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EXHIBIT 10
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement"), dated as of December 30,
1997, is between HUB FINANCIAL CORPORATION ("HUB"), a Montana corporation, and
GLACIER BANCORP, INC.
("Glacier"), a Delaware corporation.
HUB and Glacier have executed a Plan and Agreement of Merger ("Merger
Agreement"), of even date with this Agreement, which would result in the merger
of HUB with and into Glacier ("Merger").
By negotiating and executing the Merger Agreement and by taking actions
necessary or appropriate to effect the transactions contemplated by the Merger
Agreement, Glacier has incurred and will incur substantial direct and indirect
costs (including, without limitation, the costs of management and employee time)
and will forgo the pursuit of certain alternative investments and transactions.
THEREFORE, in consideration of the promises set forth in this Agreement
and in the Merger Agreement, the parties agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth in this
Agreement, HUB irrevocably grants an option ("Option") to Glacier to
purchase an aggregate of 2,302 authorized but unissued shares of HUB's
Common Stock, no par value ("Common Stock") (which if issued, and
assuming exercise of outstanding options to acquire the Common Stock,
would represent approximately 19.9% of total stock issued and
outstanding), at a per share price of $781 ("Option Price"), which was
the estimated fair market value of the Common Stock at September 30,
1997.
2. Exercise of Option. Subject to the provisions of this Section 2 and of
Section 13(a) of this Agreement, this Option may be exercised by Glacier
or any transferee as set forth in Section 5 of this Agreement, in whole
or in part, at any time, or from time to time in any of the following
circumstances:
(a) HUB or its board of directors enters into an agreement or
recommends to HUB shareholders an agreement (other than the Merger
Agreement) under which any entity, person or group (collectively
"Person"), within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"),
would: (1) merge or consolidate with, acquire 51% or more of the
assets or liabilities of, or enter into any similar transaction
with HUB, or (2) purchase or otherwise acquire (including by
merger, consolidation, share exchange or any similar transaction)
securities representing 10% or more of HUB's voting shares of HUB
(other than an exchange of Common Stock for shares of Valley Bank
of Helena common stock not owned by HUB on the date this Agreement
was signed, is such exchange is reasonably acceptable to Glacier);
(b) any Person (other than Glacier or any of its subsidiaries and
other than any Person owning as of the date of this Agreement 10%
or more of the voting shares of HUB) acquires the beneficial
ownership or the right to acquire beneficial ownership of
securities which, when aggregated with other such securities owned
by such Person, represents 10% or more of the voting shares
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of HUB (the term "beneficial ownership" for purposes of this
Agreement has the meaning set forth in Section 13(d) of the
Exchange Act, and the regulations promulgated under the Exchange
Act); notwithstanding the foregoing, the Option will not be
exercisable in the circumstances described above in this
subsection (b) if a Person acquires the beneficial ownership of
securities which, when aggregated with other such securities owned
by such Person, represents 10% or more, but less than 25%, of the
voting shares of HUB and the transaction does not result in, and
is not presumed to constitute, "control" as defined under Section
7(j) of the Federal Deposit Insurance Act or 12 CFR Part 303.4;
(c) failure of the board of directors of HUB to recommend, or
withdrawal by the board of directors of a prior recommendation of,
the Merger to the shareholders; or
(d) failure of the shareholders to approve the Merger by the required
affirmative vote at a meeting of the shareholders, after any
Person (other than Glacier or a subsidiary of Glacier) announces
publicly or communicates, in writing, to HUB a proposal to (1)
acquire HUB (by merger, consolidation, the purchase of 51% or more
of its assets or liabilities or any other similar transaction, (2)
purchase or otherwise acquire securities representing 25% or more
of the voting shares of HUB or (3) change the composition of the
board of directors of HUB.
It is understood and agreed that the Option will become exercisable on
the occurrence of any of the above-described circumstances even though
the circumstance occurred as a result, in part or in whole, of the board
of HUB complying with its fiduciary duties.
Notwithstanding the foregoing, the Option may not be exercised if either
(1) any applicable and required governmental approvals have not been
obtained with respect to such exercise or if such exercise would violate
any applicable regulatory restrictions, or (2) at the time of exercise,
Glacier is failing in any material respect to perform or observe its
covenants or conditions under the Merger Agreement, unless the reason
for such failure is that HUB is failing to perform or observe its
covenants or conditions under the Merger Agreement.
3. Notice, Time and Place of Exercise. Each time that Glacier or any
transferee wishes to exercise any portion of the Option, Glacier or such
transferee will give written notice of its intention to exercise the
Option specifying the number of shares as to which the Option is being
exercised ("Option Shares") and the place and date for the closing of
the exercise (which date may not be later than ten business days from
the date such notice is mailed). If any law, regulation or other
restriction will not permit such exercise to be consummated during this
ten-day period, the date for the closing of such exercise will be within
five days following the cessation of the restriction on consummation.
