Agreement and Plan of Merger between HBT Financial, Inc., HB-NXT Merger, Inc. and NXT Bancorporation, Inc. dated June 7, 2021
AGREEMENT AND PLAN OF MERGER
HBT FINANCIAL INC.,
HB-NXT MERGER, INC.
NXT BANCORPORATION, INC.
June 7, 2021
TABLE OF CONTENTS
Article 1 THE MERGER2
Section 1.1The Merger2
Section 1.2Effective Time; Closing2
Section 1.3Effects of the Merger2
Section 1.4Organizational Documents, Directors and Officers of the Surviving Entity2
Section 1.5Mid-Tier Merger3
Section 1.6Bank Merger3
Section 1.7Alternative Structure3
Article 2 CONVERSION OF SECURITIES IN THE MERGER3
Section 2.2No Fractional Shares4
Section 2.3Exchange of Certificates4
Section 2.4Dissenting Shares6
Article 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY6
Section 3.1Company Organization7
Section 3.2Company Subsidiary Organizations7
Section 3.3Authorization; Enforceability7
Section 3.4No Conflict8
Section 3.5Company Capitalization9
Section 3.6Company Subsidiary Capitalization10
Section 3.7Financial Statements and Reports; Regulatory Filings10
Section 3.8Books and Records11
Section 3.10Loans; Loan Loss Reserve13
Section 3.12Employee Benefits15
Section 3.13Compliance with Legal Requirements18
Section 3.14Legal Proceedings; Orders18
Section 3.15Absence of Certain Changes and Events19
Section 3.16Material Contracts22
Section 3.17No Defaults24
Section 3.19Compliance with Environmental Laws25
Section 3.20Transactions with Affiliates25
Section 3.21Voting Requirements25
Section 3.22Brokerage Commissions25
Section 3.23Approval Delays25
Section 3.24Labor Matters26
Section 3.25Intellectual Property26
Section 3.27Fiduciary Accounts27
Section 3.29Customer Information Security28
Section 3.30No Other Representations or Warranties28
Article 4 REPRESENTATIONS AND WARRANTIES OF ACQUIROR28
Section 4.1Acquiror Organization28
Section 4.2Acquiror Subsidiary Organizations29
Section 4.3Authorization; Enforceability29
Section 4.4No Conflict29
Section 4.5Acquiror Capitalization30
Section 4.6Acquiror Subsidiary Capitalization30
Section 4.7Acquiror SEC Reports; Financial Statements and Reports; Regulatory Filings30
Section 4.8Books and Records31
Section 4.9Loans; Loan Loss Reserve31
Section 4.10Absence of Certain Changes and Events32
Section 4.11Brokerage Commissions32
Section 4.12Approval Delays32
Section 4.13Financial Capability32
Section 4.14No Other Representations or Warranties32
Article 5 THE COMPANY’S COVENANTS33
Section 5.1Access and Investigation33
Section 5.2Operation of the Company and Company Subsidiaries35
Section 5.3Notice of Changes39
Section 5.4Shareholders’ Meeting39
Section 5.5Information Provided to Acquiror40
Section 5.6Operating Functions40
Section 5.7Resignations; Termination of Agreements40
Section 5.8Company Benefit Plans40
Section 5.9Acquisition Proposals41
Section 5.10Third Party Consents41
Section 5.11Conforming Accounting Entries41
Section 5.12Title and Survey to Real Estate42
Section 5.13Environmental Investigation42
Article 6 ACQUIROR’S COVENANTS43
Section 6.1Operation of Acquiror and Acquiror Subsidiaries43
Section 6.2Information Provided to the Company44
Section 6.3Operating Functions44
Section 6.4Notice of Changes44
Section 6.6Bonus Payments45
Section 6.7Authorization and Reservation of Acquiror Common Stock46
Section 6.8Stock Exchange Listing46
Article 7 COVENANTS OF ALL PARTIES46
Section 7.1Regulatory Approvals46
Section 7.2SEC Registration46
Section 7.4Reasonable Best Efforts; Cooperation47
Section 7.5Tax-Free Reorganization48
Section 7.6Employees and Employee Benefits48
Section 7.7Takeover Laws50
Section 7.8Section 16 Matters50
Section 7.9Shareholder Litigation50
Article 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR50
Section 8.1Accuracy of Representations and Warranties50
Section 8.2Performance by the Company51
Section 8.3Shareholder Approvals51
Section 8.4No Proceedings, Injunctions or Restraints; Illegality51
Section 8.5Regulatory Approvals51
Section 8.6Registration Statement51
Section 8.7Officers’ Certificate51
Section 8.8No Material Adverse Effect52
Section 8.9Dissenting Shares52
Section 8.10Certain Agreements52
Section 8.11Dissolution of Certain Company Subsidiaries52
Section 8.12Other Documents52
Article 9 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY52
Section 9.1Accuracy of Representations and Warranties52
Section 9.2Performance by Acquiror52
Section 9.3Shareholder Approvals53
Section 9.4No Proceedings; No Injunctions or Restraints; Illegality53
Section 9.5Regulatory Approvals53
Section 9.6Registration Statement53
Section 9.7Officers’ Certificate53
Section 9.8Stock Exchange Listing53
