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EXHIBIT 2.2
SUPPLEMENTAL AGREEMENT
BETWEEN
HUNTINGTON BANCSHARES INCORPORATED
AND
EMPIRE BANC CORPORATION
DATED FEBRUARY 4, 2000
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TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS................................................. 20
1.1 Definitions Contained Elsewhere in this Agreement........... 20
1.2 Definitions Contained in the Merger Agreement............... 21
1.3 Additional Definitions...................................... 21
1.4 Interpretations............................................. 29
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF EMPIRE.................... 30
2.1 Organization, Standing, and Power........................... 30
2.2 Authority; No Breach By Agreement........................... 30
2.3 Capital Stock............................................... 31
2.4 Empire Subsidiaries......................................... 32
2.5 Financial Statements........................................ 32
2.6 Absence of Undisclosed Liabilities.......................... 32
2.7 Absence of Certain Changes or Events........................ 33
2.8 Tax Matters................................................. 34
2.9 Assets and Insurance........................................ 35
2.10 Environmental Matters....................................... 36
2.11 Compliance with Laws........................................ 37
2.12 Labor Relations............................................. 38
2.13 Employee Benefit Plans...................................... 38
2.14 Material Contracts.......................................... 40
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2.15 Legal Proceedings.......................................... 41
2.16 Reports.................................................... 41
2.17 Statements True and Correct................................ 42
2.18 Tax and Regulatory Matters................................. 42
2.19 State Takeover Laws........................................ 42
2.20 Charter Provisions......................................... 42
2.21 Compliance with Certain Laws............................... 42
2.22 Community Reinvestment Act Compliance...................... 43
2.23 Acquisition Transactions................................... 43
2.24 Lump Sum Payment, Release and Waiver Agreements............ 43
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF HUNTINGTON............... 43
3.1 Organization, Standing, and Power.......................... 43
3.2 Authority; No Breach By Agreement.......................... 44
3.3 Capital Stock.............................................. 45
3.4 Huntington Subsidiaries.................................... 45
3.5 Financial Statements....................................... 46
3.6 Absence of Undisclosed Liabilities......................... 46
3.7 Absence of Certain Changes or Events....................... 46
3.8 Tax Matters................................................ 47
3.9 Assets and Insurance....................................... 47
3.10 Compliance with Laws ..................................... 48
3.11 Employee Benefit Plans..................................... 49
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3.12 Legal Proceedings............................................ 49
3.13 Reports...................................................... 49
3.14 Statements True and Correct.................................. 50
3.15 Tax and Regulatory Matters................................... 50
3.16 Community Reinvestment Act Compliance........................ 50
ARTICLE 4 - MUTUAL COVENANTS OF THE PARTIES............................. 51
4.1 Adverse Changes in Condition................................. 51
4.2 Reports...................................................... 51
4.3 Registration Statement; Proxy Statement; Shareholder Approval 51
4.4 Applications................................................. 52
4.5 Agreement as to Efforts to Consummate........................ 52
4.6 Investigation and Confidentiality............................ 52
4.7 Press Releases............................................... 53
4.8 Tax Treatment................................................ 53
4.9 No Rights Triggered.......................................... 53
ARTICLE 5 - COVENANTS OF EMPIRE......................................... 53
5.1 Conduct of the Business...................................... 53
5.2 Negative Covenants of Empire................................. 54
5.3 Certain Actions.............................................. 56
5.4 Agreements with Respect to Affiliates........................ 57
5.5 Certain Policies of Empire................................... 57
5.6 Title Insurance.............................................. 58
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5.7 Surveys..................................................... 58
5.8 Environmental Assessment.................................... 58
ARTICLE 6 - COVENANTS OF HUNTINGTON..................................... 59
6.1 Negative Covenants of Huntington............................ 59
6.2 Nasdaq Listing.............................................. 59
6.3 Employee Benefits and Contracts............................. 59
6.4 Indemnification of Directors and Officers................... 61
6.5 Stock Options............................................... 61
ARTICLE 7 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE........... 62
7.1 Conditions to Obligations of Each Party..................... 62
7.2 Conditions to Obligations of Huntington..................... 63
7.3 Conditions to Obligations of Empire......................... 65
ARTICLE 8 - CLOSING..................................................... 66
ARTICLE 9 - TERMINATION................................................. 66
9.1 Termination................................................. 66
9.2 Effect of Termination....................................... 66
9.3 Non-Survival of Representations and Covenants............... 68
ARTICLE 10 - MISCELLANEOUS.............................................. 68
10.1 Expenses.................................................... 68
10.2 Termination Fee............................................. 68
10.3 Brokers and Finders......................................... 69
10.4 Entire Agreement............................................ 69
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10.5 Amendments................................................. 70
10.6 Waivers.................................................... 70
10.7 Assignment................................................. 70
10.8 Notices.................................................... 70
10.9 Governing Law.............................................. 71
10.10 Counterparts............................................... 71
10.11 Captions................................................... 71
10.12 Interpretations............................................ 71
10.13 Enforcement of Agreement................................... 72
10.14 Severability............................................... 72
10.15 Benefit.................................................... 72
EXHIBITS:
1 Warrant Purchase Agreement
2 Matters as to which ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Attorneys, P.C. Shall Opine
3 Matters as to which Porter, Wright, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP Shall Opine
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SUPPLEMENTAL AGREEMENT
THIS SUPPLEMENTAL AGREEMENT (this "Agreement") is made and entered into
as of February 4, 2000, between EMPIRE BANC CORPORATION ("Empire"), a Michigan
corporation having its principal office located in Traverse City, Michigan; and
HUNTINGTON BANCSHARES INCORPORATED ("Huntington"), a Maryland corporation having
its principal office located in Columbus, Ohio.
RECITALS:
A. Huntington is a registered bank holding company under the BHC Act.
B. Empire is a registered bank holding company under the BHC Act.
C. Concurrently with the execution and delivery of this Agreement, the
Parties are entering into (1) an Agreement and Plan of Merger (the "Merger
Agreement"), which provides for the merger of Empire into Huntington in
accordance with the terms and conditions contained in the Merger Agreement and
in this Agreement (the "Merger"), and (2) a certain Warrant Purchase Agreement,
in the form attached as Exhibit 1 (the "Warrant Purchase Agreement"), and Empire
is issuing to Huntington a certain Warrant, in the form attached as Attachment A
to the Warrant Purchase Agreement (the "Warrant"). This Agreement, together with
the Merger Agreement, the Warrant Purchase Agreement, and the Warrant are
sometimes collectively referred to as the "Merger Documents."
D. The Parties desire to enter into this Agreement for the purpose of
setting forth certain representations, warranties, and covenants made by each
party as an inducement to the other party to execute and deliver the Merger
Agreement and to consummate the Merger and to set forth certain additional terms
and conditions applicable to the Merger.
AGREEMENT:
NOW, THEREFORE, in consideration of the above recitals and the mutual
warranties, representations, covenants, and agreements set forth herein, the
Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS CONTAINED ELSEWHERE IN THIS AGREEMENT. For purposes of
this
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Agreement, the following terms shall have the meanings ascribed to them in
the Preamble or Recitals of this Agreement:
this "AGREEMENT";
"EMPIRE";
"HUNTINGTON";
the "MERGER";
the "MERGER AGREEMENT";
the "MERGER DOCUMENTS";
the "WARRANT";
the "WARRANT PURCHASE AGREEMENT";
1.2 DEFINITIONS CONTAINED IN THE MERGER AGREEMENT. For purposes of
this Agreement, the following terms shall have the meanings ascribed to them in
the Merger Agreement:
the "DIRECTOR PLANS";
the "EFFECTIVE DATE";
the "EFFECTIVE TIME";
"EMPIRE COMMON";
the "EMPIRE STOCK OPTION PLAN";
the "EMPIRE STOCK OPTIONS";
"HUNTINGTON COMMON"; and
the "SURVIVING CORPORATION";
1.3 ADDITIONAL DEFINITIONS. For purposes of this Agreement, the
following terms shall have the following meanings:
"401(K) PLAN" shall mean the Empire National Bank Savings, Investment
and Retirement Plan.
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"ACQUISITION TRANSACTION" shall mean a transaction involving (A) the
sale or other disposition of more than 20% of the shares of the capital stock or
any other class of voting securities of Empire, including, but not limited to, a
Tender Offer, involving any Person other than Huntington or a Huntington
Affiliate, (B) the sale or other disposition of 15% or more of the consolidated
assets or deposits of Empire or of the bank owned by Empire, to any Person other
than Huntington or a Huntington Affiliate, or (C) a merger or consolidation
involving Empire and any Person other than Huntington or a Huntington Affiliate,
other than a transaction pursuant to which Empire will be the surviving
corporation and the current shareholders of Empire will be the owners of a
majority of the stock of the surviving corporation following the transaction.
"AFFILIATE" of a Person shall mean: (A) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by, or
under common control with such Person; (B) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person; or (C) any other Person for which a Person
described in clause (B) acts in any such capacity.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character, and
description, whether real, personal, or mixed, tangible or intangible, accrued
or contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the books
and records of such Person, and whether or not owned in the name of such Person
or any Affiliate of such Person and wherever located.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"CERCLA" shall mean the Comprehensive Environmental Response
Compensation and Liability Act, as amended, 42 U.S.C. 9601, et seq.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, obligation,
plan, practice, restriction, understanding, or undertaking of any kind or
character, or other document to which any Person is a party or that is binding
on any Person or its capital stock, Assets, or business.
"DEFAULT" shall mean (A) any breach or violation of or default under
any Contract, Order, or Permit, (B) any occurrence of any event that with the
passage of time or the giving of notice or both would constitute a breach or
violation of or default under any Contract, Order, or Permit, or (C) any
occurrence of any event that with or without the passage of time or the giving
of notice would give rise to a right to terminate or revoke, change the current
terms of, or renegotiate, or to accelerate, increase, or impose any Liability
under, any
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Contract, Order, or Permit, where, in any such event, such Default is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on a Party.
"DISCLOSURE MEMORANDUM" shall mean the written information entitled
"Disclosure Memorandum" delivered by Empire to Huntington prior to the date of
this Agreement identifying the matters contained therein and, with respect to
each disclosure made, specifically referencing each Section of this Agreement
under which such disclosure is being made. Information disclosed with respect to
one Section shall not be deemed to be disclosed for purposes of any other
Section not specifically referenced with respect thereto.
"EMPIRE BANK" shall mean The Empire National Bank of Traverse City, a
wholly owned subsidiary of Empire.
"EMPIRE BONUS PLAN" shall mean the Empire Profit Sharing and Incentive
Plan, as in effect as of the date of this Agreement.
"EMPIRE BONUS PLAN PARTICIPANTS" shall mean all employees of Empire who
are listed in Section 6.3(c) of the Disclosure Memorandum as participants in the
Empire Bonus Plan on the Effective Date (which list may be updated on the day
immediately preceding the Effective Date).
"EMPIRE BONUS POOL" shall mean the estimated aggregate dollar amount
that would be or become payable under the Empire Bonus Plan for the entire 2000
calendar year, in the agreed amount of $1,153,000 (which amount was calculated
without regard to any accounting or accrual adjustments that may be required
under or resulting from the Merger Documents or the transactions contemplated
thereby), multiplied by a fraction, the numerator of which is the number of days
between January 1, 2000, and the Effective Date (inclusive), and the denominator
of which is 366.
"EMPIRE COMPANIES" shall mean Empire and all Empire Subsidiaries.
"EMPIRE COMPANY" shall mean Empire and/or any Empire Subsidiary.
"EMPIRE FINANCIAL STATEMENTS" shall mean (A) the consolidated balance
sheets of Empire (including related notes and schedules, if any) as of December
31, 1998 and 1997, and the related consolidated statements of income, changes in
shareholders' equity, and cash flows (including related notes and schedules, if
any) for each of the three years ended December 31, 1998, 1997, and 1996, with
the report thereon of ▇▇▇▇▇, ▇▇▇▇▇▇ and Company LLP, as filed by Empire in SEC
Documents; (B) the audited or unaudited consolidated balance sheets of Empire
(including related notes and schedules, if any), and the related consolidated
statements of income and cash flows (including related notes and schedules, if
any) included in SEC Documents filed by Empire with respect to periods ended
subsequent to December 31, 1998; and (C) the financial information included in
the "Report to Management December 1999" previously delivered to Huntington (the
"December Report").
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"EMPIRE RIGHTS AGREEMENT" shall mean the Rights Agreement, dated
December 19, 1990, as amended, between Empire and Empire Bank, as Rights Agent.
"EMPIRE SUBSIDIARIES" shall mean the Subsidiaries of Empire, which
shall include the Empire Subsidiaries described in Section 2.4 of the Disclosure
Memorandum and any corporation, bank, savings association, or other organization
acquired as a Subsidiary of Empire after the date of this Agreement and owned by
Empire at the Effective Time.
"EMPLOYEE BENEFIT PLAN" or "BENEFIT PLAN" of a Party shall mean any and
all employee benefit plans of such Party, including, but not limited to, all
ERISA Plans and all pension, retirement, profit-sharing, deferred compensation,
stock option, employee stock ownership, severance pay, vacation, bonus, or other
incentive plans, all other written employee programs, arrangements, or
agreements, all medical, vision, dental, or other health plans, all life
insurance plans, and all other employee benefit plans or fringe benefit plans,
currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by a Party or any Subsidiary of that Party for the benefit of
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata) and which are
administered, interpreted, or enforced by the United States Environmental
Protection Agency and state and local agencies with jurisdiction over, and
including common law in respect of, pollution or protection of the environment,
including CERCLA, RCRA, and other Laws relating to emissions, discharges,
releases, or threatened releases of any Hazardous Substance, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of any Hazardous Substance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" shall have the meaning provided in Section 2.13 of
this Agreement.
"ERISA PLAN" of a Party shall mean an Employee Benefit Plan of that
Party or any Subsidiary of such Party which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA.
"ESOP" shall mean the Empire National Bank Employee Stock Ownership
Plan.
"EXHIBITS" 1 through 3, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are incorporated
by reference in, and made a
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part of, this Agreement and may be referred to in this Agreement and any other
related instrument or document without being attached to this Agreement.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GOVERNING DOCUMENTS" of a Person shall mean, collectively, the
charter, articles of incorporation, certificate of incorporation, bylaws, and
regulations, as applicable, of such Person and any and all other documents
governing the internal affairs of such Person.
"HAZARDOUS SUBSTANCE" shall mean (A) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as those
terms are defined by any applicable Environmental Laws) and (B) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or oil (and
specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and any
polychlorinated biphenyls).
"HUNTINGTON CAPITAL STOCK" shall mean, collectively, the Huntington
Common, the Huntington Preferred Stock, and any other class or series of capital
stock of Huntington.
"HUNTINGTON COMPANIES" shall mean, collectively, Huntington and all
Huntington Subsidiaries.
"HUNTINGTON FINANCIAL STATEMENTS" shall mean (A) the consolidated
balance sheets of Huntington (including related notes and schedules, if any) as
of December 31, 1998 and 1997, and the related statements of income, changes in
shareholders' equity, and cash flows (including related notes and schedules, if
any) for each of the three years ended December 31, 1998, 1997, and 1996, with
the report thereon of Ernst & Young LLP, as filed by Huntington in SEC
Documents, and (B) the unaudited consolidated balance sheets of Huntington
(including related notes and schedules, if any) and related statements of
income, changes in shareholders' equity, and cash flows (including related notes
and schedules, if any) included in SEC Documents filed with respect to periods
ended subsequent to December 31, 1998.
"HUNTINGTON PREFERRED STOCK" shall mean the "blank" serial preferred
stock of Huntington, without par value.
"HUNTINGTON RIGHTS" shall mean the preferred stock purchase rights
issued pursuant to the Huntington Rights Agreement.
"HUNTINGTON RIGHTS AGREEMENT" shall mean that certain Rights Agreement;
dated as of February 22, 1990, as amended, between Huntington and The Huntington
Trust Company, N.A., as Rights Agent.
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"HUNTINGTON SUBSIDIARIES" shall mean the Subsidiaries of Huntington,
whether currently a Subsidiary of Huntington or acquired as a Subsidiary of
Huntington after the date of this Agreement and owned by Huntington at the
Effective Time.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to a Person (including references to
such Person being aware of a particular matter) shall mean those facts that are
known or should have been known after reasonable investigation by the Chairman,
President, Chief Financial Officer, Chief Accounting Officer, Chief Credit
Officer, ("in-house") General Counsel, any ("in-house") Assistant or Deputy
General Counsel, or any Senior or Executive Vice President of such Person.
"LAW" shall mean any code, law, ordinance, regulation, reporting, or
licensing requirement, rule, or statute applicable to a Person or its Assets,
Liabilities, or business, including those promulgated, interpreted, or enforced
by any Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including costs
of investigation, collection, and defense), claim, deficiency, guaranty, or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention,
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest, other than (A) Liens for current property Taxes not yet due
and payable, (B) for depository institution Subsidiaries of a Party, pledges to
secure deposits and other Liens incurred in the ordinary course of banking
business, and (C) Liens which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on a Party.
"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, governmental, or other examination or
investigation, hearing, inquiry, administrative, or other proceeding, by any
Person alleging potential Liability, but shall not include regular, periodic
examinations of depository institutions and their Affiliates by Regulatory
Authorities.
"LOAN PROPERTY" shall mean any property owned by the Party in question
or by any of its Subsidiaries or in which such Party or Subsidiary holds a
security interest, and, where required by the context, includes the owner or
operator of such property, but only with respect
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to such property.
"MATERIAL" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine materiality in
that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change, or
occurrence which, individually or together with any other event, change, or
occurrence, has a material adverse impact on (A) the financial position,
business, or results of operations of such Party and its Subsidiaries, taken
individually (except with respect to the Empire Companies, such impact shall be
measured individually only as to Empire and Empire Bank),or as a whole, or (B)
the ability of such Party to perform its obligations under the Merger Documents
or to consummate the Merger or the other transactions contemplated by the Merger
Documents.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System of the
National Association of Securities Dealers Auto-mated Quotations System.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"OCC" shall mean the Office of the Comptroller of the Currency.
