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superseded by any information in this proxy statement/prospectus.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:
|
|
|
Annual Report on Form 10-K for the year ended December 31, 2015;
|
|
|
|
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016; June 30, 2016; and September 30, 2016;
|
|
|
|
Proxy Statement for Glaciers 2016 Annual Meeting of Shareholders; and
|
|
|
|
Current Reports on Form 8-K filed January 5, 2016; January 6, 2016; April 21, 2016; April 29, 2016; September 1, 2016; and November 16, 2016 (other than the
portions of those documents not deemed to be filed).
|
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 TFB, 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 December 21, 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 TFB shareholders nor
the issuance of Glacier common stock in the merger will create any implication to the contrary.
64
APPENDIX A
PROJECT GREEN
PLAN AND AGREEMENT OF MERGER
AMONG
GLACIER BANCORP,
INC.
GLACIER BANK
TFB BANCORP, INC., AND
THE FOOTHILLS BANK
DATED AS OF NOVEMBER 15, 2016
TABLE OF CONTENTS
-i-
TABLE OF CONTENTS
(continued)
-ii-
List of Schedules and Exhibits
|
|
|
Schedule 3.1.1
|
|
Offices of TFB/the Bank
|
|
|
Schedule 3.1.2
|
|
Third Party Consents Required by TFB/the Bank
|
|
|
Schedule 3.1.3
|
|
Capital StockTFB/the Bank
|
|
|
Schedule 3.1.4
|
|
Subsidiaries; Investments
|
|
|
Schedule 3.1.5
|
|
Financial Statements
|
|
|
Schedule 3.1.6
|
|
Properties
|
|
|
Schedule 3.1.7
|
|
Environmental Matters
|
|
|
Schedule 3.1.8(e)
|
|
Tax Returns
|
|
|
Schedule 3.1.8(q)
|
|
Tax Attributes
|
|
|
Schedule 3.1.9
|
|
Absence of Regulatory Action
|
|
|
Schedule 3.1.10
|
|
Material Contracts
|
|
|
Schedule 3.1.13
|
|
Litigation
|
|
|
Schedule 3.1.16
|
|
Asset Classifications
|
|
|
Schedule 3.1.17
|
|
Insurance Policies
|
|
|
Schedule 3.1.18
|
|
Manuals, Handbooks, Policies, Etc.; Employee Agreements
|
|
|
Schedule 3.1.19
|
|
Benefit Plans
|
|
|
Schedule 4.1.3
|
|
Certain Employee Payouts
|
|
|
Schedule 4.1.7
|
|
Compensation
|
|
|
Schedule 6.2.2
|
|
Vacation Policies
|
EXHIBITS:
|
|
|
Exhibit A
|
|
Director and Shareholder Parties to Recital E
|
|
|
Exhibit B
|
|
Form of Transaction-Related Expenses Exhibit
|
PLAN AND AGREEMENT OF MERGER
AMONG
GLACIER BANCORP,
INC., GLACIER BANK,
TFB BANCORP, INC., AND THE FOOTHILLS BANK
This Plan and Agreement of Merger (the
Agreement
), dated as of November 15, 2016, is made by and between GLACIER
BANCORP, INC. (
GBCI
), GLACIER BANK, TFB BANCORP, INC. (
TFB
), and THE FOOTHILLS BANK (the
Bank
).
PREAMBLE
The management
and boards of directors of GBCI and TFB believe that the proposed 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. Capitalized
terms used but not defined in the Recitals are used with the meanings given under the heading Definitions below.
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) TFB is a corporation duly organized and validly existing under Arizona law and is a registered bank holding company under the BHC
Act. TFBs principal office is located in Yuma, Arizona.
(4) The Bank is an Arizona state-chartered bank, duly organized and validly
existing under the laws of the State of Arizona and a wholly owned subsidiary of TFB. The Banks principal office is located in Yuma, Arizona. In addition to its principal office, the Bank maintains three branch offices in Yuma, Pinal, and
Yavapai counties in Arizona, a loan production office in Prescott, Arizona, and an operations center in Yuma, Arizona formerly used as a branch office.
B.
The Transaction
. On the Effective Date, (1) TFB will merge with and into GBCI, with GBCI as the surviving entity,
(2) immediately thereafter the Bank will merge with and into Glacier Bank, with Glacier Bank surviving as a wholly owned subsidiary of GBCI, and (3) the former branches of the Bank will operate under a newly-established division of Glacier
Bank to be known as The Foothills Bank, a division of Glacier Bank (the
Division
), which will be Glacier Banks 14
th
separate division for operating purposes.
A-1
C.
Board Approvals
. The respective boards of directors of GBCI, Glacier Bank, TFB,
and the Bank have approved this Agreement and authorized its execution and delivery, and the board of directors of TFB has directed that this Agreement be submitted to TFBs shareholders for approval, together with its recommendation that
this Agreement be approved.
D.
Other Approvals
. The Merger is subject to:
(1) Satisfaction of the conditions described in this Agreement;
(2) Approval of this Agreement and/or the Merger by TFBs shareholders; and
(3) Approval or acquiescence, as appropriate, of the Transaction by the Federal Deposit Insurance Corporation (
FDIC
), the
Board of Governors of the Federal Reserve System (
Federal Reserve
), the Arizona Division of Financial Institutions, the Commissioner of the Montana Division of Banking and Financial Institutions, and any other agencies having
jurisdiction over the Transaction.
E.
Director and Shareholder Agreements
. In connection with the parties execution
of this Agreement, the persons listed 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 TFB 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.
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 agreements set forth in this Agreement, GBCI, Glacier Bank, TFB 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 TFB, its
Subsidiaries or any successor, (b) a purchase, lease or other acquisition in one or a series of related transactions of assets of TFB or any of its Subsidiaries representing 25 percent or more of the consolidated assets of TFB and its
Subsidiaries, 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
20 percent or more of the voting power of TFB or its Subsidiaries, in each case with or by a Person or entity other than GBCI or one of its Subsidiaries.
A-2
ABCA
means the Arizona Business Corporation Act, as amended.
Acquisition Proposal
has the meaning assigned to such term in Section 4.1.10.
Agreement
means this Plan and Agreement of Merger.
ALLL
means allowance for possible loan and lease losses.
Appraisal Laws
means Chapter 13 of the ABCA, as such chapter may be applicable to a merger in which the surviving
corporation is organized under the ABCA.
Asset Classification
has the meaning assigned to such term in
Section 3.1.16(a).
Bank
has the meaning assigned to it in the first paragraph, as supplemented by
Recital A(4).
Bank Financial Statements
means the Banks (a) unaudited 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 ended December 31, 2013, 2014, and 2015; and (b) unaudited financial statements as of
June 30, 2016, and the related statements of income, cash flows and changes in shareholders equity for such period, together with the Subsequent Bank Financial Statements.
Bank Merger
means the merger of the Bank with and into Glacier Bank.
Bank Merger Agreement
means the bank merger agreement to be entered into contemporaneously with this Agreement pursuant to
which the Bank Merger will be effected.
BHC Act
has the meaning assigned to such term in Recital A(1).
Break-Up Fee
has the meaning assigned to such term in Section 7.7.
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 Merger contemplated by this Agreement, as more fully specified in
Section 2.2.
Closing Capital Differential
means the positive or negative difference between the TFB Closing
Capital and the Closing Capital Requirement.
Closing Capital Requirement
means $35,160,000, plus the amount of TFB
Closing Capital attributable to the exercise of TFB Options after March 31, 2016, if any.
A-3
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 TFB Stock held by those shareholders who have timely and properly exercised their
dissenters rights in accordance with the Appraisal Laws.
Division
has the meaning assigned to such term in
Recital B.
Effective Date
means the date on which the Effective Time occurs.
Effective Time
means the time the Merger becomes effective under the MBCA and ABCA.
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).
ERISA
means the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate
means, with respect to TFB, any other entity that is considered one employer with TFB under
Section 4001 of ERISA or IRC Section 414.
Exchange Act
has the meaning assigned to such term in
Section 3.1.5(b).
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 TFB means Mary Lynn D. Lenz, James Carr, Tom Dolan and
Danelle Thomsen.
Fairness Opinion
has the meaning assigned to such term in Section 3.1.21.
FDIC
means the Federal Deposit Insurance Corporation.
Federal Reserve
means the Board of Governors of the Federal Reserve System.
A-4
Final Transaction Related Expenses
has the meaning assigned to such term in
Section 4.14.
GAAP
means United States generally accepted accounting principles.
GBCI
has the meaning assigned to it in the first paragraph, as supplemented by Recital A(1).
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, issued and outstanding from time to
time.
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 June 30, 2016, and the related unaudited
consolidated statements of income, cash flows, and changes in shareholders equity for each of the periods then ended; and (c) unaudited consolidated balance sheet as of the end of each fiscal quarter following June 30, 2016, but
preceding the Execution Date, and the related unaudited consolidated statements of income, cash flows and changes in shareholders equity for each such quarter.
GBCI Shares
means the shares of GBCI Common Stock to be issued to the holders of TFB Stock as the Total Stock
Consideration.
Hazardous Substances
has the meaning assigned to such term in Section 3.1.7(a)(iii).
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) TFB will be deemed to have Knowledge of a particular fact or
matter if any Executive Officer of TFB or 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 TFBs and 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.
A-5
Laws
has the meaning assigned to such term in Section 3.1.2.
Letter of Transmittal
has the meaning assigned to such term 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
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 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 by TFB to its or the Banks general business 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(a).
Maximum Transaction Expense Amounts
has the meaning assigned to such term in
Exhibit B
.
MBCA
means the Montana Business Corporations Act, as amended.
Merger Consideration
means the aggregate consideration contemplated by Section 1.1.
Merger
means the merger of TFB with and into GBCI.
Pension Plan
has the meaning assigned to such term in Section 3.1.19(c).
Per Share Cash Consideration
has the meaning assigned to such term in Section 1.2.3(d).
Per Share Stock Consideration
has the meaning assigned to such term in Section 1.2.3(e).
A-6
Per Share Stock Consideration Value
has the meaning assigned to such term in
Section 1.2.3(e).
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 including, with respect to TFB, Real Property.
Proposed Dissenting Shares
means those
shares of TFB Stock as to which shareholders have properly given notice of their intent to assert appraisal rights pursuant to Appraisal Laws.
Prospectus/Proxy Statement
means the Prospectus/Proxy Statement referred to in Section 4.2.1(a), to be provided to all
shareholders of TFB in connection with their consideration and approval of the Merger.
Real Property
means any real
property that TFB or the Bank owns in fee title, other than other real estate owned.
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
has the meaning assigned to such term in Section 3.1.5(b).
Securities Laws
has the meaning assigned to such term in Section 3.1.5(b).
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.
Subsequent TFB Financial Statements
means TFBs (a) unaudited consolidated and parent-only balance sheets and
related consolidated 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, and (b) audited consolidated balance sheets and related consolidated
statements of income, cash flows, and shareholders equity for the fiscal year ended December 31, 2016, each prepared in accordance with Section 4.1.8.
A-7
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 TFB and/or 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 TFB or the Bank, (ii) a sale, lease, exchange, transfer, or other disposition of at least 25 percent of the assets of TFB or 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 20 percent or more of the TFB 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 TFB 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, (y) would, if consummated, result in a transaction that is more favorable to TFB shareholders (in their
capacities as shareholders), from a financial point of view, than the transactions contemplated by this Agreement, and (z) 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.
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.
TFB
has the meaning assigned to it in the first paragraph, as supplemented by Recital A(3).
TFB Capital
means TFBs 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 TFBs consolidated tangible equity capital at March 31, 2016, was calculated, after giving effect to adjustments, calculated in
accordance with GAAP, for accumulated other comprehensive income or loss as reported on TFBs or the Banks balance sheet. In calculating TFB Capital, purchase accounting adjustments and the Final Transaction Related Expenses of up to the
individual Maximum Transaction Expense Amounts will not be taken into account. Accordingly, to the extent any category of Maximum Transaction Expense Amount exceeds its target, the difference, on an after tax basis (applying an effective tax rate of
35 percent), will be treated as a reduction of TFB Capital.
A-8
TFB Closing Capital
has the meaning assigned to such term in
Section 4.13
.
TFB Financial Statements
means TFBs (a) audited consolidated 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 ended December 31, 2013, 2014, and 2015; and (b) unaudited financial statements
as of June 30, 2016, and the related statements of income, cash flows and changes in shareholders equity for such period, together with the Subsequent TFB Financial Statements.
TFB Meeting
has the meaning assigned in Section 4.2.2.
TFB Options
has the meaning assigned in Section 3.1.3(c).
TFB Stock
means the shares of TFB common stock, $5.00 par value per share, issued and outstanding from time to time.
