| Item 1.01 | Entry Into a Material Definitive Agreement |
On July 25, 2022, Bank First Corporation, a Wisconsin corporation (“BFC”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Hometown Bancorp, Ltd., a Wisconsin corporation
(“HTB”), whereby HTB will be merged with and into BFC (the “Merger”). Pursuant to entering into the Merger Agreement,
BFC’s wholly-owned subsidiary bank, Bank First, N.A. (“Bank First”), and HTB’s wholly-owned subsidiary bank, Hometown
Bank (“Hometown Bank”), will enter into a Plan of Bank Merger whereby Hometown Bank will be merged with and into Bank First
immediately following the merger of HTB with and into BFC (the “Bank Merger”).
The Merger Agreement has been unanimously approved by the boards of
directors of BFC and HTB. The transaction is expected to close in the fourth quarter of 2022, subject to customary closing conditions
discussed below and obtaining a conversion date from UFS and Fiserv.
Merger Consideration. Pursuant to the Merger Agreement, each
outstanding share of HTB common stock issued and outstanding immediately prior to the effective time of the Merger will be converted into
the right to receive, at the election of each HTB shareholder, either (i) $29.16 in cash (the “per share cash consideration”),
or (ii) 0.3962 of a share of BFC’s common stock (the “per share stock consideration”), subject to customary proration
and allocation procedures such that at least 70% of HTB shares will receive the stock consideration and no more than 30% of HTB shares
will receive the cash consideration. Notwithstanding the foregoing, the aggregate merger consideration (including the per share cash consideration
and per share stock consideration) is subject to a downward adjustment if HTB’s equity capital (as calculated per the Merger
Agreement) is less than $65,476,475 at the time of the closing of the Merger.
Each outstanding share of BFC’s common stock shall remain outstanding
and unaffected by the Merger.
Representations and Warranties. The Merger Agreement contains
usual and customary representations and warranties that BFC and HTB made to each other as of specific dates. The assertions embodied in
those representations and warranties were made solely for purposes of the contract between BFC and HTB and may be subject to important
qualifications and limitations agreed to by the parties in connection with negotiating certain terms. Moreover, certain of the representations
and warranties are subject to a contractual standard of materiality that may be different from what may be viewed as material to shareholders,
and the representations and warranties may have been used to allocate risk between BFC and HTB rather than establishing matters of fact.
For the foregoing reasons, no one should rely on such representations, warranties, covenants or other terms, provisions or conditions
as statements of factual information regarding BFC or HTB at the time they were made or otherwise. The representations and warranties
of the parties will not survive the closing.
Covenants; No Solicitation. Each party also has agreed to customary
covenants, including, among others, covenants relating to the conduct of its business during the interim period between the execution
of the Merger Agreement and the consummation of the Merger. Additionally, HTB has agreed (i) not to initiate, solicit, induce or knowingly
encourage or take any action or facilitate any alternative acquisition transaction or, subject to certain exceptions, participate in discussions
or negotiations regarding, or furnish any non-public information relating to, any alternative acquisition transaction and (ii) subject
to certain exceptions, not to withdraw or modify, in a manner adverse to BFC, the recommendation of the HTB board of directors that HTB’s
shareholders approve the Merger Agreement and the Merger. In the event that HTB receives a proposal with respect to an alternative acquisition
transaction that HTB board of directors determines is superior to the Merger, BFC will have an opportunity to match the terms of such
proposal, subject to certain requirements.
Conditions to Closing. Consummation of the Merger is subject
to various customary conditions, including (i) approval of the Merger Agreement and the Merger by shareholders of HTB; (ii) the receipt
of certain regulatory approvals; (iii) no injunctions or other legal restraints preventing the consummation of the Merger; (iv) the U.S.
Securities and Exchange Commission (“SEC”) having declared effective BFC’s registration statement covering the issuance
of shares of BFC’s common stock in the Merger; (v) the receipt by each party of a tax opinion to the effect that the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended; (vi) the accuracy of
representations and warranties of the parties and compliance by the parties with their respective covenants and obligations under the
Merger Agreement (subject to customary materiality qualifiers); and (vii) the absence of a material adverse effect with respect to either
BFC or HTB.
