As soon as practicable after this Registration Statement becomes effective and upon completion of the merger described in the enclosed
document.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and
there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, smaller reporting company, or an emerging growth company. See definition of large accelerated filer, accelerated filer, smaller reporting company, and
emerging growth company in Rule
12b-2
of the Exchange Act. (Check one):
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided purchase to Section 7(a)(2)(B) of the Securities Act.
SELECTED HISTORICAL FINANCIAL INFORMATION OF GLACIER
The following table presents selected consolidated financial information of Glacier for the fiscal years ended December 31, 2016, 2015,
2014, 2013, and 2012. The consolidated financial data of and for the six months ended June 30, 2017 and 2016 are derived from unaudited condensed consolidated financial statements, has been prepared on the same basis as the historical
information derived from audited financial statements and, in the opinion of Glaciers management, reflects all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of this data at or for those dates. The
results of operation for the six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2017. The consolidated financial data below should be read in
conjunction with the consolidated financial statements and notes thereto, incorporated by reference in this proxy statement/prospectus. See Where You Can Find More Information About Glacier.
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|
|
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|
|
|
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Six Months
Ended
June 30, 2017
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Six Months
Ended
June 30, 2016
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At or for the Fiscal Years Ended December 31
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2016
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|
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2015
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2014
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|
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2013
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2012
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Dollars in thousands, except
per-share
data
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Summary of
Operations:
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Interest income
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|
$
|
181,660
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|
|
$
|
170,450
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|
|
$
|
344,153
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|
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$
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319,681
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|
|
$
|
299,919
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|
|
$
|
263,576
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|
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$
|
253,757
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Interest expense
|
|
|
15,140
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|
|
|
15,099
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|
|
|
29,631
|
|
|
|
29,275
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|
|
|
26,966
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|
|
|
28,758
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|
|
|
35,714
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Net interest income
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|
|
166,520
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|
|
|
155,351
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|
|
|
314,522
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|
|
|
290,406
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|
|
|
272,953
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|
|
|
234,818
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|
|
|
218,043
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Provision for loan losses
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|
4,611
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|
|
|
568
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|
|
|
2,333
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|
|
|
2,284
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|
|
|
1,912
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|
|
|
6,887
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|
|
|
21,525
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|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net interest income after
provision for loan losses
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|
161,909
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|
|
|
154,783
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|
|
|
312,189
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|
|
|
288,122
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|
|
|
271,041
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|
|
|
227,931
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|
|
|
196,518
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Noninterest income
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|
53,345
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|
|
|
51,011
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|
|
|
107,318
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|
|
|
98,761
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|
|
|
90,302
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|
|
|
93,047
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|
|
|
91,496
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Noninterest expenses
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|
|
128,653
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|
|
|
126,817
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|
|
258,714
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|
|
|
236,757
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|
|
|
212,679
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|
|
|
195,317
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|
|
|
193,421
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|
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|
|
|
|
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|
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|
|
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|
|
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|
|
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|
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|
|
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|
|
|
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Pre-tax
net income
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|
|
86,601
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|
|
|
78,977
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|
|
|
160,793
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|
|
|
150,126
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|
|
|
148,664
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|
|
|
125,661
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|
|
|
94,593
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Taxes
|
|
|
21,659
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|
|
|
19,844
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|
|
|
39,662
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|
|
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33,999
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|
|
|
35,909
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|
|
|
30,017
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|
|
|
19,077
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|
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|
|
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|
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|
|
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|
|
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Net income
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$
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64,942
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|
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$
|
59,133
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$
|
121,131
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|
|
$
|
116,127
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|
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$
|
112,755
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$
|
95,644
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|
|
$
|
75,516
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Basic earnings per share
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$
|
0.84
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|
$
|
0.78
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|
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$
|
1.59
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|
|
$
|
1.54
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|
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$
|
1.51
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$
|
1.31
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$
|
1.05
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Diluted earnings per share
|
|
$
|
0.84
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|
|
$
|
0.78
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|
|
$
|
1.59
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|
|
$
|
1.54
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|
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$
|
1.51
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|
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$
|
1.31
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|
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$
|
1.05
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Cash dividends per share
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$
|
0.42
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$
|
0.40
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$
|
1.10
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$
|
1.05
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|
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$
|
0.98
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$
|
0.60
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|
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$
|
0.53
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Statement of Financial
Conditions:
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Total assets
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$
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9,899,494
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$
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9,199,442
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$
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9,450,600
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|
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$
|
9,089,232
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$
|
8,306,507
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$
|
7,884,350
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$
|
7,747,440
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Net loans receivable
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6,215,885
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5,246,231
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5,554,891
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|
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4,948,984
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4,358,342
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3,932,487
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|
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3,266,571
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Total deposits
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|
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7,797,963
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|
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7,088,816
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|
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7,372,279
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|
|
6,945,008
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|
|
|
6,345,212
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|
|
|
5,579,967
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|
|
|
5,364,461
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Total borrowings
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|
|
794,435
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|
|
|
874,005
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|
|
|
855,830
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|
|
|
949,995
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|
|
|
827,067
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|
|
|
1,287,525
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|
|
|
1,421,971
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Shareholders equity
|
|
|
1,209,957
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|
|
|
1,124,659
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|
|
|
1,116,869
|
|
|
|
1,076,650
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|
|
|
1,028,047
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|
|
|
963,250
|
|
|
|
900,949
|
|
Book value per share
|
|
$
|
15.51
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|
|
$
|
14.76
|
|
|
$
|
14.59
|
|
|
$
|
14.15
|
|
|
$
|
13.70
|
|
|
$
|
12.95
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|
|
$
|
12.52
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|
15
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|
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|
|
|
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|
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Six Months
Ended
June 30, 2017
|
|
|
Six Months
Ended
June 30, 2016
|
|
|
At or for the Fiscal Years Ended December 31
|
|
|
|
|
|
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|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
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2012
|
|
|
|
|
|
|
|
|
|
Dollars in thousands, except per-share data
|
|
Key Operating Ratios:
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Return on average assets
|
|
|
1.37
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%
|
|
|
1.31
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%
|
|
|
1.32
|
%
|
|
|
1.36
|
%
|
|
|
1.42
|
%
|
|
|
1.23
|
%
|
|
|
1.01
|
%
|
Return on average equity
|
|
|
11.28
|
%
|
|
|
10.76
|
%
|
|
|
10.79
|
%
|
|
|
10.84
|
%
|
|
|
11.11
|
%
|
|
|
10.22
|
%
|
|
|
8.54
|
%
|
Average equity to average assets
|
|
|
12.15
|
%
|
|
|
12.19
|
%
|
|
|
12.27
|
%
|
|
|
12.52
|
%
|
|
|
12.81
|
%
|
|
|
11.99
|
%
|
|
|
11.84
|
%
|
Net interest margin (tax equivalent)
|
|
|
4.08
|
%
|
|
|
4.04
|
%
|
|
|
4.02
|
%
|
|
|
4.00
|
%
|
|
|
3.98
|
%
|
|
|
3.48
|
%
|
|
|
3.37
|
%
|
Non-performing
assets over subsidiary assets
|
|
|
0.70
|
%
|
|
|
0.82
|
%
|
|
|
0.76
|
%
|
|
|
0.88
|
%
|
|
|
1.08
|
%
|
|
|
1.39
|
%
|
|
|
1.87
|
%
|
Dividend payout ratio
|
|
|
50.00
|
%
|
|
|
51.28
|
%
|
|
|
69.18
|
%
|
|
|
68.18
|
%
|
|
|
64.90
|
%
|
|
|
45.80
|
%
|
|
|
50.48
|
%
|
COMPARATIVE STOCK PRICE AND DIVIDEND INFORMATION
Glacier Common Stock
Glacier common
stock is quoted on The NASDAQ Global Select Market under the symbol GBCI. The following table sets forth for the periods indicated:
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|
|
the high and low unadjusted closing sale prices for Glacier common stock as reported on The NASDAQ Global Select Market; and
|
|
|
|
cash dividends declared per share on Glacier common stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
Low
|
|
|
Cash
Dividends Declared
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
18.98
|
|
|
$
|
15.19
|
|
|
|
$0.14
|
|
Second quarter
|
|
$
|
22.43
|
|
|
$
|
17.44
|
|
|
|
$0.15
|
|
Third quarter
|
|
$
|
25.05
|
|
|
$
|
22.59
|
|
|
|
$0.15
|
|
Fourth quarter
|
|
$
|
30.87
|
|
|
$
|
24.23
|
|
|
|
$0.16
|
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
30.27
|
|
|
$
|
25.35
|
|
|
|
$0.16
|
|
Second quarter
|
|
$
|
29.55
|
|
|
$
|
24.88
|
|
|
|
$0.17
|
|
Third quarter
|
|
$
|
28.93
|
|
|
$
|
25.86
|
|
|
|
$0.17
|
|
Fourth quarter
|
|
$
|
29.57
|
|
|
$
|
24.74
|
|
|
|
$0.48
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
27.47
|
|
|
$
|
22.27
|
|
|
|
$0.18
|
|
Second quarter
|
|
$
|
30.08
|
|
|
$
|
24.76
|
|
|
|
$0.19
|
|
Third quarter
|
|
$
|
29.88
|
|
|
$
|
24.33
|
|
|
|
$0.19
|
|
Fourth quarter
|
|
$
|
29.69
|
|
|
$
|
25.74
|
|
|
|
$0.49
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
Low
|
|
|
Cash
Dividends Declared
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
|
$26.34
|
|
|
|
$22.19
|
|
|
|
$0.20
|
|
Second quarter
|
|
|
$27.68
|
|
|
|
$24.31
|
|
|
|
$0.20
|
|
Third quarter
|
|
|
$29.99
|
|
|
|
$25.49
|
|
|
|
$0.20
|
|
Fourth quarter
|
|
|
$37.66
|
|
|
|
$27.50
|
|
|
|
$0.50
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
|
$38.03
|
|
|
|
$32.47
|
|
|
|
$0.21
|
|
Second quarter
|
|
|
$36.72
|
|
|
|
$32.06
|
|
|
|
$0.21
|
|
Third quarter (through August 15)
|
|
|
$37.33
|
|
|
|
$33.56
|
|
|
|
$0.00
|
|
At June 30, 2017, the 78,001,890 outstanding shares of Glacier common stock were held by
approximately 1,721 holders of record.
CCC Common Stock
CCC common stock is not publicly traded and has been traded only very infrequently through CCC. The trades that have occurred have been in
accordance with the terms of the CCC ESOP, as well as the Shareholders Agreement, and have always been at the appraised value based on the most recent semi-annual appraisal, which was $135.00 per share as of December 31, 2016.
At July 15, 2017, the 456,010 outstanding shares of CCC common stock were held by approximately 130 holders of record.
CCC SPECIAL SHAREHOLDERS MEETING
Date, Time, Place
The CCC special
meeting of shareholders will be held on September 22, 2017, at 2:00 p.m. Mountain Time, at the Denver Country Club, 1700 East First Avenue, Denver, Colorado.
As described below under Vote Required and Quorum, approval of the merger agreement requires the affirmative vote of at least a
majority
of the shares of CCCs outstanding common stock. The proposal to adjourn the special meeting, if necessary or appropriate, including adjournments to solicit additional proxies, will be approved if the votes cast in favor of the
proposal exceed the votes cast against the proposal, assuming a quorum is present. If less than a quorum is represented at the special meeting, a majority of the shares so represented may adjourn the special meeting.
Purpose
At the special meeting, CCC
shareholders will:
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|
|
Consider and vote on a proposal to approve the Plan and Agreement of Merger, dated as of June 6, 2017, among Glacier, Glacier Bank, CCC and Collegiate Bank, under the terms of which CCC will merge with and into
Glacier and Collegiate Bank will merge with and into Glacier Bank. The merger agreement is attached as
Appendix A
.
|
17
|
|
|
Consider and vote on a proposal to terminate, conditioned upon the consummation of the transactions contemplated by the merger agreement, the Columbine Capital Corp. Amended and Restated Shareholders Agreement dated
effective as of February 24, 2011.
|
|
|
|
Approve one or more adjournments of the special meeting, if necessary or appropriate, including adjournments to solicit additional proxies in favor of the merger agreement.
|
Record Date; Shares Outstanding and Entitled to Vote
The CCC Board has fixed 5:00 p.m. Mountain Time on August 16, 2017 as the record date for determining the holders of shares of CCC common stock
entitled to notice of and to vote at the special meeting. At the close of business on the record date, there were approximately 130 holders of record and 456,010 shares of CCC common stock issued and outstanding. Holders of record of CCC common
stock on the record date are entitled to one vote per share and are also entitled to exercise dissenters rights if certain procedures are followed. See The Merger Dissenters Rights of Appraisal and
Appendix
B
.
CCCs directors have agreed to vote all shares of CCC common stock they are entitled to vote
that are held or controlled by them in favor of approval of the merger agreement. As of the date hereof, a total of 182,773 shares of CCC common stock (which number excludes all vested and unvested stock options), representing approximately 40.1% of
all outstanding shares of CCC common stock, are covered by the voting agreements. See The Merger Interests of Certain Persons in the Merger Voting Agreements.
Votes Required and Quorum
The
affirmative vote of the holders of at least a majority of the shares of CCCs outstanding common stock is required to approve the merger agreement. At least a majority of the total outstanding shares of CCC common stock must be present, either
in person or by proxy, in order to constitute a quorum for the special meeting. For purposes of determining a quorum, abstentions are counted in determining the shares present at a meeting.
For voting purposes, however, shares must be affirmatively voted
FOR
approval of the merger agreement in order to be counted as votes
in favor of the merger. As a result, abstentions with respect to the proposal to approve the merger agreement will have the same effect as votes against such proposal.
The proposal to approve the termination of the Shareholders Agreement, conditioned upon the consummation of the transactions contemplated by
the merger agreement, will be approved if holders of at least
two-thirds
(2/3) of CCCs outstanding common stock vote in favor of termination. Accordingly, abstentions with respect to the proposal to
approve termination of the Shareholders Agreement will have the same effect as votes against approval of the proposal.
The proposal to
approve one or more adjournments of the special meeting, if necessary or appropriate, including adjournments to solicit additional proxies in favor of the merger agreement, will be approved if a majority in interest of the shareholders present at
the special meeting vote to approve such adjournment. Accordingly, abstentions with respect to the proposal will have no effect on the voting.
Voting,
Solicitation, and Revocation of Proxies
If the enclosed proxy card is duly executed and received in time for the special meeting, it
will be voted in accordance with the instructions given. If the proxy card is duly executed and received but no instructions are given, it is the intention of the persons named in the proxy to vote the shares represented by the proxy
FOR
the
approval of the merger agreement,
FOR
the proposal to terminate the Shareholders
18
Agreement conditioned upon the closing of the merger, and
FOR
the proposal to approve one or more adjournments to solicit additional proxies, and in the proxy holders discretion on
any other matter properly coming before the meeting. Any proxy given by a shareholder may be revoked before its exercise by:
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sending written notice to the Secretary of CCC;
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completing and submitting a later-dated proxy; or
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attending and voting at the special meeting in person.
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CCC is soliciting the proxy for the
special meeting on behalf of the CCC Board. CCC will bear the cost of solicitation of proxies from its shareholders. In addition to using the mail, CCC may solicit proxies by personal interview, telephone, and facsimile. Banks, brokerage houses,
other institutions, nominees, and fiduciaries will be requested to forward their proxy soliciting material to their principals and obtain authorization for the execution of proxies. CCC does not expect to pay any compensation for the solicitation of
proxies. However, CCC will, upon request, pay the standard charges and expenses of banks, brokerage houses, other institutions, nominees, and fiduciaries for forwarding proxy materials to and obtaining proxies from their principals.
Voting in Person at the Special Meeting
Shareholders of Record
.
Shares held directly in your name as the shareholder of record may be voted in person at the
special meeting. If you choose to vote your shares of CCC common stock in person, please bring the enclosed proxy card or proof of identification. Even if you plan to attend the special meeting, we recommend that you vote your shares of CCC common
stock in advance as described above so that your vote will be counted if you later decide not to attend the special meeting.
Termination of the
Shareholders Agreement
CCC and the owners of all issued and outstanding common stock of CCC are parties to the Columbine Capital Corp.
Amended and Restated Shareholders Agreement dated effective as of February 24, 2011 (the Shareholders Agreement). Among other things, the Shareholders Agreement requires that if a CCC shareholder desires to dispose of any of his CCC
common stock he must first offer such common stock to CCC at a designated purchase price (currently $135.00 per share).
The Shareholders
Agreement does not expressly address a situation such as the presently proposed merger of CCC with and into Glacier, and the related conversion of CCC common stock into the merger consideration upon closing; however, CCC does not believe that the
right of first refusal set forth in the Shareholders Agreement was intended to apply to the proposed merger. Nevertheless, CCC shareholders will be asked to approve the termination of the Shareholders Agreement, conditioned only upon the closing of
the merger, to clarify that the shares of Glacier common stock to be held by former CCC shareholders following the closing of the merger, which will otherwise be tradable without restriction, are free from contractual restrictions on transfer as
well.
The CCC Board has determined that termination of the Shareholders Agreement is appropriate. Such termination will be conditioned
only upon the consummation of the merger of CCC with and into Glacier as described in this proxy statement/prospectus. Such termination will occur, if approved, concurrently with the consummation of the merger.
The Shareholders Agreement may be altered, amended or terminated upon the approval of
two-thirds
(2/3)
of the voting shares of CCC, which shall be binding on CCC and the holders of all CCC shares subject to the agreement.
19
B
ACKGROUND OF AND REASONS FOR THE MERGER
Background of the Merger
From time to
time over the past several years, the board of directors of CCC discussed and considered strategic alternatives to enhance shareholder value and achieve future shareholder liquidity. With the assistance of CCCs financial advisor, D.A.
Davidson & Co. (Davidson), the board of directors of CCC identified Glacier, among other entities, as a potential future merger partner in view of Glaciers successful track record with other acquisitions, its emphasis on
locally managed community banking, its historical pursuit of similar sized banks as Collegiate Bank, and its strong financial performance.
In January of 2017, CCC directed Davidson to set up a meeting with Randall M. Chesler, President and CEO of Glacier, to explore possible
interest in a business combination. Around that same time, CCC was contacted by other parties expressing interest in a possible acquisition of CCC. The parties other than Glacier will be defined as Party B, Party C and Party D. Party B approached
David C. Boyles, CCCs Chairman and CEO, to express its interest in a possible merger immediately after another bank sale was announced in the Colorado market. Parties C and D expressed initial interest, but neither submitted an indication of
interest.
On February 7, 2017, Mr. Chesler met with Mr. Boyles and John Perkins, Collegiate Banks
Co-CEO,
along with a representative from Davidson, in Denver, Colorado to become acquainted and to discuss each organizations approach to community banking. Additionally, the parties toured Collegiate
Banks locations in the Denver area and viewed various Collegiate Bank supported projects and businesses. After the meeting and market tour, the parties committed to continue to explore a potential transaction.
From
mid-February
to
mid-March
2017, Glacier and its advisors
were granted access to a virtual dataroom that contained
non-public
financial and operational information regarding CCC. Through
mid-March
2017, CCC provided Glacier
with supplemental information regarding the financial aspects of its business, its markets and its operations. No information or data was provided to Party B.
On March 6, 2017, CCC signed an engagement letter with Davidson to act as their financial advisor.
On March 9, 2017, Party B submitted a letter of interest setting forth the proposed terms of a merger, including the principal financial
terms. On March 14, 2017, Glacier delivered a
non-binding
letter of intent setting forth the proposed terms of the Merger, including the principal financial terms. On March 15, 2017, Davidson made a
presentation to the CCC Board to review the current market conditions for bank mergers and acquisitions, bank market conditions and specific points of the proposals from Glacier and Party B.
Between March 14 and March 17, 2017, the parties, with assistance of their respective legal counsel and financial advisors,
negotiated several aspects of the merger letter of intent, both financial and
non-financial,
and on March 17, 2017, CCC delivered a signed letter of intent back to Glacier.
Between March 17 and June 5, 2017, Glacier and CCC conducted extensive and appropriate due diligence and, with the assistance of
their respective legal counsel and financial advisors, negotiated the merger agreement and related ancillary agreements. Glaciers due diligence review included an extensive loan due diligence review conducted by DLS Consulting and supported by
Glaciers Chief Credit Officer. In addition, a compliance review was conducted by Fortner, Baynes, Levkulich & Garrison, PC, and was
20
supported by Glaciers Chief Compliance Officer. On May 9, 2017, Mr. Chesler, along with
several senior executives from Glacier, was accompanied on a diligence trip by Mr. Boyles and Mr. Perkins to review the branches of Collegiate Bank and its markets.
On March 31, 2017, Glacier signed an engagement letter with Keefe, Bruyette & Woods, Inc. (KBW) to act as
Glaciers financial advisor.
On June 5, 2017, the board of directors of CCC, together with CCCs legal counsel and
representatives of Davidson, met to consider the merger agreement. At this meeting, Davidson reviewed the financial aspects of the proposed merger and rendered to the CCC Board an opinion to the effect that, as of that date and subject to the
procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Davidson as set forth in such opinion, the merger consideration in the proposed merger was fair, from a financial point of
view, to the holders of CCC common stock. Among other matters considered, the board of directors of CCC reviewed the specific terms of the merger agreement, the form and value of the consideration to be received by CCC shareholders, the price and
historical performance of Glacier common stock, current market conditions including comparable bank merger and acquisition transactions, and the implications of the merger to CCCs employees, customers, and communities. After due consideration
of these and other matters, the board of directors of CCC unanimously approved entering into the merger agreement.
On May 31 and
June 5, 2017, the board of directors of Glacier, together with its legal counsel and representatives of KBW, met to consider approval of the merger agreement. The board of directors and KBW discussed financial aspects of the merger and
Glaciers legal counsel presented a review of the key terms of the merger agreement and related ancillary agreements. Among other matters discussed, there was also discussion regarding the results of due diligence reviews, the terms of the
merger agreement and related ancillary agreements, key pricing metrics, the pro forma impact of the merger to Glaciers shareholders, risks of the merger, and the timing and process for consummation of the merger, including the results of
preliminary discussions with bank regulators. After due consideration of these and other matters, the board of directors of Glacier unanimously approved the merger agreement on June 5, 2017.
The merger agreement and related ancillary agreements were executed on June 6, 2017, and the parties issued a joint press release
announcing the merger after the close of business that day.
Reasons For The Merger CCC
At a board meeting held on June 5, 2017, the CCC Board determined that the terms of the merger agreement were in the best interests of CCC
and its shareholders. In the course of reaching this determination and related decision to approve the merger agreement, the CCC Board evaluated the merger and the merger agreement in consultation with the management of CCC and CCCs financial
advisor and legal counsel. In reaching its determination, the CCC Board considered a number of factors. Such factors also constituted the reasons that the CCC Board determined to approve the merger agreement and to recommend that CCC shareholders
vote in favor of the merger agreement. Such reasons included the following:
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the terms of the merger agreement and the value, form and mix of consideration to be received by CCC shareholders in the merger;
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the historical trading ranges for Glacier common stock;
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the historic and prospective business of CCC;
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the likely impact of the merger on the employees and customers of CCC;
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the future employment opportunities for the existing employees of CCC;
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information concerning Glaciers financial condition and results of operations as well as the likelihood that Glacier would be able to obtain regulatory approval for the merger;
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the opinion, dated June 5, 2017, of Davidson to the CCC Board as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of CCC common stock of the merger consideration in
the proposed merger, as more fully described below under Opinion of CCCs Financial Advisor;
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the expectation that CCC shareholders would have the opportunity to continue to participate in the growth of the combined company and would also benefit from the significantly greater liquidity of the trading market for
Glacier common stock;
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that Glacier has historically paid cash dividends on its common stock;
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the fact that Glaciers common stock is widely held and has an active trading market, whereas CCCs stock is illiquid;
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the provisions in the merger agreement that provide for the ability of the CCC Board to respond to an unsolicited acquisition proposal that the CCC Board determines in good faith is a superior proposal as defined in the
merger agreement;
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the provisions of the merger agreement that provide for the ability of the CCC Board to terminate the merger agreement, subject to certain conditions including the payment of a
break-up
fee, if CCC has entered into a definitive agreement with respect to a superior proposal; and
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the likelihood of the merger being approved by applicable regulatory authorities without undue conditions or delay.
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The CCC Board also considered a number of uncertainties and risks in its deliberations concerning the transactions contemplated by the merger
agreement, including the following:
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that a portion of the merger consideration will be paid through the issuance of a fixed number of shares of Glacier common stock, and any decrease in the market price of Glacier common stock after the date of the merger
agreement will result in a reduction in the aggregate merger consideration to be received by CCC shareholders at the time of completion of the merger subject to the adjustment procedures described under The Merger Termination of the
Merger Agreement;
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that CCC shareholders will not necessarily know or be able to calculate the actual value of the merger consideration which they would receive upon completion of the merger;
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the possible disruption to CCCs business that may result from the announcement of the merger and the resulting distraction of managements attention from the
day-to-day
operations of CCCs business; and
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the restrictions contained in the merger agreement on the operation of CCCs business during the period between signing of the merger agreement and completion of the merger, as well as the other covenants and
agreements of CCC contained in the merger agreement.
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The foregoing discussion of the reasons that led the CCC Board to
approve the merger agreement and recommend that CCCs shareholders vote in favor of the merger agreement is not intended to be exhaustive but is believed to include all of the material reasons for the CCC Boards decision. In reaching its
determination to approve and recommend the transaction, the CCC Board based its recommendation on the totality of the information presented to it and did not assign any relative or specific weights to the reasons considered in reaching that
determination. Individual directors may have given differing weights to different reasons. After deliberating with respect to the merger with Glacier, considering, among other things, the matters discussed above, the CCC Board unanimously approved
the merger agreement and the merger with Glacier as being in the best interests of CCC and its shareholders.
Opinion of CCCs Financial Advisor
On March, 6, 2017, CCC entered into an engagement agreement with D.A. Davidson & Co. to render financial advisory and
investment banking services to CCC. As part of its engagement, Davidson agreed to assist CCC in analyzing, structuring, negotiating and, if appropriate, effecting a transaction between CCC and another corporation or business entity. Davidson also
agreed to provide CCCs Board with an opinion as to the fairness, from a financial point of view, to the holders of CCC common stock, of the consideration in the proposed merger. CCC engaged Davidson because Davidson is a nationally recognized
investment banking firm with substantial experience in transactions similar to the merger and is familiar with CCC and its business. As part of its investment banking business, Davidson is continually engaged in the valuation of financial
institutions and their securities in connection with mergers and acquisitions and other corporate transactions.
On June, 5, 2017, the CCC
Board held a meeting to evaluate the proposed merger. At this meeting, Davidson reviewed the financial aspects of the proposed merger and rendered an opinion to the CCC Board that, as of such date and based upon and subject to assumptions made,
procedures followed, matters considered and limitations on the review undertaken, the consideration to be paid to the holders of the CCC common stock in the proposed merger was fair, from a financial point of view.
The full text of Davidsons written opinion, dated June, 5, 2017, is attached as Appendix C to this joint proxy statement/prospectus and
is incorporated herein by reference. The description of the opinion set forth herein is qualified in its entirety by reference to the full text of such opinion. CCCs shareholders are urged to read the opinion in its entirety.
Davidsons opinion speaks only as of the date of the opinion and Davidson undertakes no obligation to revise or update its opinion. The
opinion is directed to the CCC Board and addresses only the fairness, from a financial point of view, of the consideration to be paid to the holders of CCC common stock in the proposed merger. The opinion does not address, and Davidson expresses no
view or opinion with respect to, (i) the underlying business decision of CCC to engage in or proceed with the merger, (ii) the relative merits or effect of the merger as compared to any strategic alternatives or business strategies or
combinations that may be or may have been available to or contemplated by CCC or CCCs board of directors, or (iii) any legal, regulatory, accounting, tax or similar matters relating to CCC, its shareholders or relating to or arising out
of the merger. The opinion expresses no view or opinion as to any terms or other aspects of the merger. CCC and Glacier determined the consideration to be paid through the negotiation process. The opinion does not constitute a recommendation to any
CCC shareholder as to how such shareholder should vote at the CCC meeting on the merger or any related matter. The opinion does not express any view as to the fairness of the amount or nature of the compensation to any of CCCs or
23
Glaciers officers, directors or employees, or any class of such persons, relative to the merger
consideration. The opinion has been reviewed and approved by Davidsons Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.
