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PLAN AND AGREEMENT OF MERGER
BETWEEN
GLACIER BANCORP, INC.
AND
WESTERFED FINANCIAL CORPORATION
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DATED AS OF SEPTEMBER 20, 2000
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PLAN AND AGREEMENT OF MERGER
BETWEEN
GLACIER BANCORP, INC.
AND
WESTERFED FINANCIAL CORPORATION
This Plan and Agreement of Merger (the "Agreement"), dated as of
September 20, 2000, is between GLACIER BANCORP, INC. ("Glacier") and WESTERFED
FINANCIAL CORPORATION ("WesterFed")
PREAMBLE
The management and boards of directors of Glacier and WesterFed,
respectively, believe that the proposed transaction between Glacier and
WesterFed, on the terms and conditions set forth in this Agreement, is in the
best interests of Glacier's and WesterFed's shareholders.
RECITALS
A. THE PARTIES. The parties to the Merger are as follows:
(1) 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").
Glacier's principal office is located in Kalispell, Montana.
Glacier owns (1) all of the outstanding common stock of Mountain
West Bank, Glacier Bank, First Security Bank of Missoula, Valley
Bank of Helena, and Big Sky Western Bank; and (2) more than 90%
of the outstanding common stock of Glacier Bank of Whitefish and
Glacier Bank of Eureka, respectively.
(2) WesterFed is a corporation duly organized and validly existing
under Delaware law, and is a registered savings and loan holding
company under the Home Owners' Loan Act, as amended ("HOLA").
WesterFed's principal offices are located in Missoula, Montana.
WesterFed owns all of the outstanding common stock of Western
Security Bank ("the Bank").
B. THE MERGER. On the Effective Date, all of the outstanding shares of
WesterFed common stock (other than Dissenting Shares and Exception
Shares) will be exchanged for shares of Glacier common stock, cash, or a
combination of both, and WesterFed will be merged (the "Merger") with
and into Glacier in accordance with the applicable corporation law of
the State of Delaware, with Glacier continuing as the surviving entity
in the Merger, and the Bank will become a wholly-owned subsidiary of
Glacier.
C. BOARD APPROVALS. Glacier's and WesterFed's respective boards of
directors have deemed the Merger advisable, and have approved this
Agreement and authorized its execution and delivery.
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D. OTHER APPROVALS. The Merger is subject to:
(1) satisfaction of the conditions described in Section 5 of this
Agreement or waiver by a party of those conditions that may be
waived by it; and
(2) each approval required by Section 5.1 of this Agreement being
granted and all applicable waiting periods having expired.
E. EMPLOYMENT AGREEMENTS. Glacier has entered into employment agreements as
of the date hereof but to become effective as of the Effective Date with
Xxxxx X. Xxxxxxxx, President and Chief Executive Officer of WesterFed
and the Bank; Xxxxx X. Xxxxxxxxx, Executive Vice President, Treasurer
and Chief Financial Officer of WesterFed and the Bank; Xxxxxx Xxxxxxx,
Senior Vice President - Central Operations Manager of the Bank; Xxxxx
Xxxxxxxx, Senior Vice President - Credit Administration of the Bank and
Xxxx Xxxxxxxx, Senior Vice President - Human Resources of the Bank.
F. VOTING AGREEMENTS. In association with the parties' execution of this
Agreement, the directors and executive officers of WesterFed (other than
Xxxxx X. Xxxxxxxxx) and Glacier have entered into agreements,
substantially in the form attached to this Agreement as Exhibit A,
pursuant to which, among other things, each such individual has agreed
to vote his or her shares of WesterFed or Glacier common stock,
whichever is applicable, in favor of the actions contemplated by this
Agreement.
G. FAIRNESS OPINIONS. WesterFed has received from Xxxxxx Xxxxxx Securities,
Inc. ("Xxxxxx Xxxxxx") a written opinion to the effect that the Merger
Consideration to be received in the Merger is fair to the shareholders
of WesterFed from a financial point of view, a copy of which has been
provided to Glacier. As a condition to Closing of the Transaction,
Xxxxxx Xxxxxx will update this fairness opinion immediately before
WesterFed mails the Prospectus/Proxy Statement to its shareholders.
Glacier has received from X.X. Xxxxxxxx & Co. ("Davidson") a written
opinion to the effect that the Merger Consideration to be paid by
Glacier in connection with the Merger is fair to the shareholders of
Glacier from a financial point of view, a copy of which has been
provided to WesterFed. As a condition to Closing of the Transaction,
Davidson will update the fairness opinion immediately before Glacier
mails the Prospectus/Proxy Statement to its shareholders.
H. INTENTION OF THE PARTIES--ACCOUNTING AND TAX TREATMENT. The parties
intend the Merger to be treated for accounting purposes as a "purchase."
The parties intend the Merger to qualify, for federal income tax
purposes, as a tax-free reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended ("IRC").
I. STOCK OPTION AGREEMENT. As an inducement to and condition of Glacier's
execution of this Agreement, WesterFed has approved the grant of an
option to Glacier under the Stock Option Agreement, as provided in
Section 1.15.
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AGREEMENT
Glacier and WesterFed 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, WesterFed will be merged with and into
Glacier in accordance with the applicable corporation law of the State
of Delaware ("Corporate Law"). The Merger will become effective on the
date ("Effective Date") and at the time the Certificate of Merger is
accepted for filing by the Secretary of the State of Delaware. The term
"Transaction" means the Merger transaction contemplated by this
Agreement, subject to any modifications Glacier elects in accordance
with Section 1.14.
1.2 EFFECT OF TRANSACTION. On the Effective Date, the corporate existence of
WesterFed will be merged into and continued in Glacier (sometimes
referred to as the "Combined Corporation"). The name of the Combined
Corporation will be "Glacier Bancorp, Inc." The principal office of the
Combined Corporation will be located in Kalispell, Montana. The
Certificate of Incorporation and the Bylaws of the Combined Corporation
will be the Certificate of Incorporation and the Bylaws of Glacier in
effect immediately before the Effective Date. The directors of the
Combined Corporation will be the persons who were the directors of
Glacier immediately prior to the Effective Date with the addition of
Xxxxx X. Xxxxxxxx. The officers of the Combined Corporation will be the
officers of Glacier and WesterFed immediately prior to the Effective
Date. Consistent with Corporate Law, all rights, franchises and
interests of each of Glacier and WesterFed in and to every type of
property (real, personal and mixed) and choses in action will be
transferred to and vested in the Combined Corporation by virtue of the
Merger without any deed or other transfer, and the Combined Corporation,
upon the Effective Date and without any order or other action on the
part of any court of otherwise, will hold and enjoy all rights of
property, franchises, and interests in the same manner and to the same
extent as such rights, franchises and interests were held or enjoyed by
each of Glacier and WesterFed immediately prior to the Effective Date.
1.3 CONSIDERATION. Subject to the provisions of this Agreement, on the
Effective Date, by virtue of the Merger and without any action on the
part of Glacier or WesterFed, each share of WesterFed Common Stock
issued and outstanding immediately prior to the Effective Date (other
than Dissenting Shares and Excluded Shares) will, automatically and
without any action on the part of the holder of such share, be converted
into the right to receive from Glacier consideration (the "Merger
Consideration") consisting of either cash, stock, or a combination of
both, subject to the provisions of Subsections 1.6.4 and 1.6.5.
1.4 PRICE.
1.4.1 DEFINITIONS. For purposes of this Agreement, the following terms
will have the meanings set forth below:
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(a) "Aggregate Merger Consideration" means the sum of (i) the
Calculated Cash Consideration and (ii) the Calculated
Stock Consideration.
(b) "Average Closing Price" means the average, rounded to the
second decimal (rounding down if the third decimal is four
or less and rounding up if the third decimal is five or
more), of the daily closing price per share of Glacier
Common Stock as reported on the Nasdaq National Market or
such successor exchange on which Glacier Common Stock may
then be traded (as reported in the Wall Street Journal or,
if not reported therein, in another mutually agreed upon
authoritative source) for 20 consecutive trading days
ending on the Determination Date. The "Determination Date"
means the date occurring 15 trading days prior to the
Effective Date.
(c) "Calculated Cash Consideration" means (i) $9.05, if the
Average Closing Price is equal to or greater than $9.90,
or (ii) $10.04 if the Average Closing Price is less than
$9.00.
(d) "Calculated Stock Consideration" means (i) the Exchange
Ratio multiplied by (ii) the Average Closing Price.
(e) "Exchange Ratio" is 1.1.
(f) "Final Exchange Ratio" means the quotient, rounded to the
nearest ten-thousandth, obtained by dividing the Per Share
Consideration by the Average Closing Price.
(g) "Per Share Consideration" has the following meanings:
(1) AVERAGE CLOSING PRICE GREATER THAN $9.90. If the
Average Closing Price of Glacier Common Stock is
greater than or equal to $9.90, then the Per Share
Consideration will be the Aggregate Merger
Consideration;
(2) AVERAGE CLOSING PRICE BETWEEN $9.00 AND $9.90. If
the Average Closing Price of Glacier Common Stock
is less than $9.90 and greater than or equal to
$9.00, then the Per Share Consideration will be
$19.94.
(3) AVERAGE CLOSING PRICE LESS THAN $9.00. If the
Average Closing Price of Glacier Common Stock is
less than $9.00, then the Per Share Consideration
will be the Aggregate Merger Consideration, unless
Glacier timely makes the election contemplated by
Section 7.2.7, in which case the Per Share
Consideration will be $19.94.
1.4.2 MERGER CONSIDERATION. The Merger Consideration to be received by
the holder for each share of WesterFed Common Stock will be:
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(a) a number of shares of Glacier Common Stock equal to the
Final Exchange Ratio ("Stock Distribution"), or
(b) cash in an amount equal to the Per Share Consideration
("Cash Distribution").
1.5 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.
1.6 CONVERSION ELECTION PROCEDURES AND ALLOCATION.
1.6.1 ELECTION OPTIONS. Subject to the election and allocation
procedures set forth in this Section 1.6, each record holder of
WesterFed Common Stock as of the Election Deadline will be
entitled to elect to receive (i) the Cash Distribution for all or
a portion of the holder's shares of WesterFed Common Stock ("Cash
Election Shares") or (ii) the Stock Distribution for all or a
portion of the holder's shares of WesterFed Common Stock ("Stock
Election Shares"). All such elections shall be made on a form
mutually agreed to by Glacier and WesterFed for that purpose
("Form of Election"). Glacier and WesterFed will mail the Form of
Election with the Prospectus/Proxy Statement to all holders of
WesterFed Common Stock on the record date for the meeting of
shareholders of WesterFed to vote on the adoption of this
Agreement and will use commercially reasonable efforts to make
the Form of Election available to all persons who become holders
of WesterFed Common Stock subsequent to such date and no later
than the close of business on the Business Day immediately prior
to the Election Deadline.
1.6.2 EFFECTIVE ELECTION. Any election for the purposes of this Section
1.6 will be effective only if the Exchange Agent has received a
properly completed and signed Form of Election with the
associated certificate(s) representing shares of WesterFed Common
Stock by the Election Deadline. The "Election Deadline" means
7:00 p.m., Mountain Time, on the date of the WesterFed
shareholders meeting ("WesterFed Meeting") called to vote on the
adoption of this Agreement. A Form of Election may be revoked or
changed by the person submitting such Form of Election or any
other person to whom the subject shares are subsequently
transferred by written notice by such person to the Exchange
Agent at or prior to the Election Deadline. All Forms of
Elections will be deemed to be revoked if the Exchange Agent is
notified in writing by either Glacier or WesterFed that this
Agreement has been terminated in accordance with its terms and
the Exchange Agent shall promptly return certificates
representing shares of WesterFed Common Stock to those persons
who submitted such certificates to the Exchange Agent.
1.6.3 NON-ELECTION; DISCRETION OF EXCHANGE AGENT. Any holder of
WesterFed Common Stock who does not submit a properly completed
and signed Form of Election that is received by the Exchange
Agent at or prior to the Election Deadline, and any holder who
has failed to perfect or has effectively withdrawn or
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lost the right to payment for Dissenting Shares, will be deemed
to hold "Non-Election Shares" for the purposes of Section 1.6.5.
Glacier will have the discretion, which it may delegate in whole
or in part to the Exchange Agent, to determine whether Forms of
Election have been properly completed and signed, and to
disregard immaterial defects in Forms of Election. If Glacier or
the Exchange Agent determines that any purported election for
Cash Election Shares or Stock Election Shares was not properly
made, such purported election will be deemed to be of no force
and effect and the holder making such election will be deemed to
have Non-Election Shares for the purposes of Section 1.6.5. The
decision of Glacier or the Exchange Agent as to such matters will
be conclusive and binding. Neither Glacier nor the Exchange Agent
will be under any obligation to notify any holder of any defect
in a Form of Election submitted to the Exchange Agent.
