Securities Registration: Business Combination (s-4)

As filed with the Securities and Exchange Commission on May 4, 2020

Registration No. [•]

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

NICOLET BANKSHARES, INC.
(Exact name of registrant as specified in its charter)

	Wisconsin			6021			47-0871001
	(State or other jurisdiction of incorporation or organization)			(Primary Standard Industrial Classification Code Number)			(I.R.S. Employer Identification No.)

111 North Washington Street Green Bay,
Wisconsin 54301 (920) 430-1400
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Robert B. Atwell
Chairman, President, and Chief Executive Officer
Nicolet Bankshares, Inc.
111 North Washington Street
Green Bay, Wisconsin 54301
(920) 430-1400
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Robert D. Klingler, Esq.
Bryan Cave Leighton Paisner LLP
1201 West Peachtree Street, NW
Atlanta, Georgia 30309-3488
(404) 572-6600

John T. Reichert, Esq.
Reinhart Boerner Van Deuren, s.c.
N16 W23250 Stone Ridge Drive, Suite One
Waukesha, Wisconsin 53188
(414) 298-8445

Approximate Date of Commencement of Proposed Sale of the Securities to the Public:
As soon as practicable after the effective date of this Registration Statement.

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 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, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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 pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered

Amount to be
registered(1)

Proposed maximum
offering price per unit

Proposed maximum
aggregate offering price(2)

Amount of
registration fee(3)

Common Stock, $0.01 par value

1,825,830

Not applicable

68,857,595

8,938.03

(1)

The estimated maximum number of shares of Nicolet Bankshares, Inc. (“Nicolet”) common stock to be issuable upon completion of the merger of Nicolet and Commerce Financial Holdings, Inc. (“Commerce”), as described herein and pursuant to the terms of the Agreement and Plan of Merger by and between Nicolet and Commerce, dated as of February 17, 2020, and attached to the proxy statement-prospectus as Appendix A. Pursuant to Rule 416, this Registration Statement also covers an indeterminate number of shares of common stock as may become issuable as a result of stock splits, stock dividends or similar transactions.

(2)

The proposed maximum aggregate offering price of the registrant’s common stock was calculated based upon the market value of shares of Commerce common stock (the securities to be cancelled in the merger) in accordance with Rule 457(f) under the Securities Act as follows: the book value of Commerce common stock as of December 31, 2019, the latest practicable date prior to the filing of this Registration Statement, and (ii) the maximum number of shares of Commerce common stock that may be exchanged in the merger.

(3)

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and computed pursuant to Rule 457(f) under the Securities Act, based on a rate of $129.80 per $1,000,000 of the proposed maximum aggregate offering price.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF CONTENTS

The information in this proxy statement-prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement-prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Preliminary — Subject to Completion Dated May 4, 2020

PROXY STATEMENT
OF
COMMERCE FINANCIAL HOLDINGS, INC.

PROSPECTUS
OF
NICOLET BANKSHARES, INC.

PROPOSED MERGER — YOUR VOTE IS VERY IMPORTANT

The boards of directors of Commerce Financial Holdings, Inc. (“Commerce”) and Nicolet Bankshares, Inc. (“Nicolet”) have each unanimously approved a transaction that will result in the merger of Commerce with and into Nicolet. Nicolet will be the surviving bank holding company in the merger. If the merger is completed, Commerce shareholders will receive 1.15 shares of Nicolet common stock for each share of Commerce common stock (the “exchange ratio”). The exchange ratio may fluctuate in the event that the Nicolet Common Stock Price, as defined in the merger agreement, is (a) greater than $82.00, in which case the exchange ratio would become floating at the quotient of $94.30 divided by the Nicolet Common Stock Price, or (b) less than $62.00, in which case the exchange ratio would become floating at the quotient of $71.30 divided by the Nicolet Common Stock Price. In the event the Nicolet Common Stock Price is less than $62.00, in lieu of adjusting the exchange ratio, Nicolet may elect to leave the exchange ratio unchanged and instead add additional cash consideration in an amount sufficient to bring the aggregate per share consideration to $71.30 per share or it may exercise its right to terminate the merger agreement. At this time, in the event the Nicolet Common Stock Price is less than $62.00, Nicolet intends to exercise its right to terminate the merger agreement. If the Nicolet Common Stock Price is less than $62.00 and Nicolet does not elect to increase the exchange ratio or add cash consideration, Commerce may elect to terminate the merger agreement. If and after the merger is completed, we expect that current Commerce shareholders will own approximately [17]% of the outstanding shares of common stock of Nicolet, assuming no adjustment to the exchange ratio.

Nicolet’s common stock trades on the Nasdaq Capital Market under the symbol “NCBS.” The closing price of Nicolet common stock was $72.32 per share on February 14, 2020, the last trading day before public announcement of the merger. The closing price of Nicolet common stock was $[•] per share on [•], the last trading day before the date of this proxy statement-prospectus. If Nicolet’s stock price remains below $62.00 such that Nicolet Common Stock Price is below $62.00 at the time of closing, Nicolet intends to exercise its right to terminate the merger agreement. Commerce’s common stock is privately held and not traded on any public markets. The shares of Nicolet common stock issued pursuant to the merger will be registered under the Securities Act of 1933, as amended, and will trade on the Nasdaq Capital Market.

We cannot complete the merger unless we obtain the necessary governmental approvals and unless the shareholders of Commerce approve the merger agreement and the transactions contemplated thereby. Commerce is asking its shareholders to consider and vote on this merger proposal at Commerce’s special meeting of shareholders. Whether or not you plan to attend the special meeting, please take the time to vote by following the voting instructions included in the enclosed proxy card. If you sign, date and mail your proxy card without indicating how you want to vote, your proxy will be counted as a vote FOR the merger agreement and the transactions contemplated thereby. If you do not vote your shares as instructed in the enclosed proxy card, or if you do not instruct your broker how to vote any shares held for you in “street name,” the effect will be a vote against the merger.

The special meeting will be held on [•] at [•] [•].m., at [•]. Shareholders will be permitted to participate in the special meeting via remote communication, as set forth in more detail under the “Information About the Special Shareholders’ Meeting” heading on page 10.

This document contains a more complete description of the special meeting and the terms of the merger. We urge you to review this entire document carefully. You may also obtain additional information about Nicolet from documents that Nicolet has filed with the Securities and Exchange Commission.

The Commerce board of directors recommends that Commerce shareholders vote FOR approval of the merger agreement and the transactions contemplated thereby.

Robert B. Atwell
Chairman, President and Chief Executive Officer
Nicolet Bankshares, Inc.

Joseph Fazio III
Chief Executive Officer
Commerce Financial Holdings, Inc.

You should read this entire proxy statement-prospectus carefully because it contains important information about the merger. In particular, you should read carefully the information under the section entitled “Risk Factors,” beginning on page 14.

Neither the Securities and Exchange Commission nor any state securities regulators have approved or disapproved of the securities to be issued in the merger or determined if this document is truthful or complete. Any representation to the contrary is a criminal offense.

The shares of Nicolet common stock to be issued in the merger are not deposits or savings accounts or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This proxy statement-prospectus is dated [•], and is first being mailed to Commerce’s shareholders on or about [•].

TABLE OF CONTENTS

PLEASE NOTE

We have not authorized anyone to provide you with any information other than the information included in this proxy statement-prospectus and the documents to which we refer you herein. If someone provides you with other information, please do not rely on it as being authorized by us.

This proxy statement-prospectus has been prepared as of the date on the cover page. There may be changes since that date in the affairs of Commerce or Nicolet that are not reflected in this document.

As used in this proxy statement-prospectus, the terms “Commerce” and “Nicolet” refer to Commerce Financial Holdings, Inc. and Nicolet Bankshares, Inc., respectively. Where the context requires, “Commerce” may refer to Commerce Financial Holdings, Inc. and its subsidiaries, including Commerce State Bank. Similarly, “Nicolet” may refer to Nicolet Bankshares, Inc. and its subsidiaries, including Nicolet National Bank.

Unless the context indicates otherwise, all references to the “merger agreement” refer to the Agreement and Plan of Merger dated February 17, 2020, by and between Nicolet and Commerce, which is included in its entirety at Appendix A.

TABLE OF CONTENTS

Commerce Financial Holdings, Inc.
1700 S. Silverbrook Drive
West Bend, Wisconsin 53095

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON [•], 2020

To the Shareholders of Commerce Financial Holdings, Inc.:

Commerce Financial Holdings, Inc. will hold a special meeting of shareholders at [•], on [•], 2020, at [•] [•].m., local time, for the following purposes:

Merger. To authorize, approve and adopt the Agreement and Plan of Merger by and between Nicolet Bankshares, Inc. and Commerce Financial Holdings, Inc., pursuant to which Commerce will merge with and into Nicolet, and the other transactions contemplated by the merger agreement. A copy of the merger agreement is attached to the accompanying proxy statement-prospectus as Appendix A.

Other business. To transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

Adjournment. To adjourn the special meeting to a later date or dates, if necessary or appropriate, including to solicit additional proxies to approve the merger agreement and the transactions contemplated by the merger agreement.

Only shareholders of record at the close of business on [•], the record date, are entitled to notice of and to vote at the special meeting or any adjournments or postponements of the special meeting. The approval of the merger agreement requires the affirmative vote of at least a majority of the shares of Commerce common stock outstanding on the record date.

After careful consideration, the Commerce board of directors supports the merger and unanimously recommends that you vote FOR approval of the Agreement and Plan of Merger and the transactions contemplated thereby and FOR the adjournment proposal.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the special meeting, please take the time to vote by following the instructions in the enclosed proxy card. You may revoke your proxy at any time before it is voted by giving written notice of revocation to Commerce’s Corporate Secretary or by filing a properly executed proxy card of a later date with Commerce’s Corporate Secretary at or before the meeting. You may also revoke your proxy by attending the meeting, giving oral notice of your revocation, and voting your shares in person at the meeting.

Commerce shareholders have dissenters’ rights with respect to the merger under Wisconsin law. Shareholders who wish to assert their dissenters’ rights and comply with the procedural requirements of Subchapter XIII of the Wisconsin Business Corporation Law will be entitled to receive payment of the fair value of their shares in cash in accordance with Wisconsin law. A copy of Subchapter XIII of the Wisconsin Business Corporation Law is attached as Appendix C to the proxy statement-prospectus.

We do not know of any other matters to be presented at the special meeting, but if other matters are properly presented, the persons named as proxies will vote on such matters at their discretion.

By Order of the Board of Directors

[•]
Joseph Fazio III
Chief Executive Officer

West Bend, Wisconsin
[•]

TABLE OF CONTENTS

	Page
QUESTIONS AND ANSWERS		1
SUMMARY		6
The Companies		6
The Merger Agreement		7
What You Will Receive in the Merger		7
Effect of the Merger on Commerce Stock Options		8
Dissenters’ Rights		8
Your Expected Tax Treatment as a Result of the Merger		8
Comparative Stock Prices		9
The Commerce Board of Directors Recommends Shareholder Approval of the Merger		9
Opinion of Commerce’s Financial Advisor		10
Information About the Special Shareholders’ Meeting		10
Quorum and Vote Required at the Meeting		10
Share Ownership of Management		11
Structure of the Merger		11
We Must Obtain Regulatory Approval to Complete the Merger		11
We Must Meet Several Conditions to Complete the Merger		11
Termination and Termination Fee		12
Commerce’s Directors and Executive Officers Have Interests in the Merger that Differ from its Shareholders’ Interests		12
Employee Benefits of Commerce Employees after the Merger		12
Differences in Rights of Commerce’s Shareholders after the Merger		12
Accounting Treatment		13
RISK FACTORS		14
A WARNING ABOUT FORWARD-LOOKING STATEMENTS		19
THE COMMERCE SPECIAL SHAREHOLDERS’ MEETING		21
Purpose		21
Record Date; Quorum and Vote Required		21
Solicitation and Revocation of Proxies		22
How to Vote Your Shares		22
Dissenters’ Rights		23
Recommendation of the Board of Directors of Commerce		23
THE PROPOSALS		24
Proposal 1 — Approval of the Merger Agreement and the Merger		24
Proposal 2 — Adjournment of the Special Meeting		24
THE MERGER		25
Structure of the Merger		25
Background of the Merger		25
Reasons for the Merger		26
Opinion of Commerce’s Financial Advisor		29

TABLE OF CONTENTS

	Page
Prospective Financial Information of Commerce		39
Interests of Certain Persons in the Merger		40
Trading Market for Nicolet Stock		42
Nicolet Dividends		42
Potential Adjustment to Exchange Ratio		42
Surrender and Exchange of Commerce Stock Certificates		43
Resale of Nicolet Common Stock		44
Regulatory and Other Required Approvals		44
Status and Effect of Approvals		45
Status of Intentions to Consummate the Merger		46
Accounting Treatment of the Merger		46
THE MERGER AGREEMENT		47
General; Business and Operations after the Merger		47
What Commerce’s Shareholders Will Receive in the Merger		47
Potential Adjustment of Exchange Ratio		47
Dissenters’ Rights		48
Effect of the Merger on Commerce Stock Options		48
Effect of the Merger on Commerce Shares held in Commerce State Bank 401(k) & Profit Sharing Plan		48
Closing and Effective Time of the Merger		49
Representations and Warranties in the Merger Agreement		49
Conditions to the Merger		49
Waiver and Amendment		50
Business of Commerce Pending the Merger		51
Business of Nicolet Pending the Merger		53
Covenants of the Parties		53
No Solicitation of Alternative Transactions		54
Indemnification and Insurance		54
Termination of the Merger Agreement; Termination Fee		55
Payment of Expenses Relating to the Merger		56
Affiliate Agreements		56
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER		57
U.S. Shareholders		57
Qualification of the Merger as a Reorganization		58
Tax Implications to U.S. Shareholders		58
Tax Implications to Non-U.S. Shareholders		59
Tax Consequences if the Merger Does Not Qualify as a Reorganization		60
Backup Withholding and Information Reporting		60
Medicare Tax on Net Investment Income		60
CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS		62
Authorized Capital Stock		62
Composition and Election of the Board of Directors		62

TABLE OF CONTENTS

	Page
Director Nominations		63
Director Qualifications		63
Board Committees		63
Board Vacancies		64
Director Removal		64
Advance Notice of Shareholder Proposals		64
Meetings of Shareholders		65
Shareholder Vote Requirements		65
Mergers, Consolidations and Sales of Assets		65
Indemnification		66
Amendments to Articles of Incorporation and Bylaws		67
DISSENTERS’ RIGHTS		68
General		68
Preliminary Procedural Steps		68
Written Dissent Demand		68
Dissenters’ Notice		68
Payment		69
Litigation		70
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF NICOLET		72
MARKET PRICE AND DIVIDEND INFORMATION		74
OTHER MATTERS		76
EXPERTS		76
LEGAL MATTERS		76
WHERE YOU CAN FIND ADDITIONAL INFORMATION		76

	APPENDIX A AGREEMENT AND PLAN OF MERGER BY AND BETWEEN NICOLET BANKSHARES, INC. AND COMMERCE FINANCIAL HOLDINGS, INC.					A-1
	APPENDIX B OPINION OF MAGSTAR CAPITAL, LLC					B-1
	APPENDIX C SUBCHAPTER XIII OF THE WISCONSIN BUSINESS CORPORATION LAW					C-1

TABLE OF CONTENTS

QUESTIONS AND ANSWERS

On what am I being asked to vote?

You are being asked to approve the Agreement and Plan of Merger by and between Nicolet and Commerce, which we may refer to as the merger agreement, which provides for the merger of Commerce with and into Nicolet, and the other transactions contemplated thereby. You are also being asked to approve a proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger agreement and the transactions contemplated by the merger agreement.

How does the board of directors recommend I vote on the merger agreement?

The board of directors of Commerce has unanimously approved and adopted the merger agreement and recommends that Commerce shareholders vote “FOR” approval of the merger agreement and the transactions contemplated thereby, and “FOR” approval of the adjournment proposal.

What will happen to Commerce State Bank as a result of the merger?

If the merger occurs, Commerce State Bank, which is a wholly owned subsidiary of Commerce, will initially be operated as a standalone subsidiary of Nicolet. Subsequently, it is expected that Commerce State Bank would be merged with and into Nicolet National Bank, which is a wholly owned subsidiary of Nicolet, although no timeframe has been set for such merger. We may refer to this transaction as the “bank merger.” Nicolet National Bank will be the surviving entity in the bank merger if and when it occurs.

What vote is required to approve the merger agreement and the transactions contemplated thereby?

The merger cannot be completed unless a majority of the outstanding shares of Commerce vote to approve the merger agreement and the transactions contemplated thereby.

What will happen if Nicolet’s stock price does not increase?

The closing price of Nicolet’s common stock price was $[•] per share on [•], the last day before the date of this proxy statement-prospectus. Under the terms of the merger agreement, if the Nicolet Common Stock Price (defined in the agreement as the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the twenty (20) trading day period immediately preceding the second (2nd) trading day prior to the closing date) is less than $62.00, Nicolet may elect to terminate the merger agreement. As of the date of the proxy statement-prospectus, Nicolet intends to exercise this right to terminate. In this event, the merger would not close, Nicolet would not be obligated to make any payment to Commerce, and Commerce shareholders will continue to hold shares of Commerce stock.

If the Nicolet Common Stock Price is below $62.00 at the time of measurement, and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time.

Why does Nicolet intend to exercise its right to terminate the merger agreement if its stock price is below $62.00 per share?

Nicolet believes if its common stock price is below $62.00 per share, such pricing is a signal of the farther-reaching and prolonged impacts of the COVID-19 pandemic, which are still volatile and uncertain. If the Nicolet Common Stock Price is below $62.00, Nicolet believes that consummating a transaction at a fixed exchange ratio reflecting comparative valuations set before the onset of the COVID-19 pandemic is not prudent for Nicolet’s shareholders in today’s unsettled environment.

TABLE OF CONTENTS

What will I receive in the merger?

If the merger is completed, each share of Commerce common stock (excluding treasury shares, shares held directly or indirectly by Nicolet (other than in a fiduciary capacity or in connection with debts previously contracted), shares underlying restricted stock awards, and dissenting shares; all such shares are referred to herein as the “cancelled shares”) will be converted into the right to receive 1.15 shares of Nicolet common stock (the “per share stock consideration”).

Adjustment of Exchange Ratio/Termination of the Merger Agreement

The merger agreement provides that the exchange ratio is fixed unless the Nicolet Common Stock Price (defined in the agreement as the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the twenty (20) trading day period immediately preceding the second (2nd) trading day prior to the closing date) is (a) greater than $82.00, in which case the exchange ratio would become floating at the quotient of $94.30 divided by the Nicolet Common Stock Price, or (b) less than $62.00, in which case the exchange ratio would become floating at the quotient of $71.30 divided by the Nicolet Common Stock Price. If the Nicolet Common Stock Price is below $62.00 per share, in lieu of adjusting the exchange ratio, Nicolet may (a) elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $71.30 per share of Commerce Common Stock, (b) leave the exchange ratio unchanged (which would give Commerce the right to terminate the merger agreement), or (c) terminate the merger agreement. As of the date of this proxy statement-prospectus, if the Nicolet Common Stock Price is below $62.00, Nicolet does not intend to adjust the exchange ratio, does not intend to add cash consideration, and does intend to terminate the merger agreement. If the Nicolet Common Stock Price is below $62.00 per share, and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time. Additionally, under no circumstances shall the number of shares of Nicolet common stock to be issued in the merger equal or exceed 19.9% of the number of outstanding shares of Nicolet common stock such that Nasdaq rules would require approval of the merger by Nicolet’s shareholders. The parties agree to reduce the number of shares of Nicolet common stock to be issued and to increase the cash to be issued pro rata to avoid such a shareholder vote.

Cash in Lieu of Fractional Shares

In lieu of any fractional shares of Nicolet common stock, Commerce shareholders will receive an amount in cash (without interest and rounded to the nearest whole cent) as determined by multiplying the Nicolet Common Stock Price by the fractional share of Nicolet common stock to which such holder would otherwise be entitled.

Cash for Cancelled Commerce Stock Options

Pursuant to the merger agreement, each Commerce Stock Option (whether vested or not) will be cancelled in exchange for cash in an amount equal to the product of (i) the number of shares of Commerce common stock subject to such Commerce Stock Option and (ii) the excess of the product of (x) the Nicolet Common Stock Price and (y) the exchange ratio over the exercise price per share of the Commerce common stock subject to such Commerce Stock Option. Following the effective time of the merger, Commerce Stock Options will no longer be valid or exist.

Cash for Commerce Shares held in Commerce State Bank 401(k) & Profit Sharing Plan

Pursuant to the merger agreement, by virtue of the execution of the proposed merger, each share of Commerce common stock held in the Commerce State Bank 401(k) & Profit Sharing Plan will be converted into the right to receive a cash payment equal to the product of the exchange ratio and the Nicolet Common Stock Price.

TABLE OF CONTENTS

Relative Ownership of Nicolet following Closing

After the merger is completed, we expect that current Nicolet shareholders will own approximately [83]% of the outstanding shares of common stock of the combined company, and current Commerce shareholders will own approximately [17]% of the outstanding shares of common stock of the combined company, assuming no adjustment to the exchange ratio.

What are the federal income tax consequences of the merger to me as a holder of Commerce common stock?

Bryan Cave Leighton Paisner LLP has issued an opinion, which it will confirm as of the effective date of the merger, that, subject to certain limitations, the merger will qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended. Commerce shareholders receiving Nicolet common stock in the merger will not recognize gain or loss for U.S. federal income tax purposes as a result of the surrender of Commerce common stock for receipt of Nicolet common stock, except that gain may be recognized with respect to any cash received in the merger (other than cash in lieu of fractional shares). However, Commerce shareholders receiving solely cash in the merger, whether as a result of exercising dissenters’ rights or otherwise, will generally recognize gain or loss in an amount equal to the difference between the amount of cash received and the Commerce shareholder’s aggregate tax basis in its Commerce common stock surrendered or cancelled in exchange thereof. Commerce shareholders may also recognize gain or loss for U.S. federal income tax purposes with respect to any cash received in lieu of fractional shares. Your tax treatment will depend on your specific situation and many variables not within our control. You should consult your own tax advisor for a full understanding of the tax consequences of the merger to you.

What are the federal income tax consequences of the merger to me as a holder of Commerce Stock Option?

The receipt of cash by an employee that has his or her Commerce Stock Option cancelled in connection with the merger will be included as compensation in their Form W-2 for the year in which they receive the cash payment. The amount of the cash payment will be subject to and reduced by any applicable U.S. federal and state income tax withholding, social security (FICA) taxes, and other applicable taxes that Commerce, as an employer, is required to withhold with respect to the payment of wage income to employees. You should consult your own tax advisor for a full understanding of the tax consequences of the receipt of cash in cancellation of your Commerce Stock Option.

When do you expect the merger to be completed?

We are working to complete the merger on [•], assuming Commerce shareholders and the applicable bank regulatory agencies approve the merger, Nicolet’s stock price increases such that the Nicolet Common Stock Price is at least $62.00, and other conditions to closing are met. We could experience delays in meeting these conditions or be unable to meet them at all. If all other conditions to close have been satisfied, but the Nicolet Common Stock Price is below $62.00, Nicolet intends to terminate the merger agreement and the merger will not be completed. If all other conditions to close have been satisfied, but the Nicolet Common Stock Price is below $62.00 and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time. See “Risk Factors” beginning on page 14 for a discussion of these and other risks relating to the merger.

Will I be able to sell any shares of Nicolet common stock I receive pursuant to the merger?

Yes. The Nicolet common stock issued pursuant to the merger will be registered under the Securities Act of 1933, as amended, and Nicolet will cause the shares to be issued in the merger to be listed on the Nasdaq Capital Market. All shares of Nicolet common stock that you receive pursuant to the merger will be freely transferable unless you are deemed an affiliate of Nicolet. Affiliates of Nicolet will be able to sell the shares they receive pursuant to the merger subject to applicable securities regulations. See “Resale of Nicolet Common Stock” on page 44.

TABLE OF CONTENTS

What should I do now?

After carefully reading and considering the information in this proxy statement-prospectus, follow the voting instructions included in the enclosed proxy card in order to vote your shares as soon as possible, so that your shares will be represented at the special meeting. You can vote by (i) accessing the internet website specified on the enclosed proxy card, (ii) completing, signing and dating the enclosed proxy card and returning it in the postage-paid envelope, or (iii) voting in person or remotely at the special meeting.

NOTE: If you sign and send in your proxy card and do not indicate how you want to vote, your proxy will be voted “FOR” the proposal to approve the merger agreement and the transactions contemplated thereby, and “FOR” the adjournment proposal.

What if I do not vote?

If you do not vote, it will have the same effect as voting your shares against the merger.

If my shares are held in “street name” by my broker, will my broker automatically vote my shares for me?

No. Your broker will vote your shares of stock on the merger agreement only if you provide instructions on how to vote. You should instruct your broker on how to vote your shares, following the directions your broker provides. If you do not provide instructions to your broker, and your broker submits an unvoted proxy, the resulting broker nonvote will not be counted toward a quorum and your shares will not be voted at your company’s special meeting, which will have the same effect as voting your shares against the merger.

Can I change my vote after I deliver my proxy?

Yes. You can change your vote at any time before your proxy is voted at the special meeting. You can do this in four ways. First, you can revoke your proxy by giving written notice of revocation to Commerce’s Corporate Secretary. Second, you can submit a new properly executed proxy with a later date to Commerce’s Corporate Secretary at or before the special meeting. The latest proxy actually received before the meeting will be counted, and any earlier proxies will be revoked. Third, if you voted over the internet, you can vote again over the internet by the applicable deadline described below or submit a proxy card and return it prior to the vote at the annual meeting. Fourth, you can attend Commerce’s special meeting (either in-person or remotely), give oral notice of your revocation, and vote your shares in person. Any earlier proxy will be thereby revoked. Your last properly submitted vote will be the vote that is counted. However, simply attending the meeting (either in-person or remotely) without voting will not revoke your proxy. If you hold shares in “street name,” you must contact your broker prior to the special meeting if you wish to revoke your proxy or change your vote.

What is the deadline for voting?

If you are the record holder of shares of our common stock, you may vote by mail at any time prior to the annual meeting as long as we receive your proxy through the mail before the time of the annual meeting or [•] P.M. local time on [•], 2020. In addition, as a record holder, you may vote by internet until noon, local time, on [•], 2020. If your shares are held in “street name,” you must vote your shares in accordance with the voting instruction form by the deadline set by your broker.

Should I send in my stock certificates now?

No. If the merger is completed, Nicolet or Nicolet’s exchange agent will send a letter of transmittal and other customary transmittal materials providing written instructions for exchanging Commerce common stock certificates for the merger consideration in accordance with the merger agreement. In any event, do not send your stock certificates with your proxy card. If you hold your shares in “street name” or “book-entry form” through a broker, the broker will provide separate instructions for voting and for surrendering and exchanging your shares.

TABLE OF CONTENTS

Who can help answer my questions?

If you would like additional copies of this document, or if you would like to ask any questions about the merger and related matters, you should contact:

Joseph Fazio III
Chief Executive Officer, Commerce State Bank
1700 S. Silverbrook Drive
West Bend, Wisconsin 53095
(262) 247-2802
jfazio@commercesb.com

TABLE OF CONTENTS

SUMMARY

We have prepared this summary of certain material information to assist you in your review of this proxy statement-prospectus. It is necessarily general and abbreviated, and it is not intended to be a complete explanation of all of the matters covered in this proxy statement-prospectus. To understand the merger and the issuance of shares of Nicolet common stock in the merger, please see the more complete and detailed information in the sections that follow this summary, as well as the financial statements and appendices included in this proxy statement-prospectus by reference. For more information about Nicolet, please see the section entitled “Where You Can Find Additional Information.” We urge you to read all of these documents in their entirety prior to returning your proxy or voting at the special meeting of your company’s shareholders.

Each item in this summary refers to the page of this document on which that subject is discussed in more detail.

The Companies

NICOLET BANKSHARES, INC.
111 North Washington Street
Green Bay, Wisconsin 54301
(920) 430-1400

Nicolet is a Wisconsin corporation and was incorporated as Green Bay Financial Corporation, a Wisconsin corporation, on April 5, 2000, to serve as the holding company for and the sole shareholder of Nicolet National Bank. It amended and restated its articles of incorporation and changed its name to Nicolet Bankshares, Inc. on March 14, 2002. It subsequently became the holding company for Nicolet National Bank upon completion of Nicolet National Bank’s reorganization into a holding company structure on June 6, 2002.

Nicolet is a registered bank holding company under the Bank Holding Company Act of 1956, as amended. It conducts operations through its wholly owned subsidiary, Nicolet National Bank, which was organized in 2000 as a national bank under the laws of the United States and opened for business on November 1, 2000. Nicolet National Bank provides a full range of traditional banking services throughout northeastern Wisconsin and the upper peninsula of Michigan. Nicolet offers commercial, retail and wealth management services through 39 branch locations in Wisconsin and Menominee, Michigan, as of December 31, 2019.

As of December 31, 2019, Nicolet had consolidated total assets of $3.6 billion, loans of approximately $2.6 billion, deposits of $3.0 billion, and consolidated shareholders’ equity of $516 million. At December 31, 2019, Nicolet had 10,610,259 shares of common stock issued and 10,587,738 shares outstanding, held by approximately 2,500 shareholders of record.

COMMERCE FINANCIAL HOLDINGS, INC.
1700 S. Silverbrook Drive
West Bend, Wisconsin 53095
(262) 247-2800

Commerce is a registered bank holding company headquartered in West Bend, Wisconsin. Commerce State Bank (“Commerce State Bank”), Commerce’s wholly owned banking subsidiary, is a state-chartered banking institution under the laws of the State of Wisconsin. Commerce State Bank offers a full range of traditional banking services, including commercial and retail, through four retail banking locations in the Milwaukee-Waukesha-West Allis Metropolitan Statistical Area and Sheboygan Metropolitan Statistical Area.

As of December 31, 2019, Commerce had consolidated total assets of $713 million, loans of approximately $603 million, deposits of $610 million and consolidated shareholders’ equity of $66 million. At January 31, 2020, Commerce had 1,530,546 shares of common stock issued and outstanding, held by approximately 394 shareholders of record.

TABLE OF CONTENTS

The Merger Agreement
(See page 47)

Under the terms of the merger agreement, and if the merger is completed, Commerce will merge with and into Nicolet, with Nicolet being the surviving corporation. Following the merger of Commerce with and into Nicolet, Commerce State Bank will merge with and into Nicolet National Bank, with Nicolet National Bank being the surviving bank. Both Nicolet and Nicolet National Bank will continue their existence under Wisconsin law and the laws of the United States, respectively, while Commerce and Commerce State Bank will cease to exist. The merger agreement is attached to this document as Appendix A and is incorporated into this proxy statement-prospectus by reference. We encourage you to read the entire merger agreement carefully, as it is the legal document that governs the proposed merger.

What You Will Receive in the Merger
(See page 47)

If the merger is completed, each share of Commerce common stock (excluding treasury shares, shares held directly or indirectly by Nicolet (other than in a fiduciary capacity or in connection with debts previously contracted), shares underlying Commerce Stock Options, and dissenting shares; all such shares are referred to herein as the “cancelled shares”) will be converted into the right to receive the per share stock consideration of 1.15 shares of Nicolet common stock.

Adjustment of Exchange Ratio/Termination of the Agreement

If the Nicolet Common Stock Price is below $62.00 per share, in lieu of adjusting the exchange ratio, Nicolet may (a) elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $71.30 per share of Commerce Common Stock, (b) leave the exchange ratio unchanged (which would give Commerce the right to terminate the merger agreement), or (c) terminate the merger agreement. As of the date of this proxy statement-prospectus, if the Nicolet Common Stock Price is below $62.00, Nicolet does not intend to adjust the exchange ratio, does not intend to add cash consideration, and does intend to terminate the merger agreement. If the Nicolet Common Stock Price is below $62.00 per share, and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time.

Additionally, under no circumstances shall the number of shares of Nicolet common stock to be issued in the merger equal or exceed 19.9% of the number of outstanding shares of Nicolet common stock such that Nasdaq rules would require approval of the merger by Nicolet’s shareholders. The parties agree to reduce the number of shares of Nicolet common stock to be issued and to increase the cash to be issued pro rata to avoid such a shareholder vote.

Cash in Lieu of Fractional Shares

Cash for Commerce Shares held in Commerce State Bank 401(k) & Profit Sharing Plan

Each share of Commerce common stock held in the Commerce State Bank 401(k) & Profit Sharing Plan will be converted into the right to receive a cash payment equal to the product of the exchange ratio and the Nicolet Common Stock Price.

TABLE OF CONTENTS

Relative Ownership of Nicolet following Closing

Effect of the Merger on Commerce Stock Options
(See page 48)

As of January 31, 2020, there were 57,132 shares of Commerce common stock underlying Commerce Stock Options. Pursuant to the merger agreement, each Commerce Stock Option outstanding immediately prior to the effective date (whether vested or not) shall be cancelled in exchange for a cash payment equal to the product of (i) the number of shares of Commerce common stock subject to such Commerce Stock Option immediately prior to the effective time of the merger and (ii) the excess, if any, of the product of (x) the Nicolet Common Stock Price and (y) the exchange ratio, subject to any adjustment, over the exercise price per share of Commerce common stock subject to such Commerce Stock Option immediately prior to the effective time of the merger.

Dissenters’ Rights
(See page 48)

If the merger is completed, Commerce shareholders who do not vote for the merger and who follow certain procedures as required by Wisconsin law and described in this proxy statement-prospectus will be entitled to exercise dissenters’ rights and receive the “fair value” of their shares in cash under Wisconsin law. If you assert and perfect your dissenters’ rights, you will not receive any merger consideration but will be entitled to receive the “fair value” of your shares of stock in cash as determined in accordance with Wisconsin law. The “fair value” of your shares may be more or less than the consideration to be paid in the merger. Appendix C includes the relevant provisions of Wisconsin law regarding these rights. See “Dissenters’ Rights” beginning on page 48 of this proxy statement-prospectus.

Your Expected Tax Treatment as a Result of the Merger
(See page [•])

We expect that the merger will qualify as a reorganization under Section 368(a) of the Internal Revenue Code and that Commerce shareholders will not recognize gain or loss for U.S. federal income tax purposes as a result of the surrender of Commerce common stock for receipt of Nicolet common stock, except that gain may be recognized with respect to any cash received in the merger (other than cash in lieu of fractional shares). Commerce shareholders receiving solely cash in the merger, whether as a result of exercising dissenters’ rights or otherwise, will generally recognize gain or loss in an amount equal to the difference between the amount of cash received and the Commerce shareholder’s aggregate tax basis in its Commerce common stock surrendered or cancelled in exchange thereof. Commerce shareholders may also recognize gain or loss for U.S. federal income tax purposes with respect to any cash received in lieu of fractional shares.

Commerce employees that have their Commerce Stock Options cancelled as a result of the merger and receive a cash payment (net of any applicable withholding and other payroll taxes due with respect to such payment) shall be considered to have received a payment of wages subject to U.S. federal and state income taxation in the same manner as other compensation paid to such employee.

The completion of the merger is conditioned on receipt of a tax opinion from Bryan Cave Leighton Paisner LLP that the merger qualifies as a tax-free reorganization under Section 368(a) of the Internal Revenue. The opinion will not bind the Internal Revenue Service, which could take a different view of the tax consequences of the merger.

See “Material U.S. Federal Income Tax Consequences of the Merger” for a more detailed discussion of the tax consequences of the merger. Determining the actual tax consequences of the merger to you as an individual taxpayer can be complicated. The tax treatment will depend on your specific situation and many

TABLE OF CONTENTS

variables not within our control. For these reasons, we recommend that you consult your tax advisor concerning the federal and any applicable state, local or other tax consequences of the merger to you.

Comparative Stock Prices
(See page [•])

Nicolet. Nicolet common stock currently trades on the Nasdaq Capital Market under the ticker “NCBS.” The closing price of Nicolet common stock was $72.32 per share on February 14, 2020, the last trading day before public announcement of the merger. The closing price of Nicolet common stock was $[•] per share on [•], the last trading day before the date of this proxy statement-prospectus.

Commerce. Commerce’s common stock is privately held and not traded on any public markets.

The Commerce Board of Directors Recommends Shareholder Approval of the Merger
(See page [•])

The board of directors of Commerce has unanimously approved the merger agreement and believes that the merger is in the best interests of Commerce’s shareholders. The board unanimously recommends that you vote FOR approval of the merger proposal and FOR the adjournment proposal.

In deciding to engage in the merger transaction with Nicolet, Commerce’s board of directors consulted with its management, as well as its legal counsel and financial advisor, and considered numerous factors, including the following:

•

the comparison of the value of the consideration offered by Nicolet to the value of the consideration offered by other parties approached by Commerce;

•

the relationship of the consideration to be paid in the merger to market prices and the book value and earnings per share of Commerce and Nicolet;

•

Nicolet’s long term growth strategy;

•

the payment of the Merger Consideration primarily in the form of registered, freely tradeable stock of Nicolet, giving liquidity along with an opportunity to defer taxes on gain;

•

the belief that Commerce and Nicolet share a similar strategic vision and a similar community banking philosophy;

•

the complementary aspects of the Commerce and Nicolet businesses, including customer focus, geographic coverage, business orientation, and compatibility of the companies’ management and operating styles;

•

the respective presentations by management and Commerce’s financial advisor concerning the operations, financial condition and prospects of Commerce and the expected financial impact of the merger on the combined company;

•

the potential expense-saving and revenue-enhancing opportunities in connection with the merger, the related potential impact on the combined company’s earnings and the fact that the Commerce shareholders will be able to participate as Nicolet shareholders in the benefits of such savings opportunities and the future performance of the combined company generally;

•

Nicolet’s history and reputation as an efficient and effective acquirer, and success in integrating acquired organizations into its own;

•

Nicolet’s access to internal and external resources to complete the merger process on a timely basis;

•

the higher lending limits and greater breadth of products and services the merged banks will be able to offer to Commerce customers;

•

the terms of the merger agreement, and the presentation by Commerce’s outside legal advisors regarding the merger and merger agreement;

•

the financial structure, results of operations, and prospects of Commerce and Nicolet, the capital adequacy of the resulting holding company and the outlook for the organizations in the rapidly changing financial services industry;

TABLE OF CONTENTS

•

the combined resources of the two holding companies are expected to improve the efficiencies associated with the development of new products and services to be offered by Nicolet and its subsidiary bank;

•

the size and capital structure of the resulting holding company following the merger, which are expected to provide greater capacity to weather adverse market events and opportunities and flexibility in responding to the rapidly changing industry for financial service providers;

•

the enhanced ability of the combined organization to take advantage of current and emerging opportunities for growth and profitability; and

•

the receipt by Commerce’s board of directors of the Magstar Capital, LLC opinion (discussed below) concerning the fairness, from a financial point of view, of the merger to holders of Commerce’s common stock.

Opinion of Commerce’s Financial Advisor
(See page 29)

In deciding to approve the merger, the board of directors of Commerce considered the opinion of its financial advisor, Magstar Capital, LLC, an investment banking and financial advisory firm. Magstar Capital, LLC has given a fairness opinion to the Commerce board of directors that, as of the date of the opinion, the merger consideration was fair, from a financial point of view, to the holders of Commerce common stock. The opinion is based on and subject to the procedures, matters and limitations described in the opinion and other matters that Magstar Capital, LLC considered relevant. The fairness opinion is attached to this proxy statement-prospectus as Appendix B. We urge all shareholders of Commerce to read the entire opinion, which describes the procedures followed, matters considered and limitations on the review undertaken by Magstar Capital, LLC in providing its opinion. The opinion provided by Magstar Capital, LLC was prepared prior the coronavirus COVID-19 pandemic, and does not reflect the current financial conditions of Nicolet and Commerce, or the current market conditions. For further information, please see the section entitled “The Merger — Opinion of Commerce’s Financial Advisor” beginning on page 29. See also “Risk Factors” beginning on page 14 for a discussion of risks relating to the potential effects of the COVID-19 pandemic.

Information About the Special Shareholders’ Meeting
(See page 21)

A special meeting of the shareholders of Commerce will be held on [•], at [•].m., local time. The meeting will be held at [•]. Due to the COVID-19 pandemic, and out of an abundance of caution for your safety, we will be allowing shareholders to participate in the special meeting via remote communication. If you join the meeting remotely, you will be able to hear and participate in the meeting.

At the meeting, the shareholders of Commerce will vote on the merger agreement described herein and in the notice for the meeting. If Commerce’s shareholders approve the merger agreement and the other conditions to completing the merger are satisfied, we expect to complete the merger on [•].

Instructions for joining the special meeting via remote communications are set forth below:

[To insert dial-in and pin information.]

Quorum and Vote Required at the Meeting
(See page 21)

Shareholders who own Commerce common stock at the close of business on [•], the record date, will be entitled to vote at the special shareholders’ meeting. A majority of the outstanding shares of Commerce common stock as of the record date for the meeting must be present in person, via remote communication or by proxy at the meeting in order for a quorum to be present. If a quorum is not present at the meeting, the meeting will be adjourned, and no vote will be taken until and unless a quorum is present.

Approval of the merger proposal requires the affirmative vote of a majority of the shares of Commerce common stock outstanding on the record date. Abstentions, shares not voted, and broker nonvotes will have

TABLE OF CONTENTS

the same effect as a vote against the merger proposal. Approval of the adjournment proposal requires that the votes cast for the proposal exceed the votes cast against the proposal.

Share Ownership of Management
(See page [•])

As of the record date for the special meeting, directors and executive officers of Commerce had or shared voting or dispositive power over approximately 23% of the outstanding shares of Commerce common stock. It is anticipated that these individuals will vote their shares of Commerce common stock in favor of the merger agreement. Certain of these individuals have entered into a written agreement with Nicolet providing that they will vote the shares over which they have voting power in favor of the merger agreement. A copy of the form of such agreement is included as an exhibit to the merger agreement.

As of the record date for the meeting, directors and executive officers of Nicolet had or shared no voting or dispositive power over any of the outstanding shares of Commerce common stock. Nicolet had voting and dispositive power over less than 1% of the outstanding shares of Commerce common stock as of the record date.

Structure of the Merger
(See page 25)

•

Commerce Financial Holdings, Inc. will cease to exist after the merger.

•

Initially, Commerce State Bank will be operated as a standalone subsidiary of Nicolet.

•

Subsequently, it is expected that Commerce State Bank would be merged with and into Nicolet National Bank, and after such bank merger Commerce State Bank will cease to exist.

•

Subsequent to the bank merger, the business of Commerce State Bank will be conducted through Nicolet National Bank.

•

Upon consummation of the merger and the bank merger, one person from the Commerce board of directors, to be designated by Commerce and reasonably acceptable to Nicolet (expected to be Joseph Fazio III), is anticipated to join the board of directors of Nicolet and Nicolet National Bank.

We Must Obtain Regulatory Approval to Complete the Merger
(See page [•])

We cannot complete the merger unless we receive the approval of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Office of the Comptroller of the Currency (“OCC”) and the Wisconsin Department of Financial Institutions (the “WDFI”). All regulatory applications and notices required to be filed prior to the merger have been or will be filed. Although we do not know of any reason why we could not obtain the necessary regulatory approvals in a timely manner, we cannot be certain whether or when we will obtain them.

We Must Meet Several Conditions to Complete the Merger
(See page [•])

In addition to the required regulatory approvals, the merger will be completed only if certain conditions are met or waived, including the following:

•

approval by Commerce’s shareholders of the merger agreement by the required vote;

•

receipt by Commerce and Nicolet of an opinion from Bryan Cave Leighton Paisner LLP that the merger qualifies as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code;

•

Commerce maintaining tangible common equity of at least $66.5 million (as defined in the merger agreement);

•

the Nicolet Common Stock Price is at least $62.00 (if Nicolet maintains its intent to terminate the agreement if the Nicolet Common Stock Price is below $62.00); and

TABLE OF CONTENTS

•

each party’s certification to the other as to the continued accuracy of the representations and warranties contained in the merger agreement, compliance with covenants and closing conditions, and the satisfaction of all other matters applicable to the transaction.

If all regulatory approvals are received and the other conditions to completion are satisfied, Nicolet and Commerce contemplate that they will complete the merger on [•]. For a discussion of the intent of the parties to consummate the merger in the current environment, see “Status of Intentions to Consummate the Merger” at page 46.

Termination and Termination Fee
(See page 55)

The merger agreement may be terminated, either before or after shareholder approval, under certain circumstances described in detail later in this proxy statement-prospectus. If Nicolet terminates the merger agreement because Commerce’s board withdraws or changes its recommendation of the merger agreement, if Commerce terminates the agreement to accept an Acquisition Proposal it deems a Superior Proposal, as each term is defined in the merger agreement, or if either party terminates the merger agreement under certain circumstances and within twelve months of such termination Commerce enters into a definitive agreement with respect to an Acquisition Proposal, then Commerce (or its successor) must pay Nicolet a termination fee of $5.0 million. For a discussion of the intent of the parties to consummate the merger in the current environment, see “Status of Intentions to Consummate the Merger” at page 46.

Commerce’s Directors and Executive Officers Have Interests in the Merger that Differ from its Shareholders’ Interests
(See page [•])

The executive officers and directors of Commerce have interests in the merger in addition to their interests as shareholders of Commerce generally. The members of the Commerce board of directors knew about these additional interests and considered them when they adopted the merger agreement. Such interests include, among others:

•

the potential continuation of employee benefits;

•

Commerce Stock Options;

•

the potential payment of certain change in control benefits pursuant to the terms of employment agreements;

•

provisions in the merger agreement relating to director and officer liability insurance and the indemnification of officers and directors of Commerce for certain liabilities; and

•

the appointment of one Commerce board member (expected to be Joseph Fazio III) to the boards of Nicolet and Nicolet National Bank.

These interests are more fully described in this proxy statement-prospectus under the heading “The Merger — Interests of Certain Persons in the Merger” at page 40.

Employee Benefits of Commerce Employees after the Merger
(See page [•])

Nicolet has agreed to offer to all current employees of Commerce and Commerce State Bank who become Nicolet employees as a result of the merger substantially similar employee benefits to those that Nicolet offers to its employees in similar positions.

Differences in Rights of Commerce’s Shareholders after the Merger
(See page [•])

To the extent that they receive Nicolet common stock as merger consideration, Commerce shareholders will become Nicolet shareholders as a result of the merger. Their rights as shareholders after the merger will be governed by Nicolet’s articles of incorporation and bylaws. The rights of Nicolet shareholders are

TABLE OF CONTENTS

different in certain respects from the rights of Commerce’s shareholders. The material differences are described later in this proxy statement-prospectus.

Accounting Treatment
(See page 46)

Nicolet is required to account for the merger as a purchase transaction for accounting and financial reporting purposes under accounting principles generally accepted in the United States of America (“GAAP”). Under purchase accounting, the assets (including any identifiable intangible assets) and liabilities (including executory contracts and other commitments) of Commerce at the effective time of the merger will be recorded at their respective fair values and added to those of Nicolet. Any excess of purchase price over the fair values is recorded as goodwill. Any excess of the fair values over the purchase price is recorded in earnings as a bargain purchase gain. Consolidated financial statements of Nicolet issued after the merger would reflect those fair values and would not be restated retroactively to reflect the historical consolidated financial position or results of operations of Commerce.

TABLE OF CONTENTS

RISK FACTORS

In addition to the other information included in this proxy statement-prospectus, you should carefully consider the matters described below in determining whether to adopt and approve the merger agreement.

Risks Relating to the Merger

The recent global coronavirus outbreak could harm business and results of operations for each of Nicolet and Commerce and the combined company following the completion of the merger.

In December 2019, a coronavirus (COVID-19) was reported in China, and has since spread to additional countries including the United States. In March 2020, the World Health Organization declared the coronavirus to be a pandemic. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the coronavirus pandemic on the businesses of Nicolet, Commerce and the combined company, and there is no guarantee that efforts by Nicolet, Commerce and the combined company to address the adverse impacts of the coronavirus will be effective. The impact to date has included periods of significant volatility in financial, commodities and other markets. This volatility, if it continues, could have an adverse impact on Nicolet’s and Commerce’s customers and on the companies’ business, financial condition and results of operations.

In addition, recent actions by US federal, state and foreign governments to address the pandemic, including travel bans and school, business and entertainment venue closures, may also have a significant adverse effect on the markets in which Nicolet and Commerce conduct their businesses. The extent of impacts resulting from the coronavirus pandemic and other events beyond the control of Nicolet, Commerce and the combined company will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus pandemic and actions taken to contain the coronavirus or its impact, among others.

The coronavirus pandemic has, and could result in further, business disruption to Nicolet and Commerce, and if either company is unable to recover from such a business disruption on a timely basis, the merger and the combined company’s business and financial conditions and results of operations following the completion of the merger would be adversely affected. The merger and efforts to integrate the businesses of Nicolet and Commerce may also be delayed and adversely affected by the coronavirus pandemic, and become more costly. Each of Nicolet, Commerce and the combined company may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect its financial condition and results of operations.

The effect of the coronavirus pandemic on Nicolet or Commerce may result in either party’s failure to meet the closing requirements contained in the merger agreement. Pursuant to the terms of the merger agreement, either Nicolet or Commerce may terminate the merger agreement at closing if certain conditions are not met. If coronavirus pandemic continues to affect either Nicolet or Commerce through the anticipated time of closing, the parties to the merger agreement may not be able to meet closing conditions. Accordingly, the merger agreement and the entire transaction may be terminated if such closing conditions are not met. For a discussion of the intent of the parties to consummate the merger in the current environment, see “Status of Intentions to Consummate the Merger” at page 46.

Uncertainty regarding the completion of the merger may harm the combined institution if the merger is consummated.

As reflected in this proxy statement-prospectus, if the Nicolet Common Stock Price is below $62.00, Nicolet intends to terminate the merger agreement. Neither Nicolet nor Commerce can predict whether the Nicolet Common Stock Price will be at least $62.00 at the time of the prospective closing of the merger. This uncertainty may cause Nicolet to experience further difficulties with the integration process or the retention of Commerce’s employees and customers. If Nicolet experiences difficulties with the integration process, Nicolet might not achieve some of the economic benefits expected to result from the merger.

TABLE OF CONTENTS

Nicolet’s position regarding the merger agreement with Commerce may negatively affect Nicolet’s ability to successfully acquire future merger targets.

As part of Nicolet’s growth strategy, Nicolet regularly evaluates merger and acquisition opportunities and conducts due diligence activities related to possible transactions with other financial institutions and financial services companies. Nicolet seeks merger or acquisition partners that are culturally similar, have experienced management, and possess either significant market presence or have potential for improved profitability through financial management, economies of scale, or expanded services. Each potential merger or acquisition partner must make an independent decision as to whether a transaction with Nicolet is appropriate and in the best interests of their constituencies. One of the rationales offered by Nicolet to potential targets is Nicolet’s historical ability to execute on merger transactions.

As reflected in this proxy statement-prospectus, if the Nicolet Common Stock Price is below $62.00, Nicolet intends to terminate the merger agreement. Nicolet believes if its common stock price is below $62.00 per share, such pricing is a signal of the farther-reaching and prolonged impacts of the COVID-19 pandemic, which are still volatile and uncertain. If the Nicolet Common Stock Price is below $62.00, Nicolet believes that consummating a transaction at a fixed exchange ratio reflecting comparative valuations set before the onset of the COVID-19 pandemic is not prudent for Nicolet’s shareholders in today’s unsettled environment. Nicolet’s ability to terminate the agreement in that circumstance is provided for in the terms of the merger agreement as negotiated between Nicolet and Commerce. However, Nicolet’s disclosure of its intent not to consummate the merger in the event that the Nicolet Common Stock Price remains below $62.00 may be perceived by other potential targets as reducing the assurances that Nicolet would be in position to close on future acquisitions. If Nicolet’s ability to attract future market targets is limited, Nicolet may not be able to sustain its historical rate of growth, or may encounter issues associated with its growth, either of which could adversely affect Nicolet’s financial condition, results of operations, and share price.

Because the market price of Nicolet common stock will fluctuate, Commerce shareholders cannot be sure of the exact value of the merger consideration they will receive.

If the merger is completed, each share of Commerce common stock issued and outstanding immediately prior to closing of the merger (excluding cancelled shares) will be converted into the right to receive the merger consideration, which shall consist of 1.15 shares of Nicolet common stock. The value of such shares of Nicolet common stock to be received will depend on the price per share of Nicolet common stock at the time the shares are actually received by a Commerce shareholder. The value of Nicolet common stock has fluctuated from the date the merger agreement was signed and publicly announced to the date this proxy statement-prospectus was prepared, and likely will continue to fluctuate until the date of the Commerce special shareholders’ meeting, and the date immediately prior to the closing of the merger. Accordingly, Commerce shareholders will not know or be able to calculate the value of any Nicolet common stock they are to receive in the merger at the time they submit their proxy or at the time of the special shareholders’ meeting. Stock price changes may result from a variety of factors, including but not limited to general market and economic conditions, the recent outbreak of COVID-19, changes in Nicolet’s businesses, operations and prospects, and regulatory considerations, among other things. Many of these factors are beyond the control of Nicolet and Commerce.

Further, the exchange ratio may adjust in the event that the Nicolet Common Stock Price (defined in the merger agreement as the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the twenty (20) trading day period immediately preceding the second (2nd) trading day prior to the closing date) is greater than $82.00 or less than $62.00. In the event that the Nicolet Common Stock Price is below $62.00 per share, in lieu of adjusting the exchange ratio, Nicolet may (a) elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $71.30 per share of Commerce Common Stock, (b) leave the exchange ratio unchanged (which would give Commerce the right to terminate the merger agreement), or (c) terminate the merger agreement. As of the date of this proxy statement-prospectus, if the Nicolet Common Stock Price is below $62.00, Nicolet does not intend to adjust the exchange ratio, does not intend to add cash consideration, and does intend to terminate the merger agreement. If the Nicolet Common Stock Price is below $62.00 per share, and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time.

TABLE OF CONTENTS

Because Commerce common stock is privately held and not traded on any public markets, it is difficult to determine how the fair market value of Commerce common stock compares with the merger consideration.

Commerce common stock is not traded on any public trading markets. Accordingly, it is difficult to determine the fair market value of Commerce common stock and how such value compares with the merger consideration.

The fairness opinion delivered by Magstar Capital to Commerce’s board of directors prior to the entry into the merger agreement will not reflect changes in circumstances that have occurred since the dates of the opinions.

The Commerce board of directors has not obtained an updated fairness opinion either as of the date of this proxy statement-prospectus or as of any other date subsequent to the date of such opinion from Magstar Capital, LLC, Commerce’s financial advisor. Changes in the operations and prospects of Commerce and/or Nicolet, general market and economic conditions and other factors which may be beyond the control of Nicolet and Commerce, including the recent pandemic of COVID-19 that has caused higher than normal volatility in the financial markets generally, and the market prices of Nicolet and Commerce, may have altered the value of Nicolet or Commerce or the prices of shares of Nicolet common stock and shares of Commerce common stock as of the date of this proxy statement-prospectus, or may alter such values and prices by the time the merger is completed. The opinion does not speak as of any date other than its date.

Nicolet’s integration of Commerce may be more difficult, costly, or time-consuming than we expect.

Nicolet and Commerce have operated, and, until completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees or disruption of each company’s ongoing business which could adversely affect the ability to maintain relationships with clients and employees or to achieve some of the anticipated benefits of the merger. Further, the COVID-19 pandemic may cause Nicolet or Commerce to reduce integration efforts in order to focus on internal operations to account for changes in the economic environment. If the merger is consummated, it is currently anticipated that, for a period of time, Commerce State Bank and Nicolet National Bank will each continue to operate independently. Nicolet has previously integrated acquired depository institutions concurrently with the legal closing of the holding company mergers, and may experience further difficulties with this integration process. If Nicolet experiences difficulties with the integration process, Nicolet might not achieve some of the economic benefits expected to result from the merger. As with any merger of banking institutions, there also may be business disruptions that cause the combined entity to lose customers or cause customers to take their deposits out of our banks and move their business to other financial institutions.

