The consolidated financial statements of Glacier Bancorp, Inc. as of December 31, 2016 and 2015 and for each of the years in the
three-year period ended December 31, 2016 have been incorporated by reference herein and in the registration statement in reliance upon the reports of BKD, LLP, independent registered public accounting firm, and upon the authority of said firm
as experts in accounting and auditing.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows Glacier to incorporate by reference information into this proxy statement/prospectus, which means that Glacier can
disclose important information to you by referring you to another document filed separately by Glacier with the SEC. The information incorporated by reference is deemed to be part of this proxy statement/prospectus, except for any information
superseded by any information in this proxy statement/prospectus.
This proxy statement/prospectus incorporates by reference the documents
set forth below that Glacier has previously filed with the SEC. These documents contain important information about Glacier and its finances:
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Annual Report on Form
10-K
for the year ended December 31, 2016;
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Quarterly Reports on Form
10-Q
for the quarters ended March 31, 2017; June 30, 2017; and September 30, 2017;
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Proxy Statement on Schedule 14A for Glaciers 2017 Annual Meeting of Shareholders;
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Current Reports on Form
8-K
filed January 4, 2017; April 28, 2017; May 1, 2017; June 7, 2017; October 3, 2017; October 27, 2017; and December 1, 2017
(other than the portions of those documents not deemed to be filed); and
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The description of Glaciers common stock contained in the Current Report on Form
8-K
filed with the SEC on October 31, 2012, and any amendments or reports filed for the
purpose of updating such description.
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In addition, Glacier is incorporating by reference additional documents that Glacier
files with the SEC between the date of this proxy statement/prospectus and the date of the special meeting of IMB, provided, however, that Glacier is not incorporating by reference any information furnished (but not filed), except as otherwise
specified therein.
Glacier files annual, quarterly and special reports, proxy statements and other business and financial information
with the SEC. You may obtain the information incorporated by reference and any other materials Glacier may file with the SEC without charge by following the instructions in the section entitled Where You Can Find More Information About
Glacier in the forepart of this document.
You should rely only on the information contained or incorporated by reference in
this proxy statement/prospectus in deciding how to vote on the merger. We have not authorized anyone to provide you with information other than what is contained in this proxy statement/prospectus. This proxy statement/prospectus is dated December
4, 2017. You should not assume that information contained in this proxy statement/prospectus is accurate as of any other date, and neither the mailing of this proxy statement/prospectus to IMB shareholders nor the issuance of Glacier common stock in
the merger will create any implication to the contrary.
59
APPENDIX A
PROJECT BIG SKY
PLAN AND AGREEMENT OF MERGER
AMONG
GLACIER BANCORP,
INC.
GLACIER BANK
INTER-MOUNTAIN BANCORP., INC., AND
FIRST SECURITY BANK
DATED AS OF OCTOBER 26, 2017
A-1
TABLE OF CONTENTS
A-2
TABLE OF CONTENTS
(continued)
A-3
List of Schedules and Exhibits
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Schedule 3.1.1
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Offices of IMB/the Bank
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Schedule 3.1.2
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No Breach or Violation
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Schedule 3.1.3
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Capital Stock of IMB/the Bank
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Schedule 3.1.4
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Investments
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Schedule 3.1.5
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Financial Statements
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Schedule 3.1.6
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Properties
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Schedule 3.1.7
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Environmental Matters
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Schedule 3.1.8(a)
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S-Corporation
Matters
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Schedule 3.1.8(f)
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Tax Returns
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Schedule 3.1.8(p)
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Tax Attributes
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Schedule 3.1.9
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Regulatory Matters
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Schedule 3.1.10(a)
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Material Contracts
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Schedule 3.1.10(b)
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Third Party Consent or Notice Requirements
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Schedule 3.1.12
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Litigation
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Schedule 3.1.15
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Asset Classification
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Schedule 3.1.16
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Insurance Policies
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Schedule 3.1.17
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Employment Policies
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Schedule 3.1.18
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Benefit Plans
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Schedule 4.1.3(b)
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Continuing Plans
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Schedule 5.2.3(a)
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Persons to Enter into Employment Agreements
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Schedule 6.2.4
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Severance Eligibility
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EXHIBITS
:
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Exhibit A
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Director and Shareholder Parties to Recital E
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Exhibit B
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Form of Transaction-Related Expenses Calculation
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A-4
PLAN AND AGREEMENT OF MERGER
AMONG
GLACIER BANCORP,
INC., GLACIER BANK,
INTER-MOUNTAIN BANCORP., INC., AND FIRST SECURITY BANK
This Plan and Agreement of Merger (the
Agreement
), dated as of October 26, 2017, is made by and among GLACIER BANCORP,
INC. (
GBCI
), GLACIER BANK, INTER-MOUNTAIN BANCORP., INC. (
IMB
) and FIRST SECURITY BANK (the
Bank
).
PREAMBLE
The boards of
directors of GBCI and IMB believe that the proposed Merger (as defined below), to be accomplished in the manner set forth in this Agreement, is in the best interests of the respective corporations and their shareholders.
Capitalized terms used in this Agreement but not immediately defined are used with the meanings given under the heading
Definitions below.
RECITALS
A.
The Parties
.
(1) GBCI is a corporation duly organized and validly existing under Montana law and is a registered bank holding company
under the Bank Holding Company Act of 1956, as amended (
BHC Act
). GBCIs principal office is located in Kalispell, Montana.
(2) Glacier Bank is a duly organized and validly existing Montana state-chartered bank and a wholly owned subsidiary of
GBCI. Glacier Bank maintains its principal office in Kalispell, Montana and operates 14 separately branded banking divisions.
(3) IMB is a corporation duly organized and validly existing under Montana law and is a registered bank holding company
under the BHC Act. IMBs principal office is located in Bozeman, Montana.
(4) The Bank is a Montana
state-chartered bank, duly organized and validly existing under the laws of the State of Montana and a wholly owned subsidiary of IMB. The Banks principal office is located in Bozeman, Montana. In addition to its principal office and two
branches located in Bozeman, Montana, the Bank maintains branch offices in the Montana cities of Belgrade, Three Forks, West Yellowstone, Big Sky, Fort Benton, Choteau, Fairfield, and Vaughn, along with loan production offices in Chester and Havre.
B.
The Transaction
. On the Effective Date, (1) IMB will merge with and into GBCI, with
GBCI as the surviving entity; (2) immediately thereafter, the Bank will merge with and into Glacier Bank, with Glacier Bank surviving as a wholly owned subsidiary of GBCI, and (3) the former branches of the Bank located in the Bozeman area
will be combined with Glacier Banks existing Big Sky Western Bank division and the operating division will become known as First Security Bank of Bozeman, a division of Glacier Bank, and the Banks four northern branches and
two loan production offices will be combined with and become a part of Glacier Banks First Bank of Montana division.
A-5
C.
Board Approvals
. The respective boards of
directors of GBCI, Glacier Bank, IMB, and the Bank have approved this Agreement and authorized its execution and delivery, and the board of directors of IMB has unanimously approved this Agreement and recommended its approval to IMBs
shareholders.
D.
Other Approvals
. The Merger is subject to:
(1) Satisfaction of the conditions described in this Agreement;
(2) Approval of this Agreement and/or the Merger by IMBs shareholders; and
(3) Approval of or acquiescence in, as appropriate, the Transaction by the FDIC, the Federal Reserve, the Commissioner
of the Montana Division of Banking and Financial Institutions, and any other agencies having jurisdiction over the Transaction.
E
.
Director and Shareholder Agreements
. In connection with the parties execution of
this Agreement, (1) IMB has used its commercially reasonable efforts to cause the
non-director
shareholders identified on
Exhibit
A
to enter into agreements pursuant to which,
among other things, the identified persons agreed to vote his, her, or its shares of IMB Stock in favor of the actions contemplated by this Agreement, (2) the directors identified on
Exhibit
A
have entered into agreements
pursuant to which, among other things, such directors agreed to vote his or her shares of IMB Stock in favor of the actions contemplated by this Agreement, and (3) the directors of IMB agreed, following the Closing of the Transaction, to
refrain from competing with GBCI and/or Glacier Bank for a period of time.
F.
Employment
Agreements
. In connection with the parties execution of this Agreement, the persons listed on
Schedule
5.2.3(b)
shall have entered into employment agreements with Glacier Bank, with an employment term to begin
as of the Effective Date, and such agreements shall be in full force and effect as of the Effective Date.
G.
Intention of the PartiesTax Treatment
. The parties intend that the Transaction shall
qualify, for U.S. federal income tax purposes, as one or more
tax-free
reorganizations under IRC Section 368(a), and that this Agreement shall constitute a plan of reorganization for
purposes of IRC Section 368.
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AGREEMENT
In consideration of the mutual agreements set forth in this Agreement, GBCI, Glacier Bank, IMB and the Bank agree as follows:
DEFINITIONS
The
following capitalized terms used in this Agreement will have the following meanings:
Acquisition Event
means any of
the following: (a) a merger, consolidation or similar transaction involving IMB, its Subsidiaries or any successor, (b) a purchase, lease or other acquisition in one or a series of related transactions of assets of IMB or any of its
Subsidiaries representing 25 percent or more of the consolidated assets of IMB and its Subsidiaries, or (c) a purchase or other acquisition (including by way of merger, consolidation, share exchange or any similar transaction) in one or a
series of related transactions of beneficial ownership of securities representing 30 percent or more of the voting power of IMB or its Subsidiaries, in each case with or by a Person or entity other than GBCI or one of its Subsidiaries.
Acquisition Proposal
has the meaning assigned to such term in Section 4.1.10.
Agreement
means this Plan and Agreement of Merger.
ALLL
means allowance for possible loan and lease losses.
Appraisal Laws
means
Section 35-1-826
through 35-1-839
of the MBCA, as such sections may be applicable to a merger in which the corporation to be merged out of existence is organized under the laws of the
State of Montana.
Asset Classification
has the meaning assigned to such term in Section 3.1.15(a).
Bank
has the meaning assigned to it in the first paragraph, as supplemented in the first sentence of Recital A(4).
Bank Financial Statements
means the Banks (a) audited balance sheets as of December 31, 2014, 2015,
and 2016, and the related statements of income, cash flows and changes in stockholders equity for each of the years then ended; and (b) unaudited balance sheet as of June 30, 2017, and the related unaudited statement of income, for
the period then ended, together with the Subsequent Bank Financial Statements.
Bank Merger
means the merger of the
Bank with and into Glacier Bank.
Bank Merger Agreement
means the merger agreement to be entered into contemporaneously
with this Agreement pursuant to which the Bank Merger will be effected.
BHC Act
has the meaning assigned to such term
in Recital A(1).
Break-Up
Fee
has the meaning assigned to such term in
Section 7.5.
Business Day
means any day other than a Saturday, Sunday, legal holiday or a day on which banking
institutions located in the State of Montana are required by law to remain closed.
Cash Consideration
has the meaning
assigned to such term in Section 7.3.2.
Certificate
has the meaning assigned to such term in Section 1.6.1.
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Claim
has the meaning set forth in in Section 8.5.
Closing
means the closing of the Merger contemplated by this Agreement, as more fully specified in Section 2.2.
Closing Capital Differential
means the positive or negative difference between the IMB Closing Capital and the Closing
Capital Requirement.
Closing Capital Requirement
means $73,500,000.
Compensation Plans
has the meaning assigned to such term in Section 3.1.18(b).
Daily Closing Price
means for any Trading Day the daily closing price per share of GBCI Common Stock on the NASDAQ Global
Select Market, as reported on the website www.nasdaq.com.
Determination Date
means the tenth day immediately preceding
the Effective Date.
Dissenting Shares
means the shares of IMB Stock held by those shareholders who have timely and
properly exercised their dissenters rights in accordance with the Appraisal Laws.
Effective Date
means the date
on which the Effective Time occurs.
Effective Time
means the time the Merger becomes effective under the MBCA.
Employees
has the meaning assigned to such term in Section 3.1.18(b).
Environmental Laws
has the meaning assigned to such term in Section 3.1.7(a)(ii).
ERISA
means the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate
means, with respect to IMB, any other entity that is considered one employer with IMB under
Section 4001 of ERISA or IRC Section 414.
Exchange Act
has the meaning assigned to such term in
Section 3.1.5(b).
Exchange Agent
means American Stock Transfer & Trust Company, LLC.
Exchange Fund
has the meaning assigned to such term in Section 1.5.
Execution Date
means the date of this Agreement.
Executive Officers
means, (a) with respect to GBCI and/or Glacier Bank, Randall M. Chesler, Ronald J.
Copher, and Donald J. Chery, and (b) with respect to IMB and/or the Bank, Bruce A. Gerlach, Steven E. Wheeler, Dennis A. Bechtold, Michael Johnson, and Jeffrey E. Koski.
A-8
Fairness Opinion
has the meaning assigned to such term in Section 5.2.13.
FDIC
means the Federal Deposit Insurance Corporation.
Federal Reserve
means the Board of Governors of the Federal Reserve System.
Final Transaction Related Expenses
has the meaning assigned to such term in Section 4.14.
First Security Insurance
means First Security Insurance Agency, Inc., a Montana corporation.
GAAP
means United States generally accepted accounting principles.
GBCI
has the meaning assigned to it in the first paragraph, as supplemented by the first sentence of Recital A(1).
GBCI 401(k) Plan
means the Glacier Bancorp, Inc., Profit Sharing and 401(k) Plan, as amended.
GBCI Average Closing Price
means the average Daily Closing Price of GBCI Common Stock for the 20 Trading Days
immediately preceding the Determination Date.
GBCI Common Stock
means the shares of GBCI common stock, $0.01 par value
per share, issued and outstanding from time to time.
GBCI Contracts
has the meaning assigned to such term in
Section 3.2.2.
GBCI Financial Statements
means GBCIs (a) audited consolidated balance sheets as of
December 31, 2014, 2015, and 2016, and the related audited consolidated statements of income, cash flows, and changes in shareholders equity for each of the years then ended; and (b) unaudited consolidated balance sheet as of
June 30, 2017, and the related unaudited consolidated statements of income, cash flows, and changes in shareholders equity for the period then ended.
GBCI Preferred Stock
means the shares of GBCI preferred stock, $0.01 par value per share.
GBCI Reports
has the meaning assigned to such term in Section 3.2.4.
GBCI Shares
means the shares of GBCI Common Stock to be issued to the holders of IMB Stock as the Total Stock
Consideration.
Governmental Entity
means any federal, state, local or
non-U.S.
government or subdivision thereof or any other governmental, administrative, judicial, taxing, arbitral, legislative, executive, regulatory or self-regulatory authority, instrumentality, agency, commission or body.
A-9
Hazardous Substances
has the meaning assigned to such term in
Section 3.1.7(a)(iii).
IMB
has the meaning assigned to it in the first paragraph, as supplemented by the first
sentence of Recital A(3).
IMB 401(k) Plan
means the First Security Bank 401(k) Retirement Savings Plan, as
amended.
IMB Capital
means IMBs capital stock, surplus and retained earnings determined in accordance with GAAP
on a consolidated basis, net of goodwill and other intangible assets, calculated in the same manner in which IMBs consolidated tangible equity capital at December 31, 2016, and June 30, 2017, was calculated, including adjustments,
calculated in accordance with GAAP, for accumulated other comprehensive income or loss as reported on IMBs or the Banks balance sheet. In calculating IMB Capital, employee severance payments and retention bonuses payable by GBCI
post-Closing, conversion and similar post-Closing integration costs, purchase accounting adjustments, and the Final Transaction Related Expenses of up to the Maximum Transaction Expense Amount will not be taken into account. To the extent Final
Transaction Related Expenses exceed the Maximum Transaction Expense Amount, the difference, on an after tax basis (applying an effective tax rate of 35 percent), will be treated as a reduction of IMB Capital.
IMB Closing Capital
has the meaning assigned to such term in Section 4.13
.
IMB Financial Statements
means IMBs (a) audited consolidated balance sheets as of December 31, 2014, 2015,
and 2016, and the related statements of income, cash flows and changes in stockholders equity for each of the years then ended; and (b) unaudited consolidated balance sheet as of June 30, 2017, and the related unaudited statement of
income for the period then ended, together with the Subsequent IMB Financial Statements.
IMB Meeting
has the meaning
assigned in Section 4.2.2.
IMB Shareholder Agreement
means the IMB Amended and Restated Shareholder Agreement,
as amended by the First Amendment to Amended and Restated Shareholder Agreement.
IMB Stock
means the shares of IMB
common stock, $0.50 par value per share, issued and outstanding from time to time.
Independent Accountants
has the
meaning assigned to such term in Section 4.13.
IRC
means the Internal Revenue Code of 1986, as amended.
A-10
Knowledge
or any similar knowledge qualification in this Agreement has the
following meanings: (a) IMB will be deemed to have Knowledge of a particular fact or matter if any of the Executive Officers of IMB or the Bank has actual knowledge of such fact or matter or if any such Person could reasonably be
expected to discover or otherwise become aware of such fact or matter in the course of making a reasonable inquiry into such areas of IMBs and the Banks business that are under such individuals general area of responsibility; and
(b) GBCI will be deemed to have Knowledge of a particular fact or matter if any of the Executive Officers of GBCI has actual knowledge of such fact or matter or if any such Person could reasonably be expected to discover or
otherwise become aware of such fact or matter in the course of making a reasonable inquiry into such areas of GBCIs business that are under such individuals general area of responsibility.
Law
has the meaning assigned to such term in Section 3.1.2.
Letter of Transmittal
has the meaning assigned to such term in Section 1.6.1.
Liens
means, collectively, liens, pledges, security interests, claims, preemptive or subscriptive rights or other
encumbrances or restrictions of any kind.
Material Adverse Effect
with respect to a Person means an effect that:
(a) is materially adverse to the business, financial condition, results of operations or prospects of the Person and its Subsidiaries taken as a whole; or (b) significantly and adversely affects the ability of the Person to consummate the
Merger on or by the Termination Date or to perform its material obligations under this Agreement; provided, however, that Material Adverse Effect shall not be deemed to include the impact of any (i) changes in banking and similar laws of
general applicability or interpretations thereof by governmental authorities or other changes affecting depository institutions generally that do not have a materially more adverse effect on such party than that experienced by similarly situated
financial services companies, including changes in general economic conditions and changes in prevailing interest and deposit rates that do not have a materially more adverse effect on such party than that experienced by similarly situated financial
services companies; (ii) acts of terrorism or war; (iii) any modifications or changes to valuation policies and practices in connection with the Transaction or restructuring charges taken in connection with the Transaction, in each case in
accordance with GAAP; (iv) any modifications or changes made by IMB to its or the Banks general business practices or policies at the request of GBCI so as to be consistent with the practices or policies of GBCI; or (v) actions or
omissions of a party taken with the prior consent of the other, in contemplation of the Transaction as required or permitted hereunder, as required under any regulatory approval received in connection with the Transaction or which have been waived
in writing by the other party.
