Case: 5:16-cv-00461-BYP Doc #: 14 Filed: 04/04/16 1 of 48. PageID #: 83

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION

MARY H. WOJNO, In Her Capacity as the Trustee of the MARY H. WOJNO REVOCABLE TRUST, No. 5:16-cv-00461 on Behalf of Itself and All Others Similarly Situated, 1609 Gondola Park Drive Venice, FL 34292, JUDGE BENITA Y. PEARSON Plaintiff,

v.

FIRSTMERIT CORPORATION th III Cascade Plaza, 7 Floor Akron, OH 44308 AMENDED CLASS ACTION Registered Agent: AND DERIVATIVE Statutory Agent Corporation COMPLAINT FOR BREACH OF 52 East Gay Street FIDUCIARY DUTY AND Columbus, OH 43215, VIOLATIONS OF SECTIONS 14(a) AND 20(a) OF THE Nominal Defendant, SECURITIES EXCHANGE ACT

HUNTINGTON BANCSHARES, Inc., JURY TRIAL DEMANDED Registered Agent: CT Corporation System 1300 East Ninth Street Cleveland, OH 44114,

WEST SUBSIDIARY CORPORATION, Registered Agent: CT Corporation System 1300 East Ninth Street Cleveland, OH 44114,

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PAUL G. GRIEG, 2916 Nottingham Lane Chagrin Falls, OH 44022,

JOHN C. BLICKLE, 470 Saint Andrews Drive Akron, OH 44303,

PHILLIP A. LLOYD II, 2114 Firestone Trace Akron, OH 44333,

TERRY L. HAINES, 1375 Ledgewood Drive Akron, OH 44333,

R. CARY BLAIR, 3382 Hardwood Hollow Road Medina, OH 44256,

KAREN S. BELDEN, 2710 Dunkeith Drive NW Canton, OH 44708

ROBERT W. BRIGGS, 8288 Maplevale Drive Canfield, OH 44406,

RICHARD COLELLA, 344 Copper Creek Amherst, OH 44401,

GINA D. FRANCE, 5373 Rustic Hills Drive Medina, OH 44256,

J. MICHAEL HOCHSCHWENDER, 1224 Country Club Drive Akron, OH 44313,

STEVEN H. BAER, 512 Forest Cove Road Lake Bluff, IL 60044,

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RUSS M. STROBEL, 44 Woodley Road Winnetka, IL 60093,

LIZABETH A. ARDISANA, 5954 Pontiac Trail West Bloomfield, MI 48323,

ROBERT S. CUBBIN, 6650 Oakhills Drive Bloomfield Hills, MI 48301,

Defendants.

Plaintiff Mary H. Wojno, in her capacity as the trustee of the Mary H. Wojno Revocable

Trust, through undersigned counsel, on behalf of herself and all others similarly situated, and

derivatively on behalf of FirstMerit Corporation (“FirstMerit” or the “Company”), alleges the

following upon information and belief, including the investigation of counsel and review of

publicly-available information, except as to those allegations pertaining to Plaintiff, which are

alleged on knowledge:

SUMMARY OF THE ACTION

1. Plaintiff brings this shareholder class and derivative action on behalf of the public

shareholders of FirstMerit against FirstMerit’s Board of Directors (the “Board” or the

“Individual Defendants”) for its breaches of fiduciary duties and violations of Sections 14(a) and

20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 14a-9 promulgated

thereunder, arising out of its attempt to sell the Company to Huntington Bancshares, Inc.

(“Huntington”), through its wholly owned subsidiary, West Subsidiary Corporation (“Merger

Sub”), by means of an unfair process and for an unfair price. This action does not challenge the

specific price of the Proposed Transaction.

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2. Headquartered in Akron, Ohio, FirstMerit is a bank holding company—with

assets of approximately $25.5 billion—that provides diversified banking, fiduciary, financial,

insurance and investment services to corporate, institutional, and individual consumers.

3. On January 26, 2016, the Company announced that it had entered into a

Definitive Merger Agreement, dated January 25, 2016 (the “Merger Agreement”), pursuant to

which Merger Sub will merge with and into the Company with the Company surviving as a wholly owned subsidiary of Huntington (the “Proposed Transaction”).

4. Pursuant to the Merger Agreement, Huntington will acquire all of the outstanding

shares of FirstMerit for 1.72 shares of Huntington common stock and $5.00 in cash in exchange

for each share of FirstMerit common stock owned at closing (the “Merger Consideration”). At

the time of the announcement, the consideration to be received by FirstMerit stockholders was

valued at just $20.14 per share – a 6% discount to the Company’s 52-week high trading price of

$21.49 per share. However, following the merger announcement, Huntington’s trading price

plummeted – reaching a new 52-week low of $7.83 per share on the day of the announcement.

As a result, the Merger Consideration significantly undervalues FirstMerit.

5. Specifically, because the Board failed to negotiate for a collar, the actual value to

be received by FirstMerit stockholders decreased drastically after the announcement of the

Proposed Transaction and continues to fluctuate. Based on Huntington’s trading low of $7.83 per

share on January 26, 2016, FirstMerit stockholders could have expected to receive only $18.47

per share, representing a more than 8% reduction from the initial merger announcement and

a 14% discount to the Company’s 52-week high trading price. Even in the event

Huntington’s stock price recovers and/or stays above its January 25, 2016 price, the Board’s

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failure to negotiate for a collar has exposed FirstMerit stockholders to unreasonable downside

risk.

6. Given the strength of the Company and its poise for future success, Huntington

will acquire FirstMerit at a price that does not accurately reflect the inherent, standalone value of

FirstMerit. The Company continues to post increasing profitability each quarter and expanding

organic growth. Indeed, the Company recently realized its 67th consecutive quarter of

profitability, and was poised for ongoing standalone success that would have generated a higher

value than the Merger Consideration. Moreover, during an Earnings Call on October 27, 2015,

the Company disclosed its most recent third quarter 2015 financial results. During the Earnings

Call, Defendant Paul Greig (“Greig”), Chairman, President and Chief Executive Officer (“CEO”)

of the Company, expressed his hopeful outlook for the Company’s future, stating:

In summary this quarter’s results demonstrate our ability to grow organically in our markets with a focus on solid asset quality and effective expense management. We’re confident that these efforts will continue to increase the company’s profitability and enhance shareholder value.

7. Under the terms of the Merger Agreement, the Defendants (defined below) have further tilted the playing field in favor of Huntington with a slate of deal protection provisions that unreasonably deter third party bidders from launching topping bids, including: (i) a strict no-solicitation provision that prevents the Company from soliciting other potential acquirers or even in continuing discussions and negotiations with potential acquirers; (ii) an information rights provision that requires the Company to disclose confidential information about competing bids to Huntington promptly, or within one business day; (iii) a prohibitively large termination fee of $100.6 million to be paid by FirstMerit in the event it chooses to pursue an alternative, superior offer; (iv) a “no-waiver” provision that requires the Board to enforce any existing

confidentiality or standstill agreements; and (v) a “force-the-vote” provision that requires the

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Board to call a meeting of its stockholders to adopt the Merger Agreement, even if the Board changes its recommendation in support thereof.

8. These deal protection provisions, particularly when considered collectively,

substantially and improperly limit the Board’s ability to act with respect to investigating and pursuing superior proposals and alternatives, including a sale of all or part of FirstMerit.

9. In pursuing the plan to facilitate the acquisition of FirstMerit by Huntington for

grossly inadequate consideration, and through a flawed process, the Defendants have also

violated Sections 14(a) and 20(a) of the Exchange Act by causing a materially incomplete and

misleading Form S-4 Registration Statement (“S-4”) to be filed with the U.S. Securities and

Exchange Commission (“SEC”) on March 4, 2016. The S-4 recommends that FirstMerit stockholders vote in favor of the Proposed Transaction based on misleading information and without disclosing all material information, which renders the S-4 misleading.

10. Most critically, the management projections underlying the fairness opinion of

Sandler O’Neill (“Sandler”), FirstMerit’s financial advisor in the Proposed Transaction, are entirely undisclosed in the S-4. This non-disclosure is significant because management

projections would reveal that the Proposed Transaction price undervalues the Company.

Without management projections, stockholders are unable to accurately judge whether the

Proposed Transaction is a deal they want to take. This is all the more so where, as here, management revised downward its projections for the Company on a standalone basis in the middle of the sales process. In addition, the S-4 also contains materially incomplete and

misleading information concerning the background of the Proposed Transaction and the financial

analyses conducted by Sandler.

