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As filed with the Securities and Exchange Commission on June 1, 2007 | Registration No. 333-142331 |
UNDER
THE SECURITIES ACT OF 1933
West Virginia | 6711 | 55-0641179 | ||
(State or Other Jurisdiction | (Primary Standard Industrial | (I. R. S. Employer | ||
of Incorporation or Organization) | Classification Code Number) | Identification Number) |
Charleston, West Virginia 25301
(304) 348-8400
United Bankshares, Inc.
P. O. Box 393
500 Virginia Street, East
Charleston, West Virginia 25301
(304) 348-8400
Sandra M. Murphy, Esq. | Wayne A. Whitham, Jr., Esq. | |
Bowles Rice McDavid Graff & Love LLP | Williams Mullen | |
600 Quarrier Street | 1021 East Cary Street | |
P. O. Box 1386 | P.O. Box 1320 | |
Charleston, West Virginia 25325-1386 | Richmond, Virginia 23218-1320 | |
(304) 347-1131 | (804)783-6473 |
Proposed Maximum | Proposed Maximum | |||||||||||||
Title of Each Class of | Amount to Be | Offering Price Per | Aggregate Offering | Amount of | ||||||||||
Securities to Be Registered | Registered(1) | Unit | Price(2) | Registration Fee | ||||||||||
Common Stock, par value $2.50 per share | 3,648,817 shares | Not applicable | $ 122,955,168.57 | $ 3,774.72 | ||||||||||
(1) | The number of shares of common stock, par value $2.50 per share of United Bankshares, Inc. to be registered pursuant to this Registration Statement represents the maximum number of shares issuable by United Bankshares, Inc. upon consummation of the merger with Premier Community Bankshares, Inc. | |
(2) | The proposed maximum aggregate offering price is estimated solely to determine the registration fee and reflects the market price of Premier Community Bankshares, Inc. common stock to be exchanged for United Bankshares, Inc. common stock in connection with the merger, computed in accordance with Rule 457(c) and Rule 457(f) under the Securities Act of 1933, as amended, based upon the average of the high and low sales prices ($32.27 and $32.27) of Premier Community Bankshares, Inc. common stock as reported on The Nasdaq Capital Market on May 29, 2007, less the amount of cash to be paid by United Bankshares, Inc. in connection the merger ($71,829,488.00). | |
(3) | United Bankshares, Inc. has previously paid $3,663.24 of the filing fee. | |
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President and Chief Executive Officer
Premier Community Bankshares, Inc.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 10 , 2007
1. | The election of four directors to serve for terms of three years each expiring at the 2010 annual meeting of shareholders, or until their successors are elected and qualify (or, if the merger described in the second proposal below is consummated, until the effective date of the merger). (See Proposal One.) | ||
2. | A proposal to approve and adopt the Agreement and Plan of Reorganization dated as of January 26, 2007, between Premier Community Bankshares, Inc. and United Bankshares, Inc. and the transactions contemplated thereby. The reorganization agreement provides that Premier Community Bankshares will merge with and into a subsidiary of United Bankshares, upon the terms and subject to the conditions set forth in the reorganization agreement, as more fully described in the accompanying proxy statement/prospectus. (See Proposal Two.) | ||
3. | A proposal to adjourn the meeting to a later date or dates, if necessary, to permit further solicitation of proxies in the event there are not sufficient votes at the time of the meeting to approve the matters to be considered by the shareholders at the meeting, as more fully described in the accompanying proxy statement/prospectus. (See Proposal Three.) | ||
4. | Such other matters as may properly come before the annual meeting. |
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By Order of the Board of Directors | ||
June 1, 2007 | /s/ Donald L. Unger President and Chief Executive Officer | |
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Annex A – | Agreement and Plan of Reorganization dated as of January 26, 2007, between Premier Community Bankshares, Inc. and United Bankshares, Inc. |
Annex B – | Opinion of Davenport & Company LLC, dated January 26, 2007, to the board of directors of Premier Community Bankshares, Inc. |
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United Bankshares, Inc. | Premier Community Bankshares, Inc. | |
514 Market Street | 4095 Valley Pike | |
Parkersburg, West Virginia 26102 | Winchester, Virginia 22602 | |
Attention: Jennie Singer | Attention: Barbara Morris | |
Telephone: (304) 424-8800 | Telephone: (540) 869-6600 |
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ABOUT THE SHAREHOLDER MEETING AND THE MERGER
Q: | What will shareholders be voting on at the annual meeting? | |
A: | Shareholders will be voting on the following three matters: |
• | The election of four directors. The directors will be elected for terms of three years each expiring at the 2010 annual meeting of shareholders. We will shorten the end of these terms to the effective date of the merger if the merger of Premier Community Bankshares and United Bankshares is completed. | ||
• | A proposal to approve and adopt the reorganization agreement between Premier Community Bankshares and United Bankshares and the transactions contemplated thereby. | ||
• | A proposal to adjourn the meeting to a later date or dates, if necessary, to permit further solicitation of proxies in the event there are not sufficient votes at the time of the meeting to approve the matters to be considered by the shareholders at the meeting. |
Shareholders will also consider any other matters that may properly come before the meeting. | ||
Q: | Why is Premier Community Bankshares proposing the merger? | |
A: | We believe the proposed merger is in the best interests of Premier Community Bankshares and its shareholders. Our board of directors believes that combining with United Bankshares provides significant value to our shareholders and provides those shareholders who elect to receive stock in the merger the option to participate in the opportunities for growth offered by the combined company. | |
You should review the reasons for the merger described in greater detail under the caption “– Background of the Merger; Board Recommendations and Reasons for the Merger” beginning on page 66. | ||
Q: | When and where is the shareholder meeting? | |
A: | The annual meeting is scheduled to take place on Tuesday, July 10, 2007, at 10:00 a.m., local time, at the Hampton Inn, 9800 Winchester Road, Front Royal, Virginia. | |
Q: | What does the Premier Community Bankshares board of directors recommend? | |
A: | The Premier Community Bankshares board of directors has approved the reorganization agreement. The Premier Community Bankshares board recommends that shareholders vote “FOR” the proposal to approve the reorganization agreement and the transactions contemplated thereby. | |
The Premier Community Bankshares board of directors also recommends that the shareholders vote for all four nominees in the election of directors. |
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Q: | What will shareholders receive for their stock? | |
A: | For each share of Premier Community Bankshares common stock that you own, you may request to receive: |
(1) | $34.00 in cash; or | ||
(2) | 0.93 shares of United Bankshares common stock. |
Shareholders will be able to elect to receive cash, shares of United Bankshares common stock, or a combination of cash and stock for their shares of Premier Community Bankshares common stock, subject to the allocation and prorationing mechanism described in this proxy statement/prospectus in greater detail under the caption “Cash or Common Stock Election; Surrender of Certificates” beginning on page 62 and “Allocation and Proration Procedures” beginning on page 64. | ||
Q: | What must shareholders do to elect to receive cash or United Bankshares common stock? | |
A: | To elect to receive cash or United Bankshares common stock for any or all of your shares of Premier Community Bankshares common stock, you must indicate in the place provided on the election form, which you will receive in a separate mailing, the number of shares with respect to which you prefer to receive cash or stock, sign the form, and return the form in the separate envelope provided so that it is received prior to 5:00 p.m. Eastern time on July 5, 2007, which we refer to as the election deadline. | |
You will be able to make one of the following elections on the election form: |
• | to elect to receive shares of United Bankshares common stock with respect to all of your shares of Premier Community Bankshares common stock; | ||
• | to elect to receive cash with respect to all of your shares of Premier Community Bankshares common stock; | ||
• | to elect to receive shares of United Bankshares common stock with respect to some of your shares of Premier Community Bankshares common stock and cash with respect to the remainder of your shares; or | ||
• | to indicate that you make no election, and thus have no preference, with respect to your shares of Premier Community Bankshares common stock. |
If you do not submit an election form prior to the election deadline, you will be deemed to have indicated that you are making no election, and thus have no preference, with respect to your shares of Premier Community Bankshares common stock. See “Cash or Common Stock Election; Surrender of Certificates” beginning on page 62. | ||
Q: | Can I revoke or change my election after I mail my form of election? | |
A: | Yes. You may revoke or change your election at any time before the election deadline. You can do this by sending a written notice of such revocation or change in your election to the exchange agent at the address contained on the election form. |
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If you revoke your election form and then do not re-submit an election form that is timely, you will be deemed to have indicated that you are making no election with respect to your shares of Premier Community Bankshares common stock. | ||
Q: | Are shareholders guaranteed to receive the amount of stock or cash that they request on their election form? | |
A: | No. The reorganization agreement provides that at least 50% and no more than 65% of the total number of shares of Premier Community Bankshares common stock will be converted into common stock of United Bankshares. It is possible, therefore, that if you elect stock (or cash) for all or a portion of your shares of Premier Community Bankshares common stock, you could receive a different proportion of stock and cash than you elected. United Bankshares will make any allocation adjustments after the closing of the merger, based on the election forms that were timely received. | |
If the total number of shares of Premier Community Bankshares common stock with respect to which a stock election has been made (which we will refer to as the Stock Election Number) is less than 50% of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger, re-allocations will be made, first to elections that did not specify either cash or stock and then to cash elections, so that the total number of shares of Premier Community Bankshares common stock converted into United Bankshares common stock is at least 50% of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger. | ||
In addition, if the Stock Election Number is more than 65% of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger, re-allocations will be made to stock elections so that the total number of shares of Premier Community Bankshares common stock converted into United Bankshares common stock represents no more than 65% of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger. | ||
Q: | If I make an election to receive all cash, under what circumstances will my election be re-allocated? | |
A: | Because the reorganization agreement provides that the total number of shares of Premier Community Bankshares common stock converted into United Bankshares common stock cannot be less than 50% of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger, your election may be re-allocated if the Stock Election Number is less than 50% of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger. If the number of shares held by shareholders who did not make an election is less than or equal to the shortfall of required stock elections (which is the difference between 50% and the percentage that the Stock Election Number represents) of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger, then the shareholders who did not make an election will receive a combination of cash and United Bankshares common stock. If the shortfall of required stock elections exceeds the number of shares held by shareholders who did not make an election, then you will |
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receive a combination of cash and United Bankshares common stock following a pro rata adjustment of all elections for cash in order to reach the 50% stock threshold. | ||
Q: | If I make an election to receive all stock, under what circumstances will my election be re-allocated? | |
A: | Because the reorganization agreement provides that the total number of shares of Premier Community Bankshares common stock converted into United Bankshares common stock cannot exceed 65% of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger, your election may be re-allocated if the Stock Election Number is more than 65% of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger. In that circumstance, the exchange agent will identify shareholders who did not make an election and assign them as having made a cash election. Each shareholder who made an election to receive all stock will receive a combination of cash and United Bankshares common stock following a pro rata adjustment of all elections for stock as necessary to keep within this 65% stock limitation. | |
Q: | What happens if I do not make an election? | |
A: | If the Stock Election Number is less than 50% of the total number of shares of Premier Community Bankshares common stock outstanding at the effective time of the merger, and the shortfall number is less than the number of non-election shares, your “no election” shares will be converted into the right to receive a certain number of shares of United Bankshares common stock and cash in order to reach this 50% threshold. If the shortfall exceeds the number of non-election shares, then your “no-election” shares will be converted into the right to receive United Bankshares common stock. | |
If the Stock Election Number is 50% or more, but 65% or less, you will receive either cash or shares of United Bankshares common stock, as determined by United Bankshares in its discretion. | ||
If the Stock Election Number is more than 65%, you will receive cash. | ||
Q: | How will I receive my shares of United Bankshares common stock or cash? | |
A: | After the allocation of cash and United Bankshares common stock, or a combination of each, to the shareholders of Premier Community Bankshares, the exchange agent will mail transmittal forms to each Premier Community Bankshares shareholder. You should complete the transmittal form and return it to the exchange agent as soon as possible. Once the exchange agent has received the proper documentation, it will forward to you the cash and/or United Bankshares common stock to which you are entitled. | |
Shareholders will not receive any fractional shares of United Bankshares common stock. Instead, they will receive cash, without interest, for any fractional share of United Bankshares common stock that they might otherwise have been entitled to receive based on the market value of the United Bankshares common stock on the date that the merger occurs. |
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Q: | How do I exchange my Premier Community Bankshares stock certificates? | |
A: | If you make an election, you must return your Premier Community Bankshares stock certificates or an appropriate guarantee of delivery with your election form. Shortly after the merger, the exchange agent will allocate cash and United Bankshares common stock among Premier Community Bankshares shareholders, consistent with their elections and the allocation and proration procedures in the reorganization agreement. If you do not submit an election form, you will receive instructions on where to surrender your Premier Community Bankshares stock certificates from the exchange agent after the merger is completed.In any event, you should not forward your Premier Community Bankshares certificates with your proxy card. | |
Q: | What should I do if my shares of Premier Community Bankshares are held by my broker or otherwise in “street name?” | |
A: | If you hold your shares of Premier Community Bankshares common stock in “street name” (i.e., your bank or broker holds your shares for you), you should receive instructions regarding election procedures directly from your bank or broker. If you have any questions regarding these procedures, you should contact your bank or broker directly, or you may contact United Bankshares or Premier Community Bankshares at the addresses or telephone numbers listed on page 1. | |
Q: | When will we complete the merger? | |
A: | We intend to complete the merger as soon as possible after shareholder approval is received, all other regulatory approvals have been obtained and other conditions to the closing have been satisfied or waived. | |
The regulatory approvals are described under “– Regulatory Approvals” beginning on page 83. | ||
Q: | What should I do now? | |
A: | Mail your signed proxy card in the enclosed return envelope as soon as possible so that your shares may be represented at the shareholder meeting. It is important that the proxy card be received as soon as possible and in any event before the shareholder meeting. | |
In addition, you will receive the election form in a separate mailing. You should make an election as indicated on the form, sign the form, and return the form with your stock certificates (or appropriate guarantee of delivery) in the separate envelope provided so that it is received prior to 5:00 p.m. Eastern time on July 5, 2007, which we refer to as the election deadline. | ||
Q: | Can I change my vote after I mail my proxy card? | |
A: | Yes. You can change your vote at any time before your proxy is voted at the shareholder meeting. You can do this in one of three ways: |
• | First, you can send a written notice stating that you would like to revoke your proxy. | ||
• | Second, you can complete and submit a new proxy card. | ||
• | Third, you can attend the shareholder meeting and vote in person. Simply attending the shareholder meeting, however, will not revoke your proxy. |
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If you choose either of the first or second methods, you must submit your notice of revocation or your new proxy card to Premier Community Bankshares prior to the shareholder meeting. Your submissions must be mailed to the Secretary of Premier Community Bankshares at the address listed on page 1. | ||
Q: | Who will be soliciting proxies? | |
A: | In addition to solicitation of proxies by officers, directors and employees of Premier Community Bankshares, Premier Community Bankshares has engaged a professional proxy solicitation firm, Mellon Investor Services, to assist it in soliciting proxies. | |
Q: | What if I do not vote or I abstain from voting? | |
A: | If you do not vote or you abstain from voting, your failure to vote or abstention will count as a “NO” vote on the proposal to approve and adopt the reorganization agreement. | |
Abstentions will not be counted as voting in favor of or against a director in the election of directors. | ||
Q: | If my shares are held by my broker in “street name,” will my broker vote my shares for me? | |
A: | Your broker will vote your shares on the proposal to approve and adopt the reorganization agreement only if you provide instructions on how to vote. You should follow the directions provided by your broker to vote your shares. If you do not provide your broker with instructions on how to vote your shares held in “street name,” your broker will not be permitted to vote your shares on the proposal to approve and adopt the reorganization agreement, which will have the effect of a “NO” vote on the items being considered. | |
Your broker is able to vote your shares in the election of directors even if you do not provide instructions on how to vote. | ||
Q: | Will I be able to sell the shares of United Bankshares common stock that I receive in the merger? | |
A: | Yes, in most cases. The shares of United Bankshares common stock to be issued in the merger will be registered under the Securities Act of 1933 and listed on the Nasdaq Global Select Market. However, certain shareholders who are deemed to be “affiliates” of United Bankshares or Premier Community Bankshares under the Securities Act (generally, directors, executive officers and shareholders of United Bankshares or Premier Community Bankshares holding 10% or more of the outstanding shares of common stock) must abide by certain transfer restrictions under the Securities Act. | |
Q: | What are the tax consequences of the merger to me? | |
A: | Your tax consequences will depend on what form of payment you receive in the merger as well as your basis in the Premier Community Bankshares common stock that you own. For greater detail, see “Certain Federal Income Tax Consequences of the Merger” beginning on page 88. |
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Q: | Who should shareholders call with questions? | |
A: | If you have more questions about the merger you should contact: |
Senior Vice President and Chief Financial Officer
Premier Community Bankshares, Inc.