TFB Stock Plan
means The Foothills Bank 2008 Stock Option Plan, as amended May 15, 2008, and assumed by TFB in 2014.
Termination Date
means the date on which termination of this Agreement takes place under Article 7, if any.
Title Companies
has the meaning assigned to such term in Section 4.1.11.
Total Consideration Value Per Share
has the meaning assigned to such term in Section 1.2.3(g).
Trading Day
has the meaning assigned to such term in Section 1.2.3(h).
Transaction
means the Merger and the Bank Merger.
Transaction Related Expenses
means the payments and obligations related to the Transaction as more fully described on
Exhibit B
hereto.
401(k) Plan
means the TFB Bancorp, Inc., CoAdvantage Corporate Retirement Saving
Plan, as amended.
ARTICLE 1
TERMS OF TRANSACTION
1.1
Effect of Merger
. Upon Closing of the Merger, pursuant to the provisions of the MBCA and ABCA, TFB will merge with and into GBCI with GBCI as the surviving corporation under the MBCA, and in connection therewith, all shares of TFB
Stock issued and outstanding immediately prior to the Effective Time, except for Proposed Dissenting Shares but including all
A-9
unvested restricted shares of TFB Stock, will, by virtue of the Merger and without any action on the part of any holder of shares of TFB Stock, be converted into the right to receive the merger
consideration (the
Merger Consideration
) set forth in Section 1.2. Immediately following or as soon as practicable after the Merger, pursuant to the Bank Merger Agreement, the Bank will be merged into Glacier Bank, with
Glacier Bank as the resulting bank.
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 TFB Stock
. Each share of TFB Stock issued and outstanding on the Effective Date, excluding Proposed Dissenting Shares but including all unvested restricted shares of TFB Stock, will be vested to the extent unvested on the
Effective Date and converted into and represent the right to receive from GBCI a unit consisting of (a) the Per Share Cash Consideration and (b) the Per Share Stock Consideration.
1.2.3
Certain 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 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 $7.36152 per share, which is subject to adjustment pursuant to Section 7.3.2, further increased or decreased, as the case may be, by an amount per share determined by dividing (i) the Closing Capital Differential by (ii) the
number of shares of TFB Stock outstanding at the Effective Time; provided that, in lieu of increasing the Per Share Cash Consideration by the amount of any positive Closing Capital Differential, TFB may, in its discretion, elect to declare and pay a
special dividend to its shareholders in the amount of such positive Closing Capital Differential pursuant to Section 4.15.
(e)
Per Share Stock Consideration
means 0.607387 shares of GBCI Common Stock, which is subject to adjustment pursuant to Sections 7.2.2 and 7.3.2. Further, 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.
A-10
(f)
Per Share Stock Consideration Value
means the product obtained by
multiplying (i) the Per Share Stock Consideration by (ii) the GBCI Average Closing Price.
(g)
Total Consideration
Value Per Share
shall mean the sum of (i) the Per Share Stock Consideration Value and (ii) the Per Share Cash Consideration.
(h)
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 TFB 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
TFB Stock Options
. The TFB Options have been duly granted and remain outstanding pursuant to the TFB Stock Plan. If any holder of a TFB Option exercises such TFB Option before the Effective Time, TFB shall issue shares of TFB Stock upon such
exercise in accordance with the terms of the TFB Options and such shares of TFB Stock shall be converted into the Merger Consideration at the Effective Time. With respect to TFB Options that remain outstanding and unexercised as of the Effective
Time, at the Effective Time, such TFB Options shall at the Effective Time become fully vested to the extent not vested as of such date and be canceled, and in lieu thereof, the holders of such TFB Options shall be paid in cash an amount equal to the
product of (a) the number of shares of TFB Stock subject to such option at the Effective Time and (b) the amount by which the Total Consideration Value Per Share exceeds the exercise price per share of such TFB 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 TFB Options, each option holder shall execute a cancellation agreement in form and substance
reasonably satisfactory to GBCI. In the event that the exercise price of a TFB Option is greater than the Total Consideration Value Per Share, then TFB shall take such actions as may be reasonably necessary or appropriate to cause, at the Effective
Time, such TFB 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 terminated. Prior to the Effective Time, the board of
directors of TFB and the Compensation Committee thereof, as applicable, will take all reasonable corporate actions, and adopt such resolutions as may be necessary or appropriate to effectuate this Section 1.4.
1.5
Payment to Dissenting Shareholders
. Proposed Dissenting Shares shall have the rights provided by the
ABCA.
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 TFB Stock, for exchange in accordance with this Section 1.6 and Section 1.7, (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) cash in an amount necessary for payment of the Per Share Cash Consideration in full; (c) the cash in lieu of fractional shares to be
paid in accordance with Section 1.3; and (d) the cash in settlement of in-the-money TFB Options
A-11
to be paid in accordance with Section 1.4. Such cash and certificates for or other evidence of the GBCI Shares, together with any dividends or distributions with respect thereto, are
referred to in this Agreement as the
Exchange Fund
.
1.7
Certificates
.
1.7.1
Letter of Transmittal
. As soon as practicable, but in no event later than five Business Days following the Effective Date, GBCI
will cause to be mailed to each holder of record of a certificate evidencing shares of TFB Stock (a
Certificate
) a form letter of transmittal satisfactory to TFB and GBCI (which will specify that delivery will be effected, and
risk of loss and title to the Certificates will pass, only upon cancellation of the Certificates 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 Merger Consideration (and cash for fractional shares). 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 effect the exchange of their Certificates for, (a) evidence of issuance in book entry form, or upon written
request of such holder, certificates representing GBCI Common Stock; (b) a check or, at the election of the TFB 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 evidence of the Certificates marked as cancelled is
provided to GBCI and a properly executed Letter of Transmittal is received by 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 GBCIs satisfaction the right to receive the certificate evidencing GBCI Shares and (b) either pay to GBCI any applicable transfer or other
taxes or establish to GBCIs satisfaction that all applicable taxes have been paid or are not required.
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 GBCI with: (a) satisfactory evidence that the holder owns TFB Stock and that the certificate representing this ownership is lost, stolen, or destroyed, (b) any affidavit or security GBCI may require (including such bond as may be
required by the Exchange Agent in accordance with its policies), and (c) any reasonable additional assurances that GBCI or the Exchange Agent may require.
A-12
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 or
evidence of GBCI stock ownership. 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 TFB 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 TFB 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 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 GBCIs 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 TFB 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 TFB 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 TFB Stock held by such holders as determined pursuant to this Agreement, in each case, without any interest. Neither GBCI nor TFB will be liable to any holder of TFB 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 TFB 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.
ARTICLE 2
CLOSING OF TRANSACTION
2.1
Effective Date
. The Merger shall be consummated at the Effective Time by the filing with and
acceptance by the Montana Secretary of State and the Arizona Secretary of State of Articles of Merger, in the form required by and executed in accordance with the relevant provisions of the MBCA and ABCA, and by the issuance of a Certificate of
Merger by the Secretary of State of Montana. Unless GBCI and TFB agree upon a different date, the Effective Date will be the date of Closing.
A-13
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 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 TFB and the Bank
. Each of TFB and 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
. TFB is a
corporation duly organized, validly existing and in good standing under the laws of the State of Arizona, 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. The Bank is duly organized, validly existing, and in good standing as a state-chartered bank under the laws of the State of Arizona 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
Corporate 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 Contract; (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, or any of their respective properties or assets is subject (each, a
Law
); or (d) any material change in the rights or obligations of any
party under any of the Material Contracts.
Schedule 3.1.2
contains a list of all consents TFB or the Bank must obtain from third parties or notices that must be provided under any Material Contract before consummation of the Merger.
A-14
3.1.3
Capital Stock
.
(a) The authorized capital stock of TFB consists of 9,000,000 shares of TFB Stock. A total of 2,311,349 shares of TFB Stock (including
all unvested restricted shares of TFB Stock) were issued and outstanding as of September 30, 2016, and as of the Execution Date, all of which shares were validly issued and are fully paid and nonassessable. No shares of preferred stock are
authorized as of the Execution Date.
(b) The authorized capital stock of the Bank consists of 3,000,000 shares of common stock,
$5.00 par value per share. A total of 100 shares of Bank common stock are issued and outstanding as of the Execution Date, all of which are owned by TFB free and clear of all Liens and validly issued, fully paid, and nonassessable, except to
the extent of any assessment required under 12 USC Section 55.
(c) Except as set forth in
Schedule 3.1.3
and
32,175 shares of TFB Stock reserved for issuance upon exercise of options duly granted under the TFB Stock Plan and outstanding as of the Execution Date (the
TFB Options
), no shares of TFB Stock are reserved for
issuance, and there are no preemptive rights or any outstanding subscriptions, warrants, options, conversion privileges, rights or commitments of TFB or 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 neither TFB nor the Bank has issued or is obligated to issue any additional shares of common stock or any other security to any other
person. Neither TFB nor the Bank has outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights, and there are no voting trusts, shareholder agreements, proxies, or other agreements or understandings in
effect with respect to the voting or transfer of any of the outstanding shares of TFB Stock.
3.1.4
Subsidiaries; Investments
.
(a) TFB has no Subsidiaries other than the Bank, and the Bank has no Subsidiaries.
(b)
Schedule 3.1.4
lists all investments (except investments in securities issued by federal, state or local government or any
subdivision or agency thereof) made by TFB or the Bank. All such investments comply with all applicable laws and regulations, including without limitation the BHC Act.
(c) Neither TFB nor the Bank owns, or controls, or has 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 TFB or the Bank, and any executive officer or director of
TFB or the Bank or any of their respective affiliates that are not specifically reflected in the TFB Financial Statements.
3.1.5
Reports and Financial Statements
.
(a)
Filing of Reports
. Since January 1, 2013, each of TFB and the Bank has filed
all reports and statements, together with any required amendments to these reports
A-15
and statements, that they were required to file with (i) the FDIC, (ii) the Federal Reserve, (iii) the Arizona Department of Financial Institutions, 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)
Delivery to Other Party of Reports
. TFB has
delivered or otherwise made available to GBCI a copy of each and any registration statement, offering circular, private placement memorandum, report, proxy statement or information statement, or similar document (collectively, its
Reports
) under the Securities Act of 1933, as amended (
Securities Act
), the Securities Exchange Act of 1934, as amended (
Exchange Act
), and state securities and Blue Sky laws
(collectively, the
Securities Laws
) filed, used or circulated by it or the Bank with respect to periods since January 1, 2013, through the Execution Date.
(c)
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 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.
(d)
Financial Statements
. Each of TFBs and the Banks balance sheets included in the TFB Financial Statements and the Bank
Financial Statements, respectively, fairly presents in all material respects (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 TFB and 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 TFB Financial Statements and the Bank Financial Statements fairly
presents the results of operations, shareholders equity and cash flows, as the case may be, of TFB and 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 TFB and 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)
Neither TFB nor the Bank are 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 TFB Financial Statements or in
Schedule 3.1.6
,
A-16
TFB and/or the Bank have 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 and assets, tangible or intangible, reflected in the TFB Financial Statements as being owned by either of them as of the Execution Date. To the Knowledge of TFB, 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 TFB, all buildings and all fixtures, equipment and
other property and assets that are material to TFBs business on a consolidated basis are owned by TFB or 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, along with the estimated cost to establish or purchase those new branches.
(d) To the Knowledge of TFB, TFB has
provided to GBCI copies of existing title policies, if any, held in its files relating to the Real Property and 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 TFB and the Bank means (A) 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; (B) any facility in which it is or was the owner or operator of the facility; and (C) 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 TFB or the Bank and any governmental entity presently in effect relating to: (A) the manufacture, generation, transport, use, treatment, storage, recycling, disposal, release, threatened release or presence of Hazardous
Substances, or (B) the protection of human health or the environment.
(iii)
Hazardous Substances
means any
substance, material or waste that is (A) defined as a hazardous substance in 42 USC Section 9601(14), (B) defined as
A-17
a pollutant or contaminant in 33 USC Section 1362(6), (C) defined as a hazardous waste in 42 USC Section 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; provided, however,
that supplies and materials used by TFB and/or the Bank for general office purposes will not be deemed to be Hazardous Substances for the purposes of this Agreement.
(b) To the Knowledge of TFB, TFB, the Bank, and the Subject Property are, and have been, in material compliance with all applicable
Environmental Laws, and no circumstances exist that would result in a material violation of such Environmental Laws.
(c) None of the
following exists, and to the Knowledge of TFB, 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 TFB, the Bank or any Subject Property, relating to:
(i) an asserted liability of TFB or 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, neither TFB nor the Bank owns, possesses or controls 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 TFB, 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 TFB, no part of the Subject Property has been or is
scheduled for investigation, monitoring or other remedial action under any applicable Environmental Law.
