SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1996
Commission file number 0-20987
Grand Premier Financial, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-4077455
State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
486 W. Liberty St., Wauconda, IL 60084-2489
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (847) 487-1818
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days. Yes X
or No
The number of shares of the registrant's Common Stock outstanding on
October 31, 1996 was 19,940,181 shares.
GRAND PREMIER FINANCIAL, INC.
FORM 10-Q - QUARTERLY REPORT
TABLE OF CONTENTS
ITEM 1. FINANCIAL STATEMENTS Page
1. Consolidated Balance Sheets, September 30, 1996
and December 31, 1995. 1-2
2. Consolidated Statements of Income
Nine Months Ended September 30, 1996 and 1995 3
Three Months Ended September 30, 1996 and 1995 4
3. Consolidated Statements of Cash Flows, Nine Months
Ended September 30, 1996 and 1995 5
4. Notes to Unaudited Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-10
PART II. OTHER INFORMATION 11-12
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
(B) Reports on Form 8-K
GRAND PREMIER FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS
(000's omitted except share data)
September 30, December 31,
1996 1995
ASSETS (Unaudited) (Audited)
Cash and due from banks $ 57,612 $ 65,279
Interest bearing deposits in other banks 1,038 5,524
Federal Funds sold and securities
purchased under resale agreements 9,125 6,500
Cash and cash equivalents 67,775 77,303
Securities available for sale 555,047 598,570
Loans 958,643 876,333
Less: Unearned discount (1,332) (1,581)
Allowance for possible loan losses (10,292) (9,435)
Net loans 947,019 865,317
Bank premises and equipment 34,681 36,676
Excess cost over fair value
of net assets acquired 19,024 20,227
Accrued interest receivable 13,681 13,698
Other assets 18,062 12,882
Total assets $1,655,289 $1,624,673
See accompanying notes to unaudited
consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS
Unaudited
(000's omitted except share date)
September 30, December 31,
1996 1995
LIABILITIES (Unaudited ) (Audited)
Non-interest bearing deposits $192,720 $196,534
Interest bearing deposits 1,196,322 1,155,123
Deposits 1,389,042 1,351,657
Short-term borrowings 82,226 88,232
Other liabilities 19,121 17,193
Long-term debt 15,000 11,588
Total liabilities $1,505,389 $1,468,670
Shareholders' equity
Preferred stock - $.01 par value, 2,000,000
shares authorized:
Series A perpetual, $1,000 stated value,
8.25%, 7,000 shares authorized, 5,000
shares issued and outstanding in 1995 - $5,000
Series B convertible, $1,000 stated value,
8.00%, 7,250 shares authorized, issued
and outstanding 7,250 7,250
Series C perpetual, $1,000 stated value,
8.00%, 2,000 shares authorized, issued
and outstanding 2,000 -
Series D perpetual, $1,000 stated value,
7.50%, 3,300 shares authorized, 2,000
shares issued and outstanding in 1995 - 2,000
Common stock - $.01 par value
No of Shares 9/30/96 12/31/95
Authorized 30,000,000 30,000,000
Issued 19,940,181 19,869,823
Outstanding 19,940,181 19,869,823 199 199
Retained earnings 135,133 131,504
Unrealized gain on securities available
for sale, net of tax 5,318 10,050
Stockholders' equity $149,900 $156,003
Total liabilities &
stockholders' equity $1,655,289 $1,624,673
See accompanying notes to unaudited
consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's omitted except per share data)
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
1996 1995
Interest income
Interest and fees on loans $59,159 $53,865
Interest & dividends on investment securities:
Taxable 20,217 20,772
Exempt from federal income tax 5,409 5,100
Other interest income 511 810
Total interest income 85,296 80,547
Interest expense
Interest on deposits 38,662 35,352
Interest on borrowings 3,370 4,022
Total interest expense 42,032 39,374
Net interest income 43,264 41,173
Provision for loan losses 2,425 590
Net interest income after provision
for loan losses 40,839 40,583
Other income
Service charges on deposits 4,293 4,006
Trust department income 2,459 2,263
Investment securities gains, net 783 1,990
Other operating income 3,973 3,160
Total other income 11,508 11,419
Other expenses
Salaries 16,225 15,168
Pension, profit sharing, & other
employee benefits 3,257 2,854
Net occupancy of bank premises 3,303 2,964
Furniture & equipment 2,266 2,446
Federal deposit insurance premiums 87 1,863
Write-down of real estate held
for development 2,300 -
Other 14,081 10,811
Other expenses 41,519 36,106
Income before income taxes $10,828 $15,896
Income taxes 2,852 3,864
Net income $ 7,976 $12,032
Earnings per share:
Average weighted shares outstanding 20,123,435 20,111,808
Net earnings $.36 $.56
See accompanying notes to unaudited
consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's omitted except per share data)
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
1996 1995
Interest income
Interest and fees on loans $20,348 $18,830
Interest & dividends on investment securities
Taxable 6,686 7,195
Exempt from federal income tax 1,765 1,725
Other interest income 195 235
Total interest income 28,994 27,985
Interest expense
Interest on deposits 13,346 12,562
Interest on borrowings 1,032 1,383
Total interest expense 14,378 13,945
Net interest income 14,616 14,040
Provision for loan losses 1,505 394
Net interest income after provision
for loan losses 13,111 13,646
Other income
Service charges on deposits 1,364 1,339
Trust fees 812 762
Investment securities gains, net 274 706
Other operating income 1,428 1,245
Total other income 3,878 4,052
Other expenses
Salaries 5,551 5,526
Pension, profit sharing, & other
employee benefits 679 400
Net occupancy of bank premises 1,144 999
Furniture & equipment 710 887
Federal deposit insurance premiums 81 415
Write-down of real estate held
for development 2,300 -
Other 5,894 3,284
Other expenses 16,359 11,511
Income before income taxes 630 6,187
Income taxes 35 1,475
Net income $595 $4,712
Earnings per share:
Average weighted shares outstanding 20,151,337 20,035,308
Net earnings $.02 $.22
See accompanying notes to unaudited
consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
1996 1995
Cash flows from operating activities:
Net income $7,976 $12,032
Adjustments to reconcile net income
to net cash from operating activities:
Amortization net, related to:
Investment securities 1,011 1,800
Excess of cost over net assets acquired 1,203 1,194
Other (647) 264
Depreciation 2,297 2,354
Provision for possible loan losses 2,425 590
Write-down of real estate held for development 2,300 -
Gain on sale related to:
Investment securities (783) (1,990)
Loans sold to secondary market (128) (138)
Change in:
Trading account - (993)
Other assets (5,163) (5,968)
Other Liabilities 4,427 640
Net cash from operating activities 14,918 9,785
Cash flows from (used by) investing activities:
Purchase of securities held to maturity - (6,822)
Purchase of securities available for sale (258,405) (211,490)
Proceeds from:
Maturities of securities held to maturity - 8,036
Maturities of securities available for sale 192,289 94,144
Sales of securities held to maturity - 182
Sales of securities available for sale 102,180 129,255
Net increase in loans (83,116) (86,459)
Purchase of bank premises & equipment (2,838) (2,159)
Other net - 261
Net cash (used by) investing activities (49,890) (75,052)
Cash flows from (used by) financing activities:
Net increase (decrease) in:
Deposits 37,385 46,385
Securities sold under agreements
to repurchase (24,703) 2,022
Short term borrowings 18,697 11,319
Long term borrowings 3,412 938
Purchase of treasury stock - (1,373)
Reissuance of treasury stock - 150
Exercised stock options 191 -
Redemption of Series A preferred stock (5,000) -
Cash dividends paid (4,538) (3,693)
Net cash from financing activities 25,444 55,748
Decrease in cash & cash equivalents (9,528) (9,519)
Cash and cash equivalents, beginning of year 77,303 82,736
Cash and cash equivalents, end of period $67,775 $74,149
See accompanying notes to unaudited
consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. The merger of Northern Illinois Financial Corporation ("Northern
Illinois") and Premier Financial Services, Inc. ("Premier") with and into
Grand Premier Financial, Inc. ("Grand Premier") was consummated on August 22,
1996 and was accounted for as a pooling of interests. Each outstanding share
of Northern Illinois and Premier common stock was converted into 4.25 shares
and 1.116 shares of Grand Premier common stock, respectively. Each of the
7,250 shares of Premier Series B Preferred Stock was converted into one share
of Grand Premier Series B preferred Stock, and each of the 2,000 shares of
Premier Series D preferred Stock was converted into one share of Grand
Premier Series C Preferred Stock. All financial statements and information
have been restated to reflect the merger.
2. The accompanying consolidated financial statements include the financial
information of Grand Premier and its subsidiaries, all of which are wholly
owned. Significant intercompany balances and transactions have been
eliminated. The consolidated financial statements as of September 30, 1996
and 1995 have not been audited by independent public accountants. In the
opinion of management, the interim financial statements reflect all
adjustments (consisting only of adjustments of a normal recurring nature)
necessary for a fair presentation of Grand Premier's financial position,
results of operations and cash flows for the interim periods presented. The
results for such interim periods are not necessarily indicative of the
results for the full year.
3. On July 17, 1996 Premier redeemed all of the 5,000 outstanding shares of
Premier Series A Preferred Stock at stated value using borrowed funds.
