UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
(Amendment
No. 2)
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): February 1, 2017
Old Line Bancshares, Inc.
(Exact
name of registrant as specified in its charter)
|
Maryland
|
|
000-50345
|
|
20-0154352
|
|
(State or other
jurisdiction)
of incorporation |
|
(Commission File
Number)
|
|
(I.R.S. Employer
Identification No.)
|
|
1525 Pointer Ridge
Place
Bowie,
Maryland
|
|
20716
|
|
(Address of
principal executive offices)
|
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: 301-430-2500
|
|
|
N/A
|
|
(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:
☒
Written communication pursuant to Rule 425 under the Securities
Act (17 CFR
230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CRF
240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR
240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4 (c) under
the Exchange Act (17 CFR 240.13e-
4(c))
EXPLANATORY NOTE
This
Amendment No. 2 to Current Report on Form 8-K (this
“Amendment No. 2”) amends and restates in its entirety
the Current Report on Form 8-K filed by the registrant on February
1, 2017, as amended by the Form 8-K/A filed by the registrant on
February 2, 2017 (collectively, the “Original Form
8-K”), to amend the item number under which certain exhibits
were included with the Original Form 8-K.
Specifically,
the Original Form 8-K is hereby amended to provide that Exhibits
99.1, 99.2 and 99.3 are furnished under Item 7.01 - Regulation FD
Disclosure, and not filed pursuant to Item 1.01 - Entry into a
Material Definitive Agreement. In accordance with Rule 12b-15 of
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), this Amendment No. 2 sets forth the
complete text of the Original Form 8-K as amended hereby, which
text supersedes and replaces the text of the Original Form 8-K in
its entirety.
In
accordance with General Instruction B.2 of Form 8-K, Exhibits 99.1,
99.2 and 99.3 hereof shall not be deemed to be “filed”
for purposes of Section 18 of the Exchange Act, or otherwise
subject to the liability of that section, and shall not be
incorporated by reference into any filings made under the
Securities Act of 1933, as amended, or the Exchange Act, except as
shall be expressly set forth by specific reference in such
filing.
Except
as set forth herein, this amendment does not amend or update any
other information set forth in the Original 8-K, and we have not
updated disclosures contained therein to reflect any events that
may have occurred at a date subsequent to the filing of the
Original 8-K.
Item 1.01
Entry
into a Material Definitive Agreement.
On
February 1, 2017, Old Line Bancshares, Inc., a Maryland corporation
(“Old Line”), entered into an Agreement and Plan of
Merger (the “Merger Agreement”) with DCB Bancshares,
Inc., a Maryland corporation (“DCB”). The Merger
Agreement provides that, upon the terms and subject to the
conditions set forth therein, DCB will merge with and into Old
Line, with Old Line continuing as the surviving entity (the
“Merger”). Immediately following the consummation of
the Merger, Damascus Community Bank, a Maryland-state chartered
bank and wholly-owned subsidiary of DCB, will merge with and into
Old Line Bank, a trust company with commercial banking powers
chartered under the laws of the State of Maryland and wholly-owned
subsidiary of Old Line, with Old Line Bank continuing as the
surviving entity. The Merger Agreement was approved by the Board of
Directors of each of Old Line and DCB.
Subject
to the terms and conditions of the Merger Agreement, upon
completion of the Merger, the holders of DCB common stock will
receive, in the aggregate, shares of Old Line common stock having a
value equal to 160% of DCB’s stockholders’ equity less
intangible assets, if any (i.e. 160% of the aggregate tangible book
value of DCB’s common stock), at December 31, 2016 (the
“DCB Tangible Equity”). On a per-share basis, each
share of DCB common stock will be exchanged for that number of
shares of Old Line common stock equal to the “Exchange
Ratio,” which will be determined by dividing the Per Share
Value by the Average Price, rounded to the nearest ten-thousandth,
with (i) the “Per Share Value” equal to (A) DCB
Tangible Equity multiplied by 1.60, divided by (B) the number of
shares of DCB common stock outstanding upon consummation of the
Merger, and (ii) the “Average Price” equal to the
weighted average of the closing prices of the Old Line common stock
for the ten trading days ending two trading days prior to the
consummation of the Merger. Notwithstanding the foregoing, except
in connection with the Walk-Away Cure Right discussed below, the
Average Price is subject to a collar, such that it will not be less
than $20.85 or more than $27.21.
