FIRSTMERIT BANK NA, PRE 14A, 1998-02-04

FIRSTMERIT BANK NA
PRE 14A, 1998-02-04
NATIONAL COMMERCIAL BANKS

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<PAGE> 1

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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>

FIRSTMERIT CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

-------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

================================================================================
<PAGE> 2

FirstMerit

III Cascade Plaza
Akron, Ohio 44308

February 23, 1998

To Our Shareholders:

You are cordially invited to attend the Annual Meeting of Shareholders to
be held on Wednesday, April 8, 1998 at 10:00 A.M. at the John S. Knight
Convention Center, 77 E. Mill Street, Akron, Ohio 44308.

The election of directors will take place at the Annual Meeting. This year
we will elect five Class I Directors whose terms will expire at the Annual
Meeting in 2001. Three of the nominees are currently serving as directors, while
Messrs. Richard Colella and Richard N. Seaman are new nominees. You will also be
asked to consider and approve proposals to increase the number of authorized
shares of FirstMerit Common Stock, to make the Ohio Control Share Acquisition
Act inapplicable to FirstMerit, and to adopt an amendment to the Employee Stock
Purchase Plan to allow employees to deduct up to 10% of their compensation to
purchase shares of FirstMerit Common Stock. These proposals are described in
detail in the Proxy Statement.

Enclosed with this letter is a Notice of Annual Meeting together with a
Proxy Statement which contains information with respect to the proposals and the
nominees for director, as well as the other directors who will continue in
office.

It is important that your shares be voted, and we hope that you will be
able to attend the Annual Meeting. We urge you to execute and return the
enclosed form of proxy as soon as possible, whether or not you expect to attend
the Annual Meeting in person.

Sincerely,

/s/ John R. Cochran

John R. Cochran
Chairman and Chief Executive Officer
<PAGE> 3

FIRSTMERIT CORPORATION
III Cascade Plaza
Akron, Ohio 44308

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD WEDNESDAY, APRIL 8, 1998

The Annual Meeting of Shareholders of FirstMerit Corporation, an Ohio
corporation ("FirstMerit"), will be held at the John S. Knight Convention
Center, 77 E. Mill Street, Akron, Ohio, on Wednesday, April 8, 1998, at 10:00
A.M. (local time), for the following purposes:

1. To elect five Class I Directors;

2. To approve a proposal to amend FirstMerit's Amended and Restated
Articles of Incorporation to increase the authorized shares of Common
Stock from 80,000,000 to 160,000,000 shares;

3. To approve a proposal to amend FirstMerit's Code of Regulations, as
amended, to make the Ohio Control Share Acquisition Act inapplicable to
FirstMerit;

4. To approve a proposal to amend FirstMerit's Employee Stock Purchase Plan
to allow employees to deduct up to 10% of their compensation to purchase
shares of FirstMerit Common Stock; and

5. To transact such other business as may properly come before the meeting
or any adjournments thereof.

The Board of Directors has fixed the close of business on February 9, 1998,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting. All shareholders are cordially invited to
attend the meeting in person. Whether or not you expect to attend the meeting in
person, please fill in, date, sign and return the enclosed Proxy Card.

By Order of the Board of Directors,

/s/ Terry E. Patton

Terry E. Patton
Secretary
Akron, Ohio
February 23, 1998
THE 1997 ANNUAL REPORT TO SHAREHOLDERS ACCOMPANIES THIS NOTICE
<PAGE> 4

FIRSTMERIT(R) CORPORATION
------------------------

PROXY STATEMENT
------------------------

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of FirstMerit Corporation, an Ohio corporation
("FirstMerit" or "Company") of the accompanying proxy to be voted at the Annual
Meeting of Shareholders to be held on Wednesday, April 8, 1998, at 10:00 A.M.
(local time), and at any adjournment thereof. Shares represented by duly
executed proxies in the accompanying form received by the Board of Directors
prior to the meeting will be voted at the meeting. A shareholder who signs and
returns a proxy in the accompanying form may revoke it prior to or at the
meeting by giving notice to the Secretary. FirstMerit(R) is a registered
trademark of the Company.

The close of business on February 9, 1998, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the meeting. On that date FirstMerit had outstanding approximately [62, ]
shares of common stock, no par value per share ("Common Stock"), each of which
is entitled to one vote. For information concerning principal shareholders, see
the section titled "Principal Shareholders" below.

The mailing address of the principal executive offices of FirstMerit is III
Cascade Plaza, Akron, Ohio 44308, telephone number (330) 996-6300. This Proxy
Statement, together with the related Proxy Card and FirstMerit's 1997 Annual
Report to Shareholders, is being mailed to the shareholders of FirstMerit on or
about February 23, 1998.

Under Ohio law, FirstMerit's Amended and Restated Articles of Incorporation
and its Code of Regulations ("Regulations"), if a quorum is present at the
meeting, the nominees for election as directors who receive the greatest number
of votes cast will be elected directors. A majority of the outstanding shares of
Common Stock constitutes a quorum. An abstention from voting any share with
respect to the election of any nominee for director will have the practical
effect of a vote against that nominee. A broker non-vote with respect to any
share will not affect the election of directors since the share is not counted
for voting purposes.

Proposal No. 2 regarding the increase in authorized shares of Common Stock
must be approved by the affirmative vote of the holders of two-thirds of the
shares of Common Stock, present in person or represented by proxy at the Annual
Meeting, assuming a quorum is present. An abstention from voting any share with
respect to this proposal will have the practical effect of a vote against the
proposal. A broker non-vote with respect to any share will not affect the
approval of the proposal since the share is not counted for voting purposes.

Proposals Nos. 3 and 4 regarding the Ohio Control Share Acquisition Act and
the Employee Stock Purchase Plan must be approved by the affirmative vote of the
holders of a majority of the shares of Common Stock, present in person or
represented by proxy at the Annual Meeting, assuming a quorum is present. An
abstention from voting any share with respect to this proposal will have the
practical effect of a vote against the proposal. A broker non-vote with respect
to any share will not affect the approval of the proposal since the share is not
counted for voting purposes.

1
<PAGE> 5

PROPOSAL NO. 1

ELECTION OF DIRECTORS

NOMINEES

Five Class I directors are being nominated and are to be elected at this
Annual Meeting of Shareholders. In 1995 the shareholders fixed the total number
of directors at 18. There currently exists two vacancies on the Board of
Directors, one in each of Classes I and III. As a matter of corporate policy,
the Board believes it is important to maintain vacancies on the Board. This
would allow a majority of the Board, pursuant to Article III, Section 3 of the
Regulations, to appoint an individual to the Board. Such a need could occur, as
examples, as part of the terms of a future acquisition, or in the event the
Board finds a highly qualified candidate for the Board and believes it is
important to appoint such person prior to the next Annual Shareholder meeting.
Any such person appointed would serve the remaining term of such position, which
could exceed one year. The Board appointed Sid A. Bostic as a Class III Director
effective February 1, 1998 as part of its appointment of Mr. Bostic as the
President and Chief Operating Officer of FirstMerit and FirstMerit Bank, N.A. As
part of its agreement with CoBancorp Inc.'s merger with and into FirstMerit, the
Board has agreed to appoint an individual to the Board of Directors. It is
currently contemplated that a person would be appointed to Class III.

Set forth below for each nominee for election as a director and for each
director whose term will continue after the Annual Meeting of Shareholders is a
brief statement, including the age, principal occupation and business experience
during the past five years, and the number of shares of Common Stock
beneficially owned by such director. The Board of Directors has nominated the
persons listed below as nominees, all of whom presently are directors of
FirstMerit. If any nominee should become unavailable for any reason, it is
intended that votes will be cast for a substitute nominee designated by the
Board of Directors. The Board of Directors has no reason to believe that the
nominees named will be unable to serve if elected. The nominees receiving the
greatest number of votes cast by shareholders by proxy or in person at the
meetings, a quorum being present, will be elected. A majority of the outstanding
shares of Common Stock constitute a quorum. Proxies cannot be voted for a
greater number of nominees than the number named in the Proxy Statement.

NOMINEES FOR ELECTION AS CLASS I DIRECTORS
(TERM EXPIRING IN 2001)(A)

2
<PAGE> 6

CLASS II DIRECTORS CONTINUING IN OFFICE
(TERM EXPIRING IN 1999)(A)
Karen S. Belden 56 Co-owner of Easterday's Gift Shop and 22,562(d)
Florist, Canton, Ohio; and Realtor, The 169,600(e)(g)
Prudential-DeHoff Realtors, Canton, Ohio; 3,600(f)
formerly Director of The CIVISTA Corporation, a
publicly held savings and loan holding company
R. Cary Blair 58 Chairman, President and Chief Executive 3,918(e)
Officer of Westfield Companies, Westfield 3,600(f)
Center, Ohio, a group of insurance companies;
Director, The Davey Tree Expert Company, Kent,
Ohio, a publicly held horticultural company
Robert W. Briggs 56 President, Buckingham, Doolittle & 1,170(d)
Burroughs, Akron, Ohio, a legal professional 107,602(e)(g)
association 3,600(f)
Elizabeth A. Dalton 69 Formerly member of Board of Education of 4,623(d)
the Akron City School District 1,476(e)(g)
8,400(f)
Clifford J. Isroff 61 Chairman and Secretary, I Corp., Akron, 9,200(d)
Ohio, a manufacturing holding company 8,400(f)
Stephen E. Myers 54 President, Chief Executive Officer and 13,096(d)
Director of Myers Industries, Inc., Akron, 4,800(f)
Ohio, a publicly held manufacturer and distributor
of rubber, plastic and formed metal products;
Director, Reko International Group, Inc., a
publicly held manufacturer of plastic injection
molds
</TABLE>

3
<PAGE> 7

CLASS III DIRECTORS CONTINUING IN OFFICE
(TERM EXPIRING IN 2001)(A)

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FOR PAST FIVE YEARS SHARES BENEFICIALLY OWNED
NAME AGE AND OTHER INFORMATION NUMBER-PERCENT(B)(C)
- - ---------------------------- -------------------------------------------------- -------------------------
<S> <C> <C> <C>
John C. Blickle 47 President of Heidman, Inc., dba McDonald's 20,276(d)
Restaurants, Akron, Ohio, quick service 2,612(e)
restaurants 8,400(f)
Sid A. Bostic [ ] President and Chief Operating Officer, [ ]
FirstMerit Corporation, President and Chief
Operating Officer, FirstMerit Bank, N.A.; formerly
Chairman, President and Chief Executive Officer,
Norwest Bank, Fort Wayne, Indiana.
Terry L. Haines 51 President, Chief Executive Officer and 3,469(e)
Director, A. Schulman Inc., Akron, Ohio, a 7,200(f)
publicly held manufacturer and wholesaler of
plastic materials
Robert G. Merzweiler 44 President and Chief Executive Officer, 3,000(d)
Landmark Plastic Corporation, Akron, Ohio, 8,400(f)
a manufacturer of plastic products
Justin T. Rogers, Jr. 68 Formerly Chairman, Chief Executive Officer 11,311(d)
and Director, Ohio Edison Company, Akron, 7,200(f)
Ohio, a publicly held electric utility company
</TABLE>

- - ---------------

(a) The directors have served since the year following their name: Messrs.
Isroff, Rogers and Mrs. Dalton, 1981; Mr. Lloyd, 1988; Messrs. Blickle and
Myers, 1990; Messrs. Merzweiler and Haines, 1991; Mr. Read, 1992; Mr.
Cochran, 1995; Mrs. Belden and Messrs. Blair and Briggs, 1996, and Mr.
Bostic, 1998.