4. Earnings per share for the nine months and three months ended September
30, 1996 and 1995 were computed by dividing net income (less preferred stock
dividends) by the total of the average number of common shares and stock
options outstanding during such periods. The aggregate amount of preferred
stock dividends paid for the nine months ended September 30, 1996 and 1995
and for the three months ended September 30, 1996 and 1995 were $754,000,
$829,000, $201,000 and $276,000, respectively.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Grand Premier Financial, Inc's (GPFI) earnings for the third quarter, 1996,
totaled $595,000, or $.02 per share versus $4.7 million, or $.22 per share
for the same quarter in 1995. Year-to-date earnings through September 30,
1996 totaled $8.0 million, or $.36 per share as compared to $12.0 million,
or $.56 per share for the first nine months of 1995. The third quarter and
year-to-date earnings declines are primarily a result of an increased third
quarter provision for possible loan losses, higher salary expense, an expense
provision for anticipated contract and lease terminations and severance
benefits related to staff reductions, investment banking and professional
fees in connection with the merger, and a write-down of real estate held for
development. In total, these items reduced net earnings by approximately
$3.9 million, or $.19 per share in the quarter just ended and $5.7 million,
or $.28 per share year-to-date.
Net Interest Income
Core earnings remain strong despite a slight decline in net interest margin.
Year-to-date net interest income totaled $43.3 million in 1996, as compared
to $41.2 million in 1995. Net interest income for the current quarter
increased by approximately $600,000 over the third quarter of 1995. The
modest increase is a result of increased earning assets and change in asset
mix, which offset the margin decline. Earning assets averaged $1.49 billion,
or 92.2% of average total assets for the nine months ended September 30, 1996
as compared to $1.39 billion, or 89.8% of average total assets in 1995.
Loans, which are generally higher yielding assets, represented 60.7% of total
assets at September 30, 1996, 60.6% on June 30, 1996 and 57.4% on September
30, 1995. GPFI's net interest margin was 4.14% at the end of the current
quarter, reflecting a slight decline from 4.19% as of June 30, 1996 and eight
basis points lower than the 4.22% margin at September 30, 1995.
Provision for Loan Losses
The Company has experienced significant growth in loans outstanding during
1996. Loans totaled $958.6 million at September 30, 1996, an increase of
$82.3 million since December 31, 1995. In excess of $40 million of the net
growth occurred during the quarter just ended. Year-to-date net loan losses
through September 30, 1996 totaled $1.6 million, an increase of $775,000 from
the $788,000 recorded for the first nine months of 1995. Non-performing
loans (i.e., non-accrual loans, loans past due 90 days or more and still
accruing, and renegotiated loans) have increased modestly, from $7.2 million
at year end 1995 to $7.9 million at the end of the current quarter. Non-
accruing loans decreased from $6.1 million at year end 1995 to $4.8 million
at September 30, 1996, loans past due 90 days or more and still accruing
increased from $539,000 at year end 1995 to $2.6 million at September 30,
1996 and renegotiated loans decreased from $551,000 at year end 1995 to
$517,000 at September 30, 1996.
Primarily as a result of the growth in the loan portfolio, which management
anticipates may continue, the Company made an expense provision for loan
losses of $1.5 million in the third quarter of 1996. Year-to-date, the
Company's provision for possible loan losses totals $2.4 million as compared
to $ 590,000 in the first nine months of 1995. The allowance for possible
loan losses as a percent of non-performing loans was 130.4% and 130.9% as of
September 30, 1996 and December 31, 1995 respectively.
GPFI's provision for possible loan losses is determined as a result of
management's evaluation system for assessing the adequacy of the allowance
for possible loan losses. The system includes risk grading individual loans
based on credit risk as well as reviewing overall loan portfolio composition,
growth, economic factors and estimating future potential losses.
Non-interest Income
Non-interest income (excluding net gains from sale of investment securities)
increased $1.3 million, or 13.7% in the nine month period ended September 30,
1996 as compared to the same period in 1995, and 7.7% for the third quarter
of 1996 relative to the third quarter of 1995. Contributing to the increase
were service charges on deposit accounts, trust fees, gains on the sale of
other real estate and other fee income.
Service charges on deposits increased $287,000, to $4.3 million through
September 30, 1996 compared to $4.0 million the previous year. The increase
was primarily due to standardization of fee schedules among four subsidiary
banks which were merged into a single charter in February, 1996. Trust fees
increased $196,000, or 8.7%, on a year-to-date basis from 1995 to 1996. Net
gains from sale of other real estate totaled $573,000 through September 30,
1996, compared to $61,000 in 1995.
GPFI realized $274,000 in net gains from sale of investment securities during
the third quarter of 1996, versus $706,000 during the same quarter in 1995.
Year-to-date net gains from sale of investment securities total $776,000 in
1996, a decline of approximately $1.2 million from the similar period in
1995.
Non-interest Expenses
Total non-interest expenses through September 30, 1996 increased by $5.4
million, or 15.0% over the first nine months of 1995. Expense increases
of approximately $7.20 million were partially offset by a $1.8 million
reduction in FDIC insurance premiums. FDIC insurance premium expense during
the quarter just ended included a one-time charge of $59,000 on OAKAR
deposits for recapitalization of the SAIF insurance fund.
Salary and benefit expenses, increased by $304,000 in the current quarter as
compared to the third quarter of 1995. Salary and benefit expenses were
however, $550,000 less in the third quarter than in the second quarter this
year. Approximately $330,000 in severance payments were paid in the quarter
ended June 30, 1996 as a result of charter and operational consolidations
made prior to the merger. Year-to date salary and benefit expenses are up
$1.4 million over the same period in 1995.
The Company owns 5.5 acres of property in Riverwoods, Illinois which it
acquired in 1993 for possible future expansion. In late October, 1996, GPFI
decided that it no longer plans to develop the property. The Company
believes that the current fair value of the property is approximately $2.0
million. Third quarter, 1996 earnings include an adjustment of $2.3 million
to pretax earnings reflecting the write-down of the property to approximate
fair value.
Other expenses increased by $2.6 million in the third quarter of 1996 over
the same quarter in 1995, and are approximately $3.3 million more, on a year-
to-date basis, than during the first nine months of 1995. A major portion of
the increase in the quarter ended September 30, 1996, (just under $2.0
million) was the result of several non-recurring items; 1) expenses of
approximately $1.35 for anticipated contract and lease terminations and
severance benefits related to staff reductions, and 2) $543,000 in investment
banking and professional expenses in connection with the merger, bringing the
year-to-date total to $1.1 million. Miscellaneous expenses such as forms
reprinting, marketing, establishing inter-company communications systems,
etc. were primarily responsible for the remainder of the quarter-to-quarter
and year-to-year increases.
Grand Premier Operating Systems, Inc., the Company's operating subsidiary, is
expected to relocate to its new facility in Vernon Hills, Illinois, during
the fourth quarter, 1996, as a part of GPFI's plans to consolidate and
centralize back-office servicing over the next six to nine months. It is
expected that expenses associated with the move will approximate $250,000.
Income Taxes
Income taxes for the first nine months of 1996 totaled $2.9 million, or 26.3%
of before tax earnings, as compared to $3.9 million, or 24.3% of before tax
earnings in 1995. The higher effective tax rate in 1996 is due to non-tax
deductible merger expenses.
FINANCIAL CONDITION
Total assets at September 30, 1996, were $1.66 billion, an increase of $32.9
million over year end 1995 and $42.9 million over June 30, 1996.
Asset expansion during the first nine months of 1996 is dominated by growth
in loans outstanding. Loans net of unearned income increased $82.3 million
(9.4%) from year end 1995, primarily in the commercial sector. The growth
was funded primarily by a decrease in securities available for sale, which
declined by $43.5 million since year end, and a modest 2.8% increase in
deposits which rose from $1.35 billion at December 31, 1995 to $1.39 billion
at September 30, 1996.
Short-term borrowings reflect a $6.0 million decline from year end 1995,
substantially as a result of the Company's encouraging holders of securities
sold under agreements to repurchase to reinvest proceeds in interest bearing
time deposits. The $3.4 million increase in long-term debt is due to
additional advances under borrowing arrangements with the Federal Home Loan
Bank of Chicago. As of September 30, 1996, GPFI's subsidiary banks had $52.8
million available for borrowing under such arrangements, with total
outstanding borrowings of $28.4 million.
At September 30, 1996, stockholder's equity totaled $149.9 million, down 3.9%
from $156.0 million at year end 1995. On July 17, 1996, the Company
increased its short-term notes payable under a revolving credit line with an
unaffiliated correspondent bank and redeemed all $5.0 million of its
outstanding Series A Perpetual Preferred Stock at par. As of September 30,
1996, short-term notes payable were $14.0 million, with an additional $11.0
million available in unused lines. Stockholder's equity also reflects an
unrealized gain of $5.3 million, based upon current market value of
securities available for sale, net of tax, as required under SFAS No. 115.
The unrealized gain represents a decrease of $4.7 million since December 31,
1995.
GPFI's capital ratios at September 30, 1996, exceed levels established by the
Federal Reserve Board measurements defining "well capitalized" institutions.
Under the Federal Reserve Board's risk based capital guidelines, a financial
institution must maintain 1) "Tier 1 Capital" (i.e., common stockholder's
equity less goodwill to risk adjusted assets) of 4% or more, 2) "Total Risk
Based Capital" (i.e., Tier 1 Capital plus the lesser of 1.25% of risk
adjusted assets or the allowance for possible loan losses to risk adjusted
assets) of 8% or more, and 3) a "Tier 1 Leverage Ratio" (i.e., common
stockholder's equity less goodwill to total assets less goodwill) of 3% or
more. The Company's Tier 1, Total Risk Based Capital and Leverage ratios at
quarter end were 11.89%, 12.84 % and 7.87% respectively.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits as follows
The following exhibits are filed with, or incorporated by
reference in, this report. Each management contract or
compensatory plan or arrangement required to be filed as an
exhibit to this report has been marked with an asterisk.
