<PAGE> 1
As filed with the Securities and Exchange Commission on May 19, 1999
Registration No. _______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
---------------
FIRST PREMIER FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 6712 58-2398959
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
13004 STARBUCK ROAD
ST. LOUIS, MISSOURI 63141
(314) 514-8491
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
RICHARD C. JENSEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FIRST PREMIER FINANCIAL CORPORATION
13004 STARBUCK ROAD
ST. LOUIS, MISSOURI 63141
(314) 514-8491
(Name, address, including zip code and telephone number, including area code, of
agent for service)
Copies to:
ROBERT C. SCHWARTZ, ESQ. KENNETH H. SUELTHAUS, ESQ.
SMITH, GAMBRELL & RUSSELL, LLP SUELTHAUS & WALSH, P.C.
PROMENADE II, SUITE 3100 7733 FORSYTH BOULEVARD, TWELFTH FLOOR
1230 PEACHTREE STREET, N.E. ST. LOUIS, MISSOURI 63105
ATLANTA, GEORGIA 30309 (314) 727-7676
(404) 815-3500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: Upon the effective date of the merger of Premier Bancshares, Inc.
with and into the Registrant.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH AMOUNT
CLASS OF TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO REGISTERED OFFERING PRICE AGGREGATE REGISTRATION
BE REGISTERED (1) PER SHARE OFFERING PRICE FEE
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Common Stock, 1,100,000 (2) $4,464,134(3) $1,241.03
$.01 par value shares
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(1) Based on the estimated maximum number of shares of the Registrant's
common stock to be issued in connection with the proposed merger
("Merger") of Premier Bancshares, Inc. with and into the Registrant. In
accordance with Rule 416 under the Securities Act of 1933, this
Registration Statement shall also register any additional shares of the
Registrant's common stock which may become issuable to prevent dilution
resulting from stock splits, stock dividends or similar transactions as
provided by the agreement relating to the Merger.
(2) Not applicable.
(3) Computed in accordance with Rule 457(f)(2) based upon the book value as
of March 31, 1999 of the maximum estimated number of securities (42,000
shares of common stock of Premier Bancshares, Inc.) to be received by
the Registrant in exchange for the securities registered hereby.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PREMIER BANCSHARES, INC. FIRST PREMIER FINANCIAL
CORPORATION
MERGER PROPOSED-YOUR VOTE IS VERY IMPORTANT
The Boards of Directors of First Premier Financial Corporation and
Premier Bancshares, Inc. have agreed on a merger of our two companies. Before we
can complete this merger, the agreement must be approved by each company's
shareholders. We are sending you this Proxy Statement/Prospectus to ask you to
vote in favor of the merger.
Upon completion of the merger, each share of Premier common stock,
other than shares held by Premier shareholders who perfect dissenters' rights,
will be converted into the number of shares of First Premier common stock equal
to the quotient obtained by dividing $262.944 by the initial public offering
price of one share of First Premier common stock, rounded to the nearest third
decimal. This is the exchange ratio. Cash will be paid in lieu of fractional
shares. First Premier has filed a registration statement on Form S-4 pursuant to
the Securities Act of 1933, as amended, for up to 1,100,000 shares of its common
stock to be issued in connection with the merger.
First Premier's securities are not currently listed on any national
securities exchange or the Nasdaq Stock Market. First Premier has filed a
registration statement on Form S-1 registering its sale of 3,000,000 shares of
common stock in its initial public offering. First Premier intends to qualify
its common stock for trading on the Nasdaq National Stock Market following the
initial public offering under the symbol "PRBK."
THIS PROXY STATEMENT/PROSPECTUS PROVIDES DETAILED INFORMATION ABOUT THE
MERGER. YOU SHOULD READ IT CAREFULLY. THE MERGER INVOLVES CERTAIN RISKS. SEE
"RISK FACTORS" ON PAGE __ OF THIS PROXY STATEMENT/PROSPECTUS.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the special
meeting, please vote by completing the enclosed proxy card and mailing it to us.
If you sign, date and mail your proxy card without indicating how you want to
vote, we will vote your proxy in favor of the merger. If you do not return your
card, you will in effect vote against the merger.
We are enthusiastic about this merger and the strength and capabilities
we expect from the combined company. We join all the other members of each
company's Board of Directors in recommending that you vote in favor of the
merger.
The dates, times and places of the meetings are:
First Premier shareholders: Premier shareholders:
June ___, 1999, ______ a.m. June __, 1999, ______ p.m.
13004 Starbuck Road 815 West Stadium Boulevard
St. Louis, Missouri 63141 Jefferson City, Missouri 65110
Richard C. Jensen Charles R. Willibrand
President Chairman of the Board
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATOR HAS APPROVED THE SECURITIES TO BE ISSUED UNDER THIS PROXY
STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY STATEMENT/PROSPECTUS IS
ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER OBLIGATIONS OF ANY
BANK OR NON-BANK SUBSIDIARY OF ANY OF THE PARTIES, AND THEY ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER
GOVERNMENTAL AGENCY.
================================================================================
This Proxy Statement/Prospectus is dated June __,1999 and was first
mailed to shareholders on or about June _, 1999.
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PREMIER BANCSHARES, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE ___, 1999
NOTICE IS HEREBY GIVEN that a special meeting of the shareholders of Premier
Bancshares, Inc. will be held at 815 West Stadium Boulevard, Jefferson City,
Missouri, on June ____, 1999 at ___:00 p.m., local time, for the
following purposes:
1. To approve the Agreement and Plan of Merger, dated as of May 6,
1999 by and between Premier Bancshares, Inc. and First Premier Financial
Corporation, a Delaware corporation, pursuant to which Premier will merge with
and into First Premier. Upon consummation of the merger, each issued and
outstanding share of Premier common stock will be converted into the right to
receive shares of First Premier common stock, as more fully described in the
merger agreement and further described in the Proxy Statement/Prospectus; and
2. To transact such other business as may properly come before the
special meeting or any adjournments or postponements thereof.
NOTICE OF RIGHT TO DISSENT. If the merger is completed and you strictly
follow the steps required by law, you will have the right to dissent from the
merger and receive the fair value of your shares determined in accordance with
ss.351.455 RSMo. The right of any such shareholder to dissenters' rights is
contingent upon consummation of the merger and upon strict compliance with the
requirements set forth in ss.351.455 RSMo., the full text of which is set forth
as Appendix B to the accompanying Proxy Statement/Prospectus.
Only shareholders of record at the close of business on ____________,
1999 (the "Record Date") will be entitled to receive notice of, and to vote at,
the special meeting and any adjournments or postponements thereof. The
affirmative vote of the holders of two-thirds of the shares of Premier common
stock outstanding on the Record Date is required for the approval of the merger
agreement and the transactions contemplated thereby, including the merger.
THE BOARD OF DIRECTORS OF PREMIER UNANIMOUSLY RECOMMEND THAT THE
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY.
Charles R. Willibrand
Chairman of the Board
June ___, 1999
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD, WHETHER OR NOT
YOU PLAN TO ATTEND THE SPECIAL MEETING.
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FIRST PREMIER FINANCIAL CORPORATION
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE ___, 1999
NOTICE IS HEREBY GIVEN that a special meeting of the shareholders
of First Premier Financial Corporation will be held at 13004 Starbuck Road, St.
Louis, Missouri, on June ____, 1999 at ___:00 a.m., local time, for the
following purposes:
1. To approve the Agreement and Plan of Merger, dated as of May 6,
1999 by and between Premier Bancshares, Inc., a Missouri corporation, and First
Premier Financial Corporation, pursuant to which Premier will merge with and
into First Premier. Upon consummation of the merger, each issued and outstanding
share of Premier common stock will be converted into the right to receive shares
of First Premier common stock, as more fully described in the merger agreement
and further described in the Proxy Statement/Prospectus; and
2. To transact such other business as may properly come before the
special meeting or any adjournments or postponements thereof.
NOTICE OF RIGHT TO DISSENT. If the merger is completed and you strictly
follow the steps required by law, you will have the right to dissent from the
merger and receive the value of your shares determined in accordance with Title
8, Section 262, of the Delaware General Corporation Law. The right of any such
shareholder to dissenters' rights is contingent upon consummation of the merger
and upon strict compliance with the requirements set forth in Title 8, Section
262, the full text of which is set forth as Appendix C to the accompanying
Proxy Statement/Prospectus.
Only shareholders of record at the close of business on ____________,
1999 (the "Record Date") will be entitled to receive notice of, and to vote at,
the special meeting and any adjournments or postponements thereof. The
affirmative vote of a majority of the shares of First Premier common stock
outstanding on the Record Date is required for the approval of the merger
agreement and the transactions contemplated thereby, including the merger.
THE BOARD OF DIRECTORS OF FIRST PREMIER UNANIMOUSLY RECOMMEND THAT THE
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY.
Richard C. Jensen
President
June ___, 1999
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD, WHETHER OR NOT
YOU PLAN TO ATTEND THE SPECIAL MEETING.
<PAGE> 5
TABLE OF CONTENTS
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PAGE
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AVAILABLE INFORMATION AND REPORTS TO SECURITY HOLDERS.............................................................1
SUMMARY...........................................................................................................2
The Companies:..............................................................................................2
The Merger..................................................................................................2
What Premier Shareholders Will Receive......................................................................2
Reasons for the Merger......................................................................................2
The Shareholders Meetings...................................................................................3
Board of Directors Recommendations to Shareholders..........................................................3
Record Date; Voting Power...................................................................................3
Vote Required...............................................................................................3
Interests of Persons Involved in the Merger that are Different from Yours...................................3
Conditions to the Merger....................................................................................3
Termination of the Merger Agreement.........................................................................4
Regulatory Approvals........................................................................................4
Accounting Treatment........................................................................................4
Important Federal Tax Consequences..........................................................................4
Dissenters' Rights..........................................................................................4
SUMMARY SELECTED CONSOLIDATED FINANCIAL DATA......................................................................6
PRO FORMA FINANCIAL DATA..........................................................................................8
RISK FACTORS......................................................................................................9
THE SPECIAL MEETING OF FIRST PREMIER SHAREHOLDERS................................................................16
General....................................................................................................16
Matters to be Considered...................................................................................16
Vote Required..............................................................................................16
Voting of Proxies..........................................................................................16
Voting and Revocation of Proxies...........................................................................16
Solicitation of Proxies....................................................................................17
Record Date and Voting Rights..............................................................................17
Recommendation of the First Premier Board..................................................................17
THE SPECIAL MEETING OF PREMIER SHAREHOLDERS......................................................................18
General....................................................................................................18
Matters to be Considered...................................................................................18
Vote Required..............................................................................................18
Voting of Proxies..........................................................................................18
Voting and Revocation of Proxies...........................................................................18
Solicitation of Proxies....................................................................................19
Record Date and Voting Rights..............................................................................19
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Recommendation of the Premier Board........................................................................19
THE MERGER.......................................................................................................20
Description of the Merger..................................................................................20
Effective Time and Closing of the Merger...................................................................21
Exchange of Certificates...................................................................................21
Background of and Reasons for the Merger...................................................................23
Conditions Precedent to the Merger.........................................................................29
Conduct of Business Prior to the Merger....................................................................30
Termination................................................................................................32
Expenses...................................................................................................33
Material Federal Income Tax Consequences...................................................................33
Interests of Certain Persons in the Merger.................................................................34
Dissenters' Rights of Premier Shareholders and First Premier Shareholders..................................36
Accounting Treatment.......................................................................................38
Bank Regulatory Matters....................................................................................38
Status of Regulatory Approvals and Other Information .....................................................39
Restrictions on Resales....................................................................................39
Recommendation of the Premier Board........................................................................40
Recommendation of the First Premier Board..................................................................40
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY..................................................................41
Market Prices..............................................................................................41
Dividend Policy............................................................................................41
INFORMATION ABOUT FIRST PREMIER..................................................................................42
General....................................................................................................42
Acquisition of Premier Bancshares, Inc.....................................................................43
Strategy of First Premier Financial Corporation............................................................44
Operations of First Premier................................................................................50
Operations of Premier Bancshares, Inc......................................................................51
Asset/Liability Management.................................................................................51
Competition................................................................................................52
Data Processing............................................................................................52
Facilities.................................................................................................52
Employees..................................................................................................52
Legal Proceedings..........................................................................................52
Principal Shareholders of First Premier....................................................................53
Management of First Premier................................................................................54
Certain Transactions.......................................................................................60
INFORMATION ABOUT PREMIER........................................................................................61
General....................................................................................................61
Asset/Liability Management.................................................................................61
Competition................................................................................................61
Security Ownership of Certain Beneficial Owners and Management of Premier..................................61
Facilities.................................................................................................62
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(ii)
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Employees..................................................................................................62
Legal Proceedings..........................................................................................63
Monetary Policies..........................................................................................63
Certain Transactions.......................................................................................63
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS........................................................................64
First Premier Financial Corporation........................................................................64
Premier Bancshares, Inc....................................................................................64
Summary....................................................................................................64
Results of Operations......................................................................................66
Financial Condition........................................................................................71
Year 2000 Readiness........................................................................................86
Accounting Pronouncements..................................................................................88
Effects of Inflation and Changing Prices...................................................................89
Monetary Policies..........................................................................................89
DESCRIPTION OF FIRST PREMIER CAPITAL STOCK AND PREMIER CAPITAL STOCK.............................................90
First Premier Capital Stock................................................................................90
Premier Capital Stock......................................................................................93
COMPARISON OF SHAREHOLDER RIGHTS.................................................................................94
Call of Special Shareholder Meetings.......................................................................94
Shareholder Consent in Lieu of Meeting.....................................................................94
Shareholder Voting ........................................................................................94
Limitation or Elimination of Directors' Personal Liability.................................................95
Indemnification............................................................................................96
Amendments to Articles or Certificate of Incorporation and Bylaws..........................................96
Dissenters' Rights of Appraisal............................................................................97
Inspection of Books, Records and Shareholders List.........................................................97
Dissolution................................................................................................98
Preemptive Rights..........................................................................................98
Interested Director Transactions...........................................................................98
Filling Vacancies on the Board of Directors................................................................98
Dividends and Repurchases of Shares .......................................................................99
Anti-Takeover Statutes.....................................................................................99
LEGAL OPINIONS..................................................................................................101
EXPERTS.........................................................................................................101
OTHER MATTERS...................................................................................................101
INDEX TO FINANCIAL STATEMENTS...................................................................................F-1
APPENDIX A - AGREEMENT AND PLAN OF MERGER.......................................................................A-1
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(iii)
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APPENDIX B - MO. REV. STAT. ss.351.455..........................................................................B-1
APPENDIX C - DEL. CODE ANN., TITLE 8, ss.262....................................................................C-1
APPENDIX D - FAIRNESS OPINION OF GRA THOMPSON, WHITE & COMPANY, P.C.............................................D-1
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS...............................................................II-1
SIGNATURES.....................................................................................................II-6
EXHIBIT INDEX..................................................................................................II-7
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(iv)
<PAGE> 9
AVAILABLE INFORMATION AND REPORTS TO SECURITY HOLDERS
First Premier filed a registration statement on Form S-4 to register
with the Securities and Exchange Commission the First Premier common stock to be
issued to Premier shareholders in the merger. You may read and copy any
information filed by First Premier, without charge, at the Securities and
Exchange Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the Securities and Exchange Commission at
1-800-SEC-0330 for further information on the Public Reference Room. Copies of
the registration statement may be obtained through commercial document retrieval
services and at the Securities and Exchange Commission's internet site through
"http://www.sec.gov."
This joint Proxy Statement/Prospectus is a part of the registration
statement and does not contain all the information included the registration
statement. Neither First Premier nor Premier is currently subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended. Upon
completion of First Premier's initial public offering, First Premier will be
subject to these reporting requirements and will be required to file annual and
quarterly reports with the Securities and Exchange Commission.
THE INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
<PAGE> 10
SUMMARY
This summary highlights selected information from this document and may
not contain all of the information that is important to you. To understand the
merger fully, and for more complete descriptions of the legal terms of the
merger, you should read carefully this entire document and the documents we have
referred you to. (The terms "First Premier," "we," "our" or "us" refer to First
Premier Financial Corporation, unless the context indicates a different meaning.
The terms "Premier" and "Premier Bank" refer to Premier Bancshares, Inc. and its
wholly-owned banking subsidiary, Premier Bank).
THE COMPANIES:
FIRST PREMIER FINANCIAL CORPORATION
13004 Starbuck Road
St. Louis, Missouri 63141
(314) 514-8491
First Premier is a bank holding company that was organized under the
laws of the state of Delaware on May 1, 1998. First Premier is a development
stage company with no history of operations as a holding company. Prior to
acquiring Premier, First Premier will not own any banks.
PREMIER BANCSHARES, INC.
