BAY BANKS OF VIRGINIA, INC. (OTCMKTS:BAYK) Files An 8-K Completion of Acquisition or Disposition of Assets

BAY BANKS OF VIRGINIA, INC. (OTCMKTS:BAYK) Files An 8-K Completion of Acquisition or Disposition of Assets

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Item 2.01 Completion of Acquisition or Disposition of Assets.

Effective April 1, 2017, Bay Banks of Virginia, Inc. (the
“Company”) completed its previously announced merger (the
“Merger”) with Virginia BanCorp Inc (“Virginia BanCorp”), to
the Agreement and Plan of Merger, dated as of November 2, 2016,
by and between the Company and Virginia BanCorp (the “Merger
Agreement”). At closing, Virginia BanCorp merged with and into,
the Company, with the Company as the surviving company. As a
result of the Merger, and to the terms and conditions of the
Merger Agreement, each share of Virginia BanCorp common stock was
converted into 1.178 shares of the Company’s common stock.
Additionally, Virginia BanCorp shareholders will receive cash in
lieu of fractional shares.
Immediately following the Merger, Virginia Commonwealth Bank, a
commercial bank chartered under the laws of Virginia and a wholly
owned subsidiary of Virginia BanCorp, merged with and into Bank
of Lancaster, a commercial bank chartered under the laws of
Virginia and a wholly owned direct subsidiary of the Company,
with Bank of Lancaster as the surviving entity. In connection
with the bank merger, the name of the surviving bank was changed
to Virginia Commonwealth Bank (the “Bank”).
The foregoing description of the Merger Agreement and the Merger
does not purport to be complete and is qualified in its entirety
by reference to the Merger Agreement, which is incorporated
herein by reference as Exhibit 2.1.
Item 5.02
Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Resignation of Director
On March 31, 2017, Robert F. Hurliman, chairman of the Board of
Directors of the Company (the “Board”), notified the Company of
his resignation as a director of the Company, effective March 31,
2017.
Appointment of Directors
to the merger agreement, and effective as of the effective date
of the Merger, the Board appointed Lawrence N. Ashworth, James B.
McNeer, C. Frank Scott, III, Larry C. Tucker and James P.
VanLandingham to the Board. Each of these individuals previously
served as a director of Virginia BanCorp. Each of the new
directors will serve as a director of the Company until the 2017
annual meeting of shareholders of the Company. In accordance with
the Merger Agreement, and provided that such persons continue to
meet the standards for directors of the Company, the Company will
nominate these individuals for reelection at the 2017 annual
meeting. If nominated, each of Messrs. Ashworth and McNeer will
be nominated to serve an initial term of one year, each of
Messrs. Tucker and VanLandingham will be nominated to serve an
initial term of two years, and Mr. Scott will be nominated to
serve an initial term of three years.
In addition, the Board has appointed Mr. Ashworth to the Audit
Committee and Enterprise Risk Committee, Mr. McNeer to the
Compensation Committee and Nominating Committee, Mr. Scott to the
Nominating Committee, Mr. Tucker to the Compensation Committee
and Enterprise Risk Committee and Mr. VanLandingham to the Audit
Committee.
Effective as of the effective date of the Merger, Mr. Scott was
appointed as Chairman of the Board and Randal R. Greene was
appointed as Vice Chairman of the Board. Mr. Scott, formerly
President and Chief Executive Officer of Virginia BanCorp, also
was appointed as President of the Bank as contemplated by the
Merger Agreement and effective as of the effective date of the
Merger.
Each newly appointed non-employee director will be compensated
consistent with the compensation policies applicable to the
Company’s other non-employee directors as currently in effect
and as disclosed in the Company’s Registration Statement on Form
S-4 (Registration No. 333-214921), filed with the Securities and
Exchange Commission on December 6, 2016 and declared effective on
February 2, 2017.