2.1 Agreement and Plan of Merger, dated January 22,
1996, among Northern Illinois Financial
Corporation, Premier Financial Services, Inc and
the Company (incorporated by reference to
Exhibit 2.1 to the Company's Registration
Statement on Form S-4, as amended, File No. 333-
03327), as amended by the First Amendment
thereto, dated March 18, 1996 (incorporated by
reference to Exhibit 2.2 to the Company's
Registration Statement on Form S-4, as amended,
File No. 333-03327), and the Second Amendment
thereto, incorporated by reference to Exhibit
2.3 to the Company's Current Report on Form 8-K,
dated August 22, 1996, Commission File No. 0-
20987).
3.1 Amended and Restated Certificate of
Incorporation of the Company (incorporated by
reference to Appendix F to the final proxy-
statement prospectus included in the Company's
Registration Statement on Form S-4, as amended,
File No. 333-03327).
3.2 By-laws of the Company (incorporated by
reference to Exhibit 3.4 to the Company's
Registration Statement on Form S-4, as amended,
File No. 333-03327).
4 Rights Agreement, dated as of July 8, 1996,
between Grand Premier Financial, Inc. and
Premier Trust Services, Inc. (incorporated by
reference to the Company's Registration
Statement on Form S-4, as amended, File No. 333-
03327).
10.1* Form of Change in Control Agreement, dated
October (2)/(8), 1996, entered into between the
Company and each of Richard L Geach, David L.
Murray, Kenneth A. Urban, Steven E. Flahaven and
Scott Dixon.
10.2* Form of Change in Control Agreement, dated
October (2)/(8), 1996, entered into between the
Company and each of Robert Hinman, Alan Emerick,
Jack Emerick, Joseph Esposito, William Theobald,
Reid French, Larry O'Hara and Ralph Zicco.
10.3* Grand Premier Financial, Inc. 1996 Non-Qualified
Stock Option Plan (incorporated by reference to
Exhibit 4.1 to the Company's Registration
Statement on Form S-8, File No. 333-11663).
10.4* Premier Financial Services, Inc. 1996 Non-
Qualified Stock Option Plan (incorporated by
reference to Exhibit 4.2 to Post-Effective
Amendment No. 1 on Form S-8 to the Company's
Registration Statement on Form S-4, File No.
333-03327).
10.5* Premier Financial Services, Inc. 1988 Non-
Qualified Stock Option Plan (incorporated by
reference to Exhibit 4.3 to Post-Effective
Amendment No. 1 on Form S-8 to the Company's
Registration Statement on For S-4, File No. 333-
03327).
10.6* Premier Financial Services, Inc. Senior
Leadership and Directors Deferred Compensation
Plan, as amended (incorporated by reference to
Exhibit 4.1 to the Company's Registration
Statement on Form S-8, File No. 333-11645).
10.7* Consulting Agreement, dated February, 17, 1995,
between Howard A. McKee and Grand National Bank
(incorporated by reference to Exhibit 10.1 to
the Company's Registration Statement on Form S-
4, as amended, File No. 333-03327).
27. Financial Data Schedule, for the nine months
ended September 30, 1996
(B) Reports on Form 8-K
The registrant filed a report on Form 8-K dated August
22, 1996, reporting (i) the consummation of the merger
of Northern Illinois Financial Corporation and Premier
Financial Services, Inc. with and into the Registrant
under the terms and condition of an Agreement & Plan of
Merger, dated January 22, 1996, as amended and (ii) the
appointment of KPMG Peat Marwick, LLP as the Company's
auditors for the remainder of its 1996 fiscal year
The report on Form 8-K also included the following
financial statements:
(i) Northern Illinois:
(A) Consolidated Balance Sheets as of June 30, 1996
(unaudited and December 31, 1995 (audited);
(B) Consolidated Statements of Income for the six
months and three months ended June 30, 1996 and
1995 (unaudited);
(C) Consolidated Statements of Shareholder Equity
for the six months ended June 30, 1996 and 1995
(unaudited);
(D) Consolidated Statements of Cash Flows for the
six months ended June 30, 1996 and 1995
(unaudited); and
(E) Notes to Consolidated Financial Statements for
the six months and three months ended June 30,
1996 and 1995.
(ii) Premier:
(A) Consolidated Balance Sheets as of June 30, 1996
(unaudited) and December 31, 1995 (audited);
(B) Consolidated Statements of Earnings for the
three months and six months ended June 30, 1996
and 1995 (unaudited);
(C) Consolidated Statements of Cash Flows for the
six months ended June 30, 1996 and 1995
(unaudited); and
(D) Notes to Consolidated Financial Statements for
the three months and six months ended June 30,
1996 and 1995.
(iii) Pro Forma Financial Statements
(a) Pro Forma Combined Condensed Balance Sheet
as of June 30, 1996 (unaudited); and
(b) Pro Forma Condensed Statements of Income for
the three months and six months ended June
30, 1996 and 1995.
GRAND PREMIER FINANCIAL, INC.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GRAND PREMIER FINANCIAL, INC.
November 14, 1996 By: /s/ David L. Murray
David L Murray, Executive Vice President &
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description Page No.
2.1 Agreement and Plan of Merger, dated January
22, 1996, among Northern Illinios Financial
Corporation, Premier Financial Services, Inc.
and the Company (incorporated by reference to
Exhibit 2.1 to the Company's Registration
Statement on Form S-4, as amended, File No.
333-03327), as amended by the First Amendment
thereto, dated March 18, 1996 (incorporated by
referenced to Exhibit 2.2 to the Company's
Registration Statement on Form S-4, as
amended, File No. 333-03327), and the second
Amendment thereto, incorporated by reference
to Exhibit 2.3 to the Company's Current Report
on Form 8-K, dated August 22, 1996, Commission
File No. 0-20987.
3.1 Amended and Restated Certificated of
Incorporation of the Company (incorporated by
reference to Appendix F to the final proxy-
statement prospectus included in the Company's
Registration Statement on Form S-4, as
amended, File No. 333-03327).
3.2 By-laws of the Company (incorporated by
reference to Exhibit 3.4 to the Company's
Registration Statement on Form S-4, as
amended, File No. 333-03327).
4 Rights Agreement, dated as of July 8, 1996,
between Grand Premier Financial, Inc. and
Premier Trust Services, Inc (incorporated by
reference to the Company's Registration
Statement on Form S-4, as amended, File No.
333-03327).
10.1* Form of Change in Control Agreement, dated
October (2)/(8), 1996, entered into between
the Company and each of Richard L Geach, David
L. Murray, Kenneth A. Urban, Steven E.
Flahaven and Scott Dixon.
10.2* Form of Change in Control Agreement, dated
October (2)/(8), 1996, entered into between
the Company and each of Robert Hinman, Alan
Emerick, Jack Emerick, Joseph Esposito,
William Theobald, Reid French, Larry O'Hara
and Ralph Zicco.
10.3* Grand Premier Financial, Inc. 1996 Non-
Qualified Stock Option Plan (incorporated by
reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-8, File No.
333-11663).
10.4* Premier Financial Services, Inc. 1996 Non-
Qualified Stock Option Plan (incorporated by
reference to Exhibit 4.2 to Post-Effective
Amendment No. 1 on Form S-8 to the Company's
Registration Statement on Form S-4, File No.
333-03327).
10.5* Premier Financial Services, Inc. 1988 Non-
Qualified Stock Option Plan (incorporated by
reference to Exhibit 4.3 to Post-Effective
Amendment No. 1 on Form S-8 to the Company's
Registration Statement on For S-4, File No.
333-03327).
10.6* Premier Financial Services, Inc. Senior
Leadership and Directors Deferred Compensation
Plan, as amended (incorporated by reference to
Exhibit 4.1 to the Company's Registration
Statement on Form S-8, File No. 333-11645).
10.7* Consulting Agreement, dated February, 17,
1995, between Howard A. McKee and Grand
National Bank (incorporated by reference to
Exhibit 10.1 to the Company's Registration
Statement on Form S-4, as amended, File No.
333-03327).
27 Financial Data Schedule for the Nine Months
Ended September 30, 1996.
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<NAME> GRAND PREMIER FINANCIAL, INC
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9250000
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<INCOME-PRE-EXTRAORDINARY> 10828000
<EXTRAORDINARY> 0
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<NET-INCOME> 7976000
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EXHIBIT 10.1
CHANGE IN CONTROL AND TERMINATION AGREEMENT
This Change in Control and Termination Agreement (this "Agreement") is
entered into as of this ______ day of ____________________, 1996, by and
between Grand Premier Financial, Inc., a Delaware corporation ("Grand
Premier") and ____________________________ ("Executive").
WITNESSETH:
WHEREAS, Executive is currently employed by Grand Premier as its
_________ ________________; and
WHEREAS, Grand Premier desires to provide security to Executive in
connection with Executive's employment with Grand Premier in the event of a
Change in Control of Grand Premier; and
WHEREAS, Executive and Grand Premier desire to enter into this Agreement
pertaining to the terms of the security Grand Premier is providing to
Executive with respect to his employment in the event of a Change in Control;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
1. Term. The term of this Agreement shall be the period beginning on
the date hereto and terminating on the date 36 months after the date hereof
(the "Term"), provided that for each day from and after the date hereof the
Term will automatically be extended for an additional day, unless either
Grand Premier or Executive has given written notice to the other party of its
or his election to cease such automatic extension, in which case the Term
shall end at the expiration of the 36-month period beginning on the date such
notice is received by such other party.
2. Definitions. For purposes of this Agreement:
(a) "Affiliate" or "Associate" shall have the meaning set forth in
Rule 12b-2 under the Securities Exchange Act of 1934 (the "Exchange
Act").
