<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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EMERALD FINANCIAL CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
OHIO 34-1842953
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
</TABLE>
14092 PEARL ROAD
STRONGSVILLE, OHIO 44136
(440) 238-7311
(Address, including zip code, and telephone number, including area code of
Registrant's principal executive offices)
JOHN F. ZIEGLER
EXECUTIVE VICE PRESIDENT
EMERALD FINANCIAL CORP.
14092 PEARL ROAD
STRONGSVILLE, OHIO 44136
(440) 238-7311
(Name, address, including zip code and telephone number, including area code, of
agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [X]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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<CAPTION>
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AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(2) PRICE(2) REGISTRATION FEE
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, without par 30,000 shares(1) $13.75 $412,500 $142.23
value........................
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</TABLE>
(1) Plus such indeterminate number of additional shares as may be required to be
issued in the event of an adjustment as a result of an increase in the
number of issued shares of common stock resulting from a subdivision of such
shares, the payment of stock dividends or certain other capital adjustments.
(2) Calculated on the basis of the last reported sales price on the NASDAQ
National Market System on May 20, 1998 as provided in Rule 457(c).
PAGE 1 OF 39. EXHIBIT INDEX APPEARS ON SEQUENTIALLY NUMBERED PAGE 20.
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Dear Shareholder:
We are pleased to send you this Prospectus describing our Dividend
Reinvestment and Stock Purchase Plan (the "Plan"), which has recently been
amended. Through the Plan, you may automatically invest cash dividends that you
receive on your shares of Common Stock, no par value (the "Common Stock"), of
Emerald Financial Corp. (the "Company"), as well as optional cash payments made
by you under the Plan, in additional shares of Common Stock. The Company
reserves the right to suspend, modify or terminate the Plan at any time.
Participants in the Plan enjoy the following benefits:
- You will pay no service charges or brokerage commissions for shares of
Common Stock purchased on your behalf under the Plan.
- Your dollars will be invested in full and fractional shares to three
decimal places.
- Dividends are credited to your account on both full and fractional
shares.
- Your dividends will be invested quarterly and cash payments will be
invested monthly.
- Your recordkeeping will be simplified since you will receive a statement
each time there is activity in your account.
- The shares of Common Stock purchased on your behalf under the Plan will
be held in safekeeping until termination of your participation in the
Plan, or until you request that a certificate be issued to you.
- You may terminate your participation in the Plan at any time.
The following pages of the Prospectus provide complete details of the Plan
in simple question and answer form. We recommend that you review the description
of the Plan carefully and that you retain this Prospectus for future reference.
If you are not enrolled in the Plan but wish to do so, simply complete the
enclosed Authorization Card and return it in the enclosed postage-paid envelope.
You may enroll in dividend reinvestment only (partial or whole), in optional
cash payments only, or in both. IF YOU ARE ALREADY ENROLLED IN THE PLAN, YOU
NEED NOT TAKE ANY ACTION TO CONTINUE YOUR PARTICIPATION IN THE PLAN. If you do
not participate in the Plan, you will continue to receive checks for your
dividends as they are declared and paid.
Sincerely,
/s/ THOMAS P. PERCIAK
Thomas P. Perciak
President & Chief Executive Officer
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PROSPECTUS
EMERALD FINANCIAL CORP.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
30,000 COMMON SHARES
(WITHOUT PAR VALUE)
Emerald Financial Corp. (the "Company") is offering to holders of its
Common Stock, no par value ("Common Stock"), an opportunity to invest cash
dividends and optional cash payments in Common Stock pursuant to the Dividend
Reinvestment and Stock Purchase Plan set forth herein (the "Plan"). Any holder
of record of Common Stock is eligible to participate in the Plan.
A participant in the Plan may purchase Common Stock by:
- reinvesting cash dividends on all shares of the Company held by the
participant, or
- reinvesting cash dividends on part of the shares of the Company held by
the participant (while continuing to receive cash dividends on the other
shares), and/or
- making optional cash payments of at least $10 each, with all such cash
payments not exceeding $25,000 annually, whether or not the
participant's dividends are being reinvested.
Common Stock purchased under the Plan will be purchased from the Company,
on the open market, or otherwise from sources other than the Company. The price
of shares of Common Stock purchased for participants in the Plan on the open
market or otherwise from sources other than the Company will be the weighted
average of the prices paid for the Common Stock shares in all such purchases
made with respect to the applicable Investment Date (as defined in Question 10).
As to Common Stock shares purchased from the Company, the price will be the
quoted bid price on the NASDAQ National Market System on the applicable
Investment Date.
Regardless of the source, participants do not pay a brokerage commission or
service charge upon the purchase of Common Stock under the Plan, and the Company
bears the cost of administering the Plan.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 22, 1998.
SAVE THIS DOCUMENT. IT SETS FORTH THE TERMS
OF THE PLAN AND HOW IT OPERATES.
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No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offer contained herein and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any securities offered hereby in any jurisdiction or to any
person in which or to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstance, create any implication that there has been no change in the
affairs of the Company or the facts herein set forth since the date hereof.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC"). Such reports, proxy statements and other information and the
Registration Statement referred to below may be inspected and copied at the
public reference facilities maintained by the SEC at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, as well as the following SEC Regional
Offices: 7 World Trade Center, Thirteenth Floor, New York, New York, 10007; and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies may be
obtained at prescribed rates by writing to the SEC, Public Reference Section,
450 Fifth Street, N.W., Washington, D.C. 20549. The Common Stock of the Company
is traded on the National Association of Securities Dealers, Inc. Automated
Quotations ("NASDAQ") National Market System. The SEC maintains an Internet
worldwide web site that contains reports, proxy and information statements and
other information regarding issuers, like the Company, who file electronically
with the SEC. The address of that site is http://www.sec.gov. In addition,
reports, proxy statements and other information concerning the Company may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the SEC a Registration Statement on Form S-3
under the Securities Act of 1933 with respect to the Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. Reference is made to the Registration
Statement for further information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC by the Company are incorporated
as of their respective dates in this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, filed pursuant to Section 13 of the Securities
Exchange Act of 1934;
(b) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the SEC on
March 6, 1997, and any amendment or report filed for the purpose of
updating such description; and
(c) All other reports filed pursuant to Section 13, Section 14 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the date of
this Prospectus and prior to the termination of the offering of the
Common Stock pursuant to the Plan.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon such person's
written or oral request, a copy of any or all of the documents described above
under "Incorporation of Certain Documents by Reference," other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into such documents). Requests should be directed to:
Emerald Financial Corp.
14092 Pearl Road
Strongsville, Ohio 44136
Attention: Mr. John F. Ziegler
(440) 238-7311
(800) 315-9896 (toll free)
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<PAGE> 5
THE COMPANY AND THE BANK
The Company is an Ohio corporation registered as a thrift holding company
under the Savings and Loan Holding Company Act, and was incorporated in
September, 1996. On March 6, 1997, the Company became the sole stockholder of
The Strongsville Savings Bank (the "Bank") through a holding company
reorganization of the Bank, and the Bank's existing shareholders became the
shareholders of the Company. The Company's principal activity to date has
consisted of owning all of the Bank's outstanding common stock.
Founded in 1961, the Bank is an Ohio-chartered, federally insured savings
association whose business activities are concentrated in the greater Cleveland,
Ohio area. The Bank offers a wide range of consumer oriented lending and deposit
products and services and is active in the origination of loans to developers
and builders of residential real estate within its market area. The Bank
conducts its operations through its main office located in Strongsville, Ohio
and through 13 branch offices located in Cuyahoga, Lorain and Medina Counties.