Commerce and Nicolet will be subject to business uncertainties while the merger is pending, which could adversely affect their respective businesses.

Uncertainty about the consummation of the merger or the effect of the merger on employees and customers may have an adverse effect on Commerce and Nicolet and consequently on the business and stock price of Nicolet after the merger. Although the parties intend to take steps to reduce any adverse effects, these uncertainties may impair their ability to attract, retain, and motivate key personnel until the merger is consummated and for a period of time thereafter, and such uncertainties could cause customers and others that deal with Commerce or Nicolet to seek to change their existing business relationships. Employee retention could be particularly challenging during the merger, as employees may experience uncertainty about their roles in the combined company following the merger. If key employees depart because of issues relating to the perceived uncertainty and difficulty of integration or a desire not to remain with the combined company, the combined company’s business following the merger could be harmed and the market price of its common stock could decrease.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated.

The merger must be approved by the Federal Reserve, the OCC and the WDFI. The Federal Reserve, the OCC and the WDFI will consider, among other factors, the competitive impact of the merger, our financial and managerial resources and the convenience and needs of the communities to be served. As part

TABLE OF CONTENTS

of that consideration, we expect that the Federal Reserve, the OCC and the WDFI will review the capital position, safety and soundness, and legal and regulatory compliance matters and Community Reinvestment Act (“CRA”) matters. There can be no assurance as to whether other necessary approvals will be received, the timing of those approvals, or whether any conditions will be imposed. For a discussion of the status of the required regulatory approvals, see “Status and Effect of Approvals” at page 45.

The market price of Nicolet common stock after the merger may be affected by factors different from those currently affecting the market price of Commerce.

The businesses of Nicolet and Commerce differ in some respects and, accordingly, the results of operations of Nicolet and the market price of Nicolet’s shares of common stock after the merger may be affected by factors different from those currently affecting Commerce’s results of operations. For a discussion of the businesses of Nicolet and Commerce and of certain factors to consider in connection with those businesses, see “The Companies” at page 6.

The Merger Agreement limits Commerce’s ability to pursue alternatives to the merger.

The merger agreement contains provisions that limit Commerce’s ability to discuss competing third-party proposals to acquire all or a significant part of either party or any of its subsidiaries. In addition, Commerce has agreed to pay Nicolet a fee of $5.0 million if Nicolet terminates the agreement after Commerce’s board of directors withdraws or changes its recommendation of the merger agreement, if Commerce terminates the merger agreement to accept an Acquisition Proposal that Commerce’s board deems a Superior Proposal, as each term is defined in the merger agreement, or if either party terminates the merger agreement either because Commerce’s shareholders did not approve the merger agreement or because the merger was not consummated on or prior to February 17, 2021, and, within twelve months following such termination, Commerce enters into a definitive agreement with respect to an Acquisition Proposal. These provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Commerce from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share price than that proposed in the merger, or might result in a potential competing acquirer proposing to pay a lower per share price to acquire Commerce than it might otherwise have proposed to pay.

Certain directors and executive officers of Commerce have interests in the merger other than their interests as shareholders.

Certain directors and executive officers of Commerce have interests in the merger other than their interests as shareholders. The board of directors of Commerce was aware of these interests at the time it approved the merger. These interests may cause Commerce’s directors and executive officers to view the merger proposal differently than you may view it. See “The Merger — Interests of Certain Persons in the Merger” at page 40.

Failure to complete the merger could negatively impact the stock price and future business and financial results of Commerce.

If the merger is not completed for any reason, including Commerce shareholders failing to approve the merger agreement and the merger, the ongoing business of Commerce may be adversely affected and, without realizing any of the benefits of having completed the merger, Commerce could be subject to a number of possible consequences, including the following:

•

Commerce may be required, under certain circumstances, to pay a termination fee to Nicolet;

•

Commerce is subject to certain restrictions on the conduct of business prior to completing the merger, which may adversely affect its ability to execute certain business strategies;

•

Commerce’s relationships with customers, regulators and employees may be negatively affected;

•

Commerce has incurred and will continue to incur certain costs and fees associated with the merger; and

TABLE OF CONTENTS

•

matters related to the merger (including integration planning) may require substantial commitments of time and resources by the management and employees of Commerce, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to Commerce as an independent company.

Nicolet may fail to realize some or all of the anticipated benefits of the merger.

The success of the merger will depend on, among other things, Nicolet’s ability to successfully combine the businesses of Nicolet and Commerce. If Nicolet is not able to successfully achieve this objective, the anticipated benefits of the merger may not be realized fully, or at all, or may take longer to realize than expected. Nicolet and Commerce have operated and, until the consummation of the merger, will continue to operate independently. It is possible that the integration process or other factors could result in the disruption of the ongoing business of Nicolet or inconsistencies in standards, controls, procedures and policies. It is also possible that clients, customers, depositors and counterparties of Nicolet or Commerce could choose to discontinue their relationships with the combined company post-merger because they prefer doing business with an independent company or for any other reason, which would adversely affect the future performance of the combined company. These transition matters could have an adverse effect on each of Nicolet and Commerce during the pre-merger period and for an undetermined period of time after the consummation of the merger.

You will experience a substantial reduction in percentage ownership and voting power with respect to your shares as a result of the merger.

Commerce shareholders will experience a substantial reduction in their respective percentage ownership interests and effective voting power through their stock ownership in Nicolet after the merger relative to their percentage ownership interest in Commerce prior to the merger. If the merger is consummated, current Commerce shareholders would own approximately [17]% of Nicolet’s outstanding common stock, assuming no adjustments to the exchange ratio, while current Nicolet shareholders would own the remaining [83]%. Consequently, Commerce shareholders will have less voting power per share in Nicolet following the merger than they currently have in Commerce as an independent entity. See “The Merger Agreement — What Commerce Shareholders will Receive in the Merger” at page 47.

TABLE OF CONTENTS

A WARNING ABOUT FORWARD-LOOKING STATEMENTS

This proxy statement-prospectus includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “endeavor,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “potential,” “predict,” “project,” “seek,” “should,” “will” and other similar words and expressions of future intent.

The ability of Nicolet and Commerce to predict results or the actual effect of future plans or strategies is inherently uncertain. Although Nicolet and Commerce believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Factors that could cause actual results and performance to differ from those expressed in the forward-looking statements include, but are not limited to:

•

the effects of the COVID-19 pandemic on the businesses, customers, employees and third-party services providers of Nicolet and Commerce;

•

the businesses of Nicolet and Commerce may not integrate successfully or the integration may be more difficult, time-consuming or costly than expected;

•

the expected growth opportunities and cost savings from the transaction may not be fully realized or may take longer to realize than expected;

•

revenues following the transaction may be lower than expected as a result of losses of customers or other reasons, including issues arising in connection with integration of the two banks;

•

deposit attrition, operating costs, customer loss and business disruption following the transaction, including difficulties in maintaining relationships with employees, may be greater than expected;

•

governmental approvals of the transaction may not be obtained on the proposed terms or expected timeframe;

•

the terms of the proposed transaction may need to be modified to satisfy such approvals or conditions;

•

Commerce’s shareholders may fail to approve the transaction;

•

reputational risks and the reaction of the companies’ customers to the transaction;

•

diversion of management time on merger-related or pandemic-related issues;

•

changes in asset quality and credit risk;

•

the cost and availability of capital;

•

customer acceptance of the combined company’s products and services;

•

customer borrowing, repayment, investment and deposit practices;

•

the introduction, withdrawal, success and timing of business initiatives;

•

the impact, extent, and timing of technological changes;

•

severe catastrophic events in our geographic area;

•

a weakening of the economies in which the combined company will conduct operations may adversely affect its operating results;

•

changes to statutes, regulations, or regulatory policies or practices resulting from the COVID-19 pandemic;

•

changes in the U.S. legal and regulatory framework;

•

the impact of interest rates on margins and net interest income; and

TABLE OF CONTENTS

•

competition from other financial services companies in the companies’ markets could adversely affect operations.

The cautionary statements in the “Risk Factors” section and elsewhere in this proxy statement-prospectus, and other risks detailed in the parties’ press releases, shareholder communications and other SEC filings, including the Form 10-K filed by Nicolet for the year ended December 31, 2019, identify important factors and possible events that involve risk and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Nicolet and Commerce do not intend to, and undertake no obligation to, update or revise any forward-looking statements, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements.

TABLE OF CONTENTS

THE COMMERCE SPECIAL SHAREHOLDERS’ MEETING

Purpose

Commerce shareholders are receiving this proxy statement-prospectus because on [•], the record date for a special meeting of shareholders to be held on [•], at [•] at [•] [•].m., they owned shares of the common stock of Commerce, and the board of directors of Commerce is soliciting proxies for the matters to be voted on at this special meeting, as described in more detail below. A copy of this proxy statement-prospectus was mailed to holders of Commerce common stock on [•], accompanied by a proxy card for use at the meeting and at any adjournment(s) of the meeting.

At the meeting, Commerce shareholders will consider and vote upon the merger agreement and the transactions contemplated thereby and any other matters that are properly brought before the meeting or any adjournments(s) of the meeting.

When you sign the enclosed proxy card or otherwise vote pursuant to the instructions set forth on the proxy card, you appoint the proxy holder as your representative at the meeting. The proxy holder will vote your shares as you have instructed in the proxy card, thereby ensuring that your shares will be voted whether or not you attend the meeting. Even if you plan to attend the meeting (including via remote communications), we ask that you instruct the proxies how to vote your shares in advance of the meeting just in case your plans change. In the event that other matters arise at the special meeting, the proxy holder will vote your shares according to his or her discretion.

If you have not already done so, please complete, date and sign the accompanying proxy card and return it promptly in the enclosed, postage paid envelope or otherwise vote pursuant to the instructions set forth on the proxy card. If you do not vote your shares as instructed on the proxy card, or if you do not attend and cast your vote at the special meeting, the effect will be a vote against the merger agreement.

Record Date; Quorum and Vote Required

The record date for the Commerce special meeting is [•]. Commerce’s shareholders of record as of the close of business on that day will receive notice of and will be entitled to vote at the special meeting. As of the record date, there were [•] shares of Commerce common stock outstanding and entitled to vote at the meeting. The outstanding shares are held by approximately [•] holders of record.

The presence, in person, via remote communications or by proxy, of a majority of the shares of Commerce common stock entitled to vote on the merger agreement is necessary to constitute a quorum at the meeting. Each share of Commerce common stock outstanding on the record date entitles its holder to one vote on the merger agreement and any other proposal that may properly come before the meeting.

To determine the presence of a quorum at the meeting, Commerce will also count as present at the meeting the shares of Commerce common stock present in person or via remote communication but not voting, and the shares of common stock for which Commerce has received proxies but with respect to which the holders of such shares have abstained or signed without providing instructions as described in “Solicitation and Revocation of Proxies” below. Based on the number of shares of Commerce common stock outstanding as of the record date, at least [•] shares need to be present at the special meeting, whether in person, via remote communication or by proxy, to constitute a quorum.

Approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Commerce common stock as of the record date for the special meeting. Abstentions, shares not voted, and broker nonvotes will have the same effect as a vote against the merger proposal. Approval of the adjournment proposal requires that more votes be cast in favor of the adjournment proposal than against it; abstentions, shares not voted, and broker nonvotes will have no effect on this proposal.

As of the record date for the meeting, Commerce’s directors and executive officers beneficially owned a total of 357,391 shares, or approximately 23.35% of the shares entitled to vote on the merger, of Commerce common stock. These individuals have entered into a written agreement with Nicolet, as shareholders of Commerce, that they will vote their shares in favor of the merger agreement, except as may be limited by any

TABLE OF CONTENTS

existing fiduciary obligations to beneficial owners of such shares. In addition, Nicolet had voting power over less than 1% of the shares entitled to vote on the merger.

Solicitation and Revocation of Proxies

If you have delivered a signed proxy card for the Commerce special meeting, you may revoke it at any time before it is voted by:

•

attending the meeting (in-person or remotely), giving oral notice of your revocation, and voting in person or over the internet;

•

giving written notice revoking your proxy to Commerce’s Corporate Secretary prior to the date of the meeting;

•

if you voted over the internet, voting again over the internet by the applicable deadline described below or submit a proxy card and return it prior to the vote at the annual meeting; or

•

submitting a signed proxy card that is dated later than your initial proxy card to Commerce’s Corporate Secretary.

The proxy holders will vote as directed on all valid proxies that are received at or prior to the meeting and that are not subsequently revoked. If you complete, date and sign your proxy card but do not provide instructions as to your vote, the proxy holders will vote your shares FOR approval of the merger proposal and FOR the adjournment proposal. If any other matters are properly presented at the meeting for consideration, the persons named in the proxy card will have discretionary authority to vote your shares on those matters. Commerce’s board of directors is not aware of any matter to be presented at the meeting other than the merger proposal and the adjournment proposal.

If you hold shares in “street name” with a broker, bank, or other fiduciary, you will receive voting instructions from the holder of record of your shares. Under the rules of various national and regional securities exchanges, brokers, banks and other fiduciaries may generally vote your shares on routine matters, such as the ratification of an independent registered public accounting firm, even if you provide no instructions, but may not vote on non-routine matters, such as the matters being brought before the special meeting, unless you provide voting instructions. Shares for which a broker does not have the authority to vote are recorded as “broker nonvotes” and are not counted in the vote by shareholders, but will count for purposes of a quorum. As a result, any broker nonvotes will have the practical effect of a vote against the merger proposal but will not affect the adjournment proposal. We therefore encourage you to provide directions to your broker as to how you want your shares voted on all matters to be brought before the special meeting. You should do this by carefully following the instructions your broker gives you concerning its procedures. If you hold shares in “street name” and wish to change your vote at any time, you must contact your broker.

Commerce will bear the cost of soliciting proxies from its shareholders. Commerce will solicit shareholder votes by mail and may also solicit certain shareholders by other means of communication, including telephone or in person. If anyone solicits your vote in person, by telephone, or by other means of communication, they will receive no additional compensation for doing so. Commerce will reimburse brokerage firms and other persons representing beneficial owners of shares for their reasonable expenses in forwarding solicitation material to those beneficial owners.

How to Vote Your Shares

Shareholders of record (i.e., those who own shares in their own name) can vote by [internet], mail or in person as follows:

•

Voting By Internet. Access the internet website specified on the enclosed proxy card.

•

Voting by Mail. Complete, sign, date, and return the enclosed proxy card in the envelope provided.

•

Voting at the Special Meeting. If you decide to attend the special meeting and vote in person, you may deposit your proxy card with a representative of Commerce at the special meeting registration desk. You may also complete a ballot that will be distributed at the meeting. Whether or not you plan

TABLE OF CONTENTS

to attend the special meeting, please submit your proxy promptly in the enclosed envelope. If you decide to attend the special meeting via remote communication, you may vote remotely by accessing the internet website specified on the enclosed proxy card.

“Street name” shareholders (i.e., those who own their shares in the name of a broker, bank, or other fiduciary) should refer to the information you receive from your broker to see which voting methods are available to you. Please note, if you are a street name shareholder and wish to vote in person at the special meeting, you must obtain a proxy executed in your favor from your broker to be able to vote at the special meeting.

You should not send any stock certificates with your proxy card. If the merger is completed, you will receive a letter of transmittal with instructions for exchanging your stock certificates.

Dissenters’ Rights

Commerce’s shareholders have dissenters’ rights with respect to the merger under Wisconsin law. Shareholders who wish to assert their dissenters’ rights and comply with the procedural requirements of Subchapter XIII of the Wisconsin Business Corporation Law (“WBCL”) will be entitled to receive payment of the fair value of their shares in cash in accordance with Wisconsin law. For more information regarding the exercise of these rights, see, “Dissenters’ Rights,” at page 48.

Recommendation of the Board of Directors of Commerce

Commerce’s board of directors has unanimously approved the merger agreement and the transactions contemplated thereby, believes that the merger is in the best interests of Commerce and its shareholders, and recommends that you vote FOR approval of the merger agreement and the transactions contemplated thereby and FOR the adjournment proposal.

For a discussion of the factors considered by the board of directors in reaching its conclusion, see “The Merger — Background of the Merger” at page 25 and “The Merger — Reasons for the Merger” at page 26.

Shareholders should note that Commerce’s directors have certain interests in, and may derive benefits as a result of, the merger that are in addition to their interests as shareholders of Commerce. See “The Merger — Interests of Certain Persons in the Merger” at page 40.

TABLE OF CONTENTS

THE PROPOSALS

Proposal 1 — Approval of the Merger Agreement and the Merger

At the special meeting, shareholders of Commerce will be asked to approve the merger proposal providing for the merger of Commerce with and into Nicolet. Shareholders of Commerce should read this proxy statement-prospectus carefully and in its entirety, including the appendices, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this proxy statement-prospectus as Appendix A.

After careful consideration, the Commerce board of directors, by a unanimous vote of all directors, approved the merger agreement and the merger, and found them to be advisable and in the best interests of Commerce and its shareholders. See “The Merger — Background of the Merger” and “The Merger — Reasons for the Merger” included elsewhere in this proxy statement-prospectus for a more detailed discussion of the Commerce board’s recommendation.

THE COMMERCE BOARD UNANIMOUSLY RECOMMENDS THAT
COMMERCE SHAREHOLDERS VOTE “FOR” THE MERGER PROPOSAL.

Proposal 2 — Adjournment of the Special Meeting

If Commerce does not receive a sufficient number of votes to constitute a quorum of the common stock or approve the merger agreement and the transactions contemplated thereby, it may propose to adjourn the special meeting for the purpose of soliciting additional proxies to establish such quorum or approve the merger proposal. Commerce does not currently intend to propose adjournment of the special meeting if there are sufficient votes to approve the merger agreement and the transactions contemplated thereby.

THE COMMERCE BOARD UNANIMOUSLY RECOMMENDS THAT
COMMERCE SHAREHOLDERS VOTE “FOR” THE ADJOURNMENT PROPOSAL.

TABLE OF CONTENTS

THE MERGER

Structure of the Merger

The merger agreement provides for the merger of Commerce with and into Nicolet, with Nicolet being the surviving entity in the merger. After the merger, Commerce State Bank will merge with and into Nicolet National Bank, with Nicolet National Bank being the surviving bank. Each share of Commerce common stock outstanding at the effective time of the merger, other than certain cancelled shares, will be converted into the right to receive merger consideration consisting of 1.15 shares of Nicolet common stock. The merger agreement provides that the exchange ratio is fixed unless the Nicolet Common Stock Price (as defined in the merger agreement) is (a) greater than $82.00, in which case the exchange ratio would become floating at the quotient of $94.30 divided by the Nicolet Common Stock Price, or (b) less than $62.00, in which case the exchange ratio would become floating at the quotient of $71.30 divided by the Nicolet Common Stock Price. If the Nicolet Common Stock Price is below $62.00 per share, in lieu of adjusting the exchange ratio, Nicolet may (a) elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $71.30 per share of Commerce Common Stock, (b) leave the exchange ratio unchanged (which would give Commerce the right to terminate the merger agreement), or (c) terminate the merger agreement. As of the date of this proxy statement-prospectus, if the Nicolet Common Stock Price is below $62.00, Nicolet does not intend to adjust the exchange ratio, does not intend to add cash consideration, and does intend to terminate the merger agreement. If the Nicolet Common Stock Price is below $62.00 per share, and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time. Additionally, under no circumstances shall the number of shares of Nicolet common stock to be issued in the merger equal or exceed 19.9% of the number of outstanding shares of Nicolet common stock such that Nasdaq rules would require approval of the merger by Nicolet’s shareholders. The parties agree to reduce the number of shares of Nicolet common stock to be issued and to increase the cash to be issued pro rata to avoid such a shareholder vote.

See “The Merger Agreement” on page 47 for additional details regarding the structure of the merger.

Background of the Merger

Commerce’s board of directors and senior management have regularly reviewed and evaluated its business, strategic direction, performance, prospects and strategic alternatives as part of Commerce’s ongoing efforts to strengthen its businesses and improve its operations and financial performance to create value for its shareholders, taking into account economic, regulatory, competitive and other conditions. In recent years, such strategic reviews have identified that the pricing in the strategic market was peaking and such pricing may not be sustainable long term. To assist in the analysis, in August of 2019, the Commerce board approved the retention of Hillworth, LLC (“Hillworth”), an advisory firm specializing in community banks/bank holding companies, and Magstar Capital, LLC (“Magstar”), a registered FINRA-broker dealer that provides investment banking advisory services, of which Hillworth’s principals are registered representatives, and through which broker-dealer and investment banking services are provided. Hillworth and Magstar provided the board with an overview of the market and information on possible transaction parties. Commerce management worked with Hillworth to prepare a company profile and a list of the most likely transaction parties. Over the next several months, Commerce management and/or Hillworth met with five financial institutions that had been identified, each of which executed confidentiality agreements and were provided access to confidential information concerning Commerce.

Late in 2019 or early 2020, Hillworth informed the identified financial institutions that Commerce was seeking initial indications of interest in a transaction by January 13, 2020. In response, three written and one verbal interest indications were received, including an initial offer from Nicolet of a stock for stock merger valuing Commerce at approximately $85 per share.

On January 15, 2020, the Commerce board of directors, along with representatives of Hillworth and outside counsel, discussed the indications of interest received and evaluated them based on previously outlined strategic objectives and current market conditions. Following deliberations, the board directed Hillworth to solicit best and final bids from Nicolet and one other bidder. Joseph Fazio, the Commerce CEO,

TABLE OF CONTENTS

met at Nicolet’s offices to discuss possible transaction terms with members of Nicolet’s senior management team, and discussions continued for the next few days, during which a tentative agreement was struck for Nicolet to acquire Commerce in an all-stock transaction based on an exchange ratio of 1.217 shares of Nicolet stock for each Commerce share outstanding, valuing Commerce at approximately $87 per share based on a price per Nicolet share of $71.50. These terms were incorporated in an updated letter of intent, which was approved by the Commerce board of directors at a telephonic meeting the morning of January 24, 2020, and executed by both Commerce and Nicolet later that day.

Immediately following execution of the letter of intent, the drafting and negotiation of the Merger Agreement and related documents began and Nicolet conducted a detailed due diligence review. Based on its diligence review, particularly a review of the Commerce loan portfolio, Nicolet proposed a reduction in the exchange ratio to 1.15 shares of Nicolet stock for each share of Commerce. Following a review of supporting information provided by Nicolet and analysis by Commerce management, the Commerce board of directors participated in a telephonic meeting on February 12 to discuss Nicolet’s revised offer. Hillworth representatives participated on the call and expressed the opinion that even after the reduction in the exchange ratio, the Nicolet offer was superior to other offers received and compared favorably to other transactions. Following discussions, the board authorized management to continue negotiations on a definitive agreement.

Commerce scheduled a board of directors meeting to approve the Merger Agreement with Nicolet for the evening of Sunday, February 16, with the objective of having the agreement signed and announced on Monday February 17, a bank holiday. In advance of the meeting, each director was provided with the latest draft of the merger agreement together with a memorandum from Commerce counsel summarizing the Merger Agreement provisions.

On February 14, 2020, the board of Nicolet met to discuss the terms of the merger. Management provided an in-depth analysis of the bid from a financial perspective. The board also reviewed the final draft of the definitive merger agreement and summarized terms and conditions. After a thorough discussion, the board of Nicolet voted unanimously to proceed with the transaction.

On February 16, 2020, the board of Commerce met again with its advisors from Hillworth, Magstar and Reinhart Boerner Van Deuren s.c., its legal counsel. Counsel reviewed the final draft of the definitive merger agreement and summarized the terms and conditions. On February 16, 2020, Magstar issued its fairness opinion, from a financial point of view, after considering a finalized draft of the definitive merger agreement and the revised merger consideration. After a thorough discussion, the board of Commerce voted unanimously to proceed with the transaction.

Nicolet and Commerce executed the merger agreement on February 17, 2020 and issued a joint press release announcing the execution of the merger agreement and the terms of the merger on the same day.

Reasons for the Merger

General

The financial and other terms of the merger agreement resulted from arm’s-length negotiations between Nicolet’s and Commerce’s representatives. The following discussion of the information and factors considered by the Nicolet and Commerce boards of directors is not intended to be exhaustive, but includes all of the material factors the respective boards considered in determining whether to enter into the merger agreement. In reaching their determinations to approve the merger and to recommend that their respective shareholders approve the merger, neither the Nicolet board of directors nor the Commerce board of directors assigned any relative or specific weight to the following factors, and individual directors may have assigned different weight to different factors.

Nicolet

In deciding to pursue a merger with Commerce, Nicolet’s management and board of directors considered, among other things, the following:

•

the effectiveness of the merger in allowing Nicolet to expand its competitive position in the Milwaukee-Waukesha-West Allis Metropolitan Statistical Area and Sheboygan Metropolitan Statistical Area markets;

TABLE OF CONTENTS

•

the fact that the merger will allow Nicolet to make a marked entry into the cities of West Bend, Cedarburg, Sheboygan and Elm Grove, as compared to establishing a de novo branch office;

•

Nicolet’s belief that the expansion into the Milwaukee-Waukesha-West Allis Metropolitan Statistical Area and Sheboygan Metropolitan Statistical Area will provide Nicolet entry into a commercial and industrial hub in the Great Lakes region;

•

Commerce’s strong reputation and successful track record of organic commercial loan generation abilities;

•

Nicolet’s belief that the proposed merger will be “geographically accretive” to the surviving institution by moving into a higher growth and higher medium household income market;

•

the fact that certain members of Nicolet’s and Commerce’s boards of directors have long standing professional relationships and Nicolet’s belief that Commerce’s business values, cultures and philosophies seem to align with those of Nicolet;

•

Nicolet’s expectation that certain members of Commerce’s executive management team and senior lenders will remain with Nicolet and will lead the markets in West Bend, Cedarburg, Sheboygan and Elm Grove;

•

Nicolet’s expectation that Nicolet will retain its strong capital position and asset quality upon completion of the transaction; and

•

Nicolet’s expectations that the merger will offer cost savings opportunities, opportunities for revenue growth through the ability to offer new products and services to Commerce customers, and as a result, be accretive to earnings per share within the first full year.

The Nicolet board of directors approved the merger agreement after Nicolet’s senior management discussed with the Nicolet board of directors a number of factors, including those described above and the business, loan and deposit structure, assets, liabilities, results of operations, financial performance, geographic location and strategic direction of Commerce. The foregoing discussion of the information and factors considered by the Nicolet board of directors is not exhaustive, but includes the material factors considered by the Nicolet board of directors. In view of the wide variety of factors considered by the Nicolet board of directors in connection with its evaluation of the merger, the Nicolet board of directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. The Nicolet board of directors viewed its position as being based on all of the information and the factors presented to and considered by it. In addition, individual directors may have given different weights to different information and factors. The explanation of Nicolet’s reasons for the merger includes statements that are forward-looking in nature and, therefore, should be read in light of the factors discussed above under “A Warning About Forward-Looking Statements.” Following the effects of the COVID-19 pandemic, if all other closing conditions are met but Nicolet’s Common Stock Price is not above $62.00 at the time of closing, Nicolet does not intend to adjust the exchange ratio, does not intend to add cash consideration, and does intend to exercise its right to terminate the merger agreement.

Commerce

In deciding to pursue the merger transaction with Nicolet, Commerce’s board of directors consulted with its management, as well as its legal counsel and financial advisor, and considered numerous factors, including the following:

•

the comparison of the value of the consideration offered by Nicolet to the value of the consideration offered by other parties approached by Commerce;

•

the relationship of the consideration to be paid in the merger to market prices and the book value and earnings per share of Commerce and Nicolet;

•

Nicolet’s long term growth strategy;

•

the payment of the Merger Consideration primarily in the form of registered, freely tradeable stock of Nicolet, giving liquidity along with an opportunity to defer taxes on gain;

TABLE OF CONTENTS

•

the belief that Commerce and Nicolet share a similar strategic vision and a similar community banking philosophy;

•

Nicolet’s history and reputation as an efficient and effective acquirer, and success in integrating acquired organizations into its own;

•

Nicolet’s access to internal and external resources to complete the merger process on a timely basis;

•

the higher lending limits and greater breadth of products and services the merged banks will be able to offer to Commerce customers;

•

the terms of the merger agreement, and the presentation by Commerce’s outside legal advisors regarding the merger and merger agreement;

•

the enhanced ability of the combined organization to take advantage of current and emerging opportunities for growth and profitability; and

•

The board also considered certain potential risks associated with the merger, including the following:

•

the significant time and costs to be undertaken by management in completing the merger and the effort that could cause in disrupting Commerce normal business activities;

•

the conditions to closing set forth in the merger agreement and the likelihood such conditions will be satisfied, including the receipt of approvals from government agencies;

•

operating restrictions on Commerce and Commerce State Bank imposed by the Merger Agreement between signing and closing; and

•

Commerce’s obligation to pay a termination fee of $5 million to Nicolet in certain circumstances.

While each member of Commerce’s board of directors evaluated each of the foregoing as well as other factors, the board of directors collectively did not assign any specific or relative weights to the factors considered and did not make any determination with respect to any individual factor. The Commerce board of directors collectively made its determination with respect to the merger based on its unanimous conclusion that the merger, in light of the factors which each of them individually considered appropriate, is

TABLE OF CONTENTS

in the best interest of Commerce’s shareholders. All members of the board of directors voted to approve the merger agreement and the merger.

Opinion of Commerce’s Financial Advisor

The fairness opinion and a summary of the underlying financial analysis of Commerce’s financial advisor, Magstar Capital, LLC, are described below.

The description contains projections, estimates and other forward-looking statements about the future earnings or other measures of the future performance of Commerce. The projections are based on numerous variables and assumptions, which are inherently uncertain, including factors related to general economic and competitive conditions. Accordingly, actual results could vary significantly from those set forth in the projections. These statements should not be relied on as having been made or adopted by Commerce or Nicolet. The copy of the full fairness opinion is attached as Appendix B to this proxy statement-prospectus.

Magstar acted as Commerce’s financial advisor in connection with the proposed merger. Magstar is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger and is familiar with Commerce and its operations. As part of its investment banking business, Magstar is continually engaged in the valuation of businesses and their securities in connection with, among other things, mergers and acquisitions.

Magstar reviewed the financial aspects of the proposed merger with Commerce’s board of directors and, on February 16, 2020, delivered a written opinion to Commerce’s board of directors that, subject to the review, assumptions and limitations set forth in the opinion, the merger consideration to be received by the shareholders of Commerce in connection with the merger is fair to the shareholders of Commerce. In requesting Magstar’s advice and opinion, no limitations were imposed by Commerce upon Magstar with respect to the investigations made or procedures followed by Magstar in rendering its opinion.

The full text of Magstar’s written opinion is attached as Appendix B and is incorporated herein by reference. You are urged to read the opinion in its entirety for a description of the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Magstar. The summary of Magstar’s opinion included herein is qualified in its entirety by reference to the full text of such opinion.

Magstar’s opinion was directed to Commerce’s board of directors (solely in its capacity as such) and addresses only the fairness of the merger consideration to be paid to Commerce shareholders pursuant to the merger agreement in connection with the merger. Magstar did not opine on any individual stock, cash, or other components of consideration payable in connection with the merger. Magstar’s opinion did not constitute a recommendation to Commerce as to whether or not Commerce should enter into the merger agreement or to any shareholders of Commerce as to how such shareholders should vote at any special meeting of shareholders called to consider and vote upon the merger or any related matter. Magstar’s opinion does not address the underlying business decision to proceed with the merger or the fairness of the amount or nature of the compensation, if any, to be received by any of the officers, directors or employees of Commerce relative to the amount of consideration to be paid with respect to the merger. Magstar’s opinion should not be construed as implying that the value of the merger consideration is necessarily the highest or best price that could be obtained by Commerce in a sale, merger, or combination transaction with a third party. Other than as specifically set forth in the opinion, Magstar is not expressing any opinion with respect to the terms and provisions of the merger agreement or the enforceability of any such terms or provisions.

During the course of Magstar’s engagement and for the purposes of the opinion set forth herein, Magstar:

•

reviewed a draft of the Agreement dated February 13, 2020, as provided to Magstar by Commerce;

•

reviewed unaudited financial statements for Commerce, Commerce State Bank, Nicolet and Nicolet National Bank, as of and for the year ending December 31, 2019;

•

reviewed certain historical annual reports of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank, including for the year ending December 31, 2019;

TABLE OF CONTENTS

•

reviewed certain historical publicly available business and financial information concerning each of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank;

•

reviewed certain internal financial statements and other financial and operating data of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank including, without limitation, internal financial analyses and forecasts prepared by management of Commerce, Commerce State Bank, and held discussions with senior management of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank regarding recent developments and regulatory matters;

•

reviewed financial projections prepared by certain members of senior management of Commerce, Commerce State Bank;

•

discussed with certain members of senior management of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank, the business, financial condition, results of operations and future prospects of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank; the history and past and current operations of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank; Commerce’s, Commerce State Bank’s, Nicolet’s and Nicolet National Bank’s historical financial performance; and their assessment of the rationale for the merger;

•

reviewed and analyzed materials detailing the merger prepared by Commerce, Commerce State Bank, Nicolet and Nicolet National Bank including the estimated amount and timing of the cost savings and related expenses, certain purchase accounting adjustments and synergies expected to result from the merger (the “Synergies”);

•

assessed general economic, market and financial conditions;

•

analyzed the pro forma financial impact of the merger on the combined company’s earnings, tangible book value, financial ratios and other such metrics Magstar deemed relevant, giving effect to the merger based on assumptions relating to the Synergies;

•

reviewed certain S&P CapIQ consensus income and balance sheet estimates for Nicolet for 2020 and 2021;

•

reviewed historical market prices and trading volumes of Nicolet’s Common Stock;

•

reviewed the certain publicly available financial information and stock market data related to selected public financial institutions/commercial banks that Magstar deemed relevant to its analysis;
reviewed the terms of recent merger, acquisition and control investment transactions, to the extent publicly available, involving financial institutions and financial institution holding companies that Magstar considered relevant;

•

taken into consideration its experience in other similar transactions as well as its knowledge of the banking and financial services industry; and

•

performed such other analyses and considered such other factors as Magstar deemed appropriate.

Magstar also conducted meetings and had discussions with members of senior management of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank for purposes of reviewing the business, financial condition, results of operations and future prospects of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank; the history and past and current operations of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank; and Commerce’s, Commerce State Bank’s, Nicolet’s and Nicolet National Bank’s historical financial performance. Magstar discussed with management of Commerce, Commerce State Bank, Nicolet and Nicolet National Bank their assessment of the rationale for the merger. Magstar also performed such other analyses and considered such other factors as Magstar deemed appropriate, and took into account its experience in other similar transaction and securities valuations, as well as its knowledge of the banking and financial services industry.

Magstar assumed, without investigation, that there have been, and from the date of its opinion through the effective date of the merger will be, no material changes in the financial condition and results of operations of Commerce, Commerce State Bank, Nicolet, or Nicolet National Bank since the date of the latest financial information described above. Magstar relied, without independent verification or investigation, on the assessments of the management of Commerce, Commerce State Bank, Nicolet, or Nicolet National

TABLE OF CONTENTS

Bank as to their existing and future relationships with key employees and partners, clients, products and services, and assumed, with Commerce’s consent, that there will be no developments with respect to any such matters that would affect Magstar’s analyses or opinion. Magstar further assumed, without independent verification, that the representations and financial and other information included in the Agreement and all other related documents and instruments that are referred to therein or otherwise provided to Magstar by Commerce, Commerce State Bank, Nicolet, or Nicolet National Bank are true and complete. Magstar relied upon the management of Commerce, Commerce State Bank, Nicolet, or Nicolet National Bank as to the reasonableness and achievability of the financial forecasts, and projections, estimates and other forward-looking information (including the Synergies) provided to Magstar by Commerce, Commerce State Bank, Nicolet, or Nicolet National Bank, and assumed such forecasts, projections, estimates and other forward-looking information (including the Synergies) have been reasonably prepared by Commerce, Commerce State Bank, Nicolet, or Nicolet National Bank on a basis reflecting the best currently available information and Commerce’s, Commerce State Bank’s, Nicolet’s, or Nicolet National Bank’s judgments and estimates. Magstar assumed that such forecasts, projections, estimates and other forward-looking information (including the Synergies) would be realized in the amounts and at the times contemplated thereby, and does not, in any respect, assume any responsibility for the accuracy or reasonableness thereof. Magstar was authorized by Commerce and Commerce State Bank to rely upon such forecasts, projections, estimates and other information and data, and expresses no view as to any such forecasts, projections, estimates or other forward-looking information or data, or the bases or assumptions on which they were prepared.

In performing its review, Magstar assumed and relied upon the accuracy and completeness of all of the financial and other information that was available to it from public sources, that was provided to it by Commerce, Commerce State Bank, Nicolet, and Nicolet National Bank or their respective representatives or that was otherwise reviewed by it for purposes of rendering its opinion. Magstar further relied on the assurances of the respective management of Commerce, Commerce State Bank, Nicolet, and Nicolet National Bank and that they are not aware of any facts or circumstances that would make any of such information inaccurate or misleading. Magstar was not asked to and has not undertaken an independent verification of any of such information, and does not assume any responsibility or liability for the accuracy or completeness thereof. Magstar assumed that each party to the Agreement would advise it promptly if any information previously provided to it became inaccurate or was required to be updated during the period of Magstar’s review.

Magstar is not an expert in the evaluation of loan and lease portfolios for purposes of assessing the adequacy of the allowances for losses with respect thereto. Magstar assumed that such allowances for Commerce and Nicolet are, in the aggregate, adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. Magstar was not requested to make, and did not make, an independent evaluation, physical inspection or appraisal of the assets, properties, facilities, or liabilities (contingent or otherwise) of Commerce or Nicolet, the collateral securing any such assets or liabilities, or the collectability of any such assets, and Magstar was not furnished with any such evaluations or appraisals; nor did Magstar review any loan or credit files of Commerce or Nicolet.

Magstar did not evaluate the solvency of Commerce, Commerce State Bank, Nicolet, or Nicolet National Bank, under any state or federal law relating to bankruptcy, insolvency or similar matters. Accordingly, Magstar expresses no opinion regarding the liquidation value of Commerce, Commerce State Bank, Nicolet, or Nicolet National Bank, or any other entity. Magstar also assumed that Commerce, Commerce State Bank, Nicolet, and Nicolet National Bank would remain as a going concern for all periods relevant to its analysis. Accordingly, Magstar expresses no opinion with respect to the foregoing. Further, without limiting the generality of the foregoing, Magstar undertook no independent analysis of any pending or threatened litigation, regulatory action, possible unasserted claims or other contingent liabilities to which Commerce, Commerce State Bank, Nicolet, or Nicolet National Bank is a party or may be subject, and with Commerce’s consent, Magstar’s opinion makes no assumption concerning, and therefore does not consider, the possible assertion of claims, outcomes or damages arising out of any such matters. Magstar also assumed that neither Commerce, Commerce State Bank, Nicolet, nor Nicolet National Bank is a party to any material pending transaction, including without limitation any financing, recapitalization, acquisition or merger, divestiture or spin-off, other than the merger contemplated by the Agreement.

Magstar relied upon and assumed, with Commerce’s consent and without independent verification, that the merger will be consummated substantially in accordance with the terms set forth in the merger agreement,

TABLE OF CONTENTS

without any waiver of material terms or conditions by Commerce, Nicolet or any other party to the merger agreement and that the final agreement will not differ materially from the draft Magstar reviewed. Magstar assumed that the merger will be consummated in compliance with all applicable laws and regulations. Commerce advised Magstar that they were not aware of any factors that would impede any necessary regulatory or governmental approval of the merger. Magstar assumed that the necessary regulatory and governmental approvals as granted would not be subject to any conditions that would be unduly burdensome on Commerce or Nicolet or would have a material adverse effect on the contemplated benefits of the merger.

Magstar’s opinion does not consider, include or address: (i) any legal, tax, accounting, or regulatory consequences of the merger on Commerce or its shareholders; (ii) any advice or opinions provided by any other advisor to the board of directors of Commerce; (iii) any other strategic alternatives that might be available to Commerce; or (iv) whether Nicolet has sufficient cash or other sources of funds to enable it to pay the consideration contemplated by the merger.

Commerce engaged Magstar on August 20, 2019, to serve as a financial advisor to Commerce in connection with the proposed mergers and to issue a fairness opinion to Commerce’s board of directors in connection with such proposed transaction. Pursuant to the terms of the engagement, Magstar received from Commerce an advisory fee for delivery of certain transaction advisory and analysis services, a fairness opinion fee due upon the delivery of the fairness opinion to Commerce, and at the time the merger is completed, Commerce will pay Magstar a completion fee, which is contingent upon the completion of the merger. Pursuant to the engagement agreement, in addition to its fees and regardless of whether the merger is consummated, Commerce has agreed to reimburse Magstar for certain reasonable out-of-pocket expenses incurred in performing its services and to indemnify Magstar and its affiliates against certain claims, losses, liabilities and expenses arising out of the mergers or Magstar’s engagement.

Other than in connection with this present engagement, during the two years preceding the date of its opinion, Magstar has not provided investment banking or financial advisory services to Commerce. During the past two years, certain registered representatives of Magstar, who are also separate owners and employees of Hillworth, have been engaged by, and provided services to the Commerce through Hillworth. During the two years preceding the date of its opinion Magstar has not provided any investment banking or financial advisory services to Nicolet for which it received a fee. Magstar or its affiliates, as well as Hillworth (whose principals are registered with Magstar) may presently or in the future seek or receive compensation from Nicolet in connection with future transactions, or in connection with potential advisory services and corporate transactions, although to Magstar’s knowledge none are expected at this time. Except for the foregoing, during the two years preceding the date of this opinion there have not been, and there currently are no mutual understandings contemplating in the future, any material relationships between Magstar and Commerce or Nicolet.

In performing its analyses, Magstar made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of Magstar, Commerce, Commerce State Bank, Nicolet and Nicolet National Bank. Magstar’s opinion was necessarily based on financial, economic, market and other conditions and circumstances as they existed on, and on the information made available to Magstar as of, the dates used in its opinion. Any estimates contained in the analyses performed by Magstar are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities may be sold or the prices at which any securities may trade at any time in the future. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. Magstar’s opinion does not address the relative merits of the mergers as compared to any other business combination in which Commerce might engage. In addition, Magstar’s fairness opinion was among several factors taken into consideration by Commerce’s board of directors in making its determination to approve the merger agreement and the mergers. Consequently, the analyses described below should not be viewed as solely determinative of the decision of Commerce’s board of directors or Commerce’s management with respect to the fairness of the merger consideration to be received by Commerce’s shareholders in connection with the merger.

TABLE OF CONTENTS

Magstar’s opinion was based solely upon the information available to Magstar and described above, and the economic, market and other circumstances as they existed as of the date thereof. Events occurring and information that becomes available after the date thereof could materially affect the assumptions and analyses used in preparing its opinion. Magstar has not undertaken to update, revise, reaffirm or withdraw its opinion or to otherwise comment upon events occurring or information that becomes available after the date thereof.

In arriving at its opinion, Magstar did not attribute any particular weight to any single analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Magstar believes that its analyses must be considered as a whole and that selecting portions of its analyses, without considering all analyses, would create an incomplete view of the process underlying its opinion.

The following is a summary of the material analyses prepared by Magstar and delivered to Commerce’s board of directors on February 16, 2020, in connection with the delivery of its fairness opinion. This summary is not a complete description of the analyses underlying the fairness opinion or the presentation prepared by Magstar, but it summarizes the material analyses performed and presented in connection with such opinion. The preparation of a fairness opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances of the contemplated merger. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, Magstar did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. The financial analyses summarized below include information presented in tabular format. The analyses and the summary of the analyses must be considered as a whole and selecting portions of the analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying the analyses and opinion of Magstar. The tables alone are not a complete description of the financial analyses. For purposes of the analysis, Deal Value is comprised of Merger Consideration plus Option Consideration.

Market Approach — Comparable Transactions. As part of its analysis, Magstar reviewed publicly available information related to two comparable groups (a “Regional Group” and a “Nationwide Group”) of select acquisition transactions of banks. The Regional Group consisted of acquisition transactions where targets were headquartered in the Midwest Region of the United States (consisting of the states of Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin) announced since January 1, 2017, in which the target’s total assets were between $300 million and $1.5 billion, last-twelve-months (“LTM”) return on average assets (“ROAA”) was between 0.75% and 1.50%, and nonperforming assets were less than 2.0% of total assets. The Nationwide Group consisted of acquisition transactions of targets in the United States announced since January 1, 2018, in which the target’s total assets were between $500 million and $1.5 billion, LTM ROAA was between 0.85% and 1.35%, and nonperforming assets were less than 1.25% of total assets. Information for the target institutions was based on balance sheet data as of, and income statement data for, the twelve months

TABLE OF CONTENTS

preceding the most recent quarter prior to announcement of the transactions. The resulting two groups consisted of the following transactions (21 transactions for the Regional Group and 14 transactions for the Nationwide Group):

Regional Group:

Buyer (State)			Target (State)
Arbor Bancorp, Inc. (MI)			FNBH Bancorp, Inc. (MI)
Level One Bancorp, Inc. (MI)			Ann Arbor Bancorp, Inc. (MI)
Associated Banc-Corp (WI)			First Staunton Bancshares, Inc. (IL)
Nicolet Bankshares, Inc. (WI)			Choice Bancorp, Inc. (WI)
ChoiceOne Financial Services, Inc. (MI)			County Bank Corp (MI)
German American Bancorp, Inc. (IN)			Citizens First Corporation (KY)
Bank First Corporation (WI)			Partnership Community Bancshares, Inc. (WI)
Peoples Bancorp Inc. (OH)			First Prestonsburg Bancshares, Inc. (KY)
First Merchants Corporation (IN)			MBT Financial Corp. (MI)
Stifel Financial Corp. (MO)			Business Bancshares, Inc. (MO)
CNB Bank Shares, Inc. (IL)			Jacksonville Bancorp, Inc. (IL)
LCNB Corp. (OH)			Columbus First Bancorp, Inc. (OH)
Equity Bancshares, Inc. (KS)			Kansas Bank Corporation (KS)
Independent Bank Corporation (MI)			TCSB Bancorp, Inc. (MI)
Midland States Bancorp, Inc. (IL)			Alpine Bancorporation, Inc. (IL)
MutualFirst Financial, Inc. (IN)			Universal Bancorp (IN)
Horizon Bancorp (IN)			Wolverine Bancorp, Inc. (MI)
First Busey Corporation (IL)			Mid Illinois Bancorp, Inc. (IL)
First Merchants Corporation (IN)			Independent Alliance Banks, Inc. (IN)
First Busey Corporation (IL)			First Community Financial Partners, Inc. (IL)
First Merchants Corporation (IN)			Arlington Bank (OH)

Nationwide Group:

Buyer (State)			Target (State)
First Bancshares, Inc. (MS)			Southwest Georgia Financial Corporation (GA)
Citizens & Northern Corporation (PA)			Covenant Financial Inc. (PA)
Community Bank System, Inc. (NY)			Steuben Trust Corporation (NY)
Professional Holding Corp. (FL)			Marquis Bancorp, Inc. (FL)
OceanFirst Financial Corp. (NJ)			Two River Bancorp (NJ)
Associated Banc-Corp (WI)			First Staunton Bancshares, Inc. (IL)
S&T Bancorp, Inc. (PA)			DNB Financial Corporation (PA)
BancFirst Corporation (OK)			Pegasus Bank (TX)
First Merchants Corporation (IN)			MBT Financial Corp. (MI)
Banner Corporation (WA)			Skagit Bancorp, Inc. (WA)
Seacoast Banking Corporation of Florida (FL)			First Green Bancorp, Inc. (FL)
Stifel Financial Corp. (MO)			Business Bancshares, Inc. (MO)
Allegiance Bancshares, Inc. (TX)			Post Oak Bancshares, Inc. (TX)
RBB Bancorp (CA)			First American International Corp. (NY)

TABLE OF CONTENTS

For each precedent transaction, Magstar compared the implied ratio of deal value to certain financial characteristics of Commerce as follows:

•

the multiple of the deal value to the acquired company’s tangible common book value (the “Price-to-Tangible Common Book Value Multiple”);

•

the multiple of the deal value to the acquired company’s LTM net earnings per share (the “Price-to-LTM Earnings Multiple”); and

•

the multiple of the difference between the deal value and the acquired company’s tangible book value to the acquired company’s core deposits (the “Premium-to-Core Deposits Multiple”).

The results of the analysis are set forth in the table below. Transaction multiples for the merger were based on the deal value assumed by Magstar of $129.9 million for Commerce and were based on December 31, 2019 financial results of Commerce.

Assumed Value for Commerce Based On:	Price-to-Tangible Common Book Value Multiple		Price-to-LTM Earnings Multiple		Premium-to-Core Deposits Multiple
Deal Value		198%		18.0x		16.1%
Precedent Transactions Regional Group:
Median		173%		18.3x		12.7%
Minimum		127%		12.9x		4.1%
Maximum		265%		27.8x		22.6%
Precedent Transactions Nationwide Group:
Median		180%		18.3x		13.1%
Minimum		127%		11.9x		4.1%
Maximum		259%		35.8x		18.8%

Using publicly available information, Magstar compared the financial performance of Commerce with that of the median of the precedent transactions from both the Regional and Nationwide Groups. The performance highlights are based on December 31, 2019 financial results of Commerce.

	Tangible Equity/ Tangible Assets		Core Deposits		LTM ROAA(1)		LTM ROAE(2)		Efficiency Ratio		NPAs/ Assets(3)		ALLL/ NPLs (4)
Commerce		9.23%		65.4%		1.06%		11.85%		52.9%		0.37%		180.4%
Precedent Transactions Regional Group:
Median		9.97%		83.9%		1.01%		10.12%		65.4%		0.52%		144.5%
Precedent Transactions Nationwide Group:
Median		9.27%		83.7%		1.01%		10.75%		61.9%		0.47%		185.0%

(1)

Last twelve months return on average assets.

(2)

Last twelve months return on average equity.

(3)

Non-performing assets as a percent of total assets.

(4)

Allowance for loan and lease losses as a percentage of non-performing loans.

No company or transaction used as a comparison in the above transaction analyses is identical to Commerce, and no transaction was consummated on terms identical to the terms of the merger agreement. Accordingly, an analysis of these results is not strictly mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies. The resulting values of the precedent transactions Regional Group using the median values

TABLE OF CONTENTS

indicated an implied aggregate valuation ranging between $114.0 million and $132.0 million, with a three factor valuation average of $120.7 million compared to the estimated Deal Value of $129.9 million. The resulting values of the precedent transactions Nationwide Group median values indicated an implied aggregate valuation ranging between $118.1 million and $132.2 million, with a three factor valuation average of $122.8 million compared to the $129.9 million estimated deal value assumed by Magstar.

Income Approach — Discounted Cash Flow Analysis. Taking into account various factors including, but not limited to, Commerce’s recent performance, the current banking environment and the local economy in which Commerce operates, Magstar utilized information provided by management of Commerce, net income estimates for Commerce over a forward looking five year period which formed the basis for the discounted cash flow analyses. The resulting projected Commerce net income numbers used for the basis of the discounted cash flow analysis were $8.1 million for 2020, $9.1 million for 2021, $10.1 million for 2022, $11.7 million for 2023, and $12.9 million for 2024. No dividends were assumed to be paid by Commerce over the projection period.

To determine present values of Commerce based on these projections, Magstar utilized three discounted cash flow models, each of which capitalized terminal values using a different methodology: (1) Perpetuity Model (“DCF Present Value of Future Free Cash Flow”); (2) Terminal Price/Earnings Multiple (“DCF Terminal P/E Multiple”); and, (3) Terminal Price/Tangible Book Value Multiple (“DCF Terminal P/TBV Multiple”).

In the DCF Present Value of Future Free Cash Flow analysis, a perpetuity model was used assuming Commerce’s assets increase perpetually at an annual growth rate of 4.0%. The terminal value was then calculated assuming a range of discount rates between 11.0% and 15.0%, with a midpoint of 13.0%. The resulting aggregate values of Commerce’s present value of future free cash flows ranged between $98.7 million and $154.7 million, with a midpoint of $123.8 million.

In the DCF Terminal P/E Multiple analysis, an estimated value of Commerce’s common stock was calculated based on the present value of Commerce’s after-tax net income based on Commerce management’s forward-looking projections over the five year projection period. The projected 2024 net income amount was $12.9 million and served as the basis of the terminal earnings value in the DCF Terminal P/E Multiple model. Magstar utilized a terminal value at the end of 2024 by applying a range of price-to-earnings multiples of 16.3x to 20.3x, with a midpoint of 18.3x, which is based around the median price-to-earnings multiple derived from transactions in the Nationwide Group. The present value of Commerce’s projected dividends, plus the terminal value was then calculated assuming a range of discount rates between 11.0% and 15.0%, with a midpoint of 13.0%. This range of discount rates was chosen to reflect different assumptions regarding the required rates of return of holders or prospective buyers of Commerce’s common stock. The resulting aggregate values of Commerce’s common stock of the DCF Terminal P/E Multiple ranged between $111.9 million and $163.5 million, with a midpoint of $136.0 million.

In the DCF Terminal P/TBV Multiple model analysis, the same earnings estimates and projected net income were used as in the preceding DCF Termination P/E Multiple Analysis model, however, in arriving at the terminal value at the end of 2024, Magstar applied a range of price-to-tangible book value multiples of 1.70x to 1.90x with the midpoint being 1.80x, which is based around the median price-to-tangible book value multiple derived from transactions in the Nationwide Group. The present value of projected dividends, plus the terminal value, was then calculated assuming a range of discount rates between 11.0% and 15.0%, with a midpoint of 13.0%. The resulting aggregate values of Commerce’s common stock of the DCF Terminal P/TBV Multiple ranged between $106.6 million and $139.8 million, with a midpoint of $122.2 million.

TABLE OF CONTENTS

These analyses and their underlying assumptions yielded a range of implied multiple values for Commerce, which are outlined in the table below:

Implied Value for Commerce Based On:

Price-to-Tangible
Book Value Multiple

Price-to-LTM
Earnings Multiple

Premium-to-Core
Deposits Multiple

Deal Value

198%

18.0x

16.1%

DCF Analysis — Perpetuity Model

Midpoint

188%

17.1x

14.6%

DCF Analysis — Terminal P/E Multiple

Midpoint

207%

16.9x

14.2%

DCF Analysis — Terminal P/TBV Multiple

Midpoint

186%

18.8x

17.6%

Magstar noted that while the discounted cash flow present value analysis is a widely used valuation methodology, it relies on numerous assumptions, including asset and earnings growth rates, projected dividend payouts, terminal values and discount rates. Magstar’s analysis does not purport to be indicative of the actual values or expected values of Commerce’s common stock.

