The consolidated financial statements of Glacier Bancorp, Inc. as of December 31, 2015 and 2014 and for each of the years in the
three-year period ended December 31, 2015 have been incorporated by reference herein and in the registration statement in reliance upon the reports of BKD, LLP, independent registered public accounting firm, and upon the authority of said firm
as experts in accounting and auditing.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows Glacier to incorporate by reference information into this proxy statement/prospectus, which means that Glacier can
disclose important information to you by referring you to another document filed separately by Glacier with the SEC. The information incorporated by reference is deemed to be part of this proxy statement/prospectus, except for any information
superseded by any information in this proxy statement/prospectus.
This proxy statement/prospectus incorporates by reference the documents
set forth below that Glacier has previously filed with the SEC. These documents contain important information about Glacier and its finances:
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Annual Report on Form 10-K for the year ended December 31, 2015;
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Quarterly Report on Form 10-Q for the quarter ended March 31, 2016;
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Proxy Statement for Glaciers 2016 Annual Meeting of Shareholders; and
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Current Reports on Form 8-K filed January 5, 2016; January 6, 2016; January 28, 2016; April 21, 2016 (two filings); and April 29, 2016 (other than the portions of those documents
not deemed to be filed).
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In addition, Glacier is incorporating by reference additional documents that Glacier files with
the SEC between the date of this proxy statement/prospectus and the date of the special meeting of TSB, provided, however, that Glacier is not incorporating by reference any information furnished (but not filed), except as otherwise specified
therein.
Glacier files annual, quarterly and special reports, proxy statements and other business and financial information with the SEC.
You may obtain the information incorporated by reference and any other materials Glacier may file with the SEC without charge by following the instructions in the section entitled Where You Can Find More Information About Glacier in the
forepart of this document.
You should rely only on the information contained or incorporated by reference in this proxy
statement/prospectus in deciding how to vote on the merger. We have not authorized anyone to provide you with information other than what is contained in this proxy statement/prospectus. This proxy statement/prospectus is dated
[ ], 2016. You should not assume that information contained in this proxy statement/prospectus is accurate as of any other date, and neither the mailing of this proxy
statement/prospectus to TSB shareholders nor the issuance of Glacier common stock in the merger will create any implication to the contrary.
60
APPENDIX A
PROJECT SILVER
AGREEMENT AND PLAN OF MERGER
AMONG
GLACIER BANCORP,
INC
.
GLACIER BANK
TREASURE STATE BANK
DATED AS OF APRIL 20, 2016
TABLE OF CONTENTS
-i-
TABLE OF CONTENTS
(continued)
-ii-
List of Schedules and Exhibits
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SCHEDULES
:
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Schedule 3.1.1
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Office(s)
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Schedule 3.1.2
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Third Party Consents Required
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Schedule 3.1.3
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Capital Stock
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Schedule 3.1.4(b)
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Investments
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Schedule 3.1.5
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Financial Statements
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Schedule 3.1.6
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Properties
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Schedule 3.1.7
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Environmental Matters
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Schedule 3.1.8(e)
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Jurisdictions of Tax Returns/Audits
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Schedule 3.1.8(q)
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Tax Attributes
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Schedule 3.1.9
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Absence of Regulatory Action
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Schedule 3.1.10
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Material Contracts
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Schedule 3.1.15
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Asset Classification
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Schedule 3.1.16
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Litigation
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Schedule 3.1.17
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Insurance Policies
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Schedule 3.1.18
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Labor and Employment Matters
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Schedule 3.1.19
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Benefit Plans
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Schedule 4.1.7
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Compensation
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Schedule 6.2
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Identified Employees
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EXHIBITS
:
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Exhibit A
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Director Parties to Recital E
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Exhibit B
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Transaction Related Expenses
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AGREEMENT AND PLAN OF MERGER
AMONG
GLACIER BANCORP,
INC
.
,
GLACIER BANK, AND TREASURE STATE BANK
This AGREEMENT AND PLAN OF MERGER (this
Agreement
), dated as of April 20, 2016, is made by and among GLACIER BANCORP,
INC. (
GBCI
), GLACIER BANK, and TREASURE STATE BANK (the
Bank
or
TSB
).
PREAMBLE
The management and boards of directors of GBCI and the Bank believe that the proposed Bank Merger (as defined below), to be
accomplished in the manner set forth in this Agreement, is in the best interests of the respective corporations and their shareholders.
RECITALS
A
.
The Parties
.
(1) GBCI is a corporation duly organized and validly existing under Montana law and is a registered
bank holding company under the Bank Holding Company Act of 1956, as amended (
BHC Act
). GBCIs principal office is located in Kalispell, Montana.
(2) Glacier Bank is a duly organized and validly existing Montana state-chartered bank and a wholly owned subsidiary of GBCI. Glacier Bank
maintains its principal office in Kalispell, Montana and operates 13 separately branded banking divisions.
(3) The Bank is a duly
organized and validly existing Montana state-chartered bank. The Banks principal office and only branch is located in Missoula, Montana.
B
.
The Transaction
. On the Effective Date, (1) the Bank will merge with and into Glacier Bank, with Glacier Bank
surviving as a wholly owned subsidiary of GBCI, and (2) the Banks branch will operate under Glacier Banks division, First Security Bank, as part of that division (the
Division
).
C
.
Board Approvals
. The respective boards of directors of GBCI, Glacier Bank, and the Bank have approved this Agreement
and authorized its execution and delivery.
D
.
Other Approvals
. The Bank Merger is subject to:
(1) Satisfaction of the conditions described in this Agreement;
(2) Approval of this Agreement and/or the Bank Merger by the Banks shareholders; and
(3) Approval of or acquiescence in, as appropriate, the Transaction by the Federal Deposit Insurance Corporation (
FDIC
),
the Montana Division of Banking and Financial Institutions (the
Montana Division
), and any other agencies having jurisdiction over the Transaction.
A-1
E.
Director Agreements
. In connection with the parties execution of this
Agreement, the parties set forth on the attached
Exhibit A
have entered into agreements pursuant to which, among other things, each agrees to vote his, her or its shares of TSB Stock in favor of the actions contemplated by this Agreement
and the directors of the Bank have entered into agreements pursuant to which they agree to refrain from competing with GBCI and/or Glacier Bank and their respective successors for a period of time.
F.
Fairness Opinion
. The Bank has received from D.A. Davidson & Co. an opinion to the effect that the Merger
Consideration is fair from a financial point of view to the shareholders of the Bank.
G.
Intention of the PartiesTax
Treatment
. The parties intend that the Transaction shall qualify, for federal income tax purposes, as a tax-free reorganization under IRC Section 368(a), and that this Agreement shall constitute a plan of reorganization for
purposes of IRC Section 368.
AGREEMENT
In consideration of the mutual covenants set forth in this Agreement, GBCI, Glacier Bank, and the Bank agree as follows:
DEFINITIONS
The
following capitalized terms used in this Agreement will have the following meanings:
Acquisition Event
means any of
the following: (a) a merger, consolidation or similar transaction involving the Bank or any successor, (b) a purchase, lease or other acquisition in one or a series of related transactions of assets of the Bank or any of its Subsidiaries
representing 25 percent or more of the consolidated assets of the Bank, or (c) a purchase or other acquisition (including by way of merger, consolidation, share exchange or any similar transaction) in one or a series of related
transactions of beneficial ownership of securities representing 50 percent or more of the voting power of the Bank, in each case with or by a Person or entity other than GBCI or one of its Subsidiaries.
Acquisition Proposal
has the meaning assigned to such term in Section 4.1.10.
Agreement
means this Agreement and Plan of Merger.
ALLL
means allowance for possible loan and lease losses.
Appraisal Laws
means Section 35-1-826 through 35-1-839 of the MBCA, as such sections are applicable to a merger in
which the resulting or surviving bank is a state-chartered bank organized under the MBA.
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Asset Classification
has the meaning assigned to such term in
Section 3.1.15(b).
Bank
means Treasure State Bank, a Montana state-chartered bank.
Bank Merger
means the merger of the Bank with and into Glacier Bank as contemplated by the Agreement.
BHC Act
has the meaning assigned to such term in Recital A.
Break-Up Fee
has the meaning assigned to such term in Section 7.4.9.
Business Day
means any day other than a Saturday, Sunday, legal holiday, or a day on which banking institutions located in
the State of Montana are required by law to remain closed.
Certificate
has the meaning assigned to such term in
Section 1.7.1.
Closing
means the closing of the Bank Merger, as more fully specified in Section 2.2.
Closing Capital Differential
means the positive or negative difference between the TSB Closing Capital and the Closing
Capital Requirement.
Closing Capital Requirement
means $9,500,000, plus the amount of TSB Closing Capital, if any,
attributable to the exercise of TSB Options after December 31, 2015.
Compensation Plans
has the meaning assigned
to such term in Section 3.1.19(b).
Daily Closing Price
has the meaning assigned to such term in
Section 1.2.3(a).
Determination Date
has the meaning assigned to such term in Section 1.2.3(b).
Dissenting Shares
means the shares of TSB Stock held by those shareholders who have timely and properly exercised their
dissenters rights in accordance with Appraisal Laws.
Division
has the meaning assigned to such term in
Recital B.
Effective Date
means the date on which the Effective Time takes place.
Effective Time
means the time the Bank Merger becomes effective under the MBA and MBCA.
Employees
has the meaning assigned to such term in Section 3.1.19(b).
Environmental Laws
has the meaning assigned to such term in Section 3.1.7(a)(ii).
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ERISA
means the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate
means, with respect to the Bank, any other entity that is considered one employer with the Bank under
Section 4001 of ERISA or IRC Section 414.
Exchange Act
means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
Exchange Agent
means American Stock Transfer and Trust Co.
Exchange Fund
has the meaning assigned to such term in Section 1.6.
Execution Date
means the date of this Agreement.
Executive Officers
with respect to GBCI and/or Glacier Bank means Michael J. Blodnick, Randall M. Chesler, and
Ronald J. Copher.
Executive Officers
with respect to the Bank means James A. Salisbury, Anne Robinson, Jason
Erickson, and Andy Anderson.
Fairness Opinion
has the meaning assigned to such term in Section 5.2.13.
FDIC
means the Federal Deposit Insurance Corporation.
Federal Reserve
means the Board of Governors of the Federal Reserve System.
Final Transaction Related Expenses
has the meaning assigned to such term in Section 4.14.
GAAP
means United States generally accepted accounting principles.
GBCI
means Glacier Bancorp, Inc., a Montana corporation that has its principal place of business in Kalispell, Montana, and
that is a bank holding company registered pursuant to the BHC Act.
GBCI Average Closing Price
has the meaning assigned
to such term in Section 1.2.3(c).
GBCI Common Stock
means the shares of GBCI common stock, $0.01 par value per
share.
GBCI Contracts
has the meaning assigned to such term in Section 3.2.2.
GBCI Financial Statements
means GBCIs (a) audited consolidated balance sheets as of December 31, 2014, and
2015 and the related audited consolidated statements of income, cash flows and changes in shareholders equity for each of the years then ended; (b) unaudited consolidated balance sheet as of the end of each fiscal quarter following
December 31, 2015, but preceding the Execution Date, if any, and the related unaudited
A-4
consolidated statements of income, cash flows and changes in shareholders equity for each such quarter; and (c) unaudited consolidated balance sheets and related consolidated
statements of income and shareholders equity for each of the fiscal quarters ending after the Execution Date and before Closing or the Termination Date, as the case may be.
GBCI Shares
means the shares of GBCI Common Stock to be issued to the holders of TSB Stock in connection with the Bank
Merger.
Hazardous Substances
has the meaning assigned to such term in Section 3.1.7(a).
Independent Accountants
has the meaning assigned to such term in Section 4.13.
IRC
means the Internal Revenue Code of 1986, as amended.
Knowledge
has the following meanings: (a) the Bank will be deemed to have Knowledge of a particular fact
or matter if any Executive Officer of the Bank has actual knowledge of such fact or matter or if any such Person could reasonably be expected to discover or otherwise become aware of such fact or matter in the course of making a reasonable inquiry
into such areas of the Banks business that are under such individuals general area of responsibility; and (b) GBCI will be deemed to have Knowledge of a particular fact or matter if any Executive Officer of GBCI has
actual knowledge of such fact or matter or if any such Person could reasonably be expected to discover or otherwise become aware of such fact or matter in the course of making a reasonable inquiry into such areas of GBCIs business that are
under such individuals general area of responsibility.
Letter of Transmittal
has the meaning set forth in
Section 1.7.1.
Liens
means, collectively, liens, pledges, security interests, claims, preemptive or subscriptive
rights or other encumbrances or restrictions of any kind.
Material Adverse Effect
with respect to a Person means an
effect that: (a) is materially adverse to the business, financial condition, results of operations or prospects of the Person and its Subsidiaries taken as a whole; (b) significantly and adversely affects the ability of the Person to
consummate the Bank Merger on or by the Termination Date or to perform its material obligations under this Agreement; or (c) enables any Person to prevent the consummation of the Bank Merger on or by the Termination Date; provided, however,
that Material Adverse Effect shall not be deemed to include the impact of any (i) changes in banking and similar laws of general applicability or interpretations thereof by governmental authorities or other changes affecting depository
institutions generally that do not have a materially more adverse effect on such party than that experienced by similarly situated financial services companies, including changes in general economic conditions and changes in prevailing interest and
deposit rates that do not have a materially more adverse effect on such party than that experienced by similarly situated financial services companies; (ii) acts of terrorism or war; (iii) any modifications or changes to valuation policies
and practices in connection with the Transaction or restructuring charges taken in connection with the Transaction, in each case in accordance with GAAP; (iv) any modifications or changes made to the Banks general business
A-5
practices or policies at the request of GBCI so as to be consistent with the practices or policies of GBCI; or (v) actions or omissions of a party taken with the prior consent of the other,
in contemplation of the Transaction as required or permitted hereunder, as required under any regulatory approval received in connection with the Transaction or which have been waived in writing by the other party.
Material Contract
has the meaning assigned to such term in Section 3.1.10.
MBA
means the Montana Bank Act, as amended.
MBCA
means the Montana Business Corporation Act, as amended.
Merger Consideration
means the aggregate consideration contemplated by Section 1.1.
Montana Division
has the meaning assigned to such term in Recital D.
Pension Plan
has the meaning assigned to such term in Section 3.1.19(a).
Per Share Cash Consideration
has the meaning assigned to such term in Section 1.2.3(d).
Per Share Consideration Value
has the meaning assigned to such term in Section 1.2.3(e)
Per Share Stock Consideration
has the meaning assigned to such term in Section 1.2.3(f).
Per Share Stock Consideration Value
has the meaning assigned to such term in Section 1.2.3(g).
Person
includes an individual, corporation, partnership, association, limited liability company, trust or unincorporated
organization.
Plan
has the meaning assigned to such term in Section 3.1.19(a).
Properties
, with respect to any party to this Agreement, means properties or other assets owned or leased by such party or
any of its Subsidiaries.
Proposed Dissenting Shares
means those shares of TSB Stock as to which shareholders have
properly given notice of their intent to assert appraisal rights pursuant to Section 35-1-827 of the MBCA.
Prospectus/Proxy
Statement
means the Prospectus/Proxy Statement referred to in Section 4.2.1, to be provided to all shareholders of the Bank in connection with their consideration and approval of the Bank Merger.
Real Property
means any real property that the Bank owns in fee title, other than other real estate owned.
A-6
Registration Statement
has the meaning assigned to such term in
Section 4.2.1(a).
Reports
has the meaning assigned to such term in Section 3.1.5(b).
SEC
means the United States Securities and Exchange Commission.
Securities Act
means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
Simple IRA Plan
means the Treasure State Bank SIMPLE IRA Plan, as amended.
Subject Property
has the meaning assigned to such term in Section 3.1.7(a)(i).
Subsequent Bank Financial Statements
means the Banks unaudited balance sheets and related statements of income and
shareholders equity for each month after the Execution Date and before Closing or the Termination Date, as the case may be, prepared in accordance with Section 4.1.8.
