EXHIBIT 2.1
AGREEMENT AND PLAN OF SHARE EXCHANGE
BETWEEN
PENINSULA TRUST BANK, INCORPORATED
AND
MID-ATLANTIC COMMUNITY BANKGROUP, INC.
This Agreement and Plan of Share Exchange ("Agreement") is made and
entered into as of February 29, 1996 by and between PENINSULA TRUST BANK,
INCORPORATED, a Virginia state bank (the "Bank"), and MID-ATLANTIC COMMUNITY
BANKGROUP, INC., a Virginia corporation (the "Corporation").
RECITALS
1. The Board of Directors of the Bank has determined that it is
in the best interests of the Bank and its shareholders for the Bank to be
reorganized into the holding company form of ownership;
2. The Bank has caused the Corporation to be organized under
Virginia law as a wholly owned subsidiary for the purpose of becoming the
holding company of the Bank; and
3. The reorganization will be effected by a share exchange
under Virginia law in which each share of common stock of the Bank is exchanged
for one share of common stock of the Corporation:
NOW, THEREFORE, the Bank and the Corporation do hereby agree as
follows:
1. The Share Exchange. Subject to the terms and conditions
hereof, the Bank shall become a wholly-owned subsidiary of the Corporation
through the exchange of each outstanding share of common stock of the Bank for
one share of the common stock of the Corporation in accordance with Section 3 of
this Agreement in a statutory share exchange under Section 13.1-717 of the
Virginia Stock Corporation Act (the "Share Exchange"). At the Effective Date,
the Share Exchange shall have the effects stated in Section 13.1-721 of the
Virginia Stock Corporation Act.
2. Articles of Incorporation and Bylaws. The Articles of
Incorporation and Bylaws of the Corporation in effect immediately prior to the
consummation of the Share Exchange shall remain in effect following the
Effective Date until amended or repealed.
3. Exchange of Shares. On the date specified in a Certificate
of Share Exchange issued by the Virginia State Corporation Commission and
relating to this Agreement (the "Effective Date"):
(a) Each share of common stock, par value $5.00 per
share, of the Bank ("Bank Common Stock") issued and outstanding immediately
prior to the Effective Date shall, by operation of law, be automatically
exchanged for one share of Corporation Common Stock, par value $5.00 per share
("Corporation Common Stock"); and
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(b) The Corporation shall become the owner and holder of
all the shares of Bank Common Stock issued and outstanding.
4. Manner of Exchange. Each holder of a certificate representing
any shares of Bank Common Stock upon the surrender of his Bank Common Stock
certificates to the Corporation, duly endorsed for transfer in accordance with
this Section 4, will be entitled to receive in exchange therefor a certificate
or certificates representing the number of shares of Corporation Common Stock
for which his shares of Bank Common Stock are exchanged pursuant to Section
3(a).
As promptly as practicable after the Effective Date, the Bank,
acting as the Corporation's exchange agent ("Exchange Agent") shall send to each
person who is a shareholder of record of the Bank immediately prior to the
Effective Date transmittal materials for use in exchanging such shareholder's
certificates of Bank Common Stock (other than shares held by stockholders who
perfect their dissenters' rights as provided under Section 7 hereof) for the
consideration set forth in Section 3(a) above.
5. Dividends. No dividend or other distribution payable to the
holders of record of Corporation Common Stock at or as of any time after the
Effective Date shall be paid to the holder of any certificate representing
shares of Bank Common Stock issued and outstanding at the Effective Date until
such holder physically surrenders such certificate for
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exchange as provided in Section 4 of this Agreement, promptly after which time
all such dividends or distributions shall be paid (without interest).
6. Employee and Director Stock Plans. At the Effective Date, al
stock option and stock-based compensation plans of the Bank (the "Bank Plans")
shall automatically be continued as and become plans of the Corporation
("Corporation Plans"). At the Effective Date, there shall be substituted for the
options granted under the Bank Plans ("Old Options"), new options ("New
Options") under the Corporation Plans without any action on the part of
optionees, and each New Option shall be for the same number of shares of
Corporation Common Stock, exercisable at the same price and subject to the same
terms and conditions as each Old Option was with respect to Bank Common Stock.
The substitution of New Options for Old Options shall be done in accordance with
the provisions of Section 425(a) of the Internal Revenue Code of 1986. Under the
Corporation Plans, the Corporation shall assume all of the rights and
obligations of Bank under the Bank Plans.
At the Effective Date, the Board of Directors of the Corporation shall
be deemed to have reserved and authorized the issuance of the number of shares
of Corporation Common Stock under the Corporation Plans that is equal to the
number of shares of Bank Common Stock approved by the shareholders of Bank for
issuance under the Bank Plans that Bank has not issued under the Bank Plans
prior to the Effective Date.
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At the Effective Date, all rights to purchase, sell or receive Bank
Common Stock and all rights to elect to make payment in Bank Common Stock under
any agreement between Bank and any director, officer or employee thereof or
under any plan or program of Bank shall automatically, by operation of law, be
converted into and shall become an identical right to purchase, sell or receive
Corporation Common Stock and an identical right to make payment in Corporation
Common Stock under any such agreement between Bank and any director, officer or
employee thereof or under such plan or program of the Bank.
