EXHIBIT 99.1
AGREEMENT AND PLAN OF REORGANIZATION
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THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Plan of
Reorganization") is dated as of April 11, 2003 by and between Old Line Bank, a
Maryland trust company exercising the powers of a commercial bank (the "Bank"),
and Old Line Bancshares, Inc., a Maryland corporation (the "Holding Company").
Recitals
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A. The Holding Company has filed or will file an application under The
Bank Holding Company Act of 1956, as amended, to become a bank holding company.
B. The Bank and the Holding Company desire to enter into this Plan of
Reorganization, pursuant to which the corporate structure of the Bank will be
reorganized into the holding company form of ownership in a manner that is fair
and equitable to all stockholders of the Bank. The result of such reorganization
(the "Reorganization") will be that, at and after the Effective Date (as that
term is defined in Article IV below), all of the issued and outstanding shares
of the Bank's common stock, par value $10.00 per share (the "Bank Common
Stock"), will be held by the Holding Company, and the holders of the issued and
outstanding shares of Bank Common Stock, except for those stockholders
exercising the rights of dissenting stockholders pursuant to Title 3, Subtitle 2
of the Corporations and Associations Article of the Code of Maryland (the
"Corporations Article"), will become the holders of all of the issued and
outstanding shares of the Holding Company's common stock, par value $0.01 per
share (the "Holding Company Common Stock").
C. The Bank and the Holding Company have agreed that the Holding
Company will acquire all of the issued and outstanding shares of Bank Common
Stock in exchange for shares of Holding Company Common Stock pursuant to the
Corporations Article and this Plan of Reorganization.
D. This Plan of Reorganization has been determined to be fair and
equitable to all stockholders of the Bank and has been adopted and approved by
the favorable vote of all of the members of the Board of Directors of the Bank
and by the favorable vote of all of the members of the Board of Directors of the
Holding Company.
E. The parties hereto intend that the Reorganization constitute a
reorganization within the meaning of Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt, adequacy, and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
EXCHANGE OF STOCK
The manner and basis of exchanging shares of Bank Common Stock for
shares of Holding Company Common Stock, and the treatment of any Bank Common
Stock not to be exchanged on the Effective Date, shall be as follows:
1.1 Bank Common Stock. On the Effective Date, the holders of the then
issued and outstanding shares of Bank Common Stock (other than shares held by
stockholders exercising the rights of dissenting stockholders pursuant to Title
3, Subtitle 2 of the Corporations Article, if any), shall, without any further
action on their part or on the part of the Holding Company, automatically and by
operation of law, cease to own such shares, and instead each holder of shares of
Bank Common Stock shall become an owner of one (1) share of Holding Company
Common Stock for each share of Bank Common Stock theretofore held by him.
Thereafter, such persons shall have full and exclusive power to vote such shares
of Holding Company Common Stock, to receive dividends thereon, and to exercise
all rights of an owner thereof.
1.2 Holding Company Common Stock. On the Effective Date, the Holding
Company shall, without any further action on its part or on the part of the
holders of Bank Common Stock, automatically and by operation of law, acquire and
become the owner for all purposes of all of the then issued and outstanding
shares of Bank Common Stock (other than shares held by stockholders exercising
the rights of dissenting stockholders pursuant to Title 3, Subtitle 2 of the
Corporations Article, if any). Thereafter, the Holding Company shall have full
and exclusive power to vote such shares of Bank Common Stock, to receive
dividends thereon, and to exercise all rights of an owner thereof.
1.3 Certificates.
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(a) On the Effective Date, all previously issued and
outstanding certificates representing shares of Bank Common Stock (the "Bank
Stock Certificates") shall automatically and by operation of law cease to
represent shares of Bank Common Stock or any interest therein and each Bank
Stock Certificate (other than Bank Stock Certificates which represented shares
held by stockholders exercising the rights of dissenting stockholders pursuant
to Title 3, Subtitle 2 of the Corporations Article, if any), shall instead
represent the ownership by the holder thereof of the number of shares of Holding
Company Common Stock as contemplated pursuant to Section 1.1 hereof. Thereafter,
no holder of a Bank Stock Certificate shall be entitled to vote the shares of
Bank Common Stock formerly represented by such certificate, or to receive
dividends thereon, or to exercise any other rights of ownership in respect
thereof. Each such holder of a Bank Stock Certificate may exchange such
certificate, after the Effective Date, for new certificates for the appropriate
number of shares and bearing the name of the Holding Company. The Holding
Company shall provide instructions to such holders as to the time and method of
surrendering Bank Stock Certificates.