Termination. The Merger Agreement may be terminated in certain
circumstances, including: (i) by mutual written agreement of the parties, (ii) by either party if any regulatory approval required for
consummation of the transactions contemplated by the Merger Agreement has been denied by final non-appealable action by the relevant governmental
authority or an application for such approval has been permanently withdrawn at the request of a governmental authority, (iii) by either
party if the approval of the shareholders of HTB is not obtained, (iv) by either party in the event of a material breach by the other
party of any representation, warranty or covenant contained in the Merger Agreement and such breach is not cured within thirty days, (v)
by either party if the Merger is not consummated on or before May 31, 2023, subject to automatic extension to June 30, 2023 if the only
outstanding closing condition is the receipt of regulatory approvals, (vi) by BFC if HTB’s board of directors breaches its obligation
not to solicit any alternative acquisition transaction, changes its recommendation with respect to the Merger in accordance with the terms
of the Merger Agreement, or breaches its obligation to call a special HTB shareholder meeting to vote on the Merger, or (vii) by HTB in
order to enter into an agreement to a superior proposal.
HTB also has the right to terminate
the Merger Agreement in the event that (A) the price of BFC’s common stock declines by more than 15%, and (B) the decline of the
price of BFC’s common stock is 15% greater than the change in the price of the NASDAQ Bank Index over the same period of time. In
the event that such a decline in the price of BFC’s common stock occurs, BFC shall have the right, but not the obligation, to “fill”
the decline by adjusting the Merger Consideration as further described in the Merger Agreement.
Termination Fee. HTB will pay BFC a termination fee equal to
$6.2 million in the event (i) the Merger Agreement is terminated by BFC because HTB’s board of directors breaches its obligation
not to solicit any alternative acquisition transaction, changes its recommendation with respect to the Merger in accordance with the terms
of the Merger Agreement, or breaches its obligation to call a special HTB shareholder meeting to vote on the Merger, (ii) HTB terminates
this agreement in order to accept a superior proposal, or (iii) the Merger Agreement is terminated (A) by either BFC or HTB because the
required HTB shareholder approval is not obtained or (B) the Merger Agreement is terminated by BFC because of HTB’s material breach
of representations, warranties or covenants, HTB receives an acquisition proposal after the date of the Merger Agreement but before it
is terminated, and HTB enters into an agreement for or completes an acquisition transaction within 12 months of the termination of the
Merger Agreement.
Corporate Governance. Pursuant to the Merger Agreement, BFC
and Bank First will take all necessary actions to appoint Tim McFarlane, President and Chief Executive Officer of Hometown, as President
and director of BFC and Bank First, N.A. at the effective time of the Merger.
The foregoing summary of the Merger Agreement is not complete and is
qualified in its entirety by reference to the full text of the Merger Agreement and certain exhibits attached thereto, a copy of which
is filed as Exhibit 2.1 attached hereto and incorporated by reference herein. The Merger Agreement should not be read alone, but should
instead be read in conjunction with the other information regarding BFC, its affiliates and their respective businesses, and the information
regarding the Merger Agreement and the Merger that will be contained in, or incorporated by reference into, the registration statement
on Form S-4 of BFC that will include a proxy statement of HTB and a prospectus of BFC and that will be filed with the SEC.
Voting Agreements
In connection with entering into the Merger Agreement, the directors
and executive officers of HTB and Hometown Bank have entered into voting agreements (the “HTB Voting Agreements”), pursuant
to which each such director and executive officer agreed to vote his, her or its shares of HTB common stock in favor of approval of the
Merger Agreement and transactions contemplated therein and against certain other actions, proposals, transactions or agreements that would
be detrimental to the consummation of the Merger. The HTB Voting Agreements generally prohibit the sale or transfer of the shares held
by each such shareholder until the earlier of (i) termination of the Merger Agreement or (ii) receipt of the approval of the shareholders
of HTB. The HTB Voting Agreements terminate upon the earlier of (i) the consummation of the Merger, (ii) the amendment of the Merger Agreement
in any manner that materially and adversely affects any rights of the shareholder, (iii) the termination of the Merger Agreement or (iv)
three years from the date of the HTB Voting Agreements.
The foregoing summary of the HTB Voting Agreements is qualified in
its entirety by reference to the complete text of such documents, a form of which is included as Exhibit A to the Merger Agreement, filed
as Exhibit 2.1 attached hereto and which is incorporated herein by reference.
Director Non-Compete Agreements
In connection with entering into the Merger Agreement, each of the
directors of HTB and Hometown Bank will enter into a Non-Competition and Non-Disclosure Agreement with BFC, which contains provisions
related to the non-disclosure of confidential information and trade secrets, non-solicitation of customers with whom such directors had
material contact, non-competition within a restricted territory and non-recruitment of employees.
The foregoing summary of the Non-Competition and Non-Disclosure Agreement
is qualified in its entirety by reference to the complete text of such document, a form of which is included as Exhibit C to the Merger
Agreement, filed as Exhibit 2.1 attached hereto and which is incorporated herein by reference.