"OPERATIONAL REAL PROPERTY" shall mean the Real Property owned or
leased by any Empire Company and used in the operation of its business.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local, or foreign or other court, arbitrator, mediator,
tribunal, administrative agency, or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
"management," as such term is defined in CERCLA, and, where required by the
context, said term means the owner or operator of such facility or property, but
only with respect to such facility or property.
"PARTY" shall mean either Empire or Huntington, and "Parties" shall
mean both Empire and Huntington.
"PENSION PLAN" of a Party shall mean any ERISA Plan of that Party or
any Subsidiary of such Party which is also a "defined benefit plan" (as
defined in Section 414(j) of the Internal Revenue Code).
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"PERMIT" shall mean any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any Person is a party or that is or may be
binding upon or inure to the benefit of any Person or its securities, Assets, or
business.
"PERSON" shall mean a natural person or any legal, commercial, or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by Empire to
solicit the approval of its shareholders of the transactions contemplated by the
Merger Documents which shall include the prospectus of Huntington relating to
the issuance of shares of Huntington Common to holders of shares of Empire
Common.
"RABBI TRUSTS" shall mean collectively, the Director Trust Agreement,
dated December 1, 1995, as amended, and the Executive Trust Agreement, dated
December 1, 1995, as amended.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. 6901, et seq.
"REAL PROPERTY" shall mean any and all real property owned or leased by
any Empire Company.
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-4, or other appropriate form, including any pre-effective or post-effective
amendments or supplements, filed with the SEC by Huntington under the 1933 Act
with respect to the shares of Huntington Common to be issued to the shareholders
of Empire in the Merger.
"REGULATORY AUTHORITIES" shall mean, collectively, the United States
Department of Justice, the Board of the Governors of the Federal Reserve System,
the FDIC, the OCC, all state regulatory agencies, if any, having jurisdiction
over the Parties and their respective Subsidiaries, the NASD, and the SEC.
"REPRESENTATIVE" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative of a Person.
"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional shares of its
capital stock or other Rights.
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"SEC" shall mean the Securities and Exchange Commission.
"SEC DOCUMENTS" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to be
filed, by a Party or any of its Subsidiaries with any Regulatory Authority
pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder, and the blue
sky, securities, or similar laws of the various states, as applicable.
"SERP" shall mean the Empire National Bank Supplemental Executive
Retirement Plan, dated December 1, 1999.
"SHAREHOLDERS' MEETING" shall mean the meeting of the shareholders of
Empire to be held pursuant to Section 4.3 of this Agreement, including any
adjournment or adjournments thereof.
"SUBSIDIARIES" of a Party shall mean all those corporations, banks,
associations, or other entities of which the Party owns or controls 50% or more
of the outstanding equity securities either directly or through an unbroken
chain of entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent; provided, there shall
not be included any such entity acquired through foreclosure or any such entity
the equity securities of which are owned or controlled in a fiduciary capacity.
"TAX" or "TAXES" shall mean any federal, state, county, local, or
foreign income, profits, franchise, gross receipts, payroll, sales, employment,
use, property, withholding, excise, occupancy, and other taxes, assessments,
charges, fares, or impositions, including interest, penalties, and additions
imposed thereon or with respect thereto.
"TENDER OFFER" shall mean a tender or exchange offer made by any Person
other than Huntington or an Affiliate of Huntington to acquire equity securities
of Empire if, upon the completion of the transactions proposed in such offer,
such Person would own or have the right to acquire beneficial ownership of more
than 20 percent of the capital stock or any other class of voting securities of
Empire.
1.4 INTERPRETATIONS. Any singular term in this Agreement shall be
deemed to include the plural, and any plural term the singular. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed followed by the words "without limitation."
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF EMPIRE
Empire hereby represents and warrants to Huntington as follows:
2.1 ORGANIZATION, STANDING, AND POWER.
(a) Empire is duly registered as a bank holding company under the
BHC Act. Each of the Empire Companies is organized, validly existing, and in
good standing under the Laws of the United States or its respective state of
incorporation or formation and has the corporate power and authority necessary
to carry on its business as now conducted and to own, lease, and operate its
material Assets. Each Empire Company is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Empire.
(b) Section 2.1 of the Disclosure Memorandum contains true and
complete copies of all of the Governing Documents of each Empire Company.
(c) Except as disclosed in Section 2.1(c) of the Disclosure
Memorandum,the minute books of Empire accurately reflect in all material
respects all corporate meetings held or actions taken since January 1, 1995, by
the shareholders or Board of Directors of Empire.
2.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Empire has the corporate power and authority necessary to
execute, deliver, and perform its obligations under the Merger Documents and to
consummate the transactions contemplated thereby. The execution, delivery, and
performance of the Merger Documents and the consummation of the transactions
contemplated therein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
Empire, subject to the approval of the Merger Documents by a majority of the
outstanding shares of Empire Common, which is the only shareholder vote required
for approval of the Merger Documents and the consummation of the Merger by
Empire. Subject to such requisite shareholder approval, the Merger Documents
represent the legal, valid, and binding obligations of Empire, enforceable
against Empire in accordance with their respective terms (except in all cases as
such enforceability may be limited by applicable bankruptcy, insolvency,
receivership, conservatorship, reorganization, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought).
(b) Except as disclosed in Section 2.2 of the Disclosure
Memorandum, neither the
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execution and delivery of the Merger Documents by Empire nor the
consummation by Empire of the transactions contemplated thereby, nor compliance
by Empire with any of the provisions thereof, will (A) conflict with or result
in a breach of any provision of Empire's Governing Documents, or (B) constitute
or result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset of any Empire Company, under any Contract
or Permit of any Empire Company, or (C) subject to receipt of the requisite
approvals referred to in Section 7.1(a) and (b) of this Agreement, violate any
Law or Order applicable to any Empire Company or any of their respective
material Assets.
(c) Other than in connection or compliance with the provisions of
applicable state corporate and Securities Laws and rules of the NASD, and other
than Consents required from Regulatory Authorities, and other than notices to or
filings with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation with respect to any Employee Benefit Plan of any Empire Company, no
notice to, filing with, or Consent of, any public body or authority is necessary
for the consummation by Empire of the Merger and the other transactions
contemplated in the Merger Documents.
2.3 CAPITAL STOCK.
(a) The authorized capital stock of Empire consists of 5,000,000
shares of Empire Common, 3,166,234 of which are issued and outstanding as of the
date of this Agreement and 2,000,000 shares of preferred stock, without par
value, none of which was outstanding on the date of this Agreement. All of the
issued and outstanding shares of Empire Common are duly and validly issued and
outstanding and are fully paid and nonassessable. None of the outstanding shares
of capital stock of Empire has been issued in violation of any preemptive rights
of the current or past shareholders of Empire. Empire has reserved 23,820 shares
of Empire Common for issuance under the Empire Stock Option Plan, pursuant to
which options to purchase not more than 23,820 shares of Empire Common are
outstanding. As of December 31, 1999, approximately 14,500 shares of Empire
Common were reserved for issuance to satisfy obligations Empire had under the
Director Plans and an additional 5,000 shares of Empire Common have been
reserved for issuance pursuant to the Director Plans during 2000.
(b) Except for the Warrant, the Warrant Purchase Agreement, and
the Empire Rights Agreement, and except as set forth in Section 2.3(a) of this
Agreement or as disclosed in Section 2.3 of the Disclosure Memorandum, there are
no shares of capital stock or other equity securities of Empire outstanding and
no outstanding Rights relating to the capital stock of Empire. The execution and
delivery of the Merger Documents does not, and the consummation of the Merger
and the other transactions contemplated by the Merger Documents will not (A)
result in the grant of any Rights to any Person under the Empire Rights
Agreement, (B) result in separation from the shares of Empire Common of the
Rights granted under the Empire Rights Agreement, (C) permit any holder of any
of the Rights under the Empire Rights Agreement to exercise any such Rights, or
(D) give any Person any Right to purchase any securities issued by Huntington.
Empire and Empire Bank, as Rights Agent, have properly authorized and executed a
certain Amendment to Empire Rights Agreement, dated as
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of the date of this Agreement, but executed prior to the execution of this
Agreement, a copy of which has been furnished to Huntington.
2.4 EMPIRE SUBSIDIARIES. Section 2.4 of the Disclosure Memorandum
contains a true and complete list of all Empire Subsidiaries as of the date of
this Agreement. Empire Bank is a national bank chartered under laws of the
United States. Except as disclosed in Section 2.4 of the Disclosure Memorandum,
Empire owns all of the issued and outstanding shares of capital stock of each
Empire Subsidiary. No equity securities of any Empire Subsidiary are or may
become required to be issued by reason of any Rights, and there are no Contracts
by which any Empire Subsidiary is bound to issue additional shares of its
capital stock or Rights. There are no Contracts relating to the rights of any
Empire Company to vote or to dispose of any shares of the capital stock of any
Empire Subsidiary. All of the shares of capital stock of each Empire Subsidiary
held by an Empire Company are fully paid and, except pursuant to 12 U.S.C.
Section 55 in the case of Empire Bank, non-assessable and are owned by the
Empire Company free and clear of any Lien. Empire Bank is an "insured
institution," as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder, the deposits in which are insured by the Bank Insurance
Fund or the Savings Association Insurance Fund.
2.5 FINANCIAL STATEMENTS. Empire has delivered to Huntington copies of
all Empire Financial Statements and will deliver to Huntington copies of all
Empire Financial Statements prepared subsequent to the date hereof. The Empire
Financial Statements (as of the dates thereof and for the periods covered
thereby) (A) are, or if dated after the date of this Agreement, will be, in
accordance with the books and records of Empire, which are or will be, as the
case may be, complete and correct in all material respects and which have been
or will have been, as the case may be, maintained in accordance with good
business practices, and (B) present or will present, as the case may be, fairly
the consolidated financial position of Empire as of the dates indicated and the
consolidated results of operations, changes in shareholders' equity, and cash
flows of Empire for the periods indicated, in accordance with GAAP (except with
respect to the December Report which has not been prepared in accordance with
GAAP) or, as applicable, regulatory accounting principles applicable to bank
holding companies generally (subject to any exceptions as to consistency
specified therein or as may be indicated in the notes thereto or, in the case of
interim financial statements, subject to normal recurring year-end and audit
adjustments that are not material in amount or effect).
2.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in Section
2.6 of the Disclosure Memorandum, as of December 31, 1998, no Empire Company had
any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Empire, except Liabilities which were
accrued or reserved against in the consolidated balance sheets of Empire as of
December 31, 1998, included in the Empire Financial Statements. Except as
disclosed in Section 2.6 of the Disclosure Memorandum, no Empire Company has
incurred or paid any Liability since December 31, 1998, except for (A) such
Liabilities incurred or paid in the ordinary course of business consistent with
past business practice and which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Empire, (B) such Liabilities
that are expressly permitted
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hereunder, and (C) such Liabilities incurred in connection with the negotiation
and consummation of the transactions contemplated hereunder.
2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Empire Financial Statements delivered prior to the date of this Agreement or as
disclosed in Section 2.7 of the Disclosure Memorandum, since December 31, 1998,
(A) there have been no events, changes, or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Empire, and (B) Empire has not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
or occurring after the date of this Agreement, would represent or result in a
material breach or violation of any of the covenants or agreements of Empire
provided in this Agreement. Specifically, but without in any way limiting the
foregoing, except as described in Section 2.7 of the Disclosure Memorandum,
since December 31, 1998, no Empire Company has:
(a) merged with any other corporation or bank, or permitted any other
corporation or bank to merge into or consolidate with it; acquired control over
any other firm, bank, corporation, or organization;
(b) incurred any indebtedness, obligations, or liabilities, whether
absolute, accrued, contingent, or otherwise, including, without limitation,
liabilities as guarantor under any guaranty, other than indebtedness,
obligations, and liabilities incurred in the ordinary course of its business or
incurred under the Empire Contracts (as that term is defined in Section 2.14);
(c) forgiven or cancelled any indebtedness or contractual obligation,
other than in the ordinary course of business;
(d) purchased, sold, transferred, liquidated, or otherwise acquired or
disposed of any material Assets or properties, or entered into any contract for
any such purchase, sale, transfer, liquidation, acquisition, or disposition,
other than in the ordinary course of business;
(e) entered into any material lease of real or personal property other
than in the ordinary course of business;
(f) declared, paid, made, or set apart any sum or property for, any
dividend or other distribution, or otherwise paid or transferred any funds or
property to its shareholders;
(g) made any loans or loan commitments, other than in the ordinary
course of business, to any Affiliate of Empire (or any person or business entity
controlled by or affiliated with such an Affiliate);
(h) entered into any transaction involving the expenditure of more
than $50,000, other than in the ordinary course of business, except pursuant to
and in accordance with the terms of the contracts and commitments referred to in
Section 2.14;
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(i) adopted any change in any accounting policy or method, except
as appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(j) revalued any asset or adjusted any reserve other than in the
ordinary course of business.
2.8 TAX MATTERS. Except as may be disclosed in Section 2.8 of the
Disclosure Memorandum:
(a) All Tax returns required to be filed by or on behalf of any
Empire Company have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31,1998, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time and all returns filed are complete and
accurate,except for failures, if any, which, taken together, would not have a
Material Adverse Effect on Empire. All Taxes shown on filed returns have been
paid or adequate provision therefor has been made in the Empire Financial
Statements. As of the date of this Agreement, there is no audit examination,
deficiency, or refund Litigation with respect to any Taxes that is reasonably
likely to result in a determination that would have, individually or in the
aggregate, a Material Adverse Effect on Empire, except as reserved against in
the Empire Financial Statements delivered prior to the date of this Agreement or
as disclosed in Section 2.8 of the Disclosure Memorandum. All Taxes and other
Liabilities due with respect to completed and settled Tax examinations or
concluded Tax Litigation have been paid or adequate provision therefor has been
made in the Empire Financial Statements.
(b) None of the Empire Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due for any
of the Empire Companies for the period or periods through and including the date
of the respective Empire Financial Statements has been made and is reflected on
such Empire Financial Statements in accordance with GAAP.
(d) Deferred Taxes of the Empire Companies have been provided for
in accordance with GAAP.
(e) Each of the Empire Companies is in material compliance with,
and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable information
reporting and Tax withholding requirements under federal, state, and local Tax
Laws, and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code.
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(f) Empire has not received any notification of an audit of its federal
income tax returns for any tax years since 1992.
(g) Except as described in Section 2.8 of the Disclosure Memorandum,
the Empire Companies have not made any payments, are not obligated to make any
payments, and are not a party to any agreement that under certain circumstances
could obligate them to make any payments, that will not be deductible under the
Internal Revenue Code Sections 280G or 162(m).
2.9 ASSETS AND INSURANCE.
(a) Except as disclosed in Section 2.9 of the Disclosure Memorandum or
as disclosed or reserved against in the Empire Financial Statements delivered
prior to the date of this Agreement, Empire has good and marketable title, free
and clear of all Liens, to all of its Assets which are material to the operation
of its business. All Assets which are material to Empire's business and that are
held under leases or subleases by Empire, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or other Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
(b) To its Knowledge, Empire currently maintains insurance and blanket
bonds (collectively, "Insurance") similar in amounts, scope, and coverage to
that customarily maintained by other bank organizations comparable in size and
operation to Empire. Empire has not received notice from any Insurance carrier
that (A) such Insurance will be canceled or that coverage thereunder will be
reduced or eliminated, or (B) premium costs with respect to such policies of
insurance will be substantially increased. Except as set forth in Section 2.15
of the Disclosure Memorandum, there are presently no material claims pending
under such policies of Insurance and no notices have been given by Empire under
such policies with respect to any material potential or actual claims and Empire
has no Knowledge of any events that require any such notice to be given. All
premiums due under the policies of Insurance have been paid and Empire has not
failed to give any notice or to present a material claim in due and timely
fashion under any such policy of Insurance.
(c) Section 2.9 of the Disclosure Memorandum sets forth a list of the
addresses all Operational Real Property. To the Knowledge of Empire, the
Operational Real Property and the use of such Operational Real Property by
Empire does not violate zoning, land use laws, governmental regulations, or
restrictive covenants, except where such violation would not have a Material
Adverse Effect on Empire. To the Knowledge of Empire, (A) the Operational Real
Property and the use thereof by Empire do not encroach upon any property owned
by any other person, and (B) no property owned by any other person encroaches
upon any of the
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Operational Real Property, except where such encroachment would not have a
Material Adverse Effect on Empire.
2.10 ENVIRONMENTAL MATTERS. Except as disclosed in Section 2.10 of the
Disclosure Memorandum:
(a) To the Knowledge of Empire, each Empire Company's Participation
Facilities, and its Loan Properties are, and have been, in compliance with all
Environmental Laws, except for violations which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Empire.
(b) There is no Litigation pending or, to the Knowledge of Empire,
threatened before any court, governmental agency, or authority or other forum in
which any Empire Company or any of its Participation Facilities has been or,
with respect to threatened Litigation, may be named as a defendant (A) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (B) relating to the release into the environment of any Hazardous Substance,
whether or not occurring at, on, under, or involving a site owned, leased, or
operated by any Empire Company or any of its Participation Facilities, except
for such Litigation, pending or threatened, that, if a judgment adverse to an
Empire Company were to be rendered in such Litigation, would not have,
individually or in the aggregate, a Material Adverse Effect on Empire.
(c) There is no Litigation pending or, to the Knowledge of Empire,
threatened before any court, governmental agency, or board or other forum in
which any Empire Company or any of its Loan Properties has been or, with respect
to threatened Litigation, may be named as a defendant or potentially responsible
party (A) for alleged noncompliance (including by any predecessor) with any
Environmental Law or (B) relating to the release into the environment of any
Hazardous Substance, whether or not occurring at, on, under, or involving a Loan
Property, except for such Litigation, pending or threatened, that, if a judgment
adverse to an Empire Company were to be rendered in such Litigation, would not
have, individually or in the aggregate, a Material Adverse Effect on Empire.
(d) To the Knowledge of Empire, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c) above, except such as
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Empire.