Material Contract
has the meaning assigned to such term in Section 3.1.10(a).
Maximum Transaction Expense Amount
has the meaning assigned to such term in
Exhibit
B
.
MBCA
means the Montana Business Corporations Act, as amended.
A-11
Merger Consideration
means the aggregate consideration payable hereunder as
contemplated by Section 1.2.2.
Merger
means the merger of IMB with and into GBCI.
Objection Notice
has the meaning assigned to such term in Section 4.1.11.
Outside Date
has the meaning assigned to such term in Section 7.1.
Pension Plan
has the meaning assigned to such term in Section 3.1.18(c).
Per Share Cash Consideration
means an amount in cash determined by dividing (a) the total amount of any cash
consideration added pursuant to Section 7.3.2, by (b) the number of shares of IMB Stock outstanding on the Effective Date (rounded to the nearest thousandth).
Per Share Stock Consideration
means a number of shares of GBCI Common Stock determined by dividing (a) the Total Stock
Consideration by (b) the number of shares of IMB Stock outstanding on the Effective Date (rounded to the nearest thousandth). As of the Execution Date, the Per Share Stock Consideration is 22.841 shares of GBCI Common Stock for each share
of IMB Stock (subject to adjustment in accordance with the terms of this Agreement).
Person
includes an individual,
corporation, partnership, association, limited liability company, trust or unincorporated organization.
Plan
or
Plans
has the meanings assigned to such terms in Section 3.1.18(a).
Post-Signing Return
has
the meaning assigned to such term in Section 4.12.3.
Properties
, with respect to any party to this Agreement,
means properties or other assets owned or leased by such party or any of its Subsidiaries, whether tangible or intangible, and including, with respect to IMB and the Bank, Real Property.
Proposed Dissenting Shares
means those shares of IMB Stock as to which shareholders have properly given notice of their
intent to assert appraisal rights pursuant to Appraisal Laws.
Prospectus/Proxy Statement
means the Prospectus/Proxy
Statement referred to in Section 4.2.1(a) to be provided to all shareholders of IMB in connection with their consideration and approval of the Merger.
Real Property
means any real property that IMB or the Bank owns in fee title, other than other real estate
owned (as defined by the FDIC).
Registration Statement
has the meaning assigned to such term in
Section 4.2.1(a).
Reports
has the meaning assigned to such term in Section 3.1.5(b).
A-12
Requisite Regulatory Approvals
has the meaning assigned to such term in
Section 4.3.
Response Notice
has the meaning assigned to such term in Section 4.1.11.
Schedule
has the meaning assigned to such term in Section 3.1.
SEC
means the United States Securities and Exchange Commission.
Securities Act
has the meaning assigned to such term in Section 3.1.5(b).
Securities Laws
has the meaning assigned to such term in Section 3.1.5(b).
Subject Property
has the meaning assigned to such term in Section 3.1.7(a)(i).
Subsequent Bank Financial Statements
means the Banks unaudited balance sheets and related unaudited statements of
income for each month after the Execution Date and before Closing or the Termination Date, as the case may be, prepared in accordance with Section 4.1.8.
Subsequent IMB Financial Statements
means IMBs (a) unaudited parent-only balance sheets and related unaudited
statements of income for each month after the Execution Date and before Closing or the Termination Date, as the case may be, and (b) audited consolidated balance sheets and related statements of income, cash flows, and stockholders equity
for the fiscal year ended December 31, 2017, each prepared in accordance with Section 4.1.8.
Subsidiary
with
respect to any party to this Agreement means any Person in which such party owns, directly or indirectly, the majority of the outstanding capital stock or voting power of its outstanding securities.
Superior Proposal
means, with respect to IMB and/or the Bank, any Acquisition Proposal that the Board of Directors of IMB
in good faith concludes (after consultation with its financial advisors and outside counsel), taking into account, among other things, all legal, financial, regulatory, and other aspects of the proposal and the Person making the proposal,
(a) would, if consummated, result in a transaction that is more favorable to IMB shareholders (in their capacities as shareholders), from a financial point of view, than the transactions contemplated by this Agreement, and (b) is
reasonably probable of being completed.
Taxes
means all U.S. federal, state, local,
non-U.S.
and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment,
estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments, or charges imposed by a Governmental Entity in the nature
of a tax of any kind whatsoever, together with any interest, additions, or penalties with respect thereto and any interest in respect of such additions or penalties.
A-13
Tax Returns
means any return, declaration, report, claim for refund,
information return or statement or other document required to be filed with or provided to any taxing authority in respect of Taxes, including any schedule or attachment thereto, and including any amendment thereof.
Termination Date
means the date on which termination of this Agreement takes place under Article 7, if any.
Title Companies
has the meaning assigned to such term in Section 4.1.11.
Total Stock Consideration
means 4,654,151 shares of GBCI Common Stock, which is subject to adjustment pursuant to
Sections 7.2.2 and 7.3.2. Further, if GBCI declares or effects a stock dividend, reclassification, recapitalization,
split-up,
combination, exchange of shares, or similar transaction between the
Execution Date and the Effective Date, the Total Stock Consideration will be adjusted accordingly.
Trading Day
means a
day on which GBCI Common Stock is traded on the NASDAQ Global Select Market.
Transaction
means the Merger and the Bank
Merger.
Transaction Related Expenses
means all payments and obligations of IMB related to the Transaction, including
without limitation as more fully described on
Exhibit
B
hereto.
Treasury Regulations
means
any Treasury Regulations (including temporary regulations) promulgated by the United States Department of the Treasury with respect to the IRC, as amended.
ARTICLE 1
TERMS OF TRANSACTION
1.1
Effect of Merger
. Upon Closing of the Merger, pursuant to the provisions of the MBCA, IMB will merge with and into GBCI with GBCI as the surviving corporation under the MBCA, and in connection therewith, all
shares of IMB Stock issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without any action on the part of any holder of shares of IMB Stock, be (a) with respect to shares of IMB Stock not
constituting Proposed Dissenting Shares, converted into the right to receive in the aggregate the Merger Consideration less that portion of the Merger Consideration that is attributable to any Proposed Dissenting Shares, and (b) with respect to
any Proposed Dissenting Shares, entitled to the rights set forth in Section 1.4. Immediately following the Merger, pursuant to the Bank Merger Agreement, the Bank will be merged with and into Glacier Bank, with Glacier Bank as the resulting
bank.
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1.2
Merger Consideration
. Subject to
the provisions of this Agreement, including Section 1.3, as of the Effective Time:
1.2.1
Outstanding GBCI
Common Stock
. The shares of GBCI Common Stock issued and outstanding immediately prior to the Effective Time will, on and after the Effective Date, remain as issued and outstanding shares of GBCI Common Stock.
1.2.2
Outstanding IMB Stock
. Each share of IMB Stock issued and outstanding as of the Effective Time, excluding
Proposed Dissenting Shares, will be converted into and represent the right to receive from GBCI the Per Share Stock Consideration, plus any additional Per Share Cash Consideration provided by GBCI pursuant to Section 7.3.2.
1.3
No Fractional Shares
. No fractional shares of GBCI Common Stock will be issued
in the Merger. In lieu of fractional shares, if any, each holder of IMB Stock who is otherwise entitled to receive a fractional share of GBCI Common Stock after adding together all shares of GBCI Common Stock received by such holder in the Merger
will receive an amount of cash equal to the product of such fractional share multiplied by the GBCI Average Closing Price. Such fractional share interests will not include the right to vote or receive dividends or any interest on dividends.
1.4
Payment to Dissenting Shareholders
. Proposed Dissenting Shares shall have the
rights provided by the MBCA.
1.5
Deposit of Cash and Shares
. On or before the
Effective Date, GBCI will deposit, or will cause to be deposited, with the Exchange Agent, for the benefit of the holders of IMB Stock, for exchange in accordance with this Section 1.5 and Section 1.6, (a) evidence of shares in book
entry form, representing the GBCI Shares for payment of the Total Stock Consideration in full; (b) any Cash Consideration added pursuant to Section 7.3.2, and (c) the cash in lieu of fractional shares to be paid in accordance with
Section 1.3. Such cash and evidence of the GBCI Shares, together with any dividends or distributions with respect thereto, are referred to in this Agreement as the
Exchange Fund
.
1.6
Certificates
.
1.6.1
Letter of Transmittal
. GBCI will use its reasonable best efforts to cause the Exchange Agent, within five
Business Days following the Effective Date, to mail to each holder of record of a certificate evidencing shares of IMB Stock (a
Certificate
) a form letter of transmittal reasonably satisfactory to IMB and GBCI (which will specify
that delivery will be effected, and risk of loss and title to the Certificates will pass, only upon receipt of the Certificates in accordance with Section 1.6.2) advising such holder of the procedure for surrendering to the Exchange Agent the
Certificates or other evidence of ownership in exchange for the consideration to which such holder may be entitled pursuant to this Agreement (
Letter of Transmittal
).
1.6.2
Surrender of Certificates
. Subject to Section 1.4, each Certificate will, from and after the
Effective Date, be deemed for all corporate purposes to represent and evidence only the right to receive the portion of the Merger Consideration owing in respect of the number of shares of IMB Stock represented thereby. Following the Effective Date,
holders of
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Certificates will exchange their Certificates and, in accordance with instructions provided in the Letter of Transmittal, shall provide a properly completed and executed Letter of Transmittal in
order to effect the exchange of their Certificates for: (a) evidence of issuance in book entry form, or upon written request of such holder and appropriate payment therefor, certificates representing the appropriate number of shares of GBCI
Common Stock issuable in the Merger; (b) a check or, at the election of the IMB shareholder, a wire transfer (but only if the amount of cash included in that shareholders Merger Consideration exceeds $100,000) representing his, her or its
Per Share Cash Consideration if added pursuant to Section 7.3.2; and (c) a check representing the amount of cash in lieu of fractional shares, if any, to which such holder is entitled. Until the Certificate of a holder and a properly
executed Letter of Transmittal is received by the Exchange Agent (or, in the case of a lost, stolen, or destroyed Certificate, the procedure in Section 1.6.4 is complied with), the holder will not be entitled to receive his, her or its portion
of the Merger Consideration.
1.6.3
Issuance of Certificates in Other Names
. Any Person requesting that any
certificate evidencing GBCI Shares be issued in a name other than the name in which the surrendered Certificate is registered must: (a) establish to GBCIs satisfaction the right to receive the certificate evidencing GBCI Shares and
(b) either pay to GBCI any applicable transfer or other Taxes or establish to GBCIs satisfaction that all applicable Taxes have been paid or are not required.
1.6.4
Lost, Stolen, and Destroyed Certificates
. With respect to a Certificate that has been lost, stolen or
destroyed, the Exchange Agent will be authorized to issue or pay the holders portion of the Merger Consideration in exchange thereof, if the holder provides GBCI with: (a) satisfactory evidence that the holder owns IMB Stock and that the
Certificate representing this ownership is lost, stolen, or destroyed, (b) any affidavit or security GBCIs transfer agent may require in accordance with its policies and procedures (including such bond as may be required by the Exchange
Agent in accordance with such policies), and (c) any reasonable additional assurances that GBCI or the Exchange Agent may require.
1.6.5
Rights to Dividends and Distributions
. After the Effective Date, no holder of any Certificate will be
entitled to receive any dividends or other distributions otherwise payable to holders of record of GBCI Common Stock on any date on or after the Effective Date, unless the holder (a) is entitled by this Agreement to receive a certificate
representing GBCI Common Stock and (b) has surrendered in accordance with this Agreement his, her or its Certificates (or has met the requirements of Section 1.6.4) in exchange for certificates representing GBCI Shares or evidence of GBCI
stock ownership. Surrender of Certificates will not deprive the holder of any dividends or distributions that the holder is entitled to receive as a record holder of IMB Stock on a date before the Effective Date. When the holder surrenders his, her
or its Certificates in exchange for GBCI Shares, the holder shall become a shareholder of record and shall receive the amount, without interest, of any cash dividends and any other distributions distributed on or after the Effective Date on the
whole number of GBCI Shares into which the holders IMB Stock was converted at the Effective Time.
1.6.6
Checks in Other Names
. Any Person requesting that a check for any cash to be received in the Merger or
cash in lieu of fractional shares be paid in a name other than the name in which the Certificate surrendered in exchange for the cash is registered must establish to GBCIs reasonable satisfaction the right to receive this cash.
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1.6.7
Undelivered Certificates
. Any portion of the Exchange Fund
that remains unclaimed by shareholders of IMB on a date that is six months after the Effective Date may be returned to GBCI, at GBCIs election. To the extent so returned, holders of IMB Stock who have not, prior to such time, complied with the
provisions of this Section 1.6 will, from such time forward, look only to GBCI for payment of the Merger Consideration to which they are entitled and/or unpaid dividends and distributions on the GBCI Shares deliverable with respect to each
share of IMB Stock held by such holders as determined pursuant to this Agreement, in each case, without any interest. Neither GBCI nor IMB will be liable to any holder of IMB Stock for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws. In the event of a dispute with respect to ownership of IMB Stock, GBCI and the Exchange Agent shall be entitled to deposit any Merger Consideration represented thereby in escrow with an
independent third party with instructions to release the Merger Consideration as determined between the disputing parties promptly upon resolution of the dispute, and thereafter be relieved of any responsibility with respect to any claims thereto.
ARTICLE 2
CLOSING OF TRANSACTION
2.1
Effective Date
. The Merger shall be consummated at the Effective Time by the filing with and acceptance by the Montana Secretary of State of Articles of Merger, in the form required by and executed in accordance
with the relevant provisions of the MBCA, and by the issuance of a Certificate of Merger by the Secretary of State of Montana. Unless GBCI and IMB agree upon a different date, the Effective Date will be the date of Closing.
2.2
Events of Closing
. Subject to the terms and conditions of this Agreement,
Closing shall occur on or after February 28, 2018, and as of the first
month-end
occurring not less than five Business Days after fulfillment or waiver of each condition precedent set forth in, and the
granting of each approval (and expiration of any waiting period) covered by Article 5, or such other date as may be agreed upon by the parties; provided that any closing as of a
quarter-end
will occur on
the first day of the new quarter. At or prior to the Closing, all properly executed documents required by this Agreement will be delivered to the proper party, in form consistent with this Agreement. If any party fails to deliver a required document
at the Closing or otherwise defaults under this Agreement prior to the Effective Time, then the Merger will not occur unless the adversely affected party waives the default.
2.3
Manner and Time of Closing
. The Closing will take place remotely via the
electronic exchange of documents and signatures, at 9:00 a.m. Mountain Time, or such other time as the parties agree.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of IMB and the Bank
. Each of IMB and the Bank
represents and warrants to GBCI and Glacier Bank that, except as disclosed in a schedule to this Agreement (each a
Schedule
):
3.1.1
Organization and Good Standing; Authority
. IMB is a corporation duly organized, validly existing and in
good standing under the laws of the State of Montana, is a registered bank holding company pursuant to the BHC Act, and has all requisite corporate power and authority to own and operate its Properties and to carry on its businesses as now
conducted. The Bank is duly organized, validly existing, and in good standing as a state-chartered bank under the laws of the State of Montana and has all requisite corporate power and authority to own and operate its Properties and to carry on its
business as now conducted. The locations of all owned or leased offices, including approved and unopened offices of the Bank and
off-premises
ATM locations, are listed in
Schedule
3.1.1
.
3.1.2
No Breach or Violation
. The execution, delivery and
performance (assuming all Requisite Regulatory Approvals are duly made and/or obtained) of this Agreement does not and will not, and its consummation (assuming all Requisite Regulatory Approvals are duly made and/or obtained) of the Transaction will
not, constitute or result in: (a) a breach or violation of, or a default under, its articles of incorporation or bylaws; (b) other than as disclosed on
Schedule
3.1.2
, a breach or violation of, or a default under,
or the acceleration of or the creation of a Lien (with or without the giving of notice, the lapse of time or both) under any provision of any Material Contract; (c) a material violation of any law, rule, ordinance or regulation or judgment,
decree, order, award, or governmental or
non-governmental
permit or license to which it, or any of their respective Properties or assets is subject (each, a
Law
); or (d) any material
change in the rights or obligations of any party to a Material Contract.
3.1.3
Capital Stock
.
(a) The authorized capital stock of IMB consists of 500,000 shares of IMB Stock. A total of 203,763 shares of IMB Stock
are issued and outstanding as of the Execution Date, all of which shares were validly issued and are fully paid and nonassessable, and were not issued in violation of any preemptive rights.
(b) The authorized capital stock of the Bank consists of 30,000 shares of common stock, $100.00 par value per share. A
total of 30,000 shares of Bank common stock are issued and outstanding as of the Execution Date, all of which are owned by IMB free and clear of all Liens, except as disclosed on
Schedule
3.1.3
, validly issued, fully paid,
and nonassessable, except to the extent of any assessment required under 12 U.S.C. Section 1831o or
Section 32-1-506,
of the Mont. Code Ann., and were not
issued in violation of any preemptive rights.
(c) The authorized capital stock of First Security Insurance
consists of 1,000 shares of common stock, $1.00 par value per share. A total of one share of First Security
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Insurance common stock is issued and outstanding as of the Execution Date, which share is owned by IMB free and clear of all Liens, except as disclosed on
Schedule
3.1.3
, and validly issued, fully paid, and nonassessable, and issued free of any preemptive rights.
(d) No shares of IMB Stock are reserved for issuance, and there are no preemptive rights or any outstanding
subscriptions, warrants, options, conversion privileges, rights or commitments of IMB or the Bank of any character, kind or nature (including those relating to the issuance, sale, purchase, redemption, conversion, exchange, registration, voting or
transfer of such stock or securities) relating to the issuance of capital stock or other securities of IMB or the Bank, and neither IMB nor the Bank has issued or is obligated to issue any additional shares of common stock or any other security to
any other person. Neither IMB nor the Bank has outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights, and other than the IMB Shareholder Agreement, there are no voting trusts, shareholder agreements,
proxies, or other agreements or understandings in effect with respect to the voting or transfer of any of the outstanding shares of IMB Stock.
3.1.4
Subsidiaries; Investments
.
(a) IMB has no Subsidiaries other than the Bank and First Security Insurance, and neither the Bank nor First Security
Insurance has any Subsidiaries.