Dividends from the Company depend upon receipt of dividends from the Bank
because the Company has no source of income other than dividends from the Bank.
Office of Thrift Supervision (the "OTS") regulations require the Bank to give
the OTS 30 days' advance notice of any proposed declaration of dividends to the
Company, and the OTS has supervisory authority to prohibit the payment of
dividends to the Company. The Bank meets and exceeds all of its regulatory
capital requirements. At December 31, 1997, approximately $14.5 million of the
Bank's retained earnings were available to pay dividends to shareholders.
The principal executive offices of both the Company and the Bank are
located at 14092 Pearl Road, Strongsville, Ohio 44136. The telephone number is
(440) 238-7311 or (800) 315-9896.
USE OF PROCEEDS
The Company has no basis for estimating precisely the number of shares of
Common Stock that ultimately may be sold pursuant to the Plan, the extent to
which shares will be purchased directly from the Company rather than in the open
market or the prices at which shares will be sold. The net proceeds from any
purchases of Common Stock directly from the Company under the Plan would provide
the Company with funds that it would expect to use for general corporate
purposes. Shares purchased in market transactions will provide no proceeds to
the Company.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Company's Dividend Reinvestment and Stock Purchase Plan ("Plan") is set
forth below in question and answer format.
PURPOSE
1. What is the purpose of the Plan?
The Plan provides holders of record of Common Stock with a simple and
convenient method of investing cash dividends and optional cash payments in
additional Common Stock without payment of any brokerage commission or service
charge. To the extent that such additional Common Stock shares are purchased
from the Company, the Company will use the additional funds for general
corporate purposes. See "Use of Proceeds" above.
ADVANTAGES
2. What are the advantages of the Plan?
An eligible shareholder of record who wishes to participate in the Plan may
(i) have cash dividends on all of his or her shares of the Company automatically
reinvested or (ii) have cash dividends on part of his or her shares of the
Company automatically reinvested or (iii) whether or not a participant has
elected to have any such dividends automatically reinvested, invest in
additional Common Stock by making optional cash payments of not less than $10
per payment up to an aggregate maximum of $25,000 annually. No commission or
service charge is
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paid by a participant in connection with purchases under the Plan. Full
investment of funds is possible under the Plan because fractions of common
shares (computed to three decimal places), as well as whole common shares, will
be credited to a participant's Plan account. Dividends on common shares in a
participant's Plan account, including a pro rata dividend on fractional common
shares, will be reinvested in additional Common Stock and such Common Stock will
be credited to a participant's Plan account. A participant can avoid the need
for safekeeping of certificates for Common Stock credited to the participant's
account under the Plan. Periodic statements of account will provide simplified
record keeping.
ADMINISTRATION
3. Who administers the Plan for participants?
National City Bank ("National City") has been designated by the Company as
its agent to administer the Plan for participants by maintaining records,
sending statements of account to participants and performing other duties
relating to the Plan. Shares of Common Stock will be purchased from the Company
by National City or in the open market by an Independent Agent designated by
National City, in either case as agent for the participants, and such shares
will be registered in the name of National City's nominee as agent for
participants, until such participant terminates participation in the Plan or
until a written request is received from such participant for issuance of a
stock certificate for all or a portion of shares held by National City for such
participant, as more fully explained in Question 25. National City also acts as
dividend disbursing agent, transfer agent, and registrar for the Common Stock.
All correspondence concerning the Plan should be addressed to:
National City Bank
Corporate Trust Department
Reinvestment Services
P. O. Box 94946
Cleveland, OH 44101-4946
or call (800) 622-6757 or (216) 476-8572
PARTICIPATION
4. Who is eligible to participate?
All holders of record of Common Stock are eligible to participate in the
Plan. In order to be eligible to participate in the Plan, any shareholder whose
shares are registered in a name other than the participant's own name (for
example, in the name of a broker or bank nominee) must become a shareholder of
record by having shares transferred into the participant's own name.
5. How does an eligible shareholder participate?
A holder of record of shares of Common Stock may join the Plan at any time
by completing and signing an Authorization Card and returning it to National
City. Authorization Cards may be obtained at any time by a written request to
National City at the address noted in Question 3 or by contacting the Company
care of Mr. John F. Ziegler at (440) 238-7311 or (800) 315-9896. Where such
shares are registered in more than one name (i.e., joint tenants, trustees,
etc.), all registered holders must sign. Those shareholders who do not wish to
participate in the Plan will continue to receive dividends when and as declared.
If a shareholder returns a properly executed Authorization Card to National
City without electing an investment option, such Authorization Card will be
deemed to indicate the intention of such shareholder to apply any cash dividends
toward the purchase of additional shares of Common Stock.
Any shareholder of the Company who is already enrolled in the Company's
Dividend Reinvestment Plan need not take any action to continue participation in
the Plan, as recently amended. Unless a participant wishes to change the
instructions on the Authorization Card currently in effect for his or her
dividend reinvestment account, a shareholder who is already a dividend
reinvestment participant should not complete a new Authorization Card.
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6. Is partial participation possible under the Plan?
Yes. A shareholder of record who desires to participate in the Plan may
elect to have the cash dividends on only some of the shares of the Company owned
by the shareholder reinvested under the Plan, or may elect to make optional cash
payments towards the purchase of additional Common Stock under the Plan without
electing automatic reinvestment of the cash dividends on any of the shares of
the Company owned by the shareholder.
THE AUTHORIZATION CARD
7. What does the Authorization Card provide?
The Authorization Card allows each shareholder to decide the extent to
which he wants to participate in the Plan. By checking the appropriate box on
the Authorization Card, a shareholder may choose among the following options:
If "Full Dividend Reinvestment" is elected, all the cash dividends on
all the Common Stock then or subsequently registered in a participant's
name, together with any optional cash payments, will be applied toward the
purchase of additional Common Stock.
If "Partial Dividend Reinvestment" is elected, all the cash dividends
on only the number of shares that are specified on the Authorization Card,
together with any optional cash payments, will be applied toward the
purchase of additional Common Stock.
Under either of these two preceding elections, any subsequent
dividends on Common Stock held in the participant's Plan account will be
automatically reinvested. Under the Plan, dividends will be reinvested on a
cumulative basis on the shares designated on the Authorization Card and on
all Common Stock held in the Plan account, until a participant changes or
revokes the instructions on the Authorization Card in writing, or until the
participant's participation in the Plan is terminated.
By electing either "Full Dividend Reinvestment" or "Partial Dividend
Reinvestment," a participant is automatically entitled to make optional
cash payments.
If "Optional Cash Payments Only" is elected, the Company will
distribute cash dividends on shares registered in the participant's name in
the manner requested by the participant, and any optional cash payments
received toward the purchase of additional Common Stock will be applied
toward purchase of additional shares of Common Stock pursuant to the Plan.
This option should only be elected if the participant does not elect either
"Full Dividend Reinvestment" or "Partial Dividend Reinvestment".
Cash dividends payable on all Common Stock in a participant's Plan account,
whether such shares of Common Stock were purchased with reinvested dividends or
optional cash payments, will be automatically reinvested in additional Common
Stock.
8. How may a participant change options under the Plan?
A participant may change investment options under the Plan at any time by
completing a new Authorization Card (obtainable upon request from National City
at the address noted in Question 3) and returning it to National City.
