The rights of shareholders of First Interstate are currently governed by First Interstate’s amended and restated articles of incorporation, bylaws and the MBCA. The rights of shareholders of NorthwestIIBK are currently governed by Northwest’sIIBK’s articles of incorporation, bylaws and the WBCA.Idaho Bank Act. If the merger is completed, NorthwestIIBK shareholders will become First Interstate shareholders and their rights will likewise be governed by First Interstate’s amended and restated articles of incorporation, First Interstate’s bylaws and the MBCA.
Voting Rights | | | First Interstate | | NorthwestIIBK
| | | • Same provisions as NorthwestIIBK with respect to cumulative voting. | | • Northwest’s articles of incorporation do not provide for cumulative voting by shareholders in the election of directors.
| | | • Each share of First Interstate Class A common stock is entitled to one vote per share. Each share of First Interstate Class B common stock is entitled to five votes per share. | | • Northwest’sIIBK’s articles of incorporation do not provide for cumulative voting by shareholders in the election of directors. • IIBK’s bylaws provide that each shareholder is entitled to one vote for each share of stock held by such shareholder. |
Preemptive Rights
| | | | Preemptive Rights | First Interstate | | NorthwestIIBK
| | | • No holder of any stock has any preemptive rights to subscribe for or purchase any stock other than as First Interstate’s board of directors, in its sole discretion, may determine. | | • No holders of any stock have any preemptive rights to subscribe for or purchase any stock. |
| Required Vote for Authorization of Certain Actions | | | First Interstate | | NorthwestIIBK
| | | • Under the MBCA, atwo-thirds vote is generally required for approval of mergers or share exchanges, unless otherwise provided in a company’s articles of incorporation. First Interstate’s amended and restated articles of incorporation provide that, if First Interstate proposes to engage in a change in control transaction in which holders of First Interstate Class A common stock and First Interstate Class B common stock will receive different consideration, First Interstate will need to obtain, in addition to any shareholder approval required by the MBCA and the First Interstate amended and restated articles of incorporation, the approval of at least 70% of the outstanding shares of First Interstate Class A common stock, voting separately as a single class. • If First Interstate proposes to merge into another corporation and in the twelve months before such merger the acquiring company acquired any shares of First Interstate Class B common stock, then such merger transaction will require the affirmative vote of 70% of the outstanding shares of First Interstate Class A common stock, voting separately as a single class, unless the holders of the First Interstate Class A common stock and First Interstate Class B common stock receive the same consideration for their shares in the merger and the merger consideration paid is at least equal to the highest amount paid by the acquiring corporation for the First Interstate Class B common stock. | | • Under the WBCA,Idaho law, a merger or share exchange requires the approvalaffirmative vote oftwo-thirds at least a majority of the votes cast at a meeting at which a quorum consisting of at least a majority of the outstanding shares of NorthwestIIBK common stock.stock is present. |
| | Required Vote for Authorization of Business Combinations with Interested Shareholders | | | First Interstate | | NorthwestIIBK
| | | • First Interstate cannot merge with or sell any material assets to any shareholder of First Interstate Class B common stock unless such transaction is approved by a majority of the disinterested directors on First Interstate’s board of directors and the holders of a majority of the | | • IIBK has no similar restriction on business combinations with interested shareholders. |
| | | shares of First Interstate Class A common stock, voting separately as a single class. | | • Northwest has no similar restriction on business combinations with interested shareholders.
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| Dissenters’ Rights | | | First Interstate | | NorthwestIIBK
| | | • Under the MBCA, First Interstate shareholders are entitled to exercise dissenters’ rights and to receive payment of the fair value of their shares of First Interstate common stock if they fully comply with the provisions of the MBCA relating to dissenters’ rights. Corporate actions that entitle First Interstate shareholders to exercise their dissenters’ rights include, but are not limited to, (1) mergers that require shareholder approval to be consummated, (2) amendments to the articles of incorporation that materially and adversely affect certain shareholder rights and (3) any corporate action taken pursuant to a shareholder vote (to the extent the articles of incorporation, bylaws or a resolution of the board provides that voting or nonvoting shareholders are entitled to dissent and to obtain payment for their shares). | | • Under the WBCA, NorthwestIdaho Bank Act, IIBK shareholders are entitled to exercise dissenters’ rights and to receive the fair value in cash of their shares of NorthwestIIBK common stock if they fully comply with the provisions of the WBCAIdaho Bank Act relating to dissenters’ rights. Corporate actions that entitle NorthwestIIBK shareholders to exercise their dissenters’ rights include, but are not limited to,include: (1) mergersa merger that require shareholder approval to be consummated,results in a state bank; (2) amendments to the articlesa conversion of incorporation that materially and adversely affect certain shareholder rights andan Idaho state bank into a national bank; or (3) any corporate action taken pursuant to a shareholder vote (to the extent the articlessale of incorporation, bylawsall or a resolutionsubstantially all of the board provides that voting or nonvoting shareholders are entitled to dissent and to obtain payment for their shares).bank’s assets. |
| | Dividends | | | First Interstate | | NorthwestIIBK
| | | • Under the MBCA, First Interstate may not declare a dividend if, after giving it effect: (1) First Interstate would not be able to pay its debts as they become due in the usual course of business; or (2) First Interstate’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution. The holders of First Interstate Class A common stock and First Interstate Class B common stock are entitled to share equally, on a per share basis, in any dividends that First Interstate’s board of directors may declare from time to time from legally available funds, subject to limitations under Montana law and the preferential rights of holders of any outstanding shares of preferred stock. | | • Under the WBCA, NorthwestIdaho Bank Act, IIBK may not makedeclare a distributiondividend until a surplus equal to its shareholders if, after giving it effect: (1) Northwest would not be able20% of thepaid-in capital stock of IIBK has been built up. Thereafter, subject to pay its liabilities as they become due in the usual coursefurther limitations, IIBK’s board of business or (2) Northwest’s total assets would be less than the sumdirectors may declare a dividend of so much of its total liabilities plusnet profits as it deems; but before any such dividend is declared or paid, not less thanone-fifth of IIBK’s net profits for such period as is covered by the amount that would be needed, ifdividend are carried to the corporation weresurplus fund until such surplus fund amounts to be dissolved at the time50% of the distributions, to satisfy the preferential rights upon dissolutions of shareholders whose preferential rights are superior to those receiving the distribution.paid-in common stock. |
| Indemnification of Directors and Officers and Limitation of Liability | | | First Interstate
| | Northwest
| | | • First Interstate’s amended and restated articles of incorporation provides that it will indemnify to the fullest extent permitted by the MBCA any officer or director made or threatened to be made | | • IIBK’s articles of incorporation provide that it will indemnify to the fullest extent permitted by applicable law any officer or director made or threatened to be made a party to an action or |
| | | a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, or she is or was a director, officer, employee or agent of First Interstate or any predecessor to First Interstate or serves or served at any other enterprise as a director, officer, employee or agent at the request of First Interstate or any predecessor to First Interstate. • First Interstate’s bylaws further provide that it will indemnify to the fullest extent permitted by law any person who was or is a party or threatened to be a party to a proceeding or threatened proceeding by reason of the fact that such person is or was a director or officer of First Interstate or is or was serving as a director or officer serving at the request of First Interstate as a director or officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys’ fees), judgments, fines and settlements reasonably incurred by the indemnitee. Such indemnification is only permitted if (1) the indemnitee acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal proceeding, the indemnitee had no reasonable cause to believe the conduct was unlawful and (2) the indemnification is properly authorized by First Interstate according to the procedures set forth in its bylaws. Furthermore, no indemnification for actions by or in the right of the corporation is permitted in respect of any claim, issue or matter as to which the indemnitee has been adjudged liable to First Interstate, unless and only to the extent the applicable court determines the indemnitee is fairly and reasonably entitled to indemnification for expenses as the court deems proper. • Expenses reasonably incurred by an indemnitee will be paid in advance of the final disposition of any civil, criminal, administrative or investigative action, suit or proceeding upon receipt by First Interstate of an statement that the indemnitee has met the applicable standard of conduct to be | | • Under the WBCA, indemnification of directors and officers is authorized to cover judgments, amounts paid in settlement, and expenses arising out of actions where the director or officer acted in good faith and reasonably believed that the individual’s conduct was in or at least not opposed to the best interests of the corporation, and in criminal cases, where the director or officer had no reasonable cause to believe that his or her conduct was unlawful. Unless limited by the corporation’s articles of incorporation, Washington law requires indemnification if the director or officer is wholly successful on the merits of the action. Northwest’s bylaws provide that to the extent permitted or required by the WBCA, Northwest shall indemnify its directors and officers and shall advance fees to such persons incurred in the applicable proceeding. Any advancement of expenses will be made only upon (1) delivery to Northwest of an undertaking, by or on behalf of such indemnitee, to repay all amounts advanced if it is determined by final judicial decision (with not further right to appeal) that such indemnitee is not entitled to be indemnified and (2) written affirmation by the indemnitee to Northwest of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification. Northwest’s bylaws further provide that it will indemnify any person who was or is a party or threatened to be a party to a proceeding or threatened action, suit or proceeding by reason of the fact that such person is or was a director or officer of Northwest or is or was serving as a director or officer serving at the request of Northwest as a director or officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys’ fees), judgments, fines and settlements reasonably incurred by the indemnitee.
• Except as otherwise provided in its bylaws, Northwest will indemnify an indemnitee in connection with a proceeding initiated by such indemnitee only if a proceeding was authorized or ratified by the board.
• Under Northwest’s bylaws, Northwest may maintain insurance, at its expense, to protect any
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| | | First Interstate
| | Northwest
| entitled to indemnification and an undertaking by such indemnitee that he or she will repay the advanced expenses should it ultimately be determined that the he or she is not | | proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, or she is or was a director, officer, employee or agent of IIBK or serves or served at any other organization in any such capacity at the request of IIBK. • IIBK’s articles of incorporation provide that expenses (including attorneys’ fees) incurred in defending a civil or criminal action, suit or proceeding must be paid by IIBK in advance of the final disposition of such action, suit or proceeding. The director, officer, employee or agent must repay such amount, however, if it is ultimately determined that he is not entitled to be indemnified by IIBK. • IIBK’s articles of incorporation provide that IIBK may, upon the affirmative vote of a majority of its board of directors, purchase insurance for the purpose of indemnifying its directors, officers, other employees and agents. • IIBK’s articles of incorporation include a provision that eliminates its directors’ and executive officers’ personal liability to IIBK or its shareholders for breach of fiduciary duty as a director to the fullest extent permitted by law. |
| | | entitled to indemnification by First Interstate. Indemnification of and advancement of expenses to employees and agents of First Interstate is permitted to the fullest extent not prohibited by the MBCA or by any other applicable law. • Under First Interstate’s bylaws, First Interstate may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of First Interstate, or is or was a director, officer, employee or agent of First Interstate serving at the request of First Interstate as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against liability incurred by the insured in any such capacity or arising out of such status of the insured, whether or not First Interstate would have the power or obligation to indemnify the insured against liability under the provisions of First Interstate’s bylaws. • First Interstate’s amended and restated articles of incorporation include a provision that eliminates its directors’ personal liability to First Interstate or its shareholders for breach of fiduciary duty as a director to the fullest extent permitted by law. | | person who is or was a director, officer, employee or agent of Northwest or who, while a director, officer, employee or agent of Northwest is or was serving as the request of Northwest as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss asserted against or incurred by the person in that capacity or arising from his or her status as a director, officer, employee or agent, whether or not Northwest would have the power to indemnify him or her against such expense, liability or loss under the WBCA.
• Northwest’s articles of incorporation include a provision that eliminates its directors’ personal liability to Northwest or its shareholders for breach of fiduciary duty as a director to the fullest extent permitted by the WBCA, except for (1) acts or omissions finally adjudged to be intentional misconduct or a knowing violation of law, (2) conduct finally adjudged to be in violation of RCW 23B.08.310 (which involves certain distributions by a corporation) or (3) any transaction with respect to which it was finally adjudged that such director personally received a benefit to which the director was not legally entitled.
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| Shareholders’ Meetings | | | First Interstate | | NorthwestIIBK
| | | • Same provisions as Northwest with respectNotice of a meeting must be delivered and, in the case of a special meeting, a description of its purpose, no fewer than 10 days and no more than 60 days before the meeting to notice ofeach shareholder meetings.entitled to vote. • Special meetings of shareholders may be called by (1) the board of directors, (2) the Chairman of the board of directors, (3) the Chief Executive Officer (or, in the absence of a Chief Executive Officer, its President) or (4) a holder, or a group of holders, of common stock holding more than 10% of the total voting power of the outstanding shares of capital stock. • Same provisions as Northwest with respectFor purposes of determining shareholders entitled to vote at a meeting, the shareholderboard of directors may fix a record date for shareholder meetings.that is not more than 70 days nor less than 10 days before the meeting. • To nominate a director or propose new business, shareholders must give written notice to the secretary not less than the close of business on the | | • Notice of a meeting must be delivered and, in the case of a special meeting, a description of its purpose, no fewer than 10 days and no more than 60 days before the meeting to each shareholder orof record entitled to vote. • Special meetings of shareholders may be called by (1) the President,board of directors or (2) by resolution adopted by more than 50% of the entire board or (3) a holder, or a group of holders, of common stock holding more than 10%20% of the total voting powerstock of the outstanding shares of capital stock.IIBK. • For purposes of determining shareholders entitled to vote at a meeting, the board of directors may fix a record date. The WBCA requiresdate that such record date be nois not more than 7060 days nor less than 10 days before the meeting. • IIBK’s articles and bylaws do not provide for how or when shareholders can propose new business. The articles state that to nominate a director for election, a shareholder of any outstanding class of capital stock entitled to vote for election of directors may deliver a written nomination to the president of the bank and the director of the Idaho Department not less than fourteen days or more than fifty days prior to the |
| | | First Interstate
| | Northwest
| | | the 90th day nor earlier than the close of business on the 120th day before the anniversary of the preceding year’s annual shareholders’ meeting; provided, however, if no shareholders meeting was held in the prior year or the annual meeting is called for a date that is not within 30 days of such anniversary date, notice of the nomination is required to be delivered no later than the 10th day following the date on which notice of the meeting was mailed or made public, whichever occurs first. Each notice given by a shareholder with respect to a nomination to the board of directors or proposal for new business must be in writing and include certain information regarding the nominee or proposal and the shareholder making the nomination or proposal. | | • Northwest’s bylaws provide that a Northwest shareholder can submit proposals at an annual meeting by providing notice tocalled for the secretaryelection of Northwest not less than 120 days before the date of the release of Northwest’s proxy statement in connection with the previous year’s annual meeting (or such other date or period required by Regulation 14A under the Securities Exchange Act of 1934, as amended). Each notice given by a shareholder with respect to a proposal for new business must be in writing and include certain information regarding the proposal and the shareholder making the proposal.
• Northwest’s bylaws provide that a Northwest shareholder can nominate directors for election by providing notice to the secretary of Northwest not less than 60 days before the date of the meeting, provided, however, thatdirectors. However, if less than 40twenty-one days’ notice of the meeting date is given notice byto shareholders, the shareholder tonomination may be timely must be provided bydelivered no later than the close of business on the 10thseventh day following the dateday on which suchthe notice of the date of the meeting was mailed or such public disclosure was made. Each notice given by a shareholder with respect to a nomination for director must be in writing and include certain information regarding the nominee and the shareholder making the nomination.mailed.
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| Action by Shareholders Without a Meeting | First Interstate | | IIBK | • First Interstate’s bylaws require that any action to be taken by the shareholders of First Interstate must be taken at a duly called meeting of shareholders and may not be taken by any consent in writing by such shareholders, unless provided by applicable law. | | • Under Idaho law, an action required or permitted to be approved by IIBK’s shareholders at a meeting may be approved without a meeting or a vote if the action is approved by all shareholders entitled to vote on the action and is evidenced in writing. | | Board of Directors | First Interstate | | IIBK | • First Interstate’s bylaws state that the number of directors constituting the board of directors will be no less than five and no more than 18, with the exact number to be determined from time to time by the board of directors. There are currently 15 members of First Interstate’s board of directors. | | • IIBK’s articles of incorporation state that the number of directors comprising the board of directors will be from five to fifteen, with the exact number to be fixed from time to time by resolution of IIBK’s shareholders. There are currently six members of IIBK’s board of directors. | | | • First Interstate’s board of directors is divided into three classes, with each class as nearly equal in number as possible. The term of office of each class of director is three years. Each director holds office until the expiration of such director’s term or until a director dies, resigns or is removed. At each annual meeting, the number of directors equal to the number of the class whose term expires at the time of such meeting are elected to hold office. | | | First Interstate
| | Northwest
| | | • First Interstate’s bylaws require that any action to be taken by the shareholders of First Interstate must be taken at a duly called meeting of shareholders and may not be taken by any consent in writing by such shareholders, unless provided by applicable law.
| | • Under the WBCA, action required or permitted to be approved by Northwest’s
• First Interstate’s bylaws provide that vacancies on the board of directors will be filled by a vote of a majority of the remaining directors. Any director elected to fill a vacancy will hold office | | • IIBK’s board of directors is not classified and each director is elected fora one-year term. Each director holds office until the next annual meeting, unless earlier removed, and until his or her successor has been elected and qualified. • IIBK’s articles of incorporation provide that vacancies on the board of directors will be filled by a vote of a majority of the remaining directors. • Under Idaho law, shareholders may remove directors (only at a meeting called for such purpose) with or without cause unless the articles of incorporation provide that directors may be approved without a meeting or a vote if the action is approved by all shareholders entitled to vote on the action. |
Board of Directors
| | | for the remainder of the full term of the class of directors in which the vacancy occurred. • Under First Interstate’s bylaws, any director may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding shares of capital stock then entitled to vote in the election of directors. | | removed only for cause. IIBK’s articles of incorporation do not address removal of directors. | | First Interstate
| | Northwest
| | | • First Interstate’s bylaws state that the number of directors constituting the board of directors will be no less than five and no more than 18, with the exact number to be determined from time to time by the board of directors. There are currently 17 members of First Interstate’s board of directors.
• First Interstate’s board of directors is divided into three classes, with each class as nearly equal in number as possible. The term of office of each class of director is three years. Each director holds office until the expiration of such director’s term or until a director dies, resigns or is removed. At each annual meeting, the number of directors equal to the number of the class whose term expires at the time of such meeting are elected to hold office.
• First Interstate’s bylaws provide that vacancies on the board of directors will be filled by a vote of a majority of the remaining directors. Any director elected to fill a vacancy will hold office for the remainder of the full term of the class of directors in which the vacancy occurred.
• Under First Interstate’s bylaws, any director may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding shares of capital stock then entitled to vote in the election of directors.
| | • Northwest’s bylaws state that the number of directors comprising the board of directors will be from nine to 15, with the exact number to be fixed from time to time by resolution of Northwest’s board of directors. There are currently 10 members of Northwest’s board of directors.
• Northwest’s board of directors is divided into three approximately equal classes. The term of office of each class of director is three years. Each director holds office until the expiration of such director’s term or until a director dies, resigns or is removed. A person will not be qualified for election as a director if he or she will attain the age of 75 before the end of her or her term. The board of directors has the authority to determine the eligibility and to waive the eligibility requirements of any person for nomination or reelection to the board.
• Northwest’s bylaws provide that vacancies on the board of directors will be filled by a vote of a majority of the remaining directors. Any director elected to fill a vacancy will hold office for the balance of the term except that, in the case of an increase in the number of directors, such vacancy may be filled only until the next annual meeting of shareholders, at which time the vacancy will be filled by vote of the shareholders.
• Under the WBCA, shareholders may remove directors (only at a special meeting call for such purpose) with or without cause unless the articles of incorporation provide that directors may be removed only for cause. Northwest’s articles of incorporation do not address removal of directors. Northwest’s bylaws provide that any director who fails to attend nine regular meetings of the board in any12-month period will be asked to resign.
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| First Interstate | IIBK | • First Interstate’s bylaws may be amended or repealed by a majority vote of the board of directors. First Interstate’s bylaws may also be amended upon a majority vote of the outstanding shares of capital stock entitled to vote. | | • IIBK’s bylaws may be amended, altered or repealed by the board of directors by a vote of a majority of the total number of directors. The shareholders also may amend or repeal the bylaws in the manner allowed under the Idaho law. | | | | First Interstate
| | Northwest
| | | • First Interstate’s bylaws may be amended or repealed by a majority vote of the board of directors. First Interstate’s bylaws may also be amended upon a majority vote of the outstanding shares of capital stock entitled to vote.
| | • Northwest’s bylaws may be repealed or amended by the board of directors by a vote of a majority of the directors attending the board meeting at which the change to the bylaws is considered, provided a quorum is present. The shareholders also may amend or repeal the bylaws in the manner allowed under the WBCA.
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Amendment of the Articles of Incorporation | | | First Interstate | | IIBK | | Northwest
| | | • First Interstate’s amended and restated articles of incorporation may be amended in the manner allowed under the MBCA; however, the amendment of any of the provisions relating to First Interstate common stock, a Change in Control Transaction or a Class B Acquisition Transaction will require the vote of 70% of the outstanding shares of the First Interstate Class A common stock, voting separately as a class. | | • Northwest’s articles of incorporation may be amended in the manner allowed under the WBCA.
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MANAGEMENT AND OPERATIONS AFTER THE MERGER
Board of Directors
Upon the completion of the merger, First Interstate’s board of directors will consist of all the current directors of First Interstate.
For information regarding the current directors of First Interstate, executive compensation and relationships and related transactions, see First Interstate’s proxy statement for the 2018 annual meeting of shareholders and its Annual Report on Form10-K filed with the SEC, which are incorporated by reference in this document. See “Where I Can Find More Information.”
Management
The existing executive officers of First Interstate and First Interstate Bank will not change as a result of the merger.
Operations
While there can be no assurance as to the achievement of business and financial goals, First Interstate currently expects to achieve cost savings equal to approximately 30% of Northwest’s current annualizednon-interest expenses (excludingone-timenon-recurring costs in 2018 identified by Northwest) through the elimination of redundant senior and executive management and other operating efficiencies (such as the elimination of duplicative data processing services). See “Cautionary Statement About Forward-Looking Statements.”
MARKET PRICE AND DIVIDEND INFORMATION
First Interstate Class A common stock is listed on The Nasdaq Global Select Market under the symbol “FIBK.” Northwest common stock is listed on the OTC Market’s Pink Marketplace under the symbol “NBCT.” The following table lists the high and low prices per share for First Interstate Class A common stock and for Northwest common stock and the cash dividends declared by First Interstate for the periods indicated.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | First Interstate
Common Stock | | | Northwest
Common Stock | | | | | High | | | Low | | | Dividends | | | High | | | Low | | | Dividends | | Quarter Ended | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2018 (through [●], 2018) | | $ | [●] | | | $ | [●] | | | $ | [●] | | | $ | [●] | | | $ | [●] | | | $ | — | | March 31, 2018 | | | 42.90 | | | | 38.10 | | | | 0.28 | | | | 13.50 | | | | 12.50 | | | | — | | December 31, 2017 | | | 41.25 | | | | 36.00 | | | | 0.24 | | | | 12.95 | | | | 11.90 | | | | — | | September 30, 2017 | | | 38.40 | | | | 33.33 | | | | 0.24 | | | | 12.20 | | | | 11.80 | | | | — | | June 30, 2017 | | | 41.05 | | | | 33.70 | | | | 0.24 | | | | 12.60 | | | | 11.35 | | | | — | | March 31, 2017 | | | 45.35 | | | | 37.15 | | | | 0.24 | | | | 12.24 | | | | 10.25 | | | | — | | December 31, 2016 | | | 43.10 | | | | 30.70 | | | | 0.22 | | | | 10.59 | | | | 9.16 | | | | — | | September 30, 2016 | | | 32.56 | | | | 26.89 | | | | 0.22 | | | | 9.55 | | | | 9.15 | | | | — | | June 30, 2016 | | | 29.55 | | | | 26.44 | | | | 0.22 | | | | 9.60 | | | | 8.90 | | | | — | | March 31, 2016 | | | 28.92 | | | | 24.92 | | | | 0.22 | | | | 9.79 | | | | 8.85 | | | | — | |
The high and low trading prices for First Interstate Class A common stock as of April 25, 2018, the last trading day immediately before the public announcement of the merger, were $40.95 and $40.05, respectively. The high and low trading prices for Northwest common stock as of April 25, 2018, the last trading day immediately before the public announcement of the merger, were $14.00 and $14.00, respectively.
You should obtain current market quotations for First Interstate Class A common stock as the market price of First Interstate Class A common stock will fluctuate between the date of this document and the date on which the merger is completed. You can get these quotations from a newspaper, on the internet or by calling your broker.
Changes in the market price of First Interstate Class A common stock before the completion of the merger will affect the value of the merger consideration that Northwest shareholders will be entitled to receive upon completion of the merger.
As of [Record Date], there were approximately [●] holders of record of First Interstate Class A common stock. As of [Record Date], there were approximately [●] holders of record of Northwest common stock. These numbers do not reflect the number of persons or entities who may hold their stock in nominee or “street name” through brokerage firms.
Following the merger, the declaration of dividends will be at the discretion of First Interstate’s board of directors and will be determined after consideration of various factors, including earnings, cash requirements, the financial condition of First Interstate, applicable state law and government regulations and other factors deemed relevant by First Interstate’s board of directors.
STOCK OWNERSHIP OF NORTHWEST
The following table sets forth the number of shares of Northwest common stock beneficially owned by any person (including any group) who is known to Northwest to be the beneficial owner of more than five percent of Northwest’s class of common stock, each director and executive officer of Northwest, and all directors and executive officers of Northwest as a group. Beneficial ownership is shown as of [●], 2018, and is based on 7,262,001 shares of Northwest common stock outstanding as of [●], 2018. Beneficial ownership is determined in accordance with the rules of the SEC, which generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to such securities. A security holder also is deemed to be, as of any date, the beneficial owner of all securities that such security holder has the right to acquire within 60 days after such date, such as through the exercise of warrants or the conversion of a security. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them. The address of each of Northwest’s directors and executive officers is care of Northwest Bancorporation, Inc., 421 West Riverside Avenue, Suite 113, Spokane, Washington 99201.
| | | | | | | | | Name | | Amount and Nature of
Beneficial Ownership | | | Percent of
Class | | Directors and Executive Officers: | | | | | | | | | Nancy C. Allen | | | — | | | | — | % | Anthony D. Bonanzino | | | 19,875 | | | | * | | Katie Brodie | | | 11,591 | (1) | | | * | | Chad R. Burchard | | | 12,029 | | | | * | | Harlan D. Douglass | | | 923,534 | (2) | | | 12.63 | % | Mark V. Dresback | | | 30,499 | | | | * | | Barry A.J. Featherstone | | | 7,719 | | | | * | | Randall L. Fewel | | | 38,712 | | | | * | | Russell A. Lee | | | 36,667 | | | | * | | Bryan S. Norby | | | 41,217 | (1) | | | * | | Holly A. Poquette | | | 19,605 | | | | * | | Frank A. Reppenhagen | | | 990,905 | (3) | | | 13.37 | % | Jennifer P. West | | | 17,330 | | | | * | | All directors and executive officers as a group (13 persons) | | | 2,149,683 | | | | 28.74 | % | Beneficial owner of more than 5%: | | | | | | | | | Banc Funds | | | 644,593 | (4) | | | 8.88 | % | Concentric Equity Partners II LP | | | 610,135 | (5) | | | 8.40 | % | Community Bancapital, L.P. | | | 380,770 | (6) | | | 5.14 | % | Arch Investment Holdings I LTD | | | 61,681 | (7) | | | 0.85 | % | Castle CreekSSF-D Investors LP | | | 236,098 | (7) | | | 3.25 | % | Castle Creek Special Situation Advisors LLC | | | 6,492 | (7) | | | 0.09 | % | Mayo Clinic | | | 160,694 | (7) | | | 2.21 | % | Mayo Clinic Master Retirement Trust | | | 160,694 | (7) | | | 2.21 | % |
(1) | Includes shares owned together with spouse. |
(2) | Includes 6,213 shares held by Harlan Douglass, Inc and 50,000 warrants issued in conjunction with the subordinated debentures issued in November 2013. |
(3) | Under applicable securities laws, as president of CBC Partners GP, LLC, which is the general partner of Community BanCapital, L.P., Mr. Reppenhagen may be deemed to be the beneficial owner of the 230,770 shares of common stock and 150,000 warrants held by Community BanCapital, L.P. As a limited partner in
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| CEP-FIC GP, LP, which is the general partner of Concentric Equity Partners II LP, Mr. Reppenhagen may be deemed to be the beneficial owner of the 598,576 shares of common stock held by Concentric Equity Partners II LP and shares listed as owned by Concentric Equity Partners II LP include 11,559 shares issued to Mr. Reppenhagen in his individual capacity. Mr. Reppenhagen disclaims beneficial ownership of the shares held by Concentric Equity Partners II LP, except to the extent of his pecuniary interest in such common stock. |
(4) | Includes Banc Fund IX LP (231,784 shares), Banc Fund VII LP (183,079 shares) and Banc Fund VII LP (229,730 shares). Address is 20 North Wacker, Suite 3300, Chicago, IL 60606. |
(5) | Under applicable securities laws, Concentric Equity Partners II LP may be deemed to be beneficial owner of 11,559 shares held by Mr. Reppenhagen in his individual capacity. Concentric Equity Partners II LP disclaims beneficial ownership of the shares held by Mr. Reppenhagen in his individual capacity. Address is 50 E. Washington Street, Suite 400, Chicago, IL 60602. |
(6) | Includes 150,000 warrants issued in conjunction with the subordinated debentures issued in November 2013. Address is 1000 SW Broadway, Suite 1010, Portland, OR 97205. |
(7) | Arch Investment Holdings I LTD, Castle CreekSSF-D Investors LP, Castle Creek Special Situation Advisors LLC, Mayo Clinic and Mayo Clinic Master Retirement Trust are thought to be affiliated; as a total they hold 8.62%. Address for Arch Investment Holdings I LTD is 100 Pitts Bay Road, Pembroke HN08 Bermuda. Address for Castle Creek is 6051 El Tordo, Rancho Santa Fe, CA 92067. Address for Mayo Clinic is 200 First Street SW, Rochester, MN 55905. |
LEGAL MATTERS
The validity of the First Interstate Class A common stock, tovoting separately as a class.