(b)
Schedule
3.1.4
lists all investments (except
investments in Subsidiaries and securities issued by a Governmental Entity) owned by IMB, the Bank and First Security Insurance as of September 30, 2017. All such investments comply with all applicable Laws and regulations, including without
limitation the BHC Act.
(c) None of IMB (other than as described in Section 3.1.4(a)), the Bank or First
Security Insurance own, or control, or have an economic interest in, directly or indirectly, any joint ventures, partnerships, limited liability companies, special purpose entities, limited purpose entities, or qualified special purpose entities.
There are no transactions, arrangements, or other relationships between IMB, the Bank or First Security Insurance and any executive officer or director of IMB, the Bank or First Security Insurance or any of their respective Subsidiaries that are not
specifically reflected in the IMB Financial Statements.
(d) First Security Insurance sold substantially all of
its assets in a transaction that was closed on March 1, 2016. Since the date of its sale of substantially all of its assets, First Security Insurance has conducted no further business operations, and its activities have been limited to
activities required by or related to the asset purchase agreement that governed its asset sale or which are necessary or appropriate to discontinue and wind up its business operations.
3.1.5
Reports and Financial Statements
.
(a)
Filing of Reports
. Since January 1, 2014, each of IMB, the Bank, and First Security Insurance has filed
all reports and statements, together with any required amendments to these reports and statements, that they were required to file with (i) the FDIC, (ii) the Federal Reserve, (iii) the Montana Division of Banking and Financial
Institutions, and (iv) any other applicable Governmental Entity. Each of these reports and statements, as amended, including the related financial statements and exhibits, complied as to form in all material respects with all applicable
statutes, rules and regulations as of their respective dates.
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(b)
Delivery to Other Party of Reports
. IMB has delivered or
otherwise made available to GBCI copies of, and
Schedule
3.1.5
contains a complete and accurate list of, all registration statements, offering circulars, private placement memoranda, reports, proxy statements or information
statements, or similar documents (collectively, its
Reports
) under the Securities Act of 1933, as amended (
Securities Act
), the Securities Exchange Act of 1934, as amended (
Exchange Act
), and
state securities and Blue Sky laws (collectively, the
Securities Laws
) or otherwise, filed, used or circulated by it or any of its Subsidiaries with respect to periods since January 1, 2014, through the Execution
Date.
(c)
Compliance with Securities Laws
. As of their respective dates (and without giving effect to any
amendments or modifications filed after the Execution Date), each of the Reports, including the related financial statements, exhibits and schedules, filed, used or circulated before the Execution Date complied in all material respects with
applicable Securities Laws, and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they
were made, not misleading.
(d)
Financial Statements
. Each of IMBs and the Banks balance sheets
included in the IMB Financial Statements and the Bank Financial Statements, respectively, fairly presents the financial position of IMB and the Bank as of the date of such balance sheet. Except as disclosed in
Schedule
3.1.5
, each of the statements of income, cash flows and shareholders equity included in the IMB Financial Statements and the Bank Financial Statements fairly presents the results of operations,
shareholders equity and cash flows, as the case may be, of IMB and the Bank for the periods set forth in these statements (subject, in the case of unaudited statements, to normal
year-end
audit
adjustments and the absence of footnotes), in each case in accordance with GAAP, except as may be noted in these statements.
(e)
Books and Records
. The books and records of IMB and the Bank have been accurately maintained in all
material respects, and in accordance with the business practices customary in the banking industry, and they fairly reflect the substance of events and transactions included therein. Such books and records comply in all material respects with
applicable legal, regulatory, accounting and banking requirements.
3.1.6
Properties
.
(a) Neither IMB nor the Bank are party to any real property lease, whether as landlord, tenant, guarantor or otherwise,
except as disclosed in
Schedule
3.1.6
. Except as disclosed or reserved against in the IMB Financial Statements or in
Schedule
3.1.6
, IMB and/or the Bank have good and marketable fee or leasehold
title (as applicable), free and clear of all Liens (other than Liens for Taxes not yet delinquent,
non-monetary
Liens on the Real Property that do not adversely affect the use or value of the Real Property in
any material respect, pledges to secure deposits and other security provided in the ordinary course of business including, without limitation, security for Federal Home Loan Bank borrowings, federal funds and repurchase agreements) to all of the
properties and assets, tangible or intangible, reflected in
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the IMB Financial Statements as being owned by either of them as of the Execution Date. Except as disclosed in
Schedule
3.1.6
, to the Knowledge of IMB, all buildings and
structures on the Real Property and the equipment located thereon are in all material respects in good operating condition and repair (ordinary wear and tear excepted) and conform in all material respects with all ordinances, regulations, zoning and
other Laws, whether federal, state or local.
(b) To the Knowledge of IMB, all buildings and all fixtures,
equipment and other property and assets that are material to IMBs business on a consolidated basis are owned by IMB or the Bank or are held under leases or subleases, enforceable against IMB and the Bank, respectively, in accordance with their
respective terms (except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting creditors rights generally or by general equitable principles).
(c)
Schedule
3.1.1
lists all of IMBs and the Banks existing owned or leased
branches and offices and all new branches or offices that the Bank has applied to establish or purchase, along with the estimated cost to establish or purchase those new branches.
(d) IMB has delivered to GBCI true, accurate and complete copies of each of the following to the extent in the
possession or control of IMB or the Bank and in any way related to the real property listed on
Schedule
3.1.1
or
Schedule
3.1.6
: (i) title policies together with legible copies of all
underlying exceptions, (ii) zoning reports and zoning letters, and (iii) licenses and permits necessary for the use and occupancy of such real property for its current use. To the Knowledge of IMB, no exceptions, reservations, or
encumbrances have arisen or been created since the date of issuance of those policies that would interfere with the current use and occupancy of the Real Property (other than Liens for Taxes not yet delinquent).
3.1.7
Environmental Matters
.
(a) For purposes of this Section 3.1.7, the following definitions apply:
(i)
Subject Property
with respect to IMB and its Subsidiaries means (A) all real property at
which its businesses have been conducted, and any property where under any Environmental Law it or any of its Subsidiaries is deemed to be the present or past owner or operator of the property; (B) any facility in which it is or was the owner
or operator of the facility; and (C) all other real property owned by IMB or the Bank as of the Execution Date or during the three years prior to the Execution Date.
(ii)
Environmental Laws
means any federal, state or local law, regulation, order, decree, judgment,
judicial opinion, or any agreement between IMB or any of its Subsidiaries and any Governmental Entity presently in effect relating to: (A) the manufacture, generation, transport, use, treatment, storage, recycling, disposal, release, threatened
release or presence of Hazardous Substances, or (B) the protection of human health or the environment.
(iii)
Hazardous Substances
means any substance, material or waste that is (A) defined as a
hazardous substance in 42 U.S.C. Section 9601(14), (B) defined as a pollutant or contaminant in 33 U.S.C. Section 1362(6), (C) defined as a hazardous waste in 42 U.S.C.
Section 6903(5), or (D) petroleum or a petroleum product or any other substance
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defined as hazardous, dangerous, or toxic under any federal or state law or regulation enacted for the protection of human health or the environment; provided,
however, that supplies and materials used by IMB and/or the Bank for general office purposes will not be deemed to be Hazardous Substances for the purposes of this Agreement.
(b) IMB, its Subsidiaries, and the Subject Property currently owned, operated or leased are, and to the Knowledge of
IMB, IMB, its Subsidiaries and the Subject Property owned, operated, or leased at any time during the past three years have been, in material compliance with all applicable Environmental Laws, and to the Knowledge of IMB, no circumstances exist that
would result in a material violation of such Environmental Laws.
(c) None of the following exists, and to the
Knowledge of IMB, no reasonable basis for any of the following exists: pending or threatened claims, actions, investigations, notices of
non-compliance,
information requests or notices of potential
responsibility or proceedings involving IMB, the Bank, First Security Insurance, or any Subject Property, relating to:
(i) an asserted liability of IMB, the Bank, First Security Insurance or any prior owner, occupier or user of Subject
Property under any applicable Environmental Law or the terms and conditions of any permit, license, authority, settlement, agreement, decree or other obligation arising under any applicable Environmental Law;
(ii) the handling, storage, use, transportation, removal, release or disposal of Hazardous Substances;
(iii) the actual or threatened discharge, release, or emission of Hazardous Substances from, on or under or within
Subject Property into the air, water, surface water, ground water, land surface, or subsurface strata; or
(iv) personal injuries or damage to the Subject Property related to or arising out of the release, use or disposal of
Hazardous Substances.
(d) Except as disclosed in
Schedule
3.1.7
, no drums, barrels or
storage tanks underground or otherwise are present on the Subject Property currently owned, operated, or leased, or, if present, none of such vessels is leaking and each of them is in full compliance with all applicable Environmental Laws. With
respect to any Subject Property, except as permitted by applicable Environmental Laws, none of IMB, the Bank or First Security Insurance owns, possesses, or controls any PCBs,
PCB-contaminated
fluids, wastes
or equipment, or any material amount of asbestos or asbestos-containing material. Any asbestos or asbestos-containing material on the Subject Property currently owned by IMB or the Bank is properly contained in compliance with all applicable
Environmental Laws, and to the Knowledge of IMB, there is no threat that asbestos or asbestos-containing material will be released into the environment. To the Knowledge of IMB, no Hazardous Substances have been used, handled, stored, discharged,
released or emitted, or are threatened to be discharged, released or emitted, at or on or from any Subject Property, except in compliance with applicable Environmental Laws.
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(e) No part of the Subject Property currently owned by IMB or the Bank
has since January 1, 2015, been or is scheduled for, investigation, monitoring, or other remedial action under any applicable Environmental Law.
(f) To the Knowledge of IMB, no condition from, on or under the Subject Property exists with respect to the Subject
Property that would require remedial action under applicable Environmental Laws.
(g) IMB has delivered to GBCI
true, correct and complete copies of all reports or tests with respect to compliance of all Subject Properties with any Environmental Laws or the presence of Hazardous Materials that were prepared for IMB, the Bank, or First Security Insurance or
prepared for other Persons and are in the possession, custody or control of IMB, the Bank, or First Security Insurance since January 1, 2006.
3.1.8
Taxes
.
(a)
S-Corporation
. Except as disclosed on
Schedule
3.1.8(a)
,
(i) IMB (and any predecessor of IMB) has been a validly electing and
qualifying
S-corporation
within the meaning of IRC Section 1361 and IRC Section 1362 at all times since January 1, 2003, and shall continue to be a valid
S-corporation
for U.S. federal Tax purposes up to and including the day before the Closing. There have been no events, transactions or activities of IMB or its shareholders which would cause, or would
have caused, the status of IMB as an
S-corporation
to be subject to termination or revocation (whether purposefully or inadvertently) for which the Internal Revenue Service has not granted full and retroactive
relief.
(ii) Each of the Bank and First Security Insurance is a validly electing and qualifying qualified
subchapter S subsidiary within the meaning of IRC Section 1361(b)(3)(B) at all times since, with respect to the Bank, February 1, 2003, and, with respect to First Security Insurance, January 1, 2003, and shall continue to
be a valid qualified subchapter S subsidiary for U.S. federal Tax purposes up to and including the day before the Closing Date. There have been no events, transactions or activities of IMB, the Bank, First Security Insurance, or any
shareholder of IMB which would cause, or would have caused, the status of a subsidiary as a qualified subchapter S subsidiary to be subject to termination or revocation (whether purposefully or inadvertently) for which the Internal Revenue
Service has not granted full and retroactive relief.
(iii) IMB has no potential liability for any Taxes under IRC
Section 1374 and shall not be subject to Taxes under IRC Section 1374 in connection with the transactions contemplated by this Agreement. During the past ten years, IMB has not (A) acquired assets from another corporation in a
transaction in which the Companys Tax basis for the acquired assets was determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other property) in the hands of the transferor or (B) acquired the stock
of any corporation that is a qualified subchapter S subsidiary.
(b)
Tax Returns and Payment of Taxes
.
IMB, the Bank, First Security Insurance, and each other Subsidiary of IMB have duly and timely filed or caused to be filed
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(taking into account any valid extensions) all income and other material Tax Returns required by Law to be filed by each of them. Such Tax Returns are true, complete and correct in all material
respects. None of IMB, the Bank or First Security Insurance are currently the beneficiary of any extension of time within which to file any Tax Return. All income and other material Taxes due and owing by IMB, the Bank, or First Security Insurance
(whether or not shown on any Tax Return) have been timely paid or, where payment is not yet due, IMB has made an adequate provision for such Taxes in IMBs financial statements (in accordance with GAAP). IMBs most recent financial
statements reflect an adequate reserve (in accordance with GAAP) for all Taxes payable through the date of such financial statements. None of IMB, the Bank or First Security Insurance have incurred any liability for Taxes since the date of
IMBs most recent financial statements outside the ordinary course of business or otherwise inconsistent with past practice.
(c)
Availability of Tax Returns
. IMB has made available to GBCI complete and accurate copies of all
U.S. federal, state, local and
non-U.S. income
and franchise Tax Returns filed by or on behalf of IMB or any of its Subsidiaries for any Tax period ending after January 1, 2006.
(d)
Withholding
. IMB, the Bank, and First Security Insurance have at all times withheld and paid each Tax
required to have been withheld and paid in connection with amounts paid or owing to any Employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting and backup withholding provisions
of applicable Law.
(e)
Liens
. There are no Liens for Taxes upon the assets of IMB, the Bank, or First
Security Insurance other than for current Taxes not yet due and payable or for Taxes that are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been made in the IMB Financial
Statements.
(f)
Tax Deficiencies and Audits
. No deficiency for any amount of Taxes which has been
proposed, asserted or assessed in writing by any taxing authority against IMB, the Bank, or First Security Insurance and received by IMB, the Bank, or First Security Insurance remains unpaid. There are no waivers or extensions of any statute of
limitations currently in effect with respect to Taxes of IMB or any of its Subsidiaries. There are no audits, suits, proceedings, investigations, claims, examinations, or other administrative or judicial proceedings ongoing or pending with respect
to any Taxes of IMB or any of its Subsidiaries of which IMB or any of its Subsidiaries has received written notice.
Schedule
3.1.8(f)
lists all U.S. federal, state, local and
non-U.S.
income Tax Returns filed with respect to IMB, the Bank, or First Security Insurance for taxable periods ended on or after January 1, 2012, indicates which of those Tax Returns have been audited,
and indicates which of those Tax Returns currently are the subject of audit.
(g)
Tax Jurisdictions
. No
written claim by any taxing authority in a jurisdiction in which IMB, the Bank, or First Security Insurance do not or did not file Tax Returns has ever been received by IMB, the Bank, or First Security Insurance asserting that IMB, the Bank, or
First Security Insurance is or may be subject to Tax in that jurisdiction.
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(h)
Tax Rulings
. None of IMB, the Bank or First Security Insurance
have requested or are the subject of or bound by any private letter ruling, technical advice memorandum or similar ruling or memorandum with any taxing authority with respect to any Taxes, nor is any such request outstanding.
(i)
Consolidated Groups, Transferee Liability and Tax Agreements
. None of IMB, the Bank or First Security
Insurance (i) have been a member of a group filing Tax Returns on a consolidated, combined, unitary or similar basis (except for a group including solely IMB and its Subsidiaries), (ii) have any liability for Taxes of any Person (other than
IMB, the Bank or First Security Insurance) under Treasury Regulations
Section 1.1502-6
(or any comparable provision of local, state or foreign Law), as a transferee or successor, by contract (excluding
commercial agreements entered into in the ordinary course of business the primary purpose of which does not relate to Taxes), or otherwise, or (iii) are a party to, bound by or has any liability under any Tax sharing, allocation or
indemnification agreement or arrangement (except for such agreements or arrangements solely between IMB, the Bank and/or First Security Insurance and except for commercial agreements entered into in the ordinary course of business the primary
purpose of which does not relate to Taxes).
(j)
Change in Accounting Method
. None of IMB, the Bank or
First Security Insurance have agreed to make, nor are they required to make, any adjustment under IRC Section 481(a) or any comparable provision of state, local or foreign Tax Laws by reason of a change in accounting method or otherwise that
could require any income inclusion or reduction in any deduction or credit after the Effective Date.
(k)
Post-Closing Tax Items
. IMB and its Subsidiaries will not be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) closing agreement as described in IRC Section 7121 (or any corresponding or
similar provision of state, local or foreign income Tax Law) executed on or prior to the Closing Date, (ii) installment sale or open transaction disposition made on or prior to the Closing Date, (iii) prepaid amount received on or prior to
the Closing Date or (iv) election under IRC Section 108(i).
(l)
U.S.
Real
Property Holding Corporation
. None of IMB, the Bank or First Security Insurance have been a United States real property holding corporation (as defined in IRC Section 897(c)(2)) during the applicable period specified in IRC
Section 897(c)(1)(a).
(m)
IRC Section
355
. None of IMB, the Bank or First Security
Insurance have been a distributing corporation or a controlled corporation in connection with a distribution described in IRC Section 355.
(n)
Reportable Transactions
. None of IMB, the Bank or First Security Insurance have been a party to, or a
promoter of, a listed transaction within the meaning of IRC Section 6707A(c)(2) and Treasury
Regulations 1.6011-4(b)(2).
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(o)
IRC Section
6662
. IMB has disclosed on its
U.S. federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of U.S. federal income Tax within the meaning of IRC Section 6662.
(p)
Tax Attributes
.
Schedule
3.1.8(p)
sets forth the following information as each
item exists with respect to each of IMB, the Bank and First Security Insurance as of the most recent practicable date: (i) the basis in its assets; (ii) the amount of any net operating loss, net capital loss, unused investment or other
credit, unused foreign tax credit, or excess charitable contribution; (iii) the amount of any deferred gain or loss arising out of any intercompany transaction; and (iv) the amount of any excess loss account in the stock of a Subsidiary.
3.1.9
Regulatory Matters
.
(a) Since January 1, 2015, IMB and its Subsidiaries have complied in all material respects with, and are not in
default or violation in any material respect of, (i) any applicable Laws, including without limitation all Laws related to data protection or privacy, the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B,
the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, the
Dodd-Frank Wall Street Reform and Consumer Protection Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Real Estate Settlement Procedures Act and Regulation X, and any other laws or regulations relating to bank
secrecy, discriminatory lending, financing or leasing practices, money laundering prevention, and all requirements relating to the origination, sale and servicing of mortgage and consumer loans, and (ii) any posted or internal privacy policies
relating to data protection or privacy, including without limitation, the protection of personal information, and IMB has no Knowledge of, nor has it received since January 1, 2015, written notice of, any material defaults or material
violations of any applicable Law.