(b) On the Effective Date, the Holding Company shall be
entitled to have the Bank issue to it certificates representing shares of Bank
Common Stock as contemplated pursuant to Section 1.2 hereof.
1.4 Dividends. No dividend, except if and to the extent permitted by
the Board of Directors of the Holding Company, payable by the Holding Company as
of any date subsequent to the Effective Date, shall be payable to any holder of
Bank Stock Certificates, unless and until such certificates shall have been
surrendered to the Holding Company in exchange for a certificate or certificates
evidencing shares of Holding Company Common Stock (unless this provision is
waived by the Holding Company). Upon the surrender of any such Bank Stock
Certificate for a new certificate or certificates evidencing shares of Holding
Company Common Stock, there shall be paid to the holder of the certificate,
without interest, the amount of dividends (if any) payable by the Holding
Company as of a date subsequent to the Effective Date and not theretofore paid
on such shares of Holding Company Common Stock.
ARTICLE II
CLOSING CONDITIONS
The obligations of the Bank and the Holding Company to consummate the
Reorganization shall be subject to the satisfaction of the following conditions
on or prior to the Effective Date:
2.1 Regulatory Approval. The Commissioner of Financial Regulation of
the State of Maryland shall have approved the Holding Company's becoming an
"affiliate" (as such term is defined in Section 5-401 the Financial Institutions
Article of the Annotated Code of Maryland) of the Bank, and the Holding
Company's acquisition of 100% of the outstanding voting stock of the Bank
pursuant to Section 5-901 et seq. of the Financial Institutions Article, and
shall have issued any other applicable approvals. In addition, the Board of
Governors of the Federal Reserve shall have approved the Holding Company's
acquisition of 100% of the outstanding voting stock of the Bank and shall have
issued any other applicable approvals pursuant to the Bank Holding Company Act
of 1956, as amended. Furthermore, all approvals from any other state or federal
governmental agency having jurisdiction necessary for the lawful consummation of
the Reorganization as contemplated by this Plan of Reorganization shall have
been obtained, and all waiting periods imposed in connection with any such
regulatory approvals shall have expired.
2.2 Stockholder Approval. The holders of the outstanding shares of Bank
Common Stock shall, at a meeting of the stockholders of the Bank duly called,
have adopted this Plan of Reorganization and the Articles of
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Share Exchange to be filed by the Holding Company and the Bank in connection
with the Reorganization (the "Articles of Share Exchange") by the affirmative
vote of at least two-thirds of all the votes entitled to be cast on the matter.
The form of Articles of Share Exchange is attached hereto as Exhibit A.
2.3 Tax Status. The exchange of shares shall not be subject to Maryland
or federal income taxation. The Bank shall have received a favorable opinion
from its counsel, satisfactory in form and substance to the Bank, with respect
to the federal and Maryland income tax consequences of the Plan of
Reorganization and the Reorganization contemplated thereby.
2.4 Other Consents. The Bank and the Holding Company shall have
obtained all other consents, permissions and approvals and shall have taken all
actions required by law or agreement or deemed necessary by the Bank or the
Holding Company, prior to the consummation of the Reorganization.
2.5 Dissenters' Rights. The holders of no more than five percent (5%)
of the outstanding shares of Bank Common Stock shall have filed with the Bank a
written objection to the Reorganization pursuant Section 3-203 of the
Corporations Article, unless this condition is waived by the parties hereto.
ARTICLE III
TERMINATION
This Plan of Reorganization may be terminated by the Board of Directors
of the Bank or the Board of Directors of the Holding Company at any time prior
to the Effective Date.
ARTICLE IV
EFFECTIVE DATE
The Reorganization contemplated by this Plan of Reorganization shall
become effective at the time the State Department of Assessments and Taxation of
Maryland accepts for record the Articles of Share Exchange. Such date is
referred to herein as the "Effective Date."
