1
EXHIBIT 2.1
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PLAN AND AGREEMENT OF MERGER
BETWEEN
GLACIER BANCORP, INC.
AND
HUB FINANCIAL CORPORATION
================================================================================
DATED AS OF DECEMBER 30, 1997
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TABLE OF CONTENTS
Page
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SECTION 1 TERMS OF TRANSACTION................................. 2
1.1 Transaction.......................................... 2
1.2 Merger............................................... 2
1.2.1 Closing....................................... 3
1.2.2 The Bank...................................... 3
1.2.3 Effect on Glacier Common Stock................ 3
1.3 Consideration........................................ 3
1.3.1 Purchase Price................................ 3
1.3.2 Exchange Ratio................................ 3
1.3.3 HUB Expense Limitation........................ 4
1.3.4 Change in Equity Capital...................... 4
1.3.5 No Fractional Shares.......................... 4
1.3.6 Certificates.................................. 4
1.4 Payment to Dissenting Stockholders................... 5
1.5 Alternative Structures............................... 5
1.6 Letter of Transmittal................................ 6
1.7 Undelivered Certificates............................. 6
1.8 Stock Option Agreement............................... 6
SECTION 2 CLOSING OF THE TRANSACTION........................... 6
2.1 Closing.............................................. 6
2.2 Events of Closing.................................... 6
2.3 Place of Closing..................................... 6
SECTION 3 REPRESENTATIVES AND WARRANTIES....................... 7
3.1 Representations of Glacier and HUB................... 7
3.1.1 Corporate Organization and Qualification...... 7
3.1.2 Subsidiaries.................................. 7
3.1.3 Capital Stock................................. 8
3.1.4 Corporate Authority........................... 9
3.1.5 Reports and Financial Statements.............. 9
3.1.6 Absence of Certain Events and Changes......... 11
3.1.7 Material Agreements........................... 12
3.1.8 Knowledge as to Conditions.................... 12
3.1.9 Brokers and Finders........................... 12
3.2 HUB's Additional Representations..................... 12
3.2.1 Loan and Lease Losses......................... 12
3.2.2 No Stock Option Plans......................... 12
3.2.3 Governmental Filings; No Violations........... 12
3.2.4 Asset Classification.......................... 13
3.2.5 Investments................................... 13
3.2.6 Properties.................................... 13
3.2.7 Anti-takeover Provisions...................... 14
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3.2.8 Compliance with Laws.......................... 14
3.2.9 Litigation.................................... 15
3.2.10 Taxes......................................... 15
3.2.11 Insurance..................................... 16
3.2.12 Labor Matters................................. 16
3.2.13 Employee Benefits............................. 16
3.2.14 Environmental Matters......................... 18
3.3 Exceptions to Representations......................... 20
3.3.1 Disclosure of Exceptions...................... 20
3.3.2 Nature of Exceptions.......................... 20
SECTION 4 CONDUCT AND TRANSACTIONS BEFORE CLOSING............... 20
4.1 Conduct of HUB's Business Before Closing.............. 20
4.1.1 Availability of HUB's Books, Records
and Properties................................ 20
4.1.2 Ordinary and Usual Course..................... 21
4.1.3 Conduct Regarding Representations............. 22
4.1.4 Maintenance of Properties..................... 23
4.1.5 Preservation of Business Organization......... 23
4.1.6 Senior Management............................. 23
4.1.7 Compensation and Employment Agreements........ 23
4.1.8 Update of Financial Statements................ 23
4.1.9 No Solicitation............................... 24
4.1.10 Title Policies................................ 24
4.1.11 Review of Loans............................... 24
4.2 Registration Statement................................ 24
4.2.1 Preparation of Registration Statement......... 24
4.2.2 Submission to Stockholders.................... 25
4.3 Accounting Treatment.................................. 25
4.3.1 Pooling of Interests.......................... 25
4.3.2 Affiliate List................................ 25
4.3.3 Restrictive Legend............................ 25
4.3.4 Retention of Certificates..................... 26
4.4 Submission to Regulatory Authorities.................. 26
4.5 Announcements......................................... 26
4.6 Consents.............................................. 26
4.7 Further Actions....................................... 26
4.8 Notice................................................ 26
4.9 Confidentiality....................................... 26
4.10 Update of Financial Statements........................ 27
4.11 Availability of Glacier's Books, Records
and Properties........................................ 27
SECTION 5 APPROVALS AND CONDITIONS.............................. 27
5.1 Required Approvals.................................... 27
5.2 Conditions to Glacier's Obligations................... 27
5.2.1 Representations............................... 27
5.2.2 Compliance.................................... 28
5.2.3 Equity Capital Requirement.................... 28
5.2.4 Transaction Fees Statements................... 28
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5.2.5 Audit Report................................. 28
5.2.6 Plan of Exchange Executed.................... 28
5.2.7 No Material Adverse Effect................... 28
5.2.8 Financial Condition.......................... 28
5.2.9 No Change in Loan Review..................... 29
5.2.10 No Governmental Proceedings.................. 29
5.2.11 Approval by Counsel.......................... 29
5.2.12 Receipt of Title Policy...................... 29
5.2.13 Corporate and Stockholder Action............. 29
5.2.14 Tax Opinion.................................. 29
5.2.15 Opinion of Counsel........................... 29
5.2.16 Cash Paid.................................... 30
5.2.17 Affiliate Letters............................ 30
5.2.18 Registration Statement....................... 30
5.2.19 Consents..................................... 31
5.2.20 Fairness Opinions............................ 31
5.2.21 Accounting Treatment......................... 31
5.2.22 Solicitation of Employees.................... 31
5.2.23 Other Matters................................ 31
5.3 Conditions to HUB's Obligations..................... 31
5.3.1 Representations.............................. 31
5.3.2 Compliance................................... 31
5.3.3 No Material Adverse Effect................... 31
5.3.4 No Governmental Proceedings.................. 31
5.3.5 Corporate and Stockholder Action............. 32
5.3.6 Tax Opinion.................................. 32
5.3.7 Opinion of Counsel........................... 32
5.3.8 Fairness Opinion............................. 32
5.3.9 Cash Paid.................................... 32
5.3.10 Registration Statement....................... 33
5.3.11 Director Appointment......................... 33
5.3.12 Approval by Counsel.......................... 33
SECTION 6 DIRECTORS, OFFICERS AND EMPLOYEES................... 33
6.1 Directors........................................... 33
6.2 Director Appointment................................ 33
6.3 Employment Agreement................................ 33
6.4 Employees........................................... 33
6.5 Employee Benefit Issues............................. 33
6.5.1 Comparability of Benefits.................... 33
6.5.2 Termination and Transfer/Merger of Plans..... 34
6.5.3 No Contract Created.......................... 34
SECTION 7 TERMINATION OF AGREEMENT AND ABANDONMENT OF
TRANSACTION......................................... 34
7.1 Termination by Reason of Lapse of Time.............. 34
7.2 Other Grounds for Termination....................... 34
7.2.1 Mutual Consent............................... 34
7.2.2 HUB's Conditions Not Met..................... 34
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7.2.3 Glacier's Conditions Not Met................. 34
7.2.4 HUB Fails to Recommend Stockholder
Approval or Option Become Exercisable........ 34
7.2.5 Impracticability............................. 34
7.3 HUB Termination Fee................................. 35
7.4 Glacier Termination Fee............................. 35
7.5 Cost Allocation Upon Termination.................... 35
SECTION 8 MISCELLANEOUS....................................... 35
8.1 Notices............................................. 35
8.2 Waivers and Extensions.............................. 36
8.3 General Interpretation.............................. 36
8.4 Construction and Execution in Counterparts.......... 36
8.5 Survival of Representations and Covenants........... 37
8.6 Attorneys' Fees and Costs........................... 37
8.7 Arbitration......................................... 37
8.8 Governing Law and Venue............................. 37
8.9 Severability........................................ 37
SECTION 9 AMENDMENTS.......................................... 37
EXHIBITS AND SCHEDULES:
EXHIBIT A Form Affiliate Letter
TRANSITION PLAN SCHEDULE
SCHEDULE 1 Exceptions to Representations
SCHEDULE 2 Offices
SCHEDULE 3 Subsidiaries
SCHEDULE 4 Glacier Stock Plans
SCHEDULE 5 Material Contracts
SCHEDULE 6 HUB's Required Third Party Consents
SCHEDULE 7 HUB's Asset Classification List
SCHEDULE 8 HUB's Investments
SCHEDULE 9 HUB's Property Encumbrances
SCHEDULE 10 HUB's and the Bank's Offices and Branches
SCHEDULE 11 HUB's Compliance with Laws
SCHEDULE 12 HUB's Litigation Disclosure
SCHEDULE 13 HUB's and The Bank's Insurance Policies
SCHEDULE 14 HUB's Employee Benefit Plans
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INDEX OF DEFINITIONS
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TERMS SECTION
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Agreement Intro. Paragraph
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ASR 4.3.2
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Asset Classification 3.2.4
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Bank Recital A
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Bank Common Stock 3.1.3(b)(7)
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BHCA Recital A
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Closing 1.2.1
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Columbia Recital I
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Compensation Plans 3.2.13(b)
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Continuing Corporation Recital B.1
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Continuing Corporation Common Stock Recital B.2
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Continuing Employees 6.4
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Contracts 3.2.3(b)
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D. A. Davidson Recital I
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Dissenting Shares 1.4
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Effective Date 2.1
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Employees 3.2.13(b)
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Environmental Laws 3.2.14(a)(2)
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ERISA 3.2.13(a)
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ERISA Affiliate 3.2.13(d)
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Exchange Act 3.1.5(b)
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Exchange Agent 1.3.6(a)
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Exchange Ratio 1.3.2
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TERMS SECTION
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Executive Officer 3.1.8
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FDIA 3.1.2(b)
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FDIC 3.1.2(b)
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Federal Reserve Board Recital D.3
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Financial Statements 3.1.5(d)(1)
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GAAP 3.1.5(d)
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Glacier Intro. Paragraph
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Glacier Common Stock 3.1.3(a)(1)
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Glacier Financial Statements 3.1.5(d)(2)
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Glacier Preferred Stock 3.1.3(a)(1)
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Glacier Shares 1.3.2
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Glacier Stock Plans 3.1.3(a)(2)
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Governmental Entity 3.2.3(a)
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Hazardous Substances 3.2.14(a)(3)
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HOLA Recital A
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HUB Intro. Paragraph
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HUB Common Stock 3.1.3(b)(1)
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HUB Financial Statements 3.1.5(d)(4)
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IRC Recital J
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Liens 3.1.3(a)(5)
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Material Adverse Effect 3.1.6
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Merger Recital B
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Pension Plan 3.2.13(c)
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Plan/Plans 3.2.13(a)
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TERMS SECTION
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Plan of Exchange Recital G
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Property 4.1.10
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Prospectus/Proxy Statement 4.2.1(a)
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Purchase Price 1.3.1
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Registration Statement 4.2.1(a)
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Regulatory Approvals Recital D.3
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Reports 3.1.5(b)
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SEC 3.1.5(a)
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Securities Act 3.1.5(b)
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Securities Laws 3.1.5(b)
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Stock Option Agreement Recital H
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Subject Property 3.2.14(a)(1)
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Subsequent Glacier Financial Statements 3.1.5(d)(3)
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Subsequent HUB Financial Statements 3.1.5(d)(5)
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Subsidiary/Subsidiaries 3.1.2(a)
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Tangible Equity Capital 5.2.3
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Tax 3.2.10
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Termination Date 2.1
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Transaction 1.1
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Transaction Fees 1.3.3
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WBCA 1.2
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PLAN AND AGREEMENT OF MERGER
BETWEEN
GLACIER BANCORP, INC.
AND
HUB FINANCIAL CORPORATION
This Plan and Agreement of Merger ("Agreement"), dated as of December
30, 1997, is between GLACIER BANCORP, INC. ("Glacier"), a Delaware corporation
and HUB FINANCIAL CORPORATION ("HUB"), a Montana corporation.
PREAMBLE
Glacier's and HUB's management and boards of directors believe,
respectively, that the merger of HUB with and into Glacier, on the terms and
conditions set forth in this Agreement, is in the best interests of Glacier's
and HUB's stockholders.
RECITALS
A. THE PARTIES. Glacier is a corporation duly organized and validly
existing under Delaware law and is a registered bank holding company
under the Bank Holding Company Act of 1956, as amended ("BHCA"), and a
savings and loan holding company within the meaning of the Home Owner's
Loan Act, as amended ("HOLA"). Glacier's principal office is located in
Kalispell, Montana. Glacier owns (1) all of the outstanding common stock
of Glacier Bank, F.S.B. and First Security Bank of Missoula, (2) 93% of
the outstanding common stock of Glacier National Bank of Whitefish, and
(3) 93% of the outstanding common stock of First National Bank of
Eureka. HUB is a corporation duly organized and validly existing under
Montana law and is a registered bank holding company under the BHCA.
HUB's principal office is located in Helena, Montana. HUB owns
approximately 86.5% of the outstanding shares of common stock of Valley
Bank of Helena ("Bank"), a Montana state-chartered commercial bank.
B. THE MERGER. On the Effective Date, the following will occur:
1. HUB will merge with and into Glacier ("Merger"), and Glacier will be
the surviving corporation under the name Glacier Bancorp, Inc.
("Continuing Corporation"). The Bank will become a separate direct
subsidiary of Glacier.
2. Except as otherwise provided in this Agreement, the outstanding
shares of HUB Common Stock will be converted into common stock
shares of the Continuing Corporation ("Continuing Corporation Common
Stock").
C. BOARD APPROVALS. Glacier's and HUB's respective boards of directors have
approved this Agreement and authorized its execution and delivery.
D. OTHER APPROVALS. The Merger is subject to:
1. satisfaction of the conditions described in this Agreement;
2. approval by HUB's stockholders; and
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3. approval or acquiescence, as appropriate, by (a) the Board of
Governors of the Federal Reserve System ("Federal Reserve Board")
and (b) the State of Montana (collectively, "Regulatory Approvals").