(e) During the period of (A) any Empire Company's ownership or
operation of any of their respective current Real Property, (B) any Empire
Company's participation in the management of any Participation Facility, or (C)
to the Knowledge of Empire, any Empire Company's holding of a security interest
in a Loan Property, there have been no releases of Hazardous Substance in, on,
under, or affecting such properties, except such as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Empire.
Prior to the period of (A) any Empire Company's ownership or operation of any of
their respective current Real Property, (B) any Empire Company's participation
in the
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management of any Participation Facility, or (C) any Empire Company's holding of
a security interest in a Loan Property, to the Knowledge of Empire, there were
no releases of Hazardous Substance in, on, under, or affecting any such
property, Participation Facility or Loan Property, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Empire.
(f) (A) No claims have been made or, to the Knowledge of Empire,
threatened at any time by any third Person against any Empire Company relating
to damage, contribution, cost recovery, compensation, loss, or injury resulting
from any Hazardous Substance; (B) none of the Real Property has been used by any
Empire Company for the storage or disposal of Hazardous Substances, except in
compliance with applicable Law, nor, to the Knowledge of Empire, is any of the
Real Property contaminated by any Hazardous Substance; and (C) to the Knowledge
of Empire, none of the Real Property has in the past contained or presently
contains any underground storage tanks; except to the extent that any of the
matters set forth in items (A), (B), and (C) above would not have a Material
Adverse Effect on Empire.
2.11 COMPLIANCE WITH LAWS. Each Empire Company has in effect all
Permits necessary for it to own, lease, or operate its material Assets and to
carry on its business as now conducted, except for those Permits, the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Empire, and there has occurred no Default under any
such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Empire. Except as
disclosed in Section 2.11 of the Disclosure Memorandum, no Empire Company:
(a) is in Default under its Governing Documents;
(b) is in violation of any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for violations which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Empire;
(c) has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory Authority or
the staff thereof (A) asserting that any such entity is not in compliance with
any of the Laws or Orders which such governmental authority or Regulatory
Authority enforces, where such noncompliance is reasonably likely to have a
Material Adverse Effect on Empire, (B) threatening to revoke any Permits, the
revocation of which is reasonably likely to have a Material Adverse Effect on
Empire, or (C) requiring any such entity to enter into or consent to the
issuance of a cease and desist order, supervisory letter, formal agreement,
directive, commitment, or memorandum of understanding, or to adopt any
resolution of the Board of Directors of such entity or similar undertaking,
which restricts the conduct of its business, or in any manner relates to its
capital adequacy, its credit or reserve policies, its management, or the payment
of dividends, and is subject to any such agreement under, letter of
understanding; or
(d) directly or indirectly engages in any material activity prohibited
to be conducted
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by such entity, or owns any material Assets prohibited to be held by such
entity.
2.12 LABOR RELATIONS. Except as set forth in Section 2.12 of the
Disclosure Memorandum, no Empire Company is the subject of any Litigation
asserting that it has committed an unfair labor practice (within the meaning of
the National Labor Relations Act or comparable state law) or seeking to compel
it to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving any Empire
Company, pending or, to the Knowledge of Empire, threatened, or, to the
Knowledge of Empire, is there any activity involving any Empire Company's
employees seeking to certify a collective bargaining unit or engaging in any
other organization activity.
2.13 EMPLOYEE BENEFIT PLANS.
(a) Empire has disclosed in Section 2.13 of the Disclosure Memorandum,
and has delivered or made available to Huntington prior to the execution of this
Agreement copies of each Employee Benefit Plan of the Empire Companies.
(b) No Empire Company Pension Plan is or has been a "multiemployer
plan" within the meaning of Section 3(37) of ERISA.
(c) Except as disclosed in Section 2.13 of the Disclosure Memorandum,
all Employee Benefit Plans of the Empire Companies are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, including the 1986
amendments thereto, and any other applicable Laws, the breach or violation of
which are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Empire or Empire Bank.
(d) Except as disclosed in Section 2.13 of the Disclosure Memorandum,
each Empire Company ERISA Plan which is intended to be qualified under Section
401(a) of the Internal Revenue Code has received a favorable determination
letter which takes into account the Tax Reform Act of 1986 and subsequent
legislation for which a determination letter is available from the Internal
Revenue Service, and Empire is not aware of any circumstances likely to result
in revocation of any such favorable determination letter. To the Knowledge of
Empire, no Empire Company has engaged in a transaction with respect to any
Employee Benefit Plan that, assuming the taxable period of such transaction has
not expired as of the date hereof, would subject any Empire Company to a Tax
imposed by either Section 4975 of the Internal Revenue Code or Section 502(i) of
ERISA in amounts which are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Empire.
(e) Except as disclosed in Section 2.13 of the Disclosure Memorandum,
no Empire Company Pension Plan has any "unfunded current liability," as that
term is defined in Section 302(d)(8)(A) of ERISA, and the fair market value of
the assets of any such plan exceeds the plan's "benefit liabilities," as that
term is defined in Section 4001(a)(16) of ERISA, when determined under actuarial
factors that would apply if the plan terminated in accordance with all
applicable legal requirements and assuming the adoption of interest rates and
mortality
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tables described in Section 417(e)(3)(A)(i) and the use of such interest rates
published in January 1999, and assuming that all participants take a lump sum
distribution of their vested accrued benefits on January 1, 1999.
(f) Except as disclosed in Section 2.13 of the Disclosure Memorandum,
since the date of the most recent actuarial valuation, there has been (A) no
material change in the financial position of any Empire Company Pension Plan,
(B) no change in the actuarial assumptions with respect to any Empire Company
Pension Plan, and (C) no increase in benefits under any Empire Company Pension
Plan as a result of plan amendments or changes in applicable Law which is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on any Empire Company or materially adversely affect the funding status
of any such plan.
(g) Except as disclosed in Section 2.13 of the Disclosure Memorandum,
neither any Empire Company Pension Plan nor any "single-employer plan," within
the meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by
any Empire Company, or the single-employer plan of any entity which is
considered one employer with Empire under Section 4001 of ERISA or Section 414
of the Internal Revenue Code or Section 302 of ERISA (whether or not waived) (an
"ERISA Affiliate") has an "accumulated funding deficiency" within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA. No Empire
Company has provided, or is required to provide, security to an Empire Company
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Internal Revenue Code.
(h) Except as disclosed in Section 2.13 of the Disclosure Memorandum,
within the six-year period preceding the Effective Time, no Liability under
Subtitle C or D of Title IV of ERISA has been or is expected to be incurred by
any Empire Company with respect to any ongoing, frozen, or terminated
single-employer plan or the single-employer plan of any ERISA Affiliate, which
Liability is reasonably likely to have a Material Adverse Effect on Empire or
Empire Bank. No Empire Company has incurred any withdrawal Liability with
respect to a multi-employer plan under Subtitle B of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate), which
Liability is reasonably likely to have a Material Adverse Effect on an Empire
Company. No notice of a "reportable event," within the meaning of Section 4043
of ERISA for which the 30-day reporting requirement has not been waived, has
been required to be filed for any Empire Company Pension Plan or by any ERISA
Affiliate within the 12-month period ending on the date hereof.
(i) Except as disclosed in Section 2.13 of the Disclosure Memorandum,
no Empire Company has any Liability for retiree health and life benefits under
any Empire Company's Employee Benefit Plans and there are no restrictions on the
rights of such Empire Company to amend or terminate any such Employee Benefit
Plan without incurring any Liability thereunder, which Liability is reasonably
likely to have a Material Adverse Effect on Empire or Empire Bank.
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(j) Except as disclosed in Section 2.13 of the Disclosure Memorandum,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated by the Merger Documents, will (A) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director, officer, or employee of any Empire
Company from any Empire Company under any Employee Benefit Plan or otherwise,
(B) increase any benefits otherwise payable under any Employee Benefit Plan of
any Empire Company, or (C) result in any acceleration of the time of payment or
vesting of any such benefit.
(k) All liabilities under any Empire Company's Employee Benefit Plans,
other than benefits accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the audited Empire Financial Statements to the
extent required by and in accordance with GAAP.
(l) Empire Bank is the sponsor of the ESOP and 401(k) Plan. Empire as
parent of Empire Bank will require that the Trustees of the ESOP and the 401(k)
when implementing this Agreement, as it impacts the ESOP and 401(k), comply with
all material and applicable provisions of ERISA and the Internal Revenue Code.
The fiduciary liability insurance issued to Empire applicable to its Employee
Benefit Plans as further described on Section 2.13 of the Disclosure Memorandum
is in full force and effect on the date hereof and will continue to be in full
force and effect through and including the Effective Date.
2.14 MATERIAL CONTRACTS.
(a) Section 2.14 of the Disclosure Memorandum contains a complete and
correct list of all material Contracts to which any Empire Company is a party,
by which any Empire Company or any of its property is bound, or which has been
authorized by any such Empire Company, of the following types (collectively, the
"Empire Contracts"):
(1) promissory notes, guaranties, mortgages, security agreements, or
other evidences of indebtedness of Empire, other than (A) Contracts
evidencing deposit liabilities, purchases of federal funds, secured
repurchase agreements, Federal Reserve Bank advances, Federal Home Loan
Bank advances, trade payables incurred in the ordinary course of
business, (B) Contracts relating to borrowings or guarantees made in
the ordinary course of business, or (D) Contracts that are terminable
without penalty on 60 or fewer days' notice or that involve less than
$50,000 in the aggregate;
(2) employment, bonus, compensation, severance, or consulting
agreements;
(3) any Rights plan of Empire, including any stock option plan, stock
appreciation rights plan, restricted stock option plan or stock
purchase plan;
(4) collective bargaining agreements or other agreement with or to a
labor
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union or guild;
(5) any contract, arrangement, commitment, or understanding which is a
"material contract" as such term is defined in Item 601(b)(10) of the
Regulation S-K of the Securities and Exchange Commission; and
(6) any contract, arrangement, commitment, or understanding which
would prohibit or materially delay the consummation of the Merger or
any of the transactions contemplated by the Merger Documents.
(b) With respect to each Empire Contract and except as disclosed in
Section 2.14 of the Disclosure Memorandum: (A) the Contract is in full force and
effect; (B) Empire is not in Default thereunder, other than Defaults which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Empire; (C) Empire has not repudiated or waived any material
provision of any such Contract; and (D) no other party to any such Contract is,
to the knowledge of Empire, in Default in any respect, other than Defaults which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Empire, or has repudiated or waived any material provision
thereunder.
2.15 LEGAL PROCEEDINGS. Except as disclosed in Section 2.15 of the
Disclosure Memorandum, there is no Litigation instituted or pending or, to the
Knowledge of Empire, threatened (or unasserted but considered probable of
assertion) against any Empire Company, or against any Asset, interest, or right
of any of them, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any Empire Company.
Section 2.15 of the Disclosure Memorandum contains a copy of each audit letter
response received by Empire from attorneys for any Empire Company in connection
with the preparation of the Financial Statements of Empire or otherwise since
December 31, 1998, relating to any Litigation pending as of the date of this
Agreement to which any Empire Company is a party and which names any Empire
Company as a defendant or cross-defendant, and a brief summary report of any
such Litigation that is not discussed in such audit letter responses.
2.16 REPORTS. Since January 1, 1995, or the date of organization if
later, each Empire Company has timely filed all material reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any applicable federal or state securities or bank
authorities, except failures to file which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Empire. As of
their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not contain any untrue statement of a material fact or omit 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.
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2.17 STATEMENTS TRUE AND CORRECT. None of the information supplied or
to be supplied by any Empire Company or any Affiliate thereof for inclusion in
the Registration Statement to be filed by Huntington with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any Empire Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to Empire's shareholders in connection with the
Shareholders' Meeting and any other documents to be filed by Empire or any
Affiliate thereof with the SEC or any other Regulatory Authority in connection
with the transactions contemplated by the Merger Documents, will, at the
respective time such documents are filed, and with respect to the Proxy
Statement, when first mailed to the shareholders of Empire, be false or
misleading with respect to any 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, or, in the case of the Proxy Statements or
any amendment thereof or supplement thereto, at the time of the Shareholders'
Meeting, as applicable, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any statement in
any earlier communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that any Empire Company or any Affiliate
thereof is responsible for filing with any Regulatory Authority in connection
with the transactions contemplated by the Merger Documents will comply as to
form in all material respects with the provisions of applicable Law.
2.18 TAX AND REGULATORY MATTERS. No Empire Company nor, to the
Knowledge of Empire, any Affiliate thereof, has taken any action or has any
Knowledge of any fact or circumstance that is reasonably likely to (A) prevent
the transactions contemplated by the Merger Documents, including the Merger,
from qualifying as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, or (B) materially impede or delay receipt of any Consents
of Regulatory Authorities referred to in Section 7.1(b) of this Agreement or
result in the imposition of a condition or restriction of the type referred to
in the last sentence of such Section.
2.19 STATE TAKEOVER LAWS. Each Empire Company has taken all necessary
steps to exempt the transactions contemplated by the Merger Documents from any
applicable state takeover Law.
2.20 CHARTER PROVISIONS. Empire has taken all action so that the
entering into of the Merger Documents and the consummation of the Merger and the
other transactions contemplated by the Merger Documents do not and will not
result in the grant of any rights to any Person under the Governing Documents of
any Empire Company or restrict or impair the ability of Huntington or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a shareholder with
respect to, shares of Empire that may be directly or indirectly acquired or
controlled by Huntington or any of its Subsidiaries.
2.21 COMPLIANCE WITH CERTAIN LAWS. Except as disclosed in Section 2.21
of the
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Disclosure Memorandum, Empire is in compliance with all currently applicable
capital requirements and guidelines prescribed by all appropriate federal or
state Regulatory Authorities.
2.22 COMMUNITY REINVESTMENT ACT COMPLIANCE. No Empire Company has
received any notice of non-compliance with the applicable provisions of the CRA
and the regulations promulgated thereunder, and Empire Bank has received a CRA
rating of satisfactory or better from the OCC. Empire knows of no fact or
circumstance or set of facts or circumstances which would cause Empire to fail
to comply with such provisions or to cause the CRA rating of Empire to fall
below satisfactory.
2.23 ACQUISITION TRANSACTIONS. Except with respect to the Merger
Documents, there are no proposals or offers to engage in an Acquisition
Transaction previously received by Empire which remain outstanding as of the
close of business on February 4, 2000. Any breach of this representation by
Empire will cause any such proposal or offer, whether in its original form or as
amended, to be deemed to be received by Empire after February 4, 2000, for
purposes of Section 1 of the Warrant and Section 10.2 of this Agreement.
2.24 LUMP SUM PAYMENT, RELEASE, AND WAIVER AGREEMENTS. Huntington,
Empire, and each of the executives officers of Empire listed in Section
2.14(a)(2) of the Disclosure Memorandum (the "Executives"), have entered into
Lump Sum Payment, Release, and Waiver Agreements regarding, among other things,
the payment of cash in lieu of benefits otherwise payable to the Executives upon
a change in control of Empire. Empire has the corporate power and authority
necessary to execute, deliver, and perform its obligations under such Lump Sum
Payment, Release, and Waiver Agreements and the execution, delivery, and
performance of the such Lump Sum Payment, Release, and Waiver Agreement have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of Empire. Each Lump Sum Payment, Release, and Waiver
Agreement represents the legal, valid, and binding obligation of Empire and the
relevant Executive, enforceable against Empire and the relevant Executive in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF HUNTINGTON
Huntington hereby represents and warrants to Empire as follows:
3.1 ORGANIZATION, STANDING, AND POWER. Huntington is duly registered as
a bank holding company under the BHC Act. Huntington is a corporation duly
organized, validly
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existing, and in good standing under the Laws of the State of Maryland, and has
the corporate power and authority to carry on its business as now conducted and
to own, lease and operate its material Assets. Huntington is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Huntington.
3.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Huntington has the corporate power and authority necessary to
execute, deliver and perform its obligations under the Merger Documents and to
consummate the transactions contemplated thereby. The execution, delivery and
performance of the Merger Documents and the consummation of the transactions
contemplated herein and therein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Huntington. The Merger Documents represent the legal, valid, and binding
obligations of Huntington, enforceable against Huntington in accordance with
their respective terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought).
(b) Neither the execution and delivery of the Merger Documents by
Huntington, nor the consummation by Huntington of the transactions contemplated
thereby, nor compliance by Huntington with any of the provisions thereof or
hereof, will (A) conflict with or result in a breach of any provision of
Huntington's Governing Documents, or (B) constitute or result in a Default
under, or, subject to receipt of the requisite approval referred to in Section
7.1(b) of this Agreement, require any Consent pursuant to, or result in the
creation of any Lien on any Asset of any Huntington Company under, any Contract
or Permit of any Huntington Company, or, (C) subject to receipt of the requisite
approvals referred to in Section 7.1(b) of this Agreement, violate any Law or
Order applicable to any Huntington Company or any of their respective material
Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and Securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, no notice to, filing with, or Consent of, any public body
or authority is necessary for the consummation by Huntington of the Merger and
the other transactions contemplated in the Merger Documents.
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3.3 CAPITAL STOCK.
(a) The authorized capital stock of Huntington consists of (A)
500,000,000 shares of Huntington Common, of which 227,992,927 shares were issued
and outstanding as of January 31, 2000, and (B) 6,617,808 shares of Huntington
Preferred Stock, none of which are issued or outstanding. Huntington has taken
all corporate action necessary to reserve for issuance a sufficient number of
shares of Huntington Common for delivery in exchange for shares of Empire Common
upon consummation of the Merger. All of the issued and outstanding shares of
Huntington Common are, and all of the shares of Huntington Common to be issued
in exchange for shares of Empire Common upon consummation of the Merger, when
issued in accordance with the terms of this Agreement, will be, duly and validly
issued and outstanding and fully paid and nonassessable. None of the outstanding
shares of Huntington Capital Stock has been, and none of the shares of
Huntington Common to be issued in exchange for shares of Empire Common upon
consummation of the Merger will be, issued in violation of any preemptive rights
of the current or past shareholders of Huntington.
