1
EXHIBIT 10.1
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement"), dated as of September 9,
1999, is between MOUNTAIN WEST BANK ("Mountain West"), an Idaho banking
corporation, and GLACIER BANCORP, INC. ("Glacier"), a Delaware business
corporation.
Mountain West and Glacier have executed a Plan and Agreement of Merger
("Merger Agreement"), of even date with this Agreement, which would result in
the merger of Mountain West with a newly formed bank subsidiary of Glacier.
By negotiating and executing the Merger Agreement and by taking actions
necessary or appropriate to effect the transactions contemplated by the Merger
Agreement, Glacier has incurred and will incur substantial direct and indirect
costs (including, without limitation, the costs of management and employee time)
and will forgo the pursuit of certain alternative investments and transactions.
THEREFORE, in consideration of the promises set forth in this Agreement
and in the Merger Agreement, the parties agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth in this
Agreement, Mountain West irrevocably grants an option ("Option") to
Glacier to purchase an aggregate of 206,326 authorized but unissued
shares of Mountain West's Common Stock, no par value ("Common Stock")
(which if issued, and assuming exercise of outstanding options to
acquire the Common Stock, would represent approximately 19.9% of total
stock issued and outstanding), at a per share price of $21 ("Option
Price"), which was the estimated fair market value of the Common Stock
at June 30, 1999.
2. Exercise of Option. Subject to the provisions of this Section 2 and of
Section 130 of this Agreement, this Option may be exercised by Glacier
or any transferee as set forth in Section 5 of this Agreement, in whole
or in part, at any time, or from time to time in any of the following
circumstances:
(a) Mountain West or its board of directors enters into an agreement or
recommends to Mountain West shareholders an agreement (other than
the Merger Agreement) under which any entity, person or group
(collectively "Person"), within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended ("Exchange Act"),
would: (1) merge or consolidate with, acquire 51% or more of the
assets or liabilities of, or enter into any similar transaction with
Mountain West, or (2) purchase or otherwise acquire (including by
merger, consolidation, share exchange or any similar transaction)
securities representing 10% or more of Mountain West's voting shares
of Mountain West;
1
2
(b) any Person (other than Glacier or any of its subsidiaries and other
than any Person owning as of the date of this Agreement 10% or more
of the voting shares of Mountain West) acquires the beneficial
ownership or the right to acquire beneficial ownership of securities
which, when aggregated with other such securities owned by such
Person, represents 10% or more of the voting shares of Mountain West
(the term "beneficial ownership" for purposes of this Agreement has
the meaning set forth in Section 13(d) of the Exchange Act, and the
regulations promulgated under the Exchange Act); notwithstanding the
foregoing, the Option will not be exercisable in the circumstances
described above in this subsection (b) if a Person acquires the
beneficial ownership of securities which, when aggregated with other
such securities owned by such Person, represents 10% or more, but
less than 25%, of the voting shares of Mountain West and the
transaction does not result in, and is not presumed to constitute,
"control" as defined under Section 7(j) of the Federal Deposit
Insurance Act or 12 CFR Part 303.4;
(c) failure of the board of directors of Mountain West to recommend, or
withdrawal by the board of directors of a prior recommendation of,
the Merger to the shareholders; or
(d) failure of the shareholders to approve the Merger by the required
affirmative vote at a meeting of the shareholders, after any Person
(other than Glacier or a subsidiary of Glacier) announces publicly
or communicates, in writing, to Mountain West a proposal to (1)
acquire Mountain West (by merger, consolidation, the purchase of 51%
or more of its assets or liabilities or any other similar
transaction), (2) purchase or otherwise acquire securities
representing 25% or more of the voting shares of Mountain West or
(3) change the composition of the board of directors of Mountain
West.
It is understood and agreed that the Option will become exercisable on
the occurrence of any of the above-described circumstances even though
the circumstance occurred as a result, in part or in whole, of the board
of Mountain West complying with its fiduciary duties.
Notwithstanding the foregoing, the Option may not be exercised if either
(1) any applicable and required governmental approvals have not been
obtained with respect to such exercise or if such exercise would violate
any applicable regulatory restrictions, or (2) at the time of exercise,
Glacier is failing in any material respect to perform or observe its
covenants or conditions under the Merger Agreement, unless the reason
for such failure is that Mountain West is failing to perform or observe
its covenants or conditions under the Merger Agreement.
2
3
3. Notice, Time and Place of Exercise. Each time that Glacier or any
transferee wishes to exercise any portion of the Option, Glacier or such
transferee will give written notice of its intention to exercise the
Option specifying the number of shares as to which the Option is being
exercised ("Option Shares") and the place and date for the closing of
the exercise (which date may not be later than ten business days from
the date such notice is mailed). If any law, regulation or other
restriction will not permit such exercise to be consummated during this
ten-day period, the date for the closing of such exercise will be within
five days following the cessation of the restriction on consummation.