E. EMPLOYMENT AGREEMENT. The Bank has entered into an employment agreement,
effective as of the Effective Date, with Xxxx X. Xxxxxxxx, the Bank's
President and CEO.
F. DIRECTOR NONCOMPETITION AGREEMENT. Each Director of HUB's and the Bank's
boards of directors has signed a Director Noncompetition Agreement.
These noncompetition agreements will take effect on the Effective Date.
G. PLAN OF EXCHANGE. Glacier and the Bank have entered into an Agreement
and Plan of Share Exchange ("Plan of Exchange") providing for the
exchange of Bank Common Stock shares owned by the Bank's minority
shareholders for Glacier Common Stock shares. This exchange will take
place immediately following Closing.
H. STOCK OPTION AGREEMENT. As an inducement to and condition of Glacier's
execution of this Agreement, HUB has approved the grant of an option to
Glacier under the Stock Option Agreement, as provided in Subsection 1.8.
I. FAIRNESS OPINIONS. HUB has received from Columbia Financial Advisors,
Inc. ("Columbia") and delivered to Glacier an opinion to the effect that
the financial terms of the Transaction are financially fair to HUB's
stockholders. As a condition to Closing of the Transaction, Columbia
will update this fairness opinion immediately before HUB mails the
Prospectus/Proxy Statement to its stockholders and immediately before
Closing. Glacier has received from X.X. Xxxxxxxx & Co. ("D.A. Davidson")
an opinion to the effect that the financial terms of the Transaction are
financially fair to Glacier's stockholders.
J. INTENTION OF THE PARTIES--ACCOUNTING AND TAX TREATMENT. The parties
intend the Merger to qualify, for accounting purposes, as a "pooling of
interests." The parties intend the Merger to qualify, for federal income
tax purposes, as a tax-free reorganization under Section 368 of the
Internal Revenue Code of 1986, as amended ("IRC").
AGREEMENT
Glacier and HUB agree as follows:
SECTION 1
TERMS OF TRANSACTION
1.1 TRANSACTION. Under and subject to this Agreement and the other documents
referred to in this Agreement, HUB will merge with and into Glacier in
the Merger. The term "Transaction" means the Merger transaction
contemplated by this Agreement, subject to any modifications Glacier
elects in accordance with Subsection 1.5.
1.2 MERGER. On the Effective Date, HUB will merge with and into Glacier,
with Glacier being the surviving corporation, in accordance with the
provisions of, and with the effect provided in the Montana Business
Corporation Act ("MBCA"), Part 8, Subsections 35-1-813, et. seq. and
Del. Corp. Stat., Title 8, Subchapter 9. On the Effective Date, the
certificate of incorporation and bylaws of the Continuing Corporation
will be Glacier's Certificate of Incorporation and Bylaws as in effect
immediately before the Effective Date. The Continuing Corporation's name
will be "Glacier Bancorp, Inc.," and the Continuing Corporation's
principal office will be Glacier's principal office.
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Except as otherwise provided in Subsections 5.3.11 and 6.2, on the
Effective Date, Glacier's directors and Glacier's officers will become
the directors and officers of the Continuing Corporation. On the
Effective Date, Glacier's shares then issued and outstanding will become
issued and outstanding shares of the Continuing Corporation. HUB's
stockholders (other than holders of Dissenting Shares) on the Effective
Date will become stockholders of the Continuing Corporation by virtue of
the Merger.
1.2.1 CLOSING. Closing of the Transaction ("Closing") will take place in
accordance with Section 2. All shares, other than Dissenting
Shares, of HUB Common Stock issued and outstanding immediately
before Closing will be converted at Closing into shares of
Continuing Corporation Common Stock in accordance with Subsection
1.3, by virtue of the Merger.
1.2.2 THE BANK. By virtue of the Merger, the Bank will become the
Continuing Corporation's subsidiary. On the Effective Date, the
Bank's board of directors will be all directors who are the Bank's
directors immediately before the Merger plus two additional
Glacier directors designated by Glacier and reasonably acceptable
to HUB. These directors will serve on the Bank's board of
directors until the next annual meeting of the Bank's stockholders
or until their successors have been elected and qualified. Nothing
in this Agreement is intended to restrict in any way any rights of
the Bank's stockholders and directors at any time after the
Effective Date to nominate, elect, select, or remove the Bank's
directors.
1.2.3 EFFECT ON GLACIER COMMON STOCK. Glacier Common Stock shares
issued and outstanding immediately before the Effective Date will
remain outstanding and unchanged after the Merger.
1.3 CONSIDERATION.
1.3.1 PURCHASE PRICE. Except as otherwise provided in Subsection 1.4 and
Subject to Subsection 1.3.3, the aggregate consideration HUB's
stockholders will be entitled to receive from Glacier in
connection with the Transaction ("Purchase Price") will be the
number of Glacier Common Stock shares (rounded to the nearest
whole number, rounding down if the first decimal is four or less
and rounding up if the first decimal if five or more) determined
by multiplying 620,000 by HUB's fractional ownership of the Bank
at Closing. HUB's fractional ownership of the Bank at Closing will
be determined by dividing the number of Bank Common Stock shares
owned by HUB on the Effective Date by the number of Bank Common
Stock shares outstanding on the Effective Date and rounding the
quotient to two decimals (rounding down if the third decimal is
four or less and rounding up if the third decimal is five or
more).
1.3.2 EXCHANGE RATIO. Subject to the conditions and limitations in this
Agreement, holders of HUB Common Stock will receive shares of
Continuing Corporation Common Stock in exchange for their HUB
Common Stock shares. The number of Continuing Corporation Common
Stock shares each holder will receive in exchange for each HUB
Common Stock share she holds of record on the Effective Date will
be determined according to a ratio ("Exchange Ratio") computed as
follows: In exchange for each share of HUB Common Stock held of
record on the Effective Date, the holder will receive that number
(rounded to 2 decimals, rounding down if the third decimal is four
or less or up if it is five or more) of shares of Continuing
Corporation Common Stock calculated by dividing the Purchase Price
(as it may be adjusted under this Agreement) by the aggregate
number of shares of HUB Common Stock that on the Effective Date
are issued and outstanding.
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The shares of Continuing Corporation Common Stock to be issued to
HUB Stockholders under this Agreement in connection with the
Transaction are referred to as the "Glacier Shares."
1.3.3 HUB EXPENSE LIMITATION. If HUB's Transaction Fees exceed $100,000,
then before the Exchange Ratio is calculated, the Purchase Price
will be reduced by the number of Glacier Common Stock shares equal
in value to the excess. For purposes of determining this reduction
in the Purchase Price, Glacier Common Stock shares will be valued
at $21 per share. "Transaction Fees" means all costs and expenses
incurred by HUB or owed or paid by HUB to third parties in
connection with the preparation, negotiation and execution of this
Agreement, the Plan of Exchange, and all related documents and the
consummation of the Transaction, including expenses incurred by
HUB in connection with obtaining approvals for the Transaction
from regulators and stockholders, expenses related to the audits
of the HUB Financial Statements required under this Agreement, not
including exercise of options.
1.3.4 CHANGE IN EQUITY CAPITAL. If, after the date of this Agreement but
before the Effective Date, Glacier's or HUB's Common Stock issued
and outstanding increases or decreases in number or is changed
into or exchanged for a different kind or number of securities,
through a recapitalization, reclassification, stock dividend,
stock split, reverse stock split or other similar change in
capitalization (not including increases in number due to issuances
of shares upon exercise of any outstanding options to purchase
Glacier Common Stock shares) of Glacier or HUB, as the case may
be, then, as appropriate, the parties will make the proportionate
adjustment to the Purchase Price.
1.3.5 NO FRACTIONAL SHARES. The Continuing Corporation will not issue
fractional shares of Continuing Corporation Common Stock. In lieu
of fractional shares, if any, each stockholder of HUB who is
otherwise entitled to receive a fractional share of Continuing
Corporation Common Stock will receive an amount of cash equal to
the product of such fraction times $21. Such fractional share
interest will not include the right to vote or receive dividends
or any interest on dividends.
1.3.6 CERTIFICATES.
(a) Surrender of Certificates. Each certificate evidencing HUB
Common Stock shares (other than Dissenting Shares) will, on
and after the Effective Date, be deemed for all corporate
purposes to represent and evidence only the right to receive a
certificate representing the Glacier Shares (or to receive the
cash for fractional shares) to which the HUB Common Stock
shares converted in accordance with the provisions of this
Subsection 1.3. Following the Effective Date, HUB stockholders
may exchange HUB Common Stock certificates by surrendering
them to the agent ("Exchange Agent") designated by Glacier and
HUB to effect the exchange of HUB Common Stock certificates
for certificates representing Glacier Shares (or for cash in
lieu of fractional shares), in accordance with any
instructions provided by the Exchange Agent and together with
a properly completed and executed form of transmittal letter.
Until a holder's certificate evidencing HUB Common Stock is so
surrendered, the holder will not have any right to receive any
certificates evidencing Glacier Shares or cash in lieu of
fractional shares.
(b) Issuance of Certificates in Other Names. Any person requesting
that any certificate evidencing Glacier Shares be issued in a
name other than the name in
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which the surrendered HUB Common Stock certificate is
registered, must: (1) establish to the Exchange Agent's
satisfaction the right to receive the certificate evidencing
Glacier Shares and (2) either pay to the Exchange Agent any
applicable transfer or other taxes or establish to the
Exchange Agent's satisfaction that all applicable taxes have
been paid or are not required.
(c) Lost, Stolen, and Destroyed Certificates. The Exchange Agent
will be authorized to issue a certificate representing Glacier
Shares in exchange for a HUB Common Stock certificate that has
been lost, stolen or destroyed, if the holder provides the
Exchange Agent with: (1) satisfactory evidence that the holder
owns HUB Common Stock and that the certificate representing
this ownership is lost, stolen, or destroyed, (2) any
appropriate affidavit the Exchange Agent may reasonably
require, and (3) any indemnification assurances that the
Exchange Agent may reasonably require.
(d) Rights to Dividends and Distributions. No holder of a
certificate evidencing HUB Common Stock shares will be
entitled to receive any dividends or other distributions
otherwise payable to holders of record of Glacier Common Stock
on any date after the Effective Date, unless the holder (1) is
entitled by this Agreement to receive a certificate
representing Glacier Shares and (2) has surrendered in
accordance with this Agreement her HUB Common Stock
certificates (or has met the requirements of 1.3(c) above) in
exchange for certificates representing Glacier Shares.
Surrender of HUB Common Stock certificates will not deprive
the holder of any dividends or distributions that the holder
is entitled to receive as a record holder of HUB Common Stock
on a date before the Effective Date. When the holder
surrenders her certificates, the holder will receive the
amount, without interest, of any cash dividends and any other
distributions distributed to holders of record of Glacier
Common Stock on or after the Effective Date on the whole
number of shares of Glacier Shares into which the holder's HUB
Common Stock was converted at the Effective Date.
(e) Checks in Other Names. Any person requesting that a check for
cash in lieu of fractional shares be issued in a name other
than the name the HUB Common Stock certificate surrendered in
exchange for the cash is registered in, must establish to the
Exchange Agent's satisfaction the right to receive this cash.
1.4 PAYMENT TO DISSENTING STOCKHOLDERS. For purposes of this Agreement,
"Dissenting Shares" means those shares of HUB Common Stock as to which
stockholders have properly taken all steps necessary to perfect their
dissenters' rights under MBCA Subsections 35-1-826 through 35-1-839.
Each outstanding Dissenting Share of HUB Common Stock will be converted
at Closing into the rights provided under those sections of the MBCA.
1.5 ALTERNATIVE STRUCTURES. Subject to the conditions set forth below,
Glacier may, within 90 days of the execution of this Agreement and in
its sole discretion, elect to consummate the Transaction by means other
than those specified in this Section 1. If Glacier so elects, any means,
procedures, or amendments necessary or desirable to consummate the
Transaction, in the opinion of Glacier's counsel, will supersede any
conflicting, undesirable or unnecessary provisions of this Agreement.
But, unless this Agreement is amended in accordance with Section 9, the
following conditions will apply: (1) the type and amount of
consideration set forth in Subsection 1.3 will not be modified and (2)
the tax consequences to HUB and its stockholders will not be adversely
affected. If Glacier elects an alternative structure under this
Subsection 1.5, HUB will cooperate with and assist Glacier with the
following: (1) any
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amendments to this Agreement necessary or desirable in the opinion of
Glacier's counsel and (2) the preparation and filing of any
applications, documents, instruments and notices necessary or desirable,
in the opinion of Glacier's counsel, to effect the alternative structure
and to obtain the necessary stockholder approvals and approvals of any
regulatory agency, administrative body, or other governmental entity.
Glacier will pay any additional expenses incurred by HUB in connection
with any such changes, if those expenses would not have been incurred by
HUB absent Glacier's election under this Subsection 1.5, and the
expenses so incurred will not be deemed Transaction Fees.
1.6 LETTER OF TRANSMITTAL. Glacier will prepare a transmittal letter form
reasonably acceptable to HUB for use by stockholders holding HUB Common
Stock. Certificates representing shares of HUB Common Stock must be
delivered for payment in the manner provided in the transmittal letter
form. On or about the Effective Date, Glacier will mail the transmittal
letter form to HUB stockholders.
1.7 UNDELIVERED CERTIFICATES. If outstanding certificates for HUB Common
Stock are not surrendered or the payment for them is not claimed before
those payments would escheat or become the property of any governmental
unit or agency, the unclaimed items will, to the extent permitted by
abandoned property or any other applicable law, become the property of
the Continuing Corporation (and to the extent not in its possession will
be paid over to the Continuing Corporation), free and clear of all
claims or interests of any person previously entitled to such items.
But, neither the Continuing Corporation nor either party to this
Agreement will be liable to any holder of HUB Common Stock for any
amount paid to any governmental unit or agency having jurisdiction over
any such unclaimed items under the abandoned property or other
applicable law of the jurisdiction, and the Continuing Corporation will
pay no interest on amounts owed to stockholders for shares of HUB Common
Stock.