(b) Number of shares beneficially owned is reported as of February 1, 1998. None
of the directors beneficially owns one percent (1%) or more of the
outstanding shares of FirstMerit Common Stock.

(c) All directors and executive officers as a group ([ ] persons) beneficially
owned [ ] shares of Common Stock as of February 1, 1998. This
represents approximately [ ]% of the outstanding shares of Common Stock
as of that date.

(d) Sole voting and/or investment power.

(e) Shared voting and/or investment power.

(f) Shares with respect to which the nominee or director has the right to
acquire beneficial ownership by exercising options granted under
FirstMerit's 1992 Stock Option Program ("1992 Stock Plan"), the 1992
Directors Stock Option Program ("Director Stock Plan") or the 1997 Stock
Plan ("1997 Stock Plan").

(g) Includes reported beneficial ownership of the following numbers of shares
owned by family members or trusts, as to which the director disclaims any
beneficial ownership: Mrs. Belden, 169,600; Mr. Briggs, 107,602; Mrs.
Dalton, 1,476; and Mr. Lloyd, 289,357.

There are (and during the past five years there have been) no legal
proceedings material to an evaluation of the ability of any director or
executive officer of FirstMerit to act in such capacity or concerning his
integrity.

4
<PAGE> 8

For purposes of this Proxy Statement, Citizens National Bank, FirstMerit
Community Development Corporation, FirstMerit Credit Life Insurance Company,
Peoples Bank, N.A. and Peoples National Bank, are deemed the operating
subsidiaries of FirstMerit (the "Subsidiaries").

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of FirstMerit has several committees and has
appointed members to such committees since the 1997 Annual Meeting of
Shareholders.

The Audit and Review Committee consisted of Robert G. Merzweiler, Chairman,
Karen S. Belden, Robert W. Briggs, Robert M. Carter and Stephen E. Myers. It met
five times during 1997 to examine and review internal and external reports of
operations of FirstMerit and the Subsidiaries for presentation to the full Board
of Directors.

The Loan Committee consisted of Philip A. Lloyd, II, Chairman, Karen S.
Belden, John C. Blickle, Elizabeth A. Dalton, Justin T. Rogers, Jr. and Del
Spitzer. It met eight times during 1997 to monitor the lending activities of the
Subsidiaries to help assure such activities were conducted in a manner
consistent with FirstMerit's loan policy.

The Compensation Committee was appointed to establish policies for and
levels of reasonable compensation for directors, officers and employees of
FirstMerit and its Subsidiaries, and to administer (among other plans)
FirstMerit's stock option plans, the FirstMerit Corporation Senior Officer
Incentive Compensation Program (the "Compensation Program") and the Executive
Committee Life Insurance Program ("Insurance Plan"). In addition, the Committee
is involved in administering the Employee Stock Purchase Plan ("ESPP"), the
Pension Plan for Employees of FirstMerit Corporation and Subsidiaries ("Pension
Plan"), the Executive Supplemental Retirement Plan ("SERP") and the FirstMerit
Corporation and Subsidiaries Employees' Salary Savings Retirement Plan ("401(k)
Plan"). The committee met eight times during 1997. Its members consisted of
Roger T. Read, Chairman, R. Cary Blair, Terry L. Haines, Clifford J. Isroff,
Philip A. Lloyd, II and Justin T. Rogers, Jr.

The Executive Committee evaluates and responds to management's
recommendations concerning planning, management, acquisitions, nominations for
directors and committee membership. The Executive Committee is authorized to act
for the Board of Directors when the Board is not in session, except in certain
limited circumstances. The members of the Executive Committee consisted of
Clifford J. Isroff, Chairman, John C. Blickle, John R. Cochran, Philip A. Lloyd,
II, Roger T. Read, Justin T. Rogers, Jr. and Del Spitzer. It met thirteen times
during 1997.

There were fifteen regularly scheduled and special meetings of the Board of
Directors in 1997. All of the directors attended more than 75 percent of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings of committees on which each served.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires FirstMerit's
directors, officers and persons who own more than ten percent of its Common
Stock ("Section 16 Filers") to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and Nasdaq, and to furnish
FirstMerit with copies of all such forms they file. FirstMerit understands from
the information provided to it by the Section 16 Filers that for 1997 all
reports were duly and timely filed by the Section 16 Filers, except for: a Form
4 which was filed 31 days late for the purchase of 10,000 shares by Phillip A.
Lloyd, II; and a Form 4 which was filed 2 days late for the purchase of 4,000
shares by Roger T. Read.

5
<PAGE> 9

EXECUTIVE COMPENSATION AND OTHER INFORMATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table provides certain summary information concerning the
compensation paid or accrued by FirstMerit and its Subsidiaries, to or on behalf
of its executive officers. The table shows the compensation of the individuals
serving in the capacity of Chief Executive Officer, as well as each of the four
other most highly compensated executive officers of FirstMerit, determined as of
the end of the last fiscal year, December 31, 1997 (collectively the "Named
Executive Officers"), and for the fiscal years ended December 31, 1996 and 1995:

SUMMARY COMPENSATION

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------------------ ------------------------------------------
OTHER RESTRICTED SECURITIES
NAME AND ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY(2) BONUS(3) COMPENSATION(5) AWARDS(6) OPTIONS/SARS(7) COMPENSATION(8)
- - ----------------------- ---- -------- -------- ------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
John R. Cochran(1) 1997 $492,500 $264,000 $52,436 25,200 110,000 $[ ]
Chairman and Chief 1996 430,000 -0- 32,652 -0- 200,000 218,790
Executive Officer 1995 333,333 140,000(4) -0- 25,000 150,000 103,792
Robert P. Brecht 1997 188,000 72,800 27,716 -0- -0- [ ]
Executive Vice 1996 180,250 34,000 -0- -0- 60,000 70,863
President 1995 158,030 19,157 -0- -0- 4,980 39,101
Jack R. Gravo 1997 236,792 100,000 -0- -0- 9,000 [ ]
Executive Vice 1996 195,920 46,384 -0- -0- 75,000 59,460
President 1995 167,083 5,000 -0- -0- 5,900 22,919
John R. Macso 1997 272,505 130,000 -0- -0- 15,914(9) [ ]
Executive Vice 1996 263,013 44,975 42,123 -0- 105,000 93,093
President 1995 222,901 42,876 33,560 -0- 10,200 37,715
Carrie L. Tolstedt(10) 1997 192,083 100,000 -0- -0- 9,000 [ ]
Executive Vice 1996 [ ] [ ] [ ] [ ] 60,000 [ ]
President 1995 [ ] [ ] [ ] [ ] 10,000 [ ]
</TABLE>

- - ---------------

(Share information for 1996 and 1995 has been restated to give effect to the
2-for-1 stock split effective in September 1997.)

(1) Mr. Cochran became employed by FirstMerit effective March 1, 1995. Mr.
Cochran was promoted to Chairman and Chief Executive Officer from President
and Chief Executive Officer on February 1, 1998.

(2) Includes the deferred portion of salary under the 401(k) Plan.

(3) For 1997, 1996 and 1995, the Bonus includes the amounts paid pursuant to
the Compensation Program. The amounts included represent the incentive
Bonus earned for the prior year, but which cannot be determined and paid
until the first quarter of the following year. For 1997, the bonus amounts
reported for Messrs. Cochran, Brecht, Gravo and Macso, and for Mrs.
Tolstedt, include amounts which were deferred to subsequent periods
pursuant to FirstMerit's Executive Deferred Compensation Plan. The amounts
deferred to a subsequent period for each of these individuals was as
follows: Mr. Cochran, $198,000, Mr. Brecht, $3,760, Mr. Gravo, $-0-, Mr.
Macso, $84,075, and Mrs. Tolstedt, $-0-.

(4) The bonus paid Mr. Cochran in 1995 was negotiated at the time of his
acceptance of employment with FirstMerit and was not computed or paid
pursuant to the Compensation Program. No cash bonus was paid Mr. Cochran in
1996 since he was paid a bonus in December 1996 as part of his original
compensation package.

(5) Perquisites provided to each of the Named Executive Officers, other than
Messrs. Cochran and Brecht, did not exceed the disclosure thresholds
established under Securities and Exchange Commission ("SEC") regulations
and are not included in this total. The totals indicated for Messrs.
Cochran and Brecht relate to expenses paid on their behalf or reimbursed to
them for relocation expenses.

6
<PAGE> 10

(6) None of the Named Executive Officers, other than Mr. Cochran, has any
restricted stock holdings. Mr. Cochran received on March 1, 1995, 25,000
shares of restricted Common Stock pursuant to the FirstMerit Corporation
Restricted Stock Plan-1995 and he received on April 9, 1997, 25,200 shares
of restricted Common Stock pursuant to the 1997 Stock Plan. As of December
31, 1997, the fair market value of such shares equaled $1,424,425, based
upon a closing market value of $28.375 per share. The restrictions on the
1995 shares lapse equally over a three-year period beginning in March,
2001, restrictions on the 1997 shares lapse equally over a three-year
period beginning in April, 2005, but all may vest at an earlier time due to
death, disability, a Change of Control, Termination Without Cause or
Termination for Good Reason. The dividends on such shares are currently
paid to Mr. Cochran. No long-term incentive plan payouts were made in 1997.

(7) Stock Options granted in 1997 to two of the Named Executive Officers, due
to promotions and increased job responsibilities, consisted of two separate
grants: a "multi-year" grant, representing a grant equal to approximately
three times each Named Executive Officer's annual grant, and a
"performance-vested" grant, equal to one-half the size of each Named
Executive Officer's multi-year grant. The multi-year grants vest in 50%
increments on the anniversary of the option grant in 1998 and 1999. The
performance-vested grants vest in January 1999, but only if FirstMerit
reaches a specified level of cumulative earnings per share ("EPS")
(otherwise they will vest in August, 2005). In 1997, Mr. Cochran received
an annual grant. The breakdown between the multi-year grant, the
performance-vested grant, and annual grants is shown in the table
"Options/SAR Grants in Last Fiscal Year."