4. Payment and Delivery of Certificate(s). At any closing for an exercise
of the Option or any portion thereof, (a) Glacier and HUB will each
deliver to the other certificates as to the accuracy, as of the closing
date, of their respective representations and warranties under this
Agreement, (b) Glacier or the transferees will pay the aggregate
purchase price for the shares of Common Stock to be purchased by
delivery of a certified or bank cashier's check in immediately available
funds payable to the order of HUB, and (c)
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HUB will deliver to Glacier or the transferees a certificate or
certificates representing the shares so purchased.
5. Transferability of the Option and Option Shares. Before the Option, or a
portion of the Option, becomes exercisable in accordance with the
provisions of Section 2 of this Agreement, neither the Option nor any
portion of the Option will be transferable. If any of the events or
circumstances set forth in Sections 2(a) through (d) above occur,
Glacier may freely transfer, subject to applicable federal and state
securities laws, the Option or any portion of the Option, or any of the
Option Shares.
For purposes of this Agreement, a merger or consolidation of Glacier
(whether or not Glacier is the surviving entity) or an acquisition of
Glacier will not be deemed a transfer.
6. Representations, Warranties and Covenants of HUB. HUB represents and
warrants to Glacier as follows:
(a) Due Authorization. This Agreement has been duly authorized by all
necessary corporate action on the part of HUB, has been duly
executed by a duly authorized officer of HUB and constitutes a
valid and binding obligation of HUB. No shareholder approval by
HUB shareholders is required by applicable law or otherwise before
the exercise of the Option in whole or in part.
(b) Option Shares. HUB has taken all necessary corporate and other
action to authorize and reserve and to permit it to issue and, at
all times from the date of this Agreement to such time as the
obligation to deliver shares under this Agreement terminates, will
have reserved for issuance, at the closing(s) upon exercise of the
Option, or any portion of the Option, the Option Shares (subject
to adjustment, as provided in Section 8 below), all of which, upon
issuance under this Agreement, will be duly and validly issued,
fully paid and nonassessable, and will be delivered free and clear
of all claims, liens, encumbrances and security interests,
including any preemptive right of any of the shareholders of HUB.
(c) No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated by it will
violate or result in any violation of or be in conflict with or
constitute a default under any term of the articles of
incorporation or bylaws of HUB or any agreement, instrument,
judgment, decree, law, rule or order applicable to HUB or any
subsidiary of HUB or to which HUB or any such subsidiary is a
party.
(d) Notification of Record Date. At any time from and after the date
of this Agreement until the Option is no longer exercisable, HUB
will give Glacier or any transferee 30 days prior written notice
before setting the record date for determining the holders of
record of the Common Stock entitled to vote on any matter, to
receive any dividend or distribution or to participate in any
rights offering or other matters, or to receive any other benefit
or right, with respect to the Common Stock.
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7. Representations, Warranties and Covenants of Glacier. Glacier represents
and warrants to HUB as follows:
(a) Due Authorization. This Agreement has been duly authorized by all
necessary corporate action on the part of Glacier, has been duly
executed by a duly authorized officer of Glacier and constitutes a
valid and binding obligation of Glacier.
(b) Transfers of Common Stock. No shares of Common Stock acquired upon
exercise of the Option will be transferred except in a transaction
registered or exempt from registration under any applicable
securities laws.
(c) No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated by it will
violate or result in any violation of or be in conflict with or
constitute a default under any term of the certificate of
incorporation or bylaws of Glacier or any agreement, instrument,
judgment, decree, law, rule or order applicable to Glacier or any
subsidiary of Glacier or to which Glacier or any such subsidiary
is a party.
8. Adjustment Upon Changes in Capitalization. In the event of any change in
the Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, exchanges of shares or the like, the
number and kind of shares or securities subject to the Option and the
purchase price per share of Common Stock will be appropriately adjusted.
If, before the Option terminates or is exercised, HUB is acquired by
another party, consolidates with or merges into another corporation or
liquidates, Glacier or any transferee will thereafter receive, upon
exercise of the Option, the securities or properties to which a holder
of the number of shares of Common Stock then deliverable upon the
exercise thereof would have been entitled upon such acquisition,
consolidation, merger or liquidation, and HUB will take all steps in
connection with such acquisition, consolidation, merger or liquidation
as may be necessary to assure that the provisions of this agreement will
thereafter be applicable, as nearly as reasonably may be practicable, in
relation to any securities or property thereafter deliverable upon
exercise of the Option.
9. Nonassignability. This Agreement binds and inures to the benefit of the
parties and their successors. This Agreement is not assignable by either
party, but Glacier may transfer the Option, the Option Shares or any
portion of the Option or Option Shares in accordance with Section 5. A
merger or consolidation of Glacier (whether or not Glacier is the
surviving entity) or an acquisition of Glacier will not be deemed an
assignment or transfer.
