Item 1.01. Entry into a Material Definitive Agreement.
On December 13, 2020, Huntington Bancshares Incorporated, a Maryland corporation
("Huntington"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") with TCF Financial Corporation, a Michigan corporation ("TCF"). The
Merger Agreement provides that, upon the terms and subject to the conditions set
forth therein, TCF will merge with and into Huntington (the "Merger"), with
Huntington continuing as the surviving corporation in the Merger (the "Surviving
Corporation"). Immediately following the Merger, TCF's wholly owned banking
subsidiary, TCF National Bank, will merge with and into Huntington's wholly
owned banking subsidiary, The Huntington National Bank (the "Bank Merger"),
which will continue as the surviving bank in the Bank Merger. The Merger
Agreement was unanimously approved by the Board of Directors of each of
Huntington and TCF.
Upon the terms and subject to the conditions set forth in the Merger Agreement,
at the effective time of the Merger (the "Effective Time"), each share of common
stock, par value $1.00 per share, of TCF ("TCF Common Stock") outstanding
immediately prior to the Effective Time, other than certain shares held by
Huntington or TCF, will be converted into the right to receive 3.0028 shares of
common stock (the "Exchange Ratio" and such shares, the "Merger Consideration"),
par value $0.01 per share, of Huntington ("Huntington Common Stock"). Holders
of TCF Common Stock will receive cash in lieu of fractional shares. At the
Effective Time, each share of 5.70% Series C Non-Cumulative Perpetual Preferred
Stock, no par value, of TCF outstanding immediately prior to the Effective Time
will be converted into the right to receive a share of a newly created series of
preferred stock of Huntington (the "New Huntington Preferred Stock").
At the Effective Time, each outstanding TCF equity award granted under TCF's
equity compensation plans, other than unvested TCF restricted stock awards held
by non-employee directors, will be converted into a corresponding award with
respect to Huntington Common Stock, with the number of shares underlying such
award (and, in the case of stock options, the applicable exercise price)
adjusted based on the Exchange Ratio. Each such converted Huntington equity
award will continue to be subject to the same terms and conditions as applied to
the corresponding TCF equity award immediately prior to the Effective Time,
except that, in the case of TCF restricted stock unit awards, the number of
shares underlying the converted Huntington equity award will be determined with
any performance goals deemed satisfied at the greater of the target and actual
level of performance through the most recently completed calendar quarter prior
to the Effective Time as reasonably determined by the Compensation Committee of
the Board of Directors of TCF in the ordinary course consistent with past
practice. At the Effective Time, each outstanding unvested restricted stock
award that is held by a non-employee director will vest and be converted into
the right to receive the Merger Consideration in respect of each share of TCF
Common Stock subject to such TCF restricted stock award immediately prior to the
Effective Time.
The Merger Agreement also provides, among other things, that Huntington will
take all appropriate action so that, as of the Effective Time, the number of
directors constituting the Board of Directors of Huntington will be increased by
five (5) for a total of eighteen (18) directors, and five (5) current directors
of TCF designated by TCF will be appointed to the Board of Directors of
Huntington, subject to the approval of the Board of Directors of Huntington (not
to be unreasonably withheld), and one of such five (5) directors will not stand
for re-election to the Board of Directors of Huntington at Huntington's 2022
annual meeting of shareholders. In addition, as of the effective time of the
Bank Merger, Gary Torgow, TCF's Executive Chairman, will be appointed as
Chairman of the Board of Directors of The Huntington National Bank. The Merger
Agreement provides that, following the Effective Time, the meetings of the Board
of Directors of Huntington and, following the effective time of the Bank Merger,
the Board of Directors of The Huntington National Bank, will rotate between (i)
Columbus, Ohio and (ii) Detroit, Michigan and Minneapolis, Minnesota.
The Merger Agreement provides that the Surviving Corporation will have dual
headquarters for banking operations in Columbus, Ohio and Detroit, Michigan,
with the headquarters of the Surviving Corporation's consumer banking operations
located in Columbus, Ohio, and the headquarters of the Surviving Corporation's
commercial banking operations located in Detroit, Michigan. The Merger
Agreement provides that the headquarters of the Surviving Corporation and the
main office of The Huntington National Bank will be located in Columbus, Ohio.
Additionally, the Merger Agreement provides that at or prior to the consummation
of the Merger, Huntington will contribute $50 million to establish a new
Huntington Donor Advised Fund at the Community Foundation for Southeast
Michigan, with such funds to be recommended and allocated by Gary Torgow and
David T. Provost in a manner generally consistent with Huntington's recommended
charitable giving guidelines.
At the Effective Time, Huntington's charter will also be amended to increase the
number of authorized shares of Huntington Common Stock from 1.5 billion to 2.25
billion (the "Charter Amendment").
