AGREEMENT AND PLAN OF MERGER
by and among
PEOPLES, INC.,
NATIONAL BANK HOLDINGS CORPORATION,
the Significant Stockholders (as defined herein),
and
WINTON A. WINTER, JR., solely in his capacity as the Holders’ Representative
___________________________
Dated as of June 23, 2017
___________________________
TABLE OF CONTENTS
Article I DEFINITIONS...................................................................................................................2
1.1Certain Defined Terms2
Article II THE MERGER; DELIVERY OF MERGER CONSIDERATION...........................................14
2.1The Merger14
2.2Effective Time14
2.3Closing14
2.4Certificate of Incorporation and Bylaws of the Surviving Corporation14
2.5Directors and Officers15
2.6Tax Consequences15
2.7Effects of the Merger15
2.8Conversion of Stock15
2.9Treatment of Company Equity Awards17
2.10Deposit and Delivery of Merger Consideration18
2.11Escrow20
2.12Bank Merger21
Article III REPRESENTATIONS AND WARRANTIES OF COMPANY...............................................21
3.1Corporate Organization21
3.2Capitalization22
3.3Authority; No Violation23
3.4Consents and Approvals24
3.5Reports24
3.6Financial Statements25
3.7Undisclosed Liabilities25
3.8Absence of Certain Changes or Events25
3.9Legal Proceedings25
3.10Taxes and Tax Returns26
3.11Employee Benefit Plans28
3.12Labor Matters30
3.13Compliance with Applicable Law30
3.14Material Contracts31
3.15Agreements with Regulatory Agencies33
3.16Investment Securities33
3.17Derivative Instruments34
3.18Environmental Liability34
3.19Insurance35
3.20Title to Property35
3.21Intellectual Property36
3.22Broker’s Fees37
3.23No Investment Adviser37
3.24Loans37
3.25Fiduciary Activities39
3.26Related Party Transactions39
3.27Certain Estimates39
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3.28Takeover Laws39
3.29Significant Stockholder Representations40
Article IV REPRESENTATIONS AND WARRANTIES OF PARENT.................................................40
4.1Corporate Organization40
4.2Capitalization41
4.3Authority; No Violation41
4.4Consents and Approvals42
4.5Availability of Funds42
4.6Financial Statements42
4.7Absence of Certain Changes or Events43
4.8Reports43
4.9Sarbanes-Oxley44
4.10Legal Proceedings44
4.11No Undisclosed Liabilities44
4.12Insurance44
4.13Environmental Liability44
4.14Agreements with Regulatory Agencies45
4.15Parent Equity Plans45
4.16Broker’s Fees45
Article V COVENANTS RELATING TO CONDUCT OF BUSINESS...................................................45
5.1Conduct of Business of Company Prior to the Effective Time45
5.2Forbearances of Company45
5.3Forbearances of Parent49
5.4Exclusivity49
Article VI ADDITIONAL AGREEMENTS.......................................................................................50
6.1Regulatory Matters50
6.2Access to Information51
6.3Stockholder Approval52
6.4Public Disclosure52
6.5Employee Benefit Matters52
6.6Mortgage Business Matters54
6.7Indemnification55
6.8Section 280G56
6.9Shelf Registration57
6.10Transfer Restrictions59
6.11Stock Exchange Listing59
6.12Actions to Be Taken Prior to Closing59
6.13Additional Agreements59
Article VII CONDITIONS PRECEDENT.........................................................................................60
7.1Conditions to Each Party’s Obligation to Effect the Closing60
7.2Conditions to Obligations of Parent60
7.3Conditions to Obligations of Company61
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Article VIII TERMINATION AND AMENDMENT.............................................................................62
8.1Termination62
8.2Effect of Termination63
8.3Amendment63
8.4Extension; Waiver63
Article IX INDEMNIFICATION.....................................................................................................63
9.1Indemnification by Holders63
9.2Indemnification Procedures65
9.3Escrow66
Article X GENERAL PROVISIONS...............................................................................................67
10.1Survival of Representations, Warranties and Agreements67
10.2Expenses67
10.3Notices67
10.4Interpretation68
10.5Counterparts69
10.6Entire Agreement69
10.7Governing Law; Venue; Waiver of Jury Trial69
10.8Specific Performance70
10.9Severability70
10.10Assignment; Third-Party Beneficiaries70
10.11Holders’ Representative70
10.12Alternative Structure71
Schedules
Disclosure Schedule
Parent Disclosure Schedule
Exhibits
Exhibit AForm of Investor Questionnaire
Exhibit BForm of Letter of Transmittal
Exhibit CForm of National Mortgage Business Settlement Statement
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agreement and plan of MERGER
Agreement and Plan of Merger (this “Agreement”), dated as of June 23, 2017, by and among Peoples, Inc., a Kansas corporation (“Company”), National Bank Holdings Corporation, a Delaware corporation (“Parent”), the Significant Stockholders and Winton A. Winter, Jr., solely in his capacity as the Holders’ Representative (together, the “Parties,” and each a “Party”).
WHEREAS, the boards of directors of Company and Parent have determined that it is in the best interests of their respective companies and their stockholders to consummate the strategic business combination transaction provided for in this Agreement in which Company will, on the terms and subject to the conditions set forth in this Agreement, merge with and into Parent (the “Merger”), with Parent as the surviving corporation in the Merger (sometimes referred to in such capacity as the “Surviving Corporation”);
WHEREAS, immediately after the Merger, Peoples National Bank, a national bank chartered under the laws of the United States and a wholly owned subsidiary of Company and Peoples Bank, a bank chartered under the laws of the State of Kansas and a wholly owned subsidiary of Company (together, the “Company Banks”), will merge with and into NBH Bank, a bank chartered under the laws of the State of Colorado and a wholly owned subsidiary of Parent (“Parent Bank”), with Parent Bank as the surviving corporation (the “Bank Merger” and, together with the Merger, the “Mergers”);
WHEREAS, subject to Section 10.12, the parties intend that, for U.S. federal income Tax (as defined below) purposes, the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and this Agreement shall constitute a “plan of reorganization” for purposes of Sections 354 and 361 of the Code;
WHEREAS, the boards of directors of Company and Parent have adopted and approved this Agreement and the transactions contemplated hereby, including the Mergers, and the board of directors of Company has resolved to recommend that the stockholders of Company approve this Agreement and the transactions contemplated hereby, including the Mergers;
WHEREAS, concurrently with the execution of this Agreement and as a condition and inducement for Parent to enter into this Agreement, Parent has entered into an offer letter with Brendan W. Zahl (the “Offer Letter”);
WHEREAS, concurrently with the execution of this Agreement and as a condition and inducement for Parent to enter into this Agreement, Parent and the Significant Stockholders have entered into a Support Agreement (the “Support Agreement”) in connection with the Merger; and
WHEREAS, the parties desire to make certain representations, warranties and agreements in connection with the Mergers and also to prescribe certain conditions to the Mergers.
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, and intending to be legally bound, the parties hereto agree as follows:
“Acceptance Notice” shall have the meaning stated in Section 6.6(b)(iii).
“Accredited Investor” shall have the meaning stated in Section 2.8(e).
“Accrued Interest” shall mean, as of any date, (a) with respect to a Deposit, interest which is accrued on such Deposit to but excluding such date and not yet posted to the relevant deposit account and (b) with respect to a Loan, interest which is accrued on such Loan to but excluding such date and not yet paid.
“Affiliate” of a Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person.
“Aggregate Cash Consideration” shall mean, subject to the Consideration Adjustment, (a) $36,250,000 plus (b) the amount, if any, by which the Closing Tangible Book Value exceeds Target Tangible Book Value minus (c) the amount, if any, by which Target Tangible Book Value exceeds Closing Tangible Book Value minus (d) the Escrow Deposit Shortfall Amount, if any.
“Aggregate Common Stock Cash Consideration” shall mean (a) the Aggregate Cash Consideration minus (b) the Aggregate Option Consideration minus (c) the aggregate consideration to be paid in respect of the Non-Accredited Investor Shares minus (d) the product of (i) the Per Share Amount multiplied by (ii) the aggregate number of Dissenting Shares.
“Aggregate Exercise Price” shall mean the aggregate exercise price of all In-the-Money Options.
