UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
- OR -
TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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 29, 1999 was 22,292,235 shares.
GRAND PREMIER FINANCIAL INCORPORATED
FORM 10-Q - QUARTERLY REPORT
FOR QUARTER ENDED SEPTEMBER 30, 1999
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets (unaudited)
September 30, 1999 and December 31, 1998. 3 - 4
Consolidated Statements of Income (unaudited)
Nine Months Ended September 30, 1999 and 1998 5 - 6
Three Months Ended September 30, 1999 and 1998 7 - 8
Consolidated Statements of Cash Flow (unaudited)
Nine Months Ended September 30, 1999 and 1998 9 - 10
Notes to Unaudited Consolidated Financial Statements 11 - 13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 14 - 24
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 25
PART II. OTHER INFORMATION
Item 6. A. Exhibits 26 - 28
B. Reports on Form 8-K 28
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
(000's omitted
except share data)
September 30, December 31,
1999 1998
Cash and non-interest bearing deposits $ 38,641 $ 52,994
Interest bearing deposits 1,308 1,718
Federal funds sold 30,339 48,000
Cash and cash equivalents 70,288 102,712
Securities available for sale, at fair value 406,523 516,083
Securities purchased under agreements to resell 9,894 10,195
Loans 1,091,830 957,153
Less: Unearned income (1,453) (953)
Allowance for possible loan losses (13,031) (12,443)
Net loans 1,077,346 943,757
Bank premises and equipment 31,001 34,099
Excess cost over fair value of
net assets acquired, net 14,079 15,281
Accrued interest receivable 11,861 11,573
Other assets 21,692 14,541
Total assets $1,642,684 $1,648,241
The accompanying unaudited notes are an integral
part of these consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
(000's omitted
except share data)
September 30, December 31,
1999 1998
Liabilities
Non-interest bearing deposits $ 177,109 $ 199,084
Interest bearing deposits 1,167,640 1,161,936
Total deposits 1,344,749 1,361,020
Short-term borrowings 14,457 11,887
Long-term borrowings 70,000 70,000
Other liabilities 24,703 21,945
Total liabilities 1,453,909 1,464,852
Stockholders' equity
Preferred stock - $.01 par value, 2,000,000
shares authorized:
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 2,000
Common stock - $.01 par value
Number of Shares 9/30/99 12/31/98
Authorized 30,000,000 30,000,000
Issued 22,360,891 22,047,672
Outstanding 22,291,557 21,981,739 224 220
Surplus 80,703 79,056
Retained earnings 99,974 88,756
Accumulated other comprehensive income (loss) (666) 6,794
Treasury stock, at cost (69,334 shares
at 9/30/99 and 65,933 shares at 12/31/98) (710) (687)
Stockholders' equity 188,775 183,389
Total liabilities &
stockholders' equity $1,642,684 $1,648,241
The accompanying unaudited notes are an integral
part of these consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's omitted
except per share data)
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998
Interest income
Interest and fees on loans $64,007 $66,281
Interest and dividends on
investment securities:
Taxable 11,439 13,416
Exempt from federal income tax 6,585 6,263
Other interest income 1,514 1,851
Total interest income 83,545 87,811
Interest expense
Interest on deposits 32,964 36,779
Interest on short-term borrowings 481 772
Interest on long-term borrowings 3,246 3,246
Total interest expense 36,691 40,797
Net interest income 46,854 47,014
Provision for possible loan losses 2,050 2,700
Net interest income after provision
for possible loan losses 44,804 44,314
Other income
Service charges on deposits 3,615 4,269
Trust fees 2,781 2,547
Investment securities gains, net 132 20,132
Gains on sales of branches and deposits 7,869 -
Other income 3,475 3,195
Total other income 17,872 30,143
Other expenses
Salaries 13,677 14,204
Pension, profit sharing and other
employee benefits 3,966 3,805
Net occupancy of bank premises 3,344 3,365
Furniture and equipment 2,843 2,990
Amortization of excess cost over fair
value of net assets acquired 1,203 1,203
Other 11,635 11,726
Total other expenses $36,668 $37,293
The accompanying unaudited notes are an integral
part of these consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Continued)
(000's omitted
except per share data)
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998
Earnings before income taxes $26,008 $37,164
Income tax expense 8,220 13,229
Net income $17,788 $23,935
Earnings per share
Basic $ .78 $ 1.06
Diluted $ .76 $ 1.03
The accompanying unaudited notes are an integral
part of these consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's omitted
except per share data)
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998
Interest income
Interest and fees on loans $22,427 $21,644
Interest and dividends on
investment securities:
Taxable 3,740 4,755
Exempt from federal income tax 2,147 2,134
Other interest income 696 890
Total interest income 29,010 29,423
Interest expense
Interest on deposits 11,565 12,540
Interest on short-term borrowings 175 166
Interest on long-term borrowings 1,094 1,094
Total interest expense 12,834 13,800
Net interest income 16,176 15,623
Provision for possible loan losses 750 900
Net interest income after provision
for possible loan losses 15,426 14,723
Other income
Service charges on deposits 1,307 1,428
Trust fees 927 849
Investment securities gains, net 3 18,206
Other income 912 1,212
Total other income 3,149 21,695
Other expenses
Salaries 4,671 4,703
Pension, profit sharing and other
employee benefits 1,422 1,289
Net occupancy of bank premises 1,095 1,192
Furniture and equipment 891 1,000
Amortization of excess cost over fair
value of net assets acquired 401 401
Other 4,105 4,570
Total other expenses $12,585 $13,155
