
substitution, to vote all shares of Common Stock of Premier Bankshares
Corporation ("Premier") which the undersigned could vote if personally present
at the Special Meeting of Stockholders to be held May , 1997, or at any
adjournment or adjournments thereof.
PROPOSAL TO APPROVE THE AFFILIATION AND MERGER OF PREMIER WITH AND INTO FIRST
VIRGINIA BANKS, INC. ("FIRST VIRGINIA"), AS PROVIDED IN AND PURSUANT TO THE
AGREEMENT AND PLAN OF REORGANIZATION DATED AS OF OCTOBER 29, 1996 BETWEEN
PREMIER AND FIRST VIRGINIA, AND THE RELATED PLAN OF MERGER DATED AS OF OCTOBER
29, 1996 BETWEEN PREMIER AND FIRST VIRGINIA.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on the other side)
<PAGE>
The undersigned further gives the Proxies authority to vote according
to their best judgment with respect to any other matters properly coming before
the meeting and any adjournment or adjournments thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned. If no direction is given, this proxy will be voted
FOR the proposal to approve the affiliation and merger of Premier with and into
First Virginia.
The undersigned acknowledges receipt of the Notice of Special Meeting
of Stockholders and of the Proxy Statement-Prospectus, both dated April , 1997.
Please sign exactly as name(s) appear(s) below.
- --------------------------------------------
Signature
- --------------------------------------------
Signature, if held jointly
Date:_______________________________________
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