JOINING THE PLAN
9. When may an eligible shareholder join the Plan?
An eligible shareholder of the Company may join the Plan at any time. If
the Authorization Card is received by National City at the address specified in
Question 3 on or before the record date for a dividend payment, reinvestment of
dividends on the number of shares participating under the Plan will begin with
that dividend payment date. If the Authorization Card is received after the
record date for a dividend payment, reinvestment of dividends will begin on the
dividend payment date following the next record date, if such shareholder is
still a holder of record. All optional cash payments will be invested, following
receipt of the Authorization Card and the optional cash payment, in the manner
described in Questions 12, 13, and 14.
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Dividend record dates for Common Stock and the related payment dates are
generally on or about the following dates:
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RECORD DATE PAYMENT DATE
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February 20................................................. March 15
May 20...................................................... June 15
August 20................................................... September 15
November 20................................................. December 15
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The Plan does not represent a change in the Company's dividend policy or a
guarantee of future dividends, which will continue to be determined by the Board
of Directors based upon the Company's earnings, financial condition and other
factors.
INVESTMENT DATE
10. What is the Investment Date?
With respect to dividends being reinvested under the Plan, "Investment
Date" means the date on which such dividends are paid. With respect to the
investment of optional cash payments under the Plan, "Investment Date" means the
dividend payment date in any month in which there is a dividend payment on the
Company's Common Stock or, if there is no dividend payment in the month, then
the fifteenth day of the month or on the closest business day thereto.
PURCHASES OF COMMON STOCK UNDER THE PLAN
11. What is the source of Common Stock purchased under the Plan?
Common Stock purchased under the Plan with reinvested dividends or optional
cash payments may be purchased directly from the Company, on the open market or
otherwise from sources other than the Company. National City Bank, as Plan
Administrator, will use dividends and optional cash payments to acquire newly
issued shares if available for the account of participants. If the Company is
not then making newly issued shares available for purchase under the Plan, then
the agent for participants (the "Agent") appointed by the Company will purchase
Shares in the open market. The Agent for participants is currently NatCity
Investments, Inc. Such purchases may be made on any securities exchange where
the Common Stock is traded, in the over-the-counter market or in negotiated
transactions. The Plan Administrator or the Agent, as the case may be, will
acquire shares as of the relevant Investment Date (as defined in Question 10).
The Company reserves the right, in its sole discretion, to cease making newly
issued shares available for purchases under the Plan and to resume making newly
issued shares available at any time. Participants will be notified of changes in
the manner in which Common Stock is purchased under the Plan.
12. What will be the price of Common Stock purchased under the Plan?
The purchase price to the participant of Common Stock purchased on the open
market or otherwise from sources other than the Company will be the weighted
average of the prices paid for the Common Stock shares in all such purchases
made with respect to the applicable Investment Date.
The purchase price per share for Common Stock purchased from the Company
under the Plan will be the highest quoted bid price on the NASDAQ National
Market System for the Investment Date.
13. When will purchases be made with reinvested dividends?
Purchases of Common Stock from sources other than the Company will be made
commencing as of the applicable Investment Date and continuing over the period
determined appropriate, under the circumstances, by National City to acquire the
Common Stock, but in all events within 30 days of the applicable Investment
Date. Purchases of Common Stock from the Company will be made on the applicable
Investment Date. In no event will interest be paid on funds being held by
National City pending investment of such funds.
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<PAGE> 9
14. When will purchases be made with optional cash payments?
An optional cash payment will be invested under the Plan on the first
Investment Date following receipt by National City at the address specified in
Question 3 of such payment if the Common Stock is purchased from the Company. If
the Common Stock is purchased from sources other than the Company, the optional
cash payment will be invested as soon as practicable beginning on the first
Investment Date following receipt by National City at the address specified in
Question 3 of such payment, but in no event later than 30 days after receipt of
such payment by National City. No interest will be paid on optional cash
payments pending their investment.
15. How many shares of Common Stock will be purchased for a participant?
The number of Common Stock shares to be purchased depends on the amount of
a participant's reinvested dividend, the amount of any optional cash payments to
be invested on the Investment Date, and the purchase price of the Common Stock.
Each participant's Plan account will be credited with that number of shares of
Common Stock, including fractions computed to three decimal places, equal to the
participant's total amount to be invested divided by the purchase price per
common share.
OPTIONAL CASH PAYMENTS
16. How does the optional cash payment feature of the Plan work?
All eligible holders of record of shares of the Company (except for brokers
and nominees) who have submitted an Authorization Card are eligible to make
optional cash payments at any time. Optional cash payments received from a
participant will be used to purchase additional Common Stock. Cash dividends
payable on all Common Stock credited to a participant's Plan account, whether
such Common Stock shares were purchased with reinvested dividends or optional
cash payments, will be automatically reinvested in additional Common Stock.
17. How may optional cash payments be made?
An optional cash payment may be made by a participant when joining the Plan
by enclosing a check or money order payable to National City Bank with an
Authorization Card returned to National City. Thereafter, optional cash payments
may be made on a monthly, quarterly or any other basis through the use of
appropriate forms attached to each participant's statement of account. There is
no obligation to make additional cash payments, nor to make all such payments in
the same amount.
Each optional cash payment must be at least $10 and all such payments
cannot, in any one calendar year, exceed a total of $25,000 for any participant.
THE COMPANY WILL NOT APPROVE OPTIONAL CASH PURCHASES IN EXCESS OF THE MAXIMUM
AMOUNT SET FORTH HEREIN.
A participant may withdraw any optional cash payment by written notice
received by National City not less than two business days before the first
Investment Date following receipt of the optional cash payment.
EXPENSES
18. What are the expenses to participants in the Plan?
All costs of administration of the Plan will be paid by the Company. There
are no brokerage fees or commissions charged to participants in connection with
the purchase of Common Stock shares under the Plan. Certain expenses (including
a termination fee) may also be incurred by the participant if the participant
receives a cash payment for a fraction of a common share credited to the
participant's Plan account upon the participant's withdrawal of all of the
Common Stock credited to the participant's Plan account or upon termination of
the participant's participation in the Plan (see Question 28).
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<PAGE> 10
FEDERAL TAX CONSEQUENCES
19. What are the Federal income tax consequences of participation in the Plan?
In general, a shareholder who participates in the Plan will have the same
Federal income tax consequences with respect to dividends payable on Common
Stock in a Plan account as if he or she were not a participant in the Plan. In
the case of a cash dividend, a participant will be treated for Federal income
tax purposes as having received on the dividend payment date a dividend equal to
the full amount of the dividend payable with respect to all the participant's
stock, including shares registered in his or her name and those credited to the
participant's Plan account, even if all such dividends are not received by the
participant in cash, but instead are applied to the purchase of Common Stock for
the participant's account. In the case of Common Stock purchased from sources
other than the Company, commissions and brokerage fees paid by the Company in
connection with such purchases will be taxable income to the participants in an
amount equal to each participant's pro rata share of such commissions and fees
and will be reported as ordinary dividend income for the calendar year by the
Company with respect to each participant's Plan account.
The tax basis of Common Stock purchased from the Company with cash
dividends or optional cash payments will be the amount of the cash dividends or
optional cash payments, as the case may be. In the case of Common Stock
purchased from sources other than the Company, the tax basis will be the
purchase price of the Common Stock plus a participant's pro rata share of
commissions or brokerage fees paid by the Company in making such purchases. The
holding period for Common Stock purchased with reinvested dividends or optional
cash payments will begin on the date following the date on which the Common
Stock shares are purchased for the participant and credited to such
participant's Plan account, regardless of the source of purchase.