1.8 STOCK OPTION AGREEMENT. As a condition to the execution of this
Agreement, Glacier and HUB will sign a Stock Option Agreement of even
date with this Agreement.
SECTION 2
CLOSING OF THE TRANSACTION
2.1 CLOSING. Closing will occur on the Effective Date. If Closing does not
occur on or before August 31, 1998 ("Termination Date"), either Glacier
or HUB may terminate this Agreement in accordance with Section 7. Unless
Glacier and HUB agree upon another date, the Effective Date will be a
date selected by Glacier within 30 calendar days after the following:
(a) each condition precedent set forth in Section 5 has been either
fulfilled or waived; and
(b) each approval required by Section 5 has been granted, and all
applicable waiting periods have expired.
2.2 EVENTS OF CLOSING. On the Effective Date, 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 on the Effective Date or otherwise defaults
under this Agreement on or before the Effective Date, then the
Transaction will not occur unless the adversely affected party waives
the default.
2.3 PLACE OF CLOSING. Unless Glacier and HUB agree otherwise, Closing will
occur on the Effective Date at Glacier's main office, 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx.
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SECTION 3
REPRESENTATIONS
3.1 REPRESENTATIONS OF GLACIER AND HUB. Subject to Subsection 3.3 and
except as expressly set forth in Schedule 1, Glacier represents to HUB,
and HUB represents to Glacier, the following:
3.1.1 CORPORATE ORGANIZATION AND QUALIFICATION.
(a) It is a corporation duly organized and validly existing under
the state laws of either Montana or Delaware (as applicable),
and its activities do not require it to be qualified in any
jurisdiction other than Montana.
(b) It has the requisite corporate power and authority to own or
lease its properties and assets and to carry on its businesses
as they are now being conducted.
(c) The location of each of its offices is listed in Schedule 2.
(d) It has made available to the other party to this Agreement a
complete and correct copy of its certificate or articles of
incorporation and bylaws, each as amended to date and
currently in full force and effect.
3.1.2 SUBSIDIARIES.
(a) Schedule 3 lists all of its Subsidiaries and its percentage
ownership of these Subsidiaries, as of the date of this
Agreement. In this Agreement, the term "Subsidiary" with
respect to a party means any corporation, partnership,
financial institution, trust company, or other entity owned or
controlled by that party or any of its subsidiaries or
affiliates (or owned or controlled by that party together with
one or more of its subsidiaries or affiliates). A Subsidiary
is considered to be owned or controlled by a party if that
party or any of its Subsidiaries (individually or together
with the party) directly or indirectly owns, controls, or has
the ability to exercise 50% or more of the voting power of the
Subsidiary.
(b) Each of its depository institution Subsidiaries is an "insured
depository institution," as defined in the Federal Deposit
Insurance Act ("FDIA") and applicable regulations under the
FDIA, having deposits insured by the Federal Deposit Insurance
Corporation ("FDIC"), subject to applicable FDIC coverage
limitations.
(c) Each of its Subsidiaries is: (1) either a commercial bank, a
federally chartered savings bank, or a corporation; (2) duly
organized and validly existing under either federal or Montana
law (as applicable); and (3) qualified to do business and in
good standing in each jurisdiction where the property owned,
leased, or operated, or the business conducted by the
Subsidiary, requires this qualification.
(d) Each of its Subsidiaries has the requisite corporate power and
authority to own or lease its properties and assets and to
carry on its business as it is now being conducted.
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3.1.3 CAPITAL STOCK.
(a) Glacier. Glacier represents:
(1) on the date this Agreement was signed, Glacier's
authorized capital stock consists of 20 million shares
divided into two classes: (i) 12.5 million shares of
common stock, par value $.01 per share ("Glacier Common
Stock"), 6,818,563 [TO BE UPDATED BEFORE SIGNING] shares
of which are issued and outstanding and (ii) 7.5 million
shares of blank-check preferred stock, par value $.01 per
share, none of which is outstanding ("Glacier Preferred
Stock");
(2) options or rights to acquire not more than an aggregate of
466,504 [TO BE UPDATED BEFORE SIGNING] Glacier Common
Stock shares (subject to adjustment on the terms set forth
in the Glacier Stock Plans) are outstanding under the
stock option plans listed in Schedule 4 ("Glacier Stock
Plans");
(3) No Glacier Common Stock shares are reserved for issuance,
other than the shares reserved for issuance under the
Glacier Stock Plans, and Glacier has no shares of Glacier
Preferred Stock reserved for issuance;
(4) all outstanding shares of Glacier Common Stock have been
duly authorized and validly issued and are fully paid and
nonassessable;
(5) all outstanding shares of capital stock of each of
Glacier's Subsidiaries owned by Glacier or a Subsidiary of
Glacier have been duly authorized and validly issued and
are fully paid and nonassessable, except to the extent any
assessment is required under federal law, and are owned by
Glacier or a Subsidiary of Glacier free and clear of all
liens, pledges, security interests, claims, proxies,
preemptive or subscriptive rights or other encumbrances or
restrictions of any kind (collectively, "Liens"); and
(6) except as set forth in this Agreement or in the Glacier
Stock Plans, there are no preemptive rights or any
outstanding subscriptions, options, warrants, rights,
convertible securities, or other agreements or commitments
of Glacier or any of its Subsidiaries of any character
relating to the issued or unissued capital stock or other
equity securities of Glacier (including those relating to
the issuance, sale, purchase, redemption, conversion,
exchange, redemption, voting or transfer of such stock or
securities).
(b) HUB. HUB represents:
(1) HUB's authorized capital stock consists of (i) 50,000
shares of common stock, no par value ("HUB Common Stock"),
9,265 shares of which are issued and outstanding,
(2) no options or rights to acquire HUB Common Stock shares
are outstanding;
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(3) Neither HUB nor any of its Subsidiaries have any stock
option plans, employee stock purchase plans, or other
plans or agreements providing for the grant of options or
other rights to acquire HUB Common Stock shares or shares
of capital stock of any of HUB's Subsidiaries, and no HUB
Common Stock shares or capital stock shares of any of its
Subsidiaries are reserved for issuance;
(4) all outstanding HUB Common Stock shares have been duly
authorized and validly issued and are fully paid and
nonassessable;
(5) all outstanding shares of capital stock of each of HUB's
Subsidiaries have been duly authorized and validly issued
and are fully paid and nonassessable, except to the extent
of any assessment required under the Montana Bank Act
Subsection 32-1-506, and, except as otherwise provided in
this Agreement, at Closing will be owned by HUB or a
Subsidiary of HUB free and clear of all Liens;
(6) There are no preemptive rights or any outstanding
subscriptions, options, warrants, rights, convertible
securities, or other agreements or commitments of HUB or
any of its Subsidiaries of any character relating to the
issued or unissued capital stock or other equity
securities of HUB or any of its Subsidiaries (including
those relating to the issuance, sale, purchase,
redemption, conversion, exchange, registration, voting or
transfer of such stock or securities);
(7) the Bank's authorized capital stock consists of (i) 11,000
shares of common stock, par value $40 per share ("Bank
Common Stock"), 11,000 shares of which are issued and
outstanding;
(8) it owns 9,513 of the 11,000 total shares of Bank Common
Stock outstanding and all, if any, of the Bank's preferred
stock outstanding, and these shares are free and clear of
all encumbrances; and
(9) HUB has no Subsidiaries other than the Bank, and the Bank
has no Subsidiaries.
3.1.4 CORPORATE AUTHORITY.
(a) It has the requisite corporate power and authority and has
taken all corporate action necessary in order to execute and
deliver this Agreement, subject (in HUB's case) only to the
approval by HUB's stockholders of the plan of Merger contained
in this Agreement to the extent required by MBCA Subsections
35-1-815 and 35-1-819, to complete the Transaction.
(b) This Agreement is a valid and legally binding agreement of it,
enforceable in accordance with the terms of this Agreement.
3.1.5 REPORTS AND FINANCIAL STATEMENTS<<.
(a) Filing of Reports. Since January 1, 1994, it and each of its
Subsidiaries has filed all reports and statements, together
with any required amendments to these reports and statements,
that it was required to file with (1) the Securities and
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Exchange Commission ("SEC"), (2) the Federal Reserve Board,
(3) the FDIC, and (4) any other applicable federal or state
banking, insurance, securities, or other regulatory
authorities. Each of these reports and statements (as amended
before the date of this Agreement), including the related
financial statements and exhibits, complied (or will comply,
in the case of reports or statements filed after the date of
this Agreement) as to form in all material respects with all
applicable statutes, rules and regulations as of their
respective dates (and, in the case of reports or statements
filed before the date of this Agreement, without giving effect
to any amendments or modifications filed after the date of
this Agreement).
(b) Delivery to Other Party of Reports. It has delivered to the
other party a copy of each registration statement, offering
circular, report, definitive proxy statement or information
statement 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") filed, used or
circulated by it with respect to periods since January 1,
1994, through the date of this Agreement. It will promptly
deliver to the other party each such registration statement,
offering circular, report, definitive proxy statement or
information statement filed, used or circulated after the date
of this Agreement (collectively, its "Reports"), each in the
form (including related exhibits and amendments) filed with
the SEC (or if not so filed, in the form used or circulated).
(c) Compliance with Securities Laws. As of their respective dates
(and without giving effect to any amendments or modifications
filed after the date of this Agreement), each of the Reports,
including the related financial statements, exhibits and
schedules, filed, used or circulated before the date of this
Agreement complied (and each of the Reports filed after the
date of this Agreement, will comply) with applicable
Securities Laws, and did not (or in the case of reports,
statements, or circulars filed after the date of this
Agreement, 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.
(d) Financial Statements. Each of its balance sheets included in
the Financial Statements fairly presents (or, in the case of
Financial Statements for periods ending on a date following
the date of this Agreement, will fairly present) the
consolidated financial position of it and its Subsidiaries as
of the date of the balance sheet. Each of the consolidated
statements of income, cash flows and stockholders' equity
included in the Financial Statements fairly presents (or, in
the case of Financial Statements for periods ending on a date
following the date of this Agreement, will fairly present) the
consolidated results of operations, retained earnings and cash
flows, as the case may be, of it and its Subsidiaries for the
periods set forth in these statements (subject, in the case of
unaudited statements, to normal year-end audit adjustments),
in each case in accordance with generally accepted accounting
principles, consistently applied ("GAAP"), except as may be
noted in these statements.
(1) "Financial Statements" means: (i) in Glacier's case, the
Glacier Financial Statements (or for periods ending on a
date following the date of this
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Agreement, the Subsequent Glacier Financial Statements);
and (ii) in HUB's case, the HUB Financial Statements (or
for periods ending on a date following the date of this
Agreement, the Subsequent HUB Financial Statements).
(2) "Glacier Financial Statements" means Glacier's (i) audited
consolidated statements of financial condition as of
December 31, 1996 and 1995, and the related audited
statements of income, cashflows and changes in
stockholders' equity for each of the years ended December
31, 1996 and 1995; and (ii) unaudited consolidated
statements of financial condition as of the end of each
fiscal quarter following December 31, 1996 but preceding
the date of this Agreement, and the related unaudited
statements of income, cashflows and changes in
stockholders' equity for each such quarter.
(3) "Subsequent Glacier Financial Statements" means (i)
audited consolidated statements of financial condition as
of December 31, 1997, and the related audited statements
of income, cashflows, and changes in stockholders' equity
for the year ended December 31, 1997, and (ii) unaudited
balance sheets and related statements of income and
stockholders' equity for each of Glacier's fiscal quarters
ending after the December 31, 1997 and before Closing.
(4) "HUB Financial Statements" means (i) HUB's unaudited
consolidated statements of financial condition as of
December 31, 1996, 1995, and 1994, and the related
unaudited statements of income, cashflows and changes in
stockholders' equity for each of the years ended December
31, 1996, 1995, and 1994; and (ii) HUB's unaudited
consolidated statements of financial condition as of the
end of each fiscal quarter following December 31, 1996 but
preceding the date of this Agreement, and the related
unaudited statements of income, cashflows and changes in
stockholders' equity for each such quarter.
(5) "Subsequent HUB Financial Statements" means (i) unaudited
balance sheets and related statements of income and
stockholders' equity for each of HUB's and the Bank's
fiscal quarters ending after the date of this Agreement
and before Closing, and (ii) HUB's audited consolidated
statements of financial condition as of December 31, 1997,
and the related audited statements of income, cashflows,
and changes in stockholders' equity for the year ended
December 31, 1997.
3.1.6 ABSENCE OF CERTAIN EVENTS AND CHANGES. Except as disclosed in its
Financial Statements and Reports, since December 31, 1996: (1) it
and its Subsidiaries have conducted their respective businesses
only in the ordinary and usual course of the businesses and (2) no
change or development or combination of changes or developments
has occurred that, individually or in the aggregate, is reasonably
likely to result in a Material Adverse Effect with respect to it
or its Subsidiaries. For purposes of this Agreement, "Material
Adverse Effect" with respect to any corporation means an effect
that: (1) is materially adverse to the business, financial
condition, results of operations or prospects of the corporation
and its Subsidiaries taken as a whole; (2) significantly and
adversely affects the ability of the corporation to consummate the
transactions contemplated by this Agreement by the Termination
Date or to perform its
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material obligations under this Agreement; or (3) enables any
persons to prevent the consummation by the Termination Date of the
transactions contemplated by this Agreement. No Material Adverse
Effect will be deemed to have occurred on the basis of any effect
resulting from actions or omissions of the corporation taken with
the explicit prior consent of the other party to this Agreement.
3.1.7 MATERIAL AGREEMENTS.
(a) Except for the Glacier Stock Plans (in Glacier's case) and
arrangements made after the date and in accordance with the
terms of this Agreement, it and its Subsidiaries are not bound
by any material contract (as defined in Item 601(b)(10) of
Regulation S-K under the Securities Act) that: (1) is to be
performed after the date of this Agreement and (2) has not
been filed with or incorporated by reference in its Reports or
set forth in Schedule 5.