Davidson has reviewed the registration statement on Form
S-4
of which this proxy statement/
prospectus is a part and consented to the inclusion of its opinion to the CCC Board as Appendix C to this proxy statement/prospectus and to the references to Davidson and its opinion contained herein. A copy of the consent of Davidson is attached as
Exhibit 23.4 to the registration statement on Form
S-4.
In connection with rendering its opinion,
Davidson reviewed, analyzed and relied upon material bearing upon the merger and the financial and operating condition of CCC and Glacier and the merger, including among other things, the following:
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a draft of the merger agreement (including disclosure schedules) and voting agreement as of May 31, 2017;
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certain financial statements and other historical financial and business information about CCC and Glacier made available to Davidson from published sources and/or from the internal records of CCC and Glacier that
Davidson deemed relevant;
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certain publicly available analyst earnings estimates for Glacier for the years ending December, 31, 2017 and December, 31, 2018, and estimated long-term growth rate for the years thereafter, in each case as discussed
with senior management of CCC and of Glacier;
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the current market environment generally and the banking environment in particular;
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the current and historical market prices and trading activity of Glacier and compared with that of certain other publicly-traded companies that we deemed relevant;
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the financial terms of certain other transactions in the financial institutions industry, to the extent publicly available;
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the market and trading characteristics of public companies and public bank holding companies in particular;
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the relative contributions of CCC and Glacier to the combined company;
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the pro forma financial impact of the merger, taking into consideration the amounts and timing of the transaction costs and cost savings;
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the net present value of CCC with consideration of projected financial results;
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the net present value of Glacier with consideration of projected financial results;
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such other financial studies, analyses and investigations and financial, economic and market criteria and other information as Davidson considered relevant including discussions with management and other representatives
and advisors of CCC and Glacier concerning the business, financial condition, results of operations and prospects of CCC and Glacier.
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In arriving at its opinion, Davidson has assumed and relied upon the accuracy and completeness of all information supplied or otherwise made
available to Davidson, discussed with or reviewed by or for Davidson, or publicly available, and Davidson has not assumed responsibility for independently verifying such information or undertaken an independent evaluation or appraisal of any of the
assets or liabilities (contingent or otherwise) of CCC or Glacier, nor did Davidson make an independent appraisal or analysis of CCC or Glacier with respect to the merger. In addition, Davidson has not assumed any obligation to
24
conduct, nor has Davidson conducted any physical inspection of the properties or facilities of CCC or Glacier.
Davidson has further relied on the assurances of management of CCC and Glacier that they are not aware of any facts or circumstances that would make any of such information inaccurate or misleading. Davidson did not make an independent evaluation or
appraisal of the specific assets or liabilities including the amount of any fair value adjustments per FASB 141(R). Davidson did not make an independent evaluation of the adequacy of the allowance for loan losses of CCC or Glacier nor has Davidson
reviewed any individual credit files relating to CCC or Glacier. Davidson has assumed that the respective allowances for loan losses for both CCC and Glacier are adequate to cover such losses and will be adequate on a pro forma basis for the
combined entity. Davidson has assumed that there has been no material change in CCCs or Glaciers assets, financial condition, results of operations, business or prospects since the date of the most recent financial statements provided to
Davidson. Davidson has assumed in all respects material to its analysis that CCC and Glacier will remain as going concerns for all periods relevant to its analysis. Davidson has also assumed in all respects material to its analysis that all of the
representations and warranties contained in the merger agreement and all related agreements are true and correct, that each party to such agreements will perform all of the covenants required to be performed by such party under such agreements and
that the conditions precedent in the merger agreement are not waived. Davidson has assumed that in the course of obtaining the necessary regulatory or other consents or approvals (contractual or otherwise) for the merger, no restrictions, including
any divestiture requirements or amendment or modifications, will be imposed that will have a material adverse effect on the contemplated benefits of the merger. Davidsons opinion is necessarily based upon information available to Davidson and
economic, market, financial and other conditions as they exist and can be evaluated on the date the fairness opinion letter was delivered to CCCs board of directors.
Set forth below is a summary of the material financial analyses performed by Davidson in connection with rendering its opinion. The summary of
the analyses of Davidson set forth below is not a complete description of the analysis underlying its opinion, and the order in which these analyses are described below is not indicative of any relative weight or importance given to those analyses
by Davidson. The following summaries of financial analyses include information presented in tabular format. You should read these tables together with the full text of the summary financial analyses, as the tables alone are not a complete
description of the analyses.
Unless otherwise indicated, the following quantitative information, to the extent it is based on market
data, is based on market data as of June, 2, 2017, the last trading day prior to the date on which Davidson delivered the fairness opinion letter to CCCs board of directors, and is not necessarily indicative of market conditions after such
date.
Summary of Proposal
Davidson reviewed the financial terms of the proposed transaction. As described in the merger agreement, CCC shareholders will receive a unit
for each share of CCC stock outstanding consisting of (i) $34.4504 in cash and (ii) 3.7681 shares of Glacier common stock. The terms and conditions of the merger are more fully described in the merger agreement. For purposes of the financial
analyses described below, based on the closing price of Glacier common stock on June 2, 2017, of $32.92, the consideration represented a value of $158.50 per share of CCC common stock. Based upon financial information as of or for the twelve
month period ended March 31, 2017, Davidson calculated the following transaction ratios:
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Transaction Ratios
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Aggregate
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Per Share
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Transaction Price / Last Twelve Months Net Income
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15.0x
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14.6x
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Transaction Price / Tangible Book Value
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197.8%
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193.1%
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Transaction Price / Tangible Book Value (To be Delivered)
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204.7%
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199.8%
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Tangible Book Premium / Core Deposits (1)
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11.0%
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(1)
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Tangible book premium / core deposits calculated by dividing the excess or deficit of the aggregate trandaction value by core deposits
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Stock Trading History of Glacier
Davidson reviewed the history of the reported trading prices and volume of Glacier common stock and the relationship between the movements in
the prices Glacier common stock to movements in certain stock indices, including the Standard & Poors 500 Index, the SNL Bank Index and the Russell 2000 Index.
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One Year Stock Performance
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Beginning Index Value
on 6/2/2016
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Ending Index Value on
6/2/2017
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Standard & Poors 500 Index
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100.0%
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116.2%
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SNL Bank Index
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100.0%
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123.6%
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Russell 2000 Index
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100.0%
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120.8%
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Glacier
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100.0%
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119.1%
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Three Year Stock
Performance
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Beginning Index Value
on 6/2/2014
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Ending Index Value on
6/2/2017
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Standard & Poors 500 Index
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100.0%
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126.7%
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SNL Bank Index
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100.0%
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131.0%
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Russell 2000 Index
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100.0%
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124.5%
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Glacier
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100.0%
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123.7%
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Five Year Stock
Performance
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Beginning Index Value
on 6/2/2012
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Ending Index Value on
6/2/2017
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Standard & Poors 500 Index
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100.0%
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190.8%
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SNL Bank Index
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100.0%
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224.7%
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Russell 2000 Index
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100.0%
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190.6%
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Glacier
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100.0%
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241.0%
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Contribution Analysis
Davidson analyzed the relative contribution of CCC and Glacier to certain financial and operating metrics for the pro forma combined company.
Such financial and operating metrics included: (i) net income available for common shareholders during the preceding twelve months ended December 31, 2016; (ii) total assets at December 31, 2016; (iii) gross loans at December 31,
2016; (iv) total deposits at December 31, 2016; (v) tangible common equity at December 31, 2016. The relative contribution analysis did not give effect to the impact of any synergies as a result of the proposed merger. The results of
this analysis are summarized in the table below:
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Contribution Analysis
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CCC
Contribution
to Glacier
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2016 Net Income
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3.7%
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Total Assets
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4.3%
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Gross Loans Incl. Loans HFS
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5.0%
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Total Deposits
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4.7%
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Tangible Common Equity
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3.6%
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Pro Forma Ownership (Current Consideration)
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2.2%
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Pro Forma Ownership (Hypothetical 100% Stock Transaction)
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2.7%
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Note: Pro forma contribution does not include any purchase accounting or merger adjustments
CCC Comparable Companies Analysis
Davidson used publicly available information to compare selected financial and market trading information for CCC and a group of 11 financial
institutions selected by Davidson which: (i) were banks with common stock listed on the NASDAQ, NYSE or
over-the-counter
markets (OTC); (ii) were headquartered in
Arizona, Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, Oklahoma, Utah and Wyoming; and (iii) had total assets between $400.0 million and $1.5 billion; The 11 financial institutions were as follows:
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Ames National Corporation
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Landmark Bancorp, Inc.
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Blue Valley Ban Corp.
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Reliance Bancshares, Inc.
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Eagle Bancorp Montana, Inc.
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Southern Missouri Bancorp, Inc.
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Guaranty Federal Bancshares, Inc.
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State Bank Corp.
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Hawthorn Bancshares, Inc.
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Two Rivers Financial Group, Inc.
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Iowa First Bancshares Corp.
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Does not reflect impact from pending acquisitions or acquisitions closed after June 2, 2017
The analysis compared publicly available financial and market trading information for CCC and the data for the 11 financial institutions
identified above as of and for the three-month period ended March 31, 2017. The table below compares the data for CCC and the data for the 11 financial institutions identified above, with pricing data as of June 2, 2017.
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Financial Condition and
Performance
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Comparable Companies
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CCC
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Median
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Average
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Minimum
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Maximum
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Total Assets (in millions)
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$468.6
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$792.2
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$948.2
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$470.0
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$1,496.0
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Non-Performing
Assets / Total Assets
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0.20%
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1.01%
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1.31%
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0.20%
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3.22%
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Tangible Common Equity Ratio
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8.10%
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7.78%
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8.27%
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6.16%
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11.54%
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Efficiency Ratio (Most Recent Quarter)
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55.2%
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66.6%
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67.9%
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51.8%
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84.8%
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Return on Average Tangible Common Equity (Most Recent Quarter)
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13.98%
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9.10%
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9.17%
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3.31%
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13.48%
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Return on Average Assets (Most Recent Quarter)
|
|
1.12%
|
|
0.79%
|
|
0.76%
|
|
0.33%
|
|
1.07%
|
Glacier Comparable Companies Analysis
Davidson used publicly available information to compare selected financial and market trading information for Glacier and a group of 13
financial institutions selected by Davidson which: (i) were banks with common stock listed on NASDAQ or NYSE; (ii) were headquartered in Arizona, Colorado,
27
Iowa, Idaho, Minnesota, Missouri, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming; and (iii) had total assets between $5.0 billion and $25.0 billion. These 13
financial institutions were as follows:
|
|
|
BancFirst Corporation
|
|
HomeStreet, Inc.
|
Banner Corporation
|
|
TCF Financial Corporation
|
Columbia Banking System, Inc.
|
|
UMB Financial Corporation
|
Enterprise Financial Services Corp
|
|
Umpqua Holdings Corporation
|
First Interstate BancSystem, Inc.
|
|
Washington Federal, Inc.
|
Great Western Bancorp, Inc.
|
|
Western Alliance Bancorporation
|
Heartland Financial USA, Inc.
|
|
|
Does not reflect impact from pending acquisitions or acquisitions closed after June 2, 2017
The analysis compared publicly available financial and market trading information for Glacier and the data for the 13 financial institutions
identified above as of and for the three-month period ended March 31, 2017. The table below compares the data for Glacier and the data for the comparable companies, with pricing data as of June 2, 2017. The 2017 and 2018 Earnings Per Share
estimates used in the table below were based on average FactSet Research Systems, Inc. consensus earnings estimates for Glacier and the 13 financial institutions identified above.
|
|
|
|
|
|
|
|
|
|
|
Financial Condition and
Performance
|
|
|
|
|
Comparable Companies
|
|
|
Glacier
|
|
Median
|
|
Average
|
|
Minimum
|
|
Maximum
|
Total Assets (in millions)
|
|
$9,553.9
|
|
$10,068.4
|
|
$12,879.2
|
|
$5,106.2
|
|
$24,861.5
|
Non-Performing
Assets / Total Assets
|
|
1.12%
|
|
0.71%
|
|
0.83%
|
|
0.31%
|
|
2.02%
|
Tangible Common Equity Ratio
|
|
10.39%
|
|
9.15%
|
|
9.27%
|
|
7.50%
|
|
11.72%
|
Efficiency Ratio (Most Recent Quarter)
|
|
55.4%
|
|
63.6%
|
|
62.3%
|
|
43.8%
|
|
87.8%
|
Return on Average Tangible Common Equity (Most Recent Quarter)
|
|
13.01%
|
|
12.29%
|
|
11.69%
|
|
6.02%
|
|
17.95%
|
Return on Average Assets (Most Recent Quarter)
|
|
1.33%
|
|
1.04%
|
|
1.04%
|
|
0.57%
|
|
1.69%
|
Market Performance
Multiples
|
|
|
|
|
Comparable Companies
|
|
|
Glacier
|
|
Median
|
|
Average
|
|
Minimum
|
|
Maximum
|
Market Capitalization (in millions)
|
|
$2,568.5
|
|
$2,194.3
|
|
$2,338.2
|
|
$803.9
|
|
$4,827.6
|
Price / LTM Earnings Per Share
|
|
20.3x
|
|
16.7x
|
|
17.0x
|
|
11.6x
|
|
21.0x
|
Price / 2017 Est. Earnings Per Share (1)
|
|
18.5x
|
|
15.7x
|
|
16.2x
|
|
12.5x
|
|
19.2x
|
Price / 2018 Est. Earnings Per Share (1)
|
|
16.5x
|
|
13.7x
|
|
14.5x
|
|
10.7x
|
|
19.1x
|
Price / Tangible Book Value Per Share
|
|
258.3%
|
|
201.6%
|
|
201.7%
|
|
122.5%
|
|
289.6%
|
Precedent Transactions Analysis
Davidson reviewed three sets of comparable merger and acquisition transactions. The sets of mergers and acquisitions included: (1)
Western U.S. Transactions, (2) Nationwide High-Performing Transactions, and (3) Nationwide Post Election Transactions.
Western U.S. Transactions, included 11 transactions where:
|
|
|
the transaction involved banks and bank holding companies headquartered in the Western U.S.;
|
|
|
|
the transaction was announced between January 1, 2016 and June 2, 2017;
|
28
|
|
|
the selling companys total assets were between $300.0 million and $2.0 billion; and
|
|
|
|
the transaction was not a merger of equals
|
Nationwide High-Performing
Transactions included 15 transactions where:
|
|
|
the transaction involved banks and bank holding companies headquartered nationwide;
|
|
|
|
the transaction was announced between June 2, 2016 and June 2, 2017;
|
|
|
|
the selling companys total assets were between $300.0 million and $2.0 billion;
|
|
|
|
the
non-performing
assets to total assets ratio of the selling company was less than 2.50%.
|
|
|
|
the return on average assets of the selling company
(tax-adjusted
for subchapter S corporations) was between 0.80% and 1.40% over the preceding twelve months; and
|
|
|
|
the transaction was not a merger of equals
|
Nationwide Post Election Transactions
included 20 transactions where:
|
|
|
the transaction involved banks and bank holding companies headquartered nationwide;
|
|
|
|
the transaction was announced between November 8, 2016 and June 2, 2017;
|
|
|
|
the selling companys total assets were between $300.0 million and $2.0 billion;
|
|
|
|
the
non-performing
assets to total assets ratio of the selling company was less than 2.50%; and
|
|
|
|
the transaction was not a merger of equals
|
The following tables set forth the
transactions included in Western U.S. Transactions, Nationwide High-Performing Transactions, and Nationwide Post Election Transactions, and are sorted by announcement date:
Western U.S. Transactions
|
|
|
|
|
|
|
Announcement Date
|
|
|
|
Acquirer
|
|
Target
|
5/02/2017*
|
|
|
|
Seacoast Commerce Banc Holdings
|
|
Capital Bank
|
2/13/2017*
|
|
|
|
Heartland Financial USA, Inc.
|
|
Citywide Banks of Colorado, Inc.
|
12/13/2016
|
|
|
|
Pacific Premier Bancorp, Inc.
|
|
Heritage Oaks Bancorp
|
11/15/2016
|
|
|
|
Glacier Bancorp, Inc.
|
|
TFB Bancorp, Inc.
|
9/22/2016
|
|
|
|
CVB Financial Corp.
|
|
Valley Commerce Bancorp
|
7/08/2016*
|
|
|
|
Cathay General Bancorp
|
|
SinoPac Bancorp
|
4/28/2016
|
|
|
|
Mechanics Bank
|
|
California Republic Bancorp
|
4/26/2016
|
|
|
|
Pacific Continental Corporation
|
|
Foundation Bancorp, Inc.
|
3/16/2016
|
|
|
|
Guaranty Bancorp
|
|
Home State Bancorp
|
3/10/2016
|
|
|
|
Midland Financial Co.
|
|
1st Century Bancshares, Inc.
|
3/07/2016
|
|
|
|
Triumph Bancorp, Inc.
|
|
ColoEast Bankshares, Inc.
|
*
Indicates
|
the transaction was pending as of June 2, 2017
|
29
|
Nationwide High-Performing Transactions
|
|
|
|
|
|
Announcement Date
|
|
Acquirer
|
|
Target
|
5/22/2017*
|
|
SmartFinancial, Inc.
|
|
Capstone Bancshares, Inc.
|
5/02/2017*
|
|
Seacoast Commerce Banc Holdings
|
|
Capital Bank
|
4/27/2017*
|
|
TowneBank
|
|
Paragon Commercial Corporation
|
3/13/2017*
|
|
First Busey Corporation
|
|
Mid Illinois Bancorp, Inc.
|
2/13/2017*
|
|
Heartland Financial USA, Inc.
|
|
Citywide Banks of Colorado, Inc.
|
2/06/2017*
|
|
First Busey Corporation
|
|
First Community Financial Partners, Inc.
|
1/31/2017*
|
|
Bryn Mawr Bank Corporation
|
|
Royal Bancshares of Pennsylvania, Inc.
|
12/13/2016
|
|
Pacific Premier Bancorp, Inc.
|
|
Heritage Oaks Bancorp
|
11/17/2016
|
|
Simmons First National Corporation
|
|
Hardeman County Investment Co., Inc.
|
11/15/2016
|
|
Glacier Bancorp, Inc.
|
|
TFB Bancorp, Inc.
|
11/03/2016
|
|
Collins Family Trust
|
|
Inter National Bank
|
9/22/2016
|
|
CVB Financial Corp.
|
|
Valley Commerce Bancorp
|
8/23/2016
|
|
First Defiance Financial Corp.
|
|
Commercial Bancshares, Inc.
|
7/08/2016*
|
|
Cathay General Bancorp
|
|
SinoPac Bancorp
|
6/17/2016
|
|
South State Corporation
|
|
Southeastern Bank Financial Corporation
|
*
|
Indicates the transaction was pending as of June 2, 2017
|
Nationwide Post Election
Transactions
|
|
|
|
|
Announcement Date
|
|
Acquirer
|
|
Target
|
5/22/2017*
|
|
SmartFinancial, Inc.
|
|
Capstone Bancshares, Inc.
|
5/04/2017*
|
|
Seacoast Banking Corporation of Florida
|
|
Palm Beach Community Bank
|
5/02/2017*
|
|
Seacoast Commerce Banc Holdings
|
|
Capital Bank
|
4/27/2017*
|
|
TowneBank
|
|
Paragon Commercial Corporation
|
4/11/2017*
|
|
Sussex Bancorp
|
|
Community Bank of Bergen County, NJ
|
3/15/2017*
|
|
Topeka Bancorp Inc.
|
|
Kaw Valley Bancorp, Inc.
|
3/13/2017*
|
|
First Busey Corporation
|
|
Mid Illinois Bancorp, Inc.
|
2/13/2017*
|
|
Heartland Financial USA, Inc.
|
|
Citywide Banks of Colorado, Inc.
|
2/06/2017*
|
|
First Busey Corporation
|
|
First Community Financial Partners, Inc.
|
2/01/2017*
|
|
Old Line Bancshares, Inc.
|
|
DCB Bancshares, Inc.
|
1/31/2017*
|
|
Bryn Mawr Bank Corporation
|
|
Royal Bancshares of Pennsylvania, Inc.
|
1/26/2017*
|
|
Midland States Bancorp, Inc.
|
|
Centrue Financial Corporation
|
1/17/2017*
|
|
Renasant Corporation
|
|
Metropolitan BancGroup, Inc.
|
12/14/2016*
|
|
Veritex Holdings, Inc.
|
|
Sovereign Bancshares, Inc.
|
12/13/2016
|
|
Pacific Premier Bancorp, Inc.
|
|
Heritage Oaks Bancorp
|
11/30/2016
|
|
CenterState Banks, Inc.
|
|
Gateway Financial Holdings of FL, Inc.
|
11/22/2016*
|
|
ACNB Corporation
|
|
New Windsor Bancorp, Inc.
|
11/17/2016
|
|
Simmons First National Corporation
|
|
Hardeman County Investment Co., Inc.
|
11/15/2016
|
|
Glacier Bancorp, Inc.
|
|
TFB Bancorp, Inc.
|
11/08/2016
|
|
Carolina Financial Corporation
|
|
Greer Bancshares Incorporated
|
*
|
Indicates the transaction was pending as of June 2, 2017
|
For each transaction
referred to above, Davidson compared, among other things, the following implied ratios:
|
|
|
transaction price compared to earnings per share for the last twelve months, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction;
|
30
|
|
|
transaction price compared to tangible book value per share, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction; and
|
|
|
|
tangible book premium to core deposits based on the latest publicly available financial statements of the target company prior to the announcement of the transaction;
|
As illustrated in the following table, Davidson compared the proposed merger multiples to the multiples of the comparable transaction groups
and other operating financial data where relevant. The table below sets forth the data for the comparable transaction groups as of the last twelve months ended prior to the transaction announcement and CCC data for the last twelve months ended
March 31, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Condition and Performance
|
|
|
|
|
|
|
Western U.S.
|
|
|
Nationwide High-Performing
|
|
|
Nationwide Post Election
|
|
|
|
CCC
|
|
|
Median
|
|
|
Average
|
|
|
Minimum
|
|
|
Maximum
|
|
|
Median
|
|
|
Average
|
|
|
Minimum
|
|
|
Maximum
|
|
|
Median
|
|
|
Average
|
|
|
Minimum
|
|
|
Maximum
|
|
Total Assets (in millions)
|
|
$
|
468.6
|
|
|
$
|
757.6
|
|
|
$
|
927.0
|
|
|
$
|
305.6
|
|
|
$
|
1,988.3
|
|
|
$
|
832.5
|
|
|
$
|
994.9
|
|
|
$
|
305.6
|
|
|
$
|
1,988.3
|
|
|
$
|
587.9
|
|
|
$
|
772.2
|
|
|
$
|
305.6
|
|
|
$
|
1,988.3
|
|
Return on Average Assets (Last Twelve Months)
|
|
|
1.07
|
%
|
|
|
0.80
|
%
|
|
|
0.72
|
%
|
|
|
-0.46
|
%
|
|
|
1.20
|
%
|
|
|
1.00
|
%
|
|
|
1.03
|
%
|
|
|
0.80
|
%
|
|
|
1.36
|
%
|
|
|
0.81
|
%
|
|
|
0.84
|
%
|
|
|
0.45
|
%
|
|
|
1.36
|
%
|
Tangible Common Equity Ratio
|
|
|
8.10
|
%
|
|
|
9.13
|
%
|
|
|
10.49
|
%
|
|
|
7.52
|
%
|
|
|
20.65
|
%
|
|
|
10.12
|
%
|
|
|
11.00
|
%
|
|
|
6.28
|
%
|
|
|
20.65
|
%
|
|
|
8.98
|
%
|
|
|
9.44
|
%
|
|
|
6.28
|
%
|
|
|
12.71
|
%
|
Efficiency Ratio (Last Twelve Months)
|
|
|
52.9
|
%
|
|
|
70.2
|
%
|
|
|
71.2
|
%
|
|
|
56.1
|
%
|
|
|
88.1
|
%
|
|
|
64.8
|
%
|
|
|
64.8
|
%
|
|
|
56.1
|
%
|
|
|
73.6
|
%
|
|
|
67.8
|
%
|
|
|
68.7
|
%
|
|
|
56.1
|
%
|
|
|
90.2
|
%
|
Non-Performing
Assets / Total Assets
|
|
|
0.20
|
%
|
|
|
0.80
|
%
|
|
|
0.97
|
%
|
|
|
0.02
|
%
|
|
|
3.36
|
%
|
|
|
0.80
|
%
|
|
|
0.87
|
%
|
|
|
0.02
|
%
|
|
|
1.85
|
%
|
|
|
0.79
|
%
|
|
|
1.07
|
%
|
|
|
0.02
|
%
|
|
|
2.48
|
%
|
|
Transaction Multiples
|
|
|
|
|
|
|
Western U.S.
|
|
|
Nationwide High-Performing
|
|
|
Nationwide Post Election
|
|
|
|
CCC
|
|
|
Median
|
|
|
Average
|
|
|
Minimum
|
|
|
Maximum
|
|
|
Median
|
|
|
Average
|
|
|
Minimum
|
|
|
Maximum
|
|
|
Median
|
|
|
Average
|
|
|
Minimum
|
|
|
Maximum
|
|
Transaction Price / Last Twelve Months EPS
|
|
|
15.5
|
x
|
|
|
18.9
|
x
|
|
|
22.1
|
x
|
|
|
11.5
|
x
|
|
|
32.6
|
x
|
|
|
18.4
|
x
|
|
|
19.2
|
x
|
|
|
11.5
|
x
|
|
|
32.6
|
x
|
|
|
20.6
|
x
|
|
|
21.2
|
x
|
|
|
13.5
|
x
|
|
|
30.0
|
x
|
Transaction Price / Tangible Book Value (Per Share)
|
|
|
199.8
|
%
|
|
|
171.8
|
%
|
|
|
170.0
|
%
|
|
|
124.3
|
%
|
|
|
220.5
|
%
|
|
|
179.4
|
%
|
|
|
180.0
|
%
|
|
|
103.5
|
%
|
|
|
241.0
|
%
|
|
|
169.4
|
%
|
|
|
176.8
|
%
|
|
|
89.2
|
%
|
|
|
241.0
|
%
|
Transaction Price / Tangible Book Value (Aggregate)
|
|
|
204.7
|
%
|
|
|
171.8
|
%
|
|
|
174.8
|
%
|
|
|
124.3
|
%
|
|
|
222.9
|
%
|
|
|
179.4
|
%
|
|
|
183.7
|
%
|
|
|
103.5
|
%
|
|
|
243.8
|
%
|
|
|
169.4
|
%
|
|
|
179.2
|
%
|
|
|
89.2
|
%
|
|
|
243.8
|
%
|
Tangible Book Premium / Core Deposits (1)
|
|
|
11.0
|
%
|
|
|
9.8
|
%
|
|
|
10.2
|
%
|
|
|
3.0
|
%
|
|
|
15.7
|
%
|
|
|
10.7
|
%
|
|
|
10.9
|
%
|
|
|
1.0
|
%
|
|
|
15.7
|
%
|
|
|
10.6
|
%
|
|
|
11.2
|
%
|
|
|
4.2
|
%
|
|
|
17.2
|
%
|
(1)
|
Core deposits exclude time deposits with account balances greater than $100,000. Tangible book premium / core deposits calculated by dividing the excess or deficit of the aggregate transaction value over tangible book
value by core deposits
|
Net Present Value Analysis for CCC
Davidson performed an analysis that estimated the net present value per share of CCC common stock under various circumstances. The analysis
assumed: (i) CCC performed in accordance with CCC managements financial forecasts for the years ending December 31, 2017 and December 31, 2018; and (ii) an estimated long-term growth rate for the years thereafter, as
discussed with and confirmed by CCC management. To approximate the terminal value of CCC common stock at December 31, 2022, Davidson applied price to earnings multiples of 10.0x to 17.0x and multiples of tangible book value ranging from 180.0%
to 250.0%. The income streams and terminal values were then discounted to present values using different discount rates ranging from 9.00% to 15.00% chosen to reflect different assumptions regarding required rates of return of holders or prospective
buyers of CCCs common stock. In evaluating the discount rate, Davidson used industry standard methods of adding the current risk-free rate, which is based on the
20-year
Treasury yield, plus the
published Duff & Phelps Industry Equity Risk Premium and plus the published Duff & Phelps Size Premium.