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11. In short, for these reasons and as set forth in detail herein, the Proposed

Transaction is designed to unlawfully divest FirstMerit’s public stockholders of the Company’s valuable assets following a flawed, self-serving sales process, in exchange for consideration that does not reflect the Company’s standalone, inherent value, and without fully disclosing all material information concerning the transaction to the Company’s stockholders. To remedy

Defendants’ Exchange Act violations and breaches of fiduciary duties, Plaintiff seeks injunctive relief preventing consummation of the Proposed Transaction unless and until the material information discussed below is disclosed to FirstMerit stockholders or, in the event the Proposed

Transaction is consummated, to recover damages resulting from the Defendants’ violations of the Exchange Act and their fiduciary duties of loyalty, due care, independence, good faith, and fair dealing.

THE PARTIES

12. Plaintiff is, and has been at all relevant times, the owner of shares of common stock of FirstMerit.

13. Nominal Defendant FirstMerit is a corporation organized and existing under the laws of the State of Ohio. The Company maintains its principal corporate offices at III Cascade

Plaza, Akron, Ohio 44308. FirstMerit’s common stock is traded on the NASDAQ GS under the ticker symbol “FMER.”

14. Defendant Greig has been the President, Chairman, and CEO of FirstMerit since

2006. He is also the Chairman, President, and CEO of FirstMerit Bank, N.A. Upon information and belief, Defendant Greig is a citizen of the State of Ohio.

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15. Defendant Lizabeth Ardisana (“Ardisana “) has been a director of the Company since 2013, and is a member of the Compensation Committee. Upon information and belief,

Defendant Ardisana is a citizen of the State of Michigan.

16. Defendant Steven H. Baer (“Baer”) has been a director of the Company since

2007, and is a member of the Risk Management Committee. Upon information and belief,

Defendant Baer is a citizen of the State of Illinois.

17. Defendant Karen S. Belden (“Belden “) has been a director of the Company since

1996, and is a member of the Risk Management Committee. Upon information and belief,

Defendant Belden is a citizen of the State of Ohio.

18. Defendant R. Cary Blair (“Blair”) has been a director of the Company since 1996, is Chairman of the Compensation Committee, and is a member of the Executive Committee.

Upon information and belief, Defendant Blair is a citizen of the State of Ohio.

19. Defendant John C. Blickle (“Blickle”) has been a director of the Company since

1990, was elected Lead Director in July 2015, and is a member of the Executive, Audit,

Compensation, and Corporate Governance and Nominating Committees. Upon information and belief, Defendant Blickle is a citizen of the State of Ohio.

20. Defendant Robert W. Briggs (“Briggs”) has been a director of the Company since

1996, and is a member of the Executive and Risk Management Committees. Upon information and belief, Defendant Briggs is a citizen of the State of Ohio.

21. Defendant Richard Colella (“Colella”) has been a director of the Company since

1998, and is a member of the Risk Management Committee. Upon information and belief,

Defendant Colella is a citizen of the State of Ohio.

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22. Defendant Robert S. Cubbin (“Cubbin”) has been a director of the Company since

2013, and is a member of the Audit Committee. Upon information and belief, Defendant Cubbin is a citizen of the State of Michigan.

23. Defendant Gina D. France (“France”) has been a director of the Company since

2004, is Chairman of the Corporate Governance and Nominating Committee, and is a member of the Audit Committee. Upon information and belief, Defendant France is a citizen of the State of

Ohio.

24. Defendant Terry L. Haines (“Haines”) has been a director of the Company since

1991, and is a member of the Compensation, and Corporate Governance and Nominating

Committees. Upon information and belief, Defendant Haines is a citizen of the State of Ohio.

25. Defendant J. Michael Hochschwender (“Hochschwender”) has been a director of the Company since 2005, and is a member of the Audit and Compensation Committees. Upon information and belief, Defendant Hochschwender is a citizen of the State of Ohio.

26. Defendant Philip A. Lloyd II (“Lloyd”) has been a director of the Company since

1998, is Chairman of the Risk Management Committee, and is a member of the Executive

Committee. Upon information and belief, Defendant Lloyd is a citizen of the State of Ohio.

27. Defendant Russ M. Strobel (“Strobel”) has been a director of the Company since

2012, and is a member of the Risk Management Committee. Upon information and belief,

Defendant Strobel is a citizen of the State of Illinois.

28. Defendant Huntington is a Maryland corporation with its headquarters located at

41 South High Street, Columbus, Ohio that, together with its subsidiaries, provides commercial,

small business, consumer, and mortgage banking services.

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29. Defendant Merger Sub is an Ohio corporation wholly owned by Huntington that

was created for the purposes of effectuating the Proposed Transaction.

JURISDICTION AND VENUE

30. Pursuant to 28 U.S.C. § 1331 and Section 27 of the Exchange Act, this Court has

jurisdiction over the claims asserted herein for violations of Sections 14(a) and 20(a) of the

Exchange Act and SEC Rule 14a-9 promulgated thereunder. 17C.F.R. § 240. l4a-9. This Court has jurisdiction over Plaintiff’s claims for breach of fiduciary duty and the aiding and abetting thereof pursuant to 28 U.S.C. §1332 because Plaintiffs and defendants are citizens of different states and the amount in controversy exceeds $75,000, exclusive of interests and costs.

31. The Court has jurisdiction over Defendants because each is either a corporation that conducts business in and maintains operations in this District, or is an individual who has sufficient minimum contacts with this District so as to render the exercise of jurisdiction by this

Court permissible under traditional notions of fair play and substantial justice. FirstMerit is headquartered in and has its principal place of business located at III Cascade Plaza, Akron,

Ohio, and therefore is a citizen of Ohio.

32. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) because

FirstMerit maintains its primary place of business in this District, and because the conduct at issue took place and had effect in this County.

THE INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

33. By reason of the Individual Defendants’ positions with the Company as officers and/or directors, said individuals are in a fiduciary relationship with Plaintiff and the other shareholders of FirstMerit, and owe them, as well as the Company, a duty of care, loyalty, good faith, candor, and independence.

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34. By virtue of their positions as directors and/or officers of FirstMerit, the

Individual Defendants, at all relevant times, had the power to control and influence, and did control and influence and cause FirstMerit to engage in the practices complained of herein.

35. To diligently comply with their fiduciary duties, the Individual Defendants may not take any action that:

(a) adversely affects the value provided to the corporation’s shareholders;

(b) favors themselves or will discourage or inhibit alternative offers to purchase control of the corporation or its assets;

(c) contractually prohibits the Individual Defendants from complying with or carrying out their fiduciary duties; and/or

(d) will provide the Individual Defendants with preferential treatment at the expense of, or separate from, the public shareholders.

36. In accordance with their duties of loyalty and good faith, the Individual

Defendants are obligated to refrain from:

(a) participating in any transaction where the Individual Defendants’ loyalties are divided;

(b) participating in any transaction where the Individual Defendants receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

(c) unjustly enriching themselves at the expense or to the detriment of the public shareholders.

37. Plaintiff alleges herein that the Individual Defendants, separately and together, in connection with the Proposed Transaction, are knowingly or recklessly violating their fiduciary

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duties, including their duties of care, loyalty, good faith, candor, and independence owed to

plaintiff and other public shareholders of FirstMerit.

38. Because defendants are knowingly or recklessly breaching their fiduciary duties

of loyalty, good faith, and independence in connection with the Proposed Transaction, they bear

the burden of proving the entire fairness of the Proposed Transaction.

CLASS ACTION ALLEGATIONS

39. Plaintiff brings this action on behalf of herself and as a class action pursuant to

Rule 23 of the Federal Rules of Civil Procedure, on behalf of all owners of FirstMerit common

stock, and their successors in interest, who are being and will be harmed by Defendants’ actions

described herein (the “Class”). The Class specifically excludes Defendants herein, and any person, firm, trust, corporation or other entity related to, or affiliated with, any of the Defendants.

40. This action is properly maintainable as a class action for the following reasons:

(a) The Class is so numerous that joinder of all members is impracticable.

According to the Merger Agreement, as of January 22, 2016, FirstMerit had approximately 165

million shares issued and outstanding.

(b) There are questions of law and fact which are common to the Class,

including, inter alia, the following:

(i) whether the Individual Defendants breached their fiduciary duties

with respect to Plaintiff and the other members of the Class in

connection with the Proposed Transaction, including the duties of

good faith, diligence, honesty and fair dealing;

(ii) whether the Individual Defendants are unjustly enriching

themselves and other insiders or affiliates of FirstMerit;

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(iii) whether the Individual Defendants, in bad faith and for improper

motives, have impeded or erected barriers to discourage other

strategic alternatives, including offers from interested parties for

the Company or its assets;

(iv) whether the Individual Defendants misrepresented and omitted

material facts in violation of their fiduciary duties owed by them to

Plaintiffs and the other members of the Class;

(v) whether the Individual Defendants have violated Section 14(a) of

the Exchange Act and Rule 14a-9 promulgated thereunder;

(vi) whether the Individual Defendants have violated Section 20(a) of

the Exchange Act;

(vii) whether Huntington and Merger Sub aided and abetted the

Individual Defendants’ breaches of fiduciary duty;

(viii) whether Plaintiff and the other members of the Class would be

irreparably harmed were the Proposed Transaction complained of

herein consummated; and

(ix) whether the Class is entitled to injunctive relief or damages as a

result of Defendants’ wrongful conduct;

(c) Plaintiff is committed to prosecuting this action, is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature, and will fairly and adequately protect the interests of the Class;

(d) Plaintiff’s claims are typical of those of the other members of the Class;

(e) Plaintiff has no interests that are adverse to the Class;

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(f) The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the party opposing the

Class;

(g) Conflicting adjudications for individual members of the Class might, as a practical matter, be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests;

(h) Plaintiff anticipates that there will be no difficulty in the management of this litigation, and thus a class action is superior to other available methods for the fair and efficient adjudication of this controversy; and

(i) Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole.