(b) Neither it nor any of its Subsidiaries is in default under any
contract, agreement, commitment, arrangement, lease, insurance
policy, or other instrument.
3.1.8 KNOWLEDGE AS TO CONDITIONS. Its President, Chief Executive
Officer, and Chief Financial Officer (collectively, "Executive
Officers") know of no reason why the Regulatory Approvals and, to
the extent necessary, any other approvals, authorizations,
filings, registrations, and notices should not be obtained without
the imposition of any condition or restriction that is reasonably
likely to have a Material Adverse Effect with respect to it, its
Subsidiaries, or the Continuing Corporation, or the opinion of the
tax experts referred to in Subsection 5.2.14.
3.1.9 BROKERS AND FINDERS. Neither it, its Subsidiaries, nor any of
their respective officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage fees,
commissions or finder's fees in connection with the transactions
contemplated in this Agreement.
3.2 HUB'S ADDITIONAL REPRESENTATIONS. Subject to Subsection 3.3 and except
as expressly set forth in Schedule 1, HUB represents to Glacier, the
following:
3.2.1 LOAN AND LEASE LOSSES. Its Executive Officers know of no reason
why the allowance for loan and lease losses shown in the
consolidated balance sheets included in the Financial Statements
for the periods ended December 31, 1996, March 31, 1997, June 30,
1997, and September 30, 1997 was not adequate as of those dates,
respectively, to provide for estimable and probable losses, net of
recoveries relating to loans not previously charged off, inherent
in its loan portfolio.
3.2.2 NO STOCK OPTION PLANS. Neither it nor any of its Subsidiaries has
adopted any stock option plans or granted any options or rights to
acquire any shares of Bank Common Stock, HUB Common Stock, or
capital stock or other ownership interest of any HUB Subsidiary.
3.2.3 GOVERNMENTAL FILINGS; NO VIOLATIONS.
(a) Filings. Other than the Regulatory Approvals, and other than
as required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, the Securities Act, the Exchange Act,
state securities and "Blue Sky" laws, no notices, nor are any
reports or other filings are required to be made by it with,
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consents, registrations, approvals, permits or
authorizations required to be obtained by it from, any
governmental or regulatory authority, agency, court,
commission or other entity, domestic or foreign ("Governmental
Entity"), in connection with the execution, delivery or
performance of this Agreement by it and the consummation by it
of the Transaction.
(b) Violations. The execution, delivery and performance of this
Agreement does not and will not, and the consummation by it of
the Transaction will not, constitute or result in: (1) a
breach or violation of, or a default under, its articles of
incorporation or bylaws, or the comparable governing
instruments of any of its Subsidiaries; (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
agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation ("Contracts") of it or any of
its Subsidiaries; or (3) a 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 its Subsidiaries is subject; or (4) any change in
the rights or obligations of any party under any of the
Contracts. Schedule 6 contains a list of all consents it or
its Subsidiaries must obtain from third parties under any
Contracts before consummation of the Transaction.
3.2.4 ASSET CLASSIFICATION.
(a) Schedule 7 sets forth an accurate and complete list as of
September 30, 1997, except as otherwise expressly noted in
Schedule 7, separated by category of classification or
criticism ("Asset Classification"), of the aggregate amounts
of loans, extensions of credit and other assets of it and its
Subsidiaries that have been criticized or classified by any
Governmental Entity, by any outside auditor, or by any
internal audit.
(b) Except as shown on Schedule 7, no amounts of 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 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 it or its Subsidiaries
before the date of this Agreement.
3.2.5 INVESTMENTS. Schedule 8 lists all investments (except investments
in securities issued by federal state or local government or any
subdivision or agency thereof and investments in Subsidiaries)
made by it or any of its Subsidiaries in an amount greater than
$25,000 or which represent an ownership interest of more than 5%
in any corporation, company, partnership, or other entity. All
investments comply with all applicable laws and regulations.
3.2.6 PROPERTIES.
(a) Except as disclosed or reserved against in its Financial
Statements or in Schedule 9, it and its Subsidiaries have good
and marketable title, free and clear of all Liens (other than
Liens for current taxes not yet delinquent or pledges to
secure deposits or liens securing Federal Home Loan Bank
borrowings) to all of
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the properties and assets, tangible or intangible, reflected
in its Reports as being owned by it or its Subsidiaries as of
the date of this Agreement.
(b) To the knowledge of its Executive Officers, all buildings and
all fixtures, equipment and other property and assets that are
material to its business on a consolidated basis and are held
under leases or subleases by it or its Subsidiaries are held
under valid leases or subleases, enforceable 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 equity principles).
(c) Schedule 10 lists all its and its Subsidiaries' existing
branches and offices and all new branches or offices it or any
of its Subsidiaries' has applied to establish or purchase,
along with the cost to establish or purchase those branches.
(d) HUB has provided to Glacier copies of existing title policies
held in its or the Bank's files and relating to properties
owned or leased by HUB or the Bank, and no exceptions,
reservations, or encumbrances have arisen or been created
since the date of issuance of those policies.
3.2.7 ANTI-TAKEOVER PROVISIONS. It and each of its Subsidiaries have
taken all necessary action to exempt the Transaction, this
Agreement, and the Stock Option Agreement from (a) all applicable
Montana State law anti-takeover provisions, if any, and (b) any
takeover-related provisions of its or the Bank's articles of
incorporation or bylaws.
3.2.8 COMPLIANCE WITH LAWS. Except as disclosed in Schedule 11, it and
each of its Subsidiaries:
(a) are in compliance, in the conduct of their business, with all
applicable federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees,
including the Bank Secrecy Act, the Truth in Lending Act, the
Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act, the Home Mortgage Disclosure Act
and all applicable fair lending laws or other laws relating to
discrimination;
(b) have all permits, licenses, certificates of authority, orders,
and approvals of, and have made all filings, applications, and
registrations with, federal, state, local, and foreign
governmental or regulatory bodies (including the Federal
Reserve) that are required in order to permit them to carry on
their business as it is presently conducted;
(c) have received since January 1, 1994, no notification or
communication from any Governmental Entity (including any
bank, insurance and securities regulatory authorities) or its
staff (1) asserting a failure to comply with any of the
statutes, regulations or ordinances that such Governmental
Entity enforces, (2) threatening to revoke any license,
franchise, permit or governmental authorization, or (3)
threatening or contemplating revocation or limitation of, or
that would have the effect of revoking or limiting, FDIC
deposit insurance (nor, to the knowledge of its Executive
Officers, do any grounds for any of the foregoing exist); and
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(d) are not required to notify any federal banking agency before
adding directors to its board of directors or employing senior
executives (except notifications required as a result of the
Transaction).
3.2.9 LITIGATION. Except as disclosed in its Financial Statements or in
Schedule 12, before the date of this Agreement:
(a) no criminal or administrative investigations or hearings,
before or by any Governmental Entity, or civil, criminal or
administrative actions, suits, claims or proceedings, before
or by any person (including any Governmental Entity) are
pending or, to the knowledge of its Executive Officers,
threatened, against it or any of its Subsidiaries (including
under the Truth in Lending Act, the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act, the
Home Mortgage Disclosure Act, or any fair lending law or other
law relating to discrimination); and
(b) neither it nor any of its Subsidiaries (nor any officer,
director, controlling person or property of it or any of its
Subsidiaries) is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter or similar submission
to, any Governmental Entity charged with the supervision or
regulation of depository institutions or engaged in the
insurance of deposits (including the FDIC) or the supervision
or regulation of it or of its Subsidiaries, and neither it nor
any of its Subsidiaries has been advised by any such
Governmental Entity that such Governmental Entity is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, commitment
letter or similar submission.
3.2.10 TAXES. For purposes of this Subsection 3.2.10, "Tax" includes any
tax or similar governmental charge, impost, or levy (including
income taxes, franchise taxes, transfer taxes or fees, stamp
taxes, sales taxes, use taxes, excise taxes, ad valorem taxes,
withholding taxes, worker's compensation, payroll taxes,
unemployment insurance, social security, minimum taxes, or
windfall profits taxes), together with any related liabilities,
penalties, fines, additions to tax, or interest, imposed by the
United States or any state, county, provincial, local or foreign
government or subdivision or agency of the United States.
(a) All federal, state and local Tax returns, including all
information returns, it and its Subsidiaries are required to
file have been timely filed or requests for extensions have
been timely filed. If any extensions were filed, they have
been or will be granted by Closing and will not have expired.
All filed returns are complete and accurate in all material
respects.
(b) Except as disclosed in its Financial Statements:
(1) all taxes attributable to it or any of its Subsidiaries
that are or were due or payable (without regard to whether
such taxes have been assessed) have been paid in full or
have been adequately provided for in its Financial
Statements in accordance with GAAP;
(2) adequate provision in accordance with GAAP has been made
in its Financial Statements relating to all Taxes for the
periods covered by such
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Financial Statements that were not yet due and payable as
of the date of this Agreement, regardless of whether the
liability for such Taxes is disputed;
(3) as of the date of this Agreement and except as disclosed
in its Financial Statements, there is no outstanding audit
examination, deficiency, refund litigation or outstanding
waiver or agreement extending the applicable statute of
limitations for the assessment or collection of any Taxes
for any period with respect to any Taxes of it or its
Subsidiaries;
(4) all Taxes with respect to completed and settled
examinations or concluded litigation relating to it or any
of its Subsidiaries have been paid in full or have been
recorded on its Financial Statements (in accordance with
GAAP);
(5) neither it nor any of its Subsidiaries is a party to a Tax
sharing or similar agreement or any agreement under which
it or any of its Subsidiaries has indemnified any party
(other than it or one of its Subsidiaries) with respect to
Taxes; and
(6) the proper and accurate amounts have been withheld from
all employees (and timely paid to the appropriate
Governmental Entity or set aside in an account for these
purposes) for all periods through the Effective Date in
compliance with all Tax withholding provisions of
applicable federal, state, local and foreign laws
(including income, social security and employment tax
withholding for all types of compensation).
3.2.11 INSURANCE. It and each of its Subsidiaries has taken all
requisite action (including the making of claims and the giving
of notices) under its directors' and officers' liability
insurance policy or policies in order to preserve all rights
under such policies with respect to all matters known to it
(other than matters arising in connection with, and the
transactions contemplated by, this Agreement). Schedule 13 lists
all directors' and officers' liability insurance policies and
other insurance policies maintained by it or its Subsidiaries.
3.2.12 LABOR MATTERS. Neither it nor any of its Subsidiaries is a party
to, or is bound by, any collective bargaining agreement, contract
or other agreement or understanding with any labor union or labor
organization. Neither it nor any of its Subsidiaries is the
subject of any proceeding: (1) asserting that it or any of its
Subsidiaries has committed an unfair labor practice or (2)
seeking to compel it or any of its Subsidiaries to bargain with
any labor organization as to wages or conditions of employment.
No strike involving it or any of its Subsidiaries is pending or,
to the knowledge of its Executive Officers, threatened. Its
Executive Officers are not aware of any activity involving its or
any of its Subsidiaries' employees seeking to certify a
collective bargaining unit or engaging in any other
organizational activity.
3.2.13 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 the Employee
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Retirement Income Security Act of 1974, ("ERISA"), as
amended, maintained by HUB or any of its Subsidiaries, as the
case may be.
(b) Schedule 14 sets forth a list, as of the date of this
Agreement, of (1) all bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock
ownership, stock bonus, stock purchase, restricted stock and
stock option plans, (2) all employment or severance contracts
and (3) all other employee benefit plans that cover employees
or former employees of it and its Subsidiaries (its
"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) covering current or former employees or
directors of it or its Subsidiaries (its "Employees"),
including Plans and related amendments, have been made
available to the other party to this Agreement.
(c) All 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
substantial compliance 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 received a favorable
determination letter from the Internal Revenue Service, and
it is not aware of any circumstances likely to result in
revocation of any such favorable determination letter. No
litigation relating to Plans is pending or, to the knowledge
of its Executive Officers, threatened. Neither it nor any of
its Subsidiaries has engaged in a transaction with respect to
any Plan that, assuming the taxable period of such
transaction expired as of the date of this Agreement, could
subject it or any of its Subsidiaries to a Tax or penalty
imposed by either IRC Section 4975 or ERISA Section 502(i).
(d) No liability under Subtitle C or D of Title IV or ERISA
(other than payment of applicable premiums) has been or is
expected to be incurred by it or any of its Subsidiaries with
respect to any ongoing, frozen or terminated "single-employer
plan," within the meaning of ERISA Section 4001(a)(15),
currently or formerly maintained by any of them, or the
single-employer plan of any entity that is considered one
employer with it under ERISA Section 4001 or IRC Section 414
(an "ERISA Affiliate"). It and its Subsidiaries and ERISA
Affiliates have not incurred and do not expect to incur any
withdrawal liability with respect to a multiemployer plan
under Subtitle I of Title IV of ERISA (regardless of whether
based on contributions of ERISA Affiliates). Neither it, its
Subsidiaries nor any of its ERISA Affiliates has been
notified by any multiemployer plan to which it or any of its
Subsidiaries or ERISA Affiliates is contributing, or may be
obligated to contribute, that such multiemployer plan is
currently in reorganization or insolvency under and within
the meaning of ERISA Sections 4241 or 4245 or that such
multiemployer plan intends to terminate or has been
terminated under ERISA Section 4041A. No notice of a
"reportable event" within the meaning of ERISA Section 4043,
for which the 30-day reporting requirement has not been
waived, has been required to be filed for any of its Pension
Plans or by any of its ERISA Affiliates within the 12-month
period ending on the date of this Agreement. Neither it, its
Subsidiaries nor any of their respective ERISA
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Affiliates has incurred or is aware of any facts that are
reasonably likely to result in any liability under ERISA
Sections 4069 or 4204.
