<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>Premier Community Bankshares, Inc.</TITLE>
<META NAME="author" CONTENT="JAYOAK">
<META NAME="date" CONTENT="01/12/2006">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<BR>
<BR>
<P style="margin:0pt; padding-top:3pt; font-family:Times New Roman; font-size:12pt; border-top:3pt double #000000"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>UNITED STATES</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Washington, D.C. 20549</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>___________</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>FORM 8-K</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CURRENT REPORT</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Date of Report (Date of earliest event reported): &nbsp;<B>January 12, 2006</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>___________</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>PREMIER COMMUNITY BANKSHARES, INC.</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Exact name of registrant as specified in its charter)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=top width=208.067><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Virginia</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(State or other jurisdiction</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>of incorporation)</P>
</TD><TD valign=top width=208.067 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>0-18868</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>&nbsp;(Commission</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>File Number)</P>
</TD><TD valign=top width=209.867><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>54-1560968</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(I.R.S. Employer</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Identification No.)</P><BR>
</TD></TR>
<TR><TD valign=top width=313.067 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>4095 Valley Pike</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Winchester, Virginia</B> </P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Address of principal executive offices)</P>
</TD><TD valign=top width=312.933 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>22602</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>&nbsp;(Zip Code)</P>
</TD></TR>
</TABLE>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Registrant&#146;s telephone number, including area code: &nbsp;<B>(540)&nbsp;869-6600</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Not Applicable</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Former name or former address, if changed since last report)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:12pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:9pt; line-height:15pt; font-family:Wingdings; font-size:12pt">x <FONT FACE="Times New Roman">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT></P>
<P style="margin:0pt; text-indent:9pt; line-height:13pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:9pt; line-height:15pt; font-family:Wingdings; font-size:12pt">o <FONT FACE="Times New Roman">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></P>
<P style="margin:0pt; text-indent:9pt; line-height:13pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:9pt; line-height:15pt; font-family:Wingdings; font-size:12pt">o <FONT FACE="Times New Roman">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></P>
<P style="margin:0pt; text-indent:9pt; line-height:13pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:9pt; line-height:15pt; font-family:Wingdings; font-size:12pt">o <FONT FACE="Times New Roman">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; font-size:12pt; border-bottom:3pt double #000000"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<BR>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Item&nbsp;1.01 </B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Entry into a Material Definitive Agreement.</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>On January 12, 2006, Premier Community Bankshares, Inc. (the &#147;Company&#148;), Rockingham Heritage Bank, a wholly owned subsidiary of the Company (&#147;Rockingham Heritage&#148;), and Albemarle First Bank (&#147;Albemarle&#148;) entered into an Agreement and Plan of Merger (the &#147;Merger Agreement&#148;).  The Merger Agreement sets forth the terms and conditions of the Company&#146;s acquisition of Albemarle through the merger (the &#147;Merger&#148;) of Albemarle with and into Rockingham Heritage.  Albemarle will continue operations as a separate division of Rockingham Heritage.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Under the terms of the Merger Agreement, the Company will issue to the shareholders of Albemarle, for each share of Albemarle common stock that they own, a number of shares of the Company&#146;s common stock with an aggregate market value equal to $15.80 per share or $15.80 in cash, subject to the limitation that no less than 35% and no more than 50% of the total consideration will be in the form of cash.  Shareholders of Albemarle may elect to receive the Company&#146;s common stock, cash, or a combination of common stock and cash for their shares of Albemarle common stock, subject to pro ration in the event that the aggregate cash elections are less than the 35% minimum or exceed the 50% maximum.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>The actual number of shares of the Company&#146;s common stock to be issued in the Merger for each share of Albemarle common stock will be determined based upon the average of the daily closing prices of the Company&#146;s common stock for the 20 trading days ending at the close of trading on the fifth trading day preceding the closing date and, subject to certain exceptions described in the Merger Agreement, will not exceed 0.8681, or be less than 0.6529, shares of Premier common stock for each share of Albemarle common stock.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Under the terms of the Merger Agreement, the Company is not required to issue more than 989,600 shares of its common stock in the Merger.  The Company reserves the right to increase the cash consideration to be paid to Albemarle&#146;s shareholders to 50% of the total consideration if necessary to reduce the number of shares of common stock issuable in the Merger to 989,600.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Under the terms of the Merger Agreement, three members of Albemarle&#146;s board of directors will join the Rockingham Heritage board of directors, including Thomas M. Boyd, Jr., Albemarle&#146;s President and Chief Executive Officer.  Mr. Boyd will also join the Premier board of directors, and a separate advisory board of Albemarle will be established for the greater Charlottesville market. </P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Consummation of the Merger is subject to a number of customary conditions including the approval of the Merger by Albemarle&#146;s shareholders and the receipt of all required regulatory approvals.  The Merger is expected to be completed in the second quarter of 2006.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>The Merger Agreement provides that, if Albemarle terminates the Merger Agreement in order to pursue an offer from another party that is deemed by its board of directors in good faith to be superior, Albemarle will pay the Company a break-up fee of $1.25 million.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>A copy of the Merger Agreement is being filed as an exhibit to this report and is incorporated by reference into this Item 1.01.  The description of the Merger Agreement above is a summary, does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement.  The Merger Agreement has been included to provide information regarding the terms of the Merger.  It is not intended to provide any other factual information about the </P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<BR>