The accompanying unaudited notes are an integral
part of these consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Continued)
(000's omitted
except per share data)
THREE MONTHS SEPTEMBER 30, 1999 AND 1998
1999 1998
Earnings before income taxes $ 5,990 $23,263
Income tax expense 1,739 8,747
Net income $ 4,251 $14,516
Earnings per share
Basic $ .18 $ .65
Diluted $ .18 $ .62
The accompanying unaudited notes are an integral
part of these consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(000's omitted)
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998
Cash flows from operating activities:
Net income $ 17,788 $ 23,935
Adjustments to reconcile net earnings to
net cash from operating activities:
Amortization net, related to:
Investment securities 28 1,051
Excess of cost over net assets acquired 1,203 1,203
Other 721 251
Depreciation 2,964 3,079
Provision for possible loan losses 2,050 2,700
Gain on sale related to:
Branches and deposits (7,869) -
Investment securities (132) (20,132)
Loans sold to secondary market (370) (367)
Other real estate owned (51) (166)
Bank premises and equipment (337) -
Loans originated for sale (24,454) (52,149)
Loans sold to secondary market 24,824 52,516
Change in:
Other assets (2,662) 19,308
Other liabilities 2,729 (3,506)
Net cash from operating activities 16,432 27,723
Cash flows from investing activities:
Purchase of securities available for sale (126,824) (268,452)
Proceeds from:
Maturities of securities available for sale 200,916 157,575
Sales of securities available for sale 23,206 55,048
Sales of other real estate owned 547 2,095
Sales of bank premises and equipment 1,368 -
Net (increase) decrease in loans (136,717) 71,606
Purchases of bank premises and equipment (908) (2,585)
Net decrease in securities purchased
under agreements to resell 301 6,147
Net cash from investing activities $(38,111) $ 21,434
The accompanying unaudited notes are an integral
part of these consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Continued)
(Unaudited)
(000's omitted)
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998
Cash flows from financing activities:
Net increase in deposits $ 68,852 $ 25,302
Payments for deposits included in branch sales (77,254) -
Net increase (decrease) in short term borrowings 2,570 (36,159)
Dividends paid (6,540) (5,959)
Other financing activities 1,627 (565)
Net cash from financing activities (10,745) (17,381)
Net increase (decrease) in cash and
cash equivalents (32,424) 31,776
Cash and cash equivalents at beginning of period 102,712 63,661
Cash and cash equivalents at end of period $ 70,288 $ 95,437
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest 36,590 41,232
Income taxes 6,950 2,650
Non-cash activities:
Loans transferred to other real estate owned 367 108
The accompanying unaudited notes are an integral
part of these consolidated financial statements.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited consolidated financial statements include
the financial information of Grand Premier Financial, Inc. (the
"Company") and its subsidiaries, all of which are wholly owned.
Significant intercompany balances and transactions have been
eliminated. The consolidated financial statements for the nine months
ended September 30, 1999 and 1998 are unaudited. 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. The consolidated
financial statements and notes to the consolidated financial
statements contained in the Annual Report on Form 10-K for the year
ended December 31, 1998, should be read in conjunction with these
consolidated financial statements.
2. Comprehensive Income
In 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130") which
establishes standards for reporting and the display of comprehensive
income and its components in a full set of general purpose financial
statements. SFAS 130 requires all items to be recognized under
accounting standards as components of comprehensive income be reported
in a financial statement that is displayed in equal prominence with
other financial statements. The Company is required to classify items
of "other comprehensive income" by their nature in the financial
statement and display the balance of other comprehensive income
separately in the stockholders' equity section of the balance sheet.
For interim reporting purposes, the disclosure of other comprehensive
income may be included in the notes to the interim financial
statements.
The Company's comprehensive income includes net income and other
comprehensive income comprised entirely of unrealized gains or losses
on securities available for sale, net of tax.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
2. Comprehensive Income (continued)
Nine months ended
September 30,
1999 1998
Net income $17,788 $23,935
Other comprehensive income, net of tax
Unrealized gains (losses) on securities:
Unrealized holding gain (loss)
arising during the period (7,216) 1,995
Reclassification adjustment for
gains included in net income (244) (10,178)
Other comprehensive income (loss) (7,460) (8,183)
Comprehensive income $10,328 $15,752
Three months ended
September 30,
1999 1998
Net income $ 4,251 $14,516
Other comprehensive income, net of tax
Unrealized gains (losses) on securities:
Unrealized holding gain (loss)
arising during the period (2,316) 1,649
Reclassification adjustment for
gains included in net income (42) (11,672)
Other comprehensive income (loss) (2,358) (10,023)
Comprehensive income $ 1,893 $ 4,493
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3. Earnings Per Share
The following schedule reconciles net income to income available to
common stockholders and the number of average shares used in the
computation of basic and diluted earnings per share (in thousands
except share and per share data).