DERIVATIVE ALLEGATIONS

41. Plaintiff also brings this action derivatively in the right and for the benefit of First

Merit to redress injuries suffered, and to be suffered, by FirstMerit as a direct result of the breaches of fiduciary duty alleged herein.

42. Plaintiff will adequately and fairly represent the interests of FirstMerit and its shareholders in enforcing and prosecuting its rights.

43. Demand on the Board is excused because FirstMerit would suffer irreparable injury if demand were required to be made on the Board. The delay ensuing from a requirement that demand be made would allow the Individual Defendants to effectuate the Proposed

Transaction to the irreparable harm of FirstMerit. According to the Company’s press release,

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defendants expect to complete the Proposed Transaction in the third quarter of 2016. Once the

Proposed Transaction is effectuated, there is no feasible way to “unscramble the eggs” and no way for FirstMerit to recover any losses. Demand is excused because irreparable harm would be caused to the Company due to a demand or delay in the Company’s response to a demand.

Plaintiff has also not made a demand on the Board to file suit for the breaches of fiduciary duty alleged herein because such a demand would be a futile and useless act that would likely lead to

FirstMerit suffering irreparable injury, particularly for the following reasons:

a. Each of the key officers and directors knew of the wrongdoing complained of

herein;

b. Each of the key officers and directors is interested and/or involved in the

Proposed Transaction;

c. Each member of the Board has been named as a defendant to this lawsuit;

d. In order to bring this suit, all of the directors of FirstMerit would be forced to sue

themselves and persons with whom they have extensive business and personal

entanglements, which they will not do, thereby excusing demand;

e. The acts complained of constitute violations of the fiduciary duties owed by

FirstMerit’s officers and directors and these acts are incapable of ratification;

f. Any suit by the directors of FirstMerit to remedy these wrongs would likely

expose the Individual Defendants and FirstMerit to further civil actions being

filed against one or more of the Individual Defendants; therefore, they are

hopelessly conflicted in making any supposedly independent determination

whether to sue themselves;

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g. Each member of the FirstMerit Board is, directly or indirectly, the recipient of

remuneration paid by the Company and other emoluments by virtue of their Board

membership in the Company, the continuation of which is dependent upon their

cooperation with the other members of the Board, and their participation and

acquiescence in the wrongdoing set forth herein, and they are therefore incapable

of exercising independent objective judgment in deciding whether to bring this

action;

h. Because of their association as directors of the Company and their positions as

present employees, the directors are dominated and controlled so as not to be

capable of exercising independent objective judgment; and

i. Plaintiff’s claims include allegations that a majority of the Board was involved in

self-dealing and mismanagement, which extinguishes any possibility that an

impartial majority of the Board could vote in favor of and oversee this suit.

44. Demand on the Board is further excused because, upon information and belief, the

Board is protected by directors’ and officers’ liability insurance policies against personal liability for certain breaches of fiduciary duty alleged in this complaint, which they caused the Company to purchase with corporate funds. However, upon information and belief, in light of certain changes in the language of such policies in recent years, the policies at issue may not protect the

Individual Defendants for certain actions brought directly by FirstMerit against them.

Accordingly, if the Individual Defendants were to sue themselves or certain of the officers of

FirstMerit, there may be no insurance protection and they may be personally liable. For this reason, they will not sue themselves. Conversely, because this suit is brought derivatively, the

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policies may provide coverage and thus a further avenue for FirstMerit to recover against the

Individual Defendants.

45. Plaintiff has not made any demand on FirstMerit shareholders to institute this action since such demand would be a futile and useless act for the following reasons:

(a) FirstMerit is a publicly traded company with over 165 million shares

outstanding, and hundreds, if not thousands of individual shareholders;

(b) Making demand on such a number of shareholders would be impossible for a

plaintiff who has no way of finding out the names, addresses or phone

numbers of shareholders; and

(c) Making demand on all shareholders would force plaintiff to incur huge

expenses, assuming all shareholders could be individually identified.

AIDING AND ABETTING

46. In addition to the wrongful conduct herein alleged as giving rise to primary liability, certain of the defendants further aided and abetted and/or assisted each other in the breach of their respective duties as herein alleged.

47. During all relevant times hereto, the defendants, and each of them, initiated a course of conduct that was designed to: (i) favor Huntington and the Individual Defendants; (ii) permit Huntington to acquire FirstMerit pursuant to a defective sales process; and (iii) permit

Huntington to acquire FirstMerit without FirstMerit's stockholders being fully informed of all material information relating to the Proposed Transaction. In furtherance of this plan and course of conduct, Defendants, and each of them, took the actions as set forth herein.

48. Each of the defendants aided and abetted and rendered substantial assistance in the wrongs complained of herein. In taking such actions, as particularized herein, to substantially

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assist the commission of the wrongdoing complained of, each defendant acted with knowledge of

the primary wrongdoing, substantially assisted the accomplishment of that wrongdoing, and was

aware of his or her overall contribution to, and furtherance of, the wrongdoing. Defendants’ acts

of aiding and abetting included, inter alia, the acts each of them are alleged to have committed in

furtherance of the common enterprise and common course of conduct complained of herein.

BACKGROUND OF THE COMPANY

49. FirstMerit is a bank holding company organized in 1981 under the laws of the

State of Ohio and registered under the Ohio Bank Holding Company Act (“BHCA”). The

Company’s principal business consists of owning and supervising its affiliates, which provide a

wide range of banking, fiduciary, financial, insurance and investment services to corporate,

institutional and individual customers throughout Ohio; the Chicago, Illinois Metropolitan area;

Michigan; Wisconsin; and Western Pennsylvania.

50. On January 27, 2015, the Company announced its financial results for the fourth quarter of 2014. The Company reported net income of $61.1 million, or $0.36 per diluted share, compared to $57.2 million, or $0.33 per diluted share, for the fourth quarter 2013.

51. In the press release announcing the financial results, Defendant Greig, the

Company’s Chairman of the Board, President and CEO, commented on FirstMerit’s outstanding

year and bright outlook, stating,

FirstMerit’s solid performance in the fourth quarter of 2014 as well as for the entire year reflects a continued focus on strong organic growth, solid credit quality and strong capital levels. Our first full year of serving our five-state Midwest footprint resulted in record net income for the Corporation, keeping our span of consecutive profitable quarters going for more than 15 years. Our dedicated employees across the Corporation continue to work hard to provide our customers with exceptional service.

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52. On April 28, 2015, FirstMerit announced its financial results for the first quarter

of 2015. The Company reported net income of $57.1 million, or $0.33 per diluted share,

compared to $53.5 million, or $0.31 per diluted share, for the first quarter 2014. Defendant

Greig commented in the press release announcing the results, stating:

In the quarter our profitable balance sheet expansion was led by increases in our originated commercial loans portfolio and core deposit growth. The new relationships we are bringing into the Company are aligned with our disciplined credit philosophy which is sustaining our solid asset quality performance. As business conditions and the unemployment rates throughout our Midwest footprint improve, we continue to penetrate our existing and newer markets to win market share. We are also sticking to our strategy of building and maintaining capital levels that will keep us sound throughout the economic cycle.

53. The Company has continued to increase its profitability over a sustained 65

consecutive quarters. In the second quarter of 2015, for example, FirstMerit achieved net

income of $56.6 million, or $0.33 per diluted share, and total loan growth of $214.2 million, a

1.38% increase from the prior quarter. During an October 27, 2015 Earnings Call, the Company

disclosed its third quarter 2015 financial results and Defendant Greig expressed his hopeful

outlook for the Company’s future, stating:

In summary this quarter’s results demonstrate our ability to grow organically in our markets with a focus on solid asset quality and effective expense management. We’re confident that these efforts will continue to increase the company’s profitability and enhance shareholder value.

54. As reflected in these quotes and in the Company’s recent financial results and

concurrent press releases and statements, FirstMerit has achieved significant growth and expansion, which is increasing customer demand and which has begun to, and is expected to continue to, yield returns for the Company and its shareholders well into the future.

