BAY BANKS OF VIRGINIA, INC. Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
Upon completion of the Merger, in exchange for each share of Bay Banks common stock, Bay Banks shareholders will receive 0.5000 shares of Blue Ridge's common stock, plus cash in lieu of any fractional shares. Each option to purchase shares of Bay Banks's common stock, whether vested or unvested, will convert into an option to acquire shares of Blue Ridge's common stock, on terms and conditions adjusted as provided for in the Agreement. Each Bay Banks restricted stock award that is unvested or contingent will vest and convert into the right to receive the merger consideration payable under the Agreement with respect to shares of Bay Banks's common stock.
Upon completion of the Merger, the boards of directors of Blue Ridge and
The Merger is intended to be a tax-free reorganization under Section 368(a) of the Internal Revenue Code.
The boards of directors of each of Blue Ridge and Bay Banks have unanimously
approved the Agreement. The Agreement contains customary representations,
warranties and covenants from both Blue Ridge and Bay Banks. The consummation of
the Merger is subject to various conditions, including (i) approval of the
Agreement by shareholders of Blue Ridge and Bay Banks, (ii) receipt of all
required regulatory approvals, (iii) the absence of any law or order prohibiting
the closing of the Merger, (iv) the effectiveness of the registration statement
to be filed by Blue Ridge with the
The Agreement provides certain termination rights for both Blue Ridge and Bay
Banks and further provides that a termination fee of
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Furthermore, in connection with the execution of the Agreement, each of the current directors on boards of Bay Banks and Blue Ridge, respectively, have entered into certain Affiliate Agreements (described in Item 8.01 below).
The foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated by reference into this Item 1.01.
The representations, warranties and covenants contained in the Agreement were
made only for purposes of the Agreement and as of specific dates, were solely
for the benefit of the parties to the Agreement, will not survive consummation
of the Merger unless otherwise specified in the Agreement, and are subject to
limitations agreed upon by the contracting parties, including being qualified by
confidential disclosures exchanged between the parties in connection with the
execution of the Agreement. The representations and warranties may have been
made for the purposes of allocating contractual risk between the parties to the
Agreement instead of establishing these matters as facts, and may be subject to
standards of materiality applicable to the contracting parties that differ from
those applicable to investors. Accordingly, investors should not rely on the
representations, warranties, and covenants or any description thereof as
characterizations of the actual state of facts or conditions. Moreover,
information concerning the subject matter of the representations and warranties
may change after the date of the Agreement, which subsequent information may or
may not be fully reflected in the parties' public disclosures. Accordingly, the
Agreement is included with this filing only to provide investors with
information regarding the terms of the Agreement, and not to provide investors
with any other factual information regarding Blue Ridge or Bay Banks, their
respective affiliates or their respective businesses. The Agreement should not
be read alone, but should instead be read in conjunction with other information
regarding Blue Ridge, Bay Banks and their respective affiliates or their
respective businesses, the Agreement and the Merger that will be contained in or
incorporated by reference into the Registration Statement on Form S-4 of Blue
Ridge that will include a prospectus of Blue Ridge and a joint proxy statement
of Blue Ridge and Bay Banks, as well as in the Forms 10-K, Forms 10-Q, Forms 8-K
and other filings that Bay Banks makes with the
Item 8.01. Other Events. Affiliate Agreements
Simultaneous with the execution of the Agreement, Bay Banks and Blue Ridge entered into Affiliate Agreements with each of the directors on the boards of Bay Banks and Blue Ridge. Each director, as a shareholder party to an Affiliate Agreement, has agreed, among other things, to vote shares of Bay Banks's common stock or Blue Ridge's common stock, as applicable, owned by such shareholder and over which such shareholder has sole voting and investment power in favor of the Merger and the Agreement (and related plan of merger), and against any competing acquisition proposal, any action, proposal, transaction or agreement which could reasonably be expected to result in a breach of the Agreement or the Affiliate Agreement, or other action, proposal or transaction that could reasonably be expected to impede, interfere with, delay, discourage, adversely affect or inhibit the timely consummation of the Merger or the fulfillment of the parties' respective conditions under the Agreement. The Affiliate Agreements will terminate in certain circumstances, including upon consummation of the Merger or the termination of the Agreement in accordance with its terms.