815 West Stadium Boulevard
Jefferson City, Missouri 65110
(573) 893-6000
Premier is a bank holding company. Through its banking subsidiary,
Premier Bank, Premier provides a wide range of banking services in the Jefferson
City and Columbia, Missouri markets.
THE MERGER
The acquisition of Premier by First Premier is governed by a merger
agreement. We encourage you to read the merger agreement, which is attached as
Appendix A.
FORMATION OF FIRST PREMIER AND THE INITIAL PUBLIC OFFERING
We formed First Premier to create a multi-market bank serving business
customers who are dissatisfied with the impersonal service delivered by
super-regional and national banks. To accelerate the implementation of our
business plan, we have agreed to acquire Premier and its wholly-owned
subsidiary, Premier Bank, and immediately after the closing of the merger, First
Premier will close on an initial public offering of 3,000,000 shares of its
common stock. An additional 450,000 shares of First Premier common stock will be
issued if the underwriters exercise their over-allotment option. The proceeds of
the offering will be used to support future growth of Premier Bank and to
implement First Premier's business plan.
WHAT PREMIER SHAREHOLDERS WILL RECEIVE
As a result of the merger, Premier shareholders will receive, for each
share of Premier common stock that they own, the number of shares of First
Premier common stock equal to the quotient obtained by dividing $262.944 by the
initial public offering price of one share of First Premier common stock,
rounded to the nearest third decimal point. This formula is the exchange ratio.
The initial public offering price will be determined by First Premier's
underwriters in the public offering.
Premier shareholders should not send in their stock certificates until
requested to do so after the merger is completed.
REASONS FOR THE MERGER
The Board of Directors of Premier believes that the combined entity
will provide a larger capital base and diversified markets for Premier Bank. It
is anticipated that a public market for First Premier stock will exist,
providing liquidity to Premier shareholders. The Board of Directors of First
Premier believes that the merger will enable First
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<PAGE> 11
Premier to expand its operations by building upon Premier's existing
infrastructure, technology and outsourcing relationships.
THE SHAREHOLDERS MEETINGS
First Premier Shareholders. We will hold the First Premier special
meeting at _______________ St. Louis, Missouri, at ___ a.m. on _______, 1999. At
this meeting, we will ask First Premier shareholders:
1. To approve the merger agreement; and
2. To act on any other matters that may be put to a vote at the First
Premier special meeting.
Premier Shareholders. We will hold the Premier special meeting at 815
West Stadium Boulevard, Jefferson City, Missouri, at _____ p.m., on _________,
1999. At this meeting, we will ask Premier's shareholders:
1. To approve the merger agreement; and
2. To act on any other matters that may be put to a vote at the Premier
special meeting.
BOARD OF DIRECTORS RECOMMENDATIONS TO SHAREHOLDERS
First Premier Shareholders. The First Premier Board of Directors
believes that the merger is in the best interests of First Premier shareholders
and recommends that they vote "for" the proposal to approve the merger
agreement.
Premier Shareholders. The Premier Board of Directors believes that the
merger is fair to the Premier shareholders and in their best interests, and
unanimously recommends that they vote "for" the proposal to approve the merger
agreement.
RECORD DATE; VOTING POWER
First Premier Shareholders. You may vote at the First Premier special
meeting if you owned First Premier shares as of the close of business on
__________, 1999. You will have one vote for each share of First Premier common
stock you owned on that date.
Premier Shareholders. You may vote at the Premier special meeting if
you owned Premier shares as of the close of the business on _________, 1999. You
will have one vote for each share of Premier common stock you owned on
_________________, 1999.
VOTE REQUIRED
The merger must be approved by the holders of a majority of the shares
of First Premier common stock. The merger must be approved by the holders of at
least two-thirds of the holders of Premier common stock.
INTERESTS OF PERSONS INVOLVED IN THE MERGER THAT ARE DIFFERENT FROM YOURS
Certain executive officers and directors of First Premier and Premier
have interests in the merger agreement that are different from your interests
generally, including employment and bonus arrangements, as well as stock option
plans.
CONDITIONS TO THE MERGER
The completion of the merger depends on the fulfillment of a number of
conditions, including the following:
- approval of the merger by the shareholders of First Premier
and Premier;
- the Registration Statement of which this prospectus is a part,
being declared effective by the Securities and Exchange
Commission;
- receipt of the opinion of GRA Thompson, White & Company, P.C.,
as to the fairness from a financial point of view of the
merger to Premier shareholders;
- approval of appropriate regulatory agencies; and
- First Premier shall have entered into an underwriting
agreement providing for the firm commitment underwriting of
shares of its common stock having an aggregate gross purchase
price of at least $25,000,000.
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- the underwriters in the initial public offering shall have
given their assurances that they are ready, willing and able
to close on the initial public offering, and have the funds
available to pay for the shares sold in the initial public
offering.
TERMINATION OF THE MERGER AGREEMENT
The two companies can agree at any time to terminate the merger
agreement before completing the merger, even if the shareholders of both
companies have already voted to approve it.
Either company may also terminate the merger agreement if:
- the other party materially violates any of its representations
or warranties under the merger agreement and fails to cure
such violation;
- there is an inaccuracy in any representation or warranty of
the other party contained in the merger agreement which has
not been cured within 30 days after written notice of such
inaccuracy;
- any government body whose approval is necessary to complete
the merger makes a final decision not to approve the merger;
- the First Premier shareholders or the Premier shareholders do
not approve the merger agreement;
- the merger has not been consummated by September 30, 1999; or
- the conditions to the obligations of a party to complete the
merger cannot be satisfied by September 30, 1999.
The merger agreement can also be terminated by First Premier if
dissenter's rights are claimed by persons owning, in the aggregate, more than
10% of the issued and outstanding Premier stock. Premier may terminate the
merger agreement if, prior to the effective time of the merger agreement, GRA
Thompson White & Company, P.C. withdraws its fairness opinion or a third party
makes a bona fide acquisition proposal that Premier's Board of Directors
determines is more favorable to Premier shareholders than the merger agreement.
REGULATORY APPROVALS
We cannot complete the merger unless we obtain the approval of the
Federal Reserve Board and the Missouri Division of Finance. While we do not know
of any reason we would not obtain the regulatory approvals in a timely manner,
we cannot be certain when or if we will obtain them.
ACCOUNTING TREATMENT
The merger will be accounted for as if Premier had acquired First
Premier, the consolidated financial statements of Premier will become the
historical consolidated financial statements of First Premier and no goodwill
will be recorded as a result of the merger.
IMPORTANT FEDERAL TAX CONSEQUENCES
We expect that the two companies and their shareholders will not
recognize any gain or loss for U.S. federal income tax purposes in the merger,
except in connection with any cash that Premier shareholders receive instead of
fractional shares. This tax treatment will not apply to any shareholder who
exercises dissenter's rights. The tax treatment will depend on your specific
situation. You should consult your own tax advisor for a full understanding of
the merger's tax consequences.
DISSENTERS' RIGHTS
Premier. Missouri law permits Premier shareholders to dissent from the
merger and to have their shares appraised and the fair value paid to them in
cash. To exercise dissenters' rights, Premier shareholders must follow certain
procedures, including filing notices with Premier and either abstaining from
voting or voting against the merger. If you follow the required formalities,
your Premier shares will not become shares of First Premier common stock.
Instead, your only right
4
<PAGE> 13
will be to receive the fair value of your Premier shares in cash.
First Premier. Delaware law permits First Premier shareholders to
dissent from the merger and to have their shares appraised and the fair value
paid to them in cash. To exercise dissenters' rights, First Premier shareholders
must follow certain procedures, including filing notices with First Premier and
either abstaining from voting or voting against the merger.
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SUMMARY SELECTED CONSOLIDATED FINANCIAL DATA
The following tables set forth selected consolidated financial data of
Premier and First Premier for the periods indicated. Premier's selected
consolidated financial data as of December 31, 1997 and 1998 and for each of the
years ended December 31, 1996, 1997 and 1998 are derived from Premier's
consolidated financial statements, which have been audited by KPMG LLP,
independent auditors. First Premier's selected financial data as of December 31,
1998 and for the period from May 1, 1998 (Inception) to December 31, 1998 are
derived from First Premier's financial statements, which have been audited by
KPMG LLP, independent auditors. These selected consolidated financial data
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," First Premier's financial
statements and notes and Premier's consolidated financial statements and notes,
and financial and other information included in other parts of this Registration
Statement.
<TABLE>
<CAPTION>
PREMIER FIRST PREMIER
-------------------------------------------------------------- -------------------
PERIOD FROM
APRIL 1 -
DECEMBER 31, YEAR ENDED DECEMBER 31, PERIOD FROM MAY 1,
------------ ----------------------------------------- 1998 (INCEPTION) TO
1995 1996 1997 1998 DECEMBER 31, 1998
---- ---- ---- ---- -----------------
SUMMARY INCOME STATEMENT: (dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Interest income ....................... $ 515 $ 1,430 $ 2,175 $ 3,440 $ 21
Interest expense ...................... 302 883 1,309 2,090 --
-------- -------- -------- -------- --------
Net interest income ................... 213 547 866 1,350 21
Provision for loan losses ............. 64 80 112 292 --
-------- -------- -------- -------- --------
Net interest income after provision for
loan losses ........................ 149 467 754 1,058 21
Noninterest income .................... 12 47 90 169 --
Noninterest expense ................... 324 627 736 1,196 3,720
-------- -------- -------- -------- --------
Income (loss) before income tax
expense ............................ (163) (113) 108 31 (3,699)
Income tax expense .................... -- -- 11 9 --
-------- -------- -------- --------
Net income (loss) ..................... $ (163) $ (113) $ 97 $ 22 $ (3,699)
======== ======== ======== ======== ========
Basic earnings (loss) per share ....... $ (4.65) $ (3.54) $ 2.99 $ 0.55 $ (12.33)
======== ======== ======== ======== ========
Weighted average number of
common shares outstanding .......... 35,020 32,020 32,375 40,443
PERFORMANCE RATIOS:
Net interest margin(1) ................ 7.13% 3.05% 3.32% 3.23%
Efficiency ratio(2) ................... 140.00 122.02 87.25 97.48
Return on average assets .............. (2.04) (0.58) 0.34 0.05
Return on average equity .............. (6.91) (3.60) 3.15 0.53
</TABLE>
- ---------------------------
(1) Computed by dividing net interest income by average earning assets.
(2) Computed by dividing noninterest expense by the sum of net interest
income and noninterest income.
6
<PAGE> 15
<TABLE>
<CAPTION>
PREMIER FIRST PREMIER
---------------------------------------------------- -----------------
AT DECEMBER 31,
----------------------------------------------------
AT
1995 1996 1997 1998 DECEMBER 31, 1998
---- ---- ---- ---- -----------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
SUMMARY BALANCE SHEET DATA:
Investment securities ..................... $ 5,398 $ 6,256 $ 5,418 $ 6,478 $ --
Loans, net ................................ 6,264 15,206 23,342 41,171 --
Earning assets ............................ 13,808 23,543 31,060 53,170 712
Total assets .............................. 15,082 25,652 33,717 57,756 712
Noninterest-bearing deposits .............. 341 2,576 1,478 2,817 --
Total deposits ............................ 11,507 22,268 28,353 48,816 --
Federal Home Loan Bank advances ........... -- -- 940 3,445 --
Note payable .............................. 300 300 1,050 750 --
Shareholders' equity ...................... $ 3,191 $ 3,016 $ 3,222 $ 4,438 $ 708
======= ======= ======= ======= =======
ASSET QUALITY RATIOS:
Allowance for loan losses to total loans... 1.00% 0.78% 0.89% 1.05%
Non-performing loans to total loans ....... -- -- 0.69 0.23
Net charge-offs to average loans .......... -- 0.22 0.12 0.20
CAPITAL RATIOS:
Total capital to risk-weighted assets ..... 38.75% 18.63% 18.17% 11.62%
Tier 1 capital to risk-weighted assets .... 38.00 17.92 17.06 10.57
Tier 1 capital to average assets .......... 22.46 12.97 10.05 7.87
</TABLE>
7
<PAGE> 16
PRO FORMA FINANCIAL DATA
The unaudited pro forma financial data set forth below assumes that
First Premier was formed on January 1, 1998 and gives effect to the acquisition
of Premier as if the acquisition had occurred on January 1, 1998 and was
accounted for as a reverse acquisition. The pro forma financial data set forth
below does not include the effects of the First Premier initial public offering.
The pro forma financial data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations," First
Premier's financial statements and notes, Premier's consolidated financial
statements and notes, and financial and other information included elsewhere in
this prospectus. The pro forma results are not necessarily indicative of the
results that would have been achieved had the acquisition of Premier Bank
occurred on January 1, 1998, or of future operations.
<TABLE>
<CAPTION>
FIRST PREMIER PREMIER FIRST PREMIER
------------- ------- -------------
PERIOD FROM
MAY 1, 1998 YEAR ENDED
(INCEPTION) TO DECEMBER 31, PRO FORMA
DECEMBER 31, 1998 1998 CONSOLIDATED
----------------- ---- ------------
(in thousands, except per share data)
<S> <C> <C> <C>
SUMMARY INCOME STATEMENT:
Interest income .......................... $ 21 $ 3,440 $ 3,461
Interest expense ......................... -- 2,090 2,090
-------- -------- --------
Net interest income ...................... 21 1,350 1,371
Provision for loan losses ................ -- 292 292
-------- -------- --------
Net interest income after provision
for loan losses ....................... 21 1,058 1,079
Noninterest income ....................... -- 169 169
Noninterest expense ...................... 3,720 1,196 4,916
-------- -------- --------
Income (loss) before income tax expense... (3,699) 31 (3,668)
Income tax expense ....................... -- 9 9
-------- -------- --------
Net income (loss) ........................ $ (3,699) $ 22 $ (3,677)
======== ========
Basic earnings (loss) per share .......... $ (12.33) $ 0.55 $ (2.83)(1)
======== ======== ========
SUMMARY BALANCE SHEET DATA:
Investment securities .................... $ -- $ 6,478 $ 6,478
Loans, net ............................... -- 41,171 41,171
Earning assets ........................... 712 53,170 53,882
Total assets ............................. 712 57,756 58,468
Noninterest-bearing deposits ............. -- 2,817 2,817
Total deposits ........................... -- 48,816 48,816
Federal Home Loan Bank advances .......... -- 3,445 3,445
Note payable ............................. -- 750 750
Shareholders' equity ..................... 708 4,438 5,146
</TABLE>
- ------------------
(1) Pro forma earnings (loss) per share have been computed based on an
estimated 1,300,000 shares of common stock outstanding, which includes
1,000,000 shares of common stock to be issued to the shareholders of
Premier in connection with the merger and 300,000 shares of common stock of
First Premier which are currently outstanding.
8
<PAGE> 17
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the risks below and other information in this
prospectus before deciding to invest in our common stock. The risks and
uncertainties described below may not be the only ones we face. If any of the
following risks actually occur, our business, financial condition or results of
operations could be materially and adversely affected. In this event, the
trading price of our common stock could decline, and you may lose all or part of
your investment.
FIRST PREMIER HAS NO OPERATING HISTORY UPON WHICH TO BASE AN ESTIMATE
OF OUR FUTURE PERFORMANCE
We have no operating history on which to base any estimate of future
performance. We incorporated First Premier Financial Corporation on May 1, 1998
and have not engaged in any banking operations. Our prospects must be considered
in light of the risks, expenses and difficulties frequently encountered by
companies in their early stages of development. We are at risk of not
successfully addressing the following:
- expansion into our identified markets;
- building our customer base;
- developing and retaining customer loyalty;
- responding to competitive developments;
- attracting, retaining and motivating qualified management and
employees;
- maintaining efficient operations through outsourcing of back
office operations; and
- upgrading our technologies, products and services.
IF WE FAIL TO MANAGE GROWTH AS WE PURSUE OUR EXPANSION STRATEGY, IT
COULD NEGATIVELY AFFECT OUR OPERATIONS
Failure to manage our growth effectively or failure to attract and
retain qualified personnel could have a material adverse effect on our business,
future prospects, financial condition or results of operations, and could
adversely affect our ability to successfully implement our business strategy.
We intend to pursue an aggressive growth strategy and our results of
operations will be affected by our ability to:
- identify suitable markets;
- build our customer base;
- maintain credit quality;
- attract sufficient deposits to fund our anticipated loan
growth;
- attract qualified bank management in each of our targeted
markets;
- negotiate agreements with acceptable terms for the acquisition
of existing banks; and
- maintain adequate regulatory capital.