55. However, despite the financial strength of the Company and its position as a premier player in the bank holding industry, the Individual Defendants have entered into the

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Merger Agreement with Huntington, depriving the Plaintiff and the public shareholders of the

Company the opportunity to participate in the growth of the Company in which they have loyally invested.

THE FLAWED PROCESS

56. As revealed by the S-4, the Merger Agreement is the result of an expedited,

skewed process designed to ensure the sale of FirstMerit to one buyer, and one buyer only –

Huntington – on terms preferential to Huntington, and to subvert the interests of Plaintiff and the

other public stockholders of FirstMerit. In particular, the process leading to the Proposed

Transaction was tainted by conflicts and tilted toward Huntington, such that the Board rebuffed

interested strategic alternatives and acquirers consistently throughout the sales process and

permitted the Company’s conflicted financial advisor and CEO to broker the Proposed

Transaction. Indeed, FirstMerit management was permitted to meet privately with Huntington

management on numerous occasions, despite that the Board had established an Executive

Committee, after which meetings each Huntington revised bid included an increase in the

number of FirstMerit Board members that would continue their employment on Huntington’s

board of directors post-transaction.

57. Specifically, the “sales” process substantively only began in September 2015 –

less than four months before the Proposed Transaction was announced. However, FirstMerit earlier rebuffed several interested parties, which resulted in this single-bidder process.

Specifically, in the fourth quarter 2014 and first quarter 2015, FirstMerit and Sandler engaged in preliminary exploratory discussions with three financial institutions (not Huntington).

58. When these preliminary discussions stalled, FirstMerit turned to negotiate with

Huntington on a virtually exclusive basis with no attempt to conduct a pre-signing market check

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or negotiate for a post-signing go-shop provision in the Merger Agreement. On May 1, 2015,

Huntington’s CEO, Stephen Steinour (“Steinour”), contacted Defendant Greig and provided a verbal indication of interest in a potential stock-for-stock deal then-valued at $24.00 per share.

The S-4 does not disclose the implied preexisting relationship between Steinour and Greig such that Huntington would submit an apparently unsolicited acquisition offer.

59. In response to Huntington’s verbal indication of interest, Defendant Greig notified the members of the Executive Committee of the Board, consisting of Defendants Greig and

Blickle and three other undisclosed members of the Board. The S-4 does not disclose the responsibilities or authority of the Executive Committee with respect to the strategic sales process.

60. On May 5, 2015, the Board retained Sandler to act as the Company’s financial advisor in connection with Huntington’s indication of interest. It is unclear, because the S-4 does not disclose, in what capacity Sandler was acting before it was formally retained – particularly in the fourth quarter 2014 and first quarter 2015, when Sandler contacted several interested parties on behalf of the Company.

61. Shortly thereafter, on May 8, 2015, the Executive Committee met to consider

Huntington’s verbal indication of interest and concluded that the offer should be communicated to the full Board. As such, on May 13, 2015, the Board met and considered Huntington’s verbal indication of interest and authorized Defendant Greig to obtain more specific information about the offer. This direction was communicated to Huntington.

62. On May 15, 2015, Huntington submitted a written non-binding indication of interest to acquire FirstMerit for 100% stock consideration at a fixed exchange ratio of 2.137 shares of Huntington common stock for each share of FirstMerit common stock outstanding.

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According to the S-4, this offer represented an indicative value of $24.00 per share. In addition, this offer contemplated post-transaction employment on the Huntington board of directors for at least three members of the Board and priority access to Huntington job listings for FirstMerit employees.

63. The following day, Defendant Greig and Steinour privately discussed the offer terms, in particular “the representation of FirstMerit directors on the Huntington board of directors.” No more detail with respect to this private meeting is disclosed in the S-4. Notably however, on May 21, 2015, the Board held a special meeting to discuss the May 15 proposal and

“[Defendant] Greig’s and Mr. Steinour’s subsequent conversations related thereto.” Based on these considerations, the Board instructed Defendant Greig to inform Huntington that FirstMerit would not proceed. The S-4 does not disclose, with any specificity, the reasons cited by the

Board for declining to proceed at this time.

64. Four months lapsed between this meeting and any substantive strategic discussions between the Company and any other party until, on September 15, 2015, Defendant

Greig met with a senior executive of an undisclosed financial institution regarding a potential combination. The S-4 does not indicate when discussions with this unidentified party were initiated, the deal structure contemplated in the discussions, or the reasons cited by this party for its apparent lack of interest in a potential transaction.

65. Two days later, however, on September 17, 2015, Huntington inquired with

Company management about the possibility of Huntington submitting a revised proposal. Then, on September 24, 2015, Defendant Greig and Steinour again met privately to discuss the possibility of a revised proposal. Yet again, the S-4 provides no additional detail with respect to this private meeting. Moreover, the S-4 does not (but should) disclose any change in business

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operations or industry conditions for both FirstMerit and Huntington that occurred in the

intervening four months.

66. On October 4, 2015, Huntington submitted a revised written non-binding indication of interest to acquire FirstMerit that provided for 100% stock consideration at a fixed exchange ratio of 2.137 shares of Huntington common stock, then-valued at $22.61 per share.

Notably, the exchange ratio contemplated by this offer is identical to the exchange ratio

contemplated by Huntington’s May 15 offer, which the Board rejected as inadequate. This

particular offer, however, also expanded the Board’s prospect of post-transaction employment by

offering that additional FirstMerit directors would be invited to Huntington’s Advisory Board. At

a meeting of the Executive Committee that followed, and without explanation in light of the prior

rejection of the same exchange ratio, the Executive Committee recommended the offer for

consideration to the full Board.

67. On October 14, 2015, the full Board met to consider the October 4 proposal. At

the conclusion of the meeting, the Board determined to allow Huntington to perform limited due

diligence. To this end, the parties executed a confidentiality agreement containing “customary

standstill provisions” on October 15, 2015. The S-4 does not disclose whether these standstill provisions contained fall-away provisions or whether any other party contacted during the sales process executed a similar confidentiality agreement.

68. Following preliminary due diligence, the Board again met to consider

Huntington’s proposal, on November 18, 2015. At the conclusion of the meeting, the Board directed Defendant Greig to inform Huntington that FirstMerit would not consider a transaction on the present proposal terms. Again, the S-4 does not disclose, with any specificity, the reasons

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cited by the Board for declining to proceed at this time. Defendant Greig then relayed this

message to Huntington management.

69. A few days later, certain members of FirstMerit and Huntington executive management met privately to discuss the possibility of Huntington submitting a revised bid. The

S-4 provides no detail with respect to this private meeting. On December 2, 2015, Huntington submitted a revised bid, which provided for mixed stock-cash consideration, specifically: (i) an exchange ratio of 2.15 shares; and (ii) up to 20% cash. The revised proposal also increased the number of FirstMerit directors continuing on the Huntington board of directors post-transaction from three to four and provided that such directors would be nominated for a minimum of two full terms. The S-4 does not disclose whether increased board representation was discussed between the parties, particularly at the sparsely detailed private meeting only a few days earlier.

70. On December 9, 2015, the Board met to consider Huntington’s most recent proposal and authorized the Company to proceed to due diligence on the basis of such proposal.

Importantly, the Board based this decision on “Sandler’s and management’s updated views as to the presumptive financial performance of FirstMerit on a standalone basis in 2016” – yet, the S-4 provides no further explanation of Sandler or management’s apparently altered views regarding

FirstMerit’s standalone viability or the context for those changing views.

71. Following this meeting of the Board, the parties negotiated exclusively toward a final form of the Merger Agreement. On January 19, 2016, the parties agreed to a final proposal, which included a mixed stock-cash consideration consisting of: (i) an exchange ratio of 1.72 shares – down substantially from the December 2 proposal; and (ii) a fixed $5.00 in cash per share. In total, the proposal was valued at $21.48 per share, substantially below the past proposals submitted by Huntington.

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72. Then, on January 20, 2016, the FirstMerit Board belatedly performed a conflicts check regarding Sandler’s substantial prior relationship with Huntington. Also at this meeting,

Sandler relayed its belief that any other party contacted during the sales process would likely not be interested in a potential transaction. On the basis of this tainted advice, the Board determined to accept the January 19 final proposal, approve Sandler’s conflicts, and negotiate a final merger agreement.

73. The Board – in a vote of thirteen members for, and one member abstaining – approved the merger and the Merger Agreement on January 22, 2016. The S-4 does not disclose why one Board member abstained from the vote.