A-18
(f) To the Knowledge of TFB, 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
. TFB and the Bank have 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 them. Such Tax Returns are true, complete and correct in all material respects. Neither TFB nor the Bank is currently the beneficiary of any extension of time within which to file any Tax
Return. All Taxes due and owing by TFB or the Bank (whether or not shown on any Tax Return) have been timely paid or, where payment is not yet due, TFB has made an adequate provision for such Taxes in TFBs financial statements (in accordance
with GAAP). TFBs most recent financial statements reflect an adequate reserve (in accordance with GAAP) for all Taxes payable by TFB and the Bank through the date of such financial statements. Neither TFB nor the Bank has incurred any
liability for Taxes since the date of TFBs most recent financial statements outside the ordinary course of business or otherwise inconsistent with past practice.
(b)
Availability of Tax Returns
. TFB 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 TFB or the Bank for any Tax period ending after January 1, 2013.
(c)
Withholding
. TFB and the Bank have 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 TFB or 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 have been made in the TFB 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 TFB or the Bank remains unpaid. There are no waivers or extensions of any statute of limitations currently in effect with respect to Taxes of TFB or 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 TFB or the Bank.
Schedule 3.1.8(e)
lists all federal, state, local and non-U.S. income Tax Returns filed with respect to
TFB and the Bank for taxable periods ended on or after January 1, 2012, indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit.
A-19
(f)
Tax Jurisdictions
. No claim has ever been made in writing by any taxing authority in
a jurisdiction where TFB and the Bank do not file Tax Returns that TFB or the Bank is or may be subject to Tax in that jurisdiction.
(g)
Tax Rulings
. Neither TFB nor 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
. Neither TFB nor the Bank (i) has been
a member of a group filing Tax Returns on a consolidated, combined, unitary or similar basis (except for a group including solely TFB and the Bank), (ii) has any liability for Taxes of any Person (other than TFB or the Bank) 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 a party to, bound by or has any liability under any Tax sharing, allocation or
indemnification agreement or arrangement, (except for such agreements or arrangements solely between TFB and the Bank).
(i)
Change in
Accounting Method
. Neither TFB nor the Bank has agreed to make, nor is it required to make, any adjustment under IRC Section 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
. TFB and 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,
neither TFB nor the Bank has undergone an ownership change within the meaning of IRC Section 382.
(l)
U.S. Real
Property Holding Corporation
. Neither TFB nor the Bank has 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
. Neither TFB nor the Bank has been a distributing corporation or a controlled
corporation in connection with a distribution described in IRC Section 355.
(n)
Reportable Transactions
. Neither TFB
nor the Bank has 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).
A-20
(o)
IRC Section 6662
. Each of TFB and the Bank has disclosed on its federal 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)
IRC Section 280G
. Neither TFB nor the Bank has made any payments, is obligated to make any payments or is 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 each of TFB and 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
Regulatory Matters
.
(a) TFB and the Bank have complied in all material respects with, and are not in default or violation in any material respect of,
(i) any applicable Laws, including all Laws related to data protection or privacy, the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair
Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, any
regulations promulgated by the Consumer Financial Protection Bureau, the Real Estate Settlement Procedures Act and Regulation X, and any other laws or regulations relating to bank secrecy, discriminatory lending, financing or leasing practices,
money laundering prevention, and all requirements relating to the origination, sale and servicing of mortgage and consumer loans, and (ii) any posted or internal privacy policies relating to data protection or privacy, including without
limitation, the protection of personal information, and TFB has no Knowledge of, nor has it received since January 1, 2013, written notice of, any material defaults or material violations of any applicable Law.
(b) Except as disclosed in
Schedule 3.1.9
, neither TFB nor the Bank 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 have they been advised by, or have any Knowledge of facts which could give rise to an advisory notice by, such authorities that they are contemplating issuing or requesting any such order,
agreement, memorandum or similar document or undertaking.
(c) TFB and the Bank have properly administered all accounts for which they
act as a fiduciary, including accounts for which they serve as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable Law. None of
TFB, the Bank, or any director, officer or employee of TFB or the Bank has committed any material breach of trust or fiduciary duty with respect to any such fiduciary account, and the accountings for each such fiduciary account accurately reflect in
all material respects the assets of such fiduciary account.
A-21
(d) Neither TFB nor the Bank, nor, to the Knowledge of TFB, any of their respective directors,
officers, employees, agents, or any other persons acting on their behalf, (i) has violated the Foreign Corrupt Practices Act, 15 USC § 78dd-1 et seq., as amended, or any other similar applicable foreign, federal or state legal
requirement, (ii) has made or provided, or caused to be made or provided, directly or indirectly, any payment or thing of value to a foreign official, foreign political party, candidate for office or any other person while knowing or having a
reasonable belief that the person will pay or offer to pay the foreign official, party or candidate, for the purpose of influencing a decision, inducing an official to violate their lawful duty, securing an improper advantage, or inducing a foreign
official to use their influence to affect a governmental decision, (iii) has paid, accepted or received any unlawful contributions, payments, expenditures or gifts, (iv) has violated or operated in noncompliance with any export
restrictions, money laundering law, anti-terrorism law or regulation, anti-boycott regulations or embargo regulations, or (v) is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United
States Treasury Department.
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, neither TFB nor the Bank is
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 Execution Date; (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 TFB or any of its affiliates; (iv) that obligates TFB 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 TFB 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 TFB or the Bank; (vii) that limits the payment of dividends by TFB or 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, except in each case that relate to merchant banking investments by TFB or the Bank in the
ordinary course of business; (ix) that provides for payments to be made by TFB or 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 TFB or 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 $25,000 per annum (other than any such contracts which are terminable by TFB or the Bank on 60 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 TFB or 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
A-22
accordance with all applicable regulatory requirements with respect to it); (xiv) that would prevent, materially delay or materially impede TFBs ability to consummate the Merger or the
other transactions contemplated hereby; (xv) that contains a put, call or similar right pursuant to which TFB or the Bank could be required to purchase or sell, as applicable, any equity interests of any Person or assets; or (xvi) that is
otherwise not entered into in the ordinary course of business or that is material to TFB or the Bank or their financial condition or results of operations.
(b) (i) Each Material Contract is a valid and legally binding agreement of TFB or the Bank, as applicable, and, to the Knowledge of TFB,
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) TFB and the Bank have duly performed all material obligations required to be performed by it prior to the date hereof
under each Material Contract; (iii) neither TFB nor the Bank, and, to the Knowledge of TFB, 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 TFB or the Bank under any such Material Contract or provide any party thereto with the right to terminate such Material Contract.
Schedule 3.1.10
sets forth a true and complete list of (A) all Material Contracts pursuant to which consents or waivers are or may be required and (B) all notices which are required to be given, in each case, prior to the
performance by TFB of this Agreement and the consummation of the Merger, the Bank Merger and the other transactions contemplated hereby.
3.1.11
Compliance
. Each of TFB and 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 TFB or the Bank to carry on their respective businesses as they are presently
conducted. All such material permits, licenses, certificates of authority, orders and approvals are in full force and effect, and, to the Knowledge of TFB, no suspension or cancellation of any of them is threatened.
3.1.12
Knowledge as to Conditions
. To the Knowledge of TFB, 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
Litigation
. Except as shown on
Schedule 3.1.13
, no material litigation, proceeding or controversy before any court or governmental agency is pending on behalf of TFB or the Bank (other than routine foreclosure proceedings), and there is no pending
,
claim,
action or proceeding against TFB or the Bank and, to the Knowledge of TFB, no such litigation, proceeding, controversy, claim or action has been threatened or is contemplated.
3.1.14
No Material Adverse Effect
. Since December 31, 2015, (a) TFB and the Bank 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 TFB.
A-23
3.1.15
Shareholder List
. TFB has provided to GBCI a list of its shareholders as of the
most recent practicable date. To TFBs Knowledge, the shareholder list provided is a true and correct list of the names, addresses and holdings of all record holders of the TFB 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.
3.1.16
Asset Classification
.
(a)
Schedule 3.1.16
sets forth a list, accurate and complete, as of December 31, 2015, and as of June 30, 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 TFB and the Bank that have been
criticized or classified by any internal audit conducted by TFB and/or 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 3.1.16
, 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, or as of
June 30, 2016, as the case may be, 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 TFB or the Bank before the Execution
Date.
3.1.17
Insurance
. TFB and the Bank have taken all requisite action (including the making of claims and the giving of
notices) under their respective 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 insurance policies maintained by TFB or the Bank within the prior five years, including, without limitation, all directors and officers
liability and employee fiduciary policies.
3.1.18
Labor Matters
.
(a) Neither TFB nor the Bank is a party to, or is bound by, any collective bargaining agreement, contract, or other agreement or
understanding with a labor union or labor organization. Neither TFB nor the Bank is 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 TFB or the Bank is pending or, to the Knowledge of TFB, threatened. TFB has no Knowledge of any activity involving its or the Banks employees seeking to certify a
collective bargaining unit or engaging in any other organizational activity.
(b) TFB and the Bank have made available to GBCI all
personnel manuals, handbooks, or material policies, rules or procedures applicable to employees of the
A-24
Bank and the terms of their employment, and all such applicable materials are listed on
Schedule 3.1.18
. TFB and 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. Other
than as listed on
Schedule 3.1.18
, no employee of TFB or 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
TFB or the Bank (other than for salary or wages for time worked and benefits earned prior to the date of such termination). TFB has provided to GBCI a true and complete list of all independent contractors and consultants to TFB or the Bank,
including such contractor or 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.
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 TFB or the Bank, as the case may be. TFB and the Bank are not now nor have 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, incentives, bonuses, performance awards, or other compensation, or for 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 TFB or its Subsidiaries for the benefit of any employees or former employees of TFB and the Bank, including, without
limitation, all salary continuation or supplementation agreements between TFB or the Bank and any of its officers, directors, or employees (collectively, 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 its current employees or those of the Bank (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
A-25
volume submitter plan which has received an opinion or advisory letter from the Internal Revenue Service upon which TFB and/or the Bank may rely, as of the date hereof no such determination
letter has been revoked, no revocation has been threatened, and, to the Knowledge of TFB, 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
TFB, threatened. Neither TFB nor the Bank has 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 TFB or the Bank under the terms of any of its Plans have been timely
made or have been reflected in the TFB 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 TFB nor 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.
(e) Except as disclosed in the TFB Financial Statements
or in
Schedule 3.1.19
, neither TFB nor the Bank has any obligations for retiree health and life benefits.
(f) No provision
of the documents governing any Plan contains restrictions on the rights of TFB or 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 TFB Financial Statements or otherwise disclosed in this Agreement or in
Schedule 3.1.19
, the
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 or (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
have
been properly accrued in accordance with GAAP.
(h) Except as disclosed in
Schedule 3.1.19
, neither TFB nor the Bank
maintains an executive 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. To the Knowledge of TFB, the requirements of COBRA have been met with respect to each applicable Plan.
A-26
(j) Each Compensation Plan that is subject to IRC Section 409A 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
. TFB and the Bank have taken all action required to be taken 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 Arizona, applicable to it (collectively,
Takeover Laws
). TFB and the Bank have taken all action required to be taken by them 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 Articles of Incorporation and Bylaws of TFB and the Bank concerning business combination, fair
price, voting requirement, constituency requirement, or other related provisions (collectively, the
Takeover Provisions
). TFB has no shareholder rights plan, poison pill, or similar plan.
3.1.21
Opinion of Financial Advisor; Brokers or Finders Fees
. The board of directors of TFB has received the opinion
(which, if initially rendered verbally, has been or will be confirmed by a written opinion, dated the same date) of Keefe, Bruyette & Woods, Inc., to the effect that, as of the date of such opinion, and based upon and subject to the
factors, assumptions, and limitations set forth therein, the per share merger consideration to be received by the holders of TFB common stock in the Merger is fair, from a financial point of view, to such holders (the
Fairness
Opinion
). Such opinion has not been amended or rescinded as of the date hereof. Except for the fees of Keefe, Bruyette & Woods, Inc., to obtain the Fairness Opinion and for advisory services pursuant to an agreement dated
July 28, 2016, that has been disclosed to GBCI, no agent, broker, Person or firm acting on behalf of TFB or the Bank, or under their authority, is or will be entitled to any commission, brokers, finders or financial advisory fee in
connection with the Transaction.
3.1.22
Completeness of Representations
. No representation or warranty made by or with respect to
TFB or 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.
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 TFB and 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.
A-27
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
); (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 and 117,187,500 shares of GBCI
Common Stock, par value $0.01 per share. No shares of Preferred Stock are outstanding and a total of 76,525,402 shares of GBCI Common Stock were issued and outstanding as of September 30, 2016, all of which were validly issued and are
fully paid and nonassessable. As of September 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 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.
