EXHIBIT 5.1
October 29, 1998
Board of Directors
Virginia Capital Bancshares, Inc.
400 George Street
Fredericksburg, Virginia 22404
Re: The offering of up to 13,965,600 shares of
Virginia Capital Bancshares, Inc. Common Stock
Ladies and Gentlemen:
You have requested our opinion concerning certain matters of Virginia law
in connection with the conversion of Fredericksburg Savings and Loan
Association, F.A. (the "Bank"), a federally-chartered savings and loan
association, from the mutual form of ownership to a federally-chartered capital
stock savings bank to be named Fredericksburg Savings Bank (the "Conversion"),
and the related subscription offering, community offering and syndicated
community offering (the "Offerings") by Virginia Capital Bancshares, Inc., a
Virginia corporation (the "Company"), of up to 12,144,000 shares of its common
stock, par value $.01 per share ("Common Stock"), (13,965,600 shares if the
Estimated Valuation Range is increased up to 15% to reflect changes in market
and financial conditions following commencement of the Offerings) and the
issuance of 971,520 shares to Fredericksburg Savings Charitable Foundation (the
"Foundation"), a privately-owned charitable foundation formed by the Company,
(1,117,248 shares if the estimated value range is increased up to 15% to reflect
changes in market and financial conditions following commencement of the
Offerings).
In connection with your request for our opinion, you have provided to us
and we have reviewed the Company's articles of incorporation filed with the
State Corporation Commission of Virginia on September 4, 1998 (the "Articles of
Incorporation"); the Company's Bylaws; the Company's Registration Statement on
Form S-1, as filed with the Securities and Exchange Commission initially on
September 11, 1998 (the "Registration Statement"); a consent of the sole
incorporator of the Company; the gift instrument whereby shares will be granted
to the Foundation; the ESOP trust agreement and the ESOP loan agreement;
resolutions of the Board of Directors of the Company (the "Board") concerning
the organization of the Company, the Offerings and designation of a Pricing
Committee of the Board, and the form of stock certificate approved by the Board
to represent shares of Common Stock. We have also been furnished a certificate
of the State Corporation Commission of Virginia certifying the Company's good
standing as a Virginia corporation. Capitalized terms used but not defined
herein shall have the meaning given them in the Articles of Incorporation.
Board of Directors
Virginia Capital Bancshares, Inc.
October 29, 1998
Page 2
We understand that the Company will loan to the trust for the Bank's
Employee Stock Ownership Plan (the "ESOP") the funds the ESOP Trust will use to
purchase shares of Common Stock for which the ESOP Trust subscribes pursuant to
the Offerings and for purposes of rendering the opinion set forth in paragraph 2
below, we assume that: (a) the Board of Directors of the Company has duly
authorized the loan to the ESOP Trust (the "Loan"); (b) the ESOP serves a valid
corporate purpose for the Company; (c) the Loan will be made at an interest rate
and on other terms that are fair to the Company; (d) the terms of the Loan will
be set forth in customary and appropriate documents including, without
limitation, a promissory note representing the indebtedness of the ESOP Trust to
the Company as a result of the Loan; and (e) the closing for the Loan and for
the sale of Common Stock to the ESOP Trust will be held after the closing for
the sale of the other shares of Common Stock sold in the Offerings and the
receipt by the Company of the proceeds thereof.
Based upon and subject to the foregoing, and limited in all respects to
matters of Virginia law, it is our opinion that:
1. Upon the due adoption by the Pricing Committee of a resolution fixing
the number of shares of Common Stock to be sold in the Offerings, the Common
Stock to be issued in the Offerings (including the shares to be issued to the
ESOP Trust) and the shares to be granted to a charitable foundation to be
established by the Company in connection with the Conversion will be duly
authorized and, when such shares are sold and paid for or granted (in the case
of the Foundation) in accordance with the terms set forth in the Prospectus and
such resolution of the Pricing Committee, and certificates representing such
shares in the form provided to us are duly and properly issued, will be validly
issued, fully paid and nonassessable.
The following provisions of the Articles of Incorporation may not be given
effect by a court applying Virginia law, but in our opinion the failure to give
effect to such provisions will not affect the duly authorized, validly issued,
fully paid and nonassessable status of the Common Stock:
1. (a) Subsections D.3 and D.6 of Article FOURTH and Section D of Article
EIGHTH, which grant the Board the authority to construe and apply
the provisions of those Articles, subsection D.4 of Article
FOURTH, to the extent that subsection obligates any person to
provide to the Board the information such subsection authorizes
the Board to demand, subsection D.1 of Article FOURTH, to the
extent that subsection limits the amount of shares of Common
Stock a stockholder may vote, and the provision of Subsection D.7
of Article EIGHTH empowering the Board to determine the Fair
Market Value of property offered or paid for the Company's stock
by an Interested Stockholder, in each case to the extent,
Board of Directors
Virginia Capital Bancshares, Inc.
October 29, 1998
Page 3
if any, that a court applying Virginia law were to impose
equitable limitations upon such authority; and
(b) Article NINTH, which authorizes the Board to consider the effect
of any offer to acquire the Company on constituencies other than
stockholders in evaluating any such offer.
We consent to the filing of this opinion as an exhibit to the Registration
Statement on Form S-1 and the Form AC and to the use of the name of our firm
where it appears in the Registration Statement, Form AC and Prospectus.
Very truly yours,
/s/ Muldoon, Murphy & Faucette
MULDOON, MURPHY & FAUCETTE