THE PROPOSED TRANSACTION

74. Despite the Company’s consistent positive performance, on January 26, 2016, the

Company issued a press release announcing the Proposed Transaction. The press release stated, in relevant part:

Huntington Bancshares to Strengthen Midwest Franchise with Financially and Strategically Accretive Merger with FirstMerit Corporation

Columbus, Ohio and Akron, Ohio – Huntington Bancshares Incorporated (NASDAQ: HBAN; www.huntington.com) and FirstMerit Corporation (NASDAQ: FMER;www.firstmerit.com) jointly announced today the signing of a definitive merger agreement under which Ohio-based FirstMerit Corporation, the parent company of FirstMerit Bank, will merge into Huntington in a stock and cash transaction. Based on the closing price of Huntington’s common shares on January 25, 2016 of $8.80, the total transaction value is approximately $3.4 billion, including outstanding options and other equity-linked securities.

The partnership brings together two companies who have served their respective communities for 150 years or more, meeting the banking needs of consumers and small and middle market businesses across the Midwest. Huntington recently posted record earnings for 2015, including a 10% increase in net income and a 13% increase in earnings per common share, driven by ongoing growth in revenues, deposits, and lending. FirstMerit today announced their 67th consecutive quarter of profitability, reflecting strong organic loan growth and continued balance sheet strength. The pro forma company is expected to have nearly $100 billion in assets and will operate across an eight-state Midwestern

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footprint. The combination will create the largest bank in Ohio, based on deposit market share. Huntington will also expand its operations into the attractive new markets of Chicago and Wisconsin.

“We are very pleased to come together with FirstMerit to create a regional bank with added customer convenience, an enhanced portfolio of products for consumers and businesses, as well as strong market share. I believe the strength of this deal is that both organizations already understand the needs and goals of our Midwestern customers and communities. Our combined track records of service excellence and efficient financial management will add value for our collective shareholders, customers, communities, and colleagues,” said Steve Steinour, Huntington chairman, president, and CEO.

“Joining forces with Huntington will give us an opportunity to combine both companies’ commercial, small business, wealth, and consumer expertise while giving all of our customers greater access to services. We will also leverage our strong credit culture and continue our mutual tradition of community involvement to help our Midwest markets grow. We have every confidence that the integration with Huntington will be smooth and seamless for our customers and our communities, and are pleased with the commitments that Huntington has made to our employees and communities,” said Paul Greig, FirstMerit chairman, president, and CEO.

Under the terms of the definitive agreement, FirstMerit will merge with a subsidiary of Huntington Bancshares, and FirstMerit Bank will merge with and into The Huntington National Bank. In conjunction with the closing of the transaction, four independent members of the FirstMerit Board of Directors will join the Huntington Board, which will be expanded accordingly.

Shareholders of FirstMerit Corporation will receive 1.72 shares of Huntington common stock, and $5.00 in cash, for each share of FirstMerit Corporation common stock. The per share consideration is valued at $20.14 per share based on the closing price of Huntington common stock on January 25, 2016.

The transaction is expected to be completed in the third quarter of 2016, subject to the satisfaction of customary closing conditions, including regulatory approvals and the approval of the shareholders of Huntington and FirstMerit Corporation.

Goldman, Sachs & Co. served as financial advisor, and Wachtell, Lipton, Rosen, & Katz served as legal advisor to Huntington. Sandler O’Neill + Partners, L.P. served as financial advisor, and Sullivan & Cromwell LLP served as legal advisor to FirstMerit and Jones Day served as legal advisor to FirstMerit’s Board of Directors.

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About Huntington Founded in 1866, The Huntington National Bank and its affiliates provide consumer, small business, commercial, treasury management, wealth management, brokerage, trust, and insurance services. Huntington also provides auto dealer, equipment finance, national settlement and capital market services that extend beyond its core states. Visit huntington.com for more information.

About FirstMerit Corporation FirstMerit provides a complete range of banking and other financial services to consumers and businesses through its core operations. Principal affiliates include: FirstMerit Bank, N.A. and FirstMerit Mortgage Corporation. *** 75. On January 28, 2016, the Company filed a Form 8-K with the SEC wherein it disclosed the Merger Agreement. Collectively, the press release announcing the transaction and the filing of the Merger Agreement reveal that the Proposed Transaction is the product of a flawed sales process and, unless the Merger Consideration is increased, would be consummated at an unfair price.

76. The Company's standalone prospects far outweigh the value offered in the

Proposed Transaction. For example, the Merger Consideration represents a significant discount to FirstMerit’s 52-week standalone high of $21.45 per share, which it reached on June 26, 2015.

Indeed, the stock closed above the implied value of the Merger Consideration as recently as

December 1, 2015, when it closed at $20.39 per share.

77. What is more, the Merger Consideration is contrary to recent guidance from

regular Company analysts. For example, on December 21, 2015, Stephens, a regular Company

analyst, set a standalone price target of $21.00 per share for the Company’s stock, “[a]fter

spending time with senior management of FirstMerit” and gaining “greater confidence in the

Company's ability to maintain what has been a consistent story for the past few years: grow

organically, control expenses and be smart stewards of capital.” Similarly, on October 28, 2015,

Miller Tabak + Co., LLC, another regular Company analyst, set a standalone price target for the

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Company's stock of $20.33 per share, noting that FirstMerit’s “balance sheet has a

preponderance of adjustable rate loans supported by zero interest paying deposits. This is a very

strong strategic position to have if and when the Fed raises its Fed Funds rate” (emphasis in

original). RBC Capital Markets similarly set a price target of $21.00 per share on October 27,

2015.

78. On December 15, 2015, when the Company’s stock was trading at just $18.30 per

share, Sandler, the Company’s financial advisor in connection with the Proposed

Transaction, set a standalone price target of $20.00 per share for the Company’s stock – an

amount that does not reflect any acquisition or control premium, the addition of which would

raise the target well above the Merger Consideration.

79. Even after the Merger Agreement was announced, on January 28, 2016, Sandler

set a price target of $24.78 for FirstMerit stock. On January 27, 2016, in light of announcement

of the Merger Agreement, Stephens rescinded its previous standalone price target of $21.00 per

share. Likewise, in light of the Merger Agreement, on January 26, 2016, RBC Capital Markets

downgraded FirstMerit stock (from Outperform to Sector Perform) and dropped its standalone

price target from $21.00 per share to $19.00 per share.1

80. These standalone price targets are consistent with FirstMerit’s stable, long-term

growth and consistent history of profitability. Indeed, on January 26, 2016, the same day that it

announced the Merger Agreement, FirstMerit also announced its 67th consecutive quarter of

profitability. According to the Company, this performance reflected “strong organic loan growth and continued balance sheet strength.”

1 As recently as July 2015, each of Barclays, J.P. Morgan, and Sandler also set standalone price targets of $22.00, $21.50, and $21.00, respectively. And, in June 2014, Barclays set a standalone price target for the Company as high as $24.00 per share.

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81. Despite these successes, the Individual Defendants agreed to sell the Company for

an implied value of just $20.14 per share. What is more, the Board did not include a collar in the

stock portion of the Merger Consideration, which would have insulated FirstMerit stockholders

from fluctuations in the market price of Huntington common stock. On the day of the

announcement of the Merger Agreement, Huntington stock fell from $8.80 per share (on January

25, 2016) to just $8.05 per share (on January 26, 2015), and has closed as low as $8.01 per share

since that time. Since the announcement of the Proposed Transaction, the per share price of

Huntington common stock has traded as low as $7.83 per share, which not only constituted a

new 52-week low for Huntington, but which would also imply a value of just $18.47 per

FirstMerit share under the terms of the Merger Agreement. This Merger Consideration, and the

variability of its implied value resulting from the Board’s failure to negotiate a collar, simply

does not adequately value stockholders’ equity interest in the Company.

82. In short, the value of FirstMerit on a standalone basis is higher than the value

offered by the Merger Consideration.

THE CONFLICTS OF INTEREST

83. The Proposed Transaction is also the result of an irremediably conflicted process.

Specifically, certain members of the Board and executive management will receive lucrative

payments and other benefits in connection with the consummation of the Proposed Transaction

that common stockholders will not.

84. For example, many of the Individual Defendants hold otherwise illiquid blocks of

FirstMerit stock that will become liquid through the Proposed Transaction. What is more, in

connection with the consummation of the Proposed Transaction, certain outstanding options to

purchase FirstMerit stock will be cancelled and cashed out for the Merger Consideration, while

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other options will be rolled over and converted into options to acquire Huntington stock. More important, though, certain outstanding FirstMerit equity awards that are subject to vesting, repurchase, or other lapse restriction granted under a FirstMerit stock plan will, if granted prior to the date of the Merger Agreement, fully vest and be cashed out for the Merger Consideration.