“Aggregate Merger Consideration” shall mean an amount equal to the sum of (a) the Aggregate Cash Consideration and (b) the product of (i) the Aggregate Stock Consideration multiplied by (ii) the Parent Stock Price.
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“Aggregate Option Consideration” shall mean the aggregate cash consideration payable to holders of In-the-Money Options pursuant to Article II.
“Aggregate Stock Consideration” shall mean, subject to the Consideration Adjustment, 3,398,500 shares of Parent Common Stock.
“Agreement” shall have the meaning stated in the Preamble.
“Alternative Proposal” shall have the meaning stated in Section 5.4.
“Articles of Incorporation” shall mean the Articles of Incorporation of Company, as currently in effect.
“Balance Sheet” shall have the meaning stated in Section 3.6(a).
“Bank Merger” shall have the meaning stated in the second Recital.
“Bank Merger Act” shall mean the Bank Merger Act of 1960, as amended.
“BHCA” shall mean the Bank Holding Company Act of 1956, as amended.
“Borrower” shall mean any person or entity (including any Affiliate, stockholder, member or partner of such person or entity) and any guarantor, surety, spouse, co-maker or co-obligor of any extension of credit to any person or entity.
“Cancelled Shares” shall have the meaning stated in Section 2.8(c).
“Cash Consideration” shall have the meaning stated in Section 2.8(b).
“Certificate” shall mean a stock certificate which, immediately prior to the Effective Time, represents shares of Company Common Stock.
“Certificates of Merger” shall have the meaning stated in Section 2.2.
“Claim” shall have the meaning stated in Section 6.7(a).
“Closing” shall have the meaning stated in Section 2.3.
“Closing Date” shall have the meaning stated in Section 2.3.
“Closing Tangible Book Value” shall mean the tangible shareholders’ equity of Company and its Subsidiaries, as determined from financial statements prepared in accordance with GAAP and the accounting methodologies that were used to prepare the Balance Sheet, and as agreed between Parent and Company, provided, however, that Closing Tangible Book Value shall (i) include, without duplication, accruals for all unpaid Transaction Expenses, (ii) include appropriate impairments under GAAP to all real property owned by Company, (iii) exclude accounting estimates (e.g., allowances, reserves and similar items) that increase assets or reduce liabilities to levels that are greater than (in the case of assets) or less than (in the case of liabilities) the corresponding amounts set forth on the Balance Sheet and (iv) exclude all entries
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representing proceeds of, or liabilities or reserves relating to, the sale of the National Mortgage Business or revenue, expense or income attributable to the National Mortgage Business since January 1, 2017.
“Code” shall have the meaning stated in the third Recital.
“Company” shall have the meaning stated in the Preamble.
“Company 401(k) Plan” shall have the meaning stated in Section 6.5(b).
“Company Banks” shall have the meaning stated in the second Recital.
“Company Benefit Plan” shall mean each “employee benefit plan” (as defined in Section 3(3) of ERISA), whether or not such plan is subject to ERISA, and each other plan, policy, agreement or arrangement (whether written or oral) relating to stock options, stock purchases, stock awards, deferred compensation, bonus, severance, retention, termination, employment, change of control, fringe benefits, supplemental benefits or other employee benefits, in each case, sponsored, maintained or contributed to, or required to be sponsored, maintained or contributed to, by Company or its Subsidiaries, for the benefit of current or former employees, officers, directors or independent contractors of Company or its Subsidiaries, or with respect to which Company or any of its Subsidiaries has any liability, other than any Multiemployer Plan.
“Company Common Stock” shall mean the common stock, par value $1.00, of Company.
“Company Deferred Compensation Plan” shall mean the Peoples Bank Nonqualified Deferred Compensation Plan.
“Company Equity Awards” shall have the meaning stated in Section 3.2(a).
“Company Equity Plan” means Company’s 2007 Employee Stock Incentive Plan.
“Company Financial Statements” shall have the meaning stated in Section 3.6(a).
“Company Indemnified Party” shall have the meaning stated in Section 6.7(a).
“Company Intellectual Property” shall have the meaning stated in Section 3.21(a).
“Company Option” shall have the meaning stated in Section 2.9(a).
“Company Policies” shall have the meaning stated in Section 3.19.
“Company Regulatory Agreement” shall have the meaning stated in Section 3.15.
“Company Restricted Stock Award” shall have the meaning stated in Section 2.9(b).
“Company Subsidiary” shall have the meaning stated in Section 3.1(b).
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“Confidentiality Agreement” shall mean the Mutual Confidentiality and Non-Solicitation Agreement, dated as of January 25, 2017, by and between Company and Parent (as it may be amended from time to time).
“Consideration Adjustment” means the following adjustment to the Aggregate Cash Consideration and Aggregate Stock Consideration: If the Aggregate Common Stock Cash Consideration would, in the absence of a Consideration Adjustment, be less than zero, then the Aggregate Stock Consideration shall be decreased by the number of shares of Parent Common Stock equal to the quotient (rounded up to the nearest whole share) obtained by dividing the absolute value of the difference between the Aggregate Common Stock Cash Consideration (without giving effect to any Consideration Adjustment) and zero by the Parent Stock Price and the Aggregate Cash Consideration shall be increased by the product of the number of shares of Parent Common Stock by which the Aggregate Stock Consideration is decreased in accordance with the preceding clause (a) and the Parent Stock Price.
“Continuing Employee” shall have the meaning stated in Section 6.5(a).
“Controlled Group Liability” shall mean any and all liabilities (a) under Title IV of ERISA, (b) under Section 302 of ERISA, (c) under Section 412, 430 or 4971 of the Code, or (d) as a result of failure to comply with the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code.
“Corporate Entity” shall mean a bank, corporation, partnership, limited liability company or other organization, whether an incorporated or unincorporated organization.
“Covered Claim” shall have the meaning stated in Section 10.7(b).
“CRA” shall mean the Community Reinvestment Act of 1997.
“Cut-off Date” shall have the meaning stated in Section 3.24(a).
“Delaware Courts” shall have the meaning stated in Section 10.7(b).
“Deposit Insurance Fund” shall have the meaning set out in Section 3(y) of the Federal Deposit Insurance Act of 1950.
“Deposit(s)” shall mean the deposit liabilities with respect to deposit accounts booked by Company or its Subsidiaries, as of the Effective Time, which constitute “deposits” for purposes of the Federal Deposit Insurance Act, 12 U.S.C. § 1813, including collected and uncollected deposits and Accrued Interest.
“Derivative Transactions” shall have the meaning stated in Section 3.17.
“DGCL” shall have the meaning stated in Section 2.1(a).
“Disclosure Schedule” shall mean the disclosure schedule dated as of the date of this Agreement and delivered by Company to Parent concurrent with the execution and delivery of this Agreement.
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“Dissenting Shares” shall have the meaning stated in Section 2.8(d).
“Effective Time” shall have the meaning stated in Section 2.2.
“Environmental Laws” shall have the meaning stated in Section 3.18.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” shall mean, with respect to any entity, trade or business, any other entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the first entity, trade or business, or that is, or was at the relevant time, a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.
“Escrow” shall mean the escrow provided for in the Escrow Agreement.
“Escrow Agent” shall have the meaning stated in Section 2.11.
“Escrow Agreement” shall mean the escrow agreement by and among Parent, Company, the Holders’ Representative and the Escrow Agent in form and substance reasonably satisfactory to each of the parties thereto.
“Escrow Deposit Amount” shall mean the greater of (a) the Escrow Threshold or (b) the Estimated NMB Entitlement Amount.
“Escrow Deposit Shortfall Amount” shall mean the amount, if any, by which (a) the Escrow Threshold exceeds (b) the Estimated NMB Entitlement Amount.
“Escrow Fund” shall have the meaning stated in Section 2.11.
“Escrow Threshold” shall mean (a) $11,100,000 minus (b) the amount, if any, agreed by Parent in its sole discretion as representing the Company’s costs of selling or winding down the National Mortgage Business that Parent had, as of the date hereof, anticipated recovering from the Escrow Fund but which amounts have been paid by Company prior to the Closing Date.