| | • IIBK’s articles of incorporation may be issued inamended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of IIBK. No proposed merger has been passed upon for First Interstate by Luse Gorman, PC, Washington, D.C. Certain material U.S. federal income taxes consequences relating to the mergeramendment will be passed upon for First Interstateeffective until approved by Luse Gorman, PC, Washington, D.Cthe Director of the Idaho Department. | MANAGEMENT AND OPERATIONS AFTER THE MERGER Board of Directors Upon the completion of the merger, First Interstate’s and First Interstate Bank’s board of directors will consist of all the current directors of First Interstate and First Interstate Bank, respectively. For information regarding the current directors of First Interstate, executive compensation and relationships and related transactions, see First Interstate’s proxy statement for the 2018 annual meeting of shareholders and its Annual Report on Form10-K filed with the SEC, which are incorporated by reference in this document. See “Where I Can Find More Information.” Management The existing executive officers of First Interstate and First Interstate Bank will not change as a result of the merger. Operations While there can be no assurance as to the achievement of business and financial goals, First Interstate currently expects to achieve cost savings equal to approximately 56% of IIBK’s current annualizednon-interest expenses (excludingone-timenon-recurring costs in 2018 identified by IIBK) through the elimination of redundant senior and executive management and other operating efficiencies (such as the elimination of duplicative data processing services). See “Cautionary Statement About Forward-Looking Statements.” MARKET PRICE AND DIVIDEND INFORMATION First Interstate Class A common stock is listed on the Nasdaq Global Select Market under the symbol “FIBK.” IIBK common stock is listed on the OTC Market’s Pink Market Place under the symbol “IIBK.” The high and low trading prices for First Interstate Class A common stock as of October 11, 2018, the last trading day immediately before the public announcement of the merger, were $46.15 and $44.61, respectively. The high and low trading prices for IIBK common stock as of October 11, 2018, the last trading day immediately before the public announcement of the merger, were $14.95 and $14.80, respectively. You should obtain current market quotations for First Interstate Class A common stock as the market price of First Interstate Class A common stock will fluctuate between the date of this document and the date on which the merger is completed. You can get these quotations from a newspaper, on the internet or by calling your broker. Changes in the market price of First Interstate Class A common stock before the completion of the merger will affect the value of the merger consideration that IIBK shareholders will be entitled to receive upon completion of the merger. As of January 14, 2019, there were approximately 1,039 holders of record of First Interstate Class A common stock. As of January 14, 2019, there were approximately 455 holders of record of IIBK common stock. These numbers do not reflect the number of persons or entities who may hold their stock in nominee or “street name” through brokerage firms. Following the merger, the declaration of dividends will be at the discretion of First Interstate’s board of directors and will be determined after consideration of various factors, including earnings, cash requirements, the financial condition of First Interstate, applicable state law and government regulations and other factors deemed relevant by First Interstate’s board of directors. STOCK OWNERSHIP OF IIBK The following table sets forth the number of shares of IIBK common stock beneficially owned by any person (including any group) who is known to IIBK to be the beneficial owner of more than five percent of IIBK’s class of common stock, each director and executive officer of IIBK, and all directors and executive officers of IIBK as a group. Beneficial ownership is shown as of January 14, 2019, and is based on 7,742,982 shares of IIBK common stock outstanding as of January 14, 2019. Beneficial ownership is determined in accordance with the rules of the SEC, which generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to such securities. A security holder also is deemed to be, as of any date, the beneficial owner of all securities that such security holder has the right to acquire within 60 days after such date, such as through the exercise of stock options or the conversion of a security. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them. The address at which to contact each of IIBK’s directors and executive officers is “care of Idaho Independent Bank, 1260 W. Riverstone Drive, Coeur d’Alene, Idaho 83814.” | | | | | | | | | Name | | Amount and Nature of
Beneficial Ownership | | | Percent of
Class | | Directors and Executive Officers: | | | | | | | Richard D’Ambrosio | | | 13,500 | (1) | | | * | % | Roy L. Eiguren | | | 14,093 | | | | * | | Jack W. Gustavel | | | 1,041,348 | (2) | | | 13.45 | | Kurt R. Gustavel | | | 325,926 | (3) | | | 4.16 | | Jerald J. Jaeger | | | 213,158 | (4) | | | 2.74 | | Paul H. Montreuil | | | 42,000 | (5) | | | * | | Alicia A. Ritter | | | 15,825 | (6) | | | * | | All directors and executive officers as a group (7 persons) | | | 1,665,850 | | | | 21.04 | % | | | | Beneficial owner of more than 5%: | | | | | | | Kootenai Tribe of Idaho | | | 588,236 | | | | 7.60 | % |
| (1) | Includes 13,000 options to acquire shares of IIBK common stock. |
| (2) | Includes 236,233 shares owned by Wynn Investments, LLC of which Mr. Gustavel serves as Manager, 113,375 shares owned by the Gustavel Family Irrevocable Trust of which Mr. Gustavel is the Trustee, 96,455 shares owned by Gustavel, LLC of which Mr. Gustavel serves as Manager, approximately 52,660 shares held by Mr. Gustavel’s 401(k) plan, 193,099 shares owned by the Gustavel Irrevocable Grandchildrens Trust of which Mr. Gustavel disclaims ownership, and for Northwest28,211 shares owned by the Gustavel Irrevocable Great-Grandchildrens Trust of which Mr. Gustavel disclaims ownership. |
| (3) | Includes 100,000 options to acquire shares of IIBK common stock, 1,986 shares owned by his two minor sons, and approximately 42,724 shares held by Mr. Gustavel’s 401(k) plan. |
| (4) | Includes 23,500 options to acquire shares of IIBK common stock. |
| (5) | Includes 22,500 options to acquire shares of IIBK common stock. |
| (6) | Includes 15,500 options to acquire shares of IIBK common stock. |
LEGAL MATTERS The validity of the First Interstate Class A common stock to be issued in the proposed merger has been passed upon for First Interstate by Luse Gorman, PC, Washington, D.C. Certain material U.S. federal income taxes consequences relating to the merger will be passed upon for First Interstate by Luse Gorman, PC, Washington, D.C. and for IIBK by Witherspoon Kelley, Spokane, Washington. EXPERTS The consolidated financial statements of First Interstate as of December 31, 2017 and 2016 and for each of the years in the three-year period ended December 31, 2017 and the effectiveness of internal control over financial reporting as of December 31, 2017 have been incorporated by reference into this document in reliance upon the report of RSM US LLP, an independent registered public accounting firm, appearing in First Interstate’s 2017 Annual Report on Form10-K incorporated by reference in this document, and upon the authority of said firm as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION First Interstate files annual, quarterly and current reports, proxy statements and other information with the SEC. These filings are available to the public over the internet at the SEC’s website at www.sec.gov. You may also read and copy any document First Interstate files with the SEC at its public reference room located at 100 F Street, NE, Washington, DC 20549. Copies of these documents also can be obtained at prescribed rates by writing to the Public Reference Section of the SEC, at 100 F Street, NE, Washington, DC 20549 or by calling1-800-SEC-0330 for additional information on the operation of the public reference facilities. First Interstate filed with the SEC a registration statement onForm S-4 under the Securities Act to register the shares of First Interstate Class A common stock to be issued to IIBK shareholders in the merger. This document is a part of that registration statement and constitutes a prospectus of First Interstate in addition to being a proxy statement of IIBK for its special meeting. As permitted by the SEC rules, this document does not contain all of the information that you can find in the registration statement or in the exhibits to the registration statement. The additional information may be inspected and copied as set forth above. All information in this document concerning First Interstate and its subsidiaries has been furnished by First Interstate and all information in this document concerning IIBK and its subsidiaries has been furnished by IIBK. Each IIBK shareholder will receive a separate copy of this document, regardless of whether such shareholder is residing at a shared address with one or more other IIBK shareholders. You should rely only on the information contained in this document when evaluating the merger agreement. We have not authorized anyone to provide you with information that is different from what is contained in this document. This document is dated [●], 2019. You should not assume that the information contained in this document is accurate as of any date other than such date, and neither the mailing of this document to shareholders of IIBK nor the issuance of shares of First Interstate Class A common stock as contemplated by the merger agreement shall create any implication to the contrary. First Interstate incorporates by reference into this document the documents listed below and any additional documents that it may file with the SEC between the date of this document and the date of the IIBK special meeting. These documents include periodic reports, such as annual reports on Form10-K, quarterly reports on Form10-Q and current reports on Form8-K (other than information furnished under Items 2.02 or 7.01 of Form8-K), as well as proxy statements. FIRST INTERSTATE FILINGS (FILE NO001-34653) | | | Filings | | Period of Report or Date Filed | • Annual Report on Form10-K incorporated by reference in this document, and upon the authority of said firm as experts in accounting and auditing. | | Year ended December 31, 2017 | | | WHERE YOU CAN FIND MORE INFORMATION
First Interstate files annual, quarterly and current reports, proxy statements and other information with the SEC. These filings are available to the public over the internet at the SEC’s website at www.sec.gov. You may also read and copy any document First Interstate files with the SEC at its public reference room located at 100 F Street, NE, Washington, DC 20549. Copies of these documents also can be obtained at prescribed rates by writing to the Public Reference Section of the SEC, at 100 F Street, NE, Washington, DC 20549 or by calling1-800-SEC-0330 for additional information on the operation of the public reference facilities.
First Interstate filed with the SEC a registration statement onForm S-4 under the Securities Act to register the shares of First Interstate Class A common stock to be issued to Northwest shareholders in the merger. This document is a part of that registration statement and constitutes a prospectus of First Interstate in addition to being a proxy statement of Northwest for its special meeting. As permitted by the SEC rules, this document does not contain all of the information that you can find in the registration statement or in the exhibits to the registration statement. The additional information may be inspected and copied as set forth above.
All information in this document concerning First Interstate and its subsidiaries has been furnished by First Interstate and all information in this document concerning Northwest and its subsidiaries has been furnished by Northwest.
Each Northwest shareholder will receive a separate copy of this document, regardless of whether such shareholder is residing at a shared address with one or more other Northwest shareholders.
You should rely only on the information contained in this document when evaluating the merger agreement. We have not authorized anyone to provide you with information that is different from what is contained in this document. This document is dated [●], 2018. You should not assume that the information contained in this document is accurate as of any date other than such date, and neither the mailing of this document to shareholders of Northwest nor the issuance of shares of First Interstate Class A common stock as contemplated by the merger agreement shall create any implication to the contrary.
First Interstate incorporates by reference into this document the documents listed below and any additional documents that it may file with the SEC between the date of this document and the date of the Northwest special meeting. These documents include periodic reports, such as annual reports on Form10-K, quarterly reports• Quarterly Report on Form10-Q
| | Three Months Ended March 31, 2018, June 30, 2018 and current reportsSeptember 30, 2018 |
| | | Filings | | Period of Report or Date Filed | | | • Current Reports on Form8-K | | January 23, 2018, January 30, 2018, March 8, 2018, March 15, 2018, April 5, 2018, April 25, 2018, April 26, 2018, April 27, 2018, May 4, 2018, August 1, 2018, August 9, 2018, August 15, 2018, August 17, 2018, October 11, 2018, October 25, 2018, October 30, 2018 (other than information furnished under Items 2.02 or 7.01portions of Form8-K), as well as proxy statements.FIRST INTERSTATE FILINGS (FILE NO001-34653)
| | those documents not deemed to be filed) | Filings
| | Period of Report or Date Filed
| | | • Annual Report on Form10-K
| | Year ended December 31, 2017 | | | • Quarterly Report on Form10-Q
| | Three Months Ended March 31, 2018 | | | • Current Reports on Form8-K
| | January 23, 2018, January 30, 2018, March 8, 2018, March 15, 2018, April 5, 2018, April 25, 2018, April 26, 2018, April 27, 2018 and May 4, 2018 (other than portions of those documents not deemed to be filed) |
First Interstate also incorporates by reference the description of First Interstate Class A common stock contained in First Interstate’s registration statement on Form 8-A filed on March 9, 2010 with the SEC pursuant to which First Interstate’s Class A common stock was registered under Section 12 of the Exchange Act, including any amendment or report filed for the purpose of updating such description.
Documents incorporated by reference are available from First Interstate without charge (except for exhibits to the documents unless the exhibits are specifically incorporated in this document by reference). You may obtain documents incorporated by reference in this document by requesting them in writing or by telephone from the appropriate company at the following address:
First Interstate BancSystem, Inc.
401 North 31st Street
Billings, Montana 59101
Attention: Kirk D. Jensen, General Counsel
Telephone: (406)255-5304
If you would like to request documents from First Interstate, please do so by [●], 2018 to receive them before the Northwest special meeting. If you request any incorporated documents, First Interstate will mail them to you by first-class mail, or other equally prompt means, within one business day of its receipt of your request.
Neither First Interstate nor Northwest has authorized anyone to give any information or make any representation about the merger or the companies that is different from, or in addition to, that contained in this document or in any of the materials that have been incorporated in this document. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by document or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to you. The information contained in this document speaks only as of the date of this document unless the information specifically indicates that another date applies.
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Documents incorporated by reference are available from First Interstate without charge (except for exhibits to the documents unless the exhibits are specifically incorporated in this document by reference). You may obtain documents incorporated by reference in this document by requesting them in writing or by telephone from the appropriate company at the following address: First Interstate BancSystem, Inc. 401 North 31st Street Billings, Montana 59101 Attention: Kirk D. Jensen, General Counsel Telephone: (406)255-5304 If you would like to request documents from First Interstate, please do so by March 20, 2019 to receive them before the IIBK special meeting. If you request any incorporated documents, First Interstate will mail them to you by first-class mail, or other equally prompt means, within one business day of its receipt of your request. Neither First Interstate nor IIBK has authorized anyone to give any information or make any representation about the merger or the companies that is different from, or in addition to, that contained in this document or in any of the materials that have been incorporated in this document. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by document or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to you. The information contained in this document speaks only as of the date of this document unless the information specifically indicates that another date applies. ANNEX A AGREEMENT AND PLAN OF MERGER DATED AS OF APRIL 25,OCTOBER 11, 2018 BY AND BETWEENAMONG FIRST INTERSTATE BANCSYSTEM, INC. FIRST INTERSTATE BANK AND NORTHWEST BANCORPORATION, INC.
IDAHO INDEPENDENT BANK
EXHIBITS | | | | | | | Exhibit A | | Form of Northwest BancorporationIdaho Independent Bank Voting Agreement | Exhibit B
| | PlanExhibit B | | Form of Idaho Independent Bank MergerNon-Competition andNon-Solicitation Agreement |
A-ii
Agreement and Plan of Merger This is anAgreement and Plan of Merger, dated as of the 2511th day of April,October, 2018, by and betweenamong First Interstate BancSystem, Inc., a MontanaMontana-chartered corporation (“Purchaser”), First Interstate Bank, a Montana-chartered bank (“Purchaser Bank”), and Northwest Bancorporation, Inc., a Washington corporation (the “Idaho Independent Bank, an Idaho-chartered bank (“CompanyIIBK”). Introductory Statement The BoardBoards of Directors of each of Purchaser, Purchaser Bank and the CompanyIIBK have determined that this Agreement and the business combination and related transactions contemplated hereby are advisable and in the best interests of Purchaser, Purchaser Bank and the Company,IIBK, as the case may be, and in the best interests of their respective stockholders. The parties hereto intend that the Merger (as defined herein) shall qualify as a reorganization under the provisions of Section 368(a) of the IRC (as defined herein) for federal income tax purposes and that this Agreement be and is hereby adopted as a “plan of reorganization” within the meaning of Sections 354 and 361 of the IRC. Purchaser, Purchaser Bank and the CompanyIIBK each desire to make certain representations, warranties and agreements in connection with the business combination and related transactions provided for herein and to prescribe various conditions to such transactions. As a condition and inducement to Purchaser’s and Purchaser Bank’s willingness to enter into this Agreement, each executive officerIIBK Executive Officer and each member of the Board of Directors of the CompanyIIBK and certain shareholders of IIBK has entered into an agreement dated as of the date hereof in the form ofExhibit A, pursuant to which he, she or sheit will vote his, her or herits shares of CompanyIIBK Common Stock in favor of this Agreement and the transactions contemplated hereby (each, a“Voting Agreement”). As a further condition and inducement to Purchaser’s and Purchaser Bank’s willingness to enter into this Agreement, each executive officer and member of the Board of Directors of IIBK has entered into an agreement dated as of the date hereof in the form ofExhibit B, pursuant to which he or she will agree to certainnon-competition andnon-solicitation provisions (each, a“Non-Competition andNon-Solicitation Agreement”). In consideration of their mutual promises and obligations hereunder, the parties hereto adopt and make this Agreement and prescribe the terms and conditions hereof and the manner and basis of carrying it into effect, which shall be as follows: ARTICLE I DEFINITIONS The following terms are defined in this Agreement in the Section indicated: | | | Defined Term | | Location of Definition | Articles of Merger | | Section 2.3 | Average Closing Price
| | Section 7(h) | Bank Merger
| | Section 2.14 | Change of Recommendation | | Section 5.8(b) | Closing | | Section 2.2 | Closing Date | | Section 2.2 | Company
Continuing Employee | | PreambleSection 5.11(a) | Company Benefit Plans
Disclosure Letter | | Section 3.1(a) | | Dissenting Shares | | Section 2.6 | | DOL | | Section 3.2(r)(i)(ii) | Company Contract
Effective Time | | Section 3.2(o)(i) | Company Equity Plan
| | Section 2.11 | Company ERISA Affiliate
| | Section 3.2(r)(i) | Company Intellectual Property
| | Section 3.2(p)(i) | Company IT Systems
| | Section 3.2(p)(ii) | Company Qualified Plans
| | Section 3.2(r)(iv)2.3 |
| | | Defined Term | | Location of Definition | Company Restricted Stock
Exchange Agent | | Section 2.132.7(a) | Company Stock Option
Exchange Ratio | | Section 2.5(a) | | Final Index Price | | Section 7.1(h) | | IIBK | | Preamble | | IIBK Benefit Plans | | Section 3.2(r)(i) | | IIBK Contract | | Section 3.2(o)(i) | | IIBK Equity Plans | | Section 2.11 | CompanyIIBK ERISA Affiliate
| | Section 3.2(r)(i) | | IIBK Executive Officer | | Preamble | | IIBK Intellectual Property | | Section 3.2(p)(i) | | IIBK IT Systems | | Section 3.2(p)(ii) | | IIBK Qualified Plans | | Section 3.2(r)(iv) | | IIBK Stock Option | | Section 2.11 | | IIBK Stockholder Meeting | | Section 5.8(a) | Company Warrant
| | Section 2.12 | Continuing Employee
| | Section 5.11(a) | D.A. Davidson
| | Section 3.2(t) | Determination Date
Index Price | | Section 7.1(h) | Disclosure Letter
Index Ratio | | Section 3.1(a)7.1(h) | Dissenting Shares
Letter of Transmittal | | Section 2.62.7(a) | DOL
Merger | | Section 2.1 | | Merger Consideration | | Section 2.5(a) | | Multiemployer Plan | | Section 3.2(r)(vii) | | Multiple Employer Plan | | Section 3.2(r)(vii) | | Non-Competition andNon-Solicitation Agreement | | Preamble | | Non-Qualified Plans | | Section 5.11(f) | | OREO | | Section 4.1(d) | | PBGC | | Section 3.2(r)(ii) | Effective Time
| | Section 2.3 | Exchange Agent
| | Section 2.7(a) | Exchange Ratio
| | Section 2.5(a) | Final Index Price
| | Section 7.1(h) | Good Reason
| | Section 5.11(e) | INB
| | Section 2.14 | Indemnified Party
| | Section 5.12(a) | Index Price
| | Section 7.1(h) | Index Ratio
| | Section 7.1(h) | Letter of Transmittal
| | Section 2.7(a) | MBCA
| | Section 2.1 | Merger
| | Section 2.1 | Merger Consideration
| | Section 2.5(a) | Multiemployer Plan
| | Section 3.2(r)(vii) | Multiple Employer Plan
| | Section 3.2(r)(vii) | OREO
| | Section 4.1(d) | PBGC
| | Section 3.2(r)(ii) | Proxy Statement-Prospectus | | Section 5.9(a) | Purchaser | | Preamble | Purchaser Bank | | Preamble | | Purchaser Benefit Plans | | Section 3.3(r)(i) | Purchaser Contract | | Section 3.3(p)(i) | Purchaser ERISA Affiliate | | Section 3.3(r)(i) | Purchaser Intellectual Property | | Section 3.3(cc)(i) | Purchaser IT Systems | | Section 3.3(cc)(ii) | Purchaser Qualified Plans | | Section 3.3(r)(iii) | Purchaser Reports | | Section 3.3(h) | Sandler O’Neill | | Section 3.2(t) | | Starting Date | | Section 7.1(h) | Starting Price | | Section 7.1(h) | Surviving Corporation Bank | | Section 2.1 | Voting Agreement | | Preamble | | WARN Act | | Section 5.11(j) |
For purposes of this Agreement: “Acquisition Proposal” means any proposal or offer, whether or not in writing, with respect to any of the following (other than the transactions contemplated hereunder): (i) any merger, consolidation, share exchange, business combination, or other similar transaction or series of transactions involving the CompanyIIBK or any of its Subsidiaries; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 20% or more of the Company’sIIBK’s consolidated assets in a single transaction or series of transactions; (iii) any tender offer or exchange offer for 20% or more of the outstanding shares of the Company’sIIBK’s capital stock or the filing of a registration statement under the Securities Act in connection therewith; (iv) any transaction that is similar in form, substance or purpose to any of the foregoing transactions, or any combination of the foregoing; or (v) any public announcement, notice or regulatory filing of a proposal, plan or intention to do any of the foregoing or any agreement to engage in any of the foregoing. ““Affiliate”Affiliate” of a Person means any person that, directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with such Person. “Agreement” means this Agreement and the exhibits and schedules hereto, each as amended, modified or restated from time to time in accordance with its terms. “Average Closing Price” means the average closing price of Purchaser Common Stock as reported on The Nasdaq Stock Market, LLC (as reported at www.nasdaq.com) for the twenty (20) consecutive trading days ending on and including the Determination Date. “Business Day” means any day other than a Saturday, Sunday or federal holiday. “Certificate” means certificates or book entry shares evidencing shares of CompanyIIBK Common Stock held by its stockholders. “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the regulations promulgated thereunder.
“Company Common Stock” means the common stock, no par value per share, of the Company.
“Company 401(k) Plan” means the Inland Northwest Bank 401(k) Profit Sharing Plan.
“CRA” means the Community Reinvestment Act. “Determination Date” shall mean fifth day prior to the Closing Date, provided that if shares of the Purchaser Common Stock are not actually traded on The Nasdaq Stock Market, LLC on such day, the Determination Date shall be the immediately preceding day to the fifth day prior to the Closing Date on which shares of Purchaser Common Stock actually trade on The Nasdaq Stock Market, LLC. “Environmental Law” means any federal, state or local law, statute, ordinance, rule, code, order or regulation relating to (i) the protection, preservation or restoration of the environment (which includes, without limitation, air, water vapor, surface water, groundwater, drinking water supply, soil, surface land, subsurface land, plant and animal life or any other natural resource), or to human health or safety as it relates to Hazardous Materials, or (ii) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of, Hazardous Materials, in each case as amended and as now in effect. The term Environmental Law includes, without limitation, the FederalComprehensive Environmental Response, Compensation and Liability Act of 1980, the Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation and Recovery Act of 1976, and the Federal Occupational Safety and Health Act of 1970 as it relates to Hazardous Materials, each as amended and as now in effect. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. “Exchange Act” means the Securities Exchange Act of 1934, as amended. “Excluded Shares” means Dissenting Shares and shares of CompanyIIBK Common Stock owned or held (including as treasury shares), other than in a bona fide fiduciary or agency capacity or in satisfaction of a debt previously contracted, by Purchaser, the CompanyIIBK or a Subsidiary of either. “FDIC” means the Federal Deposit Insurance Corporation. “Federal Reserve” means the Board of Governors of the Federal Reserve System. “FHLB” means the Federal Home Loan Bank of Des Moines. “GAAP” means U.S. generally accepted accounting principles. “Governmental Entity” means any governmental or regulatory authority, agency, court, commission, or other administrative entity. “Hazardous Material” means any substance (whether solid, liquid or gas) that is detrimental to human health or safety or to the environment, currently or hereafter listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any Environmental Law, whether by type or by quantity, including any substance containing any such substance as a component. Hazardous Material includes, without limitation, any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste, industrial substance, oil or petroleum, or any derivative orby-product thereof, radon, radioactive material, asbestos, asbestos-containing material, urea formaldehyde foam insulation, lead and polychlorinated biphenyl. “IBA” means the Idaho Bank Act. “IDF” means the Idaho Department of Finance. “IIBK 401(k) Plan” means the Idaho Independent Bank 401(k) Retirement Trust. “IIBK Common Stock” means the common stock, $5.00 par value per share, of IIBK. “IIBK Executive Officer” means Jack W. Gustavel, Kurt R. Gustavel and Paul H. Montreuil. “IRC” means the Internal Revenue Code of 1986, as amended. “IRS” means the Internal Revenue Service. “Knowledge” means, with respect to Purchaser and Purchaser Bank, the actual Knowledge of those senior officers set forth in Purchaser’s and Purchaser Bank’s Disclosure Letter and, with respect to the Company,IIBK, the actual Knowledge of those senior officers set forth in the Company’sIIBK’s Disclosure Letter. “Lien” means any charge, mortgage, pledge, security interest, claim, lien or encumbrance. “Loan” means a loan, lease, advance, credit enhancement, guarantee, participation interest in a loan, or other extension of credit. “Loan Property” means any property in which the applicable party (or a subsidiary of it) holds a security interest and, where required by the context, includes the owner or operator of such property, but only with respect to such property. “Material Adverse Effect” means an effect, circumstance, occurrence or change that is material and adverse to the business, financial condition or results of operations of the CompanyIIBK or Purchaser, as the context may dictate, and its Subsidiaries, taken as a whole, or materially prevents, impairs or threatens the ability of either IIBK, on the Companyone hand, or Purchaser or Purchaser Bank, on the other hand, as the context may dictate, to perform its obligations under this Agreement or consummate the transactions contemplated by this Agreement;provided, however, that any such effect, circumstance, occurrence or change resulting from any (i) changes, after the date hereof, in laws, rules or regulations or GAAP or regulatory accounting requirements or interpretations thereof that apply to financial and/or depository institutions and/or their holding companies generally, (ii) changes, after the date hereof, in economic conditions affecting financial institutions generally, including but not limited to, changes in the general level of market interest rates, (iii) actions and omissions of Purchaser, Purchaser Bank or the CompanyIIBK required under this Agreement or taken or omitted to be taken with the prior written consent, or at the request, of the other, including expenses incurred by the parties in consummating the transactions contemplated by this Agreement, (iv) worsening of national or international political or social conditions including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon or within the United States, (v) natural disaster or other force majeure event, and (vi) any failure, in and of itself, to meet internal or other estimates, predictions, projections or forecasts of revenue, net income or any other measure of financial performance (except to the extent that, with respect to this clause (vi), the facts or circumstances giving rise or contributing to failure to meet estimates or projections may be deemed to constitute, or be taken into account in determining whether there has been, a Material Adverse Effect, except to the extent such facts or circumstances are themselves excepted from the definition of Material Adverse Effect pursuant to any other clause of this definition) shall not be considered in determining if a Material Adverse Effect has occurred except, with respect to clauses (i), (ii), (iv) and (v), to the extent that the effects of such change uniquely affects such party and its Subsidiaries as compared to comparable U.S. banking organizations. “MBA” means the Montana Bank Act. “MDOB” means the Montana Division of Banking and Financial Institutions. “Montana Secretary” means the Secretary of State of the State of Montana.
“Option Payment Amount” equals the Average Closing Price multiplied by the Exchange Ratio.Ratio rounded to the nearest cent. “Participation Facility” means any facility in which the applicable party (or a Subsidiary of it) participates in the management (including all property held as trustee or in any other fiduciary capacity) and, where required by the context, includes the owner or operator of such property, but only with respect to such property. “Person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization or other entity. “Purchaser 401(k) Plan” means the First Interstate Bank 401(k) Plan. “Purchaser Common Stock” means the Class A common stock, no par value per share, of Purchaser. “Purchaser 401(k) Plan” means the First Interstate Bank 401(k) Plan.
“Registration Statement” means a registration statement on FormS-4 (and any amendments or supplements thereto) with respect to the issuance of Purchaser Common Stock in the Merger. “SEC” means the U.S. Securities and Exchange Commission. “Securities Act” means the Securities Act of 1933, as amended. “Subsidiary” means a corporation, partnership, joint venture or other entity in which the CompanyIIBK, Purchaser or Purchaser Bank, as the case may be, has, directly or indirectly, an equity interest representing 50% or more of any class of the capital stock thereof or other equity interests therein. “Superior Proposal” means an unsolicited, bona fide written offer or proposal made by a third party to consummate an Acquisition Proposal that: (i) the Company’sIIBK’s Board of Directors determines in good faith, after consulting with its outside legal counsel and its financial advisor, would, if consummated, result in a transaction that is more favorable to the stockholders of the CompanyIIBK than the transactions contemplated hereby (taking into account all factors relating to such proposed transaction deemed relevant by the Company’sIIBK’s Board of Directors, including without limitation, the amount and form of consideration, the timing of payment, the risk of consummation of the transaction, the financing thereof and all other conditions thereto (including any adjustments to the terms and conditions of such transactions proposed by Purchaser and Purchaser Bank in response to such Acquisition Proposal)); (ii) is for 100% of the outstanding shares of CompanyIIBK Common Stock or all or substantially all of the assets of the Company;IIBK; and (iii) is reasonably likely to be completed on the terms proposed, in each case taking into account all legal, financial, regulatory and other aspects of such Acquisition Proposal. “Taxes” means all income, franchise, gross receipts, real and personal property, real property transfer and gains, wage and employment taxes. “Washington Secretary” means the Secretary of State of the State of Washington.
“WBCA” means the Washington Business Corporation Act.
“WDFI” means the Washington State Department of Financial Institutions.