(8) "All Other Compensation" for 1997 includes the following: (i) contributions
to FirstMerit's 401(k) Plan to match the 1997 pre-tax elective deferral
contributions made by each to the 401(k) Plan: Mr. Cochran, $7,125, Mr.
Brecht, $7,125, Mr. Gravo, $7,125, Mr. Macso, $7,125, and Mrs. Tolstedt,
$6,107; (ii) amounts accrued under FirstMerit's 1992 and 1997 Stock Plans
as "Dividend Units" (an accrued right to a cash payment) granted: Mr.
Cochran, $264,650, Mr. Brecht, $49,380, Mr. Gravo, $52,229, Mr. Macso,
$53,200, and Mrs. Tolstedt, $42,790; (iii) amounts paid or accrued by
FirstMerit for life and accidental death insurance under FirstMerit's
Insurance Program: Mr. Cochran, $[ ], Mr. Brecht, $[ ], Mr. Gravo,
$[ ], Mr. Macso, $[ ], and Mrs. Tolstedt, $[ ]; and (iv) amounts
paid or accrued by FirstMerit for fees as a director and committee member
of FirstMerit: Mr. Cochran, $-0-, Mr. Brecht, $-0-, Mr. Gravo, $-0-, Mr.
Macso, $-0-, and Mrs. Tolstedt, $-0-.

(9) Reload option granted on the exercise of a prior option.

(10) Mrs. Tolstedt became employed by FirstMerit on May 15, 1995.

7
<PAGE> 11

STOCK OPTIONS

The following table contains information concerning the grant of stock
options and/or dividend units during fiscal 1997 under FirstMerit's 1992 and
1997 Stock Plans to the Named Executive Officers:

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM(2)
OPTIONS/SARS EMPLOYEES IN OR BASE EXPIRATION -----------------------
NAME GRANTED(1) FISCAL YEAR PRICE DATE 5% 10%
- - --------------------- ------------ ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John R. Cochran...... 110,000(3) 40.6% $20.31 4/09/07 $1,405,013 $3,560,580
Robert P. Brecht..... -0- N/A N/A N/A N/A N/A
Jack R. Gravo........ 6,000(5) 2.2% 23.44 7/15/07 88,448 99,357
3,000(4) 1.1% 23.44 7/15/07 44,224 49,678
------- -----
9,000 3.3%
John R. Macso........ 15,914(6) 5.8% 21.63 2/15/06 216,478 243,178
Carrie L. Tolstedt... 6,000(5) 2.2% 23.44 7/15/07 88,448 99,357
3,000(4) 1.1% 23.44 7/15/07 44,224 49,678
------- -----
9,000 3.3%
Total All 270,914
Employees..........
</TABLE>

- - ---------------

(1)The 1992 and 1997 Stock Plans generally provides for granting of incentive
stock options ("ISOs"), non-qualified stock options ("NQSOs") (collectively
"Stock Options") and shares of restricted stock. The option price per share
of ISOs must be equal to the fair market value of a share of Common Stock on
the date granted; the option price of NQSOs may be set by the Compensation
Committee. The purchase price of any Stock Option must be paid upon exercise
in (i) immediately available funds, (ii) shares of Common Stock, or (iii) a
combination of (i) and (ii). If granted by the Committee, a one-time reload
option of NQSOs may be granted equal to the number of whole shares used by
the participant to exercise an option. Shares of stock acquired upon the
exercise of the reload option are restricted from sale for two years. If
granted by the Committee, an option may be transferred to an option holders'
immediate family. In the event of a "Change of Control," unless the Committee
otherwise determines, any unvested Stock Options will immediately vest.
"Change of Control" is basically defined as a change in 30% or more of the
beneficial ownership of FirstMerit or a change of a majority of the Board of
Directors within a two-year period.

The 1992 and 1997 Stock Plans also provide that a dividend Unit be awarded to
participants with respect to each share of Common Stock for which a Stock
Option is granted, for a period of up to five years. The 1992 and 1997 Stock
Plans provide that in the event of a Change of Control, FirstMerit will
promptly thereafter pay to each participant an amount equal to the aggregate
amount accrued on the dividend Units held by the participant on the date of
the Change of Control.

(2)This computation does not include the value of any Dividend Units which might
be paid during such time.

(3)Mr. Cochran did not receive a multi-year grant of options in 1996 as did the
Named Executive Officers. NQSOs which vest one year after grant.

8
<PAGE> 12

(4)NQSOs which vest at the earlier of January, 1999 if FirstMerit has a
specified cumulative earnings per share, or August 16, 2005.

(5)NQSOs which vest 50% on the anniversary date of the grant in 1998 and 1999.

(6)Reload option granted on the exercise of a prior option.

OPTION EXERCISES AND HOLDINGS

The following table contains information concerning the exercise of Stock
Options and/or Dividend Units under FirstMerit's 1982 Stock Plan, the 1992 Stock
Plan, and the 1997 Stock Plan, and information on unexercised Stock Options held
as of the end of the fiscal year, by the Named Executive Officers:

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN- THE-MONEY
AT FISCAL OPTIONS/SARS AT
YEAR-END YEAR-END
---------------- ---------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE(1)
- - -------------------------- --------------- -------- ---------------- ---------------------
<S> <C> <C> <C> <C>
John R. Cochran -0- $ -0- 190,000/270,000 $2,911,250/3,187,150
Robert P. Brecht 724 6,832 34,172/46,669 533,141/635,852
Jack R. Gravo -0- -0- 22,564/67,336 324,058/840,644
John R. Macso 23,332 160,407 15,914(2)/81,668 107,340/1,112,726
Carrie L. Tolstedt 6,000 57,000 17,332/52,334 250,548/635,841
</TABLE>

- - ---------------

(Share information for 1996 and 1995 has been restated to give effect to the
2-for-1 stock split effective in September 1997.)

(1) Based upon the closing price reported in the Nasdaq National Market System
("Nasdaq") for the Common Stock of FirstMerit on December 31, 1997. This
computation does not include the value of any Dividend Units which might be
paid during such time.

(2) Reload option granted on the exercise of a prior option.

BENEFICIAL OWNERSHIP AND STOCK OWNERSHIP GUIDELINES

The following table sets forth certain information regarding the Named
Executive Officers' beneficial ownership of the Common Stock of the Company as
of February 1, 1998.

<TABLE>
<CAPTION>
TITLE OF NUMBER OF PERCENT OF
CLASS NAME OF OFFICER SHARES(1) CLASS(2)
- - ------------- ------------------ --------------- -------------
<S> <C> <C> <C>
Common Stock John R. Cochran 421,772 --
Common Stock Robert P. Brecht 45,543 --
Common Stock Jack R. Gravo 107,229 --
Common Stock John R. Macso 48,985 --
Common Stock Carrie L. Tolstedt 24,506 --
</TABLE>

9
<PAGE> 13

- - ---------------

(1) The amounts shown represent the total shares owned outright by such
individuals together with shares which are issuable upon the exercise of
currently exercisable stock options. These individuals have the right to
acquire the shares indicated after their names, upon the exercise of such
stock options: Mr. Cochran, 190,000; Mr. Brecht, 34,512; Mr. Gravo, 22,564;
Mr. Macso, 15,914; and Mrs. Tolstedt, 17,332.

(2) None of the listed officers owns more than one percent of the applicable
class.

In February 1997, the Board adopted stock ownership guidelines for its
officers and directors. The guidelines state that within five years after
adoption, officers of FirstMerit should own Common Stock equal to at least the
following levels of their base salary: Chief Executive Officer, five times;
Executive Vice President, three times; and Senior Vice President, two times.

PENSION PLANS

Under the Pension Plan for Employees of FirstMerit Corporation of Ohio and
Subsidiaries (the "Pension Plan"), a tax-qualified defined benefit pension plan,
pension benefits may be paid to executive officers in the future. Executive
officers participate in the Pension Plan on the same basis as other employees.

Pension benefits at normal retirement age 65 are based on the average base
salary (exclusive of bonuses and overtime, if either exists, and not exceeding
$150,000 in 1997) of each participant for the highest four consecutive years
during the last ten years of employment. The benefits payable equal the sum of
1.35 percent of such average base salary multiplied by the number of years of
credited service, up to 40 years, plus .55 percent of such average base salary
in excess of "covered compensation," multiplied by the number of years of
credited service not exceeding 35 years. "Covered compensation" for this purpose
means the average (without indexing) of the Social Security taxable wage base in
effect for each calendar year during the 35-year period ending with the last day
of the calendar year in which the participant attains (or will attain) Social
Security retirement age.

Contributions to the Pension Plan are actuarially determined and cannot be
appropriately allocated to individual participants. As of December 31, 1997, the
following had the number of years of credited service indicated: Mr. Cochran had
three years, Mr. Brecht, 12 years, Mr. Gravo, 22 years, Mr. Macso, 32 years, and
Mrs. Tolstedt, three years.

10
<PAGE> 14

The following table sets forth estimated annual retirement benefits
(assuming the payments are made on a straight-life annuity basis) at age 65
payable to persons in the specified remuneration and years of service
classification under the FirstMerit Pension Plan.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT ON
AVERAGE BASE DECEMBER 31, 1996 WITH YEARS OF SERVICE INDICATED
SALARY USED FOR -------------------------------------------------------------------------
PLAN BENEFITS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
- - --------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 $ 40,333 $ 53,777 $ 67,221 $ 80,665 $ 94,109 $104,234
200,000 54,583 72,777 90,971 109,165 127,359 140,859
250,000 68,833 91,777 114,721 137,665 160,609 177,484
300,000 83,083 110,777 138,471 166,165 193,859 214,109
350,000 97,333 129,777 162,221 194,665 227,109 250,734
400,000 111,583 148,777 185,971 223,165 260,359 287,359
450,000 125,833 167,777 209,721 251,665 293,609 323,984
500,000 140,083 186,777 233,471 280,165 327,859 360,609
550,000 154,333 205,777 257,221 308,665 360,109 397,234
600,000 168,583 224,777 280,971 337,165 393,359 433,859
650,000 182,833 243,777 304,721 365,665 426,609 470,484
700,000 197,083 262,777 328,471 394,165 459,859 507,109
750,000 211,333 281,777 352,221 422,665 493,109 543,734
</TABLE>

The foregoing figures are provided without regard to limitations on annual
pension benefits that may be paid from a tax-qualified pension plan and trust
under the Internal Revenue Code ("Code").

FirstMerit has adopted the Supplemental Pension Plan for its employees,
including executive officers. Under this Plan, persons entitled to receive
benefits under the Pension Plan are eligible to receive the excess amounts they
would have been entitled to under the Pension Plan but for limitations on
maximum benefits imposed by the Code on tax-qualified pension plans.

FirstMerit has adopted the SERP which provides certain pension benefits to
its executive officers who are participants under the Plan. The SERP provides
total executive retirement income based upon a formula of 50% of the final
two-year average of the executive's earnings plus 1.5% of the final two-year
average earnings for each year of service up to ten years. The maximum
retirement income provided under the Plan is 65%. This retirement income
"target" is then reduced by the benefits provided by other retirement and
supplemental plans, social security, and the benefits from previous employers'
retirement plans to produce a net benefit under the SERP. In addition, benefits
are further reduced by three percent for each year where the retirement age is
less than 65 years. The Plan benefit is payable for 15 years.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee members consisted of Roger T. Read, Chairman, R.
Cary Blair, Terry L. Haines, Clifford J. Isroff, Philip A. Lloyd, II and Justin
T. Rogers, Jr. In serving on the Compensation

11
<PAGE> 15

Committee, Mr. Lloyd participated in the determination of the compensation to be
received by the executive officers of FirstMerit. With regard to stock-based
compensation and compensation subject to the Section 16 rules, effective
November 1, 1997 and thereafter, Mr. Lloyd has recused himself from the
determination of such compensation.