(b) There are no Rights relating to the outstanding shares of
Huntington Common other than those provided under the Huntington Rights
Agreement and each outstanding share of Huntington Common, including those to be
issued to the shareholders of Empire in the Merger will have the Rights provided
under the Huntington Rights Agreement. The execution and delivery of the Merger
Documents does not, and the consummation of the Merger and the other
transactions contemplated by the Merger Documents will not, (A) result in the
grant of any Rights to any Person under the Huntington Rights Agreement, (B)
result in separation from the shares of Huntington Common of the Rights granted
under the Huntington Rights Agreement, (C) permit any holder of any of the
Rights under the Huntington Rights Agreement to exercise any such Rights, or (D)
give any Person any Right to purchase any securities issued by Huntington (other
than to Empire's shareholders as contemplated in the Merger Agreement).
(c) Huntington has taken all corporate action necessary to reserve for
issuance a sufficient number of shares of Huntington Common for delivery upon
the exercise of the Empire Stock Options to be converted in accordance with the
terms of the Merger Agreement, and the shares of Huntington Common issuable upon
the exercise of the Empire Stock Options so converted shall be included under an
existing effective registration statement with respect to such shares of
Huntington Common.
3.4 HUNTINGTON SUBSIDIARIES. Huntington or one of its Subsidiaries owns
all of the issued and outstanding shares of capital stock of each material
Huntington Subsidiary. No equity securities of any material Huntington
Subsidiary are or may become required to be issued by reason of any Rights, and
there are no Contracts by which any material Huntington Subsidiary is bound to
issue additional shares of its capital stock or Rights. There are no Contracts
relating to the rights of any Huntington Company to vote or to dispose of any
shares of the capital stock of any material Huntington Subsidiary. All of the
shares of capital stock of each Huntington Subsidiary held by a Huntington
Company are fully paid and, except pursuant
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to 12 U.S.C. Section 55 in the case of The Huntington National Bank,
non-assessable and are owned by a Huntington Company free and clear of any Lien.
Each material Huntington Subsidiary is a corporation or national bank and is
duly organized, validly existing, and (as to corporations) in good standing
under the Laws of the jurisdiction in which it is incorporated or organized, and
has the corporate power and authority necessary for it to own, lease, and
operate its Assets and to carry on its business as now conducted. Each
Huntington Subsidiary is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Huntington. The Huntington National Bank is an "insured institution,"
as defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, the deposits in which are insured by the Bank Insurance Fund.
3.5 FINANCIAL STATEMENTS. Huntington has delivered to Empire all
Huntington Financial Statements and will deliver to Empire copies of all
Huntington Financial Statements prepared subsequent to the date hereof. The
Huntington Financial Statements (as of the dates thereof and for the periods
covered thereby) (A) are in accordance with the books and records of the
Huntington Companies, which are or will be, as the case may be, complete and
correct and which have been or will have been, as the case may be, maintained in
accordance with good business practices, and (B) present or will present, as the
case may be, fairly the consolidated financial position of the Huntington
Companies as of the dates indicated and the consolidated results of operations,
changes in shareholders' equity, and cash flows of the Huntington Companies for
the periods indicated, in accordance with GAAP (subject to exceptions as to
consistency specified therein or as may be indicated in the notes thereto or, in
the case of interim financial statements, to normal recurring year-end
adjustments that are not material in amount or effect).
3.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Huntington Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Huntington, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Huntington as
of December 31, 1998, included in the Huntington Financial Statements delivered
prior to the date of this Agreement or reflected in the notes thereto.
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Huntington Financial Statements delivered prior to the date of this Agreement,
since December 31, 1998, (A) there have been no events, changes or occurrences
which have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Huntington, and (B) Huntington has not
taken any action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken or occurring after the date of this
Agreement, would represent or result in a material breach or violation of any of
the covenants or agreements of Huntington provided in this Agreement.
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3.8 TAX MATTERS.
(a) All Tax returns required to be filed by or on behalf of any of the
Huntington Companies have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1998, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time and all returns filed are complete and
accurate, except for failures, if any, which, taken together, would not have a
Material Adverse Effect on Huntington. All Taxes shown on filed returns have
been paid or adequate provision therefor has been made in the Huntington
Financial Statements. As of the date of this Agreement, there is no audit
examination, deficiency, or refund Litigation with respect to any Taxes that is
reasonably likely to result in a determination that would have, individually or
in the aggregate, a Material Adverse Effect on Huntington, except as reserved
against in the Huntington Financial Statements. All Taxes and other Liabilities
due with respect to completed and settled Tax examinations or concluded Tax
Litigation have been paid or adequate provision therefor has been made in the
Huntington Financial Statements.
(b) None of the Huntington Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due for any of
the Huntington Companies for the period or periods through and including the
date of the respective Huntington Financial Statements has been made and is
reflected on such Huntington Financial Statements.
(d) Deferred Taxes of the Huntington Companies have been provided for
in accordance with GAAP.
(e) Each of the Huntington Companies is in material compliance with,
and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable information
reporting and Tax withholding requirements under federal, state, and local Tax
Laws, and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code.
3.9 ASSETS AND INSURANCE. Except to the extent that an exception to
any of the matters described below would not be reasonably likely to have a
Material Adverse Effect on Huntington:
(a) Except as disclosed or reserved against in the Huntington Financial
Statements, Huntington has good and marketable title, free and clear of all
Liens, to all of its Assets which
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are material to the operation of its business. All Assets which are material to
Huntington's business and that are held under leases or subleases by Huntington,
are held under valid Contracts enforceable in accordance with their respective
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the enforcement
of creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect.
(b) To its Knowledge, Huntington currently maintains insurance and
blanket bonds (collectively, "Insurance") similar in amounts, scope, and
coverage to that customarily maintained by other bank organizations comparable
in size and operation to Huntington. Huntington has not received notice from any
Insurance carrier that (A) such Insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (B) premium costs with respect to
such policies of insurance will be substantially increased. All premiums due
under the policies of Insurance have been paid.
3.10 COMPLIANCE WITH LAWS. Each Huntington Company has in effect all
Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Huntington, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Huntington. No
Huntington Company:
(a) is in Default under its Governing Documents;
(b) is in violation of, or in Default under, any Laws, Order or Permits
applicable to its business or employees conducting its business, except for
violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Huntington;
(c) has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory Authority or
the staff thereof (A) asserting that any Huntington Company is not in compliance
with any of the Laws or Orders, including CRA, which such governmental authority
or Regulatory Authority enforces, where such noncompliance is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
Huntington or which would prevent or delay the consummation of the transactions
contemplated under the Merger Documents, (B) threatening to revoke any Permits,
the revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Huntington, (C) requiring any Huntington
Company to enter into or consent to the issuance of a cease and desist order,
formal agreement, directive, commitment or memorandum of understanding, or to
adopt any resolution of the Board of Directors of such entity, or similar
undertaking, which restricts materially the conduct of its
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business, or in the payment of dividends, or which are reasonably likely to
delay or prevent the consummation of the transactions contemplated herein; or
(d) directly or indirectly engages in any material activity
prohibited to be conducted by such entity, or owns any material Assets
prohibited to be held by such entity.
3.11 EMPLOYEE BENEFIT PLANS.
(a) Huntington has delivered or made available to Empire prior to the
execution of this Agreement copies of all Huntington Employee Benefit Plans
currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by any Huntington Company which are applicable to employees
generally of the Huntington Companies.
(b) All Huntington Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code including the 1986 amendments thereto
and any other applicable Laws, the breach or violation of which are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Huntington.
(c) Each Huntington ERISA Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter which takes into account the Tax Reform Act of 1986 and
subsequent legislation for which a determination letter is available from the
Internal Revenue Service, and Huntington is not aware of any circumstances
likely to result in revocation of any such favorable determination letter.
3.12 LEGAL PROCEEDINGS. There is no Litigation instituted or pending
or, to the Knowledge of Huntington, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any Huntington Company, or
against any Asset, interest, or right of any of them, that seeks to enjoin,
delay or prevent the execution, delivery, or performance of the Merger Documents
or the completion of the transactions contemplated therein, or that, if a
judgment adverse to a Huntington Company were to be rendered in such Litigation,
would have, individually or in the aggregate, a Material Adverse Effect on
Huntington, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any Huntington
Company, that would have, individually, or in the aggregate, a Material Adverse
Effect on Huntington.
3.13 REPORTS. Since January 1, 1995, Huntington has filed all reports
and statements, together with any amendments required to be made with respect
thereto, that it was required to file with (A) the SEC, including, but not
limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy statements, (B) other
Regulatory Authorities, and (C) any applicable state securities or bank
authorities (except, in the case of state securities authorities, failures to
file which are not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Huntington). As of their respective dates, each of
such reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all
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material respects with all applicable Laws. As of its respective date, each such
report and document did not contain any untrue statement of a material fact or
omit 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.
3.14 STATEMENTS TRUE AND CORRECT. None of the information supplied or
to be supplied by Huntington or any Affiliate thereof for inclusion in the
Registration Statement to be filed by Huntington with the SEC, will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by Huntington or any Affiliate thereof for inclusion in the Proxy
Statement to be mailed to Empire's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by Huntington or any
Affiliate thereof with the SEC or any other Regulatory Authority in connection
with the transactions contemplated by the Merger Documents, will, at the
respective time such documents are filed, and with respect to the Proxy
Statement, when first mailed to the shareholders of Empire, be false or
misleading with respect to any 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, or, in the case of the Proxy Statement or
any amendment thereof or supplement thereto, at the time of the Shareholders'
Meeting, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that Huntington or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated by the Merger Documents will comply as to form in all
material respects with the provisions of applicable Law.
3.15 TAX AND REGULATORY MATTERS. No Huntington Company or any Affiliate
thereof has taken any action or has any Knowledge of any fact or circumstance
that is reasonably likely to (A) prevent the transactions contemplated by the
Merger Documents, including the Merger, from qualifying as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (B)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 7.1(b) of this Agreement or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
3.16 COMMUNITY REINVESTMENT ACT COMPLIANCE. The Huntington National
Bank has received a CRA rating of satisfactory or better from the OCC.
Huntington knows of no fact or circumstance or set of facts or circumstances
which would cause the CRA rating of The Huntington National Bank to fall below
satisfactory.
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ARTICLE 4
MUTUAL COVENANTS OF THE PARTIES
4.1 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (A) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (B) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
4.2 REPORTS. Empire and each Empire Subsidiary shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to Huntington copies of all
such reports promptly after the same are filed. Huntington shall file all
reports required to be filed by it with Regulatory Authorities between the date
of this Agreement and the Effective Time and shall deliver to Empire copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in shareholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end and audit adjustments that are not material). As of
their respective dates, such reports filed with the SEC will comply in all
material respects with the Securities Laws and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory Authority shall
be prepared in accordance with Laws applicable to such reports.
4.3 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER APPROVAL. As
soon as practicable after execution of this Agreement, Huntington shall file the
Registration Statement with the SEC, and shall use its reasonable efforts to
cause the Registration Statement to become effective under the 1933 Act and take
any action required to be taken under the applicable state Blue Sky or
Securities Laws in connection with the issuance of the shares of Huntington
Common upon consummation of the Merger. Empire shall furnish all information
concerning it and the holders of its capital stock as Huntington may reasonably
request in connection with such action. Empire shall call a Shareholders'
Meeting, to be held as soon as reasonably practicable after the Registration
Statement is declared effective by the SEC, for the purpose of voting upon
approval of the Merger Documents, the Merger, and such other related matters as
it deems appropriate. In connection with the Shareholders' Meeting, (A) Empire
shall assist Huntington in the preparation, as part of the Registration
Statement filed with the SEC, of a Proxy Statement and mail such Proxy Statement
to Empire shareholders following the review and clearance of such Proxy
Statement and related proxy materials by the Regulatory Authorities, (B) Empire
shall furnish to Huntington all information concerning Empire that Huntington
may reasonably request in connection with such Proxy Statement,
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(C) the Board of Directors of Empire shall recommend (subject to compliance with
their fiduciary duties as advised by counsel) to Empire's shareholders the
approval of the Merger Documents, and (D) the Board of Directors and officers of
Empire shall (subject to compliance with their fiduciary duties as advised by
counsel) use their reasonable efforts to obtain such shareholders' approval.
4.4 APPLICATIONS. Huntington shall promptly prepare and file, and
Empire shall cooperate in the preparation and, where appropriate, the filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by the Merger Documents, seeking the requisite
Consents necessary to consummate the transactions contemplated by the Merger
Documents.
4.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
the Merger Documents, including using its reasonable efforts to lift or rescind
any Order adversely affecting its ability to consummate such transactions and to
cause to be satisfied the conditions referred to in Article 7 of this Agreement;
provided, that nothing herein shall preclude either Party from exercising its
rights under this Agreement. Each Party shall use, and shall cause each of its
Subsidiaries to use, its reasonable efforts to obtain all Consents necessary or
desirable for the consummation of the transactions contemplated by the Merger
Documents. The Parties shall deliver to each other, copies of all filings,
correspondence, and orders to and from all Regulatory Authorities in connection
with the transactions contemplated by the Merger Documents.
4.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep the other Party
advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be made after
reasonable prior notice and during regular business hours, shall be reasonably
related to the transactions contemplated by the Merger Documents, and shall not
interfere unnecessarily with normal operations. No investigation by a Party
shall affect the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and agents to,
maintain the confidentiality of all confidential information furnished to it by
the other Party concerning its and its Subsidiaries' businesses, operations, and
financial positions and shall not use such information for any purpose except in
furtherance of the transactions contemplated by the Merger Documents. If this
Agreement is terminated prior to the Effective Time, each Party
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shall promptly return or certify the destruction of all documents and copies
thereof, and all work papers containing confidential information received from
the other Party.
(c) Each Party agrees to give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a material
breach of any representation, warranty, covenant, or agreement of the other
Party or which has had or is reasonably likely to have a Material Adverse Effect
on the other Party.
(d) Promptly after the execution of this Agreement, Empire will use its
best efforts to make available to Huntington complete and correct copies of all
deeds and leases in the possession of any Empire Company relating to the Real
Property.
4.7 PRESS RELEASES. Prior to the Effective Time, Empire and Huntington
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to the Merger Documents or any
other transaction contemplated thereby; provided, that nothing in this Section
4.7 shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
4.8 TAX TREATMENT. Each of the Parties undertakes and agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify for treatment as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code for federal income tax
purposes.
4.9 NO RIGHTS TRIGGERED. Each Party shall take all reasonable steps
necessary to ensure that entering into the Merger Documents and the consummation
of the transactions contemplated thereby do not and will not (A) result in the
grant of any Rights to any Person under its respective Governing Documents, (B)
result in the grant of any Rights to any Person under the Empire Rights
Agreement or the Huntington Rights Agreement, (C) result in separation from the
shares of Empire Common of the Rights granted under the Empire Rights Agreement
or separation from the shares of Huntington Common of the Rights granted under
the Huntington Rights Agreement, (D) permit any holder of any of the Rights
under the Empire Rights Agreement or the Huntington Rights Agreement to exercise
any such Rights, or (E) give any Person any Right to purchase any securities
issued by Huntington except as contemplated by the Merger.
ARTICLE 5
COVENANTS OF EMPIRE
5.1 CONDUCT OF THE BUSINESS. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, unless the
prior written consent of
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Huntington shall have been obtained, and except as otherwise expressly
contemplated herein, Empire shall and shall cause each of its Subsidiaries to
(A) operate its business only in the usual, regular, and ordinary course, and
(B) preserve intact its business organization and Assets and maintain its rights
and franchises.
5.2 NEGATIVE COVENANTS OF EMPIRE. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, Empire
covenants and agrees that it will not do or agree or commit to do, or permit any
of its Subsidiaries to do or agree or commit to do, any of the following without
the prior written consent of the chief executive officer, president, or chief
financial officer of Huntington:
(a) take any action which to its Knowledge at the time of such action,
would (A) materially adversely affect the ability of any Party to consummate the
transactions contemplated under the Merger Documents, (B) materially adversely
affect the ability of any Party to obtain any Consents required for the
consummation of the transactions contemplated under the Merger Documents without
imposition of a condition or restriction of the type referred to in the last
sentences of Section 7.1(b) or 7.1(c) of this Agreement, or (C) materially
adversely affect the ability of any Party to perform its covenants and
agreements under the Merger Documents.
(b) amend the Governing Documents of any Empire Company;
(c) engage in any acquisition, or take any other action, that
adversely affects the ability of Empire to consummate the transactions
contemplated by the Merger Documents;
(d) take any action that is intended to result in or actually results
in (A) 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, (B) any of the conditions to the Merger set forth in Article 7
hereof not being satisfied, or (C) a violation of any provisions of the Merger
Documents, except, in every case, as may be required by applicable Law.
(e) incur any additional debt obligation or other obligation for
borrowed money (except in the ordinary course of the business of Empire and its
Subsidiaries consistent with past practices and involving the creation of
deposit liabilities, purchases of federal funds, advances from the Federal
Reserve Bank or Federal Home Loan Bank, and entry into repurchase agreements
fully secured by U.S. government or agency securities), or impose, or suffer the
imposition, on any Asset of Empire of any Lien or permit any such Lien to exist
(other than in connection with deposits, repurchase agreements, bankers
acceptances, "treasury tax and loan" accounts established in the ordinary course
of business, the satisfaction of legal requirements in the exercise of trust
powers, and Liens in effect as of the date hereof that are disclosed in the
Disclosure Memorandum);
(f) repurchase, redeem, or otherwise acquire or exchange (other than
purchases or exchanges in the ordinary course under its Employee Benefit Plans),
directly or indirectly, any
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shares, or any securities convertible into any shares, of the capital stock of
Empire, or declare or pay any dividend, in cash or in any other property of any
kind, including, but not limited to, shares of the capital stock of any class of
any Empire Company, or make any other distribution in respect of Empire's
capital stock, provided that Empire may (to the extent legally and contractually
permitted to do so), but is not obligated hereunder to do so, declare and pay
its regular quarterly cash dividends on the shares of Empire Common, in an
amount or amounts not in excess of $0.30 per share of Empire Common for the
regular dividend which is expected to be declared in March 2000 and paid in
April 2000 and in an amount not in excess of $0.35 per share of Empire Common
per quarter thereafter, with usual and regular record and payment dates in
accordance with past practices, as disclosed in the Empire Financial Statements
or in Section 5.2(f) of the Disclosure Memorandum; provided that Huntington and
Empire shall coordinate with each other regarding the declaration of any
dividends in respect of shares of Empire Common and Huntington Common, and the
record and payment dates relating thereto, so that the holders of Empire Common
shall receive at least one dividend, but not more than one dividend, for any
calendar quarter with respect to their shares of Empire Common or the shares of
Huntington Common to be issued in exchange for such shares of Empire Common in
the Merger.