ARTICLE II THE MERGER 2.1The Merger. Upon the terms and subject to the conditions set forth in this Agreement, the CompanyIIBK will merge with and into Purchaser Bank (the“Merger”) at the Effective Time. At the Effective Time, the separate corporate existence of the CompanyIIBK shall cease. Purchaser Bank shall be the surviving corporationentity (hereinafter sometimes referred to in such capacity as the“Surviving CorporationBank”) in the Merger and shall continue to be governed by the Montana Business Corporation Act (the“MBCA”)MBA and its name and separate corporate existence, with all of its rights, privileges, immunities, powers and franchises, shall continue unaffected by the Merger. 2.2Closing. The closing of the Merger (the“Closing”) will take place by the electronic (PDF), facsimile or overnight courier exchange of executed documents or at a location and at a time as agreed to by the parties hereto on the date designated by Purchaser within fifteen (15) days following satisfaction or waiver (subject to applicable law) of the conditions to Closing set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing), or such later date as the parties may otherwise agree (the“Closing Date”). 2.3Effective Time. In connection with the Closing, Purchaser Bank and the CompanyIIBK shall duly execute and deliver articles of merger (and such other documents as required by law) to the Montana SecretaryMDOB and the Washington Secretary,IDF, to the extent required by the relevant provision of the MBCAMBA and the WBCA,IBA, respectively (collectively, the“Articles of Merger”). The Merger shall become effective at such time as the Articles of Merger are duly filed with and endorsed by the MDOB or at such later date or time as Purchaser Bank and the CompanyIIBK agree and specify in the Articles of Merger (the date and time the Merger becomes effective being the“Effective Time”). 2.4Effects of the Merger. The Merger will have the effects set forth in this Agreement, in the MBCAMBA and the WBCA.IBA. Without limiting the generality of the foregoing, and subject thereto, from and after the Effective Time, Purchaser Bank shall possess all of the properties, rights, privileges, powers and franchises of the CompanyIIBK and be subject to all of the debts, liabilities and obligations of IIBK. Additionally, all assets, rights, interests, privileges, powers, franchises and property (real, personal and mixed) of IIBK shall be automatically transferred to and vested in the Company.Surviving Bank by virtue of the Merger without any deed or other document of transfer. At the Effective Time, each deposit account holder of Purchaser Bank or of IIBK immediately prior to the Effective Time shall become a depositor of the Surviving Bank. The main banking office of the Surviving Bank shall be 401 North 31st Street, Billings, Montana. The branch offices of Purchaser Bank and the branch offices of IIBK that are in lawful operation prior to at the Effective Time shall be, and shall be operated as, branch offices of the Surviving Bank. 2.5 Effect on Outstanding Shares of CompanyIIBK Common Stock. (a) By virtue of the Merger, automatically and without any action on the part of the holder thereof, each share of CompanyIIBK Common Stock issued and outstanding at the Effective Time, other than Excluded Shares, shall become and be converted into the right to receive 0.5160.50 shares (the“Exchange Ratio”) of Purchaser Common Stock (the“Merger Consideration”). (b) Notwithstanding any other provision of this Agreement, no fraction of a share of Purchaser Common Stock and no certificates or scrip therefor will be issued in the Merger; instead, Purchaser shall pay to each holder of CompanyIIBK Common Stock who would otherwise be entitled to a fraction of a share of Purchaser Common Stock an amount in cash, rounded to the nearest cent, determined by multiplying such fraction by the Average Closing Price. (c) If, between the date of this Agreement and the Effective Time, the outstanding shares of Purchaser Common Stock or any other authorized capital stock of the Purchaser shall have been changed into a different number of shares or into a different class by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination, or exchange of shares, or there shall be any extraordinary dividend or distribution paid, the Exchange Ratio shall be adjusted appropriately to provide the holders of CompanyIIBK Common Stock the same economic effect as contemplated by this Agreement prior to such event. (d) As of the Effective Time, except for Dissenting Shares, each Excluded Share shall be canceled and retired and shall cease to exist, and no exchange or payment shall be made with respect thereto. All shares of Purchaser Common Stock that are held by the Company,IIBK, if any, other than shares held in a fiduciary capacity or in satisfaction of a debt previously contracted, shall be canceled and shall constitute authorized but unissued shares. 2.6Dissenter’s Rights. Each outstanding share of CompanyIIBK Common Stock, the holder of which has perfected histhe right to dissent under the WBCAIBA and has not effectively withdrawn or lost such right as of the Effective Time (the“Dissenting Shares”) shall not be converted into or represent the right to receive the Merger Consideration hereunder and shall be entitled only to such rights as are available to such holder pursuant to the applicable provisions of the WBCA.IBA. Each holder of a Dissenting Share shall be entitled to receive the value of such Dissenting Share held by him in accordance with the applicable provisions of the WBCA;IBA;provided, thatsuch holder complies with the procedures contemplated by and set forth in the applicable provisions of the WBCA.IBA. If any holder of any Dissenting Share shall effectively withdraw or lose such holder’s dissenter’s rights under the applicable provisions of the WBCA,IBA, each such Dissenting Share shall be exchangeable for the right to receive the Merger Consideration. 2.7 Exchange Procedures. (a) At or prior to the Effective Time, Purchaser shall deposit, or shall cause to be deposited, with American Stock Transfer & Trust Co. (the“Exchange Agent”), pursuant to an agreement entered into prior to the Closing, for the benefit of the holders of record of shares of CompanyIIBK Common Stock converted into the right to receive the Merger Consideration, for exchange in accordance with thisSection 2.7, (i) the number of shares of Purchaser Common Stock sufficient to deliver the aggregate Merger Consideration and (ii) any cash payable in lieu of fractional shares pursuant toSection 2.5(b), and Purchaser shall instruct the Exchange Agent to timely deliver the Merger Consideration. Appropriate transmittal materials (“Letter of Transmittal”) shall be mailed as soon as practicable after the Effective Time to each holder of record of CompanyIIBK Common Stock. A Letter of Transmittal will be deemed properly completed only if the completed Letter of Transmittal is accompanied by one or more Certificates representing CompanyIIBK Common Stock (or customary affidavits and, if required by Purchaser pursuant toSection 2.7(h), indemnification regarding the loss or destruction of such Certificates or the guaranteed delivery of such Certificates) representing all shares of CompanyIIBK Common Stock to be converted thereby. (b) At and after the Effective Time, each Certificate shall represent only the right to receive the Merger Consideration, and as to Dissenting Shares, shall represent only the right to receive applicable payments as set forth inSection 2.6. The CompanyIIBK shall provide to the Exchange Agent all information reasonably necessary for it to perform its obligations as specified herein. (c) The Letter of Transmittal shall (i) specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent, (ii) be in a form and contain any other provisions as Purchaser may reasonably determine and (iii) include instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon the proper surrender of the Certificates to the Exchange Agent, together with a properly completed and duly executed Letter of Transmittal, the holder of such Certificates shall be entitled to receive in exchange therefor a certificate, or, at the election of Purchaser, a statement reflecting shares issued in book entry form, representing that number of whole shares of Purchaser Common Stock that such holder has the right to receive pursuant toSection 2.5(a)and a check in the amount equal to any cash in lieu of fractional shares such holder is entitled to pursuant to Section 2.5(b)and any dividends or other distributions to which such holder is entitled. Certificates so surrendered shall forthwith be canceled. As soon as practicable following receipt of the properly completed Letter of Transmittal and any necessary accompanying documentation, the Exchange Agent shall distribute Purchaser Common Stock and cash in lieu of fractional shares as provided herein. The Exchange Agent shall not be entitled to vote or exercise any rights of ownership with respect to the shares of Purchaser Common Stock held by it from time to time hereunder, except that it shall receive and hold all dividends or other distributions paid or distributed with respect to such shares for the account of the Persons entitled thereto. If there is a transfer of ownership of any shares of CompanyIIBK Common Stock not registered in the transfer records of the Company,IIBK, the Merger Consideration shall be issued to the transferee thereof if the Certificates representing such CompanyIIBK Common Stock are presented to the Exchange Agent, accompanied by all documents required, in the reasonable judgment of Purchaser and the Exchange Agent, to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid. (d) No dividends or other distributions declared or made after the Effective Time with respect to Purchaser Common Stock issued pursuant to this Agreement shall be remitted to any personPerson entitled to receive shares of Purchaser Common Stock hereunder until such Person surrenders his or her Certificates in accordance with thisSection 2.7. Upon the surrender of such Person’s Certificates, such Person shall be entitled to receive any dividends or other distributions, without interest thereon, which subsequent to the Effective Time had become payable but not paid with respect to shares of Purchaser Common Stock represented by such Person’s Certificates. (e) The stock transfer books of the CompanyIIBK shall be closed immediately upon the Effective Time and from and after the Effective Time there shall be no transfers on the stock transfer records of the CompanyIIBK of any shares of CompanyIIBK Common Stock. If, after the Effective Time, Certificates are presented to Purchaser, they shall be canceled and exchanged for the Merger Consideration deliverable in respect thereof pursuant to this Agreement in accordance with the procedures set forth in thisSection 2.7. (f) Any portion of the aggregate amount of cash to be paid in lieu of fractions of a share pursuant toSection 2.5, any dividends or other distributions to be paid pursuant to thisSection 2.7 or any proceeds from any investments thereof that remains unclaimed by the holders of CompanyIIBK Common Stock for six months after the Effective Time shall be repaid by the Exchange Agent to Purchaser upon the written request of Purchaser. After such request is made, each holder of CompanyIIBK Common Stock who has not theretofore complied with thisSection 2.7 shall look only to Purchaser for the Merger Consideration deliverable in respect of each share of CompanyIIBK Common Stock such stockholder holds, as determined pursuant toSection 2.5 of this Agreement, without any interest thereon. Notwithstanding the foregoing, neither the Exchange Agent nor any party to this Agreement (or any Affiliate thereof) shall be liable to any former holder of CompanyIIBK Common Stock for any amount delivered to a public official pursuant to applicable abandoned property, escheat or similar laws. (g) Purchaser and the Exchange Agent shall be entitled to rely upon the Company’sIIBK’s stock transfer books to establish the identity of those Persons entitled to receive the Merger Consideration, which books shall be conclusive with respect thereto. The CompanyIIBK shall provide to the Exchange Agent all information reasonably necessary for it to perform its obligations as specified herein. In the event of a dispute with respect to ownership of stock represented by any Certificate, Purchaser and the Exchange Agent shall be entitled to deposit any Merger Consideration represented thereby in escrow with an independent third party and thereafter be relieved with respect to any claims thereto. (h) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and the posting by such Person of a bond in such amount as the Exchange Agent may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof pursuant toSection 2.5. 2.8Effect on Outstanding Shares of Purchaser and Purchaser Bank Common Stock.At the Effective Time, and except as provided inSection 2.5(d), each share of Purchaser Common Stock and each share of Purchaser Bank Common Stock issued and outstanding immediately prior to the Effective Time shall remain an issued and outstanding share of common stock of the Surviving CorporationPurchaser and Purchaser Bank, respectively, and shall not be affected by the Merger. 2.9Directors of Surviving CorporationBank After Effective Time.Immediately after the Effective Time, until their respective successors are duly elected or appointed and qualified, the directors of the Surviving CorporationBank shall consist of the directors of Purchaser Bank serving immediately prior to the Effective Time. 2.10Articles of Incorporation and Bylaws. The articles of incorporation of Purchaser Bank, as in effect immediately prior to the Effective Time, shall be the articles of incorporation of the Surviving CorporationBank until thereafter amended in accordance with applicable law and the terms thereof. The bylaws of Purchaser Bank, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving CorporationBank until thereafter amended in accordance with applicable law and the terms of such bylaws. 2.11Treatment of Stock Options.At the Effective Time, each option to acquire shares of CompanyIIBK Common Stock that is outstanding and unexercised immediately prior thereto (“CompanyIIBK Stock Option”) pursuant to the Inland NorthwestIdaho Independent Bank 2014 Share2004 Long-Term Equity Incentive Plan (theand Idaho Independent Bank 2016 Long-Term Equity Incentive Plan (together, the“CompanyIIBK Equity PlanPlans”) shall automatically become vested and shall be cancelled and, subject to Purchaser’s receipt of an option surrender agreement in the form set forth in the Purchaser’s Disclosure Letter, converted into the right to receive from Purchaser a cash payment in an amount, less required withholding taxes, equal to the product of (i) the number of shares of CompanyIIBK Common Stock subject to the CompanyIIBK Stock Option, multiplied by (ii) the amount by which the Option Payment Amount exceeds the exercise price of such CompanyIIBK Stock Option. If the exercise price of a CompanyIIBK Stock Option is greater than the Option Payment Amount, then at the Effective Time such CompanyIIBK Stock Option shall be cancelled without any payment made in exchange therefor. Such cash payment shall be made by wire transfer of immediately available funds on the Closing Date. 2.12Treatment of Stock Purchase Warrants.At the Effective Time, each stock purchase warrant to acquire shares of Company Common Stock that is outstanding and unexercised immediately prior thereto (“Company Warrant”) shall be cancelled pursuant to the warrant termination agreement in the form set forth in the Purchaser’s Disclosure Letter and each holder thereof shall receive from Purchaser a cash payment in an amount, less required withholding taxes, equal to the product of (i) the number of shares of Company Common Stock subject to the Company Warrant, multiplied by (ii) the amount by which the Option Payment Amount exceeds the exercise price of such Company Warrant. If the exercise price of a Company Warrant is greater than the Option Payment Amount, then at the Effective Time such Company Warrant shall be cancelled without any payment made in exchange therefor. Such cash payment shall be made by wire transfer of immediately available funds on the Closing Date. 2.13Treatment of Restricted Stock. At the Effective Time, any vesting restrictions on each share of restricted stock outstanding immediately prior thereto (“Company Restricted Stock”) pursuant to the Company Equity Plan shall automatically lapse and shall be treated as issued and outstanding shares of Company Common Stock for the purposes of this Agreement, including but not limited to, the provisions ofSection 2.5. Purchaser shall use reasonable best efforts to ensure Purchaser’s transfer agent will permit holders of Company Restricted Stock to satisfy their tax withholding obligations for the Company Restricted Stock via net settlement.
2.14Bank Merger.As soon as practicable after the execution and delivery of this Agreement, First Interstate Bank, a wholly owned subsidiary of Purchaser, and Inland Northwest Bank (“INB”), a wholly owned subsidiary of the Company, shall enter into the Plan of Bank Merger, in the form attached hereto asExhibit B, pursuant to which INB will merge with and into First Interstate Bank (the“Bank Merger”). The parties intend that the Bank Merger will become effective as soon as practicable following the Effective Time.
2.15Alternative Structure.Notwithstanding anything to the contrary contained in this Agreement, prior to the Effective Time, Purchaser or Purchaser Bank may specify that the structure of the transactions contemplated by this Agreement be revised and the parties shall enter into such alternative transactions as Purchaser or Purchaser Bank may reasonably determine to effect the purposes of this Agreement;provided, however, that such revised structure shall not (i) alter or change the amount or kind of the Merger Consideration, (ii) materially impede or delay consummation of the transactions contemplated by this Agreement, or (iii) adversely limit or impact the qualification of the Merger as
a reorganization under the provisions of Section 368(a) of the IRC. In the event that Purchaser or Purchaser Bank elects to make such a revision, the parties agree to execute appropriate documents to reflect the revised structure. 2.162.13Absence of Control.It is the intent of the parties hereto that Purchaser and Purchaser Bank by reason of this Agreement shall not be deemed (until consummation of the transactions contemplated hereby) to control, directly or indirectly, the CompanyIIBK or to exercise, directly or indirectly, a controlling influence over the management or policies of the Company.IIBK.
2.172.14Additional Actions.If, at any time after the Effective Time, Purchaser or First InterstatePurchaser Bank shall consider or be advised that any further deeds, assignments or assurances in law or any other acts are necessary or desirable to (i) vest, perfect or confirm, of record or otherwise, in Purchaser or First InterstatePurchaser Bank its right, title or interest in, to or under any of the rights, properties or assets of the Company or INB,IIBK or (ii) otherwise carry out the purposes of this Agreement, INB, the CompanyIIBK and theirits officers and directors shall be deemed to have granted to Purchaser and First InterstatePurchaser Bank an irrevocable power of attorney to execute and deliver, in such official corporate capacities, all such deeds, assignments or assurances in law or any other acts as are necessary or desirable to (a) vest, perfect or confirm, of record or otherwise, in Purchaser or First InterstatePurchaser Bank its right, title or interest in, to or under any of the rights, properties or assets of the Company or INBIIBK or (b) otherwise carry out the purposes of this Agreement, and the officers and
directors of Purchaser or First InterstatePurchaser Bank are authorized in the name of the Company or INBIIBK or otherwise to take any and all such action. 2.182.15Withholding. Purchaser or the Exchange Agent will be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement or the transactions contemplated hereby to any holder of CompanyIIBK Common Stock such amounts as Purchaser (or any Affiliate thereof) or the Exchange Agent are required to deduct and withhold with respect to the making of such payment under the IRC, or any applicable provision of U.S. federal, state, local ornon-U.S. tax law. To the extent that such amounts are properly withheld by Purchaser or the Exchange Agent, such withheld amounts will be treated for all purposes of this Agreement as having been paid to the holder of the CompanyIIBK Common Stock in respect of whom such deduction and withholding were made by Purchaser or the Exchange Agent.
ARTICLE III REPRESENTATIONS AND WARRANTIES 3.1 Disclosure Letters; Standard. (a) Prior to the execution and delivery of this Agreement, Purchaser and Purchaser Bank, on the Companyone hand, and IIBK, on the other hand, have each delivered to the other a letter (each, its“Disclosure Letter”) setting forth, among other things, facts, circumstances and events the disclosure of which is required or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more of their respective representations and warranties contained inSection 3.2 orSection 3.3, as applicable, or to one or more of its covenants contained in Articles IV or V (and making specific reference to the Section of this Agreement to which they relate). Disclosure in any paragraph of the Disclosure Letter shall apply only to the indicated Section of this Agreement except to the extent that it is reasonably clear on the face of such disclosure (notwithstanding the absence of a specific cross reference) that it is relevant to another paragraph of the Disclosure Letter or another Section of this Agreement. (b) No representation or warranty of the CompanyIIBK, Purchaser or Purchaser Bank contained inSections 3.2 or3.3, as applicable (other than (i) the representations and warranties contained inSections 3.2(c) and 3.3(c), which shall be true in all respects, and (ii) the representations and warranties contained inSections 3.2(a),3.2(d),3.2(e)(i) and(ii), 3.2(j),3.2(u),3.2(x),3.3(a),3.3(d),3.3(e)(i) and(ii), 3.3(k) and3.3(u), which shall be true in all material respects) will be deemed untrue or incorrect, and no party will be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, event or circumstance unless such fact, event or circumstance, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty contained inSections 3.2or3.3, has had or is reasonably likely to have a Material Adverse Effect with respect to the CompanyIIBK, Purchaser or Purchaser Bank, as the case may be (it being understood that, except with respect toSection 3.2(j), for purposes of determining the accuracy of such representations and warranties, all “Material Adverse Effect” qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded). 3.2Representations and Warranties of the Company.IIBK. Except (i) as disclosed in the Company’sIIBK’s Disclosure Letter, and (ii) for information and documents commonly known as “confidential supervisory information” that is prohibited from disclosure (and as to which nothing in this Agreement shall require disclosure), the CompanyIIBK represents and warrants to Purchaser and Purchaser Bank that: (a)Organization and Qualification. The CompanyIIBK is a corporation duly organized and validly existing under the laws of the State of Washington and is registered with the Federal Reserve as a bank holding company. The Companyan Idaho-chartered commercial bank. IIBK has all requisite corporate power and authority to own, lease and operate its properties and to conduct the business currently being conducted by it. The CompanyIIBK is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on IIBK. IIBK’s deposits are insured by the Company. The Company engages onlyFDIC through the Deposit Insurance Fund to the fullest extent permitted by law. IIBK is a member in activities, and holds properties onlygood standing of the types, permitted to bank holding companies byFHLB and owns the Bank Holding Company Actrequisite amount of 1956, as amended, and the rules, regulations and interpretations promulgated thereunder.stock therein. (b)Subsidiaries. (i) The Company’sIIBK’s Disclosure Letter sets forth with respect to each of the Company’sIIBK’s direct and indirect Subsidiaries its name, its jurisdiction of incorporation, the Company’sIIBK’s percentage ownership, the number of shares of stock or other equity interests owned or controlled by the CompanyIIBK and the name and number of shares held by any other person who owns any stock of the Subsidiary. The CompanyIIBK owns, directly or indirectly, all of the issued and outstanding shares of capital stock or other equity interests of each of its Subsidiaries, free and clear of any Liens. There are no contracts, commitments, agreements or understandings relating to the Company’sIIBK’s right to vote or dispose of any equity securities of its Subsidiaries. The Company’sIIBK’s ownership interest in each of its Subsidiaries is in compliance with all applicable laws, rules and regulations relating to equity investments by bank holding companies or Washington-chartered savingsIdaho-chartered commercial banks. (ii) Each of the Company’sIIBK’s Subsidiaries is a corporation or limited liability company duly organized and validly existing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease and operate its properties and to conduct the business currently being conducted by it and is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on the Company.IIBK. (iii) The outstanding shares of capital stock of each Subsidiary have been validly authorized and are validly issued, fully paid and nonassessable. No shares of capital stock of any Subsidiary of the CompanyIIBK are or may be required to be issued by virtue of any options, warrants or other rights, no securities exist that are convertible into or exchangeable for shares of such capital stock or any other debt or equity security of any Subsidiary, and there are no contracts, commitments, agreements or understandings of any kind for the issuance of additional shares of capital stock or other debt or equity security of any Subsidiary or options, warrants or other rights with respect to such securities. (iv) INB is a Washington-chartered commercial bank. No Subsidiary of the Company other than INB is an “insured depository institution” as defined in the Federal Deposit Insurance Act, as amended, and the
applicable regulations thereunder. INB’s deposits are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by law. INB is a member in good standing of the FHLB and owns the requisite amount of stock therein.
(c)Capital Structure. (i) The authorized capital stock of the CompanyIIBK consists of 30,000,00020,000,000 shares of CompanyIIBK Common Stock and 500,00010,000,000 shares of preferred stock, no$0.10 par value per share. (ii) As of the date of this Agreement: (A) 7,518,6867,739,024 shares of CompanyIIBK Common Stock (including 256,685 shares of Company Restricted Stock) are issued and outstanding, all of which are validly issued, fully paid and nonassessable and were issued in full compliance with all applicable laws and not in violation of any preemptive rights; (B) no shares of CompanyIIBK preferred stock are issued and outstanding; and (C) 200,000351,580 shares of CompanyIIBK Common Stock are reserved for issuance pursuant to outstanding CompanyIIBK Stock Options (including exercisable and unexercisable CompanyIIBK Stock Options) and Company Warrants.. (iii) Set forth in the Company’sIIBK’s Disclosure Letter are: (a)is a complete and accurate list of all outstanding CompanyIIBK Stock Options, including the names of the optionees, dates of grant, exercise prices, dates of vesting, dates of termination, shares subject to each grant and whether stock appreciation, limited or other similar rights were granted in connection with such options; (b) a complete and accurate list of all outstanding shares of Company Restricted Stock, including the names of the grantees, dates of grant, dates of vesting and shares subject to each grant; and (c) a complete and accurate list of all outstanding Company Warrants, including the names of the warrant holders, dates of grant, exercise prices, dates of vesting, dates of termination, shares subject to each grant and whether stock appreciation, limited or other similar rights were granted in connection with such warrants.options. (iv) No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which stockholders of the CompanyIIBK may vote are issued or outstanding other than (i) $5.155 million of trust preferred securities issued by Northwest Bancorporation Capital Trust I; (ii) the guarantee by the Company to the holders of the debentures issued by the Northwest Bancorporation Capital Trust I; and (iii) $6 million of unsecured subordinated notes, due November 18, 2022.outstanding. (v) Except as set forth in thisSection 3.2(c), as of the date of this Agreement, (A) no shares of capital stock or other voting securities of the CompanyIIBK are issued, reserved for issuance or outstanding, and (B) other than CompanyIIBK Stock Options, and Company Warrants, neither the CompanyIIBK nor any of its Subsidiaries has or is bound by any outstanding subscriptions, options, warrants, calls, rights, convertible securities, commitments or agreements of any character obligating the CompanyIIBK or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any additional shares of capital stock of the CompanyIIBK (including any rights plan or agreement) or obligating the CompanyIIBK or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, right, convertible security, commitment or agreement. Neither the CompanyIIBK nor any of its Subsidiaries has or is bound by any rights of any character relating to the purchase, sale, or issuance or voting of, or right to receive dividends or other distributions on shares of CompanyIIBK Common Stock, or any other security of the CompanyIIBK or a Subsidiary of the CompanyIIBK or any securities representing the right to vote, purchase or otherwise receive any shares of CompanyIIBK Common Stock or any other security of the CompanyIIBK or a Subsidiary of the Company.IIBK. Other than as stated herein, there are no outstanding securities or instruments that contain any redemption or similar provisions, and there are no outstanding contractual obligations of the CompanyIIBK or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the CompanyIIBK or any of its Subsidiaries. (vi) Other than the Voting Agreements and as set forth in the Company’sIIBK’s Disclosure Letter, there are no voting trusts, shareholder agreements, proxies or similar agreements to which the CompanyIIBK or any of its Subsidiaries is a party in effect with respect to the voting or transfer of the CompanyIIBK Common Stock or other voting securities or equity interests of the CompanyIIBK or granting any shareholder or other person any registration rights. The CompanyIIBK does not have in effect a “poison pill” or similar shareholder rights plan. (d)Authority. The CompanyIIBK has all requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder and, subject to the consents, approvals and filings set forth inSection 3.2(f), to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate actions on the part of the Company’sIIBK’s Board of Directors, and no other corporate proceedings on the part of the CompanyIIBK are necessary to authorize this Agreement or to consummate the transactions contemplated by this Agreement other than the approval and adoption of this Agreement by the affirmative vote of the holders oftwo-thirds a majority of the outstanding shares of CompanyIIBK Common Stock. The Company’sIIBK’s Board of Directors has determined that this Agreement is advisable and has directed that this Agreement be submitted to the Company’sIIBK’s stockholders for approval and adoption and has unanimously adopted a resolution to the foregoing effect and recommend that the stockholders approve and adopt this Agreement. This Agreement has been duly and validly executed and delivered by the CompanyIIBK and constitutes a valid and binding obligation of the Company,IIBK, enforceable against the CompanyIIBK in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, whether applied in a court of law or a court of equity. (e)No Violations. The execution, delivery and performance of this Agreement by the CompanyIIBK do not, and the consummation of the transactions contemplated by this Agreement will not, (i) assuming that the consents, approvals and filings referred to inSection 3.2(f)have been obtained and the applicable waiting periods have expired, violate any law, rule or regulation or any judgment, decree, order, governmental permit or license to which the CompanyIIBK or any of its Subsidiaries (or any of their respective properties) is subject, (ii) violate the articles of incorporation or bylaws of the CompanyIIBK or the similar organizational documents of any of its Subsidiaries or (iii) constitute a breach or violation of, or a default under (or an event that, with due notice or lapse of time or both, would constitute a default under), or result in the termination of, accelerate the performance required by, or result in the creation of any Lien upon any of the properties or assets of the CompanyIIBK or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, indenture, deed of trust, loan agreement or other agreement, instrument or obligation to which the CompanyIIBK or any of its Subsidiaries is a party, or to which any of their respective properties or assets may be subject. (f)Consents and Approvals. Except for (i) filings of applications and notices with, receipt of approvals or no objections from, and the expiration of related waiting periods required by, federal and state banking authorities, including filings and notices with the Federal Reserve, FDIC, the MDOB and the WDFI,IDF, (ii) the filing with the SEC of a Proxy Statement-Prospectus in definitive form relating to the meeting of the Company’sIIBK’s stockholders to be held in connection with this Agreement and the transactions contemplated hereby and of the Registration Statement in which such proxy statement will be included as a prospectus, and declaration of effectiveness of the Registration Statement, (iii) the filing of the Articles of Merger with the Montana SecretaryMDOB pursuant to the MBCAMBA and with Washington Secretarythe IDF pursuant to the WBCA, the filing of a certificate for the Bank Merger with the MDOB and the filing of a notice for the Bank Merger with the WDFI,IBA, (iv) filing with The Nasdaq Stock Market LLC of a notification or application of the listing of the shares of Purchaser Common Stock to be issued in the Merger, (v) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of shares of Purchaser Common Stock pursuant to this Agreement, and (vi) the approval by the Company’sIIBK’s stockholders required to approve the Merger under WashingtonIdaho law, no consents or approvals of, or filings or registrations with, any Governmental Entity or any third party are required to be made or obtained by the CompanyIIBK in connection with the execution and delivery by the CompanyIIBK of this Agreement or the consummation by the CompanyIIBK of the Merger and the other transactions contemplated by this Agreement, including the Bank Merger.Agreement. As of the date hereof, the CompanyIIBK has no Knowledge of any reason pertaining to the CompanyIIBK why any of the approvals referred to in thisSection 3.2(f) should not be obtained without the imposition of any material condition or restriction described inSection 6.2(e).
(g)Governmental Filings. The CompanyIIBK and each of its Subsidiaries has filed all reports, schedules, registration statements and other documents that it has been required to file since January 1,June 30, 2015 with the Federal Reserve, the FDIC and WDFIIDF or any other applicable Governmental Entity. As of their respective dates, each of such filings complied in all material respects with all laws or regulations under which it was filed (or was amended so as to be in compliance promptly following discovery of such noncompliance). (h)Financial Statements. The CompanyIIBK has previously made available to Purchaser copies of (i) the consolidated statements of financial condition of the CompanyIIBK and its Subsidiaries as of December 31, 2017 and 2016 and related consolidated statements of income, comprehensive income, changes in shareholders’stockholders’ equity and cash flows for each of the years in thetwo-year period ended December 31, 2017, together with the notes thereto, accompanied by the audit report of the Company’sIIBK’s independent registered public accounting firm. Suchfirm and (ii) the released unaudited interim consolidated financial results of IIBK as of and for the three and six months ended June 30, 2018 and related consolidated statements of income, for the three and six months ended June 30, 2018. The audited consolidated financial statements were prepared from the books and records of CompanyIIBK and its Subsidiaries, fairly present the consolidated financial position of CompanyIIBK and its Subsidiaries in each case at and as of the dates indicated and the consolidated results of operations and cash flows of CompanyIIBK and its Subsidiaries for the periods indicated, and, except as otherwise set forth in the notes thereto, were prepared in accordance with GAAP consistently applied throughout the periods covered thereby. The books and records of the CompanyIIBK and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other legal and accounting requirements and reflect only actual transactions. (i)Undisclosed Liabilities. Neither the CompanyIIBK nor any of its Subsidiaries has incurred any debt, liability or obligation of any nature whatsoever (whether accrued, contingent, absolute or otherwise and whether due or to become due) other than liabilities reflected on or reserved against in the consolidated statement of financial condition of the CompanyIIBK as of December 31, 2017,June 30, 2018, except for (i) liabilities incurred since December 31, 2017June 30, 2018 in the ordinary course of business consistent with past practice that, either alone or when combined with all similar liabilities, have not had, and would not reasonably be expected to have, a Material Adverse Effect on the CompanyIIBK and (ii) liabilities incurred for legal, accounting, financial advising fees andout-of-pocket or other expenses or fees in connection with the transactions contemplated by this Agreement. (j)Absence of Certain Changes or Events. (i) Except as set forth in the Company’sIIBK’s Disclosure Letter, since December 31, 2017, the CompanyJune 30, 2018, IIBK and its Subsidiaries have conducted their respective businesses only in the ordinary and usual course of such businesses consistent with their past practices and there has not been any event or occurrence that has had, or is reasonably expected to have, a Material Adverse Effect on the Company.IIBK. (ii) Except as set forth in the Company’sIIBK’s Disclosure Letter, since December 31, 2017,June 30, 2018, none of the CompanyIIBK or any of its Subsidiaries have taken any action that would be prohibited by clauses (b)(i), (c), (d), (e), (h), (j), (k), (n), (o) or (p) ofSection 4.1 if taken after the date hereof. (k)Litigation.There are no material suits, actions or legal, administrative or arbitration proceedings pending or, to the Knowledge of the Company,IIBK, threatened against or affecting the CompanyIIBK or any of its Subsidiaries or any property or asset of the CompanyIIBK or any of its Subsidiaries that (i) are seeking damages or declaratory relief against the CompanyIIBK or any of its Subsidiaries or (ii) challenge the validity or propriety of the transactions contemplated by this Agreement. There are no judgments, decrees, injunctions, orders or rulings of any Governmental Entity or arbitrator outstanding against the CompanyIIBK or any of its Subsidiaries or the assets of the CompanyIIBK or any of its Subsidiaries (or that, upon consummation of the Merger, would apply to Purchaser or any of its Subsidiaries). Since January 1,June 30, 2015, (i) there have been no subpoenas, written demands, or document requests received by the Companyand in direct regard to IIBK or any of its Subsidiaries from any Governmental Entity and (ii) no Governmental Entity has requested that the CompanyIIBK or any of its Subsidiaries enter into a settlement, negotiation or tolling agreement with respect to any matter related to any such subpoena, written demand, or document request. (l)Absence of Regulatory Actions. Since January 1,June 30, 2015, neither the CompanyIIBK nor any of its Subsidiaries has been a party to any cease and desist order, written agreement or memorandum of understanding with, or any commitment letter or similar undertaking to, or has been subject to any action, proceeding, order or directive by any Governmental Entity, or has adopted any board resolutions relating to such matters as are material to the business of the CompanyIIBK or its Subsidiaries at the request of any Governmental Entity, or has been advised by any Governmental Entity that it is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such action, proceeding, order, directive, written agreement, memorandum of understanding, commitment letter, board resolutions or similar undertaking. To the Knowledge of the Company,IIBK, there are no material unresolved violations, criticisms or exceptions by any Governmental Entity with respect to any report or statement relating to any examinations of the CompanyIIBK or its Subsidiaries. (m)Compliance with Laws. To the Knowledge of the Company, the CompanyIIBK, IIBK and each of its Subsidiaries havehas complied in all material respects with and areis not in material default or violation under any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity relating to the CompanyIIBK or any of its Subsidiaries, including without limitation all laws related to data protection or privacy, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act and Regulation E, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Interagency Policy Statement on Retail Sales of Nondeposit Investment Products, the SAFE Mortgage Licensing Act of 2008, Regulation O, the Real Estate Settlement Procedures Act and Regulation X, and any other law relating to bank secrecy, discriminatory lending, financing or leasing practices, money laundering prevention, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act, and all agency requirements relating to the origination, sale and servicing of mortgage and consumer loans. The CompanyIIBK and each of its Subsidiaries has all material permits, licenses, certificates of authority, orders and approvals of, and has made all filings, applications and registrations with, all Governmental Entities that are required in order to permit it to carry on its business as it is presently conducted. All such permits, licenses, certificates of authority, orders and approvals are in full force and effect, and no suspension or cancellation of any of them is, to the Knowledge of the Company,IIBK, threatened. Neither the CompanyIIBK nor any of its Subsidiaries has been given notice or been charged with any violation of, any law, ordinance, regulation, order, writ, rule, decree or condition to approval of any Governmental Entity that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Company.IIBK. (n)Taxes. All federal, state, local and foreign tax returns required to be filed by or on behalf of the CompanyIIBK or any of its Subsidiaries have been timely filed or requests for extensions have been timely filed and any such extension shall have been granted and not have expired, and all such filed returns are complete and accurate in all material respects. All Taxes shown on such returns, all Taxes required to be shown on returns for which extensions have been granted and all other Taxes required to be paid by the CompanyIIBK or any of its Subsidiaries have been paid in full or adequate provision has been made for any such Taxes on the Company’sIIBK’s statement of financial condition (in accordance with GAAP). To the Knowledge of the Company,IIBK, there is no audit examination, deficiency assessment, tax investigation or refund litigation with respect to any Taxes of the CompanyIIBK or any of its Subsidiaries, and no claim has been made in writing by any authority in a jurisdiction where the CompanyIIBK or any of its Subsidiaries do not file tax returns that the CompanyIIBK or any such Subsidiary is subject to taxation in that jurisdiction. All Taxes, interest, additions and penalties due with respect to completed and settled examinations or concluded litigation relating to the CompanyIIBK or any of its Subsidiaries have been paid in full or adequate provision has been made for any such Taxes on the Company’sIIBK’s statement of financial condition (in accordance with GAAP). The CompanyIIBK and its Subsidiaries have not executed an extension or waiver of any statute of limitations on the assessment or collection of any tax due that is currently in effect. The CompanyIIBK and each of its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party, and the CompanyIIBK and each of its Subsidiaries has timely complied with all applicable information reporting requirements under Part III, Subchapter A of Chapter 61 of the IRC and similar applicable state and local information reporting requirements. Neither the CompanyIIBK nor any of its Subsidiaries has made any payments and is not a party to any agreement, and does not maintain any plan, program or arrangement, which could require it to make any payments that would not be fully deductible by reason of Section 162(m) of the IRC. (o)Agreements. (i) The CompanyIIBK has previously delivered to Purchaser, and the Company’sIIBK’s Disclosure Letter lists, any material contract, arrangement, commitment or understanding (whether written or oral) to which the CompanyIIBK or any of its Subsidiaries is a party or is bound: (A) (1) with any director, officer or employee of the CompanyIIBK or any of its Subsidiaries the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving the CompanyIIBK or any of its Subsidiaries of the nature contemplated by this Agreement; (2) with respect to the employment of any directors, officers, employees or consultants; or (3) any of the benefits of which will be increased, or the vesting or payment of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement (including any stock option plan, phantom stock or stock appreciation rights plan, restricted stock plan or stock purchase plan); (B) that (1) contains anon-compete or client, customer or employeenon-solicit requirement or any other provision that restricts the conduct of, or the manner of conducting, any line of business of the CompanyIIBK or any of its Subsidiaries (or, following the consummation of the transactions contemplated hereby, Purchaser, Purchaser Bank or any of itstheir Subsidiaries), (2) obligates the CompanyIIBK or any of its Affiliates (or, following the consummation of the transactions contemplated hereby, Purchaser, Purchaser Bank or any of itstheir Subsidiaries) to conduct business with any third party on an exclusive or preferential basis, or (3) requires referrals of business or requires the CompanyIIBK or any of its Subsidiaries to make available investment opportunities to any person on a priority or exclusive basis; (C) pursuant to which the CompanyIIBK or any of its Subsidiaries may become obligated to invest in or contribute capital to any entity; (D) that relates to borrowings of money (or guarantees thereof) by the CompanyIIBK or any of its Subsidiaries in excess of $100,000, other than FHLB borrowings and repurchase agreements with customers entered into in the ordinary course of business; (E) that