(e) All contributions it or any of its Subsidiaries are or were
required to make under the terms of any Plans have been
timely made or have been reflected in its Financial
Statements. Neither any of its or its Subsidiaries' Pension
Plans nor any single-employer plan of any of its ERISA
Affiliates has an "accumulated funding deficiency" (whether
or not waived) within the meaning of IRC Section 412 or ERISA
Section 302. Neither it nor any of its Subsidiaries or its
ERISA Affiliates has provided, or is required to provide,
security to any Pension Plan or to any single-employer plan
of an ERISA Affiliate under IRC Section 401(a)(29), IRC
Section 412(f)(3), or ERISA Sections 306, 307 or 4204.
(f) Under each of its, its Subsidiaries, and its ERISA
Affiliates' Pension Plans that is a single-employer plan, as
of the last day of the most recent plan year ended before the
date of this Agreement, the actuarially determined present
value of all "benefit liabilities" within the meaning of
ERISA Section 4001(a)(16) (as determined on the basis of the
actuarial assumptions contained in the Pension Plan's most
recent actuarial valuation), did not exceed the then-current
value of the assets of such Pension Plan, and to the
knowledge of its Executive Officers, there has been no change
in the financial condition of such Pension Plan since the
last day of the most recent plan year that reasonably could
be expected to change such conclusion. There would be no
withdrawal liability of it and its Subsidiaries under each
Plan that is a multi-employer plan to which it, its
Subsidiaries or its ERISA Affiliates has contributed during
the preceding 12 months, if such withdrawal liability were
determined as if a "complete withdrawal," within the meaning
of ERISA Section 4203, had occurred as of the date of this
Agreement.
(g) Except as disclosed in its Financial Statements, neither it
nor its Subsidiaries have any obligations for retiree health
and life benefits.
(h) No restrictions exist on the rights of it or its Subsidiaries
to amend or terminate any Plan without incurring liability
under the Plan in addition to normal liabilities for
benefits.
(i) Except as disclosed in its Financial Statements or as
provided in a Schedule to this Agreement, the transactions
contemplated by this Agreement and the Stock Plans will not
result in: (1) vesting, acceleration, or increase of any
amounts payable under any Compensation Plan, (2) any increase
in benefits under any Compensation Plan or (3) payment of any
severance or similar compensation under any Compensation
Plan.
3.2.14 ENVIRONMENTAL MATTERS.
(a) For purposes of this Subsection 3.2.14, the following
definitions apply:
(1) "Subject Property" with respect to a party means (i) all
real property at which the businesses of it or its
Subsidiaries have been conducted, all property in which
it or its Subsidiaries holds a security or other interest
(including a fiduciary interest), and any property where
under any Environmental Law it or any of its Subsidiaries
is deemed to be the owner
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or operator of the property; (ii) any facility in which
it or its Subsidiaries participates in the management,
including participating in the management of the owner or
operator of the property; and (iii) all other real
property that, for purposes of any Environmental Law, it
or any of its Subsidiaries otherwise could be deemed to
be an owner or operator of or as otherwise having control
over.
(2) "Environmental Laws" means any federal, state, local or
foreign law, regulation, agency policy, order, decree,
judgment, judicial opinion, or any agreement with any
Governmental Entity, presently in effect or subsequently
adopted relating to: (i) the manufacture, generation,
transport, use, treatment, storage, recycling, disposal,
release, threatened release or presence of Hazardous
Substances, or (ii) the preservation, restoration or
protection of the environment, natural resources or human
health.
(3) "Hazardous Substances" means any hazardous or toxic
substance, material or waste that is regulated by any
local governmental authority, any state government or the
United States Government, including any material or
substance that is (a) defined as a "hazardous substance"
in 42 USC Section 9601(14), (b) defined as a "pollutant
or contaminant" in 42 USC Section 9604(a)(2), or (c)
defined as a "hazardous waste" in 42 USC Section 6903(5).
(b) To the knowledge of its Executive Officers, it and each of
its Subsidiaries and the Subject Property are, and have been,
in compliance with all applicable Environmental Laws, and no
circumstances exist that with the passage of time or the
giving of notice would be reasonably likely to result in
noncompliance with any Environmental Laws.
(c) To the knowledge of its Executive Officers, none of the
following, and 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 it or any of its Subsidiaries or any
Subject Property, relating to:
(1) an asserted liability of it or any of its Subsidiaries 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;
(2) the handling, storage, use, transportation, removal or
disposal of Hazardous Substances;
(3) 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
(4) personal injuries or damage to property related to or
arising out of exposure to Hazardous Substances.
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(d) To the knowledge of its Executive Officers: no storage tanks
underground or otherwise are present on the Subject Property
or, if present, none of such tanks are leaking and each of
them is in full compliance with all applicable Environmental
Laws. With respect to any Subject Property, it and its
Subsidiaries do not own, possess or control any PCBs,
PCB-contaminated fluids, wastes or equipment, or any asbestos
or asbestos-containing material. No Hazardous Substances have
been used, handled, stored, discharged, released or emitted,
or are threatened to be discharged, released or emitted, at
or on any Subject Property, except for those types and
quantities of Hazardous Substances typically used in an
office environment and that have not created conditions
requiring remediation under any applicable Environmental Law.
(e) To the knowledge of its Executive Officers and except for the
investigation or monitoring by the Environmental Protection
Agency or similar state agencies in the ordinary course, no
part of the Subject Property has been or is scheduled for
investigation or monitoring under any applicable
Environmental Law.
3.3 EXCEPTIONS TO REPRESENTATIONS.
3.3.1 DISCLOSURE OF EXCEPTIONS. Each exception set forth in a Schedule
is disclosed only for purposes of the representations referenced
in that exception; but the following conditions apply:
(a) no exception is required to be set forth in a Schedule if its
absence would not result in the related representation being
found untrue or incorrect under the standard established by
Subsection 3.3.2; and
(b) the mere inclusion of an exception in a Schedule is not an
admission by a party that the exception represents a material
fact, material set of facts, or material event or would result
in a Material Adverse Effect with respect to that party.
3.3.2 NATURE OF EXCEPTIONS. No representation contained in Subsection
3.1 or 3.2 will be found untrue or incorrect and no party to this
Agreement will have breached a representation due to the
following: the existence of any fact, set of facts, or event, if
the fact or event individually or taken together with other facts
or events would not, or, in the case of Subsection 3.2.9, is not
reasonably likely to, have a Material Adverse Effect with respect
to such party.
SECTION 4
CONDUCT AND TRANSACTIONS
BEFORE CLOSING
4.1 CONDUCT OF HUB'S BUSINESS BEFORE CLOSING. Before Closing, HUB promises
as follows:
4.1.1 AVAILABILITY OF HUB'S BOOKS, RECORDS AND PROPERTIES.
(a) Except as prohibited by applicable law HUB will make its, and
cause its Subsidiaries to make their, books, records,
properties, contracts and documents available at all
reasonable times to Glacier and its counsel, accountants and
other representatives. These items will be open for
inspection, audit and direct verification of: (1) loan or
deposit balances, (2) collateral receipts and (3) any other
transactions or documentation Glacier may find reasonably
relevant to the
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Transaction. HUB will, and will cause its Subsidiaries to,
cooperate fully in any such inspection, audit, or direct
verification procedures, and HUB will, and will cause its
Subsidiaries to, make available all information reasonably
required by or on behalf of Glacier.
(b) At Glacier's request, HUB will request any third parties
involved in the preparation or review of the HUB Financial
Statements or Subsequent HUB Financial Statements to disclose
to Glacier the work papers or any similar materials related to
these financial statements.
4.1.2 ORDINARY AND USUAL COURSE. HUB will, and will cause its
Subsidiaries to, conduct business only in the ordinary and usual
course and, without the prior written consent of Glacier, will
not, and will not allow its Subsidiaries to, do any of the
following:
(a) effect any stock split or other recapitalization with respect
to HUB Common Stock or the capital stock of a HUB Subsidiary,
or issue, pledge, redeem, or encumber in any way any shares of
HUB's or a HUB Subsidiary's capital stock; or grant any option
or other right to shares of HUB's or a HUB Subsidiary's
capital stock;
(b) declare or pay any dividend, or make any other distribution,
either directly or indirectly, with respect to HUB Common
Stock or the capital stock of any HUB Subsidiary, except (1)
dividends from the Bank to HUB to support the operations of
HUB which are consistent with past practices or required to
pay Transaction Fees, and (2) HUB's regular quarterly
dividends to its shareholders consistent with past practices
and not in an amount exceeding $6 per HUB Common Stock share;
(c) acquire, sell, transfer, assign, encumber or otherwise dispose
of assets or make any commitment with respect to its assets
other than in the ordinary and usual course of business;
(d) solicit or accept deposit accounts of a different type from
accounts previously accepted by it or at rates materially in
excess of rates previously paid by it, except to reflect
changes in prevailing interest rates, or incur any
indebtedness greater than $25,000 (except for borrowings from
the Federal Home Loan Bank in the ordinary course of business
and consistent with past practices);
(e) acquire an ownership interest or a leasehold interest in any
Property or any other real property, whether by foreclosure or
otherwise, without: (1) making an appropriate environmental
evaluation in advance of obtaining the interest and providing
the evaluation to Glacier and (2) providing Glacier with at
least 30 days' advance written notice before it acquires the
interest;
(f) enter into or recommend the adoption by HUB's stockholders of
any agreement involving a possible merger or other business
combination or asset sale by HUB not involving the
Transaction;
(g) enter into, renew, or terminate any contracts (including real
property leases and data or item processing agreements) with
or for a term of one-year or more, except for the Bank's
contracts of deposit and agreements to lend money not
otherwise restricted under this Agreement and (1) entered
into in the ordinary
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course of business, (2) consistent with past practices, and
(3) providing for not less (in the case of loans) or more (in
the case of deposits) than prevailing market rates of
interest;
(h) enter into or amend any contract (other than contracts for
deposits at the Bank or agreements to lend money not otherwise
restricted by this Agreement) calling for a payment by it of
more than $25,000, unless the contract may be terminated
without cause or penalty upon 30 days notice or less;
(i) enter into any personal services contract with any person or
firm, except contracts, agreements, or arrangements for legal,
accounting, investment advisory, or tax services entered into
directly to facilitate the Transaction;
(j) (1) 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 realized
from all sales after the date of this Agreement would be more
than $50,000 or (2) transfer any investment securities between
portfolios of securities available for sale and portfolios of
securities to be held to maturity;
(k) amend its articles of incorporation, bylaws, or other
formation agreements, or convert its charter or form of
entity;
(l) implement or adopt any material changes in its operations,
policies, or procedures, including loan loss reserve policies,
unless the changes are requested by Glacier or are necessary
or advisable, on the advice of legal counsel, to comply with
applicable laws, regulations, or regulatory policies;
(m) implement or adopt any change in its accounting principles,
practices or methods, other than as may be required (1) by
GAAP, (2) for tax purposes, or (3) to take advantage of any
beneficial tax or accounting methods;
(n) increase the combined number of full-time or equivalent
employees of HUB and its Subsidiaries above 47;
(o) other than in accordance with binding commitments existing on
the date of this Agreement, make any capital expenditures in
excess of $10,000 per project or related series of projects or
$50,000 in the aggregate, except for the Transaction Fees; or
(p) enter into any other transaction or make any expenditure other
than in the ordinary and usual course of its business and made
or entered into in a manner consistent with its
well-established practices or as required by this Agreement.
4.1.3 CONDUCT REGARDING REPRESENTATIONS. HUB will not do or cause to be
done anything that would cause any representation in Subsection
3.1 or 3.2 to be inaccurate if made at Closing, except as
otherwise required by this Agreement or consented to in writing by
Glacier.
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4.1.4 MAINTENANCE OF PROPERTIES. HUB will, and will cause the Bank to,
maintain its properties and equipment (and related insurance or
its equivalent) in accordance with good business practice.
4.1.5 PRESERVATION OF BUSINESS ORGANIZATION. HUB will, and will cause
the Bank to, use all reasonable efforts to:
(a) preserve its business organization;
(b) retain the services of present management; and
(c) preserve the goodwill of suppliers, customers, and others with
whom it has business relationships.
4.1.6 SENIOR MANAGEMENT. HUB will, and will require the Bank to, obtain
Glacier's approval before making any change, including hiring of
replacements, with respect to present management personnel having
the rank of vice-president or higher.
4.1.7 COMPENSATION AND EMPLOYMENT AGREEMENTS. HUB will not, and will not
allow the Bank to, permit any increase in the current or deferred
compensation payable or to become payable by HUB to any of its
directors, officers, employees, agents, or consultants other than
normal increments in compensation in accordance with HUB's past
practices with respect to the timing and amounts of such
increments. Without the prior written approval of Glacier, HUB
will not, and will not allow the Bank to, commit to, execute or
deliver any employment agreement with any party not terminable
upon two weeks' notice (or 30 days' notice, if such minimum notice
is required under Montana law) and without expense.
4.1.8 UPDATE OF FINANCIAL STATEMENTS. HUB will promptly deliver its
Financial Statements to Glacier. HUB will deliver Subsequent HUB
Financial Statements to Glacier by the earlier of: (1) 5 days
after HUB or the Bank has prepared and issued them or (2) 60 days
after year-end for year-end statements (except that audited
Financial Statements to be included in the Registration Statement
will be delivered to Glacier no later than ten days before Glacier
files the Registration Statement with the SEC) and 30 days after
the end of the quarter for quarterly statements. The Subsequent
HUB Financial Statements:
(a) will be prepared from the books and records of HUB and the
Bank;
(b) will present fairly the financial position and operating
results of HUB and the Bank at the times indicated and for the
periods covered;
(c) will be prepared in accordance with GAAP (except for the
absence of notes) and with the regulations promulgated by
applicable regulatory authorities, to the extent then
applicable, subject to normal year-end adjustments; and
(d) will reflect all HUB's and the Bank's liabilities, contingent
or otherwise, on the respective dates and for the respective
periods covered, except for liabilities: (1) not required to
be so reflected in accordance with GAAP or (2) not significant
in amount.