4095 Valley Pike
Winchester, Virginia 22602
Telephone: (540) 869-6600
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• | the value to be received by the shareholders under the merger agreement relative to the historical trading price of Premier Community Bankshares common stock represented a premium of approximately 70% over the closing price of Premier Community Bankshares common stock on January 25, 2007, the last trading day before the merger agreement was signed; | ||
• | the per share value of the consideration to Premier Community Bankshares shareholders and the fact that at least 35% and up to 50% of the consideration will be in the form of cash; | ||
• | the anticipated tax-free exchange of Premier Community Bankshares common stock for United Bankshares common stock for that portion of consideration; | ||
• | the ability of Premier Community Bankshares shareholders, through the United Bankshares common stock component of the merger consideration, to participate in the potential growth of the combined institutions following consummation of the transaction; | ||
• | the merger is less risky than the potential alternatives available to Premier Community Bankshares, including other potential merger transactions and the alternative of remaining independent; and | ||
• | the opinion of Davenport rendered to the Premier Community Bankshares board as to the fairness, from a financial point of view, of the merger consideration offered to holders of Premier Community Bankshares common stock. |
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• | to elect to receive shares of United Bankshares common stock with respect to all of your shares of Premier Community Bankshares common stock; | ||
• | to elect to receive cash with respect to all of your shares of Premier Community Bankshares common stock; | ||
• | to elect to receive shares of United Bankshares common stock with respect to some of your shares of Premier Community Bankshares common stock and cash with respect to the remainder of your shares; or | ||
• | to indicate that you make no election, and thus have no preference, with respect to your shares of Premier Community Bankshares common stock. |
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500 Virginia Street, East
Charleston, West Virginia 25301
(304) 348-8400
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4095 Valley Pike
Winchester, Virginia 22602
(540) 869-6600
• | to elect four directors to serve for terms of three years each expiring at the 2010 annual meeting of shareholders (or until the effective date of the merger if the merger of Premier Community Bankshares and United Bankshares is completed) (See Proposal One); | ||
• | to approve the reorganization agreement and the transactions contemplated thereby (See Proposal Two); and | ||
• | to consider and vote upon a proposal to adjourn the meeting to a later date or dates, if necessary, to permit further solicitation of proxies in the event that there are not sufficient votes at the time of the meeting to approve the matter to be considered by the shareholders at the meeting (See Proposal Three). |
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• | Premier Community Bankshares’ shareholders’ approval of the reorganization agreement; | ||
• | approval of the merger by the necessary federal and state regulatory authorities; | ||
• | authorization for the listing on the Nasdaq Global Select Market of the shares of United Bankshares common stock to be issued in the merger; | ||
• | absence of any law or court order prohibiting the merger; | ||
• | receipt of opinions from counsel to Premier Community Bankshares and United Bankshares that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; and | ||
• | the continued accuracy of certain representations and warranties. |
• | either party breaches any of its representations or obligations under the merger agreement, and does not cure the breach within 30 days if such breach individually or in the aggregate with other breaches results in a material adverse effect; | ||
• | the merger is not complete by November 30, 2007, unless the failure of the merger to be consummated arises out of or results from the knowing action or inaction of the party seeking to terminate; or | ||
• | the approval of any governmental entity required for consummation of |
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the merger is denied or the shareholders of Premier Community Bankshares do not approve the merger agreement. |
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• | timely and successfully integrate the operations of United Bankshares and Premier Community Bankshares; | ||
• | maintain existing relationships with depositors in Premier Community Bankshares to minimize withdrawals of deposits subsequent to the merger; | ||
• | maintain and enhance existing relationships with borrowers to limit unanticipated losses from loans of Premier Community Bankshares; | ||
• | control the incremental non-interest expense from United Bankshares to maintain overall operating efficiencies; | ||
• | retain and attract qualified personnel at United Bankshares and Premier Community Bankshares; and | ||
• | compete effectively in the communities served by United Bankshares and Premier Community Bankshares and in nearby communities. |
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• | historical loan loss experience; | ||
• | industry diversification of the commercial loan portfolio; | ||
• | the effect of changes in the local real estate market on collateral values; | ||
• | the amount of nonperforming loans and related collateral security; | ||
• | current economic conditions that may affect the borrower’s ability to pay and value of collateral; | ||
• | sources and cost of funds; | ||
• | volume, growth and composition of the loan portfolio; and | ||
• | other factors management believes are relevant. |
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• | the ability of Premier Community Bankshares to obtain the required shareholder approval or the companies to obtain the required regulatory approvals for the merger; | ||
• | the ability of the companies to consummate the merger; | ||
• | the ability to successfully integrate Premier Community Bankshares into United Bankshares following the merger; | ||
• | a material adverse change in the financial condition, results of operations or prospects of either United Bankshares or Premier Community Bankshares; | ||
• | the ability to fully realize any cost savings and revenues or the ability to realize them on a timely basis; | ||
• | the risk of borrower, depositor and other customer attrition after the transaction is completed; | ||
• | a change in general business and economic conditions; | ||
• | changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; | ||
• | changes in accounting principles, policies or guidelines; | ||
• | changes in legislation and regulation; | ||
• | other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the companies’ operations, pricing, and services; and | ||
• | other risk factors described on pages 16 to 20 of this proxy statement/prospectus. |
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United Bankshares | Premier Community Bankshares | |||||||||||||||||||||||
Cash | Cash | |||||||||||||||||||||||
Sales Price | Dividend | Sales Price | Dividend | |||||||||||||||||||||
High | Low | Declared | High | Low | Declared | |||||||||||||||||||
2005 | ||||||||||||||||||||||||
First Quarter | $ | 38.62 | $ | 32.00 | $ | 0.26 | $ | 21.66 | $ | 19.00 | $ | — | ||||||||||||
Second Quarter | 36.45 | �� | 29.82 | 0.26 | 23.75 | 18.94 | — | |||||||||||||||||
Third Quarter | 38.47 | 33.91 | 0.26 | 21.15 | 19.75 | — | ||||||||||||||||||
Fourth Quarter | 38.55 | 32.34 | 0.27 | 24.00 | 19.01 | 0.25 | ||||||||||||||||||
2006 | ||||||||||||||||||||||||
First Quarter | $ | 38.50 | $ | 34.46 | $ | 0.27 | $ | 23.00 | $ | 20.70 | $ | — | ||||||||||||
Second Quarter | 38.41 | 34.46 | 0.27 | 22.00 | 21.00 | — | ||||||||||||||||||
Third Quarter | 38.28 | 34.21 | 0.27 | 22.00 | 18.58 | — | ||||||||||||||||||
Fourth Quarter | 39.71 | 36.51 | 0.28 | 21.50 | 19.40 | 0.26 | ||||||||||||||||||
2007 | ||||||||||||||||||||||||
First Quarter | $ | 39.50 | $ | 33.60 | $ | 0.28 | $ | 34.34 | $ | 19.55 | — | |||||||||||||
Second Quarter | $ | 35.37 | $ | 33.12 | 0.28 | $ | 33.31 | $ | 31.85 | — | ||||||||||||||
(through May 29, 2007) | ||||||||||||||||||||||||
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Premier Community | ||||||||||||
Premier | Bankshares | |||||||||||
United | Community | Equivalent Pro Forma | ||||||||||
Bankshares | Bankshares | Market Value | ||||||||||
January 26, 2007 | $ | 36.27 | $ | 20.20 | $ | 33.73 | ||||||
May 29, 2007 | $ | 33.77 | $ | 32.27 | $ | 31.41 |
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• | An assumption that 50% of the shares of Premier Community Bankshares common stock deemed outstanding immediately prior to the merger will be converted into shares of United Bankshares common stock in the merger and 50% of the shares of Premier Community Bankshares common stock deemed outstanding immediately prior to the merger will be converted into cash of $34.00 per share in the merger. | ||
• | An assumption that 65% of the shares of Premier Community Bankshares common stock deemed outstanding immediately prior to the merger will be converted into shares of United Bankshares common stock in the merger and 35% of the shares of Premier Community Bankshares common stock deemed outstanding immediately prior to the merger will be converted into cash of $34.00 per share in the merger. | ||
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At or for the Three Months | At or for the Year Ended | |||||||
Ended March 31, 2007 | December 31, 2006 | |||||||
United Bankshares | ||||||||
Basic earnings per common share: | ||||||||
Historical | $ | 0.60 | $ | 2.15 | ||||
Pro forma at 50% stock consideration(1) | $ | 0.59 | $ | 2.11 | ||||
Pro forma at 65% stock consideration(1) | $ | 0.58 | $ | 2.10 | ||||
Diluted earnings per common share: | ||||||||
Historical | $ | 0.59 | $ | 2.13 | ||||
Pro forma at 50% stock consideration(1) | $ | 0.58 | $ | 2.08 | ||||
Pro forma at 65% stock consideration(1) | $ | 0.58 | $ | 2.08 | ||||
Dividends declared on common stock: | ||||||||
Historical | $ | 0.28 | $ | 1.09 | ||||
Pro forma at 50% stock consideration(2) | $ | 0.28 | $ | 1.09 | ||||
Pro forma at 65% stock consideration(2) | $ | 0.28 | $ | 1.09 | ||||
Book value per common share: | ||||||||
Historical | $ | 15.65 | $ | 15.44 | ||||
Pro forma at 50% stock consideration(3) | $ | 16.94 | $ | 16.94 | ||||
Pro forma at 65% stock consideration(3) | $ | 17.32 | $ | 17.13 | ||||
Premier Community Bankshares | ||||||||
Basic earnings per common share: | ||||||||
Historical | $ | 0.30 | $ | 1.47 | ||||
Equivalent pro forma at 50% stock consideration(1) | $ | 0.55 | $ | 1.96 | ||||
Equivalent pro forma at 65% stock consideration(1) | $ | 0.54 | $ | 1.95 | ||||
Diluted earnings per common share: | ||||||||
Historical | $ | 0.29 | $ | 1.45 | ||||
Equivalent pro forma at 50% stock consideration(1) | $ | 0.54 | $ | 1.94 | ||||
Equivalent pro forma at 65% stock consideration(1) | $ | 0.54 | $ | 1.93 | ||||
Dividends declared on common stock: | ||||||||
Historical | $ | 0.00 | $ | 0.26 | ||||
Equivalent pro forma at 50% stock consideration(4) | $ | 0.26 | $ | 1.01 | ||||
Equivalent pro forma at 65% stock consideration(4) | $ | 0.26 | $ | 1.01 | ||||
Book value per common share: | ||||||||
Historical | $ | 12.87 | $ | 12.58 | ||||
Equivalent pro forma at 50% stock consideration(4) | $ | 15.76 | $ | 15.75 | ||||
Equivalent pro forma at 65% stock consideration(4) | $ | 16.11 | $ | 15.93 |
(1) | Pro forma earnings per common share are based on pro forma combined net income and pro forma combined shares outstanding. | |
(2) | Pro forma dividends per share represent United’s historical dividends per share. | |
(3) | Calculated based on pro forma combined equity and pro forma combined common shares outstanding at end of period. | |
(4) | Calculated as pro forma combined multiplied by 0.93 exchange ratio. | |
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Summary Consolidated Financial Data
At or For the Three Months Ended March 31 | At or For the Years Ended December 31, | |||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | 2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||
Summary of Operations: | ||||||||||||||||||||||||||||
Total interest income | $ | 100,622 | $ | 95,581 | $ | 400,683 | $ | 345,278 | $ | 293,350 | $ | 272,520 | $ | 323,483 | ||||||||||||||
Total interest expense | 47,960 | 40,560 | 181,090 | 124,451 | 88,914 | 95,504 | 129,175 | |||||||||||||||||||||
Net interest income | 52,662 | 55,021 | 219,593 | 220,827 | 204,436 | 177,016 | 194,308 | |||||||||||||||||||||
Provision for loan losses | 350 | 250 | 1,437 | 5,618 | 4,520 | 7,475 | 8,937 | |||||||||||||||||||||
Other income | 14,916 | 13,662 | 49,033 | 52,625 | 54,231 | 52,084 | 37,787 | |||||||||||||||||||||
Other expense | 31,495 | 32,188 | 137,173 | 121,160 | 137,061 | 129,538 | 109,728 | |||||||||||||||||||||
Income taxes | 11,326 | 11,635 | 40,767 | 46,265 | 33,771 | 28,010 | 35,211 | |||||||||||||||||||||
Income from continuing operations | 24,407 | 24,610 | 89,249 | 100,409 | 83,315 | 64,077 | 78,219 | |||||||||||||||||||||
Income from discontinued operations before income taxes | — | — | — | — | 20,780 | 20,433 | 14,903 | |||||||||||||||||||||
Income taxes | — | — | — | — | 6,333 | 5,745 | 4,189 | |||||||||||||||||||||
Income from discontinued operations | — | — | — | — | 14,447 | 14,688 | 10,714 | |||||||||||||||||||||
Net Income | 24,407 | 24,610 | 89,249 | 100,409 | 97,762 | 78,765 | 88,933 | |||||||||||||||||||||
Cash dividends | 11,452 | 11,331 | 45,219 | 44,575 | 44,228 | 42,028 | 40,388 | |||||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||
Income from continuing operations: | ||||||||||||||||||||||||||||
Basic | 0.60 | 0.59 | 2.15 | 2.36 | 1.92 | 1.52 | 1.84 | |||||||||||||||||||||
Diluted | 0.59 | 0.58 | 2.13 | 2.33 | 1.89 | 1.50 | 1.81 | |||||||||||||||||||||
Income from discontinued operations: | ||||||||||||||||||||||||||||
Basic | — | — | — | — | 0.33 | 0.35 | 0.25 | |||||||||||||||||||||
Diluted | — | — | — | — | 0.33 | 0.35 | 0.25 | |||||||||||||||||||||
Net income: | ||||||||||||||||||||||||||||
Basic | 0.60 | 0.59 | 2.15 | 2.36 | 2.25 | 1.87 | 2.09 | |||||||||||||||||||||
Diluted | 0.59 | 0.58 | 2.13 | 2.33 | 2.22 | 1.85 | 2.06 | |||||||||||||||||||||
Cash dividends | 0.28 | 0.27 | 1.09 | 1.05 | 1.02 | 1.00 | 0.95 | |||||||||||||||||||||
Book value per share | 15.65 | 15.26 | 15.44 | 15.12 | 14.68 | 14.08 | 12.88 | |||||||||||||||||||||
Selected Ratios: | ||||||||||||||||||||||||||||
Return on average shareholders’ equity | 15.44 | % | 15.51 | % | 13.90 | % | 15.66 | % | 15.56 | % | 13.86 | % | 16.73 | % | ||||||||||||||