Section 9.9No Material Adverse Effect53
Article 10 TERMINATION53
Section 10.1Termination of Agreement53
Section 10.2Effect of Termination or Abandonment56
Section 10.3Fees and Expenses56
Article 11 MISCELLANEOUS57
Section 11.2Governing Law; Venue; Waiver of Jury Trial57
Section 11.3Assignments, Successors and No Third-Party Rights58
Section 11.5Extension of Time; Waiver59
Section 11.7Entire Agreement60
Section 11.9Further Assurances61
Section 11.10Specific Performance61
Article 12 DEFINITIONS61
Section 12.2Principles of Construction69
A-1List of Parties Entering into Voting and Support Agreements
A-2Form of Voting and Support Agreement
B-1List of Parties Entering into Restrictive Covenants Agreement
B-2Form of Restrictive Covenants Agreement
CMid-Tier Merger Agreement
DStatutory Bank Merger Agreement
INDEX OF DEFINED TERMS
AGREEMENT AND PLAN OF MERGER
This Agreement And Plan Of Merger (together with all exhibits and schedules, this “Agreement”) is entered into as of June 7, 2021, by and between HBT Financial, Inc., a Delaware corporation (“Acquiror”), HB-NXT MERGER, INC., a Delaware corporation and wholly-owned subsidiary of Acquiror (“MergerCo”), and NXT Bancorporation, Inc., an Iowa corporation (the “Company”).
A.The boards of directors of the Company and Acquiror have determined that it is in the best interests of their respective companies and their shareholders to consummate the strategic business combination transaction provided for herein, pursuant to which MergerCo will, subject to the terms and conditions set forth herein, merge with and into Company (the “Merger”), with Company as the surviving entity in the Merger (sometimes referred to in such capacity as the “Surviving Entity”) and as a result of such Merger, Company shall become a wholly owned subsidiary of Acquiror.
B.Immediately after the effectiveness of the Merger, the Company, as the Surviving Entity of the Merger and a wholly-owned subsidiary of Acquiror following the effectiveness of the Merger, shall merge with and into Acquiror, with the Acquiror as the surviving corporation (the “Mid-Tier Merger”).
C.The parties intend that the Merger qualify as a “reorganization” under the provisions of Section 368(a) of the Code, and that this Agreement be and hereby is adopted as a “plan of reorganization” within the meaning of Sections 354 and 361 of the Code.
D.As an inducement to Acquiror to enter into this Agreement, certain of the directors, executive officers and shareholders of the Company, listed on Exhibit A-1 hereto, have, concurrently with the execution of this Agreement, entered into a Voting and Support Agreement in substantially the form attached hereto as Exhibit A-2.
E.As an inducement of Acquiror’s willingness to enter into this Agreement, certain of the Company’s directors and executive officers, listed on Exhibit B-1 hereto, have, concurrently with the execution of this Agreement, entered into a confidentiality, non-solicitation and non-competition agreement, the form of which is attached hereto as Exhibit B-2 (the “Restrictive Covenant Agreements”), pursuant to which, among other things, such persons are prohibited from competing with the business conducted by the Acquiror and its Subsidiaries.
F.As further inducement to Acquiror to enter into this Agreement, the Bank’s President and Chief Executive Officer has, concurrently with the execution of this Agreement, entered into an Employment Agreement, by and between Acquiror and such President and Chief Executive Officer, which becomes effective as of the Effective Time and governs the terms of continuing employment for such executive.
G.The parties desire to make certain representations, warranties and agreements in connection with the Merger and the other transactions contemplated by this Agreement and the parties also agree to certain prescribed conditions to the Merger and other transactions.
In consideration of the foregoing premises and the following mutual promises, covenants and agreements, the parties hereby agree as follows:
Legal Requirements. The directors of MergerCo immediately prior to the Effective Time shall be the initial directors of the Surviving Entity and shall hold office until their respective successors and assigns are duly elected and qualified, or their earlier death, resignation or removal. The officers of MergerCo immediately prior to the Effective Time shall be the initial officers of the Surviving Entity, each to hold office until the earlier of their death, resignation or removal in accordance with the Surviving Entity’s certificate of incorporation and bylaws.