Appointment of Chief Financial Officer
to the Merger Agreement, and effective as of the effective date
of the Merger, the Board appointed James A. Wilson, Jr.,
formerly Vice President and Treasurer of Virginia BanCorp, as
Executive Vice President and Chief Financial Officer of the
Company. Deborah M. Evans was appointed Senior Vice President
of the Company and Senior Vice President and Chief Accounting
Officer of the Bank. Ms. Evans had previously served as Senior
Vice President and Chief Financial Officer of the Company and
the Bank.
Mr. Wilson, age 56, joined Virginia Commonwealth Bank in August
1989 as Treasurer/Controller and was soon thereafter promoted
to Senior Vice President/Chief Financial Officer. In 2012, he
was promoted to Executive Vice President/Chief Financial
Officer of Virginia Commonwealth Bank. Mr. Wilson is a
Certified Public Accountant, CFA charterholder and Chartered
Global Management Accountant.
In connection with entering into the Merger Agreement, the
Company entered into an employment agreement with Mr. Wilson
that became effective upon the consummation of the merger.
Under the terms of the employment agreement with Mr. Wilson,
dated November 2, 2016, Mr. Wilson will be employed as
Executive Vice President and Chief Financial Officer of the
Company and the Bank. The term of the agreement commenced upon
closing of the Merger and will expire on the second anniversary
thereof, unless earlier terminated or extended as provided
therein. The term automatically will renew for successive two
year terms, unless either party gives at least three months
prior notice to the other. Mr. Wilson will receive an initial
base salary of not less than $144,668 and may receive base
salary increases and incentive bonus compensation or other
compensation in the amounts determined by the Board of
Directors of the Bank. Mr. Wilson will be eligible to
participate in the Company’s long-term and short-term
incentive plans and in cash and non-cash employee benefit plans
and will be provided with reimbursement for certain expenses.
Mr. Wilson’s agreement also provides for the termination of
his employment at any time by the Company for other than
“Cause” or by Mr. Wilson for “Good Reason” (as those terms
are defined in his agreement). Upon termination under either of
these circumstances and provided that Mr. Wilson releases and
waives his claims against the Company as provided in his
agreement, Mr. Wilson will be entitled to the following:
an amount equal to the greater of (i) a monthly amount
equal to one-twelfth of his annual base salary in each
month for the remainder of the term of his agreement,
or (ii) a monthly amount equal to one-twelfth of his
annual base salary for a period of one year;
any bonus or other short-term incentive compensation
earned, but not yet paid, for the year prior to the
year in which his employment terminates; and
if Mr. Wilson so elects, continued participation in the
Company’s group health and dental plans for the period
in which payments are made above and payment by the
Company of its portion of premiums in effect at the
date of termination.
If within one year after a “Change in Control”, Mr. Wilson’s
employment is terminated without Cause or if he resigns for
Good Reason, Mr. Wilson will be entitled to receive a lump sum
cash payment equal to two times the sum of his base salary and
most recent annual bonus (in each case, as of the date of
termination or, if greater, as of the Change in Control) and
continued participation in benefit plans as described above for
a period of two years.
Mr. Wilson also will be subject, in certain circumstances, to
non-competition and non-solicitation restrictions for a period
of two years following the termination of his employment.
The foregoing description of Mr. Wilson’s employment agreement
does not purport to be complete and is qualified in its
entirety by reference to his employment agreement, which is
attached hereto as Exhibit 10.1 and incorporated herein by
reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.
On April 1, 2017, the Board adopted amendments to the
Company’s bylaws. In connection with the appointment of the
newly-appointed directors to the Board as described in Item
5.02, Sections 2 and 3 of Article III of the Bylaws were
amended to (i) provide that the mandatory retirement age set
forth in the bylaws will not apply to the new directors at