“Estimated NMB Entitlement Amount” shall mean the amount (which may be a positive or negative number), if any, indicated as due to the Holders on the estimated National Mortgage Business Settlement Statement most recently delivered by Company pursuant to Section 6.6(b)(i) at least seven (7) business days prior to the Closing Date, provided that Parent shall not have reasonably objected to the computation of such indicated amount within five (5) business days after receipt of such estimated National Mortgage Business Settlement Statement (in which case the Estimated NMB Entitlement Amount shall be such lesser amount in accordance with Parent’s objection).
“Excess Cash Event” shall have the meaning stated in Section 10.12.
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“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Exchange Agent” shall mean a bank or trust company appointed by Parent prior to the Effective Time and reasonably acceptable to Company.
“Exchange Fund” shall have the meaning stated in Section 2.10(a).
“Exchange Ratio” shall mean the quotient, rounded to the nearest one ten thousandth, of (a) the amount equal to (i) Per Share Amount minus (ii) the Per Share Cash Amount divided by (b) the Parent Stock Price.
“FDIC” shall have the meaning stated in Section 3.1(a).
“Federal Courts” shall have the meaning stated in Section 10.7(b).
“Federal Reserve Board” shall mean the Board of Governors of the Federal Reserve System.
“Fully Diluted Company Common Shares” shall mean the sum, without duplication, of (a) the aggregate the number of shares of Company Common Stock issued and outstanding immediately prior to the Effective Time (including any shares of Company Common Stock underlying Company Restricted Stock Awards, but excluding Cancelled Shares), plus (b) the aggregate number of shares of Company Common Stock underlying In-the-Money Options.
“GAAP” shall mean U.S. generally accepted accounting principles, consistently applied.
“Governmental Entity” shall mean any court, administrative agency, arbitrator or commission or other governmental, prosecutorial or regulatory authority or instrumentality (including government sponsored enterprises), or any SRO.
“Holder” shall mean each holder of record of Company Common Stock or Company Restricted Stock Awards.
“Holders’ Representative” shall mean Winton A. Winter, Jr.
“HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
“Indemnified Party” shall have the meaning stated in Section 9.2(a).
“Indemnifying Party” shall have the meaning stated in Section 9.2(a).
“Intellectual Property” shall mean any or all of the following and all rights in, arising out of or associated with all patents, trademarks, trade names, service marks, domain names, database rights, copyrights and any applications therefor, mask works, net lists, technology, websites, know-how, trade secrets, inventory, ideas, algorithms, processes, computer
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software programs or applications (in both source code and object code form), and tangible or intangible proprietary information or material of a Person.
“In-the-Money Options” shall mean any Company Option that has an exercise price per share of Company Common Stock that is less than the Per Share Amount.
“Investor Questionnaire” shall mean an investor questionnaire in the form attached hereto as Exhibit A.
“IRS” shall mean the Internal Revenue Service.
“KGCC” shall have the meaning stated in Section 2.1(a).
“Knowledge” (a) with respect to Company shall mean the actual knowledge after reasonable inquiry of those individuals set forth on Section 1.1(a) of the Disclosure Schedule and (b) with respect to Parent shall mean the actual knowledge after reasonable inquiry of those individuals set forth on Section 1.1(a) of the Parent Disclosure Schedule.
“Law” shall mean any law, statute, order, rule and regulation of any local, state, national or international Governmental Entity.
“Leased Premises” shall mean all parcels of real property leased to Company pursuant to the Real Property Leases.
“Letter of Transmittal” shall have the meaning stated in Section 2.10(b).
“Lien” shall mean any lien, claim, charge, option, encumbrance, mortgage, pledge or security interest or other restriction of any kind.
“Loan Documentation” means all Loan files and all documents included in Company’s or any of its Subsidiaries’ file or imaging system with respect to a Loan, including loan applications, notes, security agreements, deeds of trust, collectors’ notes, appraisals, credit reports, disclosures, titles to collateral, verifications (including employment verification, deposit verification, etc.), mortgages, loan agreements, including building and loan agreements, guarantees, pledge agreements, financing statements, intercreditor agreements, participation agreements, sureties and insurance policies (including title insurance policies) and all modifications, waivers and consents relating to any of the foregoing.
“Loan Tape” means a data storage disk produced by Company from its management information systems regarding the Loans.
“Loans” means all written or oral loan agreements, notes or borrowing arrangements (including leases, credit enhancements, commitments, guarantees and interest-bearing assets) payable to Company or its Subsidiaries.
“Losses” shall have the meaning stated in Section 9.1(a).
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“Material Adverse Effect” shall mean, with respect to Company or Parent, as the case may be, any fact, event, development, circumstance, change, effect, development or occurrence that (a) is, or could reasonably be expected to be, material and adverse to the business, operations, financial condition or results of operations of such Party and its Subsidiaries taken as a whole or (b) prevents or materially impairs, or could be reasonably likely to prevent or materially impair, such Party from consummating the transactions contemplated hereby; provided, however, for purposes of the foregoing clause (a) that a Material Adverse Effect shall not be deemed to include facts, events, developments, circumstances, changes, effects and/or occurrences to the extent directly resulting from (i) changes after the date hereof in GAAP or regulatory accounting requirements or published interpretations thereof, (ii) changes after the date hereof in laws, rules or regulations of general applicability to companies in the industries in which Company and its Subsidiaries operate, (iii) changes, after the date hereof, in global, national or regional political conditions or general economic or market conditions affecting other companies in the industries in which Company and its Subsidiaries operate or (iv) any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism, in each case of the foregoing clauses (i)-(iv), except to the extent that the effects of such facts, events, developments, circumstances, changes, effects and/or occurrences have a disproportionate effect on Company or any of its Subsidiaries relative to other financial institutions generally.
“Material Contract” shall have the meaning stated in Section 3.14(a).
“Materially Burdensome Regulatory Condition” shall have the meaning stated in Section 6.1(a).
“Merger” shall have the meaning stated in the first Recital.
“Merger Consideration” shall have the meaning stated in Section 2.8(b).
“Mergers” shall have the meaning stated in the second Recital.
“Multiemployer Plan” shall mean any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA.
“New Plans” shall have the meaning stated in Section 6.5(a).
“National Mortgage Business” shall mean the national mortgage business (including, without limitation, all underwriting, origination, processing, servicing and loan sale activities, including, but not limited to, indirect expenses from shared services, facilities and Contracts) of Peoples Bank (but excluding, for the avoidance of doubt, the local mortgage business of Peoples Bank in and around the banking markets of Kansas and New Mexico).
“National Mortgage Business Settlement Statement” shall have the meaning stated in Section 6.6(b)(i).
“Non-Accredited Investor” shall mean any Holder that Parent is unable to verify to its reasonable satisfaction is an Accredited Investor (it being understood that Parent may deem any Holder who does not complete and deliver an Investor Questionnaire either to Company and
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Parent prior to the date of this Agreement, or to the Exchange Agent prior to the fifth (5th) business day prior to the Closing Date, as applicable, as a Non-Accredited Investor).
“Non-Accredited Investor Shares” shall have the meaning stated in Section 2.8(e).
“Non-NMB Earnings” shall mean, for any period, the amount equal to (a) the net income of Company for such period minus (b) the divisional net income of the National Mortgage Business for such period, in each case determined in accordance with GAAP and the accounting methodologies that were used to prepare the Company Financial Statements (and divisional financial entries included therein) for the year ended December 31, 2016.
“Objection Notice” shall have the meaning stated in Section 6.6(b)(iii).
“OCC” shall mean the Office of the Comptroller of the Currency.
“Offer Letter” shall have the meaning stated in the fifth Recital.
“Outside Date” shall have the meaning stated in Section 8.1(b).
“Owned Real Property” shall have the meaning stated in Section 3.20(a).
“Ownership Percentage” shall meaning, with respect to any Significant Stockholder, the number of shares of Company Common Stock owned by such Significant Stockholder as of the Effective time divided by the total number of outstanding shares of Company Common Stock owned by all Significant Stockholders as of the Effective Time.
“Parachute Payment” shall have the meaning stated in Section 6.8(b).
“Parent” shall have the meaning stated in the Preamble.
“Parent 401(k) Plan” shall have the meaning stated in Section 6.5(b).