The
Exchange Ratio is subject to customary anti-dilution adjustments in
the event of stock splits, stock dividends and similar transactions
involving Old Line common stock.
Old
Line has agreed to appoint two individuals designated by DCB to
serve on the Old Line and Old Line Bank boards of directors after
the Merger. DCB has designated Steven J. Deadrick for one of these
positions, with the second to be determined by the mutual agreement
of Old Line and DCB at a later date.
The
Merger Agreement contains customary representations and warranties
from both Old Line and DCB that are qualified by the confidential
disclosures provided to the other party in connection with the
Merger Agreement.
DCB has
agreed to various customary covenants and agreements, including
(i) to conduct its business in the ordinary course in all
material respects during the interim period between the execution
of the Merger Agreement and the consummation of the Merger,
(ii) not to engage in certain kinds of transactions or take
certain actions during this period (without the prior written
consent of Old Line) and (ii) to convene and hold a meeting of
its stockholders to consider and vote upon the Merger Agreement and
the Merger. In addition, subject to certain limited exceptions, DCB
is subject to restrictions on its ability to solicit or facilitate
alternative acquisition proposals from third parties.
Old
Line has agreed to various customary covenants and agreements,
including, among others, not to take certain actions during the
interim period between the execution of the Merger Agreement and
the consummation of the Merger that could frustrate the closing of
the Merger (without the prior written consent of DCB).
Completion of the
Merger is subject to various conditions, including, among others,
(i) approval by DCB’s stockholders of the Merger
Agreement and the Merger, (ii) effectiveness of the
registration statement on Form S-4 to be filed by Old Line with the
U.S. Securities and Exchange Commission (the “SEC”) to
register the offer and sale of the shares of Old Line common stock
to be issued in the Merger, (iii) the filing of any required forms
with The NASDAQ Stock Market, LLC in connection with the issuance
of the shares of Old Line common stock to be issued in the Merger,
if required, and the completion of any review of such forms, and
(iv) receipt of required regulatory approvals without the
imposition of any condition or requirement that would, in the good
faith reasonable judgment of the Board of Directors of either DCB
or Old Line, constitute a Burdensome Condition (as defined in the
Merger Agreement) or so otherwise materially and adversely impact
the economic or business benefits to DCB or Old Line, as
applicable, of the transactions contemplated by the Merger
Agreement as to render consummation of the Merger inadvisable. Each
party’s obligation to consummate the Merger is also subject
to certain additional customary conditions, including
(i) subject to certain exceptions, the accuracy of the
representations and warranties of the other party,
(ii) performance in all material respects by the other party
of its obligations, (iii) no more than 10% of the outstanding
shares of DCB’s common stock shall have been qualified by
their owners for appraisal rights under Maryland law with respect
to the Merger (with respect to Old Line’s obligation only)
(iv) there shall not have occurred, since the date of the
Merger Agreement, a Material Adverse Effect (as such term is
defined in the Merger Agreement) with respect to Old Line or Old
Line Bank, on the one hand, or DCB or Damascus Community Bank, on
the other hand, and (v) the receipt by such party of an
opinion from its counsel or a letter from its auditor to the effect
that the Merger will qualify as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as
amended.