(g) except pursuant to the exercise of the Empire Stock Options
outstanding as of the date hereof, the exercise price of which has been
established and provided to Huntington prior to the date hereof, and pursuant to
the terms thereof in existence on the date hereof, and except with respect to
the reservation and issuance of shares of Empire Common pursuant to the Director
Plans (in amounts which will not exceed the amounts described in Section 2.3(a)
hereof), issue, sell, pledge, encumber, authorize the issuance of, enter into
any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or
otherwise permit to become outstanding, any additional shares of Empire Common
or any other capital stock of any Empire Company, or any Rights with respect
thereto;
(h) adjust, split, combine, or reclassify any capital stock of any
Empire Company, or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of Empire Common, or sell, lease,
mortgage, or otherwise dispose of any Asset (other than Assets acquired as a
result of debts previously contracted) other than in the ordinary course of
business for reasonable and adequate consideration;
(i) except for purchases of U.S. Treasury securities or U.S. Government
agency securities, which in either case have maturities of three years or less,
purchase any securities or make any material investment, either by purchase of
stock of securities, contributions to capital, Asset transfers, or purchase of
any Assets, in any Person other than a wholly owned Empire Subsidiary, or
otherwise acquire direct or indirect control over any Person, other than in
connection with (A) foreclosures in the ordinary course of business, or (B)
acquisitions of control by a depository institution Subsidiary in its fiduciary
capacity;
(j) (A) grant any increase in compensation or benefits to the employees
(except increases in compensation to non-officer employees pursuant to Empire's
normal salary
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programs, consistent with past practices) or officers of any Empire Company; (B)
fund any Rabbi Trust or pay any severance or termination pay or any bonus,
except as disclosed in Section 5.2(j) of the Disclosure Memorandum; (C) enter
into, extend, or amend any severance agreements with officers of Empire; (D)
grant any increase in fees or other increases in compensation or other benefits
to the directors of Empire; (E) voluntarily accelerate the vesting of any
employee benefit, other than pursuant to written policies or written Contracts
in effect on the date of this Agreement; or (F) grant any stock appreciation
rights, cash awards, or any Rights to acquire Empire securities under any Empire
Stock Option Plan;
(k) enter into, extend, or amend any employment Contract between
Empire and any Person (unless such amendment is required by Law);
(l) except as contemplated by this Agreement, adopt any new Empire
Benefit Plan for any Empire Company or terminate or withdraw from, or make any
material change in or to, any existing Empire Benefit Plan other than any such
change that is required by Law or that, in the opinion of counsel, is necessary
or advisable to maintain the tax qualified status of any such plan, or make any
distributions from or contribution or payment to such Empire Benefit Plans
except as required by Law or the terms of such plans and consistent with
Empire's past practice;
(m) make any significant change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to conform
to changes in Tax Laws or regulatory accounting requirements or GAAP;
(n) commence any Litigation, other than in the ordinary course of
business in accordance with past practice, or settle any Litigation involving
any Liability of Empire for material money damages or restrictions upon the
operations of Empire;
(o) except in the ordinary course of business and consistent with past
practice, (A) enter into, modify, amend or terminate any material Contract (B)
waive, release, compromise or assign any material rights or claims, or (C) incur
any capital expenditures, obligations or liabilities;
(p) enter into any agreement or commitment of the character referred
to in Section 2.14 hereof; or
(q) take or permit to be taken any action of a character which is
otherwise listed in Section 2.14 hereof.
5.3 CERTAIN ACTIONS. Except with respect to the Merger Documents and
the transactions contemplated thereby, neither Empire nor any Affiliate or any
Representatives thereof retained by Empire shall directly or indirectly solicit,
encourage, or, except to the extent necessary to comply with the fiduciary
duties of Empire's Board of Directors, as advised by counsel, entertain, any
proposal to engage in an Acquisition Transaction by any
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Person. Except to the extent necessary to comply with the fiduciary duties of
Empire's Board of Directors, as advised by counsel, neither Empire nor any
Affiliate or Representative thereof shall fail to recommend that Empire
shareholders vote in favor of the Merger or withdraw such as recommendation
previously made, fail to solicit proxies of the shareholders of Empire, or fail
to hold the Shareholders' Meeting, or shall furnish any non-public information
that it is not legally obligated to furnish in connection with, negotiate with
respect to, or enter into any Contract with respect to, any Acquisition
Transaction, but Empire may communicate and disclose information about such a
proposal to engage in an Acquisition Transaction to its shareholders if and to
the extent that it is required to do so in order to comply with its legal
obligations as advised by counsel. Empire shall promptly notify Huntington
orally and in writing in the event that it receives any inquiry or proposal
relating to any Acquisition Transaction. Empire shall (A) immediately cease and
cause to be terminated any existing activities, discussions, or negotiations
with any Persons conducted heretofore with respect to any of the foregoing, and
(B) direct and use its reasonable efforts to cause all of its Representatives
not to engage in any of the foregoing. Notwithstanding anything contained in the
Merger Documents to the contrary, any action taken by Empire or its Affiliates
or Representatives which is permitted under this Section 5.3 by virtue of such
action being necessary to comply with the fiduciary duties of Empire's Board of
Directors, as advised by counsel, shall not constitute a breach of any of the
Merger Documents by Empire.
5.4 AGREEMENTS WITH RESPECT TO AFFILIATES. Empire has disclosed in
Section 5.4 of the Disclosure Memorandum all Persons whom it reasonably believes
is an "affiliate" of Empire for purposes of Rule 145 under the 1933 Act. Empire
shall use its reasonable efforts to cause each such Person to deliver to
Huntington not later than 30 days prior to the Effective Time, a written
agreement, in a form reasonably satisfactory to both parties, providing that
such Person will not sell, pledge, transfer, or otherwise dispose of the shares
of Empire Common held by such Person except as contemplated by such agreement or
by the Merger Documents and will not sell, pledge, transfer, or otherwise
dispose of the shares of Huntington Common to be received by such Person upon
consummation of the Merger except in compliance with applicable provisions of
the 1933 Act.
5.5 CERTAIN POLICIES OF EMPIRE. At the request of Huntington, Empire
shall use its best efforts to modify and change its loan, litigation, and real
estate valuation policies and practices (including loan classifications and
levels of reserves) prior to the Effective Time so as to be consistent on a
mutually satisfactory basis with those of Huntington and GAAP. Empire shall not
be required to modify or change any such policies or practices, however, until
such time as (A) the conditions set forth in Sections 7.1(a), 7.1(b), and 7.1(c)
of this Agreement have been satisfied, (B) Empire and Huntington agree that the
Effective Time will occur prior to the public disclosure of such modifications
or changes in regular periodic earnings releases or periodic reports filed with
the Regulatory Authorities, and (C) Huntington acknowledges in writing that all
conditions to its obligation to consummate the Merger (and Huntington's rights
to terminate this Agreement) have been waived or satisfied; provided, that in
all circumstances Empire shall make such modifications and changes not later
than immediately prior to the Effective Time. Empire's representations,
warranties, covenants, and agreements contained in
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this Agreement shall not be deemed to be untrue or breached in any respect for
any purpose as a consequence of any modifications or changes undertaken solely
on account of this Section 5.5.
5.6 TITLE INSURANCE. For each parcel of Operational Real Property
described in the Disclosure Memorandum as being owned by an Empire Company,
Empire shall deliver to Huntington, at Empire's expense, no later than 60 days
after the date of this Agreement, a title insurance commitment (ALTA 1966 form
or its equivalent) for a fee owner's title insurance policy, each in an amount
equal to the carrying cost of the premises or leasehold interest to be insured
(including all improvements thereon), on the books of Empire as of December 31,
1998. Each title insurance commitment shall show that marketable fee simple
title to the owned premises is in the name of an Empire Company, and that the
owned premises are free and clear of any Liens and encumbrances which would have
a Material Adverse Effect on Empire except taxes and assessments not delinquent
and utility and other easements that do not interfere with the use of the
property for the business being conducted thereon. Each such commitment shall
provide that such fee owners policy committed for therein shall be an ALTA 1970
form, revised in 1984, or other form acceptable to Huntington.
5.7 SURVEYS. Within 60 days after the date of this Agreement,
Empire shall provide to Huntington, at Empire's expense, current land surveys of
those parcels of the Operational Real Property specifically designated by
Huntington. Each survey shall be conducted and prepared by a duly licensed land
surveyor approved by Huntington and, unless otherwise agreed by Huntington in
writing, shall be a duly certified ALTA/ACSM field survey, which shall comply
with the requirements set forth in Huntington's Standard Survey Requirements, a
copy of which has been furnished to Empire prior to the execution of this
Agreement, and shall confirm that the Operational Real Property is not subject
to any easements, restrictions, set backs, encroachments, or other limitations
which would have a Material Adverse Effect on Empire except for utility and
other easements that do not interfere with the use of the Operational Real
Property for the business then being conducted thereon, and that the Operational
Real Property is not located in any flood hazard area.
5.8 ENVIRONMENTAL ASSESSMENT. Empire shall obtain and deliver to
Huntington, at Empire's expense, on or before the date which is 60 days after
the date of this Agreement, a Phase I Environmental Site Assessment (the "Phase
I Assessment") for each tract of Operational Real Property from a consultant
acceptable to Huntington. The Phase I Assessment shall be performed in
accordance with the requirements of The Huntington National Bank Phase I (ESA)
Checklist - Minimum Requirements, a copy of which has been furnished to Empire
prior to the execution of this Agreement. Each Phase I Assessment shall reveal
no facts that establish a reason to believe that any Hazardous Substances have
been treated, stored, managed, or disposed of on the Operational Real Property
as would be reasonably likely to have a Material Adverse Effect on Empire.
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ARTICLE 6
COVENANTS OF HUNTINGTON
6.1 NEGATIVE COVENANTS OF HUNTINGTON. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
Huntington covenants and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to do, any of the
following without the prior written consent of the chief executive officer of
Empire, which consent shall not be unreasonably withheld:
(a) take any action which to its Knowledge at the time of such action,
would (A) materially adversely affect the ability of any Party to consummate the
transactions contemplated under the Merger Documents, (B) materially adversely
affect the ability of any Party to obtain any Consents required to consummate
the transactions contemplated under the Merger Documents without imposition of a
condition or restriction of the type referred to in the last sentences of
Section 7.1(b) or 7.1(c) of this Agreement, or (C) materially adversely affect
the ability of any Party to perform its covenants and agreements under the
Merger Documents;
(b) amend the Governing Documents of Huntington or the Huntington
Rights Agreement, in each case, in any manner adverse to the holders of Empire
Common as compared to rights of holders of Huntington Common generally as of the
date of this Agreement;
(c) take any action that is intended or may reasonably be expected to
result in (A) 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, (B) any of the conditions to the Merger set forth in Article
7 hereof not being satisfied, or (C) a violation of any provisions of the Merger
Documents, except, in every case, as may be required by applicable Law.
6.2 NASDAQ LISTING. Huntington shall use its reasonable efforts to
provide, prior to the Effective Time, for quotation on the Nasdaq National
Market the shares of Huntington Common to be issued to the holders of shares of
Empire Common pursuant to the Merger, and Huntington shall give all notices and
make all filings with the NASD, required in connection with the transactions
contemplated herein.
6.3 EMPLOYEE BENEFITS AND CONTRACTS.
(a) Except as set forth in this Agreement, or in Section 4.2(c) of the
Merger Agreement relating to the conversion of Empire Stock Options, following
the Effective Time, Huntington shall provide to officers and employees of Empire
who become officers or employees of any Huntington Company after the Effective
Time employee benefits under Huntington Benefit Plans, and stock option and
other plans involving the potential issuance of Huntington Common Stock, on
terms and conditions which when taken as a whole are substantially similar to
those currently provided generally by Huntington and its Affiliates to
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their similarly situated officers and employees. For purposes of participation
and vesting under such Huntington Benefit Plans, the service of the employees of
the Empire Companies (calculated pursuant to applicable Empire Benefit Plans)
prior to the Effective Time shall be treated as service with a Huntington
Company participating in such Huntington Benefit Plans. Furthermore, officers
and employees of Empire Companies (and their spouses and dependents, if
applicable) may, upon the cessation of their participation in an Empire Benefit
Plan, immediately participate in the corresponding Employee Benefit Plan
maintained by Huntington without regard to pre-existing conditions or waiting
periods. Benefit accruals under any Huntington Pension Plan will not be offset
by benefit accruals under any Empire Pension Plan; however, in the event the
Empire Pension Plan merges with the Huntington Pension Plan, and if benefit
accruals under the Empire Pension Plan cease, the Huntington Pension Plan will
provide future benefit accruals under the Huntington Pension Plan that are no
less than those benefits that would accrue assuming the Huntington Pension Plan
implements a "fresh start formula without wear away" (as described in Treasury
Regulation ss. 1.401(a)(4)-13(c)(4)(i)).
(b) Huntington undertakes and agrees to provide all persons who are
employed by Empire immediately prior to the Effective Time with severance
benefits consistent with Huntington's Transition Pay Plan as in effect as of the
Effective Time, which benefits will not be less than those provided under such
plan as of the date of this Agreement. For purposes of calculating benefits and
determining an individual's years of service under Huntington's Transition Pay
Plan, the service of an Empire Company's employee prior to the Effective Time
commencing with that employee's most recent hire date by the Empire Company
shall be treated as service with a Huntington Company. Notwithstanding the
foregoing, during the 12-month period following the Effective Time, those
officers and employees of the Empire Companies listed in Sections 6.3(a) and
6.3(b) of the Disclosure Memorandum whose employment with an Empire Company or a
Huntington Company, as the case may be, is terminated due to job elimination or
is terminated by Huntington or its Affiliates without cause, shall be paid
severance benefits upon termination of not less than 50% of their annual base
salary without offset with respect to compensation or other benefits received
from a subsequent employer. Huntington further agrees to provide out-placement
services for a period of six months following such termination to those persons
identified in Section 6.3(b) of the Disclosure Memorandum.
(c) Huntington agrees that bonuses in an aggregate amount not to
exceed the Empire Bonus Pool shall be paid to the Empire Bonus Plan Participants
in the amounts to be listed on a supplement to Section 6.3(c) of the Disclosure
Memorandum (the "Section 6.3(c) Supplement") which shall be delivered to
Huntington on or before the Effective Date; provided, however, that such bonus
payments will only be made to Empire Bonus Plan Participants who are employed by
Empire or Huntington or their Affiliates on December 31, 2000, or who were
terminated by Huntington or its Affiliates prior to December 31, 2000, without
cause or due to job elimination, in which event the aggregate Empire Bonus Pool
shall be reduced by the amount of payments allocated to such Empire Bonus Plan
Participants who are no longer eligible to receive the bonus payments.
Huntington shall pay any and all such bonus payments to such eligible Empire
Bonus Pool Participants on or before February 15,
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2001. The Section 6.3(c) Supplement will update the list of Empire Bonus Plan
Participants and confirm their eligibility pursuant to the Empire Bonus Plan as
of the Effective Date and will indicate the allocation of the Empire Bonus Pool
among such Empire Bonus Plan Participants, which allocation shall be consistent
with past practices.
(d) Immediately prior to the Effective Time, Empire will pay out to
each participant in the Director Plans all cash accrued to such participant
under the Director Plans (estimated to be $828,374 in the aggregate at June 30,
2000) and distribute to each participant in the Director Plans all shares of
Empire Common allocated for issuance to such participant under such Director's
Plans up to 19,500 shares and Empire shall terminate such Plans effective as of
the Effective Time.
6.4 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) For a period of six years after the Effective Time, to the fullest
extent permitted by applicable Law, Huntington shall, and shall cause its
Subsidiaries to, indemnify, defend, and hold harmless the present and former
directors, officers, employees, and agents of the Empire Companies (each, an
"Indemnified Party") against all Liabilities arising out of actions or omissions
arising out of the Indemnified Party's service or services as directors,
officers, employees, or agents of Empire or, at Empire's request, of another
corporation, partnership, joint venture, trust, or other enterprise occurring at
or prior to the Effective Time (including the transactions contemplated by the
Merger Documents), including provisions relating to advances of expenses
incurred in the defense of any Litigation, with respect to any Liability, claim,
demand, action, or Litigation asserted or made prior to or at any time after the
Effective Time. All such rights to indemnification with respect to any such
Liability, claim, demand, or action shall continue until the final disposition
of such Litigation and/or Liability; provided, however, that nothing contained
herein shall increase or lengthen the duration of obligations with respect to
such indemnification by the Huntington or any other Huntington Company over that
to which Empire would have been subject had the Merger not been consummated. All
rights to exculpation from liability and limitation of liability provided by
this Section 6.4 shall survive the Effective Time and the consummation of the
Merger. Without limiting the foregoing, in any case in which approval by
Huntington is required to effectuate any indemnification, Huntington shall
direct, at the election of the Indemnified Party, that the determination of any
such approval shall be made by independent counsel mutually agreed upon between
Huntington and the Indemnified Party.
(b) The provisions of this Section 6.4 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and each
Indemnified Party's heirs and representatives.
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6.5 STOCK OPTIONS.
(a) At the Effective Time, each outstanding Empire Stock Option shall
be converted into an option to purchase shares of Huntington Common in
accordance with the terms of the Merger Agreement.
(b) As soon as practicable after the Effective Time, Huntington shall
deliver to the holders of such converted Empire Stock Options appropriate
notices setting forth such holders' rights pursuant to the Huntington Stock
Option Plan and the agreements evidencing such converted Empire Stock Options.