Subsidiary
with respect to any party to this Agreement means any Person in which such party owns, directly or indirectly,
the majority of outstanding capital stock or voting power.
Superior Proposal
means, with respect to the Bank, any
Acquisition Proposal made by a Person other than GBCI or its Subsidiary (a) that is for (i) a merger, reorganization, consolidation, share exchange, business combination, recapitalization or similar transaction involving the Bank,
(ii) a sale, lease, exchange, transfer, or other disposition of at least 25 percent of the assets of the Bank, taken as a whole, in a single transaction or a series of related transactions, or (iii) the acquisition, directly or
indirectly, by a Person of beneficial ownership of 50 percent or more of the TBS Stock or the Banks outstanding shares whether by merger, consolidation, share exchange, business combination, tender, or exchange offer or otherwise, and
(b) that is otherwise on terms which the Board of Directors of the Bank in good faith concludes (after consultation with its financial advisors and outside counsel), taking into account, among other things, all legal, financial, regulatory, and
other aspects of the proposal and the Person making the proposal, (x) would, if consummated, result in a transaction that is more favorable to the Banks shareholders (in their capacities as shareholders), from a financial point of view,
than the transactions contemplated by this Agreement, and (y) is reasonably probable of being completed.
Takeover
Laws
and
Takeover Provisions
each has the meaning assigned to such terms in Section 3.1.20.
Taxes
means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem,
transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property
gains, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.
A-7
Tax Returns
means any return, declaration, report, claim for refund,
information return or statement or other document required to be filed with or provided to any taxing authority in respect of Taxes, including any Schedule or attachment thereto, and including any amendment thereof.
Termination Date
means the date on which termination of this Agreement takes place under Article 7.
Title Company
has the meaning assigned to such term in Section 4.1.11.
Total Cash Consideration
has the meaning assigned to such term in Section 1.2.3(h).
Trading Day
has the meaning assigned to such term in Section 1.2.3(g).
Transaction
means the Bank Merger.
Transaction Related Expenses
means the payments and obligations related to the Transaction as more fully described on
Exhibit B
hereto.
TSB
means Treasure State Bank, a Montana state-chartered bank.
TSB Capital
means the Banks capital stock, surplus and retained earnings determined in accordance with GAAP on a
consolidated basis, net of goodwill and other intangible assets, calculated in the same manner in which the Banks consolidated tangible equity capital at December 31, 2015, was calculated, after giving effect to adjustments, calculated in
accordance with GAAP, for accumulated other comprehensive income or loss as reported on the Banks balance sheet. In calculating TSB Capital, purchase accounting adjustments will not be taken into account.
TSB Closing Capital
has the meaning assigned to such term in Section 4.13. For purposes of calculating TSB Closing
Capital, to the extent the Final Transaction Related Expenses exceed or are less than $1,100,000, the difference, on an after-tax basis (i.e., after applying an effective income tax rate of 38.455 percent), will be reflected as a pro-forma
adjustment to TSB Capital, such that (a) to the extent the Final Transaction Related Expenses exceed $1,100,000, the excess amount, on an after-tax basis, will be treated as a reduction to TSB Capital, or (b) to the extent the Final
Transaction Related Expenses are less than $1,100,000, the deficiency amount, on an after-tax basis, will be treated as an increase to TSB Capital.
TSB Contracts
has the meaning assigned to such term in Section 3.1.2.
TSB Financial Statements
means the Banks (a) audited financial statements as of December 31, 2013, 2014,
and 2015, and the related statements of income, cash flows and changes in shareholders equity for each of the years then ended; (b) unaudited financial statements as of March 31, 2016, and the related statements of income, cash flows
and changes in shareholders equity for such quarter and (c) the Subsequent Bank Financial Statements.
A-8
TSB Meeting
has the meaning assigned in Section 4.2.2.
TSB Options
has the meaning assigned in Section 3.1.3(b).
TSB Stock
means the shares of TSB common stock, $0.01 par value per share.
ARTICLE 1
TERMS OF TRANSACTION
1.1
Effect of Bank Merger
. Upon Closing of the Bank Merger, pursuant to the provisions of the MBA, at the Effective Time, the Bank will merge with and into Glacier Bank with Glacier Bank continuing as the resulting bank under
Section 32-1-371 of the MBA, and in connection therewith, all shares of TSB Stock issued and outstanding immediately prior to Closing, except for Proposed Dissenting Shares, will, by virtue of the Bank Merger and without any action on the part
of any holder of shares of TSB Stock, be converted into the right to receive the Merger Consideration set forth in Section
1.2.
1.2
Merger Consideration
. Subject to the provisions of this Agreement, on the Effective Date:
1.2.1
Outstanding GBCI Common Stock
. The shares of GBCI Common Stock issued and outstanding immediately prior to the Effective
Date will, on and after the Effective Date, remain as issued and outstanding shares of GBCI.
1.2.2
Outstanding TSB Stock
. Each
share of TSB Stock issued and outstanding on the Effective Date, excluding Proposed Dissenting Shares, will be converted into and represent the right to receive from GBCI a unit consisting of (y) the Per Share Cash Consideration and
(z) the Per Share Stock Consideration.
1.2.3
Definitions
. For purposes of this Agreement, the following terms have the
following meanings:
(a)
Daily Closing Price
for any Trading Day means the daily closing price per share of GBCI
Common Stock on the NASDAQ Global Market, as reported on the website
www.nasdaq.com
.
(b)
Determination Date
means the tenth (10
th
) day immediately preceding the Effective Date.
(c)
GBCI Average Closing Price
means the average Daily Closing Price of GBCI Common Stock for the 20 Trading Days immediately preceding the Determination Date.
(d)
Per Share Cash Consideration
means (i) $1.9570, less (ii) the per share amount, if any, equal to the Closing
Capital Differential (but only to the extent such
A-9
Closing Capital Differential is negative) divided by the number of shares of TSB Stock outstanding at the Effective Time. The Per Share Cash Consideration is also subject to further adjustment
pursuant to Section 7.3.2.
(e)
Per Share Consideration Value
means the sum of (i) the Per Share Cash
Consideration, and (ii) the Per Share Stock Consideration Value.
(f)
Per Share Stock Consideration
means 0.2030
shares of GBCI Common Stock; provided, however, that the Per Share Stock Consideration is subject to adjustment pursuant to Sections 7.2.2 and 7.3.2. Furthermore, if GBCI declares or effects a stock dividend, reclassification,
recapitalization, split-up, combination, exchange of shares or similar transaction between the Execution Date and the Effective Date, the Per Share Stock Consideration will be adjusted accordingly.
(g)
Per Share Stock Consideration Value
means the product of (1) the Per Share Stock Consideration multiplied by
(2) the GBCI Average Closing Price.
(h)
Total Cash Consideration
means the dollar amount obtained by multiplying
(i) the Per Share Cash Consideration by (ii) the number of shares of TSB Stock outstanding at the Effective Time.
(i)
Trading Day
means a day on which GBCI Common Stock is traded on the NASDAQ Global Market.
1.3
No Fractional Shares
. No fractional shares of GBCI Common Stock will be issued. In lieu of fractional
shares, if any, each holder of TSB Stock who is otherwise entitled to receive a fractional share of GBCI Common Stock will receive an amount of cash equal to the product of such fractional share times the GBCI Average Closing Price. Such fractional
share interests will not include the right to vote or receive dividends or any interest on dividends.
1.4
TSB Stock Options
. The TSB Options have been granted and remain outstanding pursuant to the TSB Plans. At the Effective Time, each TSB Option to acquire shares of TSB Common Stock that is outstanding and unexercised, whether or not then
vested, immediately prior to the Effective Time, shall be canceled, and in lieu thereof the holders of such TSB Option shall be paid in cash an amount equal to the product of (a) the number of shares of TSB Common Stock subject to such option
at the Effective Time and (b) the amount by which the Per Share Consideration Value exceeds the exercise price per share of such TSB Option, net of any cash which must be withheld under federal and state income and employment tax requirements.
As a condition to the receipt of a cash payment in cancellation of options, each option holder shall execute a cancellation agreement in form and substance satisfactory to GBCI. In the event that the exercise price of a TSB Option is greater than
the Per Share Consideration, then TSB shall take such actions as may be necessary or appropriate to cause, at the Effective Time, such TSB Option to be canceled without any payment made in exchange therefor. At the Effective Time, all Compensation
Plans of the Bank providing for equity-based compensation shall be deemed terminated. In the event that a TSB Option is exercised prior to the Closing, the TSB shares issued upon exercise thereof shall be entitled to the consideration described in
Section 1.2.2.
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1.5
Payment to Dissenting Shareholders
. Proposed Dissenting
Shares shall have the rights provided by the MBA.
1.6
Deposit of Cash and Shares
. On or before the
Effective Date, GBCI will deposit, or will cause to be deposited, with the Exchange Agent, for the benefit of the holders of certificates representing TSB Stock, for exchange in accordance with this Section 1.5, (a) certificates or, at
GBCIs option, evidence of shares in book entry form, representing the GBCI Shares for payment of the Per Share Stock Consideration in full; (b) the Total Cash Consideration for payment of the Per Share Cash Consideration; (c) the
cash in lieu of fractional shares to be paid in accordance with Section 1.3; and (iv) the cash in settlement of in the money TSB Options to be paid in accordance with Section 1.4. Such cash and certificates for GBCI Shares,
together with any dividends or distributions with respect thereto, are referred to in this Agreement as the
Exchange Fund
. The Exchange Agent shall not be entitled to vote or exercise any rights of ownership with respect to the
GBCI Shares held by it from time to time.
1.7
Certificates
.
1.7.1
Letter of Transmittal
. Promptly following the Effective Date, GBCI will cause to be mailed to each holder of record of a
certificate evidencing shares of TSB Stock (a
Certificate
) a form letter of transmittal (which will specify that delivery will be effected, and risk of loss and title to the Certificates will pass, only upon delivery of the
Certificates to the Exchange Agent in accordance with Section 1.7.2) advising such holder of the procedure for surrendering to the Exchange Agent the Certificates or other evidence of ownership in exchange for the consideration to which such
holder may be entitled pursuant to this Agreement (
Letter of Transmittal
).
1.7.2
Surrender of Certificates
.
Subject to Section 1.5, each Certificate will, from and after the Effective Date, be deemed for all corporate purposes to represent and evidence only the right to receive the portion of the Merger Consideration (and cash for fractional shares)
payable with respect to such Certificate. Following the Effective Date, holders of Certificates will exchange their Certificates and, in accordance with instructions provided in the Letter of Transmittal, shall provide a properly completed and
executed Letter of Transmittal in order to affect the exchange of their Certificates for, (a) evidence of issuance in book entry form, or upon request of such holder, certificates representing f GBCI Common Stock; (b) a check or, at the
election of the Bank shareholder, a wire transfer (but only if the amount of cash included in that shareholders Merger Consideration exceeds $100,000), representing the cash consideration to be received pursuant to Section 1.2; and/or
(c) a check representing the amount of cash in lieu of fractional shares, if any. Until any Certificates are surrendered and a properly completed and executed Letter of Transmittal is delivered to the Exchange Agent, the holder will not be
entitled to receive his, her or its portion of the Merger Consideration.
1.7.3
Issuance of Certificates in Other Names
. Any Person
requesting that any certificate evidencing GBCI Shares be issued in a name other than the name in which the surrendered Certificate is registered must: (a) establish to the Exchange Agents satisfaction the right to receive the certificate
evidencing GBCI Shares and (b) either pay to the Exchange Agent any applicable transfer or other taxes or establish to the Exchange Agents satisfaction that all applicable taxes have been paid or are not required.
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1.7.4
Lost, Stolen, and Destroyed Certificates
. With respect to a Certificate that has
been lost, stolen or destroyed, the Exchange Agent will be authorized to issue or pay the holders portion of the Merger Consideration in exchange thereof, if the holder provides the Exchange Agent with: (a) satisfactory evidence that the
holder owns TSB Stock and that the certificate representing this ownership is lost, stolen, or destroyed, (b) any appropriate affidavit or security the Exchange Agent may require, and (c) any reasonable assurances that the Exchange Agent
or GBCI may require.
1.7.5
Rights to Dividends and Distributions
. After the Effective Date, no holder of any Certificate will be
entitled to receive any dividends or other distributions otherwise payable to holders of record of GBCI Common Stock on any date on or after the Effective Date, unless the holder (a) is entitled by this Agreement to receive a certificate
representing GBCI Common Stock and (b) has surrendered in accordance with this Agreement his, her or its Certificates (or has met the requirements of Section 1.7.4) in exchange for certificates representing GBCI Shares. Surrender of
Certificates will not deprive the holder of any dividends or distributions that the holder is entitled to receive as a record holder of TSB Stock on a date before the Effective Date. When the holder surrenders his, her or its Certificates in
exchange for GBCI Shares, the holder shall become a shareholder of record and shall receive the amount, without interest, of any cash dividends and any other distributions distributed on or after the Effective Date on the whole number of GBCI Shares
into which the holders TSB Stock was converted at the Effective Time.
1.7.6
Checks in Other Names
. Any Person requesting
that a check for cash to be received in the Bank Merger or cash in lieu of fractional shares be issued in a name other than the name in which the Certificate surrendered in exchange for the cash is registered, must establish to the Exchange
Agents satisfaction the right to receive this cash.
1.7.7
Undelivered Certificates
. GBCI, at any time following payment for
Dissenting Shares pursuant to the Appraisal Laws may receive from the Exchange Fund cash in an amount equal to the Per Share Cash Consideration times the number of Dissenting Shares for which payment has been made. Any portion of the Exchange Fund
that remains unclaimed by shareholders of the Bank on a date that is six months after the Effective Date may be paid to GBCI, at GBCIs election. To the extent so paid, holders of TSB Stock who have not, prior to such time, complied with the
provisions of this Section 1.7 will, from such time forward, look only to GBCI for payment of the Merger Consideration, the cash in lieu of fractional shares, and/or unpaid dividends and distributions on the GBCI Shares deliverable with respect
to each share of TSB Stock held by such holders as determined pursuant to this Agreement, in each case, without any interest. Neither GBCI nor the Bank will be liable to any holder of TSB Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws. In the event of a dispute with respect to ownership of TSB Stock, GBCI and the Exchange Agent shall be entitled to deposit any Merger Consideration represented thereby in escrow
with an independent third party and thereafter be relieved of any responsibility with respect to any claims thereto.
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ARTICLE 2
CLOSING OF TRANSACTION
2.1
Effective Date
. The Bank Merger shall be consummated at the Effective Time by the filing with and acceptance by the Montana Division and the Secretary of State of Montana, in the form required by and executed in accordance with the
relevant provisions of the MBA and the MBCA, and by the issuance of a Certificate of Merger by the Secretary of State of Montana. Unless GBCI and the Bank agree upon a different date, the Effective Date will be the date of Closing.
2.2
Events of Closing
. Closing shall occur within five Business Days after fulfillment or waiver of each
condition precedent set forth in, and the granting of each approval (and expiration of any waiting period) covered by Article 5, or such other date as may be agreed upon by the parties. At the Closing, all properly executed documents required
by this Agreement will be delivered to the proper party, in form consistent with this Agreement. If any party fails to deliver a required document at the Closing or otherwise defaults under this Agreement prior to the Effective Time, then the Bank
Merger will not occur unless the adversely affected party waives the default.
2.3
Manner and Time of
Closing
. The Closing will take place remotely via the electronic exchange of documents and signatures, at 9:00 a.m. Mountain Time, or such other time as the parties agree.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the Bank
. The Bank represents and warrants to GBCI and Glacier
Bank that, except as disclosed in a Schedule to this Agreement:
3.1.1
Organization and Good Standing
. The Bank is duly organized,
validly existing, and in good standing as a state-chartered bank under the laws of the State of Montana and has all requisite power and authority to own and operate its properties and to carry on its business as now conducted. The locations of all
offices, including approved and unopened offices of the Bank are listed in
Schedule 3.1.1
.
