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EXHIBIT 2(c)
WARRANT PURCHASE AGREEMENT
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THIS WARRANT PURCHASE AGREEMENT (this "Agreement") is made as of May 5,
1997, between HUNTINGTON BANCSHARES INCORPORATED, a Maryland corporation
("Huntington"), and FIRST MICHIGAN BANK CORPORATION, a Michigan corporation
("First Michigan").
RECITALS:
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A. Concurrently herewith, Huntington and First Michigan have entered
into (i) a certain Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), which provides for the merger of First Michigan into
Huntington (the "Merger"), and (ii) 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, First Michigan
has agreed to issue to Huntington a warrant or warrants entitling Huntington to
purchase up to a total of 5,268,716 shares of First Michigan Common, on the
terms and conditions set forth herein.
AGREEMENT:
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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,
First Michigan 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
5,268,716 shares of First Michigan Common at a purchase price equal to $29.275
per share (the "Exercise Price"), subject to adjustments as provided in the
Warrant. (The holder of the Warrant from time to time is hereinafter referred to
as the "Holder.") The Warrant shall be exercisable in accordance with the terms
and conditions set forth therein.
SECTION 2. REGISTRATION RIGHTS. If, at any time after the Warrant
becomes exercisable in accordance with its terms, First Michigan shall receive a
written request therefor from the Holder, First Michigan shall prepare and file
a registration statement under the 1933 Act covering such number of shares of
First Michigan 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
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Holder shall only have the right to request three such registrations. Without
the written consent of the Holder, neither First Michigan nor any other holder
of securities of First Michigan 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, First Michigan 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, First Michigan 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 First Michigan,
First Michigan shall, except as herein provided, cause all shares of First
Michigan Common which the Holder shall request be included in such registration
statement to be so included; provided, however, that nothing herein shall
prevent First Michigan from abandoning or delaying any registration at any time;
and provided, further, that if First Michigan decides not to proceed with a
registration after the registration statement has been filed with the SEC and
First Michigan's decision not to proceed is primarily based upon the anticipated
public offering price of the securities to be sold by First Michigan, First
Michigan shall promptly complete the registration for the benefit of the Holder
if the Holder agrees to bear all additional and incremental expenses incurred by
First Michigan as the result of such registration after First Michigan 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
First Michigan 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
First Michigan 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 First Michigan, 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 First Michigan 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 FIRST MICHIGAN IN CONNECTION WITH A
REGISTRATION. If and whenever First Michigan is required by the provisions of
Sections 2 or 3 hereof to effect the registration of any shares of First
Michigan Common under the 1933 Act, First Michigan 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;
(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;
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(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 First Michigan shall not be required by virtue hereof to
submit to the general jurisdiction of any state;
(e) notify the Holder, promptly after First Michigan 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 First Michigan), is required under the 1933 Act or the rules and
regulations promulgated thereunder in connection with the distribution of the
shares of First Michigan 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
(j) at the request of the Holder, furnish on the date or dates
provided for in the underwriting agreement: (i) an opinion or opinions of the
counsel representing First Michigan 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 (ii) a letter or letters from the
independent certified public accountants of First Michigan, 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 First Michigan included in the registration statement
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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 First Michigan Common in a registration statement pursuant to Section
3 hereof, First Michigan shall bear the following fees, costs, and expenses: all
registration, stock exchange listing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for First Michigan, fees and
disbursements of counsel for the underwriter or underwriters of such securities
(if First Michigan 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 First Michigan 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) First Michigan shall indemnify and hold harmless the
Holder, any underwriter (as defined in the 0000 Xxx) 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 First Michigan 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.
(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 First Michigan pursuant to the provision of such paragraph (a), promptly
notify First Michigan of the commencement thereof; but the omission to so notify
First Michigan 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 First Michigan of the
commencement thereof, First Michigan 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 First Michigan
and there is a conflict of interest which would prevent counsel for First
Michigan 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
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indemnified party or parties. After notice from First Michigan 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 First Michigan 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 (i) the indemnified party shall have employed
separate counsel in accordance with the provisions of the preceding sentence of
this paragraph (b), (ii) First Michigan 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 (iii)
First Michigan has authorized the employment of counsel for the indemnified
party at the expense of First Michigan.
