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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:
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(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.
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(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.
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7. Notices. All notice requirements and other communications shall be
deemed given 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
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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.
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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:
_______________________________________
Anthony S. Albanese, President
GROUP MEMBERS:
WALTER S. McPHAIL TRUST
By:_______________________________________
Walter S. McPhail, Trustee
McPHAIL CORPORATION EMPLOYEES
PROFIT-SHARING TRUST
By: ______________________________
Walter S. McPhail, Co-trustee
And By: __________________________
Frank A. Scerbo, Co-trustee
JAMES H. McPHAIL IV TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
And By: __________________________
Frank A. Scerbo, Co-trustee
MELINDA M. McPHAIL TRUST
By: ______________________________
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Marvin I. Bannon, Co-trustee
And By: __________________________
Frank A. Scerbo, Co-trustee
HEIDI ELISABETH WYSONG TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
And By: __________________________
Susan M. Scerbo, Co-trustee
JENNIFER ANNE SCERBO TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
And By: __________________________
Susan M. Scerbo, Co-trustee
JAMES A. SCERBO TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
And By: __________________________
Susan M. Scerbo, Co-trustee
HOLLY JEAN SCERBO TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
And By: __________________________
Susan M. Scerbo, Co-trustee
JOSEPH J. SCERBO TRUST
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By: ______________________________
Marvin I. Bannon, Co-trustee
And By: __________________________
Susan M. Scerbo, Co-trustee
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FIRST AMENDMENT TO
STANDSTILL AGREEMENT
THIS FIRST AMENDMENT TO STANDSTILL AGREEMENT (the "First Amendment"),
dated as of February ____, 1999, 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"). The Corporation and the Group Members are
referred to from time to time in this First Amendment as the "Parties."
Background
A. In connection with the public offering (the "Offering") of
shares of common stock by the Corporation and the purchase of
a significant number of such shares by the Group, the Parties
entered into that certain Standstill Agreement dated as of
March 18, 1997 (the "Original Agreement").
B. The Parties have decided to amend the Original Agreement.
C. All capitalized terms not defined in this First Amendment
shall have the meanings given in the Original Agreement.
Therefore, in consideration of the covenants and agreements contained
herein and other good and valuable consideration, the Parties agree as follows.
Agreement
1. Section 3. Covenants. Section 3(a) of the Original Agreement
is hereby deleted in its entirety and replaced by the following.
(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, beneficial ownership of,
or the right to vote, shares of the common stock of the
Corporation that would give them beneficial ownership or
voting control of 10.0% or more of the issued and outstanding
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. The
Parties agree that the Group may acquire, or offer or agree to
acquire, directly or indirectly, by purchase or otherwise,
beneficial ownership of, or the right to vote, shares of
common stock of the Corporation to the extent that such
acquisitions will not give them beneficial ownership of, or
the right to vote, an aggregate of 10.0% or more of the issued
and outstanding shares of the common stock of the Corporation.
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2. Effect of this First Amendment. This First Amendment shall be
effective as of the date first above written. Except as amended and modified by
this First Amendment, the provisions of the Original Agreement are ratified and
confirmed and remain in full force and effect.
3. 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.
* * * * * * * * * * *
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The Parties have executed this First Amendment To Standstill Agreement
as of the date first-above written.
MICHIGAN HERITAGE BANCORP, INC.
By: ________________________________
Anthony S. Albanese, President
GROUP MEMBERS:
WALTER S. McPHAIL TRUST
By: ______________________________
Walter S. McPhail, Trustee
McPHAIL CORPORATION EMPLOYEES
PROFIT-SHARING TRUST
By: ______________________________
Walter S. McPhail, Co-trustee
By: __________________________
Frank A. Scerbo, Co-trustee
JAMES H. McPHAIL IV TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
By: _______________________________
Frank A. Scerbo, Co-trustee
[Signatures Continued On Next Page]
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MELINDA M. McPHAIL TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
By: __________________________
Frank A. Scerbo, Co-trustee
HEIDI ELISABETH WYSONG TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
By: __________________________
Susan M. Scerbo, Co-trustee
JENNIFER ANNE SCERBO TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
By: __________________________
Susan M. Scerbo, Co-trustee
JAMES A. SCERBO TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
By: __________________________
Susan M. Scerbo, Co-trustee
[Signatures Continued On Next Page]
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HOLLY JEAN SCERBO TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
By: __________________________
Susan M. Scerbo, Co-trustee
JOSEPH J. SCERBO TRUST
By: ______________________________
Marvin I. Bannon, Co-trustee
By: __________________________
Susan M. Scerbo, Co-trustee
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