Nicolet Comparable Companies Analysis: Magstar used publicly available information to compare selected financial and trading information for Nicolet and a group of 28 publicly-traded financial institutions selected by Magstar which was based on publicly-traded banks in the United States with total assets between $2.0 billion and $5.0 billion, LTM ROAA greater than 1.35%, and traded on a major exchange. The following publicly-traded financial institutions comprised the comparable peer group:

	Atlantic Capital Bancshares, Inc.			Heritage Commerce Corp
	Bank First Corporation			Home Bancorp, Inc.
	Bank of Marin Bancorp			Lakeland Financial Corporation
	Bridgewater Bancshares, Inc.			Macatawa Bank Corporation
	Carolina Financial Corporation			Mercantile Bank Corporation
	CBTX, Inc.			Old Second Bancorp, Inc.
	Civista Bancshares, Inc.			People’s Utah Bancorp
	Community Trust Bancorp, Inc.			Preferred Bank
	Farmers National Banc Corp.			Sierra Bancorp
	First Community Bankshares, Inc.			Silvergate Capital Corporation
	First Defiance Financial Corp.			Southern Missouri Bancorp, Inc.
	First Financial Corporation			Sterling Bancorp, Inc.
	German American Bancorp, Inc.			Stock Yards Bancorp, Inc.
	HBT Financial, Inc.			Summit Financial Group, Inc.

The analysis compared publicly available financial and market trading information for Nicolet and the data for the 28 financial institutions identified above as of and for the most recent twelve-month period which was publicly available. The table below compares the data for Nicolet and the data for the 28 financial institutions identified above, with pricing data as of February 14, 2020.

TABLE OF CONTENTS

	Market Cap ($M)			Price/ Tangible Book Value		Price/ LTM EPS		Price/ 2020E EPS		Dividend Yield		YTD/Price Change		One Year Total Return
Nicolet		$	766		219%		13.1x		15.1x		0.00%		(2.1)%		28.8%
Comparable Companies:
Median		$	513		165%		12.0x		12.5x		2.28%		(5.3)%		6.5%
Minimum		$	306		105%		5.3x		8.2x		0.00%		(11.2)%		(26.1)%
Maximum		$	1,206		255%		17.9x		18.7x		4.46%		8.7%		35.9%

Nicolet fell within the range of pricing metrics of comparable companies. No company used as a comparison in the above analyses is identical to Nicolet. Accordingly, an analysis of these results is not strictly mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies.

Commerce Comparable Companies Analysis: Magstar compared selected financial information and the merger consideration of Commerce to selected publicly available financial and trading information for a group of 10 publicly-traded financial institutions selected by Magstar which was based on publicly-traded banks in the Southwest United States with total assets between $500 million and $2.0 billion, LTM ROAA between 0.5% and 2.0%, NPAs of less than 1.0% of assets, and traded on a major exchange:

	Ames National Corporation			LCNB Corp.
	BankFinancial Corporation			Level One Bancorp, Inc.
	Central Federal Corporation			Limestone Bancorp, Inc.
	First Capital, Inc.			SB Financial Group, Inc.
	Landmark Bancorp, Inc.			United Bancshares, Inc.

The analysis compared the financial information for Commerce to the selected publicly available financial information for the 10 financial institutions identified above as of and for the most recent twelve-month period which was publicly available in addition to analyzing the market trading information for the 10 financial institutions. The table below shows the estimated deal value and implied multiples for Commerce and the market trading data and implied multiples for the 10 financial institutions identified above, with pricing data as of February 14, 2020.

	Market Cap ($M)			Price/ Tangible Book Value		Price/ LTM EPS		Price/ 2020E EPS		Dividend Yield		YTD/Price Change		One Year Total Return
Deal Value		$	130		198%		18.0x		NA		NA		NA		NA
Comparable Companies:
Median		$	172		131%		12.0x		NA		2.15%		(3.1)%		10.2%
Minimum		$	76		100%		7.2x		NA		0.00%		(12.6)%		(16.7)%
Maximum		$	250		255%		22.0x		NA		4.27%		7.3%		28.9%

The estimated deal value to Commerce fell within the range of pricing metrics of comparable companies. No company used as a comparison in the above analyses is identical to Commerce. Accordingly, an analysis of these results is not strictly mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies.

Contribution Analysis: Magstar analyzed the relative standalone contribution of Nicolet and Commerce to various pro forma balance sheet and income statement items of the combined entity. This analysis did not include purchase accounting adjustments or synergies. To perform this analysis, Magstar used (i) historical balance sheet data for Nicolet and Commerce as of December 31, 2019, (ii) estimates of net income for 2020 and 2021 for Nicolet based on S&P CapIQ mean consensus estimates, and (iii) estimates of net income for 2020 and 2021 for Commerce provided by Commerce management. The results of Magstar’s

TABLE OF CONTENTS

analysis are set forth in the following table, which also compares the results of Magstar’s analysis with the implied pro forma ownership percentages of Nicolet shareholders and Commerce stockholders in the combined company based on the 1.15x exchange ratio in the proposed merger:

	Commerce as a % of Total		Nicolet as a % of Total
Pro Forma Common Stock Ownership		14.3%		85.7%
Financial Characteristics:
Total Assets		16.6%		83.4%
Net Loans & Leases		18.8%		81.2%
Core Deposits		12.1%		87.9%
Tangible Equity		16.2%		83.8%
LTM Net Income		11.6%		88.4%
Est. 2020 Net Income		13.5%		86.5%
Est. 2021 Net Income		14.8%		85.2%

Accretion / Dilution Analysis: Magstar performed pro forma merger analyses that combined projected income statement and balance sheet information of Commerce and Nicolet. 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 Nicolet. In the course of this analysis, Magstar used the median S&P CapIQ mean consensus estimates for earnings estimates for Nicolet for the years ending December 31, 2020 and December 31, 2021 and used earnings estimates provided by Commerce management for Commerce for the years ending December 31, 2020 and December 31, 2021. This analysis indicated that the merger is expected to be accretive to Nicolet’s consensus estimated earnings per share in 2021. The analysis also indicated that the merger is expected to be dilutive to tangible book value per share for Nicolet in 2020 and that Nicolet would maintain capital ratios in excess of those required for Nicolet to be considered well-capitalized under existing regulations. For all of the above analyses, the actual results achieved by Commerce and Nicolet prior to and following the merger will vary from the projected results, and the variations may be material.

Other Factors and Analyses. Magstar took into consideration various other factors and analyses, including but not limited to: current market environment; merger and acquisition environment; movements in the common stock valuations of selected publicly-traded banking companies; and movements in the S&P 500 Index.

Conclusion. Based upon the foregoing analyses and other investigations and assumptions set forth in its opinion, without giving specific weightings to any one factor, analysis or comparison, Magstar determined that, as of the date of its opinion, subject to the review, assumptions and limitations set forth in the opinion, the merger consideration to be paid pursuant to the merger agreement in connection with the merger is fair from a financial point of view to Commerce’s shareholders. Each shareholder is encouraged to read Magstar’s fairness opinion in its entirety. The full text of this fairness opinion is included as Appendix B.

Prospective Financial Information of Commerce

Commerce does not as a matter of course make public projections as to future sales, earnings, or other results. However, the management of Commerce has prepared the prospective financial information set forth in this proxy statement-prospectus to present certain unaudited prospective financial information regarding Commerce’s future operations for the years ending December 31, 2020 and December 31, 2021 (which we refer to in this proxy statement-prospectus as the “Commerce projections”). The accompanying prospective financial information was not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of the Commerce’s management, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management’s knowledge and belief, the expected course of action and the expected future financial performance of Commerce. However, this information is not fact and should not be relied upon as being

TABLE OF CONTENTS

necessarily indicative of actual future results, and readers of this proxy statement-prospectus are cautioned not to place undue reliance on the prospective financial information.

Neither Commerce’s independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.

The Commerce projections, which were prepared by management of Commerce, were prepared solely for internal use and are subjective in many respects. The Commerce projections reflect numerous estimates and assumptions made with respect to business, economic, market, competition, regulatory and financial conditions and matters specific to the business of Commerce, all of which are difficult to predict and many of which are beyond the control of Commerce. The Commerce projections reflect assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. Commerce can give no assurance that the Commerce projections and the underlying estimates and assumptions will be realized. In addition, because the Commerce projections cover multiple years, the information by its nature becomes less predictive with each successive year. Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the Commerce projections not to be realized include, but are not limited to, risks and uncertainties relating to the business of Commerce, industry performance, general business and economic conditions, customer requirements, competition and adverse changes in applicable laws, regulations or policies. Other factors that could cause actual results to differ are further described in the sections of this proxy statement-prospectus entitled “Risk Factors” and “A Warning About Forward-Looking Statements,” beginning on page 14 and page 19, respectively.

Furthermore, the Commerce projections do not take into account any circumstances or events occurring after the date they were prepared. Commerce can give no assurance that, had the Commerce projections been prepared as of the date of this proxy statement-prospectus, similar estimates and assumptions would be used. Neither Nicolet nor Commerce intend to, and each disclaims any obligation to, make publicly available any update or other revision to the Commerce projections to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in general economic or industry conditions. The Commerce projections do not give effect to the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with consummating the merger, the effect of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect on Commerce of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the Commerce projections do not take into account the effect of any possible failure of the merger to occur. None of Commerce, Nicolet or their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any shareholder of Commerce or Nicolet, or any other person, regarding Nicolet’s actual performance compared to the information contained in the Commerce projections or that projected results will be achieved.

In light of the foregoing, and considering that the Commerce special meeting will be held several months after the Commerce projections were prepared, as well as the uncertainties inherent in any forecasted information, shareholders of Commerce are cautioned not to place unwarranted reliance on such information in connection with their consideration of the merger.

As reflected in the Opinion of Commerce’s Financial Advisor, Commerce projected net income of approximately $8 million for 2020, and approximately $9 million for 2021. These projections were prepared prior to the onset of the coronavirus pandemic.

Interests of Certain Persons in the Merger

General

The directors and executive officers of Commerce have interests in the transaction in addition to their interests generally as shareholders of Commerce. These interests are described below. The board of directors

TABLE OF CONTENTS

of each of Nicolet and Commerce was aware of these interests and considered them, in addition to other matters, in approving the merger agreement.

Appointment to the Boards of Directors of Nicolet and Nicolet National Bank. The merger agreement provides that one current member of the Commerce board will be appointed to the boards of Nicolet and Nicolet National Bank, such member is expected to be Joseph Fazio III. Nicolet directors may participate in a director plan, pursuant to which participating directors may defer up to 100% of their board compensation towards the purchase of Nicolet common stock on a quarterly basis to be held in a trust and distributed when each participating director ends his or her service. Although directors are entitled to a separate fee for meetings of each of the boards of Nicolet and Nicolet National Bank, the boards typically meet jointly, and the directors are entitled to only one fee for such joint meetings.

Employment Agreements. Commerce has entered into separate employment agreements with each of the following Commerce officers: Joseph Fazio III, David Borchardt, Thomas Hopp and Kevin Volm (the “Employment Agreements”). Each Employment Agreement provides for severance benefits in the form of base salary continuation for twenty-four months, plus the bonus to which the officer would have been entitled to receive for the bonus period in which the termination of employment occurred, and twenty-four months of continuation of coverage under benefit plans (or a cash payment equal to the cost of obtaining such health, life, disability and other benefits) in the event such officer’s employment is terminated without “cause” or the officer resigns for “good reason” within two years following the occurrence of a “change in control.” The Employment Agreements limit these payments to the extent necessary so that no portion of the payments constitutes an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code; provided, however, no reduction would be made if the net after-tax payment to an officer (taking into account all taxes) without a reduction is greater than the net after-tax payment to an officer (taking into account all taxes) with the reduction. Each officer also agreed not to compete and not to solicit customers for two years following termination of employment.

Supplemental Executive Retirement Plans. Commerce has entered into a separate Supplemental Executive Retirement Benefits Agreement with each of the following Commerce officers: Joseph Fazio III, David Borchardt, Thomas Hopp and Kevin Volm (the “SERP Agreements”). Pursuant to the SERP Agreements, the merger would trigger a “change in control,” which would result in a lump sum payment of the present value of the vested portion of the SERP account balance.

Split-Dollar Agreements. Commerce has entered into a separate split-dollar life insurance agreement with each of the following Commerce officers: Joseph Fazio III, David Borchardt, Thomas Hopp and Kevin Volm (the “Split Dollar Agreements”). The Split Dollar Agreements provide for certain death benefits payable to an officer’s designated beneficiary following death of the officer. However, such Split Dollar Agreements terminate in full (without any payment due to the office or executive) upon termination of the officer’s employment with Commerce or surrender or termination of the life insurance policy by Commerce (in which case the officer has the opportunity to purchase the policy).

The following chart shows the potential contractual payments to Commerce’s executive officers pursuant to such Employment Agreements in the event of their severance of employment following consummation of the merger.

Executive Officer	Severance Payment
Joseph Fazio III		$	898,409
David Borchardt		$	847,799
Thomas Hopp		$	858,703
Kevin Volm		$	580,109

Potential Employment or Consultation with Nicolet. Nicolet has had preliminary discussions with certain Commerce executive officers about the possibility of the executives continuing employment with Nicolet, including preliminary discussions regarding base salary and other terms of potential employment agreements or providing consulting services pursuant to a consulting agreement. In recognition of the potential contractual obligations discussed above in the event of severance of employment following

TABLE OF CONTENTS

consummation of the merger, any employment agreement for continued employment or consulting agreement for consulting services may include a signing bonus to offset all or some of the lost severance payment. The merger agreement does not impose any requirement on Nicolet regarding retention or compensation of the Commerce executive officers. At this time, it is expected that certain of Commerce’s executive officers may enter into employment or consulting agreements with Nicolet between the date of this proxy statement-prospectus and the closing of the merger. The terms of these potential employment or consulting agreements have not been finalized.

Payments in Respect of Commerce Stock Options. Commerce has granted certain of its executive officers stock options under the Commerce 2005 Stock Incentive Compensation Plan. The merger agreement provides that, immediately prior to the effective time of the merger, each Commerce Stock Option (whether vested or not) shall be cancelled in exchange for cash in an amount equal to the product of (i) the number of shares of Commerce common stock subject to such Commerce Stock Option and (ii) the excess of the product of (x) the Nicolet Common Stock Price and (y) the exchange ratio over the exercise price per share of the Commerce common stock subject to such Commerce Stock Option. The following chart shows the potential cash payments to Commerce’s executive officers pursuant to outstanding stock option awards (assuming, in each case, that the amount calculated as the product of (x) and (y) in the immediately foregoing sentence is $[•]).

Executive Officer	Payment
Joseph Fazio III		$	[•]
David Borchardt		$	[•]
Thomas Hopp		$	[•]
Kevin Volm		$	[•]

Indemnification and Insurance. The merger agreement provides that certain indemnification and insurance arrangements for Commerce’s current officers and directors will be continued for six years after the completion of the transactions. For a summary of the indemnification provisions, see the section entitled “The Merger Agreement — Indemnification and Insurance.”

Trading Market for Nicolet Stock

The shares of Nicolet common stock issued pursuant to the merger will be registered under the Securities Act of 1933, as amended, and will be freely transferable under applicable securities laws, except to the extent of any limitations or restrictions applicable to any shares received by any shareholder who may be deemed an affiliate of Nicolet following completion of the merger. See “Resale of Nicolet Common Stock” at page 44.

Nicolet’s common stock is currently traded on the Nasdaq Capital Market, and the merger agreement requires that the shares issued in the merger also be eligible for trading on the Nasdaq Capital Market. The trading volume of Nicolet’s common stock is less than that of other larger financial services companies, and there is no guarantee that a liquid market for shares of Nicolet common stock will exist in the future.

Nicolet Dividends

The holders of Nicolet common stock receive dividends if and when declared by the Nicolet board of directors out of legally available funds. Nicolet’s board of directors has not declared a dividend since its inception in 2000. The board currently anticipates that all earnings, if any, will be used for working capital, to support Nicolet’s operations and to finance the growth and development of its business, including the merger and integration of Commerce. Any future determination relating to dividend policy will be made at the discretion of Nicolet’s board of directors and will depend on a number of factors, including the company’s future earnings, capital requirements, financial condition, future prospects, regulatory restrictions, stock repurchase strategy and other factors that the board of directors may deem relevant.

Potential Adjustment to Exchange Ratio

TABLE OF CONTENTS

Nasdaq Capital Market over the twenty trading day period immediately preceding the second trading day prior to the closing date) is (a) greater than $82.00, in which case the exchange ratio would become floating at the quotient of $94.30 divided by the Nicolet Common Stock Price, or (b) less than $62.00, in which case the exchange ratio would become floating at the quotient of $71.30 divided by the Nicolet Common Stock Price.

If the Nicolet Common Stock Price is below $62.00 per share, in lieu of adjusting the exchange ratio, Nicolet may (a) elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $71.30 per share of Commerce Common Stock, (b) leave the exchange ratio unchanged (which would give Commerce the right to terminate the merger agreement), or (c) terminate the merger agreement. As of the date of this proxy statement-prospectus, if the Nicolet Common Stock Price is below $62.00 Nicolet does not intend to adjust the exchange ratio, does not intend to add cash consideration, and does intend to terminate the merger agreement. If the Nicolet Common Stock Price is below $62.00 per share, and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time.

Based on 10,587,738 shares of Nicolet common stock outstanding at December 31, 2019, and an exchange ratio of 1.15 on Commerce common stock outstanding, the number of shares of Nicolet common stock to be issued in the merger would equal approximately [17]% of Nicolet’s outstanding shares of common stock following the merger.

Surrender and Exchange of Commerce Stock Certificates

At the effective time of the merger, Commerce shareholders will automatically become entitled to all of the rights and privileges afforded to Nicolet shareholders as of that time. However, the actual physical exchange of Commerce common stock certificates representing shares of Nicolet common stock will occur after the merger. If you hold your shares in “street name” or “book-entry form” through a broker, the broker will provide separate instructions for surrendering and exchanging your shares.

If the merger is completed, Nicolet or Nicolet’s exchange agent will send or cause to be sent to each of Commerce’s shareholders a letter of transmittal and other customary transmittal materials providing written instructions for exchanging Commerce common stock certificates for the merger consideration in accordance with the merger agreement. Each Commerce stock certificate outstanding immediately prior to the effective time of the merger will be deemed for all purposes to evidence the right to receive the merger consideration to which such holder is entitled, regardless of when they are actually exchanged.

Nicolet will delay paying former shareholders of Commerce who become holders of Nicolet common stock pursuant to the merger any dividends or other distributions that may become payable to holders of record of Nicolet common stock following the effective time of the merger until they have surrendered their certificates evidencing their Commerce common stock, at which time Nicolet will pay any such dividends or other distributions without interest.

You should not send in your Commerce stock certificate(s) until you have received the letter of transmittal and further written instructions after the effective date of the merger. Please do NOT send in your stock certificates with your proxy card.

Assuming the merger has been consummated, after the exchange agent receives your Commerce certificate(s), together with a properly completed letter of transmittal, it will deliver to you the merger consideration to which you are entitled, consisting of Nicolet common stock (in certificated or book entry form, together with any withheld dividends or other distributions, but without interest thereon) and any cash due (whether as a result of exercising dissenters’ rights, cash in lieu of fractional shares or otherwise),

TABLE OF CONTENTS

without interest. Within five business days after consummation of the merger, the exchange agent will send a transmittal letter to all Commerce shareholders who did not previously tender their shares.

Shareholders who cannot locate their stock certificates are urged to contact Commerce’s transfer agent promptly:

[ ]

[Address]

Telephone Toll Free: [ ]

Telephone Local: [ ]

Commerce will issue a new stock certificate (or provide book entry) to replace the lost certificate(s) only if the shareholder of Commerce signs an affidavit certifying that his, her or its certificate(s) cannot be located and containing an agreement to indemnify Commerce and Nicolet against any claim that may be made against Commerce or Nicolet by the owner of the certificate(s) alleged to have been lost or destroyed. Commerce or Nicolet may also require the shareholder to post a bond in an amount sufficient to support the shareholder’s agreement to indemnify Commerce and Nicolet.

Resale of Nicolet Common Stock

The shares of Nicolet common stock to be issued in the merger will be registered under the Securities Act. Commerce shareholders who are not affiliates of Nicolet may generally freely trade their Nicolet common stock upon completion of the merger. The term “affiliate” generally means each person who is an executive officer, director or 10% shareholder of Nicolet after the merger.

Those shareholders who are deemed to be affiliates of Nicolet may only sell their Nicolet common stock as provided by Rule 144 under the Securities Act or as otherwise permitted under the Securities Act. Rule 144 requires the availability of current public information about the issuer, a holding period for shares issued without registration with the SEC, volume limitations and other restrictions on the manner of sale of the shares.

Regulatory and Other Required Approvals

Federal Reserve

The Federal Reserve must approve the merger before it can be completed or waive the application. Nicolet filed an application for approval of the merger with the Federal Reserve April 10, 2020. In reviewing the application, the Federal Reserve is required to consider the following:

•

competitive factors, such as whether the merger will result in a monopoly or whether the benefits of the merger to the public in meeting the needs and convenience of the community clearly outweigh the merger’s anticompetitive effects or restraints on trade; and

•

banking and community factors, which includes an evaluation of:

•

the financial and managerial resources of Nicolet, including its subsidiaries, and of Commerce, and the effect of the proposed transaction on these resources;

•

management expertise;

•

internal control and risk management systems;

•

the capital of Nicolet;

•

the convenience and needs of the communities to be served; and

•

the effectiveness of Nicolet and Commerce in combating money laundering activities.

The application process includes publication and opportunity for comment by the public. The Federal Reserve may receive, and must consider, properly filed comments and protests from community groups and

TABLE OF CONTENTS

others regarding (among other issues) each institution’s performance under the Community Reinvestment Act of 1977, as amended (the “CRA”). The Federal Reserve is also required to ensure that the proposed transaction would not violate Wisconsin law regarding the number of years a bank must be in operation before it can be acquired, deposit concentration limits, Wisconsin community reinvestment laws and any Wisconsin antitrust statutes.

OCC

The merger of Commerce State Bank with and into Nicolet National Bank requires the approval of the OCC. Nicolet filed an Interagency Bank Merger Application for approval of the bank merger with the OCC received approval from the OCC on April 8, 2020. In evaluating the bank merger, the OCC must consider, among other factors, the financial and managerial resources and future prospects of the institutions and the convenience and needs of the communities to be served. The relevant statutes prohibit the OCC from approving the bank merger if:

•

it would result in a monopoly or be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any part of the United States; or

•

its effect in any section of the country could be to substantially lessen competition or to tend to create a monopoly, or if it would result in a restraint of trade in any other manner.

However, if the OCC should find that any anticompetitive effects are outweighed clearly by the public interest and the probable effect of the transaction in meeting the convenience and needs of the communities to be served, it may approve the bank merger. The bank merger may not be consummated until the 30th day (which the OCC may reduce to 15 days) following the later of the date of OCC approval, during which time the U.S. Department of Justice would be afforded the opportunity to challenge the transaction on antitrust grounds. The commencement of any antitrust action would stay the effectiveness of the approval of the agencies, unless a court of competent jurisdiction should specifically order otherwise.

WDFI

In addition to the required approvals of the Federal Reserve and OCC discussed above, the merger also requires the approval of the WDFI. Nicolet filed an application with the WDFI and received approval from the WDFI on April 30, 2020. In evaluating the application, the WDFI must consider various aspects of the proposed transaction and the parties thereto, including, among others, the financial and managerial resources and future prospects of the institutions involved, the best interests of their shareholders and customers, safety and soundness considerations, and the CRA compliance status of each bank. The relevant statutes prohibit the WDFI from approving the transaction if, following consummation, the combined institution would control more than 30 percent of the deposits in the state.

In connection with or as a result of the merger, Nicolet or Commerce may be required, pursuant to other laws and regulations, either to notify or obtain the consent of other regulatory authorities and organizations to which such companies or subsidiaries of either or both of them may be subject. The Nicolet common stock to be issued in exchange for Commerce common stock in the merger has been registered with the SEC and will be issued pursuant to available exemptions from registration under state securities laws.

Status and Effect of Approvals

The OCC approved the transaction on April 8, 2020. All other regulatory applications and notices required to be filed prior to the merger are in process. Nicolet and Commerce contemplate that they will complete the merger on [•], assuming the receipt of all required regulatory approvals, approval by Commerce shareholders, and the satisfaction or waiver of all other closing conditions.

Nicolet and Commerce believe that the proposed merger is compatible with the regulatory requirements described in the preceding paragraphs; however, we cannot assure you that we will be able to comply with any required conditions or that compliance or noncompliance with any such conditions would not have adverse consequences for the combined company after the merger.

While Nicolet and Commerce believe that the requisite regulatory approvals for the merger will be obtained, we can give you no assurance regarding the timing of the approvals, our ability to obtain the

TABLE OF CONTENTS

approvals on satisfactory terms or the absence of litigation challenging those approvals or otherwise. Similarly, we cannot assure you that any state attorney general or other regulatory authority will not attempt to challenge the merger on antitrust grounds or for other reasons, or, if such a challenge is made, project the result thereof. The merger is conditioned upon the receipt of all consents, approvals and actions of governmental authorities and the filing of all other notices with such authorities in respect of the merger.

We are not aware of any regulatory approvals that would be required for completion of the transactions contemplated by the merger agreement other than as described above. Should any other approvals be required, those approvals would be sought, but we cannot assure you that they will be obtained.

Status of Intentions to Consummate the Merger

Under the terms of the merger agreement, in the event the Nicolet Common Stock Price (defined in the merger agreement to equal the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the twenty trading day period ending on the second trading day prior to the closing date) is below $62.00 per share at the time of closing, Nicolet has the contractual right to elect to terminate the merger agreement. In the weeks prior to the date of this proxy statement-prospectus, the Nicolet Common Stock Price has been below $62.00. The most recent closing price of Nicolet’s common stock as of the date immediately preceding this proxy statement-prospectus was $[•].

In the event that the Nicolet Common Stock Price rises to at least $62.00 per share, and all other conditions to closing are satisfied, Nicolet intends to consummate the merger with Commerce as of the intended legal closing date agreed to between the parties, set to be [•].

In the event that the Nicolet Common Stock Price remains below $62.00 per share, or any other condition to closing is not satisfied, as of the intended legal closing date agreed to between the parties, Nicolet intends to exercise its contractual right to terminate the merger agreement. If the Nicolet Common Stock Price is below $62.00 per share, and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time. Since March of 2020, Nicolet’s and Commerce’s senior executives have had multiple communications discussing each party’s position with regard to the status of the merger and the parties’ intentions.

Accounting Treatment of the Merger

Nicolet is required to account for the merger as a purchase transaction for accounting and financial reporting purposes under GAAP. Under purchase accounting, the assets (including any identifiable intangible assets) and liabilities (including executory contracts and other commitments) of Commerce at the effective time of the merger will be recorded at their respective fair values and added to those of Nicolet. Any excess of purchase price over the fair values is recorded as goodwill. Any excess of the fair values over the purchase price is recorded in earnings as a bargain purchase gain. Consolidated financial statements of Nicolet issued after the merger would reflect those fair values and would not be restated retroactively to reflect the historical consolidated financial position or results of operations of Commerce.

TABLE OF CONTENTS

THE MERGER AGREEMENT

This section of the proxy statement-prospectus describes certain terms of the merger agreement. It is not intended to include every term of the merger, but rather addresses only the significant aspects of the merger. This discussion is qualified in its entirety by reference to the merger agreement, which is attached as Appendix A to this proxy statement-prospectus and is incorporated herein by reference.

General; Business and Operations after the Merger

If the shareholders of Commerce approve the merger agreement and the other conditions to the consummation of the merger are satisfied, Commerce will merge with and into Nicolet. Following the consummation of the merger, Commerce State Bank will merge with and into Nicolet National Bank with Nicolet National Bank surviving the merger. Commerce Financial Holdings, Inc. and Commerce State Bank will cease to exist after the merger, and the business of Commerce State Bank will be conducted through Nicolet National Bank.

What Commerce’s Shareholders Will Receive in the Merger

If the merger is completed, Commerce shareholders will receive 1.15 shares of Nicolet common stock for each share of Commerce common stock.

The exchange ratio may fluctuate in the event that the Nicolet Common Stock Price (defined in the merger agreement to equal the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the twenty trading day period ending on the second trading day prior to the closing date), is (a) greater than $82.00, in which case the exchange ratio would become floating at the quotient of $94.30 divided by the Nicolet Common Stock Price, or (b) less than $62.00, in which case the exchange ratio would become floating at the quotient of $71.30 divided by the Nicolet Common Stock Price. In the event that the Nicolet Common Stock Price is below $62.00 per share, in lieu of adjusting the exchange ratio, Nicolet may (a) elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $71.30 per share of Commerce Common Stock, (b) leave the exchange ratio unchanged (which would give Commerce the right to terminate the merger agreement), or (c) terminate the merger agreement. As of the date of this proxy statement-prospectus, if the Nicolet Common Stock Price is below $62.00, Nicolet does not intend to adjust the exchange ratio, does not intend to add cash consideration, and does intend to terminate the merger agreement. If the Nicolet Common Stock Price is below $62.00 per share, and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time.

No payment will be made with respect to shares of Commerce common stock held in the treasury of Commerce; shares held directly or indirectly by Nicolet (other than in a fiduciary capacity or in connection with debts previously contracted); shares underlying Commerce Stock Options; and dissenting shares. Upon consummation of the merger, all such shares, referred to herein as the “cancelled shares,” will be canceled and extinguished.

No fractional shares of Nicolet common stock will be issued in connection with the merger. Instead, Nicolet will make a cash payment without interest to each shareholder of Commerce who would otherwise receive a fractional share. The amount of such cash payment will be determined by multiplying the fraction of a share of Nicolet common stock otherwise issuable to such shareholder by the Nicolet Common Stock Price.

Potential Adjustment of Exchange Ratio

TABLE OF CONTENTS

Nasdaq Capital Market over the twenty (20) trading day period immediately preceding the second (2nd) trading day prior to the closing date) is (a) greater than $82.00, in which case the exchange ratio would become floating at the quotient of $94.30 divided by the Nicolet Common Stock Price, or (b) less than $62.00, in which case the exchange ratio would become floating at the quotient of $71.30 divided by the Nicolet Common Stock Price. If the Nicolet Common Stock Price is below $62.00 per share, in lieu of adjusting the exchange ratio, Nicolet may (a) elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $71.30 per share of Commerce Common Stock, (b) leave the exchange ratio unchanged (which would give Commerce the right to terminate the merger agreement), or (c) terminate the merger agreement. As of the date of this proxy statement-prospectus, if the Nicolet Common Stock Price is below $62.00, Nicolet does not intend to adjust the exchange ratio, does not intend to add cash consideration, and does intend to terminate the merger agreement. If the Nicolet Common Stock Price is below $62.00 per share, and Nicolet does not exercise its right to terminate and does not elect to increase the exchange ratio or add cash consideration, Commerce’s board of directors will have the right and authority to elect whether to terminate or proceed based on its assessment of all information available at the time. Additionally, under no circumstances shall the number of shares of Nicolet common stock to be issued in the merger equal or exceed 19.9% of the number of outstanding shares of Nicolet common stock such that Nasdaq rules would require approval of the merger by Nicolet’s shareholders. The parties agree to reduce the number of shares of Nicolet common stock to be issued and to increase the cash to be issued pro rata to avoid such a shareholder vote.

Dissenters’ Rights

Holders of shares of Commerce common stock who properly elect to exercise the dissenters’ rights provided for in Subchapter XIII of the WBCL will not have their shares converted into the right to receive merger consideration. If a holder’s dissenters’ rights are lost or withdrawn, such holder will receive his, hers or its pro rata portion of the merger consideration. See “Dissenters’ Rights” on page 8 and Appendix C for additional information.

Effect of the Merger on Commerce Stock Options

As of January 31, 2020, there were 57,132 shares of Commerce common stock underlying Commerce Stock Options. Pursuant to the merger agreement, each Commerce Stock Option outstanding immediately prior to the effective date (whether vested or not) shall be cancelled in exchange for a cash payment (without interest and less applicable withholding Taxes) equal to the product of (i) the number of shares of Commerce common stock subject to such Commerce Stock Option immediately prior to the effective time of the merger and (ii) the excess, if any, of the product of (x) the Nicolet Common Stock Price and (y) the exchange ratio, subject to any adjustment, over the exercise price per share of Commerce common stock subject to such Commerce Stock Option immediately prior to the effective time of the merger.

Effect of the Merger on Commerce Shares held in the Commerce State Bank 401(k) & Profit Sharing Plan

At the closing of the proposed merger, each share of Commerce common stock held in the Commerce State Bank 401(k) & Profit Sharing Plan will be converted into the right to receive a cash payment equal to the product of the exchange ratio and the Nicolet Common Stock Price. One of the conditions of the transaction is the termination of the Commerce State Bank 401(k) and Profit Sharing Plan (the “Plan”). The Plan provides that any distributions, including upon termination, are paid in cash. Accordingly, to avoid requiring the Plan to sell Nicolet shares of common stock in connection with the liquidation of the Plan, the parties agreed to convert the Commerce shares held in the Plan to cash in the merger. As of March 20, 2020, 12,515 shares of Commerce common stock were held in the Plan.

TABLE OF CONTENTS

Closing and Effective Time of the Merger

The merger will be completed only if all of the following occur:

•

the merger agreement is approved by a majority of Commerce’s shareholders;

•

all required regulatory consents and approvals are obtained;

•

the Nicolet Common Stock Price is at least $62.00 or, if less than $62.00, neither Commerce nor Nicolet exercise their respective rights to terminate; and

•

all other conditions to the merger discussed in this proxy statement-prospectus and the merger agreement are either satisfied or waived.

If all of these conditions are met, the closing of the merger is expected to occur on [•].

Representations and Warranties in the Merger Agreement

Commerce and Nicolet have made customary representations and warranties to each other as part of the merger agreement. Commerce’s representations and warranties are contained in Article 3 of the merger agreement and relate to, among other things:

•

its organization and authority to enter into the merger agreement;

•

its capitalization, subsidiaries, properties and financial statements;

•

pending and threatened litigation against Commerce and its subsidiaries;

•

Commerce State Bank’s loan portfolio and allowance for loan losses;

•

its insurance, employee benefits, tax and environmental matters;

•

its legal and regulatory compliance;

•

its contractual obligations and contingent liabilities; and

•

its financial statements and regulatory filings.

Nicolet’s representations and warranties are contained in Article 4 of the merger agreement and relate to, among other things:

•

its organization and authority to enter into the merger agreement;

•

its capitalization, subsidiaries, financial statements and public filings with the SEC;

•

pending and threatened litigation against Nicolet and its subsidiaries;

•

Nicolet National Bank’s loan portfolio and allowance for loan losses;

•

its employee benefits, tax and environmental matters;

•

legal and regulatory compliance; and

•

the shares of Nicolet common stock to be issued in the merger.

Each party’s representations and warranties are for the benefit of the other; they are not for the benefit of and may not be relied upon by shareholders. The representations and warranties of the parties will not survive the closing of the merger.

Conditions to the Merger

The merger agreement contains a number of conditions that must be satisfied or waived (if they are waivable) to complete the merger. The conditions include, among other things:

•

the representations and warranties made by each party in the merger must be accurate as of the closing date of the merger;

•

each party must have performed or complied in all material respects with all covenants and obligations as established in the merger agreement;

TABLE OF CONTENTS

•

approval by Commerce’s shareholders of the merger agreement by the required vote;

•

an absence of any commenced or pending legal proceeding that challenges any of the contemplated transactions or that may have the effect of preventing, delaying or making illegal or otherwise interfering with any of the contemplated transactions;

•

approval of the merger and the transactions contemplated thereby by the Federal Reserve, OCC and WDFI without imposing any restrictions that would have a “material adverse effect,” as defined in the merger agreement, on either Nicolet or Commerce;

•

the registration statement has become effective under the Securities Act;

•

the absence of a stop order suspending the effectiveness of Nicolet’s registration statement under the Securities Act with respect to the shares of Nicolet common stock to be issued to the Commerce shareholders;

•

both parties shall have received a certificate signed by an executive on behalf of the other party certifying that such party’s representations and warranties are accurate and that all covenants and obligations have been performed;

•

receipt by Commerce and Nicolet of a tax opinion from Bryan Cave Leighton Paisner LLP that the merger qualifies as a tax-free reorganization under the Internal Revenue Code;

•

Nicolet shall have filed with the Nasdaq Stock Market, LLC a notification form for the listing of all shares of Nicolet common stock to be delivered in the merger, and the Nasdaq Stock Market, LLC shall not have objected to the listing of such shares of Nicolet common stock;

•

as of the Closing Date, Commerce shall have Tangible Common Equity (as defined in the merger agreement) of no less than $66.5 million (Commerce’s tangible common equity was $[•] million as of December 31, 2019);

•

the absence of any material adverse change in the financial condition, results of operations, business or prospects of either Commerce or Nicolet;

•

each party shall have obtained the written consents, permissions and approvals as required under any agreements, contracts, appointments, indentures, plans, trusts or other arrangements with third parties;

•

the absence of an order, decree or injunction enjoining or prohibiting completion of the merger; and

•

receipt by Nicolet of documentation from Commerce evidencing the cancellation of Commerce Stock Options.

The conditions to the merger are set forth in Articles 8 and 9 of the merger agreement.

In addition to the contractual conditions to close the transaction, the merger agreement also provides a variety of means for the merger agreement to be terminated prior to closing. If the merger agreement is terminated prior to closing, the merger will not be completed. For a discussion of the intent of the parties to consummate the merger in the current environment, see “Status of Intentions to Consummate the Merger” at page 46.

The parties intend to complete the merger on [•]; however, we cannot assure you that all conditions will be satisfied or waived.

Waiver and Amendment

Nearly all of the conditions to completing the merger may be waived at any time by the party for whose benefit they were created; however, the merger agreement provides that the parties may not waive any condition that would result in the violation of any law or regulation. Also, the parties may amend or supplement the merger agreement at any time by written agreement. Any material change in the terms of the merger agreement after the Commerce special shareholders’ meeting may require a re-solicitation of votes from Commerce’s shareholders with respect to the amended merger agreement.

TABLE OF CONTENTS

Business of Commerce Pending the Merger

The merger agreement requires Commerce to continue to operate its business as usual and to preserve its business organization, rights and franchises pending the merger and to refrain from taking any action that would materially adversely affect the receipt of required regulatory or other consents or materially adversely affect either party’s ability to perform its covenants and agreements under the merger agreement.

Among other things, and subject to certain specified exceptions, Commerce may not, without Nicolet’s consent, take or agree to take any of the following actions:

•

conduct its business in any manner other than in the ordinary course of business in all material respects;

•

take any action or make any decision in contravention of commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships;

•

take any action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of Commerce or Nicolet to obtain any of the required regulatory approvals, to provide Commerce’s covenants and agreements under the merger agreement, or to consummate the contemplated merger;

•

other than pursuant to the terms of any contract to which Commerce is a party that is outstanding on the date of the merger agreement: (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of Commerce capital stock or any security convertible into Commerce capital stock; (ii) permit any additional shares of Commerce capital stock to become subject to new grants; or (iii) grant any registration rights with respect to shares of Commerce capital stock;

•

make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of Commerce capital stock (other than dividends from its wholly owned subsidiary to it or another of its wholly owned subsidiaries);

•

directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of Commerce capital stock (other than repurchases of shares of Commerce common stock in the ordinary course of business to satisfy obligations under Commerce benefit plans);

•

amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into: (i) any contract that is material to Commerce’s operations; (ii) any material restriction on the ability of Commerce or its subsidiaries to conduct its business as it is presently being conducted; or (iii) any contract or other binding obligation relating to any class of Commerce capital stock or rights associated therewith or any outstanding instrument of indebtedness;

•

enter into loan transactions not in accordance with, or consistent with, past practices of Commerce State Bank or that are on terms and conditions that, to the knowledge of Commerce, are materially more favorable than those available to the borrower from competitive sources in arm’s-length transactions;

•

enter into any new credit or new lending relationships greater than $1,000,000 or that are not in compliance with the provisions of Commerce State Bank’s formal loan policy as in effect as of the date of the merger agreement;

•

other than incident to a reasonable loan restructuring, extend additional credit to any individual or entity, or any director or officer of, or any owner of a material interest in, such entity if such person or entity is the obligor under any indebtedness to Commerce or any of its subsidiaries which constitutes a nonperforming loan or against any part of such indebtedness Commerce or any of its subsidiaries has established loss reserves or any part of which has been charged-off by Commerce or any of its subsidiaries;

•

maintain an allowance for loan and lease losses which is not appropriate in all material respects under the requirements of GAAP to provide for possible losses, net of recoveries relating to Commerce loans previously charged-off, on Commerce loans and leases outstanding (including accrued interest receivable);

TABLE OF CONTENTS

•

fail to: (i) charge-off any Commerce loans or leases that would be deemed uncollectible in accordance with GAAP or any applicable legal requirement; or (ii) place on nonaccrual any Commerce loans or leases that are past due greater than ninety (90) days;

•

sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its assets, deposits, business or properties, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances in the ordinary course of business and in a transaction that, together with other such transactions, is not material to Commerce and its subsidiaries, taken as a whole;

•

acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to Commerce and its subsidiaries, taken as a whole, and does not present a material risk that the closing date of the proposed merger will be materially delayed or that any approvals necessary to complete the merger or the other contemplated transactions will be more difficult to obtain;

•

purchase any equity security for its investment portfolio that is inconsistent with Commerce State Bank’s formal investment policy as in effect as of the date of the merger agreement or that are not in strict compliance with the provisions of such investment policy;

•

amend its articles of incorporation or its bylaws, or similar governing documents of any of its subsidiaries;

•

implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements;

•

increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Commerce or its subsidiaries;

•

become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, consulting, non-competition, change in control, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Commerce employee (or newly hired employees), director or shareholder;

•

accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Commerce benefit plans;

•

cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Commerce benefit plan;

•

materially change any actuarial assumptions used to calculate funding obligations with respect to any Commerce benefit plan that is required by applicable legal requirements to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or any applicable legal requirement;

•

conduct the administration of the Commerce benefit plan in any manner other than in the ordinary course of business;

•

hire any new employees with an annual salary in excess of $75,000;

•

incur or guarantee any indebtedness for borrowed money other than deposits, overnight fed funds or Federal Home Loan Bank of Chicago advances not over six months in maturity or enter into any capital lease or leases; or, except in the ordinary course of business, (i) lend any money or pledge any of its credit in connection with any aspect of its business, whether as a guarantor, surety, issuer of a letter of credit or otherwise; (ii) mortgage or otherwise subject to any lien any of its assets or sell, assign or transfer any of its assets in excess of $100,000 in the aggregate; or (iii) incur any other liability or loss representing, individually or in the aggregate, over $100,000;

TABLE OF CONTENTS

•

enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by applicable legal requirements or requested by any regulatory authority;

•

settle any action, suit, claim or proceeding against it or any of its subsidiaries, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $150,000 and that would not: (i) impose any material restriction on the business of Commerce or its subsidiaries; or (ii) create precedent for claims that is reasonably likely to be material to it or its subsidiaries;

•

make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility;

•

make or change any material tax elections, change or consent to any change in it or its subsidiaries’ method of accounting for tax purposes (except as required by applicable tax law), take any material position on any material tax return filed on or after the date of the merger agreement, settle or compromise any material tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of taxes, surrender any right to claim a refund for a material amount of taxes, or file any material amended tax return; or

•

agree to take, make any commitment to take, or adopt any resolutions of the Commerce board of directors in support of, any of the prohibited actions listed immediately above.

The above restrictions on Commerce’s business activities are set forth in Article V of the merger agreement.

Business of Nicolet Pending the Merger

The merger agreement requires Nicolet to continue to operate its business as usual and to preserve its business organization, rights and franchises pending the merger and to refrain from taking any action that would materially adversely affect the receipt of required regulatory or other consents or materially adversely affect either party’s ability to perform its covenants and agreements under the merger agreement.

As set forth in Section 6.1 of the merger agreement, Nicolet may not, without Commerce’s consent, take any action that would reasonably be expected to (a) materially adversely affect the ability of Nicolet to obtain any consents required to consummate the proposed merger without imposition of a condition or restriction by regulatory authorities, or (b) that would reasonably be expected to materially adversely affect the ability of Nicolet to perform its covenants and agreements under the merger agreement.

Covenants of the Parties

In addition to the above restrictions on each party’s business activities prior to consummation of the merger and the covenants discussed elsewhere in this summary of the merger agreement, the parties have agreed to the following covenants:

•

the parties shall cooperate and use reasonable best efforts to obtain the required regulatory approvals;

•

the parties are required to prepare and file a proxy statement-prospectus with the SEC, and Nicolet shall use reasonable best efforts to have such proxy statement-prospectus declared effective and to keep it effective as long as necessary to consummate the merger, and Commerce shall use its reasonable best efforts to cause the proxy statement-prospectus to be mailed to its shareholders;

•

Commerce has agreed that the information to be included in the proxy statement-prospectus shall not be false or misleading;

•

Commerce shall call a shareholders’ meeting for the purpose of approving the merger agreement and the merger, and Commerce’s board of directors shall use reasonable best efforts to obtain approval of the merger;

•

each party shall give the other prompt notice of any changes that would constitute a material breach of the merger agreement;

TABLE OF CONTENTS

•

Nicolet shall cause one person from Commerce’s Board (expected to be Joseph Fazio III) to be designated to the board of directors of Nicolet and Nicolet National Bank effective at the consummation of the merger;

•

the parties shall use commercially reasonable efforts to cause the merger to qualify as a reorganization under the Internal Revenue Code, and shall deliver such certificates and other documents necessary for Nicolet’s counsel to issue its opinion that the merger qualifies as a reorganization;

•

Nicolet shall maintain employee benefit plans and compensation opportunities that, in the aggregate, are no less favorable than the employee benefit plans and compensation opportunities made available to similarly-situated Nicolet employees, and Nicolet has agreed to credit Commerce employees for their years of service at Commerce to the same extent as if that service had been with Nicolet under the applicable Nicolet benefit plans;

•

Commerce has agreed to take all appropriate actions, upon the request of Nicolet, to amend, suspend or terminate any benefit plans;

•

Commerce has agreed, if requested by Nicolet, to use commercially reasonable efforts to repay in full to any lending parties all indebtedness owing under any agreement representing indebtedness incurred by Commerce outstanding at the time of the merger agreement, which may include (i) payment of a dividend by Commerce State Bank in the amount sufficient to enable Commerce to make any requested repayments, and/or (ii) approval by regulatory authorities necessary to enable Commerce to make any requested repayments;

•

Nicolet has agreed to authorize and reserve the number of shares of Nicolet common stock necessary to constitute the merger and to cause such shares to be approved for listing on the Nasdaq Capital Market;

•

Nicolet shall take such action to cause the acquisition of Nicolet common stock in the merger to be exempt under Exchange Act Rule 16b-3; and

•

the parties shall consult concerning the defense of any shareholder litigation.

No Solicitation of Alternative Transactions

Commerce was required to immediately cease any negotiations with any person regarding any Acquisition Proposal, as defined in the merger agreement, existing at the time the merger agreement was executed. In addition, Commerce may not solicit, directly or indirectly, inquiries or proposals with respect to, or, except to the extent determined by its board of directors in good faith, after consultation with its legal counsel, to be required to discharge properly the directors’ fiduciary duties, furnish any information relating to, or participate in any negotiations or discussions concerning, any sale of all or substantially all of its assets, any purchase of a substantial equity interest in it or any merger or other combination with Commerce. Subject to the same fiduciary duties, Commerce’s board may not withdraw its recommendation to its shareholders of the merger or recommend to its shareholders any such other transaction.

Commerce was also required to instruct its officers, directors, agents, and affiliates to refrain from taking such action prohibited by the merger agreement and is required to notify Nicolet immediately if it receives any inquiries from third parties. However, no director or officer of Commerce is prohibited from taking any action that the board of directors determines in good faith, after consultation with counsel, is required by law or is required to discharge such director’s or officer’s fiduciary duties.

Indemnification and Insurance

Nicolet has agreed to provide certain indemnification in favor of the directors, officers and employees of Commerce and its subsidiaries with respect to matters occurring prior to or at the effective time of the merger. Nicolet will cause the officers and directors currently covered by Commerce’s policy to be covered by a directors’ and officers’ liability insurance policy for six years following the effective time of the merger, subject to certain conditions provided in Section 6.3 of the merger agreement.

TABLE OF CONTENTS

Termination of the Merger Agreement; Termination Fee

The merger agreement specifies the circumstances under which the parties may terminate the agreement and abandon the merger. Those circumstances are:

•

by mutual consent of Commerce’s board of directors and Nicolet’s board of directors;

•

by either party if the other party materially breaches any representation, warranty or covenant, such breach cannot be, or is not, cured within 30 days after written notice, subject to a requirement in certain circumstances that the existence of such breach would result in a “material adverse effect,” as defined in the merger agreement, on the breaching party;

•

by either party if any regulatory authority that must grant a required approval has denied approval of any of the contemplated transactions and such denial has become final and nonappealable; provided, however, that the right to terminate the merger agreement shall not be available to a party whose failure (or the failure of any of its affiliates) to fulfill any of its obligations (excluding warranties and representations) under the merger agreement has been the cause of or resulted in the occurrence of a regulatory authority denial;

•

by either party if any application, filing or notice for a required regulatory approval has been withdrawn at the request or recommendation of the applicable regulatory authority; provided, however, that the right to terminate the merger agreement shall not be available to a party whose failure (or the failure of any of its affiliates) to fulfill any of its obligations (excluding warranties and representations) under the merger agreement has been the cause of or resulted in the occurrence of a regulatory request for withdrawal;

•

by either party if Commerce’s shareholders fail to approve the proposed merger; provided, however, that the right to terminate the merger agreement shall not be available to a party whose failure (or the failure of its affiliates) to fulfill any of its obligations (excluding warranties and representations) under the merger agreement has been the cause of or resulted in the failure to obtain the approval of Commerce’s shareholders;

•

by either party if the merger is not consummated on or before February 17, 2021;

•

by either party if any court of competent jurisdiction or other regulatory authority shall have issued a judgment, order, injunction, rule or decree, or taken any other action restraining, enjoining or otherwise prohibiting any of the contemplated transactions and such judgment, order, injunction, rule, decree or other action shall have become final and nonappealable;

•

by Commerce, prior to receipt of its shareholders’ approval, to accept an Acquisition Proposal that Commerce’s board of directors deems a Superior Proposal, as each term is defined in the merger agreement;

•

by Nicolet, if Commerce’s board of directors makes an adverse recommendation, whereby the Commerce board of directors withdraws, qualifies or adversely modifies its recommendation to Commerce shareholders that they vote in favor of the adoption and approval of the merger agreement;

•

by Nicolet, if the holders of more than 10% of the outstanding shares of Commerce common stock assert dissenters’ rights in compliance with Subchapter XIII of the WBCL;

•

by Nicolet, if the Nicolet Common Stock Price is less than $62.00 per share; or

•

by Commerce, if the Nicolet Common Stock Price is less than $62.00 per share and Nicolet elects to leave the exchange ratio unchanged and does not supplement the consideration with a cash component sufficient to make the per share merger consideration equal to $71.30.

If Nicolet terminates the merger agreement because Commerce’s board withdraws or changes its recommendation of the merger agreement, or if Commerce terminates the merger agreement to accept an Acquisition Proposal it deems a Superior Proposal, as each term is defined in the merger agreement, then Commerce (or its successor) must pay Nicolet a termination fee of $5.0 million. If an Acquisition Proposal is made, and if either party thereafter terminates the merger agreement either because the Commerce shareholder approval was not obtained or because the merger is not consummated by February 17, 2021,

TABLE OF CONTENTS

and within 12 months of such termination Commerce enters into a definitive agreement with respect to such Acquisition Proposal, then Commerce (or its successor) must pay Nicolet a termination fee of $5.0 million.

Provisions of the merger agreement regarding confidentiality, payment of the termination fee and indemnification of Commerce and its controlling persons will survive any termination of the merger agreement.

For a discussion of the intent of the parties to consummate the merger in the current environment, see “Status of Intentions to Consummate the Merger” at page 46.

Payment of Expenses Relating to the Merger

The parties will pay all of their own expenses related to negotiating and completing the merger, whether or not the merger is consummated, except that the expenses incurred in connection with the filing, printing and mailing of this proxy statement-prospectus, and all filing and other fees paid to the SEC, in each case in connection with the merger (other than attorneys’ fees, accountants’ fees and related expenses), shall be shared equally by Nicolet and Commerce.

Affiliate Agreements

Each director of Commerce has executed a Voting and Support Agreement, in which each such director agrees to vote all of his, her or its shares of Commerce common stock in favor of the merger agreement.

Forms of the Voting and Support Agreements are attached as Exhibit B to the merger agreement, which is attached to this proxy statement-prospectus as Appendix A. These agreements may have the effect of discouraging third parties from making an Acquisition Proposal, as defined in the merger agreement. The following is a brief summary of the material provisions of the agreements:

•

The director agrees to vote, or cause to be voted, in person or by proxy, all of the shares of Commerce common stock that the director owns beneficially or of record in favor of the merger agreement, unless Nicolet is then in breach of the agreement.

•

The director agrees, except for certain specific transfers set forth in the agreement, not to directly or indirectly transfer any of his, her or its Commerce common stock until the closing date of the merger without prior written consent of Nicolet.

TABLE OF CONTENTS

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The following is a summary description of the anticipated material U.S. federal income tax consequences of the merger generally applicable to U.S. Shareholders (as defined below) of Commerce who hold the common stock as capital assets within the meaning of Section 1221 of the Internal Revenue Code (the “Code”). This discussion constitutes the tax opinion of Bryan Cave Leighton Paisner LLP, tax counsel to Nicolet, as to the material U.S. federal income tax consequences of the merger to the U.S. Shareholders of Commerce common stock. This discussion deals only with the U.S. federal income tax consequences of the merger. No information is provided regarding the tax consequences of the merger under state, local, or foreign income tax laws or non-income tax laws. We do not intend this summary to be a complete description of the U.S. federal income tax laws applicable to all Commerce shareholders in light of their particular circumstances or to Commerce shareholders subject to special treatment under U.S. federal income tax laws, such as:

•

Non-U.S. Shareholders (as defined below) (except to the extent discussed under the subheading “Tax Implications to Non-U.S. Shareholders” below);

•

entities treated as partnerships for U.S. federal income tax purposes or Commerce shareholders who hold their shares through entities treated as partnerships for U.S. federal income tax purposes;

•

qualified insurance plans;

•

tax-exempt organizations;

•

qualified retirement plans and individual retirement accounts;

•

brokers or dealers in securities or currencies;

•

traders in securities that elect to use a mark-to-market method of accounting;

•

regulated investment companies;

•

real estate investment trusts;

•

persons whose functional currency is not the U.S. dollar;

•

persons who received their stock upon the exercise of employee stock options, who receive payments in cancellation and in lieu of exercise of their stock option, or otherwise acquired their stock as compensation;

•

persons who purchased or sell their shares of Commerce common stock as part of a wash sale; or

•

persons who hold the common stock as part of a “hedge,” “straddle” or other risk reduction, “constructive sale,” or “conversion transaction,” as these terms are used in the Code.

This discussion is based upon, and subject to, the Code, the Treasury regulations promulgated under the Code, existing interpretations, administrative rulings and judicial decisions, all of which are in effect as of the date of this statement, and all of which are subject to change, possibly with retroactive effect. Any such change could affect the continuing validity of this discussion. Tax laws are complex, and your individual circumstances may affect the tax consequences to you. We urge you to consult a tax advisor regarding the tax consequences of the merger to you.

U.S. Shareholders

For purposes of this discussion, the term “U.S. Shareholder” means a beneficial owner of Commerce common stock that is:

•

a citizen or resident of the U.S.;

•

a corporation (including any entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the U.S. or any of its political subdivisions;

•

a trust that (i) is subject to both the primary supervision of a court within the U.S. and the control of one or more U.S. persons, or (ii) has a valid election in effect under applicable U.S. treasury regulations to be treated as a U.S. person; or

TABLE OF CONTENTS

•

an estate that is subject to U.S. federal income tax on its income regardless of its source.