(b) Except as disclosed in
Schedule
3.1.9
, none of
IMB, the Bank or First Security Insurance are a party to any cease and desist order, written agreement, or memorandum of understanding with, or a party to any commitment letter or similar undertaking to, or are subject to any order or directive by,
or are a recipient of any extraordinary supervisory letter from, or have adopted any board resolutions that continue to be effective on or after the Execution Date at the request of, any federal or state regulatory authorities, nor have any of them
been advised by, or have any Knowledge of facts which could give rise to an advisory notice by, such authorities that they are contemplating issuing or requesting any such order, agreement, memorandum or similar document or undertaking.
(c) Each of IMB, the Bank, and First Security Insurance has properly administered all accounts for which it acts as a
fiduciary, including accounts for which they serve as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable Law. None of IMB, the
Bank, or any director, officer, or Employee of IMB or the Bank has committed any material breach of trust or fiduciary duty with respect to any such fiduciary account, and the accountings for each such fiduciary account accurately reflect in all
material respects the assets of such fiduciary account.
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(d) None of IMB, the Bank or First Security Insurance, nor, to the
Knowledge of IMB, any of their respective directors, officers, employees, agents, or any other persons acting on their behalf, (i) have violated the Foreign Corrupt Practices Act, 15 U.S.C.
Sections 78dd-1
et seq., as amended, or any other similar applicable foreign, federal or state legal requirement, (ii) have made or provided, or caused to be made or provided, directly or indirectly,
any payment or thing of value to a foreign official, foreign political party, candidate for office or any other person while knowing or having a reasonable belief that the person will pay or offer to pay the foreign official, party or candidate, for
the purpose of influencing a decision, inducing an official to violate their lawful duty, securing an improper advantage, or inducing a foreign official to use their influence to affect a governmental decision, (iii) have paid, accepted or
received any unlawful contributions, payments, expenditures or gifts, (iv) have violated or operated in noncompliance with any export restrictions, money laundering law, anti-terrorism law or regulation, anti-boycott regulations or embargo
regulations, or (v) are currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department.
3.1.10
Material Contracts
.
(a) Except for arrangements which may be made after the date and in accordance with the terms of this Agreement, none
of IMB, the Bank or First Security Insurance are bound by any contract, agreement, or arrangement that has not been set forth in
Schedule
3.1.10(a)
that is material to operation of its business (each a
Material
Contract
). A contract, agreement or arrangement will be material to the extent it: (i) is to be performed after the Execution Date and is material to the operations of the Bank; (ii) contains a
non-compete
or client or customer
non-solicit
requirement or any other provisions that materially restricts the conduct of, or the manner of conducting, any line of
business of IMB or any of its Subsidiaries; (iii) obligates IMB or any of its Subsidiaries to conduct business with any third party on an exclusive or preferential basis; (iv) requires referrals of business or requires IMB or any of its
Subsidiaries to make available investment opportunities to any Person on a priority or exclusive basis; (v) grants any right of first refusal, right of first offer or similar right with respect to any assets, rights or Properties of IMB or any
of its Subsidiaries; (vi) limits the payment of dividends by IMB or any of its Subsidiaries; (vii) relates to a joint venture, partnership, limited liability company agreement or other similar agreement or arrangement with any third party,
or to the formation, creation or operation, management or control of any partnership or joint venture with any third parties, except in each case related to merchant banking investments by IMB or any of its Subsidiaries in the ordinary course of
business; (viii) provides for payments to be made by IMB or any of its Subsidiaries upon a change in control thereof; (ix) was not negotiated and entered into on an
arms-length
basis;
(x) provides for indemnification by IMB or any of its Subsidiaries of any Person, except for contracts entered into in the ordinary course of business providing for customary and immaterial indemnification; (xi) is a consulting agreement
or data processing, software programming or licensing contract involving the payment of more than $25,000 per annum (other than any such contracts which are terminable on 30 days or less notice without any required payment or other conditions,
other than the condition of notice); (xii) involves capital expenditures in excess of $50,000 per project or series of related projects,
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or $100,000 in the aggregate; (xiii) is a contract, agreement or arrangement to which any affiliate, officer, director, employee or consultant of IMB or any of its Subsidiaries is a party or
beneficiary (except with respect to loans to, or deposit or asset management accounts of, directors, officers and employees entered into in the ordinary course of business and in accordance with all applicable regulatory requirements with respect to
it); (xiv) would prevent, materially delay or materially impede IMBs ability to consummate the Merger or the other transactions contemplated hereby; (xv) contains a put, call or similar right pursuant to which IMB or any of its
Subsidiaries could be required to purchase or sell, as applicable, any equity interests of any Person or assets; or (xvi) is otherwise not entered into in the ordinary course of business or is material to IMB or any of its Subsidiaries or their
respective financial condition or results of operations.
(b) (i) Each Material Contract is a valid and
legally binding agreement of IMB, the Bank or First Security Insurance, as applicable, and, to the Knowledge of IMB, the counterparty or counterparties thereto, is enforceable in accordance with its terms (except as may be limited by bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization or similar Laws of general applicability relating to or affecting the rights of creditors generally and subject to general principles of equity) and is in full force and effect;
(ii) IMB or its Subsidiaries have duly performed all material obligations required to be performed by it prior to the date hereof under each Material Contract; (iii) none of IMB, the Bank or First Security Insurance, and, to the Knowledge
of IMB, any counterparty or counterparties, are in breach of any material provision of any Material Contract; and (iv) no event or condition exists that constitutes, after notice or lapse of time or both, will constitute, a breach, violation or
default on the part of IMB, the Bank or First Security Insurance under any such Material Contract or provide any party thereto with the right to terminate such Material Contract.
Schedule
3.1.10(b)
sets forth a true and
complete list of (A) all Material Contracts pursuant to which consents or waivers are or may be required and (B) all notices which are required to be given, in each case, prior to the performance by IMB of this Agreement and the
consummation of the Merger, the Bank Merger and the other transactions contemplated hereby.
3.1.11
Compliance
. Each of IMB, the Bank and First Security Insurance has all material permits, licenses,
certificates of authority, orders, and approvals of, and has made all filings, applications, and registrations with, federal, state, local, and foreign governmental or regulatory bodies required in order to permit IMB, the Bank and First Security
Insurance to carry on their respective businesses. All such material permits, licenses, certificates of authority, orders and approvals (a) to the extent applicable to IMB and the Bank, are in full force and effect, and, to the Knowledge of
IMB, no suspension or cancellation of any of them is threatened, and (b) to the extent applicable to First Security Insurance, have been validly surrendered or terminated in connection with the winding up of its operations.
3.1.12
Litigation
. Except as shown on
Schedule
3.1.12
, no material litigation,
arbitration, proceeding or controversy before any Governmental Entity is pending on behalf of IMB, the Bank (other than routine foreclosure proceedings) or First Security Insurance, and there is no pending litigation, arbitration, claim, action,
proceeding or, to the Knowledge of IMB, investigation against IMB, the Bank or First Security Insurance and, to the Knowledge of IMB, no such litigation, arbitration, claim, action, investigation or proceeding has been threatened or is contemplated.
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3.1.13
No Material Adverse Effect
. Since December 31, 2016,
(a) IMB and the Bank have conducted their respective businesses only in the ordinary and usual course of business, and (b) there has not been any change in the financial condition (which includes, without limitation, the condition of
assets, franchises, results of operations and prospects) that has had or may reasonably be expected to have a Material Adverse Effect on IMB.
3.1.14
Shareholder List
. IMB has provided to GBCI a list of its shareholders as of the most recent practicable
date. To IMBs Knowledge, the shareholder list provided is a true and correct list of the names, addresses and holdings of all record holders of the IMB Stock as of the date thereof, excluding those whose identities have been withheld by
certain shareholders and their broker-dealers, as disclosed and provided to GBCI.
3.1.15
Asset
Classification
.
(a)
Schedule
3.1.15
sets forth a list, accurate and complete, as of
December 31, 2016, and as of June 30, 2017, except as otherwise expressly noted, and separated by category of classification or criticism (
Asset Classification
), of the aggregate amounts of loans, extensions of credit
and other assets of IMB and the Bank that have been criticized or classified by any internal audit conducted by IMB and/or the Bank, taking into account any assets that have been criticized or classified by any Governmental Entity.
(b) Except as shown in
Schedule
3.1.15
, no amounts of the Banks loans, extensions of
credit or other assets that have been classified or criticized by any representative of any Governmental Entity as Other Assets Especially Mentioned, Substandard, Doubtful, Loss, or words of similar
effect as of December 31, 2016, or as of June 30, 2017, as the case may be, are excluded from the amounts disclosed in the Asset Classification, other than amounts of loans, extensions of credit or other assets that were paid off or
charged off by IMB or the Bank before the Execution Date.
3.1.16
Insurance
. IMB, the Bank and First
Security Insurance have taken all requisite action (including the making of claims and the giving of notices) under their respective directors and officers liability insurance policy or policies in order to preserve all rights under such
policies with respect to all matters known to any of them (other than matters arising in connection with, and the transactions contemplated by, this Agreement).
Schedule
3.1.16
lists all insurance policies maintained by
IMB, the Bank or First Security Insurance within the prior five years, including, without limitation, all directors and officers liability and employee fiduciary policies.
3.1.17
Labor Matters
.
(a) None of IMB, the Bank or First Security Insurance are a party to, or are bound by, any collective bargaining
agreement, contract, or other agreement or understanding with a labor union or labor organization. None of IMB, the Bank or First Security Insurance are the subject of any material proceeding: (i) asserting that it has committed an unfair labor
practice or (ii) seeking to compel it to bargain with any labor organization as to wages or conditions of employment. No strike involving IMB or the Bank is pending or, to the Knowledge of IMB, threatened. IMB has no Knowledge of any activity
involving any Employees seeking to certify a collective bargaining unit or engaging in any other organizational activity.
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(b) IMB has made available to GBCI all personnel manuals, handbooks, or
material policies, rules or procedures applicable to Employees and the terms of their employment, and all such applicable materials are listed on
Schedule
3.1.17
. Each of IMB, the Bank and First Security Insurance is and,
since January 1, 2014, has been in compliance in all material respects with all applicable Laws respecting hiring and employment, including but not limited to, discrimination or harassment in employment, retaliation, reasonable accommodation,
terms and conditions of employment, termination of employment, wages, overtime classification, hours, leaves of absence, occupational safety and health, employee whistle-blowing, immigration, employee privacy, employment practices and classification
of employees, consultants and independent contractors. Except as otherwise required by Law, no Employee has an express or implied contract or agreement that prohibits such person from being dismissed immediately and without prior notice to such
Employee and without liability to IMB or its Subsidiaries (other than for salary or wages for time worked and benefits earned prior to the date of such termination). IMB has provided to GBCI a true and complete list of all independent contractors
and consultants to IMB, the Bank or First Security Insurance, including such contractor or consultants name, date of commencement, and rate of compensation payable, and all such consultants can be terminated immediately and without prior
notice to the consultant.
3.1.18
Employee Benefits
.
(a) For purposes of this Agreement, Plan, or Plans, individually or collectively, means any
employee benefit plan, as defined in Section 3(3) of ERISA, maintained by IMB, the Bank or First Security Insurance, as the case may be. IMB, the Bank and First Security Insurance are not now nor have ever been a contributing
employer to or sponsor of a multiemployer plan or a single employer plan subject to Title IV of ERISA.
(b)
Schedule
3.1.18
sets forth a list, as of the Execution Date, of (i) all Plans,
stock purchase plans, restricted stock and stock option plans, and other deferred compensation arrangements, and (ii) all other material employee benefit plans, programs, policies, agreements, collective bargaining agreements, or other
arrangements providing for compensation, severance, incentives, bonuses, performance awards, or other compensation, or for fringe, retirement, death, disability or medical benefits or other employee benefits or remuneration of any kind, whether
written or unwritten, funded or unfunded that is or has been sponsored, maintained, contributed to, or required to be contributed to, by IMB or its Subsidiaries for the benefit of any employees or former employees of IMB or its Subsidiaries
(collectively,
Employees
), including, without limitation, all salary continuation or supplementation agreements between IMB or its Subsidiaries and any of their respective officers, directors, or employees (collectively, the
Compensation Plans
). True and complete copies of the Compensation Plans (and, as applicable, copies of summary plan descriptions, governmental filings (on Form 5500 series or otherwise), actuarial reports and reports under
Financial Accounting Standards Board Statement No. 106 relating to such Compensation Plans), including Plans and related amendments, and all material correspondence relating to any Compensation Plan from or with any Governmental Entity in the
last five years have been made available to GBCI.
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(c) All of the Plans covering Employees (other than multi-employer
plans within the meaning of ERISA Sections 3(37) or 4001(a)(3)), to the extent subject to ERISA, are in compliance (both in form and operation) with ERISA. Each Plan that is an employee pension benefit plan within the meaning
of ERISA Section 3(2) (
Pension Plan
) and that is intended to be qualified under IRC Section 401(a), has either received a favorable determination letter from the Internal Revenue Service or consists of a master,
prototype, or volume submitter plan which has received an opinion or advisory letter from the Internal Revenue Service upon which IMB may rely, as of the date hereof no such determination letter has been revoked, no revocation has been threatened,
and, to the Knowledge of IMB, nothing has occurred since the date of such letter that could adversely affect the qualified status of each such Plan. All such Plans have been timely amended for all such requirements and have been submitted to the
Internal Revenue Service for a favorable determination letter within the latest applicable remedial amendment period. No litigation, audit, or investigation relating to its Plans is pending or, to the Knowledge of IMB, threatened. None of IMB, the
Bank or First Security Insurance have engaged in a transaction with respect to any Plan that could subject it to a tax or penalty imposed by either IRC Section 4975 or ERISA Section 502(i) in an amount that would be material.
(d) All contributions required to be made under the terms of any Plans have been timely made or have been reflected in
the IMB Financial Statements. Neither any Pension Plan nor any single-employer plan of any ERISA Affiliates has an accumulated funding deficiency (whether or not waived) within the meaning of IRC Section 412 or ERISA
Section 302. None of IMB, the Bank, First Security Insurance nor any of IMBs ERISA Affiliates have provided, or are required to provide, security to any Pension Plan or to any single-employer plan of an ERISA Affiliate under IRC
Sections 401(a)(29) or 412(f)(3) or ERISA Sections 306, 307, or 4204.
(e) Except as disclosed
in the IMB Financial Statements or in
Schedule
3.1.18
and, except as required by IRC Section 4980B, none of IMB, the Bank or First Security Insurance have any obligations for retiree health and life benefits.
(f) No provision of the documents governing any Plan contains restrictions on the rights of IMB or any of its
Subsidiaries to amend or terminate any Plan without incurring liability under such Plan other than normal liabilities for benefits.
(g) None of IMB, the Bank or First Security Insurance have made any payments, are obligated to make any payments or
are a party to any agreement that could obligate IMB, the Bank or First Security Insurance to make any payments that are not deductible under IRC Section 280G.
(h) Except as disclosed in
Schedule
3.1.18
, the Merger will not result in (i) vesting,
acceleration, or increase of any amounts payable under any Compensation Plan, (ii) any increase in benefits under any Compensation Plan, (iii) payment of any severance,
true-up,
change in control, or
similar payments or compensation or any forgiveness of any indebtedness under any Compensation Plan, or (iv) result in an excess parachute payment within the meaning of IRC Section 280G(b), or any payment that will not be fully
deductible by GBCI. All payments set forth in
Schedule
3.1.18
have been properly accrued in accordance with GAAP.
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(i) Except as disclosed in
Schedule
3.1.18
,
none of IMB, the Bank or First Security Insurance maintain an executive supplemental retirement plan or similar arrangement for any current or former officers, directors, or Employees.
(j) All required reports and descriptions (including Form 5500 annual reports, summary annual reports, and
summary plan descriptions) have been timely filed and/or distributed in accordance with the applicable requirements of ERISA and the IRC with respect to each Plan. The requirements of COBRA have been met with respect to each applicable Plan.
(k) Each Compensation Plan that is subject to IRC Section 409A has been operated in compliance with, and is in
documentary compliance with, such section and all applicable regulations and regulatory guidance (including, without limitation, proposed regulations, notices, and rulings).
3.1.19
No Rights or Similar Plan
. IMB has no shareholder rights plan, poison pill, or similar plan.
3.1.20
Brokers or Finders Fees
. Except for the fees of ProBank Austin to obtain the Fairness
Opinion and for advisory services relating to the Merger pursuant to an agreement that has been disclosed to GBCI, no agent, broker, Person or firm acting on behalf of IMB, the Bank or First Security Insurance, or under their authority, is or will
be entitled to any commission, brokers, finders or financial advisory fee in connection with the Transaction.
3.1.21
Completeness of Representations
. No representation or warranty made by or with respect to IMB, the Bank
or First Security Insurance in this Agreement (or in the Schedules to this Agreement) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in this Agreement (or in such
Schedules) or in such representation or warranty not misleading. No investigation by GBCI or Glacier Bank of the business and affairs of IMB, the Bank or First Security Insurance will affect or be deemed to modify or waive any representation,
warranty, or covenant in this Agreement.
3.2
Representations and Warranties of
GBCI and Glacier Bank
. Except as disclosed in a Schedule to this Agreement, each of GBCI and Glacier Bank represents and warrants to IMB and the Bank that:
3.2.1
Organization and Good Standing
. GBCI is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Montana, is a registered bank holding company pursuant to the BHC Act, and has all requisite power and authority to own and operate its Properties and to carry on its businesses as now conducted. Each of its
Subsidiaries is either a commercial bank, a statutory trust or a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all requisite power and authority to own and operate its
Properties and to carry on its businesses as now conducted.
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3.2.2
Corporate Authority
. Its execution, delivery and performance
(assuming all Requisite Regulatory Approvals are duly made and/or obtained) of this Agreement does not and will not, and its consummation (assuming all Requisite Regulatory Approvals are duly made and/or obtained) of the Transaction will not,
constitute or result in: (a) a breach or violation of, or a default under, its articles of incorporation or bylaws; (b) a breach or violation of, or a default under, or the acceleration of or the creation of a Lien (with or without the
giving of notice, the lapse of time or both) under any provision of any material agreement, lease, contract, note, mortgage, indenture, arrangement or other obligation by which it is bound or to which it is a party (collectively, the
GBCI
Contracts
); (c) a material violation of any law, rule, ordinance or regulation or judgment, decree, order, award, or governmental or
non-governmental
permit or license to which it is subject; or
(d) any change in the rights or obligations of any party under any of the GBCI Contracts. No other corporate proceedings or action is required to be taken by it relating to the performance by it of this Agreement or the consummation of the
Transaction.