Philip A. Lloyd, II, is also a director of FirstMerit and served on the
Executive and Loan Committees. Mr. Lloyd is a shareholder of the law firm of
Brouse & McDowell which performs legal services for FirstMerit and its
Subsidiaries. During 1997, Brouse & McDowell was paid $[ ] for legal services
rendered to FirstMerit and $[ ] for legal services rendered to the Subsidiaries.
The amount of Mr. Lloyd's interest in such fees cannot be practically
determined.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS

This section discusses the employment contracts and termination agreements
for the Chief Executive Officer and the other Named Executive Officers.

Effective March 1, 1995, FirstMerit entered into an employment agreement
with John R. Cochran. The agreement provides that Mr. Cochran will serve as the
President and Chief Executive Officer, established his initial annual base
salary at $400,000 (annual base in 1997 is $510,000), as well as providing for
the terms of payment of salary and benefits in the event of his death or
disability, or in the event of termination. During 1996, it provided for the
payment of a bonus of $140,000, and thereafter for his participation in the
Compensation Program. Mr. Cochran was also provided rights to stock options and
the grant of restricted stock, as well as certain additional benefits provided
executive officers (including those provided to all employees generally), as
detailed in the "Summary Compensation" and "Option/SAR Grants in Last Fiscal
Year" tables above. The agreement contains a covenant not to compete for one
year if Mr. Cochran terminates his employment other than for Good Cause, or if
he is terminated for Cause. This one-year period begins at the later to occur of
the termination of the agreement or the last payment due thereunder. The Board
of Directors also agreed to nominate Mr. Cochran to the Board of Directors. The
agreement terminates February 28, 1999, unless terminated at an earlier time.

FirstMerit also entered into a termination agreement with Mr. Cochran
effective March 1, 1995, as amended May 15, 1996 and December [ ,] 1997. The
agreement provides that if there is a Change of Control of FirstMerit, and Mr.
Cochran subsequently is terminated during the term of the agreement, he will be
entitled to an amount payable in one lump sum. This amount will be equal to the
greater of Mr. Cochran's base salary at the time of termination or immediately
prior to the Change of Control, plus an amount equal to the average annual
incentive compensation paid to Mr. Cochran over the two years preceding the
Change of Control, multiplied by three. Such amount will not be paid, however,
if the termination is (i) due to death, retirement or disability, (ii) by
FirstMerit for Cause, or (iii) by Mr. Cochran other than for Good Reason. In
addition, Mr. Cochran is to receive benefits during the three-year period after
termination which must include medical, disability and life insurance benefits
identical to those in effect just before the Change of Control. Mr. Cochran also
will be entitled to immediate vesting of all stock options and similar rights in
which he participates. FirstMerit must also pay for one year (up to $35,000) of
reasonable outplacement expenses incurred by Mr. Cochran in seeking comparable
employment through a placement firm. Notwithstanding any of the foregoing, the
termination compensation and benefits to Mr. Cochran will not exceed that which
is permitted under the Code without being considered "parachute payments."

To promote stability among the executive officers, the Board of Directors
of FirstMerit authorized FirstMerit to enter into agreements with certain key
officers regarding their termination due to a Change of Control. All of

12
<PAGE> 16

the other Named Executive Officers ("Officers") have agreements which have a
Change of Control provision. The Officers' termination agreements are identical
to that provided to Mr. Cochran and discussed above, except that the applicable
amount and period for benefits is two years, and the outplacement amount is
$25,000.

FIRSTMERIT COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

PHILOSOPHY AND COMPOSITION OF COMMITTEE

FirstMerit's executive compensation program is designed to enable
FirstMerit to attract, motivate and retain top quality executive officers by
providing a fully competitive and comprehensive compensation package. It
provides for competitive base salaries that reflect individual performance as
well as annual variable incentive awards payable in cash for the achievement of
financial performance goals established by the Compensation Committee and
approved by the non-employee members of the Board of Directors. In addition,
long-term, stock-based incentive awards are granted to strengthen the mutuality
of interest between the executive officers and FirstMerit's shareholders and to
motivate and reward the achievement of important long-term performance
objectives of FirstMerit.

FirstMerit's executive compensation program is administered by the
Compensation Committee of the Board of Directors, composed entirely of the
following directors: Roger T. Read, Chairman, R. Cary Blair, Terry L. Haines,
Clifford J. Isroff, Philip A. Lloyd, II and Justin T. Rogers, Jr. None of these
directors is an employee of FirstMerit.

ESTABLISHMENT OF EXECUTIVE COMPENSATION PROGRAM AND PROCEDURES

The Compensation Committee has utilized the services of Sibson & Company
("Sibson"), a nationally recognized independent compensation consulting company,
to review and to make recommendations regarding the effectiveness of
FirstMerit's executive compensation program. As part of that review and for
purposes of recommending a program to FirstMerit, Sibson was requested to review
the executive compensation program being utilized and compare it to similar
programs of public corporations that shared one or more common traits with
FirstMerit (such as market capitalization, asset size and geographic location),
which the Committee and Sibson felt might be FirstMerit's most direct
competitors for executive talent, and also to assist FirstMerit in establishing
and weighting specific assessment areas for the Chief Executive Officer. The
recommendations of Sibson have been utilized by the Committee and Board of
Directors.

The Compensation Committee is responsible for the establishment of the base
salary, as well as the award level for the annual incentive compensation
program, both subject to approval by the members of the Board of Directors who
are not employees of FirstMerit ("non-employee directors"). The Committee is
also responsible for the award level and administration of the stock option
programs for executive officers, as well as recommendations regarding other
executive benefits and plans, also subject to approval by the non-employee
directors. In reviewing the individual performance of the Named Executive
Officers whose compensation is detailed in this Proxy Statement, the Committee
takes into account the views of the Chief Executive Officer of FirstMerit. In
reviewing the Chief Executive Officer's performance, the Committee reports on
that evaluation directly to the non-employee members of the Executive Committee
and then to the directors.

As an overall evaluation tool in determining levels of compensation for the
FirstMerit executive officers, as well as for the Chief Executive Officer, the
Committee reviews the compensation policies of other public companies, as well
as published financial industry salary surveys. Although the Committee has not
defined or established a specific comparison group of bank holding companies for
determination of compensation, those listed in the salary surveys which share
one or more common traits with FirstMerit, such as market capitalization,

13
<PAGE> 17

asset size, geographic location, similar lines of business and financial returns
on assets and equity, are given more weight. The companies listed in the various
salary surveys may or may not be included in the Nasdaq Banks Index (an index
included in FirstMerit's "Performance Graph" below), and as such, the Committee
is unable to make any comparisons between the two.

COMPONENTS OF THE NAMED EXECUTIVE OFFICER COMPENSATION

For 1997, the executive compensation program for the Named Executive
Officers consisted of four primary components: (i) a base salary; (ii) incentive
compensation; (iii) executive benefits, such as insurance and retirement
benefits; and (iv) benefits which are generally available to all employees.
These components are discussed in detail below.

BASE SALARY. The Named Executive Officers' base salaries and performance
are reviewed annually. They are primarily determined by evaluating the
individual officers' level of responsibilities for their position, comparing
their position to similar positions within FirstMerit and by comparing salaries
detailed in the salary surveys for executives with similar experience and
responsibilities outside of FirstMerit.

Significant weight is also given to the views of the Chief Executive
Officer of FirstMerit regarding how the Named Executive Officer has succeeded in
his or her annual performance goals. These goals are established by the Chief
Executive Officer for each Executive Officer, including personal and bank goals.
The nature of these goals differs depending upon each Officer's job
responsibilities. Goals are both qualitative in nature, such as the development
and retention of key personnel, quality of products and services and management
effectiveness; and quantitative in nature, such as sales and revenue goals and
cost containment.

The Named Executive Officer's base salary is then established by the
Committee based upon the items listed above, as well as upon the Company's
overall performance during the preceding year. The Committee does not place a
specific weight value on any of the above-listed factors. The base salary as
established is subject to approval by the non-employee directors.

INCENTIVE COMPENSATION. Incentive compensation includes two programs: the
award of cash bonuses through the Compensation Program and through the award of
stock options under the 1997 Stock Plan. The participants and awards under
FirstMerit's incentive plans are determined by the Committee, subject to
approval by the non-employee directors.

Cash Incentive Compensation. FirstMerit's policy for cash incentive
compensation is to reward the achievement of financial objectives
established in advance by the Compensation Committee. Prior to the
beginning of each year performance targets are established by the
Committee. The performance targets focus upon the net operating income
("NOI") of FirstMerit, and depending upon the duties of an Executive
Officer, the NOI of one or more subsidiaries. Also included as targets are
individual performance goals. The Committee has the right, however, to also
take into consideration other factors related to the individual performance
of the Named Executive Officer in making an award to him or her under the
Compensation Program. An incentive bonus award for a Named Executive
Officer depends upon two basic factors: (i) the position held by the Named
Executive Officer which establishes a maximum bonus available based upon a
percentage of the officer's base salary (60-100% of the base salary for the
Chief Executive Officer; 40-70% of the base salary for the other Executive
Officers) and (ii) the extent to which the performance targets, including
the NOI target, meet or exceed the target levels.

14
<PAGE> 18

All incentive bonus awards are currently paid in cash. The bonuses
paid in 1997 were based upon FirstMerit's 1996 performance.

Stock Options. FirstMerit's philosophy for granting stock options is
based on the principles of encouraging key employees to remain with the
Company by providing them with a long-term interest in the Company's
overall performance and providing an incentive to those executive officers
to manage with a view toward maximizing long-term shareholder value. Stock
option grants provide an incentive for the creation of shareholder value
since the full benefit of the grant to each Named Executive Officer can
only be realized with an appreciation in the price of FirstMerit's Common
Stock.

Option grants provide the right to purchase shares of FirstMerit's
Common Stock at the fair market value on the date of the grant. Stock
options are granted pursuant to the 1992 and 1997 Stock Plans using
guidelines which include corporate performance, individual responsibilities
and performance.

In 1996, the Committee had determined and awarded to certain key
individuals "performance" stock options, which vests in January, 1999, but
only if a target cumulative EPS is achieved, otherwise the option vests
August 16, 2005, as well as "multi-year" stock options representing a grant
equal to approximately three times each Named Executive Officer's normal
annual grant, as determined by the Committee, which vests in 33 1/3%
increments on the anniversary of the option grant in 1997,1998, and 1999.
The Chief Executive Officer did not receive a multi-year grant in 1996.
Because of the grants made in 1996, the Committee only granted options
(performance or multi-year) in 1997 to newly hired personnel or personnel
who had received a promotion. The Committee does not intend to make
additional option grants in 1998, except to newly-hired or promoted
executives.

The option grants made in 1997 for all participants in the 1992 and
1997 Stock Plans were for [ ] shares of FirstMerit Common Stock,
of which [ ] shares, or [ ]% of all options granted were
awarded the Named Executive Officers.