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4.1.9 NO SOLICITATION. Neither HUB nor any of its officers or
directors, directly or indirectly, will solicit, encourage,
entertain, or facilitate any other proposals or inquiries for an
acquisition of the shares or assets of HUB or its Subsidiaries or
enter into discussions concerning any such acquisition, except as
otherwise required to comply with the fiduciary responsibilities
of HUB's board of directors. No such party will make available to
any person not affiliated with HUB or Glacier any information
about its business or organization that is not either routinely
made available to the public generally or required by law.
4.1.10 TITLE POLICIES. At Glacier's request, HUB will provide Glacier
with title reports issued by a title insurance company reasonably
satisfactory to Glacier. These title reports must show marketable
fee simple title or vendee's interest to all real Property owned
by HUB or any of its Subsidiaries and marketable leasehold
interests in all real Property leased by HUB or any of its
Subsidiaries, and these title reports may contain only such
exceptions, reservations, and encumbrances as may be consented to
in writing by Glacier, which consent Glacier may not unreasonably
withhold. At Closing, HUB will provide Glacier with update
endorsements, dated as of the Effective Date, to the title
policies for each Property owned by it or any of its
Subsidiaries. For purposes of this Agreement, "Property" includes
any property that HUB or any of its Subsidiaries owns or leases,
other than other real estate owned. Expenses incurred by HUB
under this Subsection 4.1.10 will not be deemed Transaction Fees.
4.1.11 REVIEW OF LOANS. HUB will, and will cause the Bank to, permit
Glacier to conduct an examination of the Bank's loans to
determine credit quality and the adequacy of the Bank's allowance
for loan losses. Glacier will have continued access to the Bank's
loans through Closing to update the examination. At Glacier's
reasonable request, HUB and the Bank will provide Glacier with
current reports updating the information set forth in Schedule 7.
4.2 REGISTRATION STATEMENT.
4.2.1 PREPARATION OF REGISTRATION STATEMENT.
(a) A Registration Statement ("Registration Statement") will be
filed by Glacier with the SEC under the Securities Act for
registration of the Glacier Shares; and the parties will
prepare a related prospectus/proxy statement
("Prospectus/Proxy Statement") to be mailed together with any
amendments and supplements to HUB's stockholders.
(b) The parties will cooperate with each other in preparing the
Registration Statement and Prospectus/Proxy Statement, and
will use their best efforts to: (1) file the Registration
Statement with the SEC within 60 days following the date on
which this Agreement is executed, and (2) obtain the clearance
of the SEC, 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.
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(d) Glacier will pay all costs associated with the preparation by
Glacier's counsel and filing of the Registration Statement.
HUB will pay all costs associated with (1) preparation of
financial statements or other sections of the Registration
Statement and the Prospectus/Proxy Statement by its employees,
accountants, financial advisors, or agents, and (2) review by
HUB's counsel of the Registration Statement and the
Prospectus/Proxy Statement. HUB will pay the costs associated
with the printing and mailing of the Prospectus/Proxy
Statement to its stockholders and any other direct costs
incurred by it in connection with the Prospectus/Proxy
Statement.
4.2.2 SUBMISSION TO STOCKHOLDERS.
(a) Glacier and HUB will submit the Prospectus/Proxy Statement to,
and will use their best efforts in good faith to obtain the
prompt approval of the Prospectus/Proxy Statement by, all
applicable regulatory authorities. The parties will provide
each other with copies of such submissions for review.
(b) HUB will promptly take the actions necessary in accordance
with applicable law and its Articles of Incorporation and
Bylaws to convene a stockholders' meeting to consider the
approval of this Agreement and to authorize the transactions
contemplated by this Agreement. This stockholders' meeting
will be held on the earliest practical date after the date the
Prospectus/Proxy Statement may first be sent to HUB's
stockholders without objection by applicable governmental
authorities; but HUB will have at least 30 calendar days to
solicit proxies. HUB's board of directors and officers will
recommend approval of the Transaction to HUB's stockholders.
4.3 ACCOUNTING TREATMENT.
4.3.1 POOLING OF INTERESTS. The parties intend the Merger to be treated
as a "pooling of interests" for accounting purposes. From the date
of this Agreement through the Effective Date, neither Glacier nor
HUB nor any of their respective Subsidiaries or other affiliates
(a) will knowingly take any action or enter into any contract,
agreement, commitment or arrangement that would jeopardize the
treatment of the Merger as a "pooling of interests;" or (b) will
knowingly fail to take any action that would preserve the
treatment of the Merger as a "pooling of interests." No action or
omission by either party will constitute a breach of this
Subsection 4.3.1 if the action is permitted or required under this
Agreement or is made with the other party's written consent.
4.3.2 AFFILIATE LIST. Certain persons may be deemed "affiliates" of HUB
under Securities Act Rule 145, the SEC's Accounting Series
Releases ("ASR") 130 and 135, or other rules and releases related
to "pooling of interests" accounting treatment. Within thirty days
following the date this Agreement is signed, HUB will deliver to
Glacier, after consultation with legal counsel, a list of names
and addresses of HUB's "affiliates" with respect to the
Transaction within the meaning of Rule 145 or ASR 130 and 135. By
the Effective Date, HUB will deliver, or cause to be delivered, to
Glacier a letter from each of these "affiliates," and any
additional person who becomes an "affiliate" before the Effective
Date and after the date of the list, dated as of the date of its
delivery and in the form attached as Exhibit A.
4.3.3 RESTRICTIVE LEGEND. Glacier may place a restrictive legend on all
Glacier shares to be received by an "affiliate," so as to preclude
their transfer or disposition in violation of the
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affiliate letters. Glacier may also instruct its transfer agent
not to permit the transfer of those shares and may take any other
steps reasonably necessary to ensure compliance with the
Securities Act Rule 145 or the SEC's XXX 000 and 135 or other
rules and releases related to "pooling of interests" accounting
treatment.
4.3.4 RETENTION OF CERTIFICATES. Except as otherwise permitted in
Exhibit A, by a date at least 30 days before the Effective
Date, all stock certificates evidencing ownership of HUB
Common Stock by "affiliates" will be delivered to HUB. HUB
(before the Effective Date) and Glacier (after the Effective
Date) will retain those certificates, and subsequently the
certificates representing Glacier shares for which they are
exchanged, until financial results covering at least 30 days
of combined operations of the Continuing Corporation have
been published, at which time the certificates will be
released.
4.4 SUBMISSION TO REGULATORY AUTHORITIES. Representatives of Glacier,
at Glacier's expense, will prepare and file with applicable
regulatory agencies, applications for approvals, waivers or other
actions their counsel finds necessary or desirable in order to
consummate the Transaction. Glacier will provide copies of these
applications for HUB's review. These applications and filings are
expected to include:
(a) an application to the Federal Reserve; and
(b) any filings required under the MBCA or the Montana Bank Act;
4.5 ANNOUNCEMENTS. The parties will cooperate and consult with each
other in the development and distribution of all news releases and
other public information disclosures with respect to this
Agreement or the Transaction, unless otherwise required by law.
4.6 CONSENTS. Glacier and HUB will use their best efforts to obtain
the consent or approval of any person, organization or other
entity whose consent or approval is required in order to
consummate the Transaction.
4.7 FURTHER ACTIONS. Glacier and HUB, respectively, in the name and on
behalf of those respective parties, will use their best efforts in
good faith to make all arrangements, do or cause to be done all
acts and things, and execute and deliver all certificates and
other instruments and documents reasonably necessary or
appropriate in order to consummate the Transaction as promptly as
practicable.
4.8 NOTICE. HUB will provide Glacier with prompt written notice of the
following:
(a) any events, individually or in the aggregate, that could have
a Material Adverse Effect with respect to HUB or the Bank;
(b) the commencement of any proceeding against HUB, the Bank, or
any of their Subsidiaries or affiliates, by or before any
court or governmental agency that, individually or in the
aggregate, might have a Material Adverse Effect with respect
to HUB or the Bank; or
(c) any acquisition of an ownership or leasehold interest in real
property, other than an acquisition in good faith of real
property to satisfy a debt previously contracted for.
4.9 CONFIDENTIALITY. Glacier and HUB each will, and HUB will cause the
Bank to, hold in confidence all nonpublic information obtained
from the other in connection with the Transaction,
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other than information that: (1) is required by law to be disclosed; (2)
is otherwise available on a nonconfidential basis; (3) has become public
without fault of the disclosing party; or (4) is necessary to the
defense of one of the parties in a legal or administrative action
brought against that party by the other party. If the Transaction is not
completed, Glacier and HUB will, and HUB will cause the Bank to: (1)
each return to the others all confidential documents obtained from them
and (2) not use any nonpublic information obtained under this Agreement
or in connection with the Transaction.
4.10 UPDATE OF FINANCIAL STATEMENTS. Glacier will promptly deliver its
Financial Statements to HUB. Glacier will deliver Subsequent Glacier
Financial Statements to HUB by the earlier of: (1) 5 days after Glacier
prepares and issues them or (2) 60 days after year-end for year-end
statements and 30 days after the end of the quarter for quarterly
statements. The Subsequent Glacier Financial Statements will:
(a) be prepared from the books and records of Glacier;
(b) present fairly the financial position and operating results of
Glacier at the times indicated and for the periods covered;
(c) be prepared in accordance with GAAP (except for the absence of
notes) and with the regulations promulgated by applicable regulatory
authorities, to the extent then applicable, subject to normal
year-end adjustments; and
(d) reflect all liabilities, contingent or otherwise, of Glacier on the
respective dates and for the respective periods covered, except for
liabilities not required to be so reflected in accordance with GAAP
or not significant in amount.
4.11 AVAILABILITY OF GLACIER'S BOOKS, RECORDS AND PROPERTIES. Glacier will
make available to HUB true and correct copies of its Certificate of
Incorporation and Bylaws. At HUB's reasonable request, Glacier will also
provide HUB with copies of: (1) reports filed with the SEC or banking
regulators and (2) the Glacier Stock Plans.
SECTION 5
APPROVALS AND CONDITIONS
5.1 REQUIRED APPROVALS. The obligations of the parties to this Agreement are
subject to the approval of the Agreement and the Transaction by all
appropriate regulatory agencies having jurisdiction with respect to the
Transaction.
5.2 CONDITIONS TO GLACIER'S OBLIGATIONS. All Glacier's obligations under
this Agreement are subject to satisfaction of the following conditions
at or before Closing:
5.2.1 REPRESENTATIONS. HUB's representations in this Agreement and in
any certificate or other instrument delivered in connection with
this Agreement are true and correct in all material respects at
Closing (except to the extent that they expressly relate to an
earlier date, in which case they are true in all material respects
as of that earlier date). These representations have the same
force and effect as if they had been made at Closing. HUB has
delivered to Glacier its certificate, executed by a duly
authorized officer of HUB and dated as of Closing, stating that
these representations comply with this Subsection 5.2.1.
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5.2.2 COMPLIANCE. HUB has performed and complied with all material
terms, covenants and conditions of this Agreement. HUB has
delivered to Glacier its certificate, executed by a duly
authorized officer of HUB and dated as of Closing, stating that
HUB is in compliance with this Subsection 5.2.2.
5.2.3 EQUITY CAPITAL REQUIREMENT. The Tangible Equity Capital,
determined in accordance with GAAP, of HUB and the Bank on a
consolidated basis as of the Effective Date is at least $5.9
million. HUB's certificate referred to in Subsection 5.2.2 must
confirm that this condition is satisfied. Tangible Equity Capital
means common stock, paid in capital, retained earnings, plus (or
minus) net unrealized gain (or loss) on available for sale
securities and minus goodwill and any other intangible assets.
5.2.4 TRANSACTION FEES STATEMENTS. HUB has delivered to Glacier a
statement, in a form reasonably satisfactory to Glacier, from each
third party to whom HUB has paid or owes Transaction Fees. Each
statement must set forth the total costs and expenses paid or
owing to the third party in connection with the Transaction's
consummation. HUB has delivered to Glacier its certificate,
executed by a duly authorized officer of HUB and dated as of
Closing, stating the total Transaction Fees incurred by HUB and
certifying that HUB is in compliance with Subsection 1.3.3 and
this Subsection 5.2.4.
5.2.5 AUDIT REPORT. HUB has delivered (no later than ten days before
Glacier filed the Registration Statement with the SEC) to Glacier
the completed and certified audit report of KPMG Peat Marwick LLP
, its independent certified public accountants, with respect to
HUB's audited consolidated statements of financial condition as of
December 31, 1997, and the related audited statements of income,
cashflows and changes in stockholders' equity for the year ended
December 31, 1997.
5.2.6 PLAN OF EXCHANGE EXECUTED. The Bank and HUB have used all
reasonable efforts to carry out the Plan of Exchange, unless
Glacier has determined that the Plan of Exchange would jeopardize
the Merger's treatment as a pooling of interests for accounting
purposes.
5.2.7 NO MATERIAL ADVERSE EFFECT. No damage, destruction, or loss
(whether or not covered by insurance) or other event or sequence
of events has occurred which, individually or in the aggregate,
has had or potentially may have a Material Adverse Effect with
respect to HUB or the Bank. HUB's certificate referred to in
Subsection 5.2.2 states that the conditions identified in this
Subsection 5.2.7 are satisfied.
5.2.8 FINANCIAL CONDITION. The following are true, and HUB's certificate
referred to in Subsection 5.2.2 confirms the truth of the
following:
(a) HUB's consolidated allowance for possible loan and lease
losses at Closing was and is adequate to absorb the
anticipated loan and lease losses (taking into account any
recommendations made by HUB's certified public accountants);
(b) the reserves set aside for the contingent liabilities
reflected in the Subsequent HUB Financial Statements are
adequate to absorb all reasonably anticipated losses;
(c) the Bank's deposits at Closing, excluding brokered deposits
and jumbo certificates of deposit, total at least $45 million;
and
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(d) HUB has provided Glacier with the audited HUB Financial
Statements required by this Agreement, and the audit has
revealed no required adjustment to previously unaudited HUB
Financial Statements that would have a Material Adverse Effect
upon HUB or the Bank.