4. Payment and Delivery of Certificate(s). At any closing for an exercise
of the Option or any portion thereof, (a) Glacier and Mountain West will
each deliver to the other certificates as to the accuracy, as of the
closing date, of their respective representations and warranties under
this Agreement, (b) Glacier or the transferees will pay the aggregate
purchase price for the shares of Common Stock to be purchased by
delivery of a certified or bank cashier's check in immediately available
funds payable to the order of Mountain West, and (c) Mountain West will
deliver to Glacier or the transferees a certificate or certificates
representing the shares so purchased.
5. Transferability of the Option and Option Shares. Before the Option, or a
portion of the Option, becomes exercisable in accordance with the
provisions of Section 2 of this Agreement, neither the Option nor any
portion of the Option will be transferable. If any of the events or
circumstances set forth in Sections 20 through 0 above occur, Glacier
may freely transfer, subject to applicable federal and state securities
laws, the Option or any portion of the Option, or any of the Option
Shares.
For purposes of this Agreement, a merger or consolidation of Glacier
(whether or not Glacier is the surviving entity) or an acquisition of
Glacier will not be deemed a transfer.
6. Representations, Warranties and Covenants of Mountain West. Mountain
West represents and warrants to Glacier as follows:
(a) Due Authorization. This Agreement has been duly authorized by all
necessary corporate action on the part of Mountain West, has been
duly executed by a duly authorized officer of Mountain West and
constitutes a valid and binding obligation of Mountain West. No
shareholder approval by Mountain West shareholders is required by
applicable law or otherwise before the exercise of the Option in
whole or in part.
(b) Option Shares. Mountain West has taken all necessary corporate and
other action to authorize and reserve and to permit it to issue and,
at all times from the date of this Agreement to such time as the
obligation to deliver shares under this Agreement terminates, will
have reserved for issuance, at the closing(s) upon exercise of the
Option, or any portion of the Option, the Option Shares (subject to
adjustment, as provided in Section 8 below), all of which, upon
issuance under this Agreement, will be duly and validly issued,
fully paid and nonassessable, and
3
4
will be delivered free and clear of all claims, liens, encumbrances
and security interests, including any preemptive right of any of the
shareholders of Mountain West.
(c) No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated by it will
violate or result in any violation of or be in conflict with or
constitute a default under any term of the articles of incorporation
or bylaws of Mountain West or any agreement, instrument, judgment,
decree, law, rule or order applicable to Mountain West or any
subsidiary of Mountain West or to which Mountain West or any such
subsidiary is a party.
(d) Notification of Record Date. At any time from and after the date of
this Agreement until the Option is no longer exercisable, Mountain
West will give Glacier or any transferee 30 days prior written
notice before setting the record date for determining the holders of
record of the Common Stock entitled to vote on any matter, to
receive any dividend or distribution or to participate in any rights
offering or other matters, or to receive any other benefit or right,
with respect to the Common Stock.
7. Representations, Warranties and Covenants of Glacier. Glacier represents
and warrants to Mountain West as follows:
(a) Due Authorization. This Agreement has been duly authorized by all
necessary corporate action on the part of Glacier, has been duly
executed by a duly authorized officer of Glacier and constitutes a
valid and binding obligation of Glacier.
(b) Transfers of Common Stock. No shares of Common Stock acquired upon
exercise of the Option will be transferred except in a transaction
registered or exempt from registration under any applicable
securities laws.
(c) No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated by it will
violate or result in any violation of or be in conflict with or
constitute a default under any term of the certificate of
incorporation or bylaws of Glacier or any agreement, instrument,
judgment, decree, law, rule or order applicable to Glacier or any
subsidiary of Glacier or to which Glacier or any such subsidiary is
a party.
8. Adjustment Upon Changes in Capitalization. In the event of any change in
the Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, exchanges of shares or the like, the
number and kind of shares or securities subject to the Option and the
purchase price per share of Common Stock will be appropriately adjusted.
If, before the Option terminates or is exercised, Mountain West is
acquired by another party, consolidates with or merges into another
corporation or liquidates, Glacier or any
4
5
transferee will thereafter receive, upon exercise of the Option, the
securities or properties to which a holder of the number of shares of
Common Stock then deliverable upon the exercise thereof would have been
entitled upon such acquisition, consolidation, merger or liquidation,
and Mountain West will take all steps in connection with such
acquisition, consolidation, merger or liquidation as may be necessary to
assure that the provisions of this agreement will thereafter be
applicable, as nearly as reasonably may be practicable, in relation to
any securities or property thereafter deliverable upon exercise of the
Option.
9. Nonassignability. This Agreement binds and inures to the benefit of the
parties and their successors. This Agreement is not assignable by either
party, but Glacier may transfer the Option, the Option Shares or any
portion of the Option or Option Shares in accordance with Section 5. A
merger or consolidation of Glacier (whether or not Glacier is the
surviving entity) or an acquisition of Glacier will not be deemed an
assignment or transfer.