“Parent Balance Sheet” shall have the meaning stated in Section 4.11.
“Parent Bank” shall have the meaning stated in the second Recital.
“Parent Class B Common Stock” shall have the meaning stated in Section 4.2.
“Parent Common Stock” shall mean the Class A common stock, par value $0.01 per share, of Parent.
“Parent Disclosure Schedule” shall mean the disclosure schedule dated as of the date of this Agreement and delivered by Parent to Company concurrent with the execution and delivery of this Agreement.
“Parent Equity Plans” shall mean the NBH Holdings Corp. 2009 Equity Incentive Plan and the National Bank Holdings Corporation 2014 Omnibus Incentive Plan.
“Parent Financial Statements” shall have the meaning stated in Section 4.6(a).
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“Parent Indemnitees” shall have the meaning stated in Section 9.1(a).
“Parent Stock Price” shall mean the average closing price, rounded to the nearest cent, of Parent Common Stock for the five (5) trading days immediately preceding the fifth (5th) business day prior to the Closing Date.
“Party” shall have the meaning stated in the Preamble.
“Per Share Cash Amount” shall mean the Aggregate Common Stock Cash Consideration divided by the number of shares of Company Common Stock held by Accredited Investors.
“Per Share Amount” shall mean an amount equal to (a) the sum of (i) the Aggregate Merger Consideration and (ii) the Aggregate Exercise Price, divided by (b) the Fully Diluted Company Common Shares.
“Permitted Encumbrances” shall have the meaning stated in Section 3.20(a).
“Person” shall mean any individual, Corporate Entity or Governmental Entity.
“Personal Property” shall mean all of the personal property of Company and its Subsidiaries consisting of the trade fixtures, shelving, furniture, on-premises ATMs, equipment, security systems, safe deposit boxes (exclusive of contents), vaults, sign structures and supplies, excluding any items consumed or disposed of, but including new items acquired or obtained, in the ordinary course of the operation of the business of Company and its Subsidiaries.
“Personal Property Leases” shall mean the leases under which Company or its Subsidiaries lease Personal Property.
“Real Property Leases” shall mean the leases, subleases, licenses or other contracts (including all amendments, modifications, and supplements thereto) pursuant to which Company or its Subsidiaries lease land and/or buildings, together with the real property rights (including security deposits), benefits and appurtenances pertaining thereto and rights in respect thereof, including ground leases.
“Registrable Securities” shall mean any Parent Common Stock issued pursuant to this Agreement, together with any securities issued directly or indirectly with respect to or in exchange, or substitution for, or conversion of the Parent Common Stock issued or issuable pursuant to this Agreement by way of any stock split, dividend or other distribution, recapitalization, merger, consolidation, exchange, reorganization or similar event with respect to the foregoing; provided, that as to any such securities, such securities shall cease to be Registrable Securities when they have been distributed to the public pursuant to an offering registered under the Securities Act or may be sold to the public without limitation in compliance with Rule 144 under the Securities Act.
“Registration Statement” shall mean any registration statement of Parent under the Securities Act that permits the public offering of any of the Registrable Securities and the Shelf Prospectus, amendments and supplements to such registration statement, including post-
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effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.
“Regulatory Agencies” shall have the meaning stated in Section 3.5.
“Reports” shall have the meaning stated in Section 3.5.
“Requisite Regulatory Approvals” shall have the meaning stated in Section 3.4.
“SEC” shall mean the U.S. Securities and Exchange Commission.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Shelf Prospectus” shall mean the prospectus included in a Shelf Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Shelf Registration Statement, and all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference or deemed to be incorporated by reference in such prospectus.
“Shelf Registration Statement” shall mean (i) a Registration Statement of Parent on Form S-3 (or any successor form or other appropriate form under the Securities Act) or (ii) if Parent is not permitted to file a Registration Statement on Form S-3, a Registration Statement on Form S-1 (or any successor form or other appropriate form under the Securities Act), in each case for an offering to be made on a continuous or delayed basis pursuant to Rule 415 under the Securities Act covering Registrable Securities. To the extent that Parent is a “well-known seasoned issuer” (as defined in Rule 405 under the Securities Act), a “Shelf Registration Statement” shall be deemed to refer to an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) on Form S-3.
“Significant Stockholders” shall mean, Winton Winter, Jr. Trust Share of the Winter Trust of 12/3/74, Winton Winter, Jr., Anne Cecelia Winter Trust Share of the Winter Trust of 12/3/74, Anne Cecelia Winter, Mary Winter-Stingley, Mary Winter-Stingley Share of the Winter Trust of 12/3/74, Steven Stingley, Adam Winter, Melissa Winter, Adam Winter Trust Share of the Winter Trust of 12/3/74, Nancy M. Winter Trust U/T/A 5/10/1988, as amended, and the Winton Winter Trust U/T/A 8/8/1981, as amended.
“Significant Stockholder Group” shall mean (a) Winton Winter, Jr. Trust Share of the Winter Trust of 12/3/74 and Winton Winter, Jr., (b) Anne Cecelia Winter Trust Share of the Winter Trust of 12/3/74 and Anne Cecelia Winter, (c) Steven Stingley, Mary Winter-Stingley and Mary Winter-Stingley Share of the Winter Trust of 12/3/74, (d) Adam Winter, Melissa Winter, and Adam Winter Trust Share of the Winter Trust of 12/3/74, (e) Nancy M. Winter Trust U/T/A 5/10/1988, as amended, and (f) Winton Winter Trust U/T/A 8/8/1981, as amended.
“SRO” shall mean any domestic or foreign securities, broker-dealer, investment adviser and insurance industry self-regulatory organization.
“State Act” shall have the meaning stated in Section 6.9(d).
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“Stock Consideration” shall have the meaning stated in Section 2.8(b).
“Subsidiary” shall mean, when used with respect to any party, any Corporate Entity which is consolidated with such party for financial reporting purposes or which otherwise would be deemed to be a subsidiary of such party within the meaning of the BHCA.
“Support Agreement” shall have the meaning stated in the sixth Recital.
“Surviving Corporation” shall have the meaning stated in the first Recital.
“Target Tangible Book Value” shall mean the amount equal to (a) an amount equal to (i) $83,600,000 if the Closing Date is on or before October 31, 2017, (ii) if the Closing Date is after October 31, 2017 and before December 31, 2017, (A) $83,600,000 plus (y) the product of (A) $1,800,000 and (B) the fraction the numerator of which is number of days elapsed between November 1, 2017 (inclusive) and December 31, 2017 (inclusive) and the denominator of which is 61, and (iii) $85,400,000 if the Closing Date is on or after January 1, 2018, plus (b) an amount equal to sixty-seven percent (67%) of Non-NMB Earnings for the period commencing on January 1, 2018 and continuing through the Closing Date, minus (c) the aggregate amount, not to exceed $1,000,000 (on a pre-tax basis), of impairments under GAAP to any real property set forth on Section 1.1(b) of the Disclosure Schedule taken by Company after the date hereof and prior to the Closing Date.
“Tax” shall mean all federal, state, local, and foreign income, excise, gross receipts, gross income, ad valorem, profits, gains, property, capital, sales, transfer, use, value-added, stamp, documentation, payroll, employment, severance, withholding, duties, license, intangibles, franchise, backup withholding, environmental, occupation, alternative, estimated or add-on minimum taxes, imposed by any Governmental Entity, and other taxes, charges, levies or like assessments, together with all penalties and additions to tax and interest thereon.
“Tax Return” shall mean any return, declaration, report, statement, information statement or other document filed or required to be filed with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Tenant Leases” shall mean leases, subleases, licenses or other use agreements between Company and its Affiliates, as landlord, sublandlord or licensor, on the one hand, and third parties with respect to Owned Real Property or Leased Premises, as tenant, subtenant or licensee, on the other hand.