If a partnership (including any entity or arrangement, domestic or foreign, that is treated as a partnership for U.S. federal income tax purposes) holds Commerce common stock, the tax treatment of a partner will generally depend on the status of the partners and the activities of the partnership. Partnerships and partners in such a partnership should consult their tax advisors regarding the tax consequences of the merger to them.

Qualification of the Merger as a Reorganization

Subject to the limitations set forth herein, the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. The obligation of Nicolet and Commerce to complete the merger is conditioned upon receipt of a tax opinion from Bryan Cave Leighton Paisner LLP to the effect that:

•

the merger will constitute a “reorganization” within the meaning of Section 368(a) of the Code; and

•

each of Commerce and Nicolet will be a party to such reorganization within the meaning of Section 368(b) of the Code.

The tax opinion is filed as Exhibit 8.1 to the registration statement of which this proxy statement-prospectus is a part. The tax opinion is based upon law existing on the date of the opinion and upon certain facts, assumptions, limitations, representations and covenants including those contained in representation letters executed by officers of Commerce and Nicolet that, if incorrect in certain material respects, would jeopardize the conclusions reached by Bryan Cave Leighton Paisner LLP in its opinion. The tax opinion will not bind the Internal Revenue Service or prevent the Internal Revenue Service from successfully asserting a contrary opinion. No ruling will be requested from the Internal Revenue Service in connection with the merger.

Tax Implications to U.S. Shareholders

The following discussion summarizes the material U.S. federal income tax consequences of the merger to U.S. Shareholders.

The U.S. federal income tax consequences of the merger to an owner of Commerce common stock that is a U.S. Shareholder generally will depend on whether such U.S. Shareholder receives cash in exchange for all or a portion of its Commerce common stock in the merger (whether by receipt of cash in lieu of a fractional share of Nicolet common stock, exercise of dissenter’s rights or otherwise).

•

Exchange solely for Nicolet Common Stock. No gain or loss will be recognized by U.S. Shareholders upon the exchange of shares of Commerce common stock solely for shares of Nicolet common stock pursuant to the merger, except in respect of cash received in lieu of the issuance of a fractional share of Nicolet common stock (as discussed below).

•

Exchange of Cash in Lieu of Fractional Share. A U.S. Shareholder who receives cash in lieu of the issuance of a fractional share of Nicolet common stock will generally be treated as having received such fractional share pursuant to the merger and then as having received cash in exchange for the sale of such fractional share. Gain or loss generally will be recognized in an amount equal to the difference between the amount of cash received and the portion of the U.S. Shareholder’s aggregate adjusted tax basis of the Commerce shares exchanged in the merger which would otherwise be allocable to such fractional share of Nicolet common stock.

•

Exchange for Cash and Nicolet Common Stock. In the event that the Nicolet Common Stock Price is less than $62.00 and Nicolet elects to leave the exchange ratio unchanged and instead add additional cash consideration in an amount sufficient to bring the aggregate per share consideration to $71.30 per share, a U.S. Shareholder who receives a combination of cash (not including cash received in lieu of the issuance of a fractional share of Nicolet common stock) and Nicolet common stock in exchange for Commerce common stock will generally recognize gain (but not loss) in an amount equal to the lesser of: (i) the excess, if any, of (a) the sum of the amount of cash treated as received in exchange for Commerce common stock in the merger (excluding cash received in lieu of a fractional share) plus the fair market value of Nicolet common stock (including the fair market value of any fractional share) received in the merger, over (b) the U.S. Shareholder’s adjusted tax basis in the shares

TABLE OF CONTENTS

of Commerce common stock exchanged, or (ii) the amount of cash (excluding cash received in lieu of a fractional share) received in the merger.

•

Any taxable gain to a U.S. Shareholder on the exchange of Commerce common stock generally will be treated as capital gain (either long-term capital gain if such shareholder has held such Commerce common stock for more than one year, or short-term capital gain if such shareholder has held such Commerce common stock for one year or less). If a U.S. Shareholder acquired different blocks of Commerce common stock at different times or at different prices, such U.S. Shareholder’s gain may need to be computed separately for each block of Commerce common stock. U.S. Shareholders should consult their individual tax advisors regarding the manner in which gain or loss should be determined.

•

Tax Basis of Nicolet Common Stock Received in the Merger. The aggregate tax basis of the Nicolet common stock (including a fractional share deemed received and sold for cash as described above) by those Commerce shareholders that receive only Nicolet common stock (and cash in lieu of a fractional share) in the merger will equal the aggregate tax basis of the Commerce common stock surrendered in the exchange. In the event that Commerce shareholders receive both cash and Nicolet common stock in the merger, the aggregate tax basis of the Nicolet common stock (including a fractional share deemed received and sold for cash as described above) will equal the aggregate tax basis of the Commerce common stock surrendered in the exchange decreased by the amount of cash received in the exchange (but not including cash received in lieu of a fractional share) and increased by gain recognized on the exchange (but not including gain attributable to the disposition of a fractional share).

•

Holding Period of Nicolet Common Stock Received in the Merger. The holding period for any Nicolet common stock received in the merger will include the holding period of the Commerce common stock surrendered in the exchange.

•

Exchange Solely for Cash. A U.S. Shareholder who receives solely cash in exchange for Commerce common stock as a result exercising dissenter’s rights generally will recognize gain or loss in an amount equal to the difference between the cash received and the U.S. Shareholder’s adjusted tax basis in the shares of Commerce common stock surrendered by such shareholder. Any taxable gain or loss to a U.S. Shareholder on the exchange of Commerce common stock will generally be treated as capital gain or loss, either long-term or short-term depending on such shareholder’s holding period for the Commerce common stock. If a U.S. Shareholder acquired different blocks of Commerce common stock at different times or at different prices, such U.S. Shareholder’s gain or loss may need to be computed separately for each block of Commerce common stock.

Tax Consequences to Nicolet and Commerce. Neither Nicolet nor Commerce will recognize taxable gain or loss as a result of the merger, except for, in the case of Commerce, gain, if any, that has been deferred in accordance with the consolidated return regulations.

Tax Implications to Non-U.S. Shareholders

The following discussion summarizes the material U.S. federal income tax consequences of the merger to Non-U.S. Shareholders. For purposes of this discussion, the term “Non-U.S. Shareholder” means a beneficial owner of Commerce common stock (other than an entity treated as a partnership for U.S. federal income tax purposes) that is not a U.S. Shareholder. The rules governing the U.S. federal income taxation of Non-U.S. Shareholders are complex, and no attempt will be made herein to provide more than a limited summary of those rules.

Any gain a Non-U.S. Shareholder recognizes from the exchange of Commerce common stock for cash in the merger generally will not be subject to U.S. federal income taxation unless (a) the gain is effectively connected with a trade or business conducted by the Non-U.S. Shareholder in the United States (and, if required by an applicable income tax treaty, the Non-U.S. Shareholder has a permanent establishment in the United States to which such gain is attributable), or (b) the Non-U.S. Shareholder is a nonresident alien individual present in the United States for 183 days or more in the taxable year of the sale and other conditions are met. Non-U.S. Shareholders described in (a) above will be subject to U.S. federal income tax on gain recognized at regular graduated rates and, in addition, Non-U.S. Shareholders that are corporations (or

TABLE OF CONTENTS

treated as corporations for U.S. federal income tax purposes) may be subject to a branch profits tax equal to 30% (or a lesser rate under an applicable income tax treaty) on their effectively connected earnings and profits for the taxable year, which would include such gain. Non-U.S. Shareholders described in (b) above will be subject to a flat 30% tax on any gain recognized (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses.

If a Non-U.S. Shareholder’s actual income tax liability is less than the amount withheld, due to withholding at a rate in excess of a reduced rate for which the Non-U.S. Shareholder may be eligible under a tax treaty or otherwise, the Non-U.S. Shareholder may be able to obtain a refund of or credit for any amounts withheld in excess of the applicable rate. Non-U.S. Shareholders are encouraged to consult with their own tax advisers regarding the possible implications of these withholding requirements.

Tax Consequences if the Merger Does Not Qualify as a Reorganization

If the merger fails to qualify as a reorganization within the meaning of Section 368(a) of the Code, and if the parties to the merger elect to waive this condition to closing and consummate the merger, the merger will be a fully taxable transaction to Commerce and the shareholders of Commerce common stock. For federal income tax purposes, the Merger will be deemed to be a taxable sale of assets by Commerce followed by a distribution of the sale proceeds by Commerce to its shareholders in complete liquidation of Commerce. Accordingly, Commerce will recognize, in the aggregate, gain or loss equal to the difference between (i) the sum of the total consideration received in the merger and Commerce’s liabilities deemed assumed and (ii) Commerce’s adjusted tax basis in its assets. A U.S. Shareholder will recognize gain or loss measured by the difference between the total consideration received by such shareholder in the merger (the amount of any cash received plus the fair market value of the Nicolet common stock received) and such shareholders’ tax basis in the shares of Commerce common stock surrendered in the merger. Gain or loss will generally be treated as capital gain or loss (either long-term if such shareholder has held such Commerce common stock for more than one year, or short-term if such shareholder has held such Commerce common stock for one year or less). If a U.S. Shareholder acquired different blocks of Commerce common stock at different times or at different prices, such U.S. Shareholder’s gain may need to be computed separately for each block of Commerce common stock. Each shareholder of Commerce common stock is urged to consult its tax advisor regarding the manner in which gain or loss should be calculated. The aggregate tax basis in the shares of Nicolet common stock received pursuant to the merger will be equal to the fair market value of such Nicolet common stock as of the closing date of the merger. The holding period of such shares of Nicolet common stock will begin on the date immediately following the closing date of the merger.

Additional Federal Tax Considerations

Backup Withholding and Information Reporting

In general, information reporting requirements may apply to the cash payments made to shareholders of Commerce common stock in connection with the merger, unless an exemption applies. Backup withholding may be imposed on the above payments at a rate of 24% if a shareholder (i) fails to provide a taxpayer identification number or appropriate certificates, or (ii) otherwise fails to comply with all applicable requirements of the backup withholding rules.

Any amounts withheld from payments to shareholders of Commerce common stock under the backup withholding rules are not an additional tax and will be allowed as a refund or credit against your applicable U.S. federal income tax liability, provided the required information is furnished to the Internal Revenue Service. Both U.S. Shareholders and Non-U.S. Shareholders should consult their own tax advisors regarding the application of backup withholding based on their particular circumstances and the availability and procedure for obtaining an exemption from backup withholding.

Medicare Tax on Net Investment Income

In addition to regular U.S. federal income tax, certain U.S. Shareholders that are individuals, estates or trusts are subject to a 3.8% Medicare tax on all or a portion of their net investment income, which may include gain recognized in connection with merger of Commerce and Nicolet. In the case of an individual, the tax will be imposed on the lesser of (i) the shareholder’s net investment income, or (ii) the amount by which the

TABLE OF CONTENTS

shareholder’s modified adjusted gross income exceeds a certain threshold (which is $250,000 in the case of married individuals filing jointly, $125,000 in the case of married individuals filing separately, and $200,000 in all other cases).

Nothing in the foregoing summary is intended to be, or should be construed as, tax advice. The United States federal income tax discussion set forth above is included for general information purposes only and is not a complete analysis or discussion of all potential tax consequences relevant to holders of Commerce common stock. Holders of Commerce common stock are strongly urged to consult their tax advisors to determine the federal, state, local and foreign tax consequences to them of the merger and the ownership and disposition of Nicolet common stock received in the merger in light of their own particular circumstances.

TABLE OF CONTENTS

CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS

To the extent that they receive Nicolet common stock as merger consideration, Commerce’s shareholders will become Nicolet shareholders following completion of the merger. Their rights as shareholders will then be governed by Nicolet’s articles of incorporation and bylaws rather than by Commerce’s articles of incorporation and bylaws.

Nicolet and Commerce are both corporations organized under the laws of the State of Wisconsin. The corporate affairs of Nicolet and Commerce are governed generally by the provisions of the Wisconsin Business Corporation Law (the “WBCL”). The following is a summary of differences between the rights of Commerce shareholders and Nicolet shareholders not described elsewhere in this proxy statement-prospectus. The summary is necessarily general, and it is not intended to be a complete statement of all differences affecting the rights of shareholders. It is qualified in its entirety by reference to the WBCL, as well as the articles of incorporation and bylaws of each corporation. Commerce shareholders should consult their own legal counsel with respect to specific differences and changes in their rights as shareholders that would result from the proposed merger.

Authorized Capital Stock

Nicolet. Nicolet’s articles of incorporation authorize it to issue 30,000,000 shares of common stock, $0.01 par value, and 10,000,000 shares of preferred stock, no par value, with such preferences, limitations and relative rights as determined by the board of directors. As of January 31, 2020, 10,596,140 shares were issued (including 24,521 shares of restricted stock granted but not yet vested under the Nicolet Stock Plans), 10,571,619 shares were outstanding, and no shares were treasury shares; and (ii) 10,000,000 shares of Nicolet’s preferred stock, no par value per share, of which: (i) 14,964 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, are authorized, but no shares are outstanding; (ii) 748 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B, are authorized but no shares are outstanding; and (iii) 24,400 shares of Non-Cumulative Perpetual Preferred Stock, Series C, are authorized, but no shares are outstanding.

As of January 31, 2020, no shares of Nicolet capital stock were reserved for issuance except for: (i) 1,372,166 shares of Nicolet Common Stock reserved for issuance pursuant to future awards under Nicolet Stock Plans, (ii) 1,478,954 shares of Nicolet Common Stock reserved for issuance in connection with outstanding stock options, restricted stock, or other equity awards under a Nicolet Stock Plan; (iii) 141,082 shares of Nicolet Common Stock reserved for issuance under Nicolet’s 401(k) plan; (iv) 64,352 shares of Nicolet Common Stock reserved for issuance pursuant to Nicolet’s 2009 Deferred Compensation Plan for Non-Employee Directors; and (v) 142,804 shares of Nicolet Common Stock reserved for issuance under the Nicolet Bankshares, Inc. Employee Stock Purchase Plan.

Commerce. Commerce’s articles of incorporation authorize it to issue 10,000,000 shares of common stock, $0.01 par value, and 1,000,000 shares of preferred stock, $0.01 par value. As of January 31, 2020, there were 1,530,546 shares of Commerce common stock issued and outstanding and no shares of the authorized preferred stock were issued or outstanding. As of January 31, 2020, there were 57,132 shares of Commerce common stock reserved for issuance pursuant to outstanding or future awards under Company Stock Plans.

Composition and Election of the Board of Directors

Nicolet. Nicolet’s articles of incorporation and bylaws provide that the board of directors shall consist of not fewer than two nor more than 25 directors, with the exact number of directors to be set by resolution of the board. Its articles of incorporation provide for the election of directors by cumulative voting, which means that the number of votes each common shareholder may cast is determined by multiplying the number of shares he, she or it owns by the number of directors to be elected. Those votes may be cumulated and cast for a single candidate or may be distributed among two or more candidates in the manner selected by the shareholder.

Commerce. Commerce’s bylaws and articles of incorporation provide that the number of directors shall not be less than four and shall not be greater than fifteen. Commerce’s bylaws provide that the number

TABLE OF CONTENTS

of directors shall be within the limits specified, but may be amended from time to time by resolution adopted by either the shareholders or the directors. Directors are elected by a plurality vote. The articles of incorporation do not provide for cumulative voting. Commerce’s bylaws provide that each director serves for a term of three years and until his or her successor is elected and qualified, unless the director is removed, resigns, becomes unable to serve or dies. The bylaws also provide for a staggered board, comprised of three classes, each class’s term expiring on the third succeeding annual meeting after their election.

Director Nominations

Nicolet. Under Nicolet’s bylaws, either directors or shareholders may nominate persons for election as Nicolet directors. Nominations that are not made by or on behalf of Nicolet’s management must be delivered in writing to Nicolet’s President no less than 14 and no more than 50 days before the meeting at which directors will be elected. If less than 21 days’ notice of such meeting is given, then the delivery deadline for the shareholder’s written notice is the close of business on the seventh day after the date on which notice of the meeting was mailed. The shareholder’s nomination must specify (to the extent known to the shareholder) the nominee’s name, address and principal occupation; the number of shares of capital stock that will be voted in favor of the nominee; and the nominating shareholder’s name, address and beneficial ownership of Nicolet capital stock.

Commerce. Commerce’s articles of incorporation and bylaws do not impose any specific qualification requirements for director nominations.

Director Qualifications

Nicolet. Under Nicolet’s bylaws, no person shall be eligible to be elected a director at any meeting of shareholders held on or after the date he or she attains age 72. The board of directors, at its discretion, may waive the age limitation or establish a greater age from time to time. Nicolet’s bylaws do not impose any other specific qualification requirements on directors.

Commerce. Commerce’s articles of incorporation and bylaws do not impose any specific requirements on directors.

Board Committees

Nicolet. Under the WBCL, unless the articles of incorporation or bylaws provide otherwise, a board of directors may create one or more committees, appoint members of the board of directors to serve on the committees and designate other members of the board of directors to serve as alternates. The WBCL provides that a committee may exercise the authority of the full board of directors except that it cannot approve or recommend to shareholders matters that require shareholder approval under the WBCL and it cannot adopt, amend or repeal a corporate bylaw. In addition to these restrictions, Nicolet’s bylaws provide that no board committee may approve dividends, fill board or committee vacancies without express authorization by the full board, amend the articles of incorporation, approve a plan of merger not requiring shareholder approval, approve the reacquisition of outstanding Nicolet capital stock except pursuant to parameters established by the full board, or approve the issuance of capital stock except to the extent authorized by the full board.

Commerce. Commerce’s bylaws allow the board of directors to create one or more committees by a resolution approved by either a majority of directors in office at the time. Any committee created shall consist of two or more directors and shall, unless otherwise provided by the board of directors, serve at the pleasure of the board of directors. A committee may exercise, when the board of directors is not in session, any of the powers of the board of directors, except that a committee may not: (i) authorize distributions or dividends to shareholders; (ii) elect any of the principal officers; (iii) fill vacancies on the board of directors or any board committees; (iv) approve or propose to shareholders action that the WBCL requires to be approved by shareholders; (v) amend the articles of incorporation; (vi) adopt, amend or repeal the bylaws; (vii) approve a plan of merger not requiring shareholder approval; (viii) authorize or approve reacquisition of shares except according to a formula or method prescribed by the Board of Directors; or (ix) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation of relative rights,

TABLE OF CONTENTS

preferences and limitations of a class or series of shares, except that the board of directors may authorize a committee or a senior executive officer to do so within limits described by the board of directors.

Board Vacancies

Nicolet. The WBCL provides that unless the articles of incorporation provide otherwise, if a vacancy occurs on the board of directors it may filled by any of the following: (i) the shareholders; (ii) the board of directors; or (iii) if the directors remaining in office constitute fewer than a quorum of the board, the directors, by the affirmative vote of a majority of all directors remaining in office. If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group may vote to fill the vacancy if it is filled by shareholders, and only the remaining directors elected by that voting group may vote to fill the vacancy if it is filled by the directors. A vacancy that will occur at a specific later date may be filled before the vacancy occurs, but the new directors may not take office until the vacancy occurs. Nicolet’s bylaws provide that any vacancy on the board, including a vacancy resulting from an increase in the number of directors, shall be filled by a majority of the board of directors then in office, although less than a quorum, and any directors so chosen shall hold office for the remaining term of directors of the class to which he or she has been elected and until election of his or her duly qualified successor.

Commerce. Commerce’s bylaws provide that any vacancy on the board, including a vacancy created by an increase in the number of directors, may be filled until the next succeeding annual election by (a) the board of directors; (b) the affirmative vote of a majority of the directors then in office, if the directors remaining in office constitute less than a quorum of the board of directors; or (c) by vote of the shareholder. In the case of a vacancy created by the removal of a director by vote of the shareholders, the shareholders shall have the right to fill such vacancy at the same meeting or adjournment thereof. If a vacancy was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group may vote to fill the vacancy.

Director Removal

Nicolet. Directors may be removed for cause by the affirmative vote of the holders of a majority of the outstanding shares of Nicolet common stock entitled to vote in the election of directors, except that a director may not be removed if a number of cumulative votes sufficient to elect him or her is cast against his or her removal. Removal must be voted upon at a special shareholders’ meeting called for that purpose, and any vacancy so created may be filled by majority vote of the remaining directors. “Cause” is defined as conviction of a felony, a demand for removal by regulatory authorities or a determination by two-thirds of the directors then in office (excluding the director whose removal is being sought) that the director’s conduct was inimical to the best interests of Nicolet.

Commerce. Commerce’s bylaws provide that any director or the entire board of directors may be removed, with or without cause, by the shareholders if the number of votes cast to remove the director(s) exceeds the number cast not to remove him or her. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that director. A director may be removed by the shareholders only at a meeting called for the purpose of removing a director, and the meeting notice shall state that the purpose, or one of the purposes, of the meeting is removal of the director.

Advance Notice of Shareholder Proposals

Nicolet. Nicolet’s bylaws provide that in addition to any other requirements generally applicable to matters to be brought before an annual meeting of shareholders under Nicolet’s articles of incorporation or bylaws or the WBCL, a Nicolet shareholder who wishes to present a matter for consideration at such meeting must notify Nicolet’s Corporate Secretary in writing no later than 60 days before the meeting. The shareholder’s notice must specify the nature and reason for the business proposed to be conducted; the shareholder’s name, address and beneficial ownership of Nicolet stock; and any material interest of the shareholder in the matter proposed for consideration. See “Director Nominations” above for special provisions relating to shareholder nominations of candidates for the board of directors.

TABLE OF CONTENTS

Commerce. Commerce’s articles of incorporation and bylaws do not impose any specific requirements on notice of shareholder proposals.

Meetings of Shareholders

Nicolet. Nicolet’s bylaws provide that annual meetings of shareholders will be held at such date as may be specified by the board of directors or Corporate Secretary. Subject to any contrary requirements of the WBCL, special meetings of shareholders may be called by either Nicolet’s Chief Executive Officer or President at the direction of the board of directors or by the holder(s) of at least 10% of Nicolet’s outstanding stock. Nicolet’s bylaws require at least ten and not more than sixty days’ notice of any meeting of shareholders.

Commerce. Commerce’s bylaws provide that the annual meeting of the shareholders shall be held on the second Tuesday in the month of May of each year, or on such other date within 30 days thereof as may be authorized by the board of directors and set forth in the notice of the meeting. Special meetings of the shareholders may be called only by (i) the chairman, (ii) chief executive officer, or (iii) the board of directors. A special meeting shall be called by the chief executive officer at the written request of (a) the holders of not less than one tenth of all votes entitled to be cast on any issue proposed to be considered at the special meeting, if such holders sign, date and deliver a written request stating the purpose for such meeting, or (b) one third of the directors then in office.

Shareholder Vote Requirements

Nicolet. Except as described under “Board of Directors” above and “Mergers, Consolidations and Sales of Assets” below, and unless a greater number of votes is required under Nicolet’s articles of incorporation or the WBCL, a matter voted upon by Nicolet shareholders will be approved if more votes are cast in favor of a matter than against it, assuming a quorum is present.

Commerce. Except as described under “Board of Directors” above and “Mergers, Consolidations and Sales of Assets” below, and unless a greater number of votes is required under the WBCL, a matter voted upon by a quorum of Commerce shareholders will be approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action. A majority of the votes entitled to be cast by shares entitled to vote as a separate voting group on a matter, whether represented in person or by proxy, constitutes a quorum. Additionally, Commerce shares owned by another corporation (directly or indirectly) are not entitled to vote if this corporation owns (directly or indirectly) sufficient shares to elect a majority of the directors of such other corporation.

Mergers, Consolidations and Sales of Assets

Nicolet. Nicolet’s articles of incorporation provide that any merger or share exchange of Nicolet with or into any other corporation, or any sale, lease, exchange or other disposition of substantially all of its assets to any other person or entity will require the approval of either: (i) two-thirds of the directors then in office and a majority of the outstanding shares entitled to vote; or (ii) a majority of the directors then in office and two-thirds of the outstanding shares entitled to vote.

Nicolet’s articles of incorporation require that, in considering an offer of another party to make a tender or exchange offer for any equity security of Nicolet; to merge, effect a share exchange or otherwise combine Nicolet with any other corporation; or purchase or otherwise acquire all or substantially all of the assets of Nicolet, the board, in determining what is in the best interests of Nicolet and its shareholders, give due consideration to all relevant factors, including, without limitation, (a) the short-term and long-term social and economic effects on the employees, customers, shareholders and other constituents of Nicolet and its subsidiaries, and on the communities within which Nicolet and its subsidiaries operate (it being understood that Nicolet National Bank is charged with providing support to and being involved in the communities it serves); and (b) the consideration being offered by the other party in relation to the then-current value of Nicolet in a freely negotiated transaction and in relation to the board’s then-estimate of the future value of Nicolet as an independent entity.

TABLE OF CONTENTS

Commerce. Commerce’s articles of incorporation and bylaws provide that any merger or consolidation of Commerce with one or more other corporations (regardless of which is the surviving corporation) or any sale, lease or exchange of all or substantially all of the property and assets of Commerce to or with one or more other corporations, persons or other entities, shall require the affirmative vote of the holders of at least a majority of the outstanding shares of common stock of Commerce entitled to vote on the matter if such transaction is approved by a resolution adopted by the affirmative vote of a majority of the entire board of directors; provided however that if such transaction is not adopted by resolution of the majority of the entire board of directors, such transaction shall require an affirmative vote of at least 80% of the outstanding shares of Commerce common stock entitled to vote on the matter.

Indemnification

Nicolet. Nicolet’s bylaws provide for the mandatory indemnification of a director, officer, employee or agent of Nicolet (or a person concurrently serving in such a capacity with another entity at Nicolet’s request), to the extent such person has been successful on the merits or otherwise in the defense of any threatened, pending or completed civil, criminal, administrative or investigative action, suit, arbitration or other proceeding brought by or in the right of Nicolet or by any other person or entity to which such person is a party because he or she is a director, officer, employee or agent, for all reasonable fees, costs, charges, disbursements, attorneys’ fees and other expenses incurred in connection with proceeding. In all other cases, Nicolet shall indemnify a director or officer of Nicolet, and may indemnify an employee or agent of Nicolet, against all liability and reasonable fees, costs, charges, disbursements, attorneys’ fees and other expenses incurred by such person in any proceeding brought by or in the right of Nicolet or by any other person or entity to which such person is a party because he or she is a director, officer, employee or agent, unless it has been proven by final adjudication that such person breached or failed to perform a duty owed to Nicolet that constituted:

•

a willful failure to deal fairly with Nicolet or its shareholders in connection with a matter in which the director, officer, employee or agent has a material conflict of interest;

•

a violation of criminal law, unless the director, officer, employee or agent had reasonable cause to believe his or her conduct was lawful or no reasonable cause to believe his or her conduct was unlawful;

•

a transaction from which the director, officer, employee or agent derived an improper personal profit; or

•

willful misconduct.

Unless modified by written agreement, the determination as to whether indemnification is proper shall be made in accordance with the WBCL. The right to indemnification under Nicolet’s bylaws may only be amended by the vote of two-thirds of the outstanding shares of Nicolet capital stock entitled to vote on the matter. Nicolet is authorized to purchase and maintain insurance on behalf of its directors, officers, employees or agents in connection with the foregoing indemnification obligations.

Commerce. Commerce’s bylaws provide, in accordance with the WBCL, for the mandatory indemnification of a director, officer, employee or agent, to the extent that he or she has been successful on the merits or otherwise in the defense of a proceeding, for all reasonable expenses incurred in the proceeding if the director or officer was a party because he or she is or was a director, officer, employee or agent of the corporation. Commerce’s bylaws also provide for indemnification in other instances pursuant to but not required by the WBCL (with no requirement that the director or officer be successful on the merits or otherwise), unless the director, officer, employee or agent is personally liable because the director or officer breached or failed to perform a duty that he or she owes to the corporation and the breach or failure to perform constitutes any of the following:

•

a willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director, officer, employee or agent has a material conflict of interest;

•

a violation of the criminal law, unless the director, officer, employee or agent had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful;

TABLE OF CONTENTS

•

a transaction from which the director, officer, employee or agent derived an improper personal profit; or

•

willful misconduct.

The determination as to whether indemnification is proper shall be made in accordance with the WBCL. Commerce may grant additional rights to indemnification and reimbursement of expenses. Indemnification in other circumstances shall be at the discretion of the board of directors and in accordance with the WBCL. Commerce is authorized to purchase and maintain insurance on behalf of its directors, officers, employees or agents in connection with the foregoing indemnification obligations. Commerce’s bylaws also provide for indemnification and allowance of expenses in connection with a proceeding involving securities regulation.

The merger agreement provides that Nicolet will assume Commerce’s indemnification obligations after the merger.

Amendments to Articles of Incorporation and Bylaws

Nicolet. Nicolet’s articles of incorporation may be amended as provided in the WBCL, which provides that unless the articles of incorporation, bylaws or WBCL requires a higher vote, and subject to any rights of a class to vote separately on the amendment under the WBCL, an amendment to the articles of incorporation will be approved if the number of votes cast in favor of the amendment exceed the votes cast against it.

Nicolet’s bylaws may be amended by the shareholders or by majority vote of the board of directors, except as otherwise provided in the WBCL and except as specified under “Indemnification” above. The WBCL requires shareholder approval for an amendment to any shareholder-adopted bylaw that states that the board may not amend it. Additionally, a bylaw that fixes a greater or lower quorum requirement or a greater voting requirement for shareholders may not be adopted, amended or repealed by the board of directors. A bylaw that fixes a greater or lower quorum requirement or a greater voting requirement for the board of directors may be amended or repealed as follows: (i) if originally adopted by the shareholders, only by the shareholders, unless the bylaw also permits board approval of the amendment, or (ii) if originally adopted by the board of directors, either by the shareholders or by the board of directors.

Commerce. Commerce’s articles of incorporation may only be amended by the affirmative vote of the holders of a majority of the stock entitled to vote; provided, however that any amendment to Article V (regarding the composition of the Commerce board of directors and its authority), Article VII (regarding shareholder approval of a merger or sale of Commerce) or Article VII (regarding amendments to the articles of incorporation) require the affirmative vote of at least 80% of the outstanding shares of Commerce common stock entitled to vote on the matter.

Commerce’s bylaws may be amended either by the shareholders or, to the extent permitted by WBCL, the articles of incorporation, or Article 10 of the bylaws, by the board of directors. Bylaws amended by the board of directors may be altered, amended or repealed by the shareholders. Bylaws amended by the shareholders may only be altered, amended or repealed by the shareholders. The adoption or amendment of a bylaw that adds, changes or deletes a greater or lower quorum requirement or a greater voting requirement for shareholders must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirement then in effect. Any amendment to the bylaws that amend, change or repeal any of the provisions of Section 2.14 (regarding shareholder approval of a merger or sale of Commerce), Section 3.01 (regarding the number of members of the board of directors), Section 3.02 (regarding the class, tenure and removal of members of the board of directors), Section 3.14 (regarding conduct of board of directors meetings and use of communications equipment) or Section 10.01 (regarding amendment of the bylaws) of the bylaws may be amended only by the affirmative vote of a majority of the holders of Commerce common stock entitled to vote on the matter. If an amendment to any of the aforementioned sections of the bylaws has not been approved by the affirmative vote of a majority of the entire board of directors, then the affirmative vote of at least 80% of the holders of Commerce common stock entitled to vote on the matter shall be required for such amendment.

TABLE OF CONTENTS

DISSENTERS’ RIGHTS

The following discussion is not a complete description of the law relating to dissenters’ rights available to holders and beneficial holders of Commerce and Nicolet common stock under Wisconsin law. This description is qualified in its entirety by the full text of the relevant provisions of the WBCL, which are reprinted in their entirety as Appendix C to this proxy statement-prospectus. If you desire to exercise dissenters’ rights, you should review carefully the WBCL and consult a legal advisor before electing or attempting to exercise these rights.

General

Pursuant to the provisions of sections 180.1301 to 180.1331 of the WBCL, holders and beneficial holders of Commerce common stock have the right to dissent from the merger and to receive the fair value of their shares in cash. Holders and beneficial holders of Commerce common stock who fulfill the requirements of the WBCL summarized below and set forth in Appendix C will be entitled to assert dissenters’ rights in connection with the merger. Shareholders or beneficial shareholders considering initiation of a dissenters’ proceeding should review this section and should also review Appendix C in its entirety. A dissenters’ proceeding may involve litigation.

Preliminary Procedural Steps

Pursuant to the provisions of the WBCL, if the merger is consummated, in order to exercise dissenter’s rights you must have:

•

given to Commerce, prior to the vote at the special meeting with respect to the approval of the merger, written notice of your intent to demand payment for your shares of common stock (hereinafter referred to as “shares”);

•

not voted in favor of the merger; and

•

complied with the other statutory requirements summarized below.

If you have perfected your dissenters’ rights and the merger is consummated, you will receive the fair value of your shares as of the effective date of the merger. A shareholder or beneficial shareholder who fails to deliver written notice of his, her or its intent to demand payment for his, her or its shares if the merger is consummated in accordance with the requirements of the WBCL is not entitled to payment for his or her shares pursuant to the provisions of the WBCL and will only be entitled to receive the merger consideration as provided in the merger agreement.

Brokers or others who hold shares in their name that are beneficially owned by others may assert dissenters’ rights as to fewer than all of the shares registered in your name only if they dissent with respect to all shares beneficially owned by any one person and notify Commerce in writing of the name and address of each person on whose behalf they are asserting dissenters’ rights. The rights of a shareholder who asserts dissenters’ rights as to fewer than all of the shares registered in his, her or its name are determined as if the shares as to which that holder dissents and that holder’s other shares were registered in the names of different shareholders.

Written Dissent Demand

Voting against the merger will not independently satisfy the written demand requirement. In addition to not voting in favor of the merger, if you wish to preserve the right to dissent and seek appraisal, you must give a separate written notice of your intent to demand payment for your shares if the merger is effected.

Any written notice of intent to dissent to the merger, satisfying the requirements discussed above, should be addressed to Commerce Financial Holdings, Inc., 1700 S. Silverbrook Drive, West Bend, Wisconsin 53202, Attn: Corporate Secretary. The written notice must be delivered to Commerce prior to the special meeting.

Dissenters’ Notice

If the shareholders of Commerce approve the merger at the special meeting, Commerce (or Nicolet as its successor) must deliver a written dissenters’ notice (the “Dissenters’ Notice”) to all Commerce shareholders

TABLE OF CONTENTS

who satisfy the foregoing requirements. The Dissenters’ Notice must be sent no later than ten days after the date that the merger is approved by Commerce’s shareholders and must:

•

state where dissenting shareholders should send the demand for payment and where and when dissenting shareholders should deposit certificates for the shares;

•

inform holders of uncertificated shares as to what extent transfer of these shares will be restricted after the demand for payment is received;

•

include a form for demanding payment that includes the date of the first announcement to news media or to shareholders of the terms of the merger and requires the shareholder or beneficial shareholder asserting dissenters’ rights to certify whether he, she or it acquired beneficial ownership of the shares prior to that date;

•

set a date by which Commerce (or Nicolet as its successor) must receive the demand for payment (which date may not be fewer than 30 nor more than 60 days after the Dissenters’ Notice is delivered); and

•

be accompanied by a copy of sections 180.1301 to 180.1331 of the WBCL.

A shareholder or beneficial shareholder who receives the Dissenters’ Notice or a beneficial shareholder whose shares are held by a nominee who is sent a Dissenters’ Notice must demand payment and certify as to his or her ownership of the shares in accordance with the Dissenters’ Notice. A shareholder or beneficial shareholder who holds certificated shares must also deposit his, her or its share certificates with Commerce (or Nicolet as its successor) in accordance with the terms of the Dissenters’ Notice.

A dissenting shareholder or beneficial shareholder who demands payment and deposits his, her or its share certificate in accordance with the terms of the Dissenters’ Notice will retain all of the rights of a shareholder or beneficial shareholder, respectively, until those rights are canceled or modified by the consummation of the merger. Commerce may restrict the transfer of uncertificated shares from the date that the demand for payment for those shares is received until the merger is effected or the restrictions released, in the event that it does not consummate the merger.

A shareholder or beneficial shareholder with certificated or uncertificated shares who does not demand payment by the date set forth in the Dissenters’ Notice is not entitled to payment for his, her or its shares under sections 180.1301 to 180.1331 of the WBCL. A shareholder or beneficial shareholder with certificated shares who does not deposit his, her or its share certificates where required and by the date set forth in the Dissenters’ Notice is not entitled to payment for his, her or its shares under sections 180.1301 to 180.1331 of the WBCL. Commerce (or Nicolet as its successor) may elect to withhold payment from a dissenter and instead make an offer of payment if that dissenter was not the beneficial owner of his, her or its shares prior to the date specified in the Dissenters’ Notice as the date on which the first announcement of the merger was made to the news media or to Commerce’s shareholders.

Payment

Except as described below, Commerce (or Nicolet as its successor) must, as soon as the merger is effected or upon receipt of a payment demand, whichever is later, pay each shareholder who has complied with the payment demand and deposit requirements described above the amount Commerce (or Nicolet as its successor) estimates to be the fair value of the shares, plus accrued interest. The offer of payment must be accompanied by:

•

recent financial statements of Commerce;

•

a statement of the estimate of the fair value of the shares;

•

an explanation of how the interest was calculated;

•

a statement of the dissenter’s right to demand payment under section 180.1328 of the WBCL if the dissenter is dissatisfied with the payment; and

•

a copy of sections 180.1301 to 180.1331 of the WBCL.

TABLE OF CONTENTS

If the merger is not consummated within 60 days after the date set for demanding payment and depositing share certificates, Commerce must return the deposited certificates and release the transfer restrictions imposed on uncertificated shares. Commerce (or Nicolet as its successor) must send a new Dissenters’ Notice if the merger is consummated after the return of certificates and any dissenting shareholders must repeat the payment demand procedure described above.

Section 180.1328 of the WBCL provides that a dissenter may notify Commerce (or Nicolet as its successor) in writing of his, her or its own estimate of the fair value of such holder’s shares and the interest due, and may demand payment of such holder’s estimate, less any payment received from Commerce (or Nicolet as its successor), if:

•

he or she believes that the amount paid or offered by Commerce (or Nicolet as its successor) is less than the fair value of his or her shares or that Commerce (or Nicolet as its successor) has calculated incorrectly the interest due;

•

Commerce (or Nicolet as its successor) fails to make payment within 60 days after the date set in the Dissenters’ Notice for demanding payment; or

•

Commerce, having failed to consummate the merger, does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares within 60 days after the date set for demanding payment in the Dissenters’ Notice.

A dissenting shareholder waives his, her or its right to demand payment of his, her or its own estimate of fair value and interest under sections 180.1328 unless such dissenting shareholder provides Commerce (or Nicolet as its successor) with notice of his, her or its demand, in conformance with the notice requirements of section 180.0141, within 30 days after Commerce (or Nicolet as its successor) making or offering of payment for the dissenting shareholder’s shares.

Litigation

If a demand for payment under section 180.1328 remains unsettled, Commerce (or Nicolet as its successor) must commence a nonjury equity valuation proceeding in the Circuit Court of Winnebago County, Wisconsin (in the case of Commerce) or Brown County, Wisconsin (in the case of Nicolet), within 60 days after having received the payment demand under section 180.1328 and must petition the court to determine the fair value of the shares and accrued interest. If Commerce (or Nicolet as its successor) does not commence the proceeding within those 60 days, the WBCL requires Commerce (or Nicolet as its successor) to pay each dissenting shareholder whose demand remains unsettled the amount demanded. Commerce (or Nicolet as its successor) is required to make all dissenting shareholders whose demands remain unsettled parties to the proceeding and to serve a copy of the petition upon each of them.

The jurisdiction of the court in which the proceeding is brought is plenary and exclusive. The court may appoint one or more appraisers to receive evidence and to recommend a decision on fair value. An appraiser has the powers delegated to such appraiser in the court order appointing him or her or in any amendment to the order. Dissenters are entitled to the same discovery rights as parties in other civil proceedings.

Each dissenting shareholder made a party to the proceeding is entitled to judgment for the amount, if any, by which the court finds the fair value of such holder’s shares, plus interest, exceeds the amount paid or offered, as applicable, by Commerce (or Nicolet as its successor).

The court in an appraisal proceeding commenced under the foregoing provision must determine the costs of the proceeding, excluding fees and expenses of attorneys and experts for the respective parties, and must assess those costs against Commerce (or Nicolet as its successor), except that the court may assess the costs against all or some of the dissenting shareholders to the extent the court finds they acted arbitrarily, vexatiously, or not in good faith in demanding payment under section 180.1328 of the WBCL. The court also may assess the fees and expenses of attorneys and experts for the respective parties against Commerce (or Nicolet as its successor) if the court finds Commerce (or Nicolet as its successor) did not substantially comply with the requirements of the WBCL, or against either Commerce (or Nicolet as its successor) or a dissenting shareholder if the court finds that such party acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by the WBCL.

TABLE OF CONTENTS

If the court finds that the services of attorneys or experts for any dissenter were of substantial benefit to other dissenters similarly situated, the court may award those attorneys’ reasonable fees out of the amounts awarded the dissenters who were benefited.

This is a summary of the material rights of a dissenting shareholder and is qualified in its entirety by reference to the applicable portions of the WBCL, which are included as Appendix C to this proxy statement-prospectus. If you intend to dissent from approval of the merger, you should review carefully the text of Appendix C and should also consult with your attorney. We will not give you any further notice of the events giving rise to dissenters’ rights or any steps associated with perfecting dissenters’ rights, except as indicated above or otherwise required by law.

We have not made any provision to grant you access to any of the corporate files of Nicolet or Commerce, except as may be required by the WBCL, or to obtain legal counsel or appraisal services at the expense of Commerce (or Nicolet as its successor).

Any dissenting shareholder who perfects his, her or its right to be paid the “fair value” of his, her or its shares will recognize taxable gain or loss upon receipt of cash for such shares for federal income tax purposes. See “Material U.S. Federal Income Tax Consequences of the Merger” at page 57.

You must do all of the things described in this section and as set forth in the WBCL in order to preserve your dissenters’ rights and to receive the fair value of your shares in cash (as determined in accordance with those provisions). If you do not follow each of the steps as described above, you will have no right to receive cash for your shares as provided in the WBCL and you will only be entitled to receive the merger consideration as provided in the merger agreement. In view of the complexity of these provisions of Wisconsin law, shareholders of Commerce who are considering exercising their dissenters’ rights should consult their legal advisors.

TABLE OF CONTENTS

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF NICOLET

The following table presents Nicolet’s selected historical consolidated financial data as of and for the years ended December 31, 2015 through 2019. The selected financial data as of December 31, 2015 through 2019 is derived from Nicolet’s audited consolidated financial statements and related notes included in Nicolet’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “Nicolet Form 10-K”) incorporated by reference into this proxy statement-prospectus and should be read in conjunction with the consolidated financial statements and related notes, along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Nicolet Form 10-K. See “Where You Can Find Additional Information” on page 76.

The selected historical consolidated financial data of Nicolet includes the effect of mergers and other acquisition transactions from the date of each merger or other transaction, including the acquisitions of Choice Bancorp, Inc. on November 8, 2019, First Menasha Bancshares, Inc. on April 28, 2017 and Baylake Corp. on April 29, 2016.

	At and for the years ended December 31,
(in thousands, except per share data)	2019			2018			2017			2016			2015
Results of operations:
Interest income		$	138,588		$	125,537		$	109,253		$	75,467		$	48,597
Interest expense			22,510			18,889			10,511			7,334			7,213
Net interest income			116,078			106,648			98,742			68,133			41,384
Provision for loan losses			1,200			1,600			2,325			1,800			1,800
Net interest income after provision for loan losses			114,878			105,048			96,417			66,333			39,584
Noninterest income			53,367			39,509			34,639			26,674			17,708
Noninterest expense			96,799			89,758			81,356			64,942			39,648
Income before income tax expense			71,446			54,799			49,700			28,065			17,644
Income tax expense			16,458			13,446			16,267			9,371			6,089
Net income			54,988			41,353			33,433			18,694			11,555
Net income attributable to noncontrolling interest			347			317			283			232			127
Net income attributable to Nicolet Bankshares, Inc.			54,641			41,036			33,150			18,462			11,428
Preferred stock dividends			—			—			—			633			212
Net income available to common shareholders		$	54,641		$	41,036		$	33,150		$	17,829		$	11,216
Earnings per common share:
Basic		$	5.71		$	4.26		$	3.51		$	2.49		$	2.80
Diluted		$	5.52		$	4.12		$	3.33		$	2.37		$	2.57
Common shares:
Basic weighted average			9,562			9,640			9,440			7,158			4,004
Diluted weighted average			9,900			9,956			9,958			7,514			4,362
Outstanding			10,588			9,495			9,818			8,553			4,154
Year-End Balances:
Loans		$	2,573,751		$	2,166,181		$	2,087,925		$	1,568,907		$	877,061
Allowance for loan losses (“ALLL”)			13,972			13,153			12,653			11,820			10,307
Securities available for sale, at fair value			449,302			400,144			405,153			365,287			172,596
Goodwill and other intangibles, net			165,967			124,307			128,406			87,938			3,793
Total assets			3,577,260			3,096,535			2,932,433			2,300,879			1,214,439
Deposits			2,954,453			2,614,138			2,471,064			1,969,986			1,056,417
Short-term and long-term borrowings			67,629			77,305			78,046			37,617			39,788
Common equity			516,262			386,609			364,178			275,947			97,301

TABLE OF CONTENTS

	At and for the years ended December 31,
(in thousands, except per share data)	2019			2018			2017			2016			2015
Stockholders’ equity			516,262			386,609			364,178			275,947			109,501
Book value per common share		$	48.76		$	40.72		$	37.09		$	32.26		$	23.42
Tangible book value per common share*		$	33.08		$	27.62		$	24.01		$	21.98		$	22.51
Financial Ratios:
Return on average assets			1.75%			1.38%			1.25%			0.95%			0.96%
Return on average equity			12.89			11.04			9.96			8.16			10.20
Return on average common equity			12.89			11.04			9.96			8.20			12.35
Average equity to average assets			13.56			12.48			12.57			11.69			9.45
Net interest margin			4.19			4.04			4.30			4.01			3.88
Stockholders’ equity to assets			14.43			12.49			12.42			11.99			9.02
Tangible common equity to tangible assets*			10.27			8.83			8.41			8.50			7.72
Net loan charge-offs to average loans			0.02			0.05			0.08			0.02			0.09
Nonperforming loans to total loans			0.55			0.25			0.63			1.29			0.40
Nonperforming assets to total assets			0.42			0.19			0.49			0.97			0.32
Allowance for loan losses to loans			0.54			0.61			0.61			0.75			1.18

The ratios of tangible book value per common share, return on average tangible common equity, and tangible common equity to tangible assets exclude goodwill and other intangibles, net. These financial ratios have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength.

TABLE OF CONTENTS

MARKET PRICE AND DIVIDEND INFORMATION

Nicolet

Nicolet common stock is currently traded on the Nasdaq Capital Market under the symbol “NCBS.” As of February 27, 2020, Nicolet had approximately 2,500 shareholders of record. The closing price of Nicolet common stock was $72.32 per share on February 14, 2020, the last trading day before public announcement of the merger.

Nicolet has not paid any dividends on its common stock since its inception in 2000. Nicolet anticipates that its earnings, if any, will be held for purposes of enhancing its capital. No assurances can be given that any dividends on Nicolet’s common stock will be declared in the future or, if declared, what the amount of such dividends will be or whether such dividends will continue for future periods.

Commerce

Commerce’s common stock is privately held and not traded on any public market. The following table sets forth, for the periods indicated, the high and low known sale prices per share of Commerce common stock. The market for Commerce’s common stock has been illiquid and irregular, historical transactions in its stock have been sporadic and management may not be aware of all trades or the prices at which those trades occurred. Commerce has never paid dividends and none are contemplated.

	High			Low
2020
First Quarter		$	49.00		$	48.50
2019
Fourth Quarter		$	N/A		$	N/A
Third Quarter			47.00			45.00
Second Quarter			40.00			40.00
First Quarter			47.00			47.00
2018
Fourth Quarter		$	46.50		$	40.00
Third Quarter			42.00			42.00
Second Quarter			41.50			41.50
First Quarter			40.00			40.00

TABLE OF CONTENTS

COMMERCE SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of Commerce common stock as of January 31, 2020 by (1) each director and executive officer of Commerce, (2) all directors and executive officers as a group, and (3) each person who is known by Commerce to own beneficially 5% or more of Commerce common stock. Unless otherwise indicated, based on information furnished by such stockholders, management of Commerce believes that each person has sole voting and dispositive power over the shares indicated as owned by such person.

Name

Title

Common Stock
Beneficially
Owned(1)

Percentage
Beneficially
Owned(2)

Kevin Allis

Director

480

David Borchardt

Director, CFO & COO

72,081(3)

4.71%

Cory Davis

Director

14,168(3)

Brian Dix

Director

2,583(3)

Jack Enea

Director

8,688(4)

Joseph Fazio

Chairman of the Board, CEO

111,245(3)

7.27%

Thomas Hopp

Director, President

73,809(3)

4.82%

Lori Stortz

Director

David Stroik

Director

6,868

Scott Tennies

Director

14,768(3)

James Testwuide

Director

Kevin Volm

Director, CCO & Secretary

52,560(3)

3.43%

All Directors and executive officers as a group,
consisting of 12 persons:

357,391

23.35%

Forest County Potawatomi Community

Greater than 5% owner

132,000

8.50%

Less than 1%

(1)

For all persons listed, the number includes shares held directly by, jointly with, or in trust for the benefit of, the person’s spouse and dependent children, which are reported on the presumption that the individual may share voting and/or investment power because of the family relationship.

(2)

Shares subject to currently-exercisable stock options are treated as outstanding for the purpose of computing the number and percentage of outstanding securities of the class owned by each individual and for all directors and executive officers as a group, but not for the purpose of computing the percentage of class owned by any other person.

(3)

This number includes shares held in an IRA, 401(k) or other retirement plans for the benefit of the person or the person’s spouse,.

(4)

This number includes shares held in an IRA for the benefit of the person, and a limited liability company controlled by the person.

As reflected in the above table, the directors, director nominees and executive officers of Commerce represent 23.35% beneficial ownership of Commerce’s common stock as of January 31, 2020.

TABLE OF CONTENTS

OTHER MATTERS

Commerce’s management team is not aware of any other matters to be brought before their special shareholders’ meeting. However, if any other matters are properly brought before the meeting, the persons named in the enclosed proxy card will have discretionary authority to vote all proxies with respect to such matters in accordance with their judgment.

EXPERTS

The consolidated financial statements of Nicolet Bankshares, Inc. as of December 31, 2019 and for the year in the one-year period ended December 31, 2019 and the effectiveness of internal control over financial reporting as of December 31, 2019 incorporated in this Prospectus by reference from the Annual Report on Form 10-K for the year ended December 31, 2019 have been audited by Wipfli LLP an independent registered public accounting firm, as stated in their report thereon, incorporated herein by reference, and have been incorporated in this Prospectus and Registration Statement in reliance upon such report and upon the authority of such firm as experts in accounting and auditing. The consolidated financial statements of Nicolet Bankshares, Inc. as of December 31, 2018 and for each of the years in the two-year period ended December 31, 2018 were audited by Porter Keadle Moore, LLC, and are incorporated in this Prospectus by reference from the Annual Report on Form 10-K for the year ended December 31, 2019.

LEGAL MATTERS

Bryan Cave Leighton Paisner LLP will deliver prior to the effective time of the merger their opinions to Nicolet and Commerce, respectively, as to certain United States federal income tax consequences of the merger. Please see the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 57 of this proxy statement-prospectus. The validity of the Nicolet common stock to be issued in connection with the merger will be passed upon for Nicolet by Kate Lombardi, Vice President Human Resources/Legal Counsel of Nicolet National Bank. As of December 31, 2019, Ms. Lombardi beneficially owned shares of Nicolet common stock representing less than 1% of the total outstanding shares of Nicolet common stock. Certain additional legal matters relating to the merger will be passed upon for Nicolet by Bryan Cave Leighton Paisner LLP and for Commerce by Reinhart Boerner Van Deuren, s.c.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

Nicolet has filed a registration statement on Form S-4 with the SEC that registers the Nicolet common stock to be issued in the merger to Commerce shareholders. This proxy statement-prospectus is a part of that registration statement and constitutes a prospectus of Nicolet and a proxy statement of Commerce for its special shareholders’ meeting. As allowed by SEC rules and regulations, this proxy statement-prospectus does not contain all of the information in the registration statement.

Nicolet files reports, proxy statements, and other information with the SEC under the Exchange Act. Such information can be examined without charge on the website maintained by the Securities and Exchange Commission (http://www.sec.gov). The Securities and Exchange Commission’s website contains reports, proxy and information statements, including other information regarding registrants that file electronically with the Securities and Exchange Commission, including Nicolet. The statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement are, of necessity, brief descriptions of the material terms of, and should be read in conjunction with, such contract or document.

The SEC allows Nicolet to “incorporate by reference” the information that it files with the SEC, which means that Nicolet and Commerce can disclose important information to you by referring to Nicolet’s filings with the SEC. The information incorporated by reference is considered a part of this proxy statement-prospectus, and certain information that Nicolet files later with the SEC will automatically update and supersede the information in this proxy statement-prospectus.

TABLE OF CONTENTS

Nicolet incorporates by reference the following documents Nicolet has filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, other than information in these documents that is not deemed to be filed with the SEC:

•

Nicolet’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 28, 2020;

•

Nicolet’s Quarterly Report on Form 10-Q for the period ended March 31, 2020, filed with the SEC on April 30, 2020;

•

The description of Nicolet’s common stock contained in Nicolet’s registration statement on Form 8-A, as filed with the SEC on February 22, 2016, and any amendment or report filed for the purpose of updating such description;

•

Nicolet’s Current Reports on Form 8-K* filed with the SEC on January 21, 2020, February 18, 2020, March 2, 2020, March 25, and April 21, 2020; and

•

Any document Nicolet may file* under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this document.

If you would like to request documents, please do so by [•] to receive them before the Commerce special meeting.

Nicolet has supplied all of the information contained in this proxy statement-prospectus relating to Nicolet and its subsidiaries. Commerce has supplied all of the information relating to Commerce and its subsidiaries.

Commerce shareholders should rely only on the information contained or incorporated by reference in this proxy statement-prospectus to vote on the proposals in connection with the merger. We have not authorized anyone to provide you with information that is different from what is contained in this proxy statement-prospectus. This proxy statement-prospectus is dated [•]. You should not assume that the information contained in this proxy statement-prospectus is accurate as of any other date other than such date, and neither the mailing of this proxy statement-prospectus nor the issuance of Nicolet common stock as contemplated by the merger agreement will create any implication to the contrary.

We are not incorporating and will not incorporate by reference into this proxy statement-prospectus, past or future information on reports furnished or that will be furnished under Items 2.02 and/or 7.01 of, or otherwise with, Form 8-K.

TABLE OF CONTENTS

Appendix A

Execution Copy

Agreement and Plan of Merger

by and between

Nicolet Bankshares, Inc.

and

Commerce Financial Holdings, Inc.