A participant will not realize any Federal taxable income when the
participant receives certificates for whole Common Stock shares credited to the
participant's Plan account, either upon the participant's withdrawal of some or
all of the Common Stock credited to the participant's Plan account or
termination of the participant's participation in the Plan. However, a
participant who receives, upon withdrawal of Common Stock from the Plan or
termination of the participant's participation in the Plan, a cash payment for a
fractional share of Common Stock credited to the participant's Plan account will
realize a gain or loss with respect to such fractional common share. A gain or
loss will also be realized by a participant when whole shares of Common Stock
are sold by the participant after withdrawal of such shares from the Plan
account or termination of the participant's participation in the Plan. The
amount of such gain or loss will be the difference between the amount which the
participant receives for full or fractional Common Stock and the tax basis
therefor. Any such gain or loss will be a capital gain or loss if the Common
Stock shares constitute capital assets in the hands of the participant.
Participants are advised to consult their own tax advisors to determine the
particular Federal, state and local income tax consequences that may result from
their participation in the Plan and the subsequent sale or other disposition of
Common Stock under the Plan. The income tax consequences of participants may
vary from jurisdiction to jurisdiction.
REPORTS TO PARTICIPANTS
20. What kind of reports will be sent to participants?
Each participant in the Plan will receive a statement of account as
promptly as practicable after each purchase of Common Stock for the
participant's Plan account. These statements are a record of the date and cost
of purchases made and should be retained for income tax purposes. In addition,
each participant will receive, from time to time, copies of reports, proxy
statements, and other communications sent to holders of the Common Stock
generally.
Each participant will receive annually Internal Revenue Service information
(on Form 1099) for reporting dividend income received.
8
<PAGE> 11
DIVIDENDS ON FRACTIONS OF SHARES
21. Will participants be credited with dividends on fractions of shares?
Yes. Dividends with respect to fractional, as well as whole, shares will be
reinvested in additional Common Stock.
CERTIFICATES FOR SHARES
22. Will certificates be issued for Common Stock purchased?
Common Stock credited to a participant's account in the Plan will be held
in the name of National City or its nominee. The number of shares credited to an
account under the Plan will be shown on the participant's statement of account.
This service protects against loss, theft, or destruction of certificates.
However, certificates for whole shares will be issued to participants upon the
participant's withdrawal of such shares from the Plan account or termination of
the participant's participation in the Plan, subject to payment of the $2.50
certificate fee or $5.00 termination fee, respectively (such fees are subject to
adjustment).
Common Stock credited to the account of a participant under the Plan may
not be pledged or assigned, and any such purported pledge or assignment shall be
void. A participant who wishes to pledge or assign any such shares credited to
the participant's Plan account must first withdraw such shares from the Plan
account.
Certificates for fractions of shares will not be issued to participants
under any circumstances.
23. In whose name will certificates be registered when issued to participants?
Each account under the Plan will be maintained in the name as shown on the
Authorization Card of each participant. Consequently, certificates for whole
Common Shares will be similarly registered when issued.
24. May a participant add shares to his or her account by transferring stock
certificates that the participant possesses?
Yes. For safekeeping, you may deposit certificates representing shares with
National City, but it is not necessary to do so in order to reinvest dividends
payable with respect to shares of Common Stock represented by such certificates.
Such certificates must be presented in transferable form and must be accompanied
by a written request that the certificates be held for your account.
WITHDRAWAL OF COMMON STOCK IN PLAN ACCOUNT
25. How may Common Stock be withdrawn from the Plan account?
Certificates representing shares credited to a participant's Plan account
may be withdrawn by a participant by notifying National City in writing (i)
specifying the number of shares to be withdrawn and (ii) paying a fee of $2.50
to National City for each certificate requested (such fee is subject to
adjustment). Certificates for whole shares of Common Stock so withdrawn will be
issued to and registered in the name of the participant. Cash in lieu of
fractional shares will be paid to withdrawing participants.
26. Will dividends on Common Stock withdrawn from the Plan account continue to
be reinvested?
If the participant has authorized "Full Dividend Reinvestment," cash
dividends with respect to shares withdrawn from a participant's Plan account
will continue to be reinvested. If, however, cash dividends with respect to only
part of the shares registered in a participant's name are being reinvested,
National City will continue to reinvest dividends on only the number of shares
specified by the participant on the Authorization Card (together with any other
shares acquired pursuant to the Plan and not withdrawn) unless a new
Authorization Card specifying a different number of shares is delivered.
9
<PAGE> 12
27. May a participant request that shares held in his or her account be sold
upon termination of participation?
No. Upon termination of participation in the Plan, and following a
participant's receipt from National City of a share certificate for the number
of whole shares in the account, an individual shareholder must make his or her
own arrangements to sell such Common Stock shares.
TERMINATION
28. How does a participant terminate participation under the Plan?
In order to terminate participation under the Plan, a participant must
notify National City in writing that the participant wishes to terminate. Notice
of termination must be accompanied by a termination fee of $5.00 (payable to
National City) (such fee is subject to adjustment). Such notices should be
addressed to National City at the address set forth in Question 3 and will be
effective only when received by National City. When a participant voluntarily
terminates his or her participation in the Plan or if and when the participant's
participation in the Plan or the Plan is terminated by the Company, a
certificate for whole Common Stock shares credited to the participant's Plan
account under the Plan will be issued and a cash payment will be made for any
fraction of a Common Stock share.
29. When may a participant withdraw Common Stock from his or her Plan account or
be terminated from the Plan?
A participant may withdraw Common Stock credited to the participant's Plan
account or terminate his or her participation under the Plan at any time. If the
request to withdraw or terminate is received by National City prior to a
dividend record date, the withdrawal or termination will be processed as soon as
practical after receipt of the request. If the request to withdraw or terminate
is received by National City on or after the record date for a dividend payment,
the withdrawal or termination may not be processed until shares purchased with
the dividends paid for such record date have been credited to the participant's
account. Any optional cash payment which was received prior to the request for
withdrawal or termination will be reinvested unless return of the amount is
requested at the time of the request for withdrawal or termination and such
request is received at least two business days before the next Investment Date.
All subsequent dividends will be paid to the participant in cash unless the
participant re-enrolls in the Plan. The Company reserves the right, in its sole
discretion, to terminate the Plan or any participant's account at any time.
30. May a participant re-enroll in the Plan after having previously withdrawn
from the Plan?
Generally, a shareholder may elect to re-enroll in the Plan at any time,
simply by following the same procedures described in the answer to Question 5.
However, the Company reserves the right to reject any Authorization Card from a
previous participant on grounds of excessive enrollment and termination of
participation in the Plan. Such reservation is intended to minimize unnecessary
administrative expense and to encourage use of the Plan as a long-term
shareholder investment service.
OTHER INFORMATION
31. What happens when a participant sells or transfers the shares of the Company
registered in such participant's name?
If a participant sells or transfers all shares of the Company registered in
the participant's name, the Company will continue to reinvest the cash dividends
on Common Stock credited to the participant's Plan account, subject to the
participant's right to withdraw Common Stock from the Plan account or terminate
participation under the Plan at any time.
32. What happens if the Company issues a dividend payable in Common Stock or
declares a stock split?