3.1.2
Authority
. The
execution, delivery, and performance (assuming all required consents, approvals, filings, and clearances referred to in this Agreement are duly made and/or obtained) of this Agreement does not and will not, and its consummation (assuming all
required consents, approvals, filings, and clearances referred to in this Agreement are duly made and/or obtained) of the Transaction will not, constitute or result in: (a) a breach or violation of, or a default under, its articles of
incorporation or bylaws; (b) other than as disclosed on
Schedule 3.1.2
, a breach or violation of, or a default under, or the acceleration of or the creation of a Lien (with or without the giving of notice, the lapse of time or both)
under, any material provision of any material agreement, lease, contract, note, mortgage, indenture, arrangement or other obligation by which it is bound or to which it is a party that is not terminable upon 90 days or less written notice
without penalty or premium (collectively, the
TSB Contracts
); or (c) a material violation of any law, rule, ordinance or regulation or judgment, decree, order, award, or
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governmental or non-governmental permit or license to which it is subject; or (d) any material change in the rights or obligations of any party under any of the TSB Contracts.
Schedule 3.1.2
contains a list of all consents the Bank must obtain from third parties and notices the Bank must give to third parties under any TSB Contracts before consummation of the Bank Merger.
3.1.3
Capital Stock
.
(a) The authorized capital stock of the Bank consists of 5,000,000 shares of common stock, $0.01 par value per share, and 1,000,000 shares of
preferred stock, 2,000 shares of which have been designated Series A Preferred Stock. A total of 1,740,951 shares of Bank common stock are issued and outstanding as of the date of this Agreement, all of which are fully paid and
nonassessable, and no shares of Series A Preferred Stock are outstanding and no shares of Series A Preferred Stock have previously been issued or outstanding.
(b) Except as set forth in
Schedule 3.1.3
and except for options to purchase a total of 34,344 shares of TSB Stock (the
TSB Options
), (i) no shares of TSB Stock are reserved for issuance; (ii) the Bank does not have outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights; and
(iii) there are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares, and (iv) there are no preemptive rights or any outstanding
subscriptions, warrants, options, conversion privileges, rights or commitments of the Bank of any character, kind or nature (including those relating to the issuance, sale, purchase, redemption, conversion, exchange, registration, voting or transfer
of such stock or securities), and the Bank has not issued and is not obligated to issue any additional shares of common stock or any other security to any other person, except as so disclosed.
3.1.4
Subsidiaries; Investments
.
(a) The Bank has no Subsidiaries.
(b)
Schedule 3.1.4(b)
lists all investments (except investments in securities issued by federal, state or local government or any
subdivision or agency thereof) made by the Bank. All such investments comply with all applicable laws and regulations, including without limitation the MBA.
(c) The Bank does not own, or control, or have an economic interest in, directly or indirectly, any joint ventures, partnerships, limited
liability companies, special purpose entities, limited purpose entities, or qualified special purpose entities. There are no transactions, arrangements, or other relationships between the Bank, and any executive officer or director of the Bank or
any of their respective affiliates that are not reflected in the TSB Financial Statements.
3.1.5
Reports and Financial Statements
.
(a)
Filing of Reports
. Since January 1, 2011, the Bank has filed all reports and statements, together with any required
amendments to these reports and statements, that they were required to file with (i) the FDIC, (ii) the Commissioner of the Montana Division
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and (iii) any other applicable federal or state banking, insurance, securities, or other regulatory authorities. Each of these reports and statements, including the related financial
statements and exhibits, complied as to form in all material respects with all applicable statutes, rules and regulations as of their respective dates.
(b)
Delivery to Other Party of Reports
. The Bank has delivered or otherwise made available to GBCI a copy of each and any registration
statement, offering circular, private placement memorandum, proxy statement, information statement, or similar document (collectively, its
Reports
) used or circulated by the Bank with respect to periods since January 1, 2011,
through the Execution Date.
(c)
Compliance with Laws
. As of their respective dates (and without giving effect to any amendments
or modifications filed after the Execution Date), each of the Reports, including the related financial statements, exhibits and schedules, filed, used or circulated before the Execution Date complied (and each of the Reports filed after the
Execution Date, will comply) in all material respects with applicable Laws, and did not (or in the case of reports, statements, or circulars filed after the Execution Date, will not) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.
(d)
Financial Statements
. The Banks balance sheets included in the TSB Financial Statements fairly present (or, in the case of
such financial statements for periods ending on a date following the Execution Date, will fairly present) the financial position of the Bank as of the date of such balance sheet. Except as disclosed in
Schedule 3.1.5
, each of the
statements of income, cash flows and shareholders equity included in the TSB Financial Statements fairly presents the results of operations, shareholders equity and cash flows, as the case may be, of the Bank for the periods set forth in
these statements (subject, in the case of unaudited statements, to normal year-end audit adjustments and the absence of footnotes), in each case in accordance with GAAP, except as may be noted in these statements.
(e)
Books and Records
. The books and records of the Bank have been accurately maintained in all material respects, and in accordance
with the business practices customary in the banking industry, and they fairly reflect the substance of events and transactions included therein. Such books and records comply in all material respects with applicable legal, regulatory,
accounting and banking requirements.
3.1.6
Properties
.
(a) The Bank is not a party to any real property lease, whether as landlord, tenant, guarantor or otherwise, except as disclosed in
Schedule 3.1.6
. Except as disclosed or reserved against in the TSB Financial Statements or in
Schedule 3.1.6
, the Bank has good and marketable title, free and clear of all Liens (other than Liens for taxes not yet delinquent,
non-monetary Liens on the Real Property that do not adversely affect the use or value of the Real Property in any material respect, or pledges to secure deposits and other security provided in the ordinary course of business, including, without
limitation, security for Federal Home Loan Bank borrowings, federal funds and repurchase agreements) to all of the properties
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and assets, tangible or intangible, reflected in the TSB Financial Statements as being owned by it. To the Knowledge of the Bank, except as disclosed in
Schedule 3.1.6
, all buildings
and structures on the Real Property and the equipment located thereon are in all material respects in good operating condition and repair (ordinary wear and tear excepted) and conform in all material respects to all applicable laws, ordinances, and
regulations.
(b) To the Knowledge of the Bank, all buildings and all fixtures, equipment and other property and assets that are material
to the Banks business on a consolidated basis are owned by the Bank or are held under leases or subleases, enforceable in accordance with their respective terms (except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors rights generally or by general equitable principles).
(c)
Schedule 3.1.1
lists all of its existing branches and offices and all new branches or offices that the Bank has applied to establish or purchase.
(d)
The Bank has provided to GBCI copies of existing title policies, if any, held in its files relating to the Real Property, and, to the Knowledge of the Bank, no exceptions, reservations, or encumbrances have arisen or been created since the date of
issuance of those policies (other than Liens for taxes not yet delinquent).
3.1.7
Environmental Matters
.
(a) For purposes of this Section 3.1.7, the following definitions apply:
(i)
Subject Property
with respect to the Bank means (1) all real property at which its business has been conducted,
and any property where under any Environmental Law it is deemed to be the present or past owner or operator of the property; (2) any facility in which it is or was the owner or operator of the facility; and (3) all other real property
that, for purposes of any Environmental Law, it otherwise could be deemed to be a present or past owner or operator of or as otherwise having control over.
(ii)
Environmental Laws
means any federal, state or local law, regulation, order, decree, judgment, judicial opinion, or
any agreement between the Bank and any governmental entity presently in effect relating to: (1) the manufacture, generation, transport, use, treatment, storage, recycling, disposal, release, threatened release or presence of Hazardous
Substances, or (2) the protection of human health or the environment.
(iii)
Hazardous Substances
means any
substance, material or waste that is (1) defined as a hazardous substance in 42 USC § 9601(14), (2) defined as a pollutant or contaminant in 33 USC § 1362(6), (3) defined as a
hazardous waste in 42 USC § 6903(5), or (d) petroleum or a petroleum product or any other substance defined as hazardous, dangerous, or toxic under any federal or state law or
regulation enacted for the protection of human health or the environment.
(b) To the Knowledge of the Bank, the Bank and the Subject
Property are, and have been, operated in compliance with all applicable Environmental Laws, and no circumstances exist that would result in a material violation of such Environmental Laws.
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(c) None of the following exists, and to the Knowledge of the Bank, no reasonable basis for any
of the following exists: pending or threatened claims, actions, investigations, notices of non-compliance, information requests or notices of potential responsibility or proceedings involving the Bank or any Subject Property, relating to:
(i) an asserted liability of the Bank or any prior owner, occupier or user of Subject Property under any applicable Environmental Law or the
terms and conditions of any permit, license, authority, settlement, agreement, decree or other obligation arising under any applicable Environmental Law;
(ii) the handling, storage, use, transportation, removal, release or disposal of Hazardous Substances;
(iii) the actual or threatened discharge, release or emission of Hazardous Substances from, on or under or within Subject Property into the
air, water, surface water, ground water, land surface or subsurface strata; or
(iv) personal injuries or damage to the Subject Property
related to or arising out of the release, use or disposal of Hazardous Substances.
(d) Except as disclosed in
Schedule 3.1.7
, no drums, barrels or storage tanks underground or otherwise are present on the Subject Property or, if present, none of such vessels are leaking and each of them is in full compliance with all applicable Environmental
Laws. With respect to any Subject Property, except as permitted by applicable Environmental Laws, the Bank does not own, possess, or control any PCBs, PCB-contaminated fluids, wastes or equipment, or any material amount of asbestos or
asbestos-containing material. Any asbestos or asbestos-containing material on the Subject Property is properly contained in compliance with all applicable Environmental Laws and there is no threat that asbestos or asbestos-containing material will
be released into the environment. To the Knowledge of the Bank, no Hazardous Substances have been used, handled, stored, discharged, released or emitted, or are threatened to be discharged, released or emitted, at or on or from any Subject Property,
except in compliance with applicable Environmental Laws.
(e) To the Knowledge of the Bank, no part of the Subject Property has been or
is scheduled for investigation, monitoring or other remedial action under any applicable Environmental Law.
(f) No condition from, on or
under the Subject Property exists with respect to the Subject Property that would require remedial action under applicable Environmental Laws.
3.1.8
Taxes
.
(a)
Tax
Returns and Payment of Taxes
. The Bank has duly and timely filed or caused to be filed (taking into account any valid extensions) all Tax Returns required by law to be filed by it. Such Tax Returns are true, complete and correct in all material
respects. The Bank is not currently the beneficiary of or a party to any extension of time within which to file any Tax Return. All Taxes due and owing by the Bank (whether or not shown on any Tax
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Return) have been timely paid or, where payment is not yet due, the Bank has made an adequate provision for such Taxes in TSBs Financial Statements (in accordance with GAAP). The
Banks most recent financial statements reflect an adequate reserve (in accordance with GAAP) for all Taxes payable by the Bank through the date of such financial statements. The Bank has not incurred any liability for Taxes since the date of
the Banks most recent financial statements outside the ordinary course of business or otherwise inconsistent with past practice.
(b)
Availability of Tax Returns
. The Bank has made available to GBCI complete and accurate copies of all federal, state, local and
foreign income, franchise and other Tax Returns filed by or on behalf of the Bank for any Tax period ending after January 1, 2011.
(c)
Withholding
. The Bank has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or
owing to any Employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting and backup withholding provisions of applicable law.
(d)
Liens
. There are no Liens for Taxes upon the assets of the Bank other than for current Taxes not yet due and payable or for Taxes
that are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP has been made in TSBs Financial Statements.
(e)
Tax Deficiencies and Audits
. No deficiency for any amount of Taxes which has been proposed, asserted or assessed in writing by any
taxing authority against the Bank remains unpaid. There are no waivers or extensions of any statute of limitations currently in effect with respect to Taxes of the Bank. There are no audits, suits, proceedings, investigations, claims, examinations,
or other administrative or judicial proceedings ongoing or pending with respect to any Taxes of the Bank.
Schedule 3.1.8(e)
lists all federal, state, local and non-U.S. income Tax Returns filed with respect to the Bank for taxable
periods ended on or after January 1, 2011, indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit.
(f)
Tax Jurisdictions
. No claim has ever been made in writing by any taxing authority in a jurisdiction where the Bank does not file
Tax Returns that the Bank is or may be subject to Tax in that jurisdiction.
(g)
Tax Rulings
. Neither the Bank has requested or is
the subject of or bound by any private letter ruling, technical advice memorandum or similar ruling or memorandum with any taxing authority with respect to any Taxes, nor is any such request outstanding.
(h)
Consolidated Groups, Transferee Liability and Tax Agreements
. The Bank (i) has not been a member of a group filing Tax
Returns on a consolidated, combined, unitary or similar basis, (ii) has no liability for Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any comparable provision of local, state or foreign law), as a transferee or
successor, by contract, or otherwise, or (iii) is not a party to, bound by or subject to any liability under any Tax sharing, allocation or indemnification agreement or arrangement.
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(i)
Change in Accounting Method
. The Bank has not agreed to make, nor is it required to
make, any adjustment under IRC Sections 481(a) or any comparable provision of state, local or foreign Tax laws by reason of a change in accounting method or otherwise.
(j)
Post-Closing Tax Items
. The Bank will not be required to include any item of income in, or exclude any item of deduction from,
taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) closing agreement as described in IRC Section 7121 (or any corresponding or similar provision of state, local or
foreign income Tax law) executed on or prior to the Closing Date, (ii) installment sale or open transaction disposition made on or prior to the Closing Date, (iii) prepaid amount received on or prior to the Closing Date or
(iv) election under IRC Section 108(i).
(k)
Ownership Changes
. Without regard to this Agreement, the Bank has not
undergone an ownership change within the meaning of IRC Section 382.
(l)
US Real Property Holding
Corporation
. The Bank is not and has never been a United States real property holding corporation (as defined in IRC Section 897(c)(2)) during the applicable period specified in IRC Section 897(c)(1)(a).
(m)
IRC Section 355
. The Bank has not been a distributing corporation or a controlled corporation in
connection with a distribution described in IRC Section 355.
(n)
Reportable Transactions
. The Bank has not been a party
to, or a promoter of, a reportable transaction within the meaning of IRC Section 6707A(c)(1) and Treasury Regulations 1.6011-4(b).
(o)
IRC Section 6662
. The Bank has disclosed on its income Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of IRC Section 6662.
(p)
Section 280G
. The Bank has
not made any payments, is not obligated to make any payments, and is not a party to any agreement that could obligate it to make any payments that are not deductible under IRC Section 280G.
(q)
Tax Attributes
.
Schedule 3.1.8(q)
sets forth the following information with respect to the Bank as of the most recent
practicable date: (i) the basis in its assets; (ii) the amount of any net operating loss, net capital loss, unused investment or other credit, unused foreign tax credit, or excess charitable contribution; (iii) the amount of any
deferred gain or loss arising out of any intercompany transaction; and (iv) the amount of any excess loss account in the stock of a Subsidiary.
3.1.9
Absence of Regulatory Action
. The Bank is not in material violation of any statute, rule or governmental regulation applicable to
them (including, without limitation, the Community Reinvestment Act, Bank Secrecy Act, Truth in Lending Act, Equal Credit Opportunity Act, and statutes, rules and regulations governing the reporting of taxpayer identification numbers of its
customers). Except as disclosed in
Schedule 3.1.9
, the Bank is not a
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party to any cease and desist order, written agreement or memorandum of understanding with, or a party to any commitment letter or similar undertaking to, or is subject to any order or directive
by, or is a recipient of any extraordinary supervisory letter from, or has adopted any board resolutions at the request of, federal or state regulatory authorities, nor have they been advised by such authorities that they are contemplating issuing
or requesting any such order, agreement, memorandum or similar document or undertaking.
3.1.10
Material Contracts
.