If granted on or after the date of the Merger Agreement, such equity awards will be assumed and converted into a restricted stock award of shares of Huntington common stock. Similarly, certain outstanding FirstMerit restricted stock unit awards granted under a FirstMerit stock plan will, again if granted prior to the date of the Merger Agreement, fully vest (with any performance conditions deemed satisfied at maximum achievement) and be cashed out for the Merger

Consideration, while any such awards granted after the date of the Merger Agreement will again be assumed and converted into a restricted stock unit award in respect of Huntington common stock. Notably, this accelerated vesting will occur apparently despite the fact that FirstMerit stockholders approved a stockholder proposal (that the Board opposed) in April 2015 to stop the acceleration of vesting of equity awards upon a change-in-control like this.

85. Additionally, in connection with the consummation of the Proposed Transaction, four current members of the Board, as “selected by Huntington in consultation with FirstMerit,” will be appointed to the Huntington Board. These directors will likely earn higher fees for serving on the Huntington board of directors than they did serving on the FirstMerit Board, in addition to being able to liquidate their existing equity in FirstMerit. And those directors who do not join the Hunting board will be invited to serve as members of Huntington’s existing Great

Akron-Canton Region Advisory Board for three years.

86. While Defendant Greig will retire as CEO upon completion of the Proposed

Transaction, he will remain a paid consultant for the combined company. This is despite the fact

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that he stands to make as much as $31.7 million (according to the Company’s March 2015 Proxy

Statement, which was before the aforementioned April 2015 stockholder vote) in windfall payments should the Proposed Transaction be consummated:

87. In connection with the announcement of the Merger Agreement, Defendant Greig seemed to place his own interests ahead of those of FirstMerit’s stockholders, having been quoted as stating that: “It is absolutely in human nature to have concerns and misgivings and thoughts that are probably thinking more of the first letters in merger, me. From a personal perspective, I am comfortable with out future. I hope you’re going to be as comfortable today as

I am today as you absorb this change and see the management team.”

88. Finally, Sandler, the Board’s financial advisor in connection with the Proposed

Transaction, is conflicted through its prior business relationship with Huntington. In 2012 and

2013, Sandler served as Huntington’s financial advisor in connection with its purchases of

Fidelity Bank and Camco Financial Corporation. Accordingly, Sandler has a clear interest in

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favoring its repeat client, Huntington, and was motivated to favor both its own interests and, by

extension, those of Huntington, over those of FirstMerit and its shareholders.

89. Such improper motivations can perhaps explain why, despite having set a standalone price target for FirstMerit of $21.00 per share (without a control premium) just months before the Proposed Transaction, Sandler nonetheless recommended that FirstMerit enter into a Merger Agreement pursuant to which FirstMerit shareholders would receive only $20.14 per share based on the closing price of Huntington common stock on the day before the Merger

Agreement was announced – and even less after it was announced.

THE MERGER AGREEMENT UNFAIRLY DETERS COMPETITIVE OFFERS AND IS UNDULY BENEFICIAL TO HUNTINGTON

90. The Proposed Transaction is also unfair because, as part of the Merger

Agreement, Defendants agreed to certain onerous and preclusive deal protection devices that

operate conjunctively to make the Proposed Transaction a fait accompli and ensure that no

competing offers will emerge for the Company.

91. The Merger Agreement contains a No-Solicitation clause in which the Company

must immediately cease and terminate any existing solicitation. In fact, Section 6.13(a) of the

Merger Agreement forces the Company to cease any communications already occurring, stating:

FirstMerit will, and will cause its Representatives to, immediately cease and cause to be terminated any activities, discussions or negotiations conducted before the date of this Agreement with any person other than Huntington with respect to any Acquisition Proposal.

92. Section 6.13(a) further expressly prohibits the Company from soliciting any

Acquisition Proposals, stating:

FirstMerit shall not, and shall cause its Subsidiaries and its and their officers, directors, agents, advisors and representatives (collectively, “Representatives”) not to, directly or indirectly, (i) initiate, solicit, knowingly encourage or knowingly facilitate inquiries or proposals with respect to, (ii) engage or

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participate in any negotiations with any person concerning or (iii) provide any confidential or nonpublic information or data to, or have or participate in any discussions with, any person relating to, any Acquisition Proposal.

93. Furthermore, Section 6.13(a) grants Huntington recurring and unlimited information rights, which gives FirstMerit one business day to provide unfettered access to confidential, non-public information about competing proposals from third parties and allows

Huntington three (3) business days to provide an offer that merely matches any competing superior offer.

94. Compounding matters, Section 8.2(a)(ii) of the Merger Agreement requires the

Company to pay a termination fee to Huntington in the event the Company decides to pursue any alternative offer. By the terms of the Merger Agreement, this termination fee will be payable to

Huntington in the amount of $100.6 million. As such, this termination fee would require any competing bidder to agree to pay a naked premium simply for the right to provide FirstMerit’s

shareholders a superior offer.

95. Finally, the Merger Agreement further contains a “no-waiver” provision, which

requires the Board to enforce any existing confidentiality or standstill agreements, and a “force-

the-vote” provision, which requires the Board to call a meeting of its stockholders to adopt the

Merger Agreement, even if the Board changes its recommendation in support thereof.

96. Ultimately, these preclusive deal protection provisions illegally restrain the

Company’s ability to solicit or engage in negotiations with any third party regarding a proposal

to acquire all or a significant interest in the Company. The narrow circumstances under which

the Board may respond to alternative proposals and the Company’s inability to terminate the

Merger Agreement if it accepts a superior proposal fail to provide an effective “fiduciary out” under the Merger Agreement.

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THE FALSE AND MISLEADING S-4

97. Finally, it is critical that stockholders receive complete and accurate information

about the Proposed Transaction prior to deciding whether to vote in favor of the Proposed

Transaction. The Individual Defendants have a fiduciary duty and a duty under Sections 14(a)

and 20(a) of the Exchange Act to disclose all material information regarding the Proposed

Transaction to FirstMerit stockholders so that they can make a fully informed decision whether

to vote in favor of the Proposed Transaction or seek to exercise their appraisal rights.

98. To date, however, the Individual Defendants have failed to provide FirstMerit

stockholders with such information, in violation of their fiduciary duties and Sections 14(a) and

20(a) of the Exchange Act. As set forth in more detail below, the S-4 omits and/or misrepresents

material information concerning, among other things: (1) FirstMerit’s financial projections; (2)

the data and inputs underlying the financial valuation exercises that purportedly support the so-

called “fairness opinion” provided by Sandler; (3) the data and inputs underlying the financial

valuation exercises of Goldman Sachs & Co. (“Goldman”), Huntington’s financial advisor; and

(4) the background of the Proposed Transaction.

(a) Management’s Projections

99. The S-4 discloses that Sandler and Goldman expressly relied on FirstMerit

management’s projections in assessing the fairness of the Proposed Transaction to FirstMerit and

Huntington stockholders and rendering their respective fairness opinions. Yet inexplicably, the

S-4 fails to provide even a summary of the projections relied upon by Sandler and Goldman in their analyses.

100. Because Sandler and Goldman each relied on these projections in rendering their fairness opinions, the omission of this information renders the entire fairness opinion of each

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financial advisor, on pages 75-87 and 61-72, respectively, in the S-4 false and/or materially misleading.

101. These statements in the S-4 are rendered false and/or misleading by the omissions identified in ¶99 as this information is integral to stockholders' evaluation of the consideration being offered in the Proposed Transaction. These financial projections provide a sneak peek into

FirstMerit’s expected future performance (i.e., growth/profitability) and, consequently, its value as a standalone entity. More importantly, however, this expected performance is more reliable than similar forecasts prepared by third-party analysts and other non-insiders, as it comes from members of corporate management who have their fingers on the pulse of the Company.

Accordingly, it is no surprise that financial projections are among the most highly sought-after disclosures by stockholders in the context of corporate transactions such as this.

(b) Sandler’s Financial Analyses

102. The S-4 also fails to fully and fairly disclose certain material information concerning the financial analyses conducted by Sandler that purport to support its fairness opinion.

103. For example, with respect to Sandler’s Comparable Companies Analyses, the S-4 fails to disclose the objective selection criteria and observed company-by-company pricing multiples and financial metrics examined. The omission of this information renders the following statements in the S-4 false and/or materially misleading, from page 80 of the S-4:

Comparable Company Analyses Sandler used publicly available information to compare selected financial information for FirstMerit with a group of financial institutions selected by Sandler. The FirstMerit peer group included fifteen nationwide commercial banks whose securities are publicly traded on major United States exchanges with assets between $20.0 billion and $35.0 billion, excluding targets of announced merger transactions and companies with supervoting share structures. The FirstMerit peer group consisted of the following companies:

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Signature Bank Commerce Bancshares, Inc. East West Bancorp, Inc. Umpqua Holdings Corporation BOK Financial Corporation Bank United, Inc. Cullen/Frost Bankers, Inc. Wintrust Financial Corporation Synovus Financial Corp. Hancock Holding Company Associated Banc-Corp Prosperity Bancshares, Inc. First Horizon National Corporation TCF Financial Corporation Webster Financial Corporation

The analysis compared publicly available financial information for FirstMerit with corresponding data for the FirstMerit peer group as of or for the twelve months ended September 30, 2015 (except as indicated in note 1 below), with pricing data as of January 21, 2016. The table below sets forth the data for FirstMerit and the high, low, mean, and median data for the FirstMerit peer group. Certain financial data prepared by Sandler, as referenced in the table presented below, may not correspond to the data presented in FirstMerit’s historical financial statements, as a result of the different periods, assumptions and methods used by Sander to compute the financial data presented.