At the
June 5, 2017 CCC board of directors meeting, Davidson noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made,
and the results thereof are not necessarily indicative of actual values or future results.
As illustrated in the following tables, the
analysis indicates an imputed range of values per share of CCC common stock of $90.51 to $201.18 when applying the price to earnings multiples to the financial forecasts and $138.87 to $252.17 when applying the multiples of tangible book value to
the financial forecasts.
31
Earnings Per Share Multiples
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share Multiple
|
|
Discount Rate
|
|
10.0x
|
|
|
11.0x
|
|
|
12.0x
|
|
|
13.0x
|
|
|
14.0x
|
|
|
15.0x
|
|
|
16.0x
|
|
|
17.0x
|
|
|
|
9.00%
|
|
$
|
118.34
|
|
|
$
|
130.18
|
|
|
$
|
142.01
|
|
|
$
|
153.84
|
|
|
$
|
165.68
|
|
|
$
|
177.51
|
|
|
$
|
189.35
|
|
|
$
|
201.18
|
|
|
|
10.00%
|
|
$
|
113.06
|
|
|
$
|
124.36
|
|
|
$
|
135.67
|
|
|
$
|
146.97
|
|
|
$
|
158.28
|
|
|
$
|
169.58
|
|
|
$
|
180.89
|
|
|
$
|
192.20
|
|
|
|
11.00%
|
|
$
|
108.05
|
|
|
$
|
118.86
|
|
|
$
|
129.66
|
|
|
$
|
140.47
|
|
|
$
|
151.27
|
|
|
$
|
162.08
|
|
|
$
|
172.88
|
|
|
$
|
183.69
|
|
|
|
12.00%
|
|
$
|
103.31
|
|
|
$
|
113.64
|
|
|
$
|
123.97
|
|
|
$
|
134.30
|
|
|
$
|
144.64
|
|
|
$
|
154.97
|
|
|
$
|
165.30
|
|
|
$
|
175.63
|
|
|
|
13.00%
|
|
$
|
98.82
|
|
|
$
|
108.70
|
|
|
$
|
118.58
|
|
|
$
|
128.46
|
|
|
$
|
138.34
|
|
|
$
|
148.23
|
|
|
$
|
158.11
|
|
|
$
|
167.99
|
|
|
|
14.00%
|
|
$
|
94.56
|
|
|
$
|
104.01
|
|
|
$
|
113.47
|
|
|
$
|
122.92
|
|
|
$
|
132.38
|
|
|
$
|
141.84
|
|
|
$
|
151.29
|
|
|
$
|
160.75
|
|
|
|
15.00%
|
|
$
|
90.51
|
|
|
$
|
99.57
|
|
|
$
|
108.62
|
|
|
$
|
117.67
|
|
|
$
|
126.72
|
|
|
$
|
135.77
|
|
|
$
|
144.82
|
|
|
$
|
153.87
|
|
Tangible Book Value Multiples
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book Value Per Share Multiple
|
|
Discount Rate
|
|
180.0%
|
|
|
190.0%
|
|
|
200.0%
|
|
|
210.0%
|
|
|
220.0%
|
|
|
230.0%
|
|
|
240.0%
|
|
|
250.0%
|
|
|
|
9.00%
|
|
$
|
181.57
|
|
|
$
|
191.65
|
|
|
$
|
201.74
|
|
|
$
|
211.83
|
|
|
$
|
221.91
|
|
|
$
|
232.00
|
|
|
$
|
242.09
|
|
|
$
|
252.17
|
|
|
|
10.00%
|
|
$
|
173.46
|
|
|
$
|
183.09
|
|
|
$
|
192.73
|
|
|
$
|
202.37
|
|
|
$
|
212.00
|
|
|
$
|
221.64
|
|
|
$
|
231.28
|
|
|
$
|
240.91
|
|
|
|
11.00%
|
|
$
|
165.78
|
|
|
$
|
174.99
|
|
|
$
|
184.20
|
|
|
$
|
193.41
|
|
|
$
|
202.62
|
|
|
$
|
211.83
|
|
|
$
|
221.04
|
|
|
$
|
230.25
|
|
|
|
12.00%
|
|
$
|
158.51
|
|
|
$
|
167.31
|
|
|
$
|
176.12
|
|
|
$
|
184.92
|
|
|
$
|
193.73
|
|
|
$
|
202.53
|
|
|
$
|
211.34
|
|
|
$
|
220.15
|
|
|
|
13.00%
|
|
$
|
151.61
|
|
|
$
|
160.03
|
|
|
$
|
168.46
|
|
|
$
|
176.88
|
|
|
$
|
185.30
|
|
|
$
|
193.73
|
|
|
$
|
202.15
|
|
|
$
|
210.57
|
|
|
|
14.00%
|
|
$
|
145.07
|
|
|
$
|
153.13
|
|
|
$
|
161.19
|
|
|
$
|
169.25
|
|
|
$
|
177.31
|
|
|
$
|
185.37
|
|
|
$
|
193.43
|
|
|
$
|
201.49
|
|
|
|
15.00%
|
|
$
|
138.87
|
|
|
$
|
146.59
|
|
|
$
|
154.30
|
|
|
$
|
162.02
|
|
|
$
|
169.73
|
|
|
$
|
177.45
|
|
|
$
|
185.16
|
|
|
$
|
192.88
|
|
Davidson also considered and discussed with the CCC Board how this analysis would be affected by changes in
the underlying assumptions, including variations with respect to net income. To illustrate this impact, Davidson performed a similar analysis assuming CCC estimated earnings per share in 2022 varied from 20.00% above projections to 20.00% below
projections. This analysis resulted in the following range of per share values for CCC common stock, using the same price to earnings multiples of 10.0x to 17.0x and a discount rate of 12.68%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance to
2022 EPS
|
|
Earnings Per Share Multiple
|
|
|
10.0x
|
|
|
11.0x
|
|
|
12.0x
|
|
|
13.0x
|
|
|
17.0x
|
|
|
15.0x
|
|
|
16.0x
|
|
|
17.0x
|
|
|
|
20.00%
|
|
$
|
120.28
|
|
|
$
|
132.30
|
|
|
$
|
144.33
|
|
|
$
|
156.36
|
|
|
$
|
168.39
|
|
|
$
|
180.41
|
|
|
$
|
192.44
|
|
|
$
|
204.47
|
|
|
|
15.00%
|
|
$
|
115.26
|
|
|
$
|
126.79
|
|
|
$
|
138.32
|
|
|
$
|
149.84
|
|
|
$
|
161.37
|
|
|
$
|
172.90
|
|
|
$
|
184.42
|
|
|
$
|
195.95
|
|
|
|
10.00%
|
|
$
|
110.25
|
|
|
$
|
121.28
|
|
|
$
|
132.30
|
|
|
$
|
143.33
|
|
|
$
|
154.35
|
|
|
$
|
165.38
|
|
|
$
|
176.40
|
|
|
$
|
187.43
|
|
|
|
5.00%
|
|
$
|
105.24
|
|
|
$
|
115.77
|
|
|
$
|
126.29
|
|
|
$
|
136.81
|
|
|
$
|
147.34
|
|
|
$
|
157.86
|
|
|
$
|
168.39
|
|
|
$
|
178.91
|
|
|
|
0.00%
|
|
$
|
100.23
|
|
|
$
|
110.25
|
|
|
$
|
120.28
|
|
|
$
|
130.30
|
|
|
$
|
140.32
|
|
|
$
|
150.34
|
|
|
$
|
160.37
|
|
|
$
|
170.39
|
|
|
|
-5.00%
|
|
$
|
95.22
|
|
|
$
|
104.74
|
|
|
$
|
114.26
|
|
|
$
|
123.78
|
|
|
$
|
133.31
|
|
|
$
|
142.83
|
|
|
$
|
152.35
|
|
|
$
|
161.87
|
|
|
|
-10.00%
|
|
$
|
90.21
|
|
|
$
|
99.23
|
|
|
$
|
108.25
|
|
|
$
|
117.27
|
|
|
$
|
126.29
|
|
|
$
|
135.31
|
|
|
$
|
144.33
|
|
|
$
|
153.35
|
|
|
|
-15.00%
|
|
$
|
85.20
|
|
|
$
|
93.71
|
|
|
$
|
102.23
|
|
|
$
|
110.75
|
|
|
$
|
119.27
|
|
|
$
|
127.79
|
|
|
$
|
136.31
|
|
|
$
|
144.83
|
|
|
|
-20.00%
|
|
$
|
80.18
|
|
|
$
|
88.20
|
|
|
$
|
96.22
|
|
|
$
|
104.24
|
|
|
$
|
112.26
|
|
|
$
|
120.28
|
|
|
$
|
128.29
|
|
|
$
|
136.31
|
|
Net Present Value Analysis for Glacier
Davidson performed an analysis that estimated the net present value per share of Glacier common stock under various circumstances. The analysis
assumed: (i) Glacier performed in accordance with average FactSet Research Systems, Inc. consensus earnings estimates for the years ending December 31, 2017 and December 31, 2018, and (ii) an estimated long-term growth rate for
the years thereafter, as discussed with and confirmed by Glacier and CCC management. To approximate the terminal value of Glacier common stock at December 31, 2022, Davidson applied price to earnings multiples of 13.0x to 20.0x and multiples of
tangible book value ranging from 160.0% to 300.0%. The income streams and terminal values were then discounted to present values using different discount rates ranging from 9.00% to 15.00% chosen to reflect different assumptions regarding required
rates of return of holders or prospective buyers of Glaciers common stock. In evaluating the discount rate, Davidson used industry
32
standard methods of adding the current risk-free rate, which is based on the
20-year
Treasury yield, plus the published Duff & Phelps Industry
Equity Risk Premium and plus the published Duff & Phelps Size Premium.
At the June 5, 2017 CCC board of directors meeting,
Davidson noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily
indicative of actual values or future results.
As illustrated in the following tables, the analysis indicates an imputed range of values
per share of Glacier common stock of $21.72 to $39.45 when applying the price to earnings multiples to the financial forecasts and $20.12 to $42.97 when applying the multiples of tangible book value to the financial forecasts.
Earnings Per Share Multiples
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share Multiple
|
|
Discount Rate
|
|
13.0x
|
|
|
14.0x
|
|
|
15.0x
|
|
|
16.0x
|
|
|
17.0x
|
|
|
18.0x
|
|
|
19.0x
|
|
|
20.0x
|
|
|
|
9.00%
|
|
$
|
27.52
|
|
|
$
|
29.23
|
|
|
$
|
30.93
|
|
|
$
|
32.63
|
|
|
$
|
34.34
|
|
|
$
|
36.04
|
|
|
$
|
37.74
|
|
|
$
|
39.45
|
|
|
|
10.00%
|
|
$
|
26.43
|
|
|
$
|
28.05
|
|
|
$
|
29.68
|
|
|
$
|
31.31
|
|
|
$
|
32.93
|
|
|
$
|
34.56
|
|
|
$
|
36.19
|
|
|
$
|
37.82
|
|
|
|
11.00%
|
|
$
|
25.38
|
|
|
$
|
26.94
|
|
|
$
|
28.50
|
|
|
$
|
30.05
|
|
|
$
|
31.61
|
|
|
$
|
33.16
|
|
|
$
|
34.72
|
|
|
$
|
36.27
|
|
|
|
12.00%
|
|
$
|
24.40
|
|
|
$
|
25.88
|
|
|
$
|
27.37
|
|
|
$
|
28.86
|
|
|
$
|
30.35
|
|
|
$
|
31.83
|
|
|
$
|
33.32
|
|
|
$
|
34.81
|
|
|
|
13.00%
|
|
$
|
23.46
|
|
|
$
|
24.88
|
|
|
$
|
26.30
|
|
|
$
|
27.73
|
|
|
$
|
29.15
|
|
|
$
|
30.57
|
|
|
$
|
31.99
|
|
|
$
|
33.42
|
|
|
|
14.00%
|
|
$
|
22.57
|
|
|
$
|
23.93
|
|
|
$
|
25.29
|
|
|
$
|
26.65
|
|
|
$
|
28.01
|
|
|
$
|
29.38
|
|
|
$
|
30.74
|
|
|
$
|
32.10
|
|
|
|
15.00%
|
|
$
|
21.72
|
|
|
$
|
23.03
|
|
|
$
|
24.33
|
|
|
$
|
25.63
|
|
|
$
|
26.94
|
|
|
$
|
28.24
|
|
|
$
|
29.54
|
|
|
$
|
30.84
|
|
Tangible Book Value Multiples
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book Value Per Share Multiple
|
|
Discount Rate
|
|
160.0%
|
|
|
180.0%
|
|
|
200.0%
|
|
|
220.0%
|
|
|
240.0%
|
|
|
260.0%
|
|
|
280.0%
|
|
|
300.0%
|
|
|
|
9.00%
|
|
$
|
25.43
|
|
|
$
|
27.93
|
|
|
$
|
30.44
|
|
|
$
|
32.95
|
|
|
$
|
35.45
|
|
|
$
|
37.96
|
|
|
$
|
40.47
|
|
|
$
|
42.97
|
|
|
|
10.00%
|
|
$
|
24.42
|
|
|
$
|
26.82
|
|
|
$
|
29.21
|
|
|
$
|
31.61
|
|
|
$
|
34.00
|
|
|
$
|
36.40
|
|
|
$
|
38.79
|
|
|
$
|
41.18
|
|
|
|
11.00%
|
|
$
|
23.47
|
|
|
$
|
25.76
|
|
|
$
|
28.05
|
|
|
$
|
30.34
|
|
|
$
|
32.62
|
|
|
$
|
34.91
|
|
|
$
|
37.20
|
|
|
$
|
39.49
|
|
|
|
12.00%
|
|
$
|
22.57
|
|
|
$
|
24.76
|
|
|
$
|
26.94
|
|
|
$
|
29.13
|
|
|
$
|
31.32
|
|
|
$
|
33.51
|
|
|
$
|
35.70
|
|
|
$
|
37.88
|
|
|
|
13.00%
|
|
$
|
21.71
|
|
|
$
|
23.80
|
|
|
$
|
25.90
|
|
|
$
|
27.99
|
|
|
$
|
30.08
|
|
|
$
|
32.17
|
|
|
$
|
34.27
|
|
|
$
|
36.36
|
|
|
|
14.00%
|
|
$
|
20.90
|
|
|
$
|
22.90
|
|
|
$
|
24.90
|
|
|
$
|
26.90
|
|
|
$
|
28.91
|
|
|
$
|
30.91
|
|
|
$
|
32.91
|
|
|
$
|
34.91
|
|
|
|
15.00%
|
|
$
|
20.12
|
|
|
$
|
22.04
|
|
|
$
|
23.96
|
|
|
$
|
25.87
|
|
|
$
|
27.79
|
|
|
$
|
29.71
|
|
|
$
|
31.62
|
|
|
$
|
33.54
|
|
Davidson also considered and discussed with the CCC Board how this analysis would be affected by changes in
the underlying assumptions, including variations with respect to net income. To illustrate this impact, Davidson performed a similar analysis assuming Glacier estimated earnings per share in 2022 varied from 20.0% above projections to 20.0% below
projections. This analysis resulted in the following range of per share values for Glacier common stock, using the same price to earnings multiples of 13.0x to 20.x and a discount rate of 10.00%.
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance to
2022 EPS
|
|
Earnings Per Share Multiple
|
|
|
13.0x
|
|
|
14.0x
|
|
|
15.0x
|
|
|
16.0x
|
|
|
17.0x
|
|
|
18.0x
|
|
|
19.0x
|
|
|
20.0x
|
|
|
|
20.00%
|
|
$
|
30.66
|
|
|
$
|
32.61
|
|
|
$
|
34.56
|
|
|
$
|
36.51
|
|
|
$
|
38.47
|
|
|
$
|
40.42
|
|
|
$
|
42.37
|
|
|
$
|
44.33
|
|
|
|
15.00%
|
|
$
|
29.60
|
|
|
$
|
31.47
|
|
|
$
|
33.34
|
|
|
$
|
35.21
|
|
|
$
|
37.08
|
|
|
$
|
38.96
|
|
|
$
|
40.83
|
|
|
$
|
42.70
|
|
|
|
10.00%
|
|
$
|
28.54
|
|
|
$
|
30.33
|
|
|
$
|
32.12
|
|
|
$
|
33.91
|
|
|
$
|
35.70
|
|
|
$
|
37.49
|
|
|
$
|
39.28
|
|
|
$
|
41.07
|
|
|
|
5.00%
|
|
$
|
27.48
|
|
|
$
|
29.19
|
|
|
$
|
30.90
|
|
|
$
|
32.61
|
|
|
$
|
34.32
|
|
|
$
|
36.03
|
|
|
$
|
37.74
|
|
|
$
|
39.44
|
|
|
|
0.00%
|
|
$
|
26.43
|
|
|
$
|
28.05
|
|
|
$
|
29.68
|
|
|
$
|
31.31
|
|
|
$
|
32.93
|
|
|
$
|
34.56
|
|
|
$
|
36.19
|
|
|
$
|
37.82
|
|
|
|
-5.00%
|
|
$
|
25.37
|
|
|
$
|
26.91
|
|
|
$
|
28.46
|
|
|
$
|
30.01
|
|
|
$
|
31.55
|
|
|
$
|
33.10
|
|
|
$
|
34.64
|
|
|
$
|
36.19
|
|
|
|
-10.00%
|
|
$
|
24.31
|
|
|
$
|
25.77
|
|
|
$
|
27.24
|
|
|
$
|
28.70
|
|
|
$
|
30.17
|
|
|
$
|
31.63
|
|
|
$
|
33.10
|
|
|
$
|
34.56
|
|
|
|
-15.00%
|
|
$
|
23.25
|
|
|
$
|
24.64
|
|
|
$
|
26.02
|
|
|
$
|
27.40
|
|
|
$
|
28.78
|
|
|
$
|
30.17
|
|
|
$
|
31.55
|
|
|
$
|
32.93
|
|
|
|
-20.00%
|
|
$
|
22.19
|
|
|
$
|
23.50
|
|
|
$
|
24.80
|
|
|
$
|
26.10
|
|
|
$
|
27.40
|
|
|
$
|
28.70
|
|
|
$
|
30.01
|
|
|
$
|
31.31
|
|
Net Present Value Analysis for Pro Forma Glacier
Davidson performed an analysis that estimated the net present value per share of Glacier common stock under various circumstances, including
the impact of the merger with CCC. The analysis assumed (i) Glacier performed in accordance with average FactSet Research Systems, Inc. consensus earnings estimates for the years ending December 31, 2017 and December 31, 2018, (ii) an
estimated long-term growth rate for the years thereafter; and (iii) the pro forma financial impact of the merger with CCC including the cost savings estimates, purchase accounting adjustments and transaction expenses, as discussed with and
confirmed by Glacier management. The analysis assumed (i) CCC performed in accordance with CCC managements financial forecasts for the years ending December 31, 2017 and December 31, 2018, and (ii) an estimated long-term
growth rate for the years thereafter, as discussed with and confirmed by CCC management. To approximate the terminal value of Glacier common stock at December 31, 2022, Davidson applied price to earnings multiples of 13.0x to 20.0x and
multiples of tangible book value ranging from 160.0% to 300.0%. The income streams and terminal values were then discounted to present values using different discount rates ranging from 9.00% to 15.00% chosen to reflect different assumptions
regarding required rates of return of holders or prospective buyers of Glaciers common stock. In evaluating the discount rate, Davidson used industry standard methods of adding the current risk-free rate, which is based on the
20-year
Treasury yield, plus the published Duff & Phelps Industry Equity Risk Premium and plus the published Duff & Phelps Size Premium.
At the June 5, 2017 CCC board of directors meeting, Davidson noted that the net present value analysis is a widely used valuation
methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.
As illustrated in the following tables, the analysis indicates an imputed range of values per share of Glacier common stock of $22.18 to
$40.30 when applying the price to earnings multiples to the financial forecasts and $20.24 to $43.18 when applying the multiples of tangible book value to the financial forecasts.
Earnings Per Share Multiples
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share Multiple
|
|
Discount Rate
|
|
13.0x
|
|
|
14.0x
|
|
|
15.0x
|
|
|
16.0x
|
|
|
17.0x
|
|
|
18.0x
|
|
|
19.0x
|
|
|
20.0x
|
|
|
|
9.00%
|
|
$
|
28.11
|
|
|
$
|
29.85
|
|
|
$
|
31.59
|
|
|
$
|
33.33
|
|
|
$
|
35.07
|
|
|
$
|
36.81
|
|
|
$
|
38.56
|
|
|
$
|
40.30
|
|
|
|
10.00%
|
|
$
|
26.98
|
|
|
$
|
28.65
|
|
|
$
|
30.31
|
|
|
$
|
31.98
|
|
|
$
|
33.64
|
|
|
$
|
35.30
|
|
|
$
|
36.97
|
|
|
$
|
38.63
|
|
|
|
11.00%
|
|
$
|
25.92
|
|
|
$
|
27.51
|
|
|
$
|
29.10
|
|
|
$
|
30.69
|
|
|
$
|
32.28
|
|
|
$
|
33.87
|
|
|
$
|
35.46
|
|
|
$
|
37.05
|
|
|
|
12.00%
|
|
$
|
24.91
|
|
|
$
|
26.43
|
|
|
$
|
27.95
|
|
|
$
|
29.47
|
|
|
$
|
30.99
|
|
|
$
|
32.51
|
|
|
$
|
34.03
|
|
|
$
|
35.55
|
|
|
|
13.00%
|
|
$
|
23.95
|
|
|
$
|
25.41
|
|
|
$
|
26.86
|
|
|
$
|
28.31
|
|
|
$
|
29.77
|
|
|
$
|
31.22
|
|
|
$
|
32.68
|
|
|
$
|
34.13
|
|
|
|
14.00%
|
|
$
|
23.04
|
|
|
$
|
24.43
|
|
|
$
|
25.83
|
|
|
$
|
27.22
|
|
|
$
|
28.61
|
|
|
$
|
30.00
|
|
|
$
|
31.39
|
|
|
$
|
32.78
|
|
|
|
15.00%
|
|
$
|
22.18
|
|
|
$
|
23.51
|
|
|
$
|
24.84
|
|
|
$
|
26.17
|
|
|
$
|
27.51
|
|
|
$
|
28.84
|
|
|
$
|
30.17
|
|
|
$
|
31.50
|
|
34
Tangible Book Value Multiples
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book Value Per Share Multiple
|
|
Discount Rate
|
|
160.0%
|
|
|
180.0%
|
|
|
200.0%
|
|
|
220.0%
|
|
|
240.0%
|
|
|
260.0%
|
|
|
280.0%
|
|
|
300.0%
|
|
|
|
9.00%
|
|
$
|
25.58
|
|
|
$
|
28.09
|
|
|
$
|
30.61
|
|
|
$
|
33.12
|
|
|
$
|
35.63
|
|
|
$
|
38.15
|
|
|
$
|
40.66
|
|
|
$
|
43.18
|
|
|
|
10.00%
|
|
$
|
24.57
|
|
|
$
|
26.97
|
|
|
$
|
29.37
|
|
|
$
|
31.77
|
|
|
$
|
34.17
|
|
|
$
|
36.58
|
|
|
$
|
38.98
|
|
|
$
|
41.38
|
|
|
|
11.00%
|
|
$
|
23.61
|
|
|
$
|
25.91
|
|
|
$
|
28.20
|
|
|
$
|
30.50
|
|
|
$
|
32.79
|
|
|
$
|
35.09
|
|
|
$
|
37.38
|
|
|
$
|
39.68
|
|
|
|
12.00%
|
|
$
|
22.70
|
|
|
$
|
24.90
|
|
|
$
|
27.09
|
|
|
$
|
29.29
|
|
|
$
|
31.48
|
|
|
$
|
33.68
|
|
|
$
|
35.87
|
|
|
$
|
38.07
|
|
|
|
13.00%
|
|
$
|
21.84
|
|
|
$
|
23.94
|
|
|
$
|
26.04
|
|
|
$
|
28.14
|
|
|
$
|
30.24
|
|
|
$
|
32.34
|
|
|
$
|
34.44
|
|
|
$
|
36.54
|
|
|
|
14.00%
|
|
$
|
21.02
|
|
|
$
|
23.03
|
|
|
$
|
25.04
|
|
|
$
|
27.05
|
|
|
$
|
29.06
|
|
|
$
|
31.07
|
|
|
$
|
33.07
|
|
|
$
|
35.08
|
|
|
|
15.00%
|
|
$
|
20.24
|
|
|
$
|
22.17
|
|
|
$
|
24.09
|
|
|
$
|
26.01
|
|
|
$
|
27.94
|
|
|
$
|
29.86
|
|
|
$
|
31.78
|
|
|
$
|
33.70
|
|
Davidson also considered and discussed with the CCC Board how this analysis would be affected by changes in
the underlying assumptions, including variations with respect to net income. To illustrate this impact, Davidson performed a similar analysis assuming Glaciers pro forma estimated earnings per share in 2022 varied from 20.0% above projections
to 20.0% below projections. This analysis resulted in the following range of per share values for Glacier common stock using the same price to earnings multiples of 13.0x to 20.0x, and using a discount rate of 10.00%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance to
2022 EPS
|
|
Earnings Per Share Multiple
|
|
|
13.0x
|
|
|
14.0x
|
|
|
15.0x
|
|
|
16.0x
|
|
|
17.0x
|
|
|
18.0x
|
|
|
19.0x
|
|
|
20.0x
|
|
|
|
20.00%
|
|
$
|
31.31
|
|
|
$
|
33.31
|
|
|
$
|
35.30
|
|
|
$
|
37.30
|
|
|
$
|
39.30
|
|
|
$
|
41.29
|
|
|
$
|
43.29
|
|
|
$
|
45.29
|
|
|
|
15.00%
|
|
$
|
30.23
|
|
|
$
|
32.14
|
|
|
$
|
34.06
|
|
|
$
|
35.97
|
|
|
$
|
37.88
|
|
|
$
|
39.80
|
|
|
$
|
41.71
|
|
|
$
|
43.62
|
|
|
|
10.00%
|
|
$
|
29.15
|
|
|
$
|
30.98
|
|
|
$
|
32.81
|
|
|
$
|
34.64
|
|
|
$
|
36.47
|
|
|
$
|
38.30
|
|
|
$
|
40.13
|
|
|
$
|
41.96
|
|
|
|
5.00%
|
|
$
|
28.06
|
|
|
$
|
29.81
|
|
|
$
|
31.56
|
|
|
$
|
33.31
|
|
|
$
|
35.05
|
|
|
$
|
36.80
|
|
|
$
|
38.55
|
|
|
$
|
40.29
|
|
|
|
0.00%
|
|
$
|
26.98
|
|
|
$
|
28.65
|
|
|
$
|
30.31
|
|
|
$
|
31.98
|
|
|
$
|
33.64
|
|
|
$
|
35.30
|
|
|
$
|
36.97
|
|
|
$
|
38.63
|
|
|
|
-5.00%
|
|
$
|
25.90
|
|
|
$
|
27.48
|
|
|
$
|
29.06
|
|
|
$
|
30.64
|
|
|
$
|
32.22
|
|
|
$
|
33.81
|
|
|
$
|
35.39
|
|
|
$
|
36.97
|
|
|
|
-10.00%
|
|
$
|
24.82
|
|
|
$
|
26.32
|
|
|
$
|
27.82
|
|
|
$
|
29.31
|
|
|
$
|
30.81
|
|
|
$
|
32.31
|
|
|
$
|
33.81
|
|
|
$
|
35.30
|
|
|
|
-15.00%
|
|
$
|
23.74
|
|
|
$
|
25.15
|
|
|
$
|
26.57
|
|
|
$
|
27.98
|
|
|
$
|
29.40
|
|
|
$
|
30.81
|
|
|
$
|
32.22
|
|
|
$
|
33.64
|
|
|
|
-20.00%
|
|
$
|
22.66
|
|
|
$
|
23.99
|
|
|
$
|
25.32
|
|
|
$
|
26.65
|
|
|
$
|
27.98
|
|
|
$
|
29.31
|
|
|
$
|
30.64
|
|
|
$
|
31.98
|
|
Financial Impact Analysis
Davidson performed pro forma merger analyses that combined projected income statement and balance sheet information of CCC and Glacier.
