Item 1.01. Entry into a Material Definitive Agreement.
On June 7, 2021, HBT Financial, Inc., a Delaware corporation (“HBT”), HB-NXT Merger, Inc., a Delaware corporation and wholly-owned subsidiary of HBT (“MergerCo”), and NXT Bancorporation, Inc., an Iowa corporation (“NXT”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, MergerCo will merge with and into NXT (the “Merger”), with NXT as the surviving entity, and as a result, NXT will become a wholly-owned subsidiary of HBT. Immediately following the Merger, NXT will merge into HBT, with HBT as the surviving entity. In addition, at a time to be determined by the parties, following these mergers, NXT Bank, an Iowa state chartered bank and a wholly-owned subsidiary of NXT (“NXT Bank”), will merge with and into Heartland Bank and Trust Company, an Illinois state chartered bank and a wholly-owned subsidiary of HBT (“Heartland Bank”), with Heartland Bank as the surviving bank. The Merger Agreement was unanimously approved and adopted by the board of directors of each of HBT and NXT.
Upon the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, no par value, of NXT that is issued and outstanding immediately prior to the Effective Time will be converted into the right to receive: (i) cash in the amount of $400.00 and (ii) 67.6783 duly authorized, validly issued, fully paid and non-assessable shares of HBT common stock, par value $0.01 per share, subject to adjustment if certain environmental conditions exist with respect to NXT’s real property and the total after-tax cost to remediate and/or cure such conditions or defects is greater than $1.0 million. In lieu of fractional shares, holders of NXT common stock will receive cash. In aggregate, based on NXT’s common stock outstanding as of the date hereof, NXT shareholders will receive cash consideration of approximately $10,632,892 and stock consideration of approximately 1,799,040 shares of HBT common stock.
The Merger Agreement contains customary representations and warranties from both HBT and NXT and each party has agreed to customary covenants, including, among others, covenants relating to (i) the conduct of NXT’s business during the interim period between the execution of the Merger Agreement and the Effective Time, (ii) the obligation of NXT to call a meeting of its shareholders to adopt the Merger Agreement and certain other shareholder matters and a requirement that the NXT board of directors recommend that its shareholders adopt the Merger Agreement and such matters presented at the special meeting, and (iii) NXT’s non-solicitation obligations relating to alternative acquisition proposals. In addition, the completion of the Merger is subject to customary conditions, including (i) adoption and approval of the Merger Agreement by the shareholders of NXT, (ii) receipt of required regulatory approvals, and (iii) effectiveness of the Registration Statement on Form S-4 for the HBT common stock to be issued in the Merger. The Merger Agreement provides certain termination rights for both HBT and NXT and further provides for the payment of termination fees ranging from $0.75 million to $1.5 million to be made by one party to the other in case of termination under specified events.
Concurrently with the execution of the Merger Agreement, each NXT director and certain shareholders of NXT have executed voting and support agreements pursuant to which they have agreed to vote their NXT shares in favor of the Merger Agreement and the other shareholder matters to be approved at the NXT shareholder meeting. The voting agreements entered into by certain principal shareholders of NXT also prohibit the transfer by such principal shareholders of shares of HBT common stock that they receive as consideration in the Merger for a period of 60 days following the closing of the Merger, and thereafter, include limitations in the manner of transfer of the HBT common stock received.
In addition, concurrently with the execution of the Merger Agreement, Nathan Koch, the President and Chief Executive Officer of NXT Bank entered into an employment agreement with HBT, which will become effective at the Effective Time of the Merger and governs the terms of the continuing employment for such executive.