the 2017 annual meeting of shareholders and for the remainder
of the term for which such director is elected by
shareholders at the 2017 annual meeting and (ii) expand the
size of the Board by four (4) directors, from six (6)
directors to ten (10) directors.
In addition, among other immaterial revisions, the Board also
adopted and approved the following amendments:
revisions to Article I, Sections 1 and 2 to
contemplate the issuance of certificated or
uncertificated shares;
modifications to the notice provisions for meetings
of directors in Article IV, Section 3, including to
allow for electronic or telephone communications and
to provide that notice need not be given for regular
meetings fixed by resolution of the Board;
modifications to Article V, Sections 2 and 4 to
provide that the Nominating and Governance Committee
and Compensation Committee are appointed by the
Board;
revisions to Article V, Section 3 to provide that the
Chairman of the Audit Committee is be elected by the
Board;
clarifications to Article V, Sections 2, 3 and 4 to
provide that the members of the Nominating and
Governance Committee, Audit Committee and
Compensation Committee will be selected from the
Board; and
revisions to Article VIII to provide that the vote
requirement for amendments to the bylaws by the
Company’s shareholders is a majority of votes cast.
The foregoing description of the Company’s bylaws, as
amended and restated by the Board, is qualified in its
entirety by reference to the full text of such amended and
restated bylaws. A copy of the amended and restated bylaws
and a copy marked to show changes are attached as Exhibits
3.1 and 3.2, respectively, and incorporated herein by
reference.
Item 8.01 Other Events.
On April 3, 2017, the Company issued a press release
announcing the completion of the Merger. A copy of the press
release is attached as Exhibit 99.1 to this report and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The financial statements required by this item will be filed
by amendment to this Form 8-K within 71 calendar days after
the date on which this report is required to be filed.
(b) Pro forma financial information.
The pro forma financial information required by this item
will be provided by amendment to this Form 8-K within 71
calendar days after the date on which this report is required
to be filed.
(d) Exhibits.
Exhibit No.
Description of Exhibit
2.1
Agreement and Plan of Merger, dated November 2, 2016,
by and between Bay Banks of Virginia, Inc. and Virginia
BanCorp Inc. (Incorporated by reference to Exhibit 2.1
to the Company’s Current Report on Form 8-K filed on
November 8, 2016)
3.1
Bylaws of Bay Banks of Virginia, Inc. (as amended
effective April 1, 2017)
3.2
Bylaws of Bay Banks of Virginia, Inc. (as amended
effective April 1, 2017) (marked)
10.1
Employment Agreement, dated November 2, 2016 and
effective upon the Merger, between Bay Banks of
Virginia, Inc. and James A. Wilson, Jr. (Incorporated
by reference to Exhibit 10.10 to Pre-Effective
Amendment No. 1 to the Registration Statement on Form
S-4 filed on January 30, 2017)
99.1
Press Release dated April 3, 2017


About BAY BANKS OF VIRGINIA, INC. (OTCMKTS:BAYK)

Bay Banks of Virginia, Inc. is a bank holding company that conducts its operations through its subsidiaries, Bank of Lancaster (the Bank) and Bay Trust Company (the Trust Company). The Bank is a state-chartered bank and a member of the Federal Reserve System. The Bank serves businesses, professionals and consumers with a range of financial services, including retail and commercial banking, investment services and mortgage banking. Its products include cash management accounts, individual retirement accounts, commercial and industrial loans, residential mortgages, commercial mortgages, home equity loans, consumer installment loans, investment accounts, insurance, credit cards and telephone banking. The Bank’s deposits include non-interest bearing demand deposits, interest bearing deposits and time deposits. The Trust Company provides management services for personal and corporate trusts, including estate planning, estate settlement and trust administration.

BAY BANKS OF VIRGINIA, INC. (OTCMKTS:BAYK) Recent Trading Information

BAY BANKS OF VIRGINIA, INC. (OTCMKTS:BAYK) closed its last trading session down -0.05 at 9.20 with 2,615 shares trading hands.

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