Stock Ownership Guidelines. In February 1996, the Board adopted stock
ownership guidelines for its officers and directors. The guidelines state
that within five years after adoption, officers of FirstMerit should own
Common Stock equal to at least the following levels of their base salary:
Chief Executive Officer, five times; Executive Vice President, three times;
and Senior Vice President, two times. The Board reviews the level of
ownership to monitor the progress towards attaining these guidelines.

DETERMINATION OF THE CHIEF EXECUTIVE OFFICER'S COMPENSATION

On February 1, 1998, FirstMerit named John R. Cochran as its Chairman and
Chief Executive Officer. Prior to this Mr. Cochran was the President and Chief
Executive Officer of FirstMerit Corporation, a position he was appointed to on
March 1, 1995. Before jointing FirstMerit, Mr. Cochran was the President and
Chief Executive Officer of Norwest Bank, Omaha, Nebraska, a principal subsidiary
of Norwest Corporation. Mr. Cochran's compensation for 1996 was the subject of
negotiation and was approved by the Board after a national compensation
consulting firm provided the Board with a detailed analysis and its opinion that
the compensation package was fair and in the best interests of FirstMerit. The
compensation package entered into with Mr. Cochran is detailed in this Proxy
under the tables and descriptive paragraphs of this section entitled "Executive
Compensation and Other Information."

As the Chief Executive Officer, Mr. Cochran's base salary for 1997 was
determined by the Committee through an assessment of several areas, including
the execution of the restructuring program, the annual financial results of
FirstMerit and his overall performance as a leader of the Company. In
determining compensation, the

15
<PAGE> 19

execution of the restructuring program and the annual financial results (which
focused on net operating income) were given a 75% weight by the Committee,
whereas overall performance as a leader was given a 25% weight by the Committee.
Overall performance was further broken down into seven sub-areas, three of which
were each given a 20% weight, while the other four were each given a 10% weight.
In addition to these factors, the Committee also reviewed information from
Sibson to determine if there were any overall trends in the financial services
industry regarding compensation of chief executive officers that which would
suggest any adjustments to the amounts to be paid to Mr. Cochran.

During 1997, Mr. Cochran participated in the 1997 Stock Plan and in the
Compensation Program. A cash bonus of $264,000 was awarded in 1997. The
determination of the stock option grants and grant of shares of restricted stock
to Mr. Cochran were awarded by the Committee on the same basis as the other
Named Executive Officers. Because Mr. Cochran did not receive a multi-year stock
option grant in 1996, the Committee may consider a stock option grant to Mr.
Cochran in 1998.

Based on these factors, the Committee established Mr. Cochran's annual base
salary for 1997 at $510,000, which was approximately a 16% increase from his
1996 base salary. Mr. Cochran was also granted options to purchase 110,000
shares of FirstMerit Common Stock at a per share price of $20.31 (100% of the
fair market value on the date of grant). All of the options granted were NQSOs.
Of the options for 110,000 shares, all will vest within one year of the grant.
[The remaining [ ] were performance options which vest at the earlier
of January, 19[ ], but only if a specified EPS is realized, otherwise they vest
on [ ].] The grant was made in accordance with the guidelines of the
Committee referenced above and equated to 40.6% of all options granted in 1997
to participants in the 1992 and 1997 Stock Plans.

DEDUCTIBILITY OF EXECUTIVE COMPENSATION

The Committee has reviewed the qualifying compensation regulations issued
by the Internal Revenue Service under Code Section 162(m) which provide that no
deduction is allowed for applicable employee remuneration paid by a publicly
held corporation to a covered employee to the extent that the remuneration paid
to the employee exceeds $1.0 million for the applicable taxable year, unless
certain conditions are met. Currently, remuneration is not expected to exceed
the $1.0 million base and therefore, compensation should not be affected by the
qualifying compensation regulations. Under the FirstMerit Corporation Executive
Deferred Compensation Plan ("Executive Deferred Plan"), which was approved by
the shareholders in April, 1996, amounts deferred by executives will not be
subject to Section 162(m). The Executive Deferred Plan permits executive
officers of FirstMerit to elect to defer their base salary and incentive
compensation in "stock units" (which are not actual shares of FirstMerit Common
Stock but are tied to the performance thereof.)

The foregoing report has been respectfully furnished by the members of the
Compensation Committee, being:

<TABLE>
<S> <C>
Roger T. Read, Chairman R. Cary Blair
Terry L. Haines Clifford J. Isroff
Philip A. Lloyd, II Justin T. Rogers, Jr.
</TABLE>

16
<PAGE> 20

PERFORMANCE GRAPH

Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on FirstMerit's Common Stock against the
cumulative return of the Nasdaq Banks Index, the Nasdaq Index and the S&P 500
Index for the period of five fiscal years commencing January 1, 1992 and ended
December 31, 1997.(1)

<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) FMER Nasdaq Nasdaq Banks(2) S&P 500
<S> <C> <C> <C> <C>
1992 100 100 100 100
1993 115.72 114.80 114.04 110.06
1994 114.67 112.21 113.63 111.51
1995 144.62 158.70 169.22 153.36
1996 177.28 195.19 223.41 188.55
1997 275.20 239.53 377.44 251.44
</TABLE>

- - ---------------

(1) Assumes that the value of the investment in FirstMerit Common Stock and each
index was $100 on December 31, 1992 and that all dividends were reinvested.

(2) This is a CRSP Index and includes all companies on Nasdaq within the SI
Codes of 602 and 671. To the extent Nasdaq makes available the identity of
the companies which comprise this index, the Company, in a prompt manner,
will make such information available to any person requesting such.

DIRECTOR COMPENSATION

The following table describes the standard arrangements pursuant to which
non-employee directors of FirstMerit were compensated for their services
effective in April 1996:

<TABLE>
<CAPTION>
ANNUAL FEE PER FEE PER COMMITTEE
BASE RETAINER FEE BOARD MEETING MEETING
- - ----------------- ------------- -----------------
<S> <C> <C>
$12,000 $ 700 $ 700
</TABLE>

The non-employee directors may also receive an additional cash payment of
$6,000 if certain performance based criterion are met by FirstMerit. In 1997 the
criterion were met and the directors received the additional payment.

17
<PAGE> 21

The non-employee directors who serve as the chairmen of the various Board
committees receive additional cash compensation as follows: Audit, Compensation
and Loan Committees, $625; and the Executive Committee, $775. FirstMerit may pay
fees to directors who are former officers of FirstMerit or the Subsidiaries but
not to directors who are incumbent officers of FirstMerit or the Subsidiaries.

The FirstMerit Director Deferred Compensation Plan ("Director Deferred
Plan"), which was approved by the shareholders in April, 1996, permits directors
of FirstMerit who are not employees to elect to defer their fees in either
"stock units" (which are not actual shares of FirstMerit Common Stock but are
tied to the performance thereof), or have them credited by FirstMerit to a
deferred benefit account which is credited with interest at a rate of Moody's
plus two. Ten of FirstMerit's directors participated in the Director Deferred
Plan during 1997.

On April 9, 1997, the shareholders approved the 1997 Stock Plan. This Plan
generally provides for granting of NQSOs to directors who are not full-time
employees of FirstMerit. Under the Plan, up to [200,000] shares of FirstMerit
Common Stock may be issued, subject to adjustment in the event of certain
corporate transactions as described below. Each participant in the Plan is
awarded annually, on the day after the Annual Meeting of Shareholders, NQSOs to
purchase 2,400 shares of Common Stock. The option price per share is 100 percent
of the fair market value of a share of Common Stock on the date the option is
granted. The Plan also provides that a Dividend Unit will be awarded to
participants with respect to each share of Common Stock for which a NQSO is
granted. The amount payable with respect to each Dividend Unit is equal to the
aggregate dividends actually paid on one share of Common Stock, to the extent
the participant held the Dividend Unit on the record date for payment of each
such dividend. Dividend Units will be awarded for terms of ten years, but they
will accrue dividends for only the five years following their award. The Plan
provides that in the event of a Change of Control, FirstMerit will promptly pay
to each participant an amount equal to the aggregate amount accrued on the
Dividend Units held by the participant on the date of the Change of Control.

In February 1996, the Board adopted stock ownership guidelines for its
officers and directors. The guidelines state that within five years after
adoption, directors of FirstMerit should own Common Stock equal to five times
their base retainer.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During 1997, certain directors and executive officers of FirstMerit, and
their associates, were customers of and had banking transactions with the
Subsidiaries of FirstMerit in the ordinary course of business. FirstMerit
expects that these relationships and transactions will continue in the future.
All loans and commitments to loans included in such transactions, including
equipment leasing transactions, were made and will be made in the future on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons not
employed by FirstMerit. The existing transactions do not involve more than the
normal risk of collectability or present other unfavorable features.

The law firm of Brouse & McDowell performed legal services for FirstMerit
and the Subsidiaries in 1997. Philip A. Lloyd, II, a Class I Director of
FirstMerit, is a shareholder of the law firm. The amounts of such fees for legal
services are indicated under "Compensation Committee Interlocks and Insider
Participation," above. The amount of Mr. Lloyd's interest in such fees cannot
practicably be determined.

The law firm of Buckingham, Doolittle & Burroughs received fees for the
performance of legal services for FirstMerit and a subsidiary in 1997. Robert W.
Briggs, a Class II Director of FirstMerit, is a shareholder of the law firm. The
amount of Mr. Briggs' interest in such fees cannot practicably be determined.

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The law firm of Colella & Kolczun, P.L.L. received fees for the performance
of legal services for a subsidiary of FirstMerit in 1997. Richard Colella, a
nominee to serve as a Class I Director of FirstMerit, is a shareholder of the
law firm. The amount of Mr. Colella's interest in such fees cannot practicably
be determined.

FirstMerit and the Subsidiaries also employ other law firms to perform
legal services.

PROPOSAL NO. 2

INCREASE OF AMOUNT OF AUTHORIZED COMMON STOCK

The Board of Directors has approved and determined to submit to the
FirstMerit stockholders a proposal to amend FirstMerit's Articles to increase
the number of shares of authorized Common Stock from 80,000,000 to 160,000,000
shares. As of February 1, 1998, there were issued and outstanding [62, , ]
shares of Common Stock (excluding [ ] shares of Common Stock held as
treasury shares by FirstMerit ). In addition, as of that date, approximately
[ ] shares of Common Stock were reserved for issuance under the various
FirstMerit employee stock option and stock purchase plans. As such, the balance
of unreserved shares of FirstMerit Common Stock otherwise available for issuance
would be approximately [ ] shares.