Return on average assets | 1.51 | % | 1.49 | % | 1.34 | % | 1.55 | % | 1.55 | % | 1.36 | % | 1.59 | % | ||||||||||||||
Dividend payout ratio | 46.92 | % | 46.04 | % | 50.67 | % | 44.39 | % | 45.24 | % | 53.39 | % | 45.41 | % | ||||||||||||||
Selected Balance Sheet Data: | ||||||||||||||||||||||||||||
Average assets | 6,561,330 | 6,680,414 | $ | 6,641,224 | $ | 6,465,764 | $ | 6,295,076 | $ | 5,809,131 | $ | 5,591,267 | ||||||||||||||||
Loans held for sale | 2,231 | 1,773 | 2,041 | 3,324 | 3,981 | 1,687 | 5,151 | |||||||||||||||||||||
Total loans | 4,716,297 | 4,693,329 | 4,806,747 | 4,649,829 | 4,418,276 | 3,955,234 | 3,501,188 | |||||||||||||||||||||
Assets of discontinued operations | — | — | — | — | — | 334,340 | 666,147 | |||||||||||||||||||||
Total assets | 6,571,761 | 6,706,832 | 6,717,598 | 6,728,492 | 6,435,971 | 6,387,730 | 5,797,662 | |||||||||||||||||||||
Total deposits | 4,741,572 | 4,703,268 | 4,828,192 | 4,617,452 | 4,297,563 | 4,138,487 | 3,815,830 | |||||||||||||||||||||
Long-term borrowings | 523,832 | 495,611 | 499,200 | 547,731 | 533,755 | 459,663 | 172,444 | |||||||||||||||||||||
Liabilities of discontinued operations | — | — | — | — | — | 300,754 | 638,884 | |||||||||||||||||||||
Total liabilities | 5,933,012 | 6,068,225 | 6,083,506 | 6,093,287 | 5,804,464 | 5,772,539 | 5,256,123 | |||||||||||||||||||||
Shareholders’ equity | 638,749 | 638,607 | 634,092 | 635,205 | 631,507 | 615,191 | 541,539 |
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Summary Consolidated Financial Data
At or For the Three Months Ended March 31, | At or For the Years Ended December 31, | |||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||
(Dollars in thousands, except share data) | ||||||||||||||||||||||||||||
Income Statement Data | ||||||||||||||||||||||||||||
Interest income | $ | 15,838 | $ | 11,417 | $ | 55,551 | $ | 40,146 | $ | 31,452 | $ | 26,512 | $ | 23,114 | ||||||||||||||
Interest expense | 7,534 | 4,356 | 23,659 | 13,290 | 8,971 | 8,293 | 8,468 | |||||||||||||||||||||
Net interest income | 8,304 | 7,061 | 31,892 | 26,856 | 22,481 | 18,219 | 14,646 | |||||||||||||||||||||
Provision for loan losses | 79 | 103 | 661 | 842 | 1,020 | 919 | 1,100 | |||||||||||||||||||||
Net interest income after provision for loan losses | 8,225 | 6,958 | 31,231 | 26,014 | 21,461 | 17,300 | 13,546 | |||||||||||||||||||||
Noninterest income | 1,441 | 1,127 | 5,371 | 4,600 | 4,439 | 3,654 | 2,440 | |||||||||||||||||||||
Noninterest expense | 7,081 | 5,526 | 24,918 | 20,118 | 16,573 | 13,213 | 9,527 | |||||||||||||||||||||
Income (loss) before income tax | 2,585 | 2,559 | 11,684 | 10,496 | 9,327 | 7,741 | 6,459 | |||||||||||||||||||||
Income tax | 862 | 854 | 3,839 | 3,355 | 2,984 | 2,485 | 2,095 | |||||||||||||||||||||
Net income | 1,723 | 1,705 | $ | 7,845 | $ | 7,141 | $ | 6,343 | $ | 5,256 | $ | 4,364 | ||||||||||||||||
Cash dividends | 1,482 | 1,239 | $ | 1,482 | $ | 1,239 | $ | 1,033 | $ | 879 | $ | 683 | ||||||||||||||||
Per Share Data | ||||||||||||||||||||||||||||
Net income – basic | 0.30 | 0.34 | $ | 1.47 | $ | 1.45 | $ | 1.30 | $ | 1.14 | $ | 0.96 | ||||||||||||||||
Net income — diluted | 0.29 | 0.33 | 1.45 | 1.41 | 1.26 | 1.11 | 0.94 | |||||||||||||||||||||
Cash dividends declared | — | — | 0.26 | 0.25 | 0.21 | 0.18 | 0.15 | |||||||||||||||||||||
Book value per share | 12.87 | 10.48 | 12.58 | 10.15 | 9.00 | 7.96 | 6.55 | |||||||||||||||||||||
Balance Sheet Data | ||||||||||||||||||||||||||||
Average Assets | 921,130 | 702,606 | $ | 787,531 | $ | 628,815 | $ | 527,272 | $ | 431,943 | $ | 343,460 | ||||||||||||||||
Assets | 915,796 | 698,529 | 900,711 | 674,396 | 576,150 | 463,202 | 393,755 | |||||||||||||||||||||
Loans, net (1) | 749,060 | 598,967 | 747,444 | 573,405 | 486,865 | 382,459 | 312,554 | |||||||||||||||||||||
Securities | 38,505 | 31,329 | 40,094 | 30,379 | 27,314 | 24,051 | 25,296 | |||||||||||||||||||||
Deposits | 742,273 | 588,004 | 728,274 | 562,880 | 483,933 | 397,345 | 345,062 | |||||||||||||||||||||
Long-term borrowings | 39,177 | 21,651 | 39,267 | 21,651 | 13,403 | 13,403 | 7,000 | |||||||||||||||||||||
Total liabilities | 841,950 | 646,474 | 828,998 | 624,107 | 531,888 | 424,425 | 363,931 | |||||||||||||||||||||
Shareholders’ equity | 73,846 | 52,055 | 71,713 | 50,289 | 44,262 | 38,877 | 29,824 | |||||||||||||||||||||
Shares outstanding | 5,737,797 | 4,966,648 | 5,699,842 | 4,955,648 | 4,919,548 | 4,881,084 | 4,555,484 | |||||||||||||||||||||
Performance Ratios | ||||||||||||||||||||||||||||
Return on average assets (2) | 0.76 | 0.98 | 0.96 | % | 1.13 | % | 1.20 | % | 1.22 | % | 1.27 | % | ||||||||||||||||
Return on average shareholders’ equity (2) | 9.61 | 13.51 | 11.94 | 14.97 | 15.20 | 15.86 | 15.63 | |||||||||||||||||||||
Dividend payout ratio | 86.01 | 72.67 | 18.90 | 17.40 | 16.30 | 16.70 | 15.70 |
(1) | Excludes loans held for sale. | |
(2) | On an annualized basis. |
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• | to elect four directors to serve for terms of three years each expiring at the 2010 annual meeting of shareholders (or until the effective date of the merger if the merger of Premier Community Bankshares and United Bankshares is completed) (See Proposal One); | ||
• | to approve the reorganization agreement and the transactions contemplated thereby (See Proposal Two); and | ||
• | to consider and vote upon a proposal to adjourn the meeting to a later date or dates, if necessary, to permit further solicitation of proxies in the event there are not sufficient votes at the time of the meeting to approve the matters to be considered by the shareholders at the meeting (See Proposal Three). |
4095 Valley Pike
Winchester, Virginia 22602
Attention: Barbara Morris
Telephone: (540) 869-6600
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• | to elect to receive shares of United Bankshares common stock with respect to some or all of your shares of Premier Community Bankshares common stock; | ||
• | to elect to receive cash with respect to some or all of your shares of Premier Community Bankshares common stock; or | ||
• | to indicate that you make no election, and thus have no preference, with respect to your shares of Premier Community Bankshares common stock. |
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Number | Percent | |||||||
Name | of Shares(1) | of Class (%) | ||||||
Walter H. Aikens | 30,064 | 0.52 | ||||||
Frederick A. Board | 1,839 | 0.03 | ||||||
Thomas M. Boyd, Jr. | 12,442 | 0.22 | ||||||
Mensel D. Dean | 5,000 | 0.09 | ||||||
Clifton L. Good | 78,343 | 1.36 | ||||||
Stephen T. Heitz | 20,936 | 0.36 | ||||||
D. Frank Hill, III | 5,000 | 0.09 | ||||||
Joseph W. Hollis | 74,201 | 1.29 | ||||||
Meryl G. Kiser | 4,250 | 0.07 | ||||||
Wayne B. Ruck | 151,786 | 2.64 | ||||||
John K. Stephens | 97,538 | 1.69 | ||||||
Donald L. Unger | 45,333 | 0.79 | ||||||
John A. Willingham | 5,105 | 0.09 | ||||||
Paul R. Yoder, Jr. | 94,550 | 1.65 | ||||||
James C. Youngblood | 25,910 | 0.45 | ||||||
All current directors and executive officers as a group (13 persons) | 646,208 | 11.08 |
(1) | Amounts disclosed include shares of our common stock that certain directors have the right to acquire upon the exercise of stock options exercisable within 60 days, as follows: Mr. Boyd, 3,003; Mr. Dean, 4,000; Mr. Good, 6,000; Mr. Heitz, 8,000; Mr. Hill, 4,000; Mr. Hollis, 4,000; Mr. Ruck, 8,000; Mr. Stephens, 15,000; Mr. Unger, 15,000; Mr. Willingham, 5,000; and Mr. Youngblood, 16,500. None of the amounts in this column have been pledged as security. |
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Common Stock | Percentage | |||||||
Name and Address | Beneficially Owned | of Class | ||||||
Banc Fund V L.P.(1) | 542,831 | 9.5 | % | |||||
Banc Fund VI L.P. | ||||||||
Banc Fund VII L.P. 208 S. LaSalle Street Chicago, Illinois 60604 |
(1) | In a Schedule 13G/A filed with the Securities and Exchange Commission on February 13, 2007 (the “Schedule 13G/A”), Banc Fund V L.P. reported beneficial ownership of, including sole voting and dispositive power with respect to, 231,027 shares of Common Stock, Banc Fund VI L.P. reported similar beneficial ownership of 178,663 shares of Common Stock and Banc Fund VII L.P. reported similar beneficial ownership of 130,141 shares of Common Stock, as of December 31, 2006. Banc Fund V L.P., Banc Fund VI L.P. and Banc Fund VII L.P. are under common control, according to the Schedule 13G/A. |
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ELECTION OF DIRECTORS
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THE BOARD OF DIRECTORS
• | Walter H. Aikens is the president of a construction company that has worked on a number of construction projects for Marathon Bank and Premier Bank and is an owner of a company that leases office space to Premier Bank; | ||
• | Mr. Ruck is one of the owners of a company that leases a branch to Rockingham Heritage Bank; | ||
• | Mr. Heitz is a partner in a law firm that renders legal services to Rockingham Heritage Bank; and | ||
• | Mr. Hill is a partner in a law firm that renders legal services to Premier Bank. |
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• | the ability of the prospective nominee to represent the interests of our shareholders; | ||
• | the prospective nominee’s standards of integrity, commitment and independence of thought and judgment; | ||
• | the prospective nominee’s ability to dedicate sufficient time, energy and attention to the diligent performance of his or her duties, including the prospective nominee’s service on other public company boards; and | ||
• | the extent to which the prospective nominee contributes to the range of talent, skill and expertise appropriate for the board of directors. |
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Board of Directors Meetings | $ | 800 | ||
Committee Meetings | $ | 300 |
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Fees Earned or | ||||||||
Paid in Cash | Total | |||||||
Name | ($) | ($) | ||||||
Walter H. Aikens | 36,600 | 36,600 | ||||||
Thomas M. Boyd, Jr. | 9,850 | 9,850 | ||||||
Mensel D. Dean | 21,192 | 21,192 | ||||||
Clifton L. Good | 39,975 | 39,975 | ||||||
Stephen T. Heitz | 36,342 | 36,342 | ||||||
D. Frank Hill, III | 38,209 | 38,209 | ||||||
Joseph W. Hollis | 39,800 | 39,800 | ||||||
Meryl G. Kiser | 25,192 | 25,192 | ||||||
Wayne B. Ruck | 30,916 | 30,916 | ||||||
John K. Stephens | 18,867 | 18,867 | ||||||
Donald L. Unger | 32,200 | 32,200 | ||||||
Paul R. Yoder, Jr. | 30,216 | 30,216 | ||||||
James C. Youngblood | 31,800 | 31,800 |
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RELATED TRANSACTIONS
• | Donald L. Unger—President and Chief Executive Officer, Premier Community Bankshares | ||
• | John K. Stephens—Chairman, Premier Community Bankshares, and President and Chief Executive Officer, Rockingham Heritage Bank | ||
• | John A Willingham—Senior Vice President and Chief Financial Officer | ||
• | James C. Youngblood—President and Chief Executive Officer, Marathon Bank | ||
• | Frederick A. Board—Senior Vice President and Chief Financial Officer until September 2006 | ||
• | Meryl G. Kiser—President and Chief Executive Officer, Premier Bank until January 2007 |
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• | Benchmarking—To assure that our base compensation is competitive, we have in the past referred to data from the Virginia Bankers Association Salary Survey. As part of our review, we compare an overall compensation package including salary, bonus, stock-based compensation and other related benefits. Based on our structure as a multi-bank holding company, our organization is somewhat unusual in that each of our banks is autonomous in decision making and with local control. As such, our salary structure is different than that of other community banks as we have more than one person at certain levels of responsibility that may only require one person at other companies. As a result, we may not pay those persons salaries at the same level as comparable positions at other companies in our industry. | ||
• | Allocation of Elements of Compensation—While paying a competitive base salary is necessary and desirable, we believe that additional compensation, typically in the form of an annual bonus, provides a key executive with benefits as a reward for performance. Stock-based compensation is provided on a periodic basis and is not based upon performance. Certain executive officers also have supplemental employee retirement plans and other related insurance benefits. Fringe benefits for key executives are modest and include country club dues, car allowance and other related benefits. | ||
• | Pay for Performance—We rely on the annual bonus to reward results for the year. Although we have not adopted specific metrics on which to base bonuses, we consider the contributions of key executives individually as to how successfully they have managed to budget their responsibilities in light of the overall success of the company. All bonuses are discretionary. |
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Stephen T. Heitz
D. Frank Hill, III
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Change in Pension | ||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||
Nonqualified | ||||||||||||||||||||||||||||
Deferred | ||||||||||||||||||||||||||||
Option | Compensation | All Other | ||||||||||||||||||||||||||
Name and Principal | Salary | Bonus | Awards | Earnings (1) | Compensation | Total | ||||||||||||||||||||||
Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Donald L. Unger President and Chief Executive Officer | 2006 | 176,350 | 35,000 | — | 21,653 | 63,661 | (2) | 296,664 | ||||||||||||||||||||
John A. Willingham (3) Senior Vice President and Chief Financial Officer | 2006 | 63,327 | 4,200 | 27,400 | — | 2,783 | (4) | 97,710 | ||||||||||||||||||||
John K. Stephens Chairman and President and Chief Executive Officer of Rockingham Heritage Bank | 2006 | 187,250 | 35,000 | — | 181,644 | 51,115 | (5) | 455,009 | ||||||||||||||||||||
James C. Youngblood President and Chief Executive Officer of Marathon Bank | 2006 | 125,255 | 20,000 | — | 51,112 | 51,901 | (6) | 248,268 | ||||||||||||||||||||
Meryl G. Kiser (7) Former President and Chief Executive Officer of Premier Bank | 2006 | 150,000 | 5,000 | — | — | 48,822 | (8) | 203,822 | ||||||||||||||||||||
Frederick A. Board (9) Former Chief Financial Officer | 2006 | 78,162 | 7,000 | — | 99,449 | 7,908 | (10) | 192,519 |
(1) | Amounts represent changes in the value of the benefits payable under each officer’s supplemental executive retirement plan during 2006. |
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(2) | Amount represents $22,886 in company contributions to our 401(k) Plan on behalf of Mr. Unger, $32,200 in directors’ fees from Premier Community Bankshares and Marathon Bank, $3,620 attributable to life insurance premiums paid by us pursuant to our split-dollar life insurance plan, $2,000 for life insurance premiums, $1,815 for use of a company car, $1,140 in country club dues and $240 in health benefits paid on his behalf that were in excess of our normal contribution for employees generally. | |