<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Company.  Such information can be found in the other public filings that the Company makes with the Securities and Exchange Commission, which are available without charge at www.sec.gov.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>The Merger Agreement contains representations and warranties the parties made to each other.  The assertions embodied in those representations and warranties by Albemarle are qualified by information in the confidential disclosure schedules attached to the Reorganization Agreement.  While the Company does not believe that these schedules contain information securities laws require it to publicly disclose other than information that has already been so disclosed, the disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the attached Merger Agreement.  Accordingly, the representations and warranties should not be relied on as characterizations of the actual state of facts, since they may
be modified in important part by the underlying disclosure schedules.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>A copy of the joint press release announcing the Merger is being filed as Exhibit 99.1 to this report.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; line-height:16pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Item&nbsp;9.01</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Financial Statements and Exhibits.</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; text-indent:36pt; line-height:16pt; font-family:Times New Roman; font-size:12pt" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Exhibits.</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>&nbsp;&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:36pt; text-indent:36pt; line-height:16pt; font-family:Times New Roman; font-size:12pt" align=justify><B><U>Exhibit No.</U></B></P>
<P style="margin:0pt; padding-left:36pt; text-indent:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B><U>Description</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:144pt; text-indent:-54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>2.1</P>
<P style="margin:0pt; padding-left:144pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Agreement and Plan of Merger, dated as of January 12, 2006, between Premier Community Bankshares, Inc., Rockingham Heritage Bank and Albemarle First Bank </P>
<P style="margin:0pt; padding-left:144pt; text-indent:-54pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:144pt; text-indent:-54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>99.1</P>
<P style="margin:0pt; padding-left:144pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Joint Press Release dated January 13, 2006, announcing execution of the Agreement and Plan of Merger.</P>
<P style="margin:0pt; padding-left:144pt; text-indent:-54pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<BR>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SIGNATURES</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; text-indent:171pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>PREMIER COMMUNITY BANKSHARES, INC. </B></P>
<P style="margin:0pt; text-indent:216pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant) </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; line-height:16pt; font-family:Times New Roman; font-size:12pt">Date:&nbsp; January 13, 2006 </P>
<P style="margin:0pt; text-indent:207pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">By: &nbsp;<U>/s/ Donald L. Unger</U></P>
<P style="margin:0pt; padding-left:36pt; text-indent:216pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Donald L. Unger </P>
<P style="margin:0pt; padding-left:36pt; text-indent:216pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">President and Chief Executive Officer </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<BR>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><U>Exhibit&nbsp;Index </U></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:9pt; text-indent:36pt; line-height:16pt; font-family:Times New Roman; font-size:12pt" align=justify><U>Exhibit No.</U></P>
<P style="margin:0pt; padding-left:9pt; text-indent:135pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><U>Description</U></P>
<P style="margin:0pt; padding-left:9pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:144pt; text-indent:-81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>2.1</P>
<P style="margin:0pt; padding-left:144pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Agreement and Plan of Merger, dated as of January 12, 2006, between Premier Community Bankshares, Inc., Rockingham Heritage Bank and Albemarle First Bank </P>
<P style="margin:0pt; padding-left:9pt; text-indent:-54pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:144pt; text-indent:-81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>99.1</P>
<P style="margin:0pt; padding-left:144pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Joint Press Release dated January 13, 2006, announcing execution of the Agreement and Plan of Merger.</P>
<P style="margin:0pt; padding-left:144pt; text-indent:-54pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<BR>
<BR>
</BODY>
</HTML>
[{"type": "8-K", "sequence": "1", "filename": "form8k.htm", "secsgml_size_bytes": 21619}]
{"company-data": {"conformed-name": "PREMIER COMMUNITY BANKSHARES INC", "cik": "0000854399", "assigned-sic": "6021", "irs-number": "541560968", "state-of-incorporation": "VA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-18868", "film-number": "06532935"}, "business-address": {"street1": "4095 VALLEY PIKE", "city": "WINCHESTER", "state": "VA", "zip": "22602", "phone": "5408696600"}, "mail-address": {"street1": "4095 VALLEY PIKE", "city": "WINCHESTER", "state": "VA", "zip": "22602"}, "former-company": {"former-conformed-name": "MARATHON FINANCIAL CORP", "date-changed": "19960618"}}
Premier Community Bankshares, Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 12, 2006
___________
PREMIER COMMUNITY BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction
of incorporation)
0-18868
(Commission
File Number)
54-1560968
(I.R.S. Employer
Identification No.)