(c) Huntington shall use all reasonable efforts to maintain the
effectiveness of the registration statement(s) described in Section 3.3(c) for
so long as the Empire Stock Options to be converted under the terms of the
Merger Agreement to options to purchase shares of Huntington Common remain
outstanding.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
7.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated by the Merger Documents are subject to
the satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 10.6 of this Agreement:
(a) Shareholder Approval. The shareholders of Empire shall have
approved this Agreement, and the consummation of the transactions contemplated
by the Merger Documents, including the Merger, as and to the extent required by
Law and by the provisions of its Governing Documents.
(b) Regulatory Approvals. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities required for consummation
of the Merger shall have been obtained or made and shall be in full force and
effect and all waiting periods required by Law shall have expired. No Consent
obtained from any Regulatory Authority which is necessary to consummate the
transactions contemplated by the Merger Documents shall be conditioned or
restricted in a manner (including requirements relating to the raising of
additional capital or the disposition of Assets) which in the reasonable
judgment of either Party would so materially adversely impact the economic or
business benefits of the transactions contemplated by the Merger Documents so as
to render inadvisable the consummation of the Merger.
(c) Consents and Approvals. Each Party shall have obtained any and all
Consents required for consummation of the Merger (other than those referred to
in Section 7.1(b) of this Agreement) or for the preventing of any Default under
any Contract or Permit of such Party
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which, if not obtained or made, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on such Party. No Consent so obtained
which is necessary to consummate the transactions contemplated by the Merger
Documents shall be conditioned or restricted in a manner which in the reasonable
judgment of either Party would so materially adversely impact the economic or
business benefits of the transactions contemplated by the Merger Documents so as
to render inadvisable the consummation of the Merger.
(d) Legal Proceedings. No court or governmental authority or
Regulatory Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits, restricts
or makes illegal consummation of the transactions contemplated by the Merger
Documents.
(e) Registration Statement. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness of the
Registration Statement shall have been issued, no action, suit, proceeding or
investigation by the SEC to suspend the effectiveness thereof shall have been
initiated and be continuing, and all necessary approvals under state securities
Laws or the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of Huntington Common issuable pursuant to the Merger shall have been
received.
(f) Nasdaq National Market Listing. The shares of Huntington Common
issuable pursuant to the Merger shall have been approved for quotation on the
Nasdaq National Market.
(g) Tax Matters. Each Party shall have received a written opinion of
counsel from Huntington's Counsel, in form reasonably satisfactory to such
Parties and dated as of the Effective Time (the "Tax Opinion"), to the effect
that (A) the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code, (B) the exchange in the Merger of
shares of Empire Common for shares of Huntington Common will not give rise to
gain or loss to the shareholders of Empire with respect to such exchange (except
to the extent of any cash received), and (C) neither Empire nor Huntington will
recognize gain or loss as a consequence of the Merger. Huntington shall also
cause Huntington's Counsel to provide such tax opinion(s) as are required to be
filed with the SEC as an exhibit to the Registration Statement, and any
amendments thereto. In rendering such opinions, such counsel shall be entitled
to rely upon representations of Empire's officers, directors, and shareholders
holding in excess of five percent (5%) of the outstanding shares of Empire
Common and representations of officers of Huntington, in each case reasonably
satisfactory in form and substance to such counsel.
7.2 CONDITIONS TO OBLIGATIONS OF HUNTINGTON. The obligations of
Huntington to perform this Agreement and consummate the Merger and the other
transactions contemplated by the Merger Documents are subject to the
satisfaction of the following conditions, unless waived by Huntington pursuant
to Section 10.6(a) of this Agreement:
(a) Representations and Warranties. The representations and warranties
of Empire
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set forth in this Agreement shall be true and correct in all material respects
on the Effective Date with the same force and effect as though such
representations and warranties had been made on and as of such date.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of Empire to be performed and complied with pursuant to
this Agreement and the other agreements contemplated by the Merger Documents
prior to the Effective Time shall have been duly performed and complied with in
all material respects.
(c) Certificates. Empire shall have delivered to Huntington (A) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that the
conditions of its obligations set forth in Section 7.2(a) and 7.2(b) of this
Agreement have been satisfied, and (B) certified copies of resolutions duly
adopted by Empire's Board of Directors and shareholders evidencing the taking of
all corporate action necessary to authorize the execution, delivery, and
performance of the Merger Documents and the consummation of the transactions
contemplated thereby, all in such reasonable detail as Huntington and its
counsel shall request.
(d) Opinion of Counsel. Huntington shall have received an opinion of
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Attorneys, P.C, counsel to Empire, dated as of the Effective
Date, in form reasonably satisfactory to Huntington, as to the matters set forth
in Exhibit 2.
(e) Accountant's Letters. Huntington shall have received from Empire's
auditors letters (A) dated not more than three days prior to the date of the
Proxy Statement and (B) dated as of the Effective Date, in each case with
respect to certain financial information regarding Empire, in form and substance
reasonably satisfactory to Huntington, which letters shall be based upon
customary specified procedures undertaken by such firm in accordance with
Statement of Auditing Standard No. 72.
(f) Affiliates' Agreements. Huntington shall have received from each
Affiliate of Empire the affiliate's agreement as and to the extent specified in
Section 5.4 of this Agreement.
(g) Shareholders' Equity. Empire's shareholders' equity as of the end
of last fiscal quarter preceding the Effective Date shall not be less than
$45,886,000, excluding for purposes of the calculation of such shareholders'
equity, the effects of: (A) any reductions in Empire's shareholders' equity
resulting from any actions or changes in policies of Empire taken at the request
of Huntington, including those described in Section 5.5 of this Agreement; and
(B) all costs, fees and charges, including fees and charges of Empire's
accountants, counsel, and investment bankers, whether or not accrued or paid,
that are related to the negotiation and consummation of the Merger.
(h) Warrant. Empire shall have executed and delivered to Huntington
the Warrant Purchase Agreement and the Warrant.
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(i) Dissenting Shareholders. The total number of dissenting shares, if
any, as to which the right to dissent has been properly asserted under the
Dissenters' Rights Law shall not exceed five percent of the total number of
outstanding shares of Empire Common.
(j) Title to Real Property. Empire shall have delivered to Huntington
copies of all fee owner's and leasehold owner's title insurance commitments for
policies in accordance with the requirements of Section 5.6, together with such
updating endorsements and other endorsements as Huntington may reasonable
require. All updating endorsements shall show no change in the record title
since the preceding effective dates of the respective commitments.
(k) Survey. Empire shall have delivered to Huntington the surveys
in accordance with the requirements of Section 5.7.
(l) Environmental Assessments. Empire shall have complied in all
material respects with its obligations under Section 5.8.
7.3 CONDITIONS TO OBLIGATIONS OF EMPIRE. The obligations of Empire to
perform this Agreement and consummate the Merger and the other transactions
contemplated by the Merger Documents are subject to the satisfaction of the
following conditions, unless waived by Empire pursuant to Section 10.6(b) of
this Agreement:
(a) Representations and Warranties. The representations and warranties
of Huntington set forth in this Agreement shall be true and correct in all
material respects on the Effective Date with the same force and effect as though
such representations and warranties had been made on and as of such date.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of Huntington to be performed and complied with
pursuant to this Agreement and the other agreements contemplated by the Merger
Documents prior to the Effective Time shall have been duly performed and
complied with in all material respects, and the Registration Statement shall
have been declared and shall remain effective.
(c) Certificates. Huntington shall have delivered to Empire (A) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer or an executive vice president and its chief financial
officer, to the effect that the conditions of its obligations set forth in
Section 7.3(b) of this Agreement have been satisfied, and (B) certified copies
of resolutions duly adopted by Huntington's Board of Directors evidencing the
taking of all corporate action necessary to authorize the execution, delivery,
and performance of the Merger Documents and the consummation of the transactions
contemplated thereby, all in such reasonable detail as Empire and its counsel
shall request.
(d) Opinion of Counsel. Empire shall have received an opinion of
Porter, Wright, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to Huntington, dated as of the
Effective Time, in form
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reasonably acceptable to Empire, as to the matters set forth in Exhibit 3.
(e) Fairness Opinion. Empire shall have received a letter from
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇, Inc., dated not more than five business days prior to
the date of the Empire Proxy Statement, to the effect that, in the opinion of
such firm, the Conversion Ratio in connection with the Merger is fair, from a
financial point of view, to the shareholders of Empire, and such opinion shall
not have been withdrawn prior to the date of the Shareholders' Meeting.
ARTICLE 8
CLOSING
The closing of the Merger and the other transactions contemplated under
the Merger Documents shall take place at the offices of Porter, Wright, ▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, in Columbus, Ohio, at 10:00 a.m., local time, on the date that is
five business days after the last of the conditions specified in Article 7
hereof shall have been satisfied or waived, in accordance with the terms of this
Agreement, or at such other place or time as the parties shall hereafter agree
in writing. Notwithstanding the foregoing, the Merger will become effective as
of the Effective Time.
ARTICLE 9
TERMINATION
9.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of the Merger Documents by the
shareholders of Empire, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) By mutual consent of the respective Boards of Directors of
Huntington and Empire;
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the event
of the inaccuracy of any representation or warranty contained in this Agreement
of the other Party which cannot be or has not been cured within 30 days after
the giving written notice to such other Party of such inaccuracy and which
inaccuracy would provide the terminating Party the ability to refuse to
consummate the Merger under the applicable standard set forth in Section 7.2(a)
of this Agreement in the case of any termination by Huntington and Section
7.3(a) of this Agreement in the case of any termination by Empire;
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement
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contained in this Agreement) in the event of a material breach by the other
Party of any covenant or agreement contained in this Agreement which cannot be
or has not been cured within 30 days after the giving of written notice to the
breaching Party of such breach;
(d) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the event
(A) any Consent of any Regulatory Authority required for consummation of the
Merger and the other transactions contemplated by the Merger Documents shall
have been denied by final nonappealable action of such authority or if any
action taken by such authority is not appealed within the time limit for appeal,
or (B) the shareholders of Empire fail to vote their approval of this Agreement
and the transactions contemplated by the Merger Documents as required by the
Laws of the State of Michigan, or by Empire's Governing Documents, at the
Shareholders' Meeting where the Merger was presented to such shareholders for
approval and voted upon;
(e) By the Board of Directors of either Party in the event that the
Merger shall not have been consummated by January 31, 2001, if the failure to
consummate the transactions contemplated by the Merger Documents on or before
such date is not caused by any breach of this Agreement by the Party electing to
terminate pursuant to this Section 9.1(e);
(f) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the event
that any of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date specified in
Section 9.1(e) of this Agreement; or
(g) By Huntington, in the event that the Board of Directors of Empire
fails to recommend to the shareholders of Empire that they vote their shares of
Empire Common in favor of the Merger, or withdraws such recommendation
previously made, or fails to solicit proxies of shareholders of Empire to
approve the Merger, or shall have affirmed, recommended, or authorized entering
into any Acquisition Transaction or other transaction involving a merger, share
exchange, consolidation, or transfer of substantially all of the Assets of
Empire.
9.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 9.1 of this Agreement, the
Merger Agreement and this Agreement shall become void and have no effect, except
that (A) the provisions of this Section 9.2 and Articles 1 and 10 and Section
4.6(b) of this Agreement shall survive any such termination and abandonment, and
(B) a termination pursuant to Sections 9.1(b), (c), (d), (f), or (g) of this
Agreement shall not relieve the breaching Party from Liability for an uncured
willful breach of a representation, warranty, covenant, or agreement giving rise
to such termination. Upon a termination of this Agreement, the Warrant and the
Warrant Purchase Agreement shall terminate in accordance with the express
provisions of those documents.
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9.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time, except this Section 9.3 and
Articles 1 and 10 and Sections 4.6, 4.8, 5.4, 6.3, 6.4, and 6.5 of this
Agreement.
ARTICLE 10
MISCELLANEOUS
10.1 EXPENSES. Except as otherwise provided in Section 10.2, each of
the Parties shall bear and pay all direct costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that each of the Parties shall bear and pay
one-half of the filing fees payable in connection with the Registration
Statement and the Proxy Statement and printing costs incurred in connection with
the printing of the Registration Statement and the Proxy Statement.
10.2 TERMINATION FEE.
(a) If any of the following events (a "Triggering Event") occurs:
(1) any material, willful, and intentional breach of the Merger
Documents by Empire that would permit Huntington to terminate the Merger
Documents (A) occurring after the receipt by Empire after February 4, 2000, of a
proposal to engage in an Acquisition Transaction, (B) occurring after the
announcement by any other Person of an intention to engage in an Acquisition
Transaction, or (C) in anticipation and for the purpose of engaging in an
Acquisition Transaction;
(2) (A) a proposal to engage in an Acquisition Transaction is
submitted to and approved by the shareholders of Empire at any time prior to
December 31, 2001, or (B) a Tender Offer is commenced and the transactions
contemplated in the Tender Offer are completed in such a manner that the Person
making the Tender Offer acquires beneficial ownership of more than 20 percent of
the capital stock or any other class of voting securities of Empire, and the
Merger is not consummated prior to December 31, 2001;
(3) (A) a proposal to engage in an Acquisition Transaction is received
by Empire after February 4, 2000, or a Tender Offer is made directly to the
shareholders of Empire or the intention of making an Acquisition Transaction or
Tender Offer is announced at any time prior to the holding of the Shareholders'
Meeting; (B) the Board of Directors of Empire (1) fails to recommend to the
shareholders of Empire that they vote their shares of Empire Common in favor of
the approval of the Merger, (2) withdraws such recommendation previously made,
(3) fails to solicit proxies of shareholders of Empire to approve the Merger, or
(4) fails to hold the Empire Shareholders' Meeting; and (C) the Merger is not
consummated by December 31,
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2001;
Empire shall pay to Huntington an amount in cash equal to the sum of
(A) the direct costs and expenses or portion thereof referred to in Section
10.1, incurred by or on behalf of Huntington in connection with the transactions
contemplated by the Merger Documents, and (B) $4,500,000; which sum represents
additional compensation for Huntington's loss as the result of the transactions
contemplated by the Merger Documents not being consummated. The amounts shall be
an obligation of Empire and shall be paid by Empire promptly upon notice to
Empire by Huntington.
(b) Notwithstanding the foregoing, no amount will be due Huntington
pursuant to Section 10.2(a) in the event of the failure to consummate the Merger
solely as a result of any of the following: (1) the failure of any Regulatory
Authority to provide any required Consent to the Merger, which failure was not
the result of the existence of a proposal to engage in an Acquisition
Transaction or a breach by Empire of any of its obligations under any of the
Merger Documents; or (2) the Merger Documents are terminated pursuant to Section
9.1, unless the event giving rise to the right to terminate is preceded by a
Triggering Event or the receipt by Empire after February 4, 2000, of a proposal
to engage in an Acquisition Transaction, or the announcement by another Person
of a proposal involving an Acquisition Transaction.
(c) Nothing contained in this Section 10.2 shall constitute or shall
be deemed to constitute liquidated damages for the willful breach by a Party of
the terms of this Agreement or otherwise limit the rights of the nonbreaching
Party.
10.3 BROKERS AND FINDERS. Except for the engagement of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇▇, Inc. by Empire, each of the Parties represents and warrants that
neither it nor any of its officers, directors, employees, or Affiliates has
employed any broker or finder or incurred any Liability for any financial
advisory fees, investment banker's fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the transactions contemplated
by the Merger Documents. In the event of a claim by any broker or finder based
upon his or its representing or being retained by or allegedly representing or
being retained by Empire or Huntington, each of Empire and Huntington, as the
case may be, agrees to indemnify and hold the other Party harmless of and from
any Liability in respect of any such claim.
10.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein,
the Merger Documents (including the documents and instruments referred to
herein) constitute the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersede all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
thereunder expressed or implied, is intended to confer upon any Person, other
than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of the Merger Documents.
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10.5 AMENDMENTS. To the extent permitted by Law, the Merger Documents
may be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before or
after shareholder approval of the Merger Documents has been obtained; provided,
that after any such approval by the holders of shares of Empire Common, there
shall be made no amendment that pursuant to Michigan law requires further
approval by such shareholders without the further approval of such shareholders.
10.6 WAIVERS.
(a) Prior to or at the Effective Time, Huntington, acting through its
Board of Directors, chief executive officer or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by Empire, to waive or extend the time for the compliance or
fulfillment by Empire of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
Huntington under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of Huntington.
(b) Prior to or at the Effective Time, Empire, acting through its
Board of Directors, chief executive officer or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by Huntington, to waive or extend the time for the compliance or
fulfillment by Huntington of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of Empire under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of Empire.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
10.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and assigns.
10.8 NOTICES. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission, by registered or certified mail, postage pre-paid, or
by courier or overnight carrier, to the persons
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at the addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
Empire: Empire Banc Corporation
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇,
Chairman and Chief Executive Officer
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to Counsel: ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Attorneys, P.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Huntington: ▇▇▇▇▇▇▇ ▇. Cheap
General Counsel and Secretary
Huntington Bancshares Incorporated
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to Counsel: ▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Porter, Wright, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
10.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the Laws of the State of Ohio, without regard to any
applicable conflicts of Laws, except to the extent that Maryland law governs
certain aspects of the Merger as it relates to Huntington or Michigan law
governs certain aspects of the Merger as it relates to Empire.
10.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
10.11 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
10.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties
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acknowledge and agree that this Agreement has been reviewed, negotiated, and
accepted by all parties and their attorneys and shall be construed and
interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all parties hereto.
10.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
10.14 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
10.15 BENEFIT. Nothing in this Agreement, express or implied, is
intended to confer upon any Person other than the Parties and their successors
in interest any rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
HUNTINGTON BANCSHARES INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. Cheap
----------------------------------------
▇▇▇▇▇▇▇ ▇. Cheap
General Counsel and Secretary
EMPIRE BANC CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
Chairman and Chief Executive Officer
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EXHIBIT 1 TO SUPPLEMENTAL AGREEMENT
WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT (this "Agreement") is made as of
February 4, 2000, between HUNTINGTON BANCSHARES INCORPORATED, a Maryland
corporation ("Huntington"), and EMPIRE BANC CORPORATION, a Michigan corporation
("Empire").