“Transaction Expenses” shall mean the amount of the following fees, costs, charges and other expenses payable by Company or its Subsidiaries or for which Company or any of its Subsidiaries is liable: (i) all fees and expenses of counsel, accountants, investment bankers, consultants and other advisors related to the transactions contemplated by this Agreement, (ii) any transaction or change-in-control bonus payment payable by Company or its Subsidiaries in connection with the consummation of the transactions contemplated by this Agreement (including any amounts that may become payable under Section 7.09 of the Company Deferred Compensation Plan following the Closing) and the employer portion of any payroll Taxes associated therewith, (iii) any severance resulting from any termination of employment prior to the Closing (other than any termination of employment at the request of
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Parent or its Affiliates) and the employer portion of any payroll Taxes associated therewith, and (iv) the employer portion of any payroll Taxes associated with payments paid or payable under the Company Equity Plan.
“Unrelated Accounting Firm” shall have the meaning stated in Section 6.6(b)(iii).
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2.8 Conversion of Stock. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Company or the holder of any of the following securities: |
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and no consideration shall be delivered in exchange therefor (such cancelled shares, the “Cancelled Shares”). |
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(a) As of the Effective Time, each option to purchase shares of Company Common Stock granted under the Company Equity Plan (each, a “Company Option”) shall be treated as follows: |
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if applicable, a duly executed Investor Questionnaire that, in the reasonable determination of Parent, provides that the Holder is an Accredited Investor, such Holder will be entitled to receive the Merger Consideration and any cash in lieu of fractional shares of Parent Common Stock to be issued or paid in consideration therefor in respect of the shares of Company Common Stock represented by its Certificate(s). Until so surrendered, each Certificate shall represent after the Effective Time, for all purposes, only the right to receive, without interest, the Merger Consideration and any cash in lieu of fractional shares of Parent Common Stock to be issued or paid upon surrender of such Certificate in accordance with, and any dividends or distributions to which such holder is entitled pursuant to, this Article II. |
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Stock that occurred prior to the Effective Time. If, after the Effective Time, Certificates are presented for transfer to Parent, they shall be cancelled and exchanged for the Merger Consideration and any cash in lieu of fractional shares of Parent Common Stock to be issued or paid in consideration therefor in accordance with Section 2.8(b) and the procedures set forth in this Article II. |
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cause to be deposited, with the Escrow Agent, immediately available funds equal to the Escrow Deposit Amount (the “Escrow Fund”). The Escrow Fund shall be distributed in accordance with Section 9.3. |
Except as disclosed in the correspondingly numbered section of the Disclosure Schedule, Company represents and warrants to Parent as follows:
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Disclosure Schedule also sets forth a list identifying the number (other than wholly owned Subsidiaries) and owner of all outstanding capital stock or other equity securities of each such Subsidiary, options, warrants, stock appreciation rights, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, shares of any capital stock or other equity securities of such Subsidiary, or contracts, commitments, understandings or arrangements by which such Subsidiary may become bound to issue additional shares of its capital stock or other equity securities, or options, warrants, scrip, rights to subscribe, calls or commitments for any shares of its capital stock or other equity securities and the identity of the parties to any such agreements or arrangements. All of the outstanding shares of capital stock or other securities evidencing ownership of the Company Subsidiaries are validly issued, fully paid and non-assessable, and such shares or other securities are owned by Company or another of its Subsidiaries free and clear of any Lien with respect thereto. Each Company Subsidiary (i) is a duly organized and validly existing corporation, partnership or limited liability company or other legal entity under the laws of its jurisdiction of organization, (ii) is duly licensed and qualified to do business and is in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of its business requires it to be so qualified (except for jurisdictions in which the failure to be so qualified would not have a Material Adverse Effect on Company and its Subsidiaries) and (iii) has all requisite corporate power and authority to own or lease its properties and assets and to carry on its business as now conducted. Except for its interests in the Company Subsidiaries, Company does not as of the date of this Agreement own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any Person. True and complete copies of the Articles of Incorporation and bylaws, certificate of formation, certificate of partnership, limited liability agreements, partnership agreements or other organizational documents (as applicable) of each Company Subsidiary, as in effect as of the date of this Agreement, have previously been furnished or made available to Parent. No Company Subsidiary is in violation of any of the provisions of such organizational documents. |
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underlying each Company Equity Award, (iv) the date on which the Company Equity Award was granted, (v) the exercise price of each Company Equity Award, if applicable, and (vi) the expiration date of each Company Equity Award, if applicable. Other than awards under the Company Equity Plan that are set forth on Section 3.2 of the Disclosure Schedule, no other equity-based awards are outstanding. Company has not issued or granted any Company Options under the Company Equity Plan or otherwise with an exercise price that is less than the “fair market value” of the underlying shares on the date of grant, as determined for financial accounting purposes under GAAP. With respect to each grant of Company Options, each such grant was (A) made in accordance with the terms of the Company Equity Plan and all applicable laws and complies with or is exempt from Section 409A of the Code, (B) appropriately authorized by the board of directors of Company and has a grant date that is identical to (or later than) the date on which it was actually granted or awarded by the board of directors of Company and (C) properly accounted for in accordance with GAAP in the financial statements (including the related notes) of Company. No Subsidiary of Company owns any shares of capital stock of Company. |
(b) Company has received and transmitted to Parent Investor Questionnaires from each member of the Significant Stockholder Group, in each case certifying that such member is an Accredited Investor. |
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or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by or rights or obligations under, or result in the creation of any Lien upon any of the properties or assets of Company or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement, contract, or other instrument or obligation to which Company or any of its Subsidiaries is a party, or by which they or any of their respective properties, assets or business activities may be bound or affected, except, in the case of clause (ii) above, for such violations, conflicts, breaches, defaults or loss of benefits that would not be material to Company and its Subsidiaries taken as a whole. |
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outstanding or pending or, to the Knowledge of Company, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against Company or any of its Subsidiaries that, if determined adversely to Company or any of its Subsidiaries, would reasonably be expected to result in liability to Company in excess of $50,000 or otherwise be material to Company and its Subsidiaries, taken as a whole. There is no material injunction, order, judgment, decree or regulatory restriction (other than regulatory restrictions of general application that apply to similarly situated companies) imposed upon Company, any of its Subsidiaries or the assets of Company or any of its Subsidiaries (or, upon consummation of the Mergers, would apply to Parent or any of its Subsidiaries). |
(b) No jurisdiction where Company or any of its Subsidiaries does not file a Tax Return has made a claim that Company or any of its Subsidiaries is required to file a Tax Return in such jurisdiction. |
(c) No Liens for Taxes exist with respect to any of the assets of Company and its Subsidiaries, except for statutory Liens for Taxes not yet due and payable. |
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(m) Neither Company nor any of its Subsidiaries has any application pending with any Governmental Entity requesting permission for any changes in accounting method. |
(n) No rulings, requests for rulings or closing agreements have been entered into with or issued by, or are pending with, any Governmental Entity with respect to Company or any of its Subsidiaries. |
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determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other property) in the hands of the transferor. |
(q) Neither Company nor any of its Subsidiaries currently has an election in effect to be treated as an S corporation within the meaning of Section 1361(a) of the Code. |
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(j) There are no pending or, to the Knowledge of Company, threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations that have been asserted or instituted, and, to the Knowledge of Company, no set of circumstances exists that may reasonably give rise to a claim or lawsuit, against the Company Benefit Plans, any fiduciaries thereof with respect to their duties to the Company Benefits Plans or the assets of any of the trusts under any of the Company Benefit Plans, in each case, which would reasonably be expected to result in any material liability of Company or any of its Subsidiaries. No Company Benefit Plan is under audit or the subject of an investigation by the IRS, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation, the SEC or any other Governmental Entity, nor is any such audit or investigation pending or, to the Knowledge of Company, threatened. |
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(l) No Company Benefit Plan is maintained outside the jurisdiction of the United States, or covers any employee residing or working outside of the United States. |
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December 31, 2013, in compliance with, and are not and have not been in violation of, any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity, except in each case where the failure to hold such license, registration, franchise, certificate, variance, permit or authorization or such noncompliance or violation would not be material to Company and its Subsidiaries, and neither Company nor any of its Subsidiaries knows of, or has received notice of, any violations of any of the above, except for such violations that would not be material to Company and its Subsidiaries, taken as a whole. Schedule 3.13(a) of the Disclosure Schedule sets forth a list of all licenses, permits and authorizations of Governmental Entities required for the operation of Company’s and its Subsidiaries’ respective businesses and operations (including, for the avoidance of doubt, for all sales of loans originated by the mortgage operations as currently conducted by Company and its Subsidiaries). |
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prohibiting Company from soliciting customers, clients or employees, in each case whether in any specified geographic region or business or generally; |