1.6.4 MAXIMUM STOCK AND CASH CONVERSION AMOUNTS. The maximum number of
shares of WesterFed Common Stock to be converted into the right
to receive Glacier Common Stock in the Merger will be the
Exchange Ratio multiplied by the number of shares of WesterFed
Common Stock that are issued and outstanding immediately prior to
the Effective Date divided by the Final Exchange Ratio
("Calculated Stock Election Number"). The maximum number of
shares of WesterFed Common Stock to be converted into the right
to receive cash in the Merger will be such number of Cash
Election Shares when aggregated with the Dissenting Shares that
represents 55% of the total value of the Merger Consideration
based upon the per share closing price of Glacier Common Stock on
the Effective Date, and if the Effective Date is not a trading
day, then the closing price on the most recent trading day prior
to the Effective Date. If the application of the provisions of
Subsections 1.6.1, 1.6.2, and 1.6.3 would otherwise result in
aggregate Cash Distributions or aggregate Stock Distributions in
excess of the limits set forth in this Subsection 1.6.4, then the
Cash Distributions and Stock Distributions will be allocated in
the manner set forth in Subsection 1.6.5.
1.6.5 ALLOCATION. As soon as practicable after the Effective Date,
Glacier will cause the Exchange Agent to allocate among the
holders of WesterFed Common Stock the rights to receive the Cash
Distribution or the Stock Distribution as follows:
(a) EXCESS CASH ELECTION SHARES. If the number of Cash
Election Shares exceeds the Calculated Cash Election
Number, then:
(1) Each Stock Election Share will be converted into
the right to receive the Stock Distribution;
(2) Each Non-Election Share will be converted into the
right to receive the Stock Distribution; and
(3) The Exchange Agent will reallocate the Merger
Consideration payable to each holder of Cash
Election Shares pro rata (based
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upon the number of Cash Election Shares owned by
such holder, as compared with the total number of
Cash Election Shares owned by all holders) such
that the holders of Cash Election Shares will
receive an amount of Cash Distributions that, in
the aggregate, will be equal to the product of the
Calculated Cash Election Number multiplied by the
Per Share Consideration and will receive the
remainder of the Merger Consideration due to them
as Stock Distributions.
(b) EXCESS STOCK ELECTION SHARES. If the number of Stock
Election Shares exceeds the Calculated Stock Election
Number, then:
(1) Each Cash Election Share will be converted into the
right to receive the Cash Distribution;
(2) Each Non-Election Share will be converted into the
right to receive the Cash Distribution; and
(3) The Exchange Agent will reallocate the Merger
Consideration payable to each holder of Stock
Election Shares pro rata (based upon the number of
Stock Election Shares owned by such holder, as
compared with the total number of Stock Election
Shares owned by all holders) such that the holders
of Stock Election Shares will receive, as Stock
Distributions, a number of shares of Glacier Common
Stock equal to the product of the Calculated Stock
Election Number multiplied by the Final Exchange
Ratio, and will receive the remainder of the Merger
Consideration due to them as Cash Distributions.
(c) NO EXCESS. If neither of Subsections (a) or (b) above is
applicable, all Cash Election Shares will be converted
into the right to receive the Cash Distribution, all Stock
Election Shares will be converted into the right to
receive the Stock Distribution, and the Non-Election
Shares will be converted into the right to receive the
Cash Distribution and/or the Stock Distribution as
follows:
(1) Non-Election Shares shall first be converted to a
right to receive the Cash Distribution until the
aggregate of the Non-Election Shares and Cash
Election Shares equals the Calculated Cash Election
Number.
(2) Any excess Non-Election Shares shall then be
converted to a right to receive the Stock
Distribution.
(3) All allocations pursuant to this Subsection (c)
shall be made on a pro rata basis, if applicable.
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(d) PRO RATA COMPUTATIONS. The pro rata computations performed
by the Exchange Agent pursuant to this Subsection 1.6.5
shall be binding and conclusive as to the allocation of
the Merger Consideration among the holders of WesterFed
Common Stock.
1.7 CONVERSION OF WESTERFED OPTIONS. On the Effective Date, by virtue of the
Merger, and without any action on the part of any holder of a WesterFed
Option, each WesterFed Option that is then outstanding and unexercised
will be converted into and become an option to purchase Glacier Common
Stock ("Assumed Option") on the same terms and conditions as are in
effect with respect to the WesterFed Option immediately prior to the
Effective Date, except that (A) each such Assumed Option may be
exercised solely for shares of Glacier Common Stock, (B) the number of
shares of Glacier Common Stock subject to such Assumed Option will be
equal to the number of shares of WesterFed Common Stock subject to such
Option immediately prior to the Effective Date multiplied by the Final
Exchange Ratio, the product being rounded, if necessary, up or down to
the nearest whole share, and (C) the per share exercise price under each
such Assumed Option will be adjusted by dividing the per share exercise
price of the WesterFed Option by the Final Exchange Ratio, and rounding
up or down to the nearest cent. It is intended that the foregoing
assumption shall be undertaken consistent with and in a manner that will
not constitute a "modification" under Section 424 of the IRC as to any
WesterFed Option which is an "incentive stock option". The number of
shares of WesterFed Common Stock subject to WesterFed Options (whether
vested or unvested) as of the date of this Agreement are set forth on
Schedule 3.1.3(b)(2)-W.
1.8 SHAREHOLDER RIGHTS; STOCK TRANSFERS. On the Effective Date, holders of
WesterFed Common Stock will cease to be, and will have no rights as,
shareholders of WesterFed, other than to receive the Merger
Consideration provided under Section 1.3 or payment under Section 1.10.
After the Election Deadline, there will be no transfers on the stock
transfer books of WesterFed or the Combined Corporation of the shares of
WesterFed Common Stock that were issued and outstanding immediately
prior to the Election Deadline, other than Non-Election Shares which may
be transferred at any time prior to the Effective Date.
1.9 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, no fractional shares of Glacier Common Stock and no
certificates or scrip for, or other evidence of ownership of fractional
shares, will be issued in the Merger. Glacier will pay to each holder of
WesterFed Common Stock who would otherwise be entitled to a fractional
share of Glacier Common Stock an amount in cash determined by
multiplying such fraction by the closing price per share of Glacier
Common Stock on the Nasdaq National Market (or any successor exchange)
on the Effective Date, or if the Effective Date is not a trading day,
then the closing price on the most recent trading day prior to the
Effective Date.
1.10 PAYMENT TO DISSENTING SHAREHOLDERS. For the purposes of this Agreement,
"Dissenting Shares" means any shares of WesterFed Common Stock held by a
holder who dissents from the Merger in accordance with the Corporate Law
and becomes entitled to obtain payment for the fair value of such shares
of WesterFed Common Stock pursuant to the
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applicable provisions of the Corporate Law. Notwithstanding any other
provision of this Agreement, any Dissenting Share will not, after the
Effective Date, be entitled to vote for any purpose or receive any
dividends or other distributions and will be entitled only to such
rights as are accorded to Dissenting Shares by the Corporate Law.
1.11 EXCHANGE PROCEDURES.
1.11.1 SURRENDER OF CERTIFICATE. As promptly as practicable after the
Effective Date, Glacier will send or cause to be sent to each
former shareholder of WesterFed of record immediately prior to
the Effective Date (other than with respect to Dissenting Shares,
Excluded Shares and holders who tendered their certificates with
their Forms of Election) instructions for exchanging such
shareholder's certificates for WesterFed Common Stock for the
Merger Consideration set forth in Section 1.3. WesterFed
shareholders will exchange WesterFed Common Stock certificates by
surrendering them to the exchange agent appointed by Glacier (the
"Exchange Agent"), in accordance with the instructions provided
by the Exchange Agent and together with a properly completed and
executed form of transmittal letter. Until a holder's certificate
evidencing WesterFed Common Stock is so surrendered, the holder
will not be entitled to receive any Merger Consideration with
respect thereto.
1.11.2 ISSUANCE OF MERGER CONSIDERATION IN OTHER NAMES. Any person
requesting that any Merger Consideration be issued (or paid) in a
name other than the name in which the surrendered WesterFed
Common Stock certificate is registered, must: (1) establish to
the Exchange Agent's satisfaction the right to receive the Merger
Consideration 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.
1.11.3 LOST, STOLEN, AND DESTROYED CERTIFICATES. The Exchange Agent will
be authorized to issue the Merger Consideration in exchange for a
WesterFed 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 the WesterFed Common
Stock represented by the certificate and that the certificate is
lost, stolen, or destroyed, (2) any appropriate affidavit the
Exchange Agent may require, and (3) any indemnification
assurances that the Exchange Agent may require.
1.11.4 RIGHTS TO DIVIDENDS AND DISTRIBUTIONS. In the case of WesterFed
Common Stock to be exchanged for the Stock Distribution, until
the holder properly surrenders for exchange his/her certificates
for WesterFed Common Stock, no dividends or other distributions
payable to the holders of Glacier Common Stock shall be paid
thereon. Surrender of WesterFed 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 WesterFed
Common Stock on a date before the Effective Date. When the holder
surrenders his or her certificates, the holder will receive the
amount, without interest, of any dividends and any other
distributions
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distributed on or after the Effective Date on the whole number
of shares of Glacier Common Stock into which the holder's
WesterFed Common Stock was converted at the Effective Date.
1.11.5 DELIVERY OF MERGER CONSIDERATION TO EXCHANGE AGENT. Within three
days after the Effective Date, Glacier shall deliver to the
Exchange Agent the aggregate Merger Consideration to be paid for
all of the issued and outstanding shares of WesterFed Common
Stock other than Dissenting and Excluded Shares. On an
as-required basis, Glacier shall promptly and timely tender to
the Exchange Agent additional cash funds required for the payment
of cash in lieu of fractional shares. The Merger Consideration
remaining in the hands of the Exchange Agent for non-surrendered
certificates representing shares of WesterFed Common Stock shall
be returned to Glacier at the expiration of six months from the
Effective Date.
1.11.6 AFFILIATES' CERTIFICATES. Certificates surrendered for exchange
by any person constituting an "affiliate" of WesterFed for
purposes of Rule 145 of the Securities Act will not be exchanged
for certificates representing Glacier Common Stock until Glacier
has received a written agreement from such person as specified in
Section 4.4.
1.12 MERGER CONSIDERATION ADJUSTMENTS. If, prior to the Effective Date,
shares of Glacier Common Stock shall be changed into a different number
of shares or a different class of shares by reason of any
reclassification, recapitalization, split-up, combination, exchange of
shares or readjustment, or there occurs a distribution of warrants or
rights with respect to Glacier Common Stock, or a stock dividend, stock
split or other general distribution of Glacier Common Stock is declared
with a record date prior to the Effective Date, then in any such event
the Exchange Ratio shall be appropriately adjusted.
1.13 EXCEPTION SHARES. "Exception Shares" mean any shares of WesterFed Common
Stock held by Glacier or any of its Subsidiaries or WesterFed or any of
its Subsidiaries, in any case other than in a fiduciary capacity or as a
result of debts previously contracted. Each of the Exception Shares of
WesterFed Common Stock will be canceled and retired upon consummation of
the Merger, and no consideration shall be issued in exchange therefor.
1.14 RESERVATION OF RIGHT TO REVISE STRUCTURE. In its sole discretion, and
notwithstanding any other provision in this Agreement to the contrary,
Glacier may at any time change the method of effecting the Transaction;
provided, however, that (A) no such change will alter or change the
amount or kind of consideration to be issued to holders of WesterFed
Common Stock as provided for in this Agreement, (B) no such change will
adversely affect the tax treatment to WesterFed shareholders as a result
of receiving such consideration, (C) no such change will materially
impede or delay the consummation of the Transaction and (D) no such
change shall diminish the benefits to be received by the directors,
officers or employees of WesterFed or the Bank set forth in this
Agreement or in any other agreement entered into by the parties in
connection with the Transaction. If Glacier elects to change the method
of effecting the Transaction, WesterFed and the Bank will cooperate with
and assist Glacier with any necessary amendment to this Agreement, and
with the preparation and filing of such applications, documents,
instruments and
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notices as may be necessary or desirable, in the opinion of counsel for
Glacier, to obtain all necessary shareholder approvals and approvals of
any regulatory agency, administrative body or other governmental entity.
1.15 STOCK OPTION AGREEMENT. As a condition to execution of this Agreement,
Glacier and WesterFed have executed a Stock Option Agreement, dated the
same date as this Agreement, a copy of which is attached as Exhibit B.