RECITALS:
A. Concurrently herewith, Huntington and Empire have entered into
(1) a certain Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), which provides for the merger of Empire into Huntington
(the "Merger"), and (2) a certain Supplemental Agreement, dated as of the date
hereof, which contains certain additional terms and conditions relating to the
Merger (the "Supplemental Agreement"). The Merger Agreement and the Supplemental
Agreement are sometimes hereinafter collectively referred to as the "Merger
Documents." All capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Merger Documents.
B. As a condition to Huntington's entering into the Merger Agreement
and the Supplemental Agreement, and in consideration therefor, Empire has agreed
to issue to Huntington a warrant or warrants entitling Huntington to purchase up
to a total of 630,080 shares of Empire Common, on the terms and conditions set
forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
SECTION 1. ISSUANCE, DELIVERY, AND EXERCISE OF THE WARRANT.
Concurrently with the execution of the Merger Documents and this Agreement,
Empire shall execute a warrant in favor of Huntington in the form attached as
Attachment A hereto (the "Warrant") to purchase up to a total of 630,080 shares
of Empire Common at a purchase price equal to $29.00 per share (the "Exercise
Price"), subject to adjustments as provided in the Warrant. (The holder of the
Warrant from time to time is referred to as the "Holder.") The Warrant shall be
exercisable in accordance with the terms and conditions set forth in this
Agreement.
SECTION 2. REGISTRATION RIGHTS. If, at any time after the Warrant
becomes exercisable in accordance with its terms, Empire shall receive a written
request therefor from the Holder, Empire shall prepare and file a registration
statement under the 1933 Act covering
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such number of shares of Empire Common as the Holder shall specify in the
request and shall use its best efforts to cause such registration statement to
become effective; provided, however, that the Holder shall only have the right
to request three such registrations. Without the written consent of the Holder,
neither Empire nor any other holder of securities of Empire may include any
other securities in such registration.
SECTION 3. "PIGGYBACK" RIGHTS. If, at any time after the Warrant
becomes exercisable in accordance with its terms, Empire shall determine to
proceed with the preparation and filing of a registration statement under the
1933 Act in connection with the proposed offer and sale for money of any of its
securities (other than in connection with a dividend reinvestment, employee
stock purchase, stock option, or similar plan or a registration statement on
Form S-4) by it or any of its security holders, Empire shall give written notice
thereof to the Holder. Upon the written request of the Holder given within ten
days after receipt of any such notice from Empire, Empire shall, except as
herein provided, cause all shares of Empire Common which the Holder shall
request be included in such registration statement to be so included; provided,
however, that nothing herein shall prevent Empire from abandoning or delaying
any registration at any time; and provided, further, that if Empire decides not
to proceed with a registration after the registration statement has been filed
with the SEC and Empire's decision not to proceed is primarily based upon the
anticipated public offering price of the securities to be sold by Empire, Empire
shall promptly complete the registration for the benefit of the Holder if the
Holder agrees to bear all additional and incremental expenses incurred by Empire
as the result of such registration after Empire has decided not to proceed. If
any registration pursuant to this Section shall be underwritten in whole or in
part, the Holder may require that any shares of Empire Common requested for
inclusion pursuant to this Section be included in the underwriting on the same
terms and conditions as the securities otherwise being sold through the
underwriters. In the event that the shares of Empire Common requested for
inclusion pursuant to this Section would constitute more than 25 percent of the
total number of shares to be included in a proposed underwritten public
offering, and if in the good faith judgment of the managing underwriter of such
public offering the inclusion of all of such shares would interfere with the
successful marketing of the shares of being offered by Empire, the number of
shares otherwise to be included in the underwritten public offering hereunder
may be reduced; provided, however, that after any such required reduction, the
shares of Empire Common to be included in such offering for the account of the
Holder shall constitute at least 25 percent of the total number of shares to be
included in such offering.
SECTION 4. OBLIGATIONS OF EMPIRE IN CONNECTION WITH A REGISTRATION. If
and whenever Empire is required by the provisions of Sections 2 or 3 hereof to
effect the registration of any shares of Empire Common under the 1933 Act,
Empire shall:
(a) prepare and file with the SEC a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for such period as may be
reasonably necessary to effect the sale of such securities, not to exceed nine
months;
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(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for such period
as may be reasonably necessary to effect the sale of such securities, not to
exceed nine months;
(c) furnish to the Holder and to the underwriters of the
securities being registered such reasonable number of copies of the registration
statement, amendments thereto, preliminary prospectus, final prospectus, and
such other documents as the Holder or such underwriters may reasonably request
in order to facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as the Holder or such underwriters may reasonably
request; provided that Empire shall not be required by virtue hereof to submit
to the general jurisdiction of any state;
(e) notify the Holder, promptly after Empire shall receive
notice thereof, of the time when such registration statement or any
post-effective amendment thereof has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(f) notify the Holder promptly of any request by the SEC for the
amending or supplementing of such registration statement or prospectus or for
additional information;
(g) prepare and file with the SEC, promptly upon the request of
the Holder, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for the Holder (and concurred in by
counsel for Empire), is required under the 1933 Act or the rules and regulations
promulgated thereunder in connection with the distribution of the shares of
Empire Common by the Holder;
(h) prepare and promptly file with the SEC such amendment or
supplement to such registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus is
required to be delivered under the 1933 Act, any event shall have occurred as
the result of which such prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading;
(i) advise the Holder, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued; and
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(j) at the request of the Holder, furnish on the date or dates
provided for in the underwriting agreement: (1) an opinion or opinions of the
counsel representing Empire for the purposes of such registration, addressed to
the underwriters and to the Holder, covering such matters as such underwriters
and the Holder may reasonably request and as are customarily covered by issuer's
counsel at that time; and (2) a letter or letters from the independent certified
public accountants of Empire, addressed to the underwriters and to the Holder,
covering such matters as such underwriters or the Holder may reasonably request,
in which letters such accountants shall state (without limiting the generality
of the foregoing) that they are independent certified public accountants within
the meaning of the 1933 Act and that, in the opinion of such accountants, the
financial statements and other financial data of Empire included in the
registration statement or any amendment or supplement thereto comply in all
material respects with the applicable accounting requirements of the 1933 Act.
SECTION 5. EXPENSES OF REGISTRATION. With respect to a registration
requested pursuant to Section 2 hereof and with respect to each inclusion of
shares of Empire Common in a registration statement pursuant to Section 3
hereof, Empire shall bear the following fees, costs, and expenses: all
registration, stock exchange listing or NASD fees, printing expenses, fees and
disbursements of counsel and accountants for Empire, fees and disbursements of
counsel for the underwriter or underwriters of such securities (if Empire and/or
the Holder are required to bear such fees and disbursements), and all legal fees
and disbursements and other expenses of complying with state securities or blue
sky laws of any jurisdictions in which the securities to be offered are to be
registered or qualified. Fees and disbursements of counsel and accountants for
the Holder, underwriting discounts and commissions and transfer taxes relating
to the Empire Common being sold for the Holder, and any other expenses incurred
by the Holder not expressly included above shall be borne by the Holder.
SECTION 6. INDEMNIFICATION.
(a) Empire shall indemnify and hold harmless the Holder, any
underwriter (as defined in the ▇▇▇▇ ▇▇▇) for the Holder, and each person, if
any, who controls the Holder or such underwriter within the meaning of the 1933
Act, from and against any and all loss, damage, liability, cost, and expense to
which the Holder or any such underwriter or controlling person may become
subject under the 1933 Act or otherwise, insofar as such losses, damages,
liabilities, costs, or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
filed pursuant to Section 4 hereof, any prospectus or preliminary prospectus
contained therein, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they are made, not misleading; provided,
however, that Empire will not be liable in any such case to the extent that any
such loss, damage, liability, cost, or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by the Holder, such underwriter,
or such controlling persons in writing specifically for use in the preparation
thereof.
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(b) Promptly after receipt by an indemnified party pursuant to
the provisions of paragraph (a) of this Section 6 of notice of the commencement
of any action involving the subject matter of the foregoing indemnity
provisions, such indemnified party shall, if a claim thereof is to be made
against Empire pursuant to the provision of such paragraph (a), promptly notify
Empire of the commencement thereof; but the omission to so notify Empire will
not relieve it from any liability which it may have to any indemnified party
otherwise hereunder. In case such action is brought against any indemnified
party and such indemnified party notifies Empire of the commencement thereof,
Empire shall have the right to participate in and, to the extent that it may
wish to do so, to assume the defense thereof, with counsel satisfactory to such
indemnified party; provided, however, if the defendants in any action include
both the indemnified party and Empire and there is a conflict of interest which
would prevent counsel for Empire from also representing the indemnified party,
the indemnified party or parties shall have the right to select one separate
counsel to participate in the defense of such action on behalf of such
indemnified party or parties. After notice from Empire to such indemnified party
of its election so to assume the defense of any such action, the indemnified
party shall have the right to participate in such action and to retain its own
counsel, but Empire shall not be required to indemnify and hold harmless the
indemnified party pursuant to the provisions of such paragraph (a) for any legal
fees or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, other than reasonable costs of
investigation, unless (1) the indemnified party shall have employed separate
counsel in accordance with the provisions of the preceding sentence of this
paragraph (b), (2) Empire shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after the notice of the commencement of the action, or (3) Empire has authorized
the employment of counsel for the indemnified party at the expense of Empire.
(c) If recovery is not available under the foregoing
indemnification provisions, for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be entitled to
contribution to liabilities and expenses, except to the extent that contribution
is not permitted under Section 11(f) of the 1933 Act. In determining the amount
of contribution to which the respective parties are entitled, there shall be
considered the parties' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and any other equitable
considerations appropriate under the circumstances.
SECTION 7. REPURCHASE RIGHTS.
(a) At any time after the Warrant becomes exercisable and prior
to the expiration of the Warrant, in accordance with the terms thereof:
(1) Empire may, and upon the written request of the
Holder, Empire shall, repurchase the Warrant from the Holder at a price
(the "Warrant
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Repurchase Price") equal to the difference between the "Market/Offer
Price" (as defined in paragraph (b) below) and the Exercise Price,
multiplied by the number of shares for which the Warrant may then be
exercised, in the aggregate, but only if the Market/Offer Price is
greater than the Exercise Price; and
(2) Empire may, and upon the written request of the owner
(the "Owner") of any shares of Empire Common purchased pursuant to an
exercise of the Warrant ("Warrant Stock"), Empire shall, repurchase all of
the shares of Warrant Stock held by such Owner at a price (the "Warrant
Stock Repurchase Price") equal to the number of shares to be repurchased
hereunder multiplied by the greater of the Exercise Price and the
Market/Offer Price.
(b) For purposes of Section 7(a), the "Market/Offer Price" shall
mean the highest of (1) the price per share at which a tender offer or exchange
offer for shares of Empire Common has been made, (2) the price per share of
Empire Common to be paid by any third party pursuant to an agreement with
Empire, and (3) the highest closing price for shares of Empire Common within the
4-month period immediately preceding the date the Holder gives notice of the
required repurchase of the Warrant or the Owner gives notice of the required
repurchase of Warrant Stock, as appropriate. In the event that an exchange offer
is made or an agreement is entered into for a merger or consolidation involving
consideration other than cash, the value of the securities or other property
issuable or deliverable in exchange for Empire Common shall be determined by a
nationally recognized investment banking firm mutually acceptable to the parties
hereto.
(c) The Holder and the Owner may exercise their respective
rights to require Empire to repurchase the Warrant or the Warrant Stock pursuant
to this Section 7 by surrendering for such purpose to Empire, at its principal
office, the Warrant or certificates for shares of Warrant Stock, as the case may
be, free and clear of any liens, claims, encumbrances, or rights of third
parties of any kind, accompanied by a written notice or notices stating that the
Holder or the Owner, as the case may be, requests Empire to repurchase such
Warrant or Warrant Stock in accordance with the provisions of this Section 7.
Subject to the last proviso of Section 7(d) below, as promptly as practicable,
and in any event within five business days after the surrender of the Warrant or
certificates representing shares of Warrant Stock and the receipt of such notice
or notices relating thereto, Empire shall deliver or cause to be delivered to
the Holder or Owner the Warrant Repurchase Price or the Warrant Stock Repurchase
Price therefor, as applicable, or the portion thereof which Empire is not then
prohibited under applicable law and regulation from so delivering.
(d) To the extent that Empire is prohibited under applicable
law or regulation, or as a result of administrative or judicial action,
from repurchasing the Warrant and/or the Warrant Stock in full at any time
that it may be required to do so hereunder, Empire shall immediately so
notify the Holder and/or the Owner and thereafter deliver or cause to be
delivered, from time to time, to the Holder and/or the Owner, as
appropriate, the portion of the Warrant Repurchase Price and the Warrant
Stock Repurchase Price, respectively, which it is no longer prohibited from
delivering, within five business days after the date on which Empire is no
longer so prohibited. Upon receipt of such notice from Empire and for a
period of 15 days thereafter, the Holder and/or Owner may revoke its notice
of repurchase of the Warrant and/or Warrant Stock by written notice to
Empire at its principal office stating that the
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Holder and/or the Owner elects to revoke its election to exercise its right
to require Empire to repurchase the Warrant and/or Warrant Stock, whereupon
Empire will promptly deliver to the Holder and/or Owner the Warrant and/or
certificates representing shares of Warrant Stock surrendered to Empire for
purposes of such repurchase. Whether or not such election is revoked,
Empire hereby agrees to use its best efforts to obtain all required legal
and regulatory approvals necessary to permit Empire to repurchase the
Warrant and/or the Warrant Stock as promptly as practicable.
SECTION 8. ASSUMPTION OF OBLIGATIONS UNDER THIS AGREEMENT. Empire will
not enter into any transaction described in Section 5(a) of the Warrant unless
the "Acquiring Corporation" (as that term is defined in the Warrant) assumes in
writing all the obligations of Empire hereunder.
SECTION 9. REMEDIES. Without limiting the foregoing or any remedies
available to the Holder, Empire specifically acknowledges that neither
Huntington nor any successor holder of the Warrant would have an adequate remedy
at law for any breach of this Warrant Purchase Agreement and Empire hereby
agrees that Huntington and any successor holder of the Warrant shall be entitled
to specific performance of the obligations of Empire hereunder and injunctive
relief against actual or threatened violations of the provisions hereof.
SECTION 10. TERMINATION. This Agreement will terminate upon a
termination of the Warrant in accordance with Section 9 thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant
Purchase Agreement as of the day and year first above written.
HUNTINGTON BANCSHARES
INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. Cheap
----------------------------------------
▇▇▇▇▇▇▇ ▇. Cheap
General Counsel and Secretary
EMPIRE BANC CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
Chairman and Chief Executive Officer
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ATTACHMENT A
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR
QUALIFIED UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED WITHOUT BEING SO REGISTERED OR QUALIFIED UNLESS AN EXEMPTION OR
EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE.
WARRANT
TO PURCHASE 630,080 COMMON SHARES
OF
EMPIRE BANC CORPORATION
This is to certify that, for value received, HUNTINGTON BANCSHARES
INCORPORATED, a Maryland corporation ("Huntington"), is entitled to purchase
from EMPIRE BANC CORPORATION, a Michigan corporation ("Empire"), at any time on
or after the date hereof, an aggregate of up to 630,080 common shares, without
par value, of Empire ("Empire Common"), at a price of $29.00 per share (the
"Exercise Price"), subject to the terms and conditions of this Warrant and a
certain Warrant Purchase Agreement, of even date herewith, between Huntington
and Empire (the "Warrant Purchase Agreement"). The number of shares of Empire
Common which may be received upon the exercise of this Warrant and the Exercise
Price are subject to adjustment from time to time as hereinafter set forth. The
terms and conditions set forth in this Warrant and the Warrant Purchase
Agreement shall be binding upon the respective successors and assigns of both of
the parties hereto. This Warrant is issued in connection with a certain
Agreement and Plan of Merger, dated as of the date hereof, between Huntington
and Empire (the "Merger Agreement"), which provides for the merger of Empire
into Huntington (the "Merger"), and a certain Supplemental Agreement between
Huntington and Empire, which provides certain additional terms and conditions
relating to the Merger (the "Supplemental Agreement"). (The Merger Agreement and
the Supplemental Agreement are sometimes hereinafter collectively referred to as
the "Merger Documents.") All capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Merger Documents.
The term "Holder" shall mean and refer to Huntington or any successor holder of
this Warrant.
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SECTION 1. EXERCISE OF THE WARRANT.
(a) The Holder will not exercise this Warrant unless it has
obtained all required approvals, if any, of appropriate regulatory authorities
having jurisdiction, including the Federal Reserve Board, pursuant to all
applicable laws and regulations. Further, subject to the terms and conditions
set forth in this Warrant and in the Warrant Purchase Agreement and the
provisions of applicable law, the Holder will not exercise this Warrant without
the written consent of Empire except upon the occurrence of any of the following
events (a "Triggering Event"):
(1) any material, willful, and intentional breach of the Merger
Documents by Empire that would permit Huntington to terminate
the Merger Documents (A) occurring after the receipt by Empire
after February 4, 2000, of a proposal to engage in an
Acquisition Transaction, (B) occurring after the announcement
by any other Person of an intention to engage in an Acquisition
Transaction, or (C) in anticipation and for the purpose of
engaging in an Acquisition Transaction;
(2) (A) a proposal to engage in an Acquisition Transaction is
submitted to and approved by the shareholders of Empire at any
time prior to January 31, 2001, or (B) a Tender Offer is
commenced and the transactions contemplated in the Tender Offer
are completed in such a manner that the Person making the
Tender Offer acquires beneficial ownership of more than 20
percent of the capital stock or any other class of voting
securities of Empire, and the Merger is not consummated prior
to January 31, 2001; or
(3) (A) a proposal to engage in an Acquisition Transaction is
received by Empire after February 4, 2000, or a Tender Offer is
made directly to the shareholders of Empire or the intention of
making an Acquisition Transaction or a Tender Offer is
announced at any time prior to the holding of the Empire
Shareholders' Meeting; (B) the Board of Directors of Empire (1)
fails to recommend to the shareholders of Empire that they vote
their shares of Empire Common in favor of the approval of the
Merger, (2) withdraws such recommendation previously made, (3)
fails to solicit proxies of shareholders of Empire to approve
the Merger, or (4) fails to hold the Empire Shareholders'
Meeting; and (C) the Merger is not consummated by January 31,
2001.