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The Merger Agreement contains customary representations and warranties from both
Huntington and TCF, and each party has agreed to customary covenants, including,
among others, covenants relating to (1) the conduct of its business during the
interim period between the execution of the Merger Agreement and the Effective
Time and (2) its obligation to call a meeting of its shareholders to approve the
Merger and the Merger Agreement, and, subject to certain exceptions, to
recommend that its shareholders approve the Merger and the Merger Agreement.
TCF has also agreed to certain non-solicitation obligations related to
alternative business combination proposals.
The completion of the Merger is subject to customary conditions, including (1)
approval of the Merger and the Charter Amendment by Huntington's shareholders
and approval of the Merger Agreement by TCF's shareholders, (2) authorization
for listing on the Nasdaq Stock Market of the shares of Huntington Common Stock
and New Huntington Preferred Stock (or depositary shares in respect thereof) to
be issued in the Merger, subject to official notice of issuance, (3) the receipt
of required regulatory approvals, including the approval of the Board of
Governors of the Federal Reserve System and the Office of the Comptroller of the
Currency, (4) effectiveness of the registration statement on Form S-4 for the
Huntington Common Stock and the New Huntington Preferred Stock (or depositary
shares in respect thereof) to be issued in the Merger, and (5) the absence of
any order, injunction, decree or other legal restraint preventing the completion
of the Merger, the Bank Merger or any of the other transactions contemplated by
the Merger Agreement or making the completion of the Merger, the Bank Merger or
any of the other transactions contemplated by the Merger Agreement illegal.
Each party's obligation to complete the Merger is also subject to certain
additional customary conditions, including (i) subject to certain exceptions,
the accuracy of the representations and warranties of the other party, (ii)
performance in all material respects by the other party of its obligations under
the Merger Agreement and (iii) receipt by such party of an opinion from counsel
to the effect that the Merger will qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
The Merger Agreement provides certain termination rights for both Huntington and
TCF and further provides that a termination fee of $238.8 million will be
payable by either Huntington or TCF, as applicable, upon termination of the
Merger Agreement under certain circumstances.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated
herein by reference.
The representations, warranties and covenants of each party set forth in the
Merger Agreement have been made only for the purposes of, and were and are
solely for the benefit of the parties to, the Merger Agreement, may be subject
to limitations agreed upon by the contracting parties, including being qualified
by confidential disclosures made for the purposes of allocating contractual risk
between the parties to the Merger Agreement instead of establishing these
matters as facts, and may be subject to standards of materiality applicable to
the parties that differ from those applicable to investors. Accordingly, the
representations and warranties may not describe the actual state of affairs at
the date they were made or at any other time, and investors should not rely on
them as statements of fact. In addition, such representations and warranties
(1) will not survive consummation of the Merger, and (2) were made only as of
the date of the Merger Agreement or such other date as is specified in the
Merger Agreement. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Merger
Agreement, which subsequent information may or may not be fully reflected in the
parties' public disclosures. Accordingly, the Merger Agreement is included with
this filing only to provide investors with information regarding the terms of
the Merger Agreement, and not to provide investors with any factual information
regarding Huntington or TCF, their respective affiliates or their respective
businesses. The Merger Agreement should not be read alone, but should instead
be read in conjunction with the other information regarding Huntington, TCF,
their respective affiliates or their respective businesses, the Merger Agreement
and the Merger that will be contained in, or incorporated by reference into, the
registration statement on Form S-4 to be filed by Huntington that will include a
joint proxy statement of Huntington and TCF and also constitute a prospectus of
Huntington, as well as in the Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and other filings that each of Huntington and TCF make with the
Securities and Exchange Commission (the "SEC").
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
Agreement and Plan of Merger, dated as of December 13, 2020, by and
2.1 between Huntington Bancshares Incorporated and TCF Financial
Corporation.*
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document.
*Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules and similar
attachments have been omitted. The registrant hereby agrees to furnish a copy of
any omitted schedule or similar attachment to the SEC upon request.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This communication may contain certain forward-looking statements, including,
but not limited to, certain plans, expectations, goals, projections, and
statements about the benefits of the proposed transaction, the plans,
objectives, expectations and intentions of Huntington and TCF, the expected
timing of completion of the transaction, and other statements that are not
historical facts. Such statements are subject to numerous assumptions, risks,
and uncertainties. Statements that do not describe historical or current facts,
including statements about beliefs and expectations, are forward-looking
statements. Forward-looking statements may be identified by words such as
expect, anticipate, believe, intend, estimate, plan, target, goal, or similar
expressions, or future or conditional verbs such as will, may, might, should,
would, could, or similar variations. The forward-looking statements are
intended to be subject to the safe harbor provided by Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and
the Private Securities Litigation Reform Act of 1995.