(3) | Mr. Willingham’s employment with us commenced in May 2006. He became Senior Vice President and Chief Financial Officer in September 2006. | |
(4) | Amount represents $2,783 in company contributions to our 401(k) Plan on behalf of Mr. Willingham. | |
(5) | Amount represents $24,080 in contributions to our 401(k) plan on behalf of Mr. Stephens, $18,867 in director’s fees from Premier Community Bankshares, $152 attributable to life insurance premiums paid by us pursuant to our split-dollar life insurance plan, $308 for use of a company car, $308 in country club dues and $3,900 in health benefits paid on his behalf that were in excess of our normal contribution for employees generally. | |
(6) | Amount represents $14,617 in company contributions to our 401(k) Plan on behalf of Mr. Youngblood, $31,800 in directors’ fees from Premier Community Bankshares and Marathon Bank, $307 attributable to life insurance premiums paid by us pursuant to our split-dollar life insurance plan, $2,937 for use of a company car, $1,140 in country club dues and $1,100 in health benefits paid on his behalf that were in excess of our normal contribution for employees generally. | |
(7) | Mr. Kiser resigned in January 2007. | |
(8) | Amount represents $15,843 in company contributions to our 401(k) Plan on behalf of Mr. Kiser, $25,192 in directors’ fees from Premier Community Bankshares and Premier Bank, $3,120 for use of a company car, $3,874 in country club dues and $793 in health benefits paid on his behalf that were in excess of our normal contribution for employees generally. | |
(9) | Mr. Board retired in December 2006. | |
(10) | Amount represents $7,094 in company contributions to our 401(k) Plan on behalf of Mr. Board and $814 attributable to life insurance premiums paid by us pursuant to our split-dollar life insurance plan. |
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• | A lump sum amount of $25,000, as consideration for restrictive covenants set forth in his separation agreement, to be paid following the merger of Marathon Bank and United Bank; and | ||
• | As provided in his employment agreement, a lump sum amount equal to the greater of (i) the benefits that he would have received for the termination of his employment by us without cause or resignation by him for good reason and (ii) the product of his annual salary times the multiple of the book value per share of the common stock received by our shareholders in connection with the change of control, up to a maximum multiple of 3.0 (subject to reduction to the extent that such payment constitutes an “excess parachute payment” under the Internal Revenue Code of 1986, as amended), to be paid following the merger of Marathon Bank and United Bank. |
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All Other Options | ||||||
Awards: Number of | ||||||
Securities Underlying | ||||||
Grant Date | Options | Exercise or Base Price | ||||
Name | (1) | (#) | of Option Awards | |||
Donald L. Unger | — | — | — | |||
John A. Willingham | June 10, 2006 | 5,000 | 21.05 | |||
John K. Stephens | — | — | — | |||
James C. Youngblood | — | — | — | |||
Meryl G. Kiser | — | — | — | |||
Frederick A. Board | — | — | — |
(1) | The stock option becomes exercisable with respect to 1,000 shares of common stock on each of June 10, 2006 and the four anniversaries of that date. The stock option expires on June 10, 2016. |
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Option Awards (1) | ||||||||||||||||
Number of | Number of | |||||||||||||||
Securities | Securities | |||||||||||||||
Underlying | Underlying | |||||||||||||||
Unexercised | Unexercised | Option | ||||||||||||||
Options | Options | Exercise | Option | |||||||||||||
(#) | (#) | Price | Expiration | |||||||||||||
Name | Exercisable | Unexercisable | ($) | Date | ||||||||||||
Donald L. Unger | 15,000 | — | 7.30 | 10/8/2011 | ||||||||||||
John A. Willingham | 1,000 | 4,000 | (2) | 21.05 | 6/9/2016 | |||||||||||
John K. Stephens | 15,000 | — | 7.30 | 10/8/2011 | ||||||||||||
James C. Youngblood | 6,500 | 10.53 | 6/10/2012 | |||||||||||||
10,000 | — | 20.25 | 10/10/2015 | |||||||||||||
Meryl G. Kiser | — | — | — | — | ||||||||||||
Frederick A. Board | — | — | — | — |
(1) | All options were granted under our 2002 Long-Term Incentive Plan. The exercise price of each option equals the market price of our stock on the date of grant. | |
(2) | The stock option becomes exercisable with respect to 1,000 shares of common stock on each of June 10, 2006 and the four anniversaries of that date. The stock option expires on June 10, 2016. |
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Option Awards | ||||||||
Number of Shares Acquired on | Value Realized on | |||||||
Exercise | Exercise | |||||||
Name | (#) | ($)(1) | ||||||
Donald L. Unger | 12,500 | 200,000 | ||||||
John A. Willingham | — | — | ||||||
John K. Stephens | — | — | ||||||
James C. Youngblood | 6,500 | 98,375 | ||||||
Meryl G. Kiser | 2,003 | 13,040 | ||||||
Frederick A. Board | 1,164 | 12,792 |
(1) | The value realized was calculated by determining the difference between (i) the fair market value of common stock underlying the options at the date of exercise and (ii) the exercise price of the options. |
Number of Shares | ||||||||||||
Remaining Available | ||||||||||||
for Future Issuance | ||||||||||||
Number of Shares to | Under Equity | |||||||||||
be Issued upon | Weighted Average | Compensation Plans | ||||||||||
Exercise of | Exercise Price of | (Excluding Shares | ||||||||||
Outstanding Options | Outstanding Options | Reflected in First | ||||||||||
Plan Category | and Warrants | and Warrants | Column) | |||||||||
Equity compensation plans approved by shareholders(1) | ||||||||||||
1996 Long Term Incentive Plan | 22,900 | $ | 5.25 | 0 | ||||||||
2002 Long Term Incentive Plan | 321,192 | 13.62 | 22,565 | |||||||||
Equity compensation plans not approved by shareholders | N/A | N/A | N/A | |||||||||
Total | 344,192 | $ | 13.62 | 22,565 |
(1) | We have two stock option plans, the 1996 Long Term Incentive Plan and the 2002 Long Term Incentive Plan, both of which were approved by shareholders. We no longer issue any grants or awards under the 1996 Long Term Incentive Plan. The 2002 Long Term Incentive Plan, which replaced the 1996 Long Term Incentive Plan, authorizes the issuance of up to 650,125 shares of common stock. This amount includes any unissued shares under outstanding grants or awards under the 1996 Long Term Incentive Plan (as disclosed in the table), and any shares that had been previously issued under that plan but were forfeited, expired, canceled or settled without the issuance of shares of common stock under that plan. |
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Number of Years | Present Value of | Payments During the | ||||||||||
Credited Service | Accumulated Benefit | Last Fiscal Year | ||||||||||
Name | Plan Name | (#)(1) | ($)(2) | ($) | ||||||||
Donald L. Unger | Supplemental Executive Retirement Plan | 3.0 | 610,730 | — | ||||||||
John A. Willingham | none | — | — | — | ||||||||
John K. Stephens | Supplemental Executive Retirement Plan | 1.0 | 313,817 | — | ||||||||
James C. Youngblood | Supplemental Executive Retirement Plan | 3.0 | 92,123 | — | ||||||||
Meryl G. Kiser | none | — | — | — | ||||||||
Frederick A. Board | Supplemental Executive Retirement Plan | 3.0 | 234,645 | — |
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Termination | Termination | |||||||||||||||||||
for Any | Without | |||||||||||||||||||
Reason | Cause or for | |||||||||||||||||||
Termination | Other Than | Good | ||||||||||||||||||
without | Cause | Reason | ||||||||||||||||||
Cause or for | Following a | Following a | ||||||||||||||||||
Good | Change in | Change in | ||||||||||||||||||
Benefit | Reason | Retirement | Death | Control | Control | |||||||||||||||
Donald L. Unger | ||||||||||||||||||||
Employment Agreement (1) | $ | 56,250 | — | $ | 18,750 | $ | 675,000 | — | ||||||||||||
Stock Options (unvested and accelerated) (2) | — | — | — | — | — | |||||||||||||||
Supplemental Executive Retirement Plan (3) | — | — | — | $ | 56,520 | — | ||||||||||||||
John A. Willingham | ||||||||||||||||||||
Management Continuity Agreement (4) | — | — | — | — | $ | 104,200 | ||||||||||||||
Stock Options (unvested and accelerated) (5) | $ | 45,360 | $ | 45,360 | $ | 45,360 | $ | 45,360 | — | |||||||||||
John L. Stephens | ||||||||||||||||||||
Employment Agreement (6) | $ | 225,000 | — | — | — | $ | 675,000 | |||||||||||||
Stock Options (unvested and accelerated) (2) | — | — | — | — | — | |||||||||||||||
Supplemental Executive Retirement Plan (3) | — | — | — | $ | 266,288 | — |
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Termination | Termination | |||||||||||||||||||
for Any | Without | |||||||||||||||||||
Reason | Cause or for | |||||||||||||||||||
Termination | Other Than | Good | ||||||||||||||||||
without | Cause | Reason | ||||||||||||||||||
Cause or for | Following a | Following a | ||||||||||||||||||
Good | Change in | Change in | ||||||||||||||||||
Benefit | Reason | Retirement | Death | Control | Control | |||||||||||||||
James C. Youngblood | ||||||||||||||||||||
Employment Agreement (7) | $ | 150,000 | — | $ | 12,500 | $ | 450,000 | — | ||||||||||||
Stock Options (unvested and accelerated) (2) | — | — | — | — | — | |||||||||||||||
Supplemental Executive Retirement Plan (3) | — | — | — | $ | 284,884 | — |
(1) | Under Mr. Unger’s agreement, termination of his employment by us without “cause” and resignation by him for “good reason” will entitle Mr. Unger to the payment of salary for the remainder of the then current term of the agreement and to the continued benefit to him for the same period of all employee benefit plans and programs or arrangement in which he was entitled to participate prior to his termination. Mr. Unger will not be entitled to any compensation or other benefits under the agreement if his employment is terminated for cause. In the event of his death, we will pay his estate his current compensation for a period of one month from the date of death. If his employment terminates for any reason other than cause following a “change of control” (as defined in the agreement), Mr. Unger will receive the greater of (i) the benefits that he would have received for the termination of his employment by us without cause or resignation by him for good reason and (ii) the product of his annual salary times the multiple of the book value per share of the common stock received by our shareholders in connection with the change of control, up to a maximum multiple of 3.0 (subject to reduction to the extent that such payment constitutes an “excess parachute payment” under the Internal Revenue Code of 1986, as amended). | |
(2) | All options held by the executive officer have previously vested, and thus the executive officer will not receive any additional value with respect to his options upon a termination of employment. | |
(3) | The amounts presented show the present value of any additional benefit to the executive officer, in connection with a change in control of us, relative to the present value of accumulated benefits shown in the “Pension Benefits Table” above. | |
(4) | As disclosed in the narrative below, Mr. Willingham’s management continuity agreement provides that, if his employment terminates without “cause” or for “good reason”, Mr. Willingham is entitled to receive (i) a lump-sum payment of base salary, incentive or bonus compensation, bonus and other benefits and awards earned, but not paid, through the date of termination, (ii) a lump-sum payment of his annual salary in effect at the date of termination and (iii) the continuation of employee welfare benefits for 12 months following the date of termination. | |
(5) | Mr. Willingham has unvested options totaling 4,000 at December 31, 2006. The exercise price of these options was greater than our closing price at December 31, 2006. As of April 11, 2007, the exercise price of these options was less than our closing price ($32.39), and thus the value of such options would be $11.34 per share, which is calculated by multiplying the number of accelerated options by the difference between the exercise price and the closing price of our common stock on that date. | |
(6) | Under Mr. Stephens’ agreement, termination of his employment by us without “cause” and termination by him for “good reason” will entitle him to the payment of salary for the remainder of the then current term of the agreement and to the continued benefit to him for the same period of all employee benefit plans and programs or arrangement in which he was entitled to participate prior to his termination. In the event of his death, we will pay his estate his current compensation through the end of the month in which his death occurs. If he is terminated without cause or resigns for good reason within one year following a “change of control” (as defined in the agreement), Mr. Stephens will receive the greater of (i) the amount that he would have received under the |
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remaining term of his agreement and (ii) the product of his annual salary times the multiple of the book value per share of the common stock received by our shareholders in connection with the change of control, up to a maximum multiple of 3.0 (subject to reduction to the extent that such payment constitutes an “excess parachute payment” under the Internal Revenue Code of 1986, as amended). | ||
(7) | Under Mr. Youngblood’s agreement, termination of his employment by us without “cause” and termination by him for “good reason” will entitle him to the payment of salary for the longer of one year or the remainder of the then current term of the agreement and to the continued benefit to him for the same period of all employee benefit plans and programs or arrangement in which he was entitled to participate prior to his termination. In the event of his death, we will pay his estate his current compensation for a period of one month from the date of death. If his employment terminates for any reason other than cause following a “change of control” (as defined in the agreement), Mr. Youngblood will receive the greater of (i) the benefits that he would have received for the termination of his employment by us without cause or resignation by him for good reason and (ii) the product of his annual salary times the multiple of the book value per share of the common stock received by our shareholders in connection with the change of control, up to a maximum multiple of 3.0 (subject to reduction to the extent that such payment constitutes an “excess parachute payment” under the Internal Revenue Code of 1986, as amended). |
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• | establishing and maintaining our internal control over financial reporting; | ||
