STANDSTILL AGREEMENT
THIS AGREEMENT, dated March 18, 1997, by and between MICHIGAN
HERITAGE BANCORP, INC., a Michigan corporation (the "Corporation"), and
the individuals and entities identified on the signature page of this
Agreement (collectively, the "Group;" individually, a "Group Member").
In connection with a proposed public offering (the "Offering") of
common stock by the Corporation, the Group has indicated an interest in
purchasing a significant number of shares of such common stock, and the
Corporation and the Group have agreed that it is in their mutual interests
to enter into this Agreement. In consideration of the covenants and
agreements contained herein and other good and valuable consideration, the
parties agree as follows:
1. Representations and Warranties of the Group Members. The
Group Members hereby represent and warrant to the Corporation, as follows:
(a) Exhibit A sets forth the number of shares of the common
stock of the Corporation which have been purchased by the Group
Members in the Offering.
(b) The Group Members have full and complete authority to enter
into this Agreement and to bind the entire number of shares of the
capital stock of the Corporation in which they have a beneficial
ownership interest to the terms of this Agreement and this Agreement
constitutes a valid and binding agreement of the Group and each
Group Member.
(c) There are no arrangements, agreements or understandings
between the Group (or any Group Member) and the Corporation other
than as set forth in this Agreement.
2. Representations and Warranties of the Corporation. The
Corporation hereby represents and warrants to the Group and to each Group
member, as follows:
(a) The Corporation has full power and authority to enter into
and perform its obligations under this Agreement, and the execution
and delivery of this Agreement by the Corporation regarding the
consummation of the transactions contemplated hereby has been duly
authorized by the Board of Directors of the Corporation and requires
no other Board of Directors or stockholder action. This Agreement
constitutes a valid and binding obligation of the Corporation and
the performance of its terms shall not constitute a violation of its
Articles of Incorporation or Bylaws.
(b) There are no arrangements, agreements or understandings
between the Group (or any Group Member) and the Corporation other
than as set forth in this Agreement.
3. Covenants. The Group and each Group Member covenant and
agree that during the term of this Agreement:
(a) They shall not hereafter acquire, or offer or agree to
acquire, or act in concert with any affiliate, group or other person
to acquire, or offer or agree to acquire, directly or indirectly, by
purchase or otherwise (other than through stock splits or stock
dividends), beneficial ownership of, or the right to vote, any
shares of common stock of the Corporation or any securities
convertible into such common stock, without the prior written
consent of the Board of Directors of the Corporation, and subject to
any required regulatory approvals that may be required for any such
acquisition of additional shares.
(b) They shall not directly or indirectly solicit, or act in
concert with any affiliate, group or other person to solicit,
"proxies", or directly or indirectly become a "participant" or
otherwise engage in any "solicitation" (as such terms are defined in
Regulation 14A under the Securities Exchange Act of 1934, as
amended) with respect to any matter not recommended or approved by
the Corporation's management.
(c) They shall vote, and shall require any affiliate, group or
other person acting in concert with any Group Members to vote, all
shares beneficially owned (i) in favor of any proposal submitted by
the Corporation's management, (ii) against any proposal opposed by
the Corporation's management and (iii) in accordance with the
recommendations of the Corporation's management on all procedural
matters. Furthermore, they shall not, nor shall they act in concert
with any affiliate, group or other person to join with or assist any
person or entity, directly or indirectly, in opposing, or make any
statement in opposition to, any proposal submitted by the
Corporation's management to a vote of the Corporation's shareholders
or join with or assist any person or entity, directly or indirectly.
in supporting or endorsing (including supporting, requesting or
joining in any request for a meeting of shareholders in connection
with), or make any statement in favor of, any proposal submitted to
a vote of the Corporation's shareholders that is opposed by
Corporation's management.
(d) They shall not vote, nor shall they act in concert with any
affiliate, group or other person to vote, for any nominee or
nominees for election to the Board of Directors of the Corporation,
other than those nominated by the Corporation's management,
provided, however, to the extent that any nominee or nominees for
election to the Board of Directors of the Corporation are other than
those nominated by the Corporation's management, they shall vote all
shares beneficially owned for the nominee or nominees nominated by
the Corporation's management. No Group Member shall consent to
become a nominee for election as a Director of the Corporation,
other than as a nominee of the Corporation's management.
(e) They shall not directly or indirectly solicit or initiate
any communication regarding, or act in concert with any affiliate,
group or other person to solicit or initiate any communication
regarding, any acquisition offers for the Corporation, whether by
merger, sale of assets, liquidation, exchange of shares or
otherwise, and if any offer or inquiry concerning such an offer
shall be received they shall refer such offer or inquiry directly
and solely to the Chairman of the Board of Directors and/or to the
Chief Executive Officer of the Corporation.