(a) Except for arrangements which may be made after the date and in accordance with the terms of this Agreement, the Bank is not bound by any
contract, agreement, or arrangement that is material to operation of its business (each a
Material Contract
) including, without limitation, any contract, agreement, or arrangement that: (i) is to be performed after the date
of this Agreement; (ii) has not been set forth in
Schedule 3.1.10
; (iii) that contains a non-compete or client or customer non-solicit requirement or any other provisions that materially restricts the conduct of, or the manner
of conducting, any line of business of the Bank or any of its affiliates; (iv) that obligates the Bank or any of its affiliates to conduct business with any third party on an exclusive or preferential basis; (v) that requires referrals of
business or requires the Bank or any of its affiliates to make available investment opportunities to any Person on a priority or exclusive basis; (vi) that grants any right of first refusal, right of first offer or similar right with respect to
any assets, rights or properties of the Bank; (vii) that limits the payment of dividends by the Bank; (viii) that relates to a joint venture, partnership, limited liability company agreement or other similar agreement or arrangement with
any third party, or to the formation, creation or operation, management or control of any partnership or joint venture with any third parties; (ix) that provides for payments to be made by the Bank upon a change in control thereof;
(x) that was not negotiated and entered into on an
arms-length
basis; (xi) that provides for indemnification by the Bank of any Person, except for contracts entered into in the ordinary course
of business providing for customary and immaterial indemnification; (xii) that is a consulting agreement or data processing, software programming or licensing contract involving the payment of more than $10,000 per annum (other than any such
contracts which are terminable by the Bank on 30 days or less notice without any required payment or other conditions, other than the condition of notice); (xiii) to which any affiliate, officer, director, employee, or consultant of the
Bank is a party or beneficiary (except with respect to loans to, or deposit or asset management accounts of, directors, officers and employees entered into in the ordinary course of business and in accordance with all applicable regulatory
requirements with respect to it); (xiv) that would prevent, materially delay or materially impede the Banks ability to consummate the Bank Merger or the other transactions contemplated hereby; or (xv) that contains a put, call or
similar right pursuant to which the Bank could be required to purchase or sell, as applicable, any equity interests of any Person or assets.
(b) (i) Each Material Contract is a valid and legally binding agreement of the Bank, as applicable, and, to the Knowledge of the Bank,
the counterparty or counterparties thereto, is enforceable in accordance with its terms (except as may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar Laws of general applicability relating to or
affecting the rights of creditors generally and subject to general principles of equity) and is in full force and effect; (ii) the Bank has duly performed all material obligations required to be performed by it prior to the date hereof under
each Material Contract;
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(iii) the Bank, and, to the Knowledge of the Bank, any counterparty or counterparties, is in breach of any material provision of any Material Contract; and (iv) no event or condition
exists that constitutes, after notice or lapse of time or both, will constitute, a breach, violation or default on the part of the Bank under any such Material Contract or provide any party thereto with the right to terminate such Material Contract.
Schedule 3.1.2
sets forth a true and complete list of (1) all Material Contracts pursuant to which consents or waivers are or may be required and (2) all notices which are required to be given, in each case, prior to the
performance by the Bank of this Agreement and the consummation of the Bank Merger and the other transactions contemplated hereby.
3.1.11
Compliance with Laws
. The Bank has all material permits, licenses, certificates of authority, orders, and approvals of, and has made all filings, applications, and registrations with, federal, state, local, and foreign governmental or
regulatory bodies that are required in order to permit the Bank to carry on its business as presently conducted. All such material permits, licenses, certificates of authority, orders and approvals are in full force and effect, and, to the Knowledge
of the Bank, no suspension or cancellation of any of them is threatened.
3.1.12
Knowledge as to Conditions
. To the Knowledge of
the Bank, there exists no reason why the approvals, consents and waivers of governmental authorities referred to in Section 5.1 cannot be obtained.
3.1.13
No Material Adverse Effect
. Since December 31, 2015, (a) the Bank has conducted its business only in the ordinary and
usual course of business, and (b) there has not been any change in the financial condition of the Bank (which includes, without limitation, the condition of assets, franchises, results of operations and prospects) that has had or may reasonably
be expected to have a Material Adverse Effect on the Bank.
3.1.14
Shareholder List
. The Bank has provided to GBCI a list of its
shareholders as of the most recent practicable date. To the Banks Knowledge, the shareholder list provided is a true and correct list of the names, addresses and holdings of all record holders of the TSB Stock as of the date thereof, excluding
those whose identities have been withheld by certain shareholders and their broker-dealers, as disclosed and provided to GBCI.
3.1.15
Asset Classification
.
(a)
Schedule 3.1.15
sets forth a list, accurate and complete, as of March 31, 2016, except
as otherwise expressly noted, and separated by category of classification or criticism (
Asset Classification
), of the aggregate amounts of loans, extensions of credit and other assets of the Bank that have been criticized or
classified by any internal audit conducted by the Bank, taking into account any assets that have been criticized or classified by any governmental or regulatory authority.
(b) Except as shown in
Schedule 3.1.15
, no amounts of its loans, extensions of credit or other assets that have been classified
or criticized by any representative of any governmental entity as Other Assets Especially Mentioned, Substandard, Doubtful, Loss, or words of similar effect as of December 31, 2015, are excluded
from the amounts disclosed in the Asset Classification, other than amounts of loans, extensions of credit or other assets that were paid off or charged off by the Bank before the Execution Date.
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3.1.16
Litigation
. Except as shown on
Schedule 3.1.16
, no material litigation,
proceeding or controversy is pending before any court or governmental agency (other than routine foreclosure proceedings), and there is no pending claim, action or proceeding against the Bank and, to the Knowledge of the Bank, no such litigation,
proceeding, controversy, claim or action has been threatened.
3.1.17
Insurance
. The Bank has taken all requisite action (including
the making of claims and the giving of notices) under its directors and officers liability insurance policy or policies in order to preserve all rights under such policies with respect to all matters known to them (other than matters
arising in connection with, and the transactions contemplated by, this Agreement).
Schedule 3.1.17
lists all directors and officers liability insurance policies and other material insurance policies maintained by the Bank.
3.1.18
Labor and Employment Matters
.
(a) The Bank is not a party to, and is not bound by, any collective bargaining agreement, contract, or other agreement or understanding with a
labor union or labor organization. The Bank is not the subject of any material proceeding: (i) asserting that it has committed an unfair labor practice or (ii) seeking to compel it to bargain with any labor organization as to wages or
conditions of employment. No strike involving the Bank is pending or, to the Knowledge of the Bank, threatened. The Bank has no Knowledge of any activity involving its employees seeking to certify a collective bargaining unit or engaging in any
other organizational activity.
(b) The Bank has made available to GBCI all personnel manuals, handbooks, or material policies, rules or
procedures applicable to employees of the Bank and the terms of their employment, and all such applicable materials are listed on
Schedule 3.1.18
of the Banks disclosure schedule. The Bank is and has been in compliance in all
material respects with all applicable laws and regulations respecting hiring and employment, including but not limited to, discrimination or harassment in employment, retaliation, reasonable accommodation, terms and conditions of employment,
termination of employment, wages, overtime classification, hours, leaves of absence, occupational safety and health, employee whistle-blowing, immigration, employee privacy, employment practices and classification of employees, consultants and
independent contractors. No employee of the Bank has an express or implied contract or agreement that prohibits such person from being dismissed immediately and without prior notice to the employee and without liability to the Bank (other than for
salary or wages for time worked and benefits earned prior to the date of such termination). The Bank has provided to GBCI a true and complete list of all independent contractors and consultants to the Bank, including such consultants name,
date of commencement, and rate of compensation payable, and all such consultants can be terminated immediately and without prior notice to the consultant.
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3.1.19
Employee Benefits
.
(a) For purposes of this Agreement, Plan, or Plans, individually or collectively, means any employee benefit
plan, as defined in Section 3(3) of ERISA, maintained by the Bank. The Bank is not now nor has it ever been a contributing employer to or sponsor of a multiemployer plan or a single employer plan subject to Title IV of ERISA.
(b)
Schedule 3.1.19
sets forth a list, as of the Execution Date, of (i) all Plans, stock purchase plans, restricted stock
and stock option plans, and other deferred compensation arrangements, and (ii) all other material employee benefit plans, programs, policies, agreements, collective bargaining agreements or other arrangements providing for compensation,
severance, performance awards, fringe, retirement, death, disability or medical benefits or other employee benefits or remuneration of any kind, whether written or unwritten, funded or unfunded that is or has been sponsored, maintained, contributed
to, or required to be contributed to, by the Bank for the benefit of any employees or former employees of the Bank (its
Compensation Plans
). True and complete copies of the Compensation Plans (and, as applicable, copies of summary
plan descriptions, governmental filings (on Form 5500 series or otherwise), actuarial reports and reports under Financial Accounting Standards Board Statement No. 106 relating to such Compensation Plans) covering the Banks current
employees (collectively,
Employees
), including Plans and related amendments, have been made available to GBCI.
(c)
All of its Plans covering Employees (other than multi-employer plans within the meaning of ERISA Sections 3(37) or 4001(a)(3)), to the extent subject to ERISA, are in compliance (both in form and operation) with ERISA. Each of
its Plans that is an employee pension benefit plan within the meaning of ERISA Section 3(2) (
Pension Plan
) and that is intended to be qualified under IRC Section 401(a), has either received a favorable
determination letter from the Internal Revenue Service or consists of a master, prototype, or volume submitter plan which has received an opinion or advisory letter from the Internal Revenue Service upon which the Bank may rely, as of the date
hereof no such determination letter has been revoked, no revocation has been threatened, and nothing has occurred since the date of such letter that could adversely affect the qualified status of each such Plan. All such Plans have been timely
amended for all such requirements and have been submitted to the Internal Revenue Service for a favorable determination letter within the latest applicable remedial amendment period. No litigation relating to its Plans is pending or, to the
Knowledge of the Bank, threatened. The Bank has not engaged in a transaction with respect to any Plan that could subject it or the Bank to a tax or penalty imposed by either IRC Section 4975 or ERISA Section 502(i) in an amount that would
be material.
(d) All material contributions required to be made by the Bank under the terms of any of its Plans have been timely made or
have been reflected in the TSB Financial Statements. Neither any of its Pension Plans nor any single-employer plan of any of its ERISA Affiliates has an accumulated funding deficiency (whether or not waived) within the meaning of IRC
Section 412 or ERISA Section 302. Neither the Bank or its ERISA Affiliates has provided, or is required to provide, security to any Pension Plan or to any single-employer plan of an ERISA Affiliate under IRC Sections 401(a)(29) or
412(f)(3) or ERISA Sections 306, 307, or 4204.
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(e) Except as disclosed in the TSB Financial Statements or in
Schedule 3.1.19(b)
,
the Bank has no any obligations for retiree health or life benefits.
(f) No provision of the documents governing any Plan contains
restrictions on the rights of the Bank to amend or terminate any Plan without incurring liability under such Plan other than normal liabilities for benefits.
(g) Except as disclosed in the TSB Financial Statements or otherwise disclosed in this Agreement or in
Schedule 3.1.19(b)
, the
Bank Merger will not result in (i) vesting, acceleration, or increase of any amounts payable under any Compensation Plan, (ii) any material increase in benefits under any Compensation Plan, (iii) payment of any severance, true-up,
change in control or similar payments or compensation under any Compensation Plan, or (iv) result in an excess parachute payment within the meaning of IRC Section 280G(b). All payments set forth in
Schedule 3.1.19(b)
have been properly accrued in accordance with GAAP.
(h) Except as disclosed in
Schedule 3.1.19(b)
, the Bank does not maintain a supplemental retirement plan or similar arrangement for any of its current or former officers, directors, or employees.
(i) All required reports and descriptions (including Form 5500 annual reports, summary annual reports, and summary plan descriptions)
have been timely filed and/or distributed in accordance with the applicable requirements of ERISA and the IRC with respect to each Plan. The requirements of COBRA have been meet with respect to each applicable Plan.
(j) Each Compensation Plan that is subject to Section 409A of the Code has been operated in compliance with such section and all
applicable regulatory guidance (including, without limitation, proposed regulation, notices, rulings, and final regulations).
3.1.20
Takeover Laws
. The Bank has taken all action required to be taken by it in order to exempt this Agreement and the Transaction from, and this Agreement and the Transaction are exempt from, the requirements of any moratorium,
control share, fair price, business combination, or other antitakeover laws and regulations of any state, including, without limitation, the State of Montana, applicable to it (collectively,
Takeover
Laws
). The Bank has taken all action required to be taken by it in order to make this Agreement and the Transaction comply with, and this Agreement and the Transaction do comply with, the requirements of any articles, sections or
provisions of the Banks Articles of Incorporation and Bylaws concerning business combination, fair price, voting requirement, constituency requirement, or other related provisions (collectively,
the
Takeover Provisions
). The Bank has no shareholder rights plan, poison pill or similar plan.
3.1.21
Brokers or Finders Fees
. Except for the fees of D.A. Davidson relating to its advisory and other services relating to the Bank Merger and this Agreement pursuant to an agreement that has been disclosed to GBCI, no agent, broker,
Person or firm acting on behalf of the Bank, or under its authority, is or will be entitled to any commission, brokers, finders or financial advisory fee in connection with the Transaction.
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3.1.22
Completeness of Representations
. No representation or warranty made by or with
respect to the Bank in this Agreement (or in the Schedules to this Agreement) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in this Agreement (or in such Schedules) or
in such representation or warranty not misleading. No investigation by GBCI or Glacier Bank of the business and affairs of the Bank will affect or be deemed to modify or waive any representation, warranty, covenant or agreement in this Agreement.
3.2
Representations and Warranties of GBCI and Glacier Bank
. Except as disclosed in a Schedule to
this Agreement, each of GBCI and Glacier Bank represents and warrants to the Bank that:
3.2.1
Organization and Good Standing
. GBCI
is a corporation duly organized, validly existing and in good standing under the laws of the State of Montana, is a registered bank holding company pursuant to the BHC Act, and has all requisite power and authority to own and operate its properties
and to carry on its businesses as now conducted. Each of its Subsidiaries is either a commercial bank, a statutory trust or a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all
requisite power and authority to own and operate its Properties and to carry on its businesses as now conducted.
3.2.2
Corporate
Authority
. Its execution, delivery and performance (assuming all required consents, approvals, filings and clearances referred to in this Agreement are duly made and/or obtained) of this Agreement does not and will not, and its consummation
(assuming all required consents, approvals, filings and clearances referred to in this Agreement are duly made and/or obtained) of the Transaction will not, constitute or result in: (a) a breach or violation of, or a default under, its articles
of incorporation or bylaws; (b) a breach or violation of, or a default under, or the acceleration of or the creation of a Lien (with or without the giving of notice, the lapse of time or both) under any provision of any material agreement,
lease, contract, note, mortgage, indenture, arrangement or other obligation by which it is bound or to which it is a party (collectively, the
GBCI Contracts
); or (c) a material violation of any law, rule, ordinance or
regulation or judgment, decree, order, award, or governmental or non-governmental permit or license to which it is subject; or (d) any change in the rights or obligations of any party under any of the GBCI Contracts. No other corporate
proceedings or action is required to be taken by it relating to the performance by it of this Agreement or the consummation of the Transaction.
3.2.3
Capital Stock
.
(a) The authorized capital stock of GBCI consists of 1,000,000 shares of preferred stock, par value $0.01 per share, and 117,187,500 shares of
GBCI Common Stock. No shares of Preferred Stock are outstanding and a total of 76,166,700 shares of GBCI Common Stock were issued and outstanding as of March 1, 2016, all of which were validly issued and are fully paid and nonassessable. As of
March 1, 2016, no options to acquire shares of GBCI Common Stock are outstanding.
(b) No unissued shares of common stock or any
other securities of GBCI are subject to any warrants, options, conversion privileges, rights or commitments of any
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character, kind or nature, except as set forth in GBCIs Reports, and GBCI has not issued and is not obligated to issue any additional shares of common stock or any other security to any
other Person, except as so disclosed.
3.2.4
Reports and Financial Statements
.