(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:
(i) First Michigan may, and upon the written request of
the Holder, First Michigan shall, repurchase the Warrant from the Holder
at a price (the "Warrant 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
(ii) First Michigan may, and upon the written request of
the owner (the "Owner") of any shares of First Michigan Common purchased
pursuant to an exercise of the Warrant ("Warrant Stock"), First Michigan
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 paragraph (a) of this Section 7, the
"Market/Offer Price" shall mean the highest of (i) the price per share at which
a tender offer or exchange offer for shares of First Michigan Common has been
made, (ii) the price per share of First Michigan Common to be paid by any third
party pursuant to an agreement with First Michigan, and (iii) the highest
closing price for shares of First Michigan 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
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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 First Michigan 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 First Michigan to repurchase the Warrant or the Warrant Stock
pursuant to this Section 7 by surrendering for such purpose to First Michigan,
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 First
Michigan to repurchase such Warrant or Warrant Stock in accordance with the
provisions of this Section 7. Subject to the last proviso of paragraph 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, First
Michigan 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 First Michigan is not then prohibited
under applicable law and regulation from so delivering.
(d) To the extent that First Michigan 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, First Michigan 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 First Michigan is
no longer so prohibited. Upon receipt of such notice from First Michigan 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 First
Michigan at its principal office stating that the Holder and/or the Owner elects
to revoke its election to exercise its right to require First Michigan to
repurchase the Warrant and/or Warrant Stock, whereupon First Michigan will
promptly deliver to the Holder and/or Owner the Warrant and/or certificates
representing shares of Warrant Stock surrendered to First Michigan for purposes
of such repurchase. Whether or not such election is revoked, First Michigan
hereby agrees to use its best efforts to obtain all required legal and
regulatory approvals necessary to permit First Michigan to repurchase the
Warrant and/or the Warrant Stock as promptly as practicable.
SECTION 8. ASSUMPTION OF OBLIGATIONS UNDER THIS AGREEMENT. First
Michigan will not enter into any transaction described in paragraph 5(a) of the
Warrant unless the "Acquiring Corporation" (as that term is defined in the
Warrant) assumes in writing all the obligations of First Michigan hereunder.
SECTION 9. REMEDIES. Without limiting the foregoing or any remedies
available to the Holder, First Michigan 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 First Michigan
hereby agrees that Huntington and any successor holder of the
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Warrant shall be entitled to specific performance of the obligations of First
Michigan 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/ Xxxxx Xxxxx
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Xxxxx Xxxxx, Chairman and Chief Executive Officer
FIRST MICHIGAN BANK CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, Chairman and Chief Executive
Officer
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ATTACHMENT A TO WARRANT PURCHASE AGREEMENT
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
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TO PURCHASE 5,268,716 COMMON SHARES
OF
FIRST MICHIGAN BANK CORPORATION
This is to certify that, for value received, HUNTINGTON BANCSHARES
INCORPORATED, a Maryland corporation ("Huntington"), is entitled to purchase
from FIRST MICHIGAN BANK CORPORATION, a Michigan corporation ("First Michigan"),
at any time on or after the date hereof, an aggregate of up to 5,268,716 common
shares, $1.00 par value per share, of First Michigan ("First Michigan Common"),
at a price of $29.275 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 First Michigan (the "Warrant Purchase
Agreement"). The number of shares of First Michigan 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 First Michigan (the "Merger
Agreement"), which provides for the merger of First Michigan into Huntington
(the "Merger"), and a certain Supplemental Agreement between Huntington and
First Michigan, 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.
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
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applicable law, the Holder will not exercise this Warrant without the written
consent of First Michigan except upon the occurrence of any of the following
events (a "Triggering Event"):
(i) any material, willful, and intentional breach
of the Merger Documents by First Michigan that would
permit Huntington to terminate the Merger Documents
(A) occurring after the receipt by First Michigan 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;
(ii) (A) a proposal to engage in an Acquisition
Transaction is submitted to and approved by the
shareholders of First Michigan at any time
prior to May 31, 1999, 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
First Michigan, and the Merger is not consummated
prior to May 31, 1999;
(iii) (A) a proposal to engage in an Acquisition
Transaction is received by First Michigan or a
Tender Offer is made directly to the shareholders of
First Michigan or the intention of making an
Acquisition Transaction or Tender Offer is
announced at any time prior to the holding of the
First Michigan Shareholders' Meeting; (B) the Board
of Directors of First Michigan (1) fails to
recommend to the shareholders of First Michigan that
they vote their shares of First Michigan Common in
favor of the approval of the Merger, (2) withdraws
such recommendation previously made, (3) fails to
solicit proxies of shareholders of First Michigan to
approve the Merger, or (4) fails to hold the First
Michigan Shareholders' Meeting; and (C) the Merger
is not consummated by May 31, 1999;
(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: (i) the failure of the shareholders of
Huntington to approve the Merger; (ii) 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 First Michigan of
any of its obligations under any of the Merger Documents; or (iii) the Merger
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
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a Triggering Event or the receipt by First Michigan of an Acquisition
Transaction proposal, or the announcement by another Person of a proposal
involving an Acquisition Transaction.