• | assessing the effectiveness of our internal control over financial reporting as of the end of each year; | ||
• | the preparation, presentation and integrity of our consolidated financial statements; and | ||
• | complying with laws and regulations and ethical business standards. |
• | performing an independent audit of our consolidated financial statements and our internal control over financial reporting; | ||
• | expressing an opinion as to the conformity of our consolidated financial statements with U.S. generally accepted accounting principles; and | ||
• | expressing an opinion as to management’s assessment of the effectiveness of our internal control over financial reporting and the effectiveness of our internal control over financial reporting. |
• | the appointment, compensation, retention and oversight of the work of the independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attestation services for us; and | ||
• | monitoring, overseeing and reviewing our accounting and financial reporting processes. |
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Joseph W. Hollis, Chairman
Mensel D. Dean
Clifton L. Good
Wayne B. Ruck
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• | $34.00 in cash; or | ||
• | 0.93 shares of United Bankshares common stock. |
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• | to elect to receive shares of United Bankshares common stock with respect to all of such holder’s shares of Premier Community Bankshares common stock; | ||
• | to elect to receive cash with respect to all of such holder’s shares of Premier Community Bankshares common stock; | ||
• | to elect to receive shares of Untied Bankshares common stock with respect to some of such holder’s shares of Premier Community Bankshares common stock and cash with respect to the remainder of such holder’s shares; or | ||
• | to indicate that such holder make no election, and thus has no preference, with respect to his or her shares of Premier Community Bankshares common stock. |
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Percentage of | Effect on Elections for | Effect on Elections for | Effect on | |||
Stock Elections | Cash | Stock | “No Elections” | |||
From 0% to less than 50% | if the Shortfall Number exceeds the number of non-election shares, then pro rata adjustments to each election to adjust the total number of shares converted to stock up to 50% | no adjustment – right to receive stock as elected | if the Shortfall Number is less than or equal to the number of non-election shares, then pro rata adjustments to each election to adjust the total number of shares converted to stock up to 50% | |||
From 50% to 65% | no adjustment – right to receive cash, as elected | no adjustment – right to receive stock, as elected | no adjustment – right to receive cash and/or stock as determined by United Bankshares | |||
From more than 65% to 100% | no adjustment – right to receive cash as elected | pro rata adjustment to each election to adjust the total number of shares converted to stock down to 65% | no adjustment – right to receive cash |
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• | If Stock is Oversubscribed:If Premier Community Bankshares shareholders elect to receive more United Bankshares common stock than United Bankshares has agreed to issue in the merger (more than 65%), then all Premier Community Bankshares shareholders who have elected to receive cash or who have made no election will receive cash for their Premier Community Bankshares shares and all shareholders who elected to receive United Bankshares common stock will receive a pro rata portion of the available United Bankshares shares plus cash for those shares not converted into United Bankshares common stock. | ||
• | If Stock is Undersubscribed:If Premier Community Bankshares shareholders elect to receive fewer shares of United Bankshares common stock than United Bankshares has agreed to issue in the merger (less than 50%), then all Premier Community Bankshares shareholders who have elected to receive United Bankshares common stock will receive United Bankshares common stock and those shareholders who elected to receive cash or who have made no election will be treated in the following manner: |
§ | If the number of shares held by Premier Community Bankshares shareholders who have made no election is sufficient to make up the shortfall in the number of United Bankshares shares that United is required to issue, then all Premier Community Bankshares shareholders who elected to receive cash will receive cash, and those shareholders who made no election will receive both cash and United Bankshares common stock in whatever proportion is necessary to make up the shortfall. | ||
§ | If the number of shares held by Premier Community Bankshares shareholders who have made no election is insufficient to make up the shortfall, then all Premier Community Bankshares shareholders who made no election will receive United Bankshares common stock and those Premier Community Bankshares shareholders who elected to receive cash will receive cash and United Bankshares common stock in whatever proportion is necessary to make up the shortfall. |
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• | the offer from United Bankshares included cash consideration of up to 50% of the total consideration, as compared to 25% from the other company; | ||
• | United Bankshares common stock had a lower, and thus more favorable, forward price-to-earnings ratio; | ||
• | United Bankshares had better research analyst guidance; | ||
• | United Bankshares had historically delivered higher long-term returns to shareholders; | ||
• | United Bankshares, as a result of the transaction, would experience less dilution to earnings per share at the same cost savings level; |
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• | the asset quality at United Bankshares had been historically stronger; | ||
• | United Bankshares has a strong presence in the Washington, D.C. suburbs of northern Virginia, where banks recently have sold for very high prices; | ||
• | United Bankshares is one of the few remaining large independent banks serving the Washington, D.C. suburbs of northern Virginia and, accordingly, has “scarcity value”, which should limit the downside risk to its value; and | ||
• | United Bankshares’ management and insiders are aligned with shareholders’ interests owning approximately 20% of United Bankshares’ common stock. |
• | the value to be received by the shareholders under the merger agreement relative to the historical trading price of Premier Community Bankshares common stock represented a premium of approximately 70% over the closing price of Premier Community Bankshares common stock on January 25, 2007, the last trading day before the merger agreement was signed; | ||
• | the per share value of the consideration to Premier Community Bankshares shareholders and the fact that at least 35% and up to 50% of the consideration will be in the form of cash; | ||
• | the anticipated tax-free exchange of Premier Community Bankshares common stock for United Bankshares common stock for that portion of consideration; | ||
• | the ability of Premier Community Bankshares shareholders, through the United Bankshares common stock component of the merger consideration, to participate in the potential growth of the combined institutions following consummation of the transaction; | ||
• | the competitive environment facing community banks like Premier Community Bankshares, and management’s belief that its customers and employees would benefit from a combination with United Bankshares due to the combined company’s enhanced ability to serve its customers more broadly and effectively because of the combined |
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company’s greater scale, broader product mix, stronger platform and robust systems; | |||
• | the fact that Premier Community Bankshares has minimal overlap with United Bankshares, and the resulting opportunity for United Bankshares to fill in its franchise between northern Virginia and the eastern panhandle of West Virginia and the benefits that this will afford customers and employees of Premier Community Bankshares; | ||
• | the result of the due diligence investigation of United Bankshares conducted by Premier Community Bankshares and its advisors; | ||
• | the board’s familiarity with and review of the business, financial condition, results of operations, and prospects of United Bankshares, including among others, its growth and profitability potential; | ||
• | management’s belief that the merger would likely be approved by the appropriate regulatory authorities without undue conditions of delay and in accordance with the terms proposed; | ||
• | the potential alternatives available to Premier Community Bankshares, including other potential merger transactions and the alternative of remaining independent, and the risks and challenges inherent in successfully implementing its business plan; and | ||
• | the opinion of Davenport rendered to the Premier Community Bankshares board as to the fairness, from a financial point of view, of the merger consideration offered to holders of Premier Community Bankshares common stock. |
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• | reviewed the most recent draft of the merger agreement as of January 26, 2007; | ||
• | reviewed certain publicly available financial statements and other information of Premier Community Bankshares and United Bankshares; |
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• | reviewed certain non-public financial information and operating data of Premier Community Bankshares and United Bankshares provided by their respective managements; | ||
• | reviewed the reported prices and trading activity for Premier Community Bankshares common stock and United Bankshares common stock; | ||
• | held discussions with members of Premier Community Bankshares’ and United Bankshares’ management regarding past and current business operations, financial condition, results of regulatory examinations, the merger and the business and future prospects of Premier Community Bankshares and United Bankshares, respectively; | ||
• | compared the results of operations and market value of Premier Community Bankshares and United Bankshares with similar information for selected publicly traded companies which it deemed to be relevant; | ||
• | compared the proposed financial terms of the merger with the financial terms of various other mergers and acquisitions of financial institutions in recent years; | ||
• | took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuations and knowledge of the commercial banking industry generally; and | ||
• | conducted other studies, analyses and investigations, and considered other information, that it deemed appropriate. |
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Median Transaction Multiples | ||||||||||||
Virginia | Nationwide | |||||||||||
Premier | Transactions | Transactions | ||||||||||
Price to LTM EPS | 23.6 | x | 25.6 | x | 20.9 | x | ||||||
Price to Book Value | 2.70 | x | 2.70 | x | 2.65 | x | ||||||
Price to Tangible Book Value | 3.65 | x | 2.97 | x | 3.41 | x | ||||||
Tangible Book Premium to Core Deposits | 24.8 | % | 18.3 | % | 25.3 | % | ||||||
Premium to Market Price (One Day) | 70.8 | % | 31.7 | % | 17.2 | % |
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Peer | ||||||||
Premier | Median | |||||||
Capitalization (MRQ) | ||||||||
Total Assets ($000) | 900,711 | 772,553 | ||||||
Total Deposits ($000) | 728,274 | 559,989 | ||||||
Total Equity ($000) | 71,713 | 74,665 | ||||||
Total Equity/ Total Assets (%) | 8.0 | 9.7 | ||||||
Tangible Equity/ Tangible Assets (%) | 6.0 | 8.8 | ||||||
Total Capital Ratio (%) | 12.9 | 13.4 | ||||||
Asset Quality (MRQ) | ||||||||
NPLs/ Loans (%) | 0.25 | 0.05 | ||||||
Reserves/ NPLs (%) | 366.0 | 229.3 | ||||||
Reserves/ Loans (%) | 0.92 | 1.09 | ||||||
NPAs/ Assets (%) | 0.21 | 0.05 | ||||||
NCOs/ Avg. Loans (%) | 0.03 | 0.05 | ||||||
Performance (LTM) | ||||||||
ROAA (%) | 0.96 | 1.23 | ||||||
ROAE (%) | 11.9 | 13.6 | ||||||
Return on Avg. Tangible Equity (%) | 13.6 | 15.5 | ||||||
Net Interest Margin (%) | 4.19 | 3.99 | ||||||
Noninterest Income/ Avg. Assets (%) | 0.64 | 1.02 | ||||||
Efficiency Ratio (%) | 65.8 | 62.4 | ||||||
Market Statistics | ||||||||
Closing Price (1/25/07) | $ | 19.91 | ||||||
Price/ LTM Earnings | 13.8 | x | 15.4 | x | ||||
Price/ 2007 Earnings | 12.4 | x | 14.3 | x | ||||
Price/ Tangible Book (%) | 213.9 | 202.0 | ||||||
Price/ Book (%) | 158.3 | 180.3 | ||||||
Current Dividend Yield (%) | 1.31 | 2.12 |
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Peer | ||||||||
United | Median | |||||||
Capitalization (MRQ) | ||||||||
Total Assets ($000) | 6,717,598 | 6,209,080 | ||||||
Total Deposits ($000) | 4,828,192 | 4,818,871 | ||||||
Total Equity ($000) | 634,092 | 596,392 | ||||||
Total Equity/ Total Assets (%) | 9.4 | 9.7 | ||||||
Tangible Equity/ Tangible Assets (%) | 7.1 | 6.3 | ||||||
Total Capital Ratio (%) | 11.4 | 11.8 | ||||||
Asset Quality (MRQ) | ||||||||
NPLs/ Loans (%) | 0.15 | 0.38 | ||||||
Reserves/ NPLs (%) | 436.9 | 309.7 | ||||||
Reserves/ Loans (%) | 0.91 | 1.25 | ||||||
NPAs/ Assets (%) | 0.15 | 0.27 | ||||||
NCOs/ Avg. Loans (%) | 0.04 | 0.13 | ||||||
Performance (LTM) | ||||||||
ROAA (%) | 1.34 | 1.12 | ||||||
ROAE (%) | 13.9 | 12.7 | ||||||
Return on Avg. Tangible Equity (%) | 19.2 | 20.2 | ||||||
Net Interest Margin (%) | 3.83 | 3.81 | ||||||
Noninterest Income/ Avg. Assets (%) | 0.78 | 1.25 | ||||||
Efficiency Ratio (%) | 46.9 | 58.7 | ||||||
Market Statistics | ||||||||
Closing Price (1/25/07) | $ | 36.35 | ||||||
Price/ LTM Earnings | 17.1 | x | 16.4 | x | ||||
Price/ 2007 Earnings | 14.5 | x | 15.3 | x | ||||
Price/ Tangible Book (%) | 321.7 | 307.9 | ||||||
Price/ Book (%) | 235.4 | 177.8 | ||||||
Current Dividend Yield (%) | 3.00 | 3.03 | ||||||
Market Value ($ in millions) | 1,492.5 | 1,109.5 | ||||||
Ave. Daily Volume (1-year) | 107,795 | 118,007 |
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Premier | United | |||||||
Total Assets | 12 | % | 88 | % | ||||
Net Loans | 14 | % | 86 | % | ||||
Deposits | 13 | % | 87 | % | ||||
Tangible common equity | 10 | % | 90 | % | ||||
Net income – 2007E | 8 | % | 92 | % | ||||
Net income – 2006 | 8 | % | 92 | % | ||||
Market Capitalization | 7 | % | 93 | % | ||||
Proposed ownership – all stock | 11 | % | 89 | % | ||||
Proposed ownership – 50% stock / 50% cash | 6 | % | 94 | % |
Per Premier Share – 50% Stock / 50% Cash | ||||||||||||||||
Contribute | Receive | Accretion / (Dilution) | ||||||||||||||
($) | (%) | |||||||||||||||
2007 EPS | $ | 1.60 | $ | 2.32 | $ | 0.72 | 45.0 | % | ||||||||
2007 Cash EPS | $ | 1.65 | $ | 2.39 | $ | 0.74 | 45.0 | % |
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Per Premier Share – 50% Stock / 50% Cash | ||||||||||||||||
Contribute | Receive | Accretion / (Dilution) | ||||||||||||||