(f) They shall not directly or indirectly participate or act in
concert with any affiliate, group or other person to participate, by
encouragement or otherwise, in any litigation against or
derivatively on behalf of the Corporation, except for testimony
which may be required by law, and except as may occur in the
ordinary course of business with respect to any loan, deposit or
other transaction where the Group Member or an affiliate is dealing
with the Corporation as a customer.
(g) They shall not provide, nor shall they act in concert with
any person to provide, any funds, services or facilities, to any
person in support of any activity by such person that would be a
violation of their covenants under the provisions of this Section 3
if undertaken by any of them.
(h) They shall not deposit any capital stock of the Corporation
in a voting trust or subject any shares of capital stock of the
Corporation to a voting agreement or other arrangement of similar
effect.
(i) They shall not sell, transfer or otherwise dispose of any
shares of capital stock of the Corporation without the prior consent
of the Chief Executive Officer of the Corporation, except for sales
of shares in the open market pursuant to "brokers' transactions", as
such term is defined in SEC Rule 144 under the Securities Act of
1933, as amended, and except for transfers to members of the
Immediate Family of a member of the Group or to a trust for which
such member is a trustee or a beneficiary.
4. Remedies. The Corporation and the Group acknowledge and
agree that a breach or threatened breach by either party may give rise to
irreparable injury inadequately compensable in damages, and accordingly each
party shall be entitled to injunctive relief to prevent a breach of the
provisions hereof and to enforce specifically the terms and provisions
hereof in any state or federal court having jurisdiction, in addition to any
other remedy to which such aggrieved party may be entitled to at law or in
equity.
5. Term. This Agreement shall remain in effect for a term of
10 years from the date hereof or until such earlier time as the Corporation
shall cease to exist by reason of merger, sale of assets, liquidation,
exchange of shares, or otherwise; provided, however, that if both Richard
Zamojski and Anthony S. Albanese shall cease to be employed as senior
executive officers of the Corporation, any or all of the Group Members may
terminate this Agreement in its entirety with respect to such Group Member
upon ten (10) days' prior written notice to the Corporation from such
terminating Group Member.
6. Publicity. Any press release or other publicity with
respect to this Agreement, or any provisions thereof, shall be prepared and
issued by the Corporation. During the term of this Agreement, no Group
Member shall cause, discuss, cooperate in the preparation of or otherwise
aid in any press release or other publicity concerning the Corporation or
its operations to be created, issued or circulated without prior approval of
the Corporation's management.
7. Notices. All notice requirements and other communications
shall be deemed givcn when delivered or on the third succeeding business day
after being mailed by registered or certified mail, return receipt
requested, addressed to the Group and the Corporation below:
To the Group:
c/o Mr. Frank A. Scerbo
1420 South Livernois
Rochester Hills, MI 48307
To Michigan Heritage Bancorp, Inc.:
Mr. Anthony S. Albanese, President
Michigan Heritage Bancorp, Inc.
21211 Haggerty Road
Novi, Michigan 48375
8. Governing Law and Choice of Forum. Michigan law, unless
applicable federal law or regulation is deemed controlling, shall govern the
construction and enforceability of this Agreement. Any and all actions
concerning any dispute arising hereunder shall be filed and maintained in a
state or federal court, as appropriate, sitting in the State of Michigan.
9. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated.
10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of and be enforceable by the successors
and assigns, and transferees by operation of law, of the parties. Except as
otherwise expressly provided for herein, this Agreement shall not inure to
the benefit of, be enforceable by or create any right or cause of action in
any person, including any shareowner of the Corporation, other than the
parties hereto.
11. Survival of Representations, Warranties and Agreements. All
representations, warranties, covenants and agreements made herein shall
survive the execution and delivery of this Agreement.
12. Definitions. As used in this Agreement, the following terms
shall have the meanings indicated, unless the context otherwise requires:
The term "acquire" means every type of acquisition, whether
effected by purchase, exchange, operation of law or otherwise.
The term "acting in concert" means (i) knowing participation
in a joint activity or conscious parallel action towards a common
goal whether or not pursuant to an express agreement, or (ii) a
combination of pooling of voting or other interests in the
securities of an issuer for a common purpose pursuant to any
contract, understanding, relationship, agreement or other
arrangement, whether written or otherwise.
The term "affiliate" means a person or entity that directly,
or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, one or more of the
Group Members.