February 17, 2020

TABLE OF CONTENTS

	Article 1 THE MERGER					A-1
	Section 1.1 The Merger					A-1
	Section 1.2 Effective Time; Closing					A-1
	Section 1.3 Effects of the Merger					A-1
	Section 1.4 Organizational Documents of the Surviving Entity					A-2
	Section 1.5 Directors and Officers of the Surviving Entity					A-2
	Section 1.6 Location of the Surviving Entity					A-2
	Section 1.7 Bank Merger					A-2
	Section 1.8 Absence of Control					A-2
	Section 1.9 Alternative Structure					A-2
	Article 2 CONVERSION OF SECURITIES IN THE MERGER					A-2
	Section 2.1 Consideration					A-2
	Section 2.2 Exchange of Company Stock Certificates					A-3
	Section 2.3 Maximum Nicolet Common Stock Issuance					A-4
	Section 2.4 Cancellation of Shares					A-4
	Section 2.5 No Fractional Shares					A-5
	Section 2.6 Dissenting Shares					A-5
	Section 2.7 Nicolet Common Stock					A-5
	Section 2.8 Company Stock Options					A-5
	Section 2.9 Company 401(k) Plan					A-5
	Article 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY					A-5
	Section 3.1 Company Organization					A-5
	Section 3.2 Subsidiary Organizations					A-6
	Section 3.3 Authorization; Enforceability					A-6
	Section 3.4 No Conflict					A-6
	Section 3.5 Capitalization					A-7
	Section 3.6 Company Subsidiary Capitalization					A-7
	Section 3.7 Financial Statements and Reports; Regulatory Filings					A-8
	Section 3.8 Books and Records					A-9
	Section 3.9 Properties					A-9
	Section 3.10 Loans; Loan Loss Reserve					A-10
	Section 3.11 Taxes					A-10
	Section 3.12 Employee Benefits					A-11
	Section 3.13 Compliance with Legal Requirements					A-14
	Section 3.14 Legal Proceedings; Orders					A-14
	Section 3.15 Absence of Certain Changes and Events					A-14
	Section 3.16 Material Contracts					A-15
	Section 3.17 No Defaults					A-16
	Section 3.18 Insurance					A-16
	Section 3.19 Compliance with Environmental Laws					A-16
	Section 3.20 Transactions with Affiliates					A-17
	Section 3.21 Brokers; Opinion of Financial Advisor					A-17

A-i

TABLE OF CONTENTS

	Section 3.22 Approval Delays					A-17
	Section 3.23 Labor Matters					A-17
	Section 3.24 Intellectual Property					A-18
	Section 3.25 Investments					A-18
	Section 3.26 Absence of Undisclosed Liabilities					A-18
	Section 3.27 Bank Secrecy Act; PATRIOT Act; Anti-Money Laundering					A-19
	Section 3.28 Disaster Recovery and Business Continuity					A-19
	Article 4 REPRESENTATIONS AND WARRANTIES OF NICOLET					A-19
	Section 4.1 Nicolet Organization					A-19
	Section 4.2 Nicolet Subsidiary Organizations					A-19
	Section 4.3 Authorization; Enforceability					A-20
	Section 4.4 No Conflict					A-20
	Section 4.5 Nicolet Capitalization					A-20
	Section 4.6 Nicolet Subsidiary Capitalization					A-21
	Section 4.7 Nicolet SEC Reports; Financial Statements and Reports; Regulatory Filings					A-21
	Section 4.8 Loans; Loan Loss Reserve					A-23
	Section 4.9 Taxes					A-23
	Section 4.10 Employee Benefits					A-24
	Section 4.11 Books and Records					A-24
	Section 4.12 Compliance with Legal Requirements					A-24
	Section 4.13 Legal Proceedings; Orders					A-24
	Section 4.14 Absence of Certain Changes and Events					A-25
	Section 4.15 No Defaults					A-25
	Section 4.16 Compliance with Environmental Laws					A-25
	Section 4.17 Transactions with Affiliates					A-25
	Section 4.18 Approval Delays					A-25
	Section 4.19 Labor Matters					A-25
	Article 5 THE COMPANY’S COVENANTS					A-26
	Section 5.1 Access and Investigation					A-26
	Section 5.2 Operation of the Company and the Bank					A-27
	Section 5.3 Notice of Changes					A-29
	Section 5.4 Shareholders Meeting					A-29
	Section 5.5 Information Provided to Nicolet					A-29
	Section 5.6 Operating Functions					A-30
	Section 5.7 Company Benefit Plans					A-30
	Section 5.8 Voting and Support Agreement					A-30
	Section 5.9 Acquisition Proposals					A-30
	Section 5.10 Calculation of Tangible Common Equity					A-31
	Section 5.11 Audited Financial Statements					A-31
	Section 5.12 Company Debt Agreements					A-31
	Article 6 NICOLET’S COVENANTS					A-32
	Section 6.1 Operation of Nicolet and Nicolet Subsidiaries					A-32
	Section 6.2 Notice of Changes					A-32
	Section 6.3 Indemnification					A-32

A-ii

TABLE OF CONTENTS

	Section 6.4 Board Representation					A-34
	Section 6.5 Authorization and Reservation of Nicolet Common Stock					A-34
	Section 6.6 Stock Exchange Listing					A-34
	Section 6.7 Assumption of Debt Instruments					A-35
	Article 7 COVENANTS OF ALL PARTIES					A-35
	Section 7.1 Regulatory Approvals					A-35
	Section 7.2 SEC Registration					A-35
	Section 7.3 Publicity					A-35
	Section 7.4 Reasonable Best Efforts; Cooperation; Takeover Statutes					A-36
	Section 7.5 Tax Free Reorganization					A-36
	Section 7.6 Employees and Employee Benefits					A-37
	Section 7.7 Section 16 Matters					A-38
	Section 7.8 Shareholder Litigation					A-38
	Article 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF NICOLET					A-38
	Section 8.1 Accuracy of Representations and Warranties					A-38
	Section 8.2 Performance by the Company					A-38
	Section 8.3 Shareholder Approval					A-38
	Section 8.4 No Proceedings					A-38
	Section 8.5 Regulatory Approvals					A-38
	Section 8.6 Registration Statement					A-38
	Section 8.7 Officer’s Certificate					A-39
	Section 8.8 Tax Opinion					A-39
	Section 8.9 Stock Exchange Listing					A-39
	Section 8.10 Minimum Tangible Common Equity					A-39
	Section 8.11 No Material Adverse Effect					A-39
	Section 8.12 Consents					A-39
	Section 8.13 Cancellation of Company Stock Options					A-39
	Article 9 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY					A-39
	Section 9.1 Accuracy of Representations and Warranties					A-39
	Section 9.2 Performance by Nicolet					A-39
	Section 9.3 Shareholder Approval					A-39
	Section 9.4 No Proceedings					A-40
	Section 9.5 Regulatory Approvals					A-40
	Section 9.6 Registration Statement					A-40
	Section 9.7 Officer’s Certificate					A-40
	Section 9.8 Tax Opinion					A-40
	Section 9.9 Stock Exchange Listing					A-40
	Section 9.10 No Material Adverse Effect					A-40
	Article 10 TERMINATION					A-40
	Section 10.1 Termination of Agreement					A-40
	Section 10.2 Effect of Termination or Abandonment					A-41
	Section 10.3 Fees and Expenses					A-41
	Article 11 MISCELLANEOUS					A-42
	Section 11.1 Survival					A-42

A-iii

TABLE OF CONTENTS

	Section 11.2 Governing Law					A-42
	Section 11.3 Assignments, Successors and No Third Party Rights					A-42
	Section 11.4 Modification					A-42
	Section 11.5 Extension of Time; Waiver					A-43
	Section 11.6 Notices					A-43
	Section 11.7 Entire Agreement					A-44
	Section 11.8 Severability					A-44
	Section 11.9 Further Assurances					A-44
	Section 11.10 Counterparts					A-44
	Article 12 DEFINITIONS					A-44
	Section 12.1 Definitions					A-44
	Section 12.2 Principles of Construction					A-50
	Exhibits
	A Form of Bank Plan of Merger
	B Form of Voting and Support Agreement

A-iv

TABLE OF CONTENTS

INDEX OF DEFINED TERMS

	Acquisition Proposal					44
	Adverse Recommendation					29
	Affiliate					44
	Agreement					1
	Articles of Merger					2
	Bank					44
	Bank Merger					44
	Bank Plan of Merger					2
	Borrowing Affiliate					27
	Business Day					44
	Closing					1
	Closing Date					1
	Code					1
	Company					1
	Company 401(k) Plan					5
	Company Articles of Incorporation					44
	Company Benefit Plan					44
	Company Board					45
	Company Bylaws					45
	Company Capital Stock					45
	Company Capitalization Date					7
	Company Common Stock					45
	Company Debt Agreement					45
	Company Director					2
	Company Disclosure Schedules					50
	Company Employees					28
	Company ERISA Affiliate					45
	Company Financial Statements					8
	Company Investment Securities					18
	Company Loans					10
	Company Material Contract					15
	Company Permitted Exceptions					9
	Company Preferred Stock					7
	Company Regulatory Reports					45
	Company Shareholder Approval					45
	Company Shareholders Meeting					29
	Company Stock Certificates					3
	Company Stock Option					45
	Company Stock Plans					45
	Confidentiality Agreement					26
	Contemplated Transactions					45
	Contract					45
	Control, Controlling or Controlled					45
	Conversion Fund					3
	Covered Employees					36

A-v

TABLE OF CONTENTS

	CRA					45
	Deposit Insurance Fund					46
	Derivative Transactions					46
	Dissenting Shares					46
	DOL					46
	Effective Time					2
	Environment					46
	Environmental Laws					46
	ERISA					46
	Exchange Act					46
	Exchange Agent					3
	Exchange Ratio					3
	Expenses					32
	FDIC					46
	Federal Reserve					46
	GAAP					46
	Hazardous Materials					46
	Indemnification Proceeding					32
	Indemnified Employee					32
	Indemnified Party					32
	Intangible Assets					46
	Internal Control Over Financial Reporting					22
	IRS					46
	IRS Guidelines					36
	Knowledge					46
	Legal Requirement					46
	Letter of Transmittal					3
	Material Adverse Effect					46
	Merger					1
	Merger Consideration					3
	Nasdaq Rules					47
	New Plans					37
	Nicolet					1
	Nicolet Articles of Incorporation					47
	Nicolet Bank					47
	Nicolet Benefit Plan					47
	Nicolet Board					47
	Nicolet Bylaws					47
	Nicolet Capital Stock					47
	Nicolet Capitalization Date					20
	Nicolet Common Stock					47
	Nicolet Common Stock Price					48
	Nicolet Disclosure Schedules					50
	Nicolet Equity Award					48
	Nicolet ERISA Affiliate					48
	Nicolet Evaluation Date					22
	Nicolet Financial Statements					21

A-vi

TABLE OF CONTENTS

	Nicolet Loans					22
	Nicolet Material Contract					48
	Nicolet Preferred Stock					20
	Nicolet SEC Reports					48
	Nicolet Stock Plans					48
	Old Plans					37
	Order					48
	Ordinary Course of Business					48
	OREO					48
	Outstanding Company Shares					48
	PATRIOT Act					19
	PBGC					48
	Per Share Stock Consideration					3
	Person					48
	Previously Disclosed					51
	Proceeding					48
	Proxy Statement					48
	Registration Statement					49
	Regulatory Authority					49
	Representative					49
	Requisite Regulatory Approvals					49
	Schedules					50
	SEC					49
	Securities Act					49
	Severance Costs					49
	Subsidiary					49
	Superior Proposal					49
	Supplemental Cash Consideration					5
	Surviving Entity					1
	Takeover Statutes					49
	Tangible Assets					49
	Tangible Common Equity					49
	Tax					50
	Tax Return					50
	Termination Date					40
	Termination Fee					41
	Transaction Costs					50
	Transition Date					50
	U.S.					50
	WBCL					50

A-vii

TABLE OF CONTENTS

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (together with all exhibits and schedules, this “Agreement”) is entered into as of February 17, 2020, by and between Nicolet Bankshares, Inc., a Wisconsin corporation (“Nicolet”), and Commerce Financial Holdings, Inc., a Wisconsin corporation (the “Company”).

RECITALS

A. The parties to this Agreement desire to effect a merger of the Company with and into Nicolet (the “Merger”) in accordance with this Agreement and the applicable provisions of the WBCL, with Nicolet as the surviving entity in the Merger (sometimes referred to in such capacity as the “Surviving Entity”).

B. The respective boards of directors of the Company and Nicolet have approved the Merger upon the terms and subject to the conditions of this Agreement and, in accordance with the applicable provisions of the WBCL, approved and declared the advisability of this Agreement and determined that consummation of the Merger in accordance with the terms of this Agreement is in the best interests of their respective companies and shareholders.

C. The parties intend that the Merger qualify as a “reorganization” under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement be and hereby is adopted as a “plan of reorganization” within the meaning of Sections 354 and 361 of the Code.

D. The parties desire to make certain representations, warranties and agreements in connection with the Merger and the other transactions contemplated by this Agreement, and the parties also agree to certain prescribed conditions to the Merger and other transactions.

AGREEMENTS

In consideration of the foregoing premises and the following mutual promises, covenants and agreements, the parties hereby agree as follows:

ARTICLE 1
THE MERGER

Section 1.1 The Merger. Upon the terms and subject to the conditions of this Agreement and in accordance with the applicable provisions of the WBCL, at the Effective Time, the Company shall be merged with and into Nicolet pursuant to the provisions of, and with the effects provided in, the WBCL, the separate corporate existence of the Company shall cease and Nicolet will be the Surviving Entity.

Section 1.2 Effective Time; Closing.

(a) The closing of the Merger (the “Closing”) shall occur through the mail or at a place that is mutually acceptable to Nicolet and the Company, or if they fail to agree, at the offices of Reinhart Boerner Van Deuren s.c., 1000 North Water Street, Suite 1700, Milwaukee, Wisconsin 53202, at 10:00 a.m., local time, on the date that is five (5) Business Days after the satisfaction or waiver (subject to applicable Legal Requirements) of the latest to occur of the conditions set forth in Article 8 and Article 9 (other than those conditions that by their nature are to be satisfied or waived at the Closing, but subject to the satisfaction or waiver of those conditions) or at such other time and place as Nicolet and the Company may agree in writing (the “Closing Date”). Subject to the provisions of Article 10, failure to consummate the Merger on the date and time and at the place determined pursuant to this Section 1.2 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement.

(b) The parties hereto agree to file on the Closing Date articles of merger with the Wisconsin Department of Financial Institutions (the “Articles of Merger”). The Merger shall become effective as of the date and time specified in the Articles of Merger (the “Effective Time”).

Section 1.3 Effects of the Merger. At the Effective Time, the effects of the Merger shall be as provided in this Agreement, the Articles of Merger and the applicable provisions of the WBCL. Without limiting the generality of the foregoing, at the Effective Time, all of the property, rights, privileges, powers and

A-1

TABLE OF CONTENTS

franchises of the Company shall be vested in the Surviving Entity, and all debts, liabilities and duties of the Company shall become the debts, liabilities and duties of the Surviving Entity.

Section 1.4 Organizational Documents of the Surviving Entity. The Nicolet Articles of Incorporation and the Nicolet Bylaws, as in effect immediately prior to the Effective Time, shall be the articles of incorporation and bylaws of the Surviving Entity until thereafter amended in accordance with the provisions thereof and applicable Legal Requirements.

Section 1.5 Directors and Officers of the Surviving Entity. At the Effective Time, the directors shall be the directors of Nicolet immediately prior to the Effective Time and one (1) person from the Company Board, to be designated by the Company and reasonably acceptable to Nicolet prior to the Effective Time (such person from the Company Board is expected to be Joseph Fazio, III) (the “Company Director”). At the Effective Time, the executive officers of the Surviving Entity shall be the executive officers of Nicolet immediately prior to the Effective Time. Such directors and executive officers shall serve until their resignation, removal or until their successors shall have been elected or appointed and shall have qualified in accordance with the laws and governing documents applicable to Nicolet or Nicolet Bank.

Section 1.6 Location of the Surviving Entity. The principal offices of the Surviving Entity will be located at 111 N. Washington Street, Green Bay, Wisconsin 54301.

Section 1.7 Bank Merger. Following the Effective Time of the Merger, the Bank shall be merged with and into Nicolet Bank in accordance with the provisions of the National Bank Act (12 U.S.C. § 215a), Section 18(c) of the Federal Deposit Insurance Act and Subchapter VII of the Wisconsin Banking Law and pursuant to the terms and conditions of the Plan of Merger by and between Nicolet Bank and the Bank, a form of which is attached as Exhibit A (the “Bank Plan of Merger”). Following the execution and delivery of this Agreement, the Company will cause the Bank, and Nicolet will cause Nicolet Bank, to execute and deliver the Bank Plan of Merger substantially in the form set forth in Exhibit A.

Section 1.8 Absence of Control. Subject to any specific provisions of this Agreement, it is the intent of the parties to this Agreement that neither Nicolet nor the Company by reason of this Agreement shall be deemed (until consummation of the Merger) to control, directly or indirectly, the other party or any of its respective Subsidiaries and shall not exercise, or be deemed to exercise, directly or indirectly, a controlling influence over the management or policies of such other party or any of its respective Subsidiaries.

Section 1.9 Alternative Structure. Notwithstanding anything to the contrary contained in this Agreement, before the Effective Time, Nicolet may change the method of effecting the Contemplated Transactions if and to the extent that it concludes such a change to be desirable; provided, that: (a) any such change shall not affect the U.S. federal income tax consequences of the Merger to holders of Company Common Stock; and (b) no such change shall (i) alter or change the amount or kind of the consideration to be issued to holders of Company Common Stock as consideration in the Merger or (ii) materially impede or delay consummation of the Merger. If Nicolet elects to make such a change, the parties shall execute appropriate documents to reflect the change.

ARTICLE 2
CONVERSION OF SECURITIES IN THE MERGER

Section 2.1 Consideration. At the Effective Time, by virtue of the Merger and without any action on the part of Nicolet, the Company, or the holder of any shares of Company Common Stock, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time, will be converted, subject to the maximum Nicolet Common Stock issuance procedures in Section 2.3, the fractional share procedures in Section 2.5, the dissenters rights provisions in Section 2.6 and the cash consideration provisions for shares held in the Company 401(k) Plan in Section 2.9, into the right to receive:

(i) 1.15 fully paid and nonassessable shares (subject to any adjustment in Section 2.1(ii) or (iii), the “Exchange Ratio”) of Nicolet Common Stock (the “Per Share Stock Consideration”);

(ii) If the Nicolet Common Stock Price is greater than $82.00 per share, the adjusted Exchange Ratio shall equal the quotient (rounded to the nearest thousandth of a share) obtained by dividing $94.30 by the Nicolet Common Stock Price;

A-2

TABLE OF CONTENTS

(iii) If the Nicolet Common Stock Price is less than $62.00 per share, Nicolet shall have the option to: (a) increase the number of shares of Nicolet Common Stock to be contributed using an adjusted Exchange Ratio equal to the quotient (rounded to the nearest Thousandth of a share) obtained by dividing $71.30 by the Nicolet Common Stock Price subject to the limitations set forth in Section 2.3; (b) leave the Exchange Ratio unchanged, but add additional cash consideration in an amount sufficient to bring the Per Share Stock Consideration up to $71.30 per share; (c) leave the Exchange Ratio unchanged, or (d) terminate this Agreement. Likewise, if Nicolet fails to add additional stock or cash consideration as set forth in (a) and (b) of the preceding sentence, or if Nicolet elects to leave the Exchange Ratio unchanged as set forth in (c) of the preceding sentence, the Company shall have the right to terminate this Agreement.

The total stock consideration to be paid by Nicolet in respect of shares of Company Common Stock is referred to herein as the “Merger Consideration.” Notwithstanding anything in this Section 2.1 to the contrary, at the Effective Time and by virtue of the Merger, each share of Company Common Stock held in the Company’s treasury and each share of Company Common Stock owned directly or indirectly by Nicolet (other than shares held in a fiduciary capacity or in connection with debts previously contracted) will be cancelled and no shares of Nicolet Common Stock, cash, or other consideration will be issued or paid in exchange therefor.

Section 2.2 Exchange of Company Stock Certificates.

(a) The parties to this Agreement agree: (i) that Computershare Trust Company, N.A. shall serve, pursuant to customary terms of an exchange agent agreement, as the exchange agent for purposes of this Agreement (the “Exchange Agent”); and (ii) to execute and deliver the exchange agent agreement at or prior to the Effective Time. Nicolet shall be solely responsible for the payment of any fees and expenses of the Exchange Agent.

(b) At or prior to the Effective Time, Nicolet shall authorize the issuance of and shall make available to the Exchange Agent, for the benefit of the holders of Company Common Stock for exchange in accordance with this Article 2: (i) a sufficient number of shares of Nicolet Common Stock for payment of the Merger Consideration pursuant to Section 2.1, and (ii) sufficient cash for payment of (A) Supplemental Cash Consideration in accordance with , if any Section 2.3, (B) cash in lieu of any fractional shares of Nicolet Common Stock in accordance with Section 2.5, and (C) cash for shares held in the Company 401(k) Plan in accordance with Section 2.9. Such amount of cash in lieu of fractional shares and shares of Nicolet Common Stock, together with any dividends or distributions with respect thereto paid after the Effective Time, are referred to in this Article 2 as the “Conversion Fund.”

(c) Within five (5) Business Days after the Closing Date, Nicolet shall cause the Exchange Agent to mail to each holder of record of one or more certificates representing shares of Company Common Stock (the “Company Stock Certificates”) the letter of transmittal and other appropriate and customary transmittal materials (which shall specify that delivery shall be effected, and risk of loss and title to the Company Stock Certificates shall pass, only upon proper delivery of such Company Stock Certificates to the Exchange Agent) (the “Letter of Transmittal” ) for use in effecting the surrender of Company Stock Certificates pursuant to this Agreement.

(d) Upon proper surrender of a Company Stock Certificate for exchange to the Exchange Agent, together with a properly completed and duly executed Letter of Transmittal, the holder of such Company Stock Certificate shall be entitled to receive in exchange therefor his, her or its Merger Consideration plus cash in lieu of any fractional shares of Nicolet Common Stock in accordance with Section 2.2 deliverable in respect of the shares of Company Common Stock represented by such Company Stock Certificate; thereupon such Company Stock Certificate shall forthwith be cancelled.

(e) No interest will be paid or accrued on any portion of the Merger Consideration deliverable upon surrender of a Company Stock Certificate.

(f) After the Effective Time, there shall be no transfers of Outstanding Company Shares on the stock transfer books of the Company.

A-3

TABLE OF CONTENTS

(g) No dividends or other distributions declared with respect to Nicolet Common Stock and payable to the holders of record thereof after the Effective Time shall be paid to the holder of any unsurrendered Company Stock Certificate until the holder thereof shall surrender such Company Stock Certificate in accordance with this Article 2. Promptly after the surrender of a Company Stock Certificate in accordance with this Article 2, the record holder thereof shall be entitled to receive any such dividends or other distributions, without interest thereon, which theretofore had become payable with respect to shares of Nicolet Common Stock into which the shares of Company Common Stock represented by such Company Stock Certificate were converted at the Effective Time pursuant to Section 2.1. No holder of an unsurrendered Company Stock Certificate shall be entitled, until the surrender of such Company Stock Certificate, to vote the shares of Nicolet Common Stock into which such holder’s Company Common Stock shall have been converted.

(h) Any portion of the Conversion Fund that remains unclaimed by the shareholders of the Company twelve (12) months after the Effective Time shall be paid to the Surviving Entity, or its successors in interest. Any shareholders of the Company who have not theretofore complied with this Article 2 shall thereafter look only to the Surviving Entity, or its successors in interest, for issuance of Nicolet Common stock pursuant to the Merger Consideration and the payment of cash in lieu of any fractional shares deliverable in respect of such shareholders’ shares of Company Common Stock, as well as any accrued and unpaid dividends or distributions on shares of such Nicolet Common Stock. Notwithstanding the foregoing, none of the Surviving Entity, the Exchange Agent or any other person shall be liable to any former holder of shares of Company Common Stock for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar laws.

(i) In the event any Company Stock Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Company Stock Certificate to be lost, stolen or destroyed and, if required by the Surviving Entity, the posting by such person of a bond in such amount as the Exchange Agent may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Company Stock Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Company Stock Certificate, and in accordance with this Article 2, shares of Nicolet Common Stock pursuant to the Merger Consideration and cash in lieu of any fractional shares deliverable in respect thereof pursuant to this Agreement.

(j) If, between the date of this Agreement and the Effective Time, the outstanding shares of Nicolet Common Stock shall have been changed into a different number of shares or into a different class by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, the Merger Consideration per share shall be adjusted appropriately to provide the holders of Company Common Stock the same economic effect as contemplated by this Agreement prior to such event.

Section 2.3 Maximum Nicolet Common Stock Issuance. Notwithstanding anything in this Article 2 to the contrary, under no circumstances shall the number of shares of Nicolet Common Stock to be issued as a result of the Contemplated Transactions exceed 19.9% of the outstanding shares of Nicolet Common Stock, such that the provisions of Nasdaq Listing Rule 5635 and/or the WBCL would require approval of the Contemplated Transactions by the shareholders of Nicolet. To the extent necessary to avoid a shareholder vote under Nasdaq Listing Rule 5635 and/or the WBCL, the Exchange Ratio shall be reduced to the maximum exchange ratio (rounded to the nearest Thousandth of a share) that would not cause need for a Nicolet shareholder vote, and Nicolet shall add additional cash consideration (the “Supplemental Cash Consideration”) in an amount sufficient to leave the value of the Per Share Stock Consideration unchanged as a result of such adjustment.

Section 2.4 Cancellation of Shares. At the Effective Time, the shares of Company Common Stock will no longer be outstanding and will automatically be cancelled and will cease to exist. Company Stock Certificates that represented Company Common Stock before the Effective Time will be deemed for all purposes to represent the number of shares of Nicolet Common Stock or cash into which they were converted pursuant to this Article 2.

A-4

TABLE OF CONTENTS

Section 2.5 No Fractional Shares. Notwithstanding anything to the contrary contained in this Agreement, no fractional shares of Nicolet Common Stock shall be issued as Merger Consideration in the Merger. Each holder of Company Common Stock who would otherwise be entitled to receive a fractional share of Nicolet Common Stock pursuant to this Article 2 shall instead be entitled to receive an amount in cash (without interest) rounded to the nearest whole cent, determined by multiplying Nicolet Common Stock Price by the fractional share of Nicolet Common Stock to which such former holder would otherwise be entitled.

Section 2.6 Dissenting Shares. Notwithstanding anything in this Article 2 to the contrary, no Dissenting Shares shall be converted in the Merger. All dissenting shares shall be cancelled, and the holders thereof shall thereafter be entitled only to such rights as are granted by Subchapter XIII of the WBCL; provided, however, that if any such shareholder fails to perfect his, her or its rights as a dissenting shareholder with respect to his, her or its Dissenting Shares in accordance with Subchapter XIII of the WBCL or withdraws or loses such holder’s dissenter’s rights, such shares held by such shareholder shall be deemed to have been converted into, and become exchangeable for, as of the Effective Time, the right to receive the Merger Consideration to which the holder of such shares would have been entitled as of the Effective Time, without interest thereon.

Section 2.7 Nicolet Common Stock. At the Effective Time, by virtue of the Merger and without any action on the part of Nicolet, the Company, or the holder of any shares of Nicolet Common Stock, the shares of Nicolet Common Stock issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding and shall not be affected by the Merger.

Section 2.8 Company Stock Options.

(a) Except as set forth in Article 2.8 of the Company Disclosure Schedules, immediately prior to the Effective Time, each Company Stock Option that is outstanding immediately prior to the Effective Time, whether vested or unvested, shall be cancelled, by virtue of the Merger and without any action on the part of the holder thereof, in consideration for the right to receive, as promptly as practicable (but no later than fifteen (15) calendar days) following the Effective Time, a cash payment (without interest and less applicable withholding Taxes) with respect thereto equal to the product of (i) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time and (ii) the excess, if any, of the product of (x) the Nicolet Common Stock Price and (y) the Exchange Ratio, subject to any adjustment, over the exercise price per share of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time.

(b) At or prior to the Effective Time, the Company, the Company Board and its compensation committee, as applicable, shall adopt any resolutions and take any actions that are necessary to effectuate the provisions of this .

Section 2.9 Company 401(k) Plan Shares. At the Effective Time, by virtue of the Merger and without any action on the part of Nicolet, the Company or the holder of any shares of Company Common Stock, each share of Company Common Stock held in the Commerce State Bank 401(k) & Profit Sharing Plan (the “Company 401(k) Plan”) will be converted into the right to receive a cash payment equal to the product of the Exchange Ratio and the Nicolet Common Stock Price, rounded to the nearest $0.01, plus the Supplemental Cash Consideration, if any.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as Previously Disclosed, the Company hereby represents and warrants to Nicolet as follows:

Section 3.1 Company Organization. The Company: (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Wisconsin and is also in good standing in each other jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary, except where the failure to be so qualified and in good standing would not have a Material Adverse Effect on the Company; (b) is registered with the Federal Reserve as a bank holding company under the Bank Holding Company Act of 1956, as amended; and (c) has full power and authority, corporate and otherwise, to operate as a bank holding company and to own, operate and lease its

A-5

TABLE OF CONTENTS

properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. The Company has delivered or made available to Nicolet true, complete and correct copies of the Company Articles of Incorporation and the Company Bylaws and all amendments thereto, and the Company Articles of Incorporation and the Company Bylaws are in full force and effect as of the date of this Agreement. Other than the Bank, the Company has no Subsidiaries.

Section 3.2 Subsidiary Organizations. The Bank is a Wisconsin state-chartered bank duly organized, validly existing and in good standing under the laws of the State of Wisconsin. The Bank is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is also in good standing in each other jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary, except where the failure to be so qualified and in good standing would not have a Material Adverse Effect on the Company. The Bank has full power and authority, corporate and otherwise, to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. The deposit accounts of the Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by applicable Legal Requirements, and all premiums and assessments required to be paid in connection therewith have been paid when due. The Company has delivered or made available to Nicolet copies of the charter (or similar organizational documents) and bylaws of the Bank and all amendments thereto, each of which are true, complete and correct and in full force and effect as of the date of this Agreement.

Section 3.3 Authorization; Enforceability. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Company Board. The Company Board has determined that the Merger, on substantially the terms and conditions set forth in this Agreement, is advisable and in the best interests of the Company and its shareholders, and that the Agreement and transactions contemplated hereby are in the best interests of the Company and its shareholders. The Company Board has directed the Merger, on substantially the terms and conditions set forth in this Agreement, be submitted to the Company’s shareholders for consideration at a duly held meeting of such shareholders and has resolved to recommend that the Company’s shareholders vote in favor of the adoption and approval of this Agreement and the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company, and the consummation by it of its obligations under this Agreement, have been authorized by all necessary corporate action, subject to the Company Shareholder Approval, and, subject to the receipt of the Requisite Regulatory Approvals, this Agreement constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other Legal Requirements affecting creditors’ rights generally and subject to general principles of equity.

Section 3.4 No Conflict. Neither the execution nor delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time): (a) contravene, conflict with or result in a violation of any provision of the certificate of incorporation, certificate of formation or charter (or similar organizational documents) or bylaws or operating agreement, each as in effect on the date hereof, or any currently effective resolution adopted by the board of directors, shareholders, manager or members of, the Company or the Bank; (b) assuming receipt of the Requisite Regulatory Approvals, contravene, conflict with or result in a violation of, or give any Regulatory Authority or other Person the valid and enforceable right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which the Company or the Bank, or any of their respective assets that are owned or used by them, may be subject, except for any contravention, conflict or violation that is permissible by virtue of obtaining the Requisite Regulatory Approvals; (c) contravene, conflict with or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any Company Material Contract; or (d) result in the creation of any material lien, charge or encumbrance upon or with respect to any of the assets owned or used by the Company or the Bank. Except for the Requisite Regulatory Approvals, the Company Shareholder Approval and the Registration Statement, neither the Company nor the Bank is or will be required to give any notice to or obtain any consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

A-6

TABLE OF CONTENTS

Section 3.5 Capitalization.

(a) The authorized capital stock of the Company currently consists exclusively of (i) 10,000,000 shares of Company Common Stock, $.01 par value, of which, as of January 31, 2020 (the “Company Capitalization Date”), 1,530,546 shares were issued and outstanding, and (ii) 1,000,000 shares of preferred stock, $0.01 par value (the “Company Preferred Stock”), of which, as of the Company Capitalization Date, no shares were issued and outstanding. The Company does not have outstanding any bonds, debentures, notes or other debt obligations having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) with the shareholders of the Company on any matter. All of the issued and outstanding shares of Company Common Stock have been duly authorized and validly issued and are fully paid and nonassessable. None of the outstanding shares of Company Common Stock were issued in violation of any preemptive rights.

(b) As of the Company Capitalization Date, no shares of Company Capital Stock were reserved for issuance except for 57,132 shares of Company Common Stock reserved for issuance pursuant to outstanding or future awards under Company Stock Plans.

(c) Other than 57,132 shares of Company Common Stock underlying stock options issued under Company Stock Plans, no equity-based awards were outstanding as of the Company Capitalization Date. Since the Company Capitalization Date through the date hereof, the Company has not: (i) issued or repurchased any shares of Company Common Stock or other equity securities of the Company; or (ii) issued or awarded any options, stock appreciation rights, restricted shares, restricted stock units, deferred equity units, awards based on the value of Company Common Stock or any other equity-based awards. From the Company Capitalization Date through the date of this Agreement, neither the Company nor the Bank has: (A) accelerated the vesting of or lapsing of restrictions with respect to any stock-based compensation awards or long-term incentive compensation awards; (B) with respect to executive officers of the Company or the Bank, entered into or amended any employment, severance, change in control or similar agreement (including any agreement providing for the reimbursement of excise taxes under Section 4999 of the Code); or (C) adopted or materially amended any Company Stock Plan.

(d) None of the shares of Company Common Stock were issued in violation of any federal or state securities laws or any other applicable Legal Requirement. As of the date of this Agreement, except as set forth in Section 3.5(d) of the Company Disclosure Schedules, there are: (i) no outstanding subscriptions, Contracts, conversion privileges, options, warrants, calls or other rights obligating the Company or the Bank to issue, sell or otherwise dispose of, or to purchase, redeem or otherwise acquire, any shares of capital stock of the Company or the Bank; and (ii) no contractual obligations of the Company or the Bank to repurchase, redeem or otherwise acquire any shares of Company Common Stock or any equity security of the Company or the Bank or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of the Company or the Bank. Except as permitted by this Agreement, since the Company Capitalization Date, no shares of Company Common Stock have been purchased, redeemed or otherwise acquired, directly or indirectly, by the Company or the Bank and no dividends or other distributions payable in any equity securities of the Company or the Bank have been declared, set aside, made or paid to the shareholders of the Company. Other than the Bank, the Company does not own, nor has any Contract to acquire, any equity interests or other securities of any Person or any direct or indirect equity or ownership interest in any other business.

Section 3.6 Company Subsidiary Capitalization. Except as set forth in Section 3.6 of the Company Disclosure Schedules, all of the issued and outstanding shares of capital stock or other equity ownership interests of the Bank are owned by the Company, directly or indirectly, free and clear of any material liens, pledges, charges, claims and security interests and similar encumbrances, and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. The Bank neither has nor is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of the Bank or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of the Bank.

A-7

TABLE OF CONTENTS

Section 3.7 Financial Statements and Reports; Regulatory Filings.

(a) The financial statements provided by the Company to Nicolet for the years ended December 31, 2017, 2018 and 2019 (including the related notes, where applicable) have been prepared in conformity with GAAP, except in each case as indicated in such statements or the notes thereto, and comply in all material respects with all applicable Legal Requirements. Taken together, the financial statements (collectively, the “Company Financial Statements”) are complete and correct in all material respects and fairly and accurately present the respective financial position, assets, liabilities and results of operations of the Company and the Bank at the respective dates of and for the periods referred to in the Company Financial Statements, subject to normal year-end audit adjustments in the case of unaudited Company Financial Statements. The Company Financial Statements do not include any assets or omit to state any liabilities, absolute or contingent, or other facts, which inclusion or omission would render the Company Financial Statements misleading in any material respect as of the respective dates thereof and for the periods referred to therein.

(b) The Company Regulatory Reports have been filed with the appropriate Regulatory Authority. The Company Regulatory Reports have been prepared in material compliance with the rules and regulations of the respective federal or state banking regulator with which they were filed, except as otherwise noted therein. Each Company Regulatory Report fairly presents, in all material respects, the financial position of the Company or the Bank, as appropriate, and the results of its operations at the date and for the period indicated in such Company Regulatory Report in conformity with the Instructions for the Preparation of Call Reports and other relevant guidance as promulgated by applicable regulatory authorities. None of the Company Regulatory Reports contains any material items of special or nonrecurring income or any other income not earned in the Ordinary Course of Business, except as expressly specified therein.

(c) The Company’s independent accountants, Wipfli LLP, which have expressed their opinion with respect to the Company Financial Statements (except those Company Financial Statements as of December 31, 2019, which are unaudited), are and have been throughout the periods covered by such Company Financial Statements an independent accounting firm. Section 3.7(e) of the Company Disclosure Schedules lists all non-audit services performed by Wipfli LLP for the Company and the Bank. As of the date hereof, Wipfli LLP has not resigned (or informed the Company that it intends to resign) or been dismissed as independent accountants of the Company.

(d) Each of the Company and the Bank has filed all forms, reports and documents required to be filed since January 1, 2018, with all applicable federal or state securities or banking authorities except to the extent failure would not have a Material Adverse Effect on the Company and the Bank. Such forms, reports and documents: (i) complied as to form in all material respects with applicable Legal Requirements; and (ii) did not at the time they were filed, after giving effect to any amendment thereto filed prior to the date hereof, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that information filed as of a later date (but before the date of this Agreement) is deemed to modify information as of an earlier date.

(e) Except for normal examinations conducted by a Regulatory Authority in the Ordinary Course of Business of the Company and the Bank, no Regulatory Authority has initiated since January 1, 2018, or has pending any proceeding, enforcement action or to the Knowledge of the Company, investigation into the business, disclosures or operations of the Company or the Bank. Since January 1, 2018, no Regulatory Authority has resolved any proceeding, enforcement action or, to the Knowledge of the Company, investigation into the business, disclosures or operations of the Company or the Bank. The Company and the Bank have fully complied with, and there is no unresolved violation, criticism or exception by any Regulatory Authority with respect to, any report or statement relating to any examination or inspection of the Company or the Bank. Since January 1, 2018, there have been no formal or informal inquiries by, or disagreements or disputes with, any Regulatory Authority with respect to the business, operations, policies or procedures of the Company or the Bank (other than normal examinations conducted by a Regulatory Authority in the Company’s Ordinary Course of Business). To the Knowledge of the Company, there has not been any event or occurrence since

A-8

TABLE OF CONTENTS

January 1, 2018 that would result in a determination that the Bank is not an eligible depository institution as defined in 12 C.F.R. § 303.2(r).

Section 3.8 Books and Records. The books of account, minute books, stock record books and other records kept by the Company and the Bank are in all material respects complete and accurate and have been maintained in accordance with applicable Legal Requirements and accounting requirements. The Company Financial Statements have been prepared from, and are in accordance with, the books and records of the Company and the Bank. Each of the Company and the Bank maintains accurate books and records reflecting its assets and liabilities and maintains proper and adequate internal accounting controls that provide assurance that (a) transactions are executed with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of the Company Financial Statements and the Company Regulatory Reports in accordance with GAAP, and to maintain asset and liability accountability; (c) access to each Company asset and incurrence of each liability of the Company are permitted only in accordance with management’s specific or general authorizations; (d) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals, and appropriate action is taken with respect to any difference; and (e) extensions of credit and other receivables are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis. None of the Company’s systems, controls, data or information are recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) are not under the exclusive ownership and direct control of the Company, the Bank or their accountants, except as would not reasonably be expected to have a Material Adverse Effect on the Company. Neither the Company nor the Bank has been advised of any material deficiencies in the design or operation of internal controls over financial reporting which could reasonably be expected to adversely affect its ability to record, process, summarize and report financial data, or any fraud, whether or not material, that involves management. No material weakness in internal controls has been identified by the Company’s auditors, and there have been no significant changes in internal controls that could reasonably be expected to materially and adversely affect internal controls. The minute books of the Company and the Bank contain accurate and complete records in all material respects of all meetings held of, and corporate action taken by, its respective shareholders, boards of directors and committees of the boards of directors. At the Closing, all of those books and records will be in the possession of the Company and the Bank.

Section 3.9 Properties.

(a) Section 3.9 of the Company Disclosure Schedules lists or describes all interests in real property owned by the Company and the Bank, including OREO, as of the date of this Agreement and the principal buildings and structures located thereon, together with the address of such real estate, and each lease of real property to which it is a party, identifying the parties thereto, the annual rental payable, the expiration date thereof and a brief description of the property covered, and in each case of either owned or leased real property, the proper identification, if applicable, of each such property as a branch or main office or other office.

(b) The Company and the Bank has good and marketable title to all assets and properties, whether real or personal, tangible or intangible, that it purports to own, subject to no liens, mortgages, security interests, encumbrances or charges of any kind except: (i) as noted in the most recent Company Financial Statements; (ii) statutory liens for Taxes not yet delinquent or being contested in good faith by appropriate Proceedings and for which appropriate reserves have been established and reflected in the Company Financial Statements; (iii) pledges or liens required to be granted in connection with the acceptance of government deposits, granted in connection with repurchase or reverse repurchase agreements or otherwise incurred in the Ordinary Course of Business; (iv) easements, rights of way, and other similar encumbrances that do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties; and (v) minor defects and irregularities in title and encumbrances that do not materially impair the use thereof for the purposes for which they are held (collectively, the “Company Permitted Exceptions”). Each of the Company and the Bank as lessee has the right under valid and existing leases to occupy, use, possess and control any and all of the respective property leased by it, and each such

A-9

TABLE OF CONTENTS

lease is valid and without default thereunder by the lessee or, to the Knowledge of the Company, the lessor. All buildings and structures owned by the Company and the Bank lie wholly within the boundaries of the real property owned or validly leased by it, and do not encroach upon the property of, or otherwise conflict with the property rights of, any other Person.

Section 3.10 Loans; Loan Loss Reserve.

(a) Each loan, loan agreement, note, lease or other borrowing agreement by the Bank, any participation therein, and any guaranty, renewal or extension thereof (the “Company Loans”) reflected as an asset on any of the Company Financial Statements or reports filed with the Regulatory Authorities is evidenced by documentation that is customary and legally sufficient in all material respects and constitutes, to the Knowledge of the Company, the legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors’ rights generally or equitable principles or doctrines.

(b) All Company Loans originated or purchased by the Bank were made or purchased in accordance with the policies of the board of directors of the Bank and in the Ordinary Course of Business of the Bank. Except as set forth in Section 3.10(b) of the Company Disclosure Schedules, the Bank’s interest in all Company Loans is free and clear of any security interest, lien, encumbrance or other charge, and the Bank has complied in all material respects with all Legal Requirements relating to such Company Loans. There has been no default on, or forgiveness or waiver of, in whole or in part, any Company Loan made to an executive officer or director of the Bank or an entity controlled by an executive officer or director during the three (3) years immediately preceding the date hereof.

(c) Except as set forth in Section 3.10(a) of the Company Disclosure Schedules, as of the date of this Agreement, the Bank is not a party to any Company Loan: (i) under the terms of which the obligor is more than ninety (90) days delinquent in payment of principal or interest or in default of any other material provision as of the dates shown thereon or for which the Bank has discontinued the accrual of interest; (ii) that has been classified as “substandard,” “doubtful,” “loss,” “other loans especially mentioned” or any comparable classifications by the Bank; (iii) that has been listed on any “watch list” or similar internal report of the Bank; (iv) that has been the subject of any notice from any obligor of adverse environmental conditions potentially affecting the value of any collateral for such Company Loan; (v) with respect to which the Bank has Knowledge of potential violations of any Environmental Laws that may have occurred on the property serving as collateral for such Company Loan or by any obligor of such Company Loan; or (vi) that represents an extension of credit to an executive officer or director of the Bank or an entity controlled by an executive officer or director.

(d) The Bank’s allowance for loan and lease losses reflected in the Company Financial Statements (including footnotes thereto) was determined on the basis of the Bank’s continuing review and evaluation of the portfolio of Company Loans under the requirements of GAAP and Legal Requirements, was established in a manner consistent with the Bank’s internal policies, and, in the reasonable judgment of the Bank, was adequate in all material respects under the requirements of GAAP and all Legal Requirements to provide for possible or specific losses, net of recoveries relating to Company Loans previously charged-off, on outstanding Company Loans.

Section 3.11 Taxes.

(a) The Company and the Bank have duly and timely filed all Tax Returns required to be filed by them on or before the Closing Date for all taxable or reporting periods ending on or before the Closing Date, and each such Tax Return is true, correct and complete in all material respects. The Company and the Bank have paid, or made adequate provision for the payment of, all Taxes (whether or not reflected in Tax Returns as filed or to be filed) due and payable by the Company and the Bank, or claimed to be due and payable by any Regulatory Authority, and are not delinquent in the payment of any Tax, except such Taxes as are being contested in good faith and as to which adequate reserves have been provided. There are no liens for Taxes upon any of the assets of the Company or the Bank.

A-10

TABLE OF CONTENTS

(b) There is no claim or assessment pending or, to the Knowledge of the Company, threatened against the Company and the Bank for any Taxes that they owe. No audit, examination or investigation related to Taxes paid or payable by the Company and the Bank is presently being conducted or, to the Knowledge of the Company, threatened by any Regulatory Authority. Except as set forth in Section 3.11(b) of the Company Disclosure Schedules, neither the Company nor the Bank are the beneficiary of any extension of time within which to file any Tax Return, and there are no liens for Taxes (other than Taxes not yet due and payable) upon any of the Company’s or the Bank’s assets. Neither the Company nor the Bank has executed an extension or waiver of any statute of limitations on the assessment or collection of any Tax that is currently in effect.

(c) The Company and the Bank have delivered or made available to Nicolet true, correct and complete copies of all Tax Returns relating to income taxes and franchise taxes owed by the Company and the Bank with respect to the last two (2) fiscal years.

(d) To the Knowledge of the Company, neither the Company nor the Bank has engaged in any transaction that could affect the Tax liability for any Tax Returns not closed by applicable statute of limitations: (i) which is a “reportable transaction” or a “listed transaction” or (ii) a “significant purpose of which is the avoidance or evasion of U.S. federal income tax” within the meaning of Sections 6662, 6662A, 6011, 6111 or 6707A of the Code or of the regulations of the U.S. Department of the Treasury promulgated thereunder or pursuant to notices or other guidance published by the IRS (irrespective of the effective dates).

(e) The Company and the Bank are in compliance with, and their records contain all information and documents (including properly completed IRS Forms W-9) necessary to comply with, all applicable information reporting and Tax withholding requirements under federal, state, and local Tax Legal Requirements, and such records identify with specificity all accounts subject to backup withholding under Section 3406 of the Code, except where any such failure to comply would not reasonably be expected to have a Material Adverse Effect on the Company.

(f) Except as set forth in Section 3.11(f) of the Company Disclosure Schedules, neither the Company nor the Bank has experienced a change in ownership with respect to its stock, within the meaning of Section 382 of the Code, other than the ownership change that will occur as a result of the transactions contemplated by this Agreement.

(g) There is no pending claim by any taxing authority of a jurisdiction where either the Company or the Bank has not filed Tax Returns that either the Company or Bank is subject to taxation in that jurisdiction.

(h) Neither the Company nor the Bank has ever been a member of an “affiliated group” within the meaning of Code Section 1504(a) filing a consolidated federal income tax return, other than any “affiliated group” of which the Company is the “common parent.” Except as set forth in Section 3.11(h) of the Company Disclosure Schedules, neither the Company nor the Bank is a party to any Tax sharing or Tax allocation agreement that will remain in effect after consummation to the Mergers contemplated by this Agreement.

(i) Within the past two (2) years, neither the Company nor the Bank has distributed stock of another Person, nor has the stock of either the Company or the Bank been distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 of the Code.

(j) The Company has not taken or agreed to take any action, and has no Knowledge of any fact or circumstance that is reasonably likely, to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

Section 3.12 Employee Benefits.

(a) Section 3.12(a) of the Company Disclosure Schedules includes a complete and correct list of each Company Benefit Plan. The Company has delivered or made available to Nicolet true and complete copies of the following with respect to each Company Benefit Plan: (i) copies of each Company

A-11

TABLE OF CONTENTS

Benefit Plan (including a written description where no formal plan document exists), and all related plan descriptions and other written communications provided to participants of the Company Benefit Plans, as required by applicable law, or describing the Company Benefit Plan design changes or describing opportunities to enroll in the Company Benefit Plans; (ii) to the extent applicable, the last three (3) years’ annual reports on Form 5500, including all schedules thereto and the opinions of independent accountants; and (iii) other material ancillary documents, including:

(i) all contracts with third party administrators, actuaries, investment managers, consultants, insurers, and independent contractors;

(ii) all notices and other communications that were given by the Company, the Bank, or any Company Benefit Plan to the IRS, the DOL or the PBGC pursuant to applicable law within the six (6) years preceding the date of this Agreement; and

(iii) all notices or other communications that were given by the IRS, the PBGC, or the DOL to the Company, the Bank, or any Company Benefit Plan within the six (6) years preceding the date of this Agreement.

(b) Except as set forth in Section 3.12(b) of the Company Disclosure Schedules, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby (including possible terminations of employment in connection therewith) will cause a payment, vesting, increase or acceleration of benefits or benefit entitlements under any Company Benefit Plan or any other increase in the liabilities of the Company or the Bank under any Company Benefit Plan as a result of the transactions contemplated by this Agreement. Except as set forth in Section 3.12(b) of the Company Disclosure Schedules, no Company Benefit Plan provides for payment of any amount which, considered in the aggregate with amounts payable pursuant to all other Company Benefit Plans, would result in any amount being non-deductible for federal income tax purposes by virtue of Section 280G or 162(m) of the Code. Section 3.12(b) of the Company Disclosure Schedules sets forth the name of each Person who is or would be entitled pursuant to any Contract or Company Benefit Plan to receive any payment from the Bank as a result of the consummation of the Contemplated Transactions (including any payment that is or would be due as a result of any actual or constructive termination of a Person’s employment or position following such consummation) and the maximum amount of such payment.

(c) Except as set forth in Section 3.12(c) of the Company Disclosure Schedules, neither the Company nor any of the Company ERISA Affiliates sponsors, maintains, administers or contributes to, or has ever sponsored, maintained, administered or contributed to, or has, has had or could have any liability with respect to, (i) any “multiemployer plan” (as defined in Section 3(37) of ERISA), (ii) any “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA), or (iii) any self-insured plan (including any plan pursuant to which a stop loss policy or contract applies). With respect to any Company Benefit Plan that is a “multiple employer plan” (as defined in Section 413(c) of the Code) or is provided by or through a professional employer organization, such Company Benefit Plan complies in all respects with the requirements of the Code and ERISA and neither the Company nor any of the Company ERISA Affiliates has any liabilities other than the payment and/or remittance of premiums and/or required contributions on behalf of enrolled individuals. Except as set forth in Section 3.12(c) of the Company Disclosure Schedules, neither the Company nor any of the Company ERISA Affiliates sponsors, maintains, administers or contributes to, or has ever sponsored, maintained, administered or contributed to, or has, has had or could have any liability with respect to, any Company Benefit Plan subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code, or any tax-qualified “defined benefit plan” (as defined in Section 3(35) of ERISA). No Company Benefit Plan is underfunded when comparing the present value of accrued liabilities under such plan to the market value of plan assets.

(d) Except as set forth in Section 3.12(d) of the Company Disclosure Schedules, each Company Benefit Plan that is intended to qualify under Section 401 and related provisions of the Code is the subject of a favorable determination letter or may rely upon an opinion letter from the IRS to the effect that it is so qualified under the Code and that its related funding instrument is tax exempt under Section 501 of the Code (or the Company and the Bank are otherwise relying on an opinion letter

A-12

TABLE OF CONTENTS

issued to the prototype sponsor), and, to the Company’s Knowledge, there are no facts or circumstances that would adversely affect the qualified status of any Company Benefit Plan or the tax-exempt status of any related trust.

(e) Except as set forth in Section 3.12(e) of the Company Disclosure Schedules, each Company Benefit Plan is and has been administered in all material respects in compliance with its terms and with all applicable Legal Requirements.

(f) Other than routine claims for benefits made in the Ordinary Course of Business, there is no litigation, claim or assessment pending or, to the Company’s Knowledge, threatened by, on behalf of, or against any Company Benefit Plan or against the administrators or trustees or other fiduciaries of any Company Benefit Plan that alleges a violation of applicable state or federal law or violation of any Company Benefit Plan document or related agreement.

(g) No Company Benefit Plan fiduciary or any other person has, or has had, any liability to any Company Benefit Plan participant, beneficiary or any other person under any provisions of ERISA or any other applicable law by reason of any action or failure to act in connection with any Company Benefit Plan, including any liability by any reason of any payment of, or failure to pay, benefits or any other amounts or by reason of any credit or failure to give credit for any benefits or rights. Except as set forth in Section 3.12(g) of the Company Disclosure Schedules, to the Company’s Knowledge, no party in interest (as defined in Code Section 4975(e)(2)) of any Company Benefit Plan has engaged in any nonexempt prohibited transaction (as described in Code Section 4975(c) or ERISA Section 406).

(h) All accrued contributions and other payments to be made by the Company or the Bank to any Company Benefit Plan (i) through the date hereof have been made or reserves adequate for such purposes have been set aside therefor and reflected in the Company Financial Statements and (ii) through the Closing Date will have been made or reserves adequate for such purposes will have been set aside therefore and reflected in the Company Financial Statements.

(i) Except as set forth in Section 3.12(i) of the Company Disclosure Schedules, there are no obligations under any Company Benefit Plan to provide health or other welfare benefits to retirees or other former employees, directors, consultants or their dependents (other than rights under Section 4980B of the Code or Section 601 of ERISA or comparable state laws).

(j) No condition exists as a result of which the Company or the Bank would have any liability, whether absolute or contingent, under any Company Benefit Plan with respect to any misclassification of a person performing services for the Company or the Bank as an independent contractor rather than as an employee. All individuals participating in the Company Benefit Plans are in fact eligible and authorized to participate in such Company Benefit Plan.

(k) Neither the Company nor the Bank have any liabilities to employees or former employees that are not reflected in the Company Benefit Plans.

(l) Except as identified on Section 3.12(l) of the Company Disclosure Schedules, there are no surrender charges, penalties, or other costs or fees that would be imposed by any person against the Company, any Company Benefit Plan, or any other person, including any Company Benefit Plan participant or beneficiary, as a result of the hypothetical liquidation as of the Closing Date of any insurance, annuity, or investment contracts or any other similar investment held by any Company Benefit Plan.

(m) The Company may, at any time, amend or terminate any Company Benefit Plan that it sponsors or maintains and may withdraw from any Company Benefit Plan to which it contributes (but does not sponsor or maintain), without obtaining the consent of any third party, other than an insurance company in the case of any benefit underwritten by an insurance company, and without incurring liability except for unpaid premiums or contributions due for the pay period that includes the effective date of such amendment, withdrawal or termination and for customary termination expenses. From and after the Closing Date, Nicolet would have the same discretion to amend or terminate any Company Benefit Plan as successor to Company. Any third party agreement pertaining to the

A-13

TABLE OF CONTENTS

maintenance of a Company Benefit Plan may be terminated upon the provision of ninety (90) days’ prior notice or less without penalty.