(b) "Base Salary" shall mean Executive's monthly base salary at
the rate in effect on the date of a termination of employment under
circumstances described in Section 3 below; provided, however, that such
rate shall in no event be less than the highest rate in effect for
Executive at any time during the Term.
(c) "Beneficiary" shall mean the person or entity designated by
the Executive, by written instrument delivered to Grand Premier, to
receive the benefits payable under this Agreement in the event of his
death. If the Executive fails to designate a Beneficiary, or if no
Beneficiary survives the Executive, such death benefits shall be paid:
(i) to the Executive's surviving spouse; or
(ii) if there is no surviving spouse, to the Executive's living
descendants per stirpes; or
(iii) if there is neither a surviving spouse nor descendants, to the
Executive's duly appointed and qualified executor or personal
representative.
(d) "Board" shall mean the Board of Directors of Grand Premier
Financial, Inc.
(e) A "Change in Control" of Grand Premier shall be deemed to have
occurred if or upon:
(i) The acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Sections 13(d)(3)
or 14(d)(2) of the Exchange Act, of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act of 20% or more
of either (A) the then outstanding shares of Common Stock of Grand
Premier (the "Outstanding Grand Premier Common Stock") or (B) the
combined voting power of the then outstanding securities of Grand Premier
entitled to vote generally in the election of directors (the "Outstanding
Grand Premier Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change in Control: (I) any
acquisition that resulted directly from the conversion of shares of
Northern Illinois Common Stock into shares of Grand Premier Common Stock
pursuant to the Agreement and Plan of Merger, dated January 22, 1996,
among Grand Premier, Premier Financial Services, Inc. and Northern
Illinois Financial Corporation, as amended by the First Amendment
thereto, dated March 18, 1996, and the Second Amendment thereto, dated as
of August 15, 1996 (the "Merger Agreement"), (II) any acquisition of
shares of Grand Premier Common Stock that is permitted under Section 1(b)
of the Rights Agreement, dated as of July 8, 1996, between Grand Premier
and Premier Trust Services, Inc. (the "Rights Agreement"), without
rendering the Person effecting such acquisition an "Acquiring Person" for
purposes of the Rights Agreement, (III) any acquisition directly from
Grand Premier (excluding any acquisition resulting from the exercise of
a conversion or exchange privilege in respect of outstanding convertible
or exchangeable securities), (IV) any acquisition by Grand Premier, (V)
any acquisition by an employee benefit plan (or related trust) sponsored
or maintained by Grand Premier or any corporation controlled by Grand
Premier or (VI) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation involving Grand Premier, if
immediately after such reorganization, merger or consolidation, each of
the conditions described in clauses (A), (B) and (C) of subsection (iii)
of this Section 2(e) shall be satisfied; and provided further that, for
purposes of clause (IV) of this Section 2(e)(i), if any Person (other
than Grand Premier or any employee benefit plan (or related trust)
sponsored or maintained by Grand Premier or any corporation controlled by
Grand Premier) shall become the beneficial owner of 20% or more of the
Outstanding Grand Premier Common Stock or 20% or more of the Outstanding
Grand Premier Voting Securities by reason of an acquisition by Grand
Premier and such Person shall, after such acquisition by Grand Premier,
become the beneficial owner of any additional shares of the Outstanding
Grand Premier Common Stock or any additional Outstanding Grand Premier
Voting Securities and such beneficial ownership is publicly announced,
such additional beneficial ownership shall constitute a Change in
Control;
(ii) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of such Board; provided, however, that any individual who
becomes a director of Grand Premier subsequent to the date hereof whose
election, or nomination for election by Grand Premier's stockholders, was
approved by the vote of at least a majority of the directors then
comprising the Incumbent Board shall be deemed to have been a member of
the Incumbent Board; and provided further, that no individual who was
initially elected as a director of Grand Premier as a result of an actual
or threatened election contest, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any
Person other than the Board, shall be deemed to have been a member of the
Incumbent Board;
(iii) approval by the stockholders of Grand Premier of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (A) more
than 60% of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation
and more than 60% of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals or entities who were the
beneficial owners, respectively, of the Outstanding Grand Premier Common
Stock and the Outstanding Grand Premier Voting Securities immediately
prior to such reorganization, merger or consolidation and in
substantially the same proportions relative to each other as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Grand Premier Common Stock and the
Outstanding Grand Premier Voting Securities, as the case may be, (B) no
Person (other than Grand Premier, any employee benefit plan (or related
trust) sponsored or maintained by Grand Premier or the corporation
resulting from such reorganization, merger or consolidation (or any
corporation controlled by Grand Premier) and any Person which
beneficially owned, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 20% or more of the Outstanding
Grand Premier Common Stock or the Outstanding Grand Premier Voting
Securities, as the case may be) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of common stock of
such corporation or 20% or more of the combined voting power of the then
outstanding securities of such corporation entitled to vote generally in
the election of directors and (C) at least a majority of the members of
the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement or action of
the Board providing for such reorganization, merger or consolidation; or
(iv) approval by the stockholders of Grand Premier of (A) a plan
of complete liquidation or dissolution of Grand Premier or (B) the sale
or other disposition of all or substantially all of the assets of Grand
Premier other than to a corporation with respect to which, immediately
after such sale or other disposition, (I) more than 60% of the then
outstanding shares of common stock thereof and more than 60% of the
combined voting power of the then outstanding securities thereof entitled
to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of
the Outstanding Grand Premier Common Stock and the Outstanding Grand
Premier Voting Securities immediately prior to such sale or other
disposition and in substantially the same proportions relative to each
other as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Grand Premier Common Stock and the
Outstanding Grand Premier Voting Securities, as the case may be, (II) no
Person (other than Grand Premier, any employee benefit plan (or related
trust) sponsored or maintained by Grand Premier or such corporation (or
any corporation controlled by Grand Premier) and any Person which
beneficially owned immediately prior to such sale or other disposition,
directly or indirectly, 20% or more of the Outstanding Grand Premier
Common Stock or the Outstanding Grand Premier Voting Securities, as the
case may be) beneficially owns, directly or indirectly, 20% or more of
the then outstanding shares of common stock thereof or 20% or more of the
combined voting power of the then outstanding securities thereof entitled
to vote generally in the election of directors and (III) at least a
majority of the members of the board of directors thereof were members of
the Incumbent Board at the time of the execution of the initial agreement
or action of the Board providing for such sale or other disposition.
(f) "Good Cause" shall be deemed to exist if, and only if:
(i) Executive engages in acts or omissions constituting
dishonesty, intentional breach of fiduciary obligation or intentional
wrongdoing or malfeasance, in each case that results in substantial harm
to Grand Premier or any Affiliate; or
(ii) Executive is convicted of a criminal violation involving fraud
or dishonesty.
(g) "Good Reason" shall be deemed to exist if, and only if,
Executive terminates his employment because, without his express written
consent:
(i) Grand Premier assigns to Executive duties of a nonexecutive
nature or for which Executive is not reasonably equipped by his skills
and experience;
(ii) Grand Premier reduces the salary of Executive, or materially
reduces the amount of paid vacation to which he is entitled, or his
fringe benefits and perquisites;
(iii) Grand Premier requires Executive to relocate his principal
business office or his principal place of residence, or assigns to
Executive duties that would reasonably require such relocation;
(iv) Grand Premier requires Executive, or assigns duties to
Executive which would reasonably require him, to spend more than 30
normal working days away from his principal business office or his
principal place of residence during any consecutive twelve-month period;
(v) Grand Premier fails to provide office facilities, secretarial
services, and other administrative services to Executive which are
substantially equivalent to the facilities and services provided to
Executive on the date hereof; or
(vi) Grand Premier terminates any Incentive Plan, Retirement Plan
or Welfare Plan, or reduces or limits Executive's participation therein
relative to the level of participation of other executives of similar
rank, to such an extent as to materially reduce the aggregate value of
Executive's incentive compensation and benefits below their aggregate
value as of the date hereof.
(h) "Incentive Plan" shall mean any incentive or bonus plan
currently or hereinafter made available by Grand Premier in which
Executive is eligible to participate, including, but not limited to, the
Grand Premier Financial, Inc. 1996 Stock Option Plan, and any successor
thereto.
(i) "Retirement Plan" shall mean any qualified or supplemental
employee pension benefit plan, as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), currently
or hereinafter made available by Grand Premier in which Executive is
eligible to participate, including, but not limited to, the Premier
Financial Services, Inc. Employee Savings and Stock Plan and Trust,
including any successor to such plan (the "Savings Plan"), and the
Premier Financial Services, Inc. Senior Leadership and Directors Deferred
Compensation Plan, including any successor to such plan (the "Deferred
Compensation Plan").
(j) "Severance Period" shall mean the period beginning on the date
Executive's employment with Grand Premier terminates under circumstances
described in Section 3 and ending on the date 12 months thereafter.
(k) "Substantial Portion of the Property of Grand Premier" shall
mean 50% of the aggregate book value of the assets of Grand Premier and
its Affiliates and Associates as set forth on the most recent balance
sheet of Grand Premier, prepared on a consolidated basis, by its
regularly employed, independent, certified public accountants.
(l) "Welfare Plan" shall mean any health and dental plan,
disability plan, survivor income plan or life insurance plan, as defined
in Section 3(1) of ERISA, currently or hereafter made available by Grand
Premier in which Executive is eligible to participate.