Book Value per Share | $ | 12.58 | $ | 15.72 | $ | 3.14 | 24.9 | % | ||||||||
Tangible Book Value per Share | $ | 9.31 | $ | 8.84 | -$0.47 | -5.1 | % | |||||||||
Dividend per Share | $ | 0.26 | $ | 1.04 | $ | 0.78 | 300.6 | % |
Per Premier Share – 65% Stock / 35% Cash | ||||||||||||||||
Contribute | Receive | Accretion / (Dilution) | ||||||||||||||
($) | (%) | |||||||||||||||
2007 EPS | $ | 1.60 | $ | 2.30 | $ | 0.70 | 44.1 | % | ||||||||
2007 Cash EPS | $ | 1.65 | $ | 2.37 | $ | 0.72 | 44.1 | % | ||||||||
Book Value per Share | $ | 12.58 | $ | 16.05 | $ | 3.47 | 27.5 | % | ||||||||
Tangible Book Value per Share | $ | 9.31 | $ | 9.29 | -$0.02 | -0.3 | % | |||||||||
Dividend per Share | $ | 0.26 | $ | 1.04 | $ | 0.78 | 300.6 | % |
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• | United Bankshares chose Donald L. Unger to be appointed to the board of directors of United Bankshares following the merger; | ||
• | Premier Community Bankshares chose John K. Stephens and Joseph H. Hollis, who are current members of Premier Community Bankshares board, and James A. Fernald, III, who is a current member of the Rockingham Heritage Bank board, to be appointed to the board of directors of United Bank and United Bankshares approved such selection; and | ||
• | any directors of Premier Community Bankshares who are not chosen to serve on the board of directors of United Bank will serve on a newly-created regional advisory board for the area encompassing the Winchester, Harrisonburg and Charlottesville, Virginia market known as the Northern Virginia Market. |
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• | The shareholders of Premier Community Bankshares approve the reorganization agreement and the transactions contemplated thereby, described in the proxy statement/prospectus at the meeting of shareholders for Premier Community Bankshares; | ||
• | All regulatory approvals required by law to consummate the transactions contemplated by the reorganization agreement are obtained from the Federal Reserve Board, the Virginia State Corporation Commission, the West Virginia Board of Banking and Financial Institutions and the other appropriate federal and/or state regulatory agencies without unreasonable conditions, and all waiting periods after such approvals required by law or regulation expire; | ||
• | The registration statement (of which this proxy statement/prospectus is a part) registering shares of United Bankshares common stock to be issued in the merger is declared effective and not subject to a stop order or any threatened stop order; | ||
• | There shall be no actual or threatened litigation, investigations or proceedings challenging the validity of, or damages in connection with, the merger that would have a material adverse effect with respect to the interests of United Bankshares or Premier Community Bankshares or impose a term or condition that shall be deemed to materially adversely impact the economic or business benefits of the merger; | ||
• | The absence of any statute, rule, regulation, judgment, decree, injunction or other order being enacted, issued, promulgated, enforced or entered by a governmental authority effectively prohibiting consummation of the merger; | ||
• | All permits or other authorizations under state securities laws necessary to consummate the merger and to issue the shares of United Bankshares common stock to be issued in the merger being obtained and remaining in full force and effect; and | ||
• | Authorization for the listing on The NASDAQ Stock Market, Inc.’s Global Select Market of the shares of United Bankshares common stock to be issued in the merger. |
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• | The representations and warranties of Premier Community Bankshares made in the reorganization agreement are true and correct as of the date of the reorganization agreement and as of the effective time of the merger and United Bankshares receives a certificate of the chief executive officer and the chief financial officer of Premier Community Bankshares to that effect; | ||
• | Premier Community Bankshares performs in all material respects all obligations required to be performed under the reorganization agreement prior to the effective time of the merger and delivers to United Bankshares a certificate of its chief executive officer and chief financial to that effect; and | ||
• | United Bankshares shall have received an opinion of Bowles Rice McDavid Graff & Love LLP, special counsel to United Bankshares, dated as of the effective time of the merger, that the merger constitutes a “reorganization” under Section 368 of the Internal Revenue Code. |
• | The representations and warranties of United Bankshares made in the reorganization agreement are true and correct as of the date of the reorganization agreement and as of the effective time of the merger and Premier Community Bankshares receives a certificate of the chief executive officer and chief financial officer of United Bankshares to that effect; | ||
• | United Bankshares performs in all material respects all obligations required to be performed under the reorganization agreement prior to the effective time of the merger and delivers to Premier Community Bankshares a certificate of its chief executive officer and chief financial officer to that effect; and | ||
• | Premier Community Bankshares shall have received an opinion of Williams Mullen, counsel to Premier Community Bankshares, stating that, among other things, as of the effective time of the merger, the merger constitutes a “reorganization” under Section 368 of the Internal Revenue Code and that no gain or loss will be recognized by the shareholders of Premier Community Bankshares to the extent that they receive United Bankshares common stock in exchange for their Premier Community Bankshares common stock in the merger. |
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• | organization and good standing of each entity and its subsidiaries; | ||
• | each entity’s capital structure; | ||
• | each entity’s authority relative to the execution and delivery of, and performance of its obligations under, the reorganization agreement; | ||
• | absence of material adverse changes since December 31, 2006; | ||
• | consents and approvals required; | ||
• | regulatory matters; | ||
• | accuracy of documents, including financial statements and other reports, filed by each company with the SEC; | ||
• | absence of defaults under contracts and agreements; | ||
• | absence of environmental problems; | ||
• | absence of conflicts between each entity’s obligations under the reorganization agreement and its charter documents and contracts to which it is a party or by which it is bound; | ||
• | litigation and related matters; | ||
• | taxes and tax regulatory matters; | ||
• | compliance with the Sarbanes-Oxley Act and accounting controls; | ||
• | absence of brokerage commissioners, except as disclosed for financial advisors; | ||
• | employee benefit matters; | ||
• | books and records fully and accurately maintained and fairly present events and transactions; and | ||
• | Insurance matters. |
• | the approval of any governmental entity required for consummation of the merger is denied by a final nonappealable action of such governmental entity; | ||
• | the merger has not been completed on or before November 30, 2007, unless the failure of the merger to be consummated arises out of or results from the knowing action or inaction of the party seeking to terminate; | ||
• | there has been a breach by the other party of any of its obligations under the reorganization agreement, which breach cannot be or has not been cured within 30 days following written notice to the breaching party of such breach; or |
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• | the reorganization agreement is not approved by the shareholders of Premier Community Bankshares. |
• | The reorganization agreement is terminated for failure to obtain the approval of Premier Community Bankshares’ shareholders, and at such time a competing acquisition proposal for Premier Community Bankshares has been made public and not withdrawn; or | ||
• | The reorganization agreement is terminated because Premier Community Bankshares’ board fails to recommend, withdraws, modifies, or changes its recommendation of the merger. |
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• | Conduct business other than in the ordinary and usual course or fail to use reasonable efforts to preserve intact their business organizations and assets, or take any action reasonably likely to have an adverse effect upon its ability to perform any of its material obligations under the reorganization agreement; | ||
• | Except as required by applicable law or regulation, implement or adopt any material change in its interest rate or other risk management policies, practices or procedures, fail to follow existing policies or practices with respect to managing exposure to interest rate and other risks, or fail to use commercially reasonable means to avoid any material increase in its aggregate exposure to interest rate risk; or | ||
• | Take any action while knowing that such action would, or is reasonably likely to, prevent or impede the merger from qualifying as a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended, or knowingly take any action that is intended or is reasonably likely to result in any of its representations and warranties set forth in the reorganization agreement being or becoming untrue in any material respect at any time at or prior to the effective time, any of the conditions to the merger not being satisfied, or a material violation of any provision of the merger agreement except, in each case, as may be required by applicable law or regulation. |
• | Other than pursuant to rights previously disclosed and outstanding on the date of the merger agreement, issue, sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares of Premier Community Bankshares common stock or any rights to purchase Premier Community Bankshares common stock, enter into any agreement with respect to the foregoing, or permit any additional shares of Premier Community Bankshares common stock to become subject to new grants of employee or director stock options, other rights or similar stock-based employee rights; | ||
• | Make, declare, pay or set aside for payment any dividend (other than regular quarterly cash dividends in an amount not to exceed $0.065 per share of Premier Community Bankshares common stock on the record and payment dates consistent with past practice and dividends from wholly-owned subsidiaries to Premier Community Bankshares,or another wholly-owned subsidiary of Premier Community Bankshares) on or in respect of, or declare or make any distribution on, any shares of Premier Community Bankshares stock or directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock; | ||
• | Enter into or amend or renew any employment, consulting, severance or similar agreements or arrangements with any director, officer or employee of Premier Community Bankshares or its subsidiaries, or grant any salary or wage increase or increase any employee benefit (including incentive or bonus payments), except for normal individual payments of incentives and bonuses to employees in the ordinary course of business consistent with past practice; | ||
• | Enter into, establish, adopt or amend (except as may be required by applicable law or to satisfy previously disclosed contractual obligations existing as of the date of the merger |
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agreement) any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or any trust agreement (or similar arrangement) related thereto, in respect of any director, officer or employee of Premier Community Bankshares or its subsidiaries, or take any action to accelerate the vesting or exercisability of stock options, restricted stock or other compensation or benefits payable thereunder; | |||
• | Except as previously disclosed, sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any of its assets, deposits, business or properties except in the ordinary course of business and in a transaction that is not material to it and its subsidiaries taken as a whole; | ||
• | Except as previously disclosed, acquire (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary and usual course of business consistent with past practice) all or any portion of the assets, business, deposits or properties of any other entity; | ||
• | Amend Premier Community Bankshares’ articles of incorporation or bylaws or the articles of incorporation or bylaws (or similar governing documents) of any of Premier Community Bankshares’ subsidiaries; | ||
• | Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by generally accepted accounting principles; | ||
• | Except in the ordinary course of business consistent with past practice, enter into or terminate any material contract or amend or modify in any material respect any of its existing material contracts; | ||
• | Except in the ordinary course of business consistent with past practice, settle any claim, action or proceeding, except for any claim, action or proceeding that does not involve precedent for other material claims, actions or proceedings and that involve solely money damages in an amount, individually or in the aggregate for all such settlements, that is not material to Premier Community Bankshares and its subsidiaries, taken as a whole; | ||
• | Incur any indebtedness for borrowed money other than in the ordinary course of business; or | ||
• | Agree or commit to do any of the foregoing. |
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• | Make, declare, pay or set aside for payment any extraordinary dividend, other than in connection with the United Bankshares Stock Repurchase Program; | ||
• | Prior to the effective time, enter into, or permit any United Bankshares subsidiary to enter into, any agreement, arrangement or understanding with respect to the merger, acquisition, consolidation, share exchange or similar business combination involving United Bankshares and/or a United Bankshares subsidiary, where the effect of such agreement, arrangement or understanding, or the consummation or effectuation thereof, would be reasonably likely to result in the termination of the merger agreement, materially delay or jeopardize the receipt of the approval of any regulatory authority or the filing of an application therefore, or cause the anticipated tax treatment of the transactions contemplated in the merger agreement to be unavailable; provided, however, that nothing in such covenant shall prohibit any such transaction that by its terms contemplates the consummation of the merger in accordance with the provisions of the merger agreement and that treats holders of Premier Community Bankshares common stock, upon completion of the merger and their receipt of United Bankshares stock, in the same manner as the holders of United Bankshares stock; | ||