SECTION 2
CLOSING OF THE TRANSACTION
2.1 CLOSING. Closing will occur on the Effective Date. If Closing does not
occur on or before June 30, 2001 ("Termination Date"), either Glacier or
WesterFed may terminate this Agreement in accordance with Section 7.1.
Unless Glacier and WesterFed agree upon another date, the Effective Date
will be the later of (i) January 15, 2001, or (ii) the date selected by
Glacier 30 days after the following:
(a) all conditions precedent set forth in Section 5 having been
either fulfilled or waived; and
(b) all approvals required by Section 5.1 having been granted, and
the expiration of all applicable waiting periods.
2.2 EVENTS OF CLOSING. On the Effective Date, all properly executed
documents required by this Agreement will be delivered by the parties 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 WesterFed agree otherwise, Closing
will occur on the Effective Date at Glacier's corporate office, 00
Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxx.
SECTION 3
REPRESENTATIONS
3.1 REPRESENTATIONS OF GLACIER AND WESTERFED. Subject to Section 3.2 and
except as expressly set forth in Schedule 3.1-G (in the case of
Glacier), Schedule 3.1-W (in the case of WesterFed), or the other
Schedules described in this Section 3.1, Glacier represents to
WesterFed, and WesterFed 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 Delaware, its activities do not
require it to be qualified in any jurisdiction other than
Montana (for WesterFed) and Montana and Idaho (for
Glacier), and it is duly qualified and in good standing in
such jurisdiction(s).
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(b) It has the requisite corporate power and authority to own
and lease its properties and assets and to carry on its
business as it is now being conducted.
(c) It has made available to the other party to this Agreement
a complete and correct copy of its certificate of
incorporation and bylaws, each as amended to date and
currently in full force and effect.
3.1.2 SUBSIDIARIES.
(a) Schedules 3.1.2(a)-G and 3.1.2(a)-W list all of the
Subsidiaries of Glacier and WesterFed, respectively, and
each party's respective 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 Subsidiaries is either a federally chartered
stock savings bank, a bank, or a corporation or limited
partnership duly organized and validly existing under
Montana, Idaho or Delaware law, as the case may be, and is
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 qualification.
(c) With respect to WesterFed only, (i) the Bank is a member
in good standing of the Federal Home Loan Bank System;
(ii) all eligible deposit accounts issued by the Bank are
insured by the Federal Deposit Insurance Corporation
("FDIC") to the full extent permitted under applicable
law; (iii) the Bank is a "qualified thrift lender" as
defined in Section 10(m) of HOLA; and (iv) the liquidation
account established by the Bank in connection with its
conversion from mutual to stock form has been maintained
since its establishment in accordance with applicable laws
and the records with respect to said account (including
subaccounts) are complete and accurate in all material
respects.
(d) Each of its Subsidiaries has the requisite corporate power
and authority to own and lease its properties and assets
and to carry on its business as it is now being conducted.
3.1.3 CAPITAL STOCK.
(a) Glacier. Glacier represents:
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(1) on the date of this Agreement, Glacier's authorized
capital stock consists of 51 million shares divided
into two classes: (i) 50 million shares of common
stock, par value $.01 per share ("Glacier Common
Stock"), 11,441,234 shares of which are issued and
outstanding and (ii) 1 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 912,715 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 3.1.3(a)(2)-G
("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 or pursuant
to this Agreement, and Glacier has no shares of
Glacier Preferred Stock reserved for issuance;
(4) all outstanding shares of Glacier Common Stock have
been, and all of the Glacier Common Stock to be
issued in the Merger and upon the exercise of
Assumed Options will be, duly authorized and
validly issued, and are or will be, as the case may
be, 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 state or 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
subscription rights or other encumbrances or
restrictions of any kind (collectively, "Liens");
(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, registration, voting or
transfer of such stock or securities); and
(7) Glacier has taken all corporate action necessary to
reserve for issuance a sufficient number of shares
of Glacier Common Stock to satisfy the maximum
Stock Distribution under Subsection 1.6.4
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and the maximum number of shares deliverable upon
the exercise of Assumed Options.
(b) WesterFed. WesterFed represents:
(1) as of the date of this Agreement, WesterFed's
authorized capital stock consists of (i) 10 million
shares of common stock, $0.01 par value ("WesterFed
Common Stock"), 4,069,524 shares of which are
issued and outstanding, and (ii) 5 million shares
of preferred stock, par value $0.01 per share, none
of which is outstanding ("WesterFed Preferred
Stock");
(2) options or rights to acquire not more than an
aggregate of 580,397 WesterFed Common Stock shares
(subject to adjustment on the terms set forth in
the WesterFed Stock Plans) are outstanding under
the stock option plans listed in Schedule
3.1.3(b)(2)-W ("WesterFed Stock Plans");
(3) no WesterFed Common Stock shares are reserved for
issuance, other than the shares reserved for
issuance under the WesterFed Stock Plans and the
Stock Option Agreement;
(4) all outstanding WesterFed Common Stock shares have
been duly authorized and validly issued and are
fully paid and nonassessable;
(5) all outstanding shares of capital stock (or
partnership interests) of each of WesterFed's
Subsidiaries have been duly authorized and validly
issued and in the case of capital stock are fully
paid and nonassessable except to the extent any
assessment is required under state or federal law,
and, except for partnership interests in XXXX
Limited Partnerships 2 and 3 that are owned by
others, at Closing will be owned by WesterFed or a
Subsidiary of WesterFed free and clear of all
Liens;
(6) except as set forth in this Agreement, in the
WesterFed Stock Plans, or in the Stock Option
Agreement, there are no preemptive rights or any
outstanding subscriptions, options, warrants,
rights, convertible securities, or other agreements
or commitments of WesterFed or any of its
Subsidiaries of any character relating to the
issued or unissued capital stock or other equity
securities of WesterFed 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) WesterFed has taken all corporate action necessary
to reserve for issuance a sufficient number of
shares of WesterFed Common Stock to satisfy the
full exercise of the option granted to Glacier
under the Stock Option Agreement.
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(8) except for the partnership interests owned by
others in XXXX Limited Partnerships 2 and 3, it
(alone or together with any of its Subsidiaries)
owns all of the shares of capital stock (or 100% of
any other applicable form of ownership interest if
the Subsidiary is not a corporation) of each of its
Subsidiaries free and clear of all Liens.
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 and the Stock Option Agreement,
subject in the case of this Agreement only to the adoption
of this Agreement by its shareholders to the extent
required by the Corporation Law and the rules of the
exchange on which its stock is traded to complete the
Transaction.
(b) Each of this Agreement and the Stock Option Agreement is a
valid and legally binding agreement of it, enforceable in
accordance with the terms of this Agreement (except as may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting
creditors' rights generally or by general equity
principles).
3.1.5 REPORTS AND FINANCIAL STATEMENTS.
(a) Filing of Reports. Since January 1, 1997, 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 Exchange Commission ("SEC"), (2) the
National Association of Securities Dealers ("NASD"), (3)
Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), (4) the Office of Thrift
Supervision ("OTS"), (5) the FDIC, and (6) any other
applicable federal or state banking, insurance,
securities, or other regulatory authorities. Each of these
reports and statements, 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, 1997, through the date
of this
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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 and before the Effective Date (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) in all material respects 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
shareholders' 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
and the absence of footnotes), 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
Agreement, the Subsequent Glacier Financial
Statements); and (ii) in WesterFed's case, the
WesterFed Financial Statements (or for periods
ending on a date following the date of this
Agreement, the Subsequent WesterFed Financial
Statements).
(2) "Glacier Financial Statements" means Glacier's (i)
audited consolidated statements of financial
condition as of December 31, 1999, 1998 and 1997,
and the related audited statements of income, cash
flows and changes in shareholders' equity for each
of the years ended December 31, 1999 and 1998 and
1997; and (ii)
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unaudited consolidated statements of financial
condition as of the end of each fiscal quarter
following December 31, 1999 but preceding the date
of this Agreement, and the related unaudited
statements of income, cash flows and statements of
comprehensive income for each such quarter.
(3) "Subsequent Glacier Financial Statements" means
unaudited balance sheets and related statements of
income and comprehensive income for each of the
fiscal quarters ending after the date of this
Agreement and before Closing.
(4) "WesterFed Financial Statements" means (i) audited
statements of financial condition as of December
31, 1999 and June 30, 1999, 1998 and 1997, and the
related audited statements of income, cash flows
and changes in shareholders' equity for each of the
periods ended December 31, 1999, June 30, 1999,
1998 and 1997; and (ii) unaudited consolidated
statements of financial condition as of the end of
each fiscal quarter following December 31, 1999 but
preceding the date of this Agreement, and the
related unaudited statements of income, cash flows
and changes in shareholders' equity for each such
quarter.
(5) "Subsequent WesterFed Financial Statements" means
(i) unaudited balance sheets and related statements
of income and shareholders' equity for each of
WesterFed's fiscal quarters ending after the date
of this Agreement and before Closing.
3.1.6 ABSENCE OF CERTAIN EVENTS AND CHANGES. Except as disclosed in its
Financial Statements and Reports, since December 31, 1999: (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 and its Subsidiaries, taken as a whole.
3.1.7 MATERIAL AGREEMENTS.
(a) Except for the Glacier and WesterFed Stock Plans,
respectively, this Agreement, the Stock Option Agreement,
any other agreement executed by the parties, and
arrangements made after the date of this Agreement 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 3.1.7(a)-G (in the case of Glacier) or Schedule
3.1.7(a)-W (in the case of WesterFed).
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(b) Neither it nor any of its Subsidiaries is in default under
any material 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 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 Combined Corporation, or the opinions of the
tax experts referred to in Subsections 5.2.6 and 5.3.6.
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, except Xxxxxx Xxxxxx
(in the case of WesterFed) and Davidson (in the case of Glacier).
3.1.10 CORPORATE RECORDS. Its corporate record books, transfer books and
stock ledgers (and each of those of its Subsidiaries) are
complete and accurate in all material respects and reflect all
meetings, consents and other material actions of its organizers,
incorporators, shareholders, Boards of Directors and committees
of the Boards of Directors (and those of its Subsidiaries) and
all transactions in their respective capital stocks, since their
respective inceptions.
3.1.11 LOAN AND LEASE LOSSES. Its Executive Officers know of no reason
why the allowance for loan and lease losses shown in the balance
sheets included in the Financial Statements for the periods ended
December 31, 1999, March 31, 2000, and June 30, 2000, 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.
3.1.12 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 its common stock or capital stock or
other ownership interest of any Subsidiary except as expressly
set forth in Schedule 3.1.3(a)(2)-G (in the case of Glacier) or
Schedule 3.1.3(b)(2)-W (in the case of WesterFed).
3.1.13 GOVERNMENTAL FILINGS; NO VIOLATIONS.
(a) Filings. Other than the approval of the Federal Reserve
Board (the "Regulatory Approval"), the filing of a
certificate of merger with the Secretary of State of
Delaware, and other requirements under the Securities Act,
the Exchange Act, and state securities and "Blue Sky"
laws, no notices, reports or other filings are required to
be made by it with, nor are any consents, registrations,
approvals, permits or authorizations
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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
certificate 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 material 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. A list of all consents it or its Subsidiaries
must obtain from third parties under any Contracts before
consummation of the Transaction is contained in Schedule
3.1.13(b)-G (in the case of Glacier), or Schedule
3.1.13(b)-W (in the case of WesterFed).
3.1.14 ASSET CLASSIFICATION.
(a) An accurate and complete list as of August 31, 2000,
except as otherwise expressly noted in the appropriate
Schedule, and 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, is set forth in
Schedule 3.1.14(a)-G (in the case of Glacier) or Schedule
3.1.14(a)-W (in the case of WesterFed).
(b) Except as shown on such Schedules, no amounts of loans,
extensions of credit or other assets that have been
classified or criticized as of August 31, 2000 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.
3.1.15 INVESTMENTS. 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 which represent an ownership
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interest of more than 5% in any corporation, company,
partnership, or other entity are listed on Schedule 3.1.15-G (in
the case of Glacier) or Schedule 3.1.15-W (in the case of
WesterFed). All investments comply in all material respects with
all applicable laws and regulations.
3.1.16 PROPERTIES.
(a) A complete list of all banking offices of Glacier and
WesterFed appears in Schedule 3.1.16(a)-G or Schedule
3.1.16(a)-W, respectively.
(b) Except as disclosed or reserved against in its Financial
Statements or in Schedule 3.1.16(b)-G (in the case of
Glacier) or Schedule 3.1.16(b)-W in the case of
WesterFed), 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) to all of 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.
(c) 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).
(d) A list of 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, appears in Schedule 3.1.16(d)-G (in the case of
Glacier) or Schedule 3.1.16(d)-W (in the case of
WesterFed).