Any dividend payable in Common Stock or split shares distributed by the
Company on Common Stock credited to a participant's Plan account will be added
to such account. Any dividend payable in Common Stock or
10
<PAGE> 13
split shares distributed by the Company on Common Stock not in the participant's
Plan account will be transmitted directly to the Participant in the same manner
as to shareholders who are not participating in the Plan.
33. How will Common Stock credited to a participant's Plan account be voted at
Shareholders' Meetings?
For each meeting of shareholders, a participant will receive proxy material
that will enable the participant to vote both shares registered in the
participant's name directly and Common Stock shares credited to the
participant's Plan account. If a participant elects, such participant may vote
Common Stock, including all whole common shares credited to the participant's
Plan account, in person at the shareholders' meeting.
If no instructions are indicated on a properly signed and returned proxy
card, all of the participant's common shares -- those registered in the
participant's name and those credited to the participant's Plan account -- will
be voted in accordance with the recommendations of the Company's management.
34. What are the responsibilities of the Company and National City under the
Plan?
Neither the Company nor National City shall have any responsibility beyond
the exercise of ordinary care for any action taken or omitted under the Plan nor
shall they have any duties, responsibilities, or liabilities except as expressly
set forth in the Plan. The Company and National City will not be liable under
the Plan for any act done in good faith or for any good faith omission to act
including, without limitation, any claim of liability arising (i) out of failure
to terminate a participant's Plan account upon the participant's death or
incompetence prior to receipt of written notice of such participant's death or
incompetence, (ii) with respect to the prices at which shares are purchased for
a participant's account, (iii) with respect to the times when such purchases or
sales are made, or (iv) with respect to any fluctuation in market value of the
Company's Common Stock.
The participant should recognize that the Company and National City cannot
assure the participant a profit or protect the participant against a loss on the
Common Stock shares purchased under the Plan.
35. May the Plan be changed or discontinued?
The Company may amend, suspend, modify, or terminate the Plan at any time,
including the period between a dividend record date and a dividend payment date.
Notice of any such amendment, suspension, modification, or termination will be
sent to all participants. Any such amendment shall conclusively be deemed to be
accepted by the participant unless prior to the effective date of any such
amendment as set forth in the notice, National City receives written notice of
the termination of the participant's account. Upon a termination of the Plan,
any uninvested optional cash payments will be returned, certificates for whole
common shares credited to a participant's account under the Plan will be issued,
and a cash payment will be made for any fraction of a Common Stock share
credited to a participant's account.
36. Where will notices to a participant be sent?
All notices to a participant will be addressed to the participant at the
last address of record with National City. A participant should notify National
City in writing of any changes of address at the address set forth in Question
3.
37. What is sufficient notice to a participant?
Any notice or certificate required to be given by National City to a
participant pursuant to the Plan shall be in writing and shall be deemed to have
been sufficiently given for all purposes once deposited, postage prepaid, in a
post office letter box addressed to the participant at the participant's address
as it shall last appear on National City records.
38. What law governs the Plan?
The terms and conditions of the Plan and the operation thereof shall be
governed by and construed in accordance with the laws of the State of Ohio and
the rules and regulations of the SEC, as they may be amended from time to time.
11
<PAGE> 14
39. Who interprets the Plan?
The Company reserves the right to interpret the Plan as may be necessary or
desirable in connection with the operation of the Plan.
40. What happens if the Agent cannot make market purchases?
If the Company decides not to make newly issued shares available for
purchase pursuant to the Plan, and in the event that applicable law or the
closing of securities markets requires the temporary curtailment or suspension
of market purchases of Common Stock under the Plan, the Agent is not accountable
for its inability to make purchases at such times. If Common Stock is not
available for purchase for a period longer than 90 days, National City will
promptly mail to the participant a check payable to the order of the participant
in the amount of any unapplied funds in the participant's account.
INDEMNIFICATION
The Company's Code of Regulations authorize indemnification of officers and
directors under certain circumstances, including liabilities arising under the
Securities Act of 1933. Under the terms of the Company's directors' and
officers' liability insurance policy, directors and officers of the Company are
insured against certain liabilities, including liabilities arising under the
Securities Act of 1933.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act of 1933 and is therefore unenforceable.
LEGAL OPINION
The validity of the Common Stock offered hereby has been passed upon for
the Company by Grady & Associates, 20800 Center Ridge Road, Suite 116, Rocky
River, Ohio 44116-4306. Francis X. Grady is a principal of Grady & Associates.
Due to his firm's involvement in this transaction, Mr. Grady is required to
disclose his beneficial ownership of 8,800 shares of Company Common Stock.
12
<PAGE> 15
============================================================
PROSPECTUS TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................... 2
Incorporation of Certain Documents by
Reference................................ 2
The Company And The Bank................... 3
Use of Proceeds............................ 3
Dividend Reinvestment and Stock Purchase
Plan..................................... 3
Purpose.................................. 3
Advantages............................... 3
Administration........................... 4
Participation............................ 4
The Authorization Card................... 5
Joining the Plan......................... 5
Investment Date.......................... 6
Purchases of Common Stock Under the
Plan.................................. 6
Optional Cash Payments................... 7
Expenses................................. 7
Federal Tax Consequences................. 8
Reports to Participants.................. 8
Dividends on Fractions of Shares......... 9
Certificates for Shares.................. 9
Withdrawal of Common Stock in Plan
Account............................... 9
Termination.............................. 10
Other Information........................ 10
Indemnification............................ 12
Legal Opinion.............................. 12
</TABLE>
============================================================
============================================================
30,000 COMMON SHARES
EMERALD FINANCIAL CORP.
DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
------------------------
PROSPECTUS
------------------------
ADDRESS:
14092 Pearl Road
Strongsville, Ohio 44136
Dated: May 22, 1998
============================================================
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses to be incurred in connection with the issuance and
distribution of the shares of Common Stock being offered hereby payable by the
Registrant are estimated as follows:
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 142.23
Printing and Engraving Costs................................ 2,000.00
Fees and Expenses of Counsel................................ 8,000.00
Accounting Fees and Expenses................................ 5,000.00
Miscellaneous............................................... 2,000.00
==========
TOTAL............................................. $17,142.23
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1701.13 of the Ohio Revised Code generally permits indemnification
of any director, officer or employee with respect to any proceeding against any
such person provided that: (a) such person acted in good faith, (b) such person
reasonably believed that the conduct was in or not opposed to the best interests
of the corporation, and (c) in the case of criminal proceedings, such person had
no reasonable cause to believe that the conduct was unlawful. Indemnification
may be made against expenses (including attorneys' fees), judgments, fines and
settlements actually and reasonably incurred by such person in connection with
the proceeding; provided, however, that if the proceeding is one by or in the
right of the corporation, indemnification may be made only against reasonable
expenses (including attorneys' fees) and may not be made with respect to any
proceeding in which the director, officer or employee has been adjudged to be
liable to the corporation, except to the extent that the court in which the
proceeding was brought shall determine, upon application, that such person is,
in view of all the circumstances, entitled to indemnity for such expenses as the
court shall deem proper. The termination of any proceeding by the judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent does not, of itself, create a presumption that the director, officer
or employee did not meet the standard of conduct required for indemnification to
be permitted.
Section 1701.13 of the General Corporation Law of the State of Ohio further
provides that indemnification thereunder may not be made by the corporation
unless authorized after a determination has been made that such indemnification
is proper, with that determination to be made (a) by the Board of Directors by a
majority vote of a quorum consisting of directors not parties to the proceeding;
(b) if such a quorum is not obtainable, or, even if obtainable, but a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion; (c) by the shareholders; or (d) by the court in which the proceeding
was brought.