• | Amend United Bankshares’ articles of incorporation or bylaws in a manner that would materially and adversely effect the benefits of the merger to the shareholders of Premier Community Bankshares; or | ||
• | Agree or commit to do any of the foregoing. |
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United Bankshares | Premier Community Bankshares | |
100,000,000 shares of common stock, $2.50 par value per share. | 20,000,000 shares of common stock, $1.00 par value per share and 1,000,000 shares of preferred stock, without par value. |
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United Bankshares | Premier Community Bankshares | |
United Bankshares’ bylaws provide that the board of directors shall consist of at least 5 and no more than 35 directors, provided that the number may be increased or decreased from time to time by an amendment to the bylaws, but no decrease shall have the effect of shortening the term of any incumbent director. United Bankshares’ board of directors currently consists of 15 individuals, and immediately following the merger will consist of 16 individuals, all of whom are elected annually. | Premier Community Bankshares’ bylaws provide that the board of directors shall consist of 13 directors, subject to change as provided in Premier Community Bankshares’ articles of incorporation. Premier Community Bankshares’ articles of incorporation provide that the board of directors may amend the bylaws to increase or decrease the number of directors by up to 30% of the number of directors last elected by the shareholders or, if the directors’ terms are staggered, the number of directors of all classes immediately following the most recent election of directors by shareholders. Currently, 12 individuals serve on the board of directors of Premier Community Bankshares. |
United Bankshares | Premier Community Bankshares | |
United Bankshares stockholders are allowed to cumulate their votes in the election of directors. Each share of United Bankshares stock may be voted for as many individuals as there are directors to be elected. Directors are elected by a plurality of the votes cast by the holders entitled to vote at the meeting. | Premier Community Bankshares’ shareholders do not have a right to cumulative voting in the election of directors because the articles of incorporation do not provide for such a right. Directors are elected by a plurality of the votes cast by the holders entitled to vote at the meeting. |
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United Bankshares | Premier Community Bankshares | |
United Bankshares only has one class of directors. | Premier Community Bankshares’ articles of incorporation and bylaws provide that Premier Community Bankshares’ board of directors is divided into three classes of directors as nearly equal in number as possible, with each class being elected to a staggered three-year term. |
United Bankshares | Premier Community Bankshares | |
United Bankshares has retirement provisions based on age in its Corporate Governance Policy. United Bankshares’ bylaws do not require that a person own shares of stock of United Bankshares to be qualified as a director. | Premier Community Bankshares’ bylaws do not require that a person own shares of stock of Premier Community Bankshares to be qualified as a director. The bylaws state that the term of a director shall expire at the end of the calendar year in which he or she becomes 70 years old, regardless of his or her remaining term. This limitation does not apply to directors as of August 8, 2006. |
United Bankshares | Premier Community Bankshares | |
United Bankshares’ bylaws provide that each vacancy existing on the board of directors and any directorship to be filled by reason of an increase in the number of directors, unless the articles of incorporation or bylaws provide that a vacancy shall be filled in some other manner, may be filled by the affirmative vote of a majority of the remaining directors at an annual, regular or special meeting of the board of directors. Any directorship to be filled by reason of a vacancy or an increase in the number of directors may be filled by the board of directors for a term of office continuing only until the next election of directors by the shareholders. | Premier Community Bankshares’ articles of incorporation and bylaws provide that, subject to the rights of any preferred stock then outstanding, any vacancy occurring on Premier Community Bankshares’ board of directors may be filled by an affirmative vote of a majority of the remaining directors though less than a quorum. Premier Community Bankshares’ bylaws provide that directors shall be elected at each annual shareholder meeting to fill any vacancies on the board of directors then existing. |
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United Bankshares | Premier Community Bankshares | |
Under West Virginia law any member of the board may be removed, with or without cause, by the affirmative vote of a majority of all the votes entitled to be cast for the election of directors; provided, however, that a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against the director’s removal. | Premier Community Bankshares’ articles of incorporation and bylaws provide that a director may be removed only for cause by the affirmative vote of more than two-thirds of the outstanding shares entitled to vote generally in the election of directors. |
United Bankshares | Premier Community Bankshares | |
Shareholders may make a nomination for director provided that such nomination or nominations must be made in writing, signed by the shareholder and received by the Chairman or President of United Bankshares no later than 10 days from the date the notice on the meeting of shareholders was mailed; however, in the event the notice is mailed less than 13 days prior to the meeting, such nomination or nominations must be received no later than 3 days prior to any meeting of the shareholders wherein directors are to be elected. United Bankshares’ bylaws do not address shareholder proposals except with regard to the nomination of directors. | Premier Community Bankshares’ bylaws provide that shareholders may bring business before any shareholder meeting and may nominate directors at any meeting of shareholders at which directors are to be elected, provided the shareholder has given written notice of such business or nomination to the Secretary of Premier Community Bankshares not less than 45 days prior to the meeting. Such notice must contain specific information as further delineated in Premier Community Bankshares’ bylaws. |
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United Bankshares | Premier Community Bankshares | |
United Bankshares’ articles of incorporation and bylaws do not contain any anti-takeover provisions. In addition, West Virginia corporate law does not contain statutory provisions concerning restrictions on business combinations. | Premier Community Bankshares’ bylaws provide that the provisions of Virginia law that regulate certain “control share acquisitions” shall not apply. “Control share acquisitions” are transactions causing the voting strength of any person acquiring beneficial ownership of shares of a public corporation in Virginia to meet or exceed certain threshold percentages (20%, 331/3% or 50%) of the total votes entitled to be cast for the election of directors. Premier Community Bankshares’ articles of incorporation provide for restriction on the transfer of shares of common stock to any person who is or who, immediately following the transfer, would be an “interested shareholder,” unless the transfer has been approved in advance in a resolution adopted by a majority of the board of directors. An “interested shareholder” is any person who is a beneficial owner, directly or indirectly, of 10% or more of the outstanding shares of common stock. |
United Bankshares | Premier Community Bankshares | |
United Bankshares’ articles of incorporation and bylaws are silent as to shareholder action without a meeting. Accordingly, West Virginia law would govern. | Premier Community Bankshares’ articles of incorporation and bylaws are silent as to shareholder action without a meeting. Accordingly, Virginia law would govern. |
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United Bankshares | Premier Community Bankshares | |
The annual meeting of the shareholders of United Bankshares shall be held on the third Monday in May of each calendar year or on such other date as may be designated in the notice and call of such meeting, at the principal office of United Bankshares, or at such other place either within or without the State of West Virginia as the board of directors shall, from time to time, determine, and the place and the hour at which such meeting shall be held shall be stated in the notice and call of such meeting. | Premier Community Bankshares’ bylaws provide that annual meetings of shareholders may be called by the chairman of the board of directors, the president, or a majority of the board of directors. The notice must contain specific items as delineated in Premier Community Bankshares’ bylaws. |
United Bankshares | Premier Community Bankshares | |
United Bankshares’ bylaws require that the notice of annual and special meetings be given by mailing to each shareholder a written notice specifying the time and place of such meeting, and, in the case of special meetings, the business to be transacted. The notice must be mailed to the last addresses of the shareholders as they respectively appear upon the books of the United Bankshares, and in the case of annual meetings, not less than 10 days, and in the case of special meetings, not less than 5 days, before the date of such meeting. | Premier Community Bankshares’ bylaws require that notice of any annual or special meeting of the shareholders be mailed not less than 10 nor more than 60 days before the date of the meeting. Virginia law provides that notice must be given not less than 25 days nor more than 60 days before a meeting called to act on an amendment to the articles of incorporation, a plan of merger or share exchange, domestication or entity conversion, a proposed sale, lease, exchange or other disposition of all, or substantially all, of the property of Premier Community Bankshares other than in the usual and regular course of business, or the dissolution of Premier Community Bankshares. Such notice must contain specific information as delineated in the bylaws and under Virginia law. |
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of Incorporation and Certain Transactions
United Bankshares | Premier Community Bankshares | |
Under West Virginia law, the United Bankshares articles of incorporation may be amended by the affirmative vote of a majority of all votes of stockholders entitled to be cast on the matter, unless a different number is specified in the articles of incorporation or required by the board of directors. The articles of incorporation of United Bankshares do not specify a different number. West Virginia law provides that on matters other than the election of directors and certain extraordinary corporate actions, if a quorum is present, then action on a matter is approved if the votes cast favoring the action exceed the votes cast opposing the action, unless the vote of a greater number is required by law or the articles of incorporation or bylaws. The articles of incorporation or bylaws of United Bankshares do not require a greater number. An abstention is not considered a “vote cast” for purposes of the voting requirements, but a stockholder who abstains in person or by proxy is considered present for purposes of the quorum requirement. Under West Virginia law, a consolidation, merger, share exchange or transfer must be approved by the stockholders of the corporation by the affirmative vote of a majority of all votes entitled to be cast on the matter. The articles of incorporation of United Bankshares do not provide for a different number. | Premier Community Bankshares’ articles of incorporation provide that, unless the board of directors requires a greater vote, any amendment to the articles requiring shareholder approval under Virginia law shall be approved by not less than a majority of the votes casts on the proposed amendment by each class or series of stock entitled to vote on the amendment. Any amendment to the provisions relating to the election, term, class or removal of directors or the filling of vacancies on the board of directors requires the affirmative vote of either (i) two-thirds of the shares entitled to vote in the election of directors or (ii) a majority of the “continuing directors” and the holders of the requisite number of shares specified by the board of directors. A “continuing director” is a director who (a) was elected at the organizational meeting of Premier Community Bankshares or (b) was recommended for election by, or was elected to fill a vacancy by, a majority of the continuing directors then on the board. Premier Community Bankshares’ articles further provide that, unless the board of directors requires a greater vote, any “extraordinary corporate event” requiring shareholder approval under Virginia law shall be approved by more than two-thirds of all votes cast by each class or series of stock entitled to vote. An “extraordinary corporate event” is any merger, statutory share exchange, sale of all or substantially all of the assets of Premier Community Bankshares or dissolution of Premier Community Bankshares. |
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United Bankshares | Premier Community Bankshares | |
Under West Virginia law, the United Bankshares bylaws may be amended by the affirmative vote of a majority of all votes of stockholders entitled to be cast on the matter, unless a different number is specified in the articles of incorporation or required by the board of directors. The articles of incorporation of United Bankshares do not specify a different number. Under West Virginia law and United Bankshares’ bylaws, both the board of directors and stockholders have the power to amend the bylaws. | Premier Community Bankshares’ bylaws vest the power in the Premier Community Bankshares board of directors to make, alter, amend or repeal the bylaws; provided, however, the bylaws contain provisions that are substantially similar to the provisions in the articles of incorporation relating to the election, term, class and removal of directors and the filling of vacancies, which require the same actions to be amended as the provisions in the articles of incorporation. |
United Bankshares | Premier Community Bankshares | |
