Item 1.01 Entry into a Material Definitive Agreement.
On August 23, 2022, HBT Financial, Inc., a Delaware corporation (“HBT”), HB-TC Merger, Inc., a Delaware corporation and wholly-owned subsidiary of HBT (“MergerCo”), and Town and Country Financial Corporation, a Delaware corporation (“T&C”), 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 T&C (the “Merger”), with T&C as the surviving entity, and as a result, T&C will become a wholly-owned subsidiary of HBT. Immediately following the Merger, T&C will merge into HBT, with HBT as the surviving entity. In addition, subsequent to the mergers and at a time to be determined by HBT, Town and Country Bank, an Illinois state-chartered bank and currently a wholly-owned subsidiary of T&C (“T&C 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 T&C.
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 T&C that is issued and outstanding immediately prior to the Effective Time (other than treasury and dissenter shares) will be converted into the right to receive, at the option of each T&C stockholder, one of the following: (i) 1.9010 duly authorized, validly issued, fully paid and non-assessable shares of HBT common stock, par value $0.01 per share, (ii) cash in the amount of $35.66, or (iii) a combination of cash and HBT common stock, in each case subject to adjustment and to the election and proration procedures as provided in the Merger Agreement. In lieu of fractional shares, holders of T&C common stock will receive cash. In aggregate, based on T&C’s common stock outstanding as of the date hereof, T&C stockholders are expected to receive cash consideration of approximately $38,000,000 and stock consideration of approximately 3,378,655 shares of HBT common stock.
The Merger Agreement contains customary representations and warranties from both HBT and T&C and each party has agreed to customary covenants, including, among others, covenants relating to (i) the conduct of T&C’s business during the interim period between the execution of the Merger Agreement and the Effective Time, (ii) the obligation of T&C to call a meeting of its stockholders to adopt the Merger Agreement and certain other stockholder matters and a requirement that the T&C board of directors recommend that its stockholders adopt the Merger Agreement and such matters presented at the special meeting, and (iii) T&C’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 stockholders of T&C, (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 T&C and further provides for the payment of a termination fee of $3.8 million to be made by T&C to HBT in case of termination under specified events.
Concurrently with the execution of the Merger Agreement, each T&C director and certain stockholders and officers of T&C have executed voting and support agreements pursuant to which they have agreed to vote their T&C shares in favor of the Merger Agreement and the other stockholder matters to be approved at the T&C stockholder meeting. The voting agreements entered into by certain principal stockholders of T&C also prohibit the transfer by such principal stockholders 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.