3. Benefits Upon Termination of Employment. The following provisions
will apply if a Change in Control occurs during the Term, and at any time
during the 24 months after the Change in Control occurs (whether during or
after the expiration of the Term), the employment of Executive with Grand
Premier is terminated by Grand Premier for any reason other than Good Cause,
or Executive terminates his employment with Grand Premier for Good Reason:
(a) Grand Premier shall pay Executive an amount equal to
Executive's Base Salary multiplied by 12. Such amount shall be paid to
Executive in a lump sum within 90 days after his date of termination of
employment; provided, however, Executive, by written notice to Grand
Premier, may elect to receive such payment on any date that is no earlier
than the later to occur of: (i) the date 10 days after the date of
termination; and (ii) the date 10 days after receipt of such notice.
(b) During the Severance Period, Executive and his or her spouse
and other dependents shall continue to be covered by all Welfare Plans
maintained by Grand Premier in which Executive and his or her spouse and
other dependents were participating immediately prior to the date of
Executive's termination, as if Executive continued to be an employee of
Grand Premier, and Grand Premier shall continue to pay the costs of
coverage of Executive and his spouse and other dependents under such
Welfare Plans on the same basis as is applicable to active employees
covered thereunder; provided that, if participation in any one or more of
such Welfare Plans is not possible under the terms thereof, Grand Premier
will provide substantially identical benefits. Coverage under any such
Welfare Plan will cease if and when Executive obtains employment with
another employer during the Severance Period, and becomes eligible for
coverage under any substantially similar Welfare Plan provided by his new
employer.
(c) Grand Premier shall pay to Executive in a lump sum within 90
days after his termination of employment: (i) a bonus in the amount that
would have been payable under any Incentive Plan had Executive's
employment not been terminated for the year in which such termination of
employment occurs, but pro rated according to the number of months the
Executive was employed by Grand Premier for that year; and (ii) an
additional bonus amount that is equal to the average of the annual bonus
amount paid to Executive during the three years preceding the year of his
employment termination.
(d) Grand Premier shall pay to Executive in a lump sum within 90
days after his termination of employment an amount equal to the amount
that would have been contributed by Grand Premier on behalf of the
Executive under the Savings Plan and under the Deferred Compensation Plan
for the 12-month period following the Executive's employment termination
had the Executive's employment not been terminated and had he made
contributions and deferrals under such Retirement Plans at the same level
as he made during the 12 month preceding his employment termination.
(e) Executive shall receive any and all benefits accrued under any
Retirement Plan, Welfare Plan, Incentive Plan or other plan or program in
which he participates at the date of termination of employment, to the
date of termination of employment, the amount, form and time of payment
of such benefits to be determined by the terms of such Retirement Plan,
Welfare Plan, Incentive Plan and other plan or program. Executive's
employment shall be deemed to have terminated by reason of retirement,
and without regard to vesting limitations in all such plans and other
plans or programs not subject to the qualification requirements of
Section 401(a) of the Internal Revenue Code of 1986 (the "Code"), under
circumstances that have the most favorable result for Executive
thereunder for all purposes of such plans and other plans or programs.
Payment shall be made at the earliest date permitted under any such plan.
(f) If upon the date of termination of Executive's employment,
Executive holds any options with respect to stock of Grand Premier, all
such options will immediately become fully vested and exercisable upon
such date and will be exercisable for 200 days thereafter. Any
restrictions on stock of Grand Premier owned by Executive on the date of
termination of his or her employment will lapse on such date. To the
extent such acceleration of exercise of such options, or such lapse of
restrictions, is not permissible under the terms of any plan pursuant to
which the options or restricted stock were granted, Grand Premier will
pay to Executive: (i) an amount equal to the excess, if any, of the
aggregate fair market value of all stock of Grand Premier subject to such
options, determined on the date of termination of employment, over the
aggregate exercise price of such stock, and Executive will surrender all
such options unexercised; and (ii) the aggregate fair market value on the
date of termination of employment of all such restricted stock and
Executive shall transfer such stock to Grand Premier. Payments pursuant
to the preceding sentence will be made to Executive in a lump sum within
90 days after his date of termination of employment; provided, however,
Executive, by written notice to Grand Premier, may elect to receive such
payments on any date that is not earlier than the later to occur of (i)
the date 10 days after the date of termination, and (ii) the date 10 days
after receipt of such notice.
If the employment of Executive with Grand Premier is terminated by Grand
Premier for Good Cause or by Executive other than for Good Reason,
Executive's Base Salary shall be paid through the date of his termination,
and Grand Premier shall have no further obligation to Executive or any other
person under this Agreement. Such termination shall have no effect upon
Executive's other rights, including but not limited to rights under the
Retirement Plans, Welfare Plans and Incentive Plans.
Notwithstanding anything herein to the contrary, in the event Grand
Premier or an Affiliate shall terminate the employment of Executive for Good
Cause hereunder, Grand Premier shall give Executive at least thirty (30)
days' prior written notice specifying in detail the reason or reasons for
Executive's termination.
This Agreement shall have no effect, and Grand Premier shall have no
obligations hereunder, if Executive's employment terminates for any reason
at any time other than during the 24 months following a Change in Control.
4. Excise Tax. It is the intention of Grand Premier and Executive
that no portion of any payment under this Agreement, or payments to or for
the benefit of Executive under any other agreement or plan, be deemed to be
an "Excess Parachute Payment" as defined in Section 280G of the Code, or its
successors. It is agreed that the present value of and payments to or for
the benefit of Executive in the nature of compensation, receipt of which is
contingent on the Change in Control of Grand Premier, and to which Section
280G of the Code applies (in the aggregate "Total Payments") shall not exceed
an amount equal to one dollar less than the maximum amount that Grand Premier
may pay without loss of deduction under Section 280G(a) of the Code. Present
value for purposes of this Agreement shall be calculated in accordance with
Section 280G(d)(4) of the Code. Within sixty (60) days following the earlier
of (i) the giving of the notice of termination or (ii) the giving of notice
by Grand Premier to Executive of its belief that there is a payment or
benefit due Executive which will result in an excess parachute payment as
defined in Section 280G of the Code, Executive and Grand Premier, at Grand
Premier's expense, shall obtain the opinion of such legal counsel and
certified public accountants as Executive may choose (notwithstanding the
fact that such persons have acted or may also be acting as the legal counsel
or certified public accountants for Grand Premier), which opinions need not
be unqualified, which sets forth: (i) the amount of the Base Period Income
of Executive (as defined in Code Section 280G), (ii) the present value of
Total Payments; and (iii) the amount and present value of any excess
parachute payments. In the event that such opinion determines that there
would be an excess parachute payment, the payment hereunder or any other
payment determined by such counsel to be includable in Total Payments shall
be modified, reduced or eliminated as specified by Executive in writing
delivered to Grand Premier within thirty (30) days of his receipt of such
opinions or, if Executive fails to so notify Grand Premier, then as Grand
Premier shall reasonably determine, so that under the bases of calculation
set forth in such opinions there will be no excess parachute payment. In the
event that the provisions of Sections 280G and 4999 of the Code are repealed
without succession, this Section shall be of no further force or effect.
5. Set-Off. No payments or benefits payable to or with respect to
Executive pursuant to this Agreement shall be reduced by any amount that: (i)
Executive or his or her spouse or Beneficiary, or any other beneficiary under
the Retirement Plans and Welfare Plans, may earn or receive from employment
with another employer or from any other source, except as expressly provided
in subsection 3(b); or (ii) Grand Premier claims is owed to Grand Premier or
an Affiliate by Executive.
6. Death. Upon Executive's death following his termination of
employment: (i) all unpaid amounts payable to Executive under subsections
3(a), (b), (c), (d) and (f), if any, shall be paid to his or her Beneficiary,
all amounts payable under subsection 3(e) shall be paid pursuant to the terms
of said subsection to his or her spouse or other beneficiary under the
Retirement Plan; and (ii) the Executive's spouse and other dependents shall
continue to be covered under all applicable Welfare Plans during the
remainder of the Severance Period, if any, pursuant to subsection 3(b).
7. No Solicitation of Representatives and Employees. Executive agrees
that he or she shall not, during the Term or the Severance Period, directly
or indirectly, in his or her individual capacity or otherwise, induce, cause,
persuade (or attempt to induce or persuade), any representative, agent or
employee of Grand Premier or any of its Affiliates to terminate such person's
employment relationship with Grand Premier or any of its Affiliates, or to
violate the terms of any agreement between said representative, agent or
employee and Grand Premier or any of its Affiliates.
8. Confidentiality. Executive acknowledges that preservation of a
continuing business relationship between Grand Premier or its Affiliates and
their respective customers, representatives, and employees is of critical
importance to the continued business success of Grand Premier and its
Affiliates and that it is the active policy of Grand Premier and its
Affiliates to guard as confidential certain information not available to the
public and relating to the business affairs of Grand Premier and its
Affiliates. In view of the foregoing, Executive agrees that he or she shall
not during the Term and at any time thereafter, without the prior written
consent of Grand Premier, disclose to any person or entity any such
confidential information that was obtained by Executive in the course of his
or her employment by Grand Premier or any of its Affiliates. This section
shall not be applicable if and to the extent Executive is required to testify
in a legislative, judicial or regulatory proceeding pursuant to an order of
Congress, any state or local legislature, a judge, or an administrative law
judge or is otherwise required by law to disclose such information.
9. Forfeiture. If Executive shall at any time violate any obligation
of Executive under Sections 7 or 8 in a manner that results in material
damage to Grand Premier or its business, Executive shall immediately forfeit
his or her right to any benefits under this Agreement, and Grand Premier
thereafter shall have no further obligation hereunder to Executive or his or
her spouse, Beneficiary or any other person.