ARTICLE V
BENEFIT PLANS
5.1 Stock Option Plan. By adopting and approving this Plan of
Reorganization, the Holding Company shall be deemed to have approved adoption of
the Bank's stock option plans (the "Stock Option Plans") as the stock option
plans of the Holding Company. As of the Effective Date, the Stock Option Plans
shall automatically be continued as and become the stock option plans of the
Holding Company. Subject to such other terms as may be provided in the Stock
Option Plan, each option to purchase shares of Bank Common Stock under the Stock
Option Plans outstanding on the Effective Date shall automatically be converted
into an identical option, with identical price, terms and conditions, to
purchase an identical number of shares of Holding Company Common Stock in lieu
of shares of Bank Common Stock. The Holding Company and the Bank may make
appropriate amendments to the Stock Option Plans to reflect the adoption of the
Stock Option Plans as the stock option plans of the Holding Company, without
adverse effect upon the options outstanding as of the Effective Date under the
Stock Option Plan.
5.2 Other Benefit Plans. After the Effective Date, the Holding Company
shall cause the Bank to continue to observe its obligations with respect to all
other employee benefit plans of the Bank in existence immediately prior to the
Effective Date. Where the terms of any such plan so require, the Holding Company
shall execute any and all documentation as may be necessary or appropriate.
ARTICLE VI
MISCELLANEOUS
6.1 Rules of Construction. Unless the context clearly indicates to the
contrary, the following rules apply to the construction of this Plan of
Reorganization: (i) references to the singular include the plural, and
references to the plural include the singular; (ii) words of the masculine
gender include correlative words of the feminine and neuter genders, and vice
versa; (iii) the headings or captions used in this Plan of Reorganization are
for
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convenience of reference only and do not constitute a part of this Plan of
Reorganization, nor affect its meaning, construction, or effect; and (iv) the
term "person" means any individual, corporation, partnership (whether general or
limited), limited liability company, joint venture, estate, trust, association,
organization, or other entity or governmental body.
6.2 Governing Law. This Plan of Reorganization shall be governed by and
construed in accordance with the internal laws of the State of Maryland, without
giving effect to its conflicts of laws provisions.
6.3 Severability. If any provision (or any part of any provision)
contained in this Plan of Reorganization shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, then such invalidity,
illegality, or unenforceability shall not affect any other provision (or
remaining part of the affected provision) of this Plan of Reorganization, and
this Plan of Reorganization shall be construed as if such invalid, illegal, or
unenforceable provision (or part thereof) had never been contained herein, but
only to the extent such provision (or part thereof) is invalid, illegal, or
unenforceable.
6.4 Entire Agreement; Amendment; Waiver. This Plan of Reorganization
contains the entire understanding and agreement among the parties hereto with
respect to the subject matter hereof, and supersedes all prior discussions,
understandings, and agreements (whether oral or written) between them with
respect thereto. No amendment to, or modification or waiver of, any of the terms
of this Plan of Reorganization shall be valid unless in writing and signed by
the party against whom enforcement of such amendment, modification or waiver is
sought.
6.5 Further Assurances. Each of the parties hereto agrees to furnish
such information, to do all acts and things, and to execute and deliver such
agreements, documents, certificates, and instruments as shall from time to time
be reasonably required to effectuate the terms and provisions of this Plan of
Reorganization.
6.6 Counterparts. This Plan of Reorganization may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Plan of
Reorganization under seal as of the date first above written.
ATTEST: Bank:
Old Line Bank,
A Maryland Trust Company
/s/ Xxxxxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxxxxxx X. Xxxx, Secretary Xxxxx X. Xxxxxxxxx, President
ATTEST: Holding Company:
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Old Line Bancshares, Inc.,
A Maryland Corporation
/s/ Xxxxxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxxxxxx X. Xxxx, Secretary Xxxxx X. Xxxxxxxxx, President
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Exhibit A
(Articles of Share Exchange)
ARTICLES OF SHARE EXCHANGE
Between
OLD LINE BANK
(A Maryland Commercial Bank)
And
OLD LINE BANCSHARES, INC.
(A Maryland Corporation)
OLD LINE BANK, a Maryland commercial bank (the "Bank"), and OLD LINE
BANCSHARES, INC., a Maryland corporation (the "Holding Company"), hereby certify
to the State Department of Assessments and Taxation of Maryland as follows:
FIRST: The Holding Company agrees to acquire all of the issued and
outstanding stock of the Bank, and the Bank agrees to have such stock acquired
by the Holding Company, in a statutory share exchange.
SECOND: The name and place of incorporation of each party to these
Articles of Share Exchange are: Old Line Bank, a Maryland trust company
exercising the powers of a commercial bank, and Old Line Bancshares, Inc., a
Maryland corporation. The Holding Company is acquiring the stock of the Bank in
the share exchange.