3.1.17 ANTI-TAKEOVER PROVISIONS. Each party has taken all action
required to be taken by it in order to exempt this Agreement and
the Stock Option Agreement, and the transactions contemplated
hereby and thereby from, and this Agreement, the Stock Option
Agreement and the transactions contemplated hereby and thereby
are exempt from, the requirements of any "moratorium" "control
share", "fair price", "affiliate transaction", "business
combination" or other anti-takeover laws and regulations of any
state (collectively, "Takeover Laws"), including the State of
Delaware, or any takeover-related provisions of its certificate
of incorporation or bylaws.
3.1.18 COMPLIANCE WITH LAWS. Except as disclosed in Schedule 3.1.18-G
(with respect to Glacier) or Schedule 3.1.18-W (with respect to
WesterFed), it and each of its Subsidiaries:
(a) are in compliance, in the conduct of their businesses, in
all material respects with all applicable federal, state,
local, and foreign statutes, laws,
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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, FDIC and OTS) that are
required in order to permit them to carry on their
businesses as they are presently conducted;
(c) have received since January 1, 1997, 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
(d) are not required to notify any federal banking agency
before adding directors to its board of directors or
employing senior executives.
3.1.19 LITIGATION. Except as disclosed in its Financial Statements or in
Schedule 3.1.19-G (in the case of Glacier) or Schedule 3.1.19-W
(in the case of WesterFed), 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 other 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
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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.
3.1.20 TAXES.
(a) For purposes of this Subsection, "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.
(b) All 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 prior to
Closing. All filed returns are complete and accurate in
all material respects.
(c) Except as disclosed in its most recent Financial
Statements:
(1) all Taxes attributable to it or any of its
Subsidiaries that were due or payable (without
regard to whether such taxes have been assessed) as
of the date of its most recent Financial Statements
have been paid in full or have been adequately
provided for in such Financial Statements in
accordance with GAAP;
(2) adequate provision in accordance with GAAP has been
made in its most recent Financial Statements
relating to all Taxes for the periods covered by
such Financial Statements that were not yet due and
payable as of the date thereof, 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 adequately provided for in its most
recent Financial Statements (in accordance with
GAAP);
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(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) proper and accurate amounts have been (or will be)
withheld from all employees (and timely paid to the
appropriate Governmental Entity or set aside in an
account for these purposes) for all periods prior
to 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).
3.1.21 INSURANCE. It and each of its Subsidiaries maintain insurance
with insurers which in its best judgment are sound and reputable,
on their respective assets, and upon their respective businesses
and operations, against loss or damage, risks, hazards and
liabilities as in their judgment they deem appropriate. It and
its Subsidiaries maintain in effect all insurance required to be
carried by law or by any agreement by which they are bound, and
also maintain directors' and officers' liability policies with
coverage levels consistent with their best judgment. All material
claims and notices under all policies of insurance maintained by
it and its Subsidiaries have been filed in due and timely
fashion. All directors' and officers' liability insurance
policies and other insurance policies maintained by it or its
Subsidiaries are listed in Schedule 3.1.21-G (in the case of
Glacier) or in Schedule 3.1.21-W (in the case of WesterFed).
3.1.22 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.
3.1.23 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
Retirement Income Security Act of 1974, ("ERISA"), as
amended, maintained by it or any of its Subsidiaries, as
the case may be. No Plan is a multi employer plan within
the meaning of Section 3(37) of ERISA, other than the
Financial Institutions Retirement Fund Plan (the "FIRF
Plan") sponsored by WesterFed and its Subsidiaries.
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(b) A list, as of the date of this Agreement, of (1) all
Plans, stock purchase plans, restricted stock and stock
option plans, and other deferred compensation
arrangements, (2) all other material employee benefit
plans that cover employees or former employees of it and
its Subsidiaries (its "Compensation Plans") is set forth
in Schedule 3.1.23(b)-G (in the case of Glacier) or
Schedule 3.1.23(b)-W (in the case of WesterFed). True and
complete copies of the Compensation Plans (and, as
applicable, copies of summary plan descriptions, annual
reports on Form 5500, 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.
(c) Each of its Plans that is intended to be a pension, profit
sharing, stock bonus, thrift, savings or employee stock
ownership plan that is qualified under IRC Section 401(a)
("Qualified Plans") has been determined by the Internal
Revenue Service to qualify under IRC Section 401(a), or an
application for determination of such qualification has
been timely made to the Internal Revenue Service prior to
the end of the applicable remedial amendment period under
IRC Section 401(b), and, to the knowledge of its Executive
Officers, there exist no circumstances likely to
materially adversely affect the qualified status of any
such Qualified Plan. All such Qualified Plans established
or maintained by it or any of its Subsidiaries or to which
it or any of its Subsidiaries contribute are in compliance
in all material respects with all applicable requirements
of ERISA, and are in compliance in all material respects
with all applicable IRC requirements (including
qualification and non-discrimination requirements in
effect as of the Effective Time) for obtaining the Tax
benefits the IRC thereupon permits with respect to such
Qualified Plans. All accrued contributions and other
payments required to be made by it or any of its
Subsidiaries have been made or reserves adequate for such
purposes as of such date have been set aside therefor and
reflected in its Financial Statements. Neither it nor any
of its Subsidiaries is in material default in performing
any of its respective contractual obligations under any of
Plans or any related trust agreement or insurance
contract, and there are no material outstanding
liabilities of any such Plan other than liabilities for
benefits to be paid to participants in such Plan and their
beneficiaries in accordance with the terms of such Plan.
(d) Under each Qualified Plan that is a defined benefit plan,
as of the last day of the most recent plan year, the
actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001(a)(16) of
ERISA (as determined on the basis of the actuarial
assumptions contained in the Plan's most recent actuarial
valuation) did not exceed the then current value of the
assets of such Plan, and there has been no material change
in
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the financial condition of such Plan since the last day of
the most recent plan year.
(e) There is no pending or, to the knowledge of its Executive
Officers, threatened litigation or pending claim (other
than benefit claims made in the ordinary course) by or on
behalf of or against any of the Plans (or with respect to
the administration of any of the such Plans) now or
heretofore maintained by it or any of its Subsidiaries
which allege violations of applicable state or federal law
which are reasonably likely to result in a liability on
the part of it or any of its Subsidiaries or any such
Plan.
(f) It and its Subsidiaries and all other persons having
fiduciary or other responsibilities or duties with respect
to any Plan are and have since the inception of each such
Plan been in substantial compliance with, and each such
Plan is and has been operated in all material respects in
accordance with, its provisions and in substantial
compliance with the applicable laws, rules and regulations
promulgated by the Department of Labor, the Pension
Benefit Guaranty Corporation ("PBGC") and the Internal
Revenue Service under ERISA, the IRC or any other
applicable law. Notwithstanding the foregoing, no
representation is made with respect to compliance by a
third party insurance company. No "reportable event" (as
defined in Section 4043(b) of ERISA) has occurred with
respect to any Qualified Plan. Neither it, any Subsidiary
nor any Plan has incurred or is reasonably likely to incur
any liability for any "prohibited transactions" (as
defined in Section 406 of ERISA or IRC Section 4975(c)),
or any material liability under Section 601 of ERISA or
IRC Section 4980B.
(g) It and its Subsidiaries have filed or caused to be filed,
and will continue to file or cause to be filed, in a
timely manner all filings pertaining to each Plan with the
Internal Revenue Service, the PBGC, the Department of
Labor, and as prescribed by the IRC or ERISA, or
regulations issued thereunder. All such filings, as
amended, were complete and accurate in all material
respects as of the dates of such filings, and there were
no misstatements or omissions in any such filing which
would be material to its financial condition on a
consolidated basis. Notwithstanding the foregoing, no
representation is made with respect to filings by a third
party insurance company.
(h) Except as disclosed in its Financial Statements, neither
it nor its Subsidiaries have any obligations for retiree
health and life benefits.
(i) 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, except no amendment will be
permitted to alter the vested rights and benefits of
participants and termination will result in all
participant benefits becoming fully vested.
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(j) 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 Option
Agreement will not result in: (1) vesting, acceleration,
or increase of any amounts payable under any Compensation
Plan, (2) any material increase in benefits under any
Compensation Plan or (3) payment of any severance or
similar compensation under any Compensation Plan.
3.1.24 ENVIRONMENTAL MATTERS.
(a) For purposes of this Subsection 3.1.24, 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, and any
property where under any Environmental Law it or
any of its Subsidiaries is deemed to be the owner
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) 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 such
Environmental Laws.
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(c) 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.
(d) 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 which is dangerous to the
health of human beings. 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 by it or any of its Subsidiaries
under any applicable Environmental Law.
(e) 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.
3.2 EXCEPTIONS TO REPRESENTATIONS.
3.2.1 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:
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(a) no exception is required to be set forth in a Schedule if
its absence would not result in the related representation
or warranty being found untrue or incorrect under the
standard established by Subsection 3.2.2; and
(b) the mere inclusion of an exception in a Schedule is not an
admission by a party that such 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.
3.2.2 NATURE OF EXCEPTIONS. No representation contained in Section 3.1
will be found untrue or incorrect and no party to this Agreement
will have breached a representation or warranty 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 3.1.19, is not
reasonably likely to, have a Material Adverse Effect with respect
to such party.
3.2.3 MATERIAL ADVERSE EFFECT. For purposes of this Agreement,
"Material Adverse Effect" with respect to a party means an effect
that: (1) is materially adverse to the business, financial
condition, results of operations or prospects of a party and its
Subsidiaries taken as a whole; (2) significantly and adversely
affects the ability of a party to consummate the transactions
contemplated by this Agreement by the Termination Date or to
perform its 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 a party taken with the explicit prior consent of the
other party to this Agreement.
SECTION 4
CONDUCT AND TRANSACTIONS
BEFORE CLOSING
4.1 CONDUCT OF WESTERFED'S BUSINESS BEFORE CLOSING. Before Closing,
WesterFed promises as follows:
4.1.1 AVAILABILITY OF WESTERFED'S BOOKS, RECORDS AND PROPERTIES.
(a) WesterFed 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
Transaction. WesterFed will, and will cause its
Subsidiaries to, cooperate fully in any such inspection,
audit, or direct verification procedures, and WesterFed
will, and will cause its Subsidiaries to, make available
all information reasonably required by or on behalf of
Glacier.
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(b) At Glacier's request, WesterFed will request any third
parties involved in the preparation or review of (1)
WesterFed Financial Statements, (2) Subsequent WesterFed
Financial Statements, or (3) any audits of WesterFed's
operations, loan portfolios or other assets, to disclose
to Glacier the work papers or any similar materials
related to these items (to the extent permitted by
WesterFed's outside auditors).
4.1.2 ORDINARY AND USUAL COURSE. WesterFed will, and will cause its
Subsidiaries to, conduct business only in the ordinary and usual
course and, without the prior written consent of Glacier (which
consent shall not be unreasonably withheld or delayed with
respect to subsections (g), (h) and (j) below), 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 WesterFed Common Stock or the capital stock of
a WesterFed Subsidiary, or issue, pledge, redeem, or
encumber in any way any shares of WesterFed's or a
WesterFed Subsidiary's capital stock, except shares issued
pursuant to the exercise of WesterFed Options; or grant
any option or other right to shares of WesterFed's or a
WesterFed Subsidiary's capital stock other than pursuant
to the Stock Option Agreement or as otherwise provided in
an agreement entered into by the parties;
(b) declare or pay any dividend, or make any other
distribution, either directly or indirectly, with respect
to WesterFed Common Stock or the capital stock of any
WesterFed Subsidiary, other than dividends or
distributions from the Bank to WesterFed, and regular
quarterly cash dividends on WesterFed Common Stock and a
bonus dividend on WesterFed Common Stock in an aggregate
amount not to exceed $325,000 to be declared in December,
2000 provided; however, the declaration and payment of the
last dividend (not the bonus dividend) by WesterFed prior
to the Effective Date shall be coordinated with Glacier in
a manner to preclude any loss or duplication of dividends
received by the holders of WesterFed Common Stock;
(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 in
the places where it does business, or incur any
indebtedness for borrowed funds greater than $10 million
(except for borrowings from the Federal Home Loan Bank in
the ordinary course of business and consistent with past
practices);
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(e) acquire an ownership interest or a leasehold interest in
any 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, except no
environmental evaluation will be required with respect to
one to four family residential property and (2) providing
Glacier with at least 30 days' advance written notice
before it acquires the interest;
(f) subject to the exercise of its board of directors'
fiduciary duties and on the advice of counsel, enter into
or recommend the adoption by WesterFed's shareholders of
any agreement involving a possible merger or other
business combination or asset sale by WesterFed 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 its contracts of deposit and agreements to lend money
not otherwise restricted under this Agreement and (1)
entered into in the ordinary 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 in the
places where it does business;
(h) enter into or amend any contract (other than contracts for
deposits or agreements to lend money not otherwise
restricted by this Agreement) calling for a payment by it
of more than $100,000, 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 $100,000 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 certificate 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
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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) other than in accordance with binding commitments existing
on the date of this Agreement, make any capital
expenditures for fixed assets in excess of $50,000 per
project or related series of projects or $100,000 in the
aggregate; or
(o) 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, except for the expenses to be incurred by it
relating to this Agreement and the Transaction, which
expenses to Xxxxxx, Xxxxxx and Silver, Xxxxxxxx & Taff,
shall not exceed the amounts set forth in their engagement
letters included as attachments to Schedule 3.1.7(a)-W.