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Basic:
Net income $ 4,251 $14,516 $17,788 $23,935
Less: Dividends on
preferred stock (185) (185) (555) (555)
Income available to
common stockholders $ 4,066 $14,331 $17,233 $23,380
Average common
shares outstanding 22,274,259 21,985,843 22,123,818 21,974,413
Basic earnings per share $ .18 $ .65 $ .78 $1.06
Diluted:
Net income $ 4,251 $14,516 $17,788 $23,935
Less: Dividends on
preferred stock (185) (185) (555) (555)
Add: Dividends on convertible
preferred stock 145 145 435 435
Income available to
common stockholders $ 4,211 $14,476 $17,668 $23,815
Average common
shares outstanding 22,274,259 21,985,843 22,123,818 21,974,413
Dilutive effect of:
Stock options 70,775 262,832 64,297 311,375
Convertible preferred stock 936,852 936,852 936,852 936,852
Total average shares and
assumed conversions 23,281,886 23,185,527 23,124,967 23,222,640
Diluted earnings per share $ .18 $ .62 $ .76 $1.03
</TABLE>
4. Merger
The Company signed a definitive agreement on September 9, 1999 for the
merger of Grand Premier Financial Inc., into a wholly owned subsidiary of
Old Kent Financial Corporation. The merger is intended to be structured
as a pooling-of-interests for accounting purposes and as a tax free
exchange of shares. Under the terms of the merger agreement, each share
of Grand Premier Financial, Inc. common stock will be converted into
0.4231 shares of Old Kent Financial Corporation common stock and each
share of Grand Premier Financial, Inc. preferred stock will be converted
into one share of Old Kent Financial Corporation preferred stock with
substantially identical terms. The merger, which is subject to Grand
Premier Financial, Inc. shareholder and regulatory approval, is expected
to be consummated early in the second quarter of 2000.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion provides an analysis of the Company's financial condition
and results of operations, and is intended to cover significant factors
affecting the Company's overall performance during the interim periods
presented. It is designed to provide shareholders with a more
comprehensive review of the operating results and financial condition
that are not otherwise apparent from the consolidated financial
statements included in this report, and should be read in conjunction
with the consolidated financial statements, accompanying notes and other
financial information included elsewhere in this report and in the 1998
Annual Report on Form 10-K.
Statements or comments contained in the following discussion and analysis
of financial condition and results of operations that are not historical
facts may contain forward looking information that involve substantial
risks and uncertainties. Such statements include references to
management's "belief," "opinion," or "expectations" or words of similar
import. Actual results, performance or achievements could differ
materially from the results, performance or achievements expressed or
implied by these forward looking statements. For a discussion of these
risks and uncertainties, see the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the 1998 Annual Report
on Form 10-K.
Merger
The Company signed a definitive agreement on September 9, 1999 for the
merger of Grand Premier Financial Inc., into a wholly owned subsidiary of
Old Kent Financial Corporation. The merger is intended to be structured
as a pooling-of-interests for accounting purposes and as a tax free
exchange of shares. Under the terms of the merger agreement, each share
of Grand Premier Financial, Inc. common stock will be converted into
0.4231 shares of Old Kent Financial Corporation common stock and each
share of Grand Premier Financial, Inc. preferred stock will be converted
into one share of Old Kent Financial Corporation preferred stock with
substantially identical terms. The merger, which is subject to Grand
Premier Financial, Inc. shareholder and regulatory approval, is expected
to be consummated early in the second quarter of 2000. For additional
information concerning the merger agreement, see Exhibit 2.2 in Item 6 of
this report.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Results of Operations
For the nine months ended September 30, 1999 net income was $17.8
million, or $.76 diluted earnings per share. For the similar period of
1998, net income was $23.9 million, or $1.03 diluted earnings per share.
Included in 1999 net income are after tax gains of approximately $4.7
million realized on the sales of four rural offices in the first quarter
and after tax securities gains of approximately $80,000. In 1998, after
tax securities gains that totaled $12.1 million were realized primarily
as the result of the Company's decision to sell its portfolio of listed
equity securities. Excluding securities gains and gains from the office
sales, net income in 1999 was $13.0 million, or $.56 diluted earnings per
share, compared to $11.8 million, or $.51 diluted earnings per share in
1998.
For the quarter ended September 30, net income was $4.3 million in 1999,
or $.18 diluted earnings per share, compared to $14.5 million in 1998, or
$.62 diluted earnings per share. Net after tax securities gains realized
during the quarter were nominal in 1999, however, they amounted to $11.0
million in the third quarter 1998. Excluding securities gains, net income
was $3.5 million, or $.15 diluted earnings per share for the third
quarter of 1998.
Taxable equivalent net interest income remained stable at $50.4 million
for the nine months ended 1999 and 1998. Average earning assets also
remained stable at $1.47 billion for both years. A generally lower
interest rate environment in 1999 compared to 1998 contributed to lower
average yields earned and rates paid. The average yield on earning assets
decreased 39 basis points to 7.91% in 1999 compared to 8.30% in 1998
producing taxable equivalent interest income of $87.1 million and $91.2
million for the nine month periods of 1999 and 1998, respectively. The
decrease in interest income was offset by a similar decrease in interest
expense to $36.7 million in 1999 compared to $40.8 million in 1998.