3.2.3
Capital Stock
. The authorized capital stock of GBCI consists of 1,000,000 shares of GBCI
Preferred Stock and 117,187,500 shares of GBCI Common Stock. No shares of GBCI Preferred Stock are outstanding, and as of July 15, 2017, a total of 78,001,890 shares of GBCI Common Stock were issued and outstanding, all of which were
validly issued and are fully paid and nonassessable. As of July 15, 2017, there were no options, warrants, conversion privileges or other rights to acquire shares of GBCI Common Stock or any other security of GBCI issued and outstanding, except
as are or will be disclosed in the GBCI Reports.
3.2.4
Reports and Financial Statements
.
(a)
Filing of Reports
. Since January 1, 2014, GBCI and each of its Subsidiaries has filed all reports and
statements, together with any required amendments to these reports and statements (collectively, the
GBCI Reports
), that they were required to file with (i) the SEC, (ii) the Federal Reserve, (iii) the FDIC, and
(iv) any other applicable federal or state banking, insurance, securities, or other regulatory authorities. Each of the GBCI Reports, including the related financial statements and exhibits, complied as to form in all material respects with all
applicable statutes, rules and regulations as of their respective dates.
(b)
Compliance with Securities
Laws
. As of their respective dates (and without giving effect to any amendments or modifications filed after the Execution Date), each of the GBCI Reports, including the related financial statements, exhibits and Schedules, filed, used or
circulated before the Execution Date complied (and each of the GBCI Reports filed after the Execution Date, will comply) in all material respects with applicable Securities Laws, and did not (or, in the case of reports, statements, or circulars
filed after the Execution Date, will not) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they
were made, not misleading.
(c)
Financial Statements
. Each of GBCIs balance sheets included in the
GBCI Financial Statements have been prepared in conformity with GAAP and fairly presents in all material respects (or, in the case of GBCI Financial Statements for periods ending on a date following the Execution Date, will fairly present) the
financial position of GBCI and its Subsidiaries as of the date of the balance sheet. Each of the statements of income, cash flows
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and shareholders equity included in the GBCI Financial Statements, fairly presents (or, in the case of GBCI Financial Statements to be prepared and filed with the SEC pursuant to
GBCIs reporting obligations under the Exchange Act for periods ending on a date following the Execution Date, will fairly present) the results of operations, shareholders equity and cash flows, as the case may be, of GBCI and its
Subsidiaries for the periods set forth in these statements, in each case in accordance with GAAP, except as may be noted in these statements.
3.2.5
Financing and Shares Available
. GBCI has, and at the Effective Time will have, (a) sufficient cash
and cash equivalents on hand to pay any Cash Consideration, any cash payable in lieu of fractional shares, and any amounts payable to holders of Proposed Dissenting Shares; and (b) a sufficient number of shares of common stock authorized and
available to issue the GBCI Shares.
3.2.6
Taxes
. All material Tax Returns required by Law to be filed by
GBCI and its Subsidiaries have been duly and timely filed, and all Taxes due and owing by GBCI or any of its Subsidiaries or upon any of their respective Properties, assets, income, or franchises (whether or not shown on any Tax Returns) have been
timely paid or, where payment is not yet due, GBCI has made an adequate provision for such Taxes in GBCIs financial statements (in accordance with GAAP). GBCI and its Subsidiaries have at all times withheld and paid each Tax required to have
been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting and backup withholding provisions of Law. There are
no Liens for Taxes upon the assets of GBCI or its Subsidiaries other than for current Taxes not yet due and payable or for Taxes that are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with
GAAP have been made in its financial statements. No deficiency for any amount of Taxes which has been proposed, asserted or assessed in writing by any taxing authority against GBCI or any of its Subsidiaries and received by GBCI or any of its
Subsidiaries remains unpaid. There are no waivers or extensions of any statute of limitations currently in effect with respect to Taxes of GBCI or any of its Subsidiaries. There are no audits, suits, proceedings, investigations, claims, examinations
or other administrative or judicial proceedings ongoing or pending with respect to any Taxes of GBCI or any of its Subsidiaries of which GBCI or any of its subsidiaries has received written notice. No claim has ever been made in writing received by
GBCI or any of its Subsidiaries by any taxing authority in a jurisdiction in which GBCI or any of its Subsidiaries do not or did not file Tax Returns that GBCI or any of its Subsidiaries is or may be subject to Tax in that jurisdiction.
3.2.7
Regulatory Matters
. Neither GBCI nor any of its Subsidiaries is, to the Knowledge of GBCI, in material
default or violation of any applicable Laws (including, without limitation, all Laws related to data protection or privacy, the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act,
the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, the Dodd-Frank Wall Street
Reform and Consumer Protection Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Real Estate Settlement Procedures Act and Regulation X, and any other Law relating to bank secrecy, discriminatory lending,
financing or leasing practices, money laundering prevention, and all requirements relating to the origination, sale and servicing of mortgage and consumer loans).
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Neither GBCI nor any of its Subsidiaries is a party to any cease and desist order, written agreement or memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of any extraordinary supervisory letter from, or has adopted any board resolutions that continue to be effective on or after the Execution Date at the request of, any
Governmental Entities, nor has it been advised by such Governmental Entities that they are contemplating issuing or requesting any such order, agreement, memorandum or similar document or undertaking.
3.2.8
Litigation
. Except as disclosed in GBCIs Reports, no material litigation, arbitration, proceeding,
or controversy before any Governmental Entity is pending, and there is no pending, or to the Knowledge of GBCI, threatened, litigation, arbitration, claim, action, investigation, or proceeding against GBCI or any of its Subsidiaries, which is
reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on GBCI or to materially hinder or delay consummation of the Merger.
3.2.9
No Material Adverse Effect
. Since December 31, 2016, (a) GBCI and its Subsidiaries have
conducted their respective businesses only in the ordinary and usual course of business, and (b) there has not been any change in the financial condition (which includes, without limitation, the condition of assets, franchises, results of
operations and prospects) that has had or may reasonably be expected to have a Material Adverse Effect on GBCI.
3.2.10
Completeness of Representations
. No representation or warranty made by or with respect to GBCI or its
Subsidiaries in this Agreement (or in the Schedules to this Agreement) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in this Agreement (or in such Schedules) or in such
representation or warranty not misleading. No investigation by IMB or the Bank of the business and affairs of GBCI and Glacier Bank will affect or be deemed to modify or waive any representation, warranty, or covenant in this Agreement.
ARTICLE 4
ADDITIONAL AGREEMENTS
4.1
Conduct of IMBs and the Banks Businesses Prior to Closing
. IMB and the Bank covenant that, from the Execution Date and prior to Closing:
4.1.1
Availability of Books, Records and Properties
.
(a) Upon reasonable prior written notice to IMB, subject to applicable Law, the books, records, Properties, contracts,
and documents of IMB, the Bank and First Security Insurance will be available at all reasonable times to GBCI and its counsel, accountants and other representatives. Such items will be open for inspection, audit and direct verification of loan or
deposit balances, collateral receipts and such other transactions or documentation as GBCI deems reasonably relevant to the Transaction. No disclosure or access shall be required to be provided where it would jeopardize the attorney-client privilege
or contravene any Law. IMB and the Bank will cooperate fully in such inspection and audit, and make available all information reasonably requested by or on behalf of GBCI.
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(b) Upon prior written reasonable request by GBCI, IMB and the Bank will
request that any third parties involved in the preparation or review of the IMB Financial Statements or Subsequent IMB Financial Statements disclose to GBCI the work papers or any similar materials related to such financial statements.
4.1.2
Ordinary and Usual Course
. Without prior written consent of GBCI (which consent shall not be unreasonably
withheld, conditioned, or delayed under subparagraphs (i), (j), and (l) below), subject to applicable Law and except as required by the FDIC or the Federal Reserve (so long as GBCI receives prior written notice of such required action), or
specifically contemplated by this Agreement, IMB and the Bank will conduct their respective business only in the ordinary and usual course and will not do, and IMB will not allow First Security Insurance to do, any of the following:
(a) (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 IMB Stock, or (ii) authorize or cause any additional shares of IMB Stock to become subject to new options, warrants, convertible securities of any kind, or other rights of any nature to acquire
or receive IMB Stock;
(b) directly or indirectly adjust, split, combine, redeem, reclassify, purchase, or
otherwise acquire, any shares of IMB Stock (other than repurchases in the ordinary course of business to satisfy obligations under a Plan);
(c) (i) effect any stock split or other recapitalization with respect to the shares of Bank common stock; or
(ii) issue, redeem, pledge, or encumber in any way any shares of Bank common stock;
(d) other than
(i) as permitted by this Agreement, or (ii) as otherwise consistent with past practices, declare or pay any dividend, or make any other distribution, either directly or indirectly, with respect to IMB Stock;
(e) acquire, sell, transfer, assign, encumber or otherwise dispose of any material assets having a value greater than
$100,000 or make any material commitment other than in the ordinary and usual course of business;
(f) solicit or
accept deposit accounts of a different type from accounts previously accepted by the Bank or at rates materially in excess of prevailing interest rates, or incur, or increase the principal amount of, any indebtedness for borrowed money (excluding
Fed Funds and Federal Home Loan Bank borrowings);
(g) offer or make loans or other extensions of credit of a
different type, or apply different underwriting standards, from those previously offered or applied by the Bank, or offer or make a new loan or extension of credit (other than with respect to commitments existing as of the date hereof) in an amount
greater than $2,000,000 without prior consultation with GBCI; which consultation will not be unreasonably withheld, conditioned, or delayed and approval for such will be deemed provided if GBCI has not responded to the Banks request within
three Business Days after GBCIs receipt of a complete loan package concerning the loan or extension of credit at issue;
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(h) make any negative provisions to the Banks ALLL or fail to
maintain an adequate reserve for loan and lease losses (determined in accordance with GAAP and existing regulatory guidance);
(i) acquire an ownership interest (except other real estate owned or other ownership interest acquired through
foreclosure with a value not exceeding $400,000) or leasehold interest in any real property, except real property disclosed in
Schedule
3.1.6
, and in the case of acquisition of an ownership interest, no such ownership shall
be acquired without making an appropriate environmental evaluation in advance of obtaining such interest and providing to GBCI such evaluation at least 30 days in advance of such acquisition;
(j) enter into, renew, or terminate any contracts calling for a payment by any of them of more than $50,000 (including
real property leases and data or item processing agreements) with or for a term of one year or more, except for its contracts of deposit and agreements to lend money not otherwise restricted under this Agreement and (i) entered into in the
ordinary course of business, consistent with past practices, and (ii) providing for not less (in the case of loans) or materially more (in the case of deposits) than prevailing market rates of interest;
(k) enter into or amend any contract (other than contracts for deposits or agreements to lend money not otherwise
restricted by this Agreement) calling for a payment by any of them of more than $50,000, unless the contract may be terminated without cause or penalty upon 30 days notice or less;
(l) enter into any personal services contract with any Person outside the ordinary course of business, except
contracts, agreements, or arrangements for legal, accounting, consulting, investment advisory, or tax services entered into to directly facilitate the Transaction;
(m) (i) sell any securities, whether held for investment or sale, other than in the ordinary course of business
or sell any securities, whether held for investment or sale, even in the ordinary course of business, if the aggregate gain or loss realized from all sales after the Execution Date would be more than $50,000 or (ii) transfer any investment
securities between portfolios of securities available for sale and portfolios of securities to be held to maturity;
(n) amend its articles of incorporation, bylaws, or other formation agreements, or convert its charter or form of
entity;
(o) implement or adopt any material changes in its operations, policies, or procedures, including loan
loss reserve policies, unless the changes are requested by GBCI or are necessary or advisable, on the advice of legal counsel, to comply with applicable laws, regulations, or regulatory policies;
(p) implement or adopt any change in its accounting principles, practices or methods, other than as may be required
(i) by GAAP, (ii) for Tax purposes, (iii) by Law, or (iv) to take advantage of any beneficial Tax or accounting methods;
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(q) other than in accordance with binding commitments existing on the
Execution Date, make any capital expenditures in excess of $50,000 per project or series of related projects or $100,000 in the aggregate except for emergency repairs or replacements;
(r) enter into any other material transaction or make any material expenditure other than in the ordinary and usual
course of its business except for expenses reasonably related to completion of the Transaction; or
(s) willfully
take any action which would materially and adversely affect or delay their ability or the ability of GBCI to obtain any necessary approvals, consents or waivers of any governmental authority required for the Merger or to perform in all material
respects their respective covenants and agreements under this Agreement.
4.1.3
IMB and Bank
Pre-Closing
Actions
. Following execution of this Agreement and prior to Closing, IMB or the Bank, as applicable, shall:
(a) Take all action necessary to satisfy any contractual notice or similar requirements under, and use their
respective commercially reasonable efforts to obtain any consents required by, the Material Contracts arising from the Transaction.
(b) Except as otherwise provided in this Agreement or identified in
Schedule
4.1.3(b)
,
(i) terminate or suspend by all necessary and appropriate actions of the boards of directors of IMB and the Bank, as applicable, such Compensation Plans maintained by IMB, the Bank, or First Security Insurance as may be requested by GBCI in
connection with the Closing (after satisfaction or waiver of all Closing conditions), and (ii) if requested by GBCI, cause benefit accruals and entitlements under such Plans to cease as of the Effective Time and shall cause the cancellation on
and after the Effective Time of any contract, arrangement or insurance policy relating to any such Plan for such period as may be requested by GBCI. To the extent not included in the Final Transaction Related Expenses, IMB and the Bank shall, prior
to the date of calculation of IMB Closing Capital, pay, provide for the payment of, or reflect as a liability any
change-in-control,
true-up,
deficiency, or similar payments required to be made under, or upon termination of, the Compensation Plans or closing of the Transaction. All resolutions, notices, or other documents issued, adopted or
executed by IMB or the Bank in connection with the implementation of this Section 4.1.3(b) shall be subject to GBCIs reasonable prior review and approval, which approval shall not be unreasonably withheld or delayed.
(c) Take such corporate action as may be reasonably requested by GBCI in connection with the termination (if the IMB
401(k) Plan is not deemed eligible to be merged with GBCIs 401(k) Plan as contemplated by the next sentence) or merger of the IMB 401(k) Plan. GBCI shall take all reasonable action necessary to merge the IMB 401(k) Plan with GBCIs 401(k)
Plan as soon as is administratively possible, assuming the IMB 401(k) Plan is deemed eligible to be merged, or to otherwise permit current Employees who continue employment with GBCI or any of its Subsidiaries after the Effective Time to roll over
any eligible rollover distributions (within the meaning of Section 401(a)(31) of the IRC, inclusive of loans) in cash or notes (in the case of loans) in an amount equal to the full account balance distributed to any such continuing Employee
from the IMB 401(k) Plan to GBCIs 401(k) Plan.
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(d) Satisfy the notice and consent requirements under IRC
Section 101(j) with respect to any Bank Owned Life Insurance policies or similar plans and related agreements.
(e) Take such corporate or other actions as may be required or appropriate to terminate the IMB Shareholder Agreement
and to ensure that such agreement is not applicable to the Transaction.
(f) Take such corporate or other actions
as may be necessary or appropriate to dissolve First Security Insurance and in connection therewith assign its rights and obligations to IMB, to be effective as of the Effective Date.
(g) Cooperate withand support using commercially reasonable effortsGlacier Bank in its efforts to secure
employment or similar agreements with key employees of the Bank as may be reasonably identified by Glacier Bank on such terms as Glacier Bank and such key employees may agree.
4.1.4
Maintenance of Properties
. IMB and the Bank will in all material respects maintain their respective
Properties and equipment (and related insurance or its equivalent) in accordance with good business practice, normal wear and tear excepted.
4.1.5
Preservation of Business Organization
. Each of IMB and the Bank will use its commercially reasonable
efforts to: (a) preserve its respective business organization; (b) retain the services of management and current Employees; and (c) preserve the goodwill of suppliers, customers and others with whom IMB and the Bank have business
relations.
4.1.6
Senior Management
. Except as otherwise provided in this Agreement and excluding
resignations, without prior consultation with GBCI, which consultation will not be unreasonably withheld, conditioned, or delayed and approval for such will be deemed provided if GBCI has not responded to the Banks request within three
Business Days after GBCIs receipt of a written request for consultation, IMB and the Bank will not make any change with respect to present management personnel having the rank of senior vice-president or higher.
4.1.7
Compensation
. IMB and the Bank will not permit any increase in the current or deferred compensation
payable or to become payable by IMB, the Bank or First Security Insurance to any of its directors, officers, Employees, agents or consultants other than normal increases in compensation in accordance with IMBs and the Banks established
policies and practices with respect to the timing and amounts of such increases. Without the prior written approval of GBCI, IMB, the Bank, and First Security Insurance will not commit to, or enter into, any employment agreement with any individual
not terminable without expense with two weeks notice or less, except as otherwise required by Law.
4.1.8
Updates of Financial Statements
. IMB will deliver to GBCI Subsequent Bank Financial Statements
(a) for each month ending after the Execution Date and before Closing or the Termination Date, as the case may be, within 15 days after each such
month-end
and (b) for any fiscal year ending
after the Execution Date and before Closing or the Termination Date, as the case may be, within 90 days after the end of the 2017 fiscal year. The Subsequent IMB Financial Statements: (w) will be prepared from the books and records of IMB
and the
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Bank; (x) will present fairly the financial position and operating results of IMB and/or the Bank at the times indicated and for the periods covered; (y) will be prepared in accordance
with GAAP (except for the absence of notes and exceptions from GAAP identified in Section 3.1.5) and with the regulations promulgated by applicable regulatory authorities, to the extent then applicable; and (z) will reflect all
liabilities, of IMB and/or the Bank on the respective dates and for the respective periods covered, except for liabilities: (i) not required to be so reflected on the face of a balance sheet in accordance with GAAP or (ii) not significant
in amount. All contingent liabilities known to IMB that are required to be reflected in footnotes in accordance with GAAP but not recorded on the Subsequent IMB Financial Statements will be disclosed in writing to GBCI.
4.1.9
Update Schedules
. From the Execution Date until Closing, IMB will promptly revise and supplement the
Schedules to this Agreement prepared by or on behalf of IMB or the Bank to enable such Schedules to remain accurate and complete in all material respects. Notwithstanding anything to the contrary contained herein, supplementation of such Schedules
following the execution of this Agreement will not be deemed a modification of IMBs representations or warranties contained in this Agreement, except as agreed to in writing by the parties.