10. Executive Assignment. No interest of Executive, his or her spouse
or any Beneficiary, or any other beneficiary under any Retirement Plan,
Welfare Plan or Incentive Plan, or under this Agreement, or any right to
receive any payment or distribution hereunder, shall be subject in any manner
to sale, transfer, assignment, pledge, attachment, garnishment, or other
alienation or encumbrance of any kind, nor may such interest or right to
receive a payment or distribution be taken, voluntarily or involuntarily, for
the satisfaction of the obligations or debts of, or other claims against,
Executive or his or her spouse, Beneficiary or other beneficiary, including
claims for alimony, support, separate maintenance, and claims in bankruptcy
proceedings.
11. Benefits Unfunded. All rights under this Agreement of Executive
and his or her spouse, Beneficiary or other beneficiary shall at all times
be entirely unfunded, and no provision shall at any time be made with respect
to segregating any assets of Grand Premier for payment of any amounts due
hereunder. None of Executive, his or her spouse, Beneficiary or any other
beneficiary under the Retirement Plans, Welfare Plans or Incentive Plans
shall have any interest in or rights against any specific assets of Grand
Premier, and Executive and his or her spouse, Beneficiary or other
beneficiary shall have only the rights of a general unsecured creditor of
Grand Premier. Notwithstanding the preceding provisions of this Section, the
parties hereto may at any time mutually agree that amounts payable to
Executive or his or her Beneficiary hereunder be paid to the trustee of a
trust established by Grand Premier for the benefit of Executive and his or
her Beneficiary that contains terms and conditions mutually satisfactory to
the parties.
12. Waiver. No waiver by any party at any time of any breach by the
other party of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of any
other provisions or conditions at the same time or at any prior or subsequent
time.
13. Litigation Expenses. Grand Premier shall pay Executive's
reasonable attorneys' fees and legal expenses in connection with any judicial
proceeding to enforce this Agreement, or to construe or determine the
validity of this Agreement or otherwise in connection therewith, if Executive
is successful in such litigation.
14. Applicable Law. This Agreement shall be construed and interpreted
pursuant to the laws of Illinois.
15. Entire Agreement. This Agreement contains the entire Agreement
between Grand Premier and the Executive and supersedes any and all previous
agreements, written or oral, between the parties relating to the subject
matter hereof. Without limitation of the foregoing, this Agreement
supersedes and replaces in its entirety the Change in Control and Termination
Agreement, dated January 20, 1995, between the Executive and Premier
Financial Services, Inc., which agreement shall hereafter be of no further
force and effect. No amendment or modification of the terms of this
Agreement shall be binding upon the parties hereto unless reduced to writing
and signed by Grand Premier and Executive.
16. No Employment Contract. Nothing contained in this Agreement shall
be construed to be an employment contract between Executive and Grand
Premier.
17. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original.
18. Severability. In the event any provision of this Agreement is held
illegal or invalid, the remaining provisions of this Agreement shall not be
affected thereby.
19. Successors. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, representatives and
successors. In the event of a Change in Control of Grand Premier, Grand
Premier shall cause its purchaser, transferee or successor to adopt and
assume this Agreement. This Agreement shall not be terminated by a transfer
or sale of assets of Grand Premier, or by the merger or consolidation of
Grand Premier into or with any other corporation or other entity, rather this
Agreement shall be continued after such sale, merger or consolidation by the
transferee, purchaser or successor entity.
20. Employment with an Affiliate. For purposes of this Agreement: (i)
employment or termination of employment of Executive shall mean employment
or termination of employment with Grand Premier and all Affiliates; (ii) Base
Salary shall include remuneration received by Executive from Grand Premier
and all Affiliates; and (iii) the terms Incentive Plan, Retirement Plan and
Welfare Plan maintained or made available by Grand Premier shall include any
such plans of any Affiliate of Grand Premier.
21. Notice. Notices required under this Agreement shall be in writing
and sent by registered mail, return receipt requested, to the following
addresses or to such other address as the party being notified may have
previously furnished to the other party by written notice:
If to Grand Premier: Grand Premier Financial, Inc.
486 West Liberty Street
Wauconda, Illinois 60084-2489
Attention: Director of Human Resources
If to Executive:
c/o Grand Premier Financial, Inc.
486 West Liberty Street
Wauconda, Illinois 60084-2489
<PAGE>
IN WITNESS WHEREOF, Executive has hereunto set his hand, and Grand
Premier has caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.
GRAND PREMIER FINANCIAL, INC.
By:
Title:
Executive
EXHIBIT 10.2
CHANGE IN CONTROL AND TERMINATION AGREEMENT
This Change in Control and Termination Agreement (this "Agreement") is
entered into as of this ______ day of ____________________, 1996, by and
between Grand Premier Financial, Inc., a Delaware corporation ("Grand
Premier") and ____________________________ ("Executive").
WITNESSETH:
WHEREAS, Executive is currently employed by Grand Premier as its
_________ ________________; and
WHEREAS, Grand Premier desires to provide security to Executive in
connection with Executive's employment with Grand Premier in the event of a
Change in Control of Grand Premier; and
WHEREAS, Executive and Grand Premier desire to enter into this Agreement
pertaining to the terms of the security Grand Premier is providing to
Executive with respect to his employment in the event of a Change in Control;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
1. Term. The term of this Agreement shall be the period beginning on
the date hereto and terminating on the date 36 months after the date hereof
(the "Term"), provided that for each day from and after the date hereof the
Term will automatically be extended for an additional day, unless either
Grand Premier or Executive has given written notice to the other party of its
or his election to cease such automatic extension, in which case the Term
shall end at the expiration of the 36-month period beginning on the date such
notice is received by such other party.
2. Definitions. For purposes of this Agreement:
(a) "Affiliate" or "Associate" shall have the meaning set forth
in Rule 12b-2 under the Securities Exchange Act of 1934 (the "Exchange
Act").
(b) "Base Salary" shall mean Executive's monthly base salary at
the rate in effect on the date of a termination of employment under
circumstances described in Section 3 below; provided, however, that such
rate shall in no event be less than the highest rate in effect for
Executive at any time during the Term.
(c) "Beneficiary" shall mean the person or entity designated by
the Executive, by written instrument delivered to Grand Premier, to
receive the benefits payable under this Agreement in the event of his
death. If the Executive fails to designate a Beneficiary, or if no
Beneficiary survives the Executive, such death benefits shall be paid:
(i) to the Executive's surviving spouse; or
(ii) if there is no surviving spouse, to the Executive's living
descendants per stirpes; or
(iii) if there is neither a surviving spouse nor descendants, to
the Executive's duly appointed and qualified executor or personal
representative.
(d) "Board" shall mean the Board of Directors of Grand Premier
Financial, Inc.
(e) A "Change in Control" of Grand Premier shall be deemed to
have occurred if or upon:
(i) The acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Sections 13(d)(3)
or 14(d)(2) of the Exchange Act, of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act of 20% or more
of either (A) the then outstanding shares of Common Stock of Grand
Premier (the "Outstanding Grand Premier Common Stock") or (B) the
combined voting power of the then outstanding securities of Grand Premier
entitled to vote generally in the election of directors (the "Outstanding
Grand Premier Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change in Control: (I) any
acquisition that resulted directly from the conversion of shares of
Northern Illinois Common Stock into shares of Grand Premier Common Stock
pursuant to the Agreement and Plan of Merger, dated January 22, 1996,
among Grand Premier, Premier Financial Services, Inc. and Northern
Illinois Financial Corporation, as amended by the First Amendment
thereto, dated March 18, 1996, and the Second Amendment thereto, dated as
of August 15, 1996 (the "Merger Agreement"), (II) any acquisition of
shares of Grand Premier Common Stock that is permitted under Section 1(b)
of the Rights Agreement, dated as of July 8, 1996, between Grand Premier
and Premier Trust Services, Inc. (the "Rights Agreement"), without
rendering the Person effecting such acquisition an "Acquiring Person" for
purposes of the Rights Agreement, (III) any acquisition directly from
Grand Premier (excluding any acquisition resulting from the exercise of
a conversion or exchange privilege in respect of outstanding convertible
or exchangeable securities), (IV) any acquisition by Grand Premier, (V)
any acquisition by an employee benefit plan (or related trust) sponsored
or maintained by Grand Premier or any corporation controlled by Grand
Premier or (VI) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation involving Grand Premier, if
immediately after such reorganization, merger or consolidation, each of
the conditions described in clauses (A), (B) and (C) of subsection (iii)
of this Section 2(e) shall be satisfied; and provided further that, for
purposes of clause (IV) of this Section 2(e)(i), if any Person (other
than Grand Premier or any employee benefit plan (or related trust)
sponsored or maintained by Grand Premier or any corporation controlled by
Grand Premier) shall become the beneficial owner of 20% or more of the
Outstanding Grand Premier Common Stock or 20% or more of the Outstanding
Grand Premier Voting Securities by reason of an acquisition by Grand
Premier and such Person shall, after such acquisition by Grand Premier,
become the beneficial owner of any additional shares of the Outstanding
Grand Premier Common Stock or any additional Outstanding Grand Premier
Voting Securities and such beneficial ownership is publicly announced,
such additional beneficial ownership shall constitute a Change in
Control;
(ii) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of such Board; provided, however, that any individual who
becomes a director of Grand Premier subsequent to the date hereof whose
election, or nomination for election by Grand Premier's stockholders, was
approved by the vote of at least a majority of the directors then
comprising the Incumbent Board shall be deemed to have been a member of
the Incumbent Board; and provided further, that no individual who was
initially elected as a director of Grand Premier as a result of an actual
or threatened election contest, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any
Person other than the Board, shall be deemed to have been a member of the
Incumbent Board;
(iii) approval by the stockholders of Grand Premier of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (A) more
than 60% of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation
and more than 60% of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals or entities who were the
beneficial owners, respectively, of the Outstanding Grand Premier Common
Stock and the Outstanding Grand Premier Voting Securities immediately
prior to such reorganization, merger or consolidation and in
substantially the same proportions relative to each other as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Grand Premier Common Stock and the
Outstanding Grand Premier Voting Securities, as the case may be, (B) no
Person (other than Grand Premier, any employee benefit plan (or related
trust) sponsored or maintained by Grand Premier or the corporation
resulting from such reorganization, merger or consolidation (or any
corporation controlled by Grand Premier) and any Person which
beneficially owned, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 20% or more of the Outstanding
Grand Premier Common Stock or the Outstanding Grand Premier Voting
Securities, as the case may be) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of common stock of
such corporation or 20% or more of the combined voting power of the then
outstanding securities of such corporation entitled to vote generally in
the election of directors and (C) at least a majority of the members of
the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement or action of
the Board providing for such reorganization, merger or consolidation; or
(iv) approval by the stockholders of Grand Premier of (A) a plan
of complete liquidation or dissolution of Grand Premier or (B) the sale
or other disposition of all or substantially all of the assets of Grand
Premier other than to a corporation with respect to which, immediately
after such sale or other disposition, (I) more than 60% of the then
outstanding shares of common stock thereof and more than 60% of the
combined voting power of the then outstanding securities thereof entitled
to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of
the Outstanding Grand Premier Common Stock and the Outstanding Grand
Premier Voting Securities immediately prior to such sale or other
disposition and in substantially the same proportions relative to each
other as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Grand Premier Common Stock and the
Outstanding Grand Premier Voting Securities, as the case may be, (II) no
Person (other than Grand Premier, any employee benefit plan (or related
trust) sponsored or maintained by Grand Premier or such corporation (or
any corporation controlled by Grand Premier) and any Person which
beneficially owned immediately prior to such sale or other disposition,
directly or indirectly, 20% or more of the Outstanding Grand Premier
Common Stock or the Outstanding Grand Premier Voting Securities, as the
case may be) beneficially owns, directly or indirectly, 20% or more of
the then outstanding shares of common stock thereof or 20% or more of the
combined voting power of the then outstanding securities thereof entitled
to vote generally in the election of directors and (III) at least a
majority of the members of the board of directors thereof were members of
the Incumbent Board at the time of the execution of the initial agreement
or action of the Board providing for such sale or other disposition.