(c) The shares of GBCI Common Stock to be issued pursuant to this Agreement, when issued in accordance with the terms of this Agreement, will
be duly authorized, validly issued, fully paid and non-assessable and subject to no preemptive rights.
3.2.4
Reports and Financial
Statements
.
(a)
Filing of Reports
. Since January 1, 2013, GBCI and each of its Subsidiaries have 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),
A-28
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 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 in all material respects (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
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.
3.2.7
Absence of Regulatory Action
. Neither GBCI nor any of its Subsidiaries is, to the Knowledge of GBCI, in material violation of any applicable Laws (including, without limitation, all Laws related to data protection or privacy, the USA PATRIOT
Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair
Debt Collection Practices Act, the Electronic Fund Transfer Act, the Dodd-Frank Wall Street Reform and Consumer Protection
A-29
Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Real Estate Settlement Procedures Act and Regulation X, and any other laws or regulations relating to bank
secrecy, discriminatory lending, financing or leasing practices, money laundering prevention, and all requirements relating to the origination, sale and servicing of mortgage and consumer loans). Neither 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.
3.2.8
Knowledge as to Conditions
. GBCI has no Knowledge of any reason why the approvals, consents
and waivers of governmental authorities referred to in Section 5.1 cannot be obtained.
3.2.9
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 Merger.
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.
ARTICLE 4
CONDUCT AND TRANSACTIONS PRIOR TO CLOSING
4.1
Conduct of TFBs and the Banks Businesses Prior to Closing
. TFB and the Bank covenant
that, from the Execution Date and prior to Closing:
4.1.1
Availability of Books, Records and Properties
.
(a) Upon reasonable prior written notice to TFB, subject to applicable law, the books, records, properties, contracts and documents of TFB
and the Bank will be available at 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,
A-30
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, contravene any law, order, judgment or decree. TFB and the Bank will reasonably cooperate in such inspection and audit, and make available all information reasonably requested by or on behalf of GBCI.
(b) Upon prior written reasonable request by GBCI, TFB and the Bank will request that any third parties involved in the preparation or review
of the TFB Financial Statements or TFB Subsequent 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
under subparagraphs (g), (h), and (j) below), subject to applicable law and except as required by the FDIC or the Federal Reserve (so long as GBCI receives prior written notice of such required action) or specifically contemplated by this
Agreement, TFB and the Bank will conduct their respective 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 TFB Stock or the shares of the Bank; 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 TFB Stock, or assets of TFB;
(c) acquire, sell, transfer, assign,
encumber or otherwise dispose of any material assets having a value greater than $100,000 or make any material commitment other than in the ordinary and usual course of business;
(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)
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
$1,000,000 without prior consultation with GBCI; which consultation 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 $100,000) or a leasehold interest in any real property, except those
A-31
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 $25,000 (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 (i) entered into in the ordinary course of business, consistent with past practices, and (ii) 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 $25,000, 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) (A) 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 (B) 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;
(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 (A) by GAAP,
(B) for tax purposes, or (C) 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 $25,000 per project or related series of projects or $50,000 in the aggregate except for emergency repairs or
replacements;
A-32
(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 their ability or the ability of GBCI to obtain any necessary approvals, consents or waivers of any governmental authority required for the Merger or to perform in all material respects
their respective covenants and agreements under this Agreement.
4.1.3
TFB and Bank Pre-Closing Actions
. Following execution of
this Agreement and prior to Closing, TFB or the Bank, as applicable, shall:
(a) Take all action necessary to satisfy any contractual
notice or consent requirements under the Material Contracts arising from the Transaction.
(b) Except as otherwise provided in this
Agreement, terminate by all necessary and appropriate actions of the boards of directors of TFB and the Bank, as applicable, such Plans (including Compensation Plans) maintained by TFB or the Bank as may be requested by GBCI in connection with the
Closing (after satisfaction or waiver of all Closing conditions) and for which no participant consent is required; provided that such request by GBCI is made at least 10 days prior to Closing. If requested by GBCI, TFB and 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, TFB and the Bank shall, prior to the date of calculation of TFB 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 and Compensation Plans. All resolutions, notices, or other documents issued, adopted or executed by TFB or 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 corporate action as may be reasonably requested by GBCI in connection with the termination or merger of the TFB 401(k) Plan
provided that such request by GBCI is made at least 10 days prior to Closing. GBCI shall take all reasonable action necessary to merge the 401(k) Plan with GBCIs 401(k) Plan as soon as is administratively possible, assuming the 401(k)
Plan is deemed eligible to be merged, or to otherwise permit employees of the Bank who continue employment with Glacier Bank after the Effective Time to roll over any eligible rollover distributions (within the meaning of IRC
Section 401(a)(31), inclusive of loans) in cash or notes (in the case of loans) in an amount equal to the full account balance distributed to any such continuing employee from the 401(k) Plan to GBCIs 401(k) Plan.
(d) 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.
A-33
(e) (i) Prepare and use reasonable best efforts to have executed by all employees described
on
Schedule 4.1.3
an acknowledgement and release in a form reasonably acceptable to GBCI in exchange for payment of amounts described in such schedule, and (ii) prior to the date of calculation of TFB Closing Capital, accrue for all such
payments to affected employees and make arrangements for such payments to be made at or prior to the Closing.
(f) (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.
4.1.4
Maintenance of Properties
. TFB and the Bank will in all material respects maintain
their respective properties and equipment (and related insurance or its equivalent) in accordance with good business practice.
4.1.5
Preservation of Business Organization
. Each of TFB and the Bank will use its commercially-reasonable efforts to: (a) preserve its respective business organization; (b) retain the services of management and employees; and
(c) preserve the goodwill of suppliers, customers and others with whom TFB and the Bank have business relations.
4.1.6
Senior
Management
. Except as otherwise provided in this Agreement and excluding resignations, without prior consultation with GBCI, TFB and the Bank will not make any change with respect to present management personnel having the rank of vice-president
or higher.
4.1.7
Compensation
. Except as disclosed in
Schedule 4.1.7
, TFB and the Bank will not permit any increase in
the current or deferred compensation payable or to become payable by TFB or the Bank to any of its directors, officers, employees, agents or consultants other than normal increments in compensation in accordance with TFBs and the Banks
established policies with respect to the timing and amounts of such increments. Without the prior written approval of GBCI, TFB and the Bank will not commit to, execute or deliver any employment agreement with any party not terminable without
expense with two weeks notice.
4.1.8
Updates of Financial Statements
. TFB will deliver to GBCI (a) unaudited balance
sheets and related statements of income and shareholders equity for (i) the Bank for each month 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
and (ii) TFB on a consolidated and parent-only basis for each month ending after the Execution Date and before Closing or the Termination Date, as the case may be, and (b) audited consolidated balance sheets for TFB as of December 31,
2016, and 2015, and the related audited statements of income, cash flows and changes in shareholders equity for each of the fiscal years then ended on or before February 28, 2017. The Subsequent TFB Financial Statements: (w) will be
prepared from the books and records of TFB and the Bank; (x) will present fairly the financial position and operating results of TFB and/or the Bank at the times indicated and for the periods covered; (y) will be prepared in accordance
with GAAP (except for the absence of notes and exceptions from GAAP identified in
A-34
Section 3.1.5) and with the regulations promulgated by applicable regulatory authorities, to the extent then applicable; and (z) will reflect all liabilities, of TFB and/or 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 TFB that are required to be reflected in footnotes in accordance with GAAP and not recorded on the Subsequent TFB Financial Statements will be disclosed in writing to GBCI.
4.1.9
Update Schedules
. From the Execution Date until Closing, TFB will promptly revise and supplement the schedules to this Agreement
prepared by or on behalf of TFB or the Bank to enable such schedules to remain accurate and complete in all material respects. Notwithstanding anything to the contrary contained herein, supplementation of such Schedules following the execution of
this Agreement will not be deemed a modification of TFBs representations or warranties contained in this Agreement.
4.1.10
Acquisition Proposal
. TFB and 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. TFB agrees that neither
it nor any of its Subsidiaries will, and TFB will direct and use its best efforts to cause its and its Subsidiaries directors, officers, employees, agents and representatives (including, without limitation, any investment banker, attorney or
accountant retained by it or any of its Subsidiaries) not to 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 TFB) 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 TFB receives an unsolicited bona fide
Acquisition Proposal and the board of directors of TFB determines prior to approval of the Transaction by TFBs 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, TFB 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, TFB and such Person shall have executed a confidentiality agreement on terms at least as favorable to TFB as those contained in its confidentiality agreement with GBCI. TFB will further notify
GBCI in writing immediately (and in any event within two Business 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 TFB, 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, together with a copy of any
written proposals received. TFB will take the necessary steps to inform the appropriate individuals or entities referred to in the first sentence hereof of the obligations undertaken in this Section 4.1.10.
4.1.11
Status of Title/Leasehold Interests
. TFB will use its reasonable best efforts to provide GBCI, no later than 30 days after
the Execution Date, title commitments for the Real Property issued by title insurance companies reasonably satisfactory to the parties
A-35
(the
Title Companies
), the cost of which shall be borne and paid by GBCI. These title commitments must show the current status of title to the Real Property. Within
15 days after the date on which TFB delivers all of the title reports to GBCI for its review, GBCI will inform TFB in writing whether, and in what manner, it objects to any of the exceptions to title shown on any of the title reports. TFB will,
within 10 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. TFB 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 TFB or the Bank as of the
Execution Date or (b) monetary or non-monetary exceptions disclosed in
Schedule 3.1.6
or in the TFB Financial Statements. At Closing, if requested by GBCI, TFB will cause the Title Companies to provide GBCI with standard coverage
title insurance policies issued with respect to each of the Properties, in an amount commensurate with the value of each such Property as agreed upon by GBCI and TFB, 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, TFB will notify its directors and officers liability insurers of the Merger and of all pending or, to the Knowledge of TFB, threatened claims, actions, suits, proceedings or
investigations asserted or claimed against any Person entitled to indemnification pursuant to Section 6.3 and known to TFB, 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
. TFB and the Bank will permit GBCI and its advisors to conduct an examination of
the Banks loans to determine credit quality and the adequacy of its ALLL and to establish appropriate accounting adjustments under FAS141R. GBCI and its advisors will have continued access to the Banks loans through Closing to update its
examination. At GBCIs reasonable request, the Bank will provide GBCI with current reports updating the information set forth in
Schedule 3.1.16
.
4.1.14
Continuing Representation and Warranty
. Neither TFB nor any of its Subsidiaries will 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.
4.2
Registration Statement; TFB 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 to be issued in the Merger, and the
parties will prepare a related prospectus/proxy statement (
Prospectus/Proxy Statement
) to be mailed, together with any amendments and supplements thereto, to TFBs shareholders.
A-36
(b) The parties will cooperate with each other in preparing the Registration Statement and
Prospectus/Proxy Statement, and will use their 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. When the Registration Statement becomes effective, and at all times subsequent to such effectiveness (up to and including the date of the
TFB 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 TFB relating to TFB and 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. TFB will pay all costs associated with its review and preparation of the Registration Statement and the Prospectus/Proxy Statement. TFB 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
. TFB 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
TFB
Meeting
). The TFB Meeting will be held on the earliest practical date after the date the Prospectus/Proxy Statement may first be sent to TFBs shareholders without objection by applicable governmental authorities. The Board of
Directors of TFB will recommend approval of this Agreement to TFBs shareholders, and shall not withdraw, modify, or qualify its recommendation unless, subsequent to the Execution Date, TFB receives a Superior Proposal and the board of
directors of TFB determines, in good faith and after consultation with independent legal counsel, that it would be inconsistent with its fiduciary duties not 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 Merger.
A-37
GBCI will provide copies of such applications for review by TFB 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 a waiver to be sought from the Federal Reserve with respect to the Merger; (b) an application to the Commissioner of the Montana Division and Arizona Department of Financial
Institutions and related filings regarding the Transaction; and (c) filings and coordination with the offices, of the Secretaries of State of Montana and Arizona with respect to the Merger and the Bank Merger. TFB and the Bank will cooperate
and use 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. TFB and the Bank shall, upon reasonable 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, TFB, 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 Merger will occur upon, and be determined by, the mutual
consent of TFB 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 TFB and Glacier Bank or the Bank to consummate the Merger or 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 Execution Date to the Effective Time, TFB and the Bank shall
cause one or more of their respective representatives to confer with representatives of GBCI and Glacier Bank and report the general status of its ongoing operations at such times as GBCI and Glacier Bank may reasonably request. Representatives of
GBCI, Glacier Bank, TFB, 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 processing and related electronic informational systems to those used by GBCI and Glacier Bank,
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 neither TFB nor the Bank shall be obligated to take any such action prior to the Effective Time and, unless TFB and the Bank otherwise agrees, no conversion shall take place prior to the Effective Time; provided, however, no
such request by or behalf of GBCI or Glacier Bank shall interfere materially with the performance of duties by any employee of TFB or the Bank.
