Item 1.01 Entry into a Material Definitive Agreement.
On January 21, 2019, Citizens Community Bancorp, Inc. a Maryland corporation (Citizens), and F&M Merger Sub, Inc., a newly
formed Minnesota corporation and wholly-owned subsidiary of Citizens (Merger Sub), entered into an Agreement and Plan of Merger (the Merger Agreement) with F. & M. Bancorp. of Tomah, Inc., a Wisconsin corporation
(F&M). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into F&M, with F&M continuing as the surviving entity (the Merger).
Immediately after the Merger, F&M will merge with and into Citizens, with Citizens continuing as the surviving entity. The Merger Agreement was unanimously approved and adopted by the Board of Directors of each of Citizens and F&M.
Subject to the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger (the Effective
Time), each issued and outstanding share of F&M common stock, $.25 par value (F&M Common Stock), will be converted into the right to receive, without interest, (i) a pro rata portion of the aggregate cash consideration
of approximately $18.2 million based on the number of shares of F&M Common Stock issued and outstanding immediately prior to the Effective Time, subject to adjustment as provided in the Merger Agreement, and (ii) 1.335 shares of Citizens
common stock, subject to a pricing collar adjustment in certain circumstances based on the price of Citizens common stock at the Effective Time as provided in the Merger Agreement.
Immediately following the closing of the Merger, Farmers & Merchants Bank, a bank chartered under the laws of Wisconsin and
wholly-owned subsidiary of F&M (the F&M Bank), will merge with and into Citizens Community Federal, National Association, a federally charted bank and wholly-owned subsidiary of Citizens (CCF Bank), with CCF Bank
surviving the bank merger.
The Merger Agreement contains customary representations, warranties and covenants made by each of F&M and
Citizens. Completion of the Merger is subject to certain conditions, including, among others, (i) the approval of the Merger Agreement and Merger by F&Ms shareholders; (ii) the receipt of certain governmental and regulatory
approvals; (iii) the absence of governmental orders prohibiting or actions seeking to prohibit the Merger; (iv) effectiveness of the registration statement on Form S-4 for the Citizens common stock
to be issued in the Merger; and (v) the absence of certain material adverse effects with respect to F&M or Citizens. With respect to Citizens, there are additional conditions to closing, including (1) that no more than 10% of issued
and outstanding shares of F&M Common Stock for which the holders thereof have not voted in favor of the Merger and who have properly dissented to the Merger as required by the Wisconsin Business Corporation Law; and (2) the receipt by
F&M of certain third-party consents.
The Merger Agreement may be terminated in certain circumstances, including, among others,
(i) if either party materially breaches the Merger Agreement such that the conditions to closing would not be satisfied; (ii) if the Merger has not closed on or prior to October 31, 2019; (iii) if F&M shareholders do not approve
the Merger Agreement; and (iv) if F&M receives a superior proposal to acquire more than half of its outstanding voting securities or assets. In the event of a termination of the Merger Agreement, depending on the circumstances, F&M may
be required to pay a termination fee of $750,000 plus Citizens out-of-pocket expenses.
The Merger is expected to close during the second calendar quarter of 2019.
Aside from the transactions contemplated by the Merger Agreement, there is no material relationship between F&M and Citizens.