Section 3.13 Compliance with Legal Requirements. The Company and the Bank hold all material licenses, certificates, permits, franchises and rights from all appropriate Regulatory Authorities necessary for the conduct of their respective businesses. Each of the Company and the Bank is, and at all times since January 1, 2018, has been, in compliance with each material Legal Requirement that is or was applicable to it or to the conduct or operation of its respective businesses or the ownership or use of any of its respective assets, except as set forth in Section 3.13 of the Company Disclosure Schedules. Except for issues identified in any periodic Reports of Examination from a Regulatory Authority, neither the Company nor the Bank has received, at any time since January 1, 2018, any notice or other communication (whether oral or written) from any Regulatory Authority or any other Person regarding: (a) any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement; or (b) any actual, alleged, possible, or potential obligation on the part of the Company or the Bank to undertake, or to bear all or any portion of the cost of, any remedial action of any nature in connection with a failure to comply with any Legal Requirement. The Company has Previously Disclosed all internal investigations conducted since January 1, 2018 that involved management or officers of either of the Company or the Bank.

Section 3.14 Legal Proceedings; Orders.

(a) Except as set forth in Section 3.14(a) of the Company Disclosure Schedules, since January 1, 2018, there have been, and currently are, no Proceedings or Orders pending, entered into or, to the Knowledge of the Company, threatened against or affecting the Company, the Bank or any of their respective assets, businesses, current or former directors or executive officers, or the Contemplated Transactions, that have not been fully satisfied, settled or terminated. No officer, director, employee or agent of the Company or the Bank is subject to any Order that prohibits such officer, director, employee or agent from engaging in or continuing any conduct, activity or practice relating to the businesses of the Company or the Bank as currently conducted.

(b) Neither the Company nor the Bank: (i) is subject to any cease and desist or other Order or enforcement action issued by; (ii) is a party to any written agreement, consent agreement or memorandum of understanding with; (iii) is a party to any commitment letter or similar undertaking to; (iv) is subject to any order or directive by; (v) is subject to any supervisory letter from; (vi) has been ordered to pay any civil money penalty, which has not been paid, by; or (vii) has adopted any policies, procedures or board resolutions at the request of; any Regulatory Authority that currently restricts in any material respect the conduct of its business, in any manner relates to its capital adequacy, restricts its ability to pay dividends or interest or limits in any material manner its credit or risk management policies, its management or its business. To the Knowledge of the Company, none of the foregoing has been threatened by any Regulatory Authority.

Section 3.15 Absence of Certain Changes and Events. Since December 31, 2019, except as disclosed in the Company Financial Statements or in Section 3.15 of the Company Disclosure Schedules, (i) there have been no events, changes, or occurrences which have had, or are reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company, (ii) the Company has not declared, set aside for payment or paid any dividend to holders of, or declared or made any distribution on, any shares of Company Common Stock and (iii) neither the Company nor the Bank has taken any action, or failed to take any action, prior to the date of this Agreement, which action or failure, if taken after the date of this Agreement, would represent or result in a material breach or violation of any of the covenants and agreements of the Company provided in Article 5. Except as may result from the transactions contemplated by this Agreement, or as set forth in Section 3.15 of the Company Disclosure Schedules, neither the Company nor the Bank has since December 31, 2019:

(a) borrowed any money other than deposits, overnight fed funds or Federal Home Loan Bank of Chicago advances not over six (6) months in maturity or entered into any capital lease or leases; or, except in the Ordinary Course of Business: (i) lent any money or pledged any of its credit in connection with any aspect of its business whether as a guarantor, surety, issuer of a letter of credit or otherwise, (ii) mortgaged or otherwise subjected to any lien any of its assets, sold, assigned or transferred any of its

A-14

TABLE OF CONTENTS

assets in excess of $50,000 in the aggregate or (iii) incurred any other liability or loss representing, individually or in the aggregate, over $50,000;

(b) suffered over $50,000 in damage, destruction or loss to immovable or movable property, whether or not covered by insurance;

(c) failed to operate its business in the Ordinary Course of Business, or failed to use reasonable efforts to preserve its business or to preserve the goodwill of its customers and others with whom it has business relations;

(d) forgiven any debt owed to it in excess of $50,000, or cancelled any of its claims or paid any of its noncurrent obligations or Liabilities except in the Ordinary Course of Business;

(e) made any capital expenditure or capital addition or betterment in excess of $50,000;

(f) entered into any agreement requiring the payment, conditionally or otherwise, of any salary, bonus, extra compensation (including payments for unused vacation or sick time), pension or severance payment to any of its present or former directors, officers or employees, except such agreements as are terminable at will without any penalty or other payment by it or increased (except for increases of not more than 5% consistent with past practices) the compensation (including salaries, fees, bonuses, profit sharing, incentive, pension, retirement or other similar payments) of any such person whose annual compensation would, following such increase, exceed $50,000;

(g) except as required in accordance with GAAP, changed any accounting practice followed or employed in preparing the Company Financial Statements;

(h) authorized or issued any capital stock; granted any stock option or right to purchase shares of capital stock; declared or paid any dividend or other distribution or payment in respect of shares of capital stock;

(i) amended its articles of incorporation, charter or bylaws; or

(j) entered into any agreement, contract or commitment to do any of the foregoing.

Section 3.16 Material Contracts. Section 3.16 of Company Disclosure Schedules lists or describes the following with respect to the Company and the Bank (each such agreement or document, a “Company Material Contract”), as of the date of this Agreement, for which true, complete and correct copies of each have been delivered or made available to Nicolet:

(a) each Contract relating to the borrowing of money by the Company or the guarantee by the Company of any such obligations (other than Contracts evidencing deposit liabilities, purchase of federal funds, repurchase agreements, trade payables, or Federal Home Loan Bank of Chicago advances);

(b) each Contract that involves performance of services or delivery of goods or materials (other than Contracts entered into in the Ordinary Course of Business and involving payments under any individual Contract not in excess of $50,000);

(c) each Contract with respect to patents, trademarks, copyrights, or other intellectual property, including agreements with current or former employees, consultants or contractors regarding the appropriation or the nondisclosure of any of its intellectual property;

(d) each collective bargaining agreement and other Contract to or with any labor union or other employee representative of a group of employees;

(e) each joint venture, partnership and other Contract (however named) involving a sharing of profits, losses, costs or liabilities by it with any other Person;

(f) each Contract containing covenants that in any way purport to restrict, in any material respect, the business activity of the Company or the Bank or limit, in any material respect, the ability of the Company or the Bank to engage in any line of business or to compete with any Person;

A-15

TABLE OF CONTENTS

(g) each employment agreement, consulting agreement, non-competition, severance or change in control agreement or similar arrangement or plan with respect to any independent contractor or employee of the Bank;

(h) each Contract relating to the provision of data processing or network communication services; and

(i) each amendment, supplement and modification in respect of any of the foregoing.

Section 3.17 No Defaults. Each Company Material Contract is in full force and effect and is valid and enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other Legal Requirements affecting creditors’ rights generally and subject to general principles of equity. To the Knowledge of the Company, no event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with or result in a material violation or breach of, or give the Company, the Bank or other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any Company Material Contract. Except in the Ordinary Course of Business with respect to any Company Loan, neither the Company nor the Bank has given to or received from any other Person, at any time since January 1, 2018, any notice or other communication (whether oral or written) regarding any actual, alleged, possible or potential violation or breach of, or default under, any Company Material Contract, that has not been terminated or satisfied prior to the date of this Agreement. Other than in the Ordinary Course of Business, there are no renegotiations of, attempts to renegotiate or outstanding rights to renegotiate, any material amounts paid or payable to the Company or the Bank under current or completed Company Material Contracts with any Person, and no such Person has made written demand for such renegotiation.

Section 3.18 Insurance. Section 3.18 of the Company Disclosure Schedules lists all insurance policies and bonds owned or held as of the date of this Agreement by the Company and the Bank with respect to their respective business, operations, properties or assets (including bankers’ blanket bond and insurance providing benefits for employees), true, complete and correct copies of each of which have been delivered or made available to Nicolet. The Company and the Bank are insured with reputable insurers against such risks and in such amounts as the management of the Company reasonably has determined to be prudent and consistent with industry practice. The Company and the Bank are in compliance in all material respects with their insurance policies and are not in default under any of the terms thereof. Each such policy is outstanding and in full force and effect and, except for policies insuring against potential liabilities of officers, directors and employees of the Company and the Bank, the Company or the relevant Subsidiary thereof is the sole beneficiary of such policies. All premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion. Section 3.18 of the Company Disclosure Schedules lists and briefly describes all claims that have been filed under such insurance policies and bonds within the past two (2) years prior to the date of this Agreement that individually or in the aggregate exceed $150,000 and the current status of such claims. All such claims have been filed in due and timely fashion. Neither the Company nor the Bank has had any insurance policy or bond cancelled or nonrenewed by the issuer of the policy or bond within the past two (2) years.

Section 3.19 Compliance with Environmental Laws. There are no actions, suits, investigations, liabilities, inquiries, Proceedings or Orders involving the Company or the Bank or any of their respective assets that are pending or, to the Knowledge of the Company, threatened, nor to the Knowledge of the Company, is there any factual basis for any of the foregoing, as a result of any asserted failure of the Company or the Bank of, or any predecessor thereof, to comply with any Environmental Law. No environmental clearances or other governmental approvals are required for the conduct of the business of the Company or the Bank or the consummation of the Contemplated Transactions. To the Knowledge of the Company, neither the Company nor the Bank is the owner of any interest in real estate on which any substances have been generated, used, stored, deposited, treated, recycled or disposed of, which substances if known to be present on, at or under such property, would require notification to any Regulatory Authority, clean up, removal or some other remedial action under any Environmental Law at such property or any impacted adjacent or down gradient property. Each of the Company and the Bank has complied in all material respects with all Environmental Laws applicable to it and its business operations.

A-16

TABLE OF CONTENTS

Section 3.20 Transactions with Affiliates. Except for (a) deposits that are on terms and conditions comparable in all material respects to those made available to other nonaffiliated similarly situated customers of the Company at the time such deposits were entered into, (b) the loans listed on Section 3.20(b) of the Company Disclosure Schedules, (c) the agreements designated on Section 3.20(c) of the Company Disclosure Schedules, (d) obligations under the Company Benefit Plans set forth on Section 3.20(d) of the Company Disclosure Schedules, and (e) any items described on Section 3.20(e) of the Company Disclosure Schedules, there are no contracts with or commitments to present or former shareholders who own or owned more than one percent (1.0%) of Company Common Stock, directors, officers or employees (or their Affiliates) involving the expenditure of more than $1,000 as to any one individual (including any business directly or indirectly controlled by any such person) or more than $5,000 for all such contracts for commitments in the aggregate for all such individuals.

Section 3.21 Brokers; Opinion of Financial Advisor. Except for fees and other obligations owed pursuant to an engagement letter between the Company and Hillworth, LLC and the firm identified in Section 3.21 of the Company Disclosure Schedules that has been Previously Disclosed, neither the Company nor the Bank, nor any of their respective Representatives, has incurred any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement. The Company Board has received the opinion of the firm identified in Section 3.21 of the Company Disclosure Schedules, to the effect that, as of the date of such opinion, and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration to be received by the holders of Company Common Stock in connection with the Merger is fair, from a financial point of view, to the holders of Company Common Stock.

Section 3.22 Approval Delays. To the Knowledge of the Company, there is no reason why the granting of any of the Requisite Regulatory Approvals would be denied or unduly delayed. The Bank is an “eligible bank” (as such term is defined at 12 C.F.R. § 5.3(g)), “well-capitalized” (as such term is defined at 12 C.F.R. § 225.2(r)) and “well managed” (as such term is defined at 12 C.F.R. § 225.2(s)), and the rating of the Bank under the CRA is no less than “satisfactory.” The Bank has not been informed that its status as an “eligible bank,” “well-capitalized,” “well managed” or, for CRA purposes, “satisfactory,” will change within one (1) year.

Section 3.23 Labor Matters.

(a) There are no collective bargaining agreements or other labor union Contracts applicable to any employees of the Company or the Bank. There is no labor dispute, strike, work stoppage or lockout, or, to the Knowledge of the Company, threat thereof, by or with respect to any employees of the Company or the Bank, and there has been no labor dispute, strike, work stoppage or lockout in the previous three (3) years. There are no organizational efforts with respect to the formation of a collective bargaining unit presently being made, or to the Knowledge of the Company, threatened, involving employees of the Company or the Bank. Neither the Company nor the Bank has engaged or is engaging in any unfair labor practice. The Company and the Bank are in compliance in all material respects with all applicable Legal Requirements respecting employment and employment practices, terms and conditions of employment, wages, hours of work and occupational safety and health. No Proceeding asserting that the Company or any of the Bank has committed an unfair labor practice (within the meaning of the National Labor Relations Act of 1935) or seeking to compel the Company or the Bank to bargain with any labor organization as to wages or conditions of employment is pending or, to the Knowledge of the Company, threatened with respect to the Company or the Bank before the National Labor Relations Board, the Equal Employment Opportunity Commission or any other Regulatory Authority.

(b) Neither the Company nor the Bank is a party to, or otherwise bound by, any consent decree with, or citation by, any Regulatory Authority relating to employees or employment practices. None of the Company, the Bank or any of its or their executive officers has received within the past three (3) years any written notice of intent by any Regulatory Authority responsible for the enforcement of labor or employment laws to conduct an investigation relating to the Company or the Bank and, to the Knowledge of the Company, no such investigation is in progress.

A-17

TABLE OF CONTENTS

Section 3.24 Intellectual Property. Except as set forth in of the Company Disclosure Schedules, each of the Company and the Bank has the unrestricted right and authority, and the Surviving Entity and the Bank will have the unrestricted right and authority from and after the Effective Time, to use all patents, trademarks, copyrights, service marks, trade names or other intellectual property owned by them as is necessary to enable them to conduct and to continue to conduct all material phases of the businesses of the Company and the Bank in the manner presently conducted by them, and, to the Knowledge of the Company, such use does not, and will not, conflict with, infringe on or violate any patent, trademark, copyright, service mark, trade name or any other intellectual property right of any Person.

Section 3.25 Investments.

(a) Section 3.25 of the Company Disclosure Schedules includes a complete and correct list and description as of December 31, 2019, of: (i) all investment and debt securities, mortgage-backed and related securities, marketable equity securities and securities purchased under agreements to resell that are owned by the Company or the Bank, other than, with respect to the Bank, in a fiduciary or agency capacity (the “Company Investment Securities”); and (ii) any such Company Investment Securities that are pledged as collateral to another Person. Each of the Company and the Bank has good and marketable title to all Company Investment Securities held by it, free and clear of any liens, mortgages, security interests, encumbrances or charges, except for the Company Permitted Exceptions and except to the extent such Company Investment Securities are pledged in the Ordinary Course of Business consistent with prudent banking practices to secure obligations of the Company or the Bank. The Company Investment Securities are valued on the books of the Company and the Bank in accordance with GAAP.

(b) Except as set forth in Section 3.25(b) of the Company Disclosure Schedules and as may be imposed by applicable securities laws and restrictions that may exist for securities that are classified as “held to maturity,” none of the Company Investment Securities is subject to any restriction, whether contractual or statutory, that materially impairs the ability of the Company or the Bank to dispose of such investment at any time. With respect to all material repurchase agreements to which the Company or the Bank is a party, the Company or such Subsidiary of the Company, as the case may be, has a valid, perfected first lien or security interest in the securities or other collateral securing each such repurchase agreement, and the value of the collateral securing each such repurchase agreement equals or exceeds the amount of the debt secured by such collateral under such agreement.

(c) Neither the Company nor the Bank has sold or otherwise disposed of any Company Investment Securities in a transaction in which the acquiror of such Company Investment Securities or other person has the right, either conditionally or absolutely, to require the Company or the Bank to repurchase or otherwise reacquire any such Company Investment Securities.

(d) There are no interest rate swaps, caps, floors, option agreements or other interest rate risk management arrangements (other than loan caps or floors contained within Company Loans entered into in the Ordinary Course of Business) to which the Company or the Bank is bound.

Section 3.26 Absence of Undisclosed Liabilities. Other than unfunded loan commitments and letters of credit extended in the Ordinary Course of Business, neither the Company nor the Bank has any material liabilities, except liabilities which are accrued or reserved against in the balance sheets of the Company as of December 31, 2019, included in the Company Financial Statements delivered prior to the date of this Agreement or reflected in the notes thereto. Neither the Company nor the Bank has incurred or paid any material liability since December 31, 2019, except for such liabilities incurred or paid (a) in the Ordinary Course of Business consistent with past business practice or (b) in connection with the transactions contemplated by this Agreement. Neither the Company nor the Bank is directly or indirectly liable, by guarantee, indemnity, or otherwise, upon or with respect to, or obligated, by discount or repurchase agreement or in any other way, to provide funds in respect to, or obligated to guarantee or assume any liability of any Person for any amount in excess of $50,000. Except (x) as reflected in the Company’s unaudited balance sheet at December 31, 2019 or liabilities described in any notes to the Company’s audited balance sheet as of December 31, 2018 (or liabilities for which neither accrual nor footnote disclosure is required pursuant to GAAP or any applicable Regulatory Authority) or (y) for liabilities incurred in the Ordinary Course of Business since December 31, 2019 or in connection with this Agreement or the transactions

A-18

TABLE OF CONTENTS

contemplated hereby, neither the Company nor the Bank has any material liabilities. Section 3.26 of the Company Disclosure Schedules lists, and the Company has delivered to Nicolet copies of, the documentation creating or governing, all securitization transactions and off-balance sheet arrangements effected by the Company or the Bank other than letters of credit or unfunded loan commitments extended in the Ordinary Course of Business.

Section 3.27 Bank Secrecy Act; PATRIOT Act; Anti-Money Laundering. Neither the Company nor the Bank has any reason to believe that any facts or circumstances exist, which would cause the Company or the Bank to be deemed to be operating in violation in any material respect of the Bank Secrecy Act of 1970, as amended and its implementing regulations (31 C.F.R. Part 103), the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended, and the regulations promulgated thereunder (the “PATRIOT Act”), any order issued with respect to anti-money laundering by the United States Department of the Treasury’s Office of Foreign Assets Control, or any other applicable anti-money laundering law. Furthermore, the Company Board has adopted, and the Company has implemented, an anti-money laundering program that contains adequate and appropriate customer identification verification procedures, that has not been deemed ineffective by any Governmental Authority and that meets the requirements of Sections 326 and 352 of the PATRIOT Act.

Section 3.28 Disaster Recovery and Business Continuity. The Company has developed and implemented a contingency planning program to evaluate the impact of significant events that may adversely affect The Company’s or the Bank’s customers, assets, or employees. To the Company’s Knowledge, such program ensures that the Company and the Bank can recover their mission critical functions, and complies in all material respects with the requirements of the Federal Financial Institutions Examination Council and the FDIC.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF NICOLET

Except as Previously Disclosed, Nicolet hereby represents and warrants to the Company as follows:

Section 4.1 Nicolet Organization. Nicolet: (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Wisconsin and is also in good standing in each other jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary, except where the failure to be so qualified and in good standing would not have a Material Adverse Effect on Nicolet; (b) is registered with the Federal Reserve as a financial holding company under the Bank Holding Company Act of 1956, as amended; and (c) has full power and authority, corporate and otherwise, to operate as a bank holding company and to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. The copies of the Nicolet Articles of Incorporation and Nicolet Bylaws and all amendments thereto set forth in Nicolet SEC Reports are true, complete and correct, and in full force and effect as of the date of this Agreement. Nicolet has no “Significant Subsidiary” as set forth in Rule 1-02 or Regulation S-X promulgated under the Exchange Act other than the Subsidiaries listed on Exhibit 21 to Nicolet’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Section 4.2 Nicolet Subsidiary Organizations. Nicolet Bank is a national bank duly organized, validly existing and in good standing under the laws of the United States. Each Nicolet Subsidiary is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is also in good standing in each other jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary, except where the failure to be so qualified and in good standing would not have a Material Adverse Effect on Nicolet. Each Subsidiary of Nicolet has full power and authority, corporate and otherwise, to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. The deposit accounts of Nicolet Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by applicable Legal Requirements, and all premiums and assessments required to be paid in connection therewith have been paid when due. Nicolet has delivered or made available to the Company copies of the charter (or similar organizational documents) and bylaws of each Subsidiary of Nicolet and all amendments thereto, each of which are true, complete and correct and in full force and effect as of the date of this Agreement.

A-19

TABLE OF CONTENTS

Section 4.3 Authorization; Enforceability. Nicolet has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Nicolet Board. The Nicolet Board has determined that the Merger, on substantially the terms and conditions set forth in this Agreement, is advisable and in the best interests of Nicolet and its shareholders, and that the Agreement and transactions contemplated hereby are in the best interests of Nicolet and its shareholders. The execution, delivery and performance of this Agreement by Nicolet, and the consummation by it of its obligations under this Agreement, have been authorized by all necessary corporate action and, subject to the receipt of the Requisite Regulatory Approvals, this Agreement constitutes a legal, valid and binding obligation of Nicolet enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other Legal Requirements affecting creditors’ rights generally and subject to general principles of equity.

Section 4.4 No Conflict. Neither the execution nor delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time): (a) contravene, conflict with or result in a violation of any provision of the certificate of incorporation, certificate of formation or charter (or similar organizational documents) or bylaws or operating agreement, each as in effect on the date hereof, or any currently effective resolution adopted by the board of directors, shareholders, manager or members of, Nicolet or any of its Subsidiaries; (b) assuming receipt of the Requisite Regulatory Approvals, contravene, conflict with or result in a violation of, or give any Regulatory Authority or other Person the valid and enforceable right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which Nicolet or any of its Subsidiaries, or any of their respective assets that are owned or used by them, may be subject, except for any contravention, conflict or violation that is permissible by virtue of obtaining the Requisite Regulatory Approvals; (c) contravene, conflict with or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any Nicolet Material Contract; or (d) result in the creation of any material lien, charge or encumbrance upon or with respect to any of the assets owned or used by Nicolet or any of its Subsidiaries. Except for the Requisite Regulatory Approvals, the Registration Statement and the stock exchange listing required under Section 6.6, neither Nicolet nor any of its Subsidiaries is or will be required to give any notice to or obtain any consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

Section 4.5 Nicolet Capitalization.

(a) The authorized capital stock of Nicolet currently consists exclusively of: (i) 30,000,000 shares of Nicolet Common Stock, of which, as of December 31, 2019 (the “Nicolet Capitalization Date”), 10,610,259 shares were issued (including 22,521 shares of restricted stock granted but not yet vested under the Nicolet Stock Plans), 10,587,738 shares were outstanding, and no shares were treasury shares; and (ii) 10,000,000 shares of Nicolet’s preferred stock, no par value per share (the “Nicolet Preferred Stock”), of which: (i) 14,964 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, are authorized, but no shares are outstanding; (ii) 748 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B, are authorized but no shares are outstanding; and (iii) 24,400 shares of Non-Cumulative Perpetual Preferred Stock, Series C, are authorized, but no shares are outstanding. Nicolet does not have outstanding any bonds, debentures, notes or other debt obligations having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) with the shareholders of Nicolet on any matter. All of the issued and outstanding shares of Nicolet Capital Stock have been, and those shares of Nicolet Common Stock to be issued pursuant to the Merger will be, duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights.

(b) As of the Nicolet Capitalization Date, no shares of Nicolet Capital Stock were reserved for issuance except for: (i) 1,414,166 shares of Nicolet Common Stock reserved for issuance pursuant to future awards under Nicolet Stock plans, (ii) 1,466,254 shares of Nicolet Common Stock reserved for issuance in connection with outstanding stock options, restricted stock, or other equity awards under a Nicolet Stock Plan; (iii) 141,082 shares of Nicolet Common Stock reserved for issuance under Nicolet’s 401(k) plan; (iv) 64,634 shares of Nicolet Common Stock reserved for issuance pursuant to

A-20

TABLE OF CONTENTS

Nicolet’s 2009 Deferred Compensation Plan for Non-Employee Directors; and (v) 142,344 shares of Nicolet Common Stock reserved for issuance under the Nicolet Bankshares, Inc. Employee Stock Purchase Plan.

(c) Since the Nicolet Capitalization Date through the date hereof, and except as set forth in Section 4.5(c) of the Nicolet Disclosure Schedules, Nicolet has not: (i) issued or repurchased any shares of Nicolet Common Stock or Nicolet Preferred Stock or other equity securities of Nicolet, other than in connection with the exercise of Nicolet Equity Awards that were outstanding on the Nicolet Capitalization Date or settlement thereof, in each case in accordance with the terms of the relevant Nicolet Stock Plan; or (ii) issued or awarded any options, stock appreciation rights, restricted shares, restricted stock units, deferred equity units, awards based on the value of Nicolet Common Stock or any other equity-based awards.

(d) None of the shares of Nicolet Common Stock were issued in violation of any federal or state securities laws or any other applicable Legal Requirement. As of the date of this Agreement there are: (i) other than outstanding Nicolet Equity Awards, no outstanding subscriptions, Contracts, conversion privileges, options, warrants, calls or other rights obligating Nicolet or any of its Subsidiaries to issue, sell or otherwise dispose of, or to purchase, redeem or otherwise acquire, any shares of capital stock of Nicolet or any of its Subsidiaries; and (ii) no contractual obligations of Nicolet or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Nicolet Common Stock or any equity security of Nicolet or its Subsidiaries or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of Nicolet or its Subsidiaries.

Section 4.6 Nicolet Subsidiary Capitalization. All of the issued and outstanding shares of capital stock or other equity ownership interests of each Subsidiary of Nicolet are owned by Nicolet, directly or indirectly, free and clear of any material liens, pledges, charges, claims and security interests and similar encumbrances, and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable (except as provided in 12 U.S.C. § 55) and free of preemptive rights. No Subsidiary of Nicolet has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of such Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of such Subsidiary.

Section 4.7 Nicolet SEC Reports; Financial Statements and Reports; Regulatory Filings.

(a) Nicolet has timely filed all Nicolet SEC Reports, and all such Nicolet SEC Reports have complied as to form in all material respects, as of their respective filing dates and effective dates, as the case may be, with all applicable requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder. The Nicolet SEC Reports were prepared in accordance with applicable Legal Requirements in all material respects. As of their respective filing dates, none of the Nicolet SEC Reports contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that information filed as of a later date (but before the date of this Agreement) is deemed to modify information as of an earlier date. As of the date hereof, there are no outstanding comments from or unresolved issues raised by the SEC with respect to any of the Nicolet SEC Reports. No Subsidiary of Nicolet is required to file periodic reports with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.

(b) The financial statements presented (or incorporated by reference) in the Nicolet SEC Reports (including the related notes, where applicable) have been prepared in conformity with GAAP, except in each case as indicated in such statements or the notes thereto, and comply in all material respects with all applicable Legal Requirements. Taken together, the financial statements presented in the Nicolet SEC Reports (collectively, the “Nicolet Financial Statements”) are complete and correct in all material respects and fairly and accurately present the respective financial position, assets, liabilities and results of operations of Nicolet and its Subsidiaries at the respective dates of and for the periods referred to in the Nicolet Financial Statements, subject to normal year-end audit adjustments in the case of unaudited Nicolet Financial Statements. The Nicolet Financial Statements do not include any assets or omit to

A-21

TABLE OF CONTENTS

state any liabilities, absolute or contingent, or other facts, which inclusion or omission would render the Nicolet Financial Statements misleading in any material respect as of the respective dates thereof and for the periods referred to therein. As of the date hereof, Wipfli, LLC has not resigned (or informed Nicolet that it intends to resign) or been dismissed as independent registered public accountants of Nicolet.

(c) Nicolet is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley Act of 2002 that are applicable to it or any of its Subsidiaries. Nicolet maintains a system of disclosure controls and procedures as defined in Rule 13a-15 and 15d-15 under the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed by Nicolet in reports that Nicolet is required to file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Nicolet’s management to allow timely decisions regarding required disclosures. As of the Nicolet Capitalization Date, to the Knowledge of Nicolet, such controls and procedures were effective, in all material respects, to provide such reasonable assurance.

(d) Nicolet and its consolidated Subsidiaries have established and maintained a system of internal control over financial reporting (within the meaning of Rule 13a-15 and Rule 15d-15 under the Exchange Act) (“Internal Control Over Financial Reporting”). Nicolet’s certifying officers have evaluated the effectiveness of Nicolet’s Internal Control Over Financial Reporting as of the end of the period covered by the most recently filed quarterly report on Form 10-Q of Nicolet under the Exchange Act (the “Nicolet Evaluation Date”). Nicolet presented in such quarterly report the conclusions of the certifying officers about the effectiveness of Nicolet’s Internal Control Over Financial Reporting based on their evaluations as of the Nicolet Evaluation Date. Since the Nicolet Evaluation Date, there have been no changes in Nicolet’s Internal Control Over Financial Reporting that have materially affected, or are reasonably likely to materially affect, Nicolet’s Internal Control Over Financial Reporting. Nicolet has devised and maintains a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(e) Nicolet and each of its Subsidiaries has filed all forms, reports and documents required to be filed since January 1, 2018, with all applicable federal or state securities or banking authorities except to the extent failure would not have a Material Adverse Effect on Nicolet and its Subsidiaries. Such forms, reports and documents: (i) complied as to form in all material respects with applicable Legal Requirements; and (ii) did not at the time they were filed, after giving effect to any amendment thereto filed prior to the date hereof, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that information filed as of a later date (but before the date of this Agreement) is deemed to modify information as of an earlier date.

(f) Except for normal examinations conducted by a Regulatory Authority in the Ordinary Course of Business of Nicolet and its Subsidiaries, no Regulatory Authority has initiated since January 1, 2018, or has pending any proceeding, enforcement action or to the Knowledge of Nicolet, investigation into the business, disclosures or operations of Nicolet or its Subsidiaries. Since January 1, 2018, no Regulatory Authority has resolved any proceeding enforcement action or, to the Knowledge of Nicolet, investigation into the business, disclosures or operations of Nicolet or its Subsidiaries. Nicolet and its Subsidiaries have fully complied with, and there is no unresolved violation, criticism or exception by any Regulatory Authority with respect to, any report or statement relating to any examination or inspection of Nicolet or its Subsidiaries. Since January 1, 2018, there have been no formal or informal inquiries by, or disagreements or disputes with, any Regulatory Authority with respect to the business, operations, policies or procedures of Nicolet or its Subsidiaries (other than normal examinations conducted by a Regulatory Authority in Nicolet’s Ordinary Course of Business). To the

A-22

TABLE OF CONTENTS

Knowledge of Nicolet, there has not been any event or occurrence since January 1, 2018 that would result in a determination that Nicolet Bank is not an eligible depository institution as defined in 12 C.F.R. § 303.2(r).

Section 4.8 Loans; Loan Loss Reserve.

(a) Each loan, loan agreement, note, lease or other borrowing agreement by Nicolet Bank, any participation therein, and any guaranty, renewal or extension thereof (the “Nicolet Loans” ) reflected as an asset on any of the Nicolet Financial Statements or reports filed with the Regulatory Authorities is evidenced by documentation that is customary and legally sufficient in all material respects and constitutes, to the Knowledge of Nicolet, the legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors’ rights generally or equitable principles or doctrines.

(b) All Nicolet Loans originated or purchased by Nicolet Bank were made or purchased in accordance with the policies of the board of directors of Nicolet Bank and in the Ordinary Course of Business of Nicolet Bank.

(c) Nicolet Bank’s allowance for loan and lease losses reflected in the Nicolet Financial Statements (including footnotes thereto) was determined on the basis of Nicolet Bank’s continuing review and evaluation of the portfolio of Nicolet Loans under the requirements of GAAP and Legal Requirements, was established in a manner consistent with Nicolet Bank’s internal policies, and, in the reasonable judgment of Nicolet Bank, was adequate in all material respects under the requirements of GAAP and all Legal Requirements to provide for possible or specific losses, net of recoveries relating to Nicolet Loans previously charged-off, on outstanding Nicolet Loans.

Section 4.9 Taxes.

(a) Nicolet and each of its Subsidiaries have duly and timely filed all Tax Returns required to be filed by them on or before the Closing Date for all taxable or reporting periods ending on or before the Closing Date, and each such Tax Return is true, correct and complete in all material respects. Nicolet and each of its Subsidiaries have paid, or made adequate provision for the payment of, all Taxes (whether or not reflected in Tax Returns as filed or to be filed) due and payable by Nicolet and each of its Subsidiaries, or claimed to be due and payable by any Regulatory Authority, and are not delinquent in the payment of any Tax, except such Taxes as are being contested in good faith and as to which adequate reserves have been provided. There are no liens for Taxes upon any of the assets of Nicolet or any of its Subsidiaries.

(b) There is no claim or assessment pending or, to the Knowledge of Nicolet, threatened against Nicolet and its Subsidiaries for any Taxes that they owe. Except as disclosed in Section 4.9(b) of the Nicolet Disclosure Schedules, no audit, examination or investigation related to Taxes paid or payable by Nicolet and each of its Subsidiaries is presently being conducted or, to the Knowledge of Nicolet, threatened by any Regulatory Authority. Neither Nicolet nor its Subsidiaries are the beneficiary of any extension of time within which to file any Tax Return, and there are no liens for Taxes (other than Taxes not yet due and payable) upon any of Nicolet’s or its Subsidiaries’ assets. Neither Nicolet nor its Subsidiaries have executed an extension or waiver of any statute of limitations on the assessment or collection of any Tax that is currently in effect.

(c) To the Knowledge of Nicolet, Nicolet and each of its Subsidiaries have not engaged in any transaction that could affect the Tax liability for any Tax Returns not closed by applicable statute of limitations: (i) which is a “reportable transaction” or a “listed transaction” or (ii) a “significant purpose of which is the avoidance or evasion of U.S. federal income tax” within the meaning of Sections 6662, 6662A, 6011, 6111 or 6707A of the Code or of the regulations of the U.S. Department of the Treasury promulgated thereunder or pursuant to notices or other guidance published by the IRS (irrespective of the effective dates).

(d) It is the present intention of Nicolet to continue at least one significant historic business line of the Company, or to use at least a significant portion of the Company’s historic business assets in a business, in each case within the meaning of Treas. Reg. Section 1.368-1(d).

A-23

TABLE OF CONTENTS

Section 4.10 Employee Benefits.

(a) Except as disclosed in Section 4.10(a) of the Nicolet Disclosure Schedules, each Nicolet Benefit Plan is and has been administered in all material respects in compliance with its terms and with all applicable Legal Requirements.

(b) Other than routine claims for benefits made in the Ordinary Course of Business, there is no litigation, claim or assessment pending or, to Nicolet’s Knowledge, threatened by, on behalf of, or against any Nicolet Benefit Plan or against the administrators or trustees or other fiduciaries of any Nicolet Benefit Plan that alleges a violation of applicable state or federal law or violation of any Nicolet Benefit Plan document or related agreement.

(c) No Nicolet Benefit Plan fiduciary or any other person has, or has had, any liability to any Nicolet Benefit Plan participant, beneficiary or any other person under any provisions of ERISA or any other applicable law by reason of any action or failure to act in connection with any Nicolet Benefit Plan, including any liability by any reason of any payment of, or failure to pay, benefits or any other amounts or by reason of any credit or failure to give credit for any benefits or rights. To Nicolet’s Knowledge, no party in interest (as defined in Code Section 4975(e)(2)) of any Nicolet Benefit Plan has engaged in any nonexempt prohibited transaction (as described in Code Section 4975(c) or ERISA Section 406).

(d) All accrued contributions and other payments to be made by Nicolet or any Subsidiary to any Nicolet Benefit Plan (i) through the date hereof have been made or reserves adequate for such purposes have been set aside therefor and reflected in the Nicolet Financial Statements and (ii) through the Closing Date will have been made or reserves adequate for such purposes will have been set aside therefore and reflected in the Nicolet Financial Statements.

Section 4.11 Books and Records. The books of account, minute books, stock record books and other records of Nicolet and its Subsidiaries are complete and correct in all material respects and have been maintained in accordance with Nicolet’s business practices and all applicable Legal Requirements, including the maintenance of an adequate system of internal controls required by such Legal Requirements. The minute books of Nicolet and each of its Subsidiaries contain accurate and complete records in all material respects of all meetings held of, and corporate action taken by, its respective shareholders, boards of directors and committees of the boards of directors. At the Closing, all of those books and records will be in the possession of Nicolet and its Subsidiaries.

Section 4.12 Compliance with Legal Requirements. Nicolet and each of its Subsidiaries hold all material licenses, certificates, permits, franchises and rights from all appropriate Regulatory Authorities necessary for the conduct of their respective businesses. Nicolet and each of its Subsidiaries is, and at all times since January 1, 2018, has been, in compliance with each material Legal Requirement that is or was applicable to it or to the conduct or operation of its respective businesses or the ownership or use of any of its respective assets. Neither Nicolet nor any of its Subsidiaries has received, at any time since January 1, 2018, any notice or other communication (whether oral or written) from any Regulatory Authority or any other Person regarding: (a) any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement; or (b) any actual, alleged, possible, or potential obligation on the part of Nicolet or any of its Subsidiaries to undertake, or to bear all or any portion of the cost of, any remedial action of any nature in connection with a failure to comply with any Legal Requirement.

Section 4.13 Legal Proceedings; Orders.

(a) Except as set forth in Section 4.13(a) of the Nicolet Disclosure Schedules, since January 1, 2018, there have been, and currently are, no Proceedings or Orders pending, entered into or, to the Knowledge of Nicolet, threatened against or affecting Nicolet, any of its Subsidiaries or any of their respective assets, businesses, current or former directors or executive officers, or the Contemplated Transactions, that have not been fully satisfied, settled or terminated. No officer, director, employee or agent of Nicolet or any of its Subsidiaries is subject to any Order that prohibits such officer, director, employee or agent from engaging in or continuing any conduct, activity or practice relating to the businesses of Nicolet or any of its Subsidiaries as currently conducted.

A-24

TABLE OF CONTENTS

(b) Neither Nicolet nor any of its Subsidiaries: (i) is subject to any cease and desist or other Order or enforcement action issued by; (ii) is a party to any written agreement, consent agreement or memorandum of understanding with; (iii) is a party to any commitment letter or similar undertaking to; (iv) is subject to any order or directive by; (v) is subject to any supervisory letter from; (vi) has been ordered to pay any civil money penalty, which has not been paid, by; or (vii) has adopted any policies, procedures or board resolutions at the request of; any Regulatory Authority that currently restricts in any material respect the conduct of its business, in any manner relates to its capital adequacy, restricts its ability to pay dividends or interest or limits in any material manner its credit or risk management policies, its management or its business. To the Knowledge of Nicolet, none of the foregoing has been threatened by any Regulatory Authority.

Section 4.14 Absence of Certain Changes and Events. Since December 31, 2019, Nicolet and its Subsidiaries have conducted their respective businesses only in the Ordinary Course of Business, and without limiting the foregoing with respect to each, since December 31, 2019, there has not been any event or events that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Nicolet.

Section 4.15 No Defaults. To the Knowledge of Nicolet, no event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with or result in a material violation or breach of, or give Nicolet, any of its Subsidiaries or other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any Nicolet Material Contract.

Section 4.16 Compliance with Environmental Laws. Nicolet and each Subsidiary of Nicolet has complied in all material respects with all Environmental Laws applicable to it and its business operations.

Section 4.17 Transactions with Affiliates. Since January 1, 2018, all transactions required to be disclosed by Nicolet pursuant to Item 404 of Regulation S-K promulgated under the Securities Act have been disclosed in the Nicolet SEC Reports. No transaction, or series of related transactions, is currently proposed by Nicolet or any of its Subsidiaries or, to the Knowledge of Nicolet, by any other Person, to which Nicolet or any of its Subsidiaries would be a participant that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Securities Act if consummated.

Section 4.18 Approval Delays. To the Knowledge of Nicolet, there is no reason why the granting of any of the Requisite Regulatory Approvals would be denied or unduly delayed. Nicolet Bank is an “eligible bank” (as such term is defined at 12 C.F.R. § 5.3(g)), “well-capitalized” (as such term is defined at 12 C.F.R. § 225.2(r)) and “well managed” (as such term is defined at 12 C.F.R. § 225.2(s)), and the rating of Nicolet Bank under the CRA is no less than “satisfactory.” Nicolet Bank has not been informed that its status as an “eligible bank,” “well-capitalized,” “well managed” or, for CRA purposes, “satisfactory,” will change within one (1) year.

Section 4.19 Labor Matters.

(a) There are no collective bargaining agreements or other labor union Contracts applicable to any employees of Nicolet or any of its Subsidiaries. There is no labor dispute, strike, work stoppage or lockout, or, to the Knowledge of Nicolet, threat thereof, by or with respect to any employees of Nicolet or any of its Subsidiaries, and there has been no labor dispute, strike, work stoppage or lockout in the previous three (3) years. There are no organizational efforts with respect to the formation of a collective bargaining unit presently being made, or to the Knowledge of Nicolet, threatened, involving employees of Nicolet or any of its Subsidiaries. Neither Nicolet nor any of its Subsidiaries has engaged or is engaging in any unfair labor practice. Nicolet and its Subsidiaries are in compliance in all material respects with all applicable Legal Requirements respecting employment and employment practices, terms and conditions of employment, wages, hours of work and occupational safety and health. No Proceeding asserting that Nicolet or any of its Subsidiaries has committed an unfair labor practice (within the meaning of the National Labor Relations Act of 1935) or seeking to compel Nicolet or any of its Subsidiaries to bargain with any labor organization as to wages or conditions of employment is pending or, to the Knowledge of Nicolet, threatened with respect to Nicolet or any of its Subsidiaries before the National Labor Relations Board, the Equal Employment Opportunity Commission or any other Regulatory Authority.

A-25

TABLE OF CONTENTS

(b) Neither Nicolet nor any of its Subsidiaries is a party to, or otherwise bound by, any consent decree with, or citation by, any Regulatory Authority relating to employees or employment practices. None of Nicolet, any of its Subsidiaries or any of its or their executive officers has received within the past three (3) years any written notice of intent by any Regulatory Authority responsible for the enforcement of labor or employment laws to conduct an investigation relating to Nicolet or any of its Subsidiaries and, to the Knowledge of Nicolet, no such investigation is in progress.

ARTICLE 5
THE COMPANY’S COVENANTS

Section 5.1 Access and Investigation.

(a) Subject to any applicable Legal Requirement, Nicolet and its Representatives shall, at all times during normal business hours and with reasonable advance notice, have such reasonable access to the facilities, operations, records and properties of the Company and the Bank in accordance with the provisions of this Section 5.1(a) as shall be necessary for the purpose of determining the Company’s continued compliance with the terms and conditions of this Agreement and preparing for the integration of Nicolet and the Company following the Effective Time. Nicolet and its Representatives may, during such period, make or cause to be made such reasonable investigation of the operations, records and properties of the Company and the Bank and of their respective financial and legal conditions as Nicolet shall deem necessary or advisable to familiarize itself with such records, properties and other matters; provided, however, that such access or investigation shall not interfere materially with the normal operations of the Company or the Bank. Upon request, the Company and the Bank will furnish Nicolet or its Representatives attorneys’ responses to auditors’ requests for information regarding the Company or the Bank, as the case may be, and such financial and operating data and other information reasonably requested by Nicolet (provided, such disclosure would not result in the waiver by the Company or the Bank of any claim of attorney-client privilege). No investigation by Nicolet or any of its Representatives shall affect the representations and warranties made by the Company in this Agreement. This Section 5.1(a) shall not require the disclosure of any information to Nicolet the disclosure of which, in the Company’s reasonable judgment: (i) would be prohibited by any applicable Legal Requirement including the prohibitions on disclosure of confidential supervisory information (including confidential supervisory information as defined in 12 C.F.R. § 261.2); (ii) would result in the breach of any agreement with any third party in effect on the date of this Agreement; or (iii) relate to pending or threatened litigation or investigations, if disclosure might affect the confidential nature of, or any privilege relating to, the matters being discussed. If any of the restrictions in the preceding sentence shall apply, the Company and Nicolet will make, to the extent legally permissible, appropriate alternative disclosure arrangements, including adopting additional specific procedures to protect the confidentiality of sensitive material and to ensure compliance with any applicable Legal Requirement.

(b) From the date hereof until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, the Company shall promptly furnish to Nicolet: (i) a copy of each report, schedule, registration statement and other document filed, furnished or received by it during such period pursuant to the requirements of federal and state banking laws or federal or state securities laws, which is not generally available on the SEC’s EDGAR internet database; and (ii) a copy of each report filed by it or the Bank with any Regulatory Authority; in each case other than portions of such documents relating to confidential supervisory or examination materials or the disclosure of which would violate any applicable Legal Requirement.

(c) The Company shall provide, and cause the Bank to provide, to Nicolet all information provided to the directors on all such boards or members of such committees in connection with all meetings of the board of directors and committees of the board of directors of the Company or otherwise provided to the directors or members, and to provide any other financial reports or other analysis prepared for senior management of the Company or the Bank; in each case other than portions of such documents relating to confidential supervisory information or the disclosure of which would violate any applicable Legal Requirement.

(d) All information obtained by Nicolet in accordance with this Section 5.1 shall be treated in confidence as provided in that certain confidentiality and non-disclosure agreement dated November 1, 2019, between Nicolet and the Company (the “Confidentiality Agreement”).

A-26

TABLE OF CONTENTS

Section 5.2 Operation of the Company and the Bank.

(a) Except as Previously Disclosed, as expressly contemplated by or permitted by this Agreement, as required by applicable Legal Requirement, or with the prior written consent of Nicolet, which shall not be unreasonably withheld, conditioned or delayed, during the period from the date of this Agreement to the earlier of the Closing Date or the termination of this Agreement pursuant to its terms, the Company shall, and shall cause the Bank to: (i) conduct its business in the Ordinary Course of Business in all material respects; (ii) use commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships; and (iii) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of the Company or Nicolet to obtain any of the Requisite Regulatory Approvals, to perform its covenants and agreements under this Agreement or to consummate the Contemplated Transactions.

(b) Except as Previously Disclosed, as expressly contemplated by or permitted by this Agreement, as required by applicable Legal Requirement, or with the prior written consent of Nicolet, which shall not be unreasonably withheld, conditioned or delayed, during the period from the date of this Agreement to the earlier of the Closing Date or the termination of this Agreement pursuant to its terms, the Company will not, and will cause the Bank not to:

(i) other than pursuant to the terms of any Contract to which the Company is a party that is outstanding on the date of this Agreement (as disclosed in Section 5.2(b)(i) of the Company Disclosure Schedules): (A) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of Company Capital Stock or any security convertible into Company Capital Stock; (B) permit any additional shares of Company Capital Stock to become subject to new grants; or (C) grant any registration rights with respect to shares of Company Capital Stock;

(ii) (A) make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of Company Capital Stock (other than dividends from its wholly owned Subsidiaries to it or another of its wholly owned Subsidiaries), or (B) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of Company Capital Stock (other than repurchases of shares of Company Common Stock in the Ordinary Course of Business to satisfy obligations under the Company Benefit Plans);

(iii) amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into: (A) any Company Material Contract (other than as permitted by Section 5.2(b)(xiii)); (B) any material restriction on the ability of the Company or the Bank to conduct its business as it is presently being conducted; or (C) any Contract or other binding obligation relating to any class of Company Capital Stock or rights associated therewith or any outstanding instrument of indebtedness;

(iv) enter into loan transactions not in accordance with, or consistent with, past practices of the Bank or that are on terms and conditions that, to the Knowledge of the Company, are materially more favorable than those available to the borrower from competitive sources in arm’s-length transactions;

(v) (A) enter into any new credit or new lending relationships greater than $1,000,000 or that are not in material compliance with the provisions of the Bank’s formal loan policy as in effect as of the date of this Agreement; or (B) other than incident to a reasonable loan restructuring, extend additional credit to any Person and any director or officer of, or any owner of a material interest in, such Person (any of the foregoing with respect to a Person being referred to as a “Borrowing Affiliate”) if such Person or such Borrowing Affiliate is the obligor under any indebtedness to the Company or any of its Subsidiaries which constitutes a nonperforming loan or against any part of such indebtedness the Company or any of its Subsidiaries has established loss reserves or any part of which has been charged-off by the Company or any of its Subsidiaries;

(vi) maintain an allowance for loan and lease losses which is not adequate in all material respects under the requirements of GAAP to provide for possible losses, net of recoveries relating

A-27

TABLE OF CONTENTS

to Company Loans previously charged off, on Company Loans and leases outstanding (including accrued interest receivable);

(vii) fail to: (A) charge-off any Company Loans or leases that would be deemed uncollectible in accordance with GAAP or any applicable Legal Requirement; or (B) place on non-accrual any Company Loans or leases that are past due greater than ninety (90) days;

(viii) sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its assets, deposits, business or properties, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances in the Ordinary Course of Business and in a transaction that, together with other such transactions, is not material to the Company and the Bank, taken as a whole;

(ix) acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course of Business) all or any portion of the assets, business, deposits or properties of any other entity except in the Ordinary Course of Business and in a transaction that, together with other such transactions, is not material to the Company and the Bank, taken as a whole, and does not present a material risk that the Closing Date will be materially delayed or that any approvals necessary to complete the Merger or the other Contemplated Transactions will be more difficult to obtain;

(x) purchase any equity security for its investment portfolio that is inconsistent with the Bank’s formal investment policy as in effect as of the date of this Agreement or that are not in strict compliance with the provisions of such investment policy;

(xi) amend its articles of incorporation or its bylaws, or similar governing documents of the Bank;

(xii) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements;

(xiii) (A) increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of the Company or the Bank (collectively, the “Company Employees”); (B) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, consulting, non-competition, change in control, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Company Employee (or newly hired employees), director or shareholder; (C) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans other than as contemplated by Section 2.8; (D) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; (E) materially change any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Legal Requirements to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or any applicable Legal Requirement; or (F) conduct the administration of the Company Benefit Plans in any manner other than the Ordinary Course of Business;

(xiv) hire any new employees with an annual salary in excess of $75,000;

(xv) incur or guarantee any indebtedness for borrowed money other than deposits, overnight fed funds or Federal Home Loan Bank of Chicago advances not over six (6) months in maturity or enter into any capital lease or leases; or, except in the Ordinary Course of Business: (A) lend any money or pledge any of its credit in connection with any aspect of its business, whether as a guarantor, surety, issuer of a letter of credit or otherwise; (B) mortgage or otherwise subject to

A-28

TABLE OF CONTENTS

any lien any of its assets or sell, assign or transfer any of its assets in excess of $100,000 in the aggregate; or (C) incur any other liability or loss representing, individually or in the aggregate, over $100,000;

(xvi) enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by applicable Legal Requirements or requested by any Regulatory Authority;

(xvii) settle any action, suit, claim or proceeding against it or the Bank, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $150,000 and that would not: (A) impose any material restriction on the business of the Company or the Bank; or (B) create precedent for claims that is reasonably likely to be material to it or the Bank;

(xviii) make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility;

(xix) make or change any material Tax elections, change or consent to any change in it or the Bank’s method of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any material Tax Return filed on or after the date of this Agreement, settle or compromise any material Tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of Taxes, surrender any right to claim a refund for a material amount of Taxes, or file any material amended Tax Return; or

(xx) agree to take, make any commitment to take, or adopt any resolutions of the Company Board in support of, any of the actions prohibited by this .

Section 5.3 Notice of Changes. The Company will give prompt notice to Nicolet of any fact, event or circumstance known to it that: (a) is reasonably likely, individually or taken together with all other facts, events and circumstances known to it, to result in a Material Adverse Effect on the Company; or (b) would cause or constitute a material breach of any of the Company’s representations, warranties, covenants or agreements contained herein that reasonably could be expected to give rise, individually or in the aggregate, to the failure of a condition in Article 8; provided, however, that a failure to comply with this section shall not constitute a breach of this Agreement or the failure of any condition set forth in Article 8 to be satisfied unless the underlying Material Adverse Effect or material breach would independently result in the failure of a condition set forth in to be satisfied.

Section 5.4 Shareholders Meeting. The Company shall, as promptly as reasonably practicable after the date the Registration Statement is declared effective, take all action necessary, including as required by and in accordance with the WBCL, the Company Articles of Incorporation and the Company Bylaws to duly call, give notice of, convene and hold a meeting of its shareholders (the “Company Shareholders Meeting”) for the purpose of obtaining the Company Shareholder Approval. The Company and the Company Board will use their reasonable best efforts to obtain from its shareholders the votes in favor of the adoption of this Agreement required by the WBCL, including by recommending that its shareholders vote in favor of this Agreement, and the Company and the Company Board will not withdraw, qualify or adversely modify (or publicly propose or resolve to withdraw, qualify or adversely modify) the Company Board’s recommendation to the Company’s shareholders that the Company’s shareholders vote in favor of the adoption and approval of this Agreement (an “Adverse Recommendation”). However, if, prior to the time the Company Shareholder Approval is obtained, the Company Board, after consultation with its financial advisor and outside counsel, determines in good faith that (a) an Acquisition Proposal constitutes a Superior Proposal and (b) it is reasonably likely that to continue to recommend this Agreement to its shareholders in light of such Acquisition Proposal would result in a violation of its fiduciary duties under the WBCL, then, in submitting this Agreement at the Company Shareholders Meeting, the Company Board may make an Adverse Recommendation or publicly propose or resolve to make an Adverse Recommendation.

Section 5.5 Information Provided to Nicolet. The Company agrees that the information concerning the Company or the Bank that is provided or to be provided by the Company in writing to Nicolet specifically for inclusion in the Registration Statement or Proxy Statement and any other documents to be filed with any Regulatory Authority in connection with the Contemplated Transactions will: (a) at the respective times

A-29

TABLE OF CONTENTS

such documents are filed and, in the case of the Registration Statement, when it becomes effective and, with respect to the Proxy Statement, when mailed, not be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; or (b) in the case of the Proxy Statement or any amendment thereof or supplement thereto, at the time of the Company Shareholders Meeting, not be false or misleading with respect to any material fact, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of any proxy for the meeting in connection with which the Proxy Statement shall be mailed. The Company will have a duty to correct any material misleading statement specified by the Company for inclusion, and so included, in the Registration Statement or Proxy Statement and any other documents filed with any Regulatory Authority. Notwithstanding the foregoing, the Company shall have no responsibility for the truth or accuracy of any information with respect to Nicolet or any of its Subsidiaries or any of their Affiliates contained in the Registration Statement or the Proxy Statement or in any document submitted to, or other communication with, any Regulatory Authority.

Section 5.6 Operating Functions. The Company and the Bank shall cooperate with Nicolet and Nicolet Bank in connection with planning for the efficient and orderly combination of the parties and the operation of the Bank and Nicolet Bank, and in preparing for the consolidation of the banks’ appropriate operating functions to be effective on upon consummation of the Bank Plan of Merger; provided, however, that the foregoing actions shall not unduly interfere with the business operations of the Company or the Bank. Without limiting the foregoing, the Company shall provide office space and support services (and other reasonably requested support and assistance) in connection with the foregoing, and senior officers of the Company and Nicolet shall meet from time to time as the Company or Nicolet may reasonably request, to review the financial and operational affairs of the Company and the Bank, and the Company shall give due consideration to Nicolet’s input on such matters, with the understanding that, notwithstanding any other provision contained in this Agreement: (a) neither Nicolet nor Nicolet Bank shall under any circumstance be permitted to exercise control of the Company or the Bank prior to the Effective Time; (b) neither the Company nor the Bank shall be under any obligation to act in a manner that could reasonably be deemed to constitute anti-competitive behavior under federal or state antitrust laws; and (c) neither the Company nor the Bank shall be required to agree to any material obligation that is not contingent upon the consummation of the Merger.

Section 5.7 Company Benefit Plans.

(a) At the request of Nicolet, and subject to the obligations of Nicolet pursuant to Section 7.6 below, the Company shall take all appropriate action prior to the Effective Time to amend, suspend or terminate as of the Effective Time any Company Benefit Plan.