The
Merger Agreement, in addition to providing that the parties can
mutually agree to terminate the Merger Agreement, contains certain
termination rights for Old Line and DCB, as the case may be,
including upon: (1) final, non-appealable denial of required
regulatory approvals or injunction prohibiting the transactions
contemplated by the Merger Agreement; (2) the failure of the
Merger to be completed by October 31, 2017, or November 30, 2017 if
such failure is because of a failure to obtain any required
regulatory approval or consent (unless caused by a material breach
of this Agreement by the party seeking to terminate); (3) a
breach by the other party that is not or cannot be cured within 30
days’ notice of such breach if such breach would result in a
failure of the conditions to closing set forth in the Merger
Agreement (provided that if the breach can be cured within
60 days’ notice, the cure period will be 60 days);
(4) failure of DCB’s stockholders to approve the Merger
Agreement and the Merger; (5) if the DCB Board of Directors
withdraws, changes, or modifies its recommendation to its
stockholders in any manner adverse to Old Line regarding the Merger
Agreement or the Merger or approves or announces an intention to
enter into an alternative transaction; (6) the DCB Board of
Directors has made a determination to accept a Superior Proposal or
has entered into an agreement with respect to a Superior Proposal;
or (7) (a) Old Line or Old Line Bank enter into an
agreement with a view to being acquired by, or effecting a business
combination, as a result of which Old Line is not the surviving
entity or Old Line’s directors, as of the date of the Merger
Agreement, do not comprise the majority of the surviving
entity’s board of directors, with any entity other than DCB
or Damascus Community Bank and (b) the DCB Board of Directors
determines that, after considering the advice of counsel and its
financial advisor, such transaction is not in the best interests of
DCB’s stockholders (provided that DCB must exercise this
termination option within 30 calendar days after Old Line is
required to file a Current Report on Form 8-K regarding events
triggering this termination option). A “Superior
Proposal” is a third party unsolicited bona fide written proposal to enter
into an agreement with DCB on terms that the DCB Board of Directors
determines in its good faith judgment, after consultation with and
having considered the advice of its outside legal counsel and
financial advisor: (i) would, if consummated, result in the
acquisition of all, but not less than all, of the issued and
outstanding shares of DCB common stock or all, or substantially
all, of the assets of DCB and Damascus Community Bank on a
consolidated basis; (ii) would result in a transaction that
involves consideration to DCB’s stockholders that is more
favorable than the consideration to be paid to DCB’s
stockholders pursuant to the Merger Agreement (taking into account
all legal, financial, regulatory and other aspects of such proposal
and the entity making such proposal); (iii) is not conditioned
on obtaining financing (and with respect to which DCB has
reasonably assured itself of such entity’s ability to fully
finance its proposal); and (iv) is reasonably likely to be
completed on the terms proposed, in each case taking into account
all legal, financial, regulatory and other aspects of such
proposal. In addition, if the volume-weighted average closing price
of Old Line common stock during the ten trading days ending five
business days before the effective date of the Merger (the
“Closing Market Price”) is less than $16.68, and the
ratio of the Closing Market Price to $27.21 is more than 20% lower
than any decrease in the Nasdaq Bank Stock Index over such period,
then DCB may terminate the Merger Agreement, but Old Line would
then have the option to increase the consideration to be paid in
the Merger (as a practical matter, by increasing the Exchange
Ratio) to an amount calculated as if the Average Price was $16.68
per share, in which case no termination will take place (the
“Walk-Away Cure
Right”).
Upon
termination of the Merger Agreement by Old Line pursuant to
any of clauses (1), (2), (3), (5) or (6) above, assuming
in the case of (1) and (2) that such failure is due to the knowing,
willful and intentional actions or inactions of DCB or Damascus
Community Bank and provided that in the case of (1), (2) and (5)
above that Old Line is not then in material breach of any
representation, warranty, covenant, or other agreement contained in
the Merger Agreement, DCB will be obligated to pay Old Line a
termination fee equal to the product of 3.25% of the deal value
(i.e. DCB Tangible Equity multiplied by 1.60) (the
“Termination Fee”). If DCB terminates the Merger
Agreement pursuant to any of clauses (1), (2) or (3) above,
assuming in the case of (1) and (2) that such failure is due to the
knowing, willful and intentional actions or inactions of Old Line
or Old Line Bank, and that DCB is not then in material breach of
any representation, warranty, covenant, or other agreement
contained in the Merger Agreement, then Old Line will be obligated
to pay DCB the Termination Fee.
The
foregoing description of the Merger Agreement is only a summary of
its material terms, does not purport to be complete and is
qualified in its entirety by reference to the full text of the
Merger Agreement, which is filed as an exhibit to this Current
Report on Form 8-K. The representations, warranties and
covenants of each party set forth in the Merger Agreement have been
made only for purposes of, were and are solely for the benefit of
the parties to, the Merger Agreement, may be subject to limitations
agreed upon by the contracting parties, including being qualified
by confidential disclosures made for the purposes of allocating
contractual risk between the parties to the Merger Agreement
instead of establishing these matters as facts, and may be subject
to standards of materiality applicable to the contracting parties
that differ from those applicable to investors. In addition, such
representations and warranties (i) will not survive
consummation of the Merger, unless otherwise specified therein, and
cannot be the basis for any claims under the Merger Agreement by
the other party after termination of the Merger Agreement except as
a result of fraud or a knowing breach as of the date of the Merger
Agreement, and (ii) were made only as of the date of the
Merger Agreement or such other date as is specified in the Merger
Agreement. Moreover, information concerning the subject matter of
the representations and warranties may change after the date of the
Merger Agreement, which subsequent information may or may not be
fully reflected in the parties’ public disclosures.