Finally, Section 1701.13 of the General Corporation Law of the State of
Ohio provides that indemnification provided by that Section is not exclusive of
any other rights to which those seeking indemnification may be entitled under
the Articles of Incorporation or Code of Regulations or any agreement, vote of
shareholders or disinterested directors or otherwise.
Article IV, Section A of the Code of Regulations of the Company provides
that the Company shall indemnify any person who is or was a director or officer
of the Company or who is serving at the request of the Company as a director or
officer against expenses (including attorney's fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by him or her by
reason of the fact that he or she was such director or officer in connection
with any threatened, pending or contemplated action, suit or proceeding, whether
civil, criminal, administrative or investigative to the full extent and
according to the procedures and requirements in the Ohio Revised Code as the
same may be in effect from time to time.
The Company maintains insurance on behalf of any person who is or was a
director or officer against any loss arising from any claim asserted against him
in any such capacity, subject to certain exclusions.
II-1
<PAGE> 17
ITEM 16. EXHIBITS
<TABLE>
<C> <S> <C>
3.1 Amended and Restated Articles of Incorporation of
Emerald Financial Corp............................ Incorporated herein by reference to
Exhibit 3(i) of Registrant's Registration
Statement on Form 8-A filed March 6, 1997
3.2 Code of Regulations of Emerald Financial Corp..... Incorporated herein by reference to
Exhibit 3(ii) of Registrant's Registration
Statement on Form 8-A filed March 6, 1997
4 Instruments defining the rights of security
holders including indentures...................... See Exhibits 3.1 and 3.2
5 Opinion regarding Legality
23.1 Consent of Counsel
23.2 Consent of Independent Auditors
24.1 Power of Attorney
24.2 Certified Resolutions of Board of Directors of
Emerald Financial Corp.
99 Additional Exhibits
99.1 Letter to Shareholders
99.2 Dividend Reinvestment and Stock Purchase Plan..... (Contained as part of the Prospectus
included herein)
99.3 Authorization Card
</TABLE>
ITEM 17. UNDERTAKINGS
Undertakings
(a) The undersigned registrant hereby undertakes as follows:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-2
<PAGE> 18
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Strongsville, State of Ohio, on May 20, 1998.
EMERALD FINANCIAL CORP.
(Registrant)
By: /s/ Thomas P. Perciak
----------------------------------
Thomas P. Perciak
President & Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Thomas P. Perciak President & Chief Executive Officer Date: May 20, 1998
- - --------------------------------------------- and Director
Thomas P. Perciak
/s/ Mike Kalinich, Sr. Chairman of the Board Date: May 20, 1998
- - ---------------------------------------------
Mike Kalinich, Sr.
/s/ John F. Ziegler Executive Vice President and Chief Date: May 20, 1998
- - --------------------------------------------- Financial Officer
John F. Ziegler (Principal Financial Officer and
Principal Accounting Officer)
/s/ George P. Bohnert Director Date: May 20, 1998
- - ---------------------------------------------
George P. Bohnert, Jr.
/s/ Joan M. Dzurilla Director Date: May 20, 1998
- - ---------------------------------------------
Joan M. Dzurilla
/s/ William A. Fraunfelder, Jr. Director Date: May 20, 1998
- - ---------------------------------------------
William A. Fraunfelder, Jr.
/s/ Glenn W. Goist Director Date: May 20, 1998
- - ---------------------------------------------
Glenn W. Goist
/s/ Kenneth J. Piechowski Director Date: May 20, 1998
- - ---------------------------------------------
Kenneth J. Piechowski
/s/ John J. Plucinsky Director Date: May 20, 1998
- - ---------------------------------------------
John J. Plucinsky
</TABLE>
II-4
<PAGE> 20
EXHIBIT INDEX
The following Exhibits are filed in connection with the Registration
Statement of Emerald Financial Corp. on Form S-3, pursuant to the requirements
of Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT PAGE NO.
- - ------- ------- --------
<C> <S> <C>
3.1 Amended and Restated Articles of Incorporation of
Emerald Financial Corp. .............................. Incorporated herein by reference to
Exhibit 3(i) to the Form 8-A of the
Registrant filed March 6, 1997
3.2 Code of Regulations of Emerald Financial Corp. ....... Incorporated herein by reference to
Exhibit 3(ii) to the Form 8-A of the
Registrant filed March 6, 1997
4 Instruments defining the rights of security holders
including indentures.................................. (See Exhibits 3.1 and 3.2)
5 Opinion regarding Legality............................
23.1 Consent of Counsel....................................
23.2 Consent of Independent Auditors.......................
24.1 Power of Attorney.....................................
24.2 Certified Resolutions of Board of Directors of Emerald
Financial Corp. ......................................
99 Additional Exhibits...................................
99.1 Letter to Shareholders................................
99.2 Dividend Reinvestment and Stock Purchase Plan......... (Contained as part of the Prospectus
included herein)
99.3 Authorization Card....................................
</TABLE>
II-5
<PAGE> 1
EXHIBIT 5
OPINION REGARDING LEGALITY
<PAGE> 2
May 22, 1998
Board of Directors
Emerald Financial Corp.
14092 Pearl Road
Strongsville, OH 44136
RE: Dividend Reinvestment and Stock Purchase Plan
Ladies and Gentlemen:
We have acted as special counsel to Emerald Financial Corp., an
Ohio-chartered thrift holding company (the "Company"), in connection with the
registration of the Company's 30,000 shares of Common Stock, no par value (the
"Shares") to be sold by the Company pursuant to a public offering as described
in the Company's Registration Statement on Form S-3 (the "Registration
Statement") and the prospectus dated May 22, 1998 (the "Prospectus"), each as
filed with the Securities and Exchange Commission (the "SEC") under the rules
and regulations of the SEC relating to securities offerings set forth in Title
17 of the Code of Federal Regulations ("Title 17"). This opinion letter is
written in connection with the Shares of the Company to be issued in connection
with the Dividend Reinvestment and Stock Purchase Plan (the "Plan") adopted and
approved by the Board of Directors at its regularly scheduled meeting on May 20,
1998.
In rendering the opinions hereinafter expressed, we have examined and
relied, as to matters of fact, upon such records, documents, instruments,
certificates of public officials and certificates of officers and employees of
and accountants for the Company or its subsidiary as we have deemed appropriate.
In conducting our examination, we have assumed, without investigation,
the genuineness of all signatures, the correctness of all certificates, the
authenticity of all documents and instruments submitted to us as originals, the
conformity to original documents and instruments of all such documents and
instruments submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies, and the accuracy and completeness
of all records made available to us by the Company and its subsidiary. We have
assumed, without investigation, the accuracy of the statements as to factual
matters made by officers and employees of, and accountants for, the Company or
its subsidiary and by public officials. In conducting our examination of
documents and instruments, we have assumed, without investigation, that each
party (other than the Company with respect to the Agreement) to such documents
and instruments has: (i) the power and capacity to enter into and perform all
its obligations under such documents and instruments, (ii) duly authorized all
requisite action with respect to such documents and instruments, and (iii) duly
executed and delivered such documents and instruments.