The terms "beneficial ownership" or "beneficially owned"
means all capital stock of the Corporation owned or held in the
Group Member's name individually or jointly with any other person by
any trust in which the Group Member is a settlor, trustee, or
beneficiary; by any corporation in which the Group Member is a
shareholder (owning, together with all other Group Members and their
respective affiliates, more than five percent (5%) of the
outstanding voting power or beneficial interests), director or
officer; by any partnership in which the Group Member is a limited
partner (owning, together with all other Group Members and their
respective affiliates, more than five percent (5%) of the
outstanding beneficial interests), or a general partner, employee or
agent, or by any other entity in which a Group Member holds,
together with all other Group Members and their respective
affiliates, more than five percent (5%) of the outstanding
beneficial interests.
The term "control" (including the terms "controlling",
"controlled by", and "under common control with") means the
possession, direct or indirect, or the power to direct or cause the
direction of the management, activities or policies of a person or
organization, whether through the ownership of capital stock, by
contract, or otherwise.
The term "Corporation's management" means a majority of the
members of the Board of Directors of the Corporation who are members
of the Corporation's Board of Directors as of the date hereof and
who are not Group Members or affiliates of Group Members (except
those who are affiliates of Group Members solely by reason of their
being a member of the Board of Directors of the Corporation), and
any successor to a director if such successor is designated or
elected to succeed a director by a majority of the Corporation's
management.
The term "Immediate Family" shall mean the spouse, child,
parent or sibling of a person.
The term "person" includes an individual, group acting in
concert, a corporation, a partnership, an association, a joint stock
company, a trust, an unincorporated organization or similar company,
a syndicate, or any other group formed for the purpose of acquiring,
holding or disposing of the equity securities of the Corporation.
The term "vote" means to vote in person or by proxy, or to
give or authorize the giving of any consent as a stockholder on any
matter.
13. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but each of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by duly authorized officers of the undersigned as of the day and
year first above written.
MICHIGAN HERITAGE BANCORP, INC.
By: /S/ ANTHONY S. ALBANESE
Anthony S. Albanese, President
GROUP MEMBERS:
WALTER S. McPHAIL TRUST
By: /S/ WALTER S. McPHAIL
Walter S. McPhail, Trustee
McPHAIL CORPORATION EMPLOYEES
PROFIT-SHARING TRUST
By: /S/ WALTER S. McPHAIL
Walter S. McPhail, Co-trustee
And By: /S/ FRANK A. SCERBO
Frank A. Scerbo, Co-trustee
JAMES H. McPHAIL IV TRUST
By: /S/ MARVIN I. BANNON
Marvin I. Bannon, Co-trustee
And By: /S/ FRANK A. SCERBO
Frank A. Scerbo, Co-trustee
MELINDA M. McPHAIL TRUST
By: /S/ MARVIN I. BANNON
Marvin I. Bannon, Co-trustee
And By: /S/ FRANK A. SCERBO
Frank A. Scerbo, Co-trustee
HEIDI ELISABETH WYSONG TRUST
By: /S/ MARVIN I. BANNON
Marvin I. Bannon, Co-trustee
And By: /S/ SUSAN M. SCERBO
Susan M. Scerbo, Co-trustee
JENNIFER ANNE SCERBO TRUST
By: /S/ MARVIN I. BANNON
Marvin I. Bannon, Co-trustee
And By: /S/ SUSAN M. SCERBO
Susan M. Scerbo, Co-trustee
JAMES A. SCERBO TRUST
By: /S/ MARVIN I. BANNON
Marvin I. Bannon, Co-trustee
And By: /S/ SUSAN M. SCERBO
Susan M. Scerbo, Co-trustee
HOLLY JEAN SCERBO TRUST
By: /S/ MARVIN I. BANNON
Marvin I. Bannon, Co-trustee
And By: /S/ SUSAN M. SCERBO
Susan M. Scerbo, Co-trustee
JOSEPH J. SCERBO TRUST
By: /S/ MARVIN I. BANNON
Marvin I. Bannon, Co-trustee
And By: /S/ SUSAN M. SCERBO
Susan M. Scerbo, Co-trustee
EXHIBIT A
Shares of Common Stock
Owner to be Owned
- ----- ----------------------
WALTER S. McPHAIL TRUST 55,000 shs.
McPHAIL CORPORATION EMPLOYEES
PROFIT-SHARING TRUST 20,000
JAMES H. McPHAIL IV TRUST 10,000
MELINDA M. McPHAIL TRUST 10,000
HEIDI ELISABETH WYSONG TRUST 1,000
JENNIFER ANNE SCERBO TRUST 1,000
JAMES A. SCERBO TRUST 1,000
HOLLY JEAN SCERBO TRUST 1,000
JOSEPH J. SCERBO TRUST 1,000
--------
Total 100,000 shs.