CONVERSION OF SECURITIES IN THE MERGER
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as Previously Disclosed, the Company hereby represents and warrants to Acquiror as follows:
shareholders vote in favor of the adoption and approval of this Agreement and the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company, and the consummation by it of its obligations under this Agreement, have been authorized by all necessary corporate action, subject to the Company Shareholder Approval, and, subject to the receipt of the Requisite Regulatory Approvals, this Agreement constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other Legal Requirements affecting creditors’ rights generally and subject to general principles of equity.
Section 3.4 of the Company Disclosure Schedules (all consents and approvals, the “Third Party Consents”) are necessary in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.
and all applicable Legal Requirements, including the maintenance of an adequate system of internal controls required by such Legal Requirements. The minute books of the Company and each of its Subsidiaries fairly reflect the substance of events and transactions included therein.
breach of trust with respect to any such fiduciary account, and the accountings for each such fiduciary account are true and correct in all material respects and accurately reflect the assets of such fiduciary account.
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Except as Previously Disclosed, Acquiror hereby represents and warrants to the Company as follows:
registered with the Federal Reserve as a financial holding company under the Bank Holding Company Act of 1956, as amended; and (c) has full power and authority, corporate and otherwise, to operate as a bank holding company and to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. The copies of the Acquiror Certificate of Incorporation and Acquiror Bylaws and all amendments thereto set forth in the Acquiror SEC Reports are true, complete and correct, and are in full force and effect as of the date of this Agreement. Acquiror has no direct or indirect subsidiary other than the subsidiaries listed on Exhibit 21.1 to Acquiror’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Regulatory Approvals, contravene, conflict with or result in a violation of any Legal Requirement or any Order to which Acquiror or any of its Subsidiaries, or any of their respective assets that are owned or used by them, may be subject. Except for the Third Party Consents no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality are necessary in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.
THE COMPANY’S COVENANTS
However, if, prior to the time the Company Shareholder Approval is obtained, the Company Board, after consultation with outside counsel, determines in good faith it is reasonably likely that to, or to continue to, recommend this Agreement to its shareholders would result in a violation of its fiduciary duties under applicable Legal Requirements, then the Company Board may make a Company Adverse Recommendation or publicly propose or resolve to make a Company Adverse Recommendation.
accounting entries as Acquiror may reasonably request in order to conform the accounting records of the Company and the Bank to the accounting policies and practices of Acquiror. No such adjustment shall by itself constitute or be deemed to be a breach, violation or failure to satisfy any representation, warranty, covenant, condition or other provision or constitute grounds for termination of this Agreement or be an acknowledgment by the Company or the Bank of any adverse circumstances for purposes of determining whether the conditions to Acquiror’s obligations under this Agreement have been satisfied. No adjustment required by Acquiror shall: (i) require any prior filing with any Regulatory Authority; or (ii) violate any applicable Legal Requirement.
(iii) agree to take, make any commitment to take, or adopt any resolutions of Acquiror Board in support of any of the actions prohibited by this Section 6.1.
COVENANTS OF ALL PARTIES
effective under the Securities Act. Acquiror shall also take any action required to be taken under any applicable Legal Requirement in connection with the Acquiror Stock Issuance, and each party shall furnish all information concerning itself and its shareholders as may be reasonably requested in connection with any such action. Acquiror will advise the Company, promptly after it receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of Acquiror Capital Stock issuable in connection with the Merger for offering or sale in any jurisdiction, or any request by the SEC to amend the Proxy Statement or the Registration Statement or comments thereon and responses thereto or requests by the SEC for additional information. The parties shall use reasonable best efforts to respond (with the assistance of the other party) as promptly as practicable to any comments of the SEC with respect thereto. If prior to the Effective Time any event occurs with respect to the Company, Acquiror or any Subsidiary of the Company or Acquiror, respectively, or any change occurs with respect to information supplied by or on behalf of the Company or Acquiror, respectively, for inclusion in the Proxy Statement or the Registration Statement that, in each case, is required to be described in an amendment of, or a supplement to, the Proxy Statement or the Registration Statement, the Company or Acquiror, as applicable, shall promptly notify the other of such event (including prior to entering into any agreement providing for any merger, consolidation, amalgamation, share exchange, business combination, issuance of securities, acquisition of securities, tender offer, exchange offer or other similar transaction involving Acquiror or any of its Subsidiaries), and the Company or Acquiror, as applicable, shall cooperate in the prompt filing with the SEC of any necessary amendment or supplement to the Proxy Statement and the Registration Statement and, as required by applicable Legal Requirements, in disseminating the information contained in such amendment or supplement to the Company’s shareholders and to Acquiror’s shareholders. Acquiror shall take all action (other than qualifying to do business in any jurisdiction in which it is not now so qualified) required to be taken under the Securities Act, the Exchange Act, any applicable foreign or state securities or “blue sky” Legal Requirements and the rules and regulations thereunder in connection with the Merger and the issuance of Acquiror Common Stock as merger consideration pursuant to Section 2.1(a).