Assumptions regarding the accounting treatment, acquisition adjustments and cost savings were used to calculate the financial impact that the merger would have on certain projected financial results of Glacier. In the course of this analysis,
Davidson used the average FactSet Research Systems, Inc. consensus earnings estimates for Glacier for the years ending December 31, 2017 and December 31, 2018, and used an estimated long-term growth rate for the years thereafter, as
discussed with, and confirmed by, senior management of Glacier and CCC. This analysis indicated that the merger is expected to be accretive to Glaciers estimated earnings per share in 2018, after excluding
non-recurring
transaction-related expenses. The analysis also indicated that the merger is expected to be dilutive to tangible book value per share for Glacier and that Glacier would maintain capital ratios in
excess of those required for Glacier to be considered well-capitalized under existing regulations. For all of the above analyses, the actual results achieved by CCC and Glacier prior to and following the merger will vary from the projected results,
and the variations may be material.
Davidson prepared its analyses for purposes of providing its opinion to CCCs board of directors
as to the fairness, from a financial point of view, of the consideration to be paid to the holders of the CCC common stock in the proposed merger and to assist CCCs board of directors in analyzing the proposed merger. The analyses do not
purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly
more or less favorable than those suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon
35
numerous factors or events beyond the control of the parties and their respective advisors, none of CCC, Glacier or Davidson or any other person assumes responsibility if future results are
materially different from those forecasted.
Davidsons opinion was one of many factors considered by the CCCs board of
directors in its evaluation of the merger and should not be viewed as determinative of the views of the board of directors of CCC or management with respect to the merger or the merger consideration.
Davidson and its affiliates, as part of their investment banking business, are continually engaged in performing financial analyses with
respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions. Davidson
acted as financial advisor to CCC in connection with, and participated in certain of the negotiations leading to the merger. Davidson is a full service securities firm engaged, either directly or through its affiliates, in securities trading,
investment management, financial planning and benefits counseling, financing and brokerage activities for both companies and individuals. In the ordinary course of these activities, Davidson and its affiliates may provide such services to CCC,
Glacier and their respective affiliates, may actively trade the debt and equity securities (or related derivative securities) of CCC and Glacier for their own account and for the accounts of their customers and may at any time hold long and short
positions of such securities. CCC selected Davidson as its financial advisor because it is a recognized investment banking firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement dated March 6,
2017, CCC engaged Davidson as its financial advisor in connection with the contemplated transaction. Pursuant to the terms of the engagement letter, CCC agreed to pay Davidson a cash fee of $100,000 concurrently with the rendering of its fairness
opinion. CCC has agreed to pay Davidson $100,000 upon filing of the form
S-4
by Glacier. CCC will pay to Davidson at the time of closing of the merger a contingent cash fee equal to 1.20% of the Aggregate
Consideration less $150,000 to credit a portion of fees received. CCC has also agreed to reimburse Davidson for all reasonable
out-of-pocket
expenses, including fees of
counsel, and to indemnify Davidson and certain related persons against specified liabilities, including liabilities under the federal securities laws, relating to or arising out of its engagement.
Davidson has, in the past, provided certain investment banking services to CCC and its affiliates, has had a material relationship with CCC
and its affiliates and has received compensation and reimbursement of
out-of-pocket
expenses for such services. During the two years preceding the date of the opinion,
Davidson received compensation for acting as the sole placement agent and financial advisor to CCC on its subordinated debt offering in 2016. In the past, Davidson has advised Glacier on numerous transactions and helped raise debt and equity capital
for Glacier. As of June 5, 2017, Davidson was not engaged on any assignments by Glacier. Additionally, Davidson may provide investment banking services to the combined company in the future and may receive future compensation.
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THE MERGER
The following is a brief description of the material aspects of the merger. There are other aspects of the merger that are not discussed below
but that are contained in the merger agreement. You are being asked to approve the merger in accordance with the terms of the merger agreement, and you are urged to read the merger agreement carefully. The merger agreement is attached to this proxy
statement/prospectus as
Appendix A
.
Basic Terms of the Merger
The merger agreement provides for the merger of CCC with and into Glacier, and immediately thereafter the merger of Collegiate Bank with and
into Glacier Bank, Glaciers wholly-owned subsidiary. Following the merger, Collegiate Bank will operate under the name and as Collegiate Peaks Bank, a division of Glacier Bank.
In the merger, CCC shareholders will receive a combination of Glacier common stock and cash for their CCC common stock, as described below.
See Merger Consideration.
While Glacier and CCC believe that they will receive the necessary regulatory approvals for
the merger, there can be no assurance that such approvals will be received or, if received, as to the timing of such approvals or as to the ability to obtain such approvals on satisfactory terms. See Conditions to the Merger and
Regulatory Requirements.
Merger Consideration
The merger agreement provides that as of the effective date of the merger, each share of CCC common stock will be converted into the right to
receive a unit comprised of Glacier common stock and cash, as follows:
Stock Portion of Merger Consideration
3.7681 Glacier shares, subject to adjustment as follows: If the average closing price of Glacier stock calculated in accordance
with the merger agreement exceeds $42.04, Glacier may elect to terminate the merger agreement, unless CCC elects to accept a decrease in the
per-share
number of Glacier shares to be issued in the merger. In
prior merger transactions with similar adjustment rights, Glacier has exercised its right to terminate the merger agreement, and the seller in such prior merger transactions elected to accept a decrease in the
per-share
number of Glacier shares to be issued in the merger.
Conversely, if the average closing
price is below $31.08, CCC may elect to terminate the merger agreement, unless Glacier elects to increase the
per-share
number of Glacier shares to be issued in order to avoid such termination. However, if the
closing of the merger occurs prior to December 31, 2017 (which is not expected) and Glaciers average closing price is more than $29.25, CCC will have no right to provide a notice of termination unless Glaciers stock has also
underperformed the KBW Regional Banking Index by more than 10%.
Assuming for purposes of illustration only that the average closing
price of Glacier common stock is $34.27 (which was the
per-share
closing price of Glacier common stock on August 15, 2017), CCC shareholders would receive 3.7681 shares of Glacier common stock for each share
of CCC common stock because the average closing price did not exceed $42.04 or fall below the amounts set forth above.
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The actual Glacier average closing price will not be determined until 10 days prior to the
closing of the merger, and it cannot be predicted whether such average closing price will be above or below the most likely collar range of between $42.04 and $31.08.
Cash Portion of Merger Consideration
$34.4504 in cash, subject to adjustment as follows: If the CCC Closing Capital is less than $36,194,000, which is expected to be
the Closing Capital Requirement (as defined below), the cash portion of each unit will be reduced on a pro rata basis based on the amount of such deficiency.
If CCC Closing Capital exceeds the Closing Capital Requirement, CCC may, upon written notice to Glacier and effective immediately prior to the
closing of the merger, declare and pay a special dividend to its shareholders in the amount of such excess, or, alternatively, the cash portion of the merger consideration will be increased by the amount of such excess.
CCC Closing Capital is specifically defined in the merger agreement and is equal to an amount, estimated as of the closing date of
the merger, equal to CCCs capital stock, surplus and retained earnings determined in accordance with generally accepted accounting principles (GAAP) on a consolidated basis, net of goodwill and other intangible assets, calculated
in the same manner in which CCCs consolidated tangible equity capital at December 31, 2016 was calculated, after giving effect to adjustments, calculated in accordance with GAAP, for accumulated other comprehensive income or loss as
reported on CCCs balance sheet.
The CCC Closing Capital may be adjusted based on the estimated final amount of transaction-related
expenses to be incurred by CCC, as determined and agreed upon between CCC and Glacier in accordance with the merger agreement (the Final Transaction-Related Expenses). To the extent the Final Transaction-Related Expenses do not equal
$2,450,000, the amount of such difference, on an
after-tax
basis, will be reflected as a
pro-forma
adjustment to the CCC Closing Capital, reducing or increasing, as the
case may be, the amount of the CCC Closing Capital.
Assuming for purposes of illustration only that
(i)
there is
no reduction of the cash portion of the merger consideration, and
(ii)
the average closing price of Glacier common stock immediately prior to the closing of the merger is $34.27 (which was the closing price for Glacier common
stock on August 15, 2017), each share of CCC common stock would receive consideration with a value equal to $163.5832 consisting of $34.4504 in cash and 3.7681 shares of Glacier common stock.
Fractional Shares
No fractional shares
of Glacier common stock will be issued to any holder of CCC common stock in the merger. For each fractional share that would otherwise be issued, Glacier will pay cash in an amount equal to the fraction multiplied by the Glacier average closing
price calculated as provided in the merger agreement. No interest will be paid or accrued on cash payable in lieu of fractional shares of Glacier common stock.
Effective Date of the Merger
Subject to
the satisfaction or waiver of conditions to the obligations of the parties to complete the merger as set forth in the merger agreement, the effective date of the merger will be the date the merger becomes effective under the Montana Business
Corporation Act and the Colorado Business Corporation Act, which is expected to occur on the date of closing. Subject to the foregoing and the possible adjustment of the closing date as discussed under Closing Date below, it is
currently anticipated that the merger will be consummated during the first quarter of 2018.
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Either Glacier or CCC may terminate the merger agreement if the effective date does not occur on
or before April 30, 2018, unless extended under certain circumstances as described under Termination of the Merger Agreement below.
Closing Date
The merger agreement
contemplates a possible closing date in 2017 in the event that the Durbin Amendment is repealed or overturned. The Durbin Amendment, which was passed with the Dodd-Frank financial reform legislation in 2010, limits the interchange fees
paid to banks by merchants for the privilege of accepting payment cards. The legislation applies to banks with over $10 billion in assets, and Glacier believes that the proposed merger of Collegiate Bank with and into Glacier Bank will result
in Glacier having over $10 billion in assets. Glacier desires to postpone the effect on it of the Durbin Amendment until 2018 if possible. Accordingly, the merger agreement provides that Glacier and CCC will use reasonable best efforts to
permit consummation of the merger on or before February 28, 2018, but that if the Durbin Amendment is repealed or overturned and there is no economic harm to Glacier in completing the merger in 2017, then Glacier will use its best efforts to
close the merger as of a
month-end
on or prior to November 30, 2017. If the closing does not occur on or prior to November 30, 2017, the earliest next possible closing date would be February 28,
2018.
Letter of Transmittal
Promptly following the effective date of the merger, Glaciers exchange agent will send a letter of transmittal to each holder of record
of CCC common stock. This mailing will contain instructions on how to surrender CCC common stock certificates or other evidence of ownership in exchange for the merger consideration that the holder is entitled to receive under the merger agreement.
With the exception of any proposed dissenting shares, each CCC stock certificate will, from and after the effective date of the merger,
be deemed to represent and evidence only the right to receive the portion of the merger consideration payable with respect to such certificate. CCC shareholders must provide properly completed and executed letters of transmittal in order to effect
the exchange of their shares of CCC common stock for
(i)
evidence of issuance in book entry form, or upon the request of the holder, stock certificates, representing Glacier common stock in payment of the stock portion of the merger
consideration;
(ii)
a check, or at the election of the CCC shareholder, a wire transfer (but only if the amount of cash included in such shareholders merger consideration exceeds $100,000), in payment of the cash portion of the
merger consideration; and/or
(iii)
a check representing the amount of cash in lieu of fractional shares, if any.
Lost, Stolen or Destroyed
Certificates
If a certificate for CCC common stock has been lost, stolen or destroyed, the exchange agent will be authorized to issue
or pay the holders merger consideration, if the holder provides Glacier with
(i)
satisfactory evidence that the holder owns the CCC common stock and that the certificate is lost, stolen or destroyed,
(ii)
any affidavit
or security Glacier may require (including any bond that may be required by the exchange agent in accordance with its policies), and
(iii)
any reasonable additional assurances that Glacier or Glaciers exchange agent may require.
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Voting Agreements
The directors of CCC have entered into voting agreements, dated as of June 6, 2017. In the voting agreements, each person agrees, among
other things, to vote the shares of CCC common stock that he or she is entitled to vote and that he or she owns or controls in favor of the merger agreement. As of the date hereof, the persons who have entered into the voting agreements are entitled
to vote a total of 182,773 shares of CCC common stock, representing approximately 40.1% of all outstanding shares of CCC common stock.
Dissenters Rights of Appraisal
Under the Colorado Business Corporation Act (CBCA), CCC shareholders have the right to dissent from the merger and to receive
payment in cash for the fair value of their shares of CCC common stock as determined pursuant to the CBCA.
CCC shareholders
electing to exercise dissenters rights must fully comply with the provisions of applicable Colorado law in order to perfect their rights. The following is intended only as a brief summary of the material provisions of the procedures that a CCC
shareholder must follow in order to dissent from the merger and perfect dissenters rights.
This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to the Colorado
dissenters rights law, the full text of which is set forth in Appendix B to this document.
A shareholder who wishes to
assert dissenters rights must:
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not vote in favor of the merger agreement, and
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prior to the time of the vote taken by CCC shareholders, deliver to CCC written notice of the shareholders intent to exercise dissenters rights.
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A shareholder wishing to deliver a notice asserting dissenters rights should hand deliver or mail the notice to the following address:
Columbine Capital Corp.
885 S. Colorado Boulevard
Denver, Colorado 80246
Attention: Secretary
Except in certain circumstances specified in the CBCA, a shareholder electing to assert dissenters rights must generally assert such
rights with respect to all share of CCC common stock beneficially owned by the shareholder. A notice of intent to demand payment under dissenters rights given to CCC shareholders must be in writing.
If a shareholder fails to meet the
requirements for assertion of dissenters rights, such shareholder is not entitled to payment for his, her or its shares under the CBCA.
If a shareholder properly asserts dissenters rights and the proposed merger is consummated, Glacier, as the surviving corporation in the
merger, will send each shareholder who has properly exercised dissenters rights a dissenters notice, notifying the shareholder of, among other things, the completion of the merger and provide the shareholder instructions for the deposit
of certificates representing the dissenters shares of CCC common stock and provide a form for demanding payment.
A dissenting shareholder who fails to timely demand payment or to deposit certificates representing the dissented shares of CCC
common stock is not thereafter entitled to receive payment for his, her or its shares under the CBCA.
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Glacier, as the surviving corporation in the merger, is required to pay all dissenting CCC
shareholders who have properly and timely exercised dissenters rights, deposited certificates and demanded payment of the fair value for their shares of CCC common stock. The amount of payment is determined by Glacier and made to
dissenting shareholders within time frames specified by the CBCA. If a shareholder is dissatisfied with the amount of the payment determined by Glacier, such shareholder may notify Glacier in writing, within 30 days after Glacier made or offered to
make payment, of the shareholders own estimate of the fair value of his, her or its CCC common stock and demand payment for such amount (less any payment made by Glacier). Glacier may, after the receipt of such demand, elect to pay the
additional amount demanded, or, within 60 days following receipt of such demand, commence a legal proceeding for a determination of the fair value of the shares.
In view of the complexity of the Colorado statutes governing dissenters rights, CCC shareholders who wish to dissent from the merger
and pursue dissenters rights should consult their legal advisors.
Stock Options
The merger agreement provides that if a holder of an outstanding and exercisable stock option CCC Option) exercises such CCC Option
after the date of the merger agreement and not less than three business days prior to the effective time of the merger, CCC will issue shares of CCC common stock upon such exercise in accordance with the terms of the option and such shares of CCC
common stock will be converted into the merger consideration at the effective time of the merger.
With respect to CCC Options that remain
outstanding and unexercised as of the effective time of the merger, at the effective time each such CCC Option will be assumed by Glacier and automatically converted into an option (Converted Option) to purchase Glacier common stock on
the same terms and conditions (including vesting) as were in effect to the CCC Option immediately prior to the effective time of the merger, except that:
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each such Converted Option may be exercised solely for shares of Glacier common stock;
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the number of shares of Glacier common stock subject to the Converted Option will be equal to the number of shares of CCC common stock subject to the CCC Option immediately prior to the effective time of the merger,
multiplied by the Exchange Ratio (as defined in the merger agreement); and
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the
per-share
exercise price for each such Converted Option will be adjusted by dividing the
per-share
exercise price of the CCC Option by
the Exchange Ratio.
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The merger agreement further provides that Glacier will, at the effective time of the merger, assume
the obligations of CCC under the Columbine Capital Corp. 2011 Equity Incentive Plan (the CCC Stock Plan) and award agreements pursuant to which the CCC Options have been granted.
Conditions to the Merger
Consummation of
the merger is subject to various conditions. No assurance can be provided as to whether these conditions will be satisfied or waived by the appropriate party. Accordingly, there can be no assurance that the merger will be completed.
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Certain conditions must be satisfied or events must occur before the parties will be obligated to
complete the merger. Each partys obligations under the merger agreement are conditioned on satisfaction by the other party of conditions applicable to them. Some of these conditions, applicable to the respective obligations of both Glacier and
CCC, are as follows:
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the accuracy of the other partys representations and warranties in the merger agreement and any certificate or other instrument delivered in connection with the merger agreement;
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compliance by the other party of all material terms, covenants, and conditions of the merger agreement;
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that there shall have been no damage, destruction, or loss, or other event, individually or in the aggregate, constituting a Material Adverse Effect (as defined in the merger agreement) with respect the other party;
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that no action or proceeding has been commenced or threatened by any governmental agency to restrain or prohibit or invalidate the merger;
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the parties shall have agreed on the amount of the CCC Closing Capital and Final Transaction-Related Expenses, each as defined in the merger agreement; and
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the registration statement filed with the SEC, required to register the Glacier common stock to be issued to shareholders of CCC, has become effective, and no stop-order suspending such effectiveness has been issued and
no proceedings for that purpose have been initiated or threatened by the SEC.
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In addition to the above, the obligations of
Glacier under the merger agreement are subject to conditions that:
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in the opinion of the executive officers of CCC and Collegiate Bank, Collegiate Banks allowance for possible loan and lease losses is adequate to absorb its anticipated loan losses; and
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CCC shall have provided to Glacier, upon reasonable request, certain reports relating to its loans, other extensions of credit, and other assets that are adversely classified, and neither these reports nor any
examination by Glacier will have revealed a change in adversely classified assets or other new information relating to Collegiate Banks loans which constitutes a material adverse effect on CCC.
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Additionally, either Glacier or CCC may terminate the merger if certain conditions applicable to the other party are not satisfied or waived.
Those conditions are discussed below under Termination of the Merger Agreement.
Either Glacier or CCC may waive any
conditions applicable to its obligations, except those that are required by law (such as receipt of regulatory approvals and CCC shareholder approval). Either Glacier or CCC may also grant extended time to the other party to complete an obligation
or condition.
Amendment of the Merger Agreement
The merger agreement may be amended upon authorization of the boards of directors of the parties, whether before or after the special meeting
of the shareholders of CCC. To the extent permitted under applicable law, the parties may make any amendment or supplement without further approval of CCC shareholders. However, after shareholder approval, any amendment that would change the form or
reduce the amount of consideration that CCC shareholders will receive in the merger would require further CCC shareholder approval.
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Termination of the Merger Agreement
The merger agreement contains several provisions entitling either Glacier or CCC to terminate the merger agreement under certain circumstances.
The following briefly describes these provisions:
Lapse of Time
. If the merger has not been consummated on or before
April 30, 2018, then at any time after that date, the board of directors of either Glacier or CCC may terminate the merger agreement and the merger if
(i)
the terminating partys board of directors decides to terminate
by a majority vote of all if its members, and
(ii)
the terminating party delivers to the other party written notice that its board of directors has voted in favor of termination. However, if as of April 30, 2018, all required
regulatory approvals have not been obtained, then the deadline for consummation of the merger will be extended to on or before July 31, 2018, if Glacier notifies CCC in writing on or prior to April 30, 2018 of its election to extend such
date.
Mutual Consent
. The parties may terminate the merger agreement at any time before closing, whether before or after approval
by CCC shareholders, by mutual consent if the board of directors of each party agrees to terminate by a majority vote of all of its members.
Glacier Average Closing Price Greater than $42.04
. By specific action of its board of directors, Glacier may terminate the merger
agreement if the Glacier average closing price (as defined in the merger agreement) is greater than $42.04.
If Glacier provides written
notice of its intent to terminate the merger agreement because the Glacier average closing price is greater than $42.04, CCC may elect, within three business days of its receipt of such notice, to accept an adjustment to the
per-share
stock consideration through the issuance of fewer Glacier shares; in such event, the
per-share
stock consideration will be the number of Glacier shares equal to the
quotient obtained by dividing
(a)
the quotient obtained by dividing
(x)
the result of the number of shares of CCC common stock outstanding at the Effective Time, multiplied by the
per-share
stock consideration, further multiplied by
(y)
$42.04, by
(z)
the Glacier average closing price and (b) the number of CCC shares outstanding at the closing. If CCC makes the
election to accept such decrease in the number of Glacier shares to be issued, no termination of the merger agreement will occur, and the merger agreement will remain in effect in accordance with its terms, except as the
per-share
stock consideration has been adjusted. In prior merger transactions with similar adjustment rights, Glacier has exercised its right to terminate the merger agreement, and the seller in such prior merger
transactions elected to accept a decrease in the
per-share
number of Glacier shares to be issued in the merger.
Glacier Average Closing Price Less than Specified Amounts
. By specific action of its board of directors, CCC may terminate the merger
agreement if the Glacier average closing price is less than certain amounts specified in the merger agreement.
CCC may terminate the
merger agreement if the Glacier average closing price is less than $31.08 but not less than $29.25
and
during the period from the execution date of the merger agreement to the determination date the price of Glacier common stock has
underperformed the KBW Regional Banking Index by more than 10%.
CCC may also terminate the merger agreement if the Glacier average
closing price is less than
(i)
$29.25 if the effective date of the merger is prior to or on December 31, 2017, or
(ii)
$
31.08 if the effective date of the merger is after December 31, 2017 (in either such case no
reference to the performance of Glacier stock relative to a peer group index would be required).
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If CCC provides written notice of its intent to terminate the merger agreement because the
Glacier average closing price is
(i)
less than $31.08 but not less than $29.25 and the price of Glacier stock has underperformed the KBW Regional Banking Index by more than 10%, or
(ii)
less than $29.25 (or if the
merger closes after December 31, 2017, less than $31.08), Glacier may elect, within three business of its receipt of such notice, to adjust the
per-share
stock consideration (or
per-share
cash consideration, or a combination thereof) such that the total value of Glacier stock to be issued (plus any additional cash consideration) is equal to the result of
(i)
the number of shares
of CCC common stock outstanding at the closing of the merger, multiplied by
(ii)
the
per-share
stock consideration, multiplied by
(iii)
$29.25, or if the merger closes after
December 31, 2017, $31.08.
If Glacier elects to increase the
per-share
stock consideration
(or
per-share
cash consideration) as described above, no termination of the merger agreement will occur, and the merger agreement will remain in effect in accordance with its terms, except as the consideration
has been adjusted.
No Regulatory Approvals
. Either party may terminate the merger agreement if the regulatory approvals required
to be obtained are denied, or if any such approval is conditioned on a substantial deviation from the transactions contemplated by the merger agreement, subject to certain rights granted in the merger agreement to appeal the denial of such
regulatory approval.
Breach of Representation or Covenant
. Either party may terminate the merger agreement (so long as the
terminating party is not then in material breach of any of its representations, warranties, covenants or agreements in the merger agreement) if there has been a material breach of any covenants or agreements set forth in the merger agreement by the
other party, which 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 closing of the merger.
Failure to Recommend or Obtain Shareholder Approval
. Glacier may terminate the merger agreement if the CCC Board
(i)
fails
to recommend to its shareholders approval of the merger, or
(ii)
modifies, withdraws or changes in a manner adverse to Glacier its recommendation to shareholders to approve the merger. Additionally, regardless of whether or not the CCC
Board recommends approval of the merger to its shareholders, Glacier may terminate the merger agreement if CCC shareholders elect not to approve the merger.
Impracticability
. Either party may terminate the merger agreement upon written notice to the other party if the board of directors of
the party seeking termination 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 Colorado to restrain or invalidate the merger or the merger agreement.
Dissenting Shares
. Glacier may terminate the merger agreement if holders of 5% or more of the outstanding CCC shares have properly
given notice of their intent to assert dissenters rights under Colorado law.
Superior Proposal Termination by CCC
.
CCC may terminate the merger agreement if its board of directors determines in good faith that CCC has received a Superior Proposal as defined in the merger agreement. This right is subject to the requirement that CCC may terminate the
merger agreement only if CCC
(i)
has not breached its covenants regarding the initiation or solicitation of acquisition proposals from third parties;
(ii)
subsequent to delivering the notice of termination to Glacier, CCC
intends to enter into a letter of intent, acquisition agreement or similar agreement relating to such Superior Proposal,
(iii)
CCC has provided Glacier with at least five days prior written notice that CCC is prepared to accept a
Superior Proposal and has given Glacier, if it so elects, an opportunity to amend the terms of the merger agreement
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(and negotiated with Glacier in good faith with respect to such terms) in such a manner as would enable CCC to
proceed with the merger and
(iv)
simultaneously upon entering into a letter of intent or agreement relating to the Superior Proposal, it delivers to Glacier the
break-up
fee described below.
Superior Proposal Termination by Glacier
. Glacier may terminate the merger agreement if
(i)
an Acquisition
Event (as defined in the merger agreement) has occurred or
(ii)
a third party has made a proposal to CCC or its shareholders to engage in, or has entered into an agreement with respect to, an Acquisition Event, and the merger
agreement and the merger are not approved at the special meeting of CCC shareholders.
Termination Fees
CCC will pay Glacier a termination fee of $500,000 if Glacier terminates the merger agreement based on a CCC breach of its representations or
breach of its covenants. Glacier will pay CCC a termination fee of $500,000 if CCC terminates the merger agreement based on a Glacier breach of its representations or breach of its covenants.
Additionally, the merger agreement provides that if Glacier terminates the merger agreement on or after January 1, 2018, but prior to the
July 31, 2018 or such other date to which the deadline for consummation of the merger has been extended, other than for cause under and in accordance with specified provisions of the merger agreement, Glacier will pay to CCC a termination fee
of $1,000,000.
Break-Up
Fee
If the merger agreement is terminated because
(i)
the CCC Board fails to recommend shareholder approval of the merger agreement or
modifies, or withdraws or changes its recommendation in a manner adverse to Glacier; or
(ii)
CCC terminates the merger agreement after receiving a Superior Proposal and Glacier declines the opportunity to amend the terms of the merger
agreement to enable the CCC Board to proceed with the merger; or
(iii)
Glacier terminates the merger agreement if an Acquisition Event has occurred, then CCC will immediately pay Glacier a
break-up
fee of $3,000,000. If the merger agreement is terminated by Glacier due to the merger agreement not being approved at the CCC special shareholders meeting, or due to a third partys proposal to engage in an Acquisition Event and the
merger agreement not being approved at the CCC special shareholders meeting, and prior to or within 18 months after such termination, CCC or Collegiate Bank enters into an agreement, or publicly announces an intention to engage in an
Acquisition Event, then CCC will promptly following such entry, announcement, or occurrence pay Glacier the
break-up
fee of $3,000,000.
Allocation of Costs Upon Termination
If
the merger agreement is terminated (except under circumstances that would require the payment of a termination fee or
break-up
fee) Glacier and CCC will each pay their own
out-of-pocket
expenses incurred in connection with the transaction and, except for any applicable termination or
break-up
fees, will have no other liability to the
other party.