WE WILL HAVE BROAD DISCRETION IN USING THE PROCEEDS OF THE OFFERING
We will have broad discretion in the application of the net proceeds of
the initial public offering. The timing and specific application of the net
proceeds will remain in the sole discretion of our management. Upon completion
of the offering, we intend to contribute approximately $20 million of the net
proceeds to the capital of Premier Bank to support future growth of its
business, including the opening of a banking center in the St. Louis market, and
to use approximately $1 million to redeem the outstanding Series A Preferred
9
<PAGE> 18
Stock. The remainder of the net proceeds will be applied in the future as needed
to implement our business plan. We intend to accomplish our expansion primarily
through the opening of additional banking centers in our identified markets, but
our expansion in our target markets could include one or more acquisitions of
existing financial institutions. You will not have the opportunity to evaluate
the economic, financial and other relevant information which will be utilized by
us in determining the application of such proceeds.
OUR SUCCESS LARGELY DEPENDS UPON THE SKILL AND EXPERIENCE OF OUR SENIOR
MANAGEMENT TEAM
The success of our operations will depend upon the services of Richard
C. Jensen, our President and Chief Executive Officer, as well as other senior
officers and managers. The loss of any of these individuals could have a
material adverse effect on our business, future prospects, financial condition
or results of operations. We do not have key man life insurance with respect to
any of our officers. Our future success also depends on our ability to identify,
attract and retain qualified senior officers and other employees in our
identified markets.
WE WILL BE VERY DEPENDENT ON THIRD PARTY SUPPLIERS
We are dependent on third parties to provide a number of our core
processing functions. Our financial condition may suffer if the third parties we
depend on for outsourcing our back office operations, data processing and other
products and services either increase the cost of their services or fail to
maintain the operational integrity of their networks. As a result, the failure
of the systems of any of our third party providers could adversely affect our
business operations and financial condition.
OUR RESULTS OF OPERATIONS WILL BE SIGNIFICANTLY AFFECTED BY THE ABILITY
OF OUR BORROWERS TO REPAY THEIR LOANS
Lending money is an essential part of the banking business. However,
borrowers do not always repay their loans. The risk of non-payment is affected
by:
- credit risks of a particular borrower;
- changes in economic and industry conditions;
- the duration of the loan; and
- in the case of a collateralized loan, uncertainties as to the
future value of the collateral.
Generally, commercial/industrial, construction and commercial real
estate loans present a greater risk of non-payment by a borrower than other
types of loans. Our focus on making these types of loans, especially our
concentration in commercial real estate loans, will make us more susceptible to
the risk of non-payment than other banks with a more diversified loan portfolio.
OUR FINANCIAL CONDITION AND OTHER RESULTS OF OPERATIONS WOULD BE
ADVERSELY AFFECTED IF OUR ALLOWANCE FOR LOAN LOSSES IS NOT SUFFICIENT
TO ABSORB ACTUAL LOSSES
There is no precise method of predicting loan losses. We can give no
assurance that our allowance for loan losses will be sufficient to absorb actual
loan losses. Excess loan losses could have a material adverse effect on our
financial condition and results of operations. We will attempt to maintain an
appropriate allowance for loan losses to provide for potential losses in our
loan portfolio. We will periodically determine the amount of the allowance for
loan losses based upon consideration of several factors, including:
- an ongoing review of the quality, mix and size of the overall
loan portfolio;
10
<PAGE> 19
- historical loan loss experience;
- evaluation of non-performing loans;
- assessment of economic conditions and their effects on the
existing portfolio; and
- the amount and quality of collateral, including guarantees,
securing loans.
OUR FINANCIAL CONDITION MAY BE ADVERSELY AFFECTED BY OUR INABILITY TO
ATTRACT SUFFICIENT DEPOSITS TO FUND OUR ANTICIPATED LOAN GROWTH
We anticipate that we will need to attract significant levels of
deposits to fund our anticipated loan growth. Our ability to attract and
maintain such deposit levels will depend on our ability to attract new deposit
customers. To the extent that funds generated by our deposit customers are
insufficient to fund our loan growth, we may need to raise additional funds
through public or private financings. We can give no assurance that we would be
able to obtain these funds on terms that are favorable to us.
WE MAY NOT BE ABLE TO EXPAND THROUGH BRANCHING OR FIND SUITABLE
ACQUISITION CANDIDATES
We can give no assurance that we will be able to expand our existing
market presence or successfully enter new markets. In entering new markets, we
may encounter competitors with greater financial and operational resources. In
our attempt to establish new branches of Premier Bank, we may be unable to find
attractive locations, negotiate favorable lease terms, attract customers and may
encounter additional problems experienced by new branches.
Although we intend to expand primarily through selective branch
openings, we intend to evaluate potential acquisitions that would complement or
expand our business. In doing so, we expect to compete with other potential
bidders, many of which may have greater financial resources than we have.
Failure to find suitable acquisition candidates or expand our market presence
would adversely affect our ability to successfully implement our business
strategy.
EVEN IF WE ARE ABLE TO FIND SUITABLE ACQUISITION CANDIDATES, WE MAY NOT
BE ABLE TO INTEGRATE ACQUISITIONS WITH OUR EXISTING OPERATIONS
The process of opening new bank locations and evaluating, negotiating
and integrating acquisition transactions will divert management time and
resources. We can give no assurance that we will be able to integrate
successfully or operate profitably any newly-established banking center or
acquired financial institution. We may experience disruption and incur
unexpected expenses in integrating these acquisitions. Failure to successfully
integrate these acquisitions could negatively affect our operations.
OUR BUSINESS COULD BE ADVERSELY AFFECTED IF WE ARE UNABLE TO OBTAIN
REGULATORY APPROVALS IN A TIMELY MANNER
The establishment of branches or the acquisitions of banks in our
identified markets and other market areas will be subject to our receiving the
necessary regulatory approvals. Premier Bank will apply for approval to open a
branch in the St. Louis market. Failure to obtain this approval as well as
future regulatory approvals in a timely manner could have a material adverse
effect on our business, future prospects, financial condition or results of
operations.
11
<PAGE> 20
WE COULD BE ADVERSELY AFFECTED BY CHANGES IN THE LAW ESPECIALLY CHANGES
DEREGULATING THE BANKING INDUSTRY
We will operate in a highly regulated environment and will be subject
to supervision and regulation by several governmental regulatory agencies,
including the Federal Reserve Board, the FDIC, and the Missouri Division of
Finance. These regulations are generally intended to provide protection for
depositors and customers rather than for the benefit of investors. We will be
subject to changes in federal and state law, regulations, governmental policies,
income tax laws and accounting principles. Deregulation could adversely affect
the banking industry as a whole, including our operations. The effects of these
changes could adversely affect our future operations.
INTEREST RATE VOLATILITY COULD SIGNIFICANTLY HARM OUR BUSINESS
Our results of operations will be materially affected by the monetary
and fiscal policies of the federal government and the regulatory policies of
governmental authorities. Our profitability will be dependent to a large extent
on our net interest income, which is the difference between our income on
interest-earning assets, such as loans, and our expense on interest-bearing
liabilities, such as deposits. A change in market interest rates could adversely
affect our earnings. Consequently, we will be particularly sensitive to interest
rate fluctuations. As we plan to hold most of the loans we originate internally,
we will face a greater risk of rapid changes in interest rates than banks which
sell their loans in secondary markets.
WE WILL BE COMPETING WITH MANY LARGER FINANCIAL INSTITUTIONS WHICH HAVE
FAR GREATER FINANCIAL RESOURCES THAN WE HAVE
Competition among financial institutions in the state of Missouri and
our identified markets is intense. We will compete with other bank holding
companies, state and national commercial banks, savings and loan associations,
consumer finance companies, credit unions, securities brokerages, insurance
companies, mortgage banking companies, money market mutual funds, asset-based
non-bank lenders and other financial institutions. Many of these competitors
have greater financial resources and lending limits, larger branch networks, and
are able to offer a broader range of products and services than we can. Failure
to compete effectively for deposit, loan and other banking customers in our
identified markets could have a material adverse effect on our business, future
prospects, financial condition or results of operations.
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, YOU MAY NOT BE ABLE
TO SELL YOUR SHARES AS QUICKLY AS YOU MAY LIKE
There is no established public market for our common stock. We can not
guarantee:
- that any market for our common stock will develop;
- that any market for our common stock that develops will be
liquid;
- that you will be able to sell the common stock you receive in
the merger; or
- that you will be able to sell the common stock you receive in
the merger at any particular price.
Although we expect to have our common stock approved for quotation on
The Nasdaq National Market, an active trading market may not develop or continue
after the initial public offering.
12
<PAGE> 21
FUTURE SALES OF OUR COMMON STOCK COULD DEPRESS THE PRICE OF OUR COMMON
STOCK
Sales of a substantial number of shares of common stock in the public
market following the initial public offering, or the perception that sales could
occur, could adversely affect the market price for our common stock. After the
offering, we will have 4,300,000 shares of common stock outstanding (assuming no
exercise of the underwriters' over-allotment option and assuming that 1,000,000
shares will be issued in the merger). In addition, we have a stock option plan
under which there will be options to purchase 500,000 shares of our common stock
as well as outstanding warrants to purchase 425,798 shares of common stock. Of
the 4,300,000 shares which will be outstanding after the offering, the 3,000,000
shares being sold in the initial public offering will be eligible for sale in
the open market without restriction, except for shares purchased by "affiliates"
of First Premier. 300,000 shares of common stock will be "restricted securities"
as that term is defined in Rule 144 of the Securities Act of 1933 and will
become eligible for sale pursuant to Rule 144 approximately 90 days after the
closing of the merger. Our officers, directors and some of our existing
shareholders, who hold an aggregate of 200,000 shares of common stock, have
agreed not to sell any of their shares for 180 days following the closing of the
offering without the prior written consent of the underwriters. Following the
expiration of this 180-day lockup period, these shares will be eligible for sale
in the public market subject to compliance with certain volume limitations and
other conditions of Rule 144. The market price of the common stock could be
materially adversely affected by the sale or availability for sale of shares now
held by our existing shareholders or of shares which may be issued under our
stock option plan.
In addition, Premier Bank and its officers and directors have agreed
not to sell any of their shares for 180 days following the offering. Following
the expiration of this 180-day lock-up period, these shares will be eligible for
sale in the public market subject to compliance with certain volume limitations
and other conditions of Rule 145 of the Securities Act of 1933.
OUR SUCCESS WILL BE DEPENDENT UPON ECONOMIC CONDITIONS IN MISSOURI AND
THE SURROUNDING STATES
Our success will significantly depend upon economic conditions in
Missouri and the markets in which we will operate. A prolonged economic downturn
or recession in Missouri or in any of our identified markets, could cause our
non-performing assets to increase, which would cause operating losses, impaired
liquidity and the erosion of capital. Such an economic dislocation or recession
could result from a variety of causes, including a prolonged downturn in various
industries upon which these markets depend, or natural disasters such as floods,
tornadoes or earthquakes. Future adverse changes in the Missouri economy or the
local economies of our identified markets could have a material adverse effect
on our business, future prospects, financial condition or results of operations.
WE DO NOT EXPECT TO PAY DIVIDENDS ON OUR COMMON STOCK FOR THE
FORESEEABLE FUTURE
We intend to retain any earnings to enhance Premier Bank's capital
structure for the foreseeable future. As a holding company, First Premier will
have no significant independent sources of revenue. The principal source of
funds to pay dividends on our common stock, to service indebtedness and to fund
operations will be cash dividends and other payments that we receive from
Premier Bank. Accordingly, any dividends paid to our shareholders will depend on
Premier Bank's earnings, capital requirements, financial conditions and other
factors considered relevant by First Premier's board of directors.
13
<PAGE> 22
WE WILL BE RESTRICTED IN OUR ABILITY TO PAY DIVIDENDS TO OUR
SHAREHOLDERS
Premier Bank, which is a Missouri state-chartered bank, is restricted
in its ability to pay dividends under state banking laws and regulations. As of
March 31, 1999, Premier Bank was unable to pay cash dividends on its common
stock without regulatory approval. In addition, sound banking practices require
the maintenance of adequate levels of capital. Federal regulatory authorities
have adopted standards for the maintenance of capital of banks, and adherence to
such standards may further limit the ability of banks to pay dividends.
Therefore, any money which is used to provide additional capital for Premier
Bank will be difficult for the holding company to recapture for its own
purposes.
OUR ABILITY TO EFFECTIVELY TARGET THE INTERNET BANKING MARKET WILL
LARGELY DEPEND ON OUR ABILITY TO IMPLEMENT THESE SERVICES AND REMAIN
COMPETITIVE WITH OTHER BANKS OFFERING SUCH SERVICES
The success of our Internet banking products and services will depend
in large part on our ability to implement and maintain the appropriate
technology. This includes finding a competitive provider of these services as
well as our ability to remain competitive with banks that are already using the
Internet. If we are unable to implement and maintain the appropriate technology
efficiently, it could affect our results of operations and our ability to
compete with financial institutions and our results of operations. In addition,
as we will specifically target those businesses which will be more likely to use
the Internet for their banking needs, the success of our Internet banking focus
will be linked to the overall success of the Internet.
IT IS POSSIBLE THAT OUR COMPUTER SYSTEMS, OR THOSE OF OUR DATA
PROCESSING VENDOR, WILL FAIL TO OPERATE PROPERLY BEGINNING JANUARY 1,
2000
As the year 2000 approaches, an important business issue has emerged
regarding existing application software programs and operating systems. Many
existing application software and operating products were designed to
accommodate only a two-digit year. For example, "99" is stored on the system to
represent 1999. As a result, any computer programs or equipment that are date
dependent may recognize a date using "00" as the year 1900 rather than 2000. The
business of many of our customers may be negatively affected by the Year 2000
issue, and any financial difficulties incurred by our customers in connection
with the century change could negatively affect such customer's ability to repay
loans. External factors, including electric and telephone service, are beyond
our control and the failure of such systems could have a material adverse effect
on us, our customers and third parties on whom we will rely for our day-to-day
operations. Premier Bank uses Computer Services Incorporated, a third-party
vendor, to provide its primary banking applications, including core processing
systems. In the event that Premier, CSI or its other significant vendors or loan
customers do not successfully and timely achieve Year 2000 compliance, our
business, future prospects, financial condition or results of operations could
be materially adversely affected.
THE MARKET PRICE OF OUR COMMON STOCK AFTER THE INITIAL PUBLIC OFFERING
MAY BE INFLUENCED BY A NUMBER OF FACTORS WHICH ARE BEYOND OUR CONTROL
If a market develops for our common stock after the initial public
offering, the price for the common stock will be determined in the market and
may be influenced by a number of factors beyond our control. These factors
include:
- depth and liquidity of the market;
- investor perceptions of our company;
- changes in conditions or trends in the banking industry or in
the industries of our significant customers;
14
<PAGE> 23
- publicly traded comparable companies; and
- general economic and political conditions.
OUR RESULTS MAY FLUCTUATE FROM QUARTER TO QUARTER WHICH MAY AFFECT THE
PRICE OF OUR COMMON STOCK
The trading price of our common stock could be subject to significant
fluctuations in response to quarterly variations in our actual or anticipated
operating results, changes in general market conditions and other factors. In
particular, our quarterly revenues will be difficult to forecast and our
expected expense levels are based in part on our expansion strategy in
anticipation of loan growth and revenues generated from the new banking centers.
If our revenue levels are below expectations, we may be unable or unwilling to
reduce expenses proportionately and our operating results would likely be
adversely affected. Therefore, prior to the full implementation of our business
strategy, we believe that period to period comparisons of our results may not be
as meaningful as those of a company with a history of operations and should not
be relied upon as indications of future performance. It is possible that in
future quarters our operating results will be below the expectations of public
market analysts and investors. If this happens, the market price of our common
stock would likely be negatively affected. In recent years, significant price
and volume fluctuations have occurred in the stock prices of companies that
often have been unrelated or disproportionate to their operating performance. We
can give no assurance that the market price of our common stock will not decline
below the public offering price.
OUR CERTIFICATE OF INCORPORATION CONTAINS PROVISIONS WHICH COULD SERVE
TO DETER OR PREVENT TAKEOVER ATTEMPTS BY A POTENTIAL PURCHASER OF
SHARES OF OUR COMMON STOCK WHO WOULD BE WILLING TO PAY A PREMIUM OVER
MARKET PRICE
Our Certificate of Incorporation contains provisions which give the
board of directors the ability to deter or prevent a merger with a third party,
even if the owners of a majority of the common stock were to favor such a
transaction. Our Certificate of Incorporation also authorizes the board of
directors to issue a series of preferred stock without shareholder action. The
issuance of preferred stock could discourage a third party from attempting to
acquire, or make it more difficult for a third party to acquire, a controlling
interest in our company, and could adversely affect the voting power or other
rights of holders of the common stock. In addition, our Certificate of
Incorporation establishes a staggered board of directors, which means that only
one-third of the members of our board of directors is elected each year and each
director serves for a term of three years. These provisions make it more
difficult for a third party to achieve a change in control in our company
without approval of the board of directors. As a result, you may be deprived of
opportunities to sell some or all of your shares at prices that represent a
premium over market prices.