The Board of Directors of FirstMerit is of the opinion that the present
balance of shares of Common Stock available for issuance is insufficient to
enable FirstMerit to provide for its employee stock option and purchase plans
and to allow it to take advantage of business opportunities, such as
acquisitions, that may arise. In [December, 1994], at the Special Meeting of
Shareholders, the stockholders approved an increase in authorized shares of
Common Stock from 40,000,000 to 80,000,000 shares and of Preferred Stock from
3,500,000 to 7,000,000 shares. Since that time, FirstMerit has declared a
two-for-one stock split in September, 1997, completed the acquisition of The
CIVISTA Corporation for an exchange of stock in early 1995 where it issued
approximately [13,026,238] shares (taking into effect the two-for-one stock
split in September, 1997), and proposes to issue up to 4,300,000 shares in the
merger of CoBancorp Inc. with and into FirstMerit (although FirstMerit intends
to repurchase the same number of shares). These actions have reduced the number
of shares of FirstMerit Common Stock available for future transactions and stock
splits. The increase in authorized shares would give FirstMerit the flexibility
to take advantage of various business opportunities, including acquisitions,
financings, stock splits and stock dividends, the sale of shares of Common Stock
in the open market or otherwise, for other corporate purposes, as well as
providing for future employee stock option and purchase plans.

Authorized but unissued shares may be issued at some later date upon
authorization by the FirstMerit Board of Directors, except as may be limited by
the FirstMerit Articles, law, or by the rules of the National Association of
Securities Dealers, Inc. The holders of shares of FirstMerit Common and
Preferred Stock are not entitled to preemptive rights to purchase or have
offered to them any shares of Common or Preferred Stock whether now or hereafter
authorized. Although the proposed amendments would increase the number of shares
of FirstMerit Common Stock available for issuance, the directors currently have
the authority described above and the amendment would not increase the authority
of the Board to take such actions. The Board has no present plans, except under
the merger with CoBancorp Inc., to issue shares of FirstMerit Common and/or
Preferred Stock for such purposes.

The Board of Directors does not believe that an increase in the number of
authorized shares of FirstMerit Common Stock will have a significant impact on
any attempt to gain control of FirstMerit. It is possible, however, that the
availability of authorized but unissued shares of FirstMerit Common Stock could
discourage third parties from attempting to gain such control since the Board
could authorize the issuance of shares of Common Stock in a private placement or
otherwise to one or more persons. Such an issuance of shares of Common Stock
could

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<PAGE> 23

dilute the voting power of a person attempting to acquire control of FirstMerit,
increase the cost of acquiring such control, affect the accounting treatment
thereof or otherwise hinder such efforts. As to other anti-takeover measures
which effect FirstMerit, see "Existing Anti-Takeover Provisions Under Ohio Law,"
and "Existing Anti-Takeover Provisions in FirstMerit's Articles and Regulations,
and the FirstMerit Shareholder Rights Plan" under Proposal No. 3.

It is proposed that the first paragraph of Article Fourth of the FirstMerit
Articles be amended to read as follows:

FOURTH: The maximum number of shares which the Corporation is authorized to
issue and to have outstanding at any time shall be One Hundred Sixty-Seven
Million, which shall be classified as follows:

(a) One Hundred and Sixty Million (160,000,000) of said shares shall be
Common Stock, without par value; and

(b) Seven Million (7,000,000) of said shares shall be Series Preferred
Stock, without par value ("no par value Preferred Stock");

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL

PROPOSAL NO. 3

APPROVAL TO MAKE THE OHIO CONTROL SHARE ACQUISITION ACT
INAPPLICABLE TO FIRSTMERIT

OVERVIEW OF PROPOSAL

The Board of Directors has approved a resolution to amend the Code of
Regulations of the Corporation which, if adopted, would make an Ohio
anti-takeover statute, referred to herein as the "Control Share Acquisition
Act," inapplicable to FirstMerit.

REASONS FOR THE PROPOSED AMENDMENT

The Board of Directors believes that the reasons given for adoption of the
Control Share Acquisition Act are not as compelling today as they were in 1982.
Since 1982, there have been significant developments in Ohio and federal law,
which provide significant additional protection to shareholders when faced with
a hostile tender offer or when significant blocks of a corporation's shares are
purchased. In addition, the Board believes there are circumstances under which
compliance with the Control Share Acquisition Statute may be unnecessarily
costly to FirstMerit, have a chilling effect on the willingness of third parties
to buy shares of FirstMerit, may deprive shareholders of the right to sell their
shares, or may adversely impact the Board's ability to act in what it believes
is the best interests of shareholders in hostile takeover attempts.

The Board of Directors believes that opting-out of the Control Share
Acquisition Act is advantageous to FirstMerit and its shareholders for the
following reasons:

DEVELOPMENTS IN OHIO CORPORATE AND SECURITIES LAW, AND FEDERAL SECURITIES
LAWS. The Board of Directors believes that the reasons for enactment of the
Control Share Acquisition Act are not as compelling today as they were in 1982.
Since the adoption of the Control Share Acquisition Act, there have been
material additions to Ohio corporate and securities laws that provide
significant protective measures against hostile takeovers.

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<PAGE> 24

In 1990, Ohio enacted the Ohio Interested Shareholder Transaction Statute
(the "Merger Moratorium Statute"), which severely limits a purchaser of 10% or
more of the shares of an Ohio corporation from engaging in transactions with the
corporation. Unless the purchaser first obtains approval of the board of
directors of the corporation of his acquisition, he is precluded from taking
certain actions for three years.

In 1986, Ohio corporate law was amended to confirm the authority of Ohio
corporations to adopt certain protective plans which are commonly called
"shareholder rights plans." These plans can have the effect of strengthening the
bargaining power of a board of directors in a hostile change of control contest.
The Board of Directors adopted such a plan in 1993.

Subsequent to 1982, the provisions of the Ohio Securities Act regulating
"control bids" have been administered by the Ohio Division of Securities in such
a manner that they are presently held to be enforceable and not preempted by
federal law, or invalid under the Constitution of the United States.

Since 1982, there have been amendments to rules and regulations promulgated
under the Securities Exchange Act of 1934 (the "1934 Act") or changes in the
interpretation of such rules and regulations which lessen the "coercive" effect
of tenders offers. These changes relate to the length of the tender offer
period, all holders and best price rule, withdrawal of tender offers, required
disclosures and timeliness of disclosures.

UNTIMELY AND COSTLY SPECIAL MEETINGS OF SHAREHOLDERS AND LITIGATION. Under
the Control Share Acquisition Act, the board of directors of a corporation is
required to convene a special meeting of shareholders of the corporation if any
person, even a person who does not own any shares of the corporation, sends an
"acquiring party statement" to the corporation. The statement must indicate,
among other things, that within the next 360 days such person may effect a
control share acquisition and represents to the corporation that he has the
financial capability to effect a control share acquisition.

Under the statute, the meeting to vote on the control share acquisition is
required to be held within 50 days of the corporation's receipt of the acquiring
party statement. Since FirstMerit is subject to the proxy rules promulgated
under the 1934 Act, FirstMerit would be required immediately to convene a
meeting of its Board of Directors to determine the corporation's position with
respect to the proposed control share acquisition, to authorize and approve
appropriate proxy materials for the special meeting, and generally to take all
action necessary and appropriate to convene a special meeting of shareholders of
a public company. The procedures to comply with the Control Share Acquisition
Act's special meeting and proxy counting requirements are extremely complex,
uncertain as to application and must be completed within an extremely short
period of time.

Not only would this be costly to FirstMerit, but the uncertainty of the
outcome of the vote on the control share acquisition could adversely affect
trading in FirstMerit securities or could adversely impact or delay pending
corporate transactions, such as a public or private equity or debt financing,
proposed acquisitions or sales, or other major transaction.

The Ohio public corporations which have been subject to these types of
hostile attempts have also been simultaneously subjected to significant and
costly lawsuits regarding the applicability and constitutionality of the Control
Share Acquisition Act. The costs and time which a corporation much devote to
defending against such lawsuits, and in preparing for and holding the required
special meetings, are significant.

POSSIBLE ADVERSE IMPACT IN A CHANGE OF CONTROL CONTEST. On its face, the
Control Share Acquisition Act appears protective of the interests of
shareholders in that it allows the holders of shares which are not interested
shares to determine the outcome of a change of control contest. In many
situations, however, the Board of Directors believes that the uncertainty and
delay caused by the requirements of the statute could hamper the ability of the
Board to induce other parties to present competing offers.

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<PAGE> 25

In addition, a situation could develop where if the first person to propose
a control share acquisition owns a substantial percentage of FirstMerit's
shares, e.g. 19%, such a person could be in a position to have a veto power over
any subsequent and competing control share acquisition. This results from the
fact that such a 19% holder would be the holder of a substantial portion of the
shares which would be treated as "disinterested" shares when voting on a
competing control share acquisition since many of FirstMerit's outstanding
shares are likely to be treated as interested shares.

UNNECESSARY RESTRICTION ON THE RIGHT OF A SHAREHOLDER TO SELL OR BUY
SHARES. As noted below, no shareholder is permitted, without the approval of
the holders of interested shares, to sell his shares to any person who as a
result of such purchase would first attain ownership of 20%, 33% or a majority
of the outstanding shares of FirstMerit. The Board believes, as discussed below,
that such a restriction on a shareholder's right to sell shares, or another
person's right to buy shares, is unnecessary in view of the other protections
afforded shareholders by Ohio corporate and federal law.

BACKGROUND ON THE OHIO CONTROL SHARE ACQUISITION ACT

In November 1982, the Ohio General Corporation Law was amended to include
the "Control Share Acquisition Act") which requires that "control share
acquisitions" be approved by shareholders. In adopting the statute, the General
Assembly of Ohio found that Ohio corporate law did not adequately protect the
interests of shareholders of Ohio corporations when confronted with
"non-traditional" changes of control of a corporation, such as changes of
control effected by tender offers or accumulations of significant blocks of
shares in the public markets or private transactions.

The Ohio Control Share Acquisition Act gives shareholders who are not
holders of "interested shares" a veto power over certain acquisitions of shares
of an Ohio corporation. The Control Share Acquisition Act automatically applies
to all corporations incorporated in Ohio and having certain jurisdictional
contacts with Ohio, unless the shareholders vote to "opt out" of the statute.

SUMMARY OF CONTROL SHARE ACQUISITION ACT PROCEDURES

Under the Control Share Acquisition Act, a "control share acquisition" is a
direct or indirect acquisition by any person or entity of such number of voting
shares of a corporation which, when added to those shares which the person or
entity already owns or with respect to which the person or entity may exercise
or direct the exercise of the voting power, would give the person or entity
voting power within any of the following ranges: (a) one-fifth or more but less
than one-third of such voting power; (b) one-third or more but less than a
majority of such voting power; or (c) a majority or more of such voting power.

A person or entity who proposes to make a control share acquisition must
provide notice of the proposal to the corporation in accordance with specific
requirements. The board of directors must then call a special meeting of the
shareholders within 50 days for the purpose of voting on the proposed control
share acquisition. A quorum for this meeting is achieved only if there is
present at the meeting, in person or by proxy, a majority of the voting power of
the corporation in the election of directors, and a majority of the portion of
such voting power excluding the voting power of "interested shares."

"Interested shares" are those shares of the corporation in respect of which
any of the following persons may exercise or direct the exercise of the voting
power of the corporation in the election of directors: (a) the acquiring person;
(b) any officer of the corporation elected or appointed by the directors of the
corporation; or (c) any employee of the corporation who is also a director of
the corporation. In addition "interested shares" are defined to include those
acquired by any person: (i) after the first date of public disclosure of the
transaction and prior to

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the date of the meeting, provided such person has paid over $250,000 for such
purchased shares or such purchased shares represents greater than .05% of the
outstanding shares of the company being acquired, and (ii) that transfers such
shares for valuable consideration after the record date established by the
directors, if accompanied by the voting power.

