EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of
March 13, 2001, by and between Hampton Roads Bankshares, Inc., a proposed bank
holding company organized under the laws of Virginia, with its principal office
in Chesapeake, Virginia (the "Holding Company"), and The Bank of Hampton Roads,
a banking corporation organized under the laws of the Commonwealth of Virginia,
with its main office in Chesapeake, Virginia (the "Bank") (the Holding Company
and Bank collectively the "Constituent Corporations").
WITNESSETH:
The respective Boards of Directors of the Holding Company and the Bank have
resolved that the reorganization of the Bank under a holding company structure,
pursuant to a statutory share exchange transaction under the Virginia Stock
Corporation Act (the "Share Exchange") in which the Bank will become a wholly-
owned subsidiary of the Holding Company, is in the respective best interests of
the Constituent Corporations and their shareholders. To that end, each such
Board has approved this Agreement and Plan of Reorganization.
NOW THEREFORE, in consideration of the mutual agreements set forth herein,
the Constituent Corporations agree as follows:
1. The Share Exchange. At the Effective Date of the Share Exchange, the
Bank shall become a banking subsidiary of the Holding Company. The Share
Exchange shall be effective upon the issuance of a Certificate of Share Exchange
by the Virginia State Corporation Commission upon filing of a Plan of Share
Exchange by the Constituent Corporations, substantially in the form attached
hereto as Appendix I.
2. Name; Articles of Incorporation; Bylaws; Offices. At the Effective
Date, the respective names, articles of incorporation and bylaws of the Holding
Company and Bank will not change. The main offices and branches of the Holding
Company and Bank immediately prior to the Share Exchange shall not change as a
result of the Share Exchange.
3. Conversion of Shares. Upon, and by reason of, the Share Exchange
becoming effective pursuant to the issuance of a Certificate of Share Exchange
by the Virginia State Corporation Commission (the "Effective Date"), no cash
shall be allocated to the shareholders of the Bank, and stock shall be issued
and allocated as follows:
(a) Each of the issued and outstanding shares of common stock of the
Bank ("Bank Common Stock") shall for all corporate purposes, and without any
action on the part of the holder thereof, automatically become and be converted
into one share of common stock of the Holding Company ("Holding Company Common
Stock"). Outstanding certificates representing shares of Bank Common Stock will
thereafter represent an equal number of shares of Holding Company Common Stock.
(b) Shares of Bank Common Stock issued and outstanding shall, by
virtue of the Share Exchange, continue to be issued and outstanding shares held
by the Holding Company.
4. Conversion of Stock Options. At the Effective Date, each unexercised
and theretofore unexpired outstanding option to purchase Bank Common Stock shall
be automatically exchanged for a new option to acquire, for the same aggregate
exercise price and under the same terms, the same number of shares of Holding
Company Common Stock. As soon as practicable thereafter, the Holding Company
will issue instruments representing new options to acquire Holding Company
Common Stock. Instruments representing Bank options may at any time thereafter
be surrendered to the Bank, acting as exchange agent, or such other or
additional exchange agent as the Bank may select (together with any transmittal
materials or endorsements required by the exchange agent). Each holder of Bank
options, upon the surrender of such instruments representing Bank options to the
Holding Company duly endorsed for transfer, will be entitled to receive in
exchange therefor replacement instrument(s) representing the aforementioned
number of Holding Company options, but holders will not be required to surrender
such Bank options.
5. Capital of the Bank. The capital, surplus and undivided profits of the
Bank at the Effective Date will be equal to the capital structure of the Bank at
December 31, 2000, adjusted, however, for capital contributions, normal earnings
and expenses, and other capital changes between December 31, 2000, and the
Effective Date.
6. Board of Directors; Officers. (a) At the Effective Date, the members
of the boards of directors of the Bank and the Holding Company shall continue in
office as the directors of the Bank and the Holding Company, respectively,
except as otherwise determined in the discretion of the Boards prior to the
Effective Date, until the next annual meeting or until such time as their
successors have been elected and qualified.
(b) At the Effective Date, the respective officers of the Bank and
the Holding Company shall continue to serve in their then current positions
until such time as their successors have been elected or appointed.
7. Rights of Dissenting Shareholders. Shareholders of the Bank who
dissent from the Share Exchange will be entitled to the dissenters' rights and
remedies set forth in Article 15 of the Virginia Stock Corporation Act, Sections
13.1-729 et sec.
8. Conditions to the Share Exchange. Consummation of the Share Exchange
is conditioned upon (i) the approval of this Agreement by the affirmative vote
of the shareholders owning more than two-thirds of the outstanding shares of
common stock of the Bank at a meeting to be held on the call of its board of
directors, (ii) the receipt of the required regulatory approvals, and (iii) the
receipt of an opinion of counsel as to the tax-free nature of the transaction.
Upon the satisfaction of the foregoing conditions, the Share Exchange shall
become effective at the time specified in a Certificate of Share Exchange to be
issued by the Virginia State Corporation Commission approving the Share
Exchange.
9. Termination. This Agreement may be terminated by the unilateral action
of either of the boards of directors of the Bank or the Holding Company prior to
the approval of the Agreement by the Bank's shareholders or by the mutual
consent of the respective boards of directors of the Bank and the Holding
Company after the Bank's shareholders approve the transaction. Upon termination
for any reason, this Agreement shall be void and of no further effect, and there
shall be no liability by reason of this Agreement or the termination thereof on
the part of the Bank or the Holding Company or any of their directors, officers,
employees, agents or shareholders.