Conduct Pending the Merger
The merger agreement provides that, until the merger is effective, CCC will conduct its business only in the ordinary and usual course. The
merger agreement also provides that, unless Glacier otherwise consents in writing, and except as required by applicable regulatory authorities, CCC and Collegiate Bank will refrain from engaging in various activities such as:
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effecting any stock split or other recapitalization with respect to CCC, or pledging or encumbering any shares of CCC stock;
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other than as permitted by the merger agreement, declaring or paying any dividends, or making any other distributions with respect to shares of CCC;
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acquiring, selling, transferring assigning or encumbering or otherwise disposing of any material assets having a value greater than $100,000, or making any material commitment other than in the ordinary course of
business;
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soliciting or accepting deposit accounts of a different type from accounts previously accepted by Collegiate Bank or at rates materially in excess of prevailing interest rates, or, other than as permitted by the merger
agreement, incurring any indebtedness for borrowed money;
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offering or making loans or other extensions of credit of a different type, or applying different underwriting standards, from those previously offered or applied by Collegiate Bank, or offering or making a new loan or
extension of credit in an amount greater than $1,000,000 without prior consultation with Glacier, which consultation will not be unreasonably withheld or delayed and for which approval will be deemed provided if Glacier has not responded to such
request within three business days after Glaciers receipt of a loan package concerning the loan at issue;
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making any negative provisions to the ALLL or failing to maintain an adequate reserve for loan and lease losses;
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other than as permitted by the merger agreement, acquiring an ownership interest (except other real estate owned with a value not exceeding $100,000) or leasehold interest in real property without conducting an
appropriate environmental evaluation and providing specified information and notices to Glacier;
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other than as permitted by the merger agreement, entering into, renewing, amending or terminating any contracts calling for a payment of more than $25,000, with a term of one year or more;
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other than as permitted by the merger agreement, entering into or amending any contract calling for a payment of more than $25,000, unless the contract may be terminated without cause or penalty upon 30 days
notice or less;
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other than as permitted by the merger agreement, entering into any personal services contract;
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selling any securities other than in the ordinary course of business, or selling any securities even in the ordinary course of business if the aggregate gain or loss realized from all sales after the date of execution
of the merger agreement would exceed $25,000, or transferring investment securities between portfolios;
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other than as permitted by the merger agreement, implementing or adopting any material changes in its operations, policies or procedures;
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other than in accordance with binding existing commitments, making capital expenditures in excess of $25,000 per project or related series of projects or $50,000 in the aggregate;
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entering into material transactions or making any material expenditures other than in the ordinary course of business except for expenses reasonably related to the completion of the merger; and
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willfully taking any action which would materially and adversely affect or delay the ability of either party to obtain any necessary approvals, consents or waivers of any governmental authority or for either party to
perform in all material respects their respective covenants and agreements under the merger agreement.
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Collegiate Bank Management and
Operations After the Merger
Immediately following the merger of CCC with and into Glacier, Collegiate Bank will be merged with and
into Glacier Bank. It is anticipated that that the former Collegiate Bank will operate after the closing of the merger as Collegiate Peaks Bank, a division of Glacier Bank consistent with Glaciers organizational structure.
As described below under Interests of Certain Persons in the Merger. certain executive officers of Collegiate Bank have entered
into employment agreements with Glacier and Glacier Bank, effective upon closing of the merger, pursuant to which they will serve as executive officers of Collegiate Bank, a division of Glacier Bank.
Employee Benefit Plans
The merger
agreement confirms Glaciers intent that Glaciers and Glacier Banks current personnel policies will apply to any employees of CCC who remain employed following the closing of the merger. Such employees will be eligible to
participate in all of the benefit plans of Glacier that are generally available to similarly situated employees of Glacier and/or Glacier Bank. For purposes of such participation, current employees prior service with CCC and/or Collegiate Bank
will constitute prior service with Glacier for purposes of determining eligibility and vesting under benefit plans of Glacier and Glacier Bank.
Interests of Certain Persons in the Merger
Certain members of the CCC Board and management may be deemed to have interests in the merger, in addition to their interests as shareholders
of CCC generally. The CCC Board was aware of these factors and considered them, among other things, in approving the merger agreement.
Employment Agreements with Glacier Bank
Glacier Bank has entered into employment agreements with Liam Girard, Burke Kaiser, Donna Johnson, and Kelli Steele (when used within this
section, each, an executive and collectively, the executives) governing employment by Glacier Bank following the merger. Each executive will serve as an executive officer of Collegiate Peaks Bank, a division of Glacier Bank
(the Division). The employment agreements are effective on (and conditioned upon) the closing of the merger and continue for three years thereafter. Mr. Girard will serve as President of the Division; Mr. Kaiser will serve as
President of the Divisions Mountain Region; Ms. Johnson will serve as Executive Vice President and Chief Operating Officer of the Division; and Ms. Steele will serve as the Executive Vice President and Credit Administration Manager
of the Division. Each agreement provides that the executive will receive a minimum specified Aggregate Compensation (generally, base salary, cash incentives, profit sharing, and specified equity compensation). The total annual minimum
Aggregate Compensation payable to the executives together as a group will be approximately $870,000, which is approximately equivalent to the aggregate compensation payable to the executives at the present time. Any shortfall in Aggregate
Compensation relating to a particular calendar year will be remedied through the payment of a bonus on or before March 1
st
of the following year. The executives will be eligible to participate in
Glaciers profit sharing plan and long-term incentive plan. Additionally, the executives will be entitled to participate in any group life insurance, disability, health and accident insurance plans, and any other employee fringe benefit plans
that Glacier or Glacier Bank may have in effect from time to time for its similarly situated employees.
47
The employment agreements also provide for the grant of restricted stock awards and retention
bonuses. The retention bonuses are payable only if the executive remains continuously employed through the full term of the employment agreement.
If the executives employment is terminated for Cause or the executive terminates his or her employment without Good Reason (as such
terms are defined in the agreements), Glacier Bank will pay the executive the annualized gross base salary earned and expenses reimbursable incurred through the date of termination.
If the executives employment is terminated without Cause or the executive terminates his or her employment with Good Reason, contingent
upon the executives execution of a release of claims, Glacier Bank will pay the executive a lump sum payment equal to the amount of annualized gross base salary remaining to be paid during the term of the agreement.
The employment agreements provide that during his or her employment and for six months following the date employment with Glacier Bank has
ended, the executive will not engage in any activity in Adams, Arapahoe, Chaffee, Denver, Douglas, Fremont, Jefferson, Park or Teller Counties in Colorado that is competitive with the business of Glacier or Glacier Bank. In addition, the employment
agreements provide that during his or her employment and for a period of two years following any termination of employment, the executive will not persuade or entice, or attempt to persuade or entice, any employee of Glacier or Glacier Bank to
terminate his or her employment with Glacier or Glacier Bank, or any person or entity to terminate or reduce its business relationship with Glacier or Glacier Bank.
Stock Ownership
As
of the record date of the special meeting, CCC directors, executive officers and their spouses beneficially own 196,255 shares of CCC common stock (which number excludes vested and unvested stock options). The directors and executive officers of CCC
will receive the same consideration in the merger for their shares as will other shareholders of CCC.
Indemnification of
Directors and Officers; Insurance
The merger agreement provides that Glacier will, for a period of
six years following the
closing of the merger, indemnify the present and former directors and officers of CCC and Collegiate Bank against liabilities or costs that may arise in the future, incurred in connection with claims or actions arising out of or pertaining to
matters that existed or occurred prior to the effective date of the merger. The scope of this indemnification is to the fullest extent that such persons would have been entitled to indemnification under applicable law, CCCs or Collegiate
Banks articles or CCCs or Collegiate Banks bylaws, as applicable.
The merger agreement also provides that Glacier will
use reasonable best efforts to cause to be maintained in effect for a period of six years following the effective date of the merger, director and officer liability insurance with respect to claims arising from facts or events that occurred before
the effective date of the merger.
48
Additional Agreements
Voting Agreements
As
described above under Voting Agreements, the directors of CCC have entered into voting agreements, dated as of June 6, 2017. Pursuant to the voting agreements, each signing person agrees to vote the shares of CCC common stock
that he or she is entitled to vote and that he or she owns or controls in favor of the merger.
CCC Director
Non-Competition
Agreement
Each member of the CCC Board has entered into a
non-competition
agreement with Glacier, Glacier Bank, CCC and Collegiate Bank. Except under certain limited circumstances, the
non-competition
agreement generally prohibits
such directors from becoming involved in a business that competes with Glacier or any of Glaciers subsidiaries, divisions or affiliates within specified counties in Colorado.
The agreement also prohibits the solicitation of
Glaciers employees or customers. The term of the
non-competition
agreement commences upon the effective date of the merger and continues until two years following the later of
(i)
effective
date of the merger, or
(ii)
following the termination of the directors service on the board of directors of a division of Glacier Bank.
Regulatory Requirements
Closing of the
merger is subject to approval by the appropriate banking regulatory authorities, including the Federal Reserve, the
Federal Deposit Insurance Corporation, the Commissioner of the Montana Division of Banking and Financial Institutions, and the
State of Colorado Division of Banking.
Material Federal Income Tax Consequences of the Merger
This section describes the anticipated material United States federal income tax consequences of the merger of CCC with and into Glacier, to
U.S. holders of CCC common stock who exchange shares of CCC common stock for a combination of shares of Glacier common stock and cash pursuant to the merger.
For purposes of this discussion, a U.S. holder is a beneficial owner of CCC common stock who for United States federal income tax purposes is:
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a citizen or resident of the United States;
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a corporation, or an entity treated as a corporation, created or organized in or under the laws of the United States or any state or political subdivision thereof;
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a trust that (1) is subject to (A) the primary supervision of a court within the United States and (B) the authority of one or more United States persons to control all substantial decisions of the trust
or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a United States person; or
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an estate that is subject to United States federal income tax on its income regardless of its source.
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If a partnership (including for this purpose any entity treated as a partnership for United
States federal income tax purposes) holds CCC common stock, the tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding CCC common stock, you
should consult your tax advisor.
This discussion addresses only those CCC shareholders that hold their CCC common stock as a capital
asset within the meaning of Section 1221 of the Internal Revenue Code, and does not address all the United States federal income tax consequences that may be relevant to particular CCC shareholders in light of their individual circumstances or
to CCC shareholders that are subject to special rules, such as:
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financial institutions;
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pass-through entities or investors in pass-through entities;
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tax-exempt
organizations;
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traders in securities that elect to use a mark to market method of accounting;
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persons who exercise dissenters rights;
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persons who hold CCC common stock as part of a straddle, hedge, constructive sale or conversion transaction;
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certain expatriates or persons that have a functional currency other than the U.S. dollar;
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shareholders who acquired their shares of CCC common stock through the exercise of an employee stock option or otherwise as compensation or through a
tax-qualified
retirement
plan.
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In addition, the discussion does not address any alternative minimum tax or any state, local or foreign tax
consequences of the merger.
The following discussion is based on the Internal Revenue Code, its legislative history, existing and
proposed regulations thereunder and published rulings and decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Any such change could affect the continuing validity of
this discussion.
In connection with the filing of the registration statement of which this document is a part, Garlington,
Lohn & Robinson, PLLP, special tax counsel to Glacier, has delivered an opinion to Glacier to the effect that the merger will for federal income tax purposes qualify as a reorganization within the meaning of Internal Revenue Code
Section 368(a); and both Glacier and CCC expect to report the merger accordingly on their federal income tax returns. The opinion is based on assumptions, representations, warranties and covenants, including those contained in the merger
agreement and in tax representation letters provided by Glacier, Glacier Bank and CCC. The accuracy of such assumptions, representations and warranties, and compliance with such covenants, could affect the conclusions set forth in such opinion. The
opinion is not binding on the Internal Revenue Service or the courts. Glacier and CCC have not requested and do not intend to request any ruling from the Internal Revenue Service as to the United States federal income tax consequence of the merger.
Accordingly, each CCC shareholder should consult his or her tax advisor with respect to the particular tax consequences of the merger to such holder.
50
Tax Consequences of the Merger Generally to Holders of CCC Common Stock.
If the merger is
a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, the tax consequences are as follows:
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CCC shareholders will exchange all of their CCC common stock for a combination of Glacier common stock and cash in the merger. Accordingly, holders of CCC common stock will recognize gain in an amount equal to the
lesser of (1) the amount by which the sum of the fair market value of the Glacier common stock and cash received by a holder of CCC common stock exceeds such holders cost basis in its CCC common stock, and (2) the amount of cash
received by such holder of CCC common stock in exchange for such holders CCC common stock (except with respect to any cash received instead of fractional share interests in Glacier common stock, as discussed in the section entitled Cash
Received Instead of a Fractional Share of Glacier Common Stock);
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a CCC shareholders aggregate tax basis in the Glacier common stock received in the merger will be equal to the shareholders aggregate tax basis in such shareholders CCC common stock surrendered,
decreased by the amount of any cash received and increased by the amount of any gain recognized; and
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the holding period of Glacier common stock received in exchange for shares of CCC common stock will include the holding period of the CCC common stock for which it is exchanged.
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If holders of CCC common stock acquired different blocks of CCC common stock at different times or at different prices, any gain or loss will
be determined separately with respect to each block of CCC common stock and such holders basis and holding period in their shares of Glacier common stock may be determined with reference to each block of CCC common stock. Any such holders
should consult their tax advisors regarding the manner in which cash and Glacier common stock received in the exchange should be allocated among different blocks of CCC common stock and with respect to identifying the bases or holding periods of the
particular shares of Glacier common stock received in the merger.
Gain that holders of CCC common stock recognize in connection with the
merger generally will constitute capital gain and will constitute long-term capital gain if such holders have held (or are treated as having held) their CCC common stock for more than one year as of the date of the merger. Long-term capital gain of
non-corporate
holders of CCC common stock is generally taxed at preferential rates. In addition such gain may be subject to the 3.8% Unearned Income Medicare Contribution Tax on net investment income. In some cases,
if a holder actually or constructively owns Glacier stock other than Glacier stock received pursuant to the merger, the recognized gain could be treated as having the effect of a distribution of a dividend under the tests set forth in Internal
Revenue Code Section 302, in which case such gain would be treated as dividend income. Because the possibility of dividend treatment depends primarily upon each holders particular circumstances, including the application of the
constructive ownership rules, holders of CCC common stock should consult their tax advisors regarding the application of the foregoing rules to their particular circumstances.
Cash Received Instead of a Fractional Share of Glacier Common Stock.
A holder of CCC common stock who receives cash instead of a
fractional share of Glacier common stock will generally be treated as having received the fractional share pursuant to the merger and then as having that fractional share of Glacier common stock redeemed for cash. As a result, a holder of CCC common
stock will generally recognize gain or loss equal to the difference between the amount of cash received in lieu of the fractional share and the basis in his, her or its fractional share interest as set forth above. Except as described above, this
gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the merger, the holding period for such shares is greater than one year. The deductibility of capital losses is subject
to limitations.
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Payment of Dividend.
If CCCs capital prior to closing of the merger is in excess of
a certain minimum amount, CCC may in its discretion declare and pay a special distribution to holders of its common stock in the amount of such excess. CCC intends to treat that special distribution as a distribution in respect of CCC common stock.
The IRS may take a contrary position, and to the extent the IRS were to prevail, the amount paid as the special cash dividend would be treated as additional cash received in connection with the merger, and not as a distribution as described in the
succeeding sentence. If the distribution is treated as a distribution with respect to CCC common stock, it will be taxable dividend income to the extent of such holders ratable share of CCCs current and accumulated earnings and profits,
if any. Any amount that exceeds CCCs earnings and profits will be treated first as a
tax-free
return of capital to the extent of the U.S. holders adjusted tax basis in its shares of CCC common
stock (thus reducing such adjusted tax basis) with any remaining amounts being treated as capital gain. Such capital gain will be long term capital gain if the holders holding period for the shares of CCC common stock exceeded one year at the
distribution date. Any such taxable dividend income and capital gain should be included in the U.S. holders income in the taxable year in which the distribution is received.
Backup Withholding and Information Reporting.
Payments of cash to a holder of CCC common stock may, under certain circumstances, be
subject to information reporting and backup withholding, unless the holder provides proof of an applicable exemption satisfactory to Glacier and the exchange agent or furnishes its taxpayer identification number, and otherwise complies with all
applicable requirements of the backup withholding rules. Any amounts withheld from payments to a holder under the backup withholding rules are not additional tax and will be allowed as a refund or credit against the holders United States
federal income tax liability, provided the required information is furnished to the Internal Revenue Service.
Reporting Requirements.
CCC shareholders who are significant holders are required to file a statement with their U.S. federal income tax return setting forth certain information, including, but not limited to, their tax basis (determined immediately before
the merger) in the CCC common stock exchanged in the merger and the fair market value (determined immediately before the merger) of the CCC common stock exchanged in the merger. For these purposes a significant holder is a holder of CCC
common stock who immediately before the merger
(i)
owned at least 5% of the total outstanding stock of CCC by vote or value or
(ii)
owned stock of CCC with a tax basis of at least $1 million. All CCC shareholders will be
required to retain permanent tax records of the basis of CCC common stock exchanged and the Glacier common stock and cash received in the merger.
The preceding discussion is intended only as a summary of material United States federal income tax consequences of the merger. It is not a
complete analysis or discussion of all potential tax effects that may be important to you. Thus, you are strongly encouraged to consult your tax advisor as to the specific tax consequences resulting from the merger, including tax return reporting
requirements, the applicability and effect of federal, state, local, and other tax laws and the effect of any proposed changes in the tax laws.
Accounting Treatment of the Merger
The
acquisition of CCC will be accounted for using the acquisition method of accounting by Glacier under accounting principles generally accepted in the United States of America. Accordingly, using the acquisition method of accounting, the assets and
liabilities of CCC will be recorded by Glacier at their respective fair values at the time of the merger. The excess of Glaciers purchase price over the net fair value of assets acquired including identifiable intangible assets and liabilities
assumed will be
52
recorded as goodwill. Goodwill will be periodically assessed for impairment but no less frequently than on an annual basis. Prior period financial statements are not restated and results of
operation of CCC will be included in Glaciers consolidated statement of operations after the date of the merger. The identifiable intangible assets with finite lives, other than goodwill, will be amortized against the combined companys
earnings following completion of the merger.
INFORMATION CONCERNING COLUMBINE CAPITAL CORP.
General
CCC is a Colorado corporation
formed in 2006 for the purpose of acquiring the stock of Collegiate Bank and becoming the holding company for Collegiate Bank. CCC has no substantial operations separate or apart from Collegiate Bank.
The principal offices of CCC are located at 885 S. Colorado Boulevard, Denver Colorado 80246.
Collegiate Bank is a Colorado state-chartered bank which commenced operations in 1986. Collegiate Bank operates through five bank offices
located in Aurora, Buena Vista, Denver, and Salida, Colorado.
As of June 30, 2017, CCC had total assets of approximately
$466.4 million, total gross loans of approximately $336.6 million, total deposits of approximately $398.6 million and approximately $45.5 million of shareholders equity.
Market Area
CCC serves communities in
the Mountain and Front Range regions of Colorado. Its principal market area consists of Adams, Arapahoe, Chaffee, Denver, Douglas, Fremont, Jefferson, Park and Teller counties
in Colorado.
Lending Activities
Collegiate
Banks principal business is to accept deposits from the public and to make loans and make loans and other investments. To develop business, Collegiate Bank relies to a great extent on the personalized approach of its officers and directors,
who have extensive business and personal contacts in the communities served by the bank. Collegiate Bank offers a variety of traditional loan products to its customers, primarily individual consumers and small to
medium-sized
businesses. For businesses, Collegiate Bank provides term loans, lines of credit, loans for working capital, loans for business expansion and the purchase of equipment and machinery, construction
and land development loans for builders and developers and commercial real estate loans. Collegiate Bank offers home equity loans, automobile loans and various other consumer installment loans.
At June 30, 2017, Collegiate Banks consolidated total gross loan portfolio was approximately $336.6 million, representing
approximately 72.2% of its total assets. As of such date, Collegiate Banks loan portfolio consisted of 25.5%
1-4
family real estate secured loans, 47.6% commercial real estate secured loans (excluding
construction and land development loans), 11.1% real estate construction and land development loans, 15.3% commercial loans, 0.4% installment or consumer loans and 0.1% commercial leases.
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Deposit and Banking Services
Customers of Collegiate Bank are provided with a full complement of traditional banking and deposit products. The bank is engaged in
substantially all of the business operations customarily conducted by independent financial institutions in Colorado, including the acceptance of checking accounts, savings accounts, money market accounts and a variety of certificates of deposit
accounts.
Collegiate Bank does a substantial amount of business with individuals, as well as with customers in small to
medium-sized
businesses. The primary sources of core deposits are residents of Collegiate Banks primary market area and businesses and their employees located in that area. Collegiate Bank also obtains
deposits through personal solicitation by the banks officers and directors and through local advertising. For the convenience of its customers, Collegiate Bank offers
drive-through
banking facilities,
internet and telephone banking, check/ATM cards, direct deposit, night depositories, personalized checks, and merchant bank card processing. Collegiate Banks services also include cashiers checks, travelers checks, domestic wire
transfers, account research, stop payments, and telephone and internet based transfers between accounts.
List of Schedules and Exhibits
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Schedule 3.1.1
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Offices of CCC/the Bank
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Schedule 3.1.2
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No Breach or Violation
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Schedule 3.1.3
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Capital Stock of CCC/the Bank
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Schedule 3.1.4
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Investments
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Schedule 3.1.5
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Financial Statements
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Schedule 3.1.6
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Properties
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Schedule 3.1.7
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Environmental Matters
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Schedule 3.1.8(e)
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Tax Returns
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Schedule 3.1.8(q)
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Tax Attributes
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Schedule 3.1.9
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Regulatory Matters
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Schedule 3.1.10(a)
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Material Contracts
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Schedule 3.1.10(b)
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Third Party Consent or Notice Requirements
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Schedule 3.1.13
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Litigation
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Schedule 3.1.16
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Asset Classifications
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Schedule 3.1.17
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Insurance Policies
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Schedule 3.1.18
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Employment Policies
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Schedule 3.1.19
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Benefit Plans
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Schedule 5.2.14
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Officers of CCC/The Bank
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EXHIBITS:
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Exhibit A
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Director and Shareholder Parties to Recital E
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Exhibit B
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Executive Officers and Key Employee Parties to Recital F
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Exhibit C
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Form of Bank Merger Agreement
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Exhibit D
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Form of Transaction-Related Expenses
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A-4
PLAN AND AGREEMENT OF MERGER
AMONG
GLACIER BANCORP,
INC., GLACIER BANK,
COLUMBINE CAPITAL CORP., AND COLLEGIATE PEAKS BANK
This Plan and Agreement of Merger (the
Agreement
), dated as of June 6, 2017, is made by and among GLACIER BANCORP,
INC. (
GBCI
), GLACIER BANK, COLUMBINE CAPITAL CORP. (
CCC
) and COLLEGIATE PEAKS BANK (the
Bank
).
PREAMBLE
The boards of
directors of GBCI and CCC 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 in this Agreement but not immediately defined 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 14 separately branded banking divisions.
(3) CCC is a corporation duly organized and validly existing under Colorado law and is a registered bank holding company under the BHC Act.
CCCs principal office is located in Buena Vista, Colorado.
(4) The Bank is a Colorado state-chartered bank, duly organized and
validly existing under the laws of the State of Colorado and a wholly owned subsidiary of CCC. The Banks principal office is located in Buena Vista, Colorado. In addition to its principal office, the Bank maintains branch offices in Aurora,
Denver (River North), Denver (Belcaro), and Salida, Colorado.
B
.
The Transaction
. On the Effective Date,
(1) CCC 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 Collegiate Peaks Bank, a division of Glacier Bank (the
Division
), which will be Glacier Banks 15
th
separate division for operating purposes.
A-5
C.
Board Approvals
.
The respective boards of directors of GBCI,
Glacier Bank, CCC, and the Bank have approved this Agreement and authorized its execution and delivery, and the board of directors of CCC has directed that this Agreement be submitted to CCCs shareholders for approval, together with its
unanimous 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 CCCs shareholders; and
(3) Approval of or acquiescence in, as appropriate, the Transaction by the Federal Deposit Insurance Corporation (
FDIC
),
the Board of Governors of the Federal Reserve System (
Federal Reserve
), the Commissioner of the Montana Division of Banking and Financial Institutions, the Banking Board of the Division of Banking of the Colorado Department of
Regulatory Agencies, 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
Exhibit
A
have entered into agreements pursuant to which, among other things, each agrees to vote his, her or its
shares of CCC 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.
Employment Agreements
.
In connection with the parties execution of
this Agreement, the persons listed on the attached
Exhibit
B
have entered into employment agreements with Glacier Bank, with an employment term to begin as of the Effective Date, and such agreements shall continue in full
force and effect as of the Effective Date.
G.
Fairness Opinion
. CCC has received from D.A. Davidson & Co.
an opinion to the effect that the Merger Consideration is fair from a financial point of view to CCCs shareholders.
H.
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, CCC and the Bank agree as follows:
A-6
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 CCC, its
Subsidiaries or any successor, (b) a purchase, lease or other acquisition in one or a series of related transactions of assets of CCC or any of its Subsidiaries representing 25 percent or more of the consolidated assets of CCC 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 CCC or its Subsidiaries, in each case with or by a Person or entity other than GBCI or one of its Subsidiaries.
Acquisition Proposal
has the meaning assigned to such term in Section 4.1.10.
Agreement
means this Plan and Agreement of Merger.
ALLL
means allowance for possible loan and lease losses.
Appraisal Laws
means Article 113 of the CBCA, as such article may be applicable to a merger in which the corporation to be
merged out of existence is organized under the laws of the State of Colorado.
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 in Recital A(4).
Bank Financial Statements
means the Banks (a) unaudited financial
statements as of December 31, 2014, 2015, and 2016, and the related statements of income, cash flows and changes in shareholders equity for each of the years then ended; and (b) unaudited financial statements as of March 31,
2017, 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 merger agreement to be entered into in the form attached hereto as
Exhibit
C
pursuant to which the Bank Merger will be effected.
BHC Act
has the meaning
assigned to such term in Recital A.
Break-Up
Fee
has the meaning assigned
to such term in Section 7.7.
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 or the State of Colorado are required by law to remain closed.
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CBCA
means the Colorado Business Corporation Act, as amended.
CCC
has the meaning assigned to it in the first paragraph, as supplemented by Recital A(3).
CCC Capital
means CCCs 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 CCCs consolidated tangible equity capital at December 31, 2016, was calculated, after giving effect to adjustments, calculated in
accordance with GAAP, for accumulated other comprehensive income or loss as reported on CCCs balance sheet. In calculating CCC Capital, purchase accounting adjustments and the Final Transaction Related Expenses of up to the Maximum Transaction
Expense Amount will not be taken into account. To the extent Final Transaction Related Expenses exceeds the Maximum Transaction Expense Amount, the difference, on an after tax basis (applying an effective tax rate of 35 percent), will be
treated as a reduction of CCC Capital. If the Final Transaction Related Expenses are less than the Maximum Transaction Expense Amount, the difference, on an after tax basis (applying an effective tax rate of 35 percent), will be treated as an
addition to CCC Capital.
CCC Closing Capital
has the meaning assigned to such term in Section 4.13
.
CCC Contracts
has the meaning assigned to such term in Section 3.1.2.
CCC ESOP
means the Employee Stock Ownership Plan and Trust Agreement of Columbine Capital Corp., effective January 1,
2013, administered by AMG National Bank.
CCC Financial Statements
means CCCs (a) audited consolidated
financial statements as of December 31, 2014, 2015, and 2016, and the related statements of income, cash flows and changes in shareholders equity for each of the years then ended; and (b) unaudited financial statements as of
March 31, 2017, and the related statements of income, cash flows and changes in shareholders equity for such period, together with the Subsequent CCC Financial Statements.
CCC Meeting
has the meaning assigned in Section 4.2.2.
CCC Options
has the meaning assigned in Section 3.1.3(c).
CCC Stock
means the shares of CCC common stock, $5.00 par value per share, issued and outstanding from time to time.
CCC Stock Plan
means the Columbia Capital Corp. 2011 Equity Incentive Plan, effective February 24, 2011.
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.