(c) An "Acquisition Transaction" shall mean a transaction
involving (A) the sale or other disposition of more than 20 percent of the
shares of the capital stock or any other class of voting securities of First
Michigan, including, but not limited to, a Tender Offer, (B) the sale or other
disposition of 15 percent or more of the consolidated assets or deposits of
First Michigan or of the banks owned by First Michigan, in the aggregate, or (C)
a merger or consolidation involving First Michigan other than a transaction
pursuant to which First Michigan will be the surviving corporation and the
current shareholders of First Michigan will be the owners of a majority of the
stock of the surviving corporation following the transaction. As used in this
Section 1, "person" or "group of persons" shall have the meanings assigned to
such terms by Section 13(d) of the 1934 Act. 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.
(d) This Warrant shall be exercised by presentation and
surrender hereof to First Michigan at its principal office accompanied by (i) a
written notice of exercise for a specified number of shares of First Michigan
Common, (ii) payment to First Michigan, for the account of First Michigan, of
the Exercise Price for the number of shares specified in such notice, and (iii)
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 First Michigan Common specified in the notice shall be
payable in immediately available funds.
(e) Upon such presentation and surrender, First Michigan shall
issue promptly (and within three business days if requested by the Holder) to
the Holder, or any assignee, transferee, or designee permitted by subparagraph
(g) of this Section 1, the shares to which the Holder is entitled hereunder.
(f) If this Warrant should be exercised in part only, First
Michigan 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 First Michigan
of this Warrant, in proper form for exercise, the Holder shall be deemed to be
the holder of record of the shares of First Michigan Common issuable upon such
exercise, notwithstanding that the stock transfer books of First Michigan shall
then be closed or that certificates representing such shares of First Michigan
Common shall not then be actually delivered to the Holder. First Michigan 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 subparagraph (g) of this
Section 1.
(g) 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 FIRST MICHIGAN.
(a) First Michigan shall at all times maintain sufficient
authorized but unissued shares of First Michigan Common so that this Warrant may
be exercised without additional authorization of the holders of First Michigan
Common, after giving effect to all other options, warrants, convertible
securities, and other rights to purchase First Michigan Common.
(b) First Michigan represents and warrants to the Holder that
the shares of First Michigan Common issued upon an exercise of this Warrant will
be duly authorized, fully paid, non-assessable, and subject to no preemptive
rights.
(c) First Michigan agrees (i) 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 First Michigan; (ii) 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 First Michigan duly and effectively to issue shares pursuant to
the exercise hereof; and (iii) promptly to take all action provided herein to
protect the rights of the Holder against dilution.
SECTION 3. FRACTIONAL SHARES. First Michigan shall not be required to
issue fractional shares of First Michigan 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 First Michigan for other Warrants of different
denominations entitling the Holder thereof to purchase in the aggregate the same
number of shares of First Michigan Common purchasable hereunder. The term
"Warrant" as used herein includes any warrants for which this Warrant may be
exchanged. Upon receipt by First Michigan 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, First
Michigan 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 First Michigan, 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 First Michigan shall (i) 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, (ii)
permit any Person, other than Huntington or one of its Affiliates, to merge into
First Michigan and First Michigan shall be the continuing or surviving
corporation, but, in connection with such merger, the then outstanding shares of
First Michigan Common shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (iii) 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)(ii) above, First
Michigan, 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:
(i) "Acquiring Corporation" shall mean (A) the
continuing or surviving corporation of a consolidation or merger
with First Michigan (if other than First Michigan), (B) the
corporation merging into First Michigan in a merger in which
First Michigan is the continuing or surviving person and in
connection with which the then outstanding shares of First
Michigan 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 First
Michigan's assets;
(ii) "Substitute Common" shall mean the common
stock issued by the issuer of the Substitute Warrant;
(iii) "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 First Michigan'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 First Michigan as determined by a recognized investment
banking firm selected by the Holder, divided by the number of
shares of First Michigan Common outstanding at the time of such
sale;
(iv) "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 closing price of the
shares of Substitute Common on the day preceding such
consolidation, merger, or sale; provided that if First Michigan
is the issuer of the Substitute
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Warrant, the Average Price shall be computed with respect to a share of the
common stock issued by the Person merging into First Michigan or by any company
which controls such Person, as the Holder may elect;
(v) 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
(vi) "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 First Michigan 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 First Michigan 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 First Michigan Common.