grants any right of first refusal, right of first offer or similar right with respect to any material assets, rights or properties of the CompanyIIBK or any of its Subsidiaries; (F) that limits the payment of dividends by the CompanyIIBK or any of its Subsidiaries; (G) that relates to the involvement of the CompanyIIBK or any Subsidiary in a joint venture, partnership, limited liability company agreement or other similar agreement or arrangement, or to the formation, creation or operation, management or control of any partnership or joint venture with any third parties; (H) that relates to an acquisition, divestiture, merger or similar transaction and that contains representations, covenants, indemnities or other obligations (including indemnification,“earn-out” or other contingent obligations) that are still in effect; (I) that is a lease or license with respect to any property, real or personal, whether as landlord, tenant, licensor or licensee, involving a liability or obligation as obligor in excess of $100,000 per annum; (J) that is a consulting agreement or data processing, software programming or licensing contract involving the payment of more than $100,000 per annum; or (K) that is not of the type described in clauses (A) through (J) above and that involved payments by, or to, the CompanyIIBK or any of its Subsidiaries in the fiscal year ended December 31, 2017, or that could reasonably be expected to involve such payments during the fiscal year ending December 31, 2018, of more than $100,000 (excluding Loans) or the termination of which would require payment by the CompanyIIBK or any of its Subsidiaries in excess of $100,000. Each contract, arrangement, commitment or understanding of the type described in this Section 3.2(o), whether or not set forth in the Company’sIIBK’s Disclosure Letter, is referred to herein as a “Company IIBKContract,” and neither the CompanyIIBK nor any of its Subsidiaries knows of, or has received notice of, any material violation of the above by any of the other parties thereto. (ii) Each CompanyIIBK Contract is valid and binding on the CompanyIIBK or one of its Subsidiaries, as applicable, and in full force and effect, except as, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. The CompanyIIBK. IIBK and each of its Subsidiaries has in all material respects performed all obligations required to be performed by it under each CompanyIIBK Contract. To the Company’sIIBK’s Knowledge, each third-party counterparty to each CompanyIIBK Contract has in all material respects performed all obligations required to be performed by it under such CompanyIIBK Contract, and no event or condition exists that constitutes or, after notice or lapse of time or both, will constitute, a material default on the part of the CompanyIIBK or any of its Subsidiaries under any such CompanyIIBK Contract. (iii) Neither the CompanyIIBK nor any of its Subsidiaries is in default under (and no event has occurred that with due notice or lapse of time or both, would constitute a default under) or is in material violation of any provision of any note, bond, indenture, mortgage, deed of trust, loan agreement, lease or other agreement to which it is a party or by which it is bound or to which any of its respective properties or assets is subject and, to the Knowledge of the Company,IIBK, no other party to any such agreement (excluding any Loan or extension of credit made by the CompanyIIBK or any of its Subsidiaries) is in default in any respect thereunder. (p)Intellectual Property; CompanyIIBK IT Systems. (i) The CompanyIIBK and each of its Subsidiaries owns or possesses valid and binding licenses and other rights to use (in the manner and the geographic areas in which they are currently used) without payment all patents, copyrights, trade secrets, trade names, service marks and trademarks material to its business. The Company’sIIBK’s Disclosure Letter sets forth a complete and correct list of all material trademarks, trade names, service marks and copyrights owned by or licensed to the CompanyIIBK or any of its Subsidiaries for use in its business, and all licenses and other agreements relating thereto and all agreements relating to third party intellectual property that the CompanyIIBK or any of its Subsidiaries is licensed or authorized to use in its business, including without limitation any software licenses but excluding anyso-called “shrink-wrap” license agreements and other similar computer software licensed in the ordinary course of business and/or otherwise resident on desktop computers (collectively, the“Company IIBKIntellectual Property”). With respect to each item of CompanyIIBK Intellectual Property owned by the CompanyIIBK or any of its Subsidiaries, the owner possesses all right, title and interest in and to the item, free and clear of any Lien. With respect to each item of CompanyIIBK Intellectual Property that the CompanyIIBK or any of its Subsidiaries is licensed or authorized to use, the license, sublicense or agreement covering such item is legal, valid, binding, enforceable and in full force and effect as to the CompanyIIBK and theits Subsidiaries. Neither the CompanyIIBK nor any of its Subsidiaries has received any charge, complaint, claim, demand or notice alleging any interference, infringement, misappropriation or violation with or of any intellectual property rights of a third party (including any claims that the CompanyIIBK or any of its Subsidiaries must license or refrain from using any intellectual property rights of a third party). To the Knowledge of the Company,IIBK, neither the CompanyIIBK nor any of its Subsidiaries has interfered with, infringed upon, misappropriated or otherwise come into conflict with any intellectual property rights of third parties and no third party has interfered with, infringed upon, misappropriated or otherwise come into conflict with any intellectual property rights of the CompanyIIBK or any of its Subsidiaries. (ii) To the Company’sIIBK’s Knowledge, all information technology and computer systems (including software, information technology and telecommunication hardware and other equipment) relating to the transmission, storage, maintenance, organization, presentation, generation, processing or analysis of data and information, whether or not in electronic format, used in or necessary to the conduct of the business of the CompanyIIBK or INBany of its Subsidiaries (collectively, the “Company “IIBKIT Systems”) have been properly maintained by technically competent personnel, in accordance with standards set by the manufacturers or otherwise in accordance with standards in the industry, to ensure proper operation, monitoring and use. The CompanyIIBK IT Systems are in good working condition to effectively perform all information technology operations necessary to conduct the Company’sIIBK’s consolidated business as currently conducted. Neither the CompanyIIBK nor INBany of its Subsidiaries has experienced within the past two years any material disruption to, or material interruption in, the conduct of its business attributable to a defect, bug, breakdown or other failure or deficiency of the CompanyIIBK IT Systems. No Person has gained unauthorized access to any of the CompanyIIBK IT Systems that has had, or is reasonably expected to have, a Material Adverse Effect on the Company. The CompanyIIBK. IIBK and INBits Subsidiaries have taken reasonable measures to provide for theback-up and recovery of the data and information necessary to the conduct of their businesses without material disruption to, or material interruption in, the conduct of their respective businesses. The CompanyIIBK and its Subsidiaries are in compliance in all material respects with all data protection and privacy laws and regulations as well as their own policies relating to data protection and the privacy and security of personal data and thenon-public personal information of their respective customers and employees, except for immaterial failures to comply or immaterial violations. (q)Labor Matters. (i) The Company�� IIBK and its Subsidiaries are in material compliance with all applicable laws respecting employment, retention of independent contractors, employment practices, terms and conditions of employment, and wages and hours. Neither the CompanyIIBK nor any of its Subsidiaries is or has ever been a party to, or is or has ever been bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization with respect to its employees, nor is the CompanyIIBK or any of its Subsidiaries the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it or any such Subsidiary to bargain with any labor organization as to wages and conditions of employment nor, to the Knowledge of the Company,IIBK, has any such proceeding been threatened, nor is there any strike, other labor dispute or organizational effort involving the CompanyIIBK or any of its Subsidiaries pending or, to the Knowledge of the Company,IIBK, threatened. (ii) The Company’sIIBK’s Disclosure Letter identifies (A) all present employees (including any leased or temporary employees) of the CompanyIIBK and its Subsidiaries and any consultants or independent contractors providing services to the CompanyIIBK or any of its Subsidiaries; (B) each employee’s, consultant’s or independent contractor’s date of hire and current rate of compensation; and (C) each employee’s accrued vacation, sick leave or personal leave if applicable. The Company’sIIBK’s Disclosure Letter also names any employee who is absent from work due to a leave of absence (including, (including, but not limited to, in accordance with the requirements of the Family and Medical Leave Act or the Uniformed Services Employment and Reemployment Rights Act) or a work-related injury, or who is receiving workers’ compensation or disability compensation. There are no unpaid wages, bonuses or commissions owed to any employee (other than those not yet due). (r)Employee Benefit Plans. (i) The Company’sIIBK’s Disclosure Letter lists all CompanyIIBK Benefit Plans. For purposes of this Agreement,“Company IIBKBenefit Plans” mean all employee benefit plans (as defined in Section 3(3) of ERISA), whether or not subject to ERISA, whether funded or unfunded, and all pension, benefit, retirement, bonus, stock option, stock purchase, restricted stock, stock-based, performance award, phantom equity, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance, retention, employment, consulting, termination, change in control, salary continuation, accrued leave, sick leave, vacation, paid time off, health, medical, disability, life, accidental death and dismemberment, insurance, welfare, fringe benefit and other similar plans, programs, policies, practices or arrangements or other contracts or agreements (and any amendments thereto) with respect to which the CompanyIIBK or any Subsidiary or any trade or business of the CompanyIIBK or any of its Subsidiaries, whether or not incorporated, all of which together with the CompanyIIBK would be deemed a “single employer” within the meaning of Section 4001 of ERISA (a“Company IIBKERISA Affiliate”), is a party or has any current or future obligation or that are sponsored, maintained, contributed to or required to be contributed to by the CompanyIIBK or any of its Subsidiaries or any CompanyIIBK ERISA Affiliate for the benefit of any current or former employee, officer, director, consultant or independent contractor (or any spouse or dependent of such individual) of the CompanyIIBK or any of its Subsidiaries or any CompanyIIBK ERISA Affiliate. (ii) The CompanyIIBK has heretofore made available to Purchaser and Purchaser Bank true, correct and complete copies of the following documents with respect to each of the CompanyIIBK Benefit Plans, to the extent applicable, (i) all plans and trust agreements, (ii) all summary plan descriptions, amendments, modifications or material supplements to any CompanyIIBK Benefit Plan, (iii) where any CompanyIIBK Benefit Plan has not been reduced to writing, a written summary of all the material plan terms, (iv) the annual report (Form 5500), if any, filed with the IRS for the last three (3) plan years and summary annual reports, with schedules and financial statements attached, (v) the most recently received IRS determination letter, if any, relating to any CompanyIIBK Benefit Plan, (vi) the most recently prepared actuarial report for each CompanyIIBK Benefit Plan (if applicable) for each of the last three (3) years and (vii) copies of material notices, letters or other correspondence with the IRS, U.S. Department of Labor (the“DOL”) or Pension Benefit Guarantee Corporation (the“PBGC”). (iii) Each CompanyIIBK Benefit Plan has been established, operated and administered in all material respects in accordance with its terms and the requirements of all applicable laws, including ERISA and the IRC. Neither the CompanyIIBK nor any of its Subsidiaries has taken any action to take corrective action or made a filing under any voluntary correction program of the IRS, the DOL or any other Governmental Entity with respect to any CompanyIIBK Benefit Plan, and neither the CompanyIIBK nor any of its Subsidiaries has any Knowledge of any plan defect that would qualify for correction under any such program. (iv) The Company’sIIBK’s Disclosure Letter identifies each CompanyIIBK Benefit Plan that is intended to be qualified under Section 401(a) of the IRC (the“Company IIBKQualified Plans”). The IRS has issued a favorable determination letter with respect to each CompanyIIBK Qualified Plan and the related trust, which letter has not been revoked (nor has revocation been threatened), and, to the Knowledge of the Company,IIBK, there are no existing circumstances and no events have occurred that could adversely affect the qualified status of any CompanyIIBK Qualified Plan or the exempt status of the related trust or increase the costs relating thereto. No trust funding any CompanyIIBK Benefit Plan is intended to meet the requirements of Section 501(c)(9) of the IRC. (v) Each CompanyIIBK Benefit Plan that is subject to Section 409A of the IRC has been administered and documented in compliance with the requirements of Section 409A of the IRC, except where anynon-compliance has not and cannot reasonably be expected to result in material liability to the CompanyIIBK or any of its Subsidiaries or any employee of the CompanyIIBK or any of its Subsidiaries. (vi) With respect to each CompanyIIBK Benefit Plan that is subject to Title IV or Section 302 of ERISA or Sections 412, 430 or 4971 of the IRC: (i) no such plan is in“at-risk” status for purposes of Section 430 of the IRC, (ii) the present value of accrued benefits under such CompanyIIBK Benefit Plan, based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such CompanyIIBK Benefit Plan’s actuary with respect to such CompanyIIBK Benefit Plan, did not, as of its latest valuation date, exceed the then current fair market value of the assets of such CompanyIIBK Benefit Plan allocable to such accrued benefits, (iii) no reportable event within the meaning of Section 4043(c) of ERISA for which the30-day notice requirement has not been waived has occurred, (iv) all premiums to the PBGC have been timely paid in full, (v) no liability (other than for premiums to the PBGC) under Title IV of ERISA has been or is expected to be incurred by the Company IIBK or any of its Subsidiaries, and (vi) the PBGC has not instituted proceedings to terminate any such CompanyIIBK Benefit Plan. (vii) None of the Company,IIBK, its Subsidiaries nor any CompanyIIBK ERISA Affiliate has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a“Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA (a“Multiple Employer Plan”), and none of the CompanyIIBK and its Subsidiaries nor any CompanyIIBK ERISA Affiliate has incurred any liability to a Multiemployer Plan or Multiple Employer Plan as a result of a complete or partial withdrawal (as those terms are defined in Part 1 of Subtitle E of Title IV of ERISA) from a Multiemployer Plan or Multiple Employer Plan. (viii) Neither the CompanyIIBK nor any of its Subsidiaries sponsors has sponsored or has any obligation with respect to any employee benefit plan that provides for any post-employment or post-retirement health or medical or life insurance benefits for retired, former or current employees or beneficiaries or dependents thereof, except as required by Section 4980B of the IRC. (ix) All contributions required to be made to any CompanyIIBK Benefit Plan by applicable law or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any CompanyIIBK Benefit Plan, for any period through the date hereof, have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the books and records of the Company.IIBK. (x) There are no pending or threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations that have been asserted or instituted, and, to the Company’sIIBK’s Knowledge, no set of circumstances exists that may reasonably be expected to give rise to a claim or lawsuit, against the CompanyIIBK Benefit Plans, any fiduciaries thereof with respect to their duties to the CompanyIIBK Benefit Plans or the assets of any of the trusts under any of the CompanyIIBK Benefit Plans, that could reasonably be expected to result in any material liability of the CompanyIIBK or any of its Subsidiaries to the PBGC, the IRS, the DOL, any Multiemployer Plan, a Multiple Employer Plan, any participant in any CompanyIIBK Benefit Plan, or any other party. (xi) To the Knowledge of the Company,IIBK, none of the CompanyIIBK and its Subsidiaries nor any CompanyIIBK ERISA Affiliate nor any other person, including any fiduciary, has engaged in any “prohibited transaction” (as defined in Section 4975 of the IRC or Section 406 of ERISA) that could subject any of the CompanyIIBK Benefit Plans or their related trusts, the Company,IIBK, any of its Subsidiaries, any CompanyIIBK ERISA Affiliate or any personPerson that the CompanyIIBK or any of its Subsidiaries has an obligation to indemnify, to any material tax or penalty imposed under Section 4975 of the IRC or Section 502 of ERISA. (xii) NeitherExcept as set forth in IIBK’s Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event) result in, cause the vesting, exercisability or delivery of, or increase in the amount or value of, any payment, compensation (including stock or stock-based), right or other benefit to any employee, officer, director, independent contractor, consultant or other service provider of the CompanyIIBK or any of its Subsidiaries, or result in any limitation on the right of the CompanyIIBK or any of its Subsidiaries to amend, merge, terminate or receive a reversion of assets from any CompanyIIBK Benefit Plan or related trust. Without limiting the generality of the foregoing, no amount paid or payable (whether in cash, in property, or in the form of benefits) by the CompanyIIBK or any of its Subsidiaries in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) will be an “excess parachute payment” within the meaning of Section 280G of the IRC. (xiii) Neither the CompanyIIBK nor any of its Subsidiaries maintains or contributes to a rabbi trust or similar funding vehicle, and the transactions contemplated by this Agreement will not cause or require the CompanyIIBK or any of its Affiliates to establish or make any contribution to a rabbi trust or similar funding vehicle. (xiii)(xiv) No CompanyIIBK Benefit Plan provides for thegross-up or reimbursement of Taxes under Section 409A or 4999 of the IRC, or otherwise. The Company’sIIBK’s Disclosure Letter includes true, correct and complete copies of Section 280G calculations (whether or not final) with respect to any disqualified individual in connection with the transactions contemplated hereby.
(xiv)(xv) There are no pending or, to the Company’sIIBK’s Knowledge, threatened material labor grievances or material unfair labor practice claims or charges against the CompanyIIBK or any of its Subsidiaries, or any strikes or other material labor disputes against the CompanyIIBK or any of its Subsidiaries. Neither the CompanyIIBK nor any of its Subsidiaries are party to or bound by any collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization or employee association applicable to employees of the CompanyIIBK or any of its Subsidiaries and, to the Knowledge of the Company,IIBK, there are no organizing efforts by any union or other group seeking to represent any employees of the CompanyIIBK or any of its Subsidiaries and no employees of the CompanyIIBK or any of its Subsidiaries are represented by any labor organization.
(s)Properties. (i) A list of all real property owned or leased by the CompanyIIBK or a Subsidiary of the CompanyIIBK is set forth in the Company’sIIBK’s Disclosure Letter. The CompanyIIBK and each of its Subsidiaries has good and marketable title to all real property owned by it (including any property acquired in a judicial foreclosure proceeding or by way of a deed in lieu of foreclosure or similar transfer), in each case free and clear of any Liens except (i) liens for Taxes not yet due and payable and (ii) such easements, restrictions and encumbrances, if any, as are not material in character, amount or extent, and do not materially detract from the value, or materially interfere with the present use of the properties subject thereto or affected thereby. Each lease pursuant to which the CompanyIIBK or any of its Subsidiaries as lessee, leases real or personal property is valid and in full force and effect as to the CompanyIIBK and the Subsidiaries and neither the CompanyIIBK nor any of its Subsidiaries, nor, to the Company’sIIBK’s Knowledge, any other party to any such lease, is in default or in violation of any material provisions of any such lease. The CompanyIIBK has previously delivered to Purchaser and Purchaser Bank a complete and correct copy of each such lease. All real property owned or leased by the CompanyIIBK or any of its Subsidiaries are in all material respects in a good state of maintenance and repair (normal wear and tear excepted), conform in all material respects with all applicable ordinances, regulations and zoning laws and are considered by the CompanyIIBK to be adequate for the current business of the CompanyIIBK and its Subsidiaries. To the Knowledge of the Company,IIBK, none of the buildings, structures or other improvements located on any real property owned or leased by the CompanyIIBK or any of its Subsidiaries encroaches upon or over any adjoining parcel or real estate or any easement orright-of-way. (ii) The CompanyIIBK and each of its Subsidiaries has good and marketable title to all tangible personal property owned by it, free and clear of all Liens except such Liens, if any, that are not material in character, amount or extent, and that do not materially detract from the value, or materially interfere with the present use of the properties subject thereto or affected thereby. With respect to personal property used in the business of the CompanyIIBK and its Subsidiaries that is leased rather than owned, neither the CompanyIIBK nor any of its Subsidiaries is in default under the terms of any such lease. (t)Fairness Opinion. The board of directors of CompanyIIBK has received the opinion (which, if initially rendered verbally, has been or will be confirmed by a written opinion, dated the same date) of D.A. DavidsonSandler O’Neill & Co. Partners, L.P. (“D.A. Davidson”Sandler O’Neill”) to the effect that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set forth therein, the Exchange Ratio in the Merger is fair, from a financial point of view, to the holders of CompanyIIBK Common Stock. (u)Fees. Other than for financial advisory services performed for the CompanyIIBK by D.A. DavidsonSandler O’Neill pursuant to an agreement executed March 12,September 6, 2018, a true and complete copy of which is included in the Company’sIIBK’s Disclosure Letter, neither the CompanyIIBK nor any of its Subsidiaries, nor any of their respective officers, directors, employees or agents, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the CompanyIIBK or any of its Subsidiaries in connection with this Agreement or the transactions contemplated hereby. (v)Environmental Matters. (i) Each of the Company’sIIBK’s and its Subsidiaries’ properties, the Participation Facilities, and, to the Knowledge of the Company,IIBK, the Loan Properties are, and have been during the period of the Company’sIIBK’s or its Subsidiaries’ ownership or operation thereof, in material compliance with all Environmental Laws. (ii) There is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or, to the Knowledge of the Company,IIBK, threatened, before any court or Governmental Entity against the CompanyIIBK or any of its Subsidiaries or any Participation Facility (A) for alleged noncompliance (including by any predecessor) with, or liability under, any Environmental Law or (B) relating to the presence of or release into the environment of any Hazardous Material, whether or not occurring at or on a site owned, leased or operated by the CompanyIIBK or any of its Subsidiaries or any Participation Facility. (iii) There is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or threatened before any court or, to the Knowledge of the Company,IIBK, Governmental Entity relating to or against any Loan Property (or the CompanyIIBK or any of its Subsidiaries in respect of such Loan Property) (A) relating to alleged noncompliance (including by any predecessor) with, or liability under, any Environmental Law or (B) relating to the presence of or release into the environment of any Hazardous Material, whether or not occurring at a Loan Property. (iv) Neither the CompanyIIBK nor any of its Subsidiaries has received in writing any notice, demand letter, executive or administrative order, directive or request for information from any Governmental Entity or any third party indicating that it may be in violation of, or liable under, any Environmental Law. (v) To the Knowledge of the Company,IIBK, there are no underground storage tanks at any properties owned or operated by the CompanyIIBK or any of its Subsidiaries or any Participation Facility. Neither the CompanyIIBK nor any of its Subsidiaries nor, to the Knowledge of the Company,IIBK, any other person or entity, has closed or removed any underground storage tanks from any properties owned or operated by the CompanyIIBK or any of its Subsidiaries or any Participation Facility. (vi) During the period of (A) the Company’sIIBK’s or its Subsidiary’s ownership or operation of any of their respective current properties or (B) the Company’sIIBK’s or its Subsidiary’s participation in the management of any Participation Facility, to the Knowledge of the Company,IIBK, there has been no release of Hazardous Materials in, on, under or affecting such properties except for releases of Hazardous Materials in quantities below the level at which they were regulated under any Environmental Law in effect at the time of such release. To the Knowledge of the Company,IIBK, prior to the period of (A) the Company’sIIBK’s or its Subsidiary’s ownership or operation of any of their respective current properties or (B) the Company’sIIBK’s or its Subsidiary’s participation in the management of any Participation Facility, there was no contamination by or release of Hazardous Material in, on, under or affecting such properties except for releases of Hazardous Materials in quantities below the level at which they were regulated under any Environmental Law in effect at the time of such release. (w)Loan Matters. (i) All Loans held by the CompanyIIBK or any of its Subsidiaries were made in all material respects for good, valuable and adequate consideration in the ordinary course of the business, in accordance in all material respects with sound banking practices and, to the Knowledge of the Company,IIBK, the Loans are not subject to any defenses, setoffs or counterclaims, including without limitation any such as are afforded by usury or truth in lending laws, except as may be provided by bankruptcy, insolvency or similar laws or by general principles of equity. The notes or other evidences of indebtedness evidencing such Loans and all forms of pledges, mortgages and other collateral documents and security agreements are, in all material respects, enforceable and valid. (ii) Neither the terms of any Loan, any of the documentation for any Loan, the manner in which any Loans have been administered and serviced, nor the Company’sIIBK’s practices of approving or rejecting Loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. (iii) The allowance for loan losses reflected in the Company’sIIBK’s audited statement of financial condition at December 31, 2017 was, and the allowance for loan losses shown on the statements of financial condition in the CompanyIIBK Reports for periods ending after such date, in the opinion of management, were, or will be, adequate, as of the dates thereof, under GAAP. (iv) None of the agreements pursuant to which the CompanyIIBK or any of its Subsidiaries has sold Loans or pools of Loans, or participations in Loans or pools of Loans, contains any obligation to repurchase such Loans or interests therein solely on account of a payment default by the obligor on any such Loan. (v) (A) The Company’sIIBK’s Disclosure Letter sets forth a list of all Loans as of the date hereof by the Company or INBIIBK to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve (12 C.F.R. Part 215)), as implemented by the FDIC) of the CompanyIIBK or any of its Subsidiaries, (B) there are no Loans to any employee, officer, director or Affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate that was or is not in compliance with Regulation O and (C) all such Loans are and were originated in compliance in all material respects with all applicable laws. (vi) The Company’sIIBK’s Disclosure Letter sets forth a listing, as of MarchAugust 31, 2018, by account, of: (A) each borrower, customer or other party that has notified INBIIBK during the past twelve (12) months of, or has asserted against the Company or INB,IIBK, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of the Company or INB,IIBK, each borrower, customer or other party that has given the Company or INBIIBK any oral notification of, or orally asserted to or against Company or INB,IIBK, any such claim; and (B) all Loans (1) that are contractually past due ninety (90) days or more in the payment of principal and/or interest, (2) that are onnon-accrual status, (3) that are classified as “Pass 5,” “Special Mention,” “Substandard,” “Doubtful,” “Loss” or words of similar import, (4) that are considered troubled debt restructurings or where the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the origination of the Loan due to concerns regarding the borrower’s ability to pay in accordance with the Loan’s original terms and (5) where a specific reserve allocation exists in connection therewith; and (C) all other assets classified by the Company or INBIIBK as real estate acquired through foreclosure or in lieu of foreclosure, includingin-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. (x)Anti-takeover Provisions Inapplicable. The CompanyIIBK and its Subsidiaries have taken all actions required to exempt Purchaser, Purchaser Bank, the Agreement the Plan of Bank Merger, the Merger and the Bank Merger from any provisions of an anti-takeover nature contained in their organizational documents, and the provisions of any federal or state “anti-takeover,” “fair price,” “moratorium,” “control share acquisition” or similar laws or regulations. (y)Material Interests of Certain Persons. Except for deposit and loan relationships entered into in the ordinary course of business, no current or former officer or director of the Company,IIBK, or any family member or Affiliate of any such Person, has any material interest, directly or indirectly, in any contract or property (real or personal), tangible or intangible, used in or pertaining to the business of the CompanyIIBK or any of its Subsidiaries. (z)Insurance. In the opinion of management, the CompanyIIBK and its Subsidiaries are presently insured for amounts deemed reasonable by management against such risks as companies engaged in a similar business, including engaging in the transactions contemplated by this Agreement, would, in accordance with good business practice, customarily be insured. The Company’sIIBK’s Disclosure Letter contains a list of all policies of insurance carried and owned by the CompanyIIBK or any of the Company’sIIBK’s Subsidiaries showing the name of the insurance company and agent, the nature of the coverage, the policy limit, the annual premiums and the expiration date. All of the insurance policies and bonds maintained by the CompanyIIBK and its Subsidiaries are in full force and effect, the CompanyIIBK and its Subsidiaries are not in default thereunder, all premiums and other payments due under any such policy have been paid. There are presently no material claims pending under such policies of insurance and no notices have been given by the CompanyIIBK or any of its Subsidiaries under such policies (other than with respect to health or disability insurance). (aa)Investment Securities; Derivatives. (i) Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by the CompanyIIBK or any of its Subsidiaries, including but not limited to FHLB stock, is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither the CompanyIIBK nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded orover-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as “structured notes,” “high risk mortgage derivatives,” “capped floating rate notes” or “capped floating rate mortgage derivatives” or (B) are likely to have changes in value as a result of interest or exchange rate changes that materially exceed normal changes in value attributable to interest or exchange rate changes. (bb)Indemnification. Except as provided in the Articles of Incorporation or bylaws of the CompanyIIBK and the similar organizational documents of its Subsidiaries, and in employment agreements, change in control agreements and other agreements related to employment or service as a director, officer or employee, neither the CompanyIIBK nor any of its Subsidiaries is a party to any agreement that provides for the indemnification of any of its present or former directors, officers, employees or stockholders, or other persons who serve or served as a director, officer or employee of another corporation, partnership or other enterprise at the request of the CompanyIIBK and, to the Knowledge of the Company,IIBK, there are no claims for which any such Person would be entitled to indemnification under the Articles of Incorporation or bylaws of the CompanyIIBK or the similar organizational documents of any of its Subsidiaries, under any applicable law or regulation or under any such employment-related agreement. (cc)Corporate Documents and Records. The CompanyIIBK has previously provided a complete and correct copy of the Articles of Incorporation, bylaws and similar organizational documents of the CompanyIIBK and each of the Company’sIIBK’s Subsidiaries, as in effect as of the date of this Agreement. Neither the CompanyIIBK nor any of the Company’sIIBK’s Subsidiaries is in violation of its Articles of Incorporation, bylaws or similar organizational documents. The minute books of the CompanyIIBK and each of the Company’sIIBK’s Subsidiaries constitute a complete and correct record of all actions taken by their respective boards of directors (and each committee thereof) and their stockholders. (dd)CRA, Anti-Money Laundering, OFAC and Customer Information Security. INBIIBK has received a rating of “Satisfactory” or better in its most recent examination or interim review with respect to the CRA. The CompanyIIBK does not have Knowledge of any facts or circumstances that would cause INBIIBK or any other Subsidiary of the Company:IIBK: (i) to be deemed not to be in satisfactory compliance in any material respect with the CRA, and the regulations promulgated thereunder, or to be assigned a rating for CRA purposes by federal bank regulators of lower than “Satisfactory”; or (ii) to be deemed to be operating in violation in any material respect of the Bank Secrecy Act, the USA PATRIOT Act, any order issued with respect to anti-money laundering by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or any other applicable anti-money laundering statute, rule or regulation; or (iii) to be deemed not to be in satisfactory compliance in any material respect with the applicable privacy of customer information requirements contained in any federal and state privacy laws and regulations, including without limitation, in Title V of the Gramm-Leach-Bliley Act of 1999 and the regulations promulgated thereunder, as well as the provisions of the information security program adopted by INB.IIBK. To the Knowledge of the Company,IIBK, nonon-public customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause either the CompanyIIBK or any of its Subsidiaries to undertake any remedial action. The Board of Directors of INBIIBK (or, where appropriate, of any other Subsidiary of the Company)IIBK) has adopted, and INBIIBK (or such otherany Subsidiary of the Company)IIBK) has implemented, an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with Section 326 of the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and INBIIBK (or such otherany Subsidiary of the Company)IIBK) has complied in all material respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder. (ee)Internal Controls. The CompanyIIBK and its Subsidiaries have devised and maintain a system of internal control over financial reporting sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, and (iii) access to assets is permitted only in accordance with management’s general or specific authorization. There are no significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect the Company’sIIBK’s ability to record, process, summarize and report financial information. To the Knowledge of the Company,IIBK, there has occurred no fraud, whether or not material, that involves management or other employees who have a significant role in the Company’sIIBK’s internal controls over financial reporting. (ff)Tax Treatment of the Merger. The CompanyIIBK has no Knowledge of any fact or circumstance relating to it that would prevent the transactions contemplated by this Agreement from qualifying as a reorganization under Section 368(a) of the IRC. (gg)Related Party Transactions. The Company’sIIBK’s Disclosure Letter lists all instances in which the CompanyIIBK or any CompanyIIBK Subsidiary is a party to any transaction (including any loan or other credit accommodation) with any Affiliate of the CompanyIIBK or any CompanyIIBK Subsidiary where the amount exceeds $120,000. All such transactions involving indebtedness (a) were made in the ordinary course of business, (b) were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and (c) did not involve more than the normal risk of collectability or present other unfavorable features. No loan or credit accommodation to any Affiliate of the CompanyIIBK or any CompanyIIBK Subsidiary is presently in default or, during the three-year period prior to the date of this Agreement, has been in default or has been restructured, modified or extended. Neither the CompanyIIBK nor any CompanyIIBK Subsidiary has been notified that principal or interest with respect to any such loan or other credit accommodation will not be paid when due or that the loan grade classification accorded such loan or credit accommodation is inappropriate. (hh)Trust Accounts. The CompanyIIBK and each Subsidiary has properly administered all accounts for which it acts as a fiduciary in all material respects, including but not limited to accounts for which it serves as trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable laws and regulations. Neither the CompanyIIBK nor any other Subsidiary, nor has any of their respective directors, officers or employees, committed any breach of trust with respect to any such fiduciary account and the records for each such fiduciary account. (ii)No Other Representations or Warranties. (i) Except for the representations and warranties made by the CompanyIIBK in thisSection 3.2, neither the CompanyIIBK nor any other Person makes any express or implied representation or warranty with respect to the Company,IIBK, its Subsidiaries, or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and the CompanyIIBK hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither the CompanyIIBK nor any other Person makes or has made any representation or warranty to Purchaser or any of its Affiliates or representatives with respect to (A) any financial projection, forecast, estimate, budget or prospective information relating to the Company,IIBK, any of its Subsidiaries or their respective businesses, or (B) except for the representations and warranties made by the CompanyIIBK in thisSection 3.2, any oral or written information presented to Purchaser or any of its Affiliates or representatives in the course of their due diligence investigation of the Company,IIBK, the negotiation of this Agreement or in the course of the transactions contemplated hereby. (ii) The CompanyIIBK hereby acknowledges and agrees that neither Purchaser nor any other Person has made or is making any express or implied representation or warranty other than those contained inSection 3.3. 3.3Representations and Warranties of Purchaser.Purchaser and Purchaser Bank. Except (i) as disclosed in Purchaser’s and Purchaser Bank’s Disclosure Letter, and (ii) for information and documents commonly known as “confidential supervisory information” that is prohibited from disclosure (and as to which nothing in this Agreement shall require disclosure), the Purchaser represents and warrantsPurchaser Bank represent and warrant to the CompanyIIBK that: (a)Organization and Qualification. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Montana and is registered with the Federal Reserve as a bank holding company. Purchaser has all requisite corporate power and authority to own, lease and operate its properties and to conduct the business currently being conducted by it. Purchaser is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on Purchaser. Purchaser engages only in activities, and holds properties only of the types, permitted to financial holding companies by the Bank Holding Company Act of 1956, as amended, and the rules, regulations and interpretations promulgated thereunder. (b)Subsidiaries. (i) Purchaser owns, directly or indirectly, all of the issued and outstanding shares of capital stock or other equity interests of each of its Subsidiaries free and clear of any Liens. There are no contracts, commitments, agreements or understandings relating to Purchaser’s right to vote or dispose of any equity securities of its Subsidiaries. Purchaser’s ownership interest in each of its Subsidiaries is in compliance with all applicable laws, rules and regulations relating to equity investments by bank holding companies or Montana-chartered savings banks. (ii) Each of Purchaser’s Subsidiaries is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease and operate its properties and to conduct the business currently being conducted by it and is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on the Purchaser. (iii) The outstanding shares of capital stock of each Subsidiary have been validly authorized and are validly issued, fully paid and nonassessable. No shares of capital stock of any Subsidiary of Purchaser are or may be required to be issued by virtue of any options, warrants or other rights, no securities exist that are convertible into or exchangeable for shares of such capital stock or any other debt or equity security of any Subsidiary, and there are no contracts, commitments, agreements or understandings of any kind for the issuance of additional shares of capital stock or other debt or equity security of any Subsidiary or options, warrants or other rights with respect to such securities. (iv) First InterstatePurchaser Bank is a Montana-chartered commercial bank. No Subsidiary of Purchaser other than First InterstatePurchaser Bank is an “insured depository institution” as defined in the Federal Deposit Insurance Act, as amended, and the applicable regulations thereunder. First InterstatePurchaser Bank’s deposits are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by law. First InterstatePurchaser Bank is a member in good standing of the FHLB and owns the requisite amount of stock therein. (c)Capital Structure. (i) The authorized capital stock of Purchaser consists of 100,000,000 shares of Purchaser Common Stock, 100,000,000 shares of Class B common stock, no par value per share, and 100,000 shares of preferred stock, no par value per share. (ii) As of the date of this Agreement,October 9, 2018, (A) 34,074,99338,109,425 shares of Purchaser Common Stock are issued and outstanding, all of which are validly issued, fully paid and nonassessable and were issued in full compliance with all applicable laws and not in violation of any preemptive rights; (B) 22,629,00322,501,994 shares of Class B common stock of Purchaser are issued and outstanding, all of which are validly issued, fully paid and nonassessable and were issued in full compliance with all applicable laws and not in violation of any preemptive rights; (C) no shares of Purchaser preferred stock are issued and outstanding; and (D) 1,273,959345,332 shares of Purchaser Common Stock are reserved for issuance pursuant to outstanding grants or awards under Purchaser’s stock-based benefit plans. (iii) The shares of Purchaser Common Stock to be issued in exchange for shares of CompanyIIBK Common Stock upon consummation of the Merger in accordance with this Agreement have been duly authorized and when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable and subject to no preemptive rights. (iv) No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which stockholders of Purchaser may vote are issued or outstanding. (v) Except as set forth in thisSection 3.3(c), as of the date of this Agreement, (A) no shares of capital stock or other voting securities of Purchaser are issued, reserved for issuance or outstanding, and (B) other than shares of Class B common stock, options to purchase shares of Purchaser Common Stock, neither the CompanyPurchaser nor any of its Subsidiaries has or is bound by any outstanding subscriptions, options, warrants, calls, rights, convertible securities, commitments or agreements of any character obligating Purchaser or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any additional shares of capital stock of Purchaser (including any rights plan or agreement) or obligating Purchaser or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, right, convertible security, commitment or agreement. Neither Purchaser nor any of its Subsidiaries has or is bound by any rights of any character relating to the purchase, sale or issuance or voting of, or right to receive dividends or other distributions on shares of Purchaser Common Stock, or any other security of Purchaser or a Subsidiary of Purchaser or any securities representing the right to vote, purchase or otherwise receive any shares of Purchaser Common Stock or any other security of Purchaser or a Subsidiary of Purchaser. Other than as stated herein, there are no outstanding securities or instruments that contain any redemption or similar provisions, and there are no outstanding contractual obligations of Purchaser or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Purchaser or any of its Subsidiaries. (d)Authority. Purchaser hasand Purchaser Bank have all requisite corporate power and authority to enter into this Agreement, to perform itstheir obligations hereunder and, subject to the consents, approvals and filings set forth inSection 3.3(f), to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate actions on the part of Purchaser’s Boardand Purchaser Bank’s Boards of Directors, and no other corporate proceedings on the part of Purchaser or Purchaser Bank are necessary to authorize this Agreement or to consummate the transactions contemplated by this Agreement. Purchaser’s Board of Directors has determined that this Agreement is advisable and has unanimously adopted a resolution to the foregoing effect. This Agreement has been approved by Purchaser in its capacity as sole stockholder of Purchaser Bank. This Agreement has been duly and validly executed and delivered by Purchaser and Purchaser Bank and constitutes a valid and binding obligation of Purchaser and Purchaser Bank, enforceable against Purchaser and Purchaser Bank in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, whether applied in a court of law or a court of equity. (e)No Violations. The execution, delivery and performance of this Agreement by Purchaser and Purchaser Bank do not, and the consummation of the transactions contemplated by this Agreement will not, (i) assuming that the consents, approvals and filings referred to inSection 3.3(f)have been obtained and the applicable waiting periods have expired, violate any law, rule or regulation or any judgment, decree, order, governmental permit or license to which Purchaser, Purchaser Bank or any of itstheir Subsidiaries (or any of their respective properties) is subject, (ii) violate the articles of incorporation or bylaws of Purchaser or the similar organizational documents of Purchaser Bank or any of itstheir Subsidiaries or (iii) constitute a breach or violation of, or a default under (or an event that, with due notice or lapse of time or both, would constitute a default under), or result in the termination of, accelerate the performance required by, or result in the creation of any Lien upon any of the properties or assets of Purchaser, Purchaser Bank or any of itstheir Subsidiaries under, any of the terms, conditions or provisions of any note, bond, indenture, deed of trust, loan agreement or other agreement, instrument or obligation to which Purchaser, Purchaser Bank or any of itstheir Subsidiaries is a party, or to which any of their respective properties or assets may be subject. (f)Consents and Approvals. Except for (i) filings of applications and notices with, receipt of approvals or no objections from, and the expiration of related waiting periods required by, federal and state banking authorities, including filings and notices with the Federal Reserve, the MDOB and the WDFI,IDF, (ii) the filing with the SEC of a Proxy Statement-Prospectus in definitive form relating to the meeting of the Company’sIIBK’s stockholders to be held in connection with this Agreement and the transactions contemplated hereby and of the Registration Statement in which such proxy statement will be included as a prospectus, and declaration of effectiveness of the Registration Statement, (iii) the filing of the Articles of Merger with the Montana SecretaryMDOB pursuant to the MBCAMBA and with the Washington SecretaryIDF pursuant to the WBCA, the filing of a certificate for the Bank Merger with the MDOB and the filing of a notice for the Bank Merger with the WDFI,IBA, (iv) filing with The Nasdaq Stock Market LLC of a notification or application of the listing of the shares of Purchaser Common Stock to be issued in the Merger, and (v) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of shares of Purchaser Common Stock pursuant to this Agreement, no consents or approvals of, or filings or registrations with, any Governmental Entity or any third party are required to be made or obtained in connection with the execution and delivery by Purchaser and Purchaser Bank of this Agreement or the consummation by Purchaser or Purchaser Bank of the Merger and the other transactions contemplated by this Agreement, including the Bank Merger.Agreement. As of the date hereof, Purchaser hasand Purchaser Bank have no Knowledge of any reason pertaining to Purchaser or Purchaser Bank why any of the approvals referred to in thisSection 3.3(f) should not be obtained without the imposition of any material condition or restriction described inSection 6.2(e). (g)Governmental Filings. Purchaser and each of its Subsidiaries has filed all reports, schedules, registration statements and other documents that it has been required to file since January 1,June 30, 2015 with the Federal Reserve, the MDOB or any other Governmental Entity. As of their respective dates, each of such filings complied in all material respects with all laws or regulations under which it was filed (or was amended so as to be in compliance promptly following discovery of such noncompliance). (h)Securities Filings. Purchaser has filed with the SEC all reports, schedules, registration statements, definitive proxy statements and exhibits thereto that it has been required to file under the Securities Act or the Exchange Act since January 1,June 30, 2015 (collectively,“Purchaser Reports”). None of Purchaser Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. As of their respective dates of filing with the SEC, all of Purchaser Reports complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder. Each of the financial statements (including, in each case, any notes thereto) of Purchaser included in Purchaser Reports complied as to form, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto. (i)Financial Statements. Purchaser has previously made available to the CompanyIIBK copies of (i) the consolidated balance sheets of Purchaser and its Subsidiaries as of December 31, 2017 and 2016 and related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2017, together with the notes thereto, accompanied by the audit report of Purchaser’s independent registered public accounting firm, as reported in Purchaser’s Annual Report on Form10-K for the year ended December 31, 2017 filed with the SEC.SEC and (ii) the unaudited interim consolidated financial statements of Purchaser and its Subsidiaries as of June 30, 2018 and related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for three and six months ended June 30, 2018, together with the notes thereto, filed with the SEC . Such financial statements were prepared from the books and records of Purchaser and its Subsidiaries, fairly present the consolidated financial position of Purchaser and its Subsidiaries in each case at and as of the dates indicated and the consolidated results of operations and cash flows of Purchaser and its Subsidiaries for the periods indicated, and, except as otherwise set forth in the notes thereto, were prepared in accordance with GAAP consistently applied throughout the periods covered thereby. The books and records of Purchaser and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other legal and accounting requirements and reflect only actual transactions. (j)Undisclosed Liabilities. Neither Purchaser nor any of its Subsidiaries has incurred any debt, liability or obligation of any nature whatsoever (whether accrued, contingent, absolute or otherwise and whether due or to become due) other than liabilities reflected on or reserved against in the consolidated balance sheet of Purchaser as of December 31, 2017,June 30, 2018, except for (i) liabilities incurred since December 31, 2017June 30, 2018 in the ordinary course of business consistent with past practice that, either alone or when combined with all similar liabilities, have not had, and would not reasonably be expected to have, a Material Adverse Effect on Purchaser and (ii) liabilities incurred for legal, accounting, financial advising fees andout-of-pocket expenses in connection with the transactions contemplated by this Agreement. (k)Absence of Certain Changes or Events. Since December 31, 2017,June 30, 2018, Purchaser and its Subsidiaries have conducted their respective businesses only in the ordinary and usual course of such businesses consistent with their past practices and there has not been any event or occurrence that has had, or is reasonably expected to have, a Material Adverse Effect on Purchaser. (l)Litigation.There are no material suits, actions or legal, administrative or arbitration proceedings pending or, to the Knowledge of Purchaser, threatened against or affecting Purchaser or any of its Subsidiaries or any property or asset of Purchaser or any of its Subsidiaries that (i) are seeking damages or declaratory relief against Purchaser or any of its Subsidiaries or (ii) challenge the validity or propriety of the transactions contemplated by this Agreement. There are no judgments, decrees, injunctions, orders or rulings of any Governmental Entity or arbitrator outstanding against Purchaser or any of its Subsidiaries or the assets of Purchaser or any of its Subsidiaries. Since January 1,June 30, 2015 (i) there have been no subpoenas, written demands, or document requests received by Purchaser or any of its Subsidiaries from any Governmental Entity and (ii) no Governmental Entity has requested that Purchaser or any of its Subsidiaries enter into a settlement, negotiation or tolling agreement with respect to any matter related to any such subpoena, written demand, or document request. (m)Absence of Regulatory Actions. Since January 1,June 30, 2015, neither Purchaser nor any of its Subsidiaries has been a party to any cease and desist order, written agreement or memorandum of understanding with, or any commitment letter or similar undertaking to, or has been subject to any action, proceeding, order or directive by any Governmental Entity, or has adopted any board resolutions relating to such matters as are material to the business of Purchaser or its Subsidiaries at the request of any Governmental Entity, or has been advised by any Governmental Entity that it is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such action, proceeding, order, directive, written agreement, memorandum of understanding, commitment letter, board resolutions or similar undertaking. To the Knowledge of Purchaser, there are no material unresolved violations, criticisms or exceptions by any Governmental Entity with respect to any report or statement relating to any examinations of Purchaser or its Subsidiaries. (n)Compliance with Laws. To the Knowledge of Purchaser, Purchaser and each of its Subsidiaries have complied in all material respects with and are not in material default or violation under any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity relating to the CompanyPurchaser or any of its Subsidiaries, including without limitation all laws related to data protection or privacy, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act and Regulation E, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Interagency Policy Statement on Retail Sales of Nondeposit Investment Products, the SAFE Mortgage Licensing Act of 2008, Regulation O, the Real Estate Settlement Procedures Act and Regulation X, and any other law relating to bank secrecy, discriminatory lending, financing or leasing practices, money laundering prevention, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act, and all agency requirements relating to the origination, sale and servicing of mortgage and consumer loans. Purchaser and each of its Subsidiaries has all material permits, licenses, certificates of authority, orders and approvals of, and has made all filings, applications and registrations with, all Governmental Entities that are required in order to permit it to carry on its business as it is presently conducted. All such permits, licenses, certificates of authority, orders and approvals are in full force and effect, and no suspension or cancellation of any of them is, to the Knowledge of Purchaser, threatened. Neither Purchaser nor any of its Subsidiaries has been given notice or been charged with any violation of, any law, ordinance, regulation, order, writ, rule, decree or condition to approval of any Governmental Entity that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Purchaser. (o)Taxes. All federal, state, local and foreign tax returns required to be filed by or on behalf of Purchaser or any of its Subsidiaries have been timely filed or requests for extensions have been timely filed and any such extension shall have been granted and not have expired, and all such filed returns are complete and accurate in all material respects. All Taxes shown on such returns, all Taxes required to be shown on returns for which extensions have been granted and all other Taxes required to be paid by Purchaser or any of its Subsidiaries have been paid in full or adequate provision has been made for any such Taxes on Purchaser’s balance sheet (in accordance with GAAP). To the Knowledge of Purchaser, there is no audit examination, deficiency assessment, tax investigation or refund litigation with respect to any Taxes of Purchaser or any of its Subsidiaries, and no claim has been made in writing by any authority in a jurisdiction where Purchaser or any of its Subsidiaries do not file tax returns that Purchaser or any such Subsidiary is subject to taxation in that jurisdiction. All Taxes, interest, additions and penalties due with respect to completed and settled examinations or concluded litigation relating to Purchaser or any of its Subsidiaries have been paid in full or adequate provision has been made for any such Taxes on Purchaser’s balance sheet (in accordance with GAAP). Purchaser and its Subsidiaries have not executed an extension or waiver of any statute of limitations on the assessment or collection of any tax due that is currently in effect. Purchaser and each of its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party, and Purchaser and each of its Subsidiaries has timely complied with all applicable information reporting requirements under Part III, Subchapter A of Chapter 61 of the IRC and similar applicable state and local information reporting requirements. (p)Agreements. (i) Each contract, arrangement, commitment or understanding (whether written or oral) that is a “material contract” (as such term is defined in Item 601(b)(10) of RegulationS-K under the Securities Act) to which Purchaser or any of its Subsidiaries is a party or by which Purchaser or any of its Subsidiaries is bound as of the date hereof has been filed as an exhibit to the most recent Annual Report on Form10-K filed by Purchaser, or a Quarterly Report on Form10-Q or Current Report on Form8-K subsequent thereto (each, a“Purchaser Contract”) and neither Purchaser nor any of its Subsidiaries knows of, or has received notice of, any material violation of the above by any of the other parties thereto. (ii) Each Purchaser Contract is valid and binding on Purchaser or one of its Subsidiaries, as applicable, and in full force and effect, except as, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Purchaser. Purchaser and each of its Subsidiaries has in all material respects performed all obligations required to be performed by it under each Purchaser Contract. To the Knowledge of Purchaser, each third-party counterparty to each Purchaser Contract has in all material respects performed all obligations required to be performed by it under such Purchaser Contract, and no event or condition exists which constitutes or, after notice or lapse of time or both, will constitute, a material default on the part of Purchaser or any of its Subsidiaries under any such Purchaser Contract. (q)Labor Matters. Purchaser and its Subsidiaries are in material compliance with all applicable laws respecting employment, retention of independent contractors, employment practices, terms and conditions of employment, and wages and hours. Neither Purchaser nor any of its Subsidiaries is or has ever been a party to, or is or has ever been bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization with respect to its employees, nor is Purchaser or any of its Subsidiaries the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it or any such Subsidiary to bargain with any labor organization as to wages and conditions of employment nor, to the Knowledge of Purchaser, has any such proceeding been threatened, nor is there any strike, other labor dispute or organizational effort involving Purchaser or any of its Subsidiaries pending or, to the Knowledge of Purchaser, threatened. (r)Employee Benefit Plans. (i) For purposes of this Agreement, “Purchaser Benefit Plans” mean all employee benefit plans (as defined in Section 3(3) ERISA), whether or not subject to ERISA, whether funded or unfunded, and all pension, benefit, retirement, bonus, stock option, stock purchase, restricted stock, stock-based, performance award, phantom equity, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance, accrued leave, sick leave, vacation, paid time off, health, medical, disability, life, accidental death and dismemberment, insurance, welfare, fringe benefit and other similar plans, programs, policies, practices or arrangements or other contracts or agreements (and any amendments thereto) with respect to which Purchaser or any Subsidiary or any trade or business of Purchaser or any of its Subsidiaries, whether or not incorporated, all of which together with Purchaser would be deemed a “single employer” within the meaning of Section 4001 of ERISA (a“Purchaser ERISA Affiliate”Affiliate”), is a party or that are sponsored, maintained, contributed to or required to be contributed to by Purchaser or any of its Subsidiaries or any Purchaser ERISA Affiliate for the benefit of any current employee, officer, director, consultant or independent contractor (or any spouse or dependent of such individual) of Purchaser or any of its Subsidiaries or any Purchaser ERISA Affiliate. (ii) Each Purchaser Benefit Plan has been established, operated and administered in all material respects in accordance with its terms and the requirements of all applicable laws, including ERISA and the IRC. Neither Purchaser nor any of its Subsidiaries has taken any action to take corrective action or made a filing under any voluntary correction program of the IRS, the DOL or any other Governmental Entity with respect to any Purchaser Benefit Plan, and neither Purchaser nor any of its Subsidiaries has any Knowledge of any plan defect that would qualify for correction under any such program. (iii) With regard to each Purchaser Benefit Plan that is intended to be qualified under Section 401(a) of the IRC (the“Purchaser Qualified Plans”), the IRS has issued a favorable determination letter with respect to each Purchaser Qualified Plan and the related trust, which letter has not been revoked (nor has revocation been threatened), and, to the Knowledge of Purchaser, there are no existing circumstances and no events have occurred that could adversely affect the qualified status of any Purchaser Qualified Plan or the exempt status of the related trust or increase the costs relating thereto. No trust funding any Purchaser Benefit Plan is intended to meet the requirements of Section 501(c)(9) of the IRC. (iv) With respect to each Purchaser Benefit Plan that is subject to Title IV or Section 302 of ERISA or Sections 412, 430 or 4971 of the IRC: (i) no such plan is in“at-risk” status for purposes of Section 430 of the IRC, (ii) no reportable event within the meaning of Section 4043(c) of ERISA for which the30-day notice requirement has not been waived has occurred, (iii) all premiums to the PBGC have been timely paid in full, (iv) no liability (other than for premiums to the PBGC) under Title IV of ERISA has been or is expected to be incurred by Purchaser or any of its Subsidiaries, and (v) the PBGC has not instituted proceedings to terminate any such Purchaser Benefit Plan. (v) There are no pending or threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations that have been asserted or instituted, and, to Purchaser’s Knowledge, no set of circumstances exists that may reasonably be expected to give rise to a claim or lawsuit, against Purchaser Benefit Plans, any fiduciaries thereof with respect to their duties to Purchaser Benefit Plans or the assets of any of the trusts under any of Purchaser Benefit Plans, that could reasonably be expected to result in any material liability of Purchaser or any of its Subsidiaries to the PBGC, the IRS, the DOL, any Multiemployer Plan, a Multiple Employer Plan, any participant in any Purchaser Benefit Plan, or any other party. (vi) To the Knowledge of Purchaser, none of Purchaser and its Subsidiaries nor any Purchaser ERISA Affiliate nor any other person, including any fiduciary, has engaged in any “prohibited transaction” (as defined in Section 4975 of the IRC or Section 406 of ERISA) that could subject any of Purchaser Benefit Plans or their related trusts, Purchaser, any of its Subsidiaries, any Purchaser ERISA Affiliate or any person that Purchaser or any of its Subsidiaries has an obligation to indemnify, to any material tax or penalty imposed under Section 4975 of the IRC or Section 502 of ERISA. (s)Properties. Purchaser and each of its Subsidiaries has good and marketable title to all real property owned by it (including any property acquired in a judicial foreclosure proceeding or by way of a deed in lieu of foreclosure or similar transfer), in each case free and clear of any Liens except (i) liens for Taxes not yet due and payable and (ii) such easements, restrictions and encumbrances, if any, as are not material in character, amount or extent, and do not materially detract from the value, or materially interfere with the present use of the properties subject thereto or affected thereby. Each lease pursuant to which Purchaser or any of its Subsidiaries as lessee, leases real or personal property is valid and in full force and effect as to Purchaser and the Subsidiaries and neither Purchaser nor any of its Subsidiaries, nor, to Purchaser’s Knowledge, any other party to any such lease, is in default or in violation of any material provisions of any such lease. All real property owned or leased by Purchaser or any of its Subsidiaries are in all material respects in a good state of maintenance and repair (normal wear and tear excepted), conform in all material respects with all applicable ordinances, regulations and zoning laws and are considered by Purchaser to be adequate for the current business of Purchaser and its Subsidiaries. (t)Loan Matters. All Loans held by Purchaser or any of its Subsidiaries were made in all material respects for good, valuable and adequate consideration in the ordinary course of the business, in accordance in all material respects with sound banking practices and, to the Knowledge of Purchaser, the Loans are not subject to any defenses, setoffs or counterclaims, including without limitation any such as are afforded by usury or truth in lending laws, except as may be provided by bankruptcy, insolvency or similar laws or by general principles of equity. The notes or other evidences of indebtedness evidencing such Loans and all forms of pledges, mortgages and other collateral documents and security agreements are, in all material respects, enforceable and valid. (u)Anti-takeover Provisions Inapplicable. Purchaser and its Subsidiaries have taken all actions required to exempt Purchaser, Purchaser Bank, the Agreement the Plan of Bank Merger, the Merger and the Bank Merger from any provisions of an anti-takeover nature contained in their organizational documents, and the provisions of any federal or state “anti-takeover,” “fair price,” “moratorium,” “control share acquisition” or similar laws or regulations. (v)Corporate Documents and Records. Purchaser has previously made available a complete and correct copy of the Articles of Incorporation, bylaws and similar organizational documents of Purchaser and each of Purchaser’s Subsidiaries, as in effect as of the date of this Agreement. Neither Purchaser nor any of Purchaser’s Subsidiaries is in violation of its Articles of Incorporation, bylaws or similar organizational documents. The minute books of Purchaser and each of Purchaser’s Subsidiaries constitute a complete and correct record of all actions taken by their respective boards of directors (and each committee thereof) and their stockholders. (w)CRA, Anti-Money Laundering, OFAC and Customer Information Security. First InterstatePurchaser Bank has received a rating of “Satisfactory” or better in its most recent examination or interim review with respect to the CRA. Purchaser does not have Knowledge of any facts or circumstances that would cause First InterstatePurchaser Bank or any other Subsidiary of Purchaser: (i) to be deemed not to be in satisfactory compliance in any material respect with the CRA, and the regulations promulgated thereunder, or to be assigned a rating for CRA purposes by federal bank regulators of lower than “Satisfactory”; or (ii) to be deemed to be operating in violation in any material respect of the Bank Secrecy Act, the USA PATRIOT Act, any order issued with respect to anti-money laundering by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or any other applicable anti-money laundering statute, rule or regulation; or (iii) to be deemed not to be in satisfactory compliance in any material respect with the applicable privacy of customer information requirements contained in any federal and state privacy laws and regulations, including without limitation, in Title V of the Gramm-Leach-Bliley Act of 1999 and the regulations promulgated thereunder, as well as the provisions of the information security program adopted by First InterstatePurchaser Bank. To the Knowledge of Purchaser, nonon-public customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause either Purchaser or any of its Subsidiaries to undertake any remedial action. The Board of Directors of First InterstatePurchaser Bank (or where appropriate of any other Subsidiary of Purchaser) has adopted, and First InterstatePurchaser Bank (or such other Subsidiary of Purchaser) has implemented, an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with Section 326 of the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and First InterstatePurchaser Bank (or such other Subsidiary of Purchaser) has complied in all material respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder. (x)Internal Controls. Purchaser and its Subsidiaries have devised and maintain a system of internal control over financial reporting as defined in Rule13a-15(f) of the Exchange Act sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, and (iii) access to assets is permitted only in accordance with management’s general or specific authorization. There are no significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect Purchaser’s ability to record, process, summarize and report financial information. To the Knowledge of Purchaser, there has occurred no fraud, whether or not material, that involves management or other employees who have a significant role in Purchaser’s internal controls over financial reporting. (y)Tax Treatment of the Merger. Purchaser has no Knowledge of any fact or circumstance relating to it that would prevent the transactions contemplated by this Agreement from qualifying as a reorganization under Section 368(a) of the IRC. (z)Fairness Opinion. The Board of Directors of Purchaser has received the opinion (which, if initially rendered verbally, has been or will be confirmed by a written opinion, dated the same date) of Sandler O’NeillPiper Jaffray & Partners, L.P.Co. to the effect that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set forth therein, the Exchange RatioMerger Consideration in the Merger is fair, from a financial point of view, to Purchaser. (aa)Environmental Matters. Except as set forth in Purchaser’s Disclosure Letter, each of Purchaser’s and its Subsidiaries’ properties, the Participation Facilities, and, to the Knowledge of Purchaser, the Loan Properties, are, and have been during the period of Purchaser’s or its Subsidiaries’ ownership or operation thereof, in material compliance with all Environmental Laws. (bb)Insurance. In the opinion of management, Purchaser and its Subsidiaries are presently insured for amounts deemed reasonable by management against such risks as companies engaged in a similar business, including engaging in the transactions contemplated by the Agreement, would, in accordance with good business practice, customarily be insured. All of the insurance policies and bonds maintained by Purchaser and its Subsidiaries are in full force and effect, Purchaser and its Subsidiaries are not in default thereunder, all premiums and other payments due under any such policy have been paid and all material claims thereunder have been filed in due and timely fashion. (cc)Intellectual Property;Purchaser IT Systems. (i) Purchaser and each of its Subsidiaries owns or possesses valid and binding licenses and other rights to use (in the manner and the geographic areas in which they are currently used) without payment all patents, copyrights, trade secrets, trade names, service marks and trademarks material to its business. With regard to all material trademarks, trade names, service marks and copyrights owned by Purchaser or any of its Subsidiaries for use in its business, and all licenses and other agreements relating thereto and all agreements relating to third party intellectual property that Purchaser or any of its Subsidiaries is licensed or authorized to use in its business, including without limitation any software licenses but excluding anyso-called “shrink-wrap” license agreements and other similar computer software licensed in the ordinary course of business and/or otherwise resident on desktop computers (collectively, the“Purchaser Intellectual Property”), the owner possesses all right, title and interest in and to the item, free and clear of any Lien. With respect to each item of Purchaser Intellectual Property that Purchaser or any of its Subsidiaries is licensed or authorized to use, the license, sublicense or agreement covering such item is legal, valid, binding, enforceable and in full force and effect as to Purchaser and the Subsidiaries. Neither Purchaser nor any of its Subsidiaries has received any charge, complaint, claim, demand or notice alleging any interference, infringement, misappropriation or violation with or of any intellectual property rights of a third party (including any claims that Purchaser or any of its Subsidiaries must license or refrain from using any intellectual property rights of a third party). To the Knowledge of Purchaser, neither Purchaser nor any of its Subsidiaries has interfered with, infringed upon, misappropriated or otherwise come into conflict with any intellectual property rights of third parties and no third party has interfered with, infringed upon, misappropriated or otherwise come into conflict with any intellectual property rights of Purchaser or any of its Subsidiaries. (ii) To Purchaser’s Knowledge, all information technology and computer systems (including software, information technology and telecommunication hardware and other equipment) relating to the transmission, storage, maintenance, organization, presentation, generation, processing or analysis of data and information, whether or not in electronic format, used in or necessary to the conduct of the business of Purchaser or First Interstate Bank (collectively,“Purchaser IT Systems”) have been properly maintained by technically competent personnel, in accordance with standards set by the manufacturers or otherwise in accordance with standards in the industry, to ensure proper operation, monitoring and use. Purchaser IT Systems are in good working condition to effectively perform all information technology operations necessary to conduct Purchaser’s consolidated business as currently conducted. Neither Purchaser nor First InterstatePurchaser Bank has experienced within the past two years any material disruption to, or material interruption in, the conduct of its business attributable to a defect, bug, breakdown or other failure or deficiency of Purchaser IT Systems. No Person has gained unauthorized access to any of the Purchaser IT Systems that has had, or is reasonably expected to have, a Material Adverse Effect on Purchaser. Purchaser and First InterstatePurchaser Bank have taken reasonable measures to provide for theback-up and recovery of the data and information necessary to the conduct of their businesses without material disruption to, or material interruption in, the conduct of their respective businesses. Purchaser and its Subsidiaries are in compliance in all material respects with all data protection and privacy laws and regulations as well as their own policies relating to data protection and the privacy and security of personal data and thenon-public personal information of their respective customers and employees, except for immaterial failures to comply or immaterial violations. (dd)No Other Representations or Warranties. (i) Except for the representations and warranties made by Purchaser and Purchaser Bank in thisSection 3.3, neither Purchaser, Purchaser Bank nor any other Person makes any express or implied representation or warranty with respect to Purchaser, itsPurchaser Bank, their Subsidiaries, or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and Purchaser and Purchaser Bank hereby disclaimsdisclaim any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither Purchaser, Purchaser Bank nor any other Person makes or has made any representation or warranty to the CompanyIIBK or any of its Affiliates or representatives with respect to (A) any financial projection, forecast, estimate, budget or prospective information relating to Purchaser, Purchaser Bank any of itstheir Subsidiaries or their respective businesses, or (B) except for the representations and warranties made by Purchaser or Purchaser Bank in thisSection 3.3, any oral or written information presented to the CompanyIIBK or any of its Affiliates or representatives in the course of their due diligence investigation of Purchaser and Purchaser Bank, the negotiation of this Agreement or in the course of the transactions contemplated hereby. (ii) Purchaser and Purchaser Bank hereby acknowledgesacknowledge and agreesagree that neither the CompanyIIBK nor any other Person has made or is making any express or implied representation or warranty other than those contained inSection 3.2. ARTICLE IV CONDUCT PENDING THE MERGER 4.1Forbearances by the Company.IIBK. Except as expressly contemplated or permitted by this Agreement, disclosed in the Company’sIIBK’s Disclosure Letter, or to the extent required by law or regulation or any Governmental Entity, during the period from the date of this Agreement to the Effective Time, the CompanyIIBK shall not, nor shall the CompanyIIBK permit any of its Subsidiaries to, without the prior written consent (which may include consent via electronic mail) of Purchaser or Purchaser Bank (which consent shall not be unreasonably withheld, conditioned or delayed): (a) conduct its business other than in the regular, ordinary and usual course consistent with past practice; fail to use reasonable efforts to maintain and preserve intact its business organization, properties, leases, employees and advantageous business relationships and retain the services of its officers and key employees; or take any action that would adversely affect or materially delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby; (b) (i) incur, modify, extend or renegotiate any indebtedness for borrowed money, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, other than, (A) the creation of deposit liabilitiesin each case, in the ordinary course of business consistent with past practice and (B) advances from the FHLB with a maturity of not more than one year;practice; (ii) prepay any indebtedness or other similar arrangements so as to cause the CompanyIIBK to incur any prepayment penalty thereunder; or (iii) purchaseaccept any brokered certificates of deposit; (c) (i) adjust, split, combine or reclassify any capital stock; (ii) make, declare or pay any dividend, or make any other distribution on its capital stock except for distributions payable to service Company’s outstanding subordinated notes and distributions from INB to Company to cover expenses incurred in the ordinary course of business consistent with past practice, expenses incurred in connection with filings with regulatory agencies by the Company and expenses incurred in connection with the transactions contemplated by this Agreement;stock; (iii) grant any personPerson any right to acquire any shares of its capital stock or make any grant or award under the CompanyIIBK Equity Plan;Plans; (iv) issue any additional shares of capital stock or any securities or obligations convertible or exercisable for any shares of its capital stock, except pursuant to the exercise, including via cashless exercise, of stock options or Company Warrants outstanding as of the date hereof; or (v) redeem or otherwise acquire any shares of its capital stock other than a security interest or as a result of the enforcement of a security interest and other than as provided in this Agreement; (d) other than in the ordinary course of business consistent with past practice (including the sale, transfer or disposal of other real estate owned (“OREO”)), (i) sell, transfer, mortgage, encumber or otherwise dispose of any of its real property or other assets to any personPerson other than a Subsidiary, or (ii) cancel, release or assign any indebtedness to any such Person or any claims held by any such Person; (e) make any equity investment, either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other person,Person, or form any new subsidiary; (f) other than in the ordinary course of business consistent with past practice, enter into, renew, amend or terminate any material contract, plan or agreement, or make any change in any of its leases or material contracts; (g) Exceptexcept for Loans or commitments for Loans that have previously been approved by the CompanyIIBK prior to the date of this Agreement, make, renegotiate, renew, increase the amount of, extend the term of, modify or purchase any Loans, or make any commitment in respect of any of the foregoing, exceptother than in conformitythe ordinary course of business consistent with existing lending practices;past practice; (h) (i) make any new Loan, or commit to make any new Loan, to any director or executive officer of the Company or INB,IIBK, or any entity controlled, directly or indirectly, by any of the foregoing or (ii) except for Loans made in accordance with Regulation O of the Federal Reserve, (12 C.F.R. Part 215),as implemented by the FDIC, amend, renew or increase any existing Loan, or commit to amend, renew or increase any such Loan, to any director or executive officer of the Company or INB,IIBK, or any entity controlled, directly or indirectly, by any of the foregoing; (i) (i)(a) increase in any manner the base compensation bonuses or other fringe benefits of any of its employees or directors, other than in the ordinary course of business consistent with past practice and pursuant to policies and written incentive plans then in effect or as set forth in the Company’sIIBK’s Disclosure Letter or (b) pay any bonus, pension, retirement allowance or contribution, except for cash bonusesand in the ordinary course of business consistent with past practice and as set forth in the Company’s Disclosure Letter butan amount not to exceed 10.0%the greater of 5% of such individual’s base salary or wage rate as of the date hereof;hereof or an aggregate of $7,500, or (b) create any new bonus, pension, retirement allowance or benefit contribution obligations, or pay any bonus, except for cash bonuses accrued and paid in the ordinary course of business consistent with past practice and in an amount not to exceed $2,000,000 in the aggregate, as set forth in IIBK’s Disclosure Letter or otherwise agreed to by Purchaser. Notwithstanding the foregoing, the parties agree that if the property owned by IIBK known as Trident Ridge Subdivision identified in the Disclosure Letter is successfully sold prior to Closing with Purchaser’s approval, which approval shall not be unreasonably withheld, then the amount of the cash bonus payable under IIBK’s current bonus plans as a result of the sale of such property will not be included for the purpose of calculating the $2,000,000 threshold in this Section; (ii) become a party to, amend, renew, extend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment, severance or change in control agreement with or for the benefit of any employee or director, except for amendments to any plan or agreement that are required by law;law and except for compensation agreements with residential real estate loan officers in the ordinary course of business consistent with past practice; (iii) amend, modify or revise the terms of any outstanding stock option or Company Warrant or voluntarily accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation; or make any contributions to any defined contribution plan not in the ordinary course of business consistent with past practice; (iv) elect to any office with the title of Senior Vice President or higher any person who does not hold such office as of the date of this Agreement or elect to its Board of Directors any person who is not a member of its Board of Directors as of the date of this Agreement; or (v) hire any employee with an annualized salary in excess of $100,000$150,000 except as may be necessary to replace any employee whose employment is terminated, whether voluntarily or involuntarily; (j) commence any action or proceeding, other than to enforce any obligation owed to the CompanyIIBK or any of its Subsidiaries and in accordance with past practice, or settle any claim, action or proceeding (i) involving payment by it of money damages in excess of $100,000 or (ii) that would impose any material restriction on its operations or the operations of any of its Subsidiaries; (k) amend its Articles of Incorporation or bylaws, or similar governing documents; (l) increase or decrease the rate of interest paid on time deposits or on certificates of deposit, except in the ordinary course of business; (m) other than in the ordinary course of business consistent with past practice, purchase any debt security, including mortgage-backed and mortgage-related securities, other than U.S. government and U.S. government agency securities with final maturities of less than one year;two years or FDIC insured certificates of deposit of three years or less; (n) make any capital expenditures in the aggregate in excess of $100,000,$250,000, other than pursuant to binding commitments existing on the date hereof, which are described in the Company’sIIBK’s Disclosure Letter, and except for expenditures reasonably necessary to maintain existing assets in good repair; (o) establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office; (p) enter into any futures contract, option, swap agreement, interest rate cap, interest rate floor, interest rate exchange agreement, or take any other action for purposes of hedging the exposure of its interest-earning assets or interest-bearing liabilities to changes in market rates of interest; (q) make any changes in policies in any material respect in existence on the date hereof with regard to: the extension of credit or the establishment of reserves with respect to possible loss thereon or the charge off of losses incurred thereon; investments; asset/liability management; deposit pricing or gathering; underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service, loans; its hedging practices and policies; or other material banking policies, in each case except as may be required by changes in applicable law or regulations, GAAP, or at the direction of a Governmental Entity; (r) except as required by law or for communications in the ordinary course of business consistent with past practice that do not relate to the Merger or other transactions contemplated hereby: (i) issue any communication of a general nature to employees (including general communications relating to benefits and compensation) without prior consultation with Purchaser and, to the extent relating to post-Closing employment, benefit or compensation information, without the prior consent of Purchaser (which shall not be unreasonably withheld, conditioned or delayed); or (ii) issue any communication of a general nature to customers without the prior approval of Purchaser (which shall not be unreasonably withheld, conditioned or delayed); (s) except with respect to foreclosures in process as of the date hereof, foreclose upon or take a deed or title to any commercial real estate (i) without providing prior notice to Purchaser and conducting a Phase I environmental assessment of the property and (ii) if the Phase I environmental assessment referred to in the prior clause reflects the presence of any Hazardous Material or underground storage tank; (t) make, change or rescind any material election concerning Taxes or Tax Returns, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle or compromise any material Tax claim or assessment, or surrender any right to claim a refund of Taxes or obtain any Tax ruling; (u) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VI not being satisfied or in a violation of any provision of this Agreement; (v) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines; (w) enter into any new lines of business; (x) purchase or sell any mortgage loan servicing rights other than in the ordinary course of business consistent with past practice; (y) merge or consolidate INB or any Subsidiary with any other corporation or restructure, reorganize or completely or partially liquidate or dissolve it or any of its Subsidiaries; (z) knowingly take action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368 of the IRC; or (aa) agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by thisSection 4.1. Any request by the CompanyIIBK or response thereto by Purchaser or Purchaser Bank shall be made in accordance with the notice provisions ofSection 8.7 and shall note that it is a request pursuant to thisSection 4.1. 4.2Forbearances by Purchaser.Purchaser and Purchaser Bank. Except as expressly contemplated or permitted by this Agreement or to the extent required by law or regulation or any Governmental Entity, during the period from the date of this Agreement to the Effective Time, Purchaser and Purchaser Bank shall maintain its rights and franchises in all material respects, and shall not, nor shall Purchaser or Purchaser Bank permit any of itstheir Subsidiaries to, without the prior written consent (which may include consent via electronic mail) of the CompanyIIBK (which consent shall not be unreasonably withheld, conditioned or delayed): (a) conduct its business other than in the regular, ordinary and usual course consistent with past practice; fail to use reasonable efforts to maintain and preserve intact itstheir business organization, properties, leases, employees and advantageous business relationships and retain the services of itstheir officers and key employees; (b) take any action that would adversely affect or materially delay itstheir ability to perform itstheir obligations under this Agreement or to consummate the transactions contemplated hereby; (c) take any action that is intended to or expected to result in any of itstheir representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VI not being satisfied or in a violation of any provision of this Agreement; (d) knowingly take action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368 of the IRC; (e) agree to take, make any commitment to take, or adopt any resolutions of its Boardtheir Boards of Directors in support of, any of the actions prohibited by thisSection 4.2; or (f) amend, repeal or modify any provision of itstheir Articles of Incorporation or Bylaws in a manner that would adversely affect the CompanyIIBK or any CompanyIIBK stockholder or the transactions contemplated by this Agreement. ARTICLE VAny request by Purchaser or Purchaser Bank or response thereto by IIBK shall be made in accordance with the notice provisions ofSection 8.7 and shall note that it is a request pursuant to thisSection 4.2.