or intentionally permit to be taken any action that would be a breach of the terms or provisions of this Agreement. Between the date of this Agreement and the Closing Date, each of Acquiror and the Company will, and will cause each Subsidiary of Acquiror and the Company, respectively, and all of their respective Affiliates and Representatives to, cooperate with respect to all filings that any party is required by any applicable Legal Requirements to make in connection with the Contemplated Transactions. Subject to applicable Legal Requirements and the instructions of any Regulatory Authority, each party shall keep the other party reasonably apprised of the status of matters relating to the completion of the Contemplated Transactions, including promptly furnishing the other party with copies of notices or other written communications received by it or any of its Subsidiaries from any Regulatory Authority with respect to such transactions.
CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR
The obligations of Acquiror to consummate the Contemplated Transactions and to take the other actions required to be taken by Acquiror at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Acquiror in whole or in part):
The representations and warranties (i) set forth in Section 3.1, Section 3.3 and Section 3.5 shall be true and correct in all respects (except for inaccuracies which are de minimis in amount and effect); and (ii) set forth in this Agreement (other than those specified in clause (i)) disregarding any exception or qualification as to materiality or Material Adverse Effect shall be true and correct in all respects, except in the case of this clause (ii) where any such failures to be so true and correct individually or in the aggregate have not had and would not reasonably be expected to have a Material Adverse Effect on the Company, in each of the foregoing clauses (i) and (ii), as of the date hereof and as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties are expressly made as of an earlier date, in which case as of such earlier date.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY
The obligations of the Company to consummate the Contemplated Transactions and to take the other actions required to be taken by the Company at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by the Company, in whole or in part):
For purposes of this Agreement, the following terms shall have the following meanings:
“Determination Date” means any date that is ten (10) Business Days prior to the Effective Time.
“Final Acquiror Market Value” means the volume weighted average of the daily closing sales prices of a share of Acquiror Common Stock as reported on the Nasdaq Global Select Market for the ten (10) consecutive trading days immediately preceding the Determination Date.
“Final Index Price” means the average of the daily closing value of the Index for the ten (10) consecutive trading days immediately preceding the Determination Date.
“Index” means the KBW NASDAQ Bank Index or, if such index is not available, such substitute or similar index as substantially replicates the KBW NASDAQ Bank Index.
“Index Ratio” means the Final Index Price divided by the Initial Index Price.
“Initial Acquiror Market Value” means $17.86, adjusted as indicated in the last sentence of Section 10.1(j).
“Initial Index Price” means $134.04, adjusted as indicated in the last sentence of Section 10.1(j).
of laws. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts located in Illinois solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said court or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such court, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such court. The parties hereby consent to and grant any such court jurisdiction over the Person of such parties and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided under Section 11.6 or in such other manner as may be permitted by applicable Legal Requirements shall be valid and sufficient service thereof. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH HEREIN.
If to Acquiror, to:
HBT Financial, Inc.
401 N. Hershey Road
Bloomington, IL 61704
with copies, which shall not constitute notice, to:
Kirkland & Ellis LLP
300 North LaSalle Street
Chicago, Illinois 60654
Attention:Edwin S. del Hierro, P.C.
If to the Company, to:
NXT Bancorporation, Inc.
with copies, which shall not constitute notice, to:
Vedder Price P.C.
222 N. LaSalle Street
Chicago, Illinois 60601
Attention:James M. Kane
or to such other Person or place as the Company shall furnish to Acquiror or Acquiror shall furnish to the Company in writing. Except as otherwise provided herein, all such notices, consents, waivers and other communications shall be effective: (a) if delivered by hand, when delivered; (b) if delivered by overnight delivery service, on the next Business Day after deposit with such service; (c) if mailed in the manner provided in this Section 11.6, three (3) Business Days after deposit with the U.S. Postal Service; and (d) if delivered by facsimile or electronic mail, on the next Business Day.
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[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers on the day and year first written above.
HBT FINANCIAL, Inc.
NXT Bancorporation, Inc.
By: /s/ J. Lance Carter
By: /s/ Roger A. Baker
HB-NXT MERGER, Inc.
By: /s/ J. Lance Carter
[Signature Page to Agreement and Plan of Merger]
[Signature Page to Agreement and Plan of Merger]