4.1.10
Acquisition Proposal
. IMB and the Bank will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons conducted heretofore with respect to any Acquisition Proposal (defined below). IMB agrees that neither it nor any of its Subsidiaries will, and IMB will direct and use its best efforts to
cause its and its Subsidiaries directors, officers, employees, agents and representatives (including, without limitation, any investment banker, attorney or accountant retained by it or any of its Subsidiaries) not to, initiate, solicit,
encourage or take any other action to facilitate any inquiries or the making of any proposal or offer (including, without limitation, any proposal or offer to shareholders of IMB) with respect to an Acquisition Event (any such proposal or offer
being hereinafter referred to as an
Acquisition Proposal
) or engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any Person relating to an Acquisition Proposal,
or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal; except that, in the event IMB receives an unsolicited bona fide Acquisition Proposal and the board of directors of IMB determines prior to approval of the
Transaction by IMBs shareholders, in good faith, that (a) such proposal constitutes a Superior Proposal, and (b) fiduciary duties applicable to it require it to engage in negotiations with, or provide confidential information or data
to, a Person in connection with such Acquisition Proposal, IMB may do so to the extent required by its fiduciary duties. In such event, prior to providing any confidential information or data to any such Person, IMB and such Person shall have
executed a confidentiality agreement on terms at least as favorable to IMB as those contained in its confidentiality agreement with GBCI. IMB will further notify GBCI in writing immediately (and in any event within two Business Days) if any such
inquiries or proposals are received by, any such information is requested from, or any such negotiations are sought to be initiated or continued with IMB, or if any such inquiry, proposal or request is thereafter materially modified or amended,
including providing to GBCI the material terms and conditions of any such proposal or inquiry in connection with each required notice, together with a copy of any written proposals received. IMB will take the necessary steps to inform the
appropriate individuals or entities referred to in the first sentence hereof of the obligations undertaken in this Section 4.1.10.
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4.1.11
Status of Title/Leasehold Interests
. IMB will use its
commercially reasonable efforts to provide GBCI, no later than 30 days after the Execution Date, title commitments for the Real Property issued by title insurance companies reasonably satisfactory to the parties (the
Title
Companies
), the cost of which shall be paid by IMB and included as, and in the calculation of, Transaction Related Expenses. These title commitments must show the current status of title to the Real Property. Within 30 days after the
date on which IMB delivers all of the title commitments to GBCI for its review, GBCI will inform IMB in writing whether, and in what manner, it objects to any of the exceptions to title shown on any of the title commitments (
Objection
Notice
). If GBCI provides an Objection Notice, GBCI will be deemed to have waived any exceptions or objections to title with respect to which it has not timely provided an Objection Notice. IMB will, within 20 days of the date on
which it receives the written Objection Notice from GBCI, inform GBCI if there are any objections that it is unable or unwilling to remove, cure, or endorse over at or prior to Closing (the
Response Notice
). If no Response Notice
is given within such period, IMB will be deemed to have agreed to remove, cure, or endorse over any of the matters set forth in the Objection Notice. IMB will not, in any event, be obligated to seek removal, cure of, or endorsement over exceptions
that are
(a) non-monetary
exceptions that do not prohibit or materially interfere with the use of the Properties as bank branch locations or as otherwise used by IMB or the Bank as of the Execution Date,
(b) monetary or
non-monetary
exceptions disclosed in
Schedule
3.1.6
or in the IMB Financial Statements, or (c) matters that GBCI has not taken objection to in the Objection
Notice (such title exceptions,
Permitted Exceptions
). IMB will in good faith use commercially reasonable efforts to remove, cure, or endorse over any matters set forth in the Response Notice that are not Permitted Exceptions that
are susceptible to cure. At Closing, if requested by GBCI, IMB will cause the Title Companies to provide GBCI with standard coverage title insurance policies issued with respect to each of the Properties owned in fee by IMB, in an amount
commensurate with the value of each such Property as agreed upon by GBCI and IMB, dated as of the Effective Date, insuring fee title in GBCI or such subsidiary of GBCI, as so designated by GBCI, and that each such Real Property is unencumbered by
any Liens, other than the Permitted Exceptions.
4.1.12
Directors and Officers Liability
. Before
the Effective Date, IMB will notify its directors and officers liability insurers of the Merger and of all pending or, to the Knowledge of IMB, threatened claims, actions, suits, proceedings or investigations asserted or claimed against
any Person entitled to indemnification pursuant to Section 6.3 and known to IMB, or circumstances reasonably deemed by GBCI to be likely to give rise thereto, in accordance with terms and conditions of the applicable policies.
4.1.13
Review of Loans
. IMB and the Bank will permit GBCI and its advisors, at GBCIs sole cost and
expense, to conduct an examination of the Banks loans to determine credit quality and the adequacy of the Banks ALLL and to establish appropriate accounting adjustments under FAS141R. GBCI and its advisors will have continued access to
the Banks loans through Closing to update its examination. At GBCIs reasonable request, the Bank will provide GBCI with current reports updating the information set forth in
Schedule
3.1.15
.
4.1.14
Continuing Representation and Warranty
. Neither IMB nor any of its Subsidiaries will do or cause to be
done anything that would cause any representation or warranty made by it in this Agreement to be untrue or inaccurate if made at Closing, except as otherwise contemplated or required by this Agreement or consented to in writing by GBCI.
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4.2
Registration Statemen
t; IMB
Shareholders Meeting
.
4.2.1
Preparation of Registration Statement
.
(a) GBCI will use its commercially reasonable efforts to prepare and file a Registration Statement on
Form S-4
(together with any amendments or supplements, the
Registration Statement
) with the SEC within 45 days after the Execution Date for registration of the GBCI Shares to be issued
in the Merger, and the parties will prepare a related prospectus/proxy statement (
Prospectus/Proxy Statement
) to be mailed, together with any amendments and supplements thereto, to IMBs shareholders.
(b) The parties will cooperate with each other in preparing the Registration Statement and Prospectus/Proxy Statement,
and will use their commercially reasonable efforts to obtain the clearance of the SEC, if required, any appropriate state securities regulators and any other required regulatory approvals, to issue the Prospectus/Proxy Statement.
(c) Nothing will be included in the Registration Statement or the Prospectus/Proxy Statement or any proxy solicitation
materials with respect to any party to this Agreement unless approved by that party, which approval will not be unreasonably withheld, conditioned, or delayed. When the Registration Statement becomes effective, and at all times subsequent to such
effectiveness (up to and including the date of the IMB Meeting), all information set forth in the Registration Statement that is or to be furnished by or on behalf of GBCI relating to GBCI and its Subsidiaries and by or on behalf of IMB relating to
IMB and the Bank, (i) will comply in all material respects with the provisions of the Securities Act and any other applicable statutory or regulatory requirements, and (ii) will not contain any untrue statement of a material fact or omit
to state a material fact that is required to be stated or necessary to make the statements in the Registration Statement not misleading; provided, however, that in no event will any party be liable for any untrue statement of a material fact or
omission to state a material fact in the Registration Statement where such statement or omission, as the case may be, was made in reliance upon, and in conformity with, written information concerning another party furnished by or on behalf of such
other party specifically for use in the Registration Statement.
(d) GBCI will pay all fees and costs associated
with the preparation by GBCIs counsel (and other professional advisors) and the filing of the Registration Statement. IMB will pay all fees and costs associated with its review and preparation of the Registration Statement and the
Prospectus/Proxy Statement, with all such fees and costs to be included as and in the calculation of Transaction Related Expenses. IMB will pay the costs associated with the printing and mailing of the Prospectus/Proxy Statement to its shareholders
and any other direct costs incurred by it in connection with the Prospectus/Proxy Statement, with all such costs to be included as and in the calculation of Transaction Related Expenses.
4.2.2
Submission to Shareholders
. IMB will promptly take the actions necessary in accordance with applicable law
and its articles of incorporation and bylaws to
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convene a shareholders meeting to consider the approval of this Agreement and to authorize the transactions contemplated by this Agreement (such meeting and any adjournment or postponement
thereof, the
IMB Meeting
). The IMB Meeting will be held on the earliest practical date after the date the Prospectus/Proxy Statement may first be sent to IMBs shareholders without objection by applicable governmental
authorities. The board of directors of IMB has adopted a resolution recommending approval of this Agreement by IMBs shareholders, and it shall not withdraw, modify, or qualify its recommendation unless, subsequent to the Execution Date, IMB
receives a Superior Proposal and the board of directors of IMB determines, in good faith and after consultation with independent legal counsel, that it would be inconsistent with its fiduciary duties not to withdraw, modify, or qualify such
recommendation. IMB shall use its commercially reasonable efforts to obtain from the shareholders of IMB approval of the Transaction in accordance with Montana law, including (except as provided in the preceding sentence) by communicating to its
shareholders its recommendation (and including such recommendation in the Prospectus/Proxy Statement) that they approve this Agreement and the Transactions. IMB shall adjourn or postpone the IMB Meeting if, as of the time for which such meeting is
originally scheduled, there are insufficient shares of IMB Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such meeting, or if, on the date of such IMB Meeting, (a) IMB has not
received proxies representing a sufficient number of shares necessary to obtain the required approval of the Transaction by IMBs shareholders and such approval remains possible to obtain and (b) the shareholders of IMB have authorized by
the requisite vote under Montana law the adjournment pursuant to the Prospectus/Proxy Statement.
4.3
Submission to Regulatory Authorities
. GBCI will use its commercially
reasonable efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, and to obtain all permits, approvals, consents, authorizations, waivers, clearances, and orders of Governmental
Entities necessary or advisable, in the opinion of GBCIs counsel, to consummate the Transaction (the
Requisite Regulatory Approvals
), and to comply with the terms and conditions of all Requisite Regulatory Approvals,
and to obtain as promptly as practicable all consents of third parties which are necessary or advisable to consummate the Transaction. GBCI will provide copies of such applications for review by IMB prior to their submission to the applicable
Governmental Entities. These applications are expected to include: (a) an interagency bank merger application to be filed with the FDIC and a waiver to be sought from, or application to be filed with, the Federal Reserve with respect to the
Merger; (b) an application to the Commissioner of the Montana Division and related filings regarding the Transaction; and (c) filings and coordination with the offices, of the Secretary of State of Montana with respect to the Merger and
the Bank Merger. IMB and the Bank will cooperate and use commercially reasonable efforts to prepare all documentation, timely effect all filings and obtain, and to assist GBCI in obtaining, all Requisite Regulatory Approvals. IMB and the Bank shall,
upon request, furnish GBCI with all information concerning itself, and its directors, officers, and shareholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice, or application made
by or on behalf of GBCI, Glacier Bank, IMB, or the Bank to any third party or Governmental Entity in connection with the Transaction.
4.4
Public Announcements
. Subject to written advice of legal counsel with respect to legal requirements relating to public disclosure of matters related to the subject matter of this
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Agreement, the timing and content of any announcements, press releases or other public statements concerning the Merger will occur upon, and be determined by, the mutual consent of IMB and GBCI.
4.5
Consents
. Each party to this Agreement will use its commercially
reasonable efforts to obtain the timely consent or approval of any other Person whose consent or approval is necessary or appropriate in order to permit GBCI or IMB and Glacier Bank or the Bank to consummate the Merger or the Bank Merger.
4.6
Further Actions
. The parties to this Agreement will use their commercially
reasonable efforts in good faith to make all such arrangements, do or cause to be done all such acts and things, and execute and deliver all such certificates and other instruments and documents as may be reasonably necessary or appropriate in order
to consummate the Transaction promptly.
4.7
Transition
. During the period
from the Execution Date to the Effective Time, IMB and the Bank shall cause one or more of their respective representatives to confer with representatives of GBCI and Glacier Bank and report the general status of their ongoing operations at such
times as GBCI and Glacier Bank may reasonably request. Representatives of GBCI, Glacier Bank, IMB, and the Bank shall also meet as requested by or on behalf of GBCI to discuss and plan for the conversion of the Banks data processing and
related electronic informational systems to those used by GBCI and Glacier Bank, which planning shall include, but not be limited to, discussion of the possible termination by the Bank of third-party service provider arrangements effective at the
Effective Time or at a date thereafter,
non-renewal
of personal property leases and software licenses used by the Bank in connection with its systems operations, retention of outside consultants and additional
employees to assist with the conversion, and outsourcing, as appropriate, of proprietary or self-provided system services, it being understood that neither IMB nor the Bank shall be obligated to take any such action prior to the Effective Time and,
unless IMB and the Bank otherwise agree, no conversion shall take place prior to the Effective Time; provided, however, no such request by or behalf of GBCI or Glacier Bank shall interfere materially with the performance of duties by any employee of
IMB or the Bank.
4.8
Notice
. The parties will provide each other with prompt
written notice of:
4.8.1 Any events that, individually or in the aggregate, can reasonably be expected to have a
Material Adverse Effect with respect to them.
4.8.2 The commencement of any proceeding against any one or more of
them by or before any Governmental Entity that, individually or in the aggregate, can reasonably be expected to have a Material Adverse Effect with respect to any one or more of them.
4.8.3 In the case of IMB and its Subsidiaries, the acquisition of a fee ownership or leasehold interest in any real
property (except as disclosed in
Schedule
3.1.6
), as specified in Section
4.1.2.
4.9
Confidentiality
. Subject to the requirements of law, each party
will keep confidential, and will exercise its best efforts to cause its representatives to keep confidential, all
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information and documents obtained pursuant to this Agreement unless such information (a) is required by Law to be disclosed, (b) becomes available to such party from other sources not
bound by a confidentiality obligation, (c) is disclosed with prior written approval of the party to which such information pertains or is disclosed in a legal action between the parties relating to this Agreement or the Transaction, or
(d) is or becomes public without fault of the subject party. If this Agreement is terminated or the Merger otherwise fails to be consummated, each party to this Agreement will promptly (i) return to the other, or certify as to their
destruction, at the recipients option, all confidential documents obtained from them, provided that each party may retain one copy of such confidential documents for evidentiary purposes; and (ii) not use or disclose any nonpublic
information obtained under or in connection with this Agreement or in connection with the Transaction.
4.10
Availability of GBCIs Books, Records, and Properties
. GBCI will make
its books, records, Properties, contracts, and documents available during business hours with reasonable advance notice to IMB and its counsel, accountants and other representatives. These items will be open for inspection, audit and direct
verification of loan or deposit balances and collateral receipts. GBCI will cooperate fully in any such inspection, audit, or direct verification procedures, and will make available all information reasonably required by or on behalf of IMB.
4.11
Blue Sky Filings
. GBCI will use its best efforts to obtain, prior to the
effective date of the Registration Statement, any necessary state securities laws or Blue Sky permits and approvals.
4.12
Tax
Matters
.
4.12.1
Tax Treatment
. Neither GBCI and its
Subsidiaries nor IMB and the Bank will take or cause to be taken any action that would or could reasonably be expected to prevent the Transaction from qualifying as a reorganization under IRC Section 368(a), other than treating any cash paid,
whether for fractional shares, Dissenting Shares, or otherwise, as taxable.
4.12.2
Maintenance of
S-corporation
Status
. Neither IMB nor any of its Subsidiaries will (a) revoke IMBs election to be taxed as an
S-corporation
within the meaning of IRC
Section 1361 and IRC Section 1362 or (b) revoke the Banks or First Security Insurances status as a qualified subchapter S subsidiary within the meaning of IRC Section 1361(b)(3)(B), and neither GBCI
nor any of its Subsidiaries will take any action after the Effective Time to retroactively revoke such election. Other than the Transaction, neither IMB nor any of its Subsidiaries will take any action or allow any action that (x) would cause
IMB to no longer be treated as an
S-corporation
within the meaning of IRC Section 1361 and IRC Section 1362 or (y) would cause the Bank or First Security Insurance to no longer be treated as a
qualified subchapter S subsidiary within the meaning of IRC Section 1361(b)(3)(B).
4.12.3
Tax Returns
.
(a) During the period from the date of this Agreement to the Effective Time, IMB and each of its Subsidiaries will
prepare and timely file, or cause to be prepared and timely filed, all Tax Returns required to be filed during such period (after taking into account any extensions) (each, a
Post-Signing Return
) by each such entity, and will
timely pay all Taxes
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that are due and payable during such period with respect to any such Post-Signing Return. All Post-Signing Returns filed by IMB and its Subsidiaries will be true, correct, and complete in all
material respects and, except as otherwise required by Law, shall be prepared on a basis consistent with the past practice of IMB. IMB will provide copies of any Post-Signing Return to GBCI at least 20 days prior to the date on which such
return will be filed for reasonable review and comment by GBCI, and if reasonably desired by GBCI, consultation with GBCI. During such period, GBCI and each of its Subsidiaries will prepare and timely file, or cause to be prepared and timely filed,
all Post-Signing Returns required to be filed by each such entity and will timely pay all Taxes that are due and payable during such period with respect to any such Post-Signing Return. All Post-Signing Returns filed by GBCI and its Subsidiaries
will be true, correct, and complete in all material respects and, except as otherwise required by Law, shall be prepared on a basis consistent with the past practice of GBCI.
(b) GBCI will engage IMBs independent accountants to prepare and timely file, or cause to be prepared and timely
filed, all Tax Returns required to be filed by IMB or any of its Subsidiaries due after the Effective Time but related to the period prior to the Effective Date. All such Tax Returns will, except as otherwise required by Law or as recommended by the
independent accountant, be prepared on a basis consistent with the past practice of IMB.
4.13
IMB Closing Capital
. No earlier than the 15
th
Business Day prior to Closing nor later than the 10
th
Business Day before such Closing, IMB shall calculate in good faith and provide to
GBCI the estimated IMB Capital as of Closing and shall provide GBCI with a copy of the proposed Subsequent Bank Financial Statements for the month preceding the date of calculation (if not already provided in accordance with Section 4.1.8),
together with internally prepared financial statements through the date of calculation, estimated retained earnings through the date of Closing, the impact of any pending adjustments required in the calculation of the IMB Capital, and any other
documentation reasonably requested by GBCI for purposes of confirming the amount of such IMB Capital. GBCI shall review such materials and, within three Business Days following receipt thereof, notify IMB as to whether GBCI accepts or disputes the
amount of the IMB Capital. If GBCI disputes such calculation in good faith, it shall describe in its notice its specific requested changes or adjustments. If GBCI and IMB are unable to resolve such dispute through good faith negotiations within
three Business Days after delivery of GBCIs notice of objection, then the parties shall mutually engage and submit such dispute to, and the same shall be finally resolved by, an accounting firm that is mutually and reasonably acceptable to the
parties (the
Independent Accountants
). The Independent Accountants shall review the matter in dispute and, solely as to disputes relating to accounting issues and acting as an expert and not as an arbitrator, determine and report
in writing to GBCI and IMB the resolution of such disputed matters and the effect of such determinations on the calculation of the IMB Capital as of Closing, and such determinations shall be final, binding and conclusive unless GBCI and IMB mutually
agree upon a different amount. The IMB Capital as of Closing, as determined and agreed upon in writing by GBCI and IMB in accordance with this Section 4.13, is the
IMB Closing Capital
. The fees and disbursements of the
Independent Accountants pursuant to this Section 4.13 and Section 4.14 below shall be shared equally by GBCI, on the one hand, and IMB, on the other hand, and IMBs portion shall be an expense in the calculation of the IMB Closing
Capital.