ARTICLE V COVENANTS 5.1 Acquisition Proposals. (a) From the date of this Agreement until the earlier to occur of the Closing or the termination of this Agreement in accordance with its terms, the CompanyIIBK shall not, and shall not authorize or permit any of its Subsidiaries or any of its Subsidiaries’ officers, directors or employees or any investment banker, financial advisor, attorney, accountant or other representative retained by the CompanyIIBK or any of its Subsidiaries to, directly or indirectly, (i) solicit, initiate, induce or encourage, or take any other action to facilitate, any inquiries, offers discussions or the making of any proposal that constitutes or could reasonably be expected to lead to an Acquisition Proposal, (ii) furnish any confidential ornon-public information or data regarding the CompanyIIBK or any of its Subsidiaries or afford access to any such information or data to any Person in connection with or in response to an Acquisition Proposal or an inquiry or indication of interest that would reasonably be expected to lead to an Acquisition Proposal, (iii) continue or otherwise participate in any discussions or negotiations, or otherwise communicate in any way with any personPerson (other than Purchaser)Purchaser and Purchaser Bank), regarding an Acquisition Proposal, (iv) approve, endorse or recommend any Acquisition Proposal, (v) release any personPerson from, waive any provisions of, or fail to use its reasonable best efforts to enforce any confidentiality agreement or standstill agreement to which the CompanyIIBK is a party or (vi) enter into or consummate any agreement, agreement in principle, letter of intent, arrangement or understanding contemplating any Acquisition Proposal or requiring the CompanyIIBK to abandon, terminate or fail to consummate the transactions contemplated hereby. Without limiting the foregoing, it is understood that any violation of the restrictions set forth in the preceding sentence by any officer, director or employee of the CompanyIIBK or any of the Subsidiaries or any investment banker, financial advisor, attorney, accountant or other representative retained by the CompanyIIBK or any of its Subsidiaries shall be deemed to be a breach of thisSection 5.1 by the Company.IIBK. Notwithstanding the foregoing, prior to the adoption and approval of this Agreement by the Company’sIIBK’s stockholders at the CompanyIIBK Stockholder Meeting, thisSection 5.1(a) shall not prohibit the CompanyIIBK from furnishingnon-public information regarding the CompanyIIBK and its Subsidiaries to, or entering into discussions with, any personPerson in response to an Acquisition Proposal that is submitted to the CompanyIIBK by such Person (and not withdrawn) if (1) the Acquisition Proposal constitutes or is reasonably expected to result in a Superior Proposal, (2) the CompanyIIBK has not breached any of the covenants set forth in thisSection 5.1, (3) the Company’sIIBK’s Board of Directors determines in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably be expected to violate the directors’ fiduciary obligations to the Company’sIIBK’s stockholders under applicable law, and (4) prior to furnishing anynon-public information to, or entering into discussions with, such Person, the CompanyIIBK gives Purchaser and Purchaser Bank written notice of the identity of such Person and of the Company’sIIBK’s intention to furnishnon-public information to, or enter into discussions with, such Person and the CompanyIIBK receives from such Person an executed confidentiality agreement on terms no more favorable to such Person than the confidentiality agreement between Purchaser and the CompanyIIBK is to Purchaser. (b) The CompanyIIBK will notify Purchaser orally within twenty-four (24) hoursone (1) business day and in writing (within two (2) calendarbusiness days) of receipt of any Acquisition Proposal, any request fornon-public information that could reasonably be expected to lead to an Acquisition Proposal, or any inquiry with respect to or that could reasonably be expected to lead to an Acquisition Proposal, including, in each case, the identity of the Person making such Acquisition Proposal, the request or inquiry and the terms and conditions thereof, and shall provide to Purchaser any written materials received by the CompanyIIBK or any of its Subsidiaries in connection therewith. The CompanyIIBK will keep Purchaser informed of any developments with respect to any such Acquisition Proposal, request or inquiry promptly orally (within one (1) calendar day) and in writing (within two (2) calendar days) upon the occurrence thereof. (c) The CompanyIIBK will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted prior to the date of this Agreement with respect to any of the foregoing. 5.2Advice of Changes. Prior to the Closing, each partyIIBK, on the one hand, and Purchaser and Purchaser Bank, on the other hand, shall promptly advise the other party orally and in writing to the extent that it has Knowledge of (i) any representation or warranty made by it contained in this Agreement becoming untrue or inaccurate in any material respect or (ii) the failure by it to comply in any material respect with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement;provided,however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement. 5.3 Access and Information. (a) Upon reasonable notice and subject to applicable laws relating to the exchange of information, each of Purchaser and Purchaser Bank, on the Company,one hand, and IIBK, on the other hand, for purposes of verifying the representations and warranties of the other and preparing for integration of the Mergerparties and other matters contemplated by this Agreement, shall (and shall cause its respective Subsidiaries to) afford to the other party and its representatives (including, without limitation, officers and employees of the other party and its Affiliates and counsel, accountants and other professionals retained by the other party) such reasonable access during normal business hours throughout the period prior to the Effective Time to the books, records, contracts, properties, personnel, information technology services and to such other information relating to the other party and its Subsidiaries as may be reasonably requested, except where such materials relate to (i) matters involving this Agreement, (ii) pending or threatened litigation or investigations if, in the opinion of counsel, the presence of such designees would or might adversely affect the confidential nature of, or any privilege relating to, the matters being discussed, (iii) matters involving an Acquisition Proposal or (iv) confidential supervisory information;provided, however,that no investigation pursuant to thisSection 5.3 shall affect or be deemed to modify any representation or warranty made in this Agreement. Neither party nor any of its Subsidiaries shall be required to provide access to or to disclose information where such access or disclosure would violate or prejudice the rights of its customers, jeopardize the attorney-client privilege of the entity in possession or control of such information or contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or binding agreement entered into prior to the date of this Agreement. The parties will make appropriate and reasonable substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence apply. (b) From the date hereof until the Effective Time, the CompanyIIBK shall, and shall cause its respective Subsidiaries to, promptly provide to Purchaser Bank (i) a copy of each report filed with a Governmental Entity, (ii) a copy of each periodic report provided to its senior management and all materials relating to its business or operations furnished to its Board of Directors, (iii) a copy of each press release made available to the public and (iv) all other information concerning its business, properties and personnel as may be reasonably requested, provided that Purchaser Bank shall not be entitled to receive reports or other documents relating to (w) matters involving this Agreement, (x) pending or threatened litigation or investigations if, in the opinion of counsel, the disclosure of such information would or might adversely affect the confidential nature of, or any privilege relating to, the matters being discussed, (y) matters involving an Acquisition Proposal or (z) confidential supervisory information. (c) The CompanyIIBK, Purchaser and Purchaser Bank will not, and will cause its respective representatives not to, use any information and documents obtained in the course of the consideration of the consummation of the transactions contemplated by this Agreement, including any information obtained pursuant to thisSection 5.3, for any purpose unrelated to the consummation of the transactions contemplated by this Agreement and will hold such information and documents in confidence and treat such information and documents as secret and confidential and to use all reasonable efforts to safeguard the confidentiality of such information and documents. (d) From and after the date hereof, representatives of Purchaser, Purchaser Bank and the CompanyIIBK shall meet on a regular basis to discuss and plan for the conversion of the Company’s and its Subsidiaries’IIBK’s data processing and related electronic informational systems to those used by Purchaser and its SubsidiariesBank with the goal of conducting such conversion as soon as practicable following the consummation of the Bank Merger. (e) Within ten (10) Business Days of the end of each calendar month, the CompanyIIBK shall provide Purchaser Bank with an updated list of Loans described inSection 3.2(w)(vi). (f) The information regarding the CompanyIIBK and its Subsidiaries to be supplied by the CompanyIIBK for inclusion in the Registration Statement, any filings or approvals under applicable state securities laws, or any filing pursuant to Rule 165 or Rule 425 under the Securities Act or Rule14a-12 under the Exchange Act will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The information supplied, or to be supplied, by the CompanyIIBK for inclusion in applications to Governmental Entities to obtain all permits, consents, approvals and authorizations necessary or advisable to consummate the transactions contemplated by this Agreement shall be accurate in all material respects. (g) The information regarding Purchaser, Purchaser Bank and itstheir Subsidiaries to be supplied by Purchaser and Purchaser Bank for inclusion in the Registration Statement, any filings or approvals under applicable state securities laws, or any filing pursuant to Rule 165 or Rule 425 under the Securities Act or Rule14a-12 under the Exchange Act will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Proxy Statement-Prospectus (except for such portions thereof supplied by the Company or any of its Subsidiaries) will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. The information supplied, or to be supplied, by Purchaser and Purchaser Bank for inclusion in applications to Governmental Entities to obtain all permits, consents, approvals and authorizations necessary or advisable to consummate the transactions contemplated by this Agreement shall be accurate in all material respects. The Registration Statement will comply as to form in all material respects with the provisions of the Securities Act and the rules and regulations thereunder. 5.4 Applications; Consents. (a) The parties hereto shall cooperate with each other and shall use their reasonable best efforts to prepare and file as soon as practicablewithin forty-five (45) days after the date hereof, all necessary applications, notices and filings to obtain all permits, consents, approvals and authorizations of all Governmental Entities that are necessary or advisable to consummate the transactions contemplated by this Agreement. The Company and Purchaserparties hereto shall furnish each other with all information concerning themselves, their respective Subsidiaries, and their respective Subsidiaries’ directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with any application, notice or filing made by or on behalf of Purchaser, the CompanyPurchaser Bank, IIBK or any of their respective Subsidiaries to any Governmental Entity in connection with the transactions contemplated by this Agreement. Purchaser, Purchaser Bank and the CompanyIIBK shall have the right to review in advance, and to the extent practicable each will consult with the other on, all the information relating to Purchaser, Purchaser Bank and the Company,IIBK, as the case may be, and any of their respective Subsidiaries, that appears in any filing made with, or written materials submitted to, any Governmental Entity pursuant to thisSection 5.4(a). (b) As soon as practicable after the date hereof, each of the parties hereto shall, and they shall cause their respective Subsidiaries to, use its reasonable best efforts to obtain any consent, authorization or approval of any third party that is required to be obtained in connection with the transactions contemplated by this Agreement. (c) Purchaser, Purchaser Bank and the CompanyIIBK shall promptly advise each other upon receiving any communication from any Governmental Entity whose consent or approval is required for consummation of the transactions contemplated by this Agreement that causes such party to believe that there is a reasonable likelihood that such consent or approval will not be obtained or that the receipt of any such required consent or approval will be materially delayed. 5.5Anti-Takeover Provisions. The CompanyIIBK and its Subsidiaries shall take all steps required by any relevant federal or state law or regulation or under any relevant agreement or other document to exempt or continue to exempt Purchaser, Purchaser Bank, the Agreement the Plan of Bank Merger, the Merger and the Bank Merger from any provisions of an anti-takeover nature in the Company’sIIBK’s or its Subsidiaries’ Articles of Incorporation and Bylaws, or similar organizational documents, and the provisions of any federal or state anti-takeover laws. 5.6Additional Agreements. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable efforts to take promptly, or cause to be taken promptly, all actions and to do promptly, or cause to be done promptly, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement as expeditiously as possible, including using efforts to obtain all necessary actions ornon-actions, extensions, waivers, consents and approvals from all applicable Governmental Entities, effecting all necessary registrations, applications and filings (including, without limitation, filings under any applicable state securities laws) and obtaining any required contractual consents and regulatory approvals. 5.7Publicity. The initial press release announcing this Agreement shall be a joint press release. Thereafter, the CompanyIIBK and Purchaser shall consult with each other prior to issuing any press releases or otherwise making public statements (including any written communications to stockholders) with respect to the Merger and any other transaction contemplated hereby;provided, however, that nothing in thisSection 5.7 shall be deemed to prohibit any party from making any disclosure that its counsel deems necessary to satisfy such party’s disclosure obligations imposed by law. 5.8 Stockholder Meeting. (a) The CompanyIIBK will submit to its stockholders this Agreement and any other matters required to be approved or adopted by stockholders to carry out the intentions of this Agreement. In furtherance of that obligation, the Company IIBK will take, in accordance with applicable law and its Articles of Incorporation and Bylaws, all action necessary to call, give notice of, convene and hold a meeting of its stockholders (the“CompanyIIBK Stockholder Meeting”) as promptly as practicable to consider and vote on approval and adoption of this Agreement and the transactions provided for in this Agreement. Subject toSection 5.8(b), the CompanyIIBK shall, (i) through its Board of Directors, recommend to its stockholders adoption and approval of this Agreement, (ii) include such recommendation in the Proxy Statement-Prospectus and (iii) use commercially reasonable efforts to obtain from its stockholders a vote approving and adopting this Agreement. (b) Notwithstanding anything in this Agreement to the contrary, at any time prior to the CompanyIIBK Stockholder Meeting, the Company’sIIBK’s Board of Directors may, if it concludes in good faith (after consultation with its outside legal advisors) that the failure to do so would be reasonably likely to result in a violation of its fiduciary duties under applicable law, withdraw or modify or change in a manner adverse to Purchaser its recommendation that the stockholders of the CompanyIIBK approve this Agreement (a“Change of Recommendation”);provided that prior to any such Change of Recommendation, the CompanyIIBK shall have complied in all material respects withSection 5.1, given Purchaser and Purchaser Bank written notice promptly (and in any event within twenty-four (24) hours) advising it of the decision of the Company’sIIBK’s Board of Directors to take such action and, if the decision relates to an Acquisition Proposal, given Purchaser and Purchaser Bank the material terms and conditions of the Acquisition Proposal or inquiry, including the identity of the Person making any such Acquisition Proposal; andprovided, further, that if the decision relates to an Acquisition Proposal: (i) the CompanyIIBK shall have given Purchaser and Purchaser Bank three (3) Business Days after delivery of such notice to Purchaser and Purchaser Bank to propose revisions to the terms of this Agreement (or make another proposal) and if Purchaser proposesand Purchaser Bank propose to revise the terms of this Agreement, the CompanyIIBK shall have negotiated in good faith with Purchaser and Purchaser Bank with respect to such proposed revisions or other proposal; and (ii) the Company’sIIBK’s Board of Directors shall have determined in good faith, after considering the results of such negotiations and giving effect to any proposals, amendments or modifications made or agreed to by Purchaser and Purchaser Bank, if any, that such Acquisition Proposal constitutes a Superior Proposal. If the Company’sIIBK’s Board of Directors does not make the determination that such Acquisition Proposal constitutes a Superior Proposal and thereafter determines not to withdraw, modify or change its recommendation that the stockholders of the CompanyIIBK approve this Agreement in connection with a new Acquisition Proposal, the procedures referred to above shall apply anew and shall also apply to any subsequent withdrawal, modification or change. In the event of any material revisions to the Acquisition Proposal that result in terms that are less favorable to the Company, the CompanyIIBK, IIBK shall be required to deliver a new written notice to Purchaser and Purchaser Bank and to again comply with the requirements of thisSection 5.8(b) with respect to such new written notice, except that the three (3) Business Day period referred to above shall be reduced to two (2) Business Days. In addition to the foregoing, the CompanyIIBK shall not submit to the vote of its stockholders any Acquisition Proposal other than the Merger. 5.9 Registration of Purchaser Common Stock. (a) Within forty-five (45) days following the date hereof, Purchaser shall prepare and file the Registration Statement with the SEC. The Registration Statement shall contain proxy materials relating to the matters to be submitted to the CompanyIIBK stockholders at the stockholders meetingIIBK Stockholders Meeting and shall also constitute the prospectus relating to the shares of Purchaser Common Stock to be issued in the Merger (such proxy statement/prospectus, and any amendments or supplements thereto, the“Proxy Statement-Prospectus”). The CompanyIIBK will furnish to Purchaser the information required to be included in the Registration Statement with respect to its business and affairs and shall have the right to review and consult with Purchaser and approve the form of, and any characterizations of such information included in, the Registration Statement prior to its being filed with the SEC. Purchaser shall use its reasonable best efforts to have the Registration Statement declared effective by the SEC and to keep the Registration Statement effective as long as is necessary to consummate the Merger and the transactions contemplated hereby. The CompanyIIBK will use reasonable best efforts to cause the Proxy Statement-Prospectus to be mailed to its stockholders as promptly as practicable after the Registration Statement is declared effective under the Securities Act. Purchaser will advise the Company,IIBK, promptly after it receives notice thereof, of the time when the Registration Statement has become effective, the issuance of any stop order, the suspension of the qualification of Purchaser Common Stock issuable in connection with the Merger for offering or sale in any jurisdiction, or any request by the SEC for amendment of the Proxy Statement-Prospectus or the Registration Statement. If at any time prior to the Effective Time, any information relating to Purchaser or the Company,IIBK, or any of their respective Affiliates, officers or directors, should be discovered by Purchaser or the CompanyIIBK that should be set forth in an amendment or supplement to any of the Registration Statement or the Proxy Statement-Prospectus so that any of such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other party hereto and, to the extent required by law, rules or regulations, an appropriate amendment or supplement describing such information shall be promptly filed by Purchaser with the SEC and disseminated by the CompanyIIBK to the stockholders of the Company.IIBK. (b) Purchaser shall also take any action required to be taken under any applicable state securities laws in connection with the Merger and each of the CompanyIIBK and Purchaser shall furnish all information concerning it and the holders of CompanyIIBK Common Stock as may be reasonably requested in connection with any such action. (c) Prior to the Effective Time, Purchaser shall notify or file an application with The Nasdaq Stock Market LLC offor the additional shares of Purchaser Common Stock to be issued by Purchaser in exchange for the shares of CompanyIIBK Common Stock. 5.10Notification of Certain Matters. Each party shall give prompt notice to the other of: (i) any event or notice of, or other communication relating to, a default or event that, with notice or lapse of time or both, would become a default, received by it or any of its Subsidiaries subsequent to the date of this Agreement and prior to the Effective Time, under any contract material to the financial condition, properties, businesses or results of operations of each party and its Subsidiaries taken as a whole to which each party or any Subsidiary is a party or is subject; and (ii) any event, condition, change or occurrence that individually or in the aggregate has, or that, so far as reasonably can be foreseen at the time of its occurrence, is reasonably likely to result in a Material Adverse Effect. Each of the CompanyIIBK, Purchaser and Purchaser Bank shall give prompt notice to the other party of any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with any of the transactions contemplated by this Agreement. 5.11 Employee Benefit Matters. (a) Purchaser shall honor the CompanyIIBK Benefit Plans set forth in the Company’sIIBK’s Disclosure Letter in accordance with the terms of such CompanyIIBK Benefit Plans, except to the extent an alternative treatment is set forth in thisSection 5.11 or inSectionsSection 2.11, 2.12or2.13of this Agreement. Following the Effective Time, Purchaser shall maintain or cause to be maintained employee benefit plans and compensation opportunities for the benefit of all Persons who are employees of the CompanyIIBK and its Subsidiaries immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a“Continuing Employee”) that, in the aggregate are substantially comparable to the employee benefit and compensation opportunities that are generally made available to similarly situated employees of Purchaser or its Subsidiaries;provided, however, in no event shall any Continuing Employee be eligible to participate in any frozen plan of Purchaser or its Subsidiaries. (b) At the sole discretion of Purchaser, Purchaser may maintain the Company’sIIBK’s health and welfare plans through the end of the calendar year in which the Effective Time occurs. Notwithstanding the foregoing, if Purchaser determines to terminate one or more of Company’sIIBK’s health and/or welfare plans, then, at the request of Purchaser made at least thirty (30) days prior to the Effective Time, the CompanyIIBK shall adopt resolutions, to the extent required, providing that one or more of the Company’sIIBK’s health and welfare plans (excluding any plans that are mutually agreed to in writing between the parties) will be terminated effective immediately prior to the Effective Time (or such later date as requested by Purchaser in writing or as may be required to comply with any applicable advance notice or other requirements contained in such plans) and shall arrange for termination of all corresponding insurance policies, service agreements and related arrangements effective on the same date to the extent not prohibited by the terms of such arrangements or applicable law. Notwithstanding the foregoing, no coverage of any of the Continuing Employees or their dependents shall terminate under any of the Company’sIIBK’s health and welfare plans prior to the time such Continuing Employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to all employees of Purchaser and its Subsidiaries and their dependents and, consequently, no Continuing Employee shall experience a gap in coverage. Continuing Employees who become covered under health plans, programs and benefits of Purchaser or any of its Subsidiaries shall receive credit for anyco-payments and deductibles paid under the Company’sIIBK’s health plan for the plan year in which coverage commences under Purchaser’s health plan and shall not be subject to anypre-existing conditions under any such plans. Terminated CompanyIIBK employees and qualified beneficiaries will have the right to continued coverage under group health plans of Purchaser in accordance with COBRA.the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the regulations promulgated thereunder. (c) Purchaser shall cause each Purchaser Benefit Plan in which Continuing Employees are eligible to participate to take into account for purposes of eligibility and vesting (but not benefit accrual under the Purchaser 401(k) Plan for 20182019 employer contributions) under the Purchaser Benefit Plans the service of such employees with CompanyIIBK to the same extent as such service was credited for such purpose by Company;IIBK;provided, however, that such service shall not be recognized: (i) to the extent that such recognition would result in a duplication of benefits under any of the Purchaser Benefit Plans or (ii) to the extent, at the sole discretion of Purchaser, the cash value of unused paidtime-off is paid to Continuing Employees at the Effective Time. The value of each CompanyIIBK employee’s unused paidtime-off is set forth in the Company’sIIBK’s Disclosure Letter. This Agreement shall not be construed to limit the ability of Purchaser to terminate the employment of any CompanyIIBK employee or to review any employee benefit plan or program from time to time and to make such changes (including terminating any such plan or program) as Purchaser deems appropriate. (d) The CompanyIIBK shall take all necessary and appropriate actions to cause the CompanyIIBK 401(k) Plan to be frozen as to future contributions effective immediately prior to the Effective Time and Purchaser shall take all necessary and appropriate actions to allow the Continuing Employees to participate in Purchaser’s 401(k) Plan on the first day immediately following the Effective Time. Alternatively, if requested in writing by Purchaser no later than thirty (30) days prior to Closing, the CompanyIIBK will also take all necessary steps to terminate the CompanyIIBK 401(k) Plan immediately prior to the Effective Time, subject to the occurrence of the Effective Time, and if further requested, shall prepare and submit a request to the IRS for a favorable determination letter on termination. If Purchaser requests that the CompanyIIBK apply for a favorable determination letter, then prior to the Effective Time, CompanyIIBK shall take all such actions as are necessary (determined in consultation with Purchaser) to submit the application for favorable determination letter in advance of the Effective Time, and following the Effective Time, Purchaser shall use its best efforts in good faith to obtain such favorable determination letter as promptly as possible (including, but not limited to, making such changes to the CompanyIIBK 401(k) Plan as may be required by the IRS as a condition to its issuance of a favorable determination letter). Prior to the Effective Time, the Company,IIBK, and following the Effective Time, Purchaser, will adopt such amendments to the CompanyIIBK 401(k) Plan to effect the provisions of thisSection 5.11(d). In the event Purchaser requests the CompanyIIBK to submit an application to the IRS for a determination letter, CompanyIIBK 401(k) Plan participants who are terminated at or after the Closing, but prior to the receipt of the IRS determination letter, may elect to receive a distribution from the CompanyIIBK 401(k) Plan upon termination of their employment. Purchaser shall take any and all actions as may be required to permit Continuing Employees to roll over their account balances in the Company’sIIBK’s 401(k) Plan into Purchaser’s 401(k) Plan. (e) Purchaser agrees that each full-time CompanyIIBK employee who is involuntarily terminated by Purchaser (other than for “Cause” as determined by Purchaser) within six months following the Effective Time and who is not covered by a separate severance, change in control or employment agreement shall, upon executing an appropriate release in the form reasonably determined by Purchaser, receive a severance payment equal to two weeks of base pay (at the rate in effect on the termination date) for each year of service at the Company,IIBK, with a minimum equal to four weeks of base pay and a maximum equal tofifty-two (52) weeks, as determined in accordance with Purchaser’s severance policy.policy, as set forth in Purchaser’s Disclosure Letter. For purposes of calculating the number of years of service, fractional years of service shall be rounded up or down to the nearest full month. For purposes of calculating base pay, CompanyIIBK employees who are paid on an hourly basis shall be deemed to have a base pay equal to the employee’s average weekly compensation over the two months prior to the termination date; provided that, in no event shall an employee’s base pay for this purpose be less than the employee’s base pay with the CompanyIIBK as in effect immediately prior to Closing. For employees whose compensation is determined in whole or in part on the basis of commission income, “base pay” shall include base salary or total hourly wages paid plus commissions earned during the most recent twelve (12) months ended as of the date of termination of employment. Purchaser will offer INBIIBK employees whose jobs are eliminated as a result of the Bank Merger priority in applying for open positions within Purchaser and First Interstateor Purchaser Bank. Any employee of the CompanyIIBK who has or is a party to any employment agreement, severance agreement, change in control agreement or any other agreement or arrangement that provides for any payment that may be triggered by a termination, including a termination following the Merger, shall not receive the severance benefits as provided in this Section but will receive the payment specified in such agreement or arrangement. (f) Purchaser shall honor and maintain all obligations under the employment or change in control agreements, the INB SupplementalIIBK Second Amended and Restated ExecutiveNon-Qualified Retirement Plan Agreement (the “SERP”) and the INB Executiveassociated Plan Agreements, IIBK Amended and Restated Deferred Compensation Plan,Agreement with Jack W. Gustavel, IIBK Second Amended and Restated 2005 Deferred Compensation Agreement with Jack W. Gustavel and Model Rabbi Trust Agreement, each as set forth in the Company’sIIBK’s Disclosure Letter, except to the extent any such agreement is superseded, with the consent of the beneficiary, as of, or following, the Effective Time. Purchaser specifically agrees to assume the SERPIIBK Second Amended and Restated ExecutiveNon-Qualified Retirement Plan, IIBK Amended and Restated Deferred Compensation Agreement with Jack W. Gustavel, IIBK Second Amended and Restated 2005 Deferred Compensation Agreement with Jack W. Gustavel and Model Rabbi Trust Agreement (collectively, the “Non-Qualified Plans”) and the timing and amount of the benefits that accrue and the payments thereunder will continue to be made in accordance with Section 2.1the terms of the SERP. For purposes of clarity, it is understood that neither Buyer nor Buyer Bank will terminate the SERP in accordance with Section 8.3 of the SERP and the parties will not accelerate the timing of the payments thereunder.Non-Qualified Plans. (g) Purchaser shall establish a retention bonus pool in the amount as provided in Purchaser Disclosure Letter for employees of the CompanyIIBK and its Subsidiaries jointly designated in writing by Purchaser and the CompanyIIBK (other than employees of the CompanyIIBK who are subject to employment contracts or other contracts providing for severance) to help retain key employees; provided, that any retention bonus pool payment is not considered an “excess parachute payment” within the meaning of Section 280G of the IRC or results in any other adverse tax consequence to the Purchaser. The amount and payment date of the retention bonus for each such employee shall be jointly determined in writing by Purchaser and the Company,IIBK, but in the aggregate shall equal the amount provided in Purchaser Disclosure Letter assuming all such key employees remain with the Purchaser or the Surviving Corporation or an Affiliate to such date or are involuntarily terminated without cause prior to that date. (h) Concurrently with the execution of this Agreement, Purchaser, First InterstatePurchaser Bank Company and INBIIBK shall enter into settlement agreements with each of Russell A. LeeJack Wynn Gustavel and Holly A. PoquetteKurt Gustavel to be effective as of the Effective Time, and Purchaser and First Interstate Bank shall enter into a consulting andnon-competition agreement with Russell A. Lee to be effective as of the Effective Time, each as provided in Purchaser Disclosure Letter. (i) Purchaser shall provide all employees of the CompanyIIBK and its Subsidiaries whose employment was terminated other than for cause, disability or retirement at or following the Effective Time, and who so desires, job counseling and outplacement assistance services, in which it shall assist such employees in locating new employment and shall notify all such employees who want to be so notified of opportunities for positions with Purchaser or any of its Subsidiaries for which Purchaser reasonably believes such persons are qualified and shall consider any application for such positions submitted by such persons, provided, however, that any decision to offer employment to any such person shall be made in the sole discretion of Purchaser. (j) IIBK shall take all such actions as Purchaser may reasonably request to fully and timely comply with any and all requirements of both federal Worker Adjustment and Retraining Notification Act of 1988 (“WARN Act”) and any state-specific WARN Act statutes, including providing notices to IIBK’s employees. 5.12 Indemnification. (a) From and after the Effective Time, Purchaser shall indemnify and hold harmless each of the current or former directors, officers or employees of the CompanyIIBK or any of its Subsidiaries (each, an“Indemnified Party”), and any person who becomes an Indemnified Party between the date hereof and the Effective Time, against any costs or expenses (including reasonable attorneys’ fees and expenses), judgments, fines, losses, claims, damages or liabilities and amounts paid in settlement incurred in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, based in whole or in part on, or arising in whole or in part out of, or pertaining to (i) the fact that he or she is or was a director, officer, employee or employeefiduciary of the Company,IIBK, any of its Subsidiaries, or the IIBK Benefit Plans or any of their respective predecessors or was prior to the Effective Time serving at the request of any such party as a director, officer, employee, trustee or partner of another corporation, partnership, trust, joint venture, employee benefit plan or other entity or (ii) any matters arising in connection with the transactions contemplated by this Agreement, to the fullest extent such Person would have been indemnified or have the right to advancement of expenses pursuant to the Company’sIIBK’s Articles of Incorporation and Bylaws as in effect on the date of this Agreement and as permitted by applicable law, and Purchaser and the Surviving Corporation shall also advance expenses as incurred to the fullest extent permitted under applicable law,provided that the Person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined by a court of competent jurisdiction that such Person is not entitled to indemnification. (b) Any Indemnified Party wishing to claim indemnification underSection 5.12(a), upon learning of any action, suit, proceeding or investigation described above, shall promptly notify Purchaser thereof. Any failure to so notify shall not affect the obligations of Purchaser underSection 5.12(a) unless and to the extent that Purchaser is actually prejudiced as a result of such failure. (c) For a period of six (6) years following the Effective Time, Purchaser shall maintain in effect the Company’sIIBK’s current directors’ and officers’ liability insurance covering each Person currently covered by the Company’sIIBK’s directors’ and officers’ liability insurance policy with respect to claims against such Persons arising from facts or events occurring at or prior to the Effective Time;provided, however, that in no event shall Purchaser be required to expend in the aggregate pursuant to thisSection 5.12(c) more than 200% of the annual premium currently paid by the CompanyIIBK for such insurance and, if Purchaser is unable to maintain such policy as a result of this proviso, Purchaser shall obtain as much comparable insurance as is available by payment of such time;provided further, that Purchaser may (i) request that the CompanyIIBK obtain an extended reporting period endorsement under the Company’sIIBK’s existing directors’ and officers’ liability insurance policy or (ii) substitute therefor “tail” policies the material terms of which, including coverage and amount, are no less favorable in any material respect to such Person than the Company’sIIBK’s existing insurance policies as of the date hereof. (d) If Purchaser or any of its successors or assigns (i) consolidates with or merges into any other person or entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) liquidates, dissolves, transfers or conveys all or substantially all of its properties and assets to any person or entity, then, and in each such case, to the extent necessary, proper provision shall be made so that such successor and assign of Purchaser and its successors and assigns assume the obligations set forth in thisSection 5.12. (e) The provisions of thisSection 5.12 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party and his or her representatives. (f) Any indemnification payments made pursuant to thisSection 5.12are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. 1828(k)) and the regulations promulgated thereunder by the Federal Deposit Insurance Corporation (12 C.F.R. Part 359). 5.13Stockholder Litigation. The CompanyIIBK shall give Purchaser and Purchaser Bank the opportunity to participate at Purchaser’s and Purchaser Bank’s own expense in the defense or settlement of any stockholder litigation against the CompanyIIBK and/or its directors relating to the transactions contemplated by this Agreement, and no such settlement shall be agreed to without Purchaser’s prior written consent (such consent not to be unreasonably withheld or delayed). 5.14Disclosure Supplements. From time to time prior to the Effective Time, the CompanyIIBK, Purchaser and Purchaser Bank will promptly supplement or amend their respective Disclosure Letters delivered in connection herewith with respect to any matter hereafter arising that, if existing, occurring or known at the date of this Agreement, would have been required to be set forth or described in such Disclosure Letters or that is necessary to correct any information in such Disclosure Letters that has been rendered materially inaccurate thereby. No supplement or amendment to such Disclosure Letters shall have any effect for the purpose of determining satisfaction of the conditions set forth in Article VI. 5.15Assumption of Northwest Bancorporation Capital Trust I Preferred Securities.Advisory Board.Purchaser Bank shall establish an advisory board to advise Purchaser agrees that, effective withon its operations in the Effective Time, itCoeur d’Alene, Idaho market and generating additional business contacts for Purchaser Bank in such area. Jack Wynn Gustavel shall assumebe invited to serve on the Northwest Bancorporation Capital Trust I trust preferred securities, and all of the Company obligations under the related indentures, and shall take all actions necessary or appropriate in accordance therewith, including, if requested by the trustee, execution of a supplemental indenture and other appropriate documents or certificates.advisory board.