Wherever a statement herein is qualified by "we are not aware," "known
to us," "to our knowledge," or a similar phrase, it is intended to indicate
that, during the course of our representation of the Company and in the course
of the examination referred to in the foregoing paragraph, no information that
would give us current actual knowledge of the inaccuracy of such statement has
come to our attention in connection with the representation described in the
introductory paragraph of this opinion letter. However, we have not undertaken
any independent investigation to determine the accuracy of such statement, and
any limited inquiry undertaken by us during the preparation of this opinion
letter should not be regarded as such an investigation; no inference as to our
knowledge of any matters bearing on the accuracy of any such statement should be
drawn from the fact of our representation of the Company.
The opinions hereinafter expressed are subject, without investigation,
to the assumption that all offers, sales and issuances of the Shares have
complied, and will comply, with the securities or Blue Sky laws of the states
having jurisdiction thereof.
<PAGE> 3
Emerald Financial Corp.
May 22, 1998
The opinions hereinafter expressed are subject to the following
qualifications:
(a) Our opinion in paragraph (1) below as to the good standing
of the Company is based solely upon certificates from public officials
as to the good standing of the Company in its jurisdiction of
incorporation.
(b) Our opinions below are limited to the matters expressly
set forth in this opinion letter, and no opinion is to be implied or
may be inferred beyond the matters expressly so stated. Without
limiting the foregoing, we express no opinion as to the antifraud
provisions of federal and state securities laws.
(c) We disclaim any obligation to update this opinion letter
for events occurring after the date of this opinion letter.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of
Ohio;
2. The authorized common stock of the Company is 20,000,000
shares, of which 10,264,288 are currently issued and
outstanding;
3. The Shares of the Company to be issued and sold by the Company
pursuant to the Plan have been duly authorized and, when
issued, delivered and paid for pursuant to the Plan, will be
validly issued, fully paid and nonassessable.
This opinion is furnished by us as counsel to the Company, solely for
the benefit of the Company, and upon the understanding, as we have been advised
by the Company and as the Company has agreed, that we are not hereby assuming
any professional responsibility to any other person whatsoever.
This opinion letter may not be, without our prior written consent: (i)
relied upon by any other party or for any other purpose; (ii) quoted in whole or
in part or otherwise referred to in any report or document; or (iii) furnished
(the original or copies thereof) to any other party.
Sincerely yours,
/s/ Grady & Associates
Grady & Associates
<PAGE> 1
EXHIBIT 23.1
CONSENT OF COUNSEL
<PAGE> 2
CONSENT
We hereby consent to the references to our firm and our opinion in the
Form S-3 Registration Statement and the related Prospectus filed by Emerald
Financial Corp.
/s/ Grady & Associates
-----------------------------
Grady & Associates
Dated this 22nd day of May, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF EXPERTS
<PAGE> 2
Emerald Financial Corp
S-3 Registration
KPMG Peat Marwick LLP
1500 National City Center
1900 East Ninth Street
Cleveland, OH 44114-3495
CONSENT OF KPMG PEAT MARWICK, INDEPENDENT AUDITORS
We consent to the use of our report incorporated herein by reference.
/s/ KPMG PEAT MARWICK, LLP
Cleveland, Ohio
May 20, 1998
<PAGE> 3
INDEPENDENT AUDITORS' CONSENT
Emerald Financial Corp.
We consent to the incorporation by reference in this Registration
Statement of Emerald Financial Corp. on Form S-3 of our report dated January 25,
1997 (which expresses an unqualified opinion and includes an explanatory
paragraph relating to a change in accounting for mortgage servicing rights),
incorporated by reference in the Annual Report on Form 10-K of Emerald Financial
Corp. for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
Cleveland, Ohio
May 20, 1998
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
<PAGE> 2
POWER OF ATTORNEY
The undersigned directors and officers of Emerald Financial Corp. hereby
authorize and appoint Thomas P. Perciak, President and Chief Executive Officer
and John F. Ziegler, Executive Vice President, as our agent, and each of them,
each with full power to act without the other, as attorney-in-fact, with full
power to act for us and all of us, for the purpose of subscribing our names to
the Form S-3 Registration Statement, to be filed with the Securities and
Exchange Commission, and for the purpose of making any changes or amendments
necessary or desirable to such documents and to any documents ancillary thereto,
with the same powers and to the same effect as we may do if personally present,
hereby ratifying and approving the acts of said attorneys and each of them:
Dated this 20th day of May, 1998.
/s/ Thomas P. Perciak
- - ------------------------------------------------
Thomas P. Perciak
President & Chief Executive Officer and Director
/s/ Mike Kalinich, Sr.
- - ------------------------------------------------
Mike Kalinich, Sr.
Chairman of the Board
/s/ John F. Ziegler
- - ------------------------------------------------
John F. Ziegler
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
/s/ George P. Bohnert
- - ------------------------------------------------
George P. Bohnert
Director
/s/ Joan M. Dzurilla
- - ------------------------------------------------
Joan M. Dzurilla
Director
/s/ William A. Fraunfelder, Jr.
- - ------------------------------------------------
William A. Fraunfelder, Jr.
Director
/s/ Glenn W. Goist
- - ------------------------------------------------
Glenn W. Goist
Director
/s/ Kenneth J. Piechowski
- - ------------------------------------------------
Kenneth J. Piechowski
Director
/s/ John J. Plucinsky
- - ------------------------------------------------
John J. Plucinsky
Director
<PAGE> 1
EXHIBIT 24.2
CERTIFIED RESOLUTIONS OF BOARD
OF DIRECTORS OF EMERALD FINANCIAL CORP.
<PAGE> 2
CERTIFICATION
-------------
I, Paula M. Dewey, hereby certify that I am the Secretary of Emerald
Financial Corp., a corporation duly organized under the laws of the State of
Ohio, that I have in my possession the corporate records regarding the
Corporation, and that attached hereto is a true and correct copy of the
resolution duly adopted by the Board of Directors of such Corporation at a
meeting thereof duly called and held on May 20, 1998, at which meeting a quorum
of the Board was present throughout, and that such resolutions have not been
rescinded and are in full force and effect.
IN WITNESS THEREOF, the undersigned has hereunto put her hand and the
seal of this Corporation on this 20th day of May, 1998.
/s/Paula M. Dewey
-------------------------------
Paula M. Dewey
Secretary
EMERALD FINANCIAL CORP.
<PAGE> 3
Resolutions adopted by the Board of Directors of Emerald Financial Corp. on May
20, 1998.
RESOLVED, that Emerald Financial Corp.'s (the "Corporation") Dividend
Reinvestment Plan be (a) eliminated for shareholders of record as of May
25, 1998 and (b) replaced with the Dividend Reinvestment and Stock Purchase
Plan (the "Plan") in the form attached hereto, which Plan permits the
following: partial or whole reinvestment of dividends, an optional cash
purchase feature operating independently of dividend reinvestment
participation (with a minimum optional cash payment of $10.00 and a maximum
optional cash payment of $25,000 per calendar year) and share safekeeping
services, and such other terms as the officers of the Corporation deem
necessary or advisable.
FURTHER RESOLVED, that the Plan become effective for shareholders of
record May 25, 1998 and that the National City Bank is hereby authorized to
serve as the Corporation's agent to administer the Plan.
FURTHER RESOLVED, that the officers of the Corporation be and each of
them is hereby authorized to approve amendments to the Plan, as authorized
above, together with any other related or corresponding amendments to the
Plan that such officer may determine to be necessary or desirable.
FURTHER RESOLVED, that the Corporation is hereby authorized to issue
and sell up to 30,000 Common Shares pursuant to the Plan.