(a)
Filing of Reports
. Since January 1, 2011, GBCI and each of its Subsidiaries has filed all reports and statements, together
with any required amendments to these reports and statements, that they were and will be required to file with (i) the SEC, (ii) the Federal Reserve, (iii) the FDIC, and (iv) any other applicable federal or state banking,
insurance, securities, or other regulatory authorities. Each of these reports and statements, including the related financial statements and exhibits, complied as to form in all material respects with all applicable statutes, rules and regulations
as of their respective dates.
(b)
Compliance with Securities Laws
. As of their respective dates (and without giving effect to any
amendments or modifications filed after the Execution Date), each of the Reports, including the related financial statements, exhibits and schedules, filed, used or circulated before the Execution Date complied (and each of the Reports filed after
the Execution Date, will comply) in all material respects with applicable state and federal securities laws, and did not (or, in the case of reports, statements, or circulars filed after the Execution Date, will not) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.
(c)
Financial Statements
. Each of GBCIs balance sheets included in the GBCI Financial Statements have been prepared in
conformity with GAAP and fairly presents (or, in the case of GBCI Financial Statements for periods ending on a date following the Execution Date, will fairly present) the financial position of GBCI and its Subsidiaries as of the date of the balance
sheet. Each of the statements of income, cash flows and shareholders equity included in the GBCI Financial Statements, fairly presents (or, in the case of GBCI Financial Statements to be prepared and filed with the SEC pursuant to GBCIs
reporting obligations under the Exchange Act for periods ending on a date following the Execution Date, will fairly present) the results of operations, shareholders equity and cash flows, as the case may be, of GBCI and its Subsidiaries for
the periods set forth in these statements, in each case in accordance with GAAP, except as may be noted in these statements.
3.2.5
Financing and Shares Available
. GBCI has, and at the Effective Time will have, (a) sufficient cash and cash equivalents on hand to pay the cash component of the Merger Consideration, cash in lieu of fractional shares, amounts payable to
holders of In-the-money Options, and any amounts payable to holders of Proposed Dissenting Shares; and (b) a sufficient number of shares of common stock authorized and available to issue the GBCI Shares.
3.2.6
Absence of Regulatory Action
. Neither GBCI nor any of its Subsidiaries is, to the Knowledge of GBCI, in material violation of any
statute, rule or governmental regulation applicable to them (including, without limitation, the Community Reinvestment Act, Bank Secrecy Act, Truth in Lending Act, Equal Credit Opportunity Act, and statutes, rules and regulations governing the
reporting of taxpayer identification numbers of its customers). Neither
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GBCI nor any of its Subsidiaries is a party to any cease and desist order, written agreement or memorandum of understanding with, or a party to any commitment letter or similar undertaking to, or
is subject to any order or directive by, or is a recipient of any extraordinary supervisory letter from, or has adopted any board resolutions at the request of, federal or state regulatory authorities, nor has it been advised by such authorities
that they are contemplating issuing or requesting any such order, agreement, memorandum or similar document or undertaking.
3.2.7
Knowledge as to Conditions
. GBCI knows of no reason why the approvals, consents and waivers of governmental authorities referred to in Section 5.1 cannot be obtained.
3.2.8
Litigation
. Except as disclosed in GBCIs Reports, no material litigation, proceeding or controversy before any court or
governmental agency is pending, and there is no pending, or to the knowledge of GBCI threatened, claim, action or proceeding against GBCI or any of its Subsidiaries, which is reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect on GBCI or to materially hinder or delay consummation of the Bank Merger.
3.2.9
Taxes
. All material Tax Returns and
reports required by law to be filed by GBCI and its Subsidiaries have been duly filed, and all Taxes upon GBCI or any of its Subsidiaries or upon any of their respective properties, assets, income or franchises that are shown as due and payable on
such Tax Returns have been paid. The federal income portion of such taxes have been paid in full as indicated in the federal income tax returns of GBCI and its Subsidiaries for the past five years or adequate provision has been made for any such
taxes on its balance sheet in accordance with GAAP. No material objections to returns or claims for additional Taxes are being asserted with respect to federal or state income tax returns of GBCI and its Subsidiaries for any prior years, except for
such audits, objections or claims which are being contested in good faith, by appropriate proceedings and with establishment of appropriate reserves, and which have been disclosed in writing to the other parties to this Agreement. Except as
specified in the foregoing sentence, in the past five years, there has been no past audit, objection to returns, or claim for additional Taxes.
3.2.10
No Material Adverse Effect
. Since December 31, 2015, (a) GBCI and its Subsidiaries have conducted their respective
businesses only in the ordinary and usual course of business, and (b) there has not been any change in the financial condition (which includes, without limitation, the condition of assets, franchises, results of operations and prospects) that
has had or may reasonably be expected to have a Material Adverse Effect on GBCI.
3.2.11
Completeness of Representations
. No
representation or warranty made by or with respect to GBCI or its Subsidiaries in this Agreement (or in the Schedules to this Agreement) contains any untrue statement of a material fact or omits to state a material fact necessary to make the
statements contained in this Agreement (or in such Schedules) or in such representation or warranty not misleading. No investigation by the Bank of the business and affairs of GBCI and Glacier Bank will affect or be deemed to modify or waive any
representation, warranty, covenant or agreement in this Agreement.
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ARTICLE 4
CONDUCT AND TRANSACTIONS PRIOR TO CLOSING
4.1
Conduct of the Banks Businesses Prior to Closing
. The Bank covenants that, from the date of
this Agreement and through to Closing:
4.1.1
Availability of Books, Records and Properties
.
(a) Upon reasonable prior written notice to the Bank, subject to applicable law, the books, records, properties, contracts and documents of
the Bank will be available at all reasonable times to GBCI and its counsel, accountants and other representatives. Such items will be open for inspection, audit and direct verification of loan or deposit balances, collateral receipts and such other
transactions or documentation as GBCI deems reasonably relevant to the Transaction. No disclosure or access shall be required to be provided where it would jeopardize the attorney-client privilege, or contravene any law, order, judgment or decree.
The Bank will cooperate fully in such inspection, audit, or direct verification and make available all information reasonably requested by or on behalf of GBCI.
(b) Upon prior written reasonable request by GBCI, the Bank will request that any third parties involved in the preparation or review of the
TSB Financial Statements disclose to GBCI the work papers or any similar materials related to such financial statements.
4.1.2
Ordinary and Usual Course
. Without prior written consent of GBCI (which consent shall not be unreasonably withheld or delayed, subject to applicable law and except as required by the FDIC (so long as GBCI receives prior written notice of such
required action) or specifically contemplated by this Agreement), the Bank will conduct its business only in the ordinary and usual course and will not do any of the following:
(a) effect any stock split or other recapitalization with respect to TSB Stock; issue, redeem, pledge or encumber in any way any shares of
such capital stock;
(b) other than as permitted by this Agreement, declare or pay any dividend, or make any other distribution, either
directly or indirectly, with respect to TSB Stock;
(c) acquire, sell, transfer, assign, encumber or otherwise dispose of any material
assets having a value greater than $25,000 or make any material commitment therefor, other than transactions in the ordinary and usual course of business (which shall be deemed to include any OREO transactions in an amount of $100,000 or less);
(d) solicit or accept deposit accounts of a different type from accounts previously accepted by the Bank or at rates materially in excess of
prevailing interest rates, or incur any indebtedness for borrowed money (excluding Fed Funds and Federal Home Loan Bank borrowings);
(e)
with the exception of loans approved by the Bank prior to the date hereof, or loans under commitment at the date hereof (which the Bank represents and warrants have been made pursuant to the Banks current underwriting standards and which
approvals or
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commitments have been made available to GBCI), offer or make loans or other extensions of credit of a different type, or apply different underwriting standards, from those previously offered or
applied by the Bank, or offer or make a new loan or extension of credit in an amount greater than $500,000 without prior consultation with and approved by GBCI, which consultation and approval will not be unreasonably withheld or delayed and which
will be deemed provided if GBCI has not responded to the Banks request within three Business Days after GBCIs receipt of a loan package concerning the loan at issue;
(f) make any negative provisions to the Banks ALLL or fail to maintain an adequate reserve for loan and lease losses (determined in
accordance with GAAP and existing regulatory guidance);
(g) acquire an ownership interest (except other real estate owned with a value
not exceeding $50,000) or a leasehold interest in any real property, except those disclosed in
Schedule 3.1.6
and in the case of an ownership interest (including non-residential other real estate owned), without making an appropriate
environmental evaluation in advance of obtaining such interest and without providing to GBCI such evaluation and at least 30 days advance notice;
(h) enter into, renew, or terminate any contracts calling for a payment by any of them of more than $10,000 (including real property leases
and data or item processing agreements) with or for a term of one-year or more, except for its contracts of deposit and agreements to lend money not otherwise restricted under this Agreement and (y) entered into in the ordinary course of
business, consistent with past practices, and (z) providing for not less (in the case of loans) or materially more (in the case of deposits) than prevailing market rates of interest;
(i) enter into or amend any contract (other than contracts for deposits or agreements to lend money not otherwise restricted by this
Agreement) calling for a payment by any of them of more than $10,000, unless the contract may be terminated without cause or penalty upon 30 days notice or less;
(j) enter into any personal services contract with any Person outside the ordinary course of business, except contracts, agreements, or
arrangements for legal, accounting, consulting, investment advisory, or tax services entered into to directly facilitate the Transaction;
(k) (i) sell any securities, whether held for investment or sale, other than in the ordinary course of business or sell any securities,
whether held for investment or sale, even in the ordinary course of business, if the aggregate gain or loss realized from all sales after the Execution Date would be more than $25,000 or (ii) transfer any investment securities between
portfolios of securities available for sale and portfolios of securities to be held to maturity;
(l) amend its Articles of
Incorporation, Bylaws, or other formation agreements, or convert its charter or form of entity;
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(m) implement or adopt any material changes in its operations, policies, or procedures,
including loan loss reserve policies, unless the changes are requested by GBCI or are necessary or advisable, on the advice of legal counsel, to comply with applicable laws, regulations, or regulatory policies;
(n) implement or adopt any change in its accounting principles, practices or methods, other than as may be required (i) by GAAP,
(ii) for tax purposes, or (iii) to take advantage of any beneficial tax or accounting methods;
(o) other than in accordance
with binding commitments existing on the Execution Date and that have been disclosed to GBCI, make any capital expenditures in excess of $10,000 per project or related series of projects or $25,000 in the aggregate except for emergency repairs or
replacements;
(p) enter into any other material transaction or make any material expenditure other than in the ordinary and usual course
of its business except for expenses reasonably related to completion of the Transaction; or
(q) willfully take any action which would
materially and adversely affect or delay its ability or the ability of GBCI to obtain any necessary approvals, consents or waivers of any governmental authority required for the Bank Merger or to perform in all material respects their respective
covenants and agreements under this Agreement.
4.1.3
Pre-Closing Actions
. Following execution of this Agreement and prior to
Closing, the Bank shall:
(a) Take all action necessary to satisfy any contractual notice or consent requirements under the TSB Contracts
arising from the Transaction.
(b) Except as otherwise provided in this Agreement, (i) continue to make on a timely basis all
filings with governmental authorities required in connection with administration of its Compensation Plans and other Plans, including, without limitation, timely filing of its Form 5500, and (ii) terminate by all necessary and appropriate
actions of the Board of Directors of the Bank, as applicable, Plans (including Compensation Plans) maintained by the Bank as may be requested by GBCI in connection with Closing (after satisfaction or waiver of all Closing conditions). If requested
by GBCI, the Bank shall cause benefit accruals and entitlements under such Plans to cease as of the Effective Time and shall cause the cancellation on and after the Effective Time of any contract, arrangement or insurance policy relating to any such
Plan for such period as may be requested by GBCI. To the extent not included in the Final Transaction Related Expenses, the Bank shall, prior to the date of calculation of TSB Closing Capital, pay, provide for the payment of, or reflect as a
liability any change-in-control, true-up, deficiency, or similar payments required to be made upon termination of the Plans including Compensation Plans). All resolutions, notices, or other documents issued, adopted or executed by the Bank in
connection with the implementation of this Section 4.1.3(b) shall be subject to GBCIs reasonable prior review and approval, which approval shall not be unreasonably withheld.
(c) Take such action as may be reasonably requested by GBCI to terminate or modify the Simple IRA Plan as may be necessary or appropriate to
facilitate the
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participation of employees of the Bank who continue employment with Glacier Bank after the Effective Time in GBCIs 401(k) Plan, if legally permissible. GBCI shall review and take all
reasonable action consistent with the terms of GBCIs 401(k) Plan and applicable law as soon as is reasonably practicable in light of administrative considerations to allow such continuing employees to roll over to GBCIs 401(k) Plan an
amount equal to the full account balance distributed to any such continuing employee from the Simple IRA Plan, assuming such balances are eligible for roll over.
(d) (i) Not take any action that would cause the Transaction to be subject to requirements imposed by any Takeover Laws, (ii) take
all necessary steps within its control to exempt (or ensure the continued exemption of) the Transaction from any applicable Takeover Laws, as now or hereafter in effect, (iii) not take any action that would cause the Transaction not to comply
with any Takeover Provisions, and (iv) take all necessary steps within its control to make the Transaction comply or continue to comply with the Takeover Provisions.
(e) Satisfy the notice and consent requirements under IRC Section 101(j) with respect to any Bank Owned Life Insurance policies or
similar plans and related agreements.
(f) Terminate the registration or dissolve, as appropriate or as otherwise requested by GBCI, the
corporate registration for Treasure State Bancorporation, Inc., a corporation established under the laws of Montana, and to cancel or transfer to Glacier Bank all registrations or other rights to the name and derivations thereof.
4.1.4
Maintenance of Properties
. The Bank will maintain its properties and equipment (and related insurance or its equivalent) in
accordance with good business practice in all material respects.
4.1.5
Preservation of Business Organization
. The Bank will use
its commercially-reasonable efforts to: (a) preserve its business organization, (b) retain the services of management and employees, and (c) preserve the goodwill of suppliers, customers and others with whom the Bank has business
relations.
4.1.6
Senior Management
. Except as otherwise provided in this Agreement and excluding resignations, without prior
consultation with GBCI, the Bank will not make any change with respect to present management personnel having the rank of assistant vice president or higher.
4.1.7
Compensation
. Except as set forth on
Schedule 4.1.7
with respect to interim bonus payments to be made, the Bank will
not permit any increase in the current or deferred compensation or benefits payable or to become payable by the Bank to any of its directors, officers, employees, agents or consultants, other than normal incremental increases in base compensation in
accordance with the Banks established policies and practices with respect to the timing and amounts of such incremental increases. Without the prior written approval of GBCI, the Bank will not commit to, execute or deliver any employment
agreement with any person.
4.1.8
Update of Financial Statements
. The Bank will deliver unaudited balance sheets and related
statements of income and shareholders equity for the Bank for each month
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ending after the Execution Date and before Closing or the Termination Date, as the case may be, within 15 days after each such month-end. The Subsequent TSB Financial Statements:
(a) will be prepared from the books and records of the Bank;
(b) will present fairly the financial position and operating results of the Bank at the times indicated and for the periods covered;
(c) will be prepared in accordance with GAAP (except for the absence of notes and exceptions from GAAP identified in Section 3.1.5) and
with the regulations promulgated by applicable regulatory authorities, to the extent then applicable; and
(d) will reflect all
liabilities of the Bank on the respective dates and for the respective periods covered, except for liabilities: (i) not required to be so reflected on the face of a balance sheet in accordance with GAAP or (ii) not significant in amount.
All contingent liabilities known to the Bank that are required to be reflected in footnotes in accordance with GAAP and not recorded on the Subsequent TSB Financial Statements will be disclosed in writing to GBCI.
4.1.9
Update Schedules
. From the date of this Agreement until Closing, the Bank will promptly revise and supplement the Schedules to
this Agreement prepared by or on behalf of the Bank to enable such Schedules to remain accurate and complete. Notwithstanding anything to the contrary contained herein, supplementation of such Schedules following the execution of this Agreement will
not be deemed a modification of the Banks representations or warranties contained in this Agreement.