15
<PAGE> 24
THE SPECIAL MEETING OF FIRST PREMIER SHAREHOLDERS
GENERAL
This Proxy Statement/Prospectus is first being furnished to First
Premier shareholders on or about __________, 1999, together with the Notice of
Special Meeting and a form of proxy that is solicited by the First Premier Board
for use at the special meeting and at any adjournments or postponements thereof.
The special meeting will be held at the offices of First Premier located at
________________________, Missouri, on _______________, 1999, at _______ a.m.
local time.
MATTERS TO BE CONSIDERED
At the special meeting, First Premier shareholders will be asked to
consider and vote upon a proposal to approve the Agreement and Plan of Merger
dated as of May 6, 1999, by and between First Premier and Premier, pursuant to
which Premier will be merged with and into First Premier.
VOTE REQUIRED
Under Delaware law, approval of the merger agreement requires the
affirmative vote of the holders of a majority of the outstanding shares of First
Premier common stock. On the record date, there were approximately 31 holders of
record of First Premier common stock. On such date, the directors and officers
of First Premier beneficially owned, and expressed their intent to vote in favor
of the merger, a total of approximately 38.6% of the outstanding shares of First
Premier common stock. At the date of this Proxy Statement/Prospectus, neither
Premier nor any of its affiliates owned any of the outstanding shares of First
Premier common stock.
VOTING OF PROXIES
Shares of First Premier common stock represented by properly executed
proxies received at or prior to the special meeting will be voted at the special
meeting in the manner specified by the holders of such shares. Properly executed
proxies which do not contain voting instructions will be voted FOR approval and
adoption of the merger agreement. Any shareholder present in person or by proxy
at the First Premier special meeting who abstains from voting will be counted
for purposes of determining whether a quorum exists. If any other matters are
properly presented at the special meeting, the person or persons named in the
form of proxy enclosed with this Proxy Statement/Prospectus and acting
thereunder will have discretion to vote on such matters in accordance with their
best judgment, unless the proxy indicates otherwise. First Premier has no
knowledge of any matters to be presented at the special meeting, other than the
matters described in this Proxy Statement/Prospectus.
VOTING AND REVOCATION OF PROXIES
The grant of a proxy on the enclosed form of proxy does not preclude a
First Premier shareholder from voting in person or otherwise revoking a proxy. A
First Premier shareholder may revoke a proxy at any time prior to its exercise
by delivering to the Corporate Secretary of First Premier a duly executed
revocation or proxy bearing a later date, or by voting in person at the special
meeting. All written notices of revocation and other communications with respect
to the revocation of Premier proxies should be addressed to First Premier
Financial Corporation, 13004 Starbuck Road, St. Louis, Missouri 63141,
attention: Corporate Secretary. Attendance at the First Premier special meeting
will not, in and of itself, constitute revocation of a proxy.
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<PAGE> 25
SOLICITATION OF PROXIES
Solicitation of proxies may be made in person or by mail, telephone or
facsimile, or other form of communication by directors, officers and employees
of First Premier, who will not be specially compensated for such solicitation.
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement/Prospectus and, if given or
made, such information or representation should not be relied upon as having
been authorized by First Premier, Premier or any other person. The delivery of
this Proxy Statement/Prospectus shall not, under any circumstances, create any
implication that there has been no change in the business or affairs of First
Premier or Premier since the date of the Proxy Statement/Prospectus.
First Premier will bear all costs of solicitation of proxies from First
Premier shareholders.
RECORD DATE AND VOTING RIGHTS
The First Premier Board has fixed the close of business on
______________, 1999 as the record date ("the Record Date") for the
determination of the holders of First Premier common stock entitled to receive
notice of and to vote at the special meeting. At the close of business on the
Record Date, there were 300,000 shares of First Premier common stock outstanding
and entitled to vote, with each share entitled to one vote.
BECAUSE APPROVAL OF THE MERGER AGREEMENT REQUIRES THE AFFIRMATIVE VOTE
OF A MAJORITY OF THE ISSUED AND OUTSTANDING SHARES OF FIRST PREMIER COMMON STOCK
ENTITLED TO VOTE AT THE SPECIAL MEETING, ABSTENTIONS WILL HAVE THE SAME EFFECT
AS NEGATIVE VOTES. ACCORDINGLY, THE FIRST PREMIER BOARD URGES ALL FIRST PREMIER
SHAREHOLDERS TO COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
RECOMMENDATION OF THE FIRST PREMIER BOARD
THE FIRST PREMIER BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREBY, BELIEVES THAT THE MERGER IS IN THE
BEST INTERESTS OF FIRST PREMIER AND THE FIRST PREMIER SHAREHOLDERS AND
RECOMMENDS THAT FIRST PREMIER SHAREHOLDERS VOTE "FOR" APPROVAL OF THE MERGER
AGREEMENT.
In reaching its decision to approve the merger agreement and the
transactions contemplated thereby, the First Premier board, among other things,
consulted with its legal advisors regarding the legal terms of the merger
agreement.
First Premier shareholders should note that certain members of First
Premier management and directors have certain interests in and may derive
certain benefits as a result of the merger in addition to their interests as
First Premier shareholders.
FIRST PREMIER SHAREHOLDERS SHOULD NOT SEND
ANY STOCK CERTIFICATES WITH THEIR PROXY CARDS.
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<PAGE> 26
THE SPECIAL MEETING OF PREMIER SHAREHOLDERS
GENERAL
This Proxy Statement/Prospectus is first being furnished to Premier
shareholders on or about __________, 1999, together with the Notice of Special
Meeting and a form of proxy that is solicited by the Premier Board for use at
the special meeting and at any adjournments or postponements thereof. The
special meeting will be held at the offices of Premier located at 815 West
Stadium Boulevard, Jefferson City, Missouri, on _______________, 1999, at
_______ p.m. local time.
MATTERS TO BE CONSIDERED
At the special meeting, Premier shareholders will be asked to consider
and vote upon a proposal to approve the Agreement and Plan of Merger dated as of
May 6, 1999, by and between First Premier and Premier, pursuant to which Premier
will be merged with and into First Premier.
VOTE REQUIRED
Under the Missouri Revised Statutes, approval of the merger agreement
requires the affirmative vote of at least two-thirds of the outstanding shares
of Premier common stock. On the record date, there were approximately 45 holders
of record of Premier common stock. On such date, the directors and officers of
Premier beneficially owned, and expressed their intent to vote in favor of the
merger, a total of approximately 47.17% of the outstanding shares of Premier
common stock. At the date of this Proxy Statement/Prospectus, neither First
Premier nor any of its affiliates owned any of the outstanding shares of Premier
common stock.
VOTING OF PROXIES
Shares of Premier common stock represented by properly executed proxies
received at or prior to the special meeting will be voted at the special meeting
in the manner specified by the holders of such shares. Properly executed proxies
which do not contain voting instructions will be voted FOR approval and adoption
of the merger agreement. Any shareholder present in person or by proxy at the
Premier special meeting who abstains from voting will be counted for purposes of
determining whether a quorum exists. If any other matters are properly presented
at the special meeting, the person or persons named in the form of proxy
enclosed with this Proxy Statement/Prospectus and acting thereunder will have
discretion to vote on such matters in accordance with their best judgment,
unless the proxy indicates otherwise. Premier has no knowledge of any matters to
be presented at the special meeting, other than the matters described in this
Proxy Statement/Prospectus.
VOTING AND REVOCATION OF PROXIES
The grant of a proxy on the enclosed form of proxy does not preclude a
Premier shareholder from voting in person or otherwise revoking a proxy. A
Premier shareholder may revoke a proxy at any time prior to its exercise by
delivering to the Corporate Secretary of Premier a duly executed revocation or
proxy bearing a later date, or by voting in person at the special meeting. All
written notices of revocation and other communications with respect to the
revocation of Premier proxies should be addressed to Premier Bancshares, Inc.,
815 Stadium Boulevard, Jefferson City, Missouri 65110, attention: Corporate
Secretary. Attendance at the Premier special meeting will not, in and of itself,
constitute revocation of a proxy.
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<PAGE> 27
SOLICITATION OF PROXIES
Solicitation of proxies may be made in person or by mail, telephone or
facsimile, or other form of communication by directors, officers and employees
of Premier, who will not be specially compensated for such solicitation.
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement/Prospectus and, if given or
made, such information or representation should not be relied upon as having
been authorized by First Premier, Premier or any other person. The delivery of
this Proxy Statement/Prospectus shall not, under any circumstances, create any
implication that there has been no change in the business or affairs of First
Premier or Premier since the date of the Proxy Statement/Prospectus.
Premier will bear all costs of solicitation of proxies from Premier
shareholders, except for the costs incurred in printing this Proxy
Statement/Prospectus and related materials, of which First Premier has agreed to
bear and pay all of such costs.
RECORD DATE AND VOTING RIGHTS
The Premier Board has fixed the close of business on ______________,
1999 as the record date ("the Record Date") for the determination of the holders
of Premier common stock entitled to receive notice of and to vote at the special
meeting. At the close of business on the Record Date, there were 41,834 shares
of Premier common stock outstanding and entitled to vote, with each share
entitled to one vote.
BECAUSE APPROVAL OF THE MERGER AGREEMENT REQUIRES THE AFFIRMATIVE VOTE
OF A TWO-THIRDS OF THE ISSUED AND OUTSTANDING SHARES OF PREMIER COMMON STOCK
ENTITLED TO VOTE AT THE SPECIAL MEETING, ABSTENTIONS WILL HAVE THE SAME EFFECT
AS NEGATIVE VOTES. ACCORDINGLY, THE PREMIER BOARD URGES ALL PREMIER SHAREHOLDERS
TO COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
RECOMMENDATION OF THE PREMIER BOARD
THE PREMIER BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, BELIEVES THAT THE MERGER IS IN THE BEST
INTERESTS OF PREMIER AND THE PREMIER SHAREHOLDERS AND RECOMMENDS THAT PREMIER
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT.
In reaching its decision to approve the merger agreement and the
transactions contemplated thereby, the Premier board, among other things,
consulted with its legal advisors regarding the legal terms of the merger
agreement and its financial advisor, GRA Thompson White & Company, P.C., as to
the financial fairness of the consideration Premier shareholders are to receive
in the merger.
Premier shareholders should note that certain members of Premier
management and directors have certain interests in and may derive certain
benefits as a result of the merger in addition to their interests as Premier
shareholders.
PREMIER SHAREHOLDERS SHOULD NOT SEND ANY
STOCK CERTIFICATES WITH THEIR PROXY CARDS.
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<PAGE> 28
THE MERGER
The following is a summary of certain terms and provisions of the
merger agreement. This summary is qualified in its entirety by reference to the
merger agreement, which is included as Appendix A to this Proxy Statement/
Prospectus. All shareholders are urged to read carefully the merger agreement
and the other appendices to this Proxy Statement/Prospectus. The terms "First
Premier," "we," "our" or "us" refer to First Premier Financial Corporation,
unless the context indicates a different meaning. The terms "Premier" and
"Premier Bank" refer to Premier Bancshares, Inc. and its wholly-owned banking
subsidiary, Premier Bank.
FORMATION OF FIRST PREMIER AND THE INITIAL PUBLIC OFFERING
We formed First Premier to create a multi-market bank serving business
customers who are dissatisfied with the impersonal service delivered by
super-regional and national banks. Our strategy is to capitalize on the
opportunities created by widespread consolidation in the banking industry. We
believe we have a significant opportunity to attract and maintain targeted
banking customers within our identified markets. We will offer a broad range of
banking products and services to small and medium-sized businesses, selected
real estate developers and the principals of these businesses. To accelerate the
implementation of our business plan, we have agreed to acquire Premier and its
wholly-owned subsidiary, Premier Bank, and immediately after the closing of the
merger, First Premier will close on an initial public offering of 3,000,000
shares of its common stock. An additional 450,000 shares of First Premier common
stock will be issued if the underwriters exercise their over-allotment option.
The proceeds of the offering will be used to support future growth of Premier
Bank and to implement First Premier's business plan.
DESCRIPTION OF THE MERGER
On May 6, 1999, First Premier and Premier entered into a merger
agreement which will cause Premier to be merged with and into First Premier.
First Premier will be the surviving entity in the merger. By virtue of the
merger, Premier Bank will become a wholly-owned banking subsidiary of First
Premier.
The aggregate purchase price for Premier will be $11 million in First
Premier common stock. At the effective time of the merger, each outstanding
share of Premier's capital stock (other than shares held by holders who perfect
and do not withdraw their dissenters' rights) will be converted into and
exchanged for the right to receive that number of shares of First Premier common
stock equal to the quotient obtained by dividing $262.944 by the initial public
offering price of one share of First Premier common stock, rounded to the
nearest third decimal point. This is the exchange ratio.
The value of the consideration to be paid to Premier shareholders in
the merger was arrived at as a result of First Premier's due diligence review of
Premier's financial condition and negotiations between management of First
Premier and Premier. At an assumed initial public offering price of $11.00 for
the common stock (the mid-point of the estimated range in First Premier's
initial public offering) and assuming an aggregate of 41,834 shares of Premier
stock issued and outstanding as of the effective time of the merger, each share
of Premier stock would be convertible into 23.904 shares of common stock, and an
aggregate of 1,000,000 shares of common stock would be issuable upon conversion
and exchange of all shares of Premier stock. Cash will be paid in lieu of
fractional shares. If First Premier changes the number of shares of common stock
issued and outstanding prior to the effective time of the merger as a result of
a stock split, stock dividend, recapitalization, reclassification, or similar
transaction and the record date (in the case of a stock dividend) or the
effective date (in the case of a stock split or similar recapitalization for
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<PAGE> 29
which a record date is not established) will be prior to the effective time of
the merger, the exchange ratio will be proportionately adjusted.
First Premier's net tangible book value at December 31, 1998 was
approximately $(291,000) or $(0.97) per share of common stock. Net tangible
book value per share represents the amount of our total assets less intangible
assets and total liabilities, divided by the total number of shares of common
stock outstanding. After giving effect to:
- the sale of 3,000,000 shares of common stock in the initial public
offering at an assumed initial public offering price of $11.00 per
share and the use of proceeds from the offering; and
- the issuance of an estimated 1,000,000 shares in connection with the
acquisition of Premier Bank
our pro forma net tangible book value at December 31, 1998 would have been $34.3
million or $7.99 per share of common stock. This represents an immediate
increase in such pro forma net tangible book value of $8.96 per share to First
Premier shareholders, an immediate increase in the pro forma net tangible book
value of $3.55 per share to shareholders of Premier and an immediate dilution in
the pro forma net tangible book value of $3.01 per share to investors purchasing
shares of common stock in the offering.
To induce Premier to enter into the merger agreement, Premier
shareholders are entitled to the following:
- In addition to any shares received in the merger, all Premier
shareholders will not be limited in the number of shares which they
may purchase in First Premier's initial public offering. Premier
shareholders' participation in the initial public offering is,
however, subject to any required regulatory approvals for purchases
that result in a Premier shareholder owning more than ten percent
(10%) of the total outstanding shares of First Premier;
- Upon completion of the initial offering, First Premier will grant to
each Premier shareholder (other than Bruce W. Wiley) an option to
purchase shares of First Premier at the initial public offering price.
These options will be granted on the terms and conditions as more
fully described in the merger agreement. The number of shares subject
to these options will not exceed 40,000. The number of shares granted
under each Premier shareholder's option will be determined on a pro
rata basis, so that each Premier shareholder will receive an option to
purchase one share of First Premier for each share of Premier owned by
such shareholder prior to the merger;
- For a period of forty-eight (48) months after the closing of the
initial public offering, if any additional options are granted to any
Premier shareholder who serves as a First Premier advisory director or
to any other non-employee Premier shareholder, then options will be
granted to each Premier shareholder on a pro rata basis. This means
that each Premier shareholder will receive an option to purchase
additional shares in the same proportion as the amount of option
shares granted to each advisory director or non-employee Premier
shareholder relative to the amount of shares owned by such advisory
director or non-employee shareholder at the time of the merger.
For example, if an advisory director or any non-employee Premier
shareholder owned 3,000 shares of Premier at the effective time of the
merger and is granted options to purchase 1,000 shares, then each
Premier shareholder will receive an option for one-third (i.e.,
1,000 / 3,000) of the amount of shares owned by such shareholder at
the time of the merger. Therefore, pursuant to the example above, a
Premier shareholder who owns 1,000 shares of Premier would receive
options to purchase 333 shares of First Premier.