Average interest bearing liabilities decreased to $1.19 billion in 1999
from $1.23 billion primarily as the result of the Company's sales of four
of its rural offices in the first quarter 1999. The Company's decreased
interest expense is the combined result of the lower amount of interest
bearing liabilities and lower average rate paid (4.11% in 1999 versus
4.44% in 1998). A slight shift in interest bearing liabilities from time
deposits to money market and savings also contributed to a lower average
rate paid. Overall, the Company's net interest margin remained stable at
4.58% in 1999 compared to 4.59% in 1998 (see Average Balances, Interest
and Average Interest Rates for the nine months ended September 30).
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Taxable equivalent net interest income increased 3.3% to $17.3 million
for the three months ended September 30, 1999 compared to $16.8 million
in the same quarter one year earlier. In a quarter-to-quarter comparison,
the yield on earning assets decreased 20 basis to 7.92% in 1999 and
interest income decreased $408,000 to $30.2 million in 1999. The decrease
in interest income was attributable to the combined effects of lower
yields in all earning asset categories, a $17.7 million increase in
earning assets to $1.51 billion in 1999, plus a change in asset mix that
included a shift from lower yielding investment securities to higher
yielding loans. The Company's decrease in interest income is more than
offset by a $966,000 decrease in interest expense to $12.8 million for
the third quarter 1999 from $13.8 million in 1998. The decrease in
interest paid is the combined result of a 28 basis point decrease in
average rates paid to 4.15% in 1999 and a $7.8 million decrease in total
interest bearing liabilities to $1.23 billion in 1999. Overall in a
quarter-to-quarter comparison, the Company's net interest margin improved
9 basis points to 4.55% in 1999 (see Average Balances, Interest and
Average Interest Rates for the three months ended September 30).
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
<TABLE>
Average Balances, Interest and Average Interest Rates
(dollars in thousands)
<CAPTION>
Nine months ended September 30, 1999 1998
Average Average Average Average
Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C>
Interest bearing deposits in other banks $ 1,308 $ 43 4.40% $ 379 $ 16 5.64%
Federal funds sold and securities
purchased under agreements to resell 37,273 1,471 5.28% 41,001 1,835 5.98%
Investment securities <F1>:
Taxable 266,702 11,439 5.73% 298,854 13,416 6.00%
Exempt from federal income tax <F2> 154,058 10,131 8.79% 140,627 9,635 9.16%
Loans net of unearned income <F2><F3> 1,013,292 64,048 8.45% 989,065 66,344 8.97%
Total earning assets 1,472,633 87,132 7.91% 1,469,926 91,246 8.30%
Cash and noninterest bearing deposits 37,344 45,758
Allowance for possible loan losses (12,961) (13,928)
Premises and equipment 32,310 35,193
Available for sale securities valuation 6,441 24,751
Other assets 43,060 53,166
Total assets $ 1,578,827 $ 1,614,866
Interest Bearing Deposits:
Transaction $ 186,885 2,880 2.06% $ 191,909 3,277 2.28%
Money market and savings 410,649 10,108 3.29% 389,271 10,089 3.47%
Time 510,549 19,976 5.23% 557,265 23,413 5.62%
Short-term borrowings 14,519 481 4.43% 20,363 772 5.07%
Long-term borrowings 70,000 3,246 6.20% 70,000 3,246 6.20%
Total interest bearing liabilities 1,192,602 36,691 4.11% 1,228,808 40,797 4.44%
Average interest rate spread 3.80% 3.86%
Other liabilities and stockholders' equity:
Noninterest bearing deposits 173,249 180,010
Other liabilities 24,176 27,361
Stockholders' equity 188,800 178,687
Total average liabilities
and stockholders' equity $ 1,578,827 $ 1,614,866
Net interest income / margin $50,441 4.58% $50,449 4.59%
<FN>
<F1> Average balances and yields exclude the effects of unrealized gains or losses on available for sale
securities.
<F2> Interest and yields are on a taxable equivalent basis assuming a 35% tax rate.
<F3> Average balances include nonaccrual loans.
</FN>
</TABLE>
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
<TABLE>
Average Balances, Interest and Average Interest Rates
(dollars in thousands)
<CAPTION>
Three months ended September 30, 1999 1998
Average Average Average Average
Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C>
Interest bearing deposits in other banks $ 1,186 $ 11 3.68% $ 381 $ 6 6.25%
Federal funds sold and securities
purchased under agreements to resell 50,543 685 5.38% 62,361 884 5.62%
Investment securities <F1>:
Taxable 251,575 3,740 5.90% 328,648 4,755 5.74%
Exempt from federal income tax <F2> 150,883 3,303 8.69% 144,355 3,282 9.02%
Loans net of unearned income <F2><F3> 1,057,893 22,438 8.41% 958,622 21,658 8.96%
Total earning assets 1,512,080 30,177 7.92% 1,494,367 30,585 8.12%
Cash and noninterest bearing deposits 39,010 39,964
Allowance for possible loan losses (12,613) (12,970)
Premises and equipment 31,468 35,043
Available for sale securities valuation 1,465 19,718
Other assets 44,197 49,133
Total assets $ 1,615,607 $ 1,625,255
Interest Bearing Deposits:
Transaction $ 193,922 1,045 2.14% $ 199,064 1,174 2.34%
Money market and savings 419,024 3,578 3.39% 397,819 3,568 3.56%
Time 528,998 6,942 5.21% 554,310 7,798 5.58%
Short-term borrowings 15,646 175 4.44% 14,221 166 4.63%
Long-term borrowings 70,000 1,094 6.20% 70,000 1,094 6.20%
Total interest bearing liabilities 1,227,590 12,834 4.15% 1,235,414 13,800 4.43%
Average interest rate spread 3.77% 3.69%
Other liabilities and stockholders' equity:
Noninterest bearing deposits 175,879 182,461
Other liabilities 22,012 26,745
Stockholders' equity 190,126 180,635
Total average liabilities
and stockholders' equity $ 1,615,607 $ 1,625,255
Net interest income / margin $17,343 4.55% $16,785 4.46%
<FN>
<F1> Average balances and yields exclude the effects of unrealized gains or losses on available for sale
securities.