4.1.10
Acquisition
Proposal
. The Bank will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Persons conducted heretofore with respect to any of the foregoing. Neither the Bank, nor any of the Banks
directors, officers, employees, agents, and representatives (including, without limitation, any investment banker, attorney, accountant, or adviser retained by it, or any affiliate of the Bank or any of the foregoing) shall, directly or indirectly,
initiate, solicit, encourage or take any other action to facilitate any inquiries or the making of any proposal or offer (including, without limitation, any proposal or offer to shareholders of the Bank) with respect to an Acquisition Event (any
such proposal or offer being hereinafter referred to as an
Acquisition Proposal
) or engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any Person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal; except that, in the event the Bank receives an unsolicited bona fide Acquisition Proposal and the Board of Directors of the Bank
determines prior to approval of the Transaction by the Banks shareholders, in good faith, that (a) such proposal constitutes a Superior Proposal, and (b) fiduciary duties applicable to it require it to engage in negotiations with, or
provide confidential information or data to, a Person in connection with such Acquisition Proposal, the Bank may do so to the extent required by its fiduciary duties. In such event, prior to providing any confidential information or data to any such
Person, the Bank and such Person shall have executed a confidentiality agreement on terms at least as favorable to the Bank as those contained in its confidentiality agreement with GBCI. The Bank will further notify GBCI in writing immediately (and
in any event within two Business
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Days) if any such inquiries or proposals are received by, any such information is requested from, or any such negotiations are sought to be initiated or continued with the Bank, or if any such
inquiry, proposal or request is thereafter materially modified or amended, including providing to GBCI the material terms and conditions of any such proposal or inquiry in connection with each required notice. The Bank shall keep GBCI reasonably and
promptly informed of the status and details of any such proposal or inquiry and any developments with respect thereto. The Bank will take the necessary steps to inform the appropriate individuals or entities referred to in the first sentence of this
section of the obligations undertaken in this Section 4.1.10.
4.1.11
Status of Title/Leasehold Interests
. The Bank will use
its reasonable best efforts to provide GBCI, no later than 30 days after the Execution Date, a title commitment for the Real Property issued by a title insurance company reasonably satisfactory to GBCI (the
Title Company
), the cost
of which shall be borne and paid by GBCI. The title commitment must show the current status of title to the Real Property. Within 15 days after the date on which the Bank delivers the title report to GBCI for its review, GBCI will inform the
Bank in writing whether, and in what manner, it objects to any of the exceptions to title shown on the title reports. The Bank will, within ten days of the date on which it receives the written notice of objection from GBCI, inform GBCI if there are
any objections that it is unable to remove at or prior to Closing. The Bank will not, however, be obligated to seek removal of exceptions that are
(a) non-monetary
exceptions that do not prohibit or
materially interfere with the use of the properties as bank branch locations or as otherwise used by the Bank as of the Execution Date or (b) monetary or non-monetary exceptions disclosed in
Schedule 3.1.6
or in the TSB Financial
Statements. At Closing, if requested by GBCI, the Bank will cause the Title Company to provide GBCI with standard coverage title insurance policies issued with respect to each parcel of the Real Property, in an amount commensurate with the value of
each property as agreed upon by GBCI and the Bank, dated as of the Effective Date, insuring fee title in GBCI or such subsidiary of GBCI, as so designated by GBCI, and that each such Real Property is unencumbered by any Liens, other than Liens for
taxes not yet delinquent, non-monetary Liens that do not adversely affect the use or value of such Real Property in any material respect, and other exceptions to title as set forth in the title commitments as approved by GBCI.
4.1.12
Directors and Officers Liability
. Before the Effective Date, the Bank will notify its directors and
officers liability insurers of the Bank Merger and of all pending or, to the Knowledge of the Bank, threatened claims, actions, suits, proceedings or investigations asserted or claimed against any Person entitled to indemnification pursuant to
Section 6.4 and known to the Bank, or circumstances reasonably deemed by GBCI to be likely to give rise thereto, in accordance with terms and conditions of the applicable policies.
4.1.13
Review of Loans
. The Bank will permit GBCI and its advisors to conduct an examination of the Banks loans to evaluate
credit quality and the adequacy of its ALLL and to establish appropriate accounting adjustments under FAS 141R. GBCI and its advisors will have continued access to the Banks loans and related documentation through Closing to update its
examination. At GBCIs reasonable request, the Bank will from time to time provide GBCI with current reports updating the information set forth in
Schedule 3.1.15
.
4.1.14
Continuing Representation and Warranties
. The Bank will not do or cause to be done anything that would cause any representation
or warranty made by it in this Agreement to be untrue or inaccurate if made at Closing, except as otherwise contemplated or required by this Agreement or consented to in writing by GBCI.
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4.2
Registration Statement; TSB Meeting
.
4.2.1
Preparation of Registration Statement
.
(a) As soon as possible following the Execution Date, but not later than 45 days after the Execution Date, GBCI will prepare and file a
Registration Statement on Form S-4 (together with any amendments or supplements, the
Registration Statement
) with the SEC under the Securities Act for registration of the GBCI Shares, and the parties will prepare a related
prospectus/proxy statement (
Prospectus/Proxy Statement
) to be mailed, together with any amendments and supplements thereto, to the Banks shareholders.
(b) The parties will cooperate with each other in preparing the Registration Statement and Prospectus/Proxy Statement, and will use their
reasonable best efforts to obtain the clearance of the SEC, any appropriate state securities regulators and any other required regulatory approvals, to issue the Prospectus/Proxy Statement.
(c) Nothing will be included in the Registration Statement or the Prospectus/Proxy Statement or any proxy solicitation materials with respect
to any party to this Agreement unless approved by that party, which approval will not be unreasonably withheld, conditioned, or delayed. When the Registration Statement becomes effective, and at all times subsequent to such effectiveness (up to and
including the date of the TSB Meeting), all information set forth in the Registration Statement that is or to be furnished by or on behalf of GBCI relating to GBCI and its Subsidiaries and by or on behalf of or relating to the Bank, (i) will
comply in all material respects with the provisions of the Securities Act and any other applicable statutory or regulatory requirements, and (ii) will not contain any untrue statement of a material fact or omit to state a material fact that is
required to be stated or necessary to make the statements in the Registration Statement not misleading;
provided
, however, that in no event will any party be liable for any untrue statement of a material fact or omission to state a material
fact in the Registration Statement where such statement or omission, as the case may be, was made in reliance upon, and in conformity with, written information concerning another party furnished by or on behalf of such other party specifically for
use in the Registration Statement.
(d) GBCI will pay all fees and costs associated with the preparation by GBCIs counsel (and
other professional advisors) and the filing of the Registration Statement. The Bank will pay all costs associated with its review and preparation of the Registration Statement and the Prospectus/Proxy Statement. The Bank will pay the costs
associated with the printing and mailing of the Prospectus/Proxy Statement to its shareholders and any other direct costs incurred by it in connection with the Prospectus/Proxy Statement.
4.2.2
Submission to Shareholders
. The Bank will promptly take the actions necessary in accordance with applicable law and its Articles
of Incorporation and Bylaws to convene a shareholders meeting to consider the approval of this Agreement and to authorize the transactions contemplated by this Agreement (such meeting and any adjournment or postponement thereof, the
TSB Meeting
). The TSB Meeting will be held on the earliest
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practical date after the date the Prospectus/Proxy Statement may first be sent to the Banks shareholders without objection by applicable governmental authorities. The Board of Directors of
the Bank will recommend approval of this Agreement and/or the Bank Merger to the Banks shareholders, and shall not withdraw, modify, or qualify its recommendation unless, subsequent to the date of this Agreement, the Bank receives a Superior
Proposal and the Board of Directors of the Bank determines, in good faith and after consultation with independent legal counsel, that it is in the best interests of the Bank and its shareholders to withdraw, modify or qualify such recommendation.
4.3
Submission to Regulatory Authorities
. Representatives of GBCI will prepare and file with
applicable regulatory agencies, applications for approvals, waivers or other actions deemed necessary or desirable, in the opinion of counsel, in order to consummate the Bank Merger. GBCI will provide copies of such applications for review by or on
behalf of the Bank prior to their submission to the applicable regulatory authorities. These applications are expected to include: (a) An interagency bank merger application to be filed with the FDIC; and (b) an application to the
Commissioner of the Montana Division and related filings regarding the Transaction; and (c) filings and coordination with the offices of the Montana Division and Secretary of State of Montana with respect to the Bank Merger. The Bank will
cooperate and use its reasonable best efforts to prepare all documentation, timely effect all filings and obtain, and to assist GBCI in obtaining, all permits, approvals, consents, authorizations, waivers and orders of all third parties and
governmental authorities necessary to consummate the Transaction. The Bank shall, upon request, furnish GBCI with all information concerning itself, and its directors, officers and shareholders and such other matters as may be reasonably necessary
or advisable in connection with any statement, filing, notice or application made by or on behalf of GBCI, Glacier Bank, or the Bank to any third party or governmental authority in connection with the Transaction.
4.4
Public Announcements
. Subject to written advice of legal counsel with respect to legal requirements
relating to public disclosure of matters related to the subject matter of this Agreement, the timing and content of any announcements, press releases or other public statements concerning the Bank Merger will occur upon, and be determined by, the
mutual consent of the Bank and GBCI.
4.5
Consents
. Each party to this Agreement will use its best
efforts to obtain the timely consent or approval of any Person whose consent or approval is required in order to permit GBCI or the Bank to consummate the Bank Merger.
4.6
Further Actions
. The parties to this Agreement will use their best efforts in good faith to make all
such arrangements, do or cause to be done all such acts and things, and execute and deliver all such certificates and other instruments and documents as may be reasonably necessary or appropriate in order to consummate the Transaction promptly.
4.7
Transition
. During the period from the date of this Agreement to the Effective Time, the Bank shall
cause one or more of its representatives to confer with representatives of GBCI and report the general status of its ongoing operations at such times as GBCI may reasonably request. Representatives of GBCI, Glacier Bank and the Bank shall also meet
as requested by or on behalf of GBCI to discuss and plan for the conversion of the Banks data
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processing and related electronic informational systems to those used by GBCI, which planning shall include, but not be limited to, discussion of the possible termination by the Bank of
third-party service provider arrangements effective at the Effective Time or at a date thereafter, non-renewal of personal property leases and software licenses used by the Bank in connection with its systems operations, retention of outside
consultants and additional employees to assist with the conversion, and outsourcing, as appropriate, of proprietary or self-provided system services, it being understood that the Bank shall not be obligated to take any such action prior to the
Effective Time and, unless the Bank otherwise agrees, no conversion shall take place prior to the Effective Time.
4.8
Notice
. The parties will provide each other with prompt written notice of:
(a) Any events that, individually or in the
aggregate, can reasonably be expected to have a Material Adverse Effect with respect to them.
(b) The commencement of any investigation,
action or proceeding against any one or more of them by or before any court or governmental agency that, individually or in the aggregate, can reasonably be expected to have a Material Adverse Effect with respect to any one or more of them.
(c) In the case of the Bank, the acquisition of an ownership or leasehold interest in any real property (except as disclosed in
Schedule 3.1.6
), as specified in Section 4.1.2(g).
4.9
Confidentiality
. Subject to
the requirements of law, each party will keep confidential, and will exercise its best efforts to cause its representatives to keep confidential, all information and documents obtained pursuant to this Agreement unless such information (a) is
required by law to be disclosed, (b) becomes available to such party from other sources not bound by a confidentiality obligation, (c) is disclosed with prior written approval of the party to which such information pertains or is disclosed
in a legal action between the parties relating to this Agreement or the Transaction, or (d) is or becomes public without fault of the subject party. If this Agreement is terminated or the Bank Merger otherwise fails to be consummated, each
party to this Agreement will promptly (y) return to the other all confidential documents obtained from them and (z) not use for commercial purposes or disclose for any reason any nonpublic information obtained under or in connection with
this Agreement or in connection with the Transaction, except as permitted by clauses (a) or (c)
above.
4.10
Availability of GBCIs Books, Records, and Properties
. GBCI will reasonably make
its books, records, properties, contracts, and documents available to the Bank and its counsel, accountants and other representatives during business hours with reasonable advance notice and for any reasonable purpose directly related to this
Agreement. These items will be open for inspection, audit and direct verification of loan or deposit balances and collateral receipts. GBCI will cooperate fully in any such inspection, audit, or direct verification procedures, and will make
available all information reasonably required by or on behalf of GBCI.
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4.11
Blue Sky Filings
. GBCI will use its best efforts to
obtain, prior to the effective date of the Registration Statement, any necessary state securities laws or Blue Sky permits and approvals.
4.12
Tax Treatment
. Neither GBCI nor the Bank will take or cause to be taken any action that would or
could reasonably be expected to prevent the Transaction from qualifying as a reorganization under Section
368(a) of the Code.
4.13
The Bank Closing Capital
. No later than the 10
th
Business Day before Closing, the Bank shall calculate in good faith the estimated TSB Capital as of Closing and shall provide GBCI with a copy of the proposed Subsequent Bank Financial Statements
for the month preceding the date of calculation (if not already provided in accordance with Section 4.1.8), together with internally prepared financial statements through the date of calculation, estimated retained earnings through the date of
Closing, the impact of any pending adjustments required in the calculation of the TSB Capital, and any other documentation reasonably requested by GBCI for purposes of confirming the amount of such TSB Capital. GBCI shall review such materials and,
within three Business Days following receipt thereof, notify the Bank as to whether GBCI accepts or disputes the amount of the TSB Capital. If GBCI disputes such calculation in good faith, it shall describe in its notice its specific requested
changes or adjustments. If GBCI and the Bank are unable to resolve such dispute through good faith negotiations within three Business Days after delivery of GBCIs notice of objection, then the parties shall mutually engage and submit such
dispute to, and the same shall be finally resolved by, an accounting firm that is mutually and reasonably acceptable to the parties (the
Independent Accountants
). The Independent Accountants shall determine and report in writing
to GBCI and the Bank the resolution of such disputed matters and the effect of such determinations on the calculation of the TSB Capital as of Closing, and such determinations shall be final, binding and conclusive unless GBCI and the Bank mutually
agree upon a different amount. The TSB Capital as of Closing, as determined and agreed upon in writing by GBCI and the Bank in accordance with this Section 4.13, is the
TSB Closing Capital
. The fees and disbursements of the
Independent Accountants pursuant to this Section 4.13 and Section 4.14 below shall be shared equally by GBCI, on the one hand, and the Bank, on the other hand, and the Banks portion shall be an expense in the calculation of the TSB
Closing Capital.
4.14
Transaction Related Expenses
. No later than the tenth (10
th
) Business Day before Closing, the Bank shall calculate in good faith the estimated Transaction Related Expenses as of the Closing and shall provide GBCI with a copy of a schedule in the form of
Exhibit B
detailing each Transaction Related Expense and any other documentation reasonably requested by GBCI for purposes of confirming the amount of such Transaction Related Expenses. GBCI shall review such materials and, within two
Business Days following receipt thereof, notify the Bank as to whether GBCI accepts or disputes the amount of the Transaction Related Expenses. If GBCI disputes such calculation in good faith, it shall describe in its notice its specific requested
changes or adjustments. If GBCI and the Bank are unable to resolve such dispute through good faith negotiations within three Business Days after delivery of GBCIs notice of objection, then the parties shall mutually engage and submit such
dispute to, and the same shall be finally resolved by Independent Accountants in accordance with the process set forth in Section 4.13. The Transaction Related Expenses as of Closing, as determined and agreed upon in writing by GBCI and the
Bank in accordance with this Section 4.14, are the
Final Transaction Related Expenses
.