EFFECTIVE TIME AND CLOSING OF THE MERGER
The effective time of the merger will occur on the date and at the time
the parties receive certification of the merger from the Delaware Secretary of
State (the "Effective Time"). Subject to the terms and conditions of the merger
agreement, First Premier and Premier have agreed to use their best efforts to
cause the Effective Time to occur on the date of the closing. The parties have
further agreed that the merger closing will occur immediately before the closing
of the First Premier initial public offering. The closing will take place at a
time, place and date specified by the parties as they, acting through their
chief executive officers or chief financial officers, may agree.
EXCHANGE OF CERTIFICATES
At the Effective Time, First Premier shall deposit with UMB Bank, N.A.,
Kansas City, Missouri (the "Exchange Agent") certificates evidencing the shares
of First Premier common stock to be exchanged for
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<PAGE> 30
Premier common stock pursuant to the terms of the merger agreement. Promptly
after the Effective Time, the Exchange Agent shall mail transmittal materials to
each record holder of Premier common stock. Risk of loss to the certificates
shall remain with the holder until proper delivery of such certificates to the
Exchange Agent.
Premier shareholders should not surrender their certificates for
exchange until they receive the letter of transmittal and instructions. After
the Effective Time, each holder of shares of Premier common stock issued and
outstanding at the Effective Time shall surrender the certificate or
certificates representing his or her shares to the Exchange Agent. Upon
surrender of one or more certificates for Premier common stock, each
surrendering Premier shareholder shall promptly receive the consideration they
are entitled to under the merger agreement, together with all undelivered
dividends or distributions in respect of such shares without interest. As
provided in the merger agreement, each record holder of Premier common stock
shall also receive cash in lieu of any fractional share of First Premier common
stock to which such shareholder may be otherwise entitled, without interest.
First Premier shall not be obligated to deliver the consideration to
which any former holder of Premier common stock is entitled until such holder
surrenders his or her certificate or certificates representing the shares for
exchange. The certificate or certificates so surrendered shall be duly endorsed
as the Exchange Agent may require. Neither First Premier nor the Exchange Agent
shall be liable to a holder of Premier common stock for any amounts paid or
property delivered in good faith to a public official pursuant to any applicable
abandoned property law. In the event that any shareholder of Premier is unable
to surrender a certificate because it is lost or destroyed, the Exchange Agent
may make a distribution to that shareholder upon receipt of such affidavits and
other agreements as are customary in such circumstances.
After the Effective Time (and prior to the surrender of certificates of
Premier common stock), record holders of certificates that represented Premier
common stock immediately prior to the Effective Time will have no rights with
respect to such certificates other than the right to surrender such certificates
and receive the shares of First Premier common stock to which such holder is
entitled pursuant to the merger agreement, together with a cash payment in lieu
of fractional shares, without interest.
First Premier shall pay any dividends or make any other distributions
with a record date prior to the Effective Time which have been declared or made
by Premier in respect of such shares of Premier common stock which remain unpaid
at the Effective Time. Whenever a dividend or other distribution is declared by
First Premier on the First Premier common stock, the record date for which is on
or after the Effective Time, the declaration shall include dividends or other
distributions on all shares issuable pursuant to the merger agreement. However,
beginning 30 days after the Effective Time, no dividend or other distribution
payable to the holders of record of First Premier common stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
unsurrendered Premier certificate until such holder surrenders such Premier
certificate in accordance with the terms of the merger agreement.
Upon surrender of such Premier common stock certificate, both the First
Premier common stock certificate (together with all such undelivered dividends
or other distributions without interest) and any undelivered dividends and cash
payments to be paid for fractional share interests (without interest) shall be
delivered and paid with respect to each share represented by such surrendered
certificate. Any portion of the consideration which had been made payable to the
Exchange Agent that remain unclaimed by the shareholders of Premier for six (6)
months after the Effective Time shall be paid to First Premier. Any shareholders
of Premier who have not surrendered their Premier certificates within six months
after the Effective Time shall thereafter look only to First Premier for payment
of the consideration they are entitled to under the merger agreement, together
with cash in lieu of fractional shares and unpaid dividends and distributions to
which such shareholder would be entitled, in each case, without any interest.
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<PAGE> 31
BACKGROUND OF AND REASONS FOR THE MERGER
Background of the Merger
In October 1998, Richard C. Jensen, President and Chief Executive
Officer of First Premier, met with Bruce W. Wiley, President and Chief Executive
Officer of Premier, to discuss a possible merger transaction. To accelerate the
implementation of First Premier's business plan, First Premier agreed, in May
1999, to acquire Premier and its wholly-owned subsidiary, Premier Bank. Premier
Bank offers First Premier an existing charter as well as banking centers in two
of First Premier's five initially-targeted markets. Premier Bank is currently
operating its business in a manner similar to First Premier's business plan,
targeting small and medium-sized businesses and providing a high level of
service. We will use the acquisition of Premier Bank as a platform to expand our
operations by building upon Premier Bank's existing infrastructure, core
processing and outsourcing relationships. We expect to close the acquisition
of Premier Bank immediately prior to the closing of the offering.
Premier Reasons for the Merger
In reaching its conclusion to approve the merger, the Premier Board
considered its fiduciary duties to act on an informed basis in good faith
without conflict of interest and in a belief that the merger is in the best
interests of Premier and the Premier shareholders. The Premier Board considered
a number of factors, and the Premier Board did not assign any relative or
specific weight to the factors considered. The material factors considered by
the Board of Directors included that the merger:
- will advance the long-term business strategies, goals and
interests of Premier;
- will result in the best value reasonably available to the
shareholders of Premier, considering both its current
operations and its future prospects;
- will result in an entity that is capable of successfully
competing in today's increasingly competitive financial
services marketplace and that will be well capitalized;
- will provide the opportunity to the shareholders of Premier to
participate on a pro-rata basis in a significant premium over
the current value of their common shares of Premier;
- will provide, through the ownership of First Premier common
shares, for the shareholders of Premier, to participate in
expanded opportunities for growth and profitability, received
on a tax-deferred basis; and
- will provide a public market for the First Premier common
shares to be received in the exchange.
Opinion of Premiers' Financial Advisor
Premier retained GRA, Thompson, White & Co., P.C. to serve as financial
advisor and to provide the Premier Board with an opinion regarding the fairness
of the merger, from a financial point of view, to Premier shareholders. The
following summary of GRA's opinion is entirely qualified by reference to the
full text of the opinion, which is attached hereto as "Appendix D." Premier
shareholders are urged to read
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<PAGE> 32
such opinion in its entirety. GRA's opinion is directed to the Premier Board and
does not constitute a recommendation regarding how any Premier shareholder
should vote at the special meeting.
GRA has provided accounting and consulting services to Premier since
1995. GRA does not have a present or contemplated future direct financial
interest in Premier, its subsidiary, Premier Bank, or in First Premier Financial
Corporation.
GRA considered the following in the development of its opinion:
- a review of the historical and projected financial performance
of Premier Bank and Premier including draft of audited
consolidated financial statements as of December 31, 1998;
- a review of financial information and other information
regarding the stock of First Premier including draft of
audited financial statements as of December 31, 1998;
- a review of the Draft Agreement and Plan of Merger dated April
28, 1999 by and between Premier and First Premier;
- a review of information regarding other comparable mergers in
Missouri;
- a review of market prices of publicly held bank stocks in the
region;
- a review of the investment characteristics of Premier and
First Premier; and
- any other factors that were considered necessary to render
their opinion.
In reviewing these items, GRA considered the following items pertaining
to Premier and First Premier:
- historical financial performance;
- dividend paying record;
- marketability of common stock;
- competition in the banking industry;
- market area for banking companies;
- comparison with other banking organizations;
- comparison with other sales transactions in Missouri and the
region;
- risk areas inherent in banking;
- financial impact of transaction;
- tax consequences of the proposed merger for Premier
shareholders; and
- such other factors as GRA considered necessary.
GRA assumes for the purposes of its opinion that the exchange of shares
in the transaction constitutes a non-taxable reorganization for federal income
tax purposes, and therefore, the shareholders of Premier will incur no federal
tax liability as a result of the exchange.
GRA did not visit with management representatives of First Premier.
As part of its investigation, GRA visited with management of Premier
concerning the future prospects of Premier as well as its current operating
performance.
GRA reviewed a draft of the merger agreement between Premier and First
Premier dated April 28, 1999 and has assumed that the finally executed version
is substantially the same. GRA has discussed appropriate aspects of the merger
agreement with management and counsel for Premier.
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<PAGE> 33
The merger agreement stipulates that each shareholder of Premier will
receive a calculated number of common shares of First Premier stock for each
share of Premier stock. The formula utilizes $262.944 as the quotient. Based
upon the 41,834 outstanding shares of Premier, the total consideration for all
of the outstanding shares of Premier is $11,000,000. The book value of Premier
shares at December 31, 1998 was $106.09. Consequently, the calculated multiple
of December 31, 1998 book value is 2.47.
The merger agreement calls for a closing of First Premier's public
offering. GRA's opinion is subject to the successful public offering and
dependent upon Premier's shareholders receiving shares which are marketable
subject to certain time restrictions as outlined in Section 8.3 of the merger
agreement and applicable securities laws.
The proposed exchange of shares and public offering provide a market
for shareholders of Premier which is not currently available due to the limited
number of shareholders in Premier. The shares received will be registered with
the Securities and Exchange Commission and will be able to sold on the National
Market of the Nasdaq Stock Market. Also, each Premier common shareholder, other
than Bruce Wiley, will receive warrants to purchase First Premier common shares
as described in the merger agreement. The time restrictions on sale of the
shares as outlined in Section 8.3 of the merger agreement result in these shares
being partially illiquid for up to 120 days for general shareholders and wholly
illiquid up to 180 days for directors of Premier. Consequently, the shareholder
is not guaranteed a market price equivalent to the value received at the initial
exchange. Our opinion does not extend to any period subsequent to the initial
exchange and public offering.
Financial Review
GRA's review of the financial data for Premier Bank consisted of
information obtained from:
1) The annual Consolidated Reports of Condition and Income as filed with
the FFIEC for the three years ended December 31, 1998;
2) Uniform Bank Performance Report for December 31, 1998 (peer group
reference only for analysis purposes); and
3) Internally prepared financial statements for the year ended December
31, 1998.
This information was prepared by Premier Bank's management in
accordance with generally accepted accounting principles. GRA accepted this
information without further investigation as being an accurate representation of
Premier Bank's financial condition and results of operations. GRA has assumed
that management (1) is responsible for the integrity and objectivity of the
financial statements and other related information, and (2) maintains a system
of internal controls, policies and procedures to provide reasonable assurance
that Premier Bank's assets are safeguarded and that financial transactions are
fairly reflected in the financial statements. Since these financial statements
also include estimates of value or potential exposure, GRA has also relied upon
management's evaluation of asset quality.
Balance Sheet
As of December 31, 1998, Premier Bank had total assets of $57,808,000
(unaudited). Premier Bank has grown rapidly since its chartering in 1995.
Consequently, there has been a need for additional capital to maintain
compliance with regulatory requirements.
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Total equity capital at December 31, 1998, aggregated $5,193,000
(unaudited) or 8.98% (unaudited) of total assets. This capital ratio is in
excess of minimum regulatory guidelines of 3% to 6%, and Premier Bank is
considered to be well-capitalized.
Premier Bank's loan-to-deposit ratio varies based upon seasonal demand
but is generally between 80% - 85%. Premier Bank's liquidity position is
adequate to support this level of lending.
The allowance for loan and lease losses was $400,000 (unaudited) at
December 31, 1998, which was .96% (unaudited) of total loans. The current
allowance amount is deemed adequate by Premier Bank management.
The market value of Premier Bank's securities portfolio as of December
31, 1998, was $6,478,000 as compared to amortized cost of $6,427,000 for a
$51,000 positive variance. Premier Bank carries 100% of its portfolio in an
available for sale category. The portfolio consists primarily of securities
issued by the U.S. Government, U.S. Government Agencies and state and political
subdivisions.
Demand deposits represent 4% - 6% of total deposits which is less than
peer group averages of 9% - 10%.
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Income Statement
Premier Bank's net income (unaudited) history is as follows:
<TABLE>
<S> <C>
1998 $ 187,000
1997 $ 155,000
1996 $ (56,000)
1995 $(129,000)
</TABLE>
Premier Bank has paid no dividends since its initial chartering in
1995.
MARKET INFORMATION
Public Company
The aggregate market value (market capitalization) of publicly traded
banks or bank holding companies can be calculated by multiplying the current
quoted price of the stock by the number of shares outstanding. This value can
then be correlated to readily available data resulting in price-to-earnings and
price-to-equity multiples. However, this calculated value is based upon a price
of a single share of stock and, therefore, represents an estimation of value
from a minority perspective since purchasers of these shares are not able to
influence operations or management decisions. Consequently, adjustments must be
made to reflect an estimated value for a control price valuation.
While the estimated value using public company market data should have
a bearing on the market value of any banking institution, there are other
factors which must be considered. Large publicly held companies generally have
more diverse markets through well-developed branching networks, and they have
also benefitted from certain economies of scale. The subject bank of this
valuation operates in a more localized market area with a smaller shareholder
group.
Even though direct comparisons are impossible, GRA has selected 14
publicly traded multi-bank holding companies which operate in the Midwest for
its guideline company comparable data. Among these companies, the range for
current price to earnings multiple was 11.8 to 32.0, and the range for current
price to book value multiple was 1.15 to 3.09.
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Source: Bank INVESTOR - SNL Securities
Specific Transaction
Although the public markets provide a basis for valuation purposes, the
availability of information for other bank sales transactions also serves as a
component for analysis purposes. Such transactions are documented via regulatory
filings and through public disclosure. Various sources provide summaries of this
information. Since these transactions are based upon majority sales, they must
be analyzed in that context and are not comparable to the public company
information presented above. These sales are for whole institutions, therefore,
reported prices likely include elements of synergistic value. When a motivated
buyer observes possibilities of synergistic operations or economies of scale,
the resulting price is likely to be higher than a price arrived at by the
theoretical fair market value standard. Additionally, these transactions include
both cash and stock transactions with the majority of larger transactions being
for stock. The statistics for "all cash" transactions indicates that ratios are
20-30% less than stock transactions and 10-25% less than the overall average.
The following data was used as the basis for the "Specific Transaction" method.
<TABLE>
<CAPTION>
Number of
Second Quarter-1998 Transactions Price-to-Earnings Price-to-Equity
- ------------------- ------------ ----------------- ---------------
<S> <C> <C> <C>
All Banks 33 21.29 2.48
Less than $50 million 6 14.79 2.34
Greater than $50 million and 14 19.84 2.35
less than $150 million
Cash Deals 10 21.63 1.97
Stock Deals 22 20.17 2.83
Third Quarter-1998
All Banks 30 18.36 2.23
Less than $50 million 10 20.80 1.69
Greater than $50 million and 15 16.69 2.43
less than $150 million
Cash Deals 14 17.22 1.79
Stock Deals 15 19.02 2.63
</TABLE>
Source: The Banking Company Report, Kansas City, Missouri
As mentioned previously, the transaction results in total consideration
of $11,000,000 for the Premier's stock. The calculated multiple of December 31,
1998 book value is 2.47. This is comparable to the multiples shown above for
price-to-equity. Since Premier Bank is only four years old and has expanded
rapidly, it has not established a strong earnings level. Consequently, the
price-to-earnings ratio for this transaction is far in excess of the multiples
shown above.
GRA relied on data available to it which was obtained from or developed
by sources which GRA deems to be reliable without independent verification.
GRA's opinion is for the use and benefit of the Board of Directors of Premier.
The opinion is not intended to be and does not constitute a
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recommendation to the aforementioned parties as to whether to accept First
Premier shares in exchange for Premier shares as stipulated in the proposed
transaction.
Based upon GRA's valuation of the proposed merger and exchange of
shares between Premier and First Premier, it is GRA's opinion that the exchange
ratio for the conversion of Premier common shares into First Premier common
shares in the proposed transaction is fair from a financial viewpoint to the
shareholders of Premier.