ARTICLE VI CONDITIONS TO CONSUMMATION 6.1Conditions to Each Party’s Obligations. The respective obligations of each party to effect the Merger shall be subject to the satisfaction of the following conditions: (a)Stockholder Approval. This Agreement shall have been approved by the requisite vote of the Company’sIIBK’s stockholders in accordance with applicable laws and regulations. (b)Regulatory Approvals. All approvals, consents or waivers of any Governmental Entity required to permit consummation of the transactions contemplated by this Agreement, including the Merger, and the Bank Merger, shall have been obtained and shall remain in full force and effect, and all statutory waiting periods shall have expired or been terminated. (c)No Injunctions or Restraints; Illegality. No party hereto shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction that enjoins or prohibits the consummation of the Merger or the Bank Merger and no Governmental Entity shall have instituted any proceeding for the purpose of enjoiningto enjoin or prohibitingprohibit the consummation of the Merger, the Bank Merger or any transactions contemplated by this Agreement. No statute, rule or regulation shall have been enacted, entered, promulgated or enforced by any Governmental Entity that prohibits or makes illegal consummation of the Merger or the Bank Merger. (d)Third Party Consents. Purchaser, Purchaser Bank and the CompanyIIBK shall have obtained the consent or approval of each Person (other than the governmental approvals or consents referred to inSection 6.1(b)) whose consent or approval shall be required to consummate the transactions contemplated by this Agreement, except those for which failure to obtain such consents and approvals would not, individually or in the aggregate, have a Material Adverse Effect on Purchaser (after giving effect to the consummation of the transactions contemplated hereby). (e)Registration Statement; Blue Sky Laws. The Registration Statement shall have been declared effective by the SEC and no proceedings shall be pending or threatened by the SEC to suspend the effectiveness of the Registration Statement, and Purchaser shall have received all required approvals by state securities or “blue sky” authorities with respect to the transactions contemplated by this Agreement. (f)Nasdaq. Purchaser shall have filed with The Nasdaq Stock Market LLC a notification form or application, as applicable, for the listing of all shares of Purchaser Common Stock to be delivered as Merger Consideration, and The Nasdaq Stock Market LLC shall not have objected to the listing of such shares of Purchaser Common Stock. (g)Tax Opinion. Purchaser and the CompanyIIBK shall have received written opinions of Luse Gorman, PC and Witherspoon Kelley, respectively, dated as of the Closing Date, in form and substance customary in transactions of the type contemplated hereby, and reasonably satisfactory to Purchaser and the Company,IIBK, as the case may be, substantially to the effect that on the basis of the facts, representations and assumptions set forth in such opinions, which are consistent with the state of facts existing at the Effective Time, (i) the Merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the IRC and (ii) Purchaser, Purchaser Bank and the CompanyIIBK will each be a party to that reorganization within the meaning of Section 368(b) of the IRC. Such opinions may be based on, in addition to the review of such matters of fact and law as counsel considers appropriate, representations contained in certificates of officers of Purchaser, the CompanyPurchaser Bank, IIBK and others. 6.2Conditions to the Obligations of Purchaser and Purchaser Bank.The obligations of Purchaser and Purchaser Bank to effect the Merger shall be further subject to the satisfaction of the following additional conditions, any one or more of which may be waived by Purchaser:Purchaser and Purchaser Bank: (a)The Company’sIIBK’s Representations and Warranties. Subject to the standard set forth inSection 3.1, each of the representations and warranties of the CompanyIIBK contained in this Agreement and in any certificate or other writing delivered by the CompanyIIBK pursuant hereto shall be true and correct at and as of the Closing Date as though made at and as of the Closing Date, except that those representations and warranties that address matters only as of a particular date need only be true and correct as of such date. (b)Performance of the Company’sIIBK’s Obligations. The CompanyIIBK shall have performed in all material respects all obligations and covenants required to be performed by it under this Agreement at or prior to the Effective Time. (c)Officers’ Certificate. Purchaser and Purchaser Bank shall have received a certificate signed by the chief executive officer and the chief financial or principal accounting officer of the CompanyIIBK to the effect that the conditions set forth inSections 6.2(a) and(b) have been satisfied. (d)No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Material Adverse Effect with respect to the Company.IIBK. (e)Burdensome Condition. None of the approvals, consents or waivers of any Governmental Entity required to permit consummation of the transactions contemplated by this Agreement shall contain any condition or requirement that would so materially and adversely impact the economic or business benefits to Purchaser and Purchaser Bank of the transactions contemplated hereby that, had such condition or requirement been known, Purchaser and Purchaser Bank would not, in itstheir reasonable judgment, have entered into this Agreement. (f)Dissenting Shares. As of immediately prior to the Effective Time, not more than 10.0% of the issued and outstanding shares of CompanyIIBK Common Stock shall have perfected their right to dissent under the WBCAIBA in accordance withSection 2.6 herein. 6.3Conditions to the Obligations of the CompanyIIBK. The obligations of the CompanyIIBK to effect the Merger shall be further subject to the satisfaction of the following additional conditions, any one or more of which may be waived by the Company:IIBK: (a)Purchaser’s and Purchaser Bank’s Representations and Warranties. Subject to the standard set forth inSection 3.1, each of the representations and warranties of Purchaser and Purchaser Bank contained in this Agreement and in any certificate or other writing delivered by Purchaser and Purchaser Bank pursuant hereto shall be true and correct at and as of the Closing Date as though made at and as of the Closing Date, except that those representations and warranties that address matters only as of a particular date need only be true and correct as of such date. (b)Performance of Purchaser’s and Purchaser Bank’s Obligations. Purchaser and Purchaser Bank shall have performed in all material respects all obligations and covenants required to be performed by itthem under this Agreement at or prior to the Effective Time. (c)Officers’ Certificate. The CompanyIIBK shall have received a certificate signed by the chief executive officer and the chief financial or principal accounting officer of Purchaser and Purchaser Bank to the effect that the conditions set forth inSections 6.3(a) and(b) have been satisfied. (d)No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Material Adverse Effect with respect to Purchaser.Purchaser and Purchaser Bank. ARTICLE VII TERMINATION 7.1Termination. This Agreement may be terminated, and the Merger abandoned, at any time prior to the Effective Time, by action taken or authorized by the Board of Directors of the terminating party, either before or after any requisite stockholder approval: (a) by the mutual written consent of Purchaser and the Company;IIBK; or (b) by either Purchaser or the Company,IIBK, in the event of the failure of the Company’sIIBK’s stockholders to approve the Agreement at the CompanyIIBK Stockholder Meeting;provided,however, that the CompanyIIBK shall only be entitled to terminate the Agreement pursuant to this clause if it has complied in all material respects with its obligations underSection 5.8 (subject toSection 5.8(b)); (c) by either Purchaser or the Company,IIBK, if either (i) any approval, consent or waiver of a Governmental Entity required to permit consummation of the transactions contemplated by this Agreement shall have been denied and such denial has become final andnon-appealable or (ii) any court or other Governmental Entity of competent jurisdiction shall have issued a final, unappealable order enjoining or otherwise prohibiting consummation of the transactions contemplated by this Agreement; (d) by either Purchaser or the Company,IIBK, if the Merger is not consummated by JanuaryMay 31, 2019, unless the failure to so consummate by such time is due to the failure of the party seeking to terminate this Agreement to perform or observe the covenants and agreements of such party set forth herein; (e) by either Purchaser or the CompanyIIBK (provided that the party seeking termination is not then in material breach of any representation, warranty, covenant or other agreement contained herein), in the event of a breach of any covenant or agreement on the part of the other party set forth in this Agreement, or if any representation or warranty of the other party shall have become untrue, in either case such that the conditions set forth inSections6.2(a) and(b) orSections 6.3(a)and(b), as the case may be, would not be satisfied and such breach or untrue representation or warranty has not been or cannot be cured within thirty (30) days following written notice to the party committing such breach or making such untrue representation or warranty; (f) by Purchaser, if (i) the CompanyIIBK shall have breached its obligations underSection 5.1 orSection 5.8 in any material respect or (ii) if the Board of Directors of the CompanyIIBK does not publicly recommend in the Proxy Statement-Prospectus that stockholders approve and adopt this Agreement or if, after recommending in the Proxy Statement-Prospectus that stockholders approve and adopt this Agreement, the Board of Directors effects a Change of Recommendation; (g) by the Company,IIBK, at any time prior to the adoption and approval of this Agreement by the Company’sIIBK’s stockholders, to enter into an agreement with respect to a Superior Proposal, but only if (i) the Company’sIIBK’s Board of Directors has determined in good faith based on the advice of legal counsel that failure to take such action would cause the Board of Directors to violate its fiduciary duties under applicable law, and (ii) the CompanyIIBK has not breached its obligations underSection 5.1. (h) by the Company,IIBK, at any time during thefive-day period commencing with the Determination Date, if both of the following conditions are satisfied: (i) The number obtained by dividing the Average Closing Price by the Starting Price (the “Purchaser Ratio”��) shall be less than 0.80; and (ii) (x) the Purchaser Ratio shall be less than (y) the number obtained by dividing the Index Ratio (each as defined below) and subtracting 0.20 from the quotient in this clause (ii) (y)Index Ratio (as defined below); subject, however, to the following three sentences. If the CompanyIIBK elects to exercise its termination right pursuant to thisSection 7.1(h), it shall give written notice to Purchaser (provided that such notice of election to terminate may be withdrawn at any time within the aforementionedfive-day period). During thefive-day period commencing with its receipt of such notice, Purchaser shall have the option to increase the consideration to be received by the holders of CompanyIIBK Common Stock Companyand IIBK Stock Options and Company Warrants hereunder, by adjusting the Exchange Ratio (calculated to the nearest oneten-thousandth) to equal a quotient of (A) the product of the Starting Price, 0.80 and the Exchange Ratio, divided by (B) the Average Closing Price. If Purchaser so elects within suchfive-day period, it shall give prompt written notice to the CompanyIIBK of such election and the revised Exchange Ratio, whereupon no termination shall have occurred pursuant to thisSection 7.1(h) and this Agreement shall remain in effect in accordance with its terms (except as the Exchange Ratio shall have been so modified). For purposes of thisSection 7.1(h) the following terms shall have the meanings indicated: “Final Index Price” shall meanmeans the average closing price of the Index PricesKBW Regional Banking index as reported on The Nasdaq Stock Market, LLC (as reported at www.nasdaq.com) for the twenty (20) consecutive full trading days ending on and including the Determination Date. “Index Price” shall mean $113.13,$112.11, which is the closing price on the Starting Date for the KBW Regional Banking Index.Index (as reported on www.nasdaq.com). “Index Ratio”shall mean the Final Index Price divided by the Index Price. “Starting Date” shall mean the third trading day prior to the date of the first public announcement of entry into this Agreement. “Starting Price” shall mean $40.00,$45.68, which is the closing price of a share of Purchaser Common Stock on The Nasdaq Stock Market, LLC (as reported in The Wall Street Journal, or if not reported therein, in another authoritative source)on www.nasdaq.com) on the Starting Date. 7.2 Termination Fee; Expenses. (a) In the event of termination of this Agreement by the CompanyIIBK pursuant toSection 7.1(g), the CompanyIIBK shall make payment to Purchaser of a termination fee of $5,076,204.$6,834,075. (b) In the event of termination of this Agreement by Purchaser pursuant toSection 7.1(f), so long as at the time of such termination Purchaser is not in material breach of any representation, warranty or material covenant contained herein, the CompanyIIBK shall make payment to Purchaser of a termination fee of $5,076,204.$6,834,075. (c) If (i) this Agreement is terminated (A) by either party pursuant toSection 7.1(b) or (B) by Purchaser pursuant toSection 7.1(e) and the breach giving rise to such termination was knowing or intentional, and (ii) at the time of such termination Purchaser or Purchaser Bank is not in material breach of any representation, warranty or material covenant contained herein, and (iii) prior to the CompanyIIBK Stockholder Meeting (in the case of termination pursuant toSection 7.1(b)) or the date of termination (in the case of termination pursuant toSection 7.1(e)), an Acquisition Proposal has been publicly announced, disclosed or communicated and (iv) within twelve (12) months of such termination the CompanyIIBK shall consummate or enter into any agreement with respect to the Acquisition Proposal set forth in clause (iii) of thisSection 7.2(c), then the CompanyIIBK shall make payment to Purchaser of a termination fee of $5,076,204.$6,834,075. (d) The fee payable pursuant toSection 7.2(a) or(b) shall be made by wire transfer of immediately available funds at the time of termination. Any fee payable pursuant toSection 7.2(c) shall be made by wire transfer of immediately available funds within two (2) Business Days after notice of demand for payment. The CompanyIIBK, Purchaser Bank and Purchaser acknowledge that the agreements contained in thisSection 7.2 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, Purchaser and Purchaser Bank would not enter into this Agreement. The amount payable by the CompanyIIBK pursuant toSections 7.2(a), (b) or (c) constitutes liquidated damages and not a penalty and shall be the sole remedy of Purchaser and Purchaser Bank in the event of termination of this Agreement on the bases specified in such sections. 7.3Effect of Termination. In the event of termination of this Agreement by either Purchaser or the CompanyIIBK as provided inSection 7.1, this Agreement shall forthwith become void and, subject toSection 7.2, have no effect, and there shall be no liability on the part of any party hereto or their respective officers and directors, except that (i) Sections 5.3(c),7.2and8.6, shall survive any termination of this Agreement, and (ii) notwithstanding anything to the contrary contained in this Agreement, no party shall be relieved or released from any liabilities or damages arising out of its fraud or willful and material breach of any provision of this Agreement. ARTICLE VIII CERTAIN OTHER MATTERS 8.1Interpretation. When a reference is made in this Agreement to Sections or Exhibits such reference shall be to a Section of, or Exhibit to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for ease of reference only and shall not affect the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed followed by the words “without limitation.” Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Any reference to gender in this Agreement shall be deemed to include any other gender. 8.2Survival. Only those agreements and covenants of the parties that are by their terms applicable in whole or in part after the Effective Time, includingSection 5.12 of this Agreement, shall survive the Effective Time. All other representations, warranties, agreements and covenants shall be deemed to be conditions of the Agreement and shall not survive the Effective Time. 8.3Waiver; Amendment. Prior to the Effective Time, any provision of this Agreement may be: (i) waived in writing by the party benefited by the provision or (ii) amended or modified at any time (including the structure of the transaction) by an agreement in writing between the parties hereto except that, after the vote by the stockholders of the Company,IIBK, no amendment or modification may be made that would reduce the amount or alter or change the kind of consideration to be received by holders of CompanyIIBK Common Stock or that would contravene any provision of the MBCAMBA or the applicable state and federal banking laws, rules and regulations. 8.4Counterparts. This Agreement may be executed in counterparts each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same instrument. A facsimile or other electronic copy of a signature page shall be deemed to be an original signature page. 8.5Governing Law. This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Montana, without regard to conflicts of laws principles. 8.6Expenses. Each party hereto will bear all expenses incurred by it in connection with this Agreement and the transactions contemplated hereby. 8.7Notices. All notices and other communications in connection with this Agreement shall be in writing and shall be deemed given if delivered personally, sent via facsimile (with confirmation), by email, by registered or certified mail (return receipt requested) or by commercial overnight delivery service, or delivered by an express courier (with confirmation) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): If to Purchaser or Purchaser Bank, to: First Interstate BancSystem, Inc. First Interstate Bank 401 North 31st Street Billings, Montana 59116 | | President and Chief Executive Officer |
| Email: | Facsimile: (406)255-5350
Attention: Kevin P. Riley
President and Chief Executive Officer
Email: Kevin.Riley@fib.com
|
With copies to: First Interstate BancSystem, Inc. First Interstate Bank 401 North 31st Street Billings, Montana 59116 | Email: | Facsimile: (406)255-5350
Attention: Kirk D. Jensen
General Counsel
Email: Kirk.Jensen@fib.com
|
Luse Gorman, PC 5335 Wisconsin Avenue, NW, Suite 780 Washington, DC 20015 | | Facsimile: (202)362-2902
Attention: Scott A. Brown
Lawrence M.F. Spaccasi
Email: sbrown@luselaw.com
lspaccasi@luselaw.com |
If to the Company,IIBK, to: Northwest Bancorporation, Inc.Idaho Independent Bank
4211260 W. Riverside Avenue, Suite 113Riverstone Drive
Spokane, Washington 99201Coeur d’Alene, Idaho 83814
| Attention: | Kurt R. Gustavel |
| | President and Chief Executive Officer |
| Email: | Kurt.Gustavel@iibk.net |
Facsimile: (509)850-3524
Attention: Russell A. Lee
President and Chief Executive Officer
Email: ralee@inb.com
With copies to: Witherspoon Kelley 422 W. Riverside Avenue, Suite 1100 Spokane, Washington 99201 | Attention: | Richard A. Repp |
| Email: | Facsimile: (509)458-2728
Attention: Richard A. Repp
Email: rar@witherspoonkelley.com
|
8.8Entire Agreement; etc. This Agreement, together with the Exhibits and Disclosure Letters hereto, represents the entire understanding of the parties hereto with reference to the transactions contemplated hereby and supersedes any and all other oral or written agreements heretofore made.made, except for that certainnon-disclosure agreement by and between IIBK and Purchaser, dated July 12, 2018 which shall remain in full effect pursuant to its terms. Except forSection 5.12, which confers rights on the parties described therein, nothing in this Agreement is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement, including the right to rely upon the representations and warranties set forth herein. The representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties. Any inaccuracies in such representations and warranties are subject to waiver by the parties hereto in accordance herewith without notice or liability to any other person.Person. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the Knowledge of any of the parties hereto. Consequently, Persons other than the parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date. 8.9Successors and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that this Agreement may not be assigned by eitherany party hereto without the prior written consent of the other party.parties. 8.10Severability. If any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, by any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement and the parties shall use their reasonable efforts to substitute a valid, legal and enforceable provision which,that, insofar as practical, implements the purposes and intents of this Agreement. 8.11Specific Performance.The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and, accordingly, that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof (including the parties’ obligation to consummate the Merger), in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security or a bond as a prerequisite to obtaining equitable relief. 8.12Waiver of Jury Trial.EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW AT THE TIME OF INSTITUTION OF THE APPLICABLE LITIGATION, 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, 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 MUTUALRESPECTIVE WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.12. 8.13Delivery by Facsimile or Electronic Transmission.This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent signed and delivered by means of a facsimile machine or bye-mail delivery of a “.pdf” format data file, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in Person. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine ore-mail delivery of a “.pdf” “.pdf” format data file to deliver a signature to this Agreement or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine ore-mail delivery of a “.pdf” format data file as a defense to the formation of a contract and each party hereto forever waives any such defense.
[Signature page follows] In Witness Whereof, the parties hereto have caused this Agreement and Plan of Merger to be executed by their duly authorized officers as of the date first above written. First Interstate BancSystem, Inc.
| | | | First Interstate BancSystem, Inc. | | | | By: | | /s/ Kevin P. Riley | | | Kevin P. Riley | | | President and Chief Executive Officer |
| | | | First Interstate Bank | | | | By: | | /s/ Kevin P. Riley | | | Kevin P. Riley | | | President and Chief Executive Officer |
Northwest Bancorporation, Inc.
| | | | Idaho Independent Bank | | | | By: | | /s/ Russell A. Lee Kurt R. Gustavel | | | Russell A. LeeKurt R. Gustavel | | | President and Chief Executive Officer |
AnnexANNEX B
Chapter 23B.13 RCWTITLE 26
DISSENTERS’ RIGHTSBANKS AND BANKING
RCW 23B.13.010CHAPTER 9
Definitions.CONSOLIDATION, SALE AND REORGANIZATION
As used in this chapter:
26-909. DISSENTING STOCKHOLDERS. (1) “Corporation” means the issuerA dissenting stockholder of the shares held by a dissenter before the corporate action, or the surviving or acquiring corporation by merger or share exchange of that issuer. (2) “Dissenter” means a shareholder who isstate bank shall be entitled to dissent from corporate action under RCW 23B.13.020 and who exercises that right when and in the manner required by RCW 23B.13.200 through 23B.13.280.
(3) “Fair value,” with respect to a dissenter’s shares, meansreceive the value in cash of only those shares which were voted against a merger to result in a state bank, against the shares immediately before the effective date of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable.
(4) “Interest” means interest from the effective date of the corporate action until the date of payment, at the average rate currently paid by the corporation on its principal bank loans or, if none, at a rate that is fair and equitable under all the circumstances.
(5) “Record shareholder” means the person in whose name shares are registered in the recordsconversion of a corporationstate bank into a national bank or the beneficial owner of shares to the extent of the rights granted byagainst a nominee certificate on file with a corporation.
(6) “Beneficial shareholder” means the person who is a beneficial owner of shares held in a voting trust or by a nominee as the record shareholder.
(7) “Shareholder” means the record shareholder or the beneficial shareholder.
RCW 23B.13.020
Right to dissent.
(1) A shareholder is entitled to dissent from, and obtain payment of the fair value of the shareholder’s shares in the event of, any of the following corporate actions:
(a) A plan of merger, which has become effective, to which the corporation is a party (i) if shareholder approval was required for the merger by RCW 23B.11.030, 23B.11.080, or the articles of incorporation, and the shareholder was entitled to vote on the merger, or (ii) if the corporation was a subsidiary and the plan of merger provided for the merger of the subsidiary with its parent under RCW 23B.11.040;
(b) A plan of share exchange, which has become effective, to which the corporation is a party as the corporation whose shares have been acquired, if the shareholder was entitled to vote on the plan;
(c) A sale lease, exchange, or other disposition, which has become effective, of all or substantially all of the propertystate bank’s assets, and assets of the corporation other than in the usual and regular course of business,only if the shareholder was entitled to vote on the sale, lease, exchange, or other disposition, including a disposition in dissolution, but not including a disposition pursuant to court order or a disposition for cash pursuant to a plan by
which all or substantially all of the net proceeds of the disposition will be distributedwritten demand thereupon is made to the shareholdersresulting state or national bank at any time within one year after the date of the disposition;
(d) An amendment of the articles of incorporation, whether or not the shareholder was entitled to vote on the amendment, if the amendment effects a redemption or cancellation of all of the shareholder’s shares in exchange for cash or other consideration other than shares of the corporation;
(e) Any action described in RCW 23B.25.120;
(f) Any corporate action approved pursuant to a shareholder vote to the extent the articles of incorporation, bylaws, or a resolution of the board of directors provides that voting or nonvoting shareholders are entitled to dissent and obtain payment for their shares; or
(g) A plan of entity conversion in the case of a conversion of a domestic corporation to a foreign corporation, which has become effective, to which the domestic corporation is a party as the converting entity, if: (i) The shareholder was entitled to vote on the plan; and (ii) the shareholder does not receive shares in the surviving entity that have terms as favorable to the shareholder in all material respects and that represent at least the same percentage interest of the total voting rights of the outstanding shares of the surviving entity as the shares held by the shareholder before the conversion.
(2) A shareholder entitled to dissent and obtain payment for the shareholder’s shares under this chapter may not challenge the corporate action creating the shareholder’s entitlement unless the action fails to comply with the procedural requirements imposed by this title, RCW 25.10.831 through 25.10.886, the articles of incorporation, or the bylaws, or is fraudulent with respect to the shareholder or the corporation.
(3) The right of a dissenting shareholder to obtain payment of the fair value of the shareholder’s shares shall terminate upon the occurrence of any one of the following events:
(a) The proposed corporate action is abandoned or rescinded;
(b) A court having jurisdiction permanently enjoins or sets aside the corporate action; or
RCW 23B.13.030
Dissent by nominees and beneficial owners.
(1) A record shareholder may assert dissenters’ rights as to fewer than all the shares registered in the shareholder’s name only if the shareholder dissents with respect to all shares beneficially owned by any one person and delivers to the corporation a notice of the name and address of each person on whose behalf the shareholder asserts dissenters’ rights. The rights of a partial dissenter under this subsection are determined as if the shares as to which the dissenter dissents and the dissenter’s other shares were registered in the names of different shareholders.
(2) A beneficial shareholder may assert dissenters’ rights as to shares held on the beneficial shareholder’s behalf only if:
(a) The beneficial shareholder submits to the corporation the record shareholder’s consent to the dissent not later than the time the beneficial shareholder asserts dissenters’ rights, which consent shall be set forth either (i) in a record or (ii) if the corporation has designated an address, location, or system to which the consent may be electronically transmitted and the consent is electronically transmitted to the designated address, location, or system, in an electronically transmitted record; and
(b) The beneficial shareholder does so with respect to all shares of which such shareholder is the beneficial shareholder or over which such shareholder has power to direct the vote.
RCW 23B.13.200
Notice of dissenters’ rights.
(1) If proposed corporate action creating dissenters’ rights under RCW 23B.13.020 is submitted for approval by a vote at a shareholders’ meeting, the meeting notice must state that shareholders are or may be entitled to assert dissenters’ rights under this chapter and be accompanied by a copy of this chapter.
(2) If corporate action creating dissenters’ rights under RCW 23B.13.020 is submitted for approval without a vote of shareholders in accordance with RCW 23B.07.040, the shareholder consent described in RCW 23B.07.040(1)(b) and the notice described in RCW 23B.07.040(3)(a) must include a statement that shareholders are or may be entitled to assert dissenters’ rights under this chapter and be accompanied by a copy of this chapter.
RCW 23B.13.210
Notice of intent to demand payment.
(1) If proposed corporate action creating dissenters’ rights under RCW 23B.13.020 is submitted to a vote at a shareholders’ meeting, a shareholder who wishes to assert dissenters’ rights must (a) deliver to the corporation before the vote is taken notice of the shareholder’s intent to demand payment for the shareholder’s shares if the proposed corporate action is effected, and (b) not vote such shares in favor of the proposed corporate action.
(2) If proposed corporate action creating dissenters’ rights under RCW 23B.13.020 is submitted for approval without a vote of shareholders in accordance with RCW 23B.07.040, a shareholder who wishes to assert dissenters’ rights must not execute the consent or otherwise vote such shares in favor of the proposed corporate action.
(3) A shareholder who does not satisfy the requirements of subsection (1) or (2) of this section is not entitled to payment for the shareholder’s shares under this chapter.
RCW 23B.13.220
Dissenters’ rights—Notice.
(1) If proposed corporate action creating dissenters’ rights under RCW 23B.13.020 is approved at a shareholders’ meeting, the corporation shall within tenthirty (30) days after the effective date of the corporate action delivermerger or conversion accompanied by the surrender of the stock certificates. The value of such shares will be determined, as of the date of the stockholders’ meeting approving the merger or conversion, by three (3) appraisers, one (1) to all shareholders who satisfiedbe selected by the requirements of RCW 23B.13.210(1) a notice in compliance with subsection (5) of this section.
(2) If proposed corporate action creating dissenters’ rights under RCW 23B.13.020 is approved without a vote of shareholders in accordance with RCW 23B.07.040, the owners oftwo-thirds (2/3) of the shares involved at a meeting called by the director on ten (10) days’ notice, delivered pursuant to RCW 23B.07.040(3)(b) to shareholders who satisfiedone (1) by the requirementsboard of RCW 23B.13.210(2)directors of the resulting state or national bank, and the third by the two (2) so chosen. The valuation agreed upon by any two (2) appraisers shall comply with subsection (5) of this section.