Under West Virginia law, stockholders are generally entitled to object and receive payment of the fair value of their stock in the event of any of the following corporate actions: merger, transfer of all or substantially all of the corporation’s assets, participation in a share exchange as the corporation the stock of which is to be acquired, or an amendment to the articles of incorporation that reduces the number of shares of a class or series owned by stockholders to a fraction of a share if the corporation has the obligation or right to repurchase the fractional shares. | Under Virginia law, shareholders are generally entitled to object and receive payment of the fair value of their shares of stock in the event of any of the following corporate actions: merger, transfer of all or substantially all of the corporation’s assets, participation in a share exchange as the corporation the stock of which is to be acquired, or an amendment to the articles of incorporation that reduces the number of shares of a class or series owned by shareholders to a fraction of a share if the corporation has the obligation or right to repurchase the fractional shares. However, appraisal rights are not available to shareholders in the event of one of the foregoing corporate actions if the stock is held by 2,000 or more shareholders and the outstanding shares of stock, excluding shares held by affiliates or shareholders holding more than 10% of the outstanding shares, have an aggregate market value of $20 million or more. |
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United Bankshares | Premier Community Bankshares | |
A West Virginia corporation generally may pay dividends in cash, property or its own shares except when the corporation is unable to pay its debts as they become due in the usual course of business or the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of the dividend, to satisfy any stockholders who have rights superior to those receiving the dividend. | A Virginia corporation generally may pay dividends in cash, property or its own shares except when the corporation is unable to pay its debts as they become due in the usual course of business or the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of the dividend, to satisfy any stockholders who have rights superior to those receiving the dividend. |
United Bankshares | Premier Community Bankshares | |
West Virginia law requires that a director of a West Virginia corporation discharge duties as a director in good faith, in a manner reasonably believed to be in the best interest of the corporation and with the care that a person in a like position would reasonably believe appropriate under similar circumstances. United Bankshares’ articles of incorporation provide that each director or officer of United Bankshares shall be indemnified for costs and expenses arising out of any criminal or civil suit or proceeding against the director or officer by reason of being a director or officer of United Bankshares. However, a director or officer shall not be indemnified if he or she is adjudged in such suit or proceeding to be liable for gross negligence or willful misconduct in performance of a duty owed to the corporation. | Virginia law requires that a director of a West Virginia corporation discharge duties as a director in accordance with his or her good faith business judgment of the best interests of the corporation. Premier Community Bankshares’ articles of incorporation provide that each of its directors or officers shall be indemnified for costs and expenses arising out of any criminal or civil suit or proceeding against the director or officer by reason of being a director or officer of Premier Community Bankshares. However, a director or officer shall not be indemnified if he or she engaged in willful misconduct or a knowing violation of criminal law or any federal or state securities law. |
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• Quarterly Report on Form 10-Q | Quarter ended March 31, 2007 | |
• Annual Report on Form 10-K | Year ended December 31, 2006. | |
• Definitive Proxy Materials for the 2007 Annual Meeting of Shareholders | Filed on April 11, 2007. | |
• Current Reports on Form 8-K | Filed on January 29, 2007, April 25, 2007 and May 1, 2007. | |
• Quarterly Report on Form 10-Q | Quarter ended March 31, 2007 | |
• Annual Report on Form 10-K | Year ended December 31, 2006. | |
• Current Reports on Form 8-K | Filed on January 9, 2007, January 29, 2007, February 22, 2007 and May 25, 2007. | |
United Bankshares, Inc. | Premier Community Bankshares, Inc. | |
514 Market Street | 4095 Valley Pike | |
Parkersburg, West Virginia 26102 | Winchester, Virginia 22602 | |
Attention: Jennie Singer | Attention: Barbara Morris | |
Telephone: (304) 424-8800 | Telephone: (540) 869-6600 |
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ARTICLE I | Certain Definitions | A-4 | ||||
1.01 | Certain Definitions | A-4 | ||||
ARTICLE II | The Merger | A-10 | ||||
2.01 | The Merger | A-10 | ||||
2.02 | Effective Date and Effective Time | A-11 | ||||
ARTICLE III | The Bank Merger | A-11 | ||||
3.01 | The Bank Merger | A-11 | ||||
3.02 | Effective Date and Effective Time | A-12 | ||||
ARTICLE IV | Consideration; Exchange Procedures | A-12 | ||||
4.01 | Merger Consideration | A-12 | ||||
4.02 | Election and Proration Procedures | A-13 | ||||
4.03 | Rights as Stockholders; Stock Transfers | A-16 | ||||
4.04 | Fractional Shares | A-16 | ||||
4.05 | Exchange Procedures | A-16 | ||||
4.06 | Anti-Dilution Provisions | A-17 | ||||
4.07 | Options | A-17 | ||||
4.08 | Dissenters’ Rights | A-18 | ||||
ARTICLE V | Actions Pending the Effective Time | A-19 | ||||
5.01 | Forebearances of Premier | A-19 | ||||
5.02 | Forebearances of United | A-21 | ||||
ARTICLE VI | Representations and Warranties | A-22 | ||||
6.01 | Disclosure Schedules | A-22 | ||||
6.02 | Standard | A-22 | ||||
6.03 | Representations and Warranties of Premier | A-22 | ||||
6.04 | Representations and Warranties of United | A-31 | ||||
ARTICLE VII | Covenants | A-39 | ||||
7.01 | Reasonable Best Efforts | A-39 | ||||
7.02 | Stockholder Approvals | A-39 | ||||
7.03 | Registration Statement | A-40 | ||||
7.04 | Press Releases | A-41 | ||||
7.05 | Access; Information | A-41 | ||||
7.06 | Acquisition Proposals | A-41 | ||||
7.07 | Affiliate Agreements | A-42 | ||||
7.08 | Takeover Laws | A-42 | ||||
7.09 | Certain Policies | A-42 |
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Page | ||||||
7.10 | Regulatory Applications | A-43 | ||||
7.11 | Indemnification | A-43 | ||||
7.12 | Benefit Plans | A-44 | ||||
7.13 | Notification of Certain Matters | A-45 | ||||
7.14 | Directors and Officers | A-45 | ||||
7.15 | Current Public Information | A-45 | ||||
ARTICLE VIII | Conditions to Consummation of the Merger | A-46 | ||||
8.01 | Conditions to Each Party’s Obligation to Effect the Merger | A-46 | ||||
8.02 | Conditions to Obligation of Premier | A-46 | ||||
8.03 | Conditions to Obligation of United | A-47 | ||||
ARTICLE IX | Termination | A-48 | ||||
9.01 | Termination | A-48 | ||||
9.02 | Effect of Termination and Abandonment | A-50 | ||||
9.03 | Fees and Expenses | A-50 | ||||
ARTICLE X | Miscellaneous | A-50 | ||||
10.01 | Survival | A-50 | ||||
10.02 | Waiver; Amendment | A-50 | ||||
10.03 | Counterparts | A-50 | ||||
10.04 | Governing Law | A-50 | ||||
10.05 | Expenses | A-50 | ||||
10.06 | Notices | A-50 | ||||
10.07 | Entire Understanding; No Third Party Beneficiaries | A-51 | ||||
10.08 | Interpretation; Effect | A-51 |
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4095 Valley Pike
Winchester, Virginia 22602
Attn: Donald L. Unger
President and Chief Executive Officer
Two James Center
1021 East Cary Street (23219)
P.O. Box 1320
Richmond, Virginia 23218-1320
Facsimile: (804)783-6507
Attn: Wayne A. Whitham, Jr., Esq.
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514 Market Street
Parkersburg, WV 26101
Attn: Richard M. Adams,
Chairman of the Board and Chief Executive Officer
Steven Wilson
Chief Financial Officer
600 Quarrier Street (25301)
P. O. Box 1386
Charleston, West Virginia 25325-1386
Facsimile: (305) 343-3058
Attn: Sandra M. Murphy, Esq.
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PREMIER COMMUNITY BANKSHARES, INC. | ||||
By: | /s/ Donald L. Unger | |||
Donald L. Unger | ||||
Title: | President and Chief Executive Officer | |||
UNITED BANKSHARES, INC. | ||||
By: | /s/ Richard M. Adams | |||
Richard M. Adams | ||||
Title: | Chairman of the Board and | |||
Chief Executive Officer |
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SUPPLEMENT FOR MERGER SUB ACCESSION
TO MERGER AGREEMENT
[Insert name of Merger Sub ] | ||||
By: | ||||
Name: | ||||
Title: |
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PREMIER COMMUNITY BANKSHARES, INC. | ||||
By: | ||||
Name: | ||||
Title: | President and Chief Executive Officer | |||
UNITED BANKSHARES, INC. | ||||
By: | ||||
Name: | Richard M. Adams | |||
Title: | Chairman of the Board and | |||
Chief Executive Officer |
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514 Market Street
Parkersburg, WV 26101
Attention: Steven Wilson,
Chief Financial Officer
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�� | ||||
Very truly yours, | ||||
By: | ||||
Name: | ||||
Title: |
PREMIER COMMUNITY BANKSHARES, INC. | ||||
By: | ||||
Name: | ||||
Title: | President and Chief Executive Officer | |||
UNITED BANKSHARES, INC. | ||||
By: | ||||
Name: | Richard M. Adams | |||
Title: | Chairman of the Board and | |||
Chief Executive Officer |
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Premier Community Bankshares, Inc.
4095 Valley Pike
Winchester, VA 22602
1. | Reviewed the Agreement; | ||
2. | Reviewed various publicly available financial statements and other information of Premier and United; | ||
3. | Reviewed non-public financial information and operating data of Premier and United provided by their respective managements; | ||
4. | Reviewed the reported prices and trading activity for Premier common stock and United common stock; | ||
5. | Held discussions with members of Premier’s and United’s management regarding past and current business operations, financial condition, results of regulatory examinations, the Merger and the business and future prospects of Premier and United, respectively; |
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6. | Compared the results of operations and market value of Premier and United with similar information for selected publicly traded companies which we deemed to be relevant; | ||
7. | Compared the proposed financial terms of the Merger with the financial terms of various other mergers and acquisitions of financial institutions in recent years; | ||
8. | Took into account our assessment of general economic, market and financial conditions and our experience in other transactions, as well as our experience in securities valuations and knowledge of the commercial banking industry generally; and | ||
9. | Conducted other studies, analyses and investigations, and considered other information that we deemed appropriate. |
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Exhibit | ||
Number | Description of Exhibits | |
2.1 | Agreement and Plan of Reorganization, dated as of January 26, 2007, by and between United Bankshares, Inc., and Premier Community Bankshares, Inc. (included as Annex A to the proxy statement/prospectus). | |
5.1 | Opinion of Bowles Rice McDavid Graff & Love LLP, including consent. | |
8.1 | Tax Opinion of Bowles Rice McDavid Graff & Love LLP, including consent. | |
8.2 | Tax Opinion of Williams Mullen, including consent. | |
21 | Subsidiaries of Registrant (Incorporated herein by reference to United Bankshares, Inc.’s Form 10-K for the year ended December 31, 2006). | |
23.1 | Consent of Bowles Rice McDavid Graff & Love LLP (included in Legal Opinion, Exhibit 5.1). | |
23.2 | Consent of Bowles Rice McDavid Graff & Love LLP (included in Legal Opinion, Exhibit 8.1). | |
23.3 | Consent of Williams Mullen (included in Legal Opinion, Exhibit 8.2). | |
23.4 | Consent of Ernst & Young LLP. | |
23.5 | Consent of Yount, Hyde & Barbour, P.C. | |
23.6 | Consent of Davenport & Company LLC. | |
*24 | Powers of Attorney (signature page). | |
*99.1 | Consent of Donald L. Unger. |
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Exhibit | ||
Number | Description of Exhibits | |
* 99.2 | Form of Proxy for Premier Community Bankshares, Inc. | |
* 99.3 | Form of Affiliate Letter (included as Exhibit A to Agreement and Plan of Reorganization which is included as Annex to the proxy statement/prospectus). |
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UNITED BANKSHARES, INC. | ||||
By: | /s/ Richard M. Adams | |||
Chairman of the Board and | ||||
Chief Executive Officer | ||||
By: | /s/ Steven E. Wilson | |||
Chief Financial Officer | ||||
Signatures | Title | Date | ||
/s/ Richard M. Adams | Chairman of the Board, Director, | June 1, 2007 | ||
and Chief Executive Officer | ||||
/s/ Steven E. Wilson | Chief Financial Officer | June 1, 2007 | ||
Chief Accounting Officer | ||||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
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Signatures | Title | Date | ||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
Director | June 1, 2007 | |||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
* | Director | June 1, 2007 | ||
* | Signed pursuant to Powers of Attorney dated April 20, 2007, included as part of the signature page to the Registration Statement on Form S-4 for United Bankshares, Inc. filed April 24, 2007. | |
/s/ Richard M. Adams | ||
Richard M. Adams | ||
Chairman of the Board, Director and Chief Executive Officer | ||
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Exhibit | ||
Number | Description of Exhibits | |
2.1 | Agreement and Plan of Reorganization, dated as of January 26, 2007, by and between United Bankshares, Inc., and Premier Community Bankshares, Inc. (included as Annex A to the proxy statement/prospectus). | |
5.1 | Opinion of Bowles Rice McDavid Graff & Love LLP, including consent. | |
8.1 | Tax Opinion of Bowles Rice McDavid Graff & Love LLP, including consent. | |
8.2 | Tax Opinion of Williams Mullen, including consent. | |
21 | Subsidiaries of Registrant (Incorporated herein by reference to United Bankshares, Inc.’s Form 10-K for the year ended December 31, 2006). | |
23.1 | Consent of Bowles Rice McDavid Graff & Love LLP (included in Legal Opinion, Exhibit 5.1). | |
23.2 | Consent of Bowles Rice McDavid Graff & Love LLP (included in Legal Opinion, Exhibit 8.1). | |
23.3 | Consent of Williams Mullen (included in Legal Opinion, Exhibit 8.2). | |
23.4 | Consent of Ernst & Young LLP. | |
23.5 | Consent of Yount, Hyde & Barbour, P.C. | |
23.6 | Consent of Davenport & Company LLC. | |
* 24 | Powers of Attorney (signature page). | |
* 99.1 | Consent of Donald L. Unger. | |
* 99.2 | Form of Proxy for Premier Community Bankshares, Inc. | |
* 99.3 | Form of Affiliate Letter (included as Exhibit A to Agreement and Plan of Reorganization which is included as Annex to the proxy statement/prospectus). | |
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