(b) Without limiting the foregoing or any remedies available
to the Holder, First Michigan 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 First Michigan hereby agrees that Huntington
and any successor Holder shall be entitled to specific performance of the
obligations of First Michigan hereunder and injunctive relief against actual or
threatened violations of the provisions hereof.
SECTION 7. ANTIDILUTION PROVISIONS. The number of shares of First
Michigan 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 First Michigan issues any additional
shares of First Michigan Common at any time after the date hereof (including
pursuant to stock option plans), the number of
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shares of First Michigan 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) (i) In the event that, after the date hereof,
First Michigan pays or makes a dividend or other distribution of
any class of capital stock of First Michigan in First Michigan
Common (including, but not limited to, the issuance of the First
Michigan 1997 Stock Dividend), the number of shares of First f
Michigan 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 First
Michigan 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.
(ii) In the event that, after the date hereof,
outstanding shares of First Michigan Common are subdivided into a
greater number of shares of First Michigan Common, the number of
shares of First Michigan 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 First Michigan Common are combined
into a smaller number of shares of First Michigan Common, the
number of shares of First Michigan 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.
(iii) The reclassification (including any
reclassification upon a merger in which First Michigan is the
continuing corporation) of First Michigan Common into securities
including other than First Michigan Common shall be deemed to
involve a subdivision or combination, as the case may be, of the
number of shares of First Michigan Common outstanding immediately
prior to such reclassification into the number of shares of First
Michigan 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 (ii) above.
(c) Whenever the number of shares of First Michigan 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 First
Michigan Common purchasable prior to the adjustment and the denominator of which
is equal to the number of shares of First Michigan Common purchasable after the
adjustment; provided, however, that no such adjustment of the Exercise Price
shall be made with respect to the
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15
adjustment in the number of shares purchasable upon exercise hereof to be made
pursuant to paragraph (b) above upon the issuance of the First Michigan 1997
Stock Dividend.
(d) For the purpose of this Section 7, the term "First
Michigan Common" shall include any shares of First Michigan 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 First Michigan and which is not subject to
redemption by First Michigan.
SECTION 8. NOTICE.
(a) Whenever the number of shares of First Michigan Common for
which this Warrant is exercisable is adjusted as provided in Section 7 hereof,
First Michigan shall promptly compute such adjustment and mail to the Holder a
certificate, signed by a principal financial officer of First Michigan, setting
forth the number of shares of First Michigan 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 First Michigan
shall (i) promptly notify the Holder and/or the "Owner" (as that term is defined
in the Warrant Purchase Agreement) of such event, (ii) promptly compute the
"Warrant Repurchase Price" and the "Warrant Stock Repurchase Price" (as such
terms are defined in the Warrant Purchase Agreement), and (iii) furnish to the
Holder and/or the Owner a certificate, signed by the chief financial officer of
First Michigan 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, First Michigan 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 (i) six months after the occurrence of a
Triggering Event; (ii) the Effective Date of the Merger, (iii) 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 First Michigan, or
the
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announcement by another person, of a proposal involving an Acquisition
Transaction or Tender Offer; or (iv) May 31, 1999.
IN WITNESS WHEREOF, the undersigned has executed this Warrant as of
this _____ day of May, 1997.
ATTEST: FIRST MICHIGAN BANK CORPORATION
By: By:
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Xxxxx X. Xxxxxxxx, Chairman and
Title: Chief Executive Officer
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