(vii) any alliance, cooperation, joint venture, stockholder, partnership or similar agreement involving a sharing of profits or losses relating to Company or any of its Subsidiaries; |
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(xiv) any contract involving the purchase or sale of mortgage loans by the Company Banks or their Affiliates; |
(xvi) any contract not listed above that is material to the financial condition, results of operations or business of Company or its Subsidiaries. |
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or agency capacity) free and clear of any Lien, except to the extent such securities are pledged in the ordinary course of business consistent with prudent business practices to secure obligations of Company or any of its Subsidiaries and except for such defects in title or Liens that would not be material to Company and its Subsidiaries. Such securities are valued on the books of Company and its Subsidiaries in accordance with GAAP. |
(b) Company and its Subsidiaries employ investment, securities risk management and other policies, practices and procedures which are prudent and reasonable in the context of such businesses. |
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(ii) Company’s or any of its Subsidiaries’ participation in the management of any property, or (iii) Company’s or any of its Subsidiaries’ holding of a security interest or other interest in any property, there were no releases or threatened releases of hazardous, toxic, radioactive or other materials regulated under Environmental Laws in, on, under or affecting any such property which would reasonably be expected to, individually or in the aggregate, be material to Company or any of its Subsidiaries. Company is not subject to any agreement, order, judgment or decree by or with any court, governmental authority, regulatory agency or third party imposing any liability or obligation with respect to the foregoing. There has been no written third-party environmental site assessment conducted since January 1, 2010 assessing the presence of hazardous materials located on any property owned or leased by Company or any Company Subsidiary that is within the possession or control of Company and its Affiliates as of the date of this Agreement that has not been delivered to Parent prior to the date of this Agreement. |
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Since September 30, 2013, none of the Leased Premises or Owned Real Property has been taken by eminent domain (or to the Knowledge of Company is the subject of a pending or contemplated taking which has not been consummated). All of the land, buildings, structures, plants, facilities and other improvements leased or used by Company or any of its Subsidiaries in the conduct of Company’s or such Subsidiary’s business other than those items that comprise part of the Owned Real Property are included in the Leased Premises. |
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(b) Section 3.21(b) of the Disclosure Schedule lists all Company Intellectual Property that is the subject of a registration, issuance or pending application. |
(d) Neither Company nor any of its Subsidiaries is a party to any agreement to indemnify any Person against a claim of infringement of or misappropriation by any Company Intellectual Property. |
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date indicated therein, (ii) contains customary and enforceable provisions such that the rights and remedies of the holder thereof shall be adequate for the practical realization against any collateral therefor and (iii) complies, and at the time the Loan was originated complied, with all applicable requirements of federal, state, and local laws, and regulations and rules thereunder. |
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(c) No employee of Company or its Subsidiaries provides any services to any Affiliate (other than Company and its Subsidiaries) of any Significant Stockholder. |
(a) Section 3.27(a) of the Disclosure Schedule sets forth Company’s good faith estimate as of the date hereof of the items and amounts that constitute Transaction Expenses. |
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“moratorium,” “control share,” “fair price,” “takeover,” “interested stockholder” or other similar law. |
Except as disclosed in the correspondingly numbered section of the Parent Disclosure Schedule or in any report, schedule, form or other document filed with, or furnished to, the SEC by Parent prior to the date hereof (but excluding any risk factor disclosures contained under the heading “Risk Factors” or any disclosure of risks included in any “forward-looking statements” disclaimer), Parent hereby represents and warrants to Company as follows:
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assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not be material to Parent and its Subsidiaries, taken as a whole. True and complete copies of the certificate of incorporation and bylaws of Parent, as in effect as of the date of this Agreement, have previously been made available by Parent to Company. Parent is not in violation of any of the provisions of its certificate of incorporation or bylaws, each as amended and restated. Parent Bank is a bank chartered under the laws of the State of Colorado and a member of the Federal Reserve System. The deposit accounts of Parent Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by applicable law, and all premiums and assessments required to be paid in connection therewith have been paid when due. |
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Financial Statements have been prepared from, and are in accordance with, the books and records of Company and its Subsidiaries. |
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4.9 Sarbanes-Oxley. Parent is in compliance in all material respects with applicable provisions of the Sarbanes-Oxley Act of 2002. |
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Environmental Laws in, on, under or affecting any such property which would reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect. Parent is not subject to any agreement, order, judgment or decree by or with any court, governmental authority, regulatory agency or third party imposing any liability or obligation with respect to the foregoing. |
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business consistent with past practice and with respect to Loans made to third parties who are not Affiliates of Company; |
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(j) adopt or implement any amendment to its Articles of Incorporation or any changes to its bylaws or comparable organizational documents; |
(m) except as may be required by a Regulatory Agency, change in any material respect the credit policies and collateral eligibility requirements and standards of Company; |
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(t) agree, resolve or make any commitment to take any of the actions prohibited by this Section 5.2. |
Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct Company’s operations prior to the Effective Time.
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request for information with respect to any Alternative Proposal, or any written inquiry with respect to, or which could reasonably be expected to result in, an Alternative Proposal. Promptly following the execution of this Agreement, Company shall, and shall cause its Subsidiaries and Affiliates and its and their respective officers, employees, directors, agents or representatives to, immediately cease and terminate any discussions or negotiations with any Person conducted heretofore with respect to any Alternative Proposal, and use commercially reasonable efforts to obtain the return from all such Persons or cause the destruction of all copies of confidential information previously provided to such parties (including by enforcing any rights under any confidentiality, non-disclosure or similar agreements with such parties). Notwithstanding anything contained herein to the contrary, Company agrees that Parent shall be entitled to specifically enforce this Section 5.4 in any court having equity jurisdiction, it being acknowledged and agreed that any such breach will cause irreparable injury to Company and that money damages may not provide an adequate remedy to Company. |
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and Governmental Entities necessary or advisable to consummate the transactions contemplated by this Agreement and each party will keep the other apprised of the status of matters relating to completion of the transactions contemplated herein. Each of Parent and Company shall use their reasonable best efforts to resolve any objections that may be asserted by any Governmental Entity with respect to this Agreement or the transactions contemplated by this Agreement. Notwithstanding anything set forth in this Agreement, nothing contained in this Agreement shall be deemed to require Parent to take any action, or commit to take any action, or agree to any condition or restrictions, in connection with obtaining the foregoing permits, consents, approvals and authorizations of Governmental Entities or third parties that would reasonably be expected to have a material adverse effect on the business, results of operations or financial condition of Company or Parent (measured on a scale relative to Company and its Subsidiaries, taken as a whole) or on the expected benefits to be received by Parent from the Mergers following the Closing, including, for the avoidance of doubt, any determination by a Regulatory Agency or other Governmental Entity that the Bank Merger may not be consummated as contemplated herein, including simultaneously with the Effective Time (a “Materially Burdensome Regulatory Condition”); provided that, if requested by Parent, then Company and its Subsidiaries will take or commit to take any such action, or agree to any such condition or restriction, so long as such action, commitment, agreement, condition or restriction is binding on Company and its Subsidiaries only in the event the Closing occurs. |
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Party may reasonably request. Parent and Company shall comply with, and cause their respective officers, directors, employees, accountants, counsel, financial advisors, agents and other representatives to comply with, all of their respective obligations under the Confidentiality Agreement, which shall survive the termination of this Agreement in accordance with the terms set forth therein. |
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dependent prior to the Effective Time under a Company Benefit Plan (to the same extent that such credit was given under the analogous Company Benefit Plan prior to the Effective Time) in satisfying any applicable deductible, co-payment or out-of-pocket requirements under any New Plans, and (iii) recognize all service of such employees with Company and its Subsidiaries for all purposes in any New Plan to the same extent that such service was taken into account under the analogous Company Benefit Plan prior to the Effective Time; provided that the foregoing service recognition shall not apply (A) to the extent it would result in duplication of benefits for the same period of services, (B) for purposes of benefit accrual under any defined benefit pension or the employer premium subsidy under any retiree medical plan, or (C) to any benefit plan that is a frozen plan or that provides benefits to a grandfathered employee population. |
(d) Without limiting the generality of Section 10.10, the provisions of this Section 6.5 are solely for the benefit of the parties to this Agreement, and no current or former employee or any other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement. In no event shall the terms of this Agreement be deemed to (i) establish, amend, or modify any Company Benefit Plan or any “employee benefit plan” as defined in Section 3(3) of ERISA, or any other benefit plan, program, agreement or arrangement maintained or sponsored by Parent, Company or any of their respective Affiliates; (ii) alter or limit the ability of Parent or any of its Subsidiaries (including, after the Closing Date, Company and its Subsidiaries) to amend, modify or terminate any Company Benefit Plan, employment agreement or any other benefit or employment plan, program, agreement or arrangement after the Closing Date; or (iii) confer upon any current or former employee, officer, director or consultant, any right to employment or continued employment or continued service with Parent or any of its Subsidiaries (including, following the Closing Date, Company and its Subsidiaries), or constitute or create an employment agreement with any employee. |
