Exhibit 2
AGREEMENT AND PLAN OF SHARE EXCHANGE
THIS AGREEMENT AND PLAN OF SHARE EXCHANGE (the "Plan"), is made this
22nd day of September, 1999, by and between Virginia Commerce Bank, a Virginia
commercial bank (the "Bank"), and Virginia Commerce Bancorp, Inc., a Virginia
corporation (the "Corporation").
BACKGROUND OF THE PLAN
The Boards of Directors of the Bank and the Corporation desire to
establish a holding company structure whereby the Bank will become a
wholly-owned subsidiary of the Corporation. The Boards of Directors of the Bank
and the Corporation have deemed advisable an exchange of shares between the Bank
and the Corporation in order to establish the Bank as a wholly-owned subsidiary
of the Corporation in the manner and upon the terms and conditions herein set
forth.
NOW, THEREFORE, , in consideration of the premises and the mutual
covenants and agreements set forth herein, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Exchange of Shares. On the Effective Date (as hereinafter defined),
each of the issued and outstanding shares of Common Stock of the Bank, par value
$1.00 per share (the "Bank Common Stock"), shall be exchanged for one share of
Common Stock of the Corporation, par value $1.00 per share (the "Corporation
Common Stock"), in a statutory share exchange pursuant to Section 13.1-717 of
the Virginia Stock Corporation Act, and in the manner set forth in Section 3
hereof. As a result of such share exchange, the Corporation shall become the
sole stockholder of the Bank and the holders of all of the issued and
outstanding Bank Common Stock shall become the holders of all the issued and
outstanding Corporation Common Stock.
2. Effective Date. The Plan shall become effective at the later of (i)
date and time at which the State Corporation Commission of Virginia accepts the
Articles of Share Exchange for record, and (ii) the date and time set forth in
the Articles of Share Exchange.
3. Manner of Exchange. The manner and basis of exchanging the Bank
Common Stock to be acquired for the Corporation Common Stock is as follows:
On the Effective Date, each share of Bank Common Stock then issued
and outstanding shall, without any action on the part of the holder
thereof, be converted into one share of Corporation Common Stock;
certificates representing Bank Common Stock shall thereafter represent
the right to receive certificates representing Corporation Common Stock
in the aforementioned proportions; such Bank Common Stock certificates
may at any time thereafter be exchanged by the holders thereof for new
certificates for the appropriate number of Corporation Common Stock.
4. Manner of Converting Rights. The manner and basis of converting
options, warrants or other rights to acquire Bank Common Stock into options,
warrants or other rights to acquire Corporation Common Stock is as follows:
On the Effective Date, all rights with respect to Bank Common Stock
existing pursuant to stock options granted by the Bank under the 1989
Virginia Commerce Bank Stock Option Plan and the 1998 Virginia Commerce
Bank Stock Option Plan (the "Bank Stock Option Plans"), and warrants to
purchase shares of Bank common stock which are outstanding on the
Effective Date, whether or not then exercisable, shall be converted
into and become options, or warrants, as the case may be, with respect
to Corporation Common Stock, and the Corporation shall assume each of
such Bank options and warrants in accordance with the terms of the
respective plans or other documents under which it was issued and the
certificate by it is evidenced. On the Effective Date, Bank Stock
Option Plans shall be converted into and shall become the Virginia
Commerce Bancorp, Inc. 1989 Stock Option Plan and the Virginia Commerce
Bancorp, Inc. 1998 Stock Option Plan and the Corporation shall
administer such Plan in accordance with their respective terms. From
and after the
Effective Date, (i) each such Bank option or warrants, as the case may
be, may be exercised solely for shares of Corporation Common Stock,
(ii) the number of shares of Corporation Common Stock subject to such
Bank option or warrant shall be equal to the number of shares of Bank
Common Stock subject to such Bank option or warrant immediately prior
to the Effective Date, and (iii) the per share exercise price under
each such Bank option or warrant shall remain the same exercise price
for each Corporation option or warrant into which the Bank option or
warrant was converted. It is intended that the foregoing assumption
shall be undertaken in a manner that will not constitute a
"modification" as defined in Section 425 of the Internal Revenue Code
as to any stock option which is an "incentive stock option."
5. Assumption of Plans. At the Effective Date, the Corporation shall
adopt, and shall be deemed to have adopted, the Virginia Commerce Bank 1989
Stock Option Plan, the Virginia Commerce Bank 1998 Stock Option Plan and the
options issued thereunder. References contained in such plans to the Bank shall,
at and after the Effective Date, be deemed to refer to the Corporation, except
that the class of persons eligible to receive awards under the plans shall be
employees or directors of the Corporation or any direct or indirect subsidiary
of the Corporation.
6. Conditions. Consummation of the share exchange provided for herein
shall, except as may be waived by the Board of Directors of both parties hereto,
be subject to the fulfillment of each of the following conditions:
(a) the Board of Governors of the Federal Reserve System
shall have approved an application for the Corporation
to become a bank holding company:
(b) the Commissioner of the Virginia Bureau of Financial
Institutions shall have approved an application for the Corporation to acquire
control of the Bank;
(c) the receipt of all permits, approvals and consents of any
governmental body or agency or third party which the Bank or the Corporation may
reasonably deem necessary or appropriate;
(d) the Bank and the Corporation shall have received an
opinion of counsel as to the tax free character of the share exchange, which
opinion shall be in form and substance satisfactory to each of them;
(e) the stockholders of the Bank shall have approved this Plan
by a vote of 50.1% or more of the outstanding shares of Bank Common Stock and in
the manner required by the Bank's Charter and the Virginia Stock Corporation
Act; and
(f) the Corporation Common Stock shall have been approved for
listing upon the Nasdaq National Market upon notice of issuance.
7. Termination and Abandonment. The Plan may be terminated without
liability to either party hereto and the transactions abandoned at any time
prior to the Effective Date, whether before or after approval by the
stockholders of the Bank:
(a) by the Board of Directors of either the Bank or the
Corporation in the event that the conditions referred to in Section 6 hereof
have not been fulfilled or waived on or prior to June 30, 2000;
(b) by mutual agreement of the Boards of Directors of the Bank
and the Corporation if for any other reason consummation of the share exchange
is inadvisable in the opinions of the respective Boards.
8. Amendment and Waiver. This Plan may be amended by the parties hereto
at any time. This Plan may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. Any term, condition or provision
of this Plan may be waived in writing at any time by the party which is, or
whose shareholders are, entitled to the benefits thereof.
9. Expenses. All of the expenses relating to the Plan and the
transactions contemplated thereby shall be borne by the Bank.
IN WITNESS WHEREOF, the Bank and the Corporation have caused the Plan
to be duly executed and their corporate seals to be hereunto affixed and
attested as of the date first above written.
ATTEST: [SEAL] VIRGINIA COMMERCE BANK
/s/ Xxxxxx X. L'Hommedieu /s/ Xxxxx X. Converse
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Xxxxxx X. L'Hommedieu, Secretary Xxxxx X. Converse, President
ATTEST: [SEAL] VIRGINIA COMMERCE BANCORP, INC.
/s/ Xxxxxx X. L'Hommedieu /s/ Xxxxx X. Converse
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Xxxxxx X. L'Hommedieu, Secretary Xxxxx X. Converse, President
