On January 9, 2009, FirstMerit Corporation ("FirstMerit") completed the sale to the United States Department of the Treasury (the "Treasury") of $125.0 million of newly issued FirstMerit non-voting preferred shares as part of the Treasury's Troubled Assets Relief Program Capital Purchase Program ("CPP"). To finalize FirstMerit's participation in the CPP, FirstMerit and the Treasury entered into a Letter Agreement dated January 9, 2009 (the "Letter Agreement"), including the Securities Purchase Agreement - Standard Terms which is attached thereto (the "Securities Purchase Agreement" and together with the Letter Agreement, the "UST Agreement"). Pursuant to the UST Agreement, FirstMerit issued and sold to the Treasury for an aggregate purchase price of $125.0 million in cash (1) 125,000 shares of FirstMerit's Fixed Rate Cumulative Perpetual Preferred Shares, Series A, each without par value and having a liquidation preference of $1,000 per share (the "Series A Preferred Shares"), and (2) a warrant (the "Warrant") to purchase 952,260 FirstMerit common shares, each without par value ("Common Shares"), at an exercise price of $19.69 per share. The Warrant has a ten-year term. All of the proceeds from this sale of the Series A Preferred Shares and the Warrant by FirstMerit to the Treasury will qualify as Tier I capital for regulatory purposes. The additional capital would have increased its Tier 1 capital ratio to 11.78% at September 30, 2008, and increased its total capital ratio to 13.39% at September 30, 2008. The issuance and sale to the Treasury of the Series A Preferred Shares and the Warrant was a private placement exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof.
Under the standardized CPP terms, cumulative dividends on the Series A Preferred Shares will accrue on the liquidation preference at a rate of 5% per annum for the first five years, and at a rate of 9% per annum thereafter, but will be paid only if, as and when declared by FirstMerit's Board of Directors. The Series A Preferred Shares have no maturity date and rank senior to the Common Shares with respect to the payment of dividends and distributions and amounts payable upon liquidation, dissolution and winding up of FirstMerit.
FirstMerit may redeem the Series A Preferred Shares at their liquidation value after January 9, 2012. Prior to this date, FirstMerit may redeem the Series A Preferred Shares at their liquidation value if (1) FirstMerit has raised aggregate gross proceeds in one or more Qualified Equity Offerings (as defined in the Securities Purchase Agreement) in excess of $31.25 million, and
(2) the aggregate redemption price of the Series A Preferred Shares does not exceed the aggregate net proceeds from such Qualified Equity Offerings. Any redemption is subject to the consent of FirstMerit's Appropriate Federal Banking Agency (as defined in the Securities Purchase Agreement) regulator. The Treasury may not transfer a portion or portions of the Warrant with respect to, and/or exercise the Warrant for more than one-half of, the 952,260 Common Shares issuable upon exercise of the Warrant, in the aggregate, until the earlier of (1) the date on which FirstMerit has received aggregate gross proceeds of not less than $125.0 million from one or more Qualified Equity Offerings, and (2) December 31, 2009. In the event FirstMerit completes one or more Qualified Equity Offerings on or prior to December 31, 2009 that result in FirstMerit receiving aggregate gross proceeds of not less than $125.0 million, the number of Common Shares underlying the portion of the Warrant then held by the Treasury will be reduced by one-half of the Common Shares originally covered by the Warrant. The Treasury has agreed not to exercise voting power with

respect to any Common Shares issued upon exercise of the Warrant. Any Common Shares issued by FirstMerit upon exercise of the Warrant will be issued from Common Shares held in treasury by FirstMerit.
The Securities Purchase Agreement, pursuant to which the Series A Preferred Shares and the Warrant were sold, contains limitations on the payment of dividends on the Common Shares from and after January 9, 2009 (including with respect to the payment of cash dividends in excess of $0.29 per share, which is the amount of the last quarterly cash dividend declared by FirstMerit prior to October 14, 2008). Prior to the earlier of (1) January 9, 2012, and (2) the date . . .