<F2> Interest and yields are on a taxable equivalent basis assuming a 35% tax rate.
<F3> Average balances include nonaccrual loans.
</FN>
</TABLE>
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
The Company reduced its year-to-date provision for possible loan losses
to $2.05 million in 1999 compared to $2.70 million in 1998. Third quarter
provisions totaled $750,000 and $900,000 in 1999 and 1998, respectively.
The Company's provisions are based on periodic evaluations by management
of the adequacy of the allowance for possible loan losses. These
evaluations consider numerous factors including, but not limited to,
current economic conditions, loan portfolio composition, prior loan loss
experience, and an estimation of potential losses.
The modest reduction in the Company's year-to-date provision is, in
management's opinion, consistent with an improvement in overall asset
quality since September 30, 1998. Specifically, nonperforming loans
(nonaccrual loans, accruing loans 90 days or more past due and
renegotiated loans) totaled $6.5 million at September 30, 1999 compared
to $7.5 million at December 31, 1998 and $9.3 million at September 30,
1998. Year to date net charge-offs totaled $1.5 million in 1999 compared
to $5.2 million in 1998. Approximately $1.2 million and $4.3 million net
charge-offs for 1999 and 1998, respectively, were associated with the
indirect auto loan portfolio for which the Company made a provision for
possible loan losses of approximately $6 million during the final quarter
of 1997.
The Company has experienced strong growth (annualized rate in excess of
18%) in its loan portfolio since year end 1998, with outstanding loans
totaling $1.090 billion at September 30, 1999 versus $956.2 million at
December 31, 1998. The effect of portfolio expansion has resulted in the
allowance for possible loan losses declining from 1.30% of gross loans at
year end 1998 to 1.20% of gross loans at September 30, 1999. The ratio
was 1.50% at December 31, 1997. Although management believes the
allowance for possible loan losses is adequate in relation to general
economic and portfolio conditions as of September 30, 1999, management
plans to closely monitor industry and external trends over the next
several months within the context of the specific factors noted above. In
addition, recent increases in interest rates and the indicated Federal
Reserve Bank bias toward tightening rates raises concerns that such rate
increases may result in reduced cash flow available to borrowers for
principal repayment.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Other income was $17.9 million for the first nine months of 1999 and
$30.1 million in 1998. Gains from the sales of four rural offices, and
their associated deposit liabilities that totaled $85.1 million,
contributed $7.9 million to other income during the first quarter 1999.
Securities gains contributed $20.1 million in 1998 compared to $132,000
in 1999. Excluding gains from the office sales and securities gains, year
to date other income totaled $9.9 million in 1999 and $10.0 million in
1998. Service charges on deposits were $3.6 million in 1999, $654,000
lower than 1998. The decrease in service charges is primarily
attributable to the sales of the branch deposit liabilities combined with
planned fee waivers during a data processing conversion in the second
quarter 1999. Fees from trust services were $2.8 million through
September 30, 1999, 9% greater than $2.5 million at September 30, 1998.
Gains from the sale of two bank properties added $388,000 to other income
in 1999 totaling $3.5 million compared with $3.2 million in 1998. Net
check printing revenues of $65,000 are included in other income for 1999
while gross revenues of $586,000 are included in other income for 1998
with check printing costs of $506,000 separately included in other
expense.
Total other income for the third quarter 1999 was $3.1 million compared
to the $21.7 million in 1998. Securities gains, mainly from the sale of
the Company's portfolio of listed equity securities, were $18.2 million
in 1998 compared to $3,000 in 1999. Other income excluding securities
gains totaled $3.1 million in 1999 and $3.5 million in 1998. Service
charges on deposits, the largest source of recurring other income, was
$1.3 million in the third quarter 1999 or $121,000 less than $1.4 million
in the same quarter 1998. The decrease in service charges is partially
offset by a $78,000 increase in trust fees to $927,000 in 1999. All other
income was $912,000 in 1999 and $1.2 million in 1998. Lower realized
gains from the sale of loans ($81,000 in 1999 and $182,000 in 1998) and
check printing costs ($189,000) contributed to the decrease.