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Representative and the Holders if an Acceptance Notice is delivered to Parent, or if no Objection Notice is delivered to Parent within such twenty (20) calendar day period. Any Objection Notice shall specify the items disputed, shall describe the reasons for the objection thereof. If an Objection Notice is delivered to Parent, the Holder’s Representative and Parent shall consult with each other during the fifteen (15) calendar days following the delivery of an Objection Notice and use commercially reasonable efforts to resolve such dispute. If Parent and the Holder’s Representative are unable to reach agreement within such fifteen (15) day period after an Objection Notice has been given, the Holder’s Representative may within ten (10) days thereafter (unless such period is extended in writing by Parent) refer such dispute to a nationally or regionally recognized accounting firm mutually agreed to by Parent and the Holder’s Representative which does not provide accounting or other services to the Holder’s Representative or Parent or their respective affiliates (the “Unrelated Accounting Firm”) and if Holders’ Representative does not refer such dispute to the Unrelated Accounting Firm within such ten (10)-day period then the National Mortgage Business Settlement Statement delivered by Parent shall become final and binding as if no Objection Notice related thereto had been delivered. The Unrelated Accounting Firm shall be directed to render a written report on the unresolved disputed issues as promptly as practicable (but in no event later than forty-five (45) days following submission of the matter to the Unrelated Accounting Firm) and to resolve the issues of dispute set forth in the Objection Notice. The resolution of the dispute by the Unrelated Accounting Firm shall be within the range of the positions submitted by Parent and the Holders’ Representative and shall be final and binding on the Parties with respect to such dispute. The fees and expenses of the Unrelated Accounting Firm shall be borne by the Holders and the Holder’s Representative. Parent and the Holder’s Representative shall provide the Unrelated Accounting Firm such accounting records as may be reasonably requested by the Unrelated Accounting Firm in order for the Unrelated Accounting Firm to resolve the pending dispute. |
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withheld) of or in connection with any claim, action, suit, proceeding, investigation or other legal proceeding, whether civil, criminal, administrative or investigative or investigation (each, a “Claim”), in which a Company Indemnified Party is, or is threatened to be made, a party or witness or arising out of the fact that such person is or was a director or officer of Company or a Subsidiary if such Claim pertains to any matter of fact arising, existing or occurring at or before the Effective Time (including the Mergers and the other transactions contemplated hereby), regardless of whether such Claim is asserted or claimed before, or after, the Effective Time, to the fullest extent permitted under Company’s certificate of incorporation or bylaws to the extent permitted by applicable law. The Surviving Corporation shall pay reasonable expenses (including reasonable attorneys’ fees) in advance of the final disposition of any such proceeding to each Company Indemnified Party to the full extent permitted by applicable state or federal law upon receipt of an undertaking to repay such advance payments if he shall be adjudicated or determined to be not entitled to indemnification under this Section 6.7(a). |
(c) The provisions of this Section 6.7 are intended to be for the benefit of and shall be enforceable by, each Company Indemnified Party and their respective heirs and representatives. |
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but without regard to Section 1361(b)(1)(C) of the Code), which evidence shall be (i) certified by a nationally recognized certified public accounting firm or other professional organization that is a certified public accounting firm recognized as an expert with regards to Section 280G of the Code and that has been mutually agreed by Parent and Company, (ii) reasonably satisfactory to Parent, (iii) reasonably satisfactory to Parent’s tax preparation firm, and (iv) reasonably satisfactory to Parent’s independent public accounting firm. If requested by Parent, Company shall deliver updated evidence of the foregoing as of immediately prior to the Closing. |
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“The securities evidenced by this certificate have been issued and sold without registration under the United States Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state of the United States (a “State Act”) in reliance upon certain exemptions from registration under said acts. The securities evidenced by this certificate cannot be sold, assigned or otherwise transferred within the United States
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unless such sale, assignment or other transfer is (i) made pursuant to an effective registration statement under the Securities Act and in accordance with each applicable State Act or (ii) exempt from, or not subject to, the Securities Act and each applicable State Act. The securities evidenced by this certificate are subject to restrictions on transfer set forth in a Merger Agreement dated June 23, 2017, between National Bank Holdings Corporation and certain other parties thereto (a copy of which is on file with the Secretary of National Bank Holdings Corporation).”
(e) Notwithstanding the foregoing, the holder of any certificate(s) for such shares shall be entitled to receive from Parent new certificates for a like number of shares not bearing such legend (or the elimination or termination of such notations or arrangements) upon the request of such holder at (i) such time as such restrictions are no longer applicable, and (ii) with respect to the restriction on transfer of such shares other than pursuant to a registration statement under the Securities Act, delivery of an opinion of counsel to such holder, which opinion is reasonably satisfactory in form and substance to Parent and its transfer agent, that the restriction referenced in such legend (or such notations or arrangements) is no longer required in order to ensure compliance with the Securities Act. |
6.12 Actions to Be Taken Prior to Closing. Prior to the Closing Date, Company shall complete all of the actions set forth on Section 6.12 of the Company Disclosure Schedule. |
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Mergers, the proper officers and directors of each party and their respective Subsidiaries shall, at Parent’s sole expense, take all such necessary action as may be reasonably requested by Parent. |
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(d) Support Agreement. Parent shall have received from the Significant Stockholders the deliveries required under the Support Agreement in forms reasonably satisfactory to Parent. |
(f) No Material Adverse Effect. No event or events have occurred that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Company. |
(h) Section 280G Matters. Either (i) the evidence delivered by Company pursuant to Section 6.8(a) shall be true and correct as of immediately prior to the Closing or (ii) Company shall have complied with Section 6.8(b). |
(i) FIRPTA Certificate. Company shall have delivered a duly executed statement reasonably satisfactory to Parent in form and substance and issued pursuant to Treasury Regulations Sections 1.897-2(h) and 1.1445-2(c)(3)(i), certifying that shares of Company stock are not United States real property interests within the meaning of Section 897(c) of the Code, together with evidence that notice has been provided to the IRS as described in Treasury Regulations Section 1.897-2(h)(2). |
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which case as of such earlier date, and except in the case of the foregoing clause (ii), where the failure to be so true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth therein), individually or in the aggregate, has not had and could not reasonably be expected to have a Material Adverse Effect. |
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(including attorneys’ fees), liabilities, judgments or amounts that are paid in settlement, which settlement shall require the prior written consent of Parent not to be unreasonably withheld (collectively, “Losses”) arising out of or resulting from: |
(iv) any Tax reporting or withholding liabilities, penalties or interest imposed on Parent, Company or their respective Affiliates with respect to the failure of the Company Equity Plan, any award agreements thereunder, the Company Deferred Compensation Plan, or the operation of such plans or agreements, to comply with Section 409A of the Code; |
(v) any action, claim, counterclaim, liability, arbitration, hearing, suit or proceeding, whether by arbitration or in law or equity, or any investigation of any nature by or among the Holders, holders of Company Options, holders of Company Restricted Stock Awards or any Persons alleging that they are holders of (or making claims based on rights of holders of) equity interests in Company or any of its Subsidiaries (including any and all of their respective trustees, officers, directors, employees, shareholders, members, beneficiaries or other holders of ownership interests) relating to or arising out of the Mergers or transactions contemplated by this Agreement; |
(vi) any Transaction Expenses not reflected in the Closing Tangible Book Value; and |
64
Schedule (which amount aggregates to a maximum aggregate liability of all Significant Stockholder Groups collectively of $34,500,000). The maximum aggregate liability of any Significant Stockholder for indemnification under this paragraph for Losses arising from fraud is limited to the amount of the Merger Consideration received by a particular Significant Shareholder. |
65
defense of such claim or to notify the Indemnified Party in writing that it shall assume the defense of such claim. No Indemnifying Party shall be liable to indemnify any Indemnified Party for any settlement of any such action or claim effected without the consent of the Holders’ Representative on behalf of the Indemnifying Party (not to be unreasonably withheld), but if settled with the written consent of the Holders’ Representative on behalf of the Indemnifying Party, or if there be a judgment for the plaintiff in any such action, the Indemnifying Party shall indemnify and hold harmless each Indemnified Party from and against any loss or liability by reason of such settlement or judgment, subject to the limitations set forth in Section 9.2(b). If the Holders’ Representative on behalf of the Indemnifying Party shall assume the defense of any claim in accordance with the provisions of this Section 9.2(b), the Holders’ Representative shall obtain the prior written consent of the Indemnified Party before entering into any settlement of such claim (not to be unreasonably withheld), unless the settlement releases the Indemnified Party from all liabilities and obligations with respect to such claim and does not impose injunctive or other equitable relief against the Indemnified Party. The Indemnified Party, on the one hand, and the Holders’ Representative and the Indemnifying Party, on the other hand, each agrees to fully cooperate in all matters covered by this Section 9.2(b), including, as required, the furnishing of books and records, personnel and witnesses and the execution of documents, in each case as necessary for any defense of such third party claim and at no cost to the other party (provided that any reasonable out-of-pocket expenses of the Indemnified Party incurred in connection with the foregoing shall be considered part of any Losses hereunder). |
66
Peoples, Inc.