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Closing Capital Differential
means the positive or negative difference between
the CCC Closing Capital and the Closing Capital Requirement.
Closing Capital Requirement
means $36,146,000, plus the
amount of CCC Closing Capital attributable to the exercise of CCC Options after December 31, 2016, if any.
Compensation
Plans
has the meaning assigned to such term in Section 3.1.19(b).
Converted Option
has the meaning
assigned to the term in Section 1.4.1.
Daily Closing Price
means for any Trading Day the daily closing price per
share of GBCI Common Stock on the NASDAQ Global Select Market, as reported on the website www.nasdaq.com.
Determination
Date
means the tenth day immediately preceding the Effective Date.
Dissenting Shares
means the shares of CCC
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 CBCA.
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 CCC, any other entity that is considered one employer with CCC 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.
Exchange Ratio
has the meaning assigned to such term in Section 1.4.1.
Execution Date
means the date of this Agreement.
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Executive Officers
with respect to GBCI and/or Glacier Bank means
Randall M. Chesler, Ronald J. Copher, and Donald J. Chery.
Executive Officers
with respect to CCC
and/or the Bank means David Boyles, Charles J. Forster, John Perkins, Liam Girard, Kelli Steele, and Herbert Ensley.
Fairness Opinion
has the meaning assigned to such term in Section 5.2.15.
FDIC
means the Federal Deposit Insurance Corporation.
Federal Reserve
means the Board of Governors of the Federal Reserve System.
Final Transaction Related Expenses
has the meaning assigned to such term in Section 4.14.
GAAP
means United States generally accepted accounting principles.
GBCI
has the meaning assigned to it in the first paragraph, as supplemented by Recital A(1).
GBCI Average Closing Price
means the average Daily Closing Price of GBCI Common Stock for the 20 Trading Days immediately
preceding the Determination Date.
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, 2015,
and 2016, and the related audited consolidated statements of income, cash flows, and changes in shareholders equity for each of the years then ended; and (b) unaudited consolidated balance sheet as of March 31, 2017, and the related
unaudited consolidated statements of income, cash flows, and changes in shareholders equity for the period then ended.
GBCI Shares
means the shares of GBCI Common Stock to be issued to the holders of CCC 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) CCC will be deemed to have Knowledge of a particular fact or
matter if any Executive Officer of CCC or the Bank has actual knowledge of such fact or matter or if any such Person could reasonably be expected to
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discover or otherwise become aware of such fact or matter in the course of making a reasonable inquiry into such areas of CCCs 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.
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 CCC 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 Amount
has the meaning assigned to such term in
Exhibit
D
.
MBCA
means the Montana Business Corporations Act, as amended.
Merger Consideration
has the meaning assigned to such term in Section 1.1.
Merger
means the merger of CCC with and into GBCI.
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Outside Date
has the meaning assigned to such terms in Section 7.1.
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(a).
Per Share Stock Consideration
has the meaning assigned to such term in Section 1.2.3(b).
Per Share Stock Consideration Value
means the product obtained by multiplying (i) the Per Share Stock Consideration by
(ii) the GBCI Average Closing Price.
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, whether tangible or intangible, and including, with respect to CCC, Real Property.
Proposed Dissenting Shares
means those shares of CCC 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 CCC in connection with their consideration and approval of the Merger.
Real Property
means any real property that CCC 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.
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Subsequent CCC Financial Statements
means CCCs (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) if the
Transaction has not been completed before February 28, 2018, audited consolidated balance sheets and related consolidated statements of income, cash flows, and shareholders equity for the fiscal year ended December 31, 2017, each
prepared in accordance with Section 4.1.8.
Subsidiary
with respect to any party to this Agreement means any
Person in which such party owns, directly or indirectly, the majority of outstanding capital stock or voting power.
Superior
Proposal
means, with respect to CCC 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 CCC or the Bank, (ii) a sale, lease, exchange, transfer, or other disposition of at least 25 percent of the assets of CCC 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 CCC 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 CCC 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 CCC 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.
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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
shall mean the sum of (i) the Per Share Stock Consideration Value and
(ii) the Per Share Cash Consideration.
Trading Day
means a day on which GBCI Common Stock is traded on the NASDAQ
Global Select Market.
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
D
hereto.
ARTICLE 1
TERMS OF TRANSACTION
1.1
Effect of Merger
. Upon Closing of the Merger, pursuant to the provisions of the MBCA and CBCA, CCC will merge with and into GBCI with GBCI as the surviving corporation under the MBCA, and in connection therewith, all shares of CCC
Stock issued and outstanding immediately prior to the Effective Time, except for Proposed Dissenting Shares, will, by virtue of the Merger and without any action on the part of any holder of shares of CCC Stock, be converted into the right to
receive the merger consideration (the
Merger Consideration
) set forth in Section 1.2. Immediately following the Merger, pursuant to the Bank Merger Agreement, the Bank will be merged with and into Glacier Bank, with Glacier
Bank as the resulting bank.
1.2
Merger Consideration
. Subject to the provisions of this Agreement, as
of the Effective Time:
1.2.1
Outstanding GBCI Common Stock
. The shares of GBCI Common Stock issued and outstanding immediately
prior to the Effective Time will, on and after the Effective Date, remain as issued and outstanding shares of GBCI Common Stock.
1.2.2
Outstanding CCC Stock
. Each share of CCC Stock issued and outstanding as of the Effective Time, excluding Proposed Dissenting Shares, will be 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)
Per Share Cash Consideration
means $34.4504, subject
to adjustment pursuant to Section 7.3.2, and further increased or decreased, as the case may be, by the positive or negative balance of an amount per share determined by dividing (i) the Closing
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Capital Differential by (ii) the number of shares of CCC Common Stock outstanding immediately prior to the Effective Time; provided that, in lieu of increasing the Per Share Cash
Consideration by the amount of any positive Closing Capital Differential, CCC 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.
(b)
Per Share Stock Consideration
means 3.7681 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.
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 CCC 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
CCC Stock Options
.
1.4.1
Outstanding CCC Stock Options
. The CCC Options have been granted and remain outstanding pursuant to the CCC Stock Plan. If any
holder of a CCC Option exercises such CCC Option after the Execution Date and not less than three Business Days prior to the Effective Time, CCC shall issue shares of CCC Stock upon such exercise in accordance with the terms of the CCC Option and
such shares of CCC Stock shall be converted into the Merger Consideration at the Effective Time. With respect to CCC Options that remain outstanding and unexercised as of the Effective Time, at the Effective Time, and without any action on the part
of any holder thereof, each such CCC Option shall be assumed by GBCI and will be automatically converted into an option (a
Converted Option
) to purchase GBCI Common Stock on the same terms and conditions (including as to vesting)
as are in effect with respect to the CCC Option immediately prior to the Effective Time, except that (a) each such Converted Option may be exercised solely for shares of GBCI Common Stock, (b) the number of shares of GBCI Common Stock
subject to such Converted Option will be equal to the number of shares of CCC Stock subject to the CCC Option immediately prior to the Effective Time, multiplied by the Exchange Ratio (as defined below) and rounded down to the nearest whole share of
GBCI Common Stock, and (c) the
per-share
exercise price for each such Converted Option will be adjusted by dividing the
per-share
exercise price of the CCC Option
by the Exchange Ratio (rounded up to the nearest whole cent); provided, however, that in no case shall the conversion of a CCC Option be performed in a manner that is not in compliance with the adjustment requirements of IRC Section 409A and,
to the extent that the CCC Option is an incentive stock option under IRC Section 422, the adjustment requirements of IRC Section 424(a). For purposes of this paragraph, the
Exchange Ratio
means the quotient obtained by
dividing (i) the Total Consideration Value Per Share by (ii) the GBCI Average Closing Price, and rounding the quotient to the nearest thousandth. It is the intention of the parties that the CCC Options to be assumed by GBCI qualify, to the
maximum extent permissible following the Effective Time, as incentive stock options as defined in IRC Section 422 to the extent such options qualified as incentive stock options prior to the Effective Time. Consistent with the terms of the CCC
Stock Plan and the documents governing the outstanding CCC Options under such plan, the Merger shall not terminate any of the CCC Options assumed by GBCI.
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1.4.2
CCC Stock Plan
. GBCI shall, at the Effective Time, assume obligations of CCC under
the CCC Stock Plan and award agreements pursuant to which the CCC Stock Options have been issued and shall take all corporate action necessary to reserve for issuance a sufficient number of shares of GBCI Common Stock for delivery upon exercise of
all Converted Options. GBCI shall further cause the shares of GBCI Common Stock subject to the Converted Options to be registered on
Form S-8
within a reasonable period following the Effective Date not to
exceed 75 days. Prior to the Effective Time, the board of directors of CCC will take all corporate actions, and adopt such resolutions as may be necessary or appropriate to effectuate the terms of this Section 1.4.
1.5
Payment to Dissenting Shareholders
. Proposed Dissenting Shares shall have the rights provided by the
CBCA.
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 CCC 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 Total Stock Consideration in full; (b) cash in an amount necessary for payment of the Total Cash Consideration in full; and (c) the cash in lieu of fractional shares to be paid in
accordance with Section 1.3. 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
. Within five days following the Effective Date, GBCI will cause to be mailed to each holder of record of a
certificate evidencing shares of CCC Stock (a
Certificate
) a form letter of transmittal (which will specify that delivery will be effected, and risk of loss and title to the Certificates will pass, only upon 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 CCC 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;
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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 CCC 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.
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 CCC 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 CCC 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 CCC 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 CCC 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
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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 CCC
Stock held by such holders as determined pursuant to this Agreement, in each case, without any interest. Neither GBCI nor CCC will be liable to any holder of CCC 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 CCC 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 Colorado Secretary of State of Articles of Merger, in the form required by and executed in accordance with the relevant provisions of the MBCA and CBCA, and by the issuance of a Certificate of Merger by the
Secretary of State of Montana. Unless GBCI and CCC agree upon a different date, the Effective Date will be the date of Closing.
2.2
Events of Closing
. Subject to the terms and conditions of this Agreement (including. without limitation, the provisions of Section 4.16), Closing shall occur as of the first
month-end
occurring not less than 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 CCC and the Bank
. Each of CCC 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; Authority
.
CCC is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado, 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
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Bank is duly organized, validly existing, and in good standing as a state-chartered bank under the laws of the State of Colorado 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 owned or leased offices, including approved and unopened offices of the Bank and
off-premises
ATM locations, are listed in
Schedule
3.1.1
.
3.1.2
No Breach or Violation
. The execution, delivery and performance (assuming all
required consents, approvals, filings, and clearances referred to in this Agreement are duly made and/or obtained) of this Agreement does not and will not, and its consummation (assuming all required consents, approvals, filings, and clearances
referred to in this Agreement are duly made and/or obtained) of the Transaction will not, constitute or result in: (a) a breach or violation of, or a default under, its articles of incorporation or bylaws; (b) other than as disclosed on
Schedule
3.1.2
, a breach or violation of, or a default under, or the acceleration of or the creation of a Lien (with or without the giving of notice, the lapse of time or both) under, any material provision of any material
agreement, lease, contract, note, mortgage, indenture, arrangement or other obligation by which it is bound or to which it is a party that is not terminable upon 90 days or less written notice without penalty or premium (collectively, the
CCC Contracts
); or (c) a material violation of any law, rule, ordinance or regulation or judgment, decree, order, award, or governmental or
non-governmental
permit or license to which
it, 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 CCC Contracts.
3.1.3
Capital Stock
.
(a) The authorized capital stock of CCC consists of 1,000,000 shares of CCC Stock, and 10,000 shares of preferred stock,
$.01 per share value per share. A total of 455,728 shares of CCC Stock were issued and outstanding as of the Execution Date, all of which shares were validly issued and are fully paid and nonassessable. No shares of preferred stock are
issued and outstanding as of the Execution Date.
(b) The authorized capital stock of the Bank consists of 100,000 shares of common
stock, $5.00 par value per share. A total of 100,000 shares of Bank common stock are issued and outstanding as of the Execution Date, all of which are owned by CCC free and clear of all Liens and validly issued, fully paid, and nonassessable,
except to the extent of any assessment required under 12 U.S.C. Section 55.
(c) Except as set forth in
Schedule
3.1.3
and 22,500 shares of CCC Stock reserved for issuance upon exercise of options duly granted under the CCC Stock Plan and outstanding as of the Execution Date (the
CCC
Options
), no shares of CCC Stock are reserved for issuance, and there are no preemptive rights or any outstanding subscriptions, warrants, options, conversion privileges, rights or commitments of CCC 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 CCC nor the Bank has issued or is obligated
to issue any additional shares of common stock or any other security to any other person. Except as set forth in
Schedule
3.1.3
, neither CCC 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 CCC Stock.
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3.1.4
Subsidiaries; Investments
.
(a) CCC 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 CCC or the Bank. All such investments comply with all applicable laws and regulations, including without limitation the BHC Act.
(c) Neither CCC 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 CCC or the Bank, and any executive officer or director of
CCC or the Bank or any of their respective affiliates that are not specifically reflected in the CCC Financial Statements.
3.1.5
Reports and Financial Statements
.
(a)
Filing of Reports
. Since January 1, 2012, each of CCC and the Bank has filed all
reports and statements, together with any required amendments to these reports and statements, that they were required to file with (i) the FDIC, (ii) the Federal Reserve, (iii) the Colorado Division of Banking and 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
. CCC 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, 2012, 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.
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(d)
Financial Statements
. Each of CCCs and the Banks balance sheets included
in the CCC Financial Statements and the Bank Financial Statements, respectively, fairly presents (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
CCC 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 CCC Financial Statements and the Bank
Financial Statements fairly presents the results of operations, shareholders equity and cash flows, as the case may be, of CCC 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 CCC 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 CCC 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 CCC Financial Statements or in
Schedule
3.1.6
, CCC 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 CCC Financial Statements as being owned by either of them as of the Execution Date. To the Knowledge of CCC, 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 CCC, all buildings and all fixtures, equipment and other property and assets that are material to CCCs business
on a consolidated basis are owned by CCC 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 owned or leased 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.
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(d) CCC has provided to GBCI copies of existing title policies, if any, held in its files
relating to the Real Property, and, to the Knowledge of CCC, 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 CCC 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 CCC 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 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 CCC and/or the Bank for general office purposes will not be deemed to be Hazardous Substances for the purposes of this
Agreement.
(b) CCC, the Bank, and the Subject Property are, and have been, in material compliance with all applicable Environmental
Laws, and to the Knowledge of CCC, 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 CCC, 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 CCC, the Bank or any Subject Property, relating to:
(i) an asserted
liability of CCC 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;
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(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 CCC 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 CCC, 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) Except as disclosed in
Schedule
3.1.7
, no part of the Subject Property has been or is
scheduled for investigation, monitoring or other remedial action under any applicable Environmental Law.
(f) No condition from, on or
under the Subject Property exists with respect to the Subject Property that would require remedial action under applicable Environmental Laws, except as disclosed in
Schedule
3.1.7
or where the foregoing would not have a
Material Adverse Effect.
3.1.8
Taxes
.
(a)
Tax Returns and Payment of Taxes
. CCC 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 CCC 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 CCC or the Bank (whether or not shown on any Tax Return) have been timely paid or, where payment is not yet due, CCC has made an adequate provision for such Taxes in CCCs financial statements (in accordance
with GAAP). CCCs most recent financial statements reflect an adequate reserve (in accordance with GAAP) for all Taxes payable by CCC and the Bank through the date of such financial statements. Neither CCC nor the Bank has incurred any
liability for Taxes since the date of CCCs most recent financial statements outside the ordinary course of business or otherwise inconsistent with past practice.
(b)
Availability of Tax Returns
. CCC 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 CCC or the Bank for any Tax period ending after January 1, 2012.
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(c)
Withholding
. CCC 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 CCC 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 has been made in the CCC 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 CCC or the Bank remains unpaid. There are no waivers or extensions of any statute of limitations currently in effect with respect to Taxes of CCC or the Bank. To the Knowledge of CCC, there are no audits, suits, proceedings,
investigations, claims, examinations or other administrative or judicial proceedings ongoing or pending with respect to any Taxes of CCC or the Bank.
Schedule
3.1.8(e)
lists all federal, state, local and
non-U.S.
income Tax Returns filed with respect to CCC 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.
(f)
Tax Jurisdictions
. No claim has ever been made in writing by any taxing authority in a
jurisdiction where CCC and the Bank do not file Tax Returns that CCC or the Bank is or may be subject to Tax in that jurisdiction.
(g)
Tax Rulings
. Neither CCC 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 CCC nor the Bank (a) has been
a member of a group filing Tax Returns on a consolidated, combined, unitary or similar basis (except for a group including solely CCC and the Bank), (b) has any liability for Taxes of any Person (other than CCC 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 (c) 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 CCC and the Bank).
(i)
Change in Accounting Method
. Neither CCC 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.
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(j)
Post-Closing Tax Items
. To the Knowledge of CCC, CCC 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 CCC nor the Bank has undergone an ownership change within the meaning of IRC Section 382.
(l)
U.S.
Real Property Holding Corporation
. Neither CCC 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 CCC 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 CCC 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).
(o)
IRC Section
6662
. Each of CCC and the Bank has disclosed on its federal income Tax Returns all position 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 CCC 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 CCC 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) CCC 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
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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 CCC 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 CCC 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) CCC and the Bank has properly administered all accounts for which it acts as a fiduciary, including accounts for which it serves 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 CCC, the Bank, or any director, officer or employee of CCC 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 are accurately reflect in all material respects the assets of such fiduciary account.
(d) Neither CCC nor the Bank, nor, to the Knowledge of CCC, 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 U.S.C. §
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 CCC nor the Bank is
bound by any contract, agreement, or arrangement that has not been set forth in
Schedule
3.1.10(a)
that
is
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material to operation of its business (each a
Material Contract
). A contract, agreement or arrangement will be material to the extent it: (i) is to be performed after the
Execution Date and is material to the operations of the Bank; (ii) 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 CCC or any of its affiliates; (iii) obligates CCC or any of its affiliates to conduct business with any third party on an exclusive or preferential basis;
(iv) requires referrals of business or requires CCC or any of its affiliates to make available investment opportunities to any Person on a priority or exclusive basis; (v) grants any right of first refusal, right of first offer or similar
right with respect to any assets, rights or properties of CCC or the Bank; (vi) limits the payment of dividends by CCC or the Bank; (vii) 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 relate to merchant banking investments by CCC or the
Bank in the ordinary course of business; (viii) provides for payments to be made by CCC or the Bank upon a change in control thereof; (ix) was not negotiated and entered into on an
arms-length
basis; (x) provides for indemnification by CCC or the Bank of any Person, except for contracts entered into in the ordinary course of business providing for customary and immaterial indemnification; (xi) 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 CCC or the Bank on 60 days or less notice without any required payment or other
conditions, other than the condition of notice); (xii) is a contract, agreement or arrangement to which any affiliate, officer, director, employee or consultant of CCC 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 accordance with all applicable regulatory requirements with respect to it); (xiii) would prevent, materially delay
or materially impede CCCs ability to consummate the Merger or the other transactions contemplated hereby; (xiv) contains a put, call or similar right pursuant to which CCC or the Bank could be required to purchase or sell, as applicable,
any equity interests of any Person or assets; or (xv) is otherwise not entered into in the ordinary course of business or is material to CCC or the Bank or their respective financial condition or results of operations.
(b) (i) Each Material Contract is a valid and legally binding agreement of CCC or the Bank, as applicable, and, to the Knowledge of CCC,
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) CCC 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 CCC nor the Bank, and, to the Knowledge of CCC, 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 CCC 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(b)
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 CCC of this Agreement and the consummation of the Merger, the Bank Merger and the other transactions contemplated hereby.
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3.1.11
Compliance
. Each of CCC and the Bank has, and have at all times since
January 1, 2013, had, 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 CCC 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 CCC, no suspension or cancellation of any of them is threatened.
3.1.12
Knowledge as to Conditions
. To the Knowledge
of CCC, 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 CCC or the Bank (other than routine foreclosure proceedings), and there is no pending claim, action or proceeding against CCC or the Bank and, to the Knowledge of CCC, 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) CCC 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 CCC.
3.1.15
Shareholder List
. CCC has provided to GBCI a list of its shareholders as of the most recent practicable date. To the CCCs
Knowledge, the shareholder list provided is a true and correct list of the names, addresses and holdings of all record holders of the CCC 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, 2016, and as of March 31,
2017, 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 CCC and the Bank that have
been criticized or classified by any internal audit conducted by CCC 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,
2016, or as of March 31, 2017, 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 CCC or the Bank
before the Execution Date.
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3.1.17
Insurance
. CCC 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 CCC 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 CCC 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 CCC 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 CCC or the Bank is pending or, to the Knowledge of CCC, threatened. CCC 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) CCC and the Bank have made available to GBCI all personnel
manuals, handbooks, or material policies, rules or procedures applicable to employees of the Bank and the terms of their employment, and all such applicable materials are listed on
Schedule
3.1.18
. CCC and the Bank is and
have been in compliance in all material respects with all applicable laws and regulations respecting hiring and employment, including but not limited to, discrimination or harassment in employment, retaliation, reasonable accommodation, terms and
conditions of employment, termination of employment, wages, overtime classification, hours, leaves of absence, occupational safety and health, employee whistle-blowing, immigration, employee privacy, employment practices and classification of
employees, consultants and independent contractors. No employee of CCC 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 CCC or the Bank (other than for salary or wages for time worked and benefits earned prior to the date of such termination). CCC has provided to GBCI a true and complete list of all independent contractors and consultants to CCC 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 CCC or the Bank, as the case may be. CCC 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.
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(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 CCC or its Subsidiaries for the benefit of any employees or former employees of CCC and the
Bank, including, without limitation, all salary continuation or supplementation agreements between CCC 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 volume submitter plan which has
received an opinion or advisory letter from the Internal Revenue Service upon which CCC and/or the Bank may rely, as of the date hereof no such determination letter has been revoked, no revocation has been threatened, and nothing has occurred since
the date of such letter that could adversely affect the qualified status of each such Plan. All such Plans have been timely amended for all such requirements and have been submitted to the Internal Revenue Service for a favorable determination
letter within the latest applicable remedial amendment period. No litigation relating to its Plans is pending or, to the Knowledge of CCC, threatened. Neither CCC 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 CCC or the Bank under the terms of any of its Plans have been timely made or have been
reflected in the CCC 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 CCC 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 CCC Financial Statements
or in
Schedule
3.1.19
, neither CCC nor the Bank has any obligations for retiree health and life benefits.
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(f) No provision of the documents governing any Plan contains restrictions on the rights of CCC
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 CCC 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 CCC 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.
The requirements of COBRA have been meet with respect to each applicable Plan.
(j) Except as disclosed in Schedule 3.1.19, 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
. CCC 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 the
State of Colorado (
Takeover Laws
). CCC and the Bank have taken all action required to be taken by it in order to make this Agreement and the Transaction comply with, and this Agreement and the Transaction do comply with, the
requirements of any articles, sections, or provisions of the Articles of Incorporation and Bylaws of CCC and the Bank concerning business combination, fair price, voting requirement, constituency
requirement, or other related provisions (collectively, the
Takeover Provisions
). CCC has no shareholder rights plan, poison pill, or similar plan.
3.1.21
Brokers or Finders Fees
. Except for the fees of D.A. Davidson & Co. to obtain a fairness opinion and
for advisory services relating to the Merger pursuant to an agreement that has been disclosed to GBCI, no agent, broker, Person or firm acting on behalf of CCC 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 CCC 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
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make the statements contained in this Agreement (or in such Schedules) or in such representation or warranty not misleading. No investigation by GBCI or Glacier Bank of the business and affairs
of CCC or the Bank will affect or be deemed to modify or waive any representation, warranty, covenant or agreement in this Agreement.
3.2
Representations and Warranties of GBCI and Glacier Bank
. Except as disclosed in a schedule to this Agreement, each of GBCI and Glacier Bank represents and warrants to CCC 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.
3.2.2
Corporate Authority
. Its execution, delivery and performance (assuming all required consents,
approvals, filings and clearances referred to in this Agreement are duly made and/or obtained) of this Agreement does not and will not, and its consummation (assuming all required consents, approvals, filings and clearances referred to in this
Agreement are duly made and/or obtained) of the Transaction will not, constitute or result in: (a) a breach or violation of, or a default under, its articles of incorporation or bylaws; (b) a breach or violation of, or a default under, or
the acceleration of or the creation of a Lien (with or without the giving of notice, the lapse of time or both) under any provision of any material agreement, lease, contract, note, mortgage, indenture, arrangement or other obligation by which it is
bound or to which it is a party (collectively, the
GBCI Contracts
); or (c) a material violation of any law, rule, ordinance or regulation or judgment, decree, order, award, or governmental or
non-governmental
permit or license to which it is subject; or (d) any change in the rights or obligations of any party under any of the GBCI Contracts. No other corporate proceedings or action is required
to be taken by it relating to the performance by it of this Agreement or the consummation of the Transaction.
3.2.3
Capital Stock
.
(a) The authorized capital stock of GBCI consists of 1,000,000 shares of Preferred Stock, par value $0.01 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 76,619,952 shares of GBCI Common Stock were issued and outstanding as March 31, 2017, all of which were validly issued and are fully paid
and nonassessable. As of March 31, 2017, 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.
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3.2.4
Reports and Financial Statements
.
(a)
Filing of Reports
. Since January 1, 2012, GBCI and each of its Subsidiaries has filed all reports and statements, together
with any required amendments to these reports and statements, that they were and will be required to file with (i) the SEC, (ii) the Federal Reserve, (iii) the FDIC, and (iv) any other applicable federal or state banking,
insurance, securities, or other regulatory authorities. Each of these reports and statements, including the related financial statements and exhibits, complied as to form in all material respects with all applicable statutes, rules and regulations
as of their respective dates.
(b)
Compliance with Securities Laws
. As of their respective dates (and without giving effect to any
amendments or modifications filed after the Execution Date), each of the Reports, including the related financial statements, exhibits and schedules, filed, used or circulated before the Execution Date complied (and each of the Reports filed after
the Execution Date, will comply) in all material respects with applicable Securities Laws, and did not (or, in the case of reports, statements, or circulars filed after the Execution Date, will not) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.
(c)
Financial Statements
. Each of GBCIs balance sheets included in the GBCI Financial Statements have been prepared in
conformity with GAAP and fairly presents (or, in the case of GBCI Financial Statements for periods ending on a date following the Execution Date, will fairly present) the financial position of GBCI and its Subsidiaries as of the date of the balance
sheet. Each of the statements of income, cash flows and shareholders equity included in the GBCI Financial Statements, fairly presents (or, in the case of GBCI Financial Statements to be prepared and filed with the SEC pursuant to GBCIs
reporting obligations under the Exchange Act for periods ending on a date following the Execution Date, will fairly present) the results of operations, shareholders equity and cash flows, as the case may be, of GBCI and its Subsidiaries for
the periods set forth in these statements, in each case in accordance with GAAP, except as may be noted in these statements.
3.2.5
Financing and Shares Available
. GBCI has, and at the Effective Time will have, (a) sufficient cash and cash equivalents on hand to pay the cash component of the Merger Consideration, cash in lieu of fractional shares, 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
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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 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. No investigation by CCC or the Bank of the business and affairs of GBCI and Glacier Bank will affect or be deemed to modify or waive
any representation, warranty, covenant or agreement in this Agreement.
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ARTICLE 4
CONDUCT AND TRANSACTIONS PRIOR TO CLOSING
4.1
Conduct of CCCs and the Banks Businesses Prior to Closing
. CCC 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 CCC, subject to applicable law, the books, records, properties, contracts and documents of CCC and
the Bank will be available at all reasonable times to GBCI and its counsel, accountants and other representatives. Such items will be open for inspection, audit and direct verification of loan or deposit balances, collateral receipts and such other
transactions or documentation as GBCI deems reasonably relevant to the Transaction. No disclosure or access shall be required to be provided where it would jeopardize the attorney-client privilege, contravene any law, order, judgment or decree. CCC
and the Bank will cooperate fully 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, CCC and the Bank will request that any third parties involved in the preparation or review
of the CCC Financial Statements or CCC 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, CCC 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 CCC 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 CCC Stock, or assets of CCC;
(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);
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(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 approval for such 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 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;
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(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;
(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
CCC and Bank
Pre-Closing
Actions
. Following
execution of this Agreement and prior to Closing, CCC or the Bank, as applicable, shall:
(a) Take all action necessary to satisfy any
contractual notice or consent requirements under the CCC 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 CCC and the Bank, as applicable, such Plans (including Compensation Plans) maintained by CCC or the Bank as may be requested by GBCI in connection with
the Closing (after satisfaction or waiver of all Closing conditions). If requested by GBCI, CCC 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, CCC and the Bank shall, prior to
the date of calculation of CCC 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 CCC 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 CCC ESOP, including, without limitation, taking
steps to terminate the CCC ESOP or merge it into, or engage in a
trust-to-trust
transfer with, GBCIs 401(k) Plan.