Accordingly, the Merger Agreement is included with this filing only
to provide investors with information regarding the terms of the
Merger Agreement, and not to provide investors with any other
factual information regarding Old Line or DCB, their respective
affiliates or their respective businesses. The Merger Agreement
should not be read alone, but should instead be read in conjunction
with the other information regarding Old Line or DCB, their
respective affiliates or their respective businesses that will be
contained in, or incorporated by reference into, the Registration
Statement on Form S-4 that will include a Proxy Statement of DCB
and a Prospectus of Old Line, as well as in the Forms 10-K, Forms
10-Q and other filings that Old Line makes with the
SEC.
Concurrently with
the execution of the Merger Agreement, all of the directors and
executive officers of DCB entered into separate support agreements
with Old Line pursuant to which such individuals have agreed,
subject to the terms set forth therein, to vote their shares of DCB
common stock that they are entitled to vote for the Merger and
related matters and to become subject to certain transfer
restrictions with respect to their holdings of DCB common stock.
The foregoing summary of the support agreements does not purport to
be complete and is qualified in its entirety by the text of such
agreements, the form of which is filed as an exhibit to this
Current Report on Form 8-K.
Important Additional Information.
This communication does not constitute an offer
to sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. Old Line will file with the SEC a registration
statement on Form S-4 containing a proxy statement/prospectus and
other documents regarding the proposed transaction. These materials
will set forth complete details of the Merger. DCB stockholders and
investors are urged to read the registration statement and the
proxy statement/prospectus when it becomes available and any other
relevant documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important
information about Old Line, DCB and the proposed
transaction.
Investors and
security holders will be able to obtain the documents (when
available) free of charge at the SEC’s website, www.sec.gov.
Copies of the documents filed with the SEC by Old Line will be
available free of charge on Old Line’s website at
www.oldlinebank.com under the tab “Investor Relations”
and then under the heading “SEC Filings” or by
contacting Mark A. Semanie at (301) 430-2500. You may also
read and copy any reports, statements and other information filed
with the SEC at the SEC’s Public Reference Room at 100 F
Street, NE, Washington DC. Information about the operation of the
SEC Public Reference Room may be obtained by calling the SEC at
1-800-SEC-0330. The information on Old Line’s website is not,
and shall not be deemed to be, a part of this report or
incorporated into other filings Old Line makes with the
SEC.
DCB and
its respective directors, executive officers and members of
management may be deemed to be participants in the solicitation of
proxies from the stockholders of DCB in connection with the Merger.
Information regarding the interests of these participants and other
persons who may be deemed participants in the merger may be
obtained by reading the proxy statement/prospectus regarding the
Merger when it becomes available.
Item 7.01
Regulation
FD Disclosure.
The
press release announcing Old Line’s and DCB’s entry
into the Merger Agreement, the form of support agreement and an
investor presentation prepared in connection with the execution of
the Merger Agreement are furnished herewith as Exhibits 99.1, 99.2
and 99.3, respectively.
Item 9.01
Financial
Statements and Exhibits.
(d)
Exhibits:
2.1
Agreement and Plan
of Merger, dated as of February 1, 2017, by and between Old Line
Bancshares, Inc. and DCB Bancshares, Inc. (the schedules
and exhibits have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. Old Line undertakes to furnish supplemental copies
of any of the omitted schedules or exhibits upon request by the
Securities and Exchange Commission.) (incorporated by reference to
the Original Form 8-K)
99.1
Press release,
dated February 1, 2017, of Old Line Bancshares, Inc. and DCB
Bancshares, Inc. announcing execution of the Merger Agreement
(incorporated by reference to the Original Form 8-K)
99.2
Form of Support
Agreement (incorporated by reference to the Original Form
8-K)
99.3
Investor
presentation – overview of the Merger Agreement and the
Merger Transaction (incorporated by reference to the Original Form
8-K)
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
|
|
OLD LINE BANCSHARES, INC.
|
|
|
|
|
|
|
|
|
Date: March 9,
2017
|
By:
|
/s/ Elise M.
Hubbard
|
|
|
|
|
Name
|
|
|
|
|
Elise M. Hubbard,
Senior Vice President
and Chief Financial
Officer
|
|