(3) In the case of proposed corporate action creating dissenters’ rights under RCW 23B.13.020(1)(a)(ii), the corporation shallgovern. If any necessary appraiser is not appointed within tensixty (60) days after the effective date of the corporate action deliver to all shareholders ofmerger or conversion, the subsidiary other thandirector shall make the parent a notice in compliance with subsection (5) of this section.
(4) Innecessary appointment, or if the case of proposed corporate action creating dissenters’ rights under RCW 23B.13.020(1)(d) that, pursuant to RCW 23B.10.020(4)(b),appraisal is not required to be approved by the shareholders of the corporation, the corporation shallcompleted within tenninety (90) days after the merger or conversion becomes effective, datethe director shall cause an appraisal to be made.
(2) The merger agreement may fix an amount which the merging banks consider to be the fair market value of the corporate action deliver to all shareholdersshares of a merging or a converting bank at the time of the stockholders’ meeting approving the merger or conversion, which the resulting bank will pay dissenting stockholders of that bank entitled to dissentpayment in cash. The amount due under RCW 23B.13.020(1)(d)such accepted offer or under the appraisal shall constitute a noticedebt of the resulting state or national bank. (3) The expenses of appraisal shall be paid by the resulting state bank except when the value fixed by the appraiser does not exceed the value fixed by the merger agreement in compliance with subsection (5)which caseone-half (1/2) of this section.the expenses shall be paid by the resulting bank andone-half (1/2) by the dissenting stockholders requesting the appraisal in proportion to their respective holdings. (5) Any notice under subsection (1), (2), (3), or (4) of this section must:
(a) State where the payment demand must be sent and where and when certificates for certificated shares must be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of the shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action and requires that the person asserting dissenters’ rights certify whether or not the person acquired beneficial ownership of the shares before that date;
(d) Set a date by which the corporation must receive the payment demand, which date may not be fewer than thirty nor more than sixty days after the date the notice in subsection (1), (2), (3), or (4) of this section is delivered; and
(e) Be accompanied by a copy of this chapter.
RCW 23B.13.230
Duty to demand payment.
(1) A shareholder sent a notice described in RCW 23B.13.220 must demand payment, certify whether the shareholder acquired beneficial ownership of the shares before the date required to be set forth in the notice pursuant to RCW 23B.13.220(5)(c), and deposit the shareholder’s certificates, all in accordance with the terms of the notice.
(2) The shareholder who demands payment and deposits the shareholder’s share certificates under subsection (1) of this section retains all other rights of a shareholder until the proposed corporate action is effected.
(3) A shareholder who does not demand payment or deposit the shareholder’s share certificates where required, each by the date set in the notice, is not entitled to payment for the shareholder’s shares under this chapter.
RCW 23B.13.240
Share restrictions.
(1) The corporation may restrict the transfer of uncertificated shares from the date the demand for payment under RCW 23B.13.230 is received until the proposed corporate action is effected or the restriction is released under RCW 23B.13.260.
(2) The person for whom dissenters’ rights are asserted as to uncertificated shares retains all other rights of a shareholder until the effective date of the proposed corporate action.
RCW 23B.13.250
Payment.
(1) Except as provided in RCW 23B.13.270, within thirty days of the later of the effective date of the proposed corporate action, or the date the payment demand is received, the corporation shall pay each dissenter who complied with RCW 23B.13.230 the amount the corporation estimates to be the fair value of the shareholder’s shares, plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporation’s balance sheet as of the end of a fiscal year ending not more than sixteen months before the date of payment, an income statement for that year, a statement of changes in shareholders’ equity for that year, and the latest available interim financial statements, if any;
(b) An explanation of how the corporation estimated the fair value of the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter’s right to demand payment under RCW 23B.13.280; and
(e) A copy of this chapter.
RCW 23B.13.260
Failure to take corporate action.
(1) If the corporation does not effect the proposed corporate action within sixty days after the date set for demanding payment and depositing share certificates, the corporation shall return the deposited certificates and release any transfer restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer restrictions, the corporation wishes to effect the proposed corporate action, it must send a new dissenters’ notice under RCW 23B.13.220 and repeat the payment demand procedure.
RCW 23B.13.270
After-acquired shares.
(1) A corporation may elect to withhold payment required by RCW 23B.13.250 from a dissenter unless the dissenter was the beneficial owner of the shares before the date set forth in the dissenters’ notice as the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action.
(2) To the extent the corporation elects to withhold payment under subsection (1) of this section, after the effective date of the proposed corporate action, it shall estimate the fair value of the shares, plus accrued interest, and shall pay this amount to each dissenter who agrees to accept it in full satisfaction of the dissenter’s demand. The corporation shall send with its offer an explanation of how it estimated the fair value of the shares, an explanation of how the interest was calculated, and a statement of the dissenter’s right to demand payment under RCW 23B.13.280.
RCW 23B.13.280
Procedure if shareholder dissatisfied with payment or offer.
(1) A dissenter may deliver a notice to the corporation informing the corporation of the dissenter’s own estimate of the fair value of the dissenter’s shares and amount of interest due, and demand payment of the dissenter’s estimate, less any payment under RCW 23B.13.250, or reject the corporation’s offer under RCW 23B.13.270 and demand payment of the dissenter’s estimate of the fair value of the dissenter’s shares and interest due, if:
(a) The dissenter believes that the amount paid under RCW 23B.13.250 or offered under RCW 23B.13.270 is less than the fair value of the dissenter’s shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under RCW 23B.13.250 within sixty days after the date set for demanding payment; or
(c) The corporation does not effect the proposed corporate action and does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares within sixty days after the date set for demanding payment.
(2) A dissenter waives the right to demand payment under this section unless the dissenter notifies the corporation of the dissenter’s demand under subsection (1) of this section within thirty days after the corporation made or offered payment for the dissenter’s shares.
RCW 23B.13.300
Court action.
(1) If a demand for payment under RCW 23B.13.280 remains unsettled, the corporation shall commence a proceeding within sixty days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within thesixty-day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the superior court of the county where a corporation’s principal office, or, if none in this state, its registered office, is located. If the corporation is a foreign corporation without a registered office in this state, it shall commence the proceeding in the county in this state where the registered office of the domestic corporation merged with or whose shares were acquired by the foreign corporation was located.
(3) The corporation shall make all dissenters, whether or not residents of this state, whose demands remain unsettled, parties to the proceeding as in an action against their shares and all parties must be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law.
(4) The corporation may join as a party to the proceeding any shareholder who claims to be a dissenter but who has not, in the opinion of the corporation, complied with the provisions of this chapter. If the court determines that such shareholder has not complied with the provisions of this chapter, the shareholder shall be dismissed as a party.
(5) The jurisdiction of the court in which the proceeding is commenced under subsection (2) of this section is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The appraisers have the powers described in the order appointing them, or in any amendment to it. The dissenters are entitled to the same discovery rights as parties in other civil proceedings.
(6) Each dissenter made a party to the proceeding is entitled to judgment (a) for the amount, if any, by which the court finds the fair value of the dissenter’s shares, plus interest, exceeds the amount paid by the corporation, or (b) for the fair value, plus accrued interest, of the dissenter’s after-acquired shares for which the corporation elected to withhold payment under RCW 23B.13.270.
RCW 23B.13.310
Court costs and counsel fees.
(1) The court in a proceeding commenced under RCW 23B.13.300 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the costs against the corporation, except that the court may assess the costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding payment under RCW 23B.13.280.
(2) The court may also assess the fees and expenses of counsel and experts for the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if the court finds the corporation did not substantially comply with the requirements of RCW 23B.13.200 through 23B.13.280; or
(b) Against either the corporation or a dissenter, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by chapter 23B.13 RCW.
(3) If the court finds that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated, and that the fees for those services should not be assessed against the corporation, the court may award to these counsel reasonable fees to be paid out of the amounts awarded the dissenters who were benefited.
AnnexANNEX C
 
April 25,October 11, 2018
Board of Directors Northwest Bancorporation,Idaho Independent Bank
1260 West Riverstone Drive Coeur d’Alene, ID 83814 Ladies and Gentlemen: Idaho Independent Bank (“IIB”), First Interstate BancSystem, Inc. 421 West Riverside Avenue
Spokane, WA 99201
Members of the Board:
We understand that Northwest Bancorporation, Inc. (the “Company” (“Purchaser”) proposesand First Interstate Bank (“Purchaser Bank”) are proposing to enter into an Agreement and Plan of Merger (the “Agreement”“Agreement”) with First Interstate BancSystem, Inc. (“Parent”), pursuant to which among other things,IIB will, subject to the Company willterms and conditions set forth in the Agreement, merge with and into Purchaser Bank with Purchaser Bank being the Parentsurviving entity (the “Transaction”“Merger”). Pursuant to the terms and conditions of the Agreement, at the Effective Time, each outstanding share of theIIB’s common stock, par value $5.00 per share (“IIB Common Stock”), issued and outstanding immediately prior to the Effective Time, except for certain shares of the Company (the “CompanyIIB Common Stock”) as specified in the Agreement, will be converted into and exchanged for the right to receive 0.5160.50 shares (the “Exchange Ratio”) of Purchaser Class A common stock, of Parent (the “Exchange Ratio”no par value (“Purchaser Common Stock”). YouCapitalized terms used herein without definition shall have advised us that the Transaction will qualify as atax-free reorganization for U.S. federal income tax purposes. The Exchange Ratio is subjectmeanings assigned to adjustments pursuant to Section 7.1(h) ofthem in the Agreement, as to which adjustments we express no opinion.Agreement. The terms and conditions of the TransactionMerger are more fully set forth in the Agreement.
Capitalized terms used herein without definition have the respective meanings ascribed to them in the Agreement.
You have requested our opinion as to the fairness, from a financial point of view, to the holders of the Company Common Stock (other than the Excluded Holders) of the Exchange Ratio to be paid to suchthe holders of IIB Common Stock. Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”, “we” or “our”), as part of its investment banking business, is regularly engaged in the proposed Transaction. valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions. In connection with preparing ourthis opinion, we have reviewed and considered, among other things: (i) a draft of the Agreement, dated October 11, 2018; (ii) certain publicly available financial statements and other historical financial information of IIB that we deemed relevant; (iii) certain publicly available financial statements and other historical financial information of Purchaser and Purchaser Bank that we deemed relevant; (iv) certain internal financial projections for IIB for the years ending December 31, 2018 through December 31, 2022, as provided by the senior management of IIB, as well as an estimated dividend payout ratio for the years ending December 31, 2018 through December 31, 2022, as directed by the senior management of IIB; (v) publicly available mean analyst net income estimates for Purchaser for the years ending December 31, 2018 through December 31, 2020, as well as a long-term net income growth rate for the years thereafter and annual dividends per share for the years ending December 31, 2018 through December 31, 2022, as directed by the senior management of Purchaser; (vi) the pro forma financial impact of the Merger on Purchaser based on certain assumptions relating to purchase accounting adjustments, cost savings and transaction expenses, as provided by the senior management of Purchaser (collectively, the “Pro Forma Assumptions”); (vii) the publicly reported historical price and trading activity for IIB Common Stock and Purchaser Common Stock, including a comparison of certain stock market information for IIB Common Stock and Purchaser Common Stock and certain stock indices as well as publicly available information for certain other | (i) | a draft of the Agreement, dated April 25, 2018; |
| (ii) | certain financial statements and other historical financial and business information about the Parent and the Company made available to us from published sources and/or from the internal records of the Parent and the Company that we deemed relevant; |
| (iii) | certain publicly available analyst earnings estimates for Parent for the years ending December 31, 2018 and December 31, 2019 and estimated long-term growth rate for the years thereafter, in each case as discussed with, and confirmed by, senior management of the Company and Parent; |
| (iv) | financial projections for the Company for the years ending December 31, 2018 and December 31, 2019 and estimated long term growth rate for the years thereafter, in each case as discussed with, and confirmed by, senior management of the Company; |
| (v) | the current market environment generally and the banking environment in particular; |
Investment Banking
611 Anton Boulevard● Suite 600● Costa Mesa, CA 92626● (714) 327-8800● FAX (714) 327-8700
www.dadavidson.com/Investment-Banking
C-1
| (vi) | the financial terms of certain other transactions in the financial institutions industry, to the extent publicly available; |
| (vii) | the market and trading characteristics of public companies and public bank holding companies in particular; |
similar companies, the securities of which are publicly traded; (viii) a comparison of certain financial information for IIB and Purchaser with similar financial institutions for which information is publicly available; (ix) the financial terms of certain recent business combinations in the banking industry (on a nationwide basis), to the extent publicly available; (x) the current market environment generally and the banking environment in particular; and (xi) such other information, financial studies, analyses and investigations and financial, economic and market criteria as we considered relevant. We also discussed with certain members of the senior management of IIB the business, financial condition, results of operations and prospects of IIB and held similar discussions with certain members of the management of Purchaser and regarding the business, financial condition, results of operations and prospects of Purchaser. | (viii) | the relative contributions of the Parent and Company to the combined company; |
| (ix) | the pro forma financial impact of the Transaction, taking into consideration the amounts and timing of the transaction costs and cost savings; |
| (x) | the net present value of the Company with consideration of projected financial results; |
| (xi) | the net present value of Parent with consideration of projected financial results; and |
| (xii) | such other financial studies, analyses and investigations and financial, economic and market criteria and other information as we considered relevant including discussions with management and other representatives and advisors of the Parent and the Company concerning the business, financial condition, results of operations and prospects of the Parent and the Company. |
In arriving atperforming our opinion,review, we have with your consent, assumed and relied upon the accuracy and completeness of all of the financial and other information that was publicly available or supplied or otherwise made available to discussed with orand reviewed by or for us. We have not independently verified (nor have we assumed responsibility for independently verifying) such information or its accuracy or completeness. We have not undertaken or been provided with any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of the Company, and we did not make an independent appraisal or analysis of the Company with respect to the Transaction. In addition, we have not assumed any obligation to conduct, nor have we conducted, any physical inspection of the properties or facilities of the Company, and have not been provided with any reports of such physical inspections. We have assumedus from public sources, that there has been no material change in the Company’s business, assets, financial condition, results of operations, cash flows or prospects since the date of the most recent financial statementswas provided to us andby IIB or Purchaser or their respective representatives, or that neither the Company nor Parent is party to any material pending transaction, including without limitation any financing, recapitalization, acquisition or merger, divestiture orspin-off, other than the Transaction. With respect to the financial forecasts and other analyses (including information relating to certain pro forma financial effects of, and strategic implications and operational benefits anticipated to result from, the Transaction) provided to orwas otherwise reviewed by or for or discussed with us, and we have been advised by managementassumed such accuracy and completeness for purposes of the Company, and have assumed with your consent, that such forecasts and other analyses were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of the Company as to the future financial performance of the Company and the other matters covered thereby, and that the financial results (including the potential strategic implications and operational benefits anticipated to result from the Transaction) reflected in such forecasts and analyses will be realized in the amounts and at the times projected. We assume no responsibility for and express norendering this opinion as to these forecasts and analyseswithout any independent verification or the assumptions on which they were based.investigation. We have relied on the assurances of managementthe respective managements of the CompanyIIB and Purchaser that they are not aware of any facts or circumstances that would make any of such information forecasts or analyses inaccurate or misleading.
We arehave not experts in the evaluationbeen asked to and have not undertaken an independent verification of loan and lease portfolios, classified loans or other real estate owned or in assessing the adequacyany of the allowance for loan losses with respect thereto,such information and we do not assume any responsibility or liability for the accuracy or completeness thereof. We did not make an independent evaluation or perform an appraisal thereof, or of any otherthe specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of the CompanyIIB or ParentPurchaser or any of their respective subsidiaries.subsidiaries, nor have we been furnished with any such evaluations or appraisals. We render no opinion or evaluation on the collectability of any assets or the future performance of any loans of IIB or Purchaser. We did not make an independent evaluation of the adequacy of the allowance for loan losses of IIB or Purchaser, or of the combined entity after the Merger, and we have not reviewed any individual loan or credit files relating to the CompanyIIB or Parent.Purchaser. We have assumed, with your consent, that the respective allowances for loan and lease losses for both the CompanyIIB and ParentPurchaser are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. We did not make In preparing its analyses, Sandler O’Neill used certain internal financial projections for IIB for the years ending December 31, 2018 through December 31, 2022, as provided by the senior management of IIB, as well as an independent evaluationestimated dividend payout ratio for the years ending December 31, 2018 through December 31, 2022, as directed by the senior management of IIB. In addition, Sandler O’Neill used publicly available mean analyst net income estimates for Purchaser for the years ending December 31, 2018 through December 31, 2020, as well as a long-term net income growth rate for the years thereafter and annual dividends per share for the years ending December 31, 2018 through December 31, 2022, as directed by the senior management of Purchaser. Sandler O’Neill also received and used in its pro forma analyses the Pro Forma Assumptions, as provided by the senior management of Purchaser. With respect to the foregoing information, the respective senior managements of IIB and Purchaser confirmed to us that such information reflected (or, in the case of the qualitypublicly available analyst estimates referred to above, were consistent with) the best currently available projections, estimates and judgments of those respective managements as to the future financial performance of IIB and Purchaser, respectively, and the other matters covered thereby, and we assumed that the future financial performance reflected in such information would be achieved. We express no opinion as to such information, or the assumptions on which such information is based. We have also assumed that there has been no material change in the respective assets, financial condition, results of operations, business or prospects of IIB or Purchaser since the date of the Company’s or Parent’s deposit base, normost recent financial statements made available to us. We have we independentlyassumed in all respects material to our analysis that IIB and Purchaser will remain as going concerns for all periods relevant to our analysis. evaluated potential deposit concentrations or the deposit composition of the Company or Parent. We did not make an independent evaluation of the quality of the Company’s or Parent’s investment securities portfolio, nor have we independently evaluated potential concentrations in the investment securities portfolio of the Company or Parent.
We have also assumed, with your consent, that (i) each of the parties to the Agreement will comply in all material respects with all material terms and conditions of the Agreement and all related agreements, that all of the representations and warranties contained in the Agreement and all relatedsuch agreements are true and correct in all material respects, that each of the parties to such agreements will perform in all material respects all of the covenants and other obligations required to our analysis,be performed by such party under such agreements and that the Transactionconditions precedent in such agreements are not and will not be waived, (ii) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the Merger, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on IIB, Purchaser, the Merger or any related transactions, and (iii) the Merger and any related transactions will be consummated in accordance with the terms of the Agreement without any waiver, modification or amendment of any material term, condition or covenantagreement thereof the effect of which would beand in any respect material to our analysis. We also have assumed thatcompliance with all material governmental, regulatory orapplicable laws and other consents, approvals, and waivers necessary for the consummation of the Transaction will be obtained without any material adverse effect on the Company or the contemplated benefits of the Transaction. Further,requirements. Finally, with your consent, we have assumedrelied upon the advice that the executed Agreement will not differ in any material respectIIB has received from the draft Agreement, dated April 25, 2018, reviewed by us. We have assumed inits legal, accounting and tax advisors as to all respects material to our analysis that the Company will remain as a going concern for all periods relevant to our analysis. We express no opinion regarding the liquidation value of the Company or any other entity.
Our opinion is limitedlegal, accounting and tax matters relating to the fairness, from a financial point of view, ofMerger and the Exchange Ratio to be paid to the holders of the Company Common Stock (other than the Excluded Holders) in the proposed Transaction. We do not express any view on, and our opinion does not address, any other term or aspect of the Agreement or Transaction (including, without limitation, the form or structure of the Transaction) or any term or aspect of any other agreement or instrumenttransactions contemplated by the Agreement or entered into in connection with the Transaction, including the fairness of the Transaction to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors or other constituencies of the Company, or as to the underlying decision by the Company to engage in the Transaction. Furthermore, we express no opinion with respect to the amount or nature of any compensation to any officers, directors or employees of the Company, or any class of such persons, relative to the Exchange Ratio to be paid to the holders of the Company Common Stock in the Transaction, or with respect to the fairness of any such compensation. Our opinion does not take into account individual circumstances of specific holders with respect to control, voting or other rights which may distinguish such holders.
Agreement. We express no view as to, and our opinion does not address, the relative merits of the Transaction as compared to any alternative business transactions or strategies, or whether such alternative transactions or strategies could be achieved or are available. In addition, our opinion does not address any legal, regulatory, tax or accounting matters, as to which we understand that the Company obtained such advice as it deemed necessary from qualified professionals. We do not express any opinion as to the value of any asset of the Company whether at current market prices or in the future, or as to the price at which the Company or its assets could be sold in the future. We also express no opinion as to the price at which the Company Common Stock or Parent will trade following announcement of the Transaction or at any future time.
We have not evaluated the solvency or fair value of the Company under any state, federal or other laws relating to bankruptcy, insolvency or similarsuch matters. This opinion is not a solvency opinion and does not in any way address the solvency or financial condition of the Parent. We are not expressing any opinion as to the impact of the Transaction on the solvency or viability of the Company or Parent or the ability of the Company or Parent to pay their respective obligations when they come due.
We have acted as the Company’s financial advisor in connection with the Transaction and will receive a fee for our services, a portion of which is payable upon the rendering of this opinion and a significant portion of which is contingent upon consummation of the Transaction. In addition, the Company has agreed to reimburse our reasonable expenses and indemnify us against certain liabilities arising out of our engagement.
During the two years preceding the date of this letter, we have provided investment banking and other financial services to the Company for which we have received customary compensation. Such services during such period have included serving as the Company’s financial advisor for its acquisition of CenterPointe Community Bank in 2017.
In the ordinary course of our business, D.A. Davidson & Co. and its affiliates may actively trade or hold securities of the Company or Parent for our own accounts or for the accounts of our customers and, accordingly, may at any time hold long or short positions in such securities. We may seek to provide investment banking or other financial services to the Company or Parent in the future for which we would expect to receive compensation.
This fairness opinion was reviewed and approved by a D.A. Davidson & Co. Fairness Opinion Committee.
It is understood that this letter is for the information of the Board of Directors of the Company in connection with and for the purposes of its consideration of the Transaction. This opinion is not intended to be and does not constitute a recommendation as to how the shareholders of the Company should vote or act with respect to the Transaction or any matter relating thereto.
This opinion is for the information of the Board of Directors of the Company and shall not be disclosed, referred to, published or otherwise used (in whole or in part), nor shall any public references to us be made, without our prior written consent, except that a copy of this opinion may be included in its entirety in any regulatory filing that the Company is required to make in connection with the Transaction if such inclusion is required by applicable law.
Our opinion is necessarily based on financial, economic, regulatory, market and other conditions as in effect on, and the information made available to us as of, the date hereof. Events occurring after the date hereof maycould materially affect this opinion and the assumptions used in preparing it, and we doopinion. We have not assume any obligationundertaken to update, revise, reaffirm or reaffirmwithdraw this opinion.opinion or otherwise comment upon events occurring after the date hereof. We express no opinion as to the trading value of IIB Common Stock or Purchaser Common Stock at any time or what the value of Purchaser Common Stock will be once it is actually received by the holders of IIB Common Stock. We have acted as IIB’s financial advisor in connection with the Merger and will receive a fee for our services, a significant portion of which is contingent upon closing of the Merger. We will also receive a fee for rendering this opinion, which opinion fee will be credited in full towards the portion of the transaction fee which will become payable to Sandler O’Neill on the day of closing of the Merger. IIB has also agreed to indemnify us against certain claims and liabilities arising out of our engagement. In the two years preceding the date hereof we have not provided any other investment banking services to IIB. As we have previously advised the senior management of IIB, Sandler O’Neill has provided certain investment banking services to Purchaser in the two years preceding the date hereof. Most recently, Sandler O’Neill acted as financial advisor in connection with Purchaser’s acquisition of Northwest Bancorporation, Inc., which transaction closed in August 2018. In the ordinary course of our business as a broker-dealer, we may purchase securities from and sell securities to IIB, Purchaser and their respective affiliates. We may also actively trade the equity and debt securities of IIB, Purchaser and their respective affiliates for our own account and for the accounts of our customers. Our opinion is directed to the Board of Directors of IIB in connection with its consideration of the Agreement and the Merger and does not constitute a recommendation to any shareholder of IIB as to how any such shareholder should vote at any meeting of shareholders called to consider and vote upon the approval of the Agreement and the Merger. Our opinion is directed only to the fairness, from a financial point of view, of the Exchange Ratio to the holders of IIB Common Stock and does not address the underlying business decision of IIB to engage in the Merger, the form or structure of the Merger or any other transactions contemplated in the Agreement, the relative merits of the Merger as compared to any other alternative transactions or business strategies that might exist for IIB or the effect of any other transaction in which IIB might engage. We also do not express any opinion as to the fairness of the amount or nature of the compensation to be received in the Merger by any officer, director or employee of IIB or Purchaser, or any class of such persons, if any, relative to
the compensation to be received in the Merger by any other shareholder. This opinion has been approved by Sandler O’Neill’s fairness opinion committee. This opinion may not be reproduced without Sandler O’Neill’s prior written consent;provided,however, Sandler O’Neill will provide its consent for the opinion to be included in regulatory filings to be completed in connection with the Merger. Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Exchange Ratio is fair to be paid to the holders of the CompanyIIB Common Stock (other than the Excluded Holders) in the Transaction is fair, from a financial point of view, to such holders.view. Very truly yours, 
D.A. Davidson & Co.
PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 20.
| Item 20. | Indemnification of Directors and Officers |
Sections35-1-451 through35-1-459 of the Montana Business Corporation Act (the “MBCA”) provide that a corporation may indemnify its directors and officers. In general, the MBCA provides that a corporation must indemnify a director or officer who is wholly successful, on the merits or otherwise, in his or her defense of a proceeding to which he or she is a party because of his or her status as a director or officer of the corporation, against reasonable expenses incurred by the director in connection with the proceeding, unless limited by the articles of incorporation. Pursuant to the MBCA, a corporation may indemnify a director or officer if it is determined that the director or officer engaged in good faith and meets certain standards of conduct. A corporation may not indemnify a director or officer under the MBCA when a director or officer is adjudged liable to the corporation, or when such person is adjudged liable on the basis that personal benefit was improperly received. The MBCA also permits a director or officer of a corporation who is a party to a proceeding to apply to the courts for indemnification or advancement of expenses, unless the articles of incorporation provide otherwise and the court may order indemnification or advancement of expenses under certain circumstances. First Interstate’s articles provide for the indemnification of directors and officers to the fullest extent permitted by Montana law. First Interstate’s bylaws also provide for the indemnification of directors and officers, including (i) the mandatory indemnification of a director or officer who was wholly successful, on the merits or otherwise, in the defense of any proceeding, (ii) the mandatory indemnification of a director or officer if a determination has been made that such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal proceeding, with no reasonable cause to believe such person’s conduct was unlawful, (iii) for the reimbursement of reasonable expenses incurred by a director or officer who is party to a proceeding in advance of final disposition of the proceeding, if the standards have been met as set forth in the bylaws. First Interstate has also obtained officers’ and directors’ liability insurance, which insures against liabilities that officers and directors may, in such capacities, incur.Section 35-1-458 of the MBCA provides that a corporation may purchase and maintain insurance on behalf of a director or officer of the corporation against liability asserted against or incurred by such director or officer while serving at the request of the corporation in such capacity, or arising from the individual’s status as a director or officer, whether or not the corporation would have power to indemnify the individual against the same liability under the MBCA. The foregoing is only a general summary of certain aspects of Montana law and the First Interstate amended and restated articles of incorporation and bylaws dealing with indemnification of directors and officers, and does not purport to be complete. It is qualified in its entirety by reference to the detailed provisions of those sections of the MBCA referenced above and the First Interstate amended and restated articles of incorporation and bylaws. II-1
| Item 21. | Exhibits and Financial Statement Schedules |
The exhibits and financial statements filed as part of this registration statement are as follows: Exhibits II-1
| | | Exhibits
| | | | | | 3.2 | | Third Amended and Restated Bylaws of First Interstate BancSystem, Inc. (incorporated by reference to Exhibit 3.13.2 to First Interstate’s Quarterly Report onForm 10-Q filed on August 9, 2017 (FileNo. 001-34653)) | | | | 5.1 | | Opinion of Kirk D. Jensen as to the legality of the securities being issued(1) | | | | 8.1 | | Form of Opinion of Luse Gorman, PC as to certain tax matters | | | | 8.2 | | Form of Opinion of Witherspoon Kelley as to certain tax matters | | | | 10.1 | | Form of NorthwestIIBK Voting Agreement (incorporated by reference to Exhibit A of the Agreement and Plan of Merger, dated April 25,October 11, 2018, filed as Exhibit 2.1 to First Interstate’s Current Report on Form8-K filed on April 25,October 11, 2018 (FileNo. 001-34653)) | | | | 21 | | Subsidiaries of First Interstate BancSystem, Inc. (incorporated by reference to Exhibit 21.1 to First Interstate’s Annual Report onForm 10-K filed on February 28, 2018 (FileNo. 001-34653)) | | | | 23.1 | | Consent of RSM US LLP | | | | 23.2 | | Consent of Kirk D. Jensen (set forth in Exhibit 5.1)(1) | | | | 23.3 | | Consent of Luse Gorman, PC (set forth in Exhibit 8.1) | | | | 23.4 | | Consent of Witherspoon Kelley (set forth in Exhibit 8.2) | | | | 24 | | Power of attorney (set forth on the signature pages to this registration statement)(1) | | | | 99.1 | | Form of proxy card of NorthwestIIBK (1) | | | | 99.2 | | Consent of D.A. DavidsonSandler O’Neill & Co.Partners, L.P. |
| * | Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of RegulationS-K. First Interstate BancSystem, Inc. agrees to furnish supplementally a copy of any omitted attachment to the Securities and Exchange Commission on a confidential basis upon request. |
Item 22.
The undersigned registrant hereby undertakes: | (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement (notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end |
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| of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement); and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
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| (4) | That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof. |
| (5) | That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the registrant undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
| (6) | That every prospectus (i) that is filed pursuant to paragraph (5) above, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment has become effective, and that for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof. |
| (7) | To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form,Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
| (8) | To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of, and included in, this registration statement when it became effective. |
| (9) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
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SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Billings, State of Montana, on June 8, 2018.January 16, 2019. | | | | | FIRST INTERSTATE BANCSYSTEM, INC. | | | | By: | | /s/ Kevin P. Riley | | | Kevin P. Riley | | | President, Chief Executive Officer and Director | | | (Duly Authorized Representative) |
POWER OF ATTORNEY
We, the undersigned directors and officers of First Interstate BancSystem, Inc. (the “Company”) severally constitute and appoint Kevin P. Riley and Marcy D. Mutch and each of them with full power of substitution, our true and lawful attorney and agent, to do any and all things and acts in our names in the capacities indicated below which Kevin P. Riley and Marcy D. Mutch may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with the registration statement on FormS-4 relating to the offering of the Company Class A common stock, including specifically, but not limited to, power and authority to sign for us or any of us in our names in the capacities indicated below the registration statement and any and all amendments (including post-effective amendments) thereto; and we hereby ratify and confirm all that Kevin P. Riley and Marcy D. Mutch shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. | | | | | Signatures | | Title | | Date | | | | /s/ Kevin P. Riley Kevin P. Riley | | President, Chief Executive Officer and Director (Principal Executive Officer) | | June 8, 2018January 16, 2019 | | | | /s/ Marcy D. Mutch Marcy D. Mutch | | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | | June 8, 2018January 16, 2019 | | | | /s/ James R. Scott*
James R. Scott | | Chairman of the Board | | June 8, 2018 | | | | /s/ Steven J. Corning*
Steven J. Corning | | Director | | June 8, 2018 | | | | /s/ Dana L. Crandall*
Dana L. Crandall | | Director | | June 8, 2018 | | | | /s/ William B. Ebzery*
William B. Ebzery | | Director | | June 8, 2018 | | | | * Charles E. Hart, M.D., M.S. | | Director | | | | | | * John M. Heyneman, Jr. | | Director | | | | | | * David L. Jahnke | | Director | | | | | | * Dennis L. Johnson | | Director | | |
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| | | | | Signatures | | Title | | Date | | | | /s/ Charles E. Hart
Charles E. Hart, M.D., M.S.
| | Director | | June 8, 2018 | | | | /s/ Jon M. Heyneman, Jr.
Jon M. Heyneman, Jr.
| | Director | | June 8, 2018 | | | | /s/ David L. Jahnke
David L. Jahnke
| | Director | | June 8, 2018 | | | | /s/ Dennis L. Johnson
Dennis L. Johnson
| | Director | | June 8, 2018 | | | | /s/ Ross E. Leckie*
Ross E. Leckie | | Director | | June 8, 2018 | | | | /s/ Patricia L. Moss*
Patricia L. Moss | | Director | | June 8, 2018 | | | | /s/ James R. Scott, Jr.*
James R. Scott, Jr. | | Director | | June 8, 2018 | | | | /s/ Jonathan R. Scott*
Jonathan R. Scott | | Director | | June 8, 2018 | | | | /s/ Teresa A. Taylor*
Teresa A. Taylor | | Director | | June 8, 2018 | | | | * Peter I. Wold | | Director | | |
| * | Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 of First Interstate BancSystem filed on November 28, 2018. |
| | | | | | | | | | | | By: | | /s/ Kevin P. Riley Kevin P. Riley | | | | January 16, 2019 | | | Attorney-in-fact | | | | | | By: | | /s/ Marcy D. Mutch Marcy D. Mutch | | | | January 16, 2019 | | | Attorney-in-fact |
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