A-38
4.8
Notice
. The parties will provide each other with prompt
written notice of:
4.8.1 Any events that, individually or in the aggregate, can reasonably be expected to have a Material Adverse Effect
with respect to them.
4.8.2 The commencement of any 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.
4.8.3 In the case of TFB and its Subsidiaries, 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.
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 Merger otherwise fails to be consummated, each party to
this Agreement will promptly (i) return to the other all confidential documents obtained from them and (ii) not use or disclose any nonpublic information obtained under or in connection with this Agreement or in connection with the
Transaction.
4.10
Availability of GBCIs Books, Records, and Properties
. GBCI will make its
books, records, properties, contracts and documents available during business hours with reasonable advance notice to TFB and its counsel, accountants and other representatives. 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.
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 and its Subsidiaries nor TFB and 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 IRC Section 368(a).
4.13
TFB Closing Capital
. No earlier than the 12
th
Business Day nor later than the 10
th
Business Day before the Closing, TFB shall calculate in good faith the estimated TFB Capital as of Closing and shall provide GBCI with a copy of the proposed
Subsequent Bank Financial
A-39
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 TFB Capital, and any other documentation reasonably requested by GBCI for purposes of confirming the
amount of such TFB Capital. GBCI shall review such materials and, within three Business Days following receipt thereof, notify TFB as to whether GBCI accepts or disputes the amount of the TFB Capital, which such acceptance or dispute shall not be
unreasonably withheld, conditioned or delayed. If GBCI disputes such calculation in good faith, it shall describe in its notice its specific requested changes or adjustments. If GBCI and TFB 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 TFB the resolution of such disputed matters and the effect of such determinations on
the calculation of the TFB Capital as of Closing, and such determinations shall be final, binding and conclusive unless GBCI and TFB mutually agree upon a different amount. The TFB Capital as of Closing, as determined and agreed upon in writing by
GBCI and TFB in accordance with this Section 4.13, is the
TFB 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 TFB, on the other hand, and TFBs portion shall be an expense in the calculation of the TFB Closing Capital.
4.14
Transaction Related Expenses
. No later than the
10
th
Business Day before Closing, TFB 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 TFB as to whether GBCI accepts or disputes the amount of the Transaction Related Expenses, which such acceptance or dispute shall not be unreasonably withheld, conditioned, or delayed. If GBCI disputes
such calculation in good faith, it shall describe in its notice its specific requested changes or adjustments. If GBCI and TFB 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 TFB in accordance with this Section 4.14, are the
Final Transaction Related Expenses
.
4.15
Payment of Dividend
. To the extent the TFB Closing Capital exceeds the Closing Capital Requirement,
TFB may, upon written notice to GBCI not less than 10 Business Days prior to Closing and effective immediately prior to the Effective Time, declare and pay a special dividend to its shareholders in the amount of such excess in lieu of any positive
adjustment to the Per Share Cash Consideration under Section 1.2.3(d).
4.16
Reasonable Best
Efforts
. Subject to the terms and conditions of this Agreement, each party will use its reasonable best efforts in good faith to take, or cause to be taken, all
A-40
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 Merger by February 28, 2017, and
in any case, as soon as reasonably practicable thereafter, 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 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 TFB and 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 TFB and 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). TFB and the Bank will have delivered to GBCI a certificate to that effect, executed by a duly authorized officer of TFB and the Bank and dated as of Closing.
5.2.2
Compliance
. TFB will have performed and complied, and will have caused the Bank to perform and comply, in all material respects
with all terms, covenants and conditions of this Agreement on or before Closing. TFB will have delivered to GBCI a certificate to that effect, executed by a duly authorized officer of TFB and dated as of Closing.
5.2.3
Closing Capital and Financial Statements
. TFB will have delivered to GBCI the financial information set forth in
Section 4.13, and the parties will have agreed upon the amount of TFB Closing Capital pursuant to the terms of Section 4.13.
A-41
5.2.4
Transaction Related Expenses
. TFB 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 June 30, 2016, and since the Execution Date, 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 TFB or the commencement of any proceeding against TFB or the Bank that,
individually or in the aggregate, can reasonably be expected to have a Material Adverse Effect with respect to TFB.
5.2.6
Financial
Condition
. In the opinion of the Executive Officers of TFB and 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 Merger.
5.2.8
Opinion of Counsel
. Counsel to TFB 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 TFB, an opinion addressed to TFB 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, each of the Merger and 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 commitments by the Title Companies to issue the policies required under Section 4.1.11.
5.2.11
Corporate and Shareholder Action
. Each of the following will have approved or ratified the Merger or the Bank Merger, as
applicable:
(a) The Boards of Directors of TFB and the Bank;
(b) TFB, as sole shareholder of the Bank; and
(c) The shareholders of TFB.
5.2.12
Resignation of Directors
. The directors of TFB and the Bank will have tendered their written resignations from the respective
Board of Directors, to be effective upon consummation of the Merger or the Bank Merger, as applicable.
5.2.13
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.
A-42
5.2.14
No Change in Loan Review
. TFB will have provided to GBCI the reports reasonably
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 3.1.16
or
(b) information revealed during GBCIs previous examinations of the Banks loans, in either case which change constitutes a Material Adverse Effect.
5.2.15
Provision for Payments
. TFB or the Bank shall have complied with and made provision for all payments contemplated by
Section 4.1.3(e)(ii) of this Agreement.
5.3
Conditions to Obligations of TFB
. All obligations
of TFB 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 TFB 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 TFB a certificate to
that effect, executed by a duly authorized officer of GBCI and Glacier Bank and dated as of Closing.
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 Merger.
5.3.4
No Material Adverse Effect
. Since June 30, 2016, (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 (a) the Board of Directors of GBCI, (b) GBCI, as the sole shareholder of Glacier Bank, and (c) Glacier Bank will have approved the Merger or the Bank Merger, as applicable.
A-43
5.3.6
Registration Statement; Listing
. The Registration Statement will have become
effective as specified in Section 5.2.13, 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 Merger shall have been approved for quotation on 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
Blue Sky Filings
. GBCI will have received the state securities laws or Blue Sky
permits and approvals specified in Section 4.11.
5.3.8
Tax Opinion
. TFB will have obtained from Hogan Lovells US LLP and
delivered to GBCI, an opinion addressed to TFB 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, each of the Merger and the
Bank Merger will be a reorganization within the meaning of IRC Section 368(a).
5.3.9
Payments to the Exchange Agent
. GBCI
will have deposited the Merger Consideration with the Exchange Agent.
5.3.10
Approval of TFB Shareholders
. The shareholders of TFB
will have approved this Agreement and the Merger by the requisite vote under Arizona law and TFBs Articles of Incorporation, as applicable.
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. Such agreements will take effect at the Effective Date unless otherwise noted in
the applicable agreement.
6.2
Employee Benefit Issues
.
6.2.1
Comparability of Benefits
. GBCIs and Glacier Banks personnel policies will apply to any employees of TFB and 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.
6.2.2
Treatment of Past Service
. For purposes of such participation, current employees
prior service with TFB and/or the Bank will constitute prior service with GBCI or Glacier Bank for purposes of determining eligibility and vesting (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). Following termination of any similar Plan with the Bank, if Employees become eligible to participate in a medical, dental or health plan of GBCI or Glacier Bank
upon such termination, GBCI and/or Glacier Bank, as
A-44
applicable, shall make all commercially reasonable efforts to cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the
applicable medical, health or dental plans of GBCI or Glacier Bank, (ii) honor under such plans any deductible, co-payment and out-of-pocket expenses incurred by the employees and their beneficiaries during the portion of the calendar year
prior to such participation, and (iii) waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to such employee on or after the Effective Time, in each case to the extent such employee had
satisfied any similar limitation or requirement under an analogous Plan prior to the Effective Time. GBCI and/or Glacier Bank, as applicable, shall assume and honor, under the vacation policies of TFB and the Bank as set forth on
Schedule
6.2.2
, the accrued but unused vacation time of the Employees prior to the Effective Time, less the difference between any accrual based on five weeks of vacation annually and the four week maximum to be available to employees after Closing.
6.2.3
No Contract Created
. Nothing in this Agreement will give any employee a right to continuing employment.
6.2.4
Severance Payments
. Bank employees who are not entitled to severance under the Compensation Plan payments 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 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.
6.3
Indemnification of Directors and Executive Officers
. For a period of six years from and after the Effective Date, GBCI will indemnify and defend each present and former director and officer of TFB and 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 Merger to the fullest extent that TFB and/or 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, provided, however that all rights to indemnification in respect of any claim
asserted or made in accordance with this Section 6.3 shall continue until the final disposition of such claim. GBCI shall advance expenses to the indemnified parties to the fullest extent that such indemnified parties would be entitled under
TFBs Bylaws. Any determination required to be made with respect to whether the conduct of an officer or director is entitled to indemnification complies with the standard set forth under TFBs or 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. GBCI will use reasonable best efforts to
cause to be maintained in effect (with reputable and financially sound insurers) for a period of six years after the Effective Date director and officer liability insurance with respect to claims arising from facts or events that occurred before the
Effective Time.
A-45
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 May 31, 2017,
either GBCI or TFB may terminate this Agreement and the Merger if both of the following conditions are satisfied:
7.1.1 the terminating
partys board of directors decides to terminate by a majority vote of all of its members; and
7.1.2 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 GBCI Average Closing Price Greater Than $32.52
.
7.2.1
GBCIs Right to Terminate
. By specific action
of its board of directors, GBCI may terminate this Agreement and the Merger by written notice to TFB on the Business Day immediately following the Determination Date, if the GBCI Average Closing Price is greater than $32.52 (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 TFB makes the election set forth in Section 7.2.2.
7.2.2
TFBs Right to Adjust Consideration
. If GBCI
provides written notice to TFB in accordance with Section 7.2.1, then within three Business Days following TFBs receipt of such notice, TFB may elect by written notice to GBCI to accept an adjustment to the Total Stock Consideration
through the issuance of fewer GBCI Shares; in such event, the Per Share Stock Consideration shall be the number of GBCI Shares equal to the quotient obtained by dividing (a) the quotient obtained by dividing (i) the result of (A) the
number of shares of TFB Stock outstanding at the Effective Time, multiplied by (B) the Per Share Stock Consideration, further multiplied by (C) $32.52, by (ii) the GBCI Average Closing Price (rounded up to the nearest whole share),
and (b) the number of shares of TFB 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 TFB makes such election to
accept a decrease in the number of GBCI Shares to be issued as the Per Share Stock Consideration, 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 has been adjusted).
7.3
Termination Due to GBCI Average Closing Price Less Than
$24.04
.
7.3.1
TFBs Right to Terminate
. By specific action of its board of directors, TFB may terminate this Agreement
and the Merger by written notice to GBCI on the Business Day immediately following the Determination Date, if the GBCI Average Closing Price is (a) less than $24.04 but not less than $22.62 and the price of GBCI Common Stock has, during
A-46
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 $22.62 (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 election set forth in Section 7.3.2.
7.3.2
GBCIs Right to Adjust
Consideration
. If TFB 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 TFB to (a) in the event of a
termination pursuant to Section 7.3.1(a), adjust the Per Share Stock Consideration (or Per Share Cash Consideration, or a combination thereof) 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 TFB Stock outstanding at the Effective Time, multiplied by (ii) the Per Share Stock Consideration, multiplied by (iii) $24.04, 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 in GBCIs discretion the Per Share Cash Consideration, or a combination thereof) 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 TFB Stock outstanding at the Effective Time, multiplied by (ii) the Per Share Stock Consideration, multiplied by
(iii) $22.62.
If GBCI makes such election to increase the Per Share Stock Consideration or Per Share Cash Consideration, 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 and/or Per Share Cash Consideration has been adjusted).
7.4
Other Grounds for Termination
. This Agreement and the Merger may be terminated at any time before
Closing (whether before or after applicable approval of this Agreement by TFBs shareholders, unless otherwise provided) by TFB (on behalf of itself and the Bank) or GBCI (on behalf of itself and Glacier Bank) as follows:
7.4.1
Mutual Consent
. By mutual consent of TFB 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 TFB 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 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 TFB 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-47
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 thirty 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 TFB) 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 thirty 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 as described below.