4095 Valley Pike
Winchester, Virginia
(Address of principal executive offices)
22602
(Zip Code)
Registrant's telephone number, including area code:
(540) 869-6600
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
x
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01
Entry into a Material Definitive Agreement.
On January 12, 2006, Premier Community Bankshares, Inc. (the "Company"), Rockingham Heritage Bank, a wholly owned subsidiary of the Company ("Rockingham Heritage"), and Albemarle First Bank ("Albemarle") entered into an Agreement and Plan of Merger (the "Merger Agreement").  The Merger Agreement sets forth the terms and conditions of the Company's acquisition of Albemarle through the merger (the "Merger") of Albemarle with and into Rockingham Heritage.  Albemarle will continue operations as a separate division of Rockingham Heritage.
Under the terms of the Merger Agreement, the Company will issue to the shareholders of Albemarle, for each share of Albemarle common stock that they own, a number of shares of the Company's common stock with an aggregate market value equal to $15.80 per share or $15.80 in cash, subject to the limitation that no less than 35% and no more than 50% of the total consideration will be in the form of cash.  Shareholders of Albemarle may elect to receive the Company's common stock, cash, or a combination of common stock and cash for their shares of Albemarle common stock, subject to pro ration in the event that the aggregate cash elections are less than the 35% minimum or exceed the 50% maximum.
The actual number of shares of the Company's common stock to be issued in the Merger for each share of Albemarle common stock will be determined based upon the average of the daily closing prices of the Company's common stock for the 20 trading days ending at the close of trading on the fifth trading day preceding the closing date and, subject to certain exceptions described in the Merger Agreement, will not exceed 0.8681, or be less than 0.6529, shares of Premier common stock for each share of Albemarle common stock.
Under the terms of the Merger Agreement, the Company is not required to issue more than 989,600 shares of its common stock in the Merger.  The Company reserves the right to increase the cash consideration to be paid to Albemarle's shareholders to 50% of the total consideration if necessary to reduce the number of shares of common stock issuable in the Merger to 989,600.
Under the terms of the Merger Agreement, three members of Albemarle's board of directors will join the Rockingham Heritage board of directors, including Thomas M. Boyd, Jr., Albemarle's President and Chief Executive Officer.  Mr. Boyd will also join the Premier board of directors, and a separate advisory board of Albemarle will be established for the greater Charlottesville market.
Consummation of the Merger is subject to a number of customary conditions including the approval of the Merger by Albemarle's shareholders and the receipt of all required regulatory approvals.  The Merger is expected to be completed in the second quarter of 2006.
The Merger Agreement provides that, if Albemarle terminates the Merger Agreement in order to pursue an offer from another party that is deemed by its board of directors in good faith to be superior, Albemarle will pay the Company a break-up fee of $1.25 million.
A copy of the Merger Agreement is being filed as an exhibit to this report and is incorporated by reference into this Item 1.01.  The description of the Merger Agreement above is a summary, does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement.  The Merger Agreement has been included to provide information regarding the terms of the Merger.  It is not intended to provide any other factual information about the
Company.  Such information can be found in the other public filings that the Company makes with the Securities and Exchange Commission, which are available without charge at www.sec.gov.
The Merger Agreement contains representations and warranties the parties made to each other.  The assertions embodied in those representations and warranties by Albemarle are qualified by information in the confidential disclosure schedules attached to the Reorganization Agreement.  While the Company does not believe that these schedules contain information securities laws require it to publicly disclose other than information that has already been so disclosed, the disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the attached Merger Agreement.  Accordingly, the representations and warranties should not be relied on as characterizations of the actual state of facts, since they may
be modified in important part by the underlying disclosure schedules.
A copy of the joint press release announcing the Merger is being filed as Exhibit 99.1 to this report.
Item 9.01
Financial Statements and Exhibits.
(c)
Exhibits.
Exhibit No.
Description
2.1
Agreement and Plan of Merger, dated as of January 12, 2006, between Premier Community Bankshares, Inc., Rockingham Heritage Bank and Albemarle First Bank
99.1
Joint Press Release dated January 13, 2006, announcing execution of the Agreement and Plan of Merger.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PREMIER COMMUNITY BANKSHARES, INC.
(Registrant)
Date:  January 13, 2006
By:
/s/ Donald L. Unger
Donald L. Unger
President and Chief Executive Officer
Exhibit Index
Exhibit No.
Description
2.1
Agreement and Plan of Merger, dated as of January 12, 2006, between Premier Community Bankshares, Inc., Rockingham Heritage Bank and Albemarle First Bank
99.1
Joint Press Release dated January 13, 2006, announcing execution of the Agreement and Plan of Merger.