Other expenses totaled $36.7 million for the first nine months of 1999
compared to $37.3 million in 1998. The decrease in other expenses is
largely attributable to a $366,000 reduction in salary and employee
benefit expenses to $17.6 million in 1999. The Company employed 575 full
time equivalent employees at September 30, 1999 compared to 605 one year
earlier. Occupancy and equipment expenses decreased $168,000 to $6.2
million in 1999 mainly from a reduction in depreciation expense. Other
expenses also declined from $11.7 million in 1998 to $11.6 million in
1999. Included in 1999 other expenses are $750,000 in non-tax deductible
professional fees associated with the pending merger with Old Kent
Financial Corporation. The Company currently estimates that additional
expenses relating to the merger will be approximately $2.5 million.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
The merger, which is subject to regulatory and shareholder approval, is
anticipated to be consummated early in the second quarter of 2000.
Forgery and other fraudulent losses totaling $590,000 also significantly
impacted other expenses in 1999. In 1998, other expenses included costs
associated with the closing of two branch offices ($472,000) and
write-off of obsolete software ($206,000).
Other expenses for the third quarter 1999 were $12.6 million compared to
$13.2 million in 1998. Salaries and benefits remained comparable at $6.1
million and $6.0 million in 1999 and 1998, respectively. Occupancy and
equipment expenses were $206,000 lower than the $2.2 million in 1998 due,
in part, to the closing of two branches in the third quarter 1998 and
sales of four branches in 1999. Other expenses in 1999 included
merger related professional fees of $750,000, fraud and forgery losses
totaling $170,000 partially offset by savings of approximately $250,000
from the conversion to an in-house data processing system. Third quarter
1998 other expenses included the costs of closing two branch offices and
write-off of obsolete software.
Income tax expense was $8.2 million for the first nine months of 1999
resulting in an effective tax rate of 31.6% compared to $13.2 million,
35.6% effective tax rate, in 1998. In a third quarter comparison, tax
expense was $1.7 million and $8.7 million, producing effective tax rates
of 29.0% and 37.6% for 1999 and 1998, respectively. The higher effective
tax rate of 1998 is largely attributable to the fully taxable securities
gains. Also, the Company's formation of a separate operating subsidiary
to fund certain real estate related loans during the third quarter of
1999, with a corresponding reduction of state taxable income, contributed
to the lower effective tax rate for for the three and nine month periods
of 1999. The effective tax rate was partially offset by non-deductible
professional fees.
Financial Condition
Total assets were $1.64 billion at September 30, 1999 compared to $1.65
billion nine months earlier at December 31, 1998. Gross loans totaled
$1.09 billion at September 30, 1999, an increase of $134 million (13.9%)
from $956.2 million at December 31, 1998. Based on the Company's unfunded
loan commitments, management anticipates continued strong loan growth in
the near future. Funding of loan growth has come primarily from proceeds
from sales and maturities of investment securities and short term
investments in federal funds sold. The carrying value of investment
securities was $406.5 million and $516.1 million at September 30, 1999
and December 31, 1998, respectively. Short term investments in federal
funds sold also decreased from $48 million to $30 million during the nine
month period.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Funding from deposit liabilities totaled $1.34 billion at September 30,
1999 compared to $1.36 billion at year end 1998. The Company has
effectively replaced the deposit liabilities totaling $85.1 million that
were sold along with four rural branch offices during the first quarter
of 1999 with similar core deposits. Non-interest bearing deposits were
$177.1 million at September 30, 1999 compared to $199.1 million at year
end 1998. Interest bearing deposits increased slightly from $1.16 billion
at year end to $1.17 billion nine months later. Total stockholders equity
increased $5.4 million to $188.8 million at September 30, 1999 mainly
from an $11.2 million increase in retained earnings plus proceeds
totaling $1.7 million from the exercise of stock options, offset by a
$7.5 million decrease in accumulated other comprehensive income.
Year 2000 ("Y2K")
Many existing computer programs use only two digits to identify a year in
a date field. These programs were designed and developed without
considering the impact of a change in century. If not corrected, many
computer programs could fail or create erroneous results, which could
affect a company's ability to do business prior to, at, or after
December 31, 1999.
Financial service organizations such as Grand Premier are heavily reliant
upon computer systems for processing transactions and accounting for
services provided to customers. In April, 1999 the Company converted its
core data processing system (used to process transactions and maintain
customer records) to licensed software operated "in-house". The software
was originally designed with four digit date fields and accordingly, the
vendor has asserted that the system is fully "year 2000 ready". In June,
1999 the Company conducted its own testing in order to validate the
vendor's assertions. The testing was monitored and reviewed by an
independent third party.
As a part of the June 1999 testing, the Company leased a computer
identical to that used by the Company for daily processing. The leased
machine was loaded with the Company's operating system, application
software, and databases. The computer and software dates were advanced
to those outlined by the Federal Financial Institutions Examination
Council, and normal processing occurred. The Company did not find any Y2K
related exceptions on any of the systems. Based on the test results, the
Company believes the systems will continue to function properly into the
next millennium. In addition, the Company will continue to monitor the
testing efforts of other software licensees for Y2K related issues that
could potentially affect the Company.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
In mid 1997, the Company established an internal task force to identify
and/or resolve issues related to the year 2000 change. In addition to the
internal task force, the Company employs one full-time project manager as
well as outside consultants dedicated to the year 2000 project.
The task force has completed a comprehensive inventory of all systems
used by the Company. These systems include not only data processing and
technology driven systems, but also systems which may have embedded chips
such as elevators, security systems, building controls, and various
office handling equipment. Further, the Company has identified those
systems, which are deemed "mission critical" to its business.