7. Rights of Dissenting Shareholders. Shareholders of the Bank
who object to the Share Exchange will be entitled to the rights and remedies set
forth in Sections 13.1-729 through 13.1-741 of the Virginia Stock Corporation
Act.
8. Conditions to the Share Exchange. The Share Exchange shall
not be consummated unless the following conditions have been satisfied:
(a) Holders of the issued and outstanding shares of
Bank Common Stock shall have approved this Agreement in accordance with Virginia
law and the Articles of Incorporation of the Bank and the Bank, as the sole
shareholder of the Corporation, shall have approved this Agreement. None of such
approvals shall have been revoked at or prior to the Effective Time.
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(b) If, in the opinion of counsel to the Corporation,
such registration is required, the Corporation Common Stock to be issued to the
holders of Bank Common Stock pursuant to the Share Exchange shall have been duly
registered pursuant to Section 5 of the Securities Act of 1933 and such
registration shall not be suspended at the Effective Time. Further, to the
extent required in the opinion of legal counsel for the Corporation, the
Corporation shall have complied with all applicable securities law of states and
other jurisdictions relating to such issuance of the Corporation Common Stock.
(c) Any and all approvals or consents shall have been
obtained from the Virginia State Corporation Commission, the Board of Governors
of the Federal Reserve System and any other governmental agency having
jurisdiction, and from other third parties that are, in the opinion of legal
counsel for the Bank or the Corporation, required for the lawful consummation of
the Share Exchange and the issuance and delivery of Corporation Common Stock as
contemplated by this Agreement and such approvals or consents and shall not have
been revoked.
(d) The Bank shall have received either (i) a ruling fro
the Internal Revenue Service, acceptable in form and substance to the Bank and
its legal counsel, or (ii) an opinion from Williams, Mullen, Christian &
Dobbins, in either case to the effect that:
(1) The Share Exchange either will constitute
(i) a reorganization under Section 368(a)(1) of the Internal Revenue Code of
1986, as amended (the "Code") and
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that the Bank and the Corporation each will qualify as a "party to a
reorganization" within the meaning of Section 368(b) of the Code or (ii) a
transaction described in Section 351 of the Code;
(2) No gain or loss will be recognized by the
shareholders of the Bank upon the exchange of their Bank Common Stock
solely for Corporation Common Stock;
(3) No gain or loss will be recognized by the
Corporation upon its receipt of Bank Common Stock in exchange for
Corporation Common Stock in connection with the Share Exchange;
(4) The aggregate basis of the Corporation
Common Stock received by each shareholder of the Bank in the Share
Exchange will, in each instance, be the same as the aggregate basis of
the Bank Common Stock surrendered in exchange therefor; and
(5) The holding period of the Corporation Common
Stock received by each shareholder of the Bank in the Share Exchange
will include the period during which the shareholder held his Bank
Common Stock exchanged therefor, provided that such Bank Common Stock
is held as a capital asset on the date of the Share Exchange.
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(e) Should any shareholders of the Bank dissent pursuant
to Virginia law, the payments to dissenting shareholders shall not
cause the Bank to become undercapitalized or exceed the amount of
dividends permissible for the Bank under applicable state and federal
law.
9. Abandonment of Agreement. This Agreement may be abandoned
by the Bank or the Corporation at any time before the Effective Date in the
event that (a) any action, suit, proceeding or claim has been instituted, made
or threatened relating to the Agreement which shall make consummation of the
transactions contemplated hereby inadvisable in the opinion of the Bank or the
Corporation or (b) for any other reason consummation of the transactions
contemplated hereby is inadvisable in the opinion of the Bank or the
Corporation. Such abandonment shall be effected by written notice by the Bank or
the Corporation to the other Party hereto, authorized or approved by the Board
of Directors of the Party giving such notice. Upon the giving of such notice,
this Agreement shall be terminated and there shall be no liability hereunder or
on account of such termination on the part of the Bank or the Corporation or the
directors, officers, employees, agents or stockholders of any of them. In the
event of abandonment of this Agreement, the Bank shall pay the fees and expenses
incurred by itself and the Corporation in connection with this Agreement and the
Share Exchange.
10. Amendments. To the extent permitted by law, this Agreement
may be amended by a subsequent writing signed by the Parties hereto upon the
approval of the Board
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of Directors of each of the Parties hereto; provided, however, that the
provisions of Section 3 hereof relating to the consideration to be exchanged for
shares of Bank Common Stock shall not be amended after the meeting of
stockholders of the Bank at which this Agreement is considered so as to decrease
the amount or change the form of such consideration without the approval of such
stockholders.
11. Counterparts. This Agreement may be executed in one or more
counterparts.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Virginia.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed on its behalf by its officers thereunto duly authorized, all as of
the date first above written.
PENINSULA TRUST BANK, INCORPORATED
By: ________________________________
William J. Farinholt
President
Attest: ________________________________
Secretary
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MID-ATLANTIC COMMUNITY BANKGROUP, INC.
By: ________________________________
William J. Farinholt
President
Attest: ________________________________
Secretary
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