THIRD: The principal office of each of the Bank and the Holding Company
in the State of Maryland is located in Xxxxxxx County.
FOURTH: The terms and conditions of the transaction described in these
Articles of Share Exchange were advised, authorized, and approved by the Bank in
the manner and by the vote required by its Charter and the laws of the State of
Maryland. The manner of approval was as follows:
(a) the Board of Directors of the Bank, at a meeting held on
March 27, 2003, adopted a resolution which declared that the share exchange was
advisable on substantially the terms and conditions set forth or referred to in
the resolution and directed that the share exchange be submitted for
consideration at the 2003 annual meeting of the Bank's stockholders; and
(b) the share exchange was approved by the stockholders of the
Bank at the 2003 annual meeting of the Bank's stockholders held on May 22, 2003,
by the affirmative vote of _____________ percent (%____) of all votes entitled
to be cast on the matter.
FIFTH: The terms and conditions of the transaction described in these
Articles of Share Exchange were advised, authorized, and approved by the Holding
Company in the manner and by the vote required by its Charter and the laws of
the State of Maryland. The manner of approval was as follows:
(a) the Board of Directors of the Holding Company, by written
consent dated April 11, 2003 signed by all of the directors of the Holding
Company and filed with the minutes of proceedings of the Board of Directors of
the Holding Company, adopted a resolution which declared that the share exchange
was advisable on substantially the terms and conditions set forth or referred to
in the resolution; and
(b) no stock of the Holding Company entitled to be voted on
these Articles of Share Exchange was outstanding or subscribed for at the time
of approval.
SIXTH: The total number of shares of capital stock of all classes that
the Bank has authority to issue is 6,000,000 shares, consisting of 5,000,000
shares of common stock, par value $10.00 per share (the "Bank Common Stock") and
1,000,000 shares of preferred stock, par value $0.01 per share. The aggregate
par value of all shares of all classes having a par value is ($50,010,000).
SEVENTH: The manner and basis of exchanging the stock to be acquired
for stock or other consideration to be issued or delivered by or on behalf of
the successor are as follows:
(a) On the effective date of these Articles of Share Exchange,
the holders of the then issued and outstanding shares of Bank Common Stock
(other than shares held by stockholders exercising the rights of objecting
stockholders pursuant to Title 3, Subtitle 2 of the Corporations and
Associations Article of the Annotated Code of Maryland, if any), shall, without
any further action on their part or on the part of the Holding Company,
automatically and by operation of law, cease to own such shares, and instead
each holder of shares of Bank Common Stock shall become the owner of one (1)
share of the Holding Company's common stock, par value $0.01 per share (the
"Holding Company Common Stock"), for each share of Bank Common Stock theretofore
held by him.
(b) On the effective date of these Articles of Share Exchange,
the Holding Company shall, without any further action on its part or on the part
of the holders of Bank Common Stock, automatically and by operation of law,
acquire and become the owner for all purposes of all of the then issued and
outstanding shares of Bank Common Stock (other than shares held by stockholders
exercising the rights of objecting stockholders pursuant to Title 3, Subtitle 2
of the Corporations and Associations Article, if any).
EIGHTH: The share exchange shall become effective upon the filing of
these Articles of Share Exchange with the State Department of Assessments and
Taxation of Maryland.
IN WITNESS WHEREOF, the Bank and the Holding Company have caused these
Articles of Share Exchange to be duly executed and their corporate seals to be
hereunto affixed and attested as of _____________, 2003.
ATTEST: Bank:
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Old Line Bank,
A Maryland Trust Company
___________________________ By: ________________________________
___________________, Secretary ___________________, President
ATTEST: Holding Company:
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Old Line Bancshares, Inc.,
A Maryland Corporation
___________________________ By: ________________________________
___________________, Secretary ___________________, President
THE UNDERSIGNED, President of Old Line Bank, who executed on behalf of
said corporation the foregoing Articles of Share Exchange of which this
certificate is made a part, hereby acknowledges, in the name and on behalf of
said corporation, the foregoing Articles of Share Exchange to be the corporate
act of said corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.
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_____________________, President
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THE UNDERSIGNED, President of Old Line Bancshares, Inc., who executed
on behalf of said corporation the foregoing Articles of Share Exchange of which
this certificate is made a part, hereby acknowledges, in the name and on behalf
of said corporation, the foregoing Articles of Share Exchange to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.
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_____________________, President