10. Regulatory Restrictions. HUB will use its best efforts to obtain or to
cooperate with Glacier or any transferee in obtaining all necessary
regulatory consents, approvals, waivers or other action (whether
regulatory, corporate or other) to permit the acquisition of any or all
Option Shares by Glacier or any transferee.
11. Remedies. HUB agrees that if for any reason Glacier or any transferee
will have exercised its rights under this Agreement and HUB will have
failed to issue the Option Shares to be issued upon such exercise or to
perform its other obligations under this
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Agreement, unless such action would violate any applicable law or
regulation by which HUB is bound, then Glacier or any transferee will be
entitled to specific performance and injunctive and other equitable
relief. Glacier agrees that if it fails to perform any of its
obligations under this Agreement, then HUB will be entitled to specific
performance and injunctive and other equitable relief. This provision is
without prejudice to any other rights that HUB or Glacier or any
transferee may have against the other party for any failure to perform
its obligations under this Agreement.
12. No Rights as Shareholder. This Option, before it is exercised, will not
entitle its holder to any rights as a shareholder of HUB at law or in
equity. Specifically, this Option, before it is exercised, will not
entitle the holder to vote on any matter presented to the shareholders
of HUB or, except as provided in this Agreement, to any notice of any
meetings of shareholders or any other proceedings of HUB.
13. Miscellaneous.
(a) Termination. This Agreement and the Option, to the extent not
previously exercised, will terminate upon the earliest of (1)
August 31, 1998; (2) the mutual agreement of the parties to this
Agreement; (3) 31 days after the date on which any application for
regulatory approval for the Merger has been denied, but if before
the expiration of the 31-day period, HUB or Glacier is engaged in
litigation or an appeal procedure relating to an attempt to obtain
approval of the Merger, this Agreement will not terminate until
the earlier of (i) August 31, 1998, or (ii) 31 days after the
completion of the litigation and appeal procedure; (4) the 30th
day following the termination of the Merger Agreement for any
reason other than a material noncompliance or default by Glacier
with respect to its obligations under it; or (5) the date of
termination of the Merger Agreement if the termination is due to a
material noncompliance or default by Glacier with respect to its
obligations under it; but if the Option has been exercised, in
whole or in part, before the termination of this Agreement, then
the exercise will close under Section 4 of this Agreement, even
though that closing date is after the termination of this
Agreement; and if the Option is sold before the termination of
this Agreement, the Option may be exercised by the transferee at
any time within 31 days after the date of termination even though
such exercise or the closing of such exercise occurs after the
termination of this Agreement.
(b) Amendments. This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a
written agreement executed by the parties.
(c) Severability of Terms. Any provision of this Agreement that is
invalid, illegal or unenforceable is ineffective only to the
extent of the invalidity, illegality or unenforceability without
affecting in any way the remaining provisions or rendering any
other provisions of this Agreement invalid, illegal or
unenforceable. Without limiting the generality of the foregoing,
if the right of Glacier or any transferee to exercise the Option
in full for the total number of shares of Common Stock or other
securities or property issuable upon the exercise of the Option is
limited by applicable law, or otherwise, Glacier or any transferee
may, nevertheless, exercise the Option to the fullest extent
permissible.
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(d) Notices. All notices, requests, claims, demands and other
communications under this Agreement must be in writing and must be
given (and will be deemed to have been duly received if so given)
by delivery, by cable, telecopies or telex, or by registered or
certified mail, postage prepaid, return receipt requested, to the
respective parties at the addresses below, or to such other
address as either party may furnish to the other in writing.
Change of address notices will be effective upon receipt.
If to HUB to:
HUB Financial Corporation
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxxx
With a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Holland & Xxxx LLP
Suite 1500, First Interstate Center
000 Xxxxx 00xx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
If to Glacier, to:
Glacier Bancorp, Inc.
X.X. Xxx 00
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxx X. XxxXxxxxx
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxxx & Xxxx, P.C.
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
(e) Governing Law. The parties intend this Agreement and the Option,
in all respects, including all matters of construction, validity
and performance, to be governed by the laws of the State of
Montana, without giving effect to conflicts of law principles.
(f) Counterparts. This Agreement may be executed in several
counterparts, each of which is an original, and all of which
together constitute one and the same agreement.
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(g) Effects of Headings. The section headings in this Agreement are
for convenience only and do not affect the meaning of its
provisions.
Dated December 30, 1997:
GLACIER BANCORP, INC.
BY /s/ Xxxx X. XxxXxxxxx
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Xxxx X. XxxXxxxxx
Its: President and CEO
HUB FINANCIAL CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Its: President and CEO