(b) Prior to the Effective Time, the Company shall accrue the costs associated with any contingent payments due or that could become due in connection with the execution and delivery of this Agreement or the consummation of the Contemplated Transactions (including possible terminations of employment in connection therewith) under any Company Benefit Plan, including without limitation any change of control or severance agreements, retention or stay bonus programs, or other similar arrangements.

Section 5.8 Voting and Support Agreement. Concurrently with the execution and delivery of this Agreement, the Company shall cause to be executed and delivered to Nicolet a voting and support agreement, in the form attached hereto as Exhibit B, approving this Agreement and the consummation of the Contemplated Transactions, executed by each director of the Company who holds Company Common Stock.

Section 5.9 Acquisition Proposals.

(a) The Company will immediately cease and cause to be terminated any activities, discussions or negotiations with any Persons other than Nicolet with respect to any Acquisition Proposal and will use its reasonable best efforts to enforce any confidentiality or similar agreement relating to an Acquisition Proposal. The Company will within one (1) Business Day advise Nicolet of the receipt of any Acquisition Proposal and the substance thereof (including the identity of the Person making such

A-30

TABLE OF CONTENTS

Acquisition Proposal), and will keep Nicolet apprised of any related developments, discussions and negotiations (including the material terms and conditions of the Acquisition Proposal) on a reasonably current basis.

(b) The Company agrees that it will not, and will cause the Bank and its and the Bank’s officers, directors, agents, advisors and affiliates not to, initiate, solicit, encourage or knowingly facilitate inquiries or proposals with respect to, or engage in any negotiations concerning, or provide any confidential or nonpublic information or data to, or have any discussions with, any Person relating to, any Acquisition Proposal (other than contacting a Person for the sole purpose of seeking clarification of the terms and conditions of such Acquisition Proposal); provided that, in the event the Company receives an unsolicited bona fide Acquisition Proposal, from a Person other than Nicolet, after the execution of this Agreement and prior to the receipt of the Company Shareholder Approval, and the Company Board concludes in good faith, after consultation with its financial advisor and outside counsel, that such Acquisition Proposal constitutes a Superior Proposal or would reasonably be likely to result in a Superior Proposal and, after considering the advice of outside counsel, that failure to take such actions would be reasonably likely to result in a violation of the directors’ fiduciary duties under applicable law, the Company may: (i) furnish information with respect to it to such Person making such Acquisition Proposal pursuant to a customary confidentiality agreement (subject to the requirement that any such information not previously provided to Nicolet shall be promptly furnished to Nicolet); (ii) participate in discussions or negotiations regarding such Acquisition Proposal; and (iii) terminate this Agreement in order to concurrently enter into an agreement with respect to such Acquisition Proposal; provided, however, that the Company may not terminate this Agreement pursuant to this Section 5.9 unless and until (x) five (5) Business Days have elapsed following the delivery to Nicolet of a written notice of such determination by the Company Board and, during such five (5) Business-Day period, the parties cooperate with one another with the intent of enabling the parties to engage in good faith negotiations so that the Contemplated Transactions may be effected, and (y) at the end of such five (5) Business-Day period, the Company Board continues, in good faith and after consultation with outside legal counsel and financial advisors, to believe that a Superior Proposal continues to exist.

(c) Nothing contained in this Agreement shall prevent the Company or the Company Board from complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act with respect to an Acquisition Proposal, provided that such Rules will in no way eliminate or modify the effect that any action pursuant to such Rules would otherwise have under this Agreement.

Section 5.10 Calculation of Tangible Common Equity. The Company shall deliver the calculation of Tangible Common Equity to Nicolet, accompanied by appropriate supporting detail, no later than the close of business on the fifth (5th) Business Day preceding the Closing Date, and such calculation shall be subject to verification and approval by Nicolet and its independent auditors, which approval shall not be unreasonably withheld.

Section 5.11 Audited Financial Statements. The Company shall deliver to Nicolet financial statements for the year ended December 31, 2019, which financial statements shall (a) be complete and correct in all material respects, (b) fairly and accurately present the respective financial position, assets, liabilities and results of operations of the Company and the Bank, (c) be prepared in conformity with GAAP, (d) comply in all material respects with all applicable Legal Requirements, and (e) be subject to and accompanied by the unmodified opinion of the Company’s independent public accountants, Wipfli, LLP.

Section 5.12 Company Debt Agreements. If requested by Nicolet, the Company shall use commercially reasonable efforts to repay in full all indebtedness owing under any Company Debt Agreement, and to deliver to Nicolet prior to Closing evidence of such repayment and evidence of the release of any security interests in assets of the Company related thereto. If necessary, the Company shall use commercially reasonable efforts to (a) cause the Bank to pay a dividend to the Company in an amount sufficient to allow the Company to make any requested repayments and (b) obtain any required regulatory approvals necessary to enable the Company to pay any such requested payments and to enable the payment of the dividend by the Bank described in clause (a). For the avoidance of doubt, nothing in this Section 5.12 shall affect the obligation of the Company to obtain any consents set forth on Section 8.12 of the Company Disclosure Schedules relating to any indebtedness that remains outstanding as of the Effective Time.

A-31

TABLE OF CONTENTS

ARTICLE 6
NICOLET’S COVENANTS

Section 6.1 Operation of Nicolet and Nicolet Subsidiaries. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless prior written consent of the Company shall have been obtained, and except as otherwise expressly contemplated herein, Nicolet covenants and agrees that it shall take no action that would reasonably be expected to (a) materially adversely affect the ability of Nicolet to obtain any Consents required for the transactions contemplated hereby without imposition of a condition or restriction of the type referred to in Sections 8.5 and 9.5, or (b) that would reasonably be expected to materially adversely affect the ability of Nicolet to perform its covenants and agreements under this Agreement.

Section 6.2 Notice of Changes. Nicolet will give prompt notice to the Company of any fact, event or circumstance known to it that: (a) is reasonably likely, individually or taken together with all other facts, events and circumstances known to it, to result in a Material Adverse Effect on Nicolet; or (b) would cause or constitute a material breach of any of Nicolet’s representations, warranties, covenants or agreements contained herein that reasonably could be expected to give rise, individually or in the aggregate, to the failure of a condition in Article 9provided, however, that a failure to comply with this section shall not constitute a breach of this Agreement or the failure of any condition set forth in Article 9 to be satisfied unless the underlying Material Adverse Effect or material breach would independently result in the failure of a condition set forth in Article 9 to be satisfied.

Section 6.3 Indemnification.

(a) From and after the Effective Time, Nicolet shall, to the fullest extent permitted under applicable Legal Requirements, indemnify and hold harmless (1) any natural person who is or was a director or officer of the Company or any Subsidiary of the Company, (2) any natural person who, while a director or officer of the Company or any Subsidiary of the Company, is or was serving either pursuant to the Company’s or such Subsidiary’s specific request or as a result of the nature of such person’s duties to the Company or to such Subsidiary as a director, officer, partner, trustee, member of any governing or decision-making committee, manager, employee or agent of another corporation or foreign corporation, partnership joint venture, trust or other enterprise, and (3) any natural person who, while a director or officer of the Company or any Subsidiary of the Company, is or was serving an employee benefit plan because his or her duties to the Company or to such Subsidiary also imposed duties on, or otherwise involved services by, the person to the plan or to participants in or beneficiaries of the plan (each, an “Indemnified Party”), against any and all reasonable fees (including reasonable attorneys’ fees), costs, charges, disbursements and other expenses actually and reasonably incurred by the Indemnified Party (collectively, “Expenses”) in connection with any threatened, pending or completed civil, criminal, administrative or investigative action, suit, arbitration or other proceeding, whether formal or informal, which involves federal, state or local law and which is brought by or in the right of any Person (any such action, an “Indemnification Proceeding”) to which the Indemnified Party was made a party by virtue of his or her service in any of the capacities set forth above in clauses (1) through (3) of this Section 6.13(a), to the extent that such Indemnified Party has been successful on the merits or otherwise in the defense of such Indemnification Proceeding.

(b) From and after the Effective Time, Nicolet shall, to the fullest extent permitted under applicable Legal Requirements, indemnify and hold harmless (1) any natural person who is or was an employee or agent of the Company or any Subsidiary of the Company, (2) any natural person who, while an employee or agent of the Company or any Subsidiary of the Company, is or was serving either pursuant to the Company’s or such Subsidiary’s specific request or as a result of the nature of such person’s duties to the Company or to such Subsidiary as a director, officer, partner, trustee, member of any governing or decision-making committee, manager, employee or agent of another corporation or foreign corporation, partnership joint venture, trust or other enterprise, and (3) any natural person who, while an employee or agent of the Company or any Subsidiary of the Company, is or was serving an employee benefit plan because his or her duties to the Company or to such Subsidiary also imposed duties on, or otherwise involved services by, the person to the plan or to participants in or beneficiaries of the plan (each, an “Indemnified Employee”), against any and all Expenses in connection with any Indemnification Proceeding to which the Indemnified Employee was made a party by virtue of his or

A-32

TABLE OF CONTENTS

her service in any of the capacities set forth above in clauses (1) through (3) of this Section 6.3(b), to the extent that such Indemnified Employee has been successful on the merits or otherwise in the defense of such Indemnification Proceeding.

(c) From and after the Effective Time, Nicolet shall indemnify and hold harmless any Indemnified Party against any obligation to pay a judgment, penalty, assessment, forfeiture or fine, including an excise tax assessed with respect to an employee benefit plan, or the agreement to pay any amount in settlement of an Indemnification Proceeding, and pre- and post-judgment interest related thereto, and any Expenses incurred by such Indemnified Party in connection with an Indemnification Proceeding, unless it shall be proven by final judicial adjudication that such person breached or failed to perform a duty owed to the Company or to any Subsidiary of the Company which constituted: (1) a willful failure to deal fairly with the Company, any Subsidiary of the Company, or the respective shareholders thereof in connection with a matter in which the Indemnified Party had a material conflict of interest, (2) a violation of the criminal law, unless the Indemnified Party had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful, (3) a transaction from which the Indemnified Party derived an improper personal benefit, or (4) willful misconduct.

(d) From and after the Effective Time, Nicolet may indemnify and hold harmless any Indemnified Employee against any obligation to pay a judgment, penalty, assessment, forfeiture or fine, including an excise tax assessed with respect to an employee benefit plan, or the agreement to pay any amount in settlement of an Indemnification Proceeding, and pre- and post-judgment interest related thereto, and any Expenses incurred by such Indemnified Employee in connection with an Indemnification Proceeding, unless it shall be proven by final judicial adjudication that such person breached or failed to perform a duty owed to the Company or to any Subsidiary of the Company which constituted: (1) a willful failure to deal fairly with the Company, any Subsidiary of the Company, or the respective shareholders thereof in connection with a matter in which the Indemnified Employee had a material conflict of interest, (2) a violation of the criminal law, unless the Indemnified Employee had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful, (3) a transaction from which the Indemnified Employee derived an improper personal benefit, or (4) willful misconduct. Any determination of whether an Indemnified Employee shall receive indemnification pursuant to this Section 6.3(d) shall be made at the sole and exclusive discretion of Nicolet.

(e) Upon written request by an Indemnified Party who has been made party to an Indemnification Proceeding, Nicolet shall reimburse the Expenses of such Indemnified Party as incurred if the Indemnified Party provides Nicolet with all of the following: (1) a written affirmation of his or her good faith belief that he or she did not breach or fail to perform his or her duties to the Company and (2) a written undertaking, executed personally or on his or her behalf, to repay to Nicolet such reimbursements if and to the extent that it is ultimately determined that such Indemnified Party was not entitled to indemnification for such amounts under the terms of this Agreement.

(f) Upon written request by an Indemnified Employee who has been made party to an Indemnification Proceeding, Nicolet may reimburse the Expenses of such Indemnified Employee as incurred if the Indemnified Employee provides Nicolet with all of the following: (1) a written affirmation of his or her good faith belief that he or she did not breach or fail to perform his or her duties to the Company or to any Subsidiary of the Company and (2) a written undertaking, executed personally or on his or her behalf, to repay to Nicolet such reimbursements if and to the extent that it is ultimately determined that such Indemnified Employee was not entitled to indemnification for such amounts under the terms of this Agreement. Any determination of whether an Indemnified Employee shall receive reimbursement for Expenses as such Expenses are incurred pursuant to this Section 6.3(f) shall be made at the sole and exclusive discretion of Nicolet.

(g) Notwithstanding any other provision of this Agreement, in order for any Indemnified Party or Indemnified Employee to be entitled to indemnification under this Agreement, such Indemnified Party or Indemnified Employee must make a written request to Nicolet. This written request shall contain a declaration that Nicolet shall have the right to exercise all rights and remedies available to such Indemnified Party or Indemnified Employee against any other Party arising out of or related to the

A-33

TABLE OF CONTENTS

Indemnification Proceeding for which indemnification is being sought and that the Indemnified Party or Indemnified Employee has assigned to Nicolet all such rights and remedies. Nicolet shall have no obligation to indemnify any Indemnified Party or Indemnified Employee under this Agreement if and to the extent that such Indemnified Party or Indemnified Employee has previously received indemnification or allowance for Expenses from any Party in connection with the same Indemnification Proceeding.

(h) For a period of six (6) years after the Effective Time or, if such term coverage is not available, such other maximum period of coverage available, Nicolet shall maintain a directors’ and officers’ liability insurance policy or policies covering each Indemnified Party and Indemnified Employee covered by the Company’s directors’ and officers’ liability insurance policy in effect as of the date hereof, on and subject to terms and conditions no less advantageous to the insureds than the Company’s directors’ and officers’ liability insurance policy in effect as of the date hereof, for acts or omissions occurring prior to the Effective Time; provided, that in no event shall Nicolet be required to expend annually in the aggregate an amount in excess of 300% of the amount of the aggregate premiums paid by the Company for fiscal year 2019 for such purpose and, if Nicolet is unable to maintain such policy (or substitute policy) as a result of this proviso, Nicolet shall obtain a policy or policies of insurance with substantially similar terms and conditions as may then be available, and with an equal or lesser claims reporting time period as may then be available for payment of such amount; provided further, that in lieu of the obligations of this subsection, Nicolet may request that the Company obtain, and upon such request the Company shall obtain, such extended reporting period coverage under the Company’s existing insurance programs (to be effective as of the Effective Time).

(i) If Nicolet or any of its successors or assigns shall (i) consolidate with or merge into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfer all or substantially all its properties and assets to any Person, then, and in each such case, Nicolet shall use commercially reasonable efforts to cause proper provision to be made so that the successor and assign of Nicolet assumes the obligations set forth in this Section 6.3.

(j) The provisions of this Section 6.3 shall survive consummation of the Merger and the Bank Merger and are intended to be for the benefit of, and will be enforceable by, each Indemnified Party, each Indemnified Employee, his or her heirs, and his or her legal representatives.

Section 6.4 Board Representation.

(a) On or prior to the Effective Time, Nicolet shall cause the Company Director (expected to be Joseph Fazio, III) to be added to the board of directors of the Surviving Entity and Nicolet Bank. No other directors or employees of the Company shall be designated to serve on the board of directors of the Surviving Entity or Nicolet Bank at the Effective Time. The appointment of the Company Director to the board of directors of the Surviving Entity and Nicolet Bank shall be subject to the bylaws of the Surviving Entity and Nicolet Bank, respectively, and the Company Director must (i) be reasonably acceptable to the Nominating Committee of the Surviving Entity or Nicolet Bank, as applicable, and (ii) satisfy and comply with the requirements regarding service as a member of the board of directors of the Surviving Entity or Nicolet Bank, as applicable, provided under applicable Legal Requirements and the practices and policies of such board that are generally applicable to its members.

(b) Subject to and in accordance with the bylaws of the Surviving Entity, effective as of the Effective Time, the officers of Nicolet in office immediately prior to the Effective Time, together with such additional persons as may thereafter be elected, shall serve as the officers of the Surviving Entity from and after the Effective Time in accordance with the bylaws of the Surviving Entity.

Section 6.5 Authorization and Reservation of Nicolet Common Stock. Nicolet Board shall, as of the date hereof, authorize and reserve the maximum number of shares of Nicolet Common Stock to be issued pursuant to this Agreement and take all other necessary corporate action to consummate the Contemplated Transactions.

Section 6.6 Stock Exchange Listing. Nicolet shall cause all shares of Nicolet Common Stock issuable or to be reserved for issuance under this Agreement to be approved for listing on the Nasdaq Capital Market prior to the Closing Date.

A-34

TABLE OF CONTENTS

Section 6.7 Assumption of Debt Instruments. Nicolet agrees to execute and deliver, or cause to be executed and delivered, by or on behalf of the Surviving Entity, at or prior to the Effective Time, one or more supplemental indentures, guarantees, and other instruments required for the due assumption of the Company’s outstanding debt, subordinated debentures, guarantees, securities, and other agreements to the extent required by the terms of such debt, subordinated debentures, guarantees, securities, and other agreements that remains outstanding at Closing.

ARTICLE 7
COVENANTS OF ALL PARTIES

Section 7.1 Regulatory Approvals. Nicolet and the Company and their respective Subsidiaries will cooperate and use all reasonable best efforts to as promptly as possible prepare, file, effect and obtain all Requisite Regulatory Approvals, and the parties will comply with the terms of such Requisite Regulatory Approvals. Each of Nicolet and the Company will have the right to review in advance, and to the extent practicable each will consult with the other, in each case subject to applicable Legal Requirements relating to the exchange of information, with respect to all substantive written information submitted to any Regulatory Authority in connection with the Requisite Regulatory Approvals. In exercising the foregoing right, each of the parties will act reasonably and as promptly as practicable. Each party agrees that it will consult with the other party with respect to obtaining all permits, consents, approvals and authorizations of all Regulatory Authorities necessary or advisable to consummate the Contemplated Transactions, and each party will keep the other party apprised of the status of material matters relating to completion of the Contemplated Transactions. Nicolet and the Company will, upon request, furnish the other party with all information concerning itself, its Subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with any filing, notice or application made by or on behalf of such other party or any of its Subsidiaries with or to any Regulatory Authority in connection with the Contemplated Transactions.

Section 7.2 SEC Registration. As soon as practicable following the date of this Agreement, the Company and Nicolet shall prepare the Proxy Statement and Nicolet shall prepare and file with the SEC the Registration Statement, in which the Proxy Statement will be included. Nicolet shall use its reasonable best efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing and to keep the Registration Statement effective as long as is necessary to consummate the Merger and the Contemplated Transactions. The Company will use its reasonable best efforts to cause the Proxy Statement to be mailed to the Company’s shareholders as promptly as practicable after the Registration Statement is declared effective under the Securities Act. Nicolet will advise the Company, promptly after it receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of Nicolet Capital Stock issuable in connection with the Merger for offering or sale in any jurisdiction, or any request by the SEC to amend the Proxy Statement or the Registration Statement or comments thereon and responses thereto or requests by the SEC for additional information. The parties shall use reasonable best efforts to respond (with the assistance of the other party) as promptly as practicable to any comments of the SEC with respect thereto. If prior to the Effective Time any event occurs with respect to the Company, Nicolet or any Subsidiary of the Company or Nicolet, respectively, or any change occurs with respect to information supplied by or on behalf of the Company or Nicolet, respectively, for inclusion in the Proxy Statement or the Registration Statement that, in each case, is required to be described in an amendment of, or a supplement to, the Proxy Statement or the Registration Statement, the Company or Nicolet, as applicable, shall promptly notify the other of such event, and the Company or Nicolet, as applicable, shall cooperate in the prompt filing with the SEC of any necessary amendment or supplement to the Proxy Statement and the Registration Statement and, as required by applicable Legal Requirements, in disseminating the information contained in such amendment or supplement to the Company’s shareholders.

Section 7.3 Publicity. Neither the Company nor Nicolet shall, and neither the Company nor Nicolet shall permit any of its Subsidiaries to, issue or cause the publication of any press release or other public announcement with respect to, or otherwise make any public statement or, except as otherwise specifically provided in this Agreement, any disclosure of nonpublic information to a third party, concerning, the Contemplated Transactions without the prior consent (which shall not be unreasonably withheld or delayed) of Nicolet, in the case of a proposed announcement, statement or disclosure by the Company, or the

A-35

TABLE OF CONTENTS

Company, in the case of a proposed announcement, statement or disclosure by Nicolet; provided, however, that either party may, without the prior consent of the other party (but after prior consultation with the other party to the extent practicable under the circumstances), issue or cause the publication of any press release or other public announcement to the extent required by applicable Legal Requirements or by the Nasdaq Rules. Subject to the foregoing, Nicolet and the Company agree that the press release announcing the execution and delivery of this Agreement shall be a joint press release of Nicolet and the Company, mutually agreed upon by both parties. Thereafter, and subject to the limitations of this paragraph, Nicolet and the Company shall each use their reasonable best efforts to develop a joint communications plan with respect to the Contemplated Transactions and to ensure that all press releases and other public statements with respect to the Contemplated Transactions shall be consistent with such joint communications plan.

Section 7.4 Reasonable Best Efforts; Cooperation; Takeover Statutes. Each of Nicolet and the Company agrees to exercise good faith and use its reasonable best efforts to satisfy the various covenants and conditions to Closing in this Agreement, and to consummate the Contemplated Transactions as promptly as practicable. Neither Nicolet nor the Company will intentionally take or intentionally permit to be taken any action that would be a breach of the terms or provisions of this Agreement. Between the date of this Agreement and the Closing Date, each of Nicolet and the Company will, and will cause each Subsidiary of Nicolet and the Company, respectively, and all of their respective Affiliates and Representatives to, cooperate with respect to all filings that any party is required by any applicable Legal Requirements to make in connection with the Contemplated Transactions. Subject to applicable Legal Requirements and the instructions of any Regulatory Authority, each party shall keep the other party reasonably apprised of the status of matters relating to the completion of the Contemplated Transactions, including promptly furnishing the other party with copies of notices or other written communications received by it or any of its Subsidiaries from any Regulatory Authority with respect to such transactions. Without limiting the foregoing, none of Nicolet, the Company or their respective Boards of Directors shall take any action that would cause any Takeover Statute to become applicable to this Agreement or the Contemplated Transactions, and each shall take all necessary steps to exempt (or ensure the continued exemption of) the Contemplated Transactions from any applicable Takeover Statute now or hereafter in effect. If any Takeover Statute may become, or may purport to be, applicable to the Contemplated Transactions, each party and the members of their respective Boards of Directors will grant such approvals and take such actions as are necessary so that the Contemplated Transactions may be consummated as promptly as practicable on the terms contemplated hereby and thereby and otherwise act to eliminate or minimize the effects of any Takeover Statute on any of the Contemplated Transactions, including, if necessary, challenging the validity or applicability of any such Takeover Statute.

Section 7.5 Tax Free Reorganization.

(a) The parties intend that the Merger qualify as a nontaxable reorganization within the meaning of Section 368(a) and related sections of the Code and that this Agreement constitute a “plan of reorganization” within the meaning of Section 1.368-2(g) of the income tax regulations promulgated under the Code. From and after the date of this Agreement and until the Effective Time, each of the Company and Nicolet shall use its commercially reasonable efforts to cause the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken which action or failure to act could prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code. Following the Effective Time, neither Nicolet nor any Affiliate of Nicolet knowingly shall take any action, cause any action to be taken, fail to take any action, or cause any action to fail to be taken, which action or failure to act could prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

(b) As of the date hereof, the Company does not know of any reason why it would not be able to deliver to Nicolet’s counsel, as of the date of the legal opinion referred to in Sections 8.8 and 9.8, a certificate substantially in compliance with IRS published advance ruling guidelines, with reasonable or customary exceptions and modifications thereto (the “IRS Guidelines”), to enable counsel to Nicolet to deliver the legal opinion contemplated by Sections 8.8 and 9.8, and the Company hereby agrees to deliver such certificate effective as of the date of such opinion to counsel to Nicolet.

A-36

TABLE OF CONTENTS

(c) As of the date hereof Nicolet does not know of any reason (i) why it would not be able to deliver to its counsel, as of the date of the legal opinion referred to in Sections 8.8 and 9.8, a certificate substantially in compliance with the IRS Guidelines, to enable counsel to Nicolet to deliver the legal opinion contemplated by Sections 8.8 and 9.8, and Nicolet hereby agrees to deliver such certificates effective as of the date of such opinions; or (ii) why counsel to Nicolet would not be able to deliver the opinion required by Sections 8.8 and 9.8. Nicolet hereby agrees to deliver such certificate effective as of the date of such opinion to counsel to Nicolet.

(d) Nicolet will continue at least one significant historic business line of the Company, or use at least a significant portion of the Company’s historic business assets in a business, in each case within the meaning of Treas. Reg. Section 1.368-1(d), except that Nicolet may transfer the Company’s historic business assets (i) to a corporation that is a member of Nicolet’s “qualified group,” within the meaning of Treas. Reg. Section 1.368-1(d)(4)(ii), or (ii) to a partnership if (A) one or more members of Nicolet’s “qualified group” have active and substantial management functions as a partner with respect to the Company’s historic business or (B) members of Nicolet’s “qualified group” in the aggregate own an interest in the partnership representing a significant interest in the Company’s historic business, in each case within the meaning of Treas. Reg. Section 1.368-1(d)(4)(iii).

Section 7.6 Employees and Employee Benefits.

(a) All individuals employed by the Company or the Bank immediately prior to the Closing (“Covered Employees”) shall automatically become employees of Nicolet as of the Closing. Following the Closing, Nicolet shall maintain employee benefit plans and compensation opportunities for the benefit of Covered Employees that provide employee benefits and compensation opportunities that, in the aggregate, are no less favorable than the employee benefits and compensation opportunities that are made available to similarly-situated employees of Nicolet under the Nicolet Benefit Plans; provided, however, that: (i) in no event shall any Covered Employee be eligible to participate in any closed or frozen Nicolet Benefit Plan; and (ii) until such time as Nicolet shall cause Covered Employees to participate in the Nicolet Benefit Plans, a Covered Employee’s continued participation in the Company Benefit Plans shall be deemed to satisfy the foregoing provisions of this sentence (it being understood that participation in the Nicolet Benefit Plans may commence at different times with respect to each Nicolet Benefit Plan).

(b) For all purposes (other than purposes of benefit accruals and allocations of employer contributions under Nicolet’s 401(k) Plan) under the Nicolet Benefit Plans providing benefits to the Covered Employees (the “New Plans”), each Covered Employee shall be credited with his or her years of service with the Company and the Bank and their respective predecessors to the same extent as such Covered Employee was entitled to credit for such service under any applicable Company Benefit Plan in which such Covered Employee participated or was eligible to participate immediately prior to the Transition Date; provided, however, that the foregoing shall not apply to the extent that its application would result in a duplication of benefits with respect to the same period of service.

(c) In addition, and without limiting the generality of the foregoing, as of the Transition Date, Nicolet shall use commercially reasonable efforts to provide that: (i) each Covered Employee shall be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent coverage under such New Plan is similar in type to an applicable Company Benefit Plan in which such Covered Employee was participating immediately prior to the Transition Date (such Company Benefit Plans prior to the Transition Date collectively, the “Old Plans”); (ii) for purposes of each New Plan providing medical, dental, pharmaceutical, vision or similar benefits to any Covered Employee, all pre-existing condition exclusions and actively-at-work requirements of such New Plan shall be waived for such Covered Employee and his or her covered dependents, unless such conditions would not have been waived under the Old Plan in which such Covered Employee, as applicable, participated or was eligible to participate immediately prior to the Transition Date; and (iii) any eligible expenses incurred by such Covered Employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the Transition Date shall be taken into account under such New Plan to the extent such eligible expenses were incurred during the plan year of the New Plan in which the Transition Date occurs for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket

A-37

TABLE OF CONTENTS

requirements applicable to such Covered Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.

(d) Nicolet and the Company shall determine and establish a retention bonus program for certain employees of Nicolet and the Company who remain employed through the Closing, or at Nicolet for an interim period following Closing. The Company and Nicolet shall mutually agree as to each employee eligible to receive a retention bonus and the amount of each such retention bonus.

Section 7.7 Section 16 Matters. Prior to the Effective Time, Nicolet will take such steps as may be necessary or appropriate to cause any acquisition of Nicolet Common Stock in connection with the consummation of the Contemplated Transactions to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Section 7.8 Shareholder Litigation. Each of the Company and Nicolet shall give the other the reasonable opportunity to consult concerning the defense of any shareholder litigation against the Company or Nicolet, as applicable, or any of their respective directors or officers relating to the Contemplated Transactions.

ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF NICOLET

The obligations of Nicolet to consummate the Contemplated Transactions and to take the other actions required to be taken by Nicolet at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Nicolet in whole or in part):

Section 8.1 Accuracy of Representations and Warranties. For purposes of this Section 8.1, the accuracy of the representations and warranties of the Company set forth in this Agreement shall be assessed as of the date of this Agreement and as of the Closing Date (or such other date(s) as specified, to the extent any representation or warranty speaks as of a specific date). The representations and warranties set forth in Section 3.3 and Section 3.5(a) shall be true and correct (except for inaccuracies which are de minimis in amount and effect). There shall not exist inaccuracies in the representations and warranties of the Company set forth in this Agreement (including the representations set forth in Section 3.3 and Section 3.5(a)) such that the aggregate effect of such inaccuracies has, or is reasonably likely to have, a Material Adverse Effect; provided that, for purposes of this sentence only, those representations and warranties which are qualified by references to “material” or “Material Adverse Effect” or to the “Knowledge” of any Person shall be deemed not to include such qualifications.

Section 8.2 Performance by the Company. The Company shall have performed or complied in all material respects with all of the covenants and obligations to be performed or complied with by it under the terms of this Agreement on or prior to the Closing Date.

Section 8.3 Shareholder Approval. The Company Shareholder Approval shall have been obtained.

Section 8.4 No Proceedings. Since the date of this Agreement, there must not have been commenced or be pending any Proceeding: (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions; or (b) that may have the effect of preventing, delaying, making illegal or otherwise interfering with any of the Contemplated Transactions, in either case that would reasonably be expected by the Nicolet Board to have a Material Adverse Effect on the Surviving Entity.

Section 8.5 Regulatory Approvals. All Requisite Regulatory Approvals shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired or been terminated and there shall not be any action taken, or any Legal Requirement enacted, entered, enforced or deemed applicable to the Contemplated Transactions, by any Regulatory Authority, in connection with the grant of a Requisite Regulatory Approval, which shall have imposed a restriction or condition on, or requirement of, such approval that would, after the Effective Time, reasonably be expected by the Nicolet Board to have a Material Adverse Effect on the Surviving Entity.

Section 8.6 Registration Statement. The Registration Statement shall have become effective under the Securities Act. No stop order shall have been issued or threatened by the SEC that suspends the

A-38

TABLE OF CONTENTS

effectiveness of the Registration Statement, and no Proceeding shall have been commenced or be pending or threatened for such purpose.

Section 8.7 Officer’s Certificate. Nicolet shall have received a certificate signed on behalf of the Company by an executive officer of the Company certifying as to the matters set forth in Sections 8.1 and 8.2.

Section 8.8 Tax Opinion. Nicolet shall have received a written opinion of Bryan Cave Leighton Paisner LLP, addressed to the Company and Nicolet, in form and substance reasonably satisfactory to the Company and Nicolet, dated as of the Closing Date, to the effect that: (a) the Merger will constitute a reorganization within the meaning of Section 368(a) of the Code; and (b) each of the Company and Nicolet will be a party to such reorganization within the meaning of Section 368(b) of the Code.

Section 8.9 Stock Exchange Listing. Nicolet shall have filed with the Nasdaq Stock Market, LLC a notification form for the listing of all shares of Nicolet Common Stock to be delivered in the Merger, and the Nasdaq Stock Market, LLC shall not have objected to the listing of such shares of Nicolet Common Stock.

Section 8.10 Minimum Tangible Common Equity. As of the Closing Date, the Company shall have Tangible Common Equity of no less than $66,500,000.

Section 8.11 No Material Adverse Effect. From the date of this Agreement to the Closing, there shall be and have been no change in the financial condition, assets or business of the Company or the Bank that has had or would reasonably be expected to have a Material Adverse Effect on the Company.

Section 8.12 Consents. The Company shall have obtained or caused to be obtained the written consents, permissions and approvals as required under any agreements, contracts, appointments, indentures, plans, trusts or other arrangements with third parties as set forth on Section 8.12 of the Company Disclosure Schedules that are required to effect the Contemplated Transactions.

Section 8.13 Cancellation of Company Stock Options. Nicolet shall have received documentation (in a form satisfactory to Nicolet) from the Company as required by Section 2.8(b), and subject to the payments required by Section 2.8(a), evidencing the cancellation of Company Stock Options.

ARTICLE 9
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY

The obligations of the Company to consummate the Contemplated Transactions and to take the other actions required to be taken by the Company at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by the Company, in whole or in part):

Section 9.1 Accuracy of Representations and Warranties. For purposes of this Section 9.1, the accuracy of the representations and warranties of Nicolet set forth in this Agreement shall be assessed as of the date of this Agreement and as of the Closing Date (or such other date(s) as specified, to the extent any representation or warranty speaks as of a specific date). The representations and warranties set forth in Section 4.23 and Section 4.5(a) shall be true and correct (except for inaccuracies which are de minimis in amount and effect). There shall not exist inaccuracies in the representations and warranties of Nicolet set forth in this Agreement (including the representations set forth in Section 4.3 and Section 4.5(a)) such that the aggregate effect of such inaccuracies has, or is reasonably likely to have, a Material Adverse Effect; provided, that, for purposes of this sentence only, those representations and warranties which are qualified by references to “material” or “Material Adverse Effect” or to the “Knowledge” of any Person shall be deemed not to include such qualifications.

Section 9.2 Performance by Nicolet. Nicolet shall have performed or complied in all material respects with all of the covenants and obligations to be performed or complied with by it under the terms of this Agreement on or prior to the Closing Date.

Section 9.3 Shareholder Approval. The Company Shareholder Approval shall have been obtained.

A-39

TABLE OF CONTENTS

Section 9.4 No Proceedings. Since the date of this Agreement, there must not have been commenced or be pending any Proceeding: (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions; or (b) that may have the effect of preventing, delaying, making illegal or otherwise interfering with any of the Contemplated Transactions, in either case that would reasonably be expected by the Company Board to have a Material Adverse Effect on the Surviving Entity.

Section 9.5 Regulatory Approvals. All Requisite Regulatory Approvals shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired or been terminated and there shall not be any action taken, or any Legal Requirement enacted, entered, enforced or deemed applicable to the Contemplated Transactions, by any Regulatory Authority, in connection with the grant of a Requisite Regulatory Approval, which shall have imposed a restriction or condition on, or requirement of, such approval that would, after the Effective Time, reasonably be expected by the Company Board to have a Material Adverse Effect on the Surviving Entity.

Section 9.6 Registration Statement. The Registration Statement shall have become effective under the Securities Act. No stop order shall have been issued or threatened by the SEC that suspends the effectiveness of the Registration Statement, and no Proceeding shall have been commenced or be pending or threatened for such purpose.

Section 9.7 Officer’s Certificate. The Company shall have received a certificate signed on behalf of Nicolet by an executive officer of Nicolet certifying as to the matters set forth in Sections and .

Section 9.8 Tax Opinion. The Company shall have received a written opinion of Bryan Cave Leighton Paisner LLP, addressed to the Company and Nicolet, in form and substance reasonably satisfactory to the Company and Nicolet, dated as of the Closing Date, to the effect that: (a) the Merger will constitute a reorganization within the meaning of Section 368(a) of the Code; and (b) each of the Company and Nicolet will be a party to such reorganization within the meaning of Section 368(b) of the Code.

Section 9.9 Stock Exchange Listing. Nicolet shall have filed with the Nasdaq Stock Market, LLC a notification form for the listing of all shares of Nicolet Common Stock to be delivered in the Merger, and the Nasdaq Stock Market, LLC shall not have objected to the listing of such shares of Nicolet Common Stock.

Section 9.10 No Material Adverse Effect. From the date of this Agreement to the Closing, there shall be and have been no change in the financial condition, assets or business of Nicolet or any of its Subsidiaries that has had or would reasonably be expected to have a Material Adverse Effect on Nicolet.

ARTICLE 10
TERMINATION

Section 10.1 Termination of Agreement. This Agreement may be terminated only as set forth below, whether before or after approval of the matters presented in connection with the Merger by the shareholders of the Company or Nicolet:

(a) by mutual consent of the Nicolet Board and the Company Board, each evidenced by appropriate written resolutions;

(b) by Nicolet, if the Company shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement, which breach or failure to perform, either individually or together with other such breaches, in the aggregate, if occurring or continuing on the date on which the Closing would otherwise occur would result in the failure of any of the conditions set forth in Section 8.1 and Section 8.2 and such breach or failure to perform has not been or cannot be cured within thirty (30) days following written notice to the party committing such breach, making such untrue representation and warranty or failing to perform; provided, that such breach or failure is not a result of the failure by Nicolet to perform and comply in all material respects with any of its obligations or representations and warranties under this Agreement that are to be performed or complied with by it prior to or on the date required hereunder;

(c) by the Company, if Nicolet shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement which breach or failure to perform,

A-40

TABLE OF CONTENTS

either individually or together with other such breaches, in the aggregate, if occurring or continuing on the date on which the Closing would otherwise occur would result in the failure of any of the conditions set forth in Section 9.1 and Section 9.2 and such breach or failure to perform has not been or cannot be cured within thirty (30) days following written notice to the party committing such breach, making such untrue representation and warranty or failing to perform, provided, that such breach or failure is not a result of the failure by the Company to perform and comply in all material respects with any of its obligations or representations and warranties under this Agreement that are to be performed or complied with by it prior to or on the date required hereunder;

(d) by Nicolet or the Company, if: (i) any Regulatory Authority that must grant a Requisite Regulatory Approval has denied approval of any of the Contemplated Transactions and such denial has become final and nonappealable; (ii) any application, filing or notice for a Requisite Regulatory Approval has been withdrawn at the request or recommendation of the applicable Regulatory Authority; or (iii) if the Company Shareholder Approval is not obtained following the Company Shareholders Meeting; provided, however, that the right to terminate this Agreement under this Section 10.1(d) shall not be available to a party whose failure (or the failure of any of its Affiliates) to fulfill any of its obligations (excluding warranties and representations) under this Agreement has been the cause of or resulted in the occurrence of any event described above;

(e) by Nicolet or the Company, if the Effective Time shall not have occurred at or before February 17, 2021 (the “Termination Date”); provided, however, that the right to terminate this Agreement under this Section 10.1(e) shall not be available to any party to this Agreement whose failure to fulfill any of its obligations (excluding warranties and representations) under this Agreement has been the cause of or resulted in the failure of the Effective Time to occur on or before such date;

(f) by Nicolet or the Company, if any court of competent jurisdiction or other Regulatory Authority shall have issued a judgment, Order, injunction, rule or decree, or taken any other action restraining, enjoining or otherwise prohibiting any of the Contemplated Transactions and such judgment, Order, injunction, rule, decree or other action shall have become final and nonappealable;

(g) by Nicolet, prior to receipt of the Company Shareholder Approval, if the Company Board makes an Adverse Recommendation;

(h) by the Company, prior to receipt of the Company Shareholder Approval pursuant to Section 5.9;

(i) by Nicolet, if the holders of more than 10% in the aggregate of the outstanding shares of Company Common Stock assert dissenters’ rights in compliance with Subchapter XIII of the WBCL;

(j) by Nicolet, if the Nicolet Common Stock Price is less than $62.00 per share and Nicolet elects its option set forth in Section 2.1(iii)(d); or

(k) by the Company, if the Nicolet Common Stock Price is less than $62.00 per share and Nicolet elects its option set forth in Section 2.1(iii)(c).

Section 10.2 Effect of Termination or Abandonment. In the event of the termination of this Agreement and the abandonment of the Merger pursuant to Section 10.1, this Agreement shall become null and void, and there shall be no liability of one party to the other or any restrictions on the future activities on the part of any party to this Agreement, or its respective directors, officers or shareholders, except that: (i) the Confidentiality Agreement, this Section 10.2, Section 10.3 and Article 11 shall survive such termination and abandonment; and (ii) no such termination shall relieve the breaching party from liability resulting from any willful and material breach by that party of this Agreement.

Section 10.3 Fees and Expenses.

(a) Except as otherwise provided in this Section 10.3, all fees and expenses incurred in connection with this Agreement, the Merger and the other Contemplated Transactions shall be paid by the party incurring such fees or expenses, whether or not the Merger is consummated, except that the expenses incurred in connection with the filing, printing and mailing of the Proxy Statement, and all filing and

A-41

TABLE OF CONTENTS

other fees paid to the SEC, in each case in connection with the Merger (other than attorneys’ fees, accountants’ fees and related expenses), shall be shared equally by Nicolet and the Company.

(b) If this Agreement is terminated by Nicolet pursuant to Section 10.1(g) or by the Company pursuant to Section 10.1(h), then the Company shall pay to Nicolet, within two (2) Business Days after such termination, the amount of $5,000,000 (the “Termination Fee”) by wire transfer of immediately available funds to such account as Nicolet shall designate.

(c) If (i) an Acquisition Proposal with respect to the Company shall have been communicated to or otherwise made known to the Company shareholders or the Company Board, or any Person shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to the Company after the date of this Agreement, (ii) thereafter this Agreement is terminated by the Company or Nicolet pursuant to Section 10.1(c) (A) (if the Company Shareholder Approval has not theretofore been obtained) or Section 10.1(d) (B) (iii) based on the failure to obtain the Company Shareholder Approval, and (iii) prior to the date that is twelve (12) months after the date of such termination, the Company enters into a definitive written agreement with any Person with respect to such Acquisition Proposal, then the Company shall pay to Nicolet, within two (2) Business Days after execution of such definitive written agreement, the Termination Fee by wire transfer of immediately available funds to such account as Nicolet shall designate.

(d) All payments made pursuant to this Section 10.3 shall constitute liquidated damages and the receipt thereof shall be the sole and exclusive remedy of the receiving party against the party making such payment, its Affiliates and their respective directors, officers and shareholders for any claims arising out of or relating in any way to this Agreement or the transactions contemplated herein.

ARTICLE 11
MISCELLANEOUS

Section 11.1 Survival. Except for covenants that are expressly to be performed after the Closing, none of the representations, warranties and covenants contained herein shall survive beyond the Closing.

Section 11.2 Governing Law. All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal laws of the State of Wisconsin applicable to Contracts made and wholly to be performed in such state without regard to conflicts of laws.

Section 11.3 Assignments, Successors and No Third Party Rights. Neither party to this Agreement may assign any of its rights under this Agreement (whether by operation of law or otherwise) without the prior written consent of the other party. Any purported assignment in contravention hereof shall be null and void. Subject to the preceding sentence, this Agreement and every representation, warranty, covenant, agreement and provision hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except for Section 6.3, nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement. The representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties. Any inaccuracies in such representations and warranties are subject to waiver by the parties hereto in accordance with Section 11.5 without notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, persons other than the parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

Section 11.4 Modification. This Agreement may be amended, modified or supplemented by the parties at any time before or after the Company Shareholder Approval is obtained; provided, however, that after the Company Shareholder Approval is obtained, there may not be, without further approval of the Company’s shareholders, any amendment of this Agreement that requires further approval under applicable

A-42

TABLE OF CONTENTS

Legal Requirements. This Agreement may not be amended, modified or supplemented except by an instrument in writing signed on behalf of each of the parties.

Section 11.5 Extension of Time; Waiver. At any time prior to the Effective Time, the parties may, to the extent permitted by applicable Legal Requirements: (a) extend the time for the performance of any of the obligations or other acts of the other party; (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement; or (c) waive compliance with or amend, modify or supplement any of the agreements or conditions contained in this Agreement which are for the benefit of the waiving party. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. Neither the failure nor any delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. Except as provided in Article 10, the rights and remedies of the parties to this Agreement are cumulative and not alternative. To the maximum extent permitted by applicable Legal Requirements: (x) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (y) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (z) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

Section 11.6 Notices. All notices, consents, waivers and other communications under this Agreement shall be in writing (which shall include electronic mail) and shall be deemed to have been duly given if delivered by hand or by nationally recognized overnight delivery service (receipt requested), mailed by registered or certified U.S. mail (return receipt requested) postage prepaid or sent by electronic mail (with confirmation) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to Nicolet, to:

Nicolet Bankshares, Inc.
111 N. Washington Street
Green Bay, WI 54301
Telephone: (920) 430-7317
Email: batwell@nicoletbank.com
Attention: Robert B. Atwell

with copies to:

Bryan Cave Leighton Paisner LLP
One Atlantic Center, 14th Floor
1201 W. Peachtree Street, NW
Atlanta, GA 30309-3488
Telephone:   (404) 572-6810
Email:       Robert.Klingler@bclplaw.com
Attention:    Robert D. Klingler

If to the Company, to:

Commerce Financial Holdings, Inc.
1700 S. Silverbrook Drive
West Bend, WI 53095
Telephone: (262) 247-2802
Email: jfazio@commercesb.com
Attention: Joseph Fazio, III

A-43

TABLE OF CONTENTS

with copies to:

Reinhart Boerner Van Deuren, s.c.
1000 North Water Street Suite 1700
Milwaukee, WI 53202
Telephone: (414) 298-8140
Email: rhenkle@reinhartlaw.com
Attention: Robert F. Henkle, Jr.

or to such other Person or place as the Company shall furnish to Nicolet or Nicolet shall furnish to the Company in writing. Except as otherwise provided herein, all such notices, consents, waivers and other communications shall be effective: (a) if delivered by hand, when delivered; (b) if delivered by overnight delivery service, on the next Business Day after deposit with such service; and (c) if mailed in the manner provided in this Section 11.6, five (5) Business Days after deposit with the U.S. Postal Service.

Section 11.7 Entire Agreement. This Agreement, the Schedules and any documents executed by the parties pursuant to this Agreement and referred to herein, together with the Confidentiality Agreement, constitute the entire understanding and agreement of the parties hereto and supersede all other prior agreements and understandings, written or oral, relating to such subject matter between the parties.

Section 11.8 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Legal Requirements, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Legal Requirements, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement unless the consummation of the Contemplated Transactions is adversely affected thereby.

Section 11.9 Further Assurances. The parties agree: (a) to furnish upon request to each other such further information; (b) to execute and deliver to each other such other documents; and (c) to do such other acts and things; all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement.

Section 11.10 Counterparts. This Agreement and any amendments thereto may be executed in any number of counterparts (including by electronic means), each of which shall be deemed an original, but all of which together shall constitute one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other party, it being understood that each party need not sign the same counterpart.

ARTICLE 12
DEFINITIONS

Section 12.1 Definitions. In addition to those terms defined throughout this Agreement, the following terms, when used herein, shall have the following meanings:

(a) “Acquisition Proposal” means a tender or exchange offer to acquire more than 25% of the voting power in the Company or the Bank, a proposal for a merger, consolidation or other business combination involving the Company or the Bank or any other proposal or offer to acquire in any manner more than 25% of the voting power in, or more than 25% of the business, assets or deposits of, the Company or the Bank, other than the transactions contemplated hereby and other than any sale of whole loans and securitizations in the Ordinary Course of Business.

(b) “Affiliate” means, with respect to any specified Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with, such specified Person.

(d) “Bank Merger” means the merger of the Bank with and into, and under the charter of, Nicolet Bank pursuant to the Bank Plan of Merger.

A-44

TABLE OF CONTENTS

(e) “Business Day” means any day except Saturday, Sunday and any day on which banks in Wisconsin are authorized or required by law or other government action to close.

(f) “Company Articles of Incorporation” means the Certificate of Incorporation of the Company, as amended.

(g) “Company Benefit Plan” means any: (i) qualified or nonqualified “employee pension benefit plan” (as defined in Section 3(2) of ERISA) or other deferred compensation or retirement plan or arrangement; (ii) “employee welfare benefit plan” (as defined in Section 3(1) of ERISA) or other health, welfare or similar plan or arrangement; (iii) “employee benefit plan” (as defined in Section 3(3) of ERISA); (iv) equity-based compensation plan or arrangement (including any stock option, stock purchase, stock ownership, stock appreciation, restricted stock, restricted stock unit, phantom stock or similar plan, agreement or award); (v) other paid time off, compensation, severance, bonus, profit-sharing or incentive plan or arrangement; (vi) other employee benefit plan, practice, policy or arrangement of any kind, whether written or oral, and whether for the benefit of a single individual or more than one (1) individual; or (vii) change in control agreement or employment or severance agreement, in each case with respect to clauses (i) through (vii) of this definition, to which contributions have at any time been made by the Company or the Bank or any Company ERISA Affiliate or under which any current or former employee, director, agent or independent contractor of the Company or the Bank or any beneficiary thereof is covered, is eligible for coverage or has payment or other benefit rights, and for which the Company or the Bank has or may have liability, including by reason of having a Company ERISA Affiliate.

(h) “Company Board” means the board of directors of the Company.

(i) “Company Bylaws” means the Bylaws of the Company, as amended.

(j) “Company Capital Stock” means Company Common Stock and Company Preferred Stock.

(k) “Company Common Stock” means the common stock, $0.01 par value per share, of the Company.

(l) “Company Debt Agreement” means any agreement or understanding, and any transaction documents pursuant thereto, representing a loan, credit facility or debt instrument or otherwise memorializing any indebtedness incurred by the Company and owing to any lending party or parties in effect or outstanding as of the time of this Agreement or at the Effective Time.

(m) “Company ERISA Affiliate” means each “person” (as defined in Section 3(9) of ERISA) that is treated as a single employer with the Company or the Bank for purposes of Section 414 of the Code.

(n) “Company Regulatory Reports” means (i) the Consolidated Reports of Condition and Income for A Bank With Domestic Offices Only — FFIEC 041 of the Bank for the years ended December 31, 2019, 2018 and 2017, as filed with the FDIC; (ii) the Consolidated Reports of Condition and Income for A Bank With Domestic Offices Only — FFIEC 041 of the Bank with respect to periods ended subsequent to December 31, 2019, as filed with the FDIC; (iii) the Parent Company Only Financial Statements for Small Holding Companies, Form FR Y-9SP, of the Company for the years ended December 31, 2019, 2018 and 2017; and (iv) the Parent Company Only Financial Statements for Small Holding Companies, Form FR Y-9SP, of the Company with respect to periods ended subsequent to December 31, 2019.

(o) “Company Shareholder Approval” means the adoption and approval of this Agreement by the shareholders of the Company, in accordance with the WBCL and the Company Articles of Incorporation.

(p) “Company Stock Option” means any outstanding Company Stock Option, stock appreciation right, restricted stock award, restricted stock unit, or other equity award granted under a Company Stock Plan.

A-45

TABLE OF CONTENTS

(q) “Company Stock Plans” means the Commerce Financial Holdings, Inc. 2005 Stock Incentive Compensation Plan, as amended.

(r) “Contemplated Transactions” means all of the transactions contemplated by this Agreement, including: (i) the Merger; (ii) the Bank Merger, (iii) the performance by Nicolet and the Company of their respective covenants and obligations under this Agreement; and (iv) Nicolet’s issuance of shares of Nicolet Common Stock pursuant to the Registration Statement and cash in lieu of fractional shares and for Supplemental Cash Consideration, if any, in exchange for shares of Company Common Stock.

(s) “Contract” means any agreement, contract, obligation, promise or understanding (whether written or oral and whether express or implied) that is legally binding: (i) under which a Person has or may acquire any rights; (ii) under which such Person has or may become subject to any obligation or liability; or (iii) by which such Person or any of the assets owned or used by such Person is or may become bound.

(t) “Control,” “Controlling” or “Controlled” when used with respect to any specified Person, means the power to vote 25 percent (25%) or more of any class of voting securities of a Person, the power to control in any manner the election of a majority of the directors or partners of such Person, or the power to exercise a controlling influence over the management or policies of such Person.

(u) “CRA” means the Community Reinvestment Act, as amended.

(v) “Deposit Insurance Fund” means the fund that is maintained by the FDIC to allow it to make up for any shortfalls from a failed depository institution’s assets.

(w) “Derivative Transactions” means any swap transaction, option, warrant, forward purchase or sale, transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity, securities, loans, interest rates, prices, values, or other financial or nonfinancial assets, credit-related events or conditions or any indexes, or other similar transaction or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or other similar arrangements related to such transactions.

(x) “Dissenting Shares” shall mean shares with respect to which the holders thereof have perfected dissenters’ rights under Subchapter XIII of the WBCL.

(y) “DOL” means the U.S. Department of Labor.

(z) “Environment” means surface or subsurface soil or strata, surface waters and sediments, navigable waters, groundwater, drinking water supply and ambient air.

(aa) “Environmental Laws” means any federal, state or local law, statute, ordinance, rule, regulation, code, order, permit or other legally binding requirement applicable to the business or assets of Nicolet, the Company or any of their respective Subsidiaries that imposes liability or standards of conduct with respect to the Environment and/or Hazardous Materials.

(bb) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(cc) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(dd) “FDIC” means the Federal Deposit Insurance Corporation.

(ee) “Federal Reserve” means the Board of Governors of the Federal Reserve System.

(ff) “GAAP” means generally accepted accounting principles in the U.S., consistently applied.

(gg) “Hazardous Materials” means any hazardous, toxic or dangerous substance, waste, contaminant, pollutant, gas or other material that is classified as such under Environmental Laws or is otherwise regulated under Environmental Laws.

A-46

TABLE OF CONTENTS

(hh) “Intangible Assets” means any asset that is considered an intangible asset under GAAP, including, without limitation, any goodwill and any other identifiable intangible assets recorded in accordance with GAAP, but excluding any mortgage servicing assets recorded as an intangible asset.

(ii) “IRS” means the U.S. Internal Revenue Service.

(jj) “Knowledge” means, assuming due inquiry under the facts or circumstances, the actual knowledge of the chief executive officer, president, chief financial officer, chief credit officer or general counsel of Nicolet or the Company, as the context requires.

(kk) “Legal Requirement” means any federal, state, local, municipal, foreign, international, multinational or other Order, constitution, law, ordinance, regulation, rule, policy statement, directive, statute or treaty.

(ll) “Material Adverse Effect” as used with respect to a party, means an event, circumstance, change, effect or occurrence which, individually or together with any other event, circumstance, change, effect or occurrence: (i) is materially adverse to the business, condition (financial or otherwise), assets, liabilities or results of operations of such party and its Subsidiaries, taken as a whole; or (ii) materially impairs the ability of such party to perform its obligations under this Agreement or to consummate the Merger and the other Contemplated Transactions on a timely basis; provided that, in determining whether a Material Adverse Effect has occurred, there shall be excluded any effect to the extent attributable to or resulting from: (A) changes in Legal Requirements and the interpretation of such Legal Requirements by courts or governmental authorities; (B) changes in GAAP or regulatory accounting requirements; (C) changes or events generally affecting banks, bank holding companies or financial holding companies, or the economy or the financial, securities or credit markets, including changes in prevailing interest rates, liquidity and quality, currency exchange rates, price levels or trading volumes in the U.S. or foreign securities markets; (D) changes in national or international political or social conditions including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon or within the United States; and (E) the effects of the actions expressly permitted or required by this Agreement or that are taken with the prior written consent of the other party in contemplation of the Contemplated Transactions, including the costs and expenses associated therewith, including Transaction Costs, Severance Costs, and the response of customers, vendors, licensors, investors, or employees; except with respect to clauses (A), (B), (C) and (D), to the extent that the effects of such change are materially disproportionately adverse to the financial condition, results of operations or business of such party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its Subsidiaries operate.

(mm) “Nasdaq Rules” means the listing rules of the Nasdaq Capital Market.

(nn) “Nicolet Articles of Incorporation” means the Amended and Restated Articles of Incorporation of Nicolet, as amended.

(oo) “Nicolet Bank” means Nicolet National Bank, and a wholly-owned subsidiary of Nicolet.