(f) "Good Cause" shall be deemed to exist if, and only if:
(i) Executive engages in acts or omissions constituting
dishonesty, intentional breach of fiduciary obligation or intentional
wrongdoing or malfeasance, in each case that results in substantial harm
to Grand Premier or any Affiliate; or
(ii) Executive is convicted of a criminal violation involving
fraud or dishonesty.
(g) "Good Reason" shall be deemed to exist if, and only if,
Executive terminates his employment because, without his express written
consent:
(i) Grand Premier assigns to Executive duties of a nonexecutive
nature or for which Executive is not reasonably equipped by his skills
and experience;
(ii) Grand Premier reduces the salary of Executive, or materially
reduces the amount of paid vacation to which he is entitled, or his
fringe benefits and perquisites;
(iii) Grand Premier requires Executive to relocate his principal
business office or his principal place of residence, or assigns to
Executive duties that would reasonably require such relocation;
(iv) Grand Premier requires Executive, or assigns duties to
Executive which would reasonably require him, to spend more than 30
normal working days away from his principal business office or his
principal place of residence during any consecutive twelve-month period;
(v) Grand Premier fails to provide office facilities,
secretarial services, and other administrative services to Executive
which are substantially equivalent to the facilities and services
provided to Executive on the date hereof; or
(vi) Grand Premier terminates any Incentive Plan, Retirement
Plan or Welfare Plan, or reduces or limits Executive's participation
therein relative to the level of participation of other executives of
similar rank, to such an extent as to materially reduce the aggregate
value of Executive's incentive compensation and benefits below their
aggregate value as of the date hereof.
(h) "Incentive Plan" shall mean any incentive or bonus plan
currently or hereinafter made available by Grand Premier in which
Executive is eligible to participate, including, but not limited to, the
Grand Premier Financial, Inc. 1996 Stock Option Plan, and any successor
thereto.
(i) "Retirement Plan" shall mean any qualified or supplemental
employee pension benefit plan, as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), currently
or hereinafter made available by Grand Premier in which Executive is
eligible to participate, including, but not limited to, the Premier
Financial Services, Inc. Employee Savings and Stock Plan and Trust,
including any successor to such plan (the "Savings Plan"),and the Premier
Financial Services, Inc. Senior Leadership and Directors Deferred
Compensation Plan, including any successor to such plan (the "Deferred
Compensation Plan").
(j) "Severance Period" shall mean the period beginning on the
date Executive's employment with Grand Premier terminates under
circumstances described in Section 3 and ending on the date 12 months
thereafter.
(k) "Substantial Portion of the Property of Grand Premier" shall
mean 50% of the aggregate book value of the assets of Grand Premier and
its Affiliates and Associates as set forth on the most recent balance
sheet of Grand Premier, prepared on a consolidated basis, by its
regularly employed, independent, certified public accountants.
(l) "Welfare Plan" shall mean any health and dental plan,
disability plan, survivor income plan or life insurance plan, as defined
in Section 3(1) of ERISA, currently or hereafter made available by Grand
Premier in which Executive is eligible to participate.
3. Benefits Upon Termination of Employment. The following provisions
will apply if a Change in Control occurs during the Term, and at any time
during the 24 months after the Change in Control occurs (whether during or
after the expiration of the Term), the employment of Executive with Grand
Premier is terminated by Grand Premier for any reason other than Good Cause,
or Executive terminates his employment with Grand Premier for Good Reason:
(a) Grand Premier shall pay Executive an amount equal to
Executive's Base Salary multiplied by 12. Such amount shall be paid to
Executive in a lump sum within 90 days after his date of termination of
employment; provided, however, Executive, by written notice to Grand
Premier, may elect to receive such payment on any date that is no earlier
than the later to occur of: (i) the date 10 days after the date of
termination; and (ii) the date 10 days after receipt of such notice.
(b) During the Severance Period, Executive and his or her spouse
and other dependents shall continue to be covered by all Welfare Plans
maintained by Grand Premier in which Executive and his or her spouse and
other dependents were participating immediately prior to the date of
Executive's termination, as if Executive continued to be an employee of
Grand Premier, and Grand Premier shall continue to pay the costs of
coverage of Executive and his spouse and other dependents under such
Welfare Plans on the same basis as is applicable to active employees
covered thereunder; provided that, if participation in any one or more of
such Welfare Plans is not possible under the terms thereof, Grand Premier
will provide substantially identical benefits. Coverage under any such
Welfare Plan will cease if and when Executive obtains employment with
another employer during the Severance Period, and becomes eligible for
coverage under any substantially similar Welfare Plan provided by his new
employer.
(c) Grand Premier shall pay to Executive in a lump sum within 90
days after his termination of employment: (i) a bonus in the amount that
would have been payable under any Incentive Plan had Executive's
employment not been terminated for the year in which such termination of
employment occurs, but pro rated according to the number of months the
Executive was employed by Grand Premier for that year; and (ii) an
additional bonus amount that is equal to the average of the annual bonus
amount paid to Executive during the three years preceding the year of his
employment termination.
(d) Grand Premier shall pay to Executive in a lump sum within 90
days after his termination of employment an amount equal to the amount
that would have been contributed by Grand Premier on behalf of the
Executive under the Savings Plan and under the Deferred Compensation Plan
for the 12-month period following the Executive's employment termination
had the Executive's employment not been terminated and had he made
contributions and deferrals under such Retirement Plans at the same level
as he made during the 12 month preceding his employment termination.
(e) Executive shall receive any and all benefits accrued under
any Retirement Plan, Welfare Plan, Incentive Plan or other plan or
program in which he participates at the date of termination of
employment, to the date of termination of employment, the amount, form
and time of payment of such benefits to be determined by the terms of
such Retirement Plan, Welfare Plan, Incentive Plan and other plan or
program. Executive's employment shall be deemed to have terminated by
reason of retirement, and without regard to vesting limitations in all
such plans and other plans or programs not subject to the qualification
requirements of Section 401(a) of the Internal Revenue Code of 1986 (the
"Code"), under circumstances that have the most favorable result for
Executive thereunder for all purposes of such plans and other plans or
programs. Payment shall be made at the earliest date permitted under any
such plan.
(f) If upon the date of termination of Executive's employment,
Executive holds any options with respect to stock of Grand Premier, all
such options will immediately become fully vested and exercisable upon
such date and will be exercisable for 200 days thereafter. Any
restrictions on stock of Grand Premier owned by Executive on the date of
termination of his or her employment will lapse on such date. To the
extent such acceleration of exercise of such options, or such lapse of
restrictions, is not permissible under the terms of any plan pursuant to
which the options or restricted stock were granted, Grand Premier will
pay to Executive: (i) an amount equal to the excess, if any, of the
aggregate fair market value of all stock of Grand Premier subject to such
options, determined on the date of termination of employment, over the
aggregate exercise price of such stock, and Executive will surrender all
such options unexercised; and (ii) the aggregate fair market value on the
date of termination of employment of all such restricted stock and
Executive shall transfer such stock to Grand Premier. Payments pursuant
to the preceding sentence will be made to Executive in a lump sum within
90 days after his date of termination of employment; provided, however,
Executive, by written notice to Grand Premier, may elect to receive such
payments on any date that is not earlier than the later to occur of (i)
the date 10 days after the date of termination, and (ii) the date 10 days
after receipt of such notice.