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4.15
Payment of Dividend
. To the extent the Closing Capital
Differential is positive, the Bank shall, upon written notice to GBCI and effective immediately prior to the Effective Time, declare and pay a special dividend to its shareholders in the amount of such positive Closing Capital Differential;
provided, however, the amount of such dividend may be limited to the extent necessary to cause the Bank Merger to effect a transfer of substantially all of the properties of the Bank within the meaning of Code Section 368(a)(2)(D),
as determined in the sole discretion of GBCI in consultation with tax counsel.
4.16
Reasonable Best
Efforts
. Subject to the terms and conditions of this Agreement, each party will use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable
under applicable laws, so as to permit consummation of the Bank Merger by August 31, 2016, and in any case as early as possible, and to otherwise enable consummation of the transactions contemplated by this Agreement, subject to any delays
resulting from SEC review or bank regulatory processing.
4.17
Listing
. GBCI will use its reasonable
best efforts to cause the GBCI Shares to be authorized for listing on the NASDAQ Global Market, subject to official notice of issuance, prior to the Effective Time.
ARTICLE 5
APPROVALS AND CONDITIONS
5.1
Required Approvals
. The obligations of the parties to this Agreement are subject to the approval of this Agreement and the Transaction by all appropriate regulatory agencies having jurisdiction with respect thereto;
provided
,
however
, that no such consent or approval will have imposed any condition or requirement not normally imposed in such transactions that, in the opinion of GBCI, would deprive GBCI of the material economic or business benefits of the Bank
Merger.
5.2
Conditions to Obligations of GBCI
. All obligations of GBCI pursuant to this Agreement
are subject to satisfaction of the following conditions at or before Closing:
5.2.1
Representations and Warranties
. The
representations and warranties of the Bank contained in this Agreement or in any certificate or other instrument delivered in connection with this Agreement that are not qualified as to materiality will be true and correct in all material respects
at Closing, and the representations and warranties of the Bank contained in this Agreement or in any certificate or other instrument delivered in connection with this Agreement that are qualified as to materiality will be true and correct at
Closing, all with the same force and effect as though such representations and warranties had been made on and as of Closing (except to the extent that such representations and warranties are by their express provisions made as of a specified date,
in which case such representations and warranties will be true and correct in all material respects or true and correct, as the case may be, as of such date). The Bank will have delivered to GBCI a certificate to that effect, executed by a duly
authorized officer of the Bank and dated as of Closing.
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5.2.2
Compliance
. The Bank will have performed and complied in all material respects with
all terms, covenants and conditions of this Agreement on or before Closing. The Bank will have delivered to GBCI a certificate to that effect, executed by a duly authorized officer of the Bank and dated as of Closing.
5.2.3
Closing Capital and Financial Statements
. The Bank will have delivered to GBCI the financial information set forth in
Section 4.13, and the parties will have agreed upon the amount of TSB Closing Capital pursuant to the terms of Section 4.13.
5.2.4
Transaction Related Expenses
. The Bank will have delivered to GBCI the information set forth in Section 4.14, and the
parties will have agreed upon the amount of Final Transaction Related Expenses pursuant to the terms of Section 4.14.
5.2.5
No
Material Adverse Effect
. Since December 31, 2015, and since the date of this Agreement, there will have been no material damage, destruction or loss (whether or not covered by insurance) and no other event, individually or in the aggregate,
constituting a Material Adverse Effect with respect to the Bank or the commencement of any proceeding against the Bank that, individually or in the aggregate, can reasonably be expected to have a Material Adverse Effect with respect to the Bank.
5.2.6
Financial Condition
. In the opinion of the Executive Officers of the Bank, the Banks ALLL is adequate to absorb the
Banks anticipated loan losses.
5.2.7
No Governmental Proceedings
. No action or proceeding will have been commenced or
threatened by any governmental agency to restrain or prohibit or invalidate the Bank Merger.
5.2.8
Opinion of Counsel
. Counsel to
the Bank will have delivered to GBCI a legal opinion in form and substance reasonably acceptable to GBCI.
5.2.9
Tax Opinion
. GBCI
will have obtained from Garlington, Lohn & Robinson, PLLP, and delivered to the Bank, an opinion addressed to the Bank and GBCI (subject to reasonable limitations, conditions and assumptions) to the effect that on the basis of facts,
representations and assumptions set forth in such opinion, the Bank Merger will be a reorganization within the meaning of IRC Section 368(a).
5.2.10
Real Property Matters
. GBCI will have received the irrevocable commitment by the Title Company to issue the policy required
under Section 4.1.11.
5.2.11
Corporate and Shareholder Action
. Each of the following will have approved or ratified the Bank
Merger, as applicable:
(a) The Board of Directors of the Bank; and
(b) The shareholders of the Bank.
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5.2.12
Resignation of Directors
. The directors of the Bank will have tendered their
written resignations from the Board of Directors of the Bank, to be effective upon consummation of the Bank Merger, as applicable.
5.2.13
Fairness Opinion
. The Bank has received a fairness opinion from D.A. Davidson & Co. (the
Fairness Opinion
), to the effect that the Merger Consideration to be received by the Bank shareholders is fair to such
shareholders from a financial point of view, and the Fairness Opinion has not been modified or withdrawn.
5.2.14
Registration
Statement
. The Registration Statement, as it may have been amended, required in connection with the GBCI Shares, and as described in Section 4.2, will have become effective, and no stop order suspending the effectiveness of such
Registration Statement will have been issued or remain in effect, and no proceedings for that purpose will have been initiated or threatened by the SEC, the basis for which still exists.
5.2.15
No Change in Loan Review
. The Bank will have provided to GBCI the reports requested by GBCI under Section 4.1.13, and
neither these reports nor any examinations conducted by GBCI under Section 4.1.13 will have revealed a change in either: (a) the information set forth in
Schedule 3.1.15
or (b) information revealed during GBCIs
previous examinations of the Banks loans, in either case which change constitutes a Material Adverse Effect.
5.2.16
Corporate
Dissolution
. The Bank shall have terminated the registration of, or dissolved, Treasure State Bancorporation, Inc. as required by Section 4.1.3(f).
5.2.17
Warrant Termination Agreements
. The Bank shall have received from all holders of outstanding warrants to purchase TSB Stock
warrant termination agreements in form and substance reasonably satisfactory to GBCI.
5.3
Conditions to
Obligations of the Bank
. All obligations of the Bank pursuant to this Agreement are subject to satisfaction of the following conditions at or before Closing:
5.3.1
Representations and Warranties
. The representations and warranties of GBCI and Glacier Bank contained in this Agreement or in any
certificate or other instrument delivered in connection with this Agreement that are not qualified as to materiality will be true and correct in all material respects at Closing, and the representations and warranties of GBCI and Glacier Bank
contained in this Agreement or in any certificate or other instrument delivered in connection with this Agreement that are qualified as to materiality will be true and correct at Closing, all with the same force and effect as though such
representations and warranties had been made on and as of Closing (except to the extent that such representations and warranties are by their express provisions made as of a specified date, in which case such representations and warranties will be
true and correct in all material respects or true and correct, as the case may be, as of such date). GBCI and Glacier Bank will have delivered to the Bank a certificate to that effect, executed by a duly authorized officer of GBCI and Glacier Bank
and dated as of Closing.
5.3.2
Compliance
. GBCI and Glacier Bank will have performed and complied, in all material respects, with
all terms, covenants and conditions of this Agreement on or before Closing. GBCI and Glacier Bank will have delivered to the Bank a certificate to that effect, executed by a duly authorized officer of GBCI and Glacier Bank and dated as of Closing.
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5.3.3
No Governmental Proceedings
. No action or proceeding will have been commenced or
threatened by any governmental agency to restrain or prohibit or invalidate the Bank Merger.
5.3.4
No Material Adverse Effect
.
Since December 31, 2015, (a) there will have been no material damage, destruction or loss (whether or not covered by insurance) and no other event, individually or in the aggregate, constituting a Material Adverse Effect with respect to
GBCI, or (b) the commencement of any proceeding against GBCI or any of its Subsidiaries that, individually or in the aggregate, can reasonably be expected to have a Material Adverse Effect with respect to GBCI.
5.3.5
Corporate Action
. Each of the Board of Directors of GBCI and Glacier Bank will have approved the Bank Merger, as applicable.
5.3.6
Registration Statement; Listing
. The Registration Statement will have become effective as specified in Section 5.2.14, and
no stop order suspending the effectiveness of such Registration Statement will have been issued or remain in effect, and no proceedings for that purpose will have been initiated or threatened by the SEC, the basis for which still exists. The shares
of GBCI Common Stock to be issued in the Bank Merger shall have been approved for quotation on The NASDAQ Global Market (or such other exchange on which the GBCI Common Stock may become listed) if so required and shall be freely tradable.
5.3.7
Payments to the Exchange Agent
. GBCI will have deposited the Merger Consideration with the Exchange Agent.
5.3.8
Approval of the Bank Shareholders
. The shareholders of the Bank will have approved this Agreement and the Bank Merger by the
requisite vote under Montana law and the Banks Articles of Incorporation, as applicable.
5.3.9
Fairness Opinion
. The Bank
has received the Fairness Opinion to the effect that the Merger Consideration to be received by the Bank shareholders is fair to such shareholders from a financial point of view, and the Fairness Opinion has not been modified or withdrawn.
5.3.10
Tax Opinion
. The tax opinion specified in Section 5.2.9 shall have been delivered to the Bank in form and substance
reasonably acceptable to the Bank and its advisors.
ARTICLE 6
DIRECTORS, OFFICERS AND EMPLOYEES
6.1
Director and Shareholder Agreements
. As a condition to the execution of this Agreement, the
directors and principal shareholders described in Recital E have entered into the written agreements described in Recital E on or before the Execution Date.
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6.2
Employees
. GBCI and Glacier Bank plans to offer
employment to all employees of the Bank, except as set forth on
Schedule 6.2
attached hereto.
6.3
Employee Benefit Issues
.
6.3.1
Comparability of Benefits
. GBCIs and Glacier Banks personnel policies will apply to any employees of the Bank who are
retained after the Effective Time. Such retained employees will be eligible to participate in all of the benefit plans of GBCI that are generally available to similarly situated employees of GBCI and/or Glacier Bank in accordance with and subject to
the terms of such plans.
6.3.2
Treatment of Past Service
. For purposes of such participation, current employees of the Bank
(a) will be given credit for prior service with the Bank for purposes of determining eligibility and vesting under benefits plans of GBCI and Glacier Bank (including but not limited to vacation time and participation and benefits under the
applicable GBCI or Glacier Bank severance plan for employees in effect at the time of any termination) and (b) will be able to transfer any accrued benefits such employee is currently entitled to the extent permitted by the terms of the benefit
plans of GBCI or Glacier Bank, as applicable.
6.3.3
No Contract Created
. Nothing in this Agreement will give any employee a right
to employment or to continuing employment.
6.3.4
Severance Payments
. Bank employees who are not entitled to severance under the
Compensation Plans set forth in
Schedule 3.1.19
and who stay with the Bank through Closing but are not offered employment with Glacier Bank following the Closing will receive (a) severance payments in accordance with Glacier
Banks severance policy in effect at the Closing on the basis of the number of years or prior service with the Bank, at the expense of GBCI, and (b) where deemed appropriate by Glacier Bank, reasonable outplacement services, including
guidance to opportunities for employment within Glacier Bank.
6.4
Indemnification of Directors and
Executive Officers
. For a period of four years from and after the Effective Date, GBCI will indemnify and defend each present and former director and officer of the Bank from and against any and all claims, losses, liabilities, judgments, fines,
damages, costs, and expenses (including reasonable attorneys fees) incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative, or investigative, arising out of actions or omissions
accruing at or prior to the Effective Time, including, without limitation, the Bank Merger to the fullest extent that the Bank is currently permitted to indemnify (and advance expenses to) its directors and officers under applicable law, including
federal banking law, and under their respective articles of incorporation or bylaws in effect on the Execution Date. Any determination required to be made with respect to whether an officers or directors conduct complies with the
standard set forth under the Banks articles of incorporation or bylaws will be made by independent counsel (which will not be counsel that provides any services to GBCI or any of its Subsidiaries) selected by GBCI and reasonably acceptable to
such officer or director. For a period of four years after the Effective Date, GBCI will use reasonable best efforts to cause to be maintained in effect (with reputable and financially sound insurers) director and officer liability insurance
substantially similar to that maintained by GBCI with respect to claims arising from facts or events that occurred before the Effective Time.
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ARTICLE 7
TERMINATION OF AGREEMENT AND ABANDONMENT OF TRANSACTION
7.1
Termination by Reason of Lapse of Time
. If Closing does not occur on or before November 30,
2016, either GBCI or the Bank may terminate this Agreement and the Bank Merger if both of the following conditions are satisfied:
(a) the
terminating partys board of directors decides to terminate by a majority vote of all of its members; and
(b) the terminating party
delivers to the other party written notice that its board of directors has voted in favor of termination.
7.2
Termination Due to Increase in GBCI Average Closing Price
.
7.2.1
GBCIs Right to Terminate
. By specific action of its board of directors, GBCI may terminate this Agreement and the Bank
Merger by written notice to the Bank on the Business Day immediately following the Determination Date, if the GBCI Average Closing Price is greater than $27.05 (without taking into account the declaration or effects of a stock dividend, stock split,
reverse stock split or similar transaction involving the issuance of GBCI Common Stock for which no consideration is received between the Execution Date and the Determination Date) unless the Bank makes the election set forth in Section 7.2.2.
7.2.2
The Banks Right to Adjust Consideration
. If GBCI provides written notice to the Bank in accordance with
Section 7.2.1, then within three Business Days following the Banks receipt of such notice, the Bank may elect by written notice to GBCI to accept an adjustment to the Per Share Stock Consideration through the issuance of fewer GBCI
Shares; in such event, the Per Share Stock Consideration shall be the number of shares of GBCI Common Stock equal to the quotient obtained by (a) dividing the result of (i) the number of shares of TSB Stock outstanding at the
Effective Time multiplied by (ii) the Per Share Stock Consideration multiplied by (iii) $27.05 by the GBCI Average Closing Price (rounded up to the nearest whole share), and (b) dividing that result by the number of shares of TSB
Stock outstanding at the Effective Time (prior to taking into account the declaration or effects of a stock dividend, stock split, reverse stock split or similar transaction involving the issuance of GBCI Common Stock for which no consideration is
received between the Execution Date and the Determination Date).
If the Bank makes an election to accept such decrease in the number of
GBCI Shares, no termination will occur pursuant to Section 7.2.1, and this Agreement will remain in effect according to its terms (except as the Per Share Stock Consideration has been adjusted).
7.3
Termination Due to Decrease in GBCI Average Closing Price
.
7.3.1
The Banks Right to Terminate
. By specific action of its board of directors, the Bank may terminate this Agreement and the
Bank Merger by written notice to GBCI on the Business Day immediately following the Determination Date, if the GBCI Average
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Closing Price is (a) less than $19.99 but not less than $19.00
and
the price of GBCI Common Stock has during the period from the Execution Date through the Determination Date
underperformed the KBW Regional Banking Index by more than 10 percent, or (b) less than $19.00 (without in either case taking into account the declaration or effects of a stock dividend, stock split, reverse stock split or similar
transaction involving the issuance of GBCI Common Stock for which no consideration is received between the Execution Date and the Determination Date), unless GBCI makes the applicable election set forth in Section 7.3.2.
7.3.2
GBCIs Right to Adjust Consideration
. If the Bank provides written notice to GBCI in accordance with Section 7.3.1,
then within three Business Days following GBCIs receipt of such notice, GBCI may elect by written notice to the Bank to (a) in the event of a termination by the Bank pursuant to Section 7.3.1(a), adjust the Per Share Stock
Consideration (or Per Share Cash Consideration) such that the total value of GBCI Common Stock to be issued in the Transaction (plus any additional Cash Consideration) is equal to the result of (i) the number of shares of TSB Stock outstanding
at the Effective Time multiplied by (ii) the Per Share Stock Consideration multiplied by (iii) $19.99, or (b) in the event of a termination by the Bank pursuant to Section 7.3.1(b), adjust the Per Share Stock Consideration (or
Per Share Cash Consideration), such that the total value of GBCI Common Stock in the Transaction (plus any additional Cash Consideration) is equal to the result of (i) the number of shares of TSB Stock outstanding at the Effective Time
multiplied by (ii) the Per Share Stock Consideration multiplied by (iii) $19.00.