7.4.5
Failure to Recommend or Obtain Shareholder Approval
. By GBCI (provided that GBCI is not then in material breach of any of its
representations, warranties, covenants or other agreements in this Agreement), if (a) TFBs Board of Directors (i) fails to recommend to its shareholders the approval of the Merger or (ii) modifies, withdraws, or changes in a
manner adverse to GBCI its recommendation to shareholders to approve the Merger; or (b) regardless of whether TFBs Board of Directors recommends to its shareholders the approval of the Merger, TFBs shareholders elect not to approve
the Merger.
7.4.6
Impracticability
. By either GBCI or TFB, 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 Merger has become inadvisable or impracticable by reason of
actions taken by the federal government or the governments of the States of Montana or Arizona to restrain or invalidate the Merger or this Agreement.
7.4.7
Dissenting Shares
. By GBCI, if holders of 10 percent or more of the outstanding shares of TFB Stock are Proposed Dissenting
Shares.
7.4.8
Superior ProposalTermination by TFB
. By the board of directors of TFB 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 TFB may not
A-48
terminate this Agreement pursuant to this Section 7.4.8 unless (a) it has not breached 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 TFB 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 TFBs board of directors to
proceed with the 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 to TFB if (i) an Acquisition Event will have
occurred or (ii) a third party will have made a proposal to TFB or its shareholders to engage in or entered into an agreement with respect to an Acquisition Event, and this Agreement and the Merger are not approved at the TFB Meeting.
7.5
Termination Fee Payable by TFB
. Due to expenses, direct and indirect, incurred by GBCI in
negotiating and executing this Agreement and in taking steps to effect the Merger, TFB will pay to GBCI a termination fee of $400,000 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 TFB 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 TFB in
negotiating and executing this Agreement and in taking steps to effect the Merger, GBCI will pay to TFB a termination fee of $400,000 if TFB terminates this Agreement pursuant to Section 7.4.3 (breach of representation) or Section 7.4.4
(breach of covenant). If such termination fee becomes payable pursuant to this Section 7.6, it will be payable on TFBs demand and must be paid by GBCI within three Business Days following the date of TFBs demand.
7.7
Break-Up Fee
. If this Agreement is terminated pursuant to Section 7.4.5 (Failure to Recommend),
Section 7.4.8 (Superior ProposalTermination by TFB), or Section 7.4.9(i) (Superior ProposalTermination by GBCIImmediate Acquisition Event), then TFB will immediately pay to GBCI $2,500,000 (the
Break-Up
Fee
). If this Agreement is terminated pursuant to Section 7.4.9(ii) (Superior ProposalTermination by GBCISubsequent Acquisition Event)
and
prior to or within one year after such termination, TFB or the Bank enters
into an agreement, or publicly announces an intention, to engage in an Acquisition Event, or within 12 months after such termination an Acquisition Event will have occurred, then TFB will promptly following such entry, announcement, or
occurrence 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 Section 7.5, 7.6, or 7.7, 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 the termination fees and Break-Up Fee are integral parts of the transactions contemplated by this Agreement and constitute liquidated damages and not a penalty.
A-49
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:
|
|
|
GBCI:
|
|
Glacier Bancorp, Inc.
49 Commons Loop
Kalispell, Montana 59901
Attn: President and CEO
Email(s): mblodnick@glacierbancorp.com
rchesler@glacierbancorp.com
|
|
|
with a copy to:
|
|
Miller Nash Graham & Dunn LLP
Pier
70
2801 Alaskan Way, Suite 300
Seattle, Washington
98121-1128
Attn: Stephen M. Klein
David G. Post
Email: stephen.klein@millernash.com
david.post@millernash.com
|
|
|
TFB and the Bank:
|
|
TFB Bancorp, Inc.
111689 South Foothills
Blvd.
Yuma, Arizona 85367
Attn: Mary Lynn D. Lenz,
President and CEO
Email: marylynn.lenz@foothillsbank.com
|
|
|
with a copy to:
|
|
Hogan Lovells US LP
Columbia Square
555 13
th
Street, N.W.
Washington, D.C. 20004
Attn: Richard Schaberg
Email: richard.schaberg@hoganlovells.com
|
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
A-50
comply with the preceding sentence are not effective. In accordance with this Section 8.2, a party may extend the time for the performance of any of the obligations or other acts of any
other party, and may waive:
8.2.1 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;
8.2.2 compliance with any of the covenants of any other party; and
8.2.3 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-Related 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 6.2 (Employee Benefit Issues) and Section 6.3 (Indemnification), will survive 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 Effective Time, and neither GBCI, Glacier Bank, TFB 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 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
A-51
breach or alleged breach of this Agreement, to arbitration under the American Arbitration 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 TFB Meeting; provided, however, that after approval by
TFBs shareholders, no amendment will be made changing the form or reducing the amount of consideration to be received by the shareholders of TFB 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]
A-52
This Plan and Agreement of Merger is dated as of the date first written above.
|
|
|
GLACIER BANCORP, INC.
|
|
|
By:
|
|
/s/ Michael J. Blodnick
|
|
|
Michael J. Blodnick, President and CEO
|
|
GLACIER BANK
|
|
|
By:
|
|
/s/ Michael J. Blodnick
|
|
|
Michael J. Blodnick, CEO
|
|
|
By:
|
|
/s/ Randall M. Chesler
|
|
|
Randall M. Chesler, President
|
|
TFB BANCORP, INC.
|
|
|
By:
|
|
/s/ Mary Lynn D. Lenz
|
|
|
Mary Lynn D. Lenz, President and CEO
|
|
THE FOOTHILLS BANK
|
|
|
By:
|
|
/s/ Mary Lynn D. Lenz
|
|
|
Mary Lynn D. Lenz, President and CEO
|
[Signature Page to Plan and Agreement of Merger]
EXHIBIT A
Parties to Recital E
Directors
Robert Barkley
Ram R.
Krishna
Mary Lynn D. Lenz
Tom Pancrazi
William Savory
David S. Sellers
Mark R. Smith
Scott Spencer
John R.
Sternitzke
Significant Shareholder
The Spencer 2013 Irrevocable Trust
A-1
EXHIBIT B
Form of Transaction-Related Expenses Exhibit
B-1
Exhibit B to Merger Agreement dated November 15, 2016
|
|
|
|
|
|
|
Transaction Related Expenses ($000s)
|
|
|
|
Transaction
Related Expenses
(1)
|
|
Management Change-In-Control Costs
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
Other
|
|
|
|
|
|
|
Total:
|
|
|
|
$
|
|
|
|
The Maximum Transaction Expense Amount for management change-in-control costs is $170,000. To the extent management change-in-control costs exceed $170,000, the amount in excess of $170,000 shall be treated
as a liability in the calculation of TFB Closing Capital.
|
|
|
|
|
Vendor Termination and Deconversion Fees
(2)
(3)
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Total:
|
|
|
|
$
|
|
|
|
The Maximum Transaction Expense Amount for vendor termination and deconversion fees is $2,750,000. To the extent vendor termination and deconversion fees exceed $2,750,000, the amount in excess of $2,750,000
shall be treated as a liability in the calculation of TFB Closing Capital.
|
|
|
|
|
Professional Advisory Fees
|
|
|
|
|
|
|
Investment Banking Advisory
|
|
|
|
$
|
|
|
Investment Banking Fairness Opinion
|
|
|
|
|
|
|
Legal Services
|
|
|
|
|
|
|
Auditor
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Total:
|
|
|
|
$
|
|
|
The Maximum Transaction Expense Amount for professional advisory fees is $1,230,000. To the extent professional
advisory fees exceed $1,230,000, the amount in excess of $1,230,000 shall be treated as a liability in the calculation of TFB Closing Capital.
B-2
|
|
|
|
|
|
|
Salary Continuation Plan CIC Accrual Costs
|
|
|
|
|
|
|
(4)
|
|
|
|
$
|
|
|
Other
|
|
|
|
|
|
|
Total:
|
|
|
|
$
|
|
|
The Maximum Transaction Expense Amount for salary continuation plan change-in-control accrual costs is $471,000.
To the extent salary continuation plan change-in-control accrual costs exceed $471,000, the amount in excess of $471,000 shall be treated as a liability in the calculation of TFB Closing Capital.
(1)
|
To be determined and agreed upon by the parties immediately prior to Closing in accordance with Section 4.14 of the Merger Agreement
|
(2)
|
Calculated assuming the data processing conversion occurs on , 2017, with the termination penalty calculated using the most-recently available
monthly payments (as of the respective dates of calculation)
|
(3)
|
Assuming a termination date of , 2017
|
(4)
|
Assuming a closing date of , 2017
|
For
purposes of this Exhibit B Maximum Transaction Expense Amounts means each of the individual Maximum Transaction Expense Amounts set forth above.
B-3
APPENDIX B
Arizona Revised Statutes
TITLE 10 CORPORATIONS AND ASSOCIATIONS
CHAPTER 13. DISSENTERS RIGHTS
Article 1 Dissent and Payment for Shares
Sections 10-1301 through 10-1303;
Article 2 Procedure for Exercise of Dissenters Rights
Sections 10-1320 through 10-1328; and
Article 3 Judicial Appraisal of Shares
Sections 10-1330 and 10-1331
Article 1
Dissent and Payment for Shares
10-1301.
Definitions
In this article, unless the context otherwise requires:
1.
Beneficial shareholder means the person who is a beneficial owner of shares held in a voting trust or by a nominee as the record shareholder.
2. Corporation means the issuer of the shares held by a dissenter before the corporate action or the surviving or acquiring corporation by merger
or share exchange of that issuer.
3. Dissenter means a shareholder who is entitled to dissent from corporate action under section 10-1302 and
who exercises that right when and in the manner required by article 2 of this chapter.
4. Fair value with respect to a dissenters
shares means the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion is inequitable.
5. Interest means interest from the effective date of the corporate action until the date of payment at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and equitable under the circumstances.
6. Record shareholder
means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.
7. Shareholder means the record shareholder or the beneficial shareholder.
B - 1
10-1302.
Right to dissent; applicability
A. A shareholder of a domestic corporation is entitled to dissent from and obtain payment of the fair value of the shareholders shares in the event of
any of the following corporate actions:
1. Consummation of a plan of merger to which the corporation is a party if either:
(a) Shareholder approval is required for the merger by section 10-1103 or the articles of incorporation and if the shareholder is entitled to vote on the
merger.
(b) The corporation is a subsidiary that is merged with its parent under section 10-1104.
2. Consummation of a plan of interest exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan.
3. Consummation of a sale or exchange of all or substantially all of the property of the corporation other than in the
usual and regular course of business, if the shareholder is entitled to vote on the sale or exchange, including a sale in dissolution, but not including a sale pursuant to a court order or a sale for cash pursuant to a plan by which all or
substantially all of the net proceeds of the sale will be distributed to the shareholders within one year after the date of sale.
4. An amendment of the
articles of incorporation that materially and adversely affects rights in respect of a dissenters shares because it either:
(a) Alters or abolishes
a preferential right of the shares.
(b) Creates, alters or abolishes a right in respect of redemption, including a provision respecting a sinking fund
for the redemption or repurchase, of the shares.
(c) Alters or abolishes a preemptive right of the holder of the shares to acquire shares or other
securities.
(d) Excludes or limits the right of the shares to vote on any matter or to cumulate votes other than a limitation by dilution through
issuance of shares or other securities with similar voting rights.
(e) Reduces the number of shares owned by the shareholder to a fraction of a share if
the fractional share so created is to be acquired for cash under section 10-604.
5. Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, the bylaws or a resolution of the board of directors provides that voting or nonvoting shareholders are entitled to dissent and obtain payment for their shares.
B - 2
6. An election of the shareholders pursuant to section 10-2404 to have benefit corporation status or an election
of the shareholders pursuant to section 10-2405 to terminate status as a benefit corporation.
7. Consummation of a plan of domestication if the
shareholder does not receive interests in the foreign domesticated entity that have terms as favorable to the shareholder in all material respects and that represent at least the same percentage interest of the total voting rights of the outstanding
interests of the domesticated entity as the shares held by the shareholder before the domestication.
8. Consummation of a plan of conversion if the
shareholder does not receive interests in the converted entity that have terms as favorable to the shareholder in all material respects and that represent at least the same percentage interest of the total voting rights of the outstanding interests
of the converted entity as the shares held by the shareholder before the conversion.
9. Consummation of a plan of division if the shareholder does not
receive interests in each resulting entity that have terms as favorable to the shareholder in all material respects and that represent at least the same percentage interest of the total voting rights of the outstanding interests of each resulting
entity as the shares held by the shareholder before the division.
B. A shareholder entitled to dissent and obtain payment for his shares under this
chapter may not challenge the corporate action creating the shareholders entitlement unless the action is unlawful or fraudulent with respect to the shareholder or the corporation.
C. This section does not apply to the holders of shares of any class or series if the shares of the class or series are redeemable securities issued by a
registered investment company as defined pursuant to the investment company act of 1940 (15 United States Code section 80a-1 through 80a-64).