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4.14
Transaction Related Expenses
.
No earlier than the 15
th
Business Day prior to Closing nor later than the 10
th
Business Day before such Closing, IMB shall calculate in good
faith the estimated Transaction Related Expenses as of the Closing and shall provide GBCI with a copy of a schedule in the form of
Exhibit
B
detailing each Transaction Related Expense and any other documentation reasonably
requested by GBCI for purposes of confirming the amount of such Transaction Related Expenses. GBCI shall review such materials and, within three Business Days following receipt thereof, notify IMB as to whether GBCI accepts or disputes the amount of
the Transaction Related Expenses. If GBCI disputes such calculation in good faith, it shall describe in its notice its specific requested changes or adjustments. If GBCI and IMB are unable to resolve such dispute through good faith negotiations
within three Business Days after delivery of GBCIs notice of objection, then the parties shall mutually engage and submit such dispute to, and the same shall be finally resolved by the Independent Accountants in accordance with the process set
forth in Section 4.13. The Transaction Related Expenses as of Closing, as determined and agreed upon in writing by GBCI and IMB in accordance with this Section 4.14, are the
Final Transaction Related Expenses
.
4.15
Payment of Dividend
. To the extent the IMB Closing Capital exceeds the
Closing Capital Requirement after making all adjustments required by the terms of this Agreement (including, without limitation in the event the Final Transaction Related Expenses exceed the Maximum Transaction Related Expenses), IMB may, upon prior
written notice to GBCI and effective immediately prior to the Effective Time, declare and pay a special dividend to its shareholders in the amount equal to the positive Closing Capital Differential; provided, however, that the amount of such
dividend may be limited to the extent necessary to cause the Merger to effect a transfer of substantially all of the properties of IMB and the Bank within the meaning of IRC Section 368(a)(2)(D), as determined in the reasonable
discretion of GBCI in consultation with its tax counsel and after consultation with IMB and its tax counsel.
4.16
Commercially
Reasonable Efforts
. Subject to the terms and conditions
of this Agreement, each party will use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable laws, so as to permit
consummation of the Merger on February 28, 2018; and in any case, as soon as reasonably practicable thereafter, and to otherwise enable consummation of the transactions contemplated by this Agreement, subject to any delays resulting from SEC
review or bank regulatory processing.
4.17
Listing
. GBCI will use its
commercially reasonable efforts to cause the GBCI Shares to be authorized for listing on the NASDAQ Global Select Market, subject to official notice of issuance, prior to the Effective Time.
4.18
GBCI Common Stock Issuable in Merger
. The shares of GBCI Common Stock to be
issued pursuant to this Agreement, when issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and
non-assessable
and subject to no preemptive rights.
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ARTICLE 5
APPROVALS AND CONDITIONS
5.1
Required Approvals
. The obligations of the parties to this Agreement are
subject to the approval of this Agreement and the Transaction by all appropriate Governmental Entities having jurisdiction with respect thereto; provided, however, that no such consent or approval will have imposed any condition or requirement not
normally imposed in such transactions that, in the commercially reasonable opinion of GBCI, would deprive GBCI of the economic or business benefits of the Transaction.
5.2
Conditions to Obligations of GBCI
. All obligations of GBCI pursuant to this
Agreement are subject to satisfaction of the following conditions at or before Closing:
5.2.1
Representations
and Warranties
. The representations and warranties of IMB and the Bank contained in this Agreement or in any certificate or other instrument delivered in connection with this Agreement that are not qualified as to materiality will be true and
correct in all material respects at Closing, and the representations and warranties of IMB and the Bank contained in this Agreement or in any certificate or other instrument delivered in connection with this Agreement that are qualified as to
materiality will be true and correct at Closing, all with the same force and effect as though such representations and warranties had been made on and as of Closing (except to the extent that such representations and warranties are by their express
provisions made as of a specified date, in which case such representations and warranties will be true and correct in all material respects or true and correct, as the case may be, as of such date). IMB and the Bank will have delivered to GBCI a
certificate to that effect, executed by a duly authorized officer of IMB and the Bank and dated as of Closing.
5.2.2
Compliance
. IMB will have performed and complied, and will have caused the Bank to perform and comply, in
all material respects with all terms, covenants and conditions of this Agreement on or before Closing. IMB will have delivered to GBCI a certificate to that effect, executed by a duly authorized officer of IMB and dated as of Closing.
5.2.3
Continued Effectiveness of Agreements
.
(a) Agreements entered into as described in Recital E shall continue in full force and effect.
(b) The individuals listed on
Schedule
5.2.3(b)
shall have entered into agreements with GBCI
or Glacier Bank as described in Recital F and such agreements shall continue in full force and effect.
5.2.4
Closing Capital and Financial Statements
. IMB will have delivered to GBCI the financial information set
forth in Section 4.13, and the parties will have agreed upon the amount of IMB Closing Capital pursuant to the terms of Section 4.13.
5.2.5
Transaction Related Expenses
. IMB will have delivered to GBCI the information set forth in
Section 4.14, and the parties will have agreed upon the amount of Final Transaction Related Expenses pursuant to the terms of Section 4.14.
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5.2.6
No Material Adverse Effect
. Since December 31, 2016,
there will have been no material damage, destruction, or loss (whether or not covered by insurance) and no other event, individually or in the aggregate, constituting a Material Adverse Effect with respect to IMB or the commencement of any
proceeding against IMB or the Bank that, individually or in the aggregate, is reasonably expected to have a Material Adverse Effect with respect to IMB.
5.2.7
Financial Condition
. In the opinion of the Executive Officers of IMB and the Bank, the Banks ALLL is
adequate to absorb the Banks anticipated loan losses.
5.2.8
No Governmental Proceedings
. No action or
proceeding will have been commenced or threatened by any governmental agency to restrain or prohibit or invalidate the Merger.
5.2.9
Tax Opinion
. GBCI will have obtained from Garlington, Lohn & Robinson, PLLP, and delivered to
IMB, an opinion addressed to IMB and GBCI (subject to reasonable limitations, conditions and assumptions) to the effect that on the basis of facts, representations and assumptions set forth in such opinion, each of the Merger and the Bank Merger
will be a reorganization within the meaning of IRC Section 368(a).
5.2.10
Real Property Matters
. GBCI
will have received the irrevocable commitments by the Title Companies to issue the policies required under Section 4.1.11.
5.2.11
Corporate and Shareholder Action
. Each of the following will have approved or ratified the Merger or the
Bank Merger, as applicable:
(a) The boards of directors of IMB and the Bank;
(b) IMB, as sole shareholder of the Bank; and
(c) The shareholders of IMB.
5.2.12
Resignation of Directors
. The directors of IMB and the Bank will have tendered their written resignations
from the respective board of directors, to be effective upon consummation of the Merger or the Bank Merger, as applicable.
5.2.13
Fairness Opinion
. IMB has received a fairness opinion from ProBank Austin (the
Fairness
Opinion
), to the effect that the Merger Consideration to be received by IMB shareholders is fair to such shareholders from a financial point of view, and the Fairness Opinion has not been modified or withdrawn.
5.2.14
Registration Statement
. The Registration Statement, as it may have been amended, required in connection
with the GBCI Shares, and as described in Section 4.2, will have become effective, and no stop order suspending the effectiveness of such Registration Statement will have been issued or remain in effect, and no proceedings for that purpose will
have been initiated or threatened by the SEC, the basis for which still exists.
5.2.15
No Change in Loan
Review
. IMB will have provided to GBCI the reports reasonably requested by GBCI under Section 4.1.13, and neither these reports nor any
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examinations conducted by GBCI under Section 4.1.13 will have revealed a material adverse change in either: (a) the information set forth in
Schedule
3.1.15
or
(b) information revealed during GBCIs previous examinations of the Banks loans.
5.2.16
Loan
Payoff
. IMB shall have provided to GBCI a payoff letter from its lender holding a lien on the common stock of the Bank in form and substance reasonably acceptable to GBCI that reflects the amount to be paid at Closing in order to secure the
release of such existing lien, and GBCI shall be reasonably satisfied that, upon funding of the payoff amount, such lien will be released no later than Closing.
5.3
Conditions to Obligations of IMB
. All obligations of IMB pursuant to this
Agreement are subject to satisfaction of the following conditions at or before Closing:
5.3.1
Representations
and Warranties
. The representations and warranties of GBCI and Glacier Bank contained in this Agreement or in any certificate or other instrument delivered in connection with this Agreement that are not qualified as to materiality will be true
and correct in all material respects at Closing, and the representations and warranties of GBCI and Glacier Bank contained in this Agreement or in any certificate or other instrument delivered in connection with this Agreement that are qualified as
to materiality will be true and correct at Closing, all with the same force and effect as though such representations and warranties had been made on and as of Closing (except to the extent that such representations and warranties are by their
express provisions made as of a specified date, in which case such representations and warranties will be true and correct in all material respects or true and correct, as the case may be, as of such date). GBCI and Glacier Bank will have delivered
to IMB a certificate to that effect, executed by a duly authorized officer of GBCI and Glacier Bank and dated as of Closing.
5.3.2
Compliance
. GBCI and Glacier Bank will have performed and complied, in all material respects, with all
terms, covenants and conditions of this Agreement on or before Closing. GBCI and Glacier Bank will have delivered to IMB a certificate to that effect, executed by a duly authorized officer of GBCI and Glacier Bank and dated as of Closing.
5.3.3
No Governmental Proceedings
. No action or proceeding will have been commenced or threatened by any
governmental agency to restrain or prohibit or invalidate the Merger.
5.3.4
No Material Adverse Effect
.
Since December 31, 2016, (a) there will have been no material damage, destruction or loss (whether or not covered by insurance) and no other event, individually or in the aggregate, constituting a Material Adverse Effect with respect to
GBCI, or (b) the commencement of any proceeding against GBCI or any of its Subsidiaries that, individually or in the aggregate, can reasonably be expected to have a Material Adverse Effect with respect to GBCI.
5.3.5
Corporate Action
. Each of (a) the board of directors of GBCI, (b) GBCI, as the sole shareholder
of Glacier Bank, and (c) Glacier Bank will have approved the Merger or the Bank Merger, as applicable.
5.3.6
Registration Statement; Listing
. The Registration Statement will have become effective as specified in
Section 5.2.14, and no stop order suspending the effectiveness
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of such Registration Statement will have been issued or remain in effect, and no proceedings for that purpose will have been initiated or threatened by the SEC, the basis for which still exists.
The GBCI Shares shall have been approved for listing on the NASDAQ Global Select Market (or such other exchange on which the GBCI Common Stock may become listed) if so required and shall be freely tradable.
5.3.7
Blue Sky Filings
. GBCI will have received any required state securities laws or Blue Sky
permits and approvals specified in Section 4.11.
5.3.8
Payments to the Exchange Agent
. GBCI will have
deposited the Exchange Fund with the Exchange Agent.
5.3.9
Approval of IMB Shareholders
. The shareholders
of IMB will have approved this Agreement and the Merger by the requisite vote under Montana law and IMBs articles of incorporation, as applicable.
5.3.10
Tax Opinion
. The tax opinion specified in Section 5.2.9 shall have been delivered to IMB in form and
substance reasonably acceptable to IMB and its advisors.
ARTICLE 6
DIRECTORS, OFFICERS AND EMPLOYEES
6.1
Director and Shareholder Agreements
. As a condition to the execution of this
Agreement, the directors and principal shareholders described in Recital E have entered into the written agreements described in Recital E on or before the Execution Date. Such agreements will take effect at the Effective Date unless
otherwise noted in the applicable agreement.
6.2
Employee Benefit Issues
.
6.2.1
Comparability of Benefits
. GBCIs and Glacier Banks personnel policies will apply to any
current Employees who are retained after the Effective Time. Such retained employees will be eligible to participate in all of the benefit plans of GBCI that are generally available to similarly situated employees of GBCI and/or Glacier Bank in
accordance with and subject to the terms of such plans.
6.2.2
Treatment of Past Service
. For purposes of
such participation, current Employees prior service with IMB and/or the Bank will constitute prior service with GBCI or Glacier Bank for purposes of determining eligibility and vesting (including but not limited to vacation time and
participation and benefits under the applicable GBCI or Glacier Bank severance plan for Employees in effect at the time of any termination).
6.2.3
No Contract Created
. Nothing in this Agreement will give any Employee a right to employment or continuing
employment.
6.2.4
Severance
Eligibility
. Any current Employees (a) who are not entitled to
severance, change in control, or other payments at or in connection with Closing under the Compensation Plans set forth in
Schedule
3.1.18
or otherwise or (b) who are so entitled but are
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listed on
Schedule
6.2.4
and are not offered a position by GBCI or retained by Glacier Bank following the Closing will receive severance payments in accordance with
Glacier Banks severance policy in effect at the Closing on the basis of the number of years of prior service with IMB and the Bank, at the expense of GBCI.
6.3
Indemnification of Directors and Executive Officers
. For a period of six
years from and after the Effective Date, GBCI will indemnify and defend each present and former director and officer of IMB and the Bank from and against any and all claims, losses, liabilities, judgments, fines, damages, costs, and expenses
(including reasonable attorneys fees) incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative, or investigative, arising out of actions or omissions accruing at or prior to the
Effective Time, including, without limitation, the Merger to the fullest extent that IMB and/or the Bank is currently permitted to indemnify (and advance expenses to) its directors and officers under applicable law, including federal banking law,
and under their respective articles of incorporation or bylaws in effect on the Execution Date provided, however that all rights to indemnification in respect of any claim asserted or made in accordance with this Section 6.3 shall continue
until the final disposition of such claim. GBCI shall advance expenses to the indemnified parties to the fullest extent that such indemnified parties would be entitled under IMBs Bylaws and such advancement is not in violation of or
inconsistent with any insurance policies acquired under the last sentence of this Section 6.3. Any determination required to be made with respect to whether an officers or directors conduct complies with the standard set forth under
IMBs or the Banks articles of incorporation or bylaws will be made by independent counsel (which will not be counsel that provides any services to GBCI or any of its Subsidiaries) selected by GBCI and reasonably acceptable to such
officer or director. For a period of six years after the Effective Date, GBCI will use commercially reasonable efforts to cause to be maintained in effect (with reputable and financially sound insurers) director and officer liability insurance
substantially similar to that maintained by GBCI with respect to claims arising from facts or events that occurred before the Effective Time. Prior to the Effective Time and in lieu of the foregoing, GBCI will use commercially reasonable efforts to
purchase, and IMB will cooperate in its efforts to purchase, a tail policy for directors and officers liability insurance providing coverage substantially as described in the prior sentence and fully pay for such policy prior to the
Effective Time, with all such costs to be included as and in the calculation of Transaction Related Expenses.
ARTICLE 7
TERMINATION OF AGREEMENT AND ABANDONMENT OF TRANSACTION
7.1
Termination by Reason of Lapse of Time
. If Closing does not occur on or
before July 31, 2018 (the
Outside Date
), either GBCI or IMB may terminate this Agreement and the Merger if both of the following conditions are satisfied:
7.1.1 the terminating partys board of directors decides to terminate by a majority vote of all of its members;
and
7.1.2 the terminating party delivers to the other party written notice that its board of directors has voted
in favor of termination; provided that, if as of such Outside Date, the
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condition to Closing set forth in Section 5.1 shall not have been satisfied, then the Outside Date will be extended to on or before October 31, 2018, if GBCI notifies IMB in writing on
or prior to the Outside Date of its election to extend the Outside Date; and provided, further that, the right to terminate this Agreement pursuant to this Section 7.1 shall not be available to any party whose failure to perform or observe the
covenants and agreements of such party set forth in this Agreement resulted in the failure of the Merger to be completed by the applicable Outside Date.
7.2
Termination Due to GBCI Average Closing Price Greater Than $42.
11
.
7.2.1
GBCIs Right to Terminate
. By specific action of its board of directors, GBCI may terminate this
Agreement and the Merger by written notice to IMB on the Business Day immediately following the Determination Date, if the GBCI Average Closing Price is greater than $42.11 (without taking into account the declaration or effects of a stock dividend,
stock split, reverse stock split or similar transaction involving the issuance of GBCI Common Stock for which no consideration is received between the Execution Date and the Determination Date), unless IMB makes the election set forth in
Section 7.2.2. Prior to a termination pursuant to this Section 7.2.1, the parties will have made appropriate adjustments to take into account the declaration or effects of a stock dividend, stock split, reverse stock split, or similar
transaction involving the issuance of GBCI Common Stock for which no consideration is received between the Execution Date and the Determination Date.
7.2.2
IMBs Right to Adjust Consideration
. If GBCI provides written notice to IMB in accordance with
Section 7.2.1, then within three Business Days following IMBs receipt of such notice, IMB may elect by written notice to GBCI to accept an adjustment to the Total Stock Consideration through the issuance of fewer GBCI Shares; in such
event, the Total Stock Consideration shall be the number of GBCI Shares equal to the quotient obtained by dividing (a) $195,986,299 by (b) the GBCI Average Closing Price rounded up to the nearest whole share (prior to taking into account
the declaration or effects of a stock dividend, stock split, reverse stock split or similar transaction involving the issuance of GBCI Common Stock for which no consideration is received between the Execution Date and the Determination Date). If IMB
makes such election to accept a decrease in the number of GBCI Shares to be issued as the Total Stock Consideration, no termination will occur pursuant to Section 7.2.1, and this Agreement will remain in effect according to its terms (except as
the Total Stock Consideration has been adjusted).
7.3
Termination Due to GBCI
Average Closing Price Less Than $
28.07
.
