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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 11, 1998
Village Bancorp, Inc.
(Exact name of Registrant as Specified In Charter)
Connecticut 0-11786 06-1076844
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
25 Prospect Street Ridgefield, Connecticut 06877
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (203) 438-9551
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Item 5. Other Events
On November 11, 1998, Village Bancorp ("Village") entered into an Agreement
and Plan of Merger (the "Agreement") pursuant to which Village will merge with
Webster Financial Corporation ("Webster") in a stock-for-stock or, at the
election of Village shareholders, a stock-for-cash exchange (the "Merger"). The
Merger is intended to be tax-free for Village shareholders receiving Webster
stock. The amount of cash paid to Village shareholders will be limited to 20% of
the total Merger consideration. Village shareholders receiving Webster stock
will receive $23.50 in Webster stock as long as Webster's share price is not
greater than $27.50 and not less than $19.50. If Webster's share price exceeds
$27.50, the exchange ratio will be 0.8545 shares of Webster stock for each share
of Village stock, and if Webster's share price is below $19.50, the exchange
ratio will be 1.2051 shares of Webster stock for each share of Village stock. If
Webster's share price is below $17.55, Village has the right to terminate the
Agreement, subject to Webster's right to increase the exchange ratio to the
fraction equal to $21.15 divided by Webster's share price. The Merger must be
approved by Village shareholders and regulatory authorities and is subject to
various customary closing conditions. In connection with the Agreement, Village
and Webster entered into an Option Agreement, pursuant to which Village granted
Webster an option, exercisable in certain circumstances, to purchase an
aggregate of 388,466 newly issued shares of Village common stock. Webster's
press release relating to the Merger dated November 11, 1998 is attached as
Exhibit 99.1 to this Form 8-K and incorporated herein by reference.
Item 7. Financial Statement, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Press Release dated November 11, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VILLAGE BANCORP, INC.
By: /s/ Robert V. Macklin
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Name: Robert V. Macklin
Title: President & CEO
November 17, 1998
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EXHIBIT INDEX
99.1 Press Release dated November 11, 1998.
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts:
Media: Mike Bazinet, 203-578-2391
Chris Capot, 203-578-2461
Investors: James Sitro, 203-578-2399
WEBSTER ANNOUNCES ACQUISITION OF VILLAGE BANCORP
WATERBURY, Nov. 11, 1998 -- Webster Financial Corporation (Nasdaq: WBST)
today announced that it has reached a definitive agreement to acquire Village
Bancorp, Inc. (Nasdaq: VBNK), the holding company for Village Bank & Trust
Company, for $23.50 per share in a tax-free, stock-for-stock exchange valued at
approximately $46.4 million.
Village is a state-chartered commercial bank headquartered in Ridgefield
with total assets of $230 million and six banking offices in the communities of
Danbury, Wilton, Westport, and New Milford. With the additions of Village and
Essex-based Maritime Bank & Trust, announced on Nov. 4, Webster will have $9.5
billion in assets.
The acquisition is expected to contribute positively to Webster's earnings
per share in the first year. The purchase price is approximately 2.7 times
Village's book value and 20.6 times annualized earnings for the last six months.
Webster expects to account for the transaction as a purchase.
The definitive agreement, which has been approved by both companies' boards
of directors, is subject to approval by Village Bancorp's shareholders and
regulatory authorities. Webster expects the transaction to close in the first
quarter of 1999.
"Our partnership with Village Bank & Trust will extend Webster's presence
in Fairfield and Litchfield Counties and strengthen our franchise," said James
C. Smith, Webster chairman and chief executive officer. "Customers of Webster
and Village Bank & Trust will benefit from having greater convenience through
our extensive network of branches and ATMs. Village customers will enjoy a
broader selection of services."
Based on the terms of the agreement, Village Bancorp shareholders will
receive $23.50 per Village common share if Webster's stock price is at or below
$27.50 per share during the pricing period. Above the ceiling price, the
exchange ratio fixes at 0.855 Webster shares. If Village shareholders prefer,
Webster will pay up to 20 percent of the merger consideration in cash rather
than stock. Webster
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intends to buy back in open-market transactions, the equivalent number of
Webster shares issued to Village shareholders.
Robert V. Macklin, Village Bank & Trust president and chief executive
officer, said, "Our board of directors believes a merger with Webster best
serves the long-term interests of our shareholders, customers and employees. We
will enhance our ability to provide financial services, including expanded
business banking services as well as trust and investment management services,
insurance services, and PC banking. Our institutions share a strong commitment
to Connecticut. Following the merger, Village Bank & Trust customers will be
able to transact business at all Webster Bank locations and will benefit from
Webster's broad product offerings."
"Village Bank & Trust customers should continue to bank as they normally
do," Smith said. "The transition to Webster's systems will be seamless, and
customers should not experience any inconvenience.
"Village Bank & Trust's six offices will remain open and continue to serve
their communities. This merger nearly doubles the number of our branches in
Fairfield County, gives us another branch in a prime Litchfield County
community, and positions us for further expansion," Smith said.
Webster Bank was founded in 1935 and is a leading Connecticut-based
financial institution. Webster delivers consumer banking, commercial banking,
mortgage, insurance, and trust and investment management services to
individuals, families and businesses.
Webster Bank has $9.2 billion in assets and operates through a network of
more than 100 banking offices, three commercial banking centers, and more than
174 ATMs, in addition to telephone banking, video banking and PC banking.
Webster has the number one or number two deposit market share in its primary
markets of Hartford, New Haven and Litchfield counties.
Webster is also the second-largest mortgage lender in Connecticut and a
leading, full-service commercial lender. Webster Trust, the bank's trust and
investment management subsidiary, is the second-largest bank trust company based
in Connecticut. Webster's insurance subsidiary, Damman Insurance Associates, is
one of the largest agencies in the state.