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(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.
(e) (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.
(f) Take such corporate or other actions as may be reasonably required to terminate the CCC Amended and Restated
Shareholders Agreement, effective as of February 24, 2011, as of or prior to the Effective Date, or otherwise make such agreement inapplicable to the Transactions.
4.1.4
Maintenance of Properties
. CCC 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 CCC and the Bank will use its commercially-reasonable efforts to: (i) preserve its respective business organization; (ii) retain the services of management and employees; and (iii) preserve the goodwill of suppliers, customers and
others with whom CCC 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, CCC 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
. CCC and the Bank will not permit any increase in the current or deferred compensation payable or to become payable
by CCC or the Bank to any of its directors, officers, employees, agents or consultants other than normal increments in compensation in accordance with CCCs and the Banks established policies with respect to the timing and amounts of such
increments. Without the prior written approval of GBCI, CCC 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
. CCC 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) CCC 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 CCC 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 CCC Financial Statements: (w) will be
prepared from the books and
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records of CCC and the Bank; (x) will present fairly the financial position and operating results of CCC 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 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 CCC 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 CCC that are required to be reflected in footnotes in accordance with GAAP and not recorded on the Subsequent CCC Financial Statements will be disclosed in writing to GBCI.
4.1.9
Update Schedules
. From the Execution Date until Closing, CCC will promptly revise and supplement the schedules to this Agreement
prepared by or on behalf of CCC 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 CCCs representations or warranties contained in this Agreement, except as agreed to in writing by the parties.
4.1.10
Acquisition Proposal
. CCC 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 Acquisition Proposal (defined below). CCC agrees that neither it nor any of its Subsidiaries will, and CCC 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 CCC) 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 CCC receives an unsolicited bona fide Acquisition Proposal and the board of directors of CCC determines prior to approval of the Transaction by CCCs
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, CCC 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, CCC and such Person shall have executed a
confidentiality agreement on terms at least as favorable to CCC as those contained in its confidentiality agreement with GBCI. CCC 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 CCC, 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. CCC 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.
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4.1.11
Status of Title/Leasehold Interests
. CCC 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 (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 CCC delivers all of the title commitments to GBCI for its review, GBCI will inform CCC
in writing whether, and in what manner, it objects to any of the exceptions to title shown on any of the title commitments. CCC 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. CCC 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 CCC or the Bank as of the Execution Date or (b) monetary or
non-monetary
exceptions disclosed in
Schedule
3.1.6
or in the CCC Financial Statements. At Closing, if requested by GBCI, CCC 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 CCC, 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, CCC will notify its directors and officers liability insurers of the Merger and of all pending or, to the Knowledge of CCC, threatened claims, actions, suits, proceedings or investigations
asserted or claimed against any Person entitled to indemnification pursuant to Section 6.3 and known to CCC, 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
. CCC 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 CCC 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.
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4.2
Registration Statemen
t; CCC Shareholders Meeting
.
4.2.1
Preparation of Registration Statement
.
(a) As soon as reasonably possible following the Execution Date, but not later than 60 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 CCCs shareholders.
(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
CCC 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 CCC relating to CCC 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. CCC will pay all costs associated with its review and preparation of the Registration Statement and the Prospectus/Proxy Statement. CCC 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
. CCC 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
CCC
Meeting
). The CCC Meeting will be held on the earliest practical date after the date the Prospectus/Proxy Statement may first be sent to CCCs shareholders without objection by applicable governmental authorities. The Board of
Directors
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of CCC will recommend approval of this Agreement to CCCs shareholders, and shall not withdraw, modify, or qualify its recommendation unless, subsequent to the Execution Date, CCC receives a
Superior Proposal and the board of directors of CCC 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. GBCI will provide copies of such applications for review by CCC 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 the Banking Board of the Division of Banking of the Colorado Department of Regulatory Agencies and related filings regarding the Transaction; and (c) filings
and coordination with the offices, of the Secretaries of State of Montana and Colorado with respect to the Merger and the Bank Merger. CCC 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. CCC and the Bank shall, upon
request, furnish GBCI with all information concerning itself, and its directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice or application made by or
on behalf of GBCI, Glacier Bank, CCC, 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 CCC 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 CCC 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, CCC 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, CCC, and the Bank shall also meet as requested by or on behalf of GBCI to
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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 CCC nor the Bank shall be obligated to take any such action prior to the Effective Time and, unless CCC and the Bank otherwise agrees, no conversion shall take place prior to the Effective Time.
4.8
Notice
. The parties will provide each other with prompt written notice of:
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 CCC 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 CCC 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 CCC.
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.
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4.12
Tax Treatment
. Neither GBCI and its Subsidiaries nor CCC
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
CCC Closing Capital
. No earlier than the 12
th
Business Day nor later than the 10
th
Business Day before the Closing, CCC shall calculate in good faith the estimated CCC Capital as of Closing and shall provide GBCI with a copy of the proposed
Subsequent Bank Financial Statements for the month preceding the date of calculation (if not already provided in accordance with Section 4.1.8), together with internally prepared financial statements through the date of calculation, estimated
retained earnings through the date of Closing, the impact of any pending adjustments required in the calculation of the CCC Capital, and any other documentation reasonably requested by GBCI for purposes of confirming the amount of such CCC Capital.
GBCI shall review such materials and, within three Business Days following receipt thereof, notify CCC as to whether GBCI accepts or disputes the amount of the CCC 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 CCC 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 CCC the resolution of such disputed matters and the effect of such determinations on the calculation of the CCC
Capital as of Closing, and such determinations shall be final, binding and conclusive unless GBCI and CCC mutually agree upon a different amount. The CCC Capital as of Closing, as determined and agreed upon in writing by GBCI and CCC in accordance
with this Section 4.13, is the
CCC 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 CCC, on the other hand, and CCCs portion shall be an expense in the calculation of the CCC Closing Capital.
4.14
Transaction Related Expenses
. No earlier than the 12
th
Business Day nor later than the 10
th
Business Day before Closing, CCC
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
D
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 CCC 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 CCC 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 CCC in
accordance with this Section 4.14, are the
Final Transaction Related Expenses
.
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4.15
Payment of Dividend
. To the extent the CCC Closing
Capital exceeds the Closing Capital Requirement, CCC 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(a); provided, however, the amount of such dividend may be limited to the extent necessary to cause the Merger to effect a
transfer of substantially all of the properties of CCC and the Bank within the meaning of IRC Section 368(a)(2)(D), as determined in the sole discretion of GBCI in consultation with its tax counsel.
4.16
Reasonable Best Efforts
. Subject to the terms and conditions of this Agreement, each party will use
its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable laws, so as to permit consummation of the Merger on or before
February 28, 2018;
provided that
, if the Durbin Amendment is repealed or overturned and there is no economic harm to GBCI in completing the transaction in fiscal 2017, and all regulatory and shareholder approvals have been obtained, then
GBCI will use its reasonable best efforts to close as of a
month-end
on or prior to November 30, 2017. The parties agree that, in the event the Closing does not occur on or prior to November 30,
2017, the earliest next possible Closing Date would be February 28, 2018.
4.17
Listing
. GBCI will
use its reasonable best efforts to cause the GBCI Shares to be authorized for listing on the NASDAQ Global Select 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 Transaction.
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 CCC 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 CCC 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
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warranties will be true and correct in all material respects or true and correct, as the case may be, as of such date). CCC and the Bank will have delivered to GBCI a certificate to that effect,
executed by a duly authorized officer of CCC and the Bank and dated as of Closing.
5.2.2
Compliance
. CCC 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. CCC will have delivered to GBCI a certificate to that effect, executed by a duly
authorized officer of CCC and dated as of Closing.
5.2.3
Continued Effectiveness of Agreements
. Agreements entered into as
described in Recitals E and F shall continue in full force and effect.
5.2.4
Closing Capital and Financial Statements
. CCC
will have delivered to GBCI the financial information set forth in Section 4.13, and the parties will have agreed upon the amount of CCC Closing Capital pursuant to the terms of Section 4.13.
5.2.5
Transaction Related Expenses
. CCC 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.
5.2.6
No Material
Adverse Effect
. Since December 31, 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 CCC or the commencement of any proceeding against CCC or the Bank that, individually or in the aggregate, can reasonably be expected to have a Material Adverse Effect with respect to CCC.
5.2.7
Financial Condition
. In the opinion of the Executive Officers of CCC and the Bank, the Banks ALLL is adequate to absorb the
Banks anticipated loan losses.
5.2.8
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.
5.2.9
Opinion of Counsel
. Counsel to CCC
will have delivered to GBCI a legal opinion in form and substance reasonably acceptable to GBCI.
5.2.10
Tax Opinion
. GBCI will
have obtained from Garlington, Lohn & Robinson, PLLP and delivered to CCC, an opinion addressed to CCC 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).
5.2.11
Real Property Matters
. GBCI will have received the irrevocable commitments by the Title Companies to issue the policies required
under Section 4.1.11.
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5.2.12
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 CCC and the Bank;
(b) CCC, as sole shareholder of the Bank; and
(c) The shareholders of CCC.
5.2.13
Resignation of Directors
. The directors of CCC 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.
5.2.14
Resignation of Certain
Officers
. The officers of CCC and/or the Bank listed on Schedule 5.2.14 to this Agreement will have tendered their written resignations in a form reasonably acceptable to GBCI, to be effective upon consummation of the Merger or the Bank
Merger, as applicable, and confirming that no further payments will be due to such officers as a result thereof or the transactions contemplated hereby.
5.2.15
Fairness Opinion
. CCC has received a fairness opinion from D.A. Davidson & Co. (the
Fairness
Opinion
), to the effect that the Merger Consideration to be received by CCC shareholders is fair to such shareholders from a financial point of view, and the Fairness Opinion has not been modified or withdrawn.
5.2.16
Registration Statement
. The Registration Statement, as it may have been amended, required in connection with the GBCI Shares,
and as described in Section 4.2, will have become effective, and no stop order suspending the effectiveness of such Registration Statement will have been issued or remain in effect, and no proceedings for that purpose will have been initiated
or threatened by the SEC, the basis for which still exists.
5.2.17
No Change in Loan Review
. CCC 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 material adverse 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.
5.3
Conditions to Obligations of CCC
. All obligations of CCC 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
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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 CCC 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 CCC 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 December 31, 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.
5.3.6
Registration Statement; Listing
. The
Registration Statement will have become effective as specified in Section 5.2.16, 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 Select Market (or such other exchange on which the
GBCI Common Stock may become listed) if so required and shall be freely tradable.
5.3.7
Payments to the Exchange Agent
. GBCI will
have deposited the Merger Consideration with the Exchange Agent.
5.3.8
Approval of CCC Shareholders
. The shareholders of CCC will
have approved this Agreement and the Merger by the requisite vote under Colorado law and CCCs Articles of Incorporation, as applicable.
5.3.9
Tax Opinion
. The tax opinion specified in Section 5.2.10 shall have been delivered to CCC in form and substance reasonably
acceptable to CCC and its advisors.
ARTICLE 6
DIRECTORS, OFFICERS AND EMPLOYEES
6.1
Director and Shareholder Agreements
. As a condition to the execution of this Agreement, the directors
and principal shareholders described in Recital E have entered into the written agreements described in Recital E on or before the Execution Date. Such agreements will take effect at the Effective Date unless otherwise noted in the
applicable agreement.
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6.2
Employee Benefit Issues
.
6.2.1
Comparability of Benefits
. GBCIs and Glacier Banks personnel policies will apply to any employees of CCC 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 CCC 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).
6.2.3
No Contract Created
. Nothing in this
Agreement will give any employee a right to continuing employment.
6.2.4
Severance Payments
. Any Bank employees (other than
officers listed on Schedule 5.2.14) 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 CCC 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 CCC 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. Any determination required to be made with respect to whether an
officers or directors conduct complies with the standard set forth under CCCs 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. For a period of six years after the Effective Date, GBCI will use reasonable best efforts to cause to be maintained in effect (with reputable and
financially sound insurers) director and officer liability insurance substantially similar to that maintained by GBCI with respect to claims arising from facts or events that occurred before the Effective Time.
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ARTICLE 7
TERMINATION OF AGREEMENT AND ABANDONMENT OF TRANSACTION
7.1
Termination by Reason of Lapse of Time
. If Closing does not occur on or before April 30, 2018 (the
Outside Date
), either GBCI or CCC 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;
provided that
, if as of such Outside Date, the condition to Closing set forth in Section 5.1 shall not have been satisfied, then the Outside Date will be extended to on or before July 31, 2018, if GBCI notifies CCC in writing on or
prior to April 30, 2018, of its election to extend the Outside Date;
and provided, further that
, the right to terminate this Agreement pursuant to this Section 7.1 shall not be available to any party whose failure to perform or
observe the covenants and agreements of such party set forth in this Agreement resulted in the failure of the Merger to be completed by the applicable Outside Date.
7.2
Termination Due to GBCI Average Closing Price Greater Than $42.04
.
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 CCC on the Business Day immediately following the Determination Date, if the GBCI Average Closing Price is greater than $42.04 (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 CCC makes the election set forth in Section 7.2.2.
7.2.2
CCCs Right to Adjust Consideration
. If GBCI provides written notice to CCC in accordance with Section 7.2.1, then
within three Business Days following CCCs receipt of such notice, CCC 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 CCC Stock outstanding at the Effective Time, multiplied by
(B) the Per Share Stock Consideration, further multiplied by (C) $42.04, by (ii) the GBCI Average Closing Price (rounded up to the nearest whole share), and (b) the number of shares of CCC 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 CCC makes such election to accept a decrease in the number of GBCI Shares to be issued as the Total 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 Total Stock Consideration has been adjusted).
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7.3
Termination Due to GBCI Average Closing Price Less Than
$31.08
.
7.3.1
CCCs Right to Terminate
. By specific action of its board of directors, CCC 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 $31.08 but not less than $29.25
and
the price of GBCI Common Stock has, during
the period from the Execution Date through the Determination Date, underperformed the KBW Regional Banking Index by more than 10 percent, or (b) less than $29.25 (or if the Effective Date is after December 31, 2017, $31.08, and after
which date subsection (a) shall be rendered, null, and void), unless GBCI makes the election set forth in Section 7.3.2. In either case the parties will make appropriate adjustments to take 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).
7.3.2
GBCIs Right to Adjust Consideration
. If CCC 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 CCC to: (a) In the event of a termination pursuant to Section 7.3.1(a), 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 (based on the GBCI Average Closing Price), plus any additional Cash Consideration, is
equal to the result of (i) the number of shares of CCC Stock outstanding at the Effective Time, multiplied by (ii) the Per Share Stock Consideration, multiplied by (iii) $31.08; or (b) In the event of a termination by CCC 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 CCC Stock outstanding at the Effective Time, multiplied by (ii) the Per Share Stock Consideration, multiplied by (iii) $29.25, or, if the Effective
Time is after December 31, 2017, $31.08.
If GBCI makes such election to increase the Per Share Stock Consideration, Per Share Cash
Consideration, or a combination thereof, 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 CCCs shareholders, unless otherwise provided) by CCC (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 CCC 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 CCC or GBCI, if the regulatory approvals required by Section 5.1 are
denied (or if any such required approval is conditioned on a
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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 CCC 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 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 CCC) 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.
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.
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) CCCs 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 CCCs Board of Directors recommends to its shareholders the approval of the Merger, CCCs shareholders elect not to approve
the Merger.
7.4.6
Impracticability
. By either GBCI or CCC, upon written notice given to the other party, if the board of directors
of the party seeking termination under this Section 7.4.6
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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 Colorado to restrain or invalidate the Merger or this Agreement.
7.4.7
Dissenting Shares
. By GBCI, if holders of 5 percent or more of the outstanding shares of CCC Stock are Proposed Dissenting
Shares.
7.4.8
Superior ProposalTermination by CCC
. By the board of directors of CCC 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 CCC may not terminate this Agreement pursuant to this Section 7.4.8 unless (a) it has not breached
Section 4.1.10, (b) immediately following the delivery of such notice of termination, it enters into a definitive acquisition 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 CCC 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 CCCs board of directors to proceed with the Merger, and (d) simultaneously upon entering into such definitive acquisition 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 CCC if (a) an Acquisition Event will have occurred, or (b) a third party will have made a proposal to CCC or its shareholders to engage in, or enter into an agreement
with respect to, an Acquisition Event and this Agreement and the Merger are not approved at the CCC Meeting.
7.5
Termination Fee Payable by CCC
. Due to expenses, direct and indirect, incurred by GBCI in negotiating
and executing this Agreement and in taking steps to effect the Transaction, CCC will pay to GBCI a termination fee of $500,000 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 CCC within three Business Days following the date of GBCIs demand.
7.6
Termination Fee Payable by GBCI
.
7.6.1
Termination for Breach
. Due to expenses, direct and indirect, incurred by CCC in negotiating and executing this Agreement and in
taking steps to effect the Transaction, GBCI will pay to CCC a termination fee of $500,000 if CCC 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 CCCs demand and must be paid by GBCI within three Business Days following the date of CCCs demand.
7.6.2
Other Termination
. If GBCI terminates this Agreement on or after January 1, 2018, but prior to the Outside Date, other than
for cause under and in accordance with Section 7.2 or Section 7.4 (or any of its subsections), GBCI will pay to CCC a termination fee of
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$1,000,000. If such termination fee becomes payable pursuant to this Section 7.6.2, it will be payable on CCCs demand and must be paid by GBCI within three Business Days following the
date of CCCs demand.
7.7
Break-Up
Fee
. If this Agreement
is terminated pursuant to Section 7.4.5(a) (Failure to Recommend), Section 7.4.8 (Superior ProposalTermination by CCC), or Section 7.4.9(a) (Superior ProposalTermination by GBCIImmediate Acquisition Event), then CCC
will immediately pay to GBCI $3,000,000 (the
Break-Up
Fee
). If this Agreement is terminated pursuant to Section 7.4.5(b) (Failure to Obtain Shareholder Approval) or 7.4.9(b) (Superior
ProposalOther Termination by GBCI)
and
prior to or within 18 months after such termination, CCC or the Bank enters into an agreement for, or publicly announces an intention to engage in, an Acquisition Event, or within
18 months after such termination an Acquisition Event will have occurred, then CCC 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.
ARTICLE 8
MISCELLANEOUS
8.1
Notices
. Any notice, request, instruction or other document to be given under this Agreement will be in writing and will be delivered personally, sent electronic mail or sent by registered or certified mail or overnight Federal
Express service, postage prepaid, addressed as follows:
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GBCI:
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Glacier Bancorp, Inc.
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49 Commons Loop
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Kalispell, Montana 59901
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Attn:
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Randall M. Chesler, President and CEO
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Email:
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rchesler@glacierbancorp.com
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with a copy to:
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Miller Nash Graham & Dunn LLP
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Pier 70
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2801 Alaskan Way, Suite 300
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Seattle, Washington 98121-1128
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Attn:
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Stephen M. Klein
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David G. Post
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Email:
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stephen.klein@millernash.com
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david.post@millernash.com
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CCC and the Bank:
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Columbine Capital Corp.
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885 S. Colorado Boulevard
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Denver, Colorado 80246
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Attn:
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John Perkins, President
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Email:
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john.perkins@collegiatepeaksbank.com
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with a copy to:
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Fairfield and Woods P.C.
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1801 California Street, Suite 2600
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Denver, Colorado
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Attn:
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Robert Vinton
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Ryan Tharp
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Email:
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rvinton@fwlaw.com
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rtharp@fwlaw.com
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or to such other address or Person as any party may designate by written notice to the other given under this section.
8.2
Waivers and Extensions
. Subject to Article 9, any party may grant waivers or extensions to the
other parties, but only through a written instrument executed by the President and/or CEO of the party granting the waiver or extension. Waivers or extensions that do not comply with the preceding sentence are not effective. In accordance with this
Section 8.2, a 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
A-55
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, CCC 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 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 the federal district courts of the Missoula Division for the State of 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
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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 CCC Meeting; provided, however, that after approval by CCCs shareholders, no amendment will be made changing the form or reducing the amount of consideration to be received by the
shareholders of CCC without the further approval of such shareholders. All amendments, modifications, extensions and waivers must be in writing and signed by the party agreeing to the amendment, modification, extension or waiver.
[signatures on next page]
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This Plan and Agreement of Merger is dated as of the date first written above.
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GLACIER BANCORP, INC.
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By:
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/s/ Randall M. Chesler
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Randall M. Chesler, President and CEO
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GLACIER BANK
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By:
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/s/ Randall M. Chesler
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Randall M. Chesler, President and CEO
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COLUMBINE CAPITAL CORP.
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By:
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/s/ John Perkins
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John Perkins, President
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COLLEGIATE PEAKS BANK
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By:
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/s/ John Perkins
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John Perkins,
Co-CEO
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[Signature Page to Plan and Agreement of Merger]
A-58
EXHIBIT A
Parties to Recital E
Directors
David C. Boyles
John W.
Perkins
Charles J. Forster
William Pauls
Jerry Wrench
Eric Moltz
Don Bailey
Steve Shraiberg
Rich
McClintock
Shareholders
Mesa
Capital LLC (if not covered by individual voting agreement)
A-59
EXHIBIT B
Parties to Recital F
Liam Girard
Donna Johnson
Kelli Steele
Burke Kaiser
A-60
EXHIBIT C
Form of Bank Merger Agreement
A-61
BANK MERGER AGREEMENT
This Bank Merger Agreement (
Agreement
), dated as of
, 2017, is made by and between Glacier Bank and Collegiate Peaks Bank (the
Bank
).
RECITALS
A.
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Glacier Bank, a wholly owned subsidiary of Glacier Bancorp, Inc. (
GBCI
), is a Montana state-chartered bank. Glacier Bank has authorized capital stock of 1,968,279 shares of
common stock with no par value of which 1,968,279 shares are issued and outstanding. A list of Glacier Banks office locations is attached as
Exhibit A
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B.
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The Bank, a wholly owned subsidiary of Columbine Capital Corp. (
CCC
), is a Colorado state-chartered bank. A list of the Banks office locations is attached as
Exhibit B
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C.
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GBCI, Glacier Bank, CCC, and the Bank entered into a Plan and Agreement of Merger dated as of the date hereof (the
Merger Agreement
) which provides for the merger of CCC with and into GBCI, with GBCI
as the surviving corporation (the
Holding Company Merger
). Immediately following the Holding Company Merger, the Bank will merge with and into Glacier Bank, with Glacier Bank as the resulting bank (the
Resulting
Bank
).
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D.
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The Boards of Directors of the Bank and Glacier Bank have each adopted this Agreement and authorized its execution and delivery.
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AGREEMENT
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a.
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Merger
. Subject to the terms of this Agreement, the Bank will merge with and into Glacier Bank (the
Merger
), and after the Merger, Glacier Bank will be the Resulting Bank.
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b.
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Closing
. Unless the parties agree otherwise, the closing of the Merger (
Closing
) will take place
immediately following the closing of
the Holding Company Merger (the
Effective Time
), subject to approval of the Merger in accordance with Section 2 and Section 3 and expiration of all applicable waiting periods. For the avoidance of doubt, the occurrence of the Holding Company Merger
shall be a condition to the obligation of each of the parties hereto to effect the Closing, and neither party shall have any obligation to effect the Closing and consummate the Merger unless the Holding Company Merger has occurred in accordance with
the terms of the Merger Agreement.
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c.
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Transaction
. At the Effective Time, the following will occur:
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(i)
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Bank Shares
. All shares of Bank capital stock issued and outstanding immediately before the Effective Time will be canceled.
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(ii)
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Glacier Bank Shares
. All shares of Glacier Bank capital stock issued and outstanding immediately before the Effective Time will continue as issued and outstanding shares of the Resulting Bank.
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(iii)
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Dissenting Shares
. No shares of the Resulting Bank will need to be disposed as the result of dissenting shareholders, since the Merger will not be consummated if the sole shareholder of either Glacier Bank or the
Bank declines to approve this Agreement.
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d.
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Resulting Bank
. The Resulting Banks name will be Glacier Bank. Glacier Banks charter, articles of incorporation, and bylaws will become the Resulting Banks charter, articles of
incorporation, and bylaws and are not being amended as part of the Merger. Glacier Banks principal office will become the Resulting Banks principal office, and all other offices of Glacier Bank and the Bank will become offices of the
Resulting Bank. The Resulting Banks principal office and other office locations are set forth on
Exhibit C
. The Resulting Bank will be a wholly owned subsidiary of GBCI, with the same number of issued and outstanding shares as the
issued and outstanding shares of Glacier Bank immediately before the Effective Time.
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e.
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Resulting Bank Directors
. The members of the Resulting Banks Board of Directors (collectively,
Resulting Directors
) effective at the Effective Time will include the members of the Board
of Directors of Glacier Bank as constituted immediately prior to the Effective Time. The Resulting Directors names and mailing addresses are set forth on
Exhibit D
. Nothing in this Section 1.e. or this Agreement restricts in any
way any rights of the Resulting Banks shareholder and directors at any time after the Effective Time to nominate, elect, select, or remove the Resulting Banks directors.
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f.
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Resulting Bank Officers
. The names and mailing addresses of the executive officers of the Resulting Bank are listed on
Exhibit D
. Nothing in this Section 1.f. or this Agreement restricts in any way
any rights of the Resulting Banks shareholder and directors at any time after the Effective Time to nominate, elect, select, or remove the Resulting Banks executive officers.
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2.
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Shareholder Approval
.
The Merger and this Agreement are subject to approval by GBCI, as Glacier Banks sole shareholder, and by CCC, as the Banks sole shareholder. If either GBCI
or CCC does not approve the Merger and this Agreement, this Agreement is void, and the parties are relieved of their obligations and responsibilities under this Agreement.
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3.
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Regulatory Approvals
.
The Merger and this Agreement are subject to approval by the
Federal Deposit Insurance Corporation, the Montana Division of Banking and Financial Institutions, the Banking Board of the Division of Banking of the Colorado Department of Regulatory Agencies, the Board of Governors of the Federal Reserve System,
and all other
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regulatory agencies having jurisdiction with respect to the Merger. If these agencies do not approve the Merger and this Agreement, this Agreement is void, and the parties are relieved of their
obligations and responsibilities under this Agreement.
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4.
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Miscellaneous Provisions
.
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a.
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Binding Effect
. This Agreement is binding and inures to the benefit of the parties and their respective successors and assigns.
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b.
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Assignment
. No party may assign this Agreement or any rights under this Agreement, unless the other party consents in writing to the assignment.
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c.
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Amendment and Waiver
. Except as this Agreement otherwise expressly provides, it contains the parties entire understanding. No modification or amendment of its terms or conditions is effective unless in
writing and signed by the parties.
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d.
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Section Headings
. The section headings included in this Agreement are for reference and convenience only and are not a substantive part of this Agreement.
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e.
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Counterparts
. This Agreement may be executed in one or more counterparts. Each of these counterparts will be deemed an original, and all counterparts taken together constitute one and the same document.
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f.
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Governing Law
. The parties intend this Agreement to be governed by the laws of the State of Montana, except to the extent Federal law may govern certain matters.
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- Signatures appear on the following page -
A-64
This Bank Merger Agreement is dated as of the date first written above.