4.1.3 CONDUCT REGARDING REPRESENTATIONS. WesterFed will not do or cause
to be done anything that would cause any representation made by
it in Section 3.1 to be untrue at Closing, except as consented to
in writing by Glacier.
4.1.4 MAINTENANCE OF PROPERTIES. WesterFed will, and will cause each of
its Subsidiaries 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. WesterFed will, and will
cause each of its Subsidiaries to, use all reasonable efforts to:
(a) preserve its business organization;
(b) retain the services of present employees; and
(c) preserve the goodwill of suppliers, customers and others
with whom it has business relationships.
4.1.6 SENIOR MANAGEMENT. WesterFed will 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 at WesterFed or the Bank.
4.1.7 COMPENSATION AND EMPLOYMENT AGREEMENTS. WesterFed will not permit
any increase in the current or deferred compensation payable or
to become payable by WesterFed or the Bank to any of its
directors, officers, employees, agents, or consultants other than
normal increments in compensation in accordance with WesterFed's
or the Bank's past practices with respect to the timing and
amounts of such increments, Christmas bonuses and incentive
bonuses for calendar year
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2000. Without the prior written approval of Glacier and except as
contemplated in this Agreement, WesterFed will not (and will not
permit the Bank to) commit to, execute or deliver any employment
agreement with any party not terminable upon two weeks' notice
and without expense.
4.1.8 UPDATE OF FINANCIAL STATEMENTS. WesterFed will promptly deliver
its Financial Statements to Glacier. WesterFed will deliver
Subsequent WesterFed Financial Statements to Glacier by the
earlier of: (1) 5 days after WesterFed has prepared and issued
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 WesterFed Financial Statements:
(a) will be prepared from the books and records of WesterFed
and its Subsidiaries;
(b) will present fairly the consolidated financial position
and consolidated operating results of WesterFed 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 WesterFed's consolidated 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.
4.1.9 NO SOLICITATION. Neither WesterFed nor any of its officers,
directors or any other person acting at the direction of
WesterFed or the Bank, directly or indirectly, will solicit,
encourage, entertain, or facilitate any other proposals or
inquiries for an acquisition of the shares or assets of WesterFed
or any of its Subsidiaries or enter into discussions concerning
any such acquisition, except as WesterFed's board of directors
deems necessary to comply with its fiduciary duties to
shareholders. Neither WesterFed nor any person acting on its
behalf will make available to any person not affiliated with
WesterFed or Glacier any information about WesterFed or its
Subsidiaries that is not either routinely made available to the
public generally or required by law, except as WesterFed's board
of directors deems necessary to comply with its fiduciary duties
to shareholders.
4.2 CONDUCT OF GLACIER'S BUSINESS BEFORE CLOSING. Before Closing, Glacier
promises as follows:
4.2.1 AVAILABILITY OF GLACIER'S BOOKS, RECORDS AND PROPERTIES.
(a) Glacier will make its, and cause its Subsidiaries to make
their, books, records, properties, contracts and documents
available at all reasonable
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times to WesterFed 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 WesterFed may find
reasonably relevant to the Transaction. Glacier will, and
will cause its Subsidiaries to, cooperate fully in any
such inspection, audit, or direct verification procedures,
and Glacier will, and will cause its Subsidiaries to, make
available all information reasonably required by or on
behalf of WesterFed.
(b) At WesterFed's request, Glacier will request any third
parties involved in the preparation or review of (1)
Glacier Financial Statements, (2) Subsequent Glacier
Financial Statements, or (3) any audits of Glacier's
operations, loan portfolios or other assets, to disclose
to WesterFed the work papers or any similar materials
related to these items (to the extent permitted by
Glacier's outside auditors).
4.2.2 CERTAIN PROHIBITED ACTIVITIES.
(a) Glacier shall not declare or pay any cash dividend, or
make any other cash distribution, with respect to Glacier
Common Stock, other than its regular quarterly dividend in
an amount not to exceed $0.15 per share and special
dividends consistent with past practice, in an amount not
to exceed $0.05 per share; and
(b) neither Glacier nor any of its Subsidiaries will acquire
any assets (including the capital stock of, or ownership
interest in, another entity) outside the ordinary course
of business, except that Glacier and/or its financial
institution Subsidiaries may acquire the assets and
liabilities of or capital stock of one or more financial
institutions so long as the deposit liabilities acquired
or assumed in all such transactions do not exceed $200
million in the aggregate; provided the foregoing shall not
apply to the purchase of branches, deposits and associated
loan assets from Xxxxx Fargo and First Security Bank, N.A.
on terms and conditions consistent with those previously
disclosed by Glacier to WesterFed.
4.2.3 CONDUCT REGARDING REPRESENTATIONS. Glacier will not do or cause
to be done anything that would cause any representation made by
it in Section 3.1 to be untrue at Closing, except as consented to
in writing by WesterFed.
4.2.4 MAINTENANCE OF PROPERTIES. Glacier will, and shall cause each of
its Subsidiaries to, maintain its properties and equipment (and
related insurance or its equivalent) in accordance with good
business practice.
4.2.5 PRESERVATION OF BUSINESS ORGANIZATION. Glacier will, and shall
cause each of its Subsidiaries to, use all reasonable efforts to:
(a) preserve its business organization;
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(b) retain the services of present employees; and
(c) preserve the goodwill of suppliers, customers and others
with whom it has business relationships.
4.2.6 UPDATE OF FINANCIAL STATEMENTS. Glacier will promptly deliver its
Financial Statements to WesterFed. Glacier will deliver
Subsequent Glacier Financial Statements to WesterFed by the
earlier of: (1) 5 days after WesterFed has prepared and issued
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:
(a) will be prepared from the books and records of Glacier and
its Subsidiaries;
(b) will present fairly the consolidated financial position
and consolidated operating results of Glacier 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 Glacier's consolidated 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.
4.3 REGISTRATION STATEMENT.
4.3.1 PREPARATION OF REGISTRATION STATEMENT.
(a) A Registration Statement on Form S-4 ("Registration
Statement") will be filed by Glacier with the SEC under
the Securities Act for registration of the shares of
Glacier Common Stock to be issued in the Transaction, and
the parties will prepare a related prospectus/proxy
statement ("Prospectus/Proxy Statement") to be mailed
together with any amendments and supplements to
shareholders of Glacier and WesterFed.
(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 45 days
following the date of this Agreement, 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.
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(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 or
its Subsidiaries unless approved by that party, which
approval will not be unreasonably withheld.
(d) Glacier will pay all costs associated with the preparation
by Glacier's counsel and the filing of the Registration
Statement and the Prospectus/Proxy Statement. WesterFed
will pay all costs associated with the review and
preparation by WesterFed's counsel of the Registration
Statement and the Prospectus/Proxy Statement. Glacier and
WesterFed will each pay the costs associated with the
printing and mailing of the Prospectus/Proxy Statement to
its shareholders and any other direct costs incurred by it
in connection with the Prospectus/Proxy Statement.
4.3.2 SUBMISSION TO SHAREHOLDERS.
(a) Glacier and WesterFed 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) Glacier and WesterFed will each promptly take the actions
necessary in accordance with applicable law and its
Certificate of Incorporation and Bylaws to convene a
shareholders' meeting to consider the adoption of this
Agreement and to authorize the transactions contemplated
by this Agreement. This shareholders' meetings will be
held on the earliest practical date after the date the
Prospectus/Proxy Statement may first be sent to
shareholders of Glacier and WesterFed without objection by
applicable Governmental Entities; but each party will have
at least 20 calendar days to solicit proxies. Except as
otherwise deemed necessary by its board of directors to
comply with its fiduciary duties to shareholders,
Glacier's and WesterFed's boards of directors will
recommend adoption of this Agreement to their respective
shareholders.
4.4 AFFILIATE LIST. Certain persons may be deemed "affiliates" of WesterFed
under Securities Act Rule 145. Within 30 days following the date of this
Agreement, WesterFed will deliver to Glacier, after consultation with
legal counsel, a list of names and addresses of WesterFed's "affiliates"
with respect to the Transaction within the meaning of Rule 145. By the
Effective Date, WesterFed will use its best efforts to 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 C.
4.5 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
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WesterFed's review. These applications and filings are expected to
include an application to the Federal Reserve Board.
4.6 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 in the reasonable opinion
of such party's counsel.
4.7 CONSENTS. Glacier and WesterFed will use their best efforts to obtain
the consent or approval of any person, organization or other entity
(including any applicable Governmental Entity) whose consent or approval
is required in order to consummate the Transaction.
4.8 FURTHER ACTIONS. Glacier and WesterFed, respectively, in the name and on
behalf of those respective parties, will use their best efforts in good
faith to make all such arrangements, do or cause to be done all such
acts and things, and execute and deliver all such certificates and other
instruments and documents as may be reasonably necessary or appropriate
in order to consummate the Transaction as promptly as practicable.
4.9 NOTICE. Glacier and WesterFed will each provide the other 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 the
notifying party; or
(b) the commencement of any proceeding against the notifying
party, or any of its 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 the notifying party.
4.10 CONFIDENTIALITY. Glacier and WesterFed each will hold in confidence all
nonpublic information obtained from the other in connection with the
Transaction, 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 WesterFed will: (1) each
return to the other all confidential documents obtained by it from such
other party and (2) not use or disclose any nonpublic information
obtained under this Agreement or in connection with the Transaction or
the nature or extent of any negotiations between the parties.
4.11 NASDAQ LISTING. Glacier agrees to use its reasonable best efforts to
list, prior to the Effective Date, on the Nasdaq National Market,
subject to official notice of issuance, the shares of Glacier Common
Stock to be issued to the holders of WesterFed Common Stock in the
Merger, and the shares of Glacier Common Stock to be issued upon the
exercise of Assumed Options.
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4.12 REGISTRATION OF ASSUMED OPTION SHARES. As soon as practicable after the
Effective Date, Glacier shall file an appropriate registration statement
with respect to the shares of Glacier Common Stock subject to Assumed
Options and shall use its reasonable best efforts to maintain the
effectiveness of such registration statement or registration statements
(and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options remain outstanding.
4.13 CERTAIN POLICIES. After all conditions to the consummation of the Merger
set forth in Section 5 have been satisfied or waived, WesterFed and the
Bank will, consistent with GAAP and methodology agreed upon by the
parties, modify its loan, litigation, and real estate valuation policies
and practices (including loan classifications and levels of reserves) so
as to be applied on a basis that is consistent with that of Glacier.
SECTION 5
APPROVALS AND CONDITIONS
5.1 REQUIRED APPROVALS. The obligations of the parties to this Agreement are
subject to the approval of this Agreement and the Transaction by all
appropriate regulatory agencies having jurisdiction with respect to the
Transaction.
5.2 CONDITIONS TO GLACIER'S OBLIGATIONS. All of Glacier's obligations under
this Agreement are subject to satisfaction (or waiver by Glacier) of the
following conditions at or before Closing:
5.2.1 REPRESENTATIONS. WesterFed'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. WesterFed has delivered to Glacier its
certificate, executed by a duly authorized officer of WesterFed
and dated as of Closing, stating that these representations
comply with this Subsection 5.2.1.
5.2.2 COMPLIANCE. WesterFed has performed and complied with all
material terms, covenants and conditions of this Agreement.
WesterFed's certificate referred to in Subsection 5.2.1 states
that the conditions identified in this Subsection 5.2.2 are
satisfied.
5.2.3 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 is reasonably likely to have a Material Adverse Effect
with respect to WesterFed. WesterFed's certificate referred to in
Subsection 5.2.1 states that the conditions identified in this
Subsection 5.2.3 are satisfied.
5.2.4 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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5.2.5 ACTION. The shareholders of Glacier and WesterFed, respectively,
have each adopted this Agreement.
5.2.6 TAX OPINION. Glacier, at Glacier's expense, has obtained from
Xxxxxx & Xxxx, P.C. an opinion to the effect that, the
Transaction will qualify as a reorganization within the meaning
of IRC Section 368(a)(1)(A) and that each of Glacier and
WesterFed will be a "party to a reorganization" within the
meaning of Section 368(b).