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WITNESS, the following signatures and seals for the parties, each hereunto
set by its President and attested by its Secretary, pursuant to duly authorized
resolutions of its Board of Directors.
ATTEST: THE BANK OF HAMPTON ROADS
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxx
---------------------------------- --------------------------------------
Secretary Xxxx X. Xxxxxx
President and Chief Executive Officer
ATTEST: HAMPTON ROADS BANKSHARES, INC.
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxx
---------------------------------- --------------------------------------
Secretary Xxxx X. Xxxxxx
President and Chief Executive Officer
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APPENDIX I
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PLAN OF SHARE EXCHANGE
BETWEEN
THE BANK OF HAMPTON ROADS
AND
HAMPTON ROADS BANKSHARES, INC.
Pursuant to this Plan of Share Exchange ("Plan of Share Exchange"), THE
BANK OF HAMPTON ROADS, a Virginia corporation (the "Bank"), shall become a
wholly owned subsidiary of HAMPTON ROADS BANKSHARES, INC. (the "Holding
Company"), a Virginia corporation pursuant to a share exchange under Section
13.1-717 of the Virginia Stock Corporation Act.
ARTICLE 1
Terms and Conditions of the Share Exchange
1.1 The Share Exchange. Pursuant to the Agreement and Plan of
Reorganization made and entered into as of March 13, 2001 (the "Reorganization
Agreement"), at the Effective Date (as defined in the Reorganization Agreement),
the Bank shall become a wholly owned subsidiary of the Holding Company through
the exchange of each outstanding share of common stock of the Bank for shares of
the common stock of the Holding Company in accordance with Section 2.1 of this
Plan of Share Exchange and pursuant to a share exchange under Section 13.1-717
of the Virginia Stock Corporation Act (the "Share Exchange"). At the Effective
Date, the Share Exchange shall have the effect as provided in Section 13.1-721
of the Virginia Stock Corporation Act.
1.2 Name. When the Share Exchange is effected, the names of the Bank and
the Holding Company as set forth in their respective Articles of Incorporation
shall not change.
1.3 Articles of Incorporation and Bylaws. The respective Articles of
Incorporation and Bylaws of the Holding Company and the Bank in effect
immediately prior to the consummation of the Share Exchange shall remain in
effect following the Effective Date until otherwise amended or repealed.
ARTICLE 2
Manner of Exchanging Shares
2.1 Exchange of Shares. Upon, and by reason of, the Share Exchange
becoming effective pursuant to the issuance of a Certificate of Share Exchange
by the Virginia State Corporation Commission, no cash shall be allocated to the
shareholders of the Bank, and stock shall be issued and allocated as follows:
(a) Each share of common stock, par value $0.625 per share, of the
Bank ("Bank Common Stock") issued and outstanding immediately prior to the
Effective Date shall be entitled to the exchange rights set forth in this
Section 2.1 or to rights under Article 15 of the Virginia Stock Corporation Act
as set forth in Section 2.4 below. On the Effective Date, each shareholder of
the Bank immediately prior to the Effective Date shall be entitled to exchange
each such share of Bank Common Stock held for one share of Holding Company
Common Stock. Outstanding certificates representing shares of Bank Common Stock
will thereafter represent an equal number of shares of Holding Company Common
Stock. Shareholders shall maintain the same proportional share interest in the
Holding Company as they currently hold in the Bank, except for nominal changes
in interests resulting from the exercise, if any, of dissenting shareholders'
rights under Virginia law, as further specified in Section 2.4 below. After the
Effective Date, each former holder of Bank Common Stock shall have the right to
receive any dividend or other distribution payable at or as of any time after
the Effective Date to holders of record of Holding Company Common Stock at or as
of any time after the Effective Date.
(b) Shares of Bank Common Stock issued and outstanding shall, by
virtue of the Share Exchange, continue to be issued and outstanding shares and
shall be denoted on the books and records of the Bank as held of record by the
Holding Company.
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2.2 Exchange of Stock Options. At the Effective Date, each unexercised and
theretofore unexpired outstanding option to purchase Bank Common Stock shall be
automatically converted into and become a new option to acquire, for the same
aggregate exercise price and under the same terms, the same number of shares of
Holding Company Common Stock. Each holder of Bank options, upon the surrender
of such instruments representing Bank options to the Holding Company duly
endorsed for transfer, will be entitled to receive in exchange therefor
instrument(s) representing an equivalent number of Holding Company options, but
holders will not be required to surrender Bank options.
2.3 Voting and Dividends. The shareholders of the Bank entitled to receive
the consideration described herein shall be entitled to vote after the Effective
Date at any meeting of Holding Company shareholders the number of whole shares
of Holding Company Common Stock for which their shares of Bank Common Stock are
exchanged, regardless of whether such holders continue to hold certificates
representing shares of the Bank Common Stock. Dividends or other distributions
payable to the holders of record of Holding Company Common Stock at or as of any
time after the Effective Date shall be paid to such holders and any holders of
any certificate representing shares of Bank Common Stock issued and outstanding
at the Effective Date.
2.4 Rights of Dissenting Shareholders. Shareholders of the Bank who object
to the Share Exchange will be entitled to the dissenters' rights and remedies
set forth in sections 13.1-729 through 13.1-741 of the Virginia Stock
Corporation Act.
ARTICLE 3
Termination
This Plan of Share Exchange may be terminated at any time prior to the
Effective Date by the parties hereto as provided in Article 9 of the
Reorganization Agreement.
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