CONDITIONS PRECEDENT TO THE MERGER
The obligations of Premier and First Premier to consummate the merger
are subject to the satisfaction or waiver (to the extent permitted) of the
following conditions:
(1) the shareholders of Premier and First Premier shall have approved
the merger agreement and the consummation of the merger as and to the extent
required by law;
(2) the required regulatory approvals described under "Regulatory
Approvals" shall have been received, generally without any conditions or
requirements which would, in the reasonable judgement of the Boards of Directors
of First Premier or Premier, materially adversely effect the economic or
business benefits of the transaction contemplated by the merger agreement so as
to render inadvisable the consummation of the merger;
(3) each party shall have received all consents required for
consummation of the merger or for the preventing of any default under any
contract or permit of such party which, if not obtained or made, is reasonably
likely to have, individually or in the aggregate, a material adverse effect on
such party;
(4) the Registration Statement, of which this Proxy
Statement/Prospectus is a part, shall have been declared effective by the SEC
and shall not be subject to a stop order, no action, suit, proceeding or
investigation by the SEC to suspend the effectiveness of the Registration
Statement shall have been initiated and be continuing, and all necessary
approvals under state securities laws or the 1933 Act or the 1934 Act relating
to the issuance or trading of the shares of First Premier common stock issuable
pursuant to the merger or the initial public offering shall have been received;
(5) each First Premier and Premier shall have received an opinion
from Smith, Gambrell & Russell, LLP as to the matters set forth under "Certain
Federal Income Tax Matters;"
(6) no court or regulatory authority shall have taken any action
which prohibits, restricts or makes illegal the consummation of the transactions
contemplated by the merger agreement;
(7) First Premier shall have executed an underwriting agreement
providing for the firm commitment underwriting of shares of First Premier common
stock having an aggregate gross purchase price of at least $25,000,000;
(8) the shares of First Premier common stock issuable pursuant to the
merger shall be available for trading on a registered stock exchange or Nasdaq;
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(9) the other party's representations and warranties shall remain
accurate, and the other party shall have performed all of the agreements and
covenants to be performed by it pursuant to the merger agreement, and shall have
delivered certificates confirming the satisfaction of the foregoing requirements
and certain other matters;
(10) First Premier shall have received from each affiliate of Premier
an affiliate agreement, substantially in the form attached to the merger
agreement;
(11) each party shall have received an opinion of the party's counsel,
dated as of the closing date, as to certain matters;
(12) Premier shall have received from GRA Thompson White & Company,
P.C. a letter to the effect that, in the opinion of the firm, the exchange ratio
is fair from a financial point of view, to the holders of Premier common stock;
(13) First Premier shall have delivered to the exchange agent the
consideration to be paid to holders of Premier common stock; and
(14) the underwriters in the initial public offering shall have given
their assurances that they are ready, willing and able to close on the initial
public offering, and have the funds available to deliver the full amount of the
purchase price (less the underwriter's discount) for the shares under the
initial public offering, immediately following the consummation of the merger.
CONDUCT OF BUSINESS PRIOR TO THE MERGER
Under the terms of the Merger Agreement, Premier has agreed that unless
it obtains prior written consent from First Premier and except as otherwise
contemplated by the merger agreement, it will: (1) operate its business only in
the usual, regular and ordinary course, (2) use its reasonable best efforts to
preserve intact its business organization and assets and to maintain its rights
and franchises, (3) use its reasonable best efforts to maintain its current
employee relationships and (4) take no action which would materially adversely
affect any party's ability either (a) to obtain any consent required for the
transactions contemplated by the merger agreement without imposition of a
condition or restriction which, in the reasonable judgment of the Premier Board
or the First Premier Board, would so materially adversely impact the economic or
business benefits of the transactions contemplated by the merger agreement so as
to render inadvisable the consummation of the merger or (b) to perform its
covenants and agreements under the merger agreement.
In addition, Premier has covenanted and agreed that, from the date of
the merger agreement until the earlier of the Effective Time or termination of
the merger agreement Premier will not do, or agree or commit to do, without the
prior written consent of the chief executive officer of First Premier, any of
the following:
(1) amending the Articles of Incorporation, Bylaws, or other
governing instruments of Premier, except as expressly contemplated by the merger
agreement;
(2) incurring any additional debt obligation or other obligation for
borrowed money that exceeds $50,000 in the aggregate, except in the ordinary
course of the business of Premier consistent with past practices, or allowing
the imposition of a lien to secure an obligation not in excess of $50,000 on any
asset of Premier;
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(3) acquiring or exchanging (other than exchanges in the ordinary
course under employee benefit plans) any shares or securities convertible into
any shares of the capital stock of Premier, or paying any dividend on Premier
common stock;
(4) subject to certain conditions, issuing, selling or pledging any
additional shares of Premier common stock or any rights to stock appreciation
rights, or any option, warrant, conversion, or other right to acquire any such
stock, or any security convertible into any such stock;
(5) adjusting or reclassifying or paying any dividend or other
distribution on any capital stock of Premier or issuing other securities in
respect of or in substitution for shares of Premier common stock, or disposing
of any shares of Premier common stock or any asset other than in the ordinary
course of business for reasonable and adequate consideration;
(6) purchasing any securities or making any material investment in
any person, or otherwise acquiring direct or indirect control over any person,
with certain exceptions;
(7) granting any increase in compensation or benefits to the officers
or directors of Premier (except that Premier may increase compensation of
non-officer employees by up to 5% of such employee's annual compensation if such
increase is consistent with past practice), paying any severance or termination
pay or any bonus other than pursuant to written policies or written contracts in
effect on the date of the merger agreement and as disclosed, entering into or
amending any severance agreements with officers of Premier, or voluntarily
accelerating the vesting of any stock options or other stock-based compensation
or employee benefits;
(8) entering into or amending any employment contract between Premier
and any person (unless such amendment is required by law) that Premier does not
have the unconditional right to terminate without certain liability;
(9) adopting any new employee benefit plan of Premier or materially
changing any existing employee benefit plans of Premier other than changes
required by law or to maintain a plan's tax-qualified status;
(10) making any significant change in any tax or accounting methods or
systems of internal accounting controls, except for any change required by law
or GAAP;
(11) commencing any litigation other than in accordance with past
practice or settle any litigation involving any liability of Premier which may
have a material adverse effect on Premier or which place restrictions upon the
operations of Premier without first consulting with First Premier;
(12) except in the ordinary course of business, modifying, amending or
terminating any material contract or waiving, releasing, compromising or
assigning any material rights or claims;
(13) making any investment in excess of $50,000 of any other
individual, corporation or other entity other than a wholly-owned subsidiary of
Premier; or
(14) selling, transferring, mortgaging or disposing of any of its
material properties or assets to any individual, corporation or other entity
other than a direct or indirect wholly-owned subsidiary of Premier, or
cancelling, releasing or assigning any indebtedness to any such person or any
claims held by any such
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<PAGE> 40
person, except in the ordinary course of business consistent with past practice
or pursuant to contracts or agreements in force at the date of the merger
agreement.
The merger agreement also provides that neither Premier nor its
affiliates will directly or indirectly solicit or have any discussions with any
person relating to any acquisition proposal, as defined in the merger agreement,
except with respect to the merger agreement. Additionally, except to the extent
necessary to comply with the fiduciary duties of the Premier Board, as advised
by counsel, neither Premier nor its affiliates will provide any nonpublic
information that it is not legally obligated to furnish or negotiate with
respect to any acquisition proposal. However, Premier may communicate
information about such acquisition proposal to the Premier shareholders if and
to the extent that it is required to do so in order to comply with its legal
obligations. Premier has agreed to notify First Premier if it receives any
inquiry or proposal relating to any such transaction. Premier has further agreed
to terminate any negotiations conducted prior to the date of the merger
agreement with any parties other than First Premier with respect to any of the
foregoing and to use its reasonable efforts to cause its representatives not to
engage in any of the foregoing.
In the merger agreement, First Premier has agreed that until the
earlier of the Effective Time or termination of the merger agreement, it will
(1) continue to conduct its business in a manner reasonably designed to enhance
the long-term value of the First Premier common stock and First Premier's
business prospects and (2) take no action that would materially adversely effect
any party's ability to (a) obtain any consents or approvals required for the
transactions contemplated by the merger agreement without imposition of a
condition or restriction which in the reasonable judgment of the First Premier
Board or the Premier Board would so materially adversely impact the economic or
business benefits of the transactions contemplated by the merger agreement so as
to render inadvisable the consummation of the merger or (b) perform its
covenants and agreements under the merger agreement. First Premier may
discontinue or dispose of any of its assets or business if it determines it to
be desirable in the conduct of its business. First Premier has also agreed that
it will not, without the prior written consent of the chairman and chief
executive officer of Premier, amend the First Premier Articles or the First
Premier Bylaws in any manner adverse to the Premier shareholders. First Premier
also agreed that it will not issue additional shares of First Premier common
stock or make an acquisition proposal to any individual or entity.
TERMINATION
The merger agreement between First Premier and Premier may be
terminated and the merger abandoned at any time prior to the Effective Time in
the following ways:
- by mutual written consent of the boards of directors of First
Premier and Premier;
- by the board of directors of either Premier or First Premier
for the following reasons:
-- in the event of the inaccuracy of any representation
or warranty of the other party contained in the
merger agreement which cannot or has not been cured
within 30 days after providing written notice of such
inaccuracy and which inaccuracy would provide the
terminating party the ability to refuse to consummate
the merger, provided that the terminating party is
not then in breach of any representation or warranty,
or in material breach of any covenant or agreement,
contained in the merger agreement;
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-- if the other party has materially breached any
covenant, agreement or obligation under the merger
agreement, and such breach cannot or will not be
cured within 30 days after giving written notice to
the breaching party of the breach;
-- if any application for necessary regulatory approval
consent is denied by final nonappealable action;
-- if First Premier's or Premier's shareholders fail to
approve the merger agreement;
-- the merger has not been consummated by September 30,
1999; or any of the conditions precedent to the
party's obligations to consummate the merger cannot
be satisfied, or cannot be satisfied or fulfilled by
September 30, 1999;
- by First Premier if dissenters' rights are claimed by persons
owning in the aggregate more than 10% of the issued and
outstanding Premier Stock; or
- by Premier, if any time prior to the Effective Time:
-- GRA Thompson White & Company, PC withdraws its
fairness opinion; or
-- a third-party makes a bona fide acquisition proposal,
as defined in the merger agreement, that Premier's
Board of Directors determines in its good faith and
in the exercise of its fiduciary duties, is more
favorable to Premier's shareholders than the merger
agreement and that the failure to terminate the
merger agreement and accept such alternative would be
inconsistent with the proper exercise of such
fiduciary duties.
In the event that the merger agreement is terminated by Premier
pursuant to certain triggering events defined in the merger agreement, First
Premier shall be entitled to a cash payment from Premier of $200,000 upon the
occurrence of certain other events within twelve months following the date of
such termination.
EXPENSES
The merger agreement provides that each party shall be responsible for
its own direct costs and expenses incurred in connection with the negotiation
and consummation of the transactions contemplated by the merger agreement. First
Premier will bear the costs incurred in the printing of this Proxy
Statement/Prospectus and related materials.
If the merger agreement is terminated prior to the Effective Time by
either party as a result of the other party's failure to satisfy any of its
representations, warranties or covenants set forth in the merger agreement, the
non-terminating party shall reimburse the terminating party for its reasonable
out-of-pocket expenses relating to the merger in an amount not to exceed
$50,000.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
Smith, Gambrell & Russell, LLP has delivered to First Premier and
Premier its opinion that, based upon certain customary assumptions and
representations, under federal law as currently in effect, the merger of Premier
into First Premier, and the issuance of shares of First Premier common stock
pursuant to the merger agreement will constitute a tax-free "reorganization"
under Sections 368(a)(1)(A) and (a)(2)(D) of the IRS Code. Furthermore, no gain
or loss will be recognized by shareholders of Premier upon the exchange of
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Premier common stock solely for First Premier common stock pursuant to the
merger agreement. The tax basis of the First Premier common stock received by
shareholders of Premier pursuant to the merger agreement will be the same as the
tax basis of the shares of Premier common stock surrendered in exchange for
First Premier common stock.
The holding period of the shares of First Premier common stock received
by the shareholders of Premier will include the holding period of the shares of
Premier common stock surrendered, provided that such Premier common stock is
held as a capital asset on the date of consummation of the merger. No gain or
loss will be recognized by Premier upon the transfer by Premier of substantially
all its assets to First Premier solely in exchange for First Premier common
stock and the assumption by First Premier of the liabilities of Premier pursuant
to the merger agreement.
Pursuant to Section 381(a) of the Code, First Premier will succeed to
and take into account the tax attributes of Premier described particularly in
Section 381(c) of the Code as of the date of the transfer of assets from Premier
to First Premier, subject to the limitations specified in Sections 381 through
384 of the Code. Pursuant to Section 381(c)(2) of the Code, First Premier will
succeed to and take into account the earnings and profits or deficit in earnings
and profits of Premier as of the date of the transfer of assets from Premier to
First Premier. Any deficit in such earnings and profits may be used only to
offset earnings and profits accumulated after the date of such transfer.
A holder of Premier common stock who exercises statutory dissenter's
rights in connection with the merger generally will recognize capital gain or
loss (assuming the common stock is held as a capital asset) equal to the
difference, if any, between such holder's tax basis in the Premier common stock
exchanged and the amount of cash received in exchange therefor. A holder of
Premier common stock who receives cash in lieu of a fractional share of First
Premier common stock pursuant to the terms of the merger agreement will
recognize capital gain or loss (assuming the fractional share is held as a
capital asset) equal to the difference, if any, between the amount of cash so
received and the holder's tax basis allocable to such fractional share.
THE FOREGOING IS A GENERAL DISCUSSION OF THE MATERIAL FEDERAL INCOME
TAX CONSEQUENCES OF THE PROPOSED MERGER UNDER THE CODE. THE FOREGOING DISCUSSION
DOES NOT INCLUDE CONSEQUENCES OF STATE, LOCAL, FOREIGN OR OTHER TAX LAWS OR
SPECIAL CONSEQUENCES TO PARTICULAR SHAREHOLDERS HAVING SPECIAL SITUATIONS. YOU
SHOULD CONSULT YOUR OWN TAX ADVISORS REGARDING SPECIFIC TAX CONSEQUENCES OF THE
MERGER TO YOU, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, FOREIGN
AND LOCAL TAX LAWS AND TAX CONSEQUENCES OF SUBSEQUENT SALES OF FIRST PREMIER
COMMON STOCK.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
General
Certain members of Premier's management and the Board of Directors may
be deemed to have interests in the merger in addition to any interests as
shareholders of Premier generally. These interests include, among others, the
indemnification of Premier directors and officers and certain employee benefits.
Indemnification
The merger agreement provides that First Premier will, and will cause
the surviving corporation to, indemnify the current and former directors,
officers, employees and agents of Premier against all costs, fees or expenses
(including reasonable attorney's fees), judgments, fines, penalties, losses,
claims, damages, liabilities and amounts paid in settlement of any litigation
arising out of actions or omissions occurring prior
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to the Effective Time. If First Premier's approval is required to effectuate any
indemnification, First Premier will direct, at the indemnified party's election,
for independent counsel mutually agreed upon between First Premier and the
indemnified party to determine such approval. The merger agreement also provides
that First Premier shall provide director and officer insurance tail coverage.
Matters Relating to Premier Employee Benefit Plans
Under the merger agreement, First Premier has agreed to provide
generally to continuing officers and employees of Premier employee benefits
under employee benefit plans (other than stock option or other plans involving
the potential issuance of First Premier common stock), on terms and conditions
which are no less favorable than those currently provided by Premier. For
purposes of participation and vesting (but not benefit accrual under any
employee benefit plans of First Premier other than the Premier benefit plans)
under such employee benefit plans, the service of the employees of Premier prior
to the Effective Time shall be treated as service with First Premier
participating in such employee benefit plans. First Premier will honor in
accordance with their terms all employment, severance, consulting, and other
compensation contracts disclosed by Premier pursuant to the merger agreement
between Premier and any current or former director, officer, or employee
thereof, and for all provisions for vested benefits or other vested amounts
earned or accrued through the Effective Time under the Premier benefit plans.
Employment Contract
Negotiations of the merger agreement and employment arrangements
between Bruce W. Wiley and First Premier occurred simultaneously. The Board of
Directors of Premier considered Mr. Wiley's employment arrangements when
approving the merger agreement. The employment agreement runs for five years
from the date of closing of the initial public offering. The employment
agreement provides for an annual base salary of $150,000 and the grant of
options to purchase up to 70,000 shares of First Premier common stock at the
initial public offering price. Of these options, 30,000 options will be granted
under First Premier's stock option plan on the same terms as options issued to
other members of senior management and will vest over three years. The remaining
40,000 options will vest immediately upon closing and will be granted on the
same terms as those warrants which were issued to certain founders of First
Premier in April 1998 and will be exercisable for 10 years.
In addition to the annual salary and other benefits payable to Mr.
Wiley under the employment agreement, First Premier will provide to Mr. Wiley,
as deferred compensation, one or more life insurance policies on the life of Mr.
Wiley. These life insurance policies shall be designed to provide Mr. Wiley and
his beneficiaries certain death benefits and nonqualified retirement benefits,
as more fully described in the employment agreement. Mr. Wiley will also be
eligible to participate in any discretionary bonus plan or program adopted by
First Premier's Board of Directors on the same basis as other executive officers
of First Premier.