5.2.9 NO CHANGE IN LOAN REVIEW. HUB has provided to Glacier the reports
reasonably requested by Glacier under Subsection 4.1.11, and
neither these reports nor any examinations conducted by Glacier
under Subsection 4.1.11 reveal a material adverse change in
either: (1) the information set forth in Schedule 7 or (2)
information revealed during Glacier's previous examinations of
the Bank's loans.
5.2.10 NO GOVERNMENTAL PROCEEDINGS. No action or proceeding has been
commenced or threatened by any governmental agency to restrain or
prohibit or invalidate the Transaction.
5.2.11 APPROVAL BY COUNSEL. All actions, proceedings, instruments, and
documents required in connection with this Agreement, the
Transaction, and all other related legal matters have been
approved by Glacier's counsel.
5.2.12 RECEIPT OF TITLE POLICY. Glacier has received all title insurance
reports requested under Subsection 4.1.10, and HUB has delivered
to Glacier the update endorsements required by Subsection 4.1.10.
5.2.13 CORPORATE AND STOCKHOLDER ACTION. HUB's board of directors and
HUB's stockholders have each approved the Transaction.
5.2.14 TAX OPINION. Glacier has, at Glacier's expense, obtained from
Xxxxxx & Xxxx, P.C. and delivered to HUB, an opinion addressed to
HUB and in form and substance reasonably satisfactory to HUB and
its counsel, to the effect that consummation of the Transaction
will not result in a taxable event for HUB or Glacier, and
otherwise will have each of the effects specified below:
(a) The Transaction will qualify as a reorganization within the
meaning of IRC Section 368(a)(1)(A).
(b) Under IRC Section 354(a)(i), HUB's stockholders who, in
accordance with Section 1, exchange their HUB Common Stock
shares solely for Continuing Corporation Common Stock shares
will not recognize gain or loss on the exchange.
(c) Cash payments to HUB's stockholders in lieu of a fractional
share of Continuing Corporation Common Stock will be treated
as distributions in redemption of the fractional share
interest, subject to the limitations of IRC Section 302.
5.2.15 OPINION OF COUNSEL. HUB has obtained from Holland & Xxxx LLP,
subject to customary qualifications and assumptions, and
delivered to Glacier an opinion of counsel, addressed to Glacier,
to the effect that:
(a) HUB is a corporation validly existing and in good standing
under Montana law;
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(b) the Bank is a Montana state-chartered commercial bank validly
existing and in good standing under Montana law;
(c) HUB has the corporate power and authority to execute,
deliver, and perform this Agreement;
(d) the execution, delivery, and performance of this Agreement
have been duly authorized by all necessary corporate action
on the part of HUB, and this Agreement constitutes HUB's
legal, binding, and valid obligation, enforceable in
accordance with its terms, except to the extent that
enforcement (but not validity) may be limited by bankruptcy,
insolvency, fraudulent conveyances reorganization,
moratorium, or similar laws generally affecting the
enforcement of the rights of creditors and by generally
applicable principles of equity;
(e) all issued and outstanding shares of HUB's and the Bank's
capital stock have been duly authorized and are validly
issued, fully paid, non-assessable (except as to assessments
required under the Montana Bank Act), free of preemptive or
similar rights arising by operation of law, under applicable
corporate statutes or under HUB's or the Bank's bylaws or
articles of incorporation, and have been issued in compliance
with all applicable federal and applicable state securities
laws;
(f) Neither HUB nor the Bank have any written stock option or
other plans or agreements granting options or other rights to
acquire HUB Common Stock or Bank Common Stock, and to
counsel's knowledge, no options or other rights to acquire
HUB Common Stock or Bank Common Stock are outstanding;
(g) counsel has no knowledge of any pending or threatened claims,
actions, suits or legal or equitable proceedings before any
governmental agency which, in counsel's opinion would be,
individually or in the aggregate, reasonably likely to result
in liability in excess of $25,000 or prevent consummation of
the Transaction; and
(h) execution of this Agreement and consummation of the
Transaction will not violate (1) any applicable statutes or
regulations, (2) HUB's or the Bank's articles of
incorporation or bylaws, or (3) the terms of any material
contract or other obligation entered into before the date of
this opinion by HUB or the Bank.
5.2.16 CASH PAID. The aggregate of the cash paid for fractional shares
and Dissenting Shares to holders of HUB Common Stock under this
Agreement and applicable law will not exceed 10% of the Purchase
Price, as it may be adjusted under this Agreement.
5.2.17 AFFILIATE LETTERS. Glacier has received the affiliate list and
letters specified in Subsection 4.3.2.
5.2.18 REGISTRATION STATEMENT. The Registration Statement, as it may
have been amended, required in connection with the Glacier shares
to be issued to stockholders under Subsection 1.3, and as
described in Subsection 4.2, has become effective, and no stop
order suspending the effectiveness of the Registration Statement
has been issued or remains in effect, and no proceedings for that
purpose have been initiated or threatened by the SEC the basis
for which still exists.
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5.2.19 CONSENTS. HUB has obtained the consents as indicated in Schedule
6.
5.2.20 FAIRNESS OPINIONS. HUB has received from Columbia, two updated
fairness opinions (to be delivered by HUB to Glacier at HUB's
expense), one dated immediately before HUB mails the
Prospectus/Proxy Statement to its stockholders and the other
dated immediately before Closing, to the effect that the
financial terms of the Transaction are financially fair to HUB's
stockholders. Glacier and HUB will each provide the other's
investment advisor with any information reasonably requested for
the purpose of issuing a fairness opinion.
5.2.21 ACCOUNTING TREATMENT. It has been determined to Glacier's
satisfaction that the Transaction will be treated for accounting
purposes as a "pooling of interests" in accordance with APB
Opinion No. 16, and Glacier has received a letter to this effect
from KPMG Peat Marwick LLP, certified public accountants.
5.2.22 SOLICITATION OF EMPLOYEES. Neither any member of HUB's board of
directors nor any entity with which any such director is
affiliated has solicited any employee of HUB or Glacier with the
intention of causing the employee to terminate her employment
with HUB or Glacier, as the case may be.
5.2.23 OTHER MATTERS. Glacier has received any other opinions,
certificates, and documents that Glacier reasonably requests in
connection with this Agreement and the Transaction.
5.3 CONDITIONS TO HUB'S OBLIGATIONS. All HUB's obligations under this
Agreement are subject to satisfaction of the following conditions at or
before Closing:
5.3.1 REPRESENTATIONS. Glacier's representations in this Agreement and
in any certificate or other instrument delivered in connection
with this Agreement are true and correct in all material respects
at Closing (except to the extent that they expressly relate to an
earlier date, in which case they are true in all material
respects as of that earlier date). These representations have the
same force and effect as if they had been made at Closing.
Glacier has delivered to HUB its certificate, executed by a duly
authorized officer of Glacier and dated as of Closing, stating
that these representations comply with this Subsection 5.3.1.
5.3.2 COMPLIANCE. Glacier has performed and complied with all terms,
covenants and conditions of this Agreement. Glacier has delivered
to HUB its certificate, executed by a duly authorized officer of
Glacier and dated as of Closing, stating that Glacier is in
compliance with this Subsection 5.3.2.
5.3.3 NO MATERIAL ADVERSE EFFECT. No damage, destruction, or loss
(whether or not covered by insurance) or other event or sequence
of events has occurred which, individually or in the aggregate,
has had or potentially may have a Material Adverse Effect with
respect to Glacier. Glacier's certificate referred to in
Subsection 5.3.2 states that the conditions identified in this
Subsection 5.3.3 are satisfied.
5.3.4 NO GOVERNMENTAL PROCEEDINGS. No action or proceeding has been
commenced or threatened by any governmental agency to restrain or
prohibit or invalidate the Transaction.
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5.3.5 CORPORATE AND STOCKHOLDER ACTION. Glacier's board of directors and
HUB's stockholders have each approved the Transaction.
5.3.6 TAX OPINION. The tax opinion specified in Subsection 5.2.14 has
been delivered to HUB.
5.3.7 OPINION OF COUNSEL. Glacier has obtained from Xxxxxx & Xxxx, P.C.,
subject to customary qualifications and assumptions, and delivered
to HUB an opinion, addressed to HUB, to the effect that:
(a) Glacier is a corporation validly existing and in good standing
under Delaware law;
(b) Glacier has the corporate power and authority to execute,
deliver, and perform this Agreement;
(c) the execution, delivery, and performance of this Agreement
have been duly authorized by all necessary corporate action on
Glacier's part, and this Agreement constitutes Glacier's
legal, binding, and valid obligation, enforceable in
accordance with its terms, except to the extent that
enforcement (but not validity) may be limited by bankruptcy,
insolvency, fraudulent conveyances reorganization, moratorium,
or similar laws generally affecting the enforcement of the
rights of creditors and by generally applicable principles of
equity;
(d) the Glacier Shares have been duly authorized and, when issued
as contemplated by this Agreement, will be validly issued,
fully paid and nonassessable, and free of preemptive or
similar rights arising under applicable corporate statutes or
under Glacier's bylaws or certificate of incorporation;
(e) the Registration Statement became effective under the
Securities Act on ____________, 1998, and, to the best of
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
threatened by the Securities and Exchange Commission;
(f) counsel has no knowledge of any pending or threatened claims,
actions, suits or legal or equitable proceedings before any
governmental agency which, in counsel's opinion would be,
individually or in the aggregate, reasonably likely to result
in liability in excess $50,000 or prevent consummation of the
Transaction; and
(g) all required federal regulatory approvals have been obtained.
5.3.8 FAIRNESS OPINION. HUB has received from Columbia, two updated
fairness opinions, one dated immediately before HUB mails the
Prospectus/Proxy Statement to its stockholders and the other dated
immediately before Closing, to the effect that the financial terms
of the Transaction are financially fair to HUB's stockholders.
5.3.9 CASH PAID. The aggregate of the cash paid to holders of HUB Common
Stock under this Agreement and applicable law will not exceed 10%
of the Purchase Price, as it may be adjusted under this Agreement.
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5.3.10 REGISTRATION STATEMENT. The Registration Statement, as it may
have been amended, required in connection with the Glacier shares
to be issued to stockholders under Subsection 1.3, and as
described in Subsection 4.2, has become effective, and no stop
order suspending the effectiveness of such Registration Statement
has been issued or remains in effect, and no proceedings for that
purpose have been initiated or threatened by the SEC the basis
for which still exists.
5.3.11 DIRECTOR APPOINTMENT. Effective as of Closing, Glacier has
appointed Xxxx X. Xxxxxxxx to serve on Glacier's board of
directors.
5.3.12 APPROVAL BY COUNSEL. All actions, proceedings, instruments, and
documents required in connection with this Agreement, the
Transaction, and all other related legal matters have been
approved by counsel for HUB and the Bank.
SECTION 6
DIRECTORS, OFFICERS AND EMPLOYEES
6.1 DIRECTORS. As a condition to the execution of this Agreement, each
member of HUB's and the Bank's boards of directors have entered into a
written noncompetition agreement with Glacier, HUB, and the Bank, on or
before the date this Agreement is signed. These noncompetition
agreements will take effect on the Effective Date.
6.2 DIRECTOR APPOINTMENT. Effective as of the Effective Date, Glacier will
elect or appoint Xxxx X. Xxxxxxxx to Glacier's board of directors to
serve until his successor is elected and qualified. Nothing in this
Subsection 6.2 or this Agreement restricts in any way any rights of the
Glacier's stockholders and directors at any time after the Effective
Date to nominate, elect, select, or remove Glacier's directors.
6.3 EMPLOYMENT AGREEMENT. Glacier has entered into an employment agreement,
effective as of the Effective Date, with Xxxx X. Xxxxxxxx, the Bank's
current President and CEO. As part of the employment agreement, Xx.
Xxxxxxxx waives all rights he may have under any previous employment
agreements with HUB or the Bank.
6.4 EMPLOYEES. [THIS SECTION MAY BE REVISED UPON REVIEW BY GLACIER AND ITS
COUNSEL OF HUB'S EMPLOYEE BENEFIT PLANS]. Glacier presently intends to
allow the Bank's employees who are employed with the Bank following the
Transaction ("Continuing Employees") to participate in certain employee
benefit plans in which employees of Glacier currently participate.
Glacier intends to grant Continuing Employees credit for prior service
with the Bank for purposes of determining eligibility and vesting, but
Continuing Employees will not receive this credit for purposes of
determining benefit accruals. Benefits for Continuing Employees will
begin accruing under Glacier's plans as soon as practicable and no later
than January 1, 1999. This expression of intent is not a contract with
the Bank's employees and will not be construed to create a contract or
employment right with the Bank's employees.
6.5 EMPLOYEE BENEFIT ISSUES. [THIS SECTION MAY BE REVISED UPON REVIEW BY
GLACIER AND ITS COUNSEL OF HUB'S EMPLOYEE BENEFIT PLANS AND ANY PROFIT
SHARING PLANS].
6.5.1 COMPARABILITY OF BENEFITS. Glacier confirms to HUB its present
intention to provide Continuing Employees with employee benefit
programs which, in the aggregate, are generally competitive with
employee benefit programs offered by financial institutions of
comparable size located in Glacier's market area.
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6.5.2 TERMINATION AND TRANSFER/MERGER OF PLANS. As soon as practicable
after Closing, all employee benefit plans of HUB and its
Subsidiaries will be terminated and the interests of Continuing
Employees in those plans will be transferred or merged into
Glacier's employee benefit plans.
6.5.3 NO CONTRACT CREATED. Nothing in this Agreement gives any employee
of HUB or its Subsidiaries a right to continuing employment.
SECTION 7
TERMINATION OF AGREEMENT AND
ABANDONMENT OF TRANSACTION
7.1 TERMINATION BY REASON OF LAPSE OF TIME. If Closing does not occur before
the Termination Date, either Glacier or HUB may terminate this Agreement
and the Transaction if all of the following conditions are present:
(a) the terminating party's board of directors decides to terminate by a
majority vote of its members;
(b) the terminating party delivers to the other party written notice
that its board of directors has voted in favor of termination; and
(c) the failure to consummate the Transaction by the Termination Date is
not due to a breach by the party seeking termination of any of its
obligations, covenants, or representations in this Agreement.