Other than its core data processing system, the Company contracts with
third party providers for many other systems. Although the contracted
vendors bear the responsibility for making their systems "year 2000
compliant", assuming the costs associated with necessary changes, keeping
the Company apprised of their progress in meeting established benchmarks,
and certifying to the Company that the systems are in fact "year 2000
ready", the Company bears ultimate responsibility for testing, due
diligence and assurance that its major vendors will continue to provide
service without interruption due to the change in century at year-end
1999.
The Company maintains regular communications with vendors who provide
mission critical systems to the Company to verify that 1) their
time-lines and benchmarks are met, 2) testing is performed regularly and
according to schedule, and 3) necessary changes are being identified and
addressed. Similarly, the task force has established its own benchmarks
and timelines for managing the "year 2000 project", for evaluating and
changing (if necessary) other systems used internally by the Company, and
for prioritizing efforts with regard to overall year 2000 issues as they
apply to the Company.
In addition to the core data processing system test discussed above, the
Company has successfully completed testing of in-house mission critical
systems. The timing and extent of mission critical testing for third
party systems is partially dependent on the vendor and accomplished
mostly through user group and/or proxy testing. Based on the testing
completed, management believes that the systems identified as mission
critical will continue to process through the millennium.
Management has developed contingency plans in the event that systems fail
to perform as expected. The contingency plans primarily include the use
of substitute third party service providers and/or a shift to manual
processes.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
As a part of its credit analysis process, the Company has also developed
a project plan for assessing the Year 2000 readiness of its significant
credit customers. Information has been obtained from significant
borrowers relative to their year 2000 preparedness. The Company will
continue correspondence with these significant customers to monitor
continued progress and preparedness for year 2000.
The projected total cost of the year 2000 project is currently estimated
to be $300,000, consisting primarily of the internal project manager's
salary and external consulting fees. As of September 30, 1999, a
cumulative total of approximately $250,000 had been spent on the Year
2000 project. All costs associated with the year 2000 project are being
charged to expense as incurred. The estimate does not include the time
that internal staff and user departments are devoting to task force
meetings, planning, and testing relative to Year 2000. These costs are
not anticipated to have a material impact on operations.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The Company's exposure to market risk arises from changes in interest
rates. Managing interest rate risk is the responsibility of the Company's
Asset/Liability Management Committee ("ALCO") established by the Board of
Directors. ALCO meets periodically, at least quarterly, to evaluate the
Company's market risk exposure.
Based upon ALCO's most recent evaluation, management does not believe the
Company's risk position at September 30, 1999 has changed materially from
year-end 1998 as disclosed in the Company's Annual Report on Form 10-K.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
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).
2.2 Agreement and Plan of Merger, dated September 9, 1999, among Grand
Premier Financial, Inc., Old Kent Financial Corporation, and OK
Merger Corporation (incorporated by reference to Exhibit 2.1 of
the Company's Current Report of Form 8-K filed September 15, 1999,
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).
4.1 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).
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
4.2 Amendment No. 1, dated September 9, 1999, to the Rights Agreement,
dated as of July 8, 1996, between Grand Premier Financial, Inc.
and Grand Premier Trust and Investment, Inc., as successor to
Premier Trust Services, Inc. (incorporated by reference to Exhibit
4.1 to the Company's Form 8-A/A filed with the Securities and
Exchange Commission on September 15, 1999).
10.1* Form of Change in Control Agreement, dated October (2)/(8), 1996,
entered into between the Company and each of Richard L. Geach and
Kenneth A. Urban (incorporated by reference to Exhibit 10.1 of the
Company's Quarterly Report on Form 10-Q dated September 30, 1996,
Commission file No. 0-20987).
10.2* Form of Change in Control Agreement, entered into in July or
August 1999, between the Company and each of Jack Croffoot,
Nanette K. Donton, Al Lutton, William Theobald, and James Watts in
same form as Change in Control Agreement dated October (2)/(8),
1996 (incorporated by reference to Exhibit 10.2 of the Company's
Quarterly Report on Form 10-Q dated September 30, 1996, Commission
file No. 0-20987).
10.3* Grand Premier Financial, Inc. 1996 Non-Qualified Stock Option
Plan, as amended (incorporated by reference to Exhibit 10.3 of the
Company's Annual Report on Form 10-K dated December 31, 1997,
Commission file No. 0-20987).
10.4* Premier Financial Services, Inc. 1995 Non-Qualified Stock Option
Plan, as amended (incorporated by reference to Exhibit 10.4 of the
Company's Annual Report on Form 10-K dated December 31, 1997,
Commission file No. 0-20987).
10.5* Grand Premier Financial, Inc. Deferred Compensation Plan
(incorporated by reference to Exhibit 10.8 of the Company's 1996
Annual Report on Form 10-K, Commission File No. 0-20987).
10.6* Employment and Consulting Agreement, dated May 1, 1997, between
Grand Premier Financial, Inc., and Howard A. McKee (incorporated
by reference to Exhibit 10.10 to the Company's Quarterly Report on
Form 10-Q dated June 30, 1997, Commission file No. 0-20987.)