(b) Notwithstanding the foregoing, this Warrant shall not be
exercisable in the event of the failure to consummate the Merger solely as a
result of any of the following: (1) the failure of any Regulatory Authority to
provide any required Consent to the Merger, which failure was not the result of
the existence of the Acquisition Proposal or a breach by Empire of any of its
obligations under any of the Merger Documents; or (2) the Merger
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Documents are terminated pursuant to Section 9.1 of the Supplemental Agreement,
unless the event giving rise to the right to terminate is preceded by a
Triggering Event or the receipt by Empire after February 4, 2000, of an
Acquisition Transaction proposal, or the announcement by another Person of a
proposal involving an Acquisition Transaction. For purposes of this Section 1, a
Tender Offer which is contingent upon the expiration of the Warrant is deemed to
commence when it is announced. Empire represents to the Holder that, except with
respect to the Merger Documents, there are no proposals or offers to engage in
an Acquisition Transaction previously received by Empire which remain
outstanding as of the close of business on February 4, 2000. Any breach of this
representation by Empire will cause any such proposal or offer, whether in its
original form or as amended, to be deemed to be received by Empire after
February 4, 2000, for purposes of this Section 1.
(c) This Warrant shall be exercised by presentation and
surrender hereof to Empire at its principal office accompanied by (1) a written
notice of exercise for a specified number of shares of Empire Common, (2)
payment to Empire, for the account of Empire, of the Exercise Price for the
number of shares specified in such notice, and (3) a certificate of the Holder
indicating the Triggering Event that has occurred which entitles the Holder to
exercise this Warrant. The Exercise Price for the number of shares of Empire
Common specified in the notice shall be payable in immediately available funds.
(d) Upon such presentation and surrender, Empire shall issue
promptly (and within three business days if requested by the Holder) to the
Holder, or any assignee, transferee, or designee permitted by Section 1(f), the
shares to which the Holder is entitled hereunder.
(e) If this Warrant should be exercised in part only, Empire
shall, upon surrender of this Warrant for cancellation, execute and deliver a
new Warrant evidencing the rights of the Holder thereof to purchase the balance
of the shares purchasable hereunder. Upon receipt by Empire of this Warrant, in
proper form for exercise, the Holder shall be deemed to be the holder of record
of the shares of Empire Common issuable upon such exercise, notwithstanding that
the stock transfer books of Empire shall then be closed or that certificates
representing such shares of Empire Common shall not then be actually delivered
to the Holder. Empire shall pay all expenses, and any and all federal, state,
and local taxes and other charges that may be payable in connection with the
preparation, issue, and delivery of stock certificates under this Section 1 in
the name of the Holder or of any assignee, transferee, or designee permitted by
Section 1(f).
(f) This Warrant, once exercisable, or any warrant shares
acquired by the Holder by its exercise, may be sold or transferred in whole or
in part to any person, subject to the receipt by such person of approvals of
appropriate regulatory authorities having jurisdiction, including the Federal
Reserve Board, pursuant to all applicable laws and regulations, to the extent
required.
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SECTION 2. CERTAIN COVENANTS AND REPRESENTATIONS OF EMPIRE.
(a) Empire shall at all times maintain sufficient authorized
but unissued shares of Empire Common so that this Warrant may be exercised
without additional authorization of the holders of Empire Common, after giving
effect to all other options, warrants, convertible securities, and other rights
to purchase Empire Common.
(b) Empire represents and warrants to the Holder that the
shares of Empire Common issued upon an exercise of this Warrant will be duly
authorized, fully paid, non-assessable, and subject to no preemptive rights.
(c) Empire agrees (1) that it will not, by charter amendment
or through reorganization, consolidation, merger, dissolution, or sale of
assets, or by any other voluntary act, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations, or conditions to be observed
or performed hereunder by Empire; (2) promptly to take all action as may from
time to time be required, including, without limitation (A) complying with all
pre-merger notification, reporting, and waiting period requirements specified in
15 U.S.C. ss.18a and regulations promulgated thereunder, and (B) in the event,
under the Bank Holding Company Act of 1956, as amended (the "Bank Holding
Company Act"), or the Change in Bank Control Act of 1978, or other statute, the
prior approval of the Federal Reserve Board or other regulatory agency
(collectively, the "Agencies"), is necessary before the Warrant may be exercised
or transferred, cooperate fully with the Holder in preparing such applications
and providing such information to the Agencies as the Agencies may require in
order to permit the Holder to exercise or transfer this Warrant and Empire duly
and effectively to issue shares pursuant to the exercise hereof; and (3)
promptly to take all action provided herein to protect the rights of the Holder
against dilution.
SECTION 3. FRACTIONAL SHARES. Empire shall not be required to issue
fractional shares of Empire Common upon an exercise of this Warrant but shall
pay for such fraction of a share in cash or by certified or official bank check
at the Exercise Price.
SECTION 4. EXCHANGE OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof at the principal office of Empire for other Warrants of
different denominations entitling the Holder thereof to purchase in the
aggregate the same number of shares of Empire Common purchasable hereunder. The
term "Warrant" as used herein includes any warrants for which this Warrant may
be exchanged. Upon receipt by Empire of evidence reasonably satisfactory to it
of the loss, theft, destruction, or mutilation of this Warrant, and (in the case
of loss, theft, or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, Empire will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of Empire, whether or not the Warrant so lost, stolen, destroyed, or
mutilated shall at any time be enforceable by anyone.
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SECTION 5. CERTAIN TRANSACTIONS.
(a) In case Empire shall (1) consolidate with or merge into
any Person, other than Huntington or one of its Affiliates, and shall not be the
continuing or surviving corporation of such consolidation or merger, (2) permit
any Person, other than Huntington or one of its Affiliates, to merge into Empire
and Empire shall be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of Empire Common shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (3) sell or otherwise transfer all or substantially all
of its assets to any Person, other than Huntington or one of its Affiliates,
then, and in any such case, the agreement governing such transaction shall make
proper provision so that this Warrant shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, a warrant, at the option of the Holder, of either (A)
the Acquiring Corporation (as hereinafter defined), (B) any company which
controls the Acquiring Corporation, or (C) in the case of a merger described in
clause (a)(2) above, Empire, in which case such warrant shall be a newly issued
warrant (in any such case, the "Substitute Warrant").
(b) For purposes of this Section 5, the following terms have
the meanings indicated:
(1) "Acquiring Corporation" shall mean (A) the continuing
or surviving corporation of a consolidation or merger with Empire (if
other than Empire), (B) the corporation merging into Empire in a merger
in which Empire is the continuing or surviving person and in connection
with which the then outstanding shares of Empire Common are changed
into or exchanged for stock or other securities of any other Person or
cash or any other property, or (C) the transferee of all or
substantially all of Empire's assets;
(2) "Substitute Common" shall mean the common stock
issued by the issuer of the Substitute Warrant;
(3) "Assigned Value" shall mean the Market/Offer Price as
determined pursuant to paragraph 7(b) of the Warrant Purchase
Agreement; provided, however, that in the event of a sale of all or
substantially all of Empire's assets, the Assigned Value shall be the
sum of the price paid in such sale for such assets and the current
market value of the remaining assets of Empire as determined by a
recognized investment banking firm selected by the Holder, divided by
the number of shares of Empire Common outstanding at the time of such
sale;
(4) "Average Price" shall mean the average closing
price of a share of Substitute Common for the one year immediately
preceding the consolidation, merger, or sale in question, but in no
event higher than the
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closing price of the shares of Substitute Common on the day preceding
such consolidation, merger, or sale; provided that if Empire is the
issuer of the Substitute Warrant, the Average Price shall be computed
with respect to a share of the common stock issued by the Person
merging into Empire or by any company which controls such Person, as
the Holder may elect;
(5) A "Person" shall mean any individual, firm,
corporation, or other entity and include as well any syndicate or group
deemed to be a "person" by Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended; and
(6) "Affiliate" shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended.
(c) The Substitute Warrant shall have the same terms as this
Warrant, provided that, if the terms of the Substitute Warrant cannot, for legal
reasons, be the same as this Warrant, such terms shall be as similar as possible
and in no event less advantageous to the Holder. The issuer of the Substitute
Warrant shall also enter into an agreement with the then Holder of the
Substitute Warrant in substantially the same form as the Warrant Purchase
Agreement, which shall be applicable to the Substitute Warrant.
(d) The Substitute Warrant shall be exercisable for such
number of shares of Substitute Common as is equal to the Assigned Value
multiplied by the number of shares of Empire Common for which this Warrant is
then exercisable, divided by the Average Price. The exercise price of the
Substitute Warrant per share of Substitute Common shall be equal to the Exercise
Price multiplied by a fraction in which the numerator is the number of shares of
Empire Common for which this Warrant is then exercisable and the denominator is
the number of shares of Substitute Common for which the Substitute Warrant is
exercisable.
SECTION 6. RIGHTS OF THE HOLDER; REMEDIES.
(a) The Holder shall not, by virtue hereof and prior to the
exercise hereof, be entitled to any rights of a holder of Empire Common.
(b) Without limiting the foregoing or any remedies available
to the Holder, Empire specifically acknowledges that neither Huntington nor any
successor Holder of this Warrant would have an adequate remedy at law for any
breach of this Warrant and Empire hereby agrees that Huntington and any
successor Holder shall be entitled to specific performance of the obligations of
Empire hereunder and injunctive relief against actual or threatened violations
of the provisions hereof.
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SECTION 7. ANTIDILUTION PROVISIONS. The number of shares of Empire
Common purchasable upon the exercise hereof shall be subject to adjustment
from time to time as provided in this Section 7.
(a) In the event that Empire issues any additional shares of
Empire Common at any time after the date hereof (including pursuant to stock
option plans), the number of shares of Empire Common which can be purchased
pursuant to this Warrant shall be increased by an amount equal to 19.9
percent of the additional shares so issued.
(b) (1) In the event that, after the date hereof, Empire pays
or makes a dividend or other distribution of any class of capital stock of
Empire in Empire Common, the number of shares of Empire Common purchasable
upon exercise hereof shall be increased by multiplying such number of shares
by a fraction of which the denominator shall be the number of shares of
Empire Common outstanding at the close of business on the day immediately
preceding the date of such distribution and the numerator shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such increase to become effective
immediately after the opening of business on the day following such
distribution.
(2) In the event that, after the date hereof, outstanding
shares of Empire Common are subdivided into a greater number of shares of
Empire Common, the number of shares of Empire Common purchasable upon
exercise hereof at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately increased,
and, conversely, in the event that, after the date hereof, outstanding
shares of Empire Common are combined into a smaller number of shares of
Empire Common, the number of shares of Empire Common purchasable upon
exercise hereof at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately decreased,
such increase or decrease, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(3) The reclassification (including any reclassification
upon a merger in which Empire is the continuing corporation) of Empire
Common into securities including other than Empire Common shall be deemed to
involve a subdivision or combination, as the case may be, of the number of
shares of Empire Common outstanding immediately prior to such
reclassification into the number of shares of Empire Common outstanding
immediately thereafter and the effective date of such reclassification shall
be deemed to be the day upon which such subdivision or combination becomes
effective, as the case may be, within the meaning of clause (2) above.
(c) Whenever the number of shares of Empire Common purchasable
upon exercise hereof is adjusted pursuant to paragraph (b) above, the
Exercise Price shall be adjusted by multiplying the Exercise Price by a
fraction the numerator of which is equal to the number of shares of Empire
Common purchasable prior to the adjustment and the denominator of which is
equal to the number of shares of Empire Common purchasable after the
adjustment.
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(d) For the purpose of this Section 7, the term "Empire
Common" shall include any shares of Empire of any class or series which has
no preference or priority in the payment of dividends or in the distribution
of assets upon any voluntary or involuntary liquidation, dissolution, or
winding up of Empire and which is not subject to redemption by Empire.
SECTION 8. NOTICE.
(a) Whenever the number of shares of Empire Common for which
this Warrant is exercisable is adjusted as provided in Section 7 hereof,
Empire shall promptly compute such adjustment and mail to the Holder a
certificate, signed by a principal financial officer of Empire, setting
forth the number of shares of Empire Common for which this Warrant is
exercisable and the adjusted Exercise Price as a result of such adjustment,
a brief statement of the facts requiring such adjustment, the computation
thereof, and when such adjustment will become effective.
(b) Upon the occurrence of a Triggering Event, Empire shall
(1) promptly notify the Holder and/or the "Owner" (as that term is defined
in the Warrant Purchase Agreement) of such event, (2) promptly compute the
"Warrant Repurchase Price" and the "Warrant Stock Repurchase Price" (as such
terms are defined in the Warrant Purchase Agreement), and (3) furnish to the
Holder and/or the Owner a certificate, signed by the chief financial officer
of Empire setting forth the Warrant Repurchase Price and/or the Warrant
Stock Repurchase Price and the basis and computation thereof.
(c) Upon the occurrence of an event which results in this
Warrant becoming convertible into, or exchangeable for, the Substitute
Warrant, as provided in Section 5 hereof, Empire and the Acquiring
Corporation shall promptly notify the Holder of such event; and, upon
receipt from the Holder of its choice as to the issuer of the Substitute
Warrant, the Acquiring Corporation shall promptly compute the number of
shares of Substitute Common for which the Substitute Warrant is exercisable
and furnish to the Holder a certificate, signed by a principal financial
officer of the Acquiring Corporation, setting forth the number of shares of
Substitute Common for which the Substitute Warrant is exercisable, the
Substitute Warrant exercise price, a computation thereof, and when such
adjustment will become effective.
SECTION 9. TERMINATION. This Warrant and the rights conferred hereby
shall terminate upon the earliest of (1) six months after the occurrence of
a Triggering Event, (2) the Effective Date of the Merger, (3) the date of
termination of the Merger Documents unless the event giving rise to the
right to terminate is preceded by a Triggering Event or the receipt by
Empire, or the announcement by another Person, of a proposal involving an
Acquisition Transaction or Tender Offer, or (4) March 31, 2001.
IN WITNESS WHEREOF, the undersigned has executed this Warrant as of
this 4th day of February, 2000.
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ATTEST: EMPIRE BANC CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------------ ------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
Title: Vice President And Chairman and Chief Executive Officer
Secretary/Treasurer
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EXHIBIT 2 TO SUPPLEMENTAL AGREEMENT
MATTERS AS TO WHICH ▇▇▇▇▇▇ & ▇▇▇▇▇▇ ATTORNEYS, P.C. SHALL OPINE
1. Empire is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Michigan with full corporate power
and authority to carry on the business in which it is engaged and to own and use
its material Assets.
2. Each of the Empire Subsidiaries is duly organized, validly existing,
and in good standing under the Laws of the United States or its state of
incorporation, with full corporate power and authority to carry on the business
in which it is engaged and to own and use its material Assets.
3. The execution and delivery of the Merger Documents and compliance
with their respective terms by Empire do not and will not violate or contravene
any provision of the Articles of Incorporation or Bylaws of Empire nor, to our
knowledge but without any independent investigation, any Law, Order, Permit or
Contract to which Empire is a party or by which Empire or any of its material
Assets is bound.
4. The Merger Documents have been duly and validly executed and
delivered by Empire and assuming valid authorization, execution, and delivery by
Huntington, constitute the valid and binding agreements of Empire enforceable in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, or similar laws affecting creditors'
rights generally, provided, however, that we express no opinion as to the
availability of the equitable remedy of specific performance.
5. Empire has the corporate power and authority to own its properties
and assets and to carry on its business within the State of Michigan. To our
Knowledge, Empire is not required to be qualified to do business in any
jurisdiction other than Michigan.
6. All corporate actions required to be taken by the directors and
shareholders of Empire to authorize the Merger Documents and the transactions
contemplated thereby have been taken.
7. All eligible accounts of deposit in all Empire Subsidiaries that are
depository institutions are insured by the Federal Deposit Insurance Corporation
to the fullest extent permitted by Law.
8. The Merger shall be exempted from the requirements of Section
780 of Chapter 7A of the Michigan Business Corporation Act, as amended.
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9. The execution and delivery of the Merger Documents does not, and the
consummation of the Merger and the other transactions contemplated by the Merger
Documents will not (a) result in the grant of any Rights to any Person under the
Empire Rights Agreement, (b) result in separation from the shares of Empire
Common of the Rights granted under the Empire Rights Agreement, (c) permit any
holder of any of the Rights under the Empire Rights Agreement to exercise any
such Rights, or (d) give any Person any Right to purchase any securities issued
by Huntington under the Empire Rights Agreement.
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EXHIBIT 3 TO SUPPLEMENTAL AGREEMENT
MATTERS AS TO WHICH PORTER, WRIGHT, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP SHALL OPINE
1. Huntington is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Maryland with full corporate power
and authority to carry on the business in which it is engaged and to own and use
its material Assets.
2. The execution and delivery of the Merger Documents and compliance
with their respective terms by Huntington do not and will not violate or
contravene any provision of the Articles of Incorporation or Bylaws of
Huntington or, to our knowledge but without any independent investigation, any
Law, Order, or Permit to which Huntington is a party or by which Huntington is
bound.
3. The Merger Documents have been duly and validly executed and
delivered by Huntington and, assuming valid authorization, execution and
delivery by Empire, constitute the valid and binding agreements of Huntington
enforceable in accordance with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, or similar laws
affecting creditors' rights generally, provided, however, that we express no
opinion as to the availability of the equitable remedy of specific performance.
4. All corporate action required to be taken by the directors of
Huntington to authorize the Merger Documents and the transactions contemplated
thereby have been taken and the shareholders of Huntington are not required to
take any action with respect to the Merger Documents.
5. The shares of Huntington Common to be issued to the shareholders of
Empire as contemplated by the Merger Documents have been registered under the
Securities Act of 1933, as amended, and when properly issued and delivered
following consummation of the Merger will be duly authorized, validly issued,
fully paid, and non-assessable under the Maryland Business Corporation Act.
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