5.2.7 REGISTRATION STATEMENT. The Registration Statement, as described
in Section 4.3 and as it may have been amended, 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.
5.2.8 CONSENTS. WesterFed has obtained the consents as indicated in
Schedule 3.1.13(b)-W, but only to the extent that the absence of
one or more consents is reasonably likely to result in a Material
Adverse Effect to Glacier.
5.2.9 SOLICITATION OF EMPLOYEES. Neither any member of WesterFed's
board of directors nor any entity with which any such director is
affiliated has solicited any employee of WesterFed, Glacier or
any of their respective Subsidiaries with the intention of
causing the employee to terminate his or her employment with
WesterFed, Glacier or any of their respective Subsidiaries, as
the case may be.
5.2.10 DIRECTOR APPOINTMENT. Effective as of Closing, WesterFed has
appointed Xxxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxx to serve on
the Bank's board of directors.
5.2.11 OTHER MATTERS. Glacier has received any other opinions,
certificates, and documents that Glacier reasonably requests in
connection with this Agreement and the Transaction.
5.2.12 FAIRNESS OPINIONS.
(a) WesterFed has received from Xxxxxx Xxxxxx, an updated
fairness opinion at WesterFed's expense, dated as of or
immediately before WesterFed mails the Prospectus/Proxy
Statement to its shareholders, to the effect that the
Merger Consideration is fair to the shareholders of
WesterFed from a financial point of view, and a copy of
such updated opinion has been supplied to Glacier. Glacier
will provide WesterFed's investment advisor with any
information reasonably requested for the purpose of
issuing a fairness opinion.
(b) Glacier has received from Davidson an updated fairness
opinion at Glacier's expense, dated as of or immediately
before Glacier mails the Prospectus/Proxy Statement to its
shareholders, to the effect that the Merger Consideration
to be paid by Glacier in connection with the Merger
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is fair to the shareholders of Glacier from a financial
point of view. WesterFed will provide Glacier's investment
advisor with any information reasonably requested for the
purpose of issuing a fairness opinion.
5.3 CONDITIONS TO WESTERFED'S OBLIGATIONS. All of WesterFed's obligations
under this Agreement are subject to satisfaction (or waiver by
WesterFed) of the following conditions at or before Closing:
5.3.1 REPRESENTATIONS. Glacier's representations and warranties 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 and warranties have the same force and effect as
if they had been made at Closing. Glacier has delivered to
WesterFed its certificate, executed by a duly authorized officer
of Glacier and dated as of Closing, stating that these
representations and warranties comply with this Subsection 5.3.1.
5.3.2 COMPLIANCE. Glacier has performed and complied in all material
respects with all terms, covenants and conditions of this
Agreement. Glacier's certificate referred to in Subsection 5.3.1
states that the conditions identified in this Subsection 5.3.2
are satisfied.
5.3.3 NO MATERIAL ADVERSE EFFECT. No damage, destruction, loss or other
event or sequence of events has occurred which, individually or
in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect with respect to Glacier. Glacier's
certificate referred to in Subsection 5.3.1 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,
prohibit or invalidate the Transaction.
5.3.5 SHAREHOLDER ACTION. The shareholders of Glacier and WesterFed,
respectively, have each adopted this Agreement.
5.3.6 TAX OPINION. WesterFed has, at WesterFed's expense, obtained from
Silver, Xxxxxxxx & Xxxx, L.L.P., an opinion to the effect that
the Transaction will qualify as a reorganization within the
meaning of IRC Section 368(a)(1)(A) and that each of Glacier and
WesterFed will be a "party to a reorganization" within the
meaning of Section 368(b).
5.3.7 REGISTRATION STATEMENT. The Registration Statement described in
Subsection 4.3 and as it may have been amended, 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.
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5.3.8 DIRECTOR APPOINTMENT. Effective as of Closing, Glacier has
appointed Xxxxx X. Xxxxxxxx to serve on Glacier's board of
directors.
5.3.9 NASDAQ LISTING. The shares of Glacier Common Stock to be issued
in the Merger shall have been approved for listing on the Nasdaq
National Market, subject to official notice of issuance.
5.3.10 FAIRNESS OPINION.
(a) WesterFed has received from Xxxxxx Xxxxxx an updated
fairness opinion at WesterFed's expense, dated as of or
immediately before WesterFed mails the Prospectus/Proxy
statement to its shareholders, to the effect that the
Merger Consideration is fair to the shareholders of
WesterFed from a financial point of view. Glacier will
provide WesterFed's investment advisor with any
information reasonably requested for the purpose of
issuing a fairness opinion.
(b) Glacier has received from Davidson an updated fairness
opinion at Glacier's expense, dated as of or immediately
before Glacier mails the Prospectus/Proxy Statement to its
shareholders, to the effect that the Merger Consideration
to be paid by Glacier in connection with the Merger is
fair to the shareholders of Glacier from a financial point
of view, and a copy of such updated opinion has been
supplied to WesterFed. WesterFed will provide Glacier's
investment advisor with any information reasonably
requested for the purpose of issuing a fairness opinion.
SECTION 6
DIRECTORS, OFFICERS AND EMPLOYEES
6.1 DIRECTORS. As a condition to the execution of this Agreement, each
member of WesterFed's (other than Xxxxx X. Xxxxxxxxx) and Glacier's
boards of directors has entered into the written agreement described in
Recital F with Glacier and WesterFed on or before the date of this
Agreement.
6.2 EMPLOYMENT AGREEMENTS. As a condition to the execution of this
Agreement, Glacier has entered into employment agreements, effective as
of the Effective Date, with Xxxxx X. Xxxxxxxx, WesterFed's and the
Bank's current President and Chief Executive Officer; Xxxxx X.
Xxxxxxxxx, WesterFed's and the Bank's Executive Vice President and Chief
Financial Officer; Xxxxxx Xxxxxxx, the Bank's current Senior Vice
President - Central Operations Manager; Xxxxx Xxxxxxxx, the Bank's
current Senior Vice President - Credit Administration and Xxxx Xxxxxxxx,
the Bank's current Senior Vice President - Human Resources. As part of
these employment agreements, all such individuals will, as of the
Effective Date, waive all rights they may have under any previous
employment or change in control agreements with WesterFed and/or the
Bank.
6.3 EMPLOYEES. Employees of WesterFed and its Subsidiaries who remain
employed after the Effective Date will be eligible to participate in all
of the benefit, welfare, bonus, incentive, stock, and similar plans of
Glacier and its Subsidiaries that are generally
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available to similarly situated employees of Glacier and/or its
Subsidiaries in accordance with and subject to the terms and provisions
of such plans, with credit for years of service with WesterFed and its
Subsidiaries (including service with any entity acquired by WesterFed or
the Bank) for the purpose of determining eligibility for participation,
vesting and accrual of benefits (including vacation time and sick pay,
but not for the purpose of accrual of benefits under any qualified
defined benefit plan of Glacier or any of its Subsidiaries).
Contributions to (and accrual of benefits, to the extent applicable, if
any) under plans of Glacier and its Subsidiaries on behalf of continuing
employees of WesterFed and its Subsidiaries shall only relate to
compensation earned by such employees after the Effective Date subject
to the terms and provisions of such plans. Glacier shall use
commercially reasonable efforts to cause any and all pre-existing
condition limitations (to the extent such limitations did not apply to a
pre-existing condition under the corresponding WesterFed health plan)
and eligibility waiting periods under its health plan to be waived with
respect to the employees of WesterFed and its Subsidiaries who continue
employment after the Effective Date and their eligible dependents. To
the extent that any employee of WesterFed or its Subsidiaries continues
employment after the Effective Date and he or she has satisfied in whole
or in part any annual deductible under the WesterFed health plan, or has
paid any out-of-pocket expenses pursuant to the WesterFed health plan
co-insurance provisions, such amount shall be counted toward the
satisfaction of any applicable deductible or out-of-pocket expense
maximum, respectively, under Glacier's health plan.
6.4 INDEMNIFICATION; DIRECTOR AND OFFICER INSURANCE.
6.4.1 Glacier agrees that from and after the Effective Date until six
years following the Effective Date, Glacier will indemnify and
hold harmless each present and former director and officer of
WesterFed and its Subsidiaries, determined as of the Effective
Date (the "Indemnified Parties"), against any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "Costs") incurred
in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters existing
or occurring at or prior to the Effective Date, whether asserted
or claimed prior to, at or after the Effective Date, to the
fullest extent that WesterFed would have been permitted under
Delaware law (or the Bank would have been permitted under federal
law, if applicable) and the certificate of incorporation (or
charter of the Bank, if applicable) or bylaws of WesterFed or the
Bank in effect on the date of this Agreement to indemnify such
person (and Glacier will also advance expenses as incurred to the
fullest extent permitted under applicable law; provided, that the
person to whom expenses are advanced provides an undertaking to
repay such advances if it is ultimately determined that such
person is not entitled to indemnification).
6.4.2 To the extent that Subsection 6.4.1 will not serve to indemnify
and hold harmless an Indemnified Party, for a period of six years
after the Effective Date, Glacier agrees that it will, subject to
the terms set forth herein, indemnify and hold harmless, to the
fullest extent permitted under applicable law (and Glacier will
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also advance expenses as incurred to the fullest extent permitted
under applicable law, provided, that the person to whom expenses
are advanced provides an undertaking to repay such advances if it
is ultimately determined that such person is not entitled to
indemnification), each Indemnified Party against any Costs
incurred in connection with any claim, action, suit, proceeding
or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to the Transaction.
In the event any claim or claims are asserted or made within such
six-year period, all rights to indemnification in respect of any
such claim or claims will continue until final disposition of any
and all such claims.
6.4.3 Any Indemnified Party wishing to claim indemnification under
Subsection 6.4.1 or 6.4.2, upon learning of any such claim,
action, suit, proceeding or investigation, will promptly notify
Glacier, but the failure to so notify will not relieve Glacier of
any liability it may have to such Indemnified Party if such
failure does not materially prejudice Glacier. In the event of
any such claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Date), Glacier
will have the right to assume the defense thereof and Glacier
will not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently
incurred by such Indemnified Parties in connection with the
defense thereof, except that, if Glacier elects not to assume
such defense or counsel for the Indemnified Parties advises that
there are issues which raise conflicts of interest between
Glacier and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and Glacier will pay all
reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefore are received. If such
indemnity is not available with respect to any Indemnified Party,
then Glacier and the Indemnified Parties will contribute to the
amount payable in such proportion as is appropriate to reflect
relative faults and benefits.
6.4.4 For a period of six years from and after the Effective Date,
Glacier shall use commercially reasonable efforts to cause to be
maintained in effect the current policies of directors' and
officers' liability insurance maintained by WesterFed and its
Subsidiaries (provided that Glacier may substitute therefor
policies from a financially capable insurer of at least the same
coverage and amount containing terms and conditions which are
substantially no less advantageous, or in the event such coverage
is provided through Glacier's current insurer it may be on terms
and conditions (other than coverage and amounts) consistent with
Glacier's current coverage), or in lieu thereof Glacier will
obtain or permit WesterFed to obtain single limit tail coverage
for such period, with respect to claims arising from facts or
events which occurred on or before the Effective Date. Following
consummation of the Merger, the directors and officers of Glacier
and its Subsidiaries (including the Bank) will be covered by the
directors' and officers' liability insurance maintained by
Glacier and its Subsidiaries.
6.4.5 The obligations of Glacier provided under Subsections 6.4.1 -
6.4.4 are intended to be enforceable against Glacier directly by
the Indemnified Parties and will be binding on all respective
successors and assigns of Glacier.
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6.5 EMPLOYEE BENEFIT ISSUES.