A proposed control share acquisition may be consummated only if approved at
the meeting by both of the following groups: (1) holders of a majority of the
voting power of the corporation in the election of directors represented at the
meeting by person or by proxy, and (2) holders of a majority of the portion of
such voting power excluding the voting power of interested shares. A proposed
control share acquisition which receives approval in the manner described must
be consummated, in accordance with the terms so authorized, no later than 360
days following shareholder authorization of the control share acquisition.

EXISTING ANTI-TAKEOVER PROVISIONS OF OHIO LAW

MERGER MORATORIUM LAW. Under the Merger Moratorium Statute, a corporation
is prohibited from entering into a "Chapter 1704 transaction" with the direct or
indirect beneficial owner of 10% or more of the shares of such corporation (a
"10% shareholder") for at least three years after the shareholder attains his
10% ownership unless the board of directors of the corporation approves, before
the shareholder attains his 10% ownership, either the transaction or the
purchase of shares resulting in his 10% ownership. A "Chapter 1704 transaction"
is broadly defined to include, among other things, a merger or consolidation
involving the corporation and the 10% shareholder, a sale or purchase of
substantial assets between the corporation and the 10% shareholder, a
reclassification, recapitalization, or other transaction proposed by the 10%
shareholder that results in an increase in the proportion of shares beneficially
owned by the 10% shareholder, and the receipt by the 10% shareholder of a loan,
guarantee, other financial assistance, or tax benefit not received
proportionately by all shareholders.

Even after the three-year period, Ohio law restricts these transactions
between the corporation and the 10% shareholder. At that time, such a
transaction may proceed only if (a) the board of directors of the corporation
had approved the purchase of shares that gave the shareholder his 10% ownership,
(b) the transaction is approved by the holders of shares of the corporation with
at least two-thirds of the voting power of the corporation (or a different
proportion set forth in the corporation's articles of incorporation), including
at least a majority of the outstanding shares after excluding shares held or
controlled by the 10% shareholder, or (c) the business combination results in
shareholders, other than the 10% shareholder, receiving a prescribed fair price
plus interest for their shares.

"ANTI-GREENMAIL" STATUTE. Pursuant to ORC Section 1707.043, a public
corporation formed in Ohio may recover profits that a shareholder makes from the
sale of the corporation's securities within 18 months after making a proposal to
acquire control or publicly disclosing the possibility of a proposal to acquire
control. The corporation may not, however, recover from a person who proves
either (i) that his sole purpose in making the proposal was to succeed in
acquiring control of the corporation and there were reasonable grounds to
believe that he would acquire control of the corporation or (ii) that his
purpose was not to increase any profit or decrease any loss in the stock. Also,
before the corporation may obtain any recovery, the aggregate amount of the
profit realized by such person must exceed $250,000. Any shareholder may bring
an action on behalf of the corporation if a corporation refuses to bring an
action to recover these profits. The party bringing such an action may recover
his attorneys' fees if the court having jurisdiction over such action orders
recovery of any profits. An Ohio corporation may elect not to be covered by the
"anti-greenmail" statute with an appropriate amendment to its articles of
incorporation, but neither FirstMerit nor CoBancorp has taken any such corporate
action to opt out of the statute.

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CONTROL BID PROVISIONS OF THE OHIO SECURITIES ACT. Ohio law further
requires that any offeror making a control bid for any securities of a "subject
company" pursuant to a tender offer must file information specified in the Ohio
Securities Act with the Ohio Division of Securities when the bid commences. The
Ohio Division of Securities must then decide whether it will suspend the bid
under the statute within three calendar days. If it does so, it must initiate
hearings on the suspension within 10 calendar days of the suspension date and
make a determination of whether to maintain the suspension, within 16 calendar
days of the suspension date. For this purpose, a "control bid" is the purchase
of, or an offer to purchase, any equity security of a subject company from a
resident of Ohio that would, in general, result in the offeror acquiring 10% or
more of the outstanding shares of such company. A "subject company" includes any
company with both (a) its principal place of business or principal executive
office in Ohio or assets located in Ohio with a fair market value of at least
$1,000,000 and (b) more than 10% of its record or beneficial equity security
holders are resident in Ohio, more than 10% of its equity securities are owned
of record or beneficially by Ohio residents, or more than 1,000 of its record or
beneficial equity security holders are resident in Ohio.

EXISTING ANTI-TAKEOVER PROVISIONS IN FIRSTMERIT'S ARTICLES AND REGULATIONS,
AND THE FIRSTMERIT SHAREHOLDER RIGHTS PLAN

FIRSTMERIT'S ARTICLES AND REGULATIONS. FirstMerit's Articles and
Regulations, as amended by the stockholders at the 1988 Annual Shareholders
Meeting, contain certain provisions that can be viewed as having anti-takeover
effects. Under these provisions, FirstMerit's Board of Directors is divided into
three classes with approximately one-third of the members of the Board nominated
for election each year, directors may be removed only for cause, the maximum
number of directors is fixed in the Articles at 24 (although it is currently set
at 18 by the stockholders) and advance notice is required from stockholders
nominating a director. In addition, the affirmative vote of 80% of FirstMerit's
outstanding voting power is required to approve certain business transactions
(such as mergers or disposition of substantially all of its assets) involving
another entity owning ten percent or more of the outstanding capital stock of
FirstMerit, unless (a) the transaction is structured to provide a "fair price"
to all stockholders; and (b) the transaction has been approved by (i) a majority
of the Board prior to the entity acquiring ten percent, or (ii) by two-thirds of
the Board and by a majority of the continuing directors any time before
consummation. If such approval is received, the affirmative vote of only
two-thirds of FirstMerit 's outstanding voting power is required.

AUTHORIZED COMMON AND PREFERRED STOCK. Article [ ] of the Articles
provide some protection against attempts by persons or entities to take control
of FirstMerit . This Article provides for authorized Common Stock of 80,000,000
shares (160,000,000 if Proposal No. 2 is adopted) and authorized voting serial
Preferred Stock of 7,000,000 shares. As of February 1, 1998, there are
[ ] shares of the Common Stock unissued and not reserved for issuance,
and there are [ ] shares of the serial Preferred Stock unissued and not
reserved for issuance. Under Ohio law, shareholder approval is unnecessary for
the issuance of additional authorized shares of Common Stock unless the issuance
would result in one person or entity owning, directly or indirectly, twenty
percent (20%) or more of the outstanding stock or unless an acquisition is
involved which would result in twenty percent (20%) or greater increase in the
outstanding shares. The Articles provide that serial Preferred Stock may be
issued in one or more series and expressly vest the board of directors with
authority to determine the designated preferences and certain other rights of
each series. Although the Board of Directors has no present intent of doing so,
shares of Common Stock or serial Preferred Stock could be issued to a party who
would vote against a particular transaction. The issuance of such additional
shares could increase the absolute cost of a business combination and thereby
discourage a potential buyer.

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NO CUMULATIVE VOTING. Article Fifth of the Articles eliminates the right of
shareholders to vote cumulatively in the election of directors. The inability to
vote cumulatively increases the difficulty of minority shareholders to obtain
even proportional representation on the board of directors. This provision was
approved by the shareholders at the Annual Shareholders meeting in 19[87].

FIRSTMERIT'S SHAREHOLDER RIGHTS PLAN. On October 21,1993, the FirstMerit
Board of Director's adopted the FirstMerit Shareholder Rights Agreement, between
FirstMerit and FirstMerit Bank, N.A., as rights agent ("Rights Plan"). The
Rights Plan was amended in July, 1996. Unless otherwise indicated, defined terms
in this section are as defined in the Rights Agreement.

Under the terms of the Rights Plan, a dividend of one preferred share
purchase right (a "Right") was declared for each outstanding share of FirstMerit
Common Stock. Each Right entitles its registered holder to purchase from
FirstMerit, after the "Distribution Date," one one-hundredth of a share of
Series A Preferred Stock, no par value (the "Preferred Shares"), for $45 (the
"Purchase Price"), subject to adjustment. The Rights are evidenced by the Common
Stock certificates until the close of business on the earlier of the
"Distribution Date" which is (i) the tenth business day (or such later date as
the Board of Directors of FirstMerit may from time to time fix by resolution)
after the date on which any "Person" commences a tender or exchange offer which,
if consummated, would result in such Person's becoming an Acquiring Person (as
discussed below), or (ii) the tenth business day (or such earlier or later date
as the Board of Directors of FirstMerit may from time to time fix by resolution)
after the first date of public announcement by FirstMerit that such Person has
become an Acquiring Person (the "Flip-in Date"); provided that if a tender or
exchange offer referred to in clause (i) is canceled, terminated or otherwise
withdrawn prior to the Distribution Date without the purchase of any shares of
stock pursuant thereto, such offer shall be deemed never to have been made.

An Acquiring Person is any Person who is the Beneficial Owner of 10% or
more of the outstanding Common Stock, provided, however, such term shall not
include (i) FirstMerit, any wholly-owned subsidiary of FirstMerit or any
employee stock ownership or other employee benefit plan of FirstMerit, (ii) any
person who is the Beneficial Owner of 10% or more of the outstanding Common
Stock as of the date of the Rights Agreement or who shall become the Beneficial
Owner of 10% or more of the outstanding Common Stock solely as a result of an
acquisition of Common Stock by FirstMerit, until such time as such Person
acquires additional Common Stock, other than through a dividend or stock split,
(iii) any Person who becomes an Acquiring Person without any plan or intent to
seek or affect control of FirstMerit if such Person promptly divests sufficient
securities such that such 10% or greater Beneficial Ownership ceases; or (iv)
any Person who Beneficially Owns Common Stock consisting solely of (A) shares
acquired pursuant to the grant or exercise of an option granted by FirstMerit in
connection with an agreement to merge with, or acquire, FirstMerit prior to a
Flip-in Date, (B) shares owned by such Person and its Affiliates and Associates
at the time of such grant, (C) shares, amounting to less than 1% of the
outstanding Common Stock, acquired by Affiliates and Associates of such Person
after the time of such grant and (D) shares which are held by such Person in
trust accounts, managed accounts and the like or otherwise held in a fiduciary
capacity, that are beneficially owned by third persons who are not Affiliates or
Associates of such Person or acting together with such Person to hold shares, or
which are held by such Person in respect of a debt previously contracted.

The Rights Plan provides that, until the Distribution Date, the Rights will
be transferred with and only with the Common Stock. Promptly following the
Distribution Date, separate certificates evidencing the Rights would be mailed
to holders of record of Common Stock at the Distribution Date.