In addition, Mr. Wiley's employment agreement provides that he will
serve as a director of First Premier and his title following the merger and the
offering will be President of the Mid-Missouri Market. In the event of a "change
in control" of First Premier (as defined in the employment agreement), Mr. Wiley
may elect to give written notice to First Premier of the termination of the
agreement and to receive a cash payment equal to approximately 300% of the
compensation received by him in the one year period immediately preceding the
change in control. Mr. Wiley's employment agreement also contains certain
non-compete and non- solicitation provisions which provide that if Mr. Wiley
terminates his employment agreement, he will not,
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for a period of 12 months, without the consent of First Premier, serve as an
executive officer of any financial institution in Cole or Boone County,
Missouri.
DISSENTERS' RIGHTS OF PREMIER SHAREHOLDERS AND FIRST PREMIER SHAREHOLDERS
Premier Shareholders' Dissenters' Rights.
Holders of Premier common stock will be entitled to assert dissenters'
rights with respect to the merger in accordance with Section 351.455 RSMo, a
copy of which is attached as Exhibit B. Any such Premier shareholder who follows
the procedures specified in Section 351.455 RSMo will be entitled to receive the
fair value of his or her shares of Premier common stock.
A shareholder wishing to assert dissenters' rights must follow the
specified procedures which include:
- delivering to Premier prior to or at the special meeting of
shareholders written objection to the plan of merger;
- not voting his or her shares in favor of the plan of merger;
- Within 20 days after the merger is effected, giving written
demand to Premier for payment of the fair value of his or her
shares as of the day prior to the date on which the vote was
taken approving the merger.
IN NO EVENT WILL ANY SHAREHOLDER BE ENTITLED TO DISSENTERS' RIGHTS IF
HE OR SHE VOTES "FOR" THE ADOPTION OF THE MERGER AGREEMENT.
Upon receipt of a dissenting shareholder's written demand for fair
value of his or her shares, First Premier shall pay to such dissenting
shareholder the fair value of his or her shares upon surrender of his or her
certificate or certificates. The dissenting shareholder's demand shall state the
number and class of shares owned by the dissenting shareholder. Any shareholder
failing to make demand within the 20-day period shall be conclusively presumed
to have consented to the merger and shall be bound by the terms of the merger.
If, within 30 days after the date on which the merger was effected, the
fair value of the dissenting shareholder's shares is agreed upon between the
dissenting shareholder and First Premier, First Premier shall pay the agreed
upon value within 90 days after the date on which the merger was effected, upon
the surrender of the shareholder's certificate or certificates representing such
shares. Upon payment of the agreed value, the dissenting shareholder shall cease
to have any interest in the shares or in First Premier.
If, within 30 days after the date on which the merger was effected, the
shareholder and First Premier do not agreed on the value of the dissenting
shareholder's shares, then the dissenting shareholder may, within 60 days after
the expiration of the 30-day period, file a petition in any court of competent
jurisdiction within the county in which the registered office of First Premier
is situated, asking for a finding and determination of the fair value of such
shares. The dissenting shareholder shall be entitled to judgment against First
Premier for the amount of such fair value as of the day prior to the date on
which the vote was taken approving the merger, together with interest to the
date of the judgment. The judgment shall be payable only upon, and
simultaneously with, the surrender to First Premier of the certificate or
certificates representing the shares. Upon the payment of the judgment, the
dissenting shareholder shall cease to have any interest in the shares or in
First Premier. Unless the dissenting shareholder files a petition within the
time frame described above, the shareholder and all persons claiming under the
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shareholder shall be conclusively presumed to have approved and ratified the
merger and shall be bound by the terms of the merger.
Before or after the Closing of the merger, dissenting Premier
shareholders should send any communications regarding their rights to Premier
Bancshares, Inc., 815 West Stadium Boulevard, Jefferson City, Missouri 65110
Attn: Mr. Bruce W. Wiley, President. All communications should be signed by or
on behalf of the dissenting Premier shareholder in the form in which his or her
shares are registered on the books of Premier.
First Premier Shareholders' Dissenters' Rights.
First Premier shareholders, upon compliance with the applicable
statutory procedures summarized below, may be entitled to appraisal rights under
Section 262 of the Delaware General Corporation Law. This joint Proxy
Statement/Prospectus constitutes notice to the First Premier shareholders of the
possible availability of appraisal rights under Delaware law and the applicable
statutory provisions are attached to this joint Proxy Statement/Prospectus as
Appendix C. This summary does not intend to be complete and is qualified in its
entirety by reference to Appendix C. Under Delaware law, a First Premier
shareholder wishing to exercise any available appraisal rights must be the
record holder of his or her shares on the date the written demand for appraisal
is made and must continue to hold such shares through the Effective Time.
If the First Premier shareholders were to assert their appraisal rights
with respect to their shares, then within 120 days after the consummation of the
merger, the shareholders or First Premier would be entitled to file a petition
in the Delaware Chancery Court demanding a determination of the fair value of
the shares as to which a timely demand for appraisal had been made. First
Premier shareholders who elect to exercise appraisal rights should mail or
deliver their written demands to: Richard C. Jensen, President and Chief
Executive Officer, First Premier Financial Corporation, 13004 Starbuck Road, St.
Louis, Missouri 63141.
First Premier shareholders who desire to exercise their appraisal
rights must deliver a written demand for appraisal to First Premier to the
address set forth in the immediately preceding paragraph, before the taking of
the vote on the approval and adoption of the merger agreement at the special
meeting of stockholders of First Premier.
A demand for appraisal must be executed by or for the shareholder of
record, fully and correctly, as such stockholder's name appears on the stock
certificates. If such shares are owned of record in a fiduciary capacity, such
as by a trustee, guardian or custodian, such demand must be executed by or for
the fiduciary. If such shares are owned of record by more than one person, as in
a joint tenancy or tenancy in common, such demand must be executed by or for all
joint owners. A record owner, such as a broker, who holds such shares as a
nominee for others, may exercise appraisal rights with respect to such shares
held for all or less than all beneficial owners of such shares as to which the
holder is the record owner. In such case, the written demand must set forth the
number of shares covered by such demand.
The written demand for appraisal should specify the shareholder's name
and mailing address, the number of shares covered by the demand, and that the
shareholder is thereby demanding appraisal of such shares.
If a petition for an appraisal were timely filed, after a hearing on
such petition, the Delaware Chancery Court would appraise the "fair value" of
the shares, exclusive of any element of value arising
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from the accomplishment or expectation of the merger, together with a fair rate
of interest, if any, to be paid upon the amount determined to be the fair value.
The Delaware Supreme Court has stated that "proof of value by any techniques or
methods which are generally considered acceptable in the financial community and
otherwise admissible in court" should be considered in the appraisal
proceedings. The Delaware Chancery Court would determine the amount of interest,
if any, to be paid upon the amounts to be received in respect of the shares. The
costs of the action may be determined by the Delaware Chancery Court and charged
to the parties as the Delaware Chancery Court deems equitable.
Any shareholders who seek appraisal would not, after the consummation
of the merger, be entitled to vote the shares for any purpose or be entitled to
the payment of dividends or other distributions on the shares (except dividends
or other distributions payable as of a record date prior to the consummation of
the merger).
A stockholder will fail to perfect, or effectively lose or withdraw,
his or her right to appraisal if, among other things, no petition for appraisal
is filed within 120 days after the Effective Time, or if the stockholder
withdraws his or her demand for appraisal. Any withdrawal attempted more than 60
days after the Effective Time would require the written approval of First
Premier. Moreover, no appraisal proceeding pending in the Delaware Court of
Chancery will be dismissed without the approval of the Court, and any such
approval would be conditioned upon such terms as the Court deems just.
ACCOUNTING TREATMENT
The merger will be accounted for as a reverse acquisition, meaning that
the financial statements of Premier will become the historical financial
statements of First Premier and no goodwill will be recorded on First Premier's
balance sheet as a result of the merger.
BANK REGULATORY MATTERS
The merger is subject to prior approval by the Federal Reserve Board
and the Missouri Division of Finance. In determining whether to approve a
transaction such as the merger, the Federal Reserve Board, the FDIC and the
Missouri Division of Finance consider the financial and managerial resources
(including the competence, experience and integrity of the officers, directors
and principal shareholders) and future prospects of the existing and proposed
institutions and the convenience and needs of the communities to be served. In
considering financial resources and future prospects, the adequacy of the
capital levels of the parties to a proposed transaction are evaluated.
The Bank Holding Company Act ("BHCA") prohibits the Federal Reserve
Board from approving a merger if it would result in a monopoly or if its effect
would be substantially to lessen competition or to tend to create a monopoly, or
if it would result in a restraint of trade. However, a merger can be approved if
the Federal Reserve Board finds that the anti-competitive effects of a merger
are clearly outweighed by the probable effect of the transaction in meeting the
convenience and needs of the communities to be served. In addition, the
Community Reinvestment Act of 1977, as amended, obligates the Federal Reserve
Board to take into account the record of performance of the existing
institutions in meeting the credit needs of the entire community, including low-
and moderate-income neighborhoods, served by such institutions.
Applicable federal law provides for the publication of notice and
public comment relating to the federal and state filings noted above. Interested
parties are permitted to intervene in the proceedings. If an
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interested party is permitted to intervene, such intervention could delay the
regulatory approvals required for consummation of the merger.
The merger generally may not be consummated until between 15 and 30
days following the date of applicable federal regulatory approval, during which
time the United States Department of Justice may challenge the merger on
antitrust grounds. The commencement of an antitrust action would stay the
effectiveness of the regulatory agency's approval unless a court specifically
ordered otherwise. First Premier and Premier believe that the merger does not
raise substantial antitrust or other significant regulatory concerns.
STATUS OF REGULATORY APPROVALS AND OTHER INFORMATION
First Premier and Premier have filed all applications and notices and
have taken (or will take) other appropriate action with respect to any requisite
approvals or other actions of any governmental authority. The merger agreement
provides that the obligation of each of First Premier and Premier to consummate
the merger is conditioned upon the receipt of all requisite regulatory
approvals. There can be no assurance that any governmental agency will approve
or take any other required action with respect to the merger. And, if approvals
are received or action is taken, there can be no assurance as to the date of
such approvals or action, that such approvals or action will not be conditioned
upon matters that would cause the parties to abandon the merger, or that no
action will be brought challenging such approvals or action, including a
challenge by the Department of Justice.
First Premier and Premier are not aware of any governmental approvals
or actions that may be required for consummation of the merger other than as
described above. Should any other approval or action be required, First Premier
and Premier currently contemplate that such approval or action would be sought.
THE MERGER CANNOT PROCEED IN THE ABSENCE OF THE REQUISITE REGULATORY
APPROVALS. THERE CAN BE NO ASSURANCE THAT SUCH REGULATORY APPROVALS WILL BE
OBTAINED OR AS TO THE DATES OF ANY SUCH APPROVALS. THERE CAN ALSO BE NO
ASSURANCE THAT SUCH APPROVALS WILL NOT CONTAIN A CONDITION OR REQUIREMENT WHICH
CAUSES SUCH APPROVALS TO FAIL TO SATISFY THE CONDITIONS SET FORTH IN THE MERGER
AGREEMENT. THERE LIKEWISE CAN BE NO ASSURANCE THAT THE DEPARTMENT OF JUSTICE
WILL NOT CHALLENGE THE MERGER, OR, IF SUCH A CHALLENGE IS MADE, AS TO THE RESULT
THEREOF.
RESTRICTIONS ON RESALES
Shares of First Premier common stock to be issued to Premier
shareholders in the merger have been registered under the Securities Act and may
be traded freely by shareholders not deemed to be "affiliates" of Premier or
First Premier, as that term is defined under the Securities Act, except as
described below. Pursuant to the terms of the merger agreement, Premier's
shareholders, except for those shareholders who serve as directors and/or
officers of Premier (who may not sell any shares of First Premier common stock
for 180 days following the merger and initial public offering), may not sell or
otherwise transfer any shares of common stock which they own, except as
permitted in the schedule set forth below:
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<TABLE>
<CAPTION>
TIME TABLE AGGREGATE PERCENTAGE OF SHARES PERMITTED
- ---------- FOR SALE BY EACH PREMIER SHAREHOLDER
------------------------------------
<S> <C>
From the date of pricing the initial public offering
through the date of closing the initial public offering No sales are permitted
From 1 to 30 days after closing 10%
From 31 to 60 after closing 20%
From 61 to 90 days after closing 40%
From 91 to 120 days after closing 60%
From 121 days after closing 100%
</TABLE>
Any transfer of shares by any person who is an affiliate of Premier at the time
the merger is submitted for vote or consent of the Premier shareholders will,
under existing law, require either (a) the further registration under the
Securities Act of the shares of First Premier common stock to be transferred,
(b) compliance with Rule 145 promulgated under the Securities Act (permitting
limited sales under certain circumstances) or (c) the availability of another
exemption from registration.
An "affiliate" of Premier, as defined by the rules promulgated pursuant
to the Securities Act, is a person who directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with
Premier. The foregoing restrictions are expected to apply to the directors,
executive officers and the beneficial holders of 10% or more of the Premier
common stock (and to certain relatives or the spouse of any such person and any
trusts, estates, corporations or other entities in which any such person has a
10% or greater beneficial or equity interest). First Premier will provide stop
transfer instructions to the transfer agent with respect to the First Premier
common stock to be received by persons subject to the restrictions described
above. Premier has agreed that, not later than 30 days prior to the Effective
Time, it will use its best efforts to cause each of those persons identified by
Premier as affiliates to deliver to First Premier appropriate agreements that
each such individual will not transfer or otherwise dispose of the shares of
Premier common stock held by such person except in accordance with such
agreement or make any further sales or otherwise dispose of shares of First
Premier common stock received upon consummation of the merger except in
compliance with the restrictions described in this paragraph.
RECOMMENDATION OF THE PREMIER BOARD
THE PREMIER BOARD HAS UNANIMOUSLY APPROVED THE ADOPTION OF THE MERGER
AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT THE PREMIER SHAREHOLDERS VOTE TO ADOPT
THE MERGER AGREEMENT.
RECOMMENDATION OF THE FIRST PREMIER BOARD
THE FIRST PREMIER BOARD HAS UNANIMOUSLY APPROVED THE ADOPTION OF THE
MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT THE FIRST PREMIER SHAREHOLDERS
VOTE TO ADOPT THE MERGER AGREEMENT.
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PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
MARKET PRICES
There is no established public market for either the First Premier or
Premier common stock. As of the Record Date, there were 300,000 shares of First
Premier common stock issued and outstanding held by 31 holders of record. And,
as of the Record Date, there were 41,834 shares of Premier common stock issued
and outstanding held by 45 holders of record.
The proposed Nasdaq national market symbol is "PRBK."
DIVIDEND POLICY
First Premier has not declared or distributed any dividends to its
shareholders since First Premier incorporated. The First Premier board of
directors intends, for the foreseeable future, to follow a policy of retaining
any earnings to provide funds to operate and expand the business of First
Premier. Therefore, it is not likely that any cash dividends on the First
Premier common stock will be declared for the foreseeable future.
Because First Premier's principal operations will be conducted through
Premier Bank, if we decide to pay dividends, First Premier will generate cash to
pay dividends primarily through dividends paid to the holding company from
Premier Bank. Accordingly, any dividends paid to our shareholders will depend on
Premier Bank's earnings, capital requirements, financial conditions and other
factors considered relevant by First Premier's board of directors. Premier Bank,
which is a Missouri state-chartered bank, is restricted in its ability to pay
dividends under state banking laws and regulations. As of March 31, 1999,
Premier Bank was unable to pay cash dividends on its common stock without
regulatory approval. Under Missouri law, a Missouri state bank may not pay
dividends from its capital. All dividends must be paid out of undivided profits,
after deducting expenses and losses. A Missouri state bank whose surplus account
for each dividend period does not equal at least 40% of the amount of its
capital is required to transfer to its surplus account 10% of its net income for
such dividend period. Retained earnings in excess of any such required transfer
to surplus are available for dividends. In addition, sound banking practices
require the maintenance of adequate levels of capital. Federal regulatory
authorities have adopted standards for the maintenance of capital of banks, and
adherence to such standards may further limit the ability of banks to pay
dividends.
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INFORMATION ABOUT FIRST PREMIER
GENERAL
We were incorporated on May 1, 1998 to create a multi-market banking
franchise focusing on small to medium-sized business customers, selected real
estate developers and the principals of these businesses who have become
dissatisfied with the impersonal service delivered by super-regional and
national banks. We formed First Premier with the intent of acquiring an existing
financial institution which would provide a platform for expansion throughout
Missouri. Immediately prior to the closing of the offering, First Premier will
acquire Premier Bancshares, Inc., a Missouri bank holding company for Premier
Bank, a state-chartered commercial bank, as its entry into the Jefferson City
and Columbia, Missouri market areas.