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GLACIER BANK
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COLLEGIATE PEAKS BANK
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By:
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Randall M. Chesler
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By:
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John W. Perkins
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Its:
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President and CEO
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Its:
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Co-CEO
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[Signature Page to Bank Merger Agreement]
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EXHIBIT A
GLACIER BANK
OFFICE
LOCATIONS
A-66
EXHIBIT B
COLLEGIATE PEAKS BANK
OFFICE LOCATIONS
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EXHIBIT C
RESULTING BANK
MAIN
OFFICE AND OTHER OFFICE LOCATIONS
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EXHIBIT D
RESULTING BANK
DIRECTORS AND EXECUTIVE OFFICERS
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EXHIBIT D
Form of Transaction-Related Expenses Calculation
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Transaction-Related Expenses ($000s)
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Estimated
Transaction-Related
Expenses
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Final
Transaction-Related
Expenses
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Vendor Contracts
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|
|
|
|
|
|
|
|
|
|
Retention Bonuses
1
|
|
|
|
|
|
|
|
|
D&O Tail Coverage Insurance
|
|
|
|
|
|
|
|
|
Professional Expenses
|
|
|
|
|
|
|
|
|
Investment banking
|
|
|
|
|
|
|
|
|
Legal
|
|
|
|
|
|
|
|
|
Accounting and other
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
As provided in the Plan and Agreement of Merger, differences between the Final Transaction Related Expenses and $2,450,000
(the
Maximum Transaction Expense Amount
) will be added to or subtracted from, as the case may be, CCC Capital on an after tax basis (applying an effective tax rate of 35 percent) for purposes of determining both
CCC Closing Capital and the Closing Capital Differential.
1
|
To include retention bonuses payable post closing to executives continuing with the Division.
|
A-70
APPENDIX B
COLORADO DISSENTERS RIGHTS
§
7-113-101.
Definitions
For purposes of this article:
(1) Beneficial shareholder means the 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
domestic or foreign corporation, by merger or share exchange of that issuer.
(3) Dissenter means a shareholder who is
entitled to dissent from corporate action under section
7-113-102
and who exercises that right at the time and in the manner required by part 2 of this article.
(4) Fair value, with respect to a dissenters shares, means the value of the shares immediately before the effective date of
the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action except to the extent that exclusion would be 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 the legal rate as specified in section
5-12-101,
C.R.S.
(6) Record shareholder means the person in whose name shares are registered in the records of a corporation or the beneficial
owner of shares that are registered in the name of a nominee to the extent such owner is recognized by the corporation as the shareholder as provided in section
7-107-204.
(7) Shareholder means either a
record shareholder or a beneficial shareholder.
§
7-113-102.
Right to dissent
(1) A shareholder, whether or not entitled to vote, is entitled to dissent and obtain payment of the fair value of
the shareholders shares in the event of any of the following corporate actions:
(a) Consummation of a plan of merger to which the
corporation is a party if:
(I) Approval by the shareholders of that corporation is required for the merger by section
7-111-103
or
7-111-104
or by the articles of incorporation; or
(II) The corporation is a subsidiary that is merged with its parent corporation under section
7-111-104;
(b) Consummation of a plan of share exchange to which the corporation is a party as
the corporation whose shares will be acquired;
(c) Consummation of a sale, lease, exchange, or other disposition of all, or substantially
all, of the property of the corporation for which a shareholder vote is required under section
7-112-102
(1);
B-1
(d) Consummation of a sale, lease, exchange, or other disposition of all, or substantially all,
of the property of an entity controlled by the corporation if the shareholders of the corporation were entitled to vote upon the consent of the corporation to the disposition pursuant to section
7-112-102
(2);
(e) Consummation of a conversion in which the corporation is the converting
entity as provided in section
7-90-206
(2);
(f) An
amendment, conversion, or merger described in section
7-101-504
(3); and
(g) Consummation of a plan by which a public benefit corporation terminates public benefit corporation status by merger or conversion into a
corporation that has not elected public benefit corporation status as provided in section
7-101-504
(4) or by amendment of its articles of incorporation.
(1.3) A shareholder is not entitled to dissent and obtain payment, under subsection (1) of this section, of the fair value of the shares
of any class or series of shares that either were listed on a national securities exchange registered under the federal Securities Exchange Act of 1934, as amended, or were held of record by more than two thousand shareholders, at the
time of:
(a) The record date fixed under section
7-107-107
to determine the shareholders entitled to receive notice of the shareholders meeting at which the corporate action is submitted to a vote;
(b) The record date fixed under section
7-107-104
to determine
shareholders entitled to sign writings consenting to the corporate action; or
(c) The effective date of the corporate action if the
corporate action is authorized other than by a vote of shareholders.
(1.8) The limitation set forth in subsection (1.3) of this section
shall not apply if the shareholder will receive for the shareholders shares, pursuant to the corporate action, anything except:
(a)
Shares of the corporation surviving the consummation of the plan of merger or share exchange;
(b) Shares of any other corporation which,
at the effective date of the plan of merger or share exchange, either will be listed on a national securities exchange registered under the federal Securities Exchange Act of 1934, as amended, or will be held of record by more than two
thousand shareholders;
(c) Cash in lieu of fractional shares; or
(d) Any combination of the foregoing described shares or cash in lieu of fractional shares.
(2) (Deleted by amendment, L. 96, p. 1321, § 30, effective June 1, 1996.)
(2.5) A shareholder, whether or not entitled to vote, is entitled to dissent and obtain payment of the fair value of the shareholders
shares in the event of a reverse split that reduces the number of shares owned by the shareholder to a fraction of a share or to scrip if the fractional share or scrip so created is to be acquired for cash or the scrip is to be voided under section
7-106-104.
B-2
(3) A shareholder is entitled to dissent and obtain payment of the fair value of the
shareholders shares in the event of any corporate action to the extent provided by the bylaws or a resolution of the board of directors.
(4) A shareholder entitled to dissent and obtain payment for the shareholders shares under this article may not challenge the corporate
action creating such entitlement unless the action is unlawful or fraudulent with respect to the shareholder or the corporation.
§
7-113-103.
Dissent by nominees and beneficial owners
(1) A
record shareholder may assert dissenters rights as to fewer than all 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 causes
the corporation to receive written notice which states such dissent and the name, address, and federal taxpayer identification number, if any, of each person on whose behalf the record shareholder asserts dissenters rights. The rights of a
record shareholder under this subsection (1) are determined as if the shares as to which the record shareholder dissents and the other shares of the record shareholder were registered in the names of different shareholders.
(2) A beneficial shareholder may assert dissenters rights as to the shares held on the beneficial shareholders behalf only if:
(a) The beneficial shareholder causes the corporation to receive the record shareholders written consent to the dissent not later
than the time the beneficial shareholder asserts dissenters rights; and
(b) The beneficial shareholder dissents with respect to all
shares beneficially owned by the beneficial shareholder.
(3) The corporation may require that, when a record shareholder dissents with
respect to the shares held by any one or more beneficial shareholders, each such beneficial shareholder must certify to the corporation that the beneficial shareholder and the record shareholder or record shareholders of all shares owned
beneficially by the beneficial shareholder have asserted, or will timely assert, dissenters rights as to all such shares as to which there is no limitation on the ability to exercise dissenters rights. Any such requirement shall be
stated in the dissenters notice given pursuant to section
7-113-203.
§
7-113-201.
Notice of dissenters rights
(1) If a proposed corporate action creating dissenters rights under section
7-113-102
is submitted to a vote at a shareholders meeting, the notice of the meeting shall be given to all shareholders, whether or not entitled to vote. The 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 and the materials, if any, that, under articles 101 to 117 of this title, are required to be given to shareholders entitled to
vote on the proposed action at the meeting. Failure to give notice as provided by this subsection (1) shall not affect any action taken at the shareholders meeting for which the notice was to have been given, but any shareholder who was
entitled to
B-3
dissent but who was not given such notice shall not be precluded from demanding payment for the shareholders shares under this article by reason of the shareholders failure to comply
with the provisions of section
7-113-202
(1).
(2) If a
proposed corporate action creating dissenters rights under section
7-113-102
is authorized without a meeting of shareholders pursuant to section
7-107-104,
any written or oral solicitation of a shareholder to execute a writing consenting to such action contemplated in section
7-107-104
shall be accompanied or preceded by a written notice stating that shareholders are or may be entitled to assert dissenters rights under this article, by a copy of this article, and by the
materials, if any, that, under articles 101 to 117 of this title, would have been required to be given to shareholders entitled to vote on the proposed action if the proposed action were submitted to a vote at a shareholders meeting. Failure
to give notice as provided by this subsection (2) shall not affect any action taken pursuant to section
7-107-104
for which the notice was to have been given, but
any shareholder who was entitled to dissent but who was not given such notice shall not be precluded from demanding payment for the shareholders shares under this article by reason of the shareholders failure to comply with the
provisions of section
7-113-202
(2).
§
7-113-202.
Notice of intent to demand payment
(1) If a
proposed corporate action creating dissenters rights under section
7-113-102
is submitted to a vote at a shareholders meeting and if notice of
dissenters rights has been given to such shareholder in connection with the action pursuant to section
7-113-201
(1), a shareholder who wishes to assert
dissenters rights shall:
(a) Cause the corporation to receive, before the vote is taken, written notice of the shareholders
intention to demand payment for the shareholders shares if the proposed corporate action is effectuated; and
(b) Not vote the
shares in favor of the proposed corporate action.
(2) If a proposed corporate action creating dissenters rights under section
7-113-102
is authorized without a meeting of shareholders pursuant to section
7-107-104
and if
notice of dissenters rights has been given to such shareholder in connection with the action pursuant to section
7-113-201
(2), a shareholder who wishes to assert
dissenters rights shall not execute a writing consenting to the proposed corporate action.
(3) A shareholder who does not satisfy
the requirements of subsection (1) or (2) of this section is not entitled to demand payment for the shareholders shares under this article.
§
7-113-203.
Dissenters notice
(1) If a proposed corporate action creating dissenters rights under section
7-113-102
is authorized, the corporation shall give a written dissenters notice to all shareholders who are entitled to demand payment for their shares under this article.
(2) The dissenters notice required by subsection (1) of this section shall be given no later than ten days after the effective date
of the corporate action creating dissenters rights under section
7-113-102
and shall:
(a) State that the corporate action was authorized and state the effective date or proposed effective date of the corporate action;
B-4
(b) State an address at which the corporation will receive payment demands and the address of a
place where certificates for certificated shares must be deposited;
(c) Inform holders of uncertificated shares to what extent transfer
of the shares will be restricted after the payment demand is received;
(d) Supply a form for demanding payment, which form shall request
a dissenter to state an address to which payment is to be made;
(e) Set the date by which the corporation must receive the payment demand
and certificates for certificated shares, which date shall not be less than thirty days after the date the notice required by subsection (1) of this section is given;
(f) State the requirement contemplated in section
7-113-103
(3), if such requirement is imposed; and
(g) Be accompanied by a copy of this article.
§
7-113-204.
Procedure to demand payment
(1) A shareholder who is given a dissenters notice pursuant to section
7-113-203
and who wishes to assert dissenters rights shall, in accordance with the terms of the dissenters notice:
(a) Cause the corporation to receive a payment demand, which may be the payment demand form contemplated in section
7-113-203
(2) (d), duly completed, or may be stated in another writing; and
(b) Deposit the shareholders certificates for certificated shares.
(2) A shareholder who demands payment in accordance with subsection (1) of this section retains all rights of a shareholder, except the
right to transfer the shares, until the effective date of the proposed corporate action giving rise to the shareholders exercise of dissenters rights and has only the right to receive payment for the shares after the effective date of
such corporate action.
(3) Except as provided in section
7-113-207
or
7-113-209
(1) (b), the demand for payment and deposit of certificates are
irrevocable.
(4) A shareholder who does not demand payment and deposit the shareholders share certificates as required by the date
or dates set in the dissenters notice is not entitled to payment for the shares under this article.
§
7-113-205.
Uncertificated shares
(1) Upon receipt of a demand for payment under section
7-113-204
from a shareholder holding uncertificated shares, and in lieu of the deposit of certificates representing the shares, the corporation may restrict the transfer
thereof.
(2) In all other respects, the provisions of section
7-113-204
shall be applicable to shareholders who own uncertificated shares.
B-5
§
7-113-206.
Payment
(1) Except as provided in section
7-113-208,
upon the
effective date of the corporate action creating dissenters rights under section
7-113-102
or upon receipt of a payment demand pursuant to section
7-113-204,
whichever is later, the corporation shall pay each dissenter who complied with section
7-113-204,
at the address stated in the payment demand, or if no such address is stated in the payment demand, at the address shown on the corporations current
record of shareholders for the record shareholder holding the dissenters shares, the amount the corporation estimates to be the fair value of the dissenters shares, plus accrued interest.
(2) The payment made pursuant to subsection (1) of this section shall be accompanied by:
(a) The corporations balance sheet as of the end of its most recent fiscal year or, if that is not available, 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, and, if the corporation customarily provides such statements to shareholders, a statement of changes in
shareholders equity for that year and a statement of cash flow for that year, which balance sheet and statements shall have been audited if the corporation customarily provides audited financial statements to shareholders, as well as the
latest available financial statements, if any, for the interim or full-year period, which financial statements need not be audited;
(b) A
statement of the corporations estimate of the fair value of the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenters right to demand payment under section
7-113-209;
and
(e) A copy of this article.
§
7-113-207.
Failure to take action
(1) If the effective date of the corporate action creating dissenters rights under section
7-113-102
does not occur within sixty days after the date set by the corporation by which the corporation must receive the payment demand as provided in section
7-113-203,
the corporation shall return the deposited certificates and release the transfer restrictions imposed on uncertificated shares.
(2) If the effective date of the corporate action creating dissenters rights under section
7-113-102
occurs more than sixty days after the date set by the corporation by which the corporation must receive the payment demand as provided in section
7-113-203,
then the corporation shall send a new dissenters notice, as provided in section
7-113-203,
and the provisions
of sections
7-113-204
to
7-113-209
shall again be applicable.
§
7-113-208.
Special provisions relating to shares acquired after
announcement of proposed corporate action
(1) The corporation may, in or with the dissenters notice given pursuant to section
7-113-203,
state the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action creating dissenters rights under
section
7-113-102
and state that the
B-6
dissenter shall certify in writing, in or with the dissenters payment demand under section
7-113-204,
whether
or not the dissenter (or the person on whose behalf dissenters rights are asserted) acquired beneficial ownership of the shares before that date. With respect to any dissenter who does not so certify in writing, in or with the payment demand,
that the dissenter or the person on whose behalf the dissenter asserts dissenters rights acquired beneficial ownership of the shares before such date, the corporation may, in lieu of making the payment provided in section
7-113-206,
offer to make such payment if the dissenter agrees to accept it in full satisfaction of the demand.
(2) An offer to make payment under subsection (1) of this section shall include or be accompanied by the information required by section
7-113-206
(2).
§
7-113-209.
Procedure if dissenter is dissatisfied with payment or offer
(1) A dissenter may
give notice to the corporation in writing of the dissenters estimate of the fair value of the dissenters shares and of the amount of interest due and may demand payment of such estimate, less any payment made under section
7-113-206,
or reject the corporations offer under section
7-113-208
and demand payment of
the fair value of the shares and interest due, if:
(a) The dissenter believes that the amount paid under section
7-113-206
or offered under section
7-113-208
is less than the fair value of the shares or that
the interest due was incorrectly calculated;
(b) The corporation fails to make payment under section
7-113-206
within sixty days after the date set by the corporation by which the corporation must receive the payment demand; or
(c) The corporation does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares as
required by section
7-113-207
(1).
(2) A dissenter waives
the right to demand payment under this section unless the dissenter causes the corporation to receive the notice required by subsection (1) of this section within thirty days after the corporation made or offered payment for the
dissenters shares.
§
7-113-301.
Court action
(1) If a demand for payment under section
7-113-209
remains
unresolved, the corporation may, within sixty days after receiving the payment demand, commence a proceeding and 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 to each dissenter whose demand remains unresolved the amount demanded.
(2) The corporation shall commence the proceeding described in subsection (1) of this section in the district court for the county in
this state in which the street address of the corporations principal office is located, or, if the corporation has no principal office in this state, in the district court for the county in which the street address of its registered agent is
located, or, if the corporation has no registered agent, in the district court for the city and county of Denver. If the corporation is a foreign corporation without a registered agent, it shall commence the proceeding in the county in which the
domestic corporation merged into, or whose shares were acquired by, the foreign corporation would have commenced the action if that corporation were subject to the first sentence of this subsection (2).
B-7
(3) The corporation shall make all dissenters, whether or not residents of this state, whose
demands remain unresolved parties to the proceeding commenced under subsection (2) of this section as in an action against their shares, and all parties shall be served with a copy of the petition. Service on each dissenter shall be by
registered or certified mail, to the address stated in such dissenters payment demand, or if no such address is stated in the payment demand, at the address shown on the corporations current record of shareholders for the record
shareholder holding the dissenters shares, or as provided by law.
(4) The jurisdiction of the court in which the proceeding is
commenced under subsection (2) of this section is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers have the powers
described in the order appointing them, or in any amendment to such order. The parties to the proceeding are entitled to the same discovery rights as parties in other civil proceedings.
(5) Each dissenter made a party to the proceeding commenced under subsection (2) of this section is entitled to judgment for the amount,
if any, by which the court finds the fair value of the dissenters shares, plus interest, exceeds the amount paid by the corporation, or for the fair value, plus interest, of the dissenters shares for which the corporation elected to
withhold payment under section
7-113-208.
§
7-113-302.
Court costs and counsel fees
(1) The court in an
appraisal proceeding commenced under section
7-113-301
shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court. The court shall assess the costs against the corporation; except that the court may assess costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds the dissenters acted
arbitrarily, vexatiously, or not in good faith in demanding payment under section
7-113-209.
(2) The court may also assess the fees and expenses of counsel and experts for the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any dissenters if the court finds the corporation did not substantially comply with part 2 of
this article; or
(b) Against either the corporation or one or more dissenters, 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 article.
(3) If the court finds that the services of counsel 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 said counsel reasonable fees to be paid out of the amounts awarded to the dissenters who were benefited.
B-8
APPENDIX C
June 5, 2017
Board
of Directors
Columbine Capital Corporation
105 Centennial
Plaza
Buena Vista, CO 81211
Members of the Board:
We understand that Columbine Capital Corporation (the Parent) and Collegiate Peaks Bank, a wholly owned subsidiary of Parent (the
Bank
) propose to enter into a Merger Agreement (the
Agreement
) with Glacier Bancorp, Inc. (the
Company
) pursuant to which, among other things, the Company will acquire all of the issued and
outstanding common stock of the Parent and then the Parent will merge with and into the Company (the Transaction). Immediately following the merger of the Parent into the Company, the Bank will be merged with and
into Glacier Bank, with Glacier Bank as the resulting bank. The Transaction calls for each outstanding share of the common stock of the Parent (the Parent Common Stock) issued and outstanding immediately prior to the Effective Time
(including any shares of Company common stock issued upon the exercise of Company stock options) shall be converted into and shall represent the right to receive from the Company a unit consisting of (a) $34.4504 in cash (the Per Share Cash
Consideration) and (b) 3.7681 shares of common stock of Glacier Bancorp, Inc. (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 final Merger Consideration paid to the Parent will vary based upon the Parents closing tangible equity at closing, and is subject to certain adjustments described in the Agreement. The terms and
conditions of the Transaction are more fully set forth in the Agreement.
Capitalized terms used herein without definition have the
respective meanings ascribed to them in the Agreement.
You have requested our opinion as to the fairness, from a financial point of view,
to Parent of the Merger Consideration to be paid to the holders of the Parent Common Stock in the proposed Transaction.
In connection
with preparing our opinion, we have reviewed, among other things:
|
(i)
|
a draft of the Agreement (including disclosure schedules) and Voting Agreement, dated May 31, 2017;
|
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(ii)
|
certain financial statements and other historical financial and business information about the Parent and the Company made available to us from published sources and/or from the internal records of the Parent and the
Company that we deemed relevant;
|
|
(iii)
|
certain publicly available analyst earnings estimates for the Company for the years ending December 31, 2017 and December 31, 2018 and estimated long-term growth rate for the years thereafter, in each case as
discussed with, and confirmed by, senior management of the Parent;
|
|
(iv)
|
the current market environment generally and the banking environment in particular;
|
Investment Banking
8 Third St. N. I Great Falls, MT 594011 (406) 791-74211 FAX (406) 791-7315
www.davidsoncompanioes.com/ecm/
|
(v)
|
the current and historical market prices and trading activity of the Company with that of certain other publicly-traded companies that we deemed relevant;
|
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(vi)
|
the financial terms of certain other transactions in the financial institutions industry, to the extent publicly available;
|
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(vii)
|
the market and trading characteristics of public companies and public bank holding companies in particular;
|
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(viii)
|
the relative contributions of the Parent and Company to the combined company;
|
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(ix)
|
the pro forma financial impact of the Transaction, taking into consideration the amounts and timing of the transaction costs and cost savings;
|
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(x)
|
the net present value of the Company with consideration of projected financial results;
|
|
(xi)
|
the net present value of Parent with consideration of projected financial results; and
|
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(xii)
|
such other financial studies, analyses and investigations and financial, economic and market criteria and other information as we considered relevant including discussions with management and other representatives and
advisors of the Parent and the Company concerning the business, financial condition, results of operations and prospects of the Parent and the Company.
|
In arriving at our opinion, we have, with your consent, assumed and relied upon the accuracy and completeness of all information that was
publicly available or supplied or otherwise made available to, discussed with or reviewed by or for us. We have not independently verified (nor have we assumed responsibility for independently verifying) such information or its accuracy or
completeness. We have not undertaken or been provided with any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of the Company or Parent, and we did not make an independent appraisal or analysis of
the Company or Parent with respect to the Transaction. In addition, we have not assumed any obligation to conduct, nor have we conducted, any physical inspection of the properties or facilities of the Company or Parent, and have not been provided
with any reports of such physical inspections. We have assumed that there has been no material change in the Companys or Parents business, assets, financial condition, results of operations, cash flows or prospects since the date of the
most recent financial statements provided to us, and that neither the Company nor Parent is party to any material pending transaction, including without limitation any financing, recapitalization, acquisition or merger, divestiture or
spin-off,
other than the Transaction.
With respect to the financial forecasts and other analyses
(including information relating to certain pro forma financial effects of, and strategic implications and operational benefits anticipated to result from, the Transaction) provided to or otherwise reviewed by or for or discussed with us, we have
been advised by management of the Parent, and have assumed with your consent, that such forecasts and other analyses were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of Parent
as to the future financial performance of the Company and Parent and the other matters covered thereby, and that the financial results (including the potential strategic implications and operational benefits anticipated to result from the
Transaction) reflected in such forecasts and analyses will be realized in the amounts and at the times projected. We assume no responsibility for and express no opinion as to these forecasts and analyses or the assumptions on which they were based.
We have relied on the assurances of management of Parent that they are not aware of any facts or circumstances that would make any of such information, forecasts or analyses inaccurate or misleading.
2
We are not experts in the evaluation of loan and lease portfolios, classified loans or other real
estate owned or in assessing the adequacy of the allowance for loan losses with respect thereto, and we did not make an independent evaluation or appraisal thereof, or of any other specific assets, the collateral securing assets or the liabilities
(contingent or otherwise) of the Company or Parent or any of their respective subsidiaries. We have not reviewed any individual loan or credit files relating to the Company or Parent. We have assumed, with your consent, that the respective
allowances for loan and lease losses for both the Company and Parent are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. We did not make an independent evaluation of the quality of the Companys
or Parents deposit base, nor have we independently evaluated potential deposit concentrations or the deposit composition of the Company or Parent. We did not make an independent evaluation of the quality of the Companys or Parents
investment securities portfolio, nor have we independently evaluated potential concentrations in the investment securities portfolio of the Company or Parent.
We have assumed that all of the representations and warranties contained in the Agreement and all related agreements are true and correct in
all respects material to our analysis, and that the Transaction will be consummated in accordance with the terms of the Agreement, without waiver, modification or amendment of any term, condition or covenant thereof the effect of which would be in
any respect material to our analysis. We also have assumed that all material governmental, regulatory or other consents, approvals, and waivers necessary for the consummation of the Transaction will be obtained without any material adverse effect on
the Company or Parent or the contemplated benefits of the Transaction. Further, we have assumed that the executed Agreement will not differ in any material respect from the draft Agreement, dated May 31, 2017, reviewed by us.
We have assumed in all respects material to our analysis that the Company will remain as a going concern for all periods relevant to our
analysis. We express no opinion regarding the liquidation value of the Company or any other entity.
Our opinion is limited to the
fairness, from a financial point of view, to Parent of the Merger Consideration to be paid to the holders of the Parent Common Stock in the proposed Transaction. We do not express any view on, and our opinion does not address, any other term or
aspect of the Agreement or Transaction (including, without limitation, the form or structure of the Transaction) or any term or aspect of any other agreement or instrument contemplated by the Agreement or entered into in connection with the
Transaction, or as to the underlying decision by Parent to engage in the Transaction. Furthermore, we express no opinion with respect to the amount or nature of any compensation to any officers, directors or employees of the Parent, or any class of
such persons, relative to the Consideration to be paid to the holders of the Parent Common Stock in the Transaction, or with respect to the fairness of any such compensation to Parent.
We express no view as to, and our opinion does not address, the relative merits of the Transaction as compared to any alternative business
transactions or strategies, or whether such alternative transactions or strategies could be achieved or are available. In addition, our opinion does not address any legal, regulatory, tax or accounting matters, as to which we understand that Parent
obtained such advice as it deemed necessary from qualified professionals. We do not express any opinion as to the value of any asset of the Parent whether at current market prices or in the future, or as to the price at which the Parent or its
assets could be acquired in the future. We also express no opinion as to the price at which the Company Common Stock or the common stock of Parent will trade following announcement of the Transaction or at any future time.
We have not evaluated the solvency or fair value of the Company or Parent under any state, federal or other laws relating to bankruptcy,
insolvency or similar matters. This opinion is not a solvency opinion and does not in any way address the solvency or financial condition of the Company or Parent. We are not expressing any opinion as to the impact of the Transaction on the solvency
or viability of the Company or Parent or the ability of the Company or Parent to pay their respective obligations when they come due.
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We have acted as Parents financial advisor in connection with the Transaction and will
receive a fee for our services, a portion of which is payable upon the rendering of this opinion and a significant portion of which is contingent upon consummation of the Transaction. In addition, Parent has agreed to reimburse our reasonable
expenses and indemnify us against certain liabilities arising out of our engagement.
Please be advised that during the two years
preceding the date of this letter, we have provided investment banking and other financial services to the Parent for which we have received customary compensation. Such services during such period have included acting as the Parents placement
agent in a private placement of subordinated debt. During the two years preceding the date of this letter, we have provided investment banking and other financial services to the Company for which we have received customary compensation. Such
services during such period have included representing the Company on M&A transactions.
In the ordinary course of our business, D.A.
Davidson & Co. and its affiliates may actively trade or hold securities of the Company or Parent for our own accounts or for the accounts of our customers and, accordingly, may at any time hold long or short positions in such securities. We
may seek to provide investment banking or other financial services to the Company or Parent in the future for which we would expect to receive compensation.
This fairness opinion was reviewed and approved by a D.A. Davidson & Co. Fairness Opinion Committee.
It is understood that this letter is for the information of the Board of Directors of Parent in connection with and for the purposes of its
consideration of the Transaction. This opinion is not intended to be and does not constitute a recommendation as to how the shareholders of Parent should vote or act with respect to the Transaction or any matter relating thereto.
This opinion is for the information of the Board of Directors of Parent and shall not be disclosed, referred to, published or otherwise used
(in whole or in part), nor shall any public references to us be made, without our prior written consent, except that a copy of this opinion may be included in its entirety in any regulatory filing that Parent is required to make in connection with
the Transaction if such inclusion is required by applicable law.
Our opinion is necessarily based on economic, market and other
conditions as in effect on, and the information made available to us as of, the date hereof. Events occurring after the date hereof may affect this opinion and the assumptions used in preparing it, and we do not assume any obligation to update,
revise or reaffirm this opinion.
Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Merger
Consideration to be paid to the holders of the Parent Common Stock in the Transaction is fair, from a financial point of view, to Parent.
Very truly
yours,
D.A. Davidson & Co.
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