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It is proposed that the Amended and Restated Code of Regulations be amended
by adding the following new Article XI:

The provisions of Section 1701.831 of the Ohio Revised Code, as
amended, requiring shareholder approval of control share acquisitions, as
defined in Section 1701.01(Z) of such Code, as amended, shall not be
applicable to the corporation.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL

PROPOSAL NO. 4

AMENDMENT TO FIRSTMERIT'S EMPLOYEE STOCK PURCHASE PLAN

The Employee Stock Purchase Program (the "Employee Plan") provides
employees of FirstMerit with the opportunity to acquire FirstMerit Common Stock
on a payroll deduction basis. The Employee Plan currently limits an employee to
electing up to five percent of his compensation deducted. The directors have
amended the Employee Plan, subject to shareholder approval, to increase the
amount which can be deducted to 10 percent. Shareholder approval is required
under Section 423 of the Internal Revenue Code.

The Employee Plan provides that any person who has been employed by
FirstMerit or any subsidiary for at least six months and who currently is
employed on a regularly scheduled basis is eligible to participate in the
Employee Plan ("Eligible Employee"). Executive officers of FirstMerit are not
considered Eligible Employees.

Eligible Employees can through payroll deduction purchase shares of
FirstMerit Common Stock at 85% of the current market price, and at 100% of the
current market value purchase shares through dividend reinvestment. An Eligible
Employee may have up to five percent (10% if approved by the shareholders) of
his compensation deducted, however, no Eligible Employee may purchase shares
exceeding $25,000 in fair market value in any one calendar year or purchase
shares if, after the purchase, the Employee would own more than five percent of
the outstanding shares of Common Stock

Under the Employee Plan, there are currently [ ] shares of Common
Stock available for issuance, subject to adjustment in the event of certain
transactions affecting FirstMerit's capital structure.

As of January 1, 1997, Merrill Lynch was appointed as the administrator of
the Employee Plan. All shares of FirstMerit Common Stock acquired on behalf of
an Eligible Employee are maintained on a book entry basis on the records of
FirstMerit or the Plan Administrator. An Eligible Employee is deemed the owner
of such shares and has the rights of a shareholder at the time the shares are
acquired. Dividends which accrue on the shares will be paid and distributed to
the Eligible Employee, unless the reinvestment option is elected. If an Eligible
Employee requests delivery of the Common Stock held in his account, whole shares
will be delivered to the Eligible Employee and any fractional shares will be
paid in cash.

The grant of an option pursuant to the Employee Plan is not a taxable event
to an Eligible Employee for federal income tax purposes. Also, the transfer of
shares of Common Stock to an Eligible Employee on exercise of an option will not
result in taxable income to the Eligible Employee (and no deduction will be
allowed to FirstMerit with respect to such transfer) if the Eligible Employee
was an employee of FirstMerit at all times from the date of the grant of the
option until three months before the exercise (the "Employment Requirement"). In
such case, the Eligible Employee's tax basis for the shares so acquired will be
equal to the purchase price at exercise. However, if the Eligible Employee sells
or otherwise disposes of the shares of Common Stock so acquired within two years
of the date of the grant or within one year after the transfer of the shares to
him (the "Required Holding Periods"), he must report as ordinary compensation
income in the year of disposition (and

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FirstMerit may deduct) the difference between the option price and the fair
market value of the shares at the time of exercise of the option. The Eligible
Employee increases his basis in the shares by the amount he reports as ordinary
income. The difference between this increased basis and the selling price is a
capital gain or loss.

If the Eligible Employee disposes of (or dies while owning) the shares
after expiration of the Required Holding Periods, the Eligible Employee must
report as ordinary compensation income in the year of disposition (or death) the
lesser of: (i) the excess of the fair market value of the shares at the time of
disposition or death over the amount paid for the shares, or (ii) the excess of
the fair market value of the shares at the time the option was granted over the
amount paid for the shares. However, FirstMerit may not deduct this amount. The
Eligible Employee may increase the basis of his shares by the amount which he is
required to report as ordinary compensation income upon disposition. The
difference between this increased basis and the selling price of such shares is
a capital gain or loss.

If the Employment Requirement is not satisfied, the Eligible Employee will
recognize ordinary compensation income at the time of exercise of the option
equal to (and FirstMerit may deduct) the amount by which the fair market value
of the shares at exercise exceeds the amount paid for such shares.

The directors adopted the Employee Plan in February 1992 and it was
approved by the shareholders in April 1992. The directors made certain
administrative amendments to the Employee Plan in August 1995 and November 19,
1996. The Employee Plan provides that the directors may from time to time alter,
amend, suspend or terminate the Employee Plan; provided, however, that the
directors may not (i) change the number of shares reserved under the Employee
Plan except for adjustments necessitated by capital changes as described above,
(ii) extend the duration of the Employee Plan, (iii) extend the exercise period
for purchasing shares, (iv) change the purchase price of shares, (v) change the
eligibility requirements, or (vi) make any other changes that would adversely
affect the terms and conditions of any outstanding rights of an Eligible
Employee without the Eligible Employee's consent.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL

27
<PAGE> 31

PRINCIPAL SHAREHOLDERS

The following table describes the beneficial ownership of Common Stock of
each entity who was known by FirstMerit to be the beneficial owner of more than
five percent of the total shares issued and outstanding on or about February 14,
1998. Under rules and regulations promulgated by the Commission, a person is
deemed to be the "beneficial owner" of all the shares with respect to which he
has or shares voting power or investment power, regardless of whether he is
entitled to receive any economic benefit from his interest in the shares. As
used herein, the term "voting power" means the power to vote or to direct the
voting of shares and "investment power" means the power to dispose of or to
direct the disposition of shares.

These parties have certified to the Commission that the shares were
acquired in the ordinary course of business and were not acquired for the
purpose of and do not have the effect of changing or influencing the control of
FirstMerit.

<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP % OF CLASS
- - ---------------------------------------- -------------------- ----------
<S> <C> <C>
Cincinnati Financial Corporation [ ] [ ]%
P.O. Box 145496
Cincinnati, OH 45250
FirstMerit Bank, N.A. [ ] [ ]%
Trust Division
121 S. Main Street
Akron, OH 44308
</TABLE>

AUDITORS

FirstMerit has selected Coopers & Lybrand as its auditors for 1998. Coopers
& Lybrand has served as auditors for FirstMerit since 1992. A representative of
the auditors will be present at the meeting and will be available to answer
questions. The representative will have the opportunity to make a statement at
the meeting.

SHAREHOLDER PROPOSALS AND BOARD NOMINATIONS

Any proposals to be considered for inclusion in the proxy material to be
provided to shareholders of FirstMerit for its next Annual Meeting of
Shareholders to be held in 1999 may be made only by a qualified shareholder and
must be received by FirstMerit no later than October 27, 1998.

The Executive Committee will consider nominees for directors of FirstMerit
recommended by shareholders who submit the person's name and qualifications, in
writing, to the Executive Committee. Under Article II, Section 2, of
FirstMerit's Regulations, shareholders entitled to vote for the election of
directors who intend to nominate a director for election must deliver written
notice to the Secretary of FirstMerit no later than (i) with respect to the
election to be held at an annual meeting of shareholders, 90-days in advance of
such meeting, and (ii) with respect to the election to be held at a special
meeting of shareholders, the close of business on the seventh day following the
date on which notice of such meeting is first given to shareholders. The notice
from the shareholder must set forth certain information concerning the
shareholder and each nominee, including names and addresses, a representation
that the shareholder is entitled to vote and intends to appear in person or by
proxy at the meeting, a description of arrangements or understandings between
the shareholder and each nominee, such other information required to be included
in a proxy statement, and the consent of each nominee to serve as a director of
FirstMerit if so elected.

28
<PAGE> 32

GENERAL

The accompanying proxy is solicited by and on behalf of the Board of
Directors of FirstMerit, whose notice of meeting is attached to this Proxy
Statement, and the entire cost of such solicitation will be borne by FirstMerit.
In addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by directors, officers and employees of
FirstMerit. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held of record by such persons, and FirstMerit
will reimburse them for reasonable out-of-pocket expenses incurred by them in
connection therewith. FirstMerit has engaged Georgeson & Company Inc. to aid in
the solicitation of proxies in order to assure a sufficient return of votes on
the proposals to be presented at the meeting. It is expected that Georgeson will
primarily solicit institutional investors and owners not of record who are
non-objecting beneficial owners of FirstMerit Common Stock. The costs of such
services are estimated at $[6,000], plus reasonable distribution and mailing
costs.

Management of FirstMerit has no information that other matters will be
brought before the meeting. If, however, other matters are properly presented,
the accompanying proxy will be voted in accordance with the best judgment of the
proxy holders with respect to such matters.

/s/ Terry E. Patton
Terry E. Patton,
Secretary

Akron, Ohio
February 23, 1998

29
<PAGE> 33
FIRSTMERIT CORPORATION PROXY

SOLICITED BY THE BOARD OF DIRECTORS

WILLIAM B. POE, FRANK H. HARVEY, JR. AND JAMES L. HILTON, or any of
them, with full power of substitution, are hereby authorized to represent the
shareholder designated hereby and to vote all Common Stock of such shareholder
in FirstMerit Corporation (the "Company") at the Annual Meeting of Shareholders
of the Company to be held on Wednesday, April 8, 1998, and any adjournment(s)
thereof, with respect to the matters listed on the reverse side of this card.

PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.

Please sign this proxy card exactly as your name or names appear
hereon. Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be that
of an authorized officer who should state his or her title.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

- - ---------------------------------- ----------------------------------

|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE

FOR WITHHOLD FOR ALL EXCEPT
1. For the election of five Class I Directors. [ ] [ ] [ ]

Nominees:

John R. Cochran, Richard Colella, Philip A. Lloyd, II,
Roger T. Read and Richard N. Seaman

Instruction: To withhold authority to vote for any individual nominee, mark
the "For All Except" box and strike a line through the nominee's name in the
list above.

RECORD DATE SHARES:

Please be sure to sign and date this Proxy. Date:___________________

- - ---------------------------------- ------------------------------------
Shareholder sign here Co-owner sign here

<PAGE> 34

FOR AGAINST ABSTAIN
2. To approve the increase of Common Stock to [ ] [ ] [ ]
160,000,000 shares

FOR AGAINST ABSTAIN
3. To make the Ohio Control Share Acquisition Act [ ] [ ] [ ]
inapplicable to FirstMerit

FOR AGAINST ABSTAIN
4. To approve the amendment to FirstMerit's Employee [ ] [ ] [ ]
Stock Purchase Plan to allow employees to deduct
up to 10% of compensation

5. Such other business as properly may come before said meeting and any
adjournment(s) thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF THIS PROXY IS SIGNED AND NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS SET FORTH HEREIN.

Mark box at right if comments or address change have [ ] been noted on the
reverse side of this card.

DETACH CARD DETACH CARD

<PAGE> 35

FIRSTMERIT CORPORATION
III Cascade Plaza
Akron, Ohio 44308

February 23, 1998

Dear Shareholder:

Please take note of the important information enclosed with this Proxy
Ballot. There are a number of issues related to the management and operation of
your Company that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.

Your vote counts, and you are strongly encouraged to exercise your
right to vote your shares.

Please mark the boxes on the proxy card to indicate how your shares
shall be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.

Your vote must be received prior to the Annual Meeting of Shareholders,
Wednesday, April 8, 1998.

Thank you in advance for your prompt consideration of these matters.

Sincerely,

FirstMerit Corporation