If the employment of Executive with Grand Premier is terminated by Grand
Premier for Good Cause or by Executive other than for Good Reason,
Executive's Base Salary shall be paid through the date of his termination,
and Grand Premier shall have no further obligation to Executive or any other
person under this Agreement. Such termination shall have no effect upon
Executive's other rights, including but not limited to rights under the
Retirement Plans, Welfare Plans and Incentive Plans.
Notwithstanding anything herein to the contrary, in the event Grand
Premier or an Affiliate shall terminate the employment of Executive for Good
Cause hereunder, Grand Premier shall give Executive at least thirty (30)
days' prior written notice specifying in detail the reason or reasons for
Executive's termination.
This Agreement shall have no effect, and Grand Premier shall have no
obligations hereunder, if Executive's employment terminates for any reason
at any time other than during the 24 months following a Change in Control.
4. Excise Tax. It is the intention of Grand Premier and Executive
that no portion of any payment under this Agreement, or payments to or for
the benefit of Executive under any other agreement or plan, be deemed to be
an "Excess Parachute Payment" as defined in Section 280G of the Code, or its
successors. It is agreed that the present value of and payments to or for
the benefit of Executive in the nature of compensation, receipt of which is
contingent on the Change in Control of Grand Premier, and to which Section
280G of the Code applies (in the aggregate "Total Payments") shall not exceed
an amount equal to one dollar less than the maximum amount that Grand Premier
may pay without loss of deduction under Section 280G(a) of the Code. Present
value for purposes of this Agreement shall be calculated in accordance with
Section 280G(d)(4) of the Code. Within sixty (60) days following the earlier
of (i) the giving of the notice of termination or (ii) the giving of notice
by Grand Premier to Executive of its belief that there is a payment or
benefit due Executive which will result in an excess parachute payment as
defined in Section 280G of the Code, Executive and Grand Premier, at Grand
Premier's expense, shall obtain the opinion of such legal counsel and
certified public accountants as Executive may choose (notwithstanding the
fact that such persons have acted or may also be acting as the legal counsel
or certified public accountants for Grand Premier), which opinions need not
be unqualified, which sets forth: (i) the amount of the Base Period Income
of Executive (as defined in Code Section 280G), (ii) the present value of
Total Payments; and (iii) the amount and present value of any excess
parachute payments. In the event that such opinion determines that there
would be an excess parachute payment, the payment hereunder or any other
payment determined by such counsel to be includable in Total Payments shall
be modified, reduced or eliminated as specified by Executive in writing
delivered to Grand Premier within thirty (30) days of his receipt of such
opinions or, if Executive fails to so notify Grand Premier, then as Grand
Premier shall reasonably determine, so that under the bases of calculation
set forth in such opinions there will be no excess parachute payment. In the
event that the provisions of Sections 280G and 4999 of the Code are repealed
without succession, this Section shall be of no further force or effect.
5. Set-Off. No payments or benefits payable to or with respect to
Executive pursuant to this Agreement shall be reduced by any amount that: (i)
Executive or his or her spouse or Beneficiary, or any other beneficiary under
the Retirement Plans and Welfare Plans, may earn or receive from employment
with another employer or from any other source, except as expressly provided
in subsection 3(b); or (ii) Grand Premier claims is owed to Grand Premier or
an Affiliate by Executive.
6. Death. Upon Executive's death following his termination of
employment: (i) all unpaid amounts payable to Executive under subsections
3(a), (b), (c), (d) and (f), if any, shall be paid to his or her Beneficiary,
all amounts payable under subsection 3(e) shall be paid pursuant to the terms
of said subsection to his or her spouse or other beneficiary under the
Retirement Plan; and (ii) the Executive's spouse and other dependents shall
continue to be covered under all applicable Welfare Plans during the
remainder of the Severance Period, if any, pursuant to subsection 3(b).
7. No Solicitation of Representatives and Employees. Executive agrees
that he or she shall not, during the Term or the Severance Period, directly
or indirectly, in his or her individual capacity or otherwise, induce, cause,
persuade (or attempt to induce or persuade), any representative, agent or
employee of Grand Premier or any of its Affiliates to terminate such person's
employment relationship with Grand Premier or any of its Affiliates, or to
violate the terms of any agreement between said representative, agent or
employee and Grand Premier or any of its Affiliates.
8. Confidentiality. Executive acknowledges that preservation of a
continuing business relationship between Grand Premier or its Affiliates and
their respective customers, representatives, and employees is of critical
importance to the continued business success of Grand Premier and its
Affiliates and that it is the active policy of Grand Premier and its
Affiliates to guard as confidential certain information not available to the
public and relating to the business affairs of Grand Premier and its
Affiliates. In view of the foregoing, Executive agrees that he or she shall
not during the Term and at any time thereafter, without the prior written
consent of Grand Premier, disclose to any person or entity any such
confidential information that was obtained by Executive in the course of his
or her employment by Grand Premier or any of its Affiliates. This section
shall not be applicable if and to the extent Executive is required to testify
in a legislative, judicial or regulatory proceeding pursuant to an order of
Congress, any state or local legislature, a judge, or an administrative law
judge or is otherwise required by law to disclose such information.
9. Forfeiture. If Executive shall at any time violate any obligation
of Executive under Sections 7 or 8 in a manner that results in material
damage to Grand Premier or its business, Executive shall immediately forfeit
his or her right to any benefits under this Agreement, and Grand Premier
thereafter shall have no further obligation hereunder to Executive or his or
her spouse, Beneficiary or any other person.
10. Executive Assignment. No interest of Executive, his or her spouse
or any Beneficiary, or any other beneficiary under any Retirement Plan,
Welfare Plan or Incentive Plan, or under this Agreement, or any right to
receive any payment or distribution hereunder, shall be subject in any manner
to sale, transfer, assignment, pledge, attachment, garnishment, or other
alienation or encumbrance of any kind, nor may such interest or right to
receive a payment or distribution be taken, voluntarily or involuntarily, for
the satisfaction of the obligations or debts of, or other claims against,
Executive or his or her spouse, Beneficiary or other beneficiary, including
claims for alimony, support, separate maintenance, and claims in bankruptcy
proceedings.
11. Benefits Unfunded. All rights under this Agreement of Executive
and his or her spouse, Beneficiary or other beneficiary shall at all times
be entirely unfunded, and no provision shall at any time be made with respect
to segregating any assets of Grand Premier for payment of any amounts due
hereunder. None of Executive, his or her spouse, Beneficiary or any other
beneficiary under the Retirement Plans, Welfare Plans or Incentive Plans
shall have any interest in or rights against any specific assets of Grand
Premier, and Executive and his or her spouse, Beneficiary or other
beneficiary shall have only the rights of a general unsecured creditor of
Grand Premier. Notwithstanding the preceding provisions of this Section, the
parties hereto may at any time mutually agree that amounts payable to
Executive or his or her Beneficiary hereunder be paid to the trustee of a
trust established by Grand Premier for the benefit of Executive and his or
her Beneficiary that contains terms and conditions mutually satisfactory to
the parties.
12. Waiver. No waiver by any party at any time of any breach by the
other party of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of any
other provisions or conditions at the same time or at any prior or subsequent
time.
13. Litigation Expenses. Grand Premier shall pay Executive's
reasonable attorneys' fees and legal expenses in connection with any judicial
proceeding to enforce this Agreement, or to construe or determine the
validity of this Agreement or otherwise in connection therewith, if Executive
is successful in such litigation.
14. Applicable Law. This Agreement shall be construed and interpreted
pursuant to the laws of Illinois.
15. Entire Agreement. This Agreement contains the entire Agreement
between Grand Premier and the Executive and supersedes any and all previous
agreements, written or oral, between the parties relating to the subject
matter hereof. No amendment or modification of the terms of this Agreement
shall be binding upon the parties hereto unless reduced to writing and signed
by Grand Premier and Executive.
16. No Employment Contract. Nothing contained in this Agreement shall
be construed to be an employment contract between Executive and Grand
Premier.
17. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original.
18. Severability. In the event any provision of this Agreement is held
illegal or invalid, the remaining provisions of this Agreement shall not be
affected thereby.
19. Successors. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, representatives and
successors. In the event of a Change in Control of Grand Premier, Grand
Premier shall cause its purchaser, transferee or successor to adopt and
assume this Agreement. This Agreement shall not be terminated by a transfer
or sale of assets of Grand Premier, or by the merger or consolidation of
Grand Premier into or with any other corporation or other entity, rather this
Agreement shall be continued after such sale, merger or consolidation by the
transferee, purchaser or successor entity.
20. Employment with an Affiliate. For purposes of this Agreement: (i)
employment or termination of employment of Executive shall mean employment
or termination of employment with Grand Premier and all Affiliates; (ii) Base
Salary shall include remuneration received by Executive from Grand Premier
and all Affiliates; and (iii) the terms Incentive Plan, Retirement Plan and
Welfare Plan maintained or made available by Grand Premier shall include any
such plans of any Affiliate of Grand Premier.
21. Notice. Notices required under this Agreement shall be in writing
and sent by registered mail, return receipt requested, to the following
addresses or to such other address as the party being notified may have
previously furnished to the other party by written notice:
If to Grand Premier: Grand Premier Financial, Inc.
486 West Liberty Street
Wauconda, Illinois 60084-2489
Attention: Director of Human Resources
If to Executive:
c/o Grand Premier Financial, Inc.
486 West Liberty Street
Wauconda, Illinois 60084-2489<PAGE>
IN WITNESS WHEREOF, Executive has hereunto set his hand, and Grand
Premier has caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.
GRAND PREMIER FINANCIAL, INC.
By:
Title:
Executive