The description under "Item 1.01 - Entry into a Material Definitive Agreement" is incorporated by reference into this Item 3.02.

The description under "Item 1.01 - Entry into a Material Definitive Agreement" is incorporated by reference into this Item 3.03.

The information set forth under "Item 1.01 - Entry into a Material Definitive Agreement" above relating to executive compensation is incorporated by reference into this Item 5.02.

Article FOURTH of FirstMerit's Second Amended and Restated Articles of Incorporation authorizes the issuance from time to time of one or more series of no par preferred shares, each without par value, up to a maximum of 7,000,000 shares. At a Special Meeting of Shareholders held on January 5, 2009, FirstMerit's shareholders approved certain amendments to Article FOURTH of FirstMerit's Articles of Incorporation to provide FirstMerit's Board of Directors with the authority to (1) limit the voting rights of shares of preferred stock issued by the corporation, and (2) issue preferred stock with the right to elect up to two directors. On January 5, 2009, FirstMerit filed with the Secretary of State of the State of Ohio a Certificate of Amendment by Shareholders or Members (the "Certificate of Amendment by Shareholders") evidencing the amendments to Article FOURTH of FirstMerit's Articles of Incorporation approved by FirstMerit's shareholders. The Certificate of Amendment by Shareholders was effective upon filing. A copy of the Certificate of Amendment by Shareholders is attached as Exhibit 3.1 hereto and is incorporated by reference herein.
On January 5, 2009, FirstMerit's Board of Directors adopted certain amendments to Article FOURTH of FirstMerit's Articles of Incorporation and established the express terms of FirstMerit's Fixed Rate Cumulative Perpetual Preferred Shares, Series A, each without par value, fixed 125,000 shares as the authorized number of shares of the series, and fixed and determined the dividend rate of the shares of the series, the liquidation rights of the shares of the series, the redemption rights in respect of the shares of the series, the voting rights in respect of the shares of the series, and certain other preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions thereof. On January 8, 2009, FirstMerit filed with the Secretary of State of the State of Ohio a Certificate of Amendment by Directors or Incorporators to Articles (the "Certificate of Amendment by Directors") evidencing the amendments to Article FOURTH of FirstMerit's Articles of Incorporation adopted by FirstMerit's Board of Directors. The Certificate of Amendment by Directors was effective upon filing. A copy of the Certificate of Amendment by Directors is attached as Exhibit 3.2 hereto and is incorporated by reference herein.

(d) Exhibits.

Exhibit
Number    Description

  3.1     Certificate of Amendment by Shareholders or Members, filed with the
          Secretary of State of the State of Ohio on January 5, 2009, evidencing
          adoption of amendments by the shareholders of FirstMerit Corporation to
          Article FOURTH to the Second Amended and Restated Articles of
          Incorporation of FirstMerit Corporation, as amended.

  3.2     Certificate of Amendment by Directors or Incorporators to Articles,
          filed with the Secretary of State of the State of Ohio on January 8,
          2009, evidencing adoption of amendments by the Board of Directors of
          FirstMerit Corporation to Article FOURTH to the Second Amended and
          Restated Articles of Incorporation of FirstMerit Corporation, as
          amended, to establish the express terms of the Fixed Rate Cumulative
          Perpetual Preferred Shares, Series A, each without par value, of
          FirstMerit Corporation.

  4.1     Form of Warrant to purchase 952,260 Common Shares of FirstMerit
          Corporation, issued to the United States Department of the Treasury on
          January 9, 2009.

 10.1     Letter Agreement, dated January 9, 2009, including the Securities
          Purchase Agreement - Standard Terms attached thereto as Exhibit A,
          between FirstMerit Corporation and the United States Department of the
          Treasury [Note: Annex A to the Securities Purchase Agreement is not
          included herewith; filed as Exhibit 3.2 to this Current Report on
          Form 8-K].

 10.2     Form of Letter Agreement, dated January 9, 2009, between FirstMerit
          Corporation and its Senior Executive Officers [Note: Appendix A is not
          included herewith; filed as Exhibit 10.1 to this Current Report on
          Form 8-K].