D. Unless
the articles of incorporation of the corporation provide otherwise, this section does not apply to the holders of shares of a class or series if the shares of the class or series were registered on a national securities exchange, were listed on the
national market systems of the national association of securities dealers automated quotation system or were held of record by at least two thousand shareholders on the date fixed to determine the shareholders entitled to vote on the proposed
corporate action.
10-1303.
Dissent by nominees and beneficial owners
A. A record shareholder may assert dissenters rights as to fewer than all of the shares registered in the record shareholders name only if the
record shareholder dissents with respect to all shares beneficially owned by any one person and notifies the corporation in writing of the name and address of each person on whose behalf the record shareholder asserts dissenters rights. The
rights of a partial dissenter under this subsection are determined as if the shares as to which the record shareholder dissents and the record shareholders other shares were registered in the names of different shareholders.
B - 3
B. A beneficial shareholder may assert dissenters rights as to shares held on the beneficial
shareholders behalf only if both:
1. The beneficial shareholder submits to the corporation the record shareholders written consent to the
dissent not later than the time the beneficial shareholder asserts dissenters rights.
2. The beneficial shareholder does so with respect to all
shares of which the beneficial shareholder is the beneficial shareholder or over which the beneficial shareholder has power to direct the vote.
Article 2 Procedure for Exercise of Dissenters Rights
10-1320.
Notice of dissenters rights
A. If
proposed corporate action creating dissenters rights under section 10-1302 is submitted to a vote at a shareholders meeting, the meeting notice shall state that shareholders are or may be entitled to assert dissenters rights under
this article and shall be accompanied by a copy of this article.
B. If corporate action creating dissenters rights under section 10-1302 is taken
without a vote of shareholders, the corporation shall notify in writing all shareholders entitled to assert dissenters rights that the action was taken and shall send them the dissenters notice described in section 10-1322.
10-1321.
Notice of intent to demand payment
A. If
proposed corporate action creating dissenters rights under section 10-1302 is submitted to a vote at a shareholders meeting, a shareholder who wishes to assert dissenters rights shall both:
1. Deliver to the corporation before the vote is taken written notice of the shareholders intent to demand payment for the shareholders shares if
the proposed action is effectuated.
2. Not vote the shares in favor of the proposed action.
B. A shareholder who does not satisfy the requirements of subsection A of this section is not entitled to payment for the shares under this article.
B - 4
10-1322.
Dissenters notice
A. If proposed corporate action creating dissenters rights under section 10-1302 is authorized at a shareholders meeting, the corporation shall
deliver a written dissenters notice to all shareholders who satisfied the requirements of section 10-1321.
B. The dissenters notice shall be
sent no later than ten days after the corporate action is taken and shall:
1. State where the payment demand must be sent and where and when certificates
for certificated shares shall be deposited.
2. Inform holders of uncertificated shares to what extent transfer of the shares will be restricted after the
payment demand is received.
3. Supply a form for demanding payment that includes the date of the first announcement to news media or to shareholders of
the terms of the proposed corporate action and that requires that the person asserting dissenters rights certify whether or not the person acquired beneficial ownership of the shares before that date.
4. Set a date by which the corporation must receive the payment demand, which date shall be at least thirty but not more than sixty days after the date the
notice provided by subsection A of this section is delivered.
5. Be accompanied by a copy of this article.
10-1323.
Duty to demand payment
A. A shareholder
sent a dissenters notice described in section 10-1322 shall demand payment, certify whether the shareholder acquired beneficial ownership of the shares before the date required to be set forth in the dissenters notice pursuant to section
10-1322, subsection B, paragraph 3 and deposit the shareholders certificates in accordance with the terms of the notice.
B. A shareholder who
demands payment and deposits the shareholders certificates under subsection A of this section retains all other rights of a shareholder until these rights are canceled or modified by the taking of the proposed corporate action.
C. A shareholder who does not demand payment or does not deposit the shareholders certificates if required, each by the date set in the dissenters
notice, is not entitled to payment for the shareholders shares under this article.
B - 5
10-1324.
Share restrictions
A. The corporation may restrict the transfer of uncertificated shares from the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions are released under section 10-1326.
B. The person for whom dissenters rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are canceled or modified by the taking of the proposed corporate action.
10-1325.
Payment
A. Except as provided in section 10-1327, as soon as the proposed corporate action is taken, or if such action is taken without a
shareholder vote, on receipt of a payment demand, the corporation shall pay each dissenter who complied with section 10-1323 the amount the corporation estimates to be the fair value of the dissenters shares plus accrued interest.
B. The payment shall be accompanied by all of the following:
1. The corporations balance sheet as of the end of a fiscal year ending not more than sixteen months before the date of payment, an income statement for
that year, a statement of changes in shareholders equity for that year and the latest available interim financial statements, if any.
2. A
statement of the corporations estimate of the fair value of the shares.
3. An explanation of how the interest was calculated.
4. A statement of the dissenters right to demand payment under section 10-1328.
5. A copy of this article.
10-1326.
Failure to take
action
A. If the corporation does not take the proposed action within sixty days after the date set for demanding payment and depositing share
certificates, the corporation shall return the deposited certificates and release the transfer restrictions imposed on uncertificated shares.
B. If after
returning deposited certificates and releasing transfer restrictions, the corporation takes the proposed action, it shall send a new dissenters notice under section 10-1322 and shall repeat the payment demand procedure.
B - 6
10-1327.
After-acquired shares
A. A corporation may elect to withhold payment required by section 10-1325 from a dissenter unless the dissenter was the beneficial owner of the shares before
the date set forth in the dissenters notice as the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action.
B. To the extent the corporation elects to withhold payment under subsection A of this section, after taking the proposed corporate action, it shall estimate
the fair value of the shares plus accrued interest and shall pay this amount to each dissenter who agrees to accept it in full satisfaction of his demand. The corporation shall send with its offer a statement of its estimate of the fair value of the
shares, an explanation of how the interest was calculated and a statement of the dissenters right to demand payment under section
10-1328.
10-1328.
Procedure if shareholder dissatisfied with payment or offer
A. A dissenter may notify the corporation in writing of the dissenters own estimate of the fair value of the dissenters shares and amount of
interest due and either demand payment of the dissenters estimate, less any payment under section 10-1325, or reject the corporations offer under section 10-1327 and demand payment of the fair value of the dissenters shares and
interest due, if either:
1. The dissenter believes that the amount paid under section 10-1325 or offered under section 10-1327 is less than the fair
value of the dissenters shares or that the interest due is incorrectly calculated.
2. The corporation fails to make payment under section 10-1325
within sixty days after the date set for demanding payment.
3. The corporation, having failed to take the proposed action, does not return the deposited
certificates or does not release the transfer restrictions imposed on uncertificated shares within sixty days after the date set for demanding payment.
B. A dissenter waives the right to demand payment under this section unless the dissenter notifies the corporation of the dissenters demand in writing
under subsection A of this section within thirty days after the corporation made or offered payment for the dissenters shares.
B - 7
Article 3 Judicial Appraisal of Shares
10-1330.
Court action
A. If a demand for payment
under section 10-1328 remains unsettled, the corporation shall commence a proceeding within sixty days after receiving the payment demand and shall petition the court to determine the fair value of the shares and accrued interest. If the corporation
does not commence the proceeding within the sixty day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.
B. The
corporation shall commence the proceeding in the court in the county where a corporations principal office or, if none in this state, its known place of business is located. If the corporation is a foreign corporation without a known place of
business in this state, it shall commence the proceeding in the county in this state where the known place of business of the domestic corporation was located.
C. The corporation shall make all dissenters, whether or not residents of this state, whose demands remain unsettled parties to the proceeding as in an action
against their shares, and all parties shall be served with a copy of the petition. Nonresidents may be served by certified mail or by publication as provided by law or by the Arizona rules of civil procedure.
D. The jurisdiction of the court in which the proceeding is commenced under subsection B of this section is plenary and exclusive. There is no right to trial
by jury in any proceeding brought under this section. The court may appoint a master to have the powers and authorities as are conferred on masters by law, by the Arizona rules of civil procedure or by the order of appointment. The masters
report is subject to exceptions to be heard before the court, both on the law and the facts. The dissenters are entitled to the same discovery rights as parties in other civil proceedings.
E. Each dissenter made a party to the proceeding is entitled to judgment either:
1. For the amount, if any, by which the court finds the fair value of his shares plus interest exceeds the amount paid by the corporation.
2. For the fair value plus accrued interest of the dissenters after-acquired shares for which the corporation elected to withhold payment under section
10-1327.
10-1331.
Court costs and attorney fees
A. The court in an appraisal proceeding commenced under section 10-1330 shall determine all costs of the proceeding, including the reasonable compensation and
expenses of any master appointed by the court. The court shall assess the costs against the corporation, except that the court shall assess costs against all or some of the dissenters to the extent the court finds that the fair value does not
materially exceed the amount offered by the corporation pursuant to sections 10-1325 and 10-1327 or that the dissenters acted arbitrarily, vexatiously or not in good faith in demanding payment under section 10-1328.
B - 8
B. The court may also assess the fees and expenses of attorneys and experts for the respective parties in amounts
the court finds equitable either:
1. Against the corporation and in favor of any or all dissenters if the court finds that the corporation did not
substantially comply with the requirements of article 2 of this chapter.
2. Against the dissenter and in favor of the corporation if the court finds that
the fair value does not materially exceed the amount offered by the corporation pursuant to sections 10-1325 and 10-1327.
3. Against either the
corporation or a dissenter in favor of any other party if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously or not in good faith with respect to the rights provided by this chapter.
C. If the court finds that the services of an attorney for any dissenter were of substantial benefit to other dissenters similarly situated and that the fees
for those services should not be assessed against the corporation, the court may award to these attorneys reasonable fees to be paid out of the amounts awarded the dissenters who were benefitted.
B - 9
Appendix C
November 15, 2016
The Board of Directors
TFB Bancorp, Inc.
11689 South Foothills Boulevard
Yuma, Arizona 85367
Members of the Board:
You have requested the
opinion of Keefe, Bruyette & Woods, Inc. (KBW or we) as investment bankers as to the fairness, from a financial point of view, to the common shareholders of TFB Bancorp, Inc. (TFB) of the Merger Consideration
(as defined below) to be received by such shareholders in the proposed merger (the Merger) of TFB with and into Glacier Bancorp, Inc. (Glacier), pursuant to the Plan and Agreement of Merger (the Agreement) to be
entered into by and among TFB, Foothills Bank, a wholly-owned subsidiary of TFB (Foothills Bank), Glacier and Glacier Bank, a wholly-owned subsidiary of Glacier (Glacier Bank). Pursuant to the Agreement and subject to the
terms, conditions and limitations set forth therein, on the Effective Date (as defined in the Agreement), each share of common stock, par value $5.00 per share, of TFB (the TFB Common Stock) issued and outstanding on the Effective Date
(excluding Proposed Dissenting Shares (as defined in the Agreement)) will be converted into the right to receive the following consideration (subject to adjustment as provided in the Agreement and as to which we express no opinion): (i) $7.36152 in
cash (the Per Share Cash Consideration) and (ii) 0.607387 of a share of common stock, par value $0.01 per share, of Glacier (Glacier Common Stock and, such portion of a share of Glacier Common Stock issuable for one share of
TFB Common Stock, the Per Share Stock Consideration). The Per Share Cash Consideration and the Per Share Stock Consideration, taken together, are referred to herein as the Merger Consideration. The terms and conditions of the
Merger are more fully set forth in the Agreement.
The Agreement further provides that, immediately following the Merger (or as soon as
practicable thereafter) and pursuant to a separate merger agreement, Foothills Bank will be merged with and into Glacier Bank, with Glacier Bank as the surviving entity (such transaction, the Bank Merger).
KBW has acted as financial advisor to TFB and not as an advisor to or agent of any other person. As part of our investment banking business,
we are continually engaged in the valuation of bank and bank holding company securities in connection with acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for
various other purposes. As specialists in the securities of banking companies, we have experience in, and knowledge of, the valuation of banking enterprises. In the ordinary course of their broker-dealer businesses, including pursuant to existing
sales and trading relationships between certain KBW affiliates and Glacier, KBW and its affiliates may from time to time purchase securities from, and sell securities to, TFB and Glacier and, as market makers in securities, KBW and its affiliates
may from time to time have a long or short position in, and buy or sell, debt or equity securities of TFB and Glacier for its and their own accounts and for the accounts of its and their respective customers and clients. We have acted exclusively
for the board of directors of TFB (the Board) in rendering this opinion and will receive a fee from TFB for our services. A portion of our fee is payable upon the rendering of this opinion, and a significant portion is contingent upon
the successful completion of the Merger. In addition, TFB has agreed to indemnify us for certain liabilities arising out of our engagement.