(pp) “Nicolet Benefit Plan” means any: (i) qualified or nonqualified “employee pension benefit plan” (as defined in Section 3(2) of ERISA) or other deferred compensation or retirement plan or arrangement; (ii) “employee welfare benefit plan” (as defined in Section 3(1) of ERISA) or other health, welfare or similar plan or arrangement; (iii) “employee benefit plan” (as defined in Section 3(3) of ERISA); (iv) equity-based plan or arrangement (including any stock option, stock purchase, stock ownership, stock appreciation, restricted stock, restricted stock unit, phantom stock or similar plan, agreement or award); (v) other paid time off, compensation, severance, bonus, profit-sharing or incentive plan or arrangement; (vi) other employee benefit plan, practice, policy or arrangement of any kind, whether written or oral, and whether for the benefit of a single individual or more than one (1) individual; or (vii) change in control agreement or employment or severance agreement, in each case with respect to clauses (i) through (vii) of this definition, to which contributions have at any time been made by Nicolet or any of its Subsidiaries or any Nicolet ERISA Affiliate or under which any employee, former employee, director, agent or independent contractor of Nicolet or any of its Subsidiaries or any

A-47

TABLE OF CONTENTS

beneficiary thereof is covered, is eligible for coverage or has benefit rights, and for which Nicolet or any of its Subsidiaries has or may have liability, including by reason of having a Nicolet ERISA Affiliate.

(qq) “Nicolet Board” means the board of directors of Nicolet.

(rr) “Nicolet Bylaws” means the Nicolet Amended and Restated Bylaws, as amended.

(ss) “Nicolet Capital Stock” means Nicolet Common Stock and Nicolet Preferred Stock, collectively.

(tt) “Nicolet Common Stock” means the common stock, $0.01 par value per share, of Nicolet.

(uu) “Nicolet Common Stock Price” means the volume weighted average closing price of Nicolet Common Stock on the Nasdaq Capital Market over the twenty (20) trading day period immediately preceding the second (2nd) trading day prior to the Closing Date.

(vv) “Nicolet Equity Award” means any outstanding stock option, stock appreciation right, restricted stock award, restricted stock unit, or other equity award granted under a Nicolet Stock Plan.

(ww) “Nicolet ERISA Affiliate” means each “person” (as defined in Section 3(9) of ERISA) that is treated as a single employer with Nicolet or any of its Subsidiaries for purposes of Section 414 of the Code.

(xx) “Nicolet Material Contract” means any contract that is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated under the Securities Act).

(yy) “Nicolet SEC Reports” means the annual, quarterly and other reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein) filed or furnished by Nicolet with the SEC under the Securities Act, the Exchange Act, or the regulations thereunder, since January 1, 2017.

(zz) “Nicolet Stock Plans” means any of the following:

Nicolet Bankshares, Inc. 2002 Stock Incentive Plan.

Nicolet Bankshares, Inc. 2010 Equity Incentive Plan.

Nicolet Bankshares, Inc. 2011 Long-Term Incentive Plan, as amended.

(aaa) “Order” means any award, decision, injunction, judgment, order, ruling, extraordinary supervisory letter, policy statement, memorandum of understanding, resolution, agreement, directive, subpoena or verdict entered, issued, made, rendered or required by any court, administrative or other governmental agency, including any Regulatory Authority, or by any arbitrator.

(bbb) “Ordinary Course of Business” shall include any action taken by a Person only if such action is consistent with the past practices of such Person and is similar in nature and magnitude to actions customarily taken in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

(ccc) “OREO” means real estate owned by a Person and designated as “other real estate owned.”

(ddd) “Outstanding Company Shares” means the shares of Company Common Stock issued and outstanding immediately prior to the Effective Time.

(eee) “PBGC” means the U.S. Pension Benefit Guaranty Corporation.

(fff) “Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, foundation, joint venture, estate, trust, association, organization, labor union or other entity or Regulatory Authority.

(ggg) “Proceeding” means any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or

A-48

TABLE OF CONTENTS

heard by or before, or otherwise involving, any judicial or governmental authority, including a Regulatory Authority, or arbitrator.

(hhh) “Proxy Statement” means a proxy statement prepared by Nicolet and the Company for use in connection with the Company Shareholders Meeting in accordance with the rules and regulations of the SEC.

(iii) “Registration Statement” means a registration statement on Form S-4 or other applicable form under the Securities Act covering the shares of Nicolet Common Stock to be issued pursuant to this Agreement, which shall include the Proxy Statement.

(jjj) “Regulatory Authority” means any federal, state or local governmental body, agency, court or authority that, under applicable Legal Requirements: (i) has supervisory, judicial, administrative, police, enforcement, taxing or other power or authority over the Company, Nicolet, or any of their respective Subsidiaries; (ii) is required to approve, or give its consent to, the Contemplated Transactions; or (iii) with which a filing must be made in connection therewith.

(kkk) “Representative” means with respect to a particular Person, any director, officer, manager, employee, agent, consultant, advisor or other representative of such Person, including legal counsel, accountants and financial advisors.

(lll) “Requisite Regulatory Approvals” means all necessary documentation, applications, notices, petitions, filings, permits, consents, approvals and authorizations from all applicable Regulatory Authorities for approval of the Contemplated Transactions.

(mmm) “SEC” means the Securities and Exchange Commission.

(nnn) “Securities Act” means the Securities Act of 1933, as amended.

(ooo) “Severance Costs” shall mean any and all amounts in the nature of compensation paid or payable pursuant to any agreement with any employee of the Company, the Bank or any other Subsidiary of the Company, as determined on an after-tax basis, that is contingent upon a change in control of the Company or a sale of a substantial portion of the assets of the Company, regardless of whether such payment is due or made before, on or after the Closing Date, and regardless of whether such payments are subject to termination of employment or other events that may occur after the Closing Date. For the avoidance of doubt, all such payments that could become due after a change in ownership upon voluntary termination of employment of an executive under any employment agreement would be considered a Severance Cost.

(ppp) “Subsidiary” with respect to any Person means an affiliate controlled by such Person directly or indirectly through one or more intermediaries.

(qqq) “Superior Proposal” means a bona fide written Acquisition Proposal which the Company Board concludes in good faith to be more favorable from a financial point of view to the Company shareholders than the Merger and the other transactions contemplated hereby, (i) after receiving the advice of its financial advisors (which shall be Hillworth, LLC, or any nationally recognized investment banking firm), (ii) after taking into account the likelihood and timing of consummation of the proposed transaction on the terms set forth therein (as compared to, and with due regard for, the terms herein) and (iii) after taking into account all legal (with the advice of outside counsel), financial (including the financing terms of any such proposal), regulatory (including the advice of outside counsel regarding the potential for regulatory approval of any such proposal) and other aspects of such proposal and any other relevant factors permitted under applicable law.

(rrr) “Takeover Statutes” means any provisions of any potentially applicable “moratorium,” “control share,” “fair price,” “business combination,” “takeover” or “interested shareholder” law.

(sss) “Tangible Assets” means, as of the Closing Date, the total assets of the Company, calculated in accordance with GAAP, consistently applied, less any Intangible Assets.

(ttt) “Tangible Common Equity” means the excess of Tangible Assets over the total liabilities of the Company, calculated in accordance with GAAP as of the Closing Date, as adjusted to exclude:

A-49

TABLE OF CONTENTS

(i) Transaction Costs; (ii) Severance Costs; (iii) any changes to the valuation of the Company (or the Bank) investment portfolio attributed to ASC 320, whether upward or downward, from December 31, 2019 until the calculation of the Tangible Common Equity pursuant to Section 5.10; and as set forth in Section 12.1(ttt) of the Company Disclosure Schedules.

(uuu) “Tax” means any tax (including any income tax, franchise tax, capital gains tax, value-added tax, sales tax, property tax, escheat tax, use tax, payroll tax, gift tax or estate tax), levy, assessment, tariff, duty (including any customs duty), deficiency or other fee, and any related charge or amount (including any fine, penalty, interest or addition to tax), imposed, assessed or collected by or under the authority of any Regulatory Authority or payable pursuant to any tax-sharing agreement or any other Contract relating to the sharing or payment of any such tax, levy, assessment, tariff, duty, deficiency or fee.

(vvv) “Tax Return” means any return (including any information return), report, statement, schedule, notice, form or other document or information filed with or submitted to, or required to be filed with or submitted to, any Regulatory Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.

(www) “Transaction Costs” shall mean any and all amounts incurred by the Company or Nicolet, as determined on an after-tax basis, whether or not paid by the Company or Nicolet and whether incurred before, on or after the date of this Agreement, that arise out of or in connection with the negotiation and preparation of this Agreement and the consummation and performance of the transactions contemplated hereby.

(xxx) “Transition Date” means, with respect to any Covered Employee, the date Nicolet commences providing benefits to such employee with respect to each New Plan.

(yyy) “U.S.” means the United States of America.

(zzz) “WBCL” means the Wisconsin Business Corporation Law, as amended.

Section 12.2 Principles of Construction.

(a) In this Agreement, unless otherwise stated or the context otherwise requires, the following uses apply: (i) actions permitted under this Agreement may be taken at any time and from time to time in the actor’s sole discretion; (ii) references to a statute shall refer to the statute and any successor statute, and to all regulations promulgated under or implementing the statute or its successor, as in effect at the relevant time; (iii) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until” and “ending on” (and the like) mean “to, but excluding”; (iv) references to a governmental or quasi-governmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of the agency, authority or instrumentality; (v) indications of time of day mean Central Time; (vi) “including” means “including, but not limited to”; (vii) all references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Agreement unless otherwise specified; (viii) all words used in this Agreement will be construed to be of such gender or number as the circumstances and context require; (ix) the captions and headings of articles, sections, schedules and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (x) any reference to a document or set of documents in this Agreement, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof.

(b) The schedules of each of the Company and Nicolet referred to in this Agreement (the “Company Disclosure Schedules” and the “Nicolet Disclosure Schedules,” respectively, and collectively the “Schedules”) shall consist of items, the disclosure of which with respect to a specific party is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained herein or to one or more

A-50

TABLE OF CONTENTS

covenants contained herein, which Schedules were delivered by each of the Company and Nicolet to the other before the date of this Agreement. In the event of any inconsistency between the statements in the body of this Agreement and those in the Schedules (other than an exception expressly set forth as such in the Schedules), the statements in the body of this Agreement will control. For purposes of this Agreement, “Previously Disclosed” means information set forth by the Company or Nicolet in the applicable paragraph of its Schedules, or any other paragraph of its Schedules (so long as it is reasonably clear from the context that the disclosure in such other paragraph of its Schedule is also applicable to the section of this Agreement in question).

(d) With regard to each and every term and condition of this Agreement and any and all agreements and instruments subject to the terms hereof, the parties hereto understand and agree that the same have or has been mutually negotiated, prepared and drafted, and that if at any time the parties hereto desire or are required to interpret or construe any such term or condition or any agreement or instrument subject hereto, no consideration shall be given to the issue of which party hereto actually prepared, drafted or requested any term or condition of this Agreement or any agreement or instrument subject hereto.

(e) No disclosure, representation, or warranty shall be required to be made (or any other action taken) pursuant to this Agreement that would involve the disclosure of confidential supervisory information of any Regulatory Authority by any party hereto to the extent prohibited by a Legal Requirement, and, to the extent legally permissible, appropriate substitute disclosures or actions shall be made or taken under circumstances in which the limitations of this sentence apply.

[Remainder of Page Intentionally Left Blank]

[Signature Page Follows]

A-51

TABLE OF CONTENTS

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers on the day and year first written above.

	Nicolet:			Company:
	Nicolet Bankshares, Inc.			Commerce Financial Holdings, INC.
	By: /s/ Michael E. Daniels Name: Michael E. Daniels Title: Executive Vice President and Secretary			By: /s/ Joseph Fazio Name: Joseph Fazio, III Title: Chief Executive Officer

[Signature Page to Agreement and Plan of Merger]

TABLE OF CONTENTS

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers on the day and year first written above.

	Nicolet:			Company:
	Nicolet Bankshares, Inc.			Commerce Financial Holdings, INC.
	By: Name: Robert B. Atwell Title: Chairman and Chief Executive Officer			By: Name: Joseph Fazio, III Title: Chief Executive Officer

[Signature Page to Agreement and Plan of Merger]

TABLE OF CONTENTS

Appendix B

February 16, 2020

Board of Directors
Commerce Financial Holdings, Inc.
1700 South Silverbrook Drive
West Bend, WI 53095

Ladies and Gentlemen:

Magstar Capital, LLC (“we” or “Magstar”) understands that Nicolet Bankshares, Inc., a Wisconsin corporation (“Nicolet”) and Commerce Financial Holdings, Inc., a Wisconsin corporation (the “Company”) are about to enter into an Agreement and Plan of Merger to be dated on or about February 17, 2020 (the “Agreement”). Pursuant to the Agreement, and subject to the terms, conditions and limitations set forth therein, the Company will be merged with and into Nicolet (the “Merger”), with Nicolet as the surviving entity in the Merger (the “Surviving Entity”). Following the Effective Time of the Merger, Commerce State Bank (the “Bank”), a wholly-owned subsidiary of the Company, shall be merged with and into Nicolet Bank, a wholly-owned subsidiary of Nicolet, pursuant to the terms and conditions of the Plan of Merger by and between Nicolet Bank and the Bank as set forth in the Agreement (the “Bank Plan of Merger”). Capitalized terms used herein that are not otherwise defined shall have the same meanings attributed to them in the Agreement.

Pursuant and subject to the terms of the Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of Nicolet, the Company, or the holder of any shares of Company Common Stock, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time, will be converted (subject to the maximum Nicolet Common Stock issuance procedures in Section 2.3, the fractional share procedures in Section 2.5, the dissenters rights provisions in Section 2.6 and the cash consideration provisions for shares held in the Company 401(k) Plan in Section 2.9 of the Agreement), into the right to receive 1.15 fully paid and nonassessable shares (subject to any adjustment in Section 2.1(ii) or (iii) of the Agreement, the “Exchange Ratio”) of Nicolet Common Stock (the “Per Share Stock Consideration”). Furthermore, and pursuant to the Agreement and for purposes of our opinion, we understand that if the Nicolet Common Stock Price (as defined in the Agreement) is greater than $82.00 per share, the adjusted Exchange Ratio shall equal the quotient (rounded to the nearest thousandth of a share) obtained by dividing $94.30 by the Nicolet Common Stock Price and if the Nicolet Common Stock Price is less than $62.00 per share, Nicolet shall have the option to: (a) increase the number of shares of Nicolet Common Stock to be contributed using an adjusted Exchange Ratio equal to the quotient (rounded to the nearest thousandth of a share) obtained by dividing $71.30 by the Nicolet Common Stock Price subject to the limitations set forth in Section 2.3 of the Agreement; (b) leave the Exchange Ratio unchanged, but add additional cash consideration in an amount sufficient to bring the Per Share Stock Consideration up to $71.30 per share; (c) leave the Exchange Ratio unchanged, or (d) terminate the Agreement. The total stock consideration to be paid by Nicolet in respect of shares of Company Common Stock is referred to as the “Merger Consideration.”

We note that pursuant to Section 2.3 of the Agreement, under no circumstances shall the number of shares of Nicolet Common Stock to be issued as a result of the Contemplated Transactions exceed 19.9% of the outstanding shares of Nicolet Common Stock, such that the provisions of Nasdaq Listing Rule 5635 and/or the WBCL would require approval of the Contemplated Transactions by the shareholders of Nicolet. Accordingly, to the extent necessary to avoid a shareholder vote under Nasdaq Listing Rule 5635 and/or the WBCL, the Exchange Ratio shall be reduced to the maximum exchange ratio (rounded to the nearest Thousandth of a share) that would not cause need for a Nicolet shareholder vote, and Nicolet shall add additional cash consideration (the “Supplemental Cash Consideration”) in an amount sufficient to leave the value of the Per Share Stock Consideration unchanged as a result of such adjustment.

B-1

TABLE OF CONTENTS

We further note that pursuant to Section 2.8 of the Agreement, except as set forth therein, immediately prior to the Effective Time, each Company Stock Option that is outstanding immediately prior to the Effective Time, whether vested or unvested, shall be cancelled, by virtue of the Merger and without any action on the part of the holder thereof, in consideration for the right to receive, as promptly as practicable (but no later than fifteen (15) calendar days) following the Effective Time, a cash payment (without interest and less applicable withholding Taxes) with respect thereto equal to the product of (i) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time and (ii) the excess, if any, of the product of (x) the Nicolet Common Stock Price and (y) the Exchange Ratio, subject to any adjustment, over the exercise price per share of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time. You have advised us that as of the date hereof, the value of the Option Consideration is approximately $2.62 million (based on 57,132 options outstanding with a weighted average strike price of $37.31, and assuming a $72.30 closing price of Nicolet Common Stock as of February 14, 2020).

You have instructed us to assume for purposes of our analysis and opinion that the Company will have Tangible Common Equity of not less than $66.5 million as of the applicable determination date provided in the Agreement. Accordingly, based on the foregoing, and assuming no adjustments to the Merger Consideration under the terms of the Agreement, we have assumed for purposes of our opinion and analysis, and with your consent, that the holders of the Company Common Stock will have the right to receive Merger Consideration with an value of approximately $127,292,449 (based on 1,760,128 shares of Nicolet Common Stock issuable and a closing price of Nicolet Common Stock of $72.32 per share as of February 14, 2020).

You have requested our opinion as to the fairness, from a financial point of view, of the Merger Consideration to the shareholders of the Company. This opinion addresses only the fairness of the Merger Consideration to be paid in connection with the Merger and we are not opining on any individual cash, stock, option, or other components of the consideration.

During the course of our engagement and for the purposes of the opinion set forth herein, we have:

(i) reviewed a draft of the Agreement provided on February 13, 2020, as provided to Magstar by the Company;

(ii) reviewed unaudited financial statements for the Company, the Bank, Nicolet and Nicolet Bank, as of and for the year ending December 31, 2019;

(iii) reviewed certain historical annual reports of, the Company, the Bank, and Nicolet, including for the year ending December 31, 2018;

(iv) reviewed certain historical publicly available business and financial information concerning each of the Company, the Bank, Nicolet and Nicolet Bank;

(v) reviewed certain internal financial statements and other financial and operating data of the Company, the Bank, Nicolet and Nicolet Bank including, without limitation, internal financial analyses and forecasts prepared by management of the Company and the Bank, and held discussions with senior management of the Company, the Bank, Nicolet and Nicolet Bank regarding recent developments and regulatory matters;

(vi) reviewed financial projections prepared by certain members of senior management of the Company and the Bank;

(vii) discussed with certain members of senior management of the Company, the Bank, Nicolet and Nicolet Bank, the business, financial condition, results of operations and future prospects of the Company, the Bank, Nicolet and Nicolet Bank; the history and past and current operations of the Company, the Bank, Nicolet and Nicolet Bank; the Company’s, the Bank’s, Nicolet’s and Nicolet Bank’s historical financial performance; and their assessment of the rationale for the Merger;

B-2

TABLE OF CONTENTS

(viii) reviewed and analyzed materials detailing the Merger prepared by the Company, the Bank, Nicolet and Nicolet Bank and by their respective legal and financial advisors including the estimated amount and timing of the cost savings and related expenses, purchase accounting adjustments and synergies expected to result from the Merger (the “Synergies”);

(ix) assessed general economic, market and financial conditions;

(x) analyzed the pro forma financial impact of the Merger on the combined company’s earnings, tangible book value, financial ratios and other such metrics we deemed relevant, giving effect to the Merger based on assumptions relating to the Synergies;

(xi) reviewed certain S&P CapIQ consensus income and balance sheet estimates for Nicolet for 2020 and 2021;

(xii) reviewed historical market prices and trading volumes of Nicolet’s Common Stock;

(xiii) reviewed the certain publicly available financial information and stock market data related to selected public financial institutions/commercial banks that we deemed relevant to our analysis;

(xiii) reviewed the terms of recent merger, acquisition and control investment transactions, to the extent publicly available, involving financial institutions and financial institution holding companies that we considered relevant;

(xv) taken into consideration our experience in other similar transactions as well as our knowledge of the banking and financial services industry; and

(xvi) performed such other analyses and considered such other factors as we have deemed appropriate.

We have assumed, without investigation, that there have been, and from the date hereof through the Effective Date will be, no material changes in the financial condition and results of operations of the Company, the Bank, Nicolet, or Nicolet Bank since the date of the latest financial information described above. We have relied, without independent verification or investigation, on the assessments of the management of the Company, the Bank, Nicolet, or Nicolet Bank as to their existing and future relationships with key employees and partners, clients, products and services, and we have assumed, with your consent, that there will be no developments with respect to any such matters that would affect our analyses or opinion. We have further assumed, without independent verification, that the representations and financial and other information included in the Agreement and all other related documents and instruments that are referred to therein or otherwise provided to us by the Company, the Bank, Nicolet, or Nicolet Bank are true and complete. We have relied upon the management of the Company, the Bank, Nicolet, and Nicolet Bank as to the reasonableness and achievability of the financial forecasts, and projections, estimates and other forward-looking information (including the Synergies) provided to us by the Company, the Bank, Nicolet, and Nicolet Bank, and we assumed such forecasts, projections, estimates and other forward-looking information (including the Synergies) have been reasonably prepared by the Company, the Bank, Nicolet, and Nicolet Bank on a basis reflecting the best currently available information and the Company’s, the Bank’s, Nicolet’s, and Nicolet Bank’s judgments and estimates. We have assumed that such forecasts, projections, estimates and other forward-looking information (including the Synergies) would be realized in the amounts and at the times contemplated thereby, and we do not, in any respect, assume any responsibility for the accuracy or reasonableness thereof. We have been authorized by the Company and the Bank to rely upon such forecasts, projections, estimates and other information and data, and we express no view as to any such forecasts, projections, estimates or other forward-looking information or data, or the bases or assumptions on which they were prepared.

B-3

TABLE OF CONTENTS

In performing our review, we have assumed and relied upon the accuracy and completeness of all of the financial and other information that was available to us from public sources, that was provided to us by the Company, the Bank, Nicolet, and Nicolet Bank or their respective representatives or that was otherwise reviewed by us for purposes of rendering this opinion. We have further relied on the assurances of the respective management of the Company, the Bank, Nicolet, and Nicolet Bank and that they are not aware of any facts or circumstances that would make any of such information inaccurate or misleading. We have not been asked to and have not undertaken an independent verification of any of such information, and we do not assume any responsibility or liability for the accuracy or completeness thereof. We have assumed that each party to the Agreement would advise us promptly if any information previously provided to us became inaccurate or was required to be updated during the period of our review.

We are not experts in the evaluation of loan and lease portfolios for purposes of assessing the adequacy of the allowances for losses with respect thereto or otherwise. We have assumed that such allowances for the Company, the Bank, Nicolet, and Nicolet Bank are, in the aggregate, adequate to cover such losses, and will be adequate on a pro forma basis for the combined entity. We were not requested to make, and have not made, an independent evaluation, physical inspection or appraisal of the assets, properties, facilities, or liabilities (contingent or otherwise) of the Company, the Bank, Nicolet, and Nicolet Bank, the collateral securing any such assets or liabilities, or the collectability of any such assets, and we were not furnished with any such evaluations or appraisals, nor did we review any loan or credit files of the Company, the Bank, Nicolet, or Nicolet Bank. We also did not conduct a review of any credit mark which may be taken in connection with the Merger nor have we evaluated the adequacy of any contemplated credit mark to be so taken.

In arriving at our opinion, we have not evaluated the solvency of the Company, the Bank, Nicolet, or Nicolet Bank, under any state or federal law relating to bankruptcy, insolvency or similar matters. Accordingly, we express no opinion regarding the liquidation value of the Company, the Bank, Nicolet, or Nicolet Bank, or any other entity. We have also assumed that the Company, the Bank, Nicolet, and Nicolet Bank would remain as a going concern for all periods relevant to our analysis. Accordingly, we express no opinion with respect to the foregoing. Further, without limiting the generality of the foregoing, we have undertaken no independent analysis of any pending or threatened litigation, regulatory action, possible unasserted claims or other contingent liabilities to which the Company, the Bank, Nicolet, or Nicolet Bank is a party or may be subject, and with your consent, our opinion makes no assumption concerning, and therefore does not consider, the possible assertion of claims, outcomes or damages arising out of any such matters. We have also assumed that neither the Company, the Bank, Nicolet, nor Nicolet Bank is a party to any material pending transaction, including without limitation any financing, recapitalization, acquisition or merger, divestiture or spin-off, other than the Merger contemplated by the Agreement.

We have relied upon and assumed with your consent and without independent verification, that the Merger will be consummated substantially in accordance with the terms set forth in the Agreement, without any waiver of material terms or conditions by the Company, Nicolet or any other party to the Agreement and that the final Agreement will not differ materially from the draft we reviewed. We have assumed that the Merger will be consummated in compliance with all applicable laws and regulations. The Company has advised us that they are not aware of any factors that would impede any necessary regulatory or governmental approval of the Merger. We have assumed that the necessary regulatory and governmental approvals as granted will not be subject to any conditions that would be unduly burdensome on the Company, the Bank, Nicolet, or Nicolet Bank, or would have a material adverse effect on the contemplated benefits of the Merger. We have also assumed that the Merger will qualify as a tax-free reorganization for United States federal income tax purposes.

Our opinion does not consider, include or address: (i) the legal, tax, accounting, or regulatory consequences of the Merger on the Company, Nicolet or their respective shareholders; (ii) any advice or opinions provided by any other advisor to the Board of Directors of the Company or Nicolet; (iii) any other strategic alternatives that might be available to the Company; or (iv) whether Nicolet has sufficient cash or other sources of funds to enable it to pay any consideration contemplated by the Merger.

B-4

TABLE OF CONTENTS

Our opinion does not constitute a recommendation to the Company as to whether or not it should enter into the Agreement or to any shareholders of the Company as to how such shareholders should vote at any meetings of shareholders called to consider and vote upon the Merger. Our opinion does not address the underlying business decision to proceed with the Merger or the fairness of the amount or nature of the compensation, if any, to be received by any of the officers, directors or employees of the Company or the Bank relative to the amount of consideration to be paid with respect to the Merger. Our opinion should not be construed as implying that the Merger Consideration is necessarily the highest or best price that could be obtained in the Merger or in an acquisition, sale, merger, or combination transaction with a third party. We do not express any opinion as to the prices, trading range or volume at which Nicolet Common Stock may trade following the announcement of the proposed Merger, following the consummation of the Merger, or the prices at which shares of Nicolet Common Stock may be purchased or sold at any time. We render no opinion as to the value of Nicolet Common Stock when such stock is actually received by shareholders of the Company. Other than as specifically set forth herein, we are not expressing any opinion with respect to the terms and provisions of the Agreement or the enforceability of any such terms or provisions. Our opinion is not a solvency opinion and does not in any way address the solvency or financial condition of the Company or Nicolet.

This opinion was approved by Magstar’s fairness opinion committee. This letter is directed solely to the Board of Directors of the Company and is not to be used for any other purpose or quoted or referred to, in whole or in part, in any registration statement, prospectus, proxy statement, or any other document, except in each case in accordance with our prior written consent; provided, however, that we hereby consent to the inclusion and reference to this letter in any registration statement, proxy statement or information statement to be delivered to the holders of the Company’s common stock in connection with the Merger if, and only if, this letter is quoted in full or attached as an exhibit to such document, this letter has not been withdrawn prior to the date of such document, and any description of or reference to Magstar or the analyses performed by Magstar or any summary of this opinion in such filing is in a form acceptable to Magstar and its counsel in the exercise of their reasonable judgment.

Our opinion is based solely upon the information available to us and described above, and the economic, market and other circumstances as they exist as of the date hereof. Events occurring and information that becomes available after the date hereof could materially affect the assumptions and analyses used in preparing this opinion. We have not undertaken to update, revise, reaffirm or withdraw this opinion or otherwise comment upon events occurring or information that becomes available after the date hereof. No assurance can be given that downward adjustments to the consideration to be received in the Merger will not be required by the actual results of operations of the Company or the Bank after December 31, 2019.

In arriving at this opinion, Magstar did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Magstar believes that its analyses must be considered as a whole and that selecting portions of its analyses, without considering all analyses, would create an incomplete view of the process underlying this opinion.

Magstar, as part of its investment banking business, performs valuations of businesses and their securities in connection with mergers and acquisitions and other corporate transactions. In addition to being retained to render this opinion letter, we and Hillworth, LLC (“Hillworth”), an advisory firm focused on community banks and thrifts, were retained by the Company to act as its financial advisor in connection with the Merger. Members of Hillworth, are registered representatives of Magstar and any securities transactions and investment banking services to be rendered to Hillworth’s clients are provided through Magstar.

B-5

TABLE OF CONTENTS

We have received compensation from the Company including an advisory fee for delivery of certain transaction advisory and analysis services in connection with our engagement, and in connection with our services, will also receive a fairness opinion fee that is contingent upon the issuance of this opinion letter, and a completion fee that is contingent upon the consummation of the Merger. The Company has also agreed to indemnify us, Hillworth and our affiliates for certain liabilities that may arise out of this engagement. In the past two years, Magstar has not provided investment banking or financial advisory services to the Company or the Bank. Magstar or its affiliates may in the future provide investment banking and financial advisory services to Nicolet and receive compensation for such services, although to our knowledge none are expected at this time. During the past two years, certain registered representatives of Magstar, who are also separate owners and employees of Hillworth, have been engaged by, and provided services to the Company through Hillworth.

Based upon and subject to the foregoing review, assumptions and limitations, we are of the opinion, as of the date hereof, that the Merger Consideration to be paid in connection with the Merger is fair to the holders of the Company Common Stock from a financial point of view.

Sincerely,

MAGSTAR CAPITAL, LLC

B-6

TABLE OF CONTENTS

Appendix C

SUBCHAPTER XIII OF THE
WISCONSIN BUSINESS CORPORATION LAW

180.1301 Definitions.

In ss. 180.1301 to 180.1331:

(1) “Beneficial shareholder” means a person who is a beneficial owner of shares held by a nominee as the shareholder.

(1m) “Business combination” has the meaning given in s. 180.1130 (3).

(2) “Corporation” means the issuer corporation or, if the corporate action giving rise to dissenters’ rights under s. 180.1302 is a merger or share exchange that has been effectuated, the surviving domestic corporation or foreign corporation of the merger or the acquiring domestic corporation or foreign corporation of the share exchange.

(3) “Dissenter” means a shareholder or beneficial shareholder who is entitled to dissent from corporate action under s. 180.1302 and who exercises that right when and in the manner required by ss. 180.1320 to 180.1328.

(4) “Fair value”, with respect to a dissenter’s shares other than in a business combination, means the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable. “Fair value”, with respect to a dissenter’s shares in a business combination, means market value, as defined in s. 180.1130 (9) (a) 1. to 4.

(5) “Interest” means interest from the effectuation date of the corporate action until the date of payment, at the average rate currently paid by the corporation on its principal bank loans or, if none, at a rate that is fair and equitable under all of the circumstances.

(6) “Issuer corporation” means a domestic corporation that is the issuer of the shares held by a dissenter before the corporate action.

History: 1989 a. 303; 1991 a. 16.

“Date of payment” in sub. (5) refers to the actual payment date by a corporation following a special proceeding, even if the payment occurs after a “verdict, decision or report,” within the meaning of s. 814.04 (4), or after “judgment,” within the meaning of s. 815.05 (8). Thus the definition of interest contained in sub. (5) applies to the time period following a court decision on fair value until final payment is made. HMO-W Incorporated v. SSM Health Care System, 2003 WI App 137, 266 Wis. 2d 69, 667 N.W.2d 733, 02-0042.

The phrase “rate that is fair and equitable under all of the circumstances” in sub. (5) directs the circuit court to consider the circumstances of the particular case in determining the interest rate to be paid. It was appropriate under this standard to look at the borrowing power of a parent corporation to determine if the rate the subsidiary would obtain would be the rate the parent could obtain. HMO-W Incorporated v. SSM Health Care System, 2003 WI App 137, 266 Wis. 2d 69, 667 N.W.2d 733, 02-0042.

180.1302 Right to dissent.

(1) Except as provided in sub. (4) and s. 180.1008 (3), a shareholder or beneficial shareholder may dissent from, and obtain payment of the fair value of his or her shares in the event of, any of the following corporate actions:

(a) Consummation of a plan of merger to which the issuer corporation is a party if any of the following applies:

C-1

TABLE OF CONTENTS

1. Shareholder approval is required for the merger by s. 180.1103 or by the articles of incorporation.

2. The issuer corporation is a subsidiary that is merged with its parent under s. 180.1104.

3. The issuer corporation is a parent that is merged with its subsidiary under s. 180.1104. This subdivision does not apply if all of the following are true:

a. The articles of incorporation of the surviving corporation do not differ from the articles of incorporation of the parent before the merger, except for amendments specified in s. 180.1002 (1) to (9).

b. Each shareholder of the parent whose shares were outstanding immediately before the effective time of the merger holds the same number of shares with identical designations, preferences, limitations, and relative rights, immediately after the merger.

c. The number of voting shares, as defined in s. 180.1103 (5) (a) 2., outstanding immediately after the merger, plus the number of voting shares issuable as a result of the merger, either by the conversion of securities issued pursuant to the merger or the exercise of rights or warrants issued pursuant to the merger, do not exceed by more than 20 percent the total number of voting shares of the parent outstanding immediately before the merger.

d. The number of participating shares, as defined in s. 180.1103 (5) (a) 1., outstanding immediately after the merger, plus the number of participating shares issuable as a result of the merger, either by the conversion of securities issued pursuant to the merger or the exercise of rights or warrants issued pursuant to the merger, do not exceed by more than 20 percent the total number of participating shares of the parent outstanding immediately before the merger.

(b) Consummation of a plan of share exchange if the issuer corporation’s shares will be acquired, and the shareholder or the shareholder holding shares on behalf of the beneficial shareholder is entitled to vote on the plan.

(c) Consummation of a sale or exchange of all, or substantially all, of the property of the issuer corporation other than in the usual and regular course of business, including a sale in dissolution, but not including any of the following:

1. A sale pursuant to court order.

2. A sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one year after the date of sale.

(cm) Consummation of a plan of conversion.

(d) Except as provided in sub. (2), any other corporate action taken pursuant to a shareholder vote to the extent that the articles of incorporation, bylaws or a resolution of the board of directors provides that the voting or nonvoting shareholder or beneficial shareholder may dissent and obtain payment for his or her shares.

(2) Except as provided in sub. (4) and s. 180.1008 (3), the articles of incorporation may allow a shareholder or beneficial shareholder to dissent from an amendment of the articles of incorporation and obtain payment of the fair value of his or her shares if the amendment materially and adversely affects rights in respect of a dissenter’s shares because it does any of the following:

(a) Alters or abolishes a preferential right of the shares.

(b) Creates, alters or abolishes a right in respect of redemption, including a provision respecting a sinking fund for the redemption or repurchase, of the shares.

C-2

TABLE OF CONTENTS

(d) Excludes or limits the right of the shares to vote on any matter or to cumulate votes, other than a limitation by dilution through issuance of shares or other securities with similar voting rights.

(e) Reduces the number of shares owned by the shareholder or beneficial shareholder to a fraction of a share if the fractional share so created is to be acquired for cash under s. 180.0604.

(3) Notwithstanding sub. (1) (a) to (c), if the issuer corporation is a statutory close corporation under ss. 180.1801 to 180.1837, a shareholder of the statutory close corporation may dissent from a corporate action and obtain payment of the fair value of his or her shares, to the extent permitted under sub. (1) (d) or (2) or s. 180.1803, 180.1813 (1) (d) or (2) (b), 180.1815 (3) or 180.1829 (1) (c).

(3m) Notwithstanding any other provision of this section, if the issuer corporation has become a benefit corporation under s. 204.104(1) or (2), a shareholder of the benefit corporation may dissent from the amendment of the articles or the fundamental transaction to become a benefit corporation and obtain payment of the fair value of his or her shares, as provided in s. 204.104(3). “Fair value” as used in this subsection means the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable and not reduced by lack of marketability or minority discounts.

(4) Unless the articles of incorporation provide otherwise, subs. (1) and (2) do not apply to the holders of shares of any class or series if the shares of the class or series are registered on a national securities exchange or quoted on the National Association of Securities Dealers, Inc., automated quotations system on the record date fixed to determine the shareholders entitled to notice of a shareholders meeting at which shareholders are to vote on the proposed corporate action.

(5) Except as provided in s. 180.1833, a shareholder or beneficial shareholder entitled to dissent and obtain payment for his or her shares under ss. 180.1301 to 180.1331 may not challenge the corporate action creating his or her entitlement unless the action is unlawful or fraudulent with respect to the shareholder, beneficial shareholder or issuer corporation.

History: 1989 a. 303; 1991 a. 16; 2001 a. 44; 2005 a. 476.

Minority discounts are inappropriate under dissenters’ rights statutes and will not be applied in determining “fair value” under sub. (1). Each dissenting shareholder should be assigned the proportionate interest of his or her shares in the going interest in the entire company. HMO-W Incorporated v. SSM Health Care System, 2000 WI 46, 234 Wis. 2d 707, 611 N.W.2d 250, 98-2834.

The Role of Discounts in Determining “Fair Value” Under Wisconsin’s Dissenters’ Rights Statutes: The Case for Discounts. Emory. 1995 WLR 1155.

180.1303 Dissent by shareholders and beneficial shareholders.

(1) A shareholder may assert dissenters’ rights as to fewer than all of the shares registered in his or her name only if the shareholder dissents with respect to all shares beneficially owned by any one person and notifies the corporation in writing of the name and address of each person on whose behalf he or she asserts dissenters’ rights. The rights of a shareholder who under this subsection asserts dissenters’ rights as to fewer than all of the shares registered in his or her name are determined as if the shares as to which he or she dissents and his or her other shares were registered in the names of different shareholders.

(2) A beneficial shareholder may assert dissenters’ rights as to shares held on his or her behalf only if the beneficial shareholder does all of the following:

(a) Submits to the corporation the shareholder’s written consent to the dissent not later than the time that the beneficial shareholder asserts dissenters’ rights.

(b) Submits the consent under par. (a) with respect to all shares of which he or she is the beneficial shareholder.

History: 1989 a. 303.

C-3

TABLE OF CONTENTS

180.1320 Notice of dissenters’ rights.

(1) If proposed corporate action creating dissenters’ rights under s. 180.1302 is submitted to a vote at a shareholders’ meeting, the meeting notice shall state that shareholders and beneficial shareholders are or may be entitled to assert dissenters’ rights under ss. 180.1301 to 180.1331 and shall be accompanied by a copy of those sections.

(2) If corporate action creating dissenters’ rights under s. 180.1302 is authorized without a vote of shareholders, the corporation shall notify, in writing and in accordance with s. 180.0141, all shareholders entitled to assert dissenters’ rights that the action was authorized and send them the dissenters’ notice described in s. 180.1322.

History: 1989 a. 303.

When the plaintiff was not a shareholder at the time of the complained of acts, it had no right to vote in dissent to a plan of liquidation and dissolution, and it could not be a dissenter entitled to notice of dissenters’ rights, as only one who can vote in dissent is entitled to such notice under this section. Borne v. Gonstead Advanced Techniques, Inc. 2003 WI App 135, 266 Wis. 2d 253, 667 N.W.2d 709, 01-2624.

180.1321 Notice of intent to demand payment.

(1) If proposed corporate action creating dissenters’ rights under s. 180.1302 is submitted to a vote at a shareholders’ meeting, a shareholder or beneficial shareholder who wishes to assert dissenters’ rights shall do all of the following:

(a) Deliver to the issuer corporation before the vote is taken written notice that complies with s. 180.0141 of the shareholder’s or beneficial shareholder’s intent to demand payment for his or her shares if the proposed action is effectuated.

(b) Not vote his or her shares in favor of the proposed action.

(2) A shareholder or beneficial shareholder who fails to satisfy sub. (1) is not entitled to payment for his or her shares under ss. 180.1301 to 180.1331.

History: 1989 a. 303.

180.1322 Dissenters’ notice.

(1) If proposed corporate action creating dissenters’ rights under s. 180.1302 is authorized at a shareholders’ meeting, the corporation shall deliver a written dissenters’ notice to all shareholders and beneficial shareholders who satisfied s. 180.1321.

(2) The dissenters’ notice shall be sent no later than 10 days after the corporate action is authorized at a shareholders’ meeting or without a vote of shareholders, whichever is applicable. The dissenters’ notice shall comply with s. 180.0141 and shall include or have attached all of the following:

(a) A statement indicating where the shareholder or beneficial shareholder must send the payment demand and where and when certificates for certificated shares must be deposited.

(b) For holders of uncertificated shares, an explanation of the extent to which transfer of the shares will be restricted after the payment demand is received.

(c) A form for demanding payment that includes the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action and that requires the shareholder or beneficial shareholder asserting dissenters’ rights to certify whether he or she acquired beneficial ownership of the shares before that date.

(d) A date by which the corporation must receive the payment demand, which may not be fewer than 30 days nor more than 60 days after the date on which the dissenters’ notice is delivered.

(e) A copy of ss. 180.1301 to 180.1331.

C-4

TABLE OF CONTENTS

History: 1989 a. 303.

180.1323 Duty to demand payment.

(1) A shareholder or beneficial shareholder who is sent a dissenters’ notice described in s. 180.1322, or a beneficial shareholder whose shares are held by a nominee who is sent a dissenters’ notice described in s. 180.1322, must demand payment in writing and certify whether he or she acquired beneficial ownership of the shares before the date specified in the dissenters’ notice under s. 180.1322 (2) (c). A shareholder or beneficial shareholder with certificated shares must also deposit his or her certificates in accordance with the terms of the notice.

(2) A shareholder or beneficial shareholder with certificated shares who demands payment and deposits his or her share certificates under sub. (1) retains all other rights of a shareholder or beneficial shareholder until these rights are canceled or modified by the effectuation of the corporate action.

(3) A shareholder or beneficial shareholder with certificated or uncertificated shares who does not demand payment by the date set in the dissenters’ notice, or a shareholder or beneficial shareholder with certificated shares who does not deposit his or her share certificates where required and by the date set in the dissenters’ notice, is not entitled to payment for his or her shares under ss. 180.1301 to 180.1331.

History: 1989 a. 303.

180.1324 Restrictions on uncertificated shares.

(1) The issuer corporation may restrict the transfer of uncertificated shares from the date that the demand for payment for those shares is received until the corporate action is effectuated or the restrictions released under s. 180.1326.

(2) The shareholder or beneficial shareholder who asserts dissenters’ rights as to uncertificated shares retains all of the rights of a shareholder or beneficial shareholder, other than those restricted under sub. (1), until these rights are canceled or modified by the effectuation of the corporate action.

History: 1989 a. 303.

180.1325 Payment.

(1) Except as provided in s. 180.1327, as soon as the corporate action is effectuated or upon receipt of a payment demand, whichever is later, the corporation shall pay each shareholder or beneficial shareholder who has complied with s. 180.1323 the amount that the corporation estimates to be the fair value of his or her shares, plus accrued interest.

(2) The payment shall be accompanied by all of the following:

(a) The corporation’s latest available financial statements, audited and including footnote disclosure if available, but including not less than a balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, an income statement for that year, a statement of changes in shareholders’ equity for that year and the latest available interim financial statements, if any.

(b) A statement of the corporation’s estimate of the fair value of the shares.

(d) A statement of the dissenter’s right to demand payment under s. 180.1328 if the dissenter is dissatisfied with the payment.

(e) A copy of ss. 180.1301 to 180.1331.

History: 1989 a. 303.

C-5

TABLE OF CONTENTS

180.1326 Failure to take action.

(1) If an issuer corporation does not effectuate the corporate action within 60 days after the date set under s. 180.1322 for demanding payment, the issuer corporation shall return the deposited certificates and release the transfer restrictions imposed on uncertificated shares.

(2) If after returning deposited certificates and releasing transfer restrictions, the issuer corporation effectuates the corporate action, the corporation shall deliver a new dissenters’ notice under s. 180.1322 and repeat the payment demand procedure.

History: 1989 a. 303.

180.1327 After-acquired shares.

(1) A corporation may elect to withhold payment required by s. 180.1325 from a dissenter unless the dissenter was the beneficial owner of the shares before the date specified in the dissenters’ notice under s. 180.1322 (2) (c) as the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action.

(2) To the extent that the corporation elects to withhold payment under sub. (1) after effectuating the corporate action, it shall estimate the fair value of the shares, plus accrued interest, and shall pay this amount to each dissenter who agrees to accept it in full satisfaction of his or her demand. The corporation shall send with its offer a statement of its estimate of the fair value of the shares, an explanation of how the interest was calculated, and a statement of the dissenter’s right to demand payment under s. 180.1328 if the dissenter is dissatisfied with the offer.

History: 1989 a. 303.

180.1328 Procedure if dissenter dissatisfied with payment or offer.

(1) A dissenter may, in the manner provided in sub. (2), notify the corporation of the dissenter’s estimate of the fair value of his or her shares and amount of interest due, and demand payment of his or her estimate, less any payment received under s. 180.1325, or reject the offer under s. 180.1327 and demand payment of the fair value of his or her shares and interest due, if any of the following applies:

(a) The dissenter believes that the amount paid under s. 180.1325 or offered under s. 180.1327 is less than the fair value of his or her shares or that the interest due is incorrectly calculated.

(b) The corporation fails to make payment under s. 180.1325 within 60 days after the date set under s. 180.1322 for demanding payment.

(c) The issuer corporation, having failed to effectuate the corporate action, does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares within 60 days after the date set under s. 180.1322 for demanding payment.

(2) A dissenter waives his or her right to demand payment under this section unless the dissenter notifies the corporation of his or her demand under sub. (1) in writing within 30 days after the corporation made or offered payment for his or her shares. The notice shall comply with s. 180.0141.

History: 1989 a. 303.

When payment is made by check, the payment date under sub. (2) is the date the payee receives the check. Kohler Co. v. Sogen International Fund, Inc. 2000 WI App 60, 233 Wis. 2d 592, 608 N.W.2d 746, 99-0960.

180.1330 Court action.

(1) If a demand for payment under s. 180.1328 remains unsettled, the corporation shall bring a special proceeding within 60 days after receiving the payment demand under s. 180.1328 and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not bring the special proceeding within the 60-day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.

C-6

TABLE OF CONTENTS

(2) The corporation shall bring the special proceeding in the circuit court for the county where its principal office or, if none in this state, its registered office is located. If the corporation is a foreign corporation without a registered office in this state, it shall bring the special proceeding in the county in this state in which was located the registered office of the issuer corporation that merged with or whose shares were acquired by the foreign corporation.

(3) The corporation shall make all dissenters, whether or not residents of this state, whose demands remain unsettled parties to the special proceeding. Each party to the special proceeding shall be served with a copy of the petition as provided in s. 801.14.

(4) The jurisdiction of the court in which the special proceeding is brought under sub. (2) is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. An appraiser has the power described in the order appointing him or her or in any amendment to the order. The dissenters are entitled to the same discovery rights as parties in other civil proceedings.

(5) Each dissenter made a party to the special proceeding is entitled to judgment for any of the following:

(a) The amount, if any, by which the court finds the fair value of his or her shares, plus interest, exceeds the amount paid by the corporation.

(b) The fair value, plus accrued interest, of his or her shares acquired on or after the date specified in the dissenter’s notice under s. 180.1322 (2) (c), for which the corporation elected to withhold payment under s. 180.1327.

History: 1989 a. 303.

Because this section does not provide for different procedures, all procedural mechanisms under chs. 801 to 847 are available in an action under this section. Kohler Co. v. Sogen International Fund, Inc. 2000 WI App 60, 233 Wis. 2d 592, 608 N.W.2d 746, 99-0960.

Subs. (2) and (4) establish a rule of venue applicable within Wisconsin’s judicial system and do not attempt to block corporations from using federal diversity jurisdiction. Albert Trostel & Son v. Edward Notz, 679 F.3d 627 (2012).

180.1331 Court costs and counsel fees.

(1)

(a) Notwithstanding ss. 814.01 to 814.04, the court in a special proceeding brought under s. 180.1330 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court and shall assess the costs against the corporation, except as provided in par. (b).

(b) Notwithstanding ss. 814.01 and 814.04, the court may assess costs against all or some of the dissenters, in amounts that the court finds to be equitable, to the extent that the court finds the dissenters acted arbitrarily, vexatiously or not in good faith in demanding payment under s. 180.1328.

(2) The parties shall bear their own expenses of the proceeding, except that, notwithstanding ss. 814.01 to 814.04, the court may also assess the fees and expenses of counsel and experts for the respective parties, in amounts that the court finds to be equitable, as follows:

(a) Against the corporation and in favor of any dissenter if the court finds that the corporation did not substantially comply with ss. 180.1320 to 180.1328.

(b) Against the corporation or against a dissenter, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously or not in good faith with respect to the rights provided by this chapter.

C-7

TABLE OF CONTENTS

(3) Notwithstanding ss. 814.01 to 814.04, if the court finds that the services of counsel and experts for any dissenter were of substantial benefit to other dissenters similarly situated, the court may award to these counsel and experts reasonable fees to be paid out of the amounts awarded the dissenters who were benefited.

History: 1989 a. 303.

C-8

TABLE OF CONTENTS

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.

Indemnification of Directors and Officers

The Registrant’s bylaws provide for the mandatory indemnification of a director, officer, employee or agent of the Registrant (or a person concurrently serving in such a capacity with another entity at the Registrant’s request), to the extent such person has been successful on the merits or otherwise in the defense of any threatened, pending or completed civil, criminal, administrative or investigative action, suit, arbitration or other proceeding brought by or in the right of the Registrant or by any other person or entity to which such person is a party because he or she is a director, officer, employee or agent, for all reasonable fees, costs, charges, disbursements, attorneys’ fees and other expenses incurred in connection with proceeding. In all other cases, the Registrant shall indemnify a director or officer, and may indemnify an employee or agent, of the Registrant against all liability and reasonable fees, costs, charges, disbursements, attorneys’ fees and other expenses incurred by such person in any proceeding brought by or in the right of the Registrant or by any other person or entity to which such person is a party because he or she is a director, officer, employee or agent, unless it has been proven by final adjudication that such person breached or failed to perform a duty owed to Nicolet that constituted:

•

a willful failure to deal fairly with the Registrant or its shareholders in connection with a matter in which the director, officer, employee or agent has a material conflict of interest;

•

a transaction from which the director, officer, employee or agent derived an improper personal profit; or

•

willful misconduct.

Unless modified by written agreement, the determination as to whether indemnification is proper shall be made in accordance with the Wisconsin Business Corporation Law. The right to indemnification under the Registrant’s bylaws may only be amended by the vote of two-thirds of the outstanding shares of the Registrant’s capital stock entitled to vote on the matter. The Registrant is authorized to purchase and maintain insurance on behalf of its directors, officers, employees or agents in connection with the foregoing indemnification obligations.

Item 21.

Exhibits and Financial Statement Schedules

(a) List of Exhibits

	Exhibit No.			Description
	2.1			Agreement and Plan of Merger by and between Nicolet Bankshares, Inc. and Commerce Financial Holdings, Inc., dated February 17, 2020 (attached as Appendix A to the proxy statement-prospectus, which is part of this registration statement and incorporated herein by reference).+
	5.1			Opinion of Kate Lombardi, Vice President Human Resources/Legal Counsel of Nicolet National Bank regarding legality of securities being registered (including her consent).
	8.1			Opinion of Bryan Cave Leighton Paisner LLP regarding certain tax matters (including its consent).*
	23.1			Consent of Kate Lombardi (included as part of Exhibit 5.1).
	23.2			Consent of Bryan Cave Leighton Paisner LLP (included as part of Exhibit 8.1).*
	23.3			Consent of Wipfli LLP.
	23.4			Consent of Porter Keadle Moore, LLC.
	24.1			Power of Attorney (included in the signature pages to the Registration Statement on Form S-4).
	99.1			Consent of Magstar Capital, LLC (included as part of Appendix B).

II-1

TABLE OF CONTENTS

	Exhibit No.			Description
	99.2			Form of Proxy Card of Commerce.*

Certain schedules and attachments to the merger agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. Nicolet Bankshares, Inc. agrees to furnish a supplemental copy of any omitted schedule or attachment to the SEC upon request.

To be filed by amendment.

(b) Financial Statement Schedules

None. All other schedules for which provision is made in Regulation S-X of the Securities and Exchange Commission are either not required under the related restrictions, are inapplicable or the required information has been incorporated by reference into the proxy statement-prospectus, and, therefore, have been omitted.

Item 22.

Undertakings

The undersigned registrant hereby undertakes:

(a) (1)

To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i)

To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii)

To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a twenty percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and

(iii)

To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.

(2)

That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b)

The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-2

TABLE OF CONTENTS

(g)(1)

The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

(2)

The registrant undertakes that every prospectus (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(h)

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-3

TABLE OF CONTENTS

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Green Bay, State of Wisconsin, on May 4, 2020.

NICOLET BANKSHARES, INC.

By: /s/ Robert B. Atwell

Robert B. Atwell, Chairman, President and

Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the persons whose signature appears below appoints and constitutes Robert B. Atwell and Michael E. Daniels, or either of them, his or her true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to execute any and all amendments (including post-effective amendments) to the within registration statement (as well as any registration statement for the same offering covered by this registration statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933), and to file the same, together with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission and such other agencies, offices and persons as may be required by applicable law, granting unto said attorneys-in-fact and agents, or either of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities stated and on the fourth day of May, 2020.

	/s/ Robert B. Atwell Robert B. Atwell Chairman, President and Chief Executive Officer (Principal Executive Officer)			/s/ Andrew F. Hetzel, Jr. Andrew F. Hetzel, Jr. Director
	/s/ Ann K. Lawson Ann K. Lawson Chief Financial Officer (Principal Financial and Accounting Officer)			/s/ Donald J. Long, Jr. Donald J. Long, Jr. Director
	/s/ Michael E. Daniels Michael E. Daniels Executive Vice President and Secretary, Director			/s/ Dustin J. McClone Dustin J. McClone Director
	Rachel Campos-Duffy Director			/s/ Susan L. Merkatoris Susan L. Merkatoris Director
	/s/ John N. Dykema John N. Dykema Director			/s/ Randy J. Rose Randy J. Rose Director

II-4

TABLE OF CONTENTS

	/s/ Terrence R. Fulwiler Terrence R. Fulwiler Director			/s/ Oliver Pierce Smith Oliver Pierce Smith Director
	/s/ Christopher Ghidorzi Christopher Ghidorzi Director			/s/ Robert J. Weyers Robert J. Weyers Director

II-5

TABLE OF CONTENTS

EXHIBIT INDEX

Exhibit No.		Description
	2.1	Agreement and Plan of Merger by and between Nicolet Bankshares, Inc. and Commerce Financial Holdings, Inc., dated February 17, 2020 (attached as Appendix A to the proxy statement- prospectus, which is part of this registration statement and incorporated herein by reference).+
	5.1	Opinion of Kate Lombardi, Vice President Human Resources/Legal Counsel of Nicolet National Bank regarding legality of securities being registered (including her consent).
	8.1	Opinion of Bryan Cave Leighton Paisner LLP regarding certain tax matters (including its consent).*
	23.1	Consent of Kate Lombardi (included as part of Exhibit 5.1).
	23.2	Consent of Bryan Cave Leighton Paisner LLP (included as part of Exhibit 8.1).*
	23.3	Consent of Wipfli LLP.
	23.4	Consent of Porter Keadle Moore, LLC.
	24.1	Power of Attorney (included in the signature pages to the Registration Statement on Form S- 4).
	99.1	Consent of Magstar Capital, LLC (included as part of Appendix B).
	99.2	Form of Proxy Card of Commerce.*