6.5.1 EMPLOYEE STOCK OWNERSHIP PLAN. With respect to WesterFed's
Employee Stock Ownership Plan (the "ESOP"), WesterFed will:
(a) take any action it deems appropriate to amend the ESOP to
allocate contributions on a pro-rata basis (based upon
existing methodology for allocating annual contributions)
through the day next preceding the Effective Date and to
eliminate any requirement that a participant must be
employed on the last day of the plan year to receive a
contribution allocation;
(b) take any actions necessary to cause the ESOP to be
terminated and for the balances in all Accounts (as
defined in the ESOP) to become fully vested and
nonforfeitable as of the Effective Date;
(c) use its best efforts to cause the Trustee of the ESOP to
make such elections under Section 1.6 of this Agreement
with respect to unallocated WesterFed Common Stock as are
necessary to obtain cash at least equal to the remaining
ESOP indebtedness;
(d) cause the Trustee to use such cash (and convert
unallocated Glacier Common Stock received in the Merger to
cash, if applicable), to repay in full all such
outstanding ESOP indebtedness as soon as is practicable
after the Effective Date;
(e) take any action it deems appropriate (including amending
the ESOP) to cause the shares of Glacier Common Stock
received in the Merger and/or any cash remaining in the
suspense account maintained under the ESOP, after giving
effect to the repayment of ESOP indebtedness referred to
in subparagraph (c) above, to be allocated as investment
earnings of the ESOP (as of the Effective Date) to the
accounts of all ESOP participants who have account
balances as of the Effective Date, in proportion to the
aggregate value of their respective Stock Accounts and
Investment Accounts (as defined in the ESOP) in accordance
with the applicable provisions of the ESOP;
(f) cause the account balances of all ESOP participants to be
distributed in a lump sum (or transferred in accordance
with Section 401(a)(31) of the IRC) as soon as practicable
following the later of (A) the Effective Date or (B) the
date of receipt of a favorable determination letter from
the Internal Revenue Service regarding the qualified
status of the ESOP upon its termination; and
(g) adopt amendment(s) to the ESOP, in form and substance
reasonably satisfactory to Glacier, which includes and
provides for the actions described in subparagraphs (b),
(c), (d), (e) and (f) above or as may be requested by the
Internal Revenue Service in connection with the request
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for a determination letter (including provisions to comply
with applicable tax law changes).
6.5.2 FIRF PLAN. WesterFed will, and will cause its participating
Subsidiaries to, withdraw from the FIRF Plan effective on or
before the Effective Date. In addition, WesterFed will, and will
cause its participating Subsidiaries to, take all necessary
action prior to their withdrawal from the FIRF Plan to amend the
benefit formula for their employee participants under the FIRF
Plan to eliminate any unfunded liability on the part of WesterFed
and its participating Subsidiaries to the FIRF Plan, or if the
unfunded liability cannot be eliminated, to minimize the amount
of the unfunded liability, in each case, to the extent permitted
by the FIRF Plan, ERISA, the IRC or any other applicable law.
6.5.3 TERMINATION AND TRANSFER/MERGER OF PLANS. As soon as practicable
after Effective Date, all other employee benefit plans of
WesterFed 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.
6.5.4 NO CONTRACT CREATED. Nothing in this Agreement gives any employee
of WesterFed 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 WesterFed 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 the shareholders of the
parties, unless otherwise provided) as follows:
7.2.1 MUTUAL CONSENT. By mutual consent of WesterFed and Glacier, if
the boards of directors of each party agrees to terminate by a
majority vote of its members.
7.2.2 WESTERFED'S CONDITIONS NOT MET. By Glacier's board of directors
if, by June 30, 2001, any condition set forth in Section 5.1 or
5.2 has not been satisfied
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(or at any time following the failure of the shareholders of
either party to adopt this Agreement at a duly convened meeting
held to vote on the adoption of this Agreement).
7.2.3 GLACIER'S CONDITIONS NOT MET. By WesterFed's board of directors
if, by June 30, 2001, any condition set forth in Section 5.1 or
5.3 has not been satisfied (or at any time following the failure
of the shareholders of either party to adopt this Agreement at a
duly convened meeting held to vote on the adoption of this
Agreement).
7.2.4 WESTERFED FAILS TO RECOMMEND SHAREHOLDER APPROVAL. By Glacier's
board of directors before WesterFed's shareholders adopt this
Agreement, if WesterFed's board of directors: (a) fails to
recommend to its shareholders the adoption of this Agreement or
(b) modifies, withdraws or changes in a manner adverse to Glacier
its recommendation to shareholders to adopt this Agreement.
7.2.5 GLACIER FAILS TO RECOMMEND SHAREHOLDER APPROVAL. By WesterFed's
board of directors before Glacier's shareholders adopt this
Agreement, if Glacier's board of directors: (a) fails to
recommend to its shareholders the adoption of this Agreement or
(b) modifies, withdraws or changes in a manner adverse to
WesterFed its recommendation to shareholders to adopt this
Agreement.
7.2.6 IMPRACTICABILITY. By either Glacier or WesterFed, upon written
notice given to the other party, if the board of directors of the
party seeking termination under this Subsection 7.2.6 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 by reason of the
institution of litigation by the federal government or the
government of any state to restrain or invalidate the Transaction
or this Agreement.
7.2.7 AVERAGE CLOSING PRICE LESS THAN $9.00. By WesterFed, if its board
of directors so determines by an affirmative vote of the majority
of its members, if the Average Closing Price is less than $9.00.
If WesterFed elects to exercise its termination right pursuant to
the preceding sentence, the following provisions will apply:
(a) WesterFed will give written notice of its election to
Glacier no later than the end of the third Business Day
following the Determination Date. A "Business Day" means a
calendar day other than a Saturday, Sunday or any other
day that is a day on which banking institutions in Montana
are authorized or obligated by law or executive order to
close.
(b) Within ten Business Days following the Determination Date,
Glacier may elect by written notice to WesterFed to
increase the Merger Consideration to be received by the
holder of each share of WesterFed Common Stock as provided
in Subsection 1.4.1(g)(3).
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(c) If Glacier elects to increase the Merger Consideration, it
may do so in a combination of additional cash or
additional shares of Glacier Common Stock, notwithstanding
any election made pursuant to Section 1.6, provided that
(notwithstanding any other provision of this Agreement) in
no event will less than 45% of the total value of the
Merger Consideration be paid in Glacier Common Stock based
upon the per share closing price of Glacier Common Stock
on the Effective Date, or if the Effective Date is not a
trading day, then the closing price on the most recent
trading day prior to the Effective Date calculated as if
all Dissenting Shares received the Cash Distribution.
(d) If Glacier makes the election contemplated by paragraphs
(b) and (c) above, by giving timely written notice to
WesterFed, no termination will occur pursuant to this
Subsection 7.2.7 and this Agreement will remain in effect
according to its terms (except as the Merger Consideration
has been supplemented).
7.2.8 AVERAGE CLOSING PRICE LESS THAN $7.50. By Glacier, if its board
of directors so determines by an affirmative vote of the majority
of its members of the Average Closing Price is less than or equal
to $7.50.
7.3 GLACIER LIQUIDATED DAMAGES.
7.3.1 PAYMENT OF LIQUIDATED DAMAGES. Due to expenses, direct and
indirect, incurred by WesterFed in negotiating and executing this
Agreement and in taking steps to effect the Transaction, and the
loss by it of other opportunities, Glacier will pay to WesterFed
$3.5 million if (1) after a Triggering Event the shareholders of
Glacier fail to adopt this Agreement or (2) WesterFed terminates
this Agreement under Subsection 7.2.5. The foregoing amount
represents agreed upon liquidated damages and will be payable on
WesterFed's demand and must be paid by Glacier within three (3)
Business Days after the date WesterFed makes the demand. However,
if demand and payment is made pursuant to this subsection 7.3.1,
then WesterFed will have no other rights or claims against
Glacier under this Agreement, it being agreed that acceptance of
liquidated damages under this subsection 7.3.1 by WesterFed will
constitute its sole and exclusive remedy against Glacier.
7.3.2 LIMITATION ON PAYMENT OF LIQUIDATED DAMAGES. No liquidated
damages shall be payable pursuant to Subsection 7.3.1 if (i)
Glacier terminates, or has the right to terminate, this Agreement
pursuant to Subsection 7.2.2 (solely on account of the willful
breach of WesterFed) or Section 7.2.4; or (ii) if at the
WesterFed Meeting, the WesterFed shareholders fail to adopt this
Agreement.
7.3.3 DEFINITIONS. For purposes of this Agreement, the following terms
will have the meanings set forth below:
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(a) "Acquisition Proposal" means a proposal to engage in any
of the following: (1) a merger, consolidation or any
similar transaction involving Glacier or any of its
financial institution Subsidiaries (other than the
Transaction, acquisitions by Glacier and its financial
institution Subsidiaries that are not prohibited under
Subsection 4.2.2(b) or a merger or other transactions
between financial institution Subsidiaries of Glacier),
(2) a purchase, lease or other acquisition of all or
substantially all the assets of Glacier or any of its
financial institution Subsidiaries, other than in a
transaction between financial institution Subsidiaries of
Glacier, (3) a purchase or other acquisition of
"beneficial ownership" by any "person" or "group" (as such
terms are defined in Section 13(d)(3) of the Exchange Act)
(including by way of merger, consolidation, share
exchange, or otherwise) which would cause such person or
group to become the beneficial owner of securities
representing more than 19.9% of the voting power of
Glacier or any of its financial institution Subsidiaries,
(4) a tender or exchange offer to acquire securities
representing more than 19.9% of the voting power of
Glacier, (5) a public proxy or consent solicitation made
to the shareholders of Glacier seeking proxies in
opposition to the Transaction, or (6) the filing of an
application or notice with the Federal Reserve Board, the
FDIC, the OTS, the SEC, or any other federal or state
regulatory authority (which application has been accepted
for processing) seeking approval to engage in one or more
of the transactions referenced in clauses (1) through (5)
above.
(b) "Triggering Event" means Glacier's entering into, or the
public announcement of or any filing with a regulatory
authority or the SEC with respect to, an Acquisition
Proposal.
7.4 WESTERFED LIQUIDATED DAMAGES.
7.4.1 PAYMENT OF LIQUIDATED DAMAGES. Due to expenses, direct and
indirect, incurred by Glacier in negotiating and executing this
Agreement and in taking steps to effect the Transaction, and the
loss by it of other opportunities, WesterFed will pay to Glacier
$4.5 million if (i) Glacier terminates this Agreement under
subsection 7.2.4, or (ii) the shareholders of WesterFed do not
adopt this Agreement at the WesterFed meeting after there has
been proposed by a third party a WesterFed Acquisition
Transaction (the "WesterFed Proposal"). The foregoing amount
represents agreed upon liquidated damages and will be payable on
Glacier's demand and must be paid by WesterFed within three (3)
Business Days after the date Glacier makes the demand. However,
if demand and payment is made pursuant to this subsection 7.4.1,
then Glacier will have no other rights or claims against
WesterFed under this Agreement, it being agreed that acceptance
of liquidated damages under this subsection 7.4.1 by Glacier will
constitute its sole and exclusive remedy against WesterFed.
7.4.2 LIMITATION ON PAYMENT OF LIQUIDATED DAMAGES. No liquidated
damages will be payable pursuant to subsection 7.4.1 if (i)
Glacier or its assigns has acquired
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any shares pursuant to the exercise of its Option (as defined in
the Stock Option Agreement), WesterFed has repurchased the Option
pursuant to the Stock Option Agreement or WesterFed has paid
Glacier or its assigns the Surrender Price (as defined in the
Stock Option Agreement) pursuant to the Stock Option Agreement,
(ii) Glacier refuses to execute and deliver a written release of
all of Glacier's rights under the Stock Option Agreement and all
claims, demands or causes of action that Glacier has or might
have against WesterFed, under this Agreement against delivery by
WesterFed of the $4.5 million liquidated damages set forth above,
(iii) WesterFed terminates, or has the right to terminate, this
Agreement pursuant to subsection 7.2.3 (solely on account of the
willful breach of Glacier) or subsection 7.2.5, or (iv) if at the
Glacier shareholders' meeting to vote on the adoption of this
Agreement, the Glacier shareholders fail to adopt this Agreement.
7.4.3 For purposes of the foregoing, "WesterFed Acquisition
Transaction" shall have the same meaning as the term "Acquisition
Transaction" in the Stock Option Agreement except that a
percentage referred to in Section 2.1(a)(iii) thereof shall be
25%.
7.5 COST ALLOCATION UPON TERMINATION. In connection with the termination of
this Agreement under this Section 7, except as provided in Sections 7.3
and 7.4, Glacier and WesterFed will each pay their own out-of-pocket
costs incurred in connection with this Agreement, and neither party will
have any liability to the other party, unless this Agreement is
terminated or the Transaction is not consummated due to the willful
breach of a party.
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.
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxxx
with a copy to: Xxxxxx & Xxxx, P.C.
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxxxxx, Esq.
WesterFed WesterFed Financial Corporation
000 Xxxx Xxxxxxxx
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X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxxx
with a copy to: Silver, Xxxxxxxx & Xxxx, L.L.P.
0000 Xxx Xxxx Xxxxxx XX
Xxxxx 000 Xxxxxxxxxx, X.X. 00000-0000
Attn: Xxxxx X. Xxxx, P.C.
8.2 WAIVERS AND EXTENSIONS. Subject to Section 9, Glacier or WesterFed may
grant waivers or extensions to the other party, but only through a
written instrument executed by the Chief Executive Officer or President
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 in the representations and warranties of
the other party contained in this Agreement or in any
document delivered by the other party in connection with
this Agreement;
(b) compliance with any of the covenants of the other party;
and
(c) the 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 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 or in any other agreement executed
by the parties on or as of the date of 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 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.