10.7* Grand Premier Financial, Inc. Non-Employee Directors Stock Option
Plan (incorporated by reference to Appendix A of the Company's
Definitive Proxy Statement dated April 13, 1998).
10.8* Form of Change in Control Agreement, dated July 22 and August 29,
1999, respectively, entered into between the Company and each of
Scott Dixon and Larry O'Hara.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
10.9* Form of Change in Control Agreement, dated August 30, 1999,
entered into between the Company and each of Alan Emerick and
David Murray.
11. Statement re computation of per share earnings (See Note 3 to the
Consolidated Financial Statements for the nine months ended
September 30, 1999).
27. Financial Data Schedule, for the nine months ended
September 30, 1999.
(B) Reports on Form 8-K
The Company filed a Current Report of Form 8-K on Septmber 15, 1999
announcing it had entered into an Agreement and Plan of Merger with Old
Kent Financial Corporation and OK Merger Corporation.
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
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
(Registrant)
November 9, 1999 /s/ David L. Murray
Date David L. Murray, Senior Executive Vice
President and Chief Financial Officer
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
EXHIBIT INDEX
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).
2.2 Agreement and Plan of Merger, dated September 9, 1999, among
Grand Premier Financial, Inc., Old Kent Financial Corporation,
and OK Merger Corporation (incorporated by reference to Exhibit
2.1 of the Company's Current Report of Form 8-K filed September
15, 1999, 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).
4.1 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).
4.2 Amendment No. 1, dated September 9, 1999, to the Rights
Agreement, dated as of July 8, 1996, between Grand Premier
Financial, Inc. and Grand Premier Trust and Investment, Inc., as
successor to Premier Trust Services, Inc. (incorporated by
reference to Exhibit 4.1 to the Company's Form 8-A/A filed with
the Securities and Exchange Commission on September 15, 1999).
GRAND PREMIER FINANCIAL, INC.
AND SUBSIDIARIES
10.1* Form of Change in Control Agreement, dated October (2)/(8),
1996, entered into between the Company and each of Richard L.
Geach and Kenneth A. Urban (incorporated by reference to Exhibit
10.1 of the Company's Quarterly Report on Form 10-Q dated
September 30, 1996, Commission file No. 0-20987).
10.2* Form of Change in Control Agreement, entered into in July or
August 1999, between the Company and each of Jack Croffoot,
Nanette K. Donton, Al Lutton, William Theobald, and James Watts
in same form as Change in Control Agreement dated October
(2)/(8), 1996 (incorporated by reference to Exhibit 10.2 of the
Company's Quarterly Report on Form 10-Q dated
September 30, 1996, Commission file No. 0-20987).
10.3* Grand Premier Financial, Inc. 1996 Non-Qualified Stock Option
Plan, as amended (incorporated by reference to Exhibit 10.3 of
the Company's Annual Report on Form 10-K dated December 31,
1997, Commission file No. 0-20987).
10.4* Premier Financial Services, Inc. 1995 Non-Qualified Stock Option
Plan, as amended (incorporated by reference to Exhibit 10.4 of
the Company's Annual Report on Form 10-K dated December 31,
1997, Commission file No. 0-20987).
10.5* Grand Premier Financial, Inc. Deferred Compensation Plan
(incorporated by reference to Exhibit 10.8 of the Company's 1996
Annual Report on Form 10-K, Commission File No. 0-20987).
10.6* Employment and Consulting Agreement, dated May 1, 1997, between
Grand Premier Financial, Inc., and Howard A. McKee (incorporated
by reference to Exhibit 10.10 to the Company's Quarterly Report
on Form 10-Q dated June 30, 1997, Commission file No. 0-20987.)
10.7* Grand Premier Financial, Inc. Non-Employee Directors Stock
Option Plan (incorporated by reference to Appendix A of the
Company's Definitive Proxy Statement dated April 13, 1998).
10.8* Form of Change in Control Agreement, dated July 22 and August
29, 1999, respectively, entered into between the Company and
each of Scott Dixon and Larry O'Hara.
10.9* Form of Change in Control Agreement, dated August 30, 1999,
entered into between the Company and each of Alan Emerick and
David Murray.
11. Statement re computation of per share earnings (See Note 3 to
the Consolidated Financial Statements for the nine months ended
September 30, 1999).
27. Financial Data Schedule, for the nine months ended
September 30, 1999.
EXHIBIT 10.8
CHANGE IN CONTROL AND TERMINATION AGREEMENT
This Change in Control and Termination Agreement (this "Agreement") is
entered into as of this ______ day of ____________________, 1999, 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
12 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 12-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 Bard 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 18 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 18. 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 18 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) ays 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: ________________________
________________________
________________________
________________________
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 10.9
CHANGE IN CONTROL AND TERMINATION AGREEMENT
This Change in Control and Termination Agreement (this "Agreement") is
entered into as of this ______ day of ____________________, 1999, 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 12 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 12-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
Bard 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 24 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 24. 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 24 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.
(g) Grand Premier shall provide the Executive with out
placement services, which will continue until the
Executive accepts a new position.
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) ays 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: ________________________
________________________
________________________
________________________
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
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<S> <C>
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<PERIOD-END> SEP-30-1999
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0
9,250,000
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<INCOME-PRETAX> 26,008,000
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