104. These statements in the S-4 are rendered false and/or misleading by the omissions

identified in ¶103 because such omissions are essential to stockholders ability to properly

evaluate the analysis performed by Sandler. Indeed, the selected comparable companies used in

the analysis were chosen because Sandler felt they all shared similarities to FirstMerit.

Invariably, however, some types of companies will share more similarities to FirstMerit than

others, so information relating to Sandler’s perspective on relative comparability is vital when

evaluating the multiples implied by FirstMerit’s forecasts, compared to the multiples from the

companies FirstMerit selected as part of this analysis. Without the aforementioned information,

stockholders ability to understand FirstMerit’s analysis is significantly limited, rendering them

unable to make a fully-informed decision whether to vote to approve the Proposed Transaction.

105. With respect to Sandler’s Net Present Value Analyses, the S-4 fails to disclose: (i) the rationale for Sandler’s selection of multiples of 11.0x to 16.0x, wholly below the precedent transactions mean and median multiples observed in the Precedent Transactions Analysis; and

(ii) the adjusted projections from on or about December 9, 2015, that were used in the analysis.

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The omission of this information renders the following statements in the S-4 false and/or materially misleading, from page 84 of the S-4:

Net Present Value Analyses Sandler performed an analysis that estimated the net present value per share of FirstMerit common stock, assuming FirstMerit performed in accordance with publicly available consensus median analyst earnings estimates for FirstMerit for the years ending December 31, 2016 through December 31, 2017 and estimated earnings per share growth rates for the years ending December 31, 2018 through December 31, 2020, as provided by the senior management of FirstMerit. To approximate the terminal value of FirstMerit common stock at December 31, 2020, Sandler applied price to 2020 earnings multiples ranging from 11.0x to 16.0x and multiples of December 31, 2020 tangible book value ranging from 130% to 180%. The terminal values were then discounted to present values using different discount rates ranging from 8.0% to 11.0%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of FirstMerit common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of FirstMerit common stock of $14.53 to $22.76 when applying multiples of earnings and $15.94 to $23.62 when applying multiples of tangible book value.

106. These statements in the S-4 are rendered false and/or misleading by the omissions identified in ¶105 because they rendered Plaintiff and FirstMerit’s stockholders entirely in the dark as to whether this analysis accurately captured the present state of the Company. Without the omitted information, FirstMerit stockholders could not evaluate for themselves whether the analysis was performed properly and, in turn, determine what weight, if any, they should place on the analysis (and Sandler’s fairness opinion as a whole) when deciding whether to vote to approve the Proposed Transaction.

107. With respect to Sandler’s Analysis of Selected Merger Transactions, the S-4 fails to disclose the objective selection criteria and observed transaction-by-transaction enterprise values, pricing multiples and financial metrics. The omission of this information renders the following statements in the S-4 false and/or materially misleading, from page 83 of the S-4:

Analysis of Selected Merger Transactions Sandler reviewed a group of selected merger and acquisition transactions. The group consisted of nine nationwide bank and thrift transactions announced between January 1, 2013 and January 21, 2016 with over $1 billion in reported deal value (the “Precedent Transactions”).

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The Precedent Transactions were composed of the following transactions:

Acquirer Target BBCN Bancorp, Inc. Wilshire Bancorp, Inc. KeyCorp First Niagara Financial Group, Inc New York Community Bancorp, Inc Astoria Financial Corporation BB&T Corporation National Penn Bancshares Inc. Royal Bank of Canada City National Corporation BB&T Corporation Susquehanna Bancshares Inc. CIT Group Inc. IMB Holdco LLC Umpqua Holdings Corporation Sterling Financial Corporation PacWest Bancorp CapitalSource Inc.

Using the latest publicly available information prior to the announcement of the relevant transaction, Sandler reviewed the following quantitative transaction metrics: transaction price to last-twelve-months earnings per share, transaction price to book value per share, transaction price to tangible book value per share, tangible book premium to core deposits, and 1-day market premium. Sandler compared the indicated transaction metrics for the merger, based on an aggregate implied transaction value of approximately $3.41 billion, or a transaction price per share of approximately $20.48, resulting from the closing stock price of Huntington common stock on January 21, 2016 of $9.00, to the high, low, mean and median metrics of the Precedent Transactions.

108. These statements in the S-4 are rendered false and/or misleading by the omissions

identified in ¶107 because, without the objective selection criteria employed by Sandler and the

individually observed multiples for the chosen comparable transactions, stockholders are unable

to adequately assess whether FirstMerit is being appropriately valued in relation to the precedent transactions selected and reviewed by Sandler. For example, without this information, stockholders have a limited ability to gauge whether the applied multiples are appropriate given the differences between FirstMerit and the subject transactions.

(c) Sales Process Leading to the Proposed Transaction

109. Finally, the S-4 fails to fully and fairly disclose certain material information concerning the process leading to the Proposed Transaction and the conflicts of interest that infected it. With respect to the sales process that led to the Proposed Transaction, the

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Background of the Merger section contained on pages 52-59 of the S-4 is materially deficient in

that it fails to disclose:

(a) the implied preexisting relationship between Steinour and Greig such that

Huntington would submit an apparently unsolicited acquisition offer;

(b) the reasons cited by the Board for declining to proceed with the several

proposals by Huntington outlined in the chronology;

(c) when discussions with the unidentified party – pursuant to which a

meeting on September 15, 2015 was held – were initiated, the deal structure contemplated in the

discussions, or the reasons cited by this party for its apparent lack of interest in a potential

transaction;

(d) specifics regarding the private meetings held on September 17, 2015 and

November 27, 2015, and whether increased board representation was discussed between the

parties;

(e) whether any party other than Huntington contacted during the sales

process executed a confidentiality agreement containing “customary standstill provisions” and if

so, whether these standstill provisions contained fall-away provisions;

(f) specifics regarding Sandler’s and management’s apparently altered views

on FirstMerit’s standalone viability and the context for those views (and any downward revision

in management projections), discussed at the December 9, 2015 meeting;

(g) the reason one Board member abstained from voting on the merger; and

(h) additional details relating to the separation and consulting agreement between Greig and Huntington under which Greig will receive $1.25 million per year for three

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years, for providing consulting services “of up to 30 hours per month” – when it was negotiated, among who, whether the Board made aware of these negotiations, etc.

110. The S-4 is false and/or misleading due to the omissions identified in ¶109 because it does not give stockholders material information that will allow them to fairly assess the process undertaken by the Board leading up to the Proposed Transaction. Specifically, Company management’s own proprietary financial interest in a transaction must be carefully considered in assessing how much credence to give its recommendation in favor of a merger. The chronology in the S-4 indicates that management began negotiating for their own employment post- transaction very early in the sales process, yet fails to disclose with sufficient detail the timing and context of these employment discussions. FirstMerit stockholders are entitled to consider for themselves whether a conflict of interest was present, and to consider management’s recommendation in light of these facts.

111. Defendants’ failure to provide FirstMerit stockholders with the foregoing material information constitutes a violation of their fiduciary duties and Sections 14(a) and 20(a) of the

Exchange Act, and Rule 14a-9 promulgated thereunder. The Individual Defendants were aware of their duty to disclose this information and acted negligently (if not deliberately) in failing to include this information in the S-4. Absent disclosure of the foregoing material information prior to the stockholder vote on the Proposed Transaction, Plaintiff and the other members of the

Class will be unable to make a fully-informed decision whether to vote in favor of the Proposed

Transaction and are thus threatened with irreparable harm warranting the injunctive relief sought herein.

112. Plaintiff and the other members of the Class are immediately threatened by the wrongs complained of herein, and lack an adequate remedy at law. Accordingly, Plaintiff seeks

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injunctive and other equitable relief to prevent the irreparable injury that the Company’s shareholders will continue to suffer absent judicial intervention.

CLAIMS FOR RELIEF

COUNT I Breach of Fiduciary Duties (Against All Individual Defendants)

113. Plaintiff incorporates by reference and realleges each and every allegation contained above, as though fully set forth herein.

114. The Individual Defendants have knowingly, recklessly and in bad faith violated their fiduciary duties of care, loyalty, good faith, and independence owed to the public shareholders of FirstMerit and have acted to put their personal interests ahead of the interests of

FirstMerit shareholders.