FURTHER RESOLVED, that the officers of the Corporation be and each of
them is hereby authorized, for and on behalf of the Corporation, to prepare
or cause to be prepared and to execute and file with the Securities and
Exchange Commission (the "Commission") such registration statements or
amendments to existing registration statements (on such form or forms as
are applicable) under the Securities Act of 1933, as amended (the "1933
Act"), and to do or cause to be done all things necessary or advisable to
effect registration under the 1933 Act of the Common Shares authorized
above to be issued and sold under the Plan.
FURTHER RESOLVED, that Thomas P. Perciak, President and Chief Executive
Officer and John F. Ziegler, Executive Vice President and Chief Financial
Officer, and each of them, each with full power to act without the other,
are hereby appointed as the attorney-in-fact of the Corporation, with full
power of substitution and resubstitution, for and in the name, place, and
stead of the Corporation, to sign and file: (A) any and all registration
statements on Form S-3, or such other forms as may be appropriate and such
amendments as may be, in their judgement, appropriate, with respect to the
Common Shares or other securities issuable pursuant to the above
resolutions, (B) any and all amendments, post-effective amendments, and
exhibits thereto, and (C) any and all applications and other documents to
be filed with the Commission pertaining to such securities or such
registrations, with full power and authority to do and perform any and all
acts and things whatsoever requisite and necessary to effect such
registrations, and that such individuals be and each of them are hereby
authorized and directed, for and on behalf of the Corporation, to execute a
power of attorney evidencing the foregoing appointment of attorney.
FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized in connection with the proposed offering of the Common Shares,
to take any action which they may deem necessary or advisable to effect the
registration or qualification (or exemption therefrom) of such Common
Shares under the securities or blue sky laws of any of the States of the
United States of America to carry out such offering, and, in connection
therewith, to execute, acknowledge, verify, deliver, file, and publish all
such applications, reports, notices, and other papers and instruments, to
post bonds or otherwise give security as may be required under such laws,
and to take all such further action as any of them may deem necessary or
advisable to maintain such registration or qualification or exemption
therefrom for as long as they may deem necessary or required by law.
<PAGE> 4
FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized to execute and file irrevocable written consents to service of
process in all States of the United States of America where such consents
may be requisite or advisable under the securities law thereof in
connection with the registration, qualification, or exemption of the Common
Shares and to appoint the appropriate person as agent of the Corporation
for the purpose of receiving and accepting process.
FURTHER RESOLVED, that any form of additional resolution relating to
any of the foregoing resolutions appropriate to or required by law,
regulation, or a regulatory agency, be and it is hereby adopted and that
the Secretary of the Corporation be and each of them are hereby authorized
to certify as having been adopted by this Board such form of authorizing
resolution required in accordance with the foregoing, provided that a copy
of each form of resolution so certified shall be attached to the minutes to
this meeting.
FURTHER RESOLVED, that the officers of the Corporation be and each of
them is hereby authorized to execute any and all additional documents and
take any and all additional action necessary to carry out the provisions of
the foregoing resolutions.
<PAGE> 1
EXHIBIT 99.1
LETTER TO SHAREHOLDERS
<PAGE> 2
Dear Shareholder:
We are pleased to send you this Prospectus describing our Dividend
Reinvestment and Stock Purchase Plan (the "Plan"), which has recently been
amended. Through the Plan, you may automatically invest cash dividends that you
receive on your shares of Common Stock, no par value (the "Common Stock"), of
Emerald Financial Corp. (the "Company"), as well as optional cash payments made
by you under the Plan, in additional shares of Common Stock. The Company
reserves the right to suspend, modify or terminate the Plan at any time.
Participants in the Plan enjoy the following benefits:
o You will pay no service charges or brokerage commissions for
shares of Common Stock purchased on your behalf under the
Plan.
o Your dollars will be invested in full and fractional shares to
three decimal places.
o Dividends are credited to your account on both full and
fractional shares.
o Your dividends will be invested quarterly and cash payments
will be invested monthly.
o Your recordkeeping will be simplified since you will receive a
statement each time there is activity in your account.
o The shares of Common Stock purchased on your behalf under the
Plan will be held in safekeeping until termination of your
participation in the Plan, or until you request that a
certificate be issued to you.
o You may terminate your participation in the Plan at any time.
The following pages of the Prospectus provide complete details of the
Plan in simple question and answer form. We recommend that you review the
description of the Plan carefully and that you retain this Prospectus for future
reference.
If you are not enrolled in the Plan but wish to do so, simply complete
the enclosed Authorization Card and return it in the enclosed postage-paid
envelope. You may enroll in dividend reinvestment only (partial or whole), in
optional cash payments only, or in both. If you are already enrolled in the
Plan, you need not take any action to continue your participation in the Plan.
If you do not participate in the Plan, you will continue to receive checks for
your dividends as they are declared and paid.
Sincerely,
/s/ Thomas P. Perciak
Thomas P. Perciak
President & Chief Executive Officer
<PAGE> 1
EXHIBIT 99.2
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
(CONTAINED AS PART OF THE PROSPECTUS INCLUDED HEREIN)
<PAGE> 1
EXHIBIT 99.3
ENROLLMENT CARD
<PAGE> 2
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------------
EMERALD FINANCIAL CORP. THIS IS NOT A PROXY
AUTHORIZATION FORM
<S> <C>
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
I hereby authorize National City Bank (Agent) to apply Check One Box Only:
cash dividends from Common Stock of Emerald Financial [ ] FULL DIVIDEND REINVESTMENT on all
Corp. (Company) registered in my name, and/or credited shares held with the option of purchasing
in my account under this Plan, and any optional cash stock with optional cash payments.
payments made by me in accordance with the Plan, to the [ ] PARTIAL DIVIDEND REINVESTMENT on
purchase of full and fractional Shares of the Company's Common _______ shares held with the option of purchasing
Stock. stock with optional cash payments.
[ ] OPTIONAL CASH PAYMENTS (ONLY).
I wish to make an optional cash payment to my
Plan Account.
AMOUNT ENCLOSED
$
--------------------------
(Check or money order only)
-----------------------------------------------------
Stockholder Signature
-----------------------------------------------------
Stockholder Signature
If name(s) and address is not preprinted above, please print your name
(exactly as it appears on your registered common stock) and address. -----------------------------------------------------
Area Code -- Telephone Number
Dated:
------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- - --------------------------------------------------------------------------------
Completion of this card authorizes Emerald Financial Corp. to enroll your
account in the Dividend Reinvestment and Stock Purchase Plan in one of the
following ways:
FULL DIVIDEND REINVESTMENT -- The dividends on all shares of Emerald
Financial Corp. Common Stock registered in your name as well as shares credited
to your account under the Plan will automatically be reinvested in additional
shares of Common Stock. Also, you may make optional payments.
PARTIAL DIVIDEND REINVESTMENT -- The dividends on only the number of shares
that are specified on the authorization card, together with any optional cash
payments, will be applied toward the purchase of additional Common Stock.
OPTIONAL CASH PAYMENTS -- Optional cash payments may be made at any time.
The minimum optional cash payment is $10 monthly and the maximum amount is
$25,000 annually. To make an optional cash payment with this Authorization Form,
indicate the amount and enclose a check or money order payable to the order of
National City Bank, Agent (Reinvestment Services, P. O. Box 94946, Cleveland,
Ohio 44101-4946). No interest will be paid on any amounts pending their
investment.
Your participation in the Plan and the Agent's authorization herein are
subject to the terms and conditions set forth in the Prospectus describing the
Plan.
- - --------------------------------------------------------------------------------