7.2 OTHER GROUNDS FOR TERMINATION. This Agreement and the Transaction may be
terminated at any time before Closing (whether before or after
applicable approval of this Agreement by HUB's stockholders, unless
otherwise provided) as follows:
7.2.1 MUTUAL CONSENT. By mutual consent of HUB and Glacier, if the
boards of directors of each party agrees to terminate by a
majority vote of its members.
7.2.2 HUB'S CONDITIONS NOT MET. By Glacier's board of directors if, by
August 31, 1998, any condition set forth in Subsections 5.1 or 5.2
has not been satisfied.
7.2.3 GLACIER'S CONDITIONS NOT MET. By HUB's board of directors if, by
August 31, 1998, any condition set forth in Subsections 5.1 or 5.3
has not been satisfied.
7.2.4 HUB FAILS TO RECOMMEND STOCKHOLDER APPROVAL OR OPTION BECOME
EXERCISABLE. By Glacier's board of directors (a) before HUB's
stockholders approve the Transaction, if HUB's board of directors:
(1) fails to recommend to its stockholders the approval of the
Transaction or (2) modifies, withdraws or changes in a manner
adverse to Glacier its recommendation to stockholders to approve
the Transaction; or (b) the option granted by HUB to Glacier under
the Stock Option Agreement becomes exercisable by Glacier, unless
Glacier exercises its rights under the Stock Option Agreement.
7.2.5 IMPRACTICABILITY. By either Glacier or HUB, upon written notice
given to the other party, if the party seeking termination under
this Subsection 7.2.5's board of directors has determined in its
sole judgment, made in good faith and after due consideration and
consultation with counsel, that the Transaction has become
inadvisable or impracticable
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by reason of the institution of litigation by the federal
government or the government of the State of Montana to restrain
or invalidate the Transaction or this Agreement.
7.3 HUB TERMINATION FEE. HUB acknowledges that Glacier has incurred
expenses, direct and indirect, in negotiating and executing this
Agreement and in taking steps to effect Transaction. Accordingly, HUB
will pay to Glacier $250,000, if (1) this Agreement terminates because
HUB does not use all reasonable efforts to consummate the Transaction in
accordance with the terms of this Agreement; (2) HUB terminates this
Agreement for any reason other than the grounds for termination set
forth in Subsections 7.1, 7.2.1, 7.2.3 or 7.2.5; or (3) Glacier
terminates this Agreement under Subsections 7.2.2 (other than for
failure of a condition set forth in Subsections 5.1, 5.2.10, 5.2.11,
5.2.14, 5.2.18, 5.2.20, 5.2.21, and 5.2.23, unless the failure of any of
those conditions is due to HUB's fault) or 7.2.4. If this termination
fee becomes payable, it will be payable on Glacier's demand and must be
paid by HUB within 3 business days of the date Glacier makes the demand.
Glacier's rights under the Stock Option Agreement are in addition to
this Subsection 7.3, and this Subsection 7.3 does not limit or restrict
these rights or the circumstances under which Glacier may exercise the
Option.
7.4 GLACIER TERMINATION FEE. Due to expenses, direct and indirect, incurred
by HUB in negotiating and executing this Agreement and in taking steps
to effect the Transaction, Glacier will pay to HUB $100,000 if (1) this
Agreement terminates because Glacier does not use all reasonable efforts
to consumate the Transaction in accordance with the terms of this
Agreement (2) Glacier terminates this Agreement for any reason other
than the grounds for termination set forth in Subsections 7.1, 7.2.2,
7.2.4, or 7.2.5, or (3) HUB terminates this Agreement under Subsection
7.2.3 (other than for failure of a condition set forth in 5.1, 5.3.4,
5.3.5, 5.3.6, 5.3.8, 5.3.9, 5.3.10, and 5.3.12, unless the failure of
any of those conditions is due to Glacier's fault). If this termination
fee becomes payable, it will be payable on HUB's demand and must be paid
by Glacier within three business days of the date HUB makes the demand.
7.5 COST ALLOCATION UPON TERMINATION. In connection with the termination of
this Agreement under this Section 7, except as provided in Subsection
7.3 and 7.4, Glacier and HUB will each pay their own out-of-pocket costs
incurred in connection with this Agreement, and will have no other
liability to the other party. But, termination of this Agreement does
not affect Glacier's rights under the Stock Option Agreement or the
circumstances under which Glacier may exercise the Option.
SECTION 8
MISCELLANEOUS
8.1 NOTICES. Any notice, request, instruction or other document given under
this Agreement must be in writing and must either be delivered
personally or via facsimile transmission or be sent by registered or
certified mail, postage prepaid, and addressed as follows (or to any
other address or person representing any party as designated by that
party through written notice to the other party):
Glacier Glacier Bancorp, Inc.
X.X. Xxx 00
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxx X. XxxXxxxxx
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with a copy to: Xxxxxxx X. Xxxxx, Esq.
Xxxxxx & Xxxx, P.C.
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
HUB HUB Financial Corporation
P.O. Box 5269
0000 X. Xxxxxxx Xxx.
Xxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx
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
8.2 WAIVERS AND EXTENSIONS. Subject to Section 9, Glacier or HUB may grant
waivers or extensions to the other party, but only through a written
instrument executed by the Chief Executive Officer of the party granting
the waiver or extension. Waivers or extensions which 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:
(a) any inaccuracies of any other party in the representations
contained in this Agreement or in any document delivered in
connection with this Agreement;
(b) compliance with any of the covenants of any other party; and
(c) any other party's performance of any obligations under this
Agreement and any other condition precedent set out in Section 5.
8.3 GENERAL INTERPRETATION. Except as otherwise expressly provided in this
Agreement or unless the context clearly requires otherwise: (1) the
defined terms defined in this Agreement include the plural as well as
the singular and (2) references in this Agreement to Sections,
Subsections, Schedules, and Exhibits refer to Sections and Subsections
of and Schedules and Exhibits to this Agreement. Whenever the words
"include", "includes", or "including" are used in this Agreement, the
parties intend them to be interpreted as if they are followed by the
words "without limitation." All pronouns used in this Agreement include
the masculine, feminine and neuter gender, as the context requires. All
accounting terms used in this Agreement that are not expressly defined
in this Agreement have the respective meanings given to them in
accordance with GAAP.
8.4 CONSTRUCTION AND EXECUTION IN COUNTERPARTS. Except as otherwise
expressly provided in this Agreement, this Agreement: (1) contains the
parties' entire understanding, 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; (2) will not be
interpreted by reference to any of the titles or headings to the
Sections or Subsections, which have been inserted for convenience only
and are not deemed a substantive part of this Agreement; (3) includes
all amendments to this Agreement, each of which is made a part of this
Agreement by this
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reference; and (4) 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.
8.5 SURVIVAL OF REPRESENTATIONS AND COVENANTS. The representations and
covenants in this Agreement will not survive Closing or termination of
this Agreement, except that (1) Subsection 4.9 (confidentiality),
Subsection 7.3 (termination fee), and Subsection 7.5 (expense
allocation) will survive termination and Closing, and (2) the covenants
in this Agreement that impose duties or obligations on the parties
following Closing will survive Closing.
8.6 ATTORNEYS' FEES AND COSTS. In the event of any dispute or litigation
with respect to the terms and conditions or enforcement of rights or
obligations arising by reason of this Agreement or the Transaction, the
prevailing party in any such litigation will be entitled to
reimbursement from the other party for its costs and expenses, including
reasonable judicial and extra-judicial attorneys' fees, expenses and
disbursements, and fees, costs and expenses relating to any mediation or
appeal.
8.7 ARBITRATION. At either party's request, the parties must submit any
dispute, controversy or claim arising out of or in connection with, or
relating to, this Agreement or any breach or alleged breach of this
Agreement, to arbitration under the American Arbitration Association's
rules then in effect (or under any other form of arbitration mutually
acceptable to the parties). A single arbitrator agreed on by the parties
will conduct the arbitration. If the parties cannot agree on a single
arbitrator, each party must select one arbitrator and those two
arbitrators will select a third arbitrator. This third arbitrator will
hear the dispute. The arbitrator's 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 arbitrator's decision. The arbitrator will
provide the parties with a written decision naming the substantially
prevailing party in the action. This prevailing party is entitled to
reimbursement from the other party for its costs and expenses, including
reasonable attorneys' fees.
8.8 GOVERNING LAW AND VENUE. This Agreement will be governed by and
construed in accordance with Montana law, except to the extent that
certain matters may be governed by federal law. The parties must bring
any legal proceeding arising out of this Agreement in Flathead County,
Montana.
8.9 SEVERABILITY. If a court determines that any term of this Agreement is
invalid or unenforceable under applicable law, the remainder of this
Agreement is not affected, and each remaining term is valid and
enforceable to the fullest extent permitted by law.
SECTION 9
AMENDMENTS
At any time before the Effective Date, whether before or after the
parties have obtained any applicable stockholder approvals of the Transaction,
the boards of directors of Glacier and HUB may: (1) amend or modify this
Agreement or any attached Exhibit or Schedule and (2) grant waivers or time
extensions in accordance with Subsection 8.2. But, after HUB's stockholders have
approved this Agreement, the parties' boards of directors may not without HUB
stockholder approval amend or waive any provision of this Agreement if the
amendment or waiver would reduce the amount or change the form of consideration
HUB stockholders will receive in the Transaction. All amendments, modifications,
extensions and waivers must be in writing and signed by the party agreeing to
the amendment, modification, extension or waiver. Failure by any party to insist
on strict compliance by the other party with any of its obligations, agreements
or conditions under this Agreement, does not,
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without a writing, operate as a waiver or estoppel with respect to that or any
other obligation, agreement, or condition.
Signed as of December 30, 1997:
GLACIER BANCORP, INC., INC.
By /s/ Xxxx X. XxxXxxxxx
--------------------------------------
Name: Xxxx X. XxxXxxxxx
Title: Chairman, President and CEO
HUB FINANCIAL CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
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STATE OF MONTANA )
) ss.
COUNTY OF FLATHEAD )
On this 30th day of December, 1997, before me personally appeared Xxxx
X. XxxXxxxxx, to me known to be the Chairman of the Board, President and Chief
Executive Officer of GLACIER BANCORP, INC., the corporation that executed the
foregoing instrument, who acknowledged said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes mentioned
there, and who stated on oath that he was authorized to execute said instrument,
and that the seal affixed (if any) was the official seal of said corporation.
IN WITNESS OF THE FOREGOING, I have set my hand and official seal to
this document as of the day and year first written above.
/s/
----------------------------------------------
NOTARY PUBLIC in and for the State of Montana,
residing at __________________________________
Title: _______________________________________
My commission expires: _______________________
STATE OF MONTANA )
) ss.
COUNTY OF XXXXX AND XXXXX )
On this 30th day of December, 1997, before me personally appeared Xxxxxx
X. Xxxxxxx, to me known to be the President and Chief Executive Officer of HUB
FINANCIAL CORPORATION, the corporation that executed the foregoing instrument,
who acknowledged said instrument to be the free and voluntary act and deed of
said corporation, for the uses and purposes mentioned there, and who stated on
oath that he was authorized to execute said instrument, and that the seal
affixed (if any) was the official seal of said corporation.
IN WITNESS OF THE FOREGOING, I have set my hand and official seal to
this document as of the day and year first written above.
/s/
----------------------------------------------
NOTARY PUBLIC in and for the State of Montana,
residing at __________________________________
Title: _______________________________________
My commission expires: _______________________
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The undersigned, all being officers or members of the board of directors
of either HUB Financial Corporation ("HUB") or Valley Bank of Helena ("Bank"),
hereby consent to the Plan and Agreement of Merger ("Agreement"), dated as of
December 30, 1997, between Glacier Bancorp, Inc., Inc. and HUB, and individually
and as a group agree to vote in favor of the Agreement the shares of capital
stock each beneficially owns and, subject to the good faith exercise of their
fiduciary duties in accordance with the advice of counsel, to support and
recommend the Agreement's adoption by the other stockholders of HUB.
Except as otherwise required by law, the undersigned hereby,
individually and as a group, further agree to refrain from (a) negotiating or
accepting any offer of merger, consolidation, or acquisition of any of the
shares or all or substantially all of the assets of HUB from the date of the
Agreement through the meeting of the stockholders of HUB at which the
transactions contemplated by the Agreement will be considered, and (b) any other
actions or omissions inconsistent with the transactions contemplated by the
Agreement.
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxxx
----------------------------------------- -----------------------------------------
Xxxxxx X. Xxxxxxx Xxxx X. Xxxxxxxx
Chairman of HUB and Director of Bank Director of Bank
/s/ Xxxxxx X. Xxxxxx /s/ Xx. Xxxxxxxx X. Xxxxxx
----------------------------------------- -----------------------------------------
Xxxxxx X. Xxxxxx Xx. Xxxxxx X. Xxxxxx
Vice Chairman of HUB and Director of Bank Director of Bank
/s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------- -----------------------------------------
Xxxxx X. Xxxxx Xxxxxx X. Xxxxxxxx
Chairman of Bank Director of Bank
/s/ Xxxxx X. Xxxxxxxx, Xx. /s/ Xx. Xxxx X. Xxxxxxxx
----------------------------------------- -----------------------------------------
Xxxxx X. Xxxxxxxx, Xx. Xx. Xxxx X. Xxxxxxxx
Director of Bank Director of Bank
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxx Xxxxxx
----------------------------------------- -----------------------------------------
Xxxxxx X. Xxxxxxxx Xxxx Xxxxxx
Director of HUB Director of Bank
/s/ Xxxx X. Xxxxxx /s/ Xxxx X. Xxxxxx
----------------------------------------- -----------------------------------------
Xxxx X. Xxxxxx Xxxx X. Xxxxxx
Director of Bank Director of Bank
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Exhibits and Schedules to
Plan and Agreement of Merger
Between
Glacier Bancorp, Inc.
and
HUB Financial Corporation
Not Included