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8.5 SURVIVAL OF REPRESENTATIONS AND COVENANTS. The representations and
covenants in this Agreement will not survive the Effective Date or
termination of this Agreement, except that (1) Section 4.10
(confidentiality), Sections 7.3 and 7.4 (liquidated damages fee), and
Section 7.5 (expense allocation) will survive termination, (2) the
representations and covenants will survive termination for the purpose
of the pursuit and determination of the willful breach by a party which
resulted in termination or non-consummation of the Transaction, and (3)
the covenants in this Agreement that impose duties or obligations on a
party following the Effective Date will survive the Effective Date.
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 such
litigation.
8.7 ARBITRATION AND SPECIFIC PERFORMANCE. 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 will
bind 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. The
parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
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.
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 will not be affected thereby, and each remaining term will
continue to be valid and enforceable to the fullest extent permitted by
law.
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SECTION 9
AMENDMENTS
At any time before the Effective Date, whether before or after the
parties have obtained any applicable shareholder approvals of this Agreement,
the boards of directors of Glacier and WesterFed may: (1) amend or modify this
Agreement or any attached Exhibit or Schedule and (2) grant waivers or time
extensions in accordance with Section 8.2. But, after WesterFed's shareholders
have adopted this Agreement, the parties' boards of directors may not without
WesterFed shareholder approval amend or waive any provision of this Agreement if
the amendment or waiver would reduce the amount or change the form of
consideration WesterFed shareholders 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,
without a writing, operate as a waiver or estoppel with respect to that or any
other obligation, agreement, or condition.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
51
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Signed as of _______________, 2000:
GLACIER BANCORP, INC.
By
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
WESTERFED FINANCIAL CORPORATION
By
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
52
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STATE OF ___________ )
) ss.
COUNTY OF __________ )
On this _____ day ____________, 2000, before me personally appeared
Xxxxxxx X. Xxxxxxxx, to me known to be the 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.
-------------------------------------
NOTARY PUBLIC in and for the State of
_____________, residing at __________
Title:
-------------------------------
My commission expires:
---------------
STATE OF _____________________ )
) ss.
COUNTY OF_____________________ )
On this ____ day of ___________, 2000, before me personally appeared
Xxxxx X. Xxxxxxxx, to me known to be the President and Chief Executive Officer
of WESTERFED 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.
-------------------------------------
NOTARY PUBLIC in and for the State of
_____________, residing at __________
Title:
-------------------------------
My commission expires:
---------------
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TABLE OF CONTENTS
PAGE
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SECTION 1 TERMS OF TRANSACTION...............................................................3
1.1 Transaction...................................................................3
1.2 Effect of Transaction.........................................................3
1.3 Consideration.................................................................3
1.4 Price.........................................................................3
1.4.1 Definitions............................................................3
1.4.2 Merger Consideration...................................................4
1.5 Effect on Glacier Common Stock................................................5
1.6 Conversion Election Procedures and Allocation.................................5
1.6.1 Election Options.......................................................5
1.6.2 Effective Election.....................................................5
1.6.3 Non-election; Discretion of Exchange Agent.............................5
1.6.4 Maximum Stock and Cash Conversion Amounts..............................6
1.6.5 Allocation.............................................................6
1.7 Conversion of WesterFed Options...............................................8
1.8 Shareholder Rights; Stock Transfers...........................................8
1.9 Fractional Shares.............................................................8
1.10 Payment to Dissenting Shareholders............................................8
1.11 Exchange Procedures...........................................................9
1.11.1 Surrender of Certificate...............................................9
1.11.2 Issuance of Merger Consideration in Other Names........................9
1.11.3 Lost, Stolen, and Destroyed Certificates...............................9
1.11.4 Rights to Dividends and Distributions..................................9
1.11.5 Delivery of Merger Consideration to Exchange Agent....................10
1.11.6 Affiliates' Certificates..............................................10
1.12 Merger Consideration Adjustments.............................................10
1.13 Exception Shares.............................................................10
1.14 Reservation Of Right To Revise Structure.....................................10
1.15 Stock Option Agreement.......................................................11
SECTION 2 CLOSING OF THE TRANSACTION........................................................11
2.1 Closing......................................................................11
2.2 Events of Closing............................................................11
2.3 Place of Closing.............................................................11
SECTION 3 REPRESENTATIONS...................................................................11
3.1 Representations of Glacier and WesterFed.....................................11
3.1.1 Corporate Organization and Qualification..............................11
3.1.2 Subsidiaries..........................................................12
3.1.3 Capital Stock.........................................................12
3.1.4 Corporate Authority...................................................15
3.1.5 Reports and Financial Statements......................................15
3.1.6 Absence of Certain Events and Changes.................................17
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3.1.7 Material Agreements...................................................17
3.1.8 Knowledge as to Conditions............................................18
3.1.9 Brokers and Finders...................................................18
3.1.10 Corporate Records.....................................................18
3.1.11 Loan and Lease Losses.................................................18
3.1.12 No Stock Option Plans.................................................18
3.1.13 Governmental Filings; No Violations...................................18
3.1.14 Asset Classification..................................................19
3.1.15 Investments...........................................................19
3.1.16 Properties............................................................20
3.1.17 Anti-takeover Provisions..............................................20
3.1.18 Compliance with Laws..................................................20
3.1.19 Litigation............................................................21
3.1.20 Taxes.................................................................22
3.1.21 Insurance.............................................................23
3.1.22 Labor Matters.........................................................23
3.1.23 Employee Benefits.....................................................23
3.1.24 Environmental Matters.................................................26
3.2 Exceptions to Representations................................................27
3.2.1 Disclosure of Exceptions..............................................27
3.2.2 Nature of Exceptions..................................................28
3.2.3 Material Adverse Effect...............................................28
SECTION 4 CONDUCT AND TRANSACTIONS BEFORE CLOSING...........................................28
4.1 Conduct of WesterFed's Business Before Closing...............................28
4.1.1 Availability of WesterFed's Books, Records and Properties.............28
4.1.2 Ordinary and Usual Course.............................................29
4.1.3 Conduct Regarding Representations.....................................31
4.1.4 Maintenance of Properties.............................................31
4.1.5 Preservation of Business Organization.................................31
4.1.6 Senior Management.....................................................31
4.1.7 Compensation and Employment Agreements................................31
4.1.8 Update of Financial Statements........................................32
4.1.9 No Solicitation.......................................................32
4.2 Conduct of Glacier's Business Before Closing.................................32
4.2.1 Availability of Glacier's Books, Records and Properties...............32
4.2.2 Certain Prohibited Activities.........................................33
4.2.3 Conduct Regarding Representations.....................................33
4.2.4 Maintenance of Properties.............................................33
4.2.5 Preservation of Business Organization.................................33
4.2.6 Update of Financial Statements........................................34
4.3 Registration Statement.......................................................34
4.3.1 Preparation of Registration Statement.................................34
4.3.2 Submission to Shareholders............................................35
4.4 Affiliate List...............................................................35
4.5 Submission to Regulatory Authorities.........................................35
4.6 Announcements................................................................36
4.7 Consents.....................................................................36
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PAGE
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4.8 Further Actions..............................................................36
4.9 Notice.......................................................................36
4.10 Confidentiality..............................................................36
4.11 NASDAQ Listing...............................................................36
4.12 Registration of Assumed Option Shares........................................37
4.13 Certain Policies.............................................................37
SECTION 5 APPROVALS AND CONDITIONS..........................................................37
5.1 Required Approvals...........................................................37
5.2 Conditions to Glacier's Obligations..........................................37
5.2.1 Representations.......................................................37
5.2.2 Compliance............................................................37
5.2.3 No Material Adverse Effect............................................37
5.2.4 No Governmental Proceedings...........................................37
5.2.5 Action................................................................38
5.2.6 Tax Opinion...........................................................38
5.2.7 Registration Statement................................................38
5.2.8 Consents..............................................................38
5.2.9 Solicitation of Employees.............................................38
5.2.10 Director Appointment..................................................38
5.2.11 Other Matters.........................................................38
5.2.12 Fairness Opinions.....................................................38
5.3 Conditions to WesterFed's Obligations........................................39
5.3.1 Representations.......................................................39
5.3.2 Compliance............................................................39
5.3.3 No Material Adverse Effect............................................39
5.3.4 No Governmental Proceedings...........................................39
5.3.5 Shareholder Action....................................................39
5.3.6 Tax Opinion...........................................................39
5.3.7 Registration Statement................................................39
5.3.8 Director Appointment..................................................40
5.3.9 NASDAQ Listing........................................................40
5.3.10 Fairness Opinion......................................................40
SECTION 6 DIRECTORS, OFFICERS AND EMPLOYEES.................................................40
6.1 Directors....................................................................40
6.2 Employment Agreements........................................................40
6.3 Employees....................................................................40
6.4 Indemnification; Director and Officer Insurance..............................41
6.5 Employee Benefit Issues......................................................43
6.5.1 Employee Stock Ownership Plan.........................................43
6.5.2 FIRF Plan.............................................................44
6.5.3 Termination and Transfer/Merger of Plans..............................44
6.5.4 No Contract Created...................................................44
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SECTION 7 TERMINATION OF AGREEMENT AND ABANDONMENT OF TRANSACTION...........................44
7.1 Termination by Reason of Lapse of Time.......................................44
7.2 Other Grounds for Termination................................................44
7.2.1 Mutual Consent........................................................44
7.2.2 WesterFed's Conditions Not Met........................................44
7.2.3 Glacier's Conditions Not Met..........................................45
7.2.4 WesterFed Fails to Recommend Shareholder Approval.....................45
7.2.5 Glacier Fails to Recommend Shareholder Approval.......................45
7.2.6 Impracticability......................................................45
7.2.7 Average Closing Price Less Than $9.00.................................45
7.2.8 Average Closing Price Less Than $7.50.................................46
7.3 Glacier Liquidated Damages...................................................46
7.3.1 Payment of Liquidated Damages.........................................46
7.3.2 Limitation on Payment of Liquidated Damages...........................46
7.3.3 Definitions...........................................................46
7.4 WesterFed Liquidated Damages.................................................47
7.4.1 Payment of Liquidated Damages.........................................47
7.4.2 Limitation on Payment of Liquidated Damages...........................47
7.5 Cost Allocation Upon Termination.............................................48
SECTION 8 MISCELLANEOUS.....................................................................48
8.1 Notices......................................................................48
8.2 Waivers and Extensions.......................................................49
8.3 General Interpretation.......................................................49
8.4 Construction and Execution in Counterparts...................................49
8.5 Survival of Representations and Covenants....................................50
8.6 Attorneys' Fees and Costs....................................................50
8.7 Arbitration and Specific Performance.........................................50
8.8 Governing Law and Venue......................................................50
8.9 Severability.................................................................50
SECTION 9 AMENDMENTS........................................................................51
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SECTION 7 TERMINATION OF AGREEMENT AND ABANDONMENT OF TRANSACTION...........................44
7.1 Termination by Reason of Lapse of Time.......................................44
7.2 Other Grounds for Termination................................................44
7.2.1 Mutual Consent........................................................44
7.2.2 WesterFed's Conditions Not Met........................................44
7.2.3 Glacier's Conditions Not Met..........................................45
7.2.4 WesterFed Fails to Recommend Shareholder Approval.....................45
7.2.5 Glacier Fails to Recommend Shareholder Approval.......................45
7.2.6 Impracticability......................................................45
7.2.7 Average Closing Price Less Than $9.00.................................45
7.2.8 Average Closing Price Less Than $7.50.................................46
7.3 Glacier Liquidated Damages...................................................46
7.3.1 Payment of Liquidated Damages.........................................46
7.3.2 Limitation on Payment of Liquidated Damages...........................46
7.3.3 Definitions...........................................................46
7.4 WesterFed Liquidated Damages.................................................47
7.4.1 Payment of Liquidated Damages.........................................47
7.4.2 Limitation on Payment of Liquidated Damages...........................47
7.5 Cost Allocation Upon Termination.............................................48
SECTION 8 MISCELLANEOUS.....................................................................48
8.1 Notices......................................................................48
8.2 Waivers and Extensions.......................................................49
8.3 General Interpretation.......................................................49
8.4 Construction and Execution in Counterparts...................................49
8.5 Survival of Representations and Covenants....................................50
8.6 Attorneys' Fees and Costs....................................................50
8.7 Arbitration and Specific Performance.........................................50
8.8 Governing Law and Venue......................................................50
8.9 Severability.................................................................50
SECTION 9 AMENDMENTS........................................................................51
iv