737 Indiana
Lawrence, Kansas 66044
Attention:Winton A. Winter, Jr.
Fax:
(785) 842-5842
Email:Wwinter@bankingunusual.com
with a copy to:
Lathrop & Gage LLP
2345 Grand Blvd., Suite 2200
Kansas City, Missouri 64108
Attention:
Thomas Stahl
Fax:(816) 292-2001
Email:TStahl@lathropgage.com
National Bank Holdings Corporation
7800 East Orchard, Suite 300
Greenwood Village, Colorado 80111
Attention:
Zsolt K. Besskó
Fax:(855) 558-7601
Email:zbessko@nationalbankholdings.com
67
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention:
David E. Shapiro
Mark F. Veblen
Fax:(212) 403-2000
Email:DEShapiro@wlrk.com
MFVeblen@wlrk.com
(c) if to the Significant Stockholders or Holders’ Representative to: |
Winton A. Winter, Jr.
737 Indiana
Lawrence, Kansas 66044
Fax:(785) 842-5842
Email:
Wwinter@bankingunusual.com
with a copy to:
Lathrop & Gage LLP
2345 Grand Blvd., Suite 2200
Kansas City, Missouri 64108
Attention:
Thomas Stahl
Fax:(816) 292-2001
Email:TStahl@lathropgage.com
All notices and other communications shall be deemed to have been given (i) when received if given in person, (ii) on the date of electronic confirmation of receipt if sent by facsimile, electronic mail or other wire transmission, (iii) three (3) business days after being deposited in the U.S. mail, certified or registered mail, postage prepaid, or (iv) one (1) business day after being deposited with a reputable overnight courier.
68
lower amounts, or the items so included or other items, are or are not material, and neither party shall use the fact of the setting of such amounts or the fact of the inclusion of any such item in the Disclosure Schedule in any dispute or controversy between the parties as to whether any obligation, item or matter not described in this Agreement or included in the Disclosure Schedule is or is not material for purposes of this Agreement. |
69
concerning the procedures and law applied in the Federal Courts and the Delaware Courts and has not relied on any representation by any other party or its Affiliates, representatives or advisors as to the content, scope, or effect of such procedures and law, and will not contend otherwise in any proceeding in any court of any jurisdiction. Nothing herein shall affect the right of any party to serve process in any other manner permitted by applicable law. |
70
documents, as such Holders’ Representative shall deem necessary or appropriate in connection therewith, including the power (a) to negotiate, execute and deliver all ancillary agreements, statements, certificates, notices, approvals, extensions, waivers, undertakings, amendments and other documents required or permitted to be given in connection with this Agreement, the Escrow Agreement, the Escrow or the Escrow Fund (it being understood that such Holder shall execute and deliver any such documents which the Holders’ Representative agrees to execute) and (b) to give and receive all notices and communications to be given or received under the Escrow Agreement with respect to the Holders and to receive service of process in connection with the any claims under the Escrow Agreement against any or all of the Holders, including service of process in connection with arbitration. |
[Signature page follows]
71
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.
PEOPLES, INC.
By: /s/ Winton A. Winter, Jr.
Name: Winton A. Winter, Jr.
Title: President
NATIONAL BANK HOLDINGS CORPORATION
By:/s/ G. Timothy Laney
Name: G. Timothy Laney
Title: Chairman, President and CEO
HOLDERS’ REPRESENTATIVE
By:/s/ Winton A. Winter, Jr.
Name: Winton A. Winter, Jr.
[Signature Page to Merger Agreement]
SIGNIFICANT STOCKHOLDERS:
WINTON WINTER, JR. TRUST SHARE OF THE WINTER TRUST OF 12/3/1974
By:/s/ Adam Y. Winter
Adam Y. Winter, Trustee
By: /s/ Mary E. Winter-Stingley
Mary E. Winter-Stingley, Trustee
By: /s/ Winton A. Winter, Jr.
Winton A. Winter, Jr., Trustee
WINTON WINTER TRUST U/T/A 8/8/1981, as amended
By: /s/ Wayne Duderstadt
Wayne Duderstadt, Trustee
By: /s/ Bob Green
Bob Green, Trustee
By: /s/ Joe Sims
Joe Sims, Trustee
/s/ Winton A. Winter, Jr.
WINTON A. WINTER, JR., Individually
(rest of page intentionally left blank)
[Signature Page to Merger Agreement]
ANNE CECELIA WINTER TRUST SHARE OF THE WINTER TRUST OF 12/3/1974
By: /s/ Anne C. Winter
Anne C. Winter, Trustee
Country Club Trust Company, N.A. as co-Trustee of the Anne Cecelia Winter Trust Share of the Winter Trust of 12/3/1974 and not in its individual capacity
By: /s/ Dean A. Lanier
Dean A. Lanier, Executive Vice President
/s/ Anne Cecelia Winter
ANNE CECELIA WINTER, Individually
MARY WINTER-STINGLEY TRUST SHARE OF THE WINTER TRUST OF 12/3/1974
By: /s/ Adam Y. Winter
Adam Y. Winter, Trustee
By: /s/ Mary E. Winter-Stingley
Mary E. Winter-Stingley, Trustee
By: /s/ Winton A. Winter, Jr.
Winton A. Winter, Jr., Trustee
/s/ Mary Winter-Stingley
MARY WINTER-STINGLEY, Individually
C-1
ADAM YOUNG WINTER TRUST SHARE OF THE WINTER TRUST OF 12/3/1974
By: /s/ Adam Y. Winter
Adam Y. Winter, Trustee
By: /s/ Mary E. Winter-Stingley
Mary E. Winter-Stingley, Trustee
By: /s/ Winton A. Winter, Jr.
Winton A. Winter, Jr., Trustee
/s/ Adam Young Winter
ADAM YOUNG WINTER, Individually
NANCY M. WINTER TRUST U/T/A 8/8/1981, as amended
By: /s/ Wayne Duderstadt
Wayne Duderstadt, Trustee
By: /s/ Bob Green
Bob Green, Trustee
By: /s/ Joe Sims
Joe Sims, Trustee
/s/ Steven Stingley
STEVEN STINGLEY, Individually
/s/ Melissa Winter
MELISSA WINTER, Individually
[Signature Page to Merger Agreement]