Keefe,
Bruyette & Woods, a Stifel Company ● One Montgomery Street, Suite 3700, San Francisco, CA 94104
(415) 591-5020
● www.kbw.com
C-1
The Board of Directors TFB Bancorp, Inc.
November 15, 2016
Page 2 of 5
Other than in connection with this present engagement, in the past two years, KBW has not
provided investment banking and financial advisory services to TFB. In the past two years, KBW has not provided investment banking and financial advisory services to Glacier. We may in the future provide investment banking and financial
advisory services to TFB or Glacier and receive compensation for such services.
In connection with this opinion, we have reviewed,
analyzed and relied upon material bearing upon the financial and operating condition of TFB and Glacier and bearing upon the Merger, including among other things, the following: (i) a draft of the Agreement dated November 8, 2016 (the most recent
draft made available to us); (ii) the audited financial statements for the three fiscal years ended December 31, 2015 of TFB; (iii) the unaudited quarterly financial statements for the fiscal quarters ended March 31, 2016, June 30, 2016 and
September 30, 2016 of TFB; (iv) the audited financial statements and the Annual Reports on Form 10-K for the three fiscal years ended December 31, 2015 of Glacier; (v) the unaudited quarterly financial statements and the Quarterly Reports on Form
10-Q for the fiscal quarters ended March 31, 2016, June 30, 2016 and September 30, 2016 of Glacier; (vi) certain regulatory filings of TFB, Foothills Bank, Glacier and Glacier Bank, including (as applicable) the semi-annual reports on Form FR Y-9SP
and quarterly reports on Form FR Y-9C and quarterly call reports required to be filed with respect to each semi-annual period and quarter (as the case may be) during the three year period ended December 31, 2015, the quarter ended March 31, 2016,
the semi-annual period and quarter ended June 30, 2016 and the quarter ended September 30, 2016; (vii) certain other interim reports and other communications of TFB and Glacier to their respective shareholders; and (viii) other financial information
concerning the businesses and operations of TFB and Glacier that was furnished to us by TFB and Glacier or which we were otherwise directed to use for purposes of our analyses. Our consideration of financial information and other factors that we
deemed appropriate under the circumstances or relevant to our analyses included, among others, the following: (i) the historical and current financial position and results of operations of TFB and Glacier; (ii) the assets and liabilities of TFB and
Glacier; (iii) the nature and terms of certain other merger transactions and business combinations in the banking industry; (iv) a comparison of certain financial and stock market information for TFB and Glacier with similar information for certain
other companies the securities of which are publicly traded; (v) financial and operating forecasts and projections of TFB that were prepared by, and provided to us and discussed with us by, TFB management and that were used and relied upon by us at
the direction of such management and with the consent of the Board; (vi) publicly available consensus street estimates of Glacier for 2016 through 2018, as well as assumed long-term Glacier growth rates provided to us by Glacier
management, all of which information was discussed with us by such management and used and relied upon by us based on such discussions, at the direction of TFB management and with the consent of the Board; and (vii) estimates regarding certain pro
forma financial effects of the Merger on Glacier (including, without limitation, the cost savings and related expenses expected to result or be derived from the Merger) that were prepared by, and provided to and discussed with us by, the management
of Glacier, and used and relied upon by us based on such discussions, at the direction of TFB management and with the consent of the Board. We have also performed such other studies and analyses as we considered appropriate and have taken into
account our assessment of general economic, market and financial conditions and our experience in other transactions, as well as our experience in securities valuation and knowledge of the banking industry generally. We have also participated in
discussions that were held with the respective managements of TFB and Glacier regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies and such other matters as
we have deemed relevant to our inquiry. In addition, we have considered the results of the efforts undertaken by or on behalf of TFB, with our assistance, to solicit indications of interest from third parties regarding a potential transaction with
TFB.
In conducting our review and arriving at our opinion, we have relied upon and assumed the accuracy and completeness of all of the
financial and other information that was provided to us or that
Keefe, Bruyette & Woods, a Stifel
Company ● One Montgomery Street, Suite 3700, San Francisco, CA 94104
(415) 591-5020 ● www.kbw.com
C-2
The Board of Directors TFB Bancorp, Inc.
November 15, 2016
Page 3 of 5
was publicly available and we have not independently verified the accuracy or completeness of any such information or assumed any responsibility or liability for such verification, accuracy or
completeness. We have relied upon the management of TFB as to the reasonableness and achievability of the financial and operating forecasts and projections of TFB (and the assumptions and bases therefor) that were prepared by, and provided to us and
discussed with us by, such management and we have assumed that such forecasts and projections were reasonably prepared on bases reflecting the best currently available estimates and judgments of such management and that such forecasts and
projections will be realized in the amounts and in the time periods currently estimated by such management. We have further relied, with the consent of TFB, upon Glacier management as to the reasonableness and achievability of the publicly available
consensus street estimates of Glacier (and the assumed Glacier long-term growth rates provided to us by such management) referred to above, as well as the estimates regarding certain pro forma financial effects of the Merger on Glacier
(and the assumptions and bases therefor, including, without limitation, the cost savings and related expenses expected to result or be derived from the Merger) referred to above, and we have assumed that all such information was reasonably prepared
on bases reflecting, or in the case of the Glacier street estimates referred to above that such estimates were consistent with, the best currently available estimates and judgments of Glacier management and that the forecasts,
projections and estimates reflected in such information will be realized in the amounts and in the time periods currently estimated.
It
is understood that the portion of the foregoing financial information of TFB and Glacier that was provided to us was not prepared with the expectation of public disclosure, that all of the foregoing financial information, including the publicly
available consensus street estimates of Glacier referred to above that we were directed to use, is based on numerous variables and assumptions that are inherently uncertain, including, without limitation, factors related to general
economic and competitive conditions and that, accordingly, actual results could vary significantly from those set forth in such information. We have assumed, based on discussions with the respective managements of TFB and Glacier and with the
consent of the Board, that all such information provides a reasonable basis upon which we could form our opinion and we express no view as to any such information or the assumptions or bases therefor. We have relied on all such information without
independent verification or analysis and do not in any respect assume any responsibility or liability for the accuracy or completeness thereof.
We also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or
prospects of either TFB or Glacier since the date of the last financial statements of each such entity that were made available to us. We are not experts in the independent verification of the adequacy of allowances for loan and lease losses and we
have assumed, without independent verification and with your consent, that the aggregate allowances for loan and lease losses for TFB and Glacier are adequate to cover such losses. In rendering our opinion, we have not made or obtained any
evaluations or appraisals or physical inspection of the property, assets or liabilities (contingent or otherwise) of TFB or Glacier, the collateral securing any of such assets or liabilities, or the collectability of any such assets, nor have we
examined any individual loan or credit files, nor did we evaluate the solvency, financial capability or fair value of TFB or Glacier under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. Estimates of
values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Because such estimates are inherently subject to uncertainty, we assume no responsibility or
liability for their accuracy.
We have assumed, in all respects material to our analyses, the following: (i) that the Merger and any
related transactions (including the Bank Merger) will be completed substantially in accordance with the terms set forth in the Agreement (the final terms of which we have assumed will not differ in any respect material to our analyses from the draft
reviewed by us referred to above) with no adjustments to the Merger Consideration (other than as reflected in our analyses) and no additional payments in respect
Keefe, Bruyette & Woods, a Stifel
Company ● One Montgomery Street, Suite 3700, San Francisco, CA 94104
(415) 591-5020 ● www.kbw.com
C-3
The Board of Directors TFB Bancorp, Inc.
November 15, 2016
Page 4 of 5
of the TFB Common Stock; (ii) that the representations and warranties of each party in the Agreement and in all related documents and instruments referred to in the Agreement are true and
correct; (iii) that each party to the Agreement and all related documents will perform all of the covenants and agreements required to be performed by such party under such documents; (iv) that there are no factors that would delay or subject to any
adverse conditions, any necessary regulatory or governmental approval for the Merger or any related transaction (including the Bank Merger) and that all conditions to the completion of the Merger and any related transaction will be satisfied without
any waivers or modifications to the Agreement or any of the related documents; and (v) that in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the Merger and any related transaction (including the
Bank Merger), no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, will be imposed that will have a material adverse effect on the future results of operations or financial condition
of TFB, Glacier or the pro forma entity, or the contemplated benefits of the Merger, including the cost savings and related expenses expected to result or be derived from the Merger. We have assumed that the Merger will be consummated in a manner
that complies with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. We have further been advised by
representatives of TFB that TFB has relied upon advice from its advisors (other than KBW) or other appropriate sources as to all legal, financial reporting, tax, accounting and regulatory matters with respect to TFB, Glacier, the Merger and any
related transaction (including the Bank Merger), and the Agreement. KBW has not provided advice with respect to any such matters.
This
opinion addresses only the fairness, from a financial point of view, as of the date hereof, to the holders of TFB Common Stock of the Merger Consideration to be received by such holders in the Merger. We express no view or opinion as to any
other terms or aspects of the Merger or any term or aspect of any related transaction (including the Bank Merger), including without limitation, the form or structure of the Merger (including the form of Merger Consideration or the allocation
thereof between cash and stock) or any related transaction, any consequences of the Merger or any related transaction to TFB, its shareholders, creditors or otherwise, or any terms, aspects, merits or implications of any employment, consulting,
voting, support, shareholder or other agreements, arrangements or understandings contemplated or entered into in connection with the Merger or otherwise. Our opinion is necessarily based upon conditions as they exist and can be evaluated on the date
hereof and the information made available to us through the date hereof. It is understood that subsequent developments may affect the conclusion reached in this opinion and that KBW does not have an obligation to update, revise or reaffirm this
opinion. Our opinion does not address, and we express no view or opinion with respect to, (i) the underlying business decision of TFB to engage in the Merger or enter into the Agreement, (ii) the relative merits of the Merger as compared to any
strategic alternatives that are, have been or may be available to or contemplated by TFB or the Board, (iii) the fairness of the amount or nature of any compensation to any of TFBs officers, directors or employees, or any class of such
persons, relative to the compensation to the holders of TFB Common Stock, (iv) the effect of the Merger or any related transaction on, or the fairness of the consideration to be received by, holders of any class of securities of TFB (other than the
holders of TFB Common Stock, solely with respect to the Merger Consideration as described herein and not relative to the consideration to be received by holders of any other class of securities) or holders of any class of securities of Glacier or
any other party to any transaction contemplated by the Agreement, (v) whether Glacier has sufficient cash, available lines of credit or other sources of funds to enable it to pay the aggregate amount of the Per Share Cash Consideration to the
holders of TFB Common Stock at the closing of the Merger, (vi) whether TFB will have the ability to pay any special dividend to holders of TFB Common Stock in accordance with the Agreement, or the merits of any such dividend payment (including
relative to any alternatives that may be available to TFB), (vii) the actual value of Glacier Common Stock to be issued in the Merger, (viii) the prices, trading range or volume at which Glacier Common Stock will trade following the public
Keefe, Bruyette & Woods, a Stifel
Company ● One Montgomery Street, Suite 3700, San Francisco, CA 94104
(415) 591-5020 ● www.kbw.com
C-4
The Board of Directors TFB Bancorp, Inc.
November 15, 2016
Page 5 of 5
announcement of the Merger or the consummation of the Merger, (ix) any advice or opinions provided by any other advisor to any of the parties to the Merger or any other transaction contemplated
by the Agreement, or (x) any legal, regulatory, accounting, tax or similar matters relating to TFB, Glacier, their respective shareholders, or relating to or arising out of or as a consequence of the Merger or any related transaction (including the
Bank Merger), including whether or not the Merger would qualify as a tax-free reorganization for United States federal income tax purposes.
This opinion is for the information of, and is directed to, the Board (in its capacity as such) in connection with its consideration of the
financial terms of the Merger. This opinion does not constitute a recommendation to the Board as to how it should vote on the Merger, or to any holder of TFB Common Stock or any shareholder of any other entity as to how to vote in connection with
the Merger or any other matter, nor does it constitute a recommendation regarding whether or not any such shareholder should enter into a voting, shareholders, or affiliates agreement with respect to the Merger or exercise any
dissenters or appraisal rights that may be available to such shareholder.
This opinion has been reviewed and approved by our
Fairness Opinion Committee in conformity with our policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.
Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Merger Consideration to be received by the holders
of TFB Common Stock in the Merger is fair, from a financial point of view, to such holders.
|
Very truly yours,
|
|
|
|
Keefe, Bruyette & Woods, Inc.
|
Keefe, Bruyette & Woods, a Stifel
Company ● One Montgomery Street, Suite 3700, San Francisco, CA 94104
(415) 591-5020 ● www.kbw.com
C-5