7.3.1
IMBs Right to Terminate
. By specific action
of its board of directors, IMB may terminate this Agreement and the Merger by written notice to GBCI on the Business Day immediately following the Determination Date, if the GBCI Average Closing Price is less than $28.07 (without taking into account
the declaration or effects of a stock dividend, stock split, reverse stock split or similar transaction involving the issuance of GBCI Common Stock for which no consideration is received between the Execution Date and the Determination Date), unless
GBCI makes the election set forth in Section 7.3.2. Prior to a termination pursuant to this Section 7.3.1, the parties will have made appropriate adjustments to take into account the declaration or effects of a stock dividend, stock split,
reverse stock split or similar transaction involving the issuance of GBCI Common Stock for which no consideration is received between the Execution Date and the Determination Date.
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7.3.2
GBCIs Right to Adjust Consideration
. If IMB provides
written notice to GBCI in accordance with Section 7.3.1, then within three Business Days following GBCIs receipt of such notice, GBCI may elect by written notice to IMB to adjust the Total Stock Consideration through the issuance of
additional GBCI Shares or, in GBCIs sole and absolute discretion, pay Cash Consideration, or a combination thereof, such that the total value of the GBCI Shares to be issued in the Transaction (based on the GBCI Average Closing Price rounded
up to the nearest whole share (prior to taking into account the declaration or effects of a stock dividend, stock split, reverse stock split or similar transaction involving the issuance of GBCI Common Stock for which no consideration is received
between the Execution Date and the Determination Date)), plus any Cash Consideration, is equal to $130,642,019; provided that any GBCI right to pay Cash Consideration pursuant to this Section 7.3.2 shall be limited to the maximum amount of Cash
Consideration that may be paid without causing the Merger to be a reorganization under IRC Section 368(a). If GBCI makes such election to increase the Total Stock Consideration or pay Cash Consideration (or a combination thereof), no
termination will occur pursuant to Section 7.3.1, and this Agreement will remain in effect according to its terms (except as the Total Stock Consideration or Cash Consideration has been adjusted). For purposes of this Section,
Cash
Consideration
shall mean the total cash consideration paid to holders of shares of IMB Stock as consideration for the Merger.
7.4
Other Grounds for Termination
. This Agreement and the Merger may be terminated at any time before Closing (whether before or after applicable approval of this Agreement by IMBs shareholders, unless
otherwise provided) by IMB (on behalf of itself and the Bank) or GBCI (on behalf of itself and Glacier Bank) as follows:
7.4.1
Mutual Consent
. By mutual consent of IMB and GBCI, if the board of directors of each party agrees to
terminate by a majority vote of all of its members.
7.4.2
No Regulatory Approvals
. By IMB or GBCI, if a
Governmental Entity that must grant a Requisite Regulatory Approval has denied a Requisite Regulatory Approval or a Requisite Regulatory Approval is conditioned on a substantial deviation from the Merger; provided, however, that either party will
have 15 Business Days following receipt of any denial to appeal the decision, and if such appeal is timely made, either party will have 60 days to prosecute diligently and overturn such denial and such other party may not terminate this
Agreement pursuant to this Section 7.4.2 during such period of time; provided further, however, either party shall be entitled to terminate this Agreement pursuant to the terms of Section 7.1 during such period of time.
7.4.3
Breach of Representation
. By IMB or GBCI (provided that the terminating party is not then in material
breach of any of its representations, warranties, agreements or covenants in this Agreement if they are not qualified as to materiality and is not then in breach of any of its representations, warranties, agreements or covenants in this Agreement if
they are qualified as to materiality) if there has been a material breach of any of the representations or warranties set forth in this Agreement that are not qualified as to materiality or a breach of any of the representations or warranties set
forth in this Agreement that are qualified
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as to materiality on the part of the other party, which breach is not cured within 30 days following written notice to the party committing such breach, or which breach, by its nature,
cannot be cured prior to the end of such 30-day period; provided, however, that neither party will have the right to terminate this Agreement pursuant to this Section 7.4.3 unless the breach of such representation or warranty, together with any
other such breaches, would entitle the party receiving such representation not to consummate the transactions contemplated hereby under Section 5.2.1 (in the case of a breach of a representation or warranty by IMB) or Section 5.3.1 (in the
case of a breach of a representation or warranty by GBCI).
7.4.4
Breach of Covenant
. By either party
(provided that the terminating party is not then in material breach of any of its representations, warranties, agreements or covenants in this Agreement if they are not qualified as to materiality and is not then in breach of any of its
representations, warranties, agreements or covenants in this Agreement if they are qualified as to materiality) if there has been a material breach of any of the covenants or agreements set forth in this Agreement that are not qualified as to
materiality or a breach of any of the covenants or agreements set forth in this Agreement that are qualified as to materiality on the part of the other party, which breach is not cured within 30 days following written notice to the party
committing such breach, or which breach, by its nature, cannot be cured prior to the end of such 30-day period.
7.4.5
Failure to Recommend or Obtain Shareholder Approval
. By (a) GBCI (provided that GBCI is not then in
material breach of any of its representations, warranties, covenants or other agreements in this Agreement), if (i) IMBs board of directors (A) fails to recommend to its shareholders the approval of the Merger or (B) modifies,
withdraws, or changes in a manner adverse to GBCI its recommendation to shareholders to approve the Merger; or (b) GBCI or IMB (provided that the party electing to terminate is not then in material breach of any of its representations,
warranties, covenants, or agreements in this Agreement) if IMBs shareholders elect not to approve the Merger.
7.4.6
Impracticability
. By either GBCI or IMB, upon written notice given to the other party, if the board of
directors of the party seeking termination under this Section 7.4.6 has determined in its sole judgment, made in good faith and after due consideration and consultation with counsel, that the Merger has become inadvisable or impracticable by
reason of actions taken by the federal government or the government of the State of Montana to restrain or invalidate the Merger or this Agreement.
7.4.7
Dissenting Shares
. By GBCI, if holders of 10 percent or more of the outstanding shares of IMB Stock
are Proposed Dissenting Shares.
7.4.8
Superior ProposalTermination by IMB
. By the board of directors
of IMB upon written notice to GBCI if such board of directors has in good faith determined that an Acquisition Proposal constitutes a Superior Proposal; provided, however, that IMB may not terminate this Agreement pursuant to this Section 7.4.8
unless (a) it has not breached Sections 4.1.10 or 4.2.2, (b) immediately following the delivery of such notice of termination, it enters into a definitive acquisition agreement relating to such Superior Proposal, (c) it has
provided GBCI at least five days prior written notice advising GBCI that the board of directors of IMB is prepared to accept a Superior Proposal and has given GBCI, if it so elects, an
A-55
opportunity to amend the terms of this Agreement (and negotiated with GBCI in good faith with respect to such terms) in such a manner as would enable IMBs board of directors to proceed with
the Merger, and (d) simultaneously upon entering into such definitive acquisition agreement relating to such Superior Proposal referred to in clause (b), it delivers to GBCI the
Break-Up
Fee.
7.4.9
Superior ProposalTermination by GBCI
. By GBCI upon written notice to IMB if (a) an Acquisition
Event will have occurred or (b)(i) a third party will have made a proposal to IMB or its shareholders to engage in, or enter into an agreement with respect to, an Acquisition Event and (ii) this Agreement and the Merger are not approved at
the IMB Meeting.
7.5
Break-Up
Fee
.
If this Agreement is terminated pursuant to Section 7.4.5(a), Section 7.4.8, or Section 7.4.9(a), then IMB will immediately pay to GBCI $6,500,000 (the
Break-Up
Fee
). If this
Agreement is terminated pursuant to Section 7.4.5(b) or Section 7.4.9(b), or by GBCI pursuant to Section 7.4.4 for breach of either Section 4.1.10 or Section 4.2.2,
and
within 15 months after such termination,
IMB or the Bank enters into an agreement for, or publicly announces an intention to engage in, an Acquisition Event, or within 15 months after such termination an Acquisition Event will have occurred, then IMB will promptly following such
entry, announcement, or occurrence pay to GBCI the
Break-Up
Fee.
7.6
Cost Allocation Upon Termination
; Limitations;
Break-Up
Fee as Liquidated Damages
. In connection with the termination of this Agreement under this Article 7, except as provided in Section 7.5, each party will pay its own
out-of-pocket
costs incurred in connection with this Agreement and will have no liability to the other parties arising from such termination, except that in the event of a
termination under Section 7.4.3 or Section 7.4.4 in a circumstance in which no
Break-Up
Fee is paid, no party will be relieved from any liability arising out of the underlying breach by reason of
such termination. The parties acknowledge and agree that the agreements contained in Section 7.5 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, neither party would enter into this
Agreement. Any amount payable by IMB pursuant to Section 7.5 constitutes liquidated damages and not a penalty and shall be the sole monetary remedy of GBCI in the event of termination of this Agreement under circumstances that give rise to
payment of the
Break-Up
Fee. In the event that IMB fails to pay the
Break-Up
Fee when due, then (a) IMB shall reimburse GBCI for all costs and expenses (including
disbursements and reasonable fees of counsel) incurred in connection with the collection of unpaid or overdue amounts, and (b) IMB shall pay to GBCI interest on such overdue amounts (for the period commencing as of the date that such overdue
amount was originally required to be paid and ending on the date that such overdue amount is actually paid in full) at a rate per annum equal to the prime rate published in
The Wall Street Journal
on the date such payment was required to be
made, plus 2 percent.
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ARTICLE 8
MISCELLANEOUS
8.1
Notices
. Any notice, request, instruction or other document to be given under this Agreement will be in writing and will be delivered personally, sent electronic mail or sent by registered or certified mail or
overnight Federal Express service, postage prepaid, addressed as follows:
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GBCI:
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Glacier Bancorp, Inc.
49 Commons Loop
Kalispell, Montana 59901
Attn: Randall M. Chesler, President and CEO
Email: rchesler@glacierbancorp.com
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with a copy to:
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Miller Nash Graham & Dunn LLP
Pier 70, 2801 Alaskan Way, Suite 300
Seattle, Washington 98121-1128
Attn: Stephen M. Klein,
P.C.
David G. Post,
P.C.
Email: steve.klein@millernash.com
david.post@millernash.com
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IMB and the Bank:
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Inter-Mountain Bancorp., Inc.
208 East Main Street
Bozeman, Montana 59715
Attn: Bruce A. Gerlach, President and CEO
Email: bruce.gerlach@ourbank.com
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with copies to:
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Christian, Samson & Jones, PLLC
310 W. Spruce Street
Missoula, Montana 59802
Attn: David Chisholm
Email: chisholm@csjlaw.com
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and
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Holland & Hart LLP
1800 Broadway, Suite 300
Boulder, Colorado 80302
Attn: Scott A. Berdan, P.C.
Email: saberdan@hollandhart.com
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or to such other address or Person as any party may designate by written notice to the other given under this Section.
8.2
Waivers and Extensions
. Subject to Article 9, any party may grant
waivers or extensions to the other parties, but only through a written instrument executed by the President and/or CEO of the party granting the waiver or extension. Waivers or extensions that do not comply with the preceding sentence are not
effective. In accordance with this Section 8.2, a party may extend the time for the performance of any of the obligations or other acts of any other party, and may waive:
8.2.1 any inaccuracies of any other party in the representations and warranties contained in this Agreement or in any
document delivered in connection with this Agreement;
8.2.2 compliance with any of the covenants of any other
party; and
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8.2.3 any other partys performance of any obligations under this
Agreement and any other condition precedent set out in Article 5.
8.3
Construction and Execution in Counterparts
. Except as otherwise expressly
provided in this Agreement, this Agreement: (a) covers the entire understanding of the parties, and no modification or amendment of its terms or conditions will be effective unless in writing and signed by the parties or their respective duly
authorized agents; (b) will not be interpreted by reference to any of the titles or headings to the sections or subsections of this Agreement, which have been inserted for convenience only and are not deemed a substantive part of this
Agreement; (c) is deemed to include all amendments to this Agreement, each of which is made a part of this Agreement by this reference; and (d) may be executed in one or more counterparts, each of which will be deemed an original, but all
of which taken together will constitute one and the same document. References in this Agreement to Recitals, Sections, Subsections or Schedules are references to the Recitals, Sections, Subsections, and Schedules of and to this Agreement unless
expressly stated otherwise.
8.4
Survival of Representations, Warranties, and
Covenants
. Except as set forth below, the representations, warranties, agreements and covenants set forth in this Agreement will not survive the Effective Time or termination of this Agreement, except that (a) Section 4.9
(Confidentiality), Section 7.5
(Break-Up
Fee), Section 7.6 (Cost Allocation Upon Termination), and Sections 8.3 through 8.8 will survive termination, and neither GBCI nor IMB or the Bank
shall be relieved of any liability or damages arising out of its knowing or willful breach of any provision of this Agreement; and (b) the covenants and other agreements in this Agreement that impose duties or obligations on the parties
following the Effective Time, including without limitation Section 6.2 (Employee Benefit Issues) and Section 6.3 (Indemnification of Directors and Executive Officers), will survive the Effective Time. Except as specifically set forth in
the preceding sentences, none of the representations, warranties, agreements or covenants contained in this Agreement shall survive the Effective Time, and none of GBCI, Glacier Bank, IMB, nor the Bank shall have any rights or remedies after Closing
with respect to any breach of any such representations, warranties, agreements, or covenants.
8.5
Attorneys Fees and Costs
. In the event of any dispute, claim, or
litigation arising out of or in connection with, or relating to, this Agreement or any breach or alleged breach of this Agreement (
Claim
), the substantially prevailing party on any such Claim will be entitled to reimbursement from
the other party of its costs and expenses, including reasonable attorneys fees.
8.6
Arbitration
. At either partys request, the parties must submit any
Claim to arbitration under the American Arbitration Associations Commercial Arbitration Rules then in effect (or under any other form of arbitration mutually acceptable to the parties); provided that a party shall not be prevented from seeking
injunctive relief in accordance with Section 8.7 and Section 8.10 below to enforce this Agreement. A single arbitrator agreed on by the parties will conduct any arbitration. If the parties cannot agree on a single arbitrator within
15 days after service of the demand for arbitration, Claims shall be heard by a panel of three arbitrators, selected as follows: each party shall select one person to act as arbitrator and the two selected shall select a third arbitrator within
ten days of their appointment; if the arbitrators selected by the parties fail to select or are unable to agree on the third arbitrator, the third arbitrator shall be
A-58
selected by the American Arbitration Association. The arbitration decision is final (except as otherwise specifically provided by law) and binds the parties, and either party may request any
court having jurisdiction to enter a judgment and to enforce the arbitrators decision. The arbitrator will provide the parties with a written decision naming the substantially prevailing party in the action. This substantially prevailing party
is entitled to reimbursement from the other party for its reasonable costs and expenses, including reasonable attorneys fees. Any arbitration or related proceedings will take place in Kalispell, Montana.
8.7
Governing Law and Venue
. This Agreement will be governed by and construed in
accordance with the laws of the State of Montana, except to the extent that federal law may govern certain matters. Subject to the arbitration provisions set forth in Section 8.6, the parties must bring any legal proceeding arising out of this
Agreement in the federal district courts of the Missoula Division for the State of Montana. Each party consents to and submits to the jurisdiction of any such federal court.
8.8
Severability
. If a court determines that any term of this Agreement is
invalid or unenforceable under applicable law, the remainder of this Agreement will not be affected thereby, and each remaining term will continue to be valid and enforceable to the fullest extent permitted by law.
8.9
No Assignment
. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned by any of the parties (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of and be enforceable by the parties and their respective successors and assigns. Except as otherwise expressly provided, this Agreement (including the documents and instruments referred to in this Agreement) is not intended to confer
upon any Person other than the parties any rights or remedies under this Agreement.
8.10
Specific Performance
. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to seek specific performance of the terms hereof, this being in
addition to any other remedies to which they are entitled at law or equity.
ARTICLE 9
AMENDMENTS
Subject to
applicable law, this Agreement and the form of any attached Exhibit or Schedule may be amended upon authorization of the boards of directors of the parties, whether before or after the IMB Meeting; provided, however, that after approval by
IMBs shareholders, no amendment will be made changing the form or reducing the amount of consideration to be received by the shareholders of IMB without the further approval of such shareholders. All amendments, modifications, extensions and
waivers must be in writing and signed by the party agreeing to the amendment, modification, extension or waiver.
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This Plan and Agreement of Merger is dated as of the date first written above.
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GLACIER BANCORP, INC.
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By:
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/s/ Randall M. Chesler
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Randall M. Chesler, President and CEO
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GLACIER BANK
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By:
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/s/ Randall M. Chesler
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Randall M. Chesler, President and CEO
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INTER-MOUNTAIN BANCORP., INC.
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By:
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/s/ Bruce A. Gerlach
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Bruce A. Gerlach, President and CEO
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FIRST SECURITY BANK
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By:
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/s/ Steven E. Wheeler
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Steven E. Wheeler, President and CEO
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[Signature Page to Plan and Agreement of Merger]
A-60
EXHIBIT A
Parties to Recital E
P
ERSONS
S
IGNING
V
OTING
A
GREEMENTS
Daphne Gillam Revocable Trust
John T. Kamp and Joyce B. Kamp
Marci Johnson Shaw
Wayne D. &
Leona E. Gibson Irrevocable Trust
D
IRECTORS
S
IGNING
V
OTING
AND
N
ONCOMPETITION
A
GREEMENTS
IMB Directors
Robert Karl
Kamp
Dana Dogterom
Bruce
Gerlach
Michael Wm. Johnson
Tom O. Milesnick
Jack Rochford
A-61
EXHIBIT B
Form of Transaction-Related Expenses Calculation
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Transaction-Related Expenses ($000s)
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Estimated
Transaction-Related
Expenses
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Final
Transaction-Related
Expenses
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Employee Related
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Change-in-Control
Cost
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Retention Payments
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D&O Tail Coverage Insurance
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Integration/Operations
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Data Processing - Termination and Deconversion Fee
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Other IT/Systems Termination Cost
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Title Policy Premiums
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Professional Expenses
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Investment banking - Advisory
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Investment banking - Fairness Opinion
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Legal
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Accounting*
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Other
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TOTAL
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As provided in the Plan and Agreement of Merger, any negative differential between $5,300,000 (the
Maximum
Transaction Expense Amount
) and the Final Transaction Related Expenses will be subtracted from IMB Capital on an after tax basis (applying an effective tax rate of 35 percent) for purposes of determining both IMB Closing
Capital and the Closing Capital Differential.
*
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To include estimated costs of 2017 and final stub 2018 informational tax returns.
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A-62
APPENDIX B
Montana Code Annotated
TITLE 35
CHAPTER 1.
BUSINESS CORPORATIONS