The foregoing description of the Affiliate Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Affiliate Agreements, forms of which are attached as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K and are incorporated by reference herein.
Additional Information About the Merger and Where to Find It
In connection with the proposed merger, Blue Ridge intends to file with the
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READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS WHEN
THEY BECOME AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE
Blue Ridge, Bay Banks and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Blue Ridge and Bay Banks in connection with the proposed Merger. Information about the directors and executive officers of Blue Ridge and Bay Banks will be included in the joint proxy statement/prospectus when it becomes available. Additional information regarding the interests of those persons and other persons who may be deemed participants in the transaction may be obtained by reading the joint proxy statement/prospectus regarding the proposed Merger when it becomes available. You may obtain free copies of each document as described in the preceding paragraph.
Cautionary Note Regarding Forward-Looking Statements
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about (i) the benefits of the Merger, including future financial and operating results, cost savings, enhancements to revenue and accretion to reported earnings that may be realized from the Merger; (ii) Blue Ridge's and Bay Banks's plans, objectives, expectations and intentions and other statements about the Merger; and (iii) other statements identified by words such as "may", "assumes", "approximately", "will", "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "targets", "projects", or words of similar meaning generally intended to identify forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of the respective management of Blue Ridge and Bay Banks and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Blue Ridge and Bay Banks. In addition, these forward-looking statements are subject to various risks, uncertainties and assumptions with respect to future business strategies and decisions that are subject to change and difficult to predict with regard to timing, extent, likelihood and degree of occurrence. As a result, actual results may differ materially from the anticipated results discussed in these forward-looking statements because of possible uncertainties.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the businesses of Blue Ridge and Bay Banks may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; (2) the expected growth opportunities or cost savings from the Merger may not be fully realized or may take longer to realize than expected; (3) deposit attrition, operating costs, customer losses and business disruption following the Merger, including adverse effects on relationships with employees and customers, may be greater than expected; (4) the regulatory approvals required for the Merger may not be obtained on the proposed terms or on the anticipated schedule; (5) the shareholders of Blue Ridge or Bay Banks may fail to approve the Merger; (6) economic, legislative or regulatory changes, including changes in accounting standards, may adversely affect the businesses in which Blue Ridge and Bay Banks are engaged; (7) the interest rate environment may further compress margins and adversely affect net interest income; (8) results may be adversely affected by continued diversification of assets and adverse changes to credit quality; (9) competition from other financial services companies in Blue Ridge's and Bay Banks's markets could adversely affect operations; (10) an economic slowdown could adversely affect credit quality and loan originations; (11) the COVID-19 pandemic is adversely affecting Blue Ridge, Bay Banks, and their respective customers, employees and third-party service providers; the adverse impacts of the pandemic on their respective business, financial position, operations and prospects have been material, and it is not possible to accurately predict the extent,
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severity or duration of the pandemic or when normal economic and operation
conditions will return; and (12) other factors that may affect future results of
Blue Ridge and Bay Banks, including: changes in asset quality and credit risk;
the inability to sustain revenue and earnings growth; changes in interest rates
and capital markets; inflation; customer borrowing, repayment, investment and
deposit practices; the impact, extent and timing of technological changes;
capital management activities; and other actions of bank regulatory agencies and
legislative and regulatory actions and reforms. Additional factors, that could
cause actual results to differ materially from those expressed in the
forward-looking statements are discussed in Blue Ridge's and Bay Banks's reports
(such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K) filed with the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 2.1 Agreement and Plan of Reorganization, dated as ofAugust 12, 2020 , between Blue Ridge Bankshares, Inc. andBay Banks of Virginia, Inc. 99.1 Form of Affiliate Agreement, dated as ofAugust 12, 2020 , by and among Blue Ridge Bankshares, Inc.,Bay Banks of Virginia, Inc. , and certain shareholders ofBay Banks of Virginia, Inc. 99.2 Form of Affiliate Agreement, dated as ofAugust 12, 2020 , by and among Blue Ridge Bankshares, Inc.,Bay Banks of Virginia, Inc. , and certain shareholders of Blue Ridge Bankshares, Inc. 104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.
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