10. Regulatory Restrictions. Mountain West will use its best efforts to
obtain or to cooperate with Glacier or any transferee in obtaining all
necessary regulatory consents, approvals, waivers or other action
(whether regulatory, corporate or other) to permit the acquisition of
any or all Option Shares by Glacier or any transferee.
11. Remedies. Mountain West agrees that if for any reason Glacier or any
transferee will have exercised its rights under this Agreement and
Mountain West will have failed to issue the Option Shares to be issued
upon such exercise or to perform its other obligations under this
Agreement, unless such action would violate any applicable law or
regulation by which Mountain West is bound, then Glacier or any
transferee will be entitled to specific performance and injunctive and
other equitable relief. Glacier agrees that if it fails to perform any
of its obligations under this Agreement, then Mountain West will be
entitled to specific performance and injunctive and other equitable
relief. This provision is without prejudice to any other rights that
Mountain West or Glacier or any transferee may have against the other
party for any failure to perform its obligations under this Agreement.
12. No Rights as Shareholder. This Option, before it is exercised, will not
entitle its holder to any rights as a shareholder of Mountain West at
law or in equity. Specifically, this Option, before it is exercised,
will not entitle the holder to vote on any matter presented to the
shareholders of Mountain West or, except as provided in this Agreement,
to any notice of any meetings of shareholders or any other proceedings
of Mountain West.
13. Miscellaneous.
(a) Termination. This Agreement and the Option, to the extent not
previously exercised, will terminate upon the earliest of (1) April
30, 2000; (2) the mutual agreement of the parties to this Agreement;
(3) 31 days after the date on which any application for regulatory
approval for the Merger has been denied, but if before the
expiration of the 31-day period, Mountain West or Glacier is engaged
5
6
in litigation or an appeal procedure relating to an attempt to
obtain approval of the Merger, this Agreement will not terminate
until the earlier of (i) April 30, 2000, or (ii) 31 days after the
completion of the litigation and appeal procedure; (4) the 30th day
following the termination of the Merger Agreement for any reason
other than a material noncompliance or default by Glacier with
respect to its obligations under it; or (5) the date of termination
of the Merger Agreement if the termination is due to a material
noncompliance or default by Glacier with respect to its obligations
under it; but if the Option has been exercised, in whole or in part,
before the termination of this Agreement, then the exercise will
close under Section 4 of this Agreement, even though that closing
date is after the termination of this Agreement; and if the Option
is sold before the termination of this Agreement, the Option may be
exercised by the transferee at any time within 31 days after the
date of termination even though such exercise or the closing of such
exercise occurs after the termination of this Agreement.
(b) Amendments. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written
agreement executed by the parties.
(c) Severability of Terms. Any provision of this Agreement that is
invalid, illegal or unenforceable is ineffective only to the extent
of the invalidity, illegality or unenforceability without affecting
in any way the remaining provisions or rendering any other
provisions of this Agreement invalid, illegal or unenforceable.
Without limiting the generality of the foregoing, if the right of
Glacier or any transferee to exercise the Option in full for the
total number of shares of Common Stock or other securities or
property issuable upon the exercise of the Option is limited by
applicable law, or otherwise, Glacier or any transferee may,
nevertheless, exercise the Option to the fullest extent permissible.
(d) Notices. All notices, requests, claims, demands and other
communications under this Agreement must be in writing and must be
given (and will be deemed to have been duly received if so given) by
delivery, by cable, telecopies or telex, or by registered or
certified mail, postage prepaid, return receipt requested, to the
respective parties at the addresses below, or to such other address
as either party may furnish to the other in writing. Change of
address notices will be effective upon receipt.
If to Mountain West to:
Mountain West Bank
P.O. Box 1059
000 Xxxxxxxx Xxxxx
Xxxxx x'Xxxxx, XX 00000
Attn: Xxx X. Xxxxxxx
6
7
With a copy to:
Xxxxx Xxxxxx, Esq.
Xxxxxx & Xxxxx, X.X.
000 XX Xxxxxxxxx, Xxxxx 000
Xxxxx x'Xxxxx, XX 00000
If to Glacier, to:
Glacier Bancorp, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxxx & Xxxx, P.C.
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
(e) Governing Law. The parties intend this Agreement and the Option,
in all respects, including all matters of construction, validity
and performance, to be governed by the laws of the State of
Montana, without giving effect to conflicts of law principles.
(f) Counterparts. This Agreement may be executed in several
counterparts, each of which is an original, and all of which
together constitute one and the same agreement.
(g) Effects of Headings. The section headings in this Agreement are
for convenience only and do not affect the meaning of its
provisions.
[SIGNATURES APPEAR ON NEXT PAGE]
7
8
Dated September 9, 1999:
GLACIER BANCORP, INC.
BY /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxx
Its: President and CEO
MOUNTAIN WEST BANK
By /s/ Xxx X. Xxxxxxx
--------------------------------------
Xxx X. Xxxxxxx
Its: President and CEO
8