While there is no assurance that any list of risks and uncertainties or risk
factors is complete, below are certain factors which could cause actual results
to differ materially from those contained or implied in the forward-looking
statements: changes in general economic, political, or industry conditions; the
magnitude and duration of the COVID-19 pandemic and its impact on the global
economy and financial market conditions and our business, results of operations,
and financial condition; uncertainty in U.S. fiscal and monetary policy,
including the interest rate policies of the Federal Reserve Board; volatility
and disruptions in global capital and credit markets; movements in interest
rates; reform of LIBOR; competitive pressures on product pricing and services;
success, impact, and timing of our business strategies, including market
acceptance of any new products or services including those implementing our
"Fair Play" banking philosophy; the nature, extent, timing, and results of
governmental actions, examinations, reviews, reforms, regulations, and
interpretations, including those related to the Dodd-Frank Wall Street Reform
and Consumer Protection Act and the Basel III regulatory capital reforms, as
well as those involving the OCC, Federal Reserve, FDIC, and CFPB; the occurrence
of any event, change or other circumstances that could give rise to the right of
one or both of the parties to terminate the merger agreement between Huntington
and TCF; the outcome of any legal proceedings that may be instituted against
Huntington or TCF; delays in completing the transaction; the failure to obtain
necessary regulatory approvals (and the risk that such approvals may result in
the imposition of conditions that could adversely affect the combined company or
the expected benefits of the transaction); the failure to obtain shareholder
approvals or to satisfy any of the other conditions to the transaction on a
timely basis or at all; the possibility that the anticipated benefits of the
transaction are not realized when expected or at all, including as a result of
the impact of, or problems arising from, the integration of the two companies or
as a result of the strength of the economy and competitive factors in the areas
where Huntington and TCF do business; the possibility that the transaction may
be more expensive to complete than anticipated, including as a result of
unexpected factors or events; diversion of management's attention from ongoing
business operations and opportunities; potential adverse reactions or changes to
business or employee relationships, including those resulting from the
announcement or completion of the transaction; the ability to complete the
transaction and integration of Huntington and TCF successfully; the dilution
caused by Huntington's issuance of additional shares of its capital stock in
connection with the transaction; and other factors that may affect the future
results of Huntington and TCF. Additional factors that could cause results to
differ materially from those described above can be found in Huntington's Annual
Report on Form 10-K for the year ended December 31, 2019 and in its subsequent
Quarterly Reports on Form 10-Q, including for the quarter ended September 30,
2020, each of which is on file with the Securities and Exchange Commission (the
"SEC") and available in the "Investor Relations" section of Huntington's
website, http://www.huntington.com, under the heading "Publications and Filings"
and in other documents Huntington files with the SEC, and in TCF's Annual Report
on Form 10-K for the year ended December 31, 2019 and in its subsequent
Quarterly Reports on Form 10-Q, including for the quarter ended September 30,
2020, each of which is on file with the SEC and available on TCF's investor
relations website, ir.tcfbank.com, under the heading "Financial Information" and
in other documents TCF files with the SEC.
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All forward-looking statements speak only as of the date they are made and are
based on information available at that time. Neither Huntington nor TCF assumes
any obligation to update forward-looking statements to reflect circumstances or
events that occur after the date the forward-looking statements were made or to
reflect the occurrence of unanticipated events except as required by federal
securities laws. As forward-looking statements involve significant risks and
uncertainties, caution should be exercised against placing undue reliance on
such statements.
IMPORTANT ADDITIONAL INFORMATION
In connection with the proposed transaction, Huntington will file with the SEC a
Registration Statement on Form S-4 that will include a Joint Proxy Statement of
Huntington and TCF and a Prospectus of Huntington, as well as other relevant
documents concerning the proposed transaction. The proposed transaction
involving Huntington and TCF will be submitted to TCF's shareholders and
Huntington's shareholders for their consideration. This communication does not
constitute an offer to sell or the solicitation of an offer to buy any
securities or a solicitation of any vote or approval, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF HUNTINGTON AND
SHAREHOLDERS OF TCF ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT
PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN IT BECOMES AVAILABLE
AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS
OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Shareholders will be able to obtain a free copy of the definitive
joint proxy statement/prospectus, as well as other filings containing
information about Huntington and TCF, without charge, at the SEC's website
(http://www.sec.gov). Copies of the joint proxy statement/prospectus and the
filings with the SEC that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to Huntington Investor Relations, Huntington Bancshares Incorporated,
Huntington Center, HC0935, 41 South High Street, Columbus, Ohio 43287, (800)
576-5007 or to TCF Investor Relations, TCF Financial Corporation, 333 W. Fort
Street, Suite 1800, Detroit, Michigan 48226, (866) 258-1807.
PARTICIPANTS IN THE SOLICITATION
Huntington, TCF, and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the shareholders of Huntington and TCF in connection with the proposed
transaction under the rules of the SEC. Information regarding Huntington's
directors and executive officers is available in its definitive proxy statement
relating to its 2020 Annual Meeting of Shareholders, which was filed with the
SEC on March 12, 2020, and other documents filed by Huntington with the SEC.
Information regarding TCF's directors and executive officers is available in its
definitive proxy statement relating to its 2020 Annual Meeting of Shareholders,
which was filed with the SEC on March 25, 2020, and other documents filed by TCF
with the SEC. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials filed with the SEC. Free
copies of this document may be obtained as described in the preceding paragraph.
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