Huntington National Bank 2009 Annual Report Download - page 175

Durin
g
the 2009 first and second quarters, Huntin
g
ton entered into a
g
reements with various institutiona
l
i
nvestors exc
h
an
gi
n
g
s
h
ares o
f
common stoc
kf
or s
h
ares o
f
t
h
e Ser
i
es A Pre
f
erre
d
Stoc
kh
e
ld by
t
he
institutional investors. The table below provides details of the a
gg
re
g
ate activities
:
F
i
r
st
Q
uarter 2009
S
econ
d
Q
uarter 2009 Tota
l
(
In thousands
)
Pre
f
erre
d
s
h
ares exc
h
an
g
e
d
......................... 114
9
220
6
C
ommon s
h
ares
i
ssue
d
:
At state
d
convert
ibl
eo
p
t
i
o
n
.......................
9
,5
47 7
,
730 17
,
277
As deemed dividen
d
............................
1
5,
044 8
,
7
5
123
,
79
5
Tota
l
common s
h
ares
i
ssue
d:
........................
24
,5
91 16
,
481 41
,
072
Deemed di
v
iden
d
................................
$27
,
742 $28
,
293 $56
,
035
Each share of the Series A Preferred Stock is non-votin
g
and ma
y
be converted at an
y
time, at the optio
n
of the holder, into 83.668 shares of common stock of Huntin
g
ton, which represents an approximate initia
l
conversion price of
$
11.95 per share of common stock (for a total of approximatel
y
30.3 million shares a
t
Decem
b
er 31, 2009). T
h
e convers
i
on rate an
d
convers
i
on pr
i
ce w
ill b
esu
bj
ect to a
dj
ustments
i
n certa
i
n
circumstances. On or after April 15, 2013, at the option of Huntin
g
ton, the Series A Preferred Stock will be
sub
j
ect to mandator
y
conversion into Huntin
g
ton’s common stock at the prevailin
g
conversion rate, if th
e
c
l
os
i
n
g
pr
i
ce o
f
Hunt
i
n
g
ton’s common stoc
k
excee
d
s 130% o
f
t
h
e convers
i
on pr
i
ce
f
or 20 tra
di
n
gd
a
y
s
d
ur
i
n
g
an
y
30 consecut
i
ve tra
di
n
gd
a
y
per
i
o
d.
Troubled Asset Relie
f
Program (TARP
)
In 2008, Huntin
g
ton received $1.4 billion of equit
y
capital b
y
issuin
g
to the U.S. Department of Treasur
y
1.4 million shares of Huntin
g
ton’s 5.00% Series B Non-votin
g
Cumulative Preferred Stock, par value
$
0.01
per share with a liquidation preference of
$
1,000 per share, and a ten-
y
ear warrant to purchase up to
2
3.6 million shares of Huntin
g
ton’s common stock, par value
$
0.01 per share, at an exercise price of
$
8.90 per
share. The
p
roceeds received were allocated to the
p
referred stock and additional
p
aid-in-ca
p
ital based on thei
r
re
l
at
i
ve
f
a
i
rva
l
ues. T
h
e resu
l
t
i
n
gdi
scount on t
h
e pre
f
erre
d
stoc
ki
s amort
i
ze
d
a
g
a
i
nst reta
i
ne
d
earn
i
n
g
san
dis
re
fl
ecte
di
n Hunt
i
n
g
ton’s conso
lid
ate
d
statement o
fi
ncome as “D
i
v
id
en
d
s on pre
f
erre
d
s
h
ares”, resu
l
t
i
n
gi
n
additional dilution to Huntin
g
ton’s earnin
g
s per share. The warrants are immediatel
y
exercisable, in whole o
r
i
n part, over a term o
f
10
y
ears. T
h
e warrants are
i
nc
l
u
d
e
di
n Hunt
i
n
g
ton’s
dil
ute
d
avera
g
e common s
h
are
s
outstan
di
n
g
us
i
n
g
t
h
e treasur
y
stoc
k
met
h
o
d
. Bot
h
t
h
e pre
f
erre
d
secur
i
t
i
es an
d
warrants were accounte
df
or a
s
additions to Huntin
g
ton’s re
g
ulator
y
Tier 1 and Total capital
.
T
h
e Ser
i
es B Pre
f
erre
d
Stoc
ki
s not man
d
ator
ily
re
d
eema
bl
ean
d
w
ill
pa
y
cumu
l
at
i
ve
di
v
id
en
d
s at a rat
e
of 5% per
y
ear for the first five
y
ears and 9% per
y
ear thereafter. With re
g
ulator
y
approval, Huntin
g
ton ma
y
re
d
eem t
h
e Ser
i
es B Pre
f
erre
d
Stoc
k
at par w
i
t
h
an
y
unamort
i
ze
ddi
scount reco
g
n
i
ze
d
as a
d
eeme
ddi
v
id
en
din
t
h
e per
i
o
d
o
f
re
d
empt
i
on. T
h
e Ser
i
es B Pre
f
erre
d
Stoc
k
ran
k
on equa
l
pr
i
or
i
t
y
w
i
t
h
Hunt
i
n
g
ton’s ex
i
st
i
n
g
8.
5
0% Series A Non-Cumulative Per
p
etual Convertible Preferred Stock.
A
compan
y
t
h
at part
i
c
i
pates
i
nt
h
e TARP must a
d
opt certa
i
n stan
d
ar
d
s
f
or execut
i
ve compensat
i
on
,
includin
g
(a) prohibitin
g
“
g
olden parachute” pa
y
ments as defined in the Emer
g
enc
y
Economic Stabilization
Act o
f
2008 (EESA) to sen
i
or execut
i
ve o
ffi
cers; (
b
) requ
i
r
i
n
g
recover
y
o
f
an
y
compensat
i
on pa
id
to sen
i
o
r
execut
i
ve o
ffi
cers
b
ase
d
on cr
i
ter
i
at
h
at
i
s
l
ater proven to
b
e mater
i
a
lly i
naccurate; (c) pro
hibi
t
i
n
gi
ncent
i
v
e
compensation that encoura
g
es unnecessar
y
and excessive risks that threaten the value of the financial
institution, and (d) acceptin
g
restrictions on the pa
y
ment of dividends and the repurchase of common stock.
As o
f
Decem
b
er 31, 2009, Hunt
i
n
g
ton
i
s
i
n comp
li
ance w
i
t
h
a
ll
TARP stan
d
ar
d
san
d
restr
i
ct
i
ons.
S
h
are Re
p
urc
h
ase Progra
m
A
s a con
di
t
i
on to part
i
c
i
pate
i
nt
h
e TARP, Hunt
i
n
g
ton ma
y
not repurc
h
ase an
y
a
ddi
t
i
ona
l
s
h
ares w
i
t
h
ou
t
prior approval from the Department of Treasur
y
. Huntin
g
ton did not repurchase an
y
shares under the 200
6
1
6
7