If GBCI makes an election under
Section 7.3.2, no termination will occur pursuant to Section 7.3.1, and this Agreement will remain in effect according to its terms (except as the Per Share Stock Consideration (or Per Share Cash Consideration) has been adjusted).
7.4
Other Grounds for Termination
. This Agreement and the Bank Merger may be terminated at any time
before Closing (whether before or after applicable approval of this Agreement by the Banks shareholders, unless otherwise provided) by the Bank or GBCI (on behalf of itself and Glacier Bank) as follows:
7.4.1
Mutual Consent
. By mutual consent of the Bank and GBCI, if the board of directors of each party agrees to terminate by a majority
vote of all of its members.
7.4.2
No Regulatory Approvals
. By the Bank or GBCI, if the regulatory approvals required by
Section 5.1 are denied (or if any such required approval is conditioned on a substantial deviation from the Bank Merger);
provided
,
however
, that either party will have 15 Business Days following receipt of such denial to
appeal the decision, and if such appeal is timely made, either party will have 60 days to prosecute diligently and overturn such denial, and such other party may not terminate this Agreement pursuant to this Section 7.4.2 during such
period of time;
provided further
,
however
, either party shall be entitled to terminate this Agreement pursuant to Section 7.1 during such period of time.
7.4.3
Breach of Representation
. By the Bank or GBCI (provided that the terminating party is not then in material breach of any of its
representations, warranties, agreements or covenants in this Agreement if they are not qualified as to materiality and is not then in breach of any of its representations, warranties, agreements or covenants in this
A-44
Agreement if they are qualified as to materiality) if there has been a material breach of any of the representations or warranties set forth in this Agreement that are not qualified as to
materiality or a breach of any of the representations or warranties set forth in this Agreement that are qualified as to materiality on the part of the other party, which breach is not cured within 30 days following written notice to the party
committing such breach, or which breach, by its nature, cannot be cured prior to the end of such
30-day
period;
provided
,
however
, that neither party will have the right to terminate this
Agreement pursuant to this Section 7.4.3 unless the breach of such representation or warranty, together with any other such breaches, would entitle the party receiving such representation not to consummate the transactions contemplated hereby
under Section 5.2.1 (in the case of a breach of a representation or warranty by the Bank) or Section 5.3.1 (in the case of a breach of a representation or warranty by GBCI). In the event of termination pursuant to this Section 7.4.3,
the terminating party will be entitled to receive from the other party a termination fee as described below.
7.4.4
Breach of
Covenant
. By either party (provided that the terminating party is not then in material breach of any of its representations, warranties, agreements or covenants in this Agreement if they are not qualified as to materiality and is not then in
breach of any of its representations, warranties, agreements or covenants in this Agreement if they are qualified as to materiality) if there has been a material breach of any of the covenants or agreements set forth in this Agreement that are not
qualified as to materiality or a breach of any of the covenants or agreements set forth in this Agreement that are qualified as to materiality on the part of the other party, which breach is not cured within 30 days following written notice to
the party committing such breach, or which breach, by its nature, cannot be cured prior to the end of such
30-day
period. In the event of termination pursuant to this Section 7.4.4, the terminating party
will be entitled to receive from the other party a termination fee.
7.4.5
Failure to Recommend or Obtain Shareholder Approval
. By
GBCI if (a) the Board of Directors of the Bank (i) fails to recommend to its shareholders the approval of the Bank Merger or (ii) modifies, withdraws, or changes in a manner adverse to GBCI its recommendation to shareholders to
approve the Bank Merger; or (b) regardless of whether the Board of Directors of the Bank recommends to the Banks shareholders the approval of the Bank Merger, the Banks shareholders do not approve the Bank Merger at the
TSB Meeting.
7.4.6
Impracticability
. By either GBCI or the Bank, upon written notice given to the other party, if the board
of directors of the party seeking termination under this Section 7.4.6 has determined in its sole judgment, made in good faith and after due consideration and consultation with counsel, that the Bank Merger has become inadvisable or
impracticable by reason of actions taken by the federal government or the government of the State of Montana to restrain or invalidate the Bank Merger or this Agreement.
7.4.7
Dissenting Shares
. By GBCI if holders of 5 percent or more of the outstanding shares of TSB Stock are Proposed Dissenting
Shares.
7.4.8
Superior ProposalTermination by the Bank
. By the Board of Directors of the Bank upon written notice to GBCI if
such Board of Directors has in good faith determined that an Acquisition Proposal constitutes a Superior Proposal; provided, however, that the Bank may not terminate this Agreement pursuant to this Section 7.4.8 unless (a) it has not
breached
A-45
Section 4.1.10, (b) subsequent to delivering such notice of termination, it intends to enter into a letter of intent, acquisition agreement or similar agreement relating to such
Superior Proposal, (c) it has provided GBCI at least five days prior written notice advising GBCI that the Board of Directors of the Bank is prepared to accept a Superior Proposal and has given GBCI, if it so elects, an opportunity to
amend the terms of this Agreement (and negotiated with GBCI in good faith with respect to such terms) in such a manner as would enable the Board of Directors of the Bank to proceed with the Bank Merger, and (d) simultaneously upon entering into
such letter of intent, acquisition agreement or similar agreement relating to such Superior Proposal referred to in clause (b), it delivers to GBCI the Break-Up Fee.
7.4.9
Superior ProposalTermination by GBCI
. By GBCI upon written notice by the Bank if (a) an Acquisition Event will have
occurred or (b) a third party will have made a proposal to the Bank or its shareholders to engage in or entered into an agreement with respect to an Acquisition Event, and this Agreement and the Bank Merger are not approved at the TSB Meeting.
7.5
Termination Fee Payable by the Bank
. Due to expenses, direct and indirect, incurred by GBCI in
negotiating and executing this Agreement and in taking steps to effect the Merger, the Bank will pay to GBCI a termination fee of $250,000 if GBCI terminates this Agreement pursuant to Sections 7.4.3 (breach of representation) or 7.4.4
(breach of covenant). If such termination fee becomes payable pursuant to this Section 7.5, it will be payable on GBCIs demand and must be paid by the Bank within three Business Days following the date of GBCIs demand.
7.6
Termination Fee Payable by GBCI
. Due to expenses, direct and indirect, incurred by the Bank in
negotiating and executing this Agreement and in taking steps to effect the Merger, GBCI will pay to the Bank a termination fee of $250,000 if the Bank terminates this Agreement pursuant to Sections 7.4.3 (breach of representation) or 7.4.4
(breach of covenant). If such termination fee becomes payable pursuant to this Section 7.6, it will be payable on the Banks demand and must be paid by GBCI within three Business Days following the date of the Banks demand.
7.7
Break-Up Fee
. If this Agreement is terminated pursuant to Section 7.4.5(a) (Failure to
Recommend or Obtain), Section 7.4.8 (Superior ProposalTermination by the Bank), or Section 7.4.9(a) (Superior ProposalTermination by GBCIImmediate Acquisition Event), then the Bank will immediately pay to GBCI $590,000
(the
Break-Up Fee
). If this Agreement is terminated pursuant to Section 7.4.9(b) (Superior ProposalTermination by GBCI Subsequent Acquisition Event)
and
prior to or within one year after such termination,
the Bank enters into an agreement, or publicly announces an intention, to engage in an Acquisition Event, or within 18 months after such termination an Acquisition Event will have occurred, then the Bank will promptly pay to GBCI the Break-Up
Fee.
7.8
Cost Allocation Upon Termination
. In connection with the termination of this Agreement
under this Article 7, except as provided in Sections 7.5 or 7.6, each party will pay its own out-of-pocket costs incurred in connection with this Agreement and will have no other liability to the other parties. The parties agree that the
agreements herein with respect to termination fees under Section 7.5 or 7.6 and the Break-Up Fee are integral parts of the transactions contemplated by this Agreement and constitute reasonable liquidated damages and not a penalty.
A-46
ARTICLE 8
MISCELLANEOUS
8.1
Notices
. Any notice, request, instruction or other document to be given under this Agreement will be in writing and will be delivered personally, sent electronic mail or sent by registered or certified mail or overnight Federal
Express service, postage prepaid, addressed as follows:
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GBCI:
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Glacier Bancorp, Inc.
49 Commons Loop
Kalispell, Montana 59901
Email:
mblodnick@glacierbancorp.com
Attn: Michael J. Blodnick
President and CEO
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with a copy to:
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Miller Nash Graham & Dunn LLP
Pier 70
2801 Alaskan Way
Suite 300
Seattle, Washington 98121-1128
Email:
Stephen.Klein@millernash.com
David.Post@millernash.com
Attn: Stephen M. Klein
David G. Post
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the Bank:
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Treasure State Bank
3660 Mullan Road
Missoula, Montana 59808
Email:
jsalisbury@treasurestatebank.com
Attn: James A. Salisbury
Chairman and CEO
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with a copy to:
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Bjornson Law Offices, PLLC
2809 Great Northern
Loop, Suite 100
Missoula, Montana 59808
Email:
david@bjornsonlaw.com
Attn: David H. Bjornson
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or to such other address or Person as any party may designate by written notice to the other given under this Section.
8.2
Waivers and Extensions
. Subject to Article 9, any party may grant waivers or extensions to the
other parties, but only through a written instrument executed by the President and/or CEO of the party granting the waiver or extension. Waivers or extensions that do not comply with the preceding sentence are not effective. In accordance with this
Section 8.2, a
A-47
party may extend the time for the performance of any of the obligations or other acts of any other party, and may waive:
(a) any inaccuracies of any other party in the representations and warranties contained in this Agreement or in any document delivered in
connection with this Agreement;
(b) compliance with any of the covenants of any other party; and
(c) any other partys performance of any obligations under this Agreement and any other condition precedent set out in Article 5.
8.3
Construction and Execution in Counterparts
. Except as otherwise expressly provided in this
Agreement, this Agreement: (a) covers the entire understanding of the parties, and no modification or amendment of its terms or conditions will be effective unless in writing and signed by the parties or their respective duly authorized agents;
(b) will not be interpreted by reference to any of the titles or headings to the Sections or Subsections of this Agreement, which have been inserted for convenience only and are not deemed a substantive part of this Agreement; (c) is
deemed to include all amendments to this Agreement, each of which is made a part of this Agreement by this reference; and (d) may be executed in one or more counterparts, each of which will be deemed an original, but all of which taken together
will constitute one and the same document. References in this Agreement to Recitals, Sections, Subsections, or Schedules are references to the Recitals, Sections, Subsections, and Schedules of and to this Agreement unless expressly stated otherwise.
8.4
Survival of Representations, Warranties, and Covenants
. Except as set forth below, the
representations, warranties, agreements and covenants set forth in this Agreement will not survive the Effective Time or termination of this Agreement, except that (a) Section 4.9 (Confidentiality), Sections 7.5 and 7.6
(Termination Fees), Section 7.7 (Break-Up Fee), Section 7.8 (Cost Allocation Upon Termination), and Sections 8.3 through 8.8 will survive termination; and (b) the covenants and other agreements in this Agreement that impose
duties or obligations on the parties following the Effective Time, including without limitation Section 6.3 (Employee Benefit Issues) and Section 6.4 (Indemnification), will survive the Effective Time. Except as specifically set forth in
the preceding sentences, none of the representations, warranties, agreements or covenants contained in this Agreement shall survive the Effective Time, and neither GBCI, Glacier Bank, nor the Bank shall have any rights or remedies after Closing with
respect to any breach of any such representations, warranties, agreements, or covenants.
8.5
Attorneys Fees and Costs
. In the event of any dispute or litigation with respect to the terms and conditions or enforcement of rights or obligations arising by reason of this Agreement or the Bank Merger, the substantially prevailing
party in any such litigation will be entitled to reimbursement from the other party of its costs and expenses, including reasonable attorneys fees.
8.6
Arbitration
. At either partys request, the parties must submit any dispute, controversy or
claim arising out of or in connection with, or relating to, this Agreement or any breach or alleged breach of this Agreement, to arbitration under the American Arbitration
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Associations rules then in effect (or under any other form of arbitration mutually acceptable to the parties). A single arbitrator agreed on by the parties will conduct the arbitration. If
the parties cannot agree on a single arbitrator, each party must select one arbitrator and those two arbitrators will select a third arbitrator. This third arbitrator will hear the dispute. The arbitrators decision is final (except as
otherwise specifically provided by law) and binds the parties, and either party may request any court having jurisdiction to enter a judgment and to enforce the arbitrators decision. The arbitrator will provide the parties with a written
decision naming the substantially prevailing party in the action. This prevailing party is entitled to reimbursement from the other party for its costs and expenses, including reasonable attorneys fees. Any arbitration or related proceedings
will take place in Kalispell, Montana.
8.7
Governing Law and Venue
. This Agreement will be governed
by and construed in accordance with the laws of the State of Montana, except to the extent that federal law may govern certain matters. The parties must bring any legal proceeding arising out of this Agreement in federal court in Kalispell, Montana.
Each party consents to and submits to the jurisdiction of any such federal court.
8.8
Severability
.
If a court determines that any term of this Agreement is invalid or unenforceable under applicable law, the remainder of this Agreement will not be affected thereby, and each remaining term will continue to be valid and enforceable to the fullest
extent permitted by law.
8.9
No Assignment
. Neither this Agreement nor any of the rights, interests
or obligations under this Agreement may be assigned by any of the parties (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Except as otherwise expressly provided, this Agreement (including the documents and instruments referred to in this Agreement) is not intended to
confer upon any Person other than the parties any rights or remedies under this Agreement.
8.10
Time of
the Essence
. Time shall be of the essence for the performance of the respective obligations of the parties under this Agreement.
ARTICLE 9
AMENDMENTS
Subject to applicable law, this Agreement and the form of any attached Exhibit or Schedule may be amended upon authorization of the boards of
directors of the parties, whether before or after the TSB Meeting;
provided
,
however
, that after approval by the Banks shareholders, no amendment will be made changing the form or reducing the amount of consideration to be
received by the shareholders of the Bank without the further approval of such shareholders. All amendments, modifications, extensions and waivers must be in writing and signed by the party agreeing to the amendment, modification, extension or
waiver.
[signatures on next page]
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This Agreement and Plan of Merger is dated as of the date first written above.
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GLACIER BANCORP, INC.
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By:
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/s/ Michael J. Blodnick
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Michael J. Blodnick, President and CEO
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GLACIER BANK
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By:
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/s/ Michael J. Blodnick
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Michael J. Blodnick, CEO
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TREASURE STATE BANK
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By:
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/s/ James A. Salisbury
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James A. Salisbury, Chairman and CEO
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[Signature Page to Agreement and Plan of Merger]
A-50
EXHIBIT A
Director Parties to Recital E
Mark
Burnham
Fred G. Carl, III
Stan Jenne, Ph.D.
J. Richard Orizotti
Ronald Premuroso, Ph.D.
Ray Round
James A. Salisbury
A-1
EXHIBIT B
Transaction Related Expenses
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Transaction-Related Expenses ($000s)
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Estimated
Transaction-Related
Expenses
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Final
Transaction-Related
Expenses
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Vendor Contracts
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Accruals relating to change in control payments, if any
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Other severance amounts
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Professional Expenses
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Investment banking
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Legal
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Accounting and other
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TOTAL
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As provided in the Agreement and Plan of Merger, differences between the Final Transaction Related Expenses and $1,100,000
will be added to or subtracted from, as the case may be, TSB Capital for purposes of determining both TSB Closing Capital and the Closing Capital Differential.
B-1
APPENDIX B
Montana Code Annotated
TITLE 35
CHAPTER 1.
BUSINESS CORPORATIONS