115. By the acts, transactions and courses of conduct alleged herein, the Individual

Defendants are knowingly or recklessly and in bad faith attempting to unfairly deprive Plaintiffs and other members of the Class of the true value of their investment in FirstMerit.

116. The Individual Defendants knowingly or recklessly and in bad faith violated their fiduciary duties by entering into the Proposed Transaction without regard to the fairness of the transaction to FirstMerit’s shareholders and by failing to disclose all material information concerning the Proposed Transaction to such shareholders.

117. As a result of the Individual Defendants’ breaches of their fiduciary duties,

Plaintiff and the Class will suffer irreparable injury in that they have not and will not receive their fair portion of the value of FirstMerit’s assets and will be prevented from benefiting from a value-maximizing transaction.

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118. Unless enjoined by this Court, the Individual Defendants will continue to breach

their fiduciary duties owed to Plaintiff and the Class, and may consummate the Proposed

Transaction, to the irreparable harm of the Class.

119. Plaintiff and the Class have no adequate remedy at law.

COUNT II For Breach of Fiduciary Duties Brought Derivatively on Behalf of FirstMerit (Against the Individual Defendants)

120. Plaintiff incorporates by reference and realleges each and every allegation

contained above, as though fully set forth herein.

121. The Individual Defendants have violated the fiduciary duties of care, loyalty,

good faith, and independence owed to the Company and its public shareholders and have acted to

put their personal interests ahead of the interests of FirstMerit and its shareholders.

122. By the acts, transactions and courses of conduct alleged herein, Defendants, individually and acting as a part of a common plan, are attempting to unfairly deprive the

Company and its shareholders of FirstMerit’s true value.

123. The Individual Defendants have violated their fiduciary duties by entering

FirstMerit into the Merger Agreement without regard to the effect of the Proposed Transaction on FirstMerit and its shareholders.

124. By reason of the foregoing acts, practices and course of conduct, the Individual

Defendants have failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward FirstMerit, Plaintiff and the other members of the Class.

125. As a result of the Individual Defendants’ unlawful actions, FirstMerit and its

shareholders will be irreparably harmed in that they will forever be denied the fair value of the

Company’s assets and operations. Unless the Proposed Transaction is enjoined by the Court, the

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Individual Defendants will continue to breach their fiduciary duties owed to the Company and its

shareholders, will not engage in arm’s-length negotiations on the Proposed Transaction terms

and may consummate the Proposed Transaction, all to the irreparable harm of the Company and

its shareholders.

126. Plaintiff and the members of the Class have no adequate remedy at law. Only

through the exercise of this Court’s equitable powers can FirstMerit and its shareholders be fully

protected from the immediate and irreparable injury which Defendants’ actions threaten to inflict.

COUNT III For Violations of Section 14(a) of the Exchange Act and Rule 14a-9 Promulgated Thereunder (Against the Individual Defendants)

127. Plaintiff incorporates by reference and realleges each and every allegation

contained above, as though fully set forth herein.

128. SEC Rule 14a-9, 17 C.F.R. § 240.14a-9, promulgated pursuant to Section 14(a) of

the Exchange Act, provides:

No solicitation subject to this regulation shall be made by means of any proxy statement, form of proxy, notice of meeting or other communication, written or oral, containing any statement which, at the time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading.

129. During the relevant period, the Individual Defendants disseminated the false and

misleading S-4 specified above, which failed to disclose material facts necessary in order to

make the statements made, in light of the circumstances under which they were made, not

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misleading in violation of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated

thereunder.

130. By virtue of their positions within the Company, the Individual Defendants were

aware of this information and of their duty to disclose this information in the S-4. The S-4 was

prepared, reviewed, and/or disseminated by the Individual Defendants. The S-4 misrepresented and/or omitted material facts, including material information about the unfair sale process for the

Company, the unfair consideration offered in the Proposed Transaction, and the actual intrinsic value of the Company's assets. The defendants were at least negligent in filing the S-4 with these materially false and misleading statements. The defendants have also failed to correct the

S-4 and the failure to update and correct false statements is also a violation of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder.

131. The omissions and false and misleading statements in the S-4 are material in that a reasonable stockholder would consider them important in deciding how to vote on the

Proposed Transaction. In addition, a reasonable investor would view a full and accurate disclosure as significantly altering the “total mix” of information made available in the S-4 and in other information reasonably available to stockholders.

132. By reason of the foregoing, the defendants have violated Section 14(a) of the

Exchange Act and Rule 14a-9(a) promulgated thereunder.

133. Unless the Individual Defendants are enjoined by the Court, they will continue to breach their duties owed to Plaintiff and the members of the Class, to the irreparable harm of the members of the Class.

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134. Because of the false and misleading statements in the S-4, Plaintiff and the Class are threatened with irreparable harm, rendering money damages inadequate. Therefore, injunctive relief is appropriate to ensure the Individual Defendants’ misconduct is corrected.

COUNT IV For Violations of Section 20(a) of the Exchange Act (Against the Individual Defendants)

135. Plaintiff incorporates by reference and realleges each and every allegation contained above, as though fully set forth herein.

136. The Individual Defendants acted as controlling persons of FirstMerit within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as officers and/or directors of FirstMerit and participation in and/or awareness of the Company’s operations and/or intimate knowledge of the false statements contained in the S-4 filed with the

SEC, they had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Company, including the content and dissemination of the various statements which Plaintiff contends are false and misleading.

137. Each of the Individual Defendants was provided with or had unlimited access to copies of the S-4 and other statements alleged by Plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected.

138. In particular, each of the Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Company, and, therefore, each of the Individual

Defendants is presumed to have had the power to control or influence the particular transactions giving rise to the securities violations as alleged herein, and exercised the same. The S-4 at issue

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contains the unanimous recommendation of each of the Individual Defendants to approve the

Proposed Transaction. They were, thus, directly involved in the making of this document.

139. In addition, as the S-4 sets forth at length, and as described herein, the Individual

Defendants were each involved in negotiating, reviewing, and approving the Proposed

Transaction. The S-4 purports to describe the various issues and information that they reviewed

and considered — descriptions that had input from the Individual Defendants.

140. By virtue of the foregoing, the Individual Defendants have violated Section 20(a)

of the Exchange Act.

COUNT V Aiding and Abetting (Against Huntington and Merger Sub)

141. Plaintiff incorporates by reference and realleges each and every allegation

contained above, as though fully set forth herein.

142. As alleged in more detail above, Defendants Huntington and Merger Sub have

aided and abetted the Individual Defendants’ breaches of fiduciary duties.

143. As a result, Plaintiff and the Class members are being harmed.

144. Plaintiff and the Class have no adequate remedy at law.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment against Defendants jointly and severally, as follows:

(A) Declaring that this action is properly maintainable as a class and derivative action and certifying Plaintiff as the Class representatives and its counsel as Class counsel;

(B) Preliminarily and permanently enjoining Defendants and their counsel, agents, employees and all persons acting under, in concert with, or for them from proceeding

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with, consummating, or closing the Proposed Transaction, unless and until the Company adopts

and implements a procedure or process to obtain an agreement providing fair and reasonable

terms and consideration to Plaintiff and the Class;

(C) Rescinding, to the extent already implemented, the Merger Agreement or any of the terms thereof, or granting Plaintiff and the Class rescissory damages;

(D) Directing the Individual Defendants to account to Plaintiff and the Class for all damages suffered as a result of the Individual Defendants’ wrongdoing;

(E) Awarding Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

(F) Granting such other and further equitable relief as this Court may deem just and proper.

Dated: April 4, 2016 Respectfully submitted,

PERANTINIDES & NOLAN CO., L.P.A.

/s/ Chris T. Nolan CHRIS T. NOLAN (0006617) Attorney for Plaintiff 300 Courtyard Square 80 South Summit Street Akron, OH 44308-1736 (330) 253-5454 (330) 253-6524 Fax Email: [email protected]

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Of Counsel:

KAHN SWICK & FOTI, LLC Michael J. Palestina Christopher R. Tillotson 206 Covington Street Madisonville, LA 70447 (504) 455-1400 (504) 455-1498 Email: [email protected] [email protected]

JURY DEMAND

Plaintiff hereby demands a trial by jury on all the issues of the within cause of action.

/s/ Chris T. Nolan CHRIS T. NOLAN (0006617)

CERTIFICATE OF SERVICE

I hereby certify that on April 4, 2016, a copy of the foregoing Amended Class Action and Derivative Complaint was filed electronically. Notice of this filing will be sent by operation of the Court’s electronic filing system. All parties not capable of receiving electronic documents will be served by regular U.S. Mail. Parties may access this filing through the Court’s electronic filing system.

/s/ Chris T. Nolan CHRIS T. NOLAN (0006617) Attorney for Plaintiff

48