Our strategy is to capitalize on the opportunities created by
widespread consolidation in the banking industry. We believe that this
consolidation has compromised customer relationships as the larger regional
financial institutions increasingly focus on larger corporate customers,
standardized loan and deposit products and other services. More specifically,
many financial institutions have centralized their loan approval practices for
small businesses, leaving less responsibility and authority with the traditional
loan officer. By virtue of their banking experience in Missouri, management
believes that the most frequent customer complaints are based on a lack of
personalized service and turnover in lending personnel, which limits the
customer's ability to develop a relationship with his or her banks. As a result
of these factors, we believe there currently exists a significant opportunity to
attract and maintain customers who are dissatisfied with their banks. We also
believe we can attract experienced management personnel within our identified
markets.
To implement our business plan, we have assembled a senior management
team with over 85 years of banking experience in our identified markets. Our
management team is headed by Richard C. Jensen, who has over 25 years of banking
experience in the St. Louis market. Prior to founding the company, Mr. Jensen
served as President of NationsBank St. Louis, formerly Boatmen's National Bank
of St. Louis which, as of June 1998, had approximately $5.3 billion in total
deposits and over 71 branches in the St. Louis market. We believe that the
combination of Mr. Jensen's 25 years of experience in the Missouri banking
industry, his extensive network of contacts throughout the state and his
management skills will provide the leadership necessary for First Premier to
implement its business strategy. In addition, all members of the senior
management team have worked with Mr. Jensen at either Boatmen's National Bank or
NationsBank. As a group, the senior management team has over 85 years of banking
experience in the Missouri markets. The senior management team shares the same
credit culture and will be responsible for maintaining strict credit policies
and procedures as well as managing administrative functions at the company
headquarters in St. Louis. This management team has gained prominence in
servicing small and medium-sized businesses and their principals throughout
Missouri, which should allow them to continue to provide quality service for
these types of customers. We expect that the familiarity of the senior
management team with each other, as well as with the various Missouri
communities, will also provide a strong foundation for implementing our business
plan. In addition, we will have the resources of management of Premier Bank and
their existing relationships in the Columbia and Jefferson City markets.
We intend to open a banking center in the St. Louis market following
the completion of the offering. Future business plans include further expansion
in the Jefferson City and Columbia markets and entry into the markets of Kansas
City and Springfield. We expect to establish banking centers in each new market
area, primarily through the opening of new branches of Premier Bank. We will
also, however,
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evaluate opportunities for acquisitions of financial institutions in Missouri as
well as markets in the adjacent states that would complement or expand our
business. Within each of our targeted markets, we expect to offer a broad range
of banking products and services, focusing primarily on small and medium-sized
businesses and their principals. Although we will offer a variety of loan
products, we expect to emphasize commercial/industrial and construction and
commercial real estate lending. We will also promote private banking services
and asset management products for our professional and executive customers.
We will have a community banking approach that emphasizes responsive
and personalized service to our customers. Our expansion strategy includes
attracting strong local management teams who have significant banking
experience, strong community contacts and strong business development potential
in our identified markets. Once local management teams are assembled, we intend
to establish banking centers in each of the identified markets. We currently
have management teams in place in the St. Louis, Columbia and Jefferson City
markets. Each management team will operate one or more banking centers within
its particular market area, will have a high degree of local decision-making and
lending authority and will operate in a manner that provides responsive,
personalized services similar to an independent community bank. In addition,
local management will be compensated based on the performance of their
respective banking centers and the overall financial and market performance of
the bank. We expect that upon our entry into a new market area, we will
undertake a marketing campaign using an officer calling program and
community-based promotions. Each market area will be supported by a local board
of directors, which will be provided with financial incentives to assist in the
development of banking relationships throughout the community.
First Premier will provide a variety of centralized support services to
each of the banking centers, including:
- accounting and back office support operations;
- investment portfolio management;
- credit administration and review;
- human resources;
- administration;
- training; and
- strategic planning.
Core processing, check clearing and other similar functions will be outsourced
to third-party vendors. As a result, we believe that these operating strategies
will enable First Premier to achieve cost efficiencies, to maintain consistency
in policies and procedures, and to allow the local management teams to
concentrate on developing and enhancing customer relationships.
ACQUISITION OF PREMIER BANCSHARES, INC.
Based upon a business plan developed by T. Stephen Johnson & Associates,
Inc., a financial services consulting firm ("TSJ&A"), TSJ&A and Richard C.
Jensen, the President and Chief Executive Officer of First Premier, developed
the concept for First Premier. First Premier is a Delaware corporation which was
organized on May 1, 1998 to implement this concept. Mr. Jensen and TSJ&A
evaluated potential bank acquisition candidates in various Missouri markets and
identified Premier as an independent financial institution capable of providing
a platform to implement its business strategy. On May 6, 1999, First Premier
signed a merger agreement with Premier Bancshares, Inc., and agreed to acquire
all of the outstanding capital stock of Premier in exchange for shares of First
Premier common stock. The
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acquisition of Premier Bank provides us with an existing charter so that we may
immediately commence banking operations upon completion of the merger in two of
our five initially-targeted markets. We intend to use the acquisition of Premier
Bank as a platform to expand our operations by building upon Premier Bank's
existing infrastructure, core processing technology and outsourcing
relationships.
STRATEGY OF FIRST PREMIER FINANCIAL CORPORATION
General
Our business strategy is to create a banking franchise that captures
market share among small and medium-sized businesses, their principals and other
professionals and executives in geographic markets that are familiar to
management. We will implement this strategy by:
- Targeting small and medium-sized business customers who demand high
levels of personalized attention and customer service;
- Establishing a banking center in St. Louis, expanding into Kansas
City and Springfield, while continuing to enhance our current
operations in Columbia and Jefferson City;
- Staffing banking centers with community-minded and responsive
management teams that will have significant local decision-making
authority;
- Operating with a few strategically located offices supported by
outsourced core processing and back room operations to increase
efficiencies;
- Enhancing private banking relationships by offering a broad spectrum
of products and services, including securities brokerage services
and investment management services; and
- Offering our customers the convenience and advantages offered by
Internet banking while targeting businesses that have been identified
as Internet users to leverage our banking centers.
Our Banking Model
Upon completion of the acquisition of Premier Bank, we will have banking
centers in two of our five initially-targeted markets. We intend to establish a
banking center within each of our identified markets primarily through the
branching of Premier Bank. We may, however, accomplish our expansion strategy by
acquiring existing banks within an identified market if an opportunity for such
an acquisition becomes available. Although each banking center will legally be a
branch of Premier Bank, our business strategy envisions that banking centers
located within each market will operate as if they were independent community
banks.
Local Management Teams. Prior to expanding into a new market area, we will
identify an individual who will serve as the president of that particular market
area, as well as those individuals who will serve on the local board of
directors. Each local president will be primarily responsible for actively
recruiting and assembling a management team, including lending officers, from
the local market area. We believe that a management team familiar with the needs
of its community will provide high quality personalized service to its
customers. The local management team will have a significant amount of
decision-making and lending authority and will be accessible to its customers.
As a result of the consolidation trend in the
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state of Missouri, we believe there are significant opportunities to attract
experienced bank managers who would be available to join an institution
promoting a community banking concept.
Local Boards of Directors. Each banking center will have a local board of
directors which will be comprised of prominent members of the community,
including business leaders and professionals. These local directors will act as
ambassadors of First Premier within the community and will be expected to
promote the business development of each banking center.
We will encourage both the members of our local boards of directors as
well as our lending officers to be active in the civic, charitable and social
organizations located in their communities. It is anticipated that members of
the local management team will hold leadership positions in a number of
community organizations.
We expect that upon our entry into a new market area, we will undertake a
marketing campaign utilizing an officer calling program, and community-based
promotions and media advertising. Such campaigns will emphasize each banking
center's responsiveness, local management team and special focus on personalized
service.
The initial banking center established in an identified market will have
the following banking personnel: a President, a Senior Lender, an Associate
Lending Officer, a Credit Analyst, a Branch/Operations Manager and an
appropriate number of financial service managers and tellers. The number of
financial service managers and tellers.
Lending Officers with Local Decision-Making Authority. It is expected that
the lending officers will be primarily responsible for the sales and marketing
efforts of the banking centers. We will emphasize relationship banking whereby
each customer will be assigned to a specific officer, with other local officers
serving as backup or in supporting roles. We intend to hire the appropriate
number of lending officers necessary to facilitate the development of strong
customer relationships. Our lending officers will be supported by our
organization's ability to make significantly larger loans than smaller community
banks.
We intend to offer salaries to the lending officers that are competitive
with other financial institutions in each market area. Local management will be
compensated based on the performance of their particular banking centers as well
as the overall financial and market performance of the bank. Lending officers
will be compensated based on an annual salary plus an incentive payment
structure that will be based upon the achievement of certain loan quality and
production goals. Those goals will be evaluated on an annual basis. We believe
that such a compensation structure will provide greater motivation for
participating officers.
It is anticipated that the banking centers will be strategically located
in areas in each market where the local management team determines that there is
the greatest potential to reach the maximum number of small and medium-sized
businesses. It is expected that these banking centers will develop in the areas
surrounding office complexes and other commercial areas. Such determinations
will depend upon the customer demographics of a particular market area and the
accessibility of a particular location to its customers. We expect to lease our
facilities to avoid investing significant amounts of capital in property and
facilities.
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Customers
We believe that the recent bank consolidation within the state of Missouri
provides a community-oriented bank significant opportunities to build a
successful, locally-oriented franchise. We further believe that many of the
larger financial institutions do not emphasize a high level of personalized
service to small and medium-sized businesses and their principals. We intend to
focus our marketing efforts on attracting small and medium-sized businesses and
individuals including: service companies, manufacturing companies, commercial
real estate developers, entrepreneurs and professionals, such as physicians and
attorneys. Because we intend to focus on small and medium-sized businesses, we
believe that the majority of our loan portfolio will be in the commercial area
with an emphasis placed on commercial/industrial, construction and commercial
real estate loans secured by real estate, accounts receivable, inventory, and
property, plant and equipment.
Although we expect to concentrate our lending efforts on commercial
businesses, we also anticipate that we will attract a significant amount of
consumer business. We expect that many of our retail customers will be the
principals of our small and medium-sized business customers. These customers
will comprise our private banking clients, for whom First Premier is expected to
provide investment management services, asset management services and securities
brokerage services. We intend to offer these services through strategic
alliances with third-party vendors. We intend to emphasize "relationship
banking" in order that each customer will identify and establish a comfort level
with the bank officers within a banking center. We intend to develop our retail
business with individuals who appreciate a high level of personal service,
contact with their lending officer and responsive decision-making. We expect
that most of our business will be developed through our lending officers and
local boards of directors and by pursuing an aggressive strategy of calling on
customers throughout the market area.
Products and Services
We intend to offer and Premier currently offers a broad array of
traditional banking products and services to our customers.
Loans. We intend to offer a wide range of commercial and consumer loans as
follows:
- Commercial/Industrial. We expect that our commercial lending will
consist primarily of loans for the financing of accounts receivable,
inventory and property, plant and equipment. We also expect to offer
Small Business Administration guaranteed loans. In making these
loans, we intend to manage our credit risk by actively monitoring
such measures as advance rate, cash flow, collateral value and other
appropriate credit factors.
- Commercial Construction. We expect to provide loans for the
construction and development of real estate which would be secured by
commercial properties. These loans generally command higher rates and
fees commensurate with the risk warranted in the construction lending
field. The risk in construction lending is dependent upon the
performance of the builder in building the project to the plans and
specifications of the borrower and the bank's ability to administer
and control all phases of the construction disbursements. Upon
completion of the construction period, this type of loan is typically
converted to a permanent loan.
- Commercial Real Estate. We anticipate that we will also offer
commercial real estate loans to developers of both commercial and
residential properties. In making these loans, we intend to
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manage credit risk by actively monitoring such measures as advance
rate, cash flow, collateral value and other appropriate credit
factors.
- Residential Mortgage. We expect that our real estate loans will
consist of residential first and second mortgage loans and
residential construction loans. We expect that we will make mortgage
loans with a variety of terms, including fixed and floating to
variable rates and a variety of maturities. These loans will be made
consistent with our appraisal policy and real estate lending policy
which will detail maximum loan-to-value ratios and maturities. We
expect that these loan-to-value ratios will be sufficient to
compensate for fluctuations in the real estate market to minimize
the risk of loss. We believe that many of our mortgage loans that
conform with secondary market criteria will be sold in the secondary
markets.
- Consumer Loans. We expect that our consumer loans will include lines
of credit and term loans secured by second mortgages on the
residences of borrowers for home improvements, education and other
personal expenditures. The remaining consumer loans will consist of
installment loans to individuals for personal, family and household
purposes. In evaluating these loans, we will require our lending
officers to review the borrower's level and stability of income,
past credit history and the impact of these factors on the ability
of the borrower to repay the loan in a timely manner. In addition,
we will require that our banking centers maintain an appropriate
margin between the loan amount and collateral value. We expect that
many of our consumer loans will be made to the principals of the
small and medium-sized businesses for whom we provide banking
services.
Private Banking Services. We also expect to provide other fee generating
services for the principals of our business customers. We intend to offer
services such as securities brokerage and investment services, portfolio and
asset management services, insurance products and will consider other
permissible activities. We also expect to offer investment products and cash
management products.
Internet Banking. We believe that there is a strong need within our market
niche for Internet banking. These services, which would be provided through a
third party, would allow customers to access their bank accounts on a
seven-day-a-week, 24-hour-a-day basis from any personal computer, wherever
located, by means of a secure web browser. This technology gives Internet
banking an advantage over PC-based home banking, which utilizes PC-based
software, requires repeated downloading and limits the user to a specific PC. We
believe that Internet banking will encourage our customers to maintain their
total banking relationships with us. We also anticipate using the Internet for
direct e-mail solicitation to small and medium-sized businesses we have
identified as current Internet users. We will market the convenience and
advantages of Internet banking, including on-line bill paying, money transfer
and cash management. We believe that Internet banking will leverage our
strategically located banking centers by attracting customers from within
Missouri and adjacent market areas. We are negotiating with several Internet
banking providers about implementing these services upon completion of the
merger and the offering.
Deposits. We intend to offer a broad range of interest-bearing and
noninterest-bearing deposit accounts, including commercial and retail checking
accounts, money market accounts, individual retirement accounts, regular
interest-bearing savings accounts and certificates of deposit with a range of
maturity date options. We anticipate that the primary sources of deposits will
be small and medium-sized businesses and individuals within an identified
market. In each identified market, senior management will have the authority to
set rates within specified parameters in order to remain competitive with other
financial institutions located in the same market. All deposits will be insured
by the FDIC up to the maximum amount permitted by law. In addition, we expect to
implement a service charge fee schedule
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which will be competitive with other financial institutions in a community
banking center's market area, covering such matters as maintenance fees on
checking accounts, per item processing fees on checking accounts, returned check
charges and other similar fees.
Specialized Consumer Services. We intend to offer specialized products and
services to our customers, such as travelers checks, safe deposit services,
credit cards and consumer lines of credit. Premier Bank currently offers all of
these services and provides credit cards to its customers through a third party.
Courier Services. We expect to offer courier services to our business
customers. Courier services will be provided through a third party, which will
permit us to provide the convenience and personalized service its customers
require by scheduling pick-ups of deposits.
Automatic Teller Machines ("ATMs"). We expect to establish a limited ATM
network and we intend to make other financial institutions' ATMs available to
our customers.
Market Expansion
First Premier intends to expand into the attractive and growing
communities in the state of Missouri. Once it has assembled a local management
team and local board of directors for a particular market area, First Premier
intends to establish one or more banking centers in that market. Upon the
completion of the acquisition of Premier Bank, we will have established banking
centers in the Jefferson City and Columbia market areas. Jefferson City is the
capital of Missouri and Columbia is the site of the main campus of the
University of Missouri. In addition, we have assembled a management team in St.
Louis and, immediately following the offering, will open a banking center in the
St. Louis market. The other markets into which First Premier presently intends
to expand are Kansas City and Springfield. We have identified these markets as
providing the most favorable opportunities for growth and intend to establish
banking centers within these markets as soon as practicable. As opportunities
arise, we will also consider expansion into other selected banking markets in
the states adjacent to Missouri.
The consolidation within the banking industry is evidenced by the
following statistics. According to the FDIC, as of December 31, 1987, 596
depository institutions were located in Missouri. By December 31, 1998, there
were a total of 383 depository institutions in Missouri, representing a decline
of approximately 36% over the ten-year period. Management attributes this
decline to consolidation resulting from the liberalization of interstate banking
and branching laws allowing the entry into, and expansion in, Missouri by
numerous large banks. The result of this consolidation has been a significant
reduction in the number of community-oriented financial institutions focusing on
personalized service to small and medium-sized business customers. We believe
that our strategy, which incorporates a community banking concept, is better
suited to provide a high level of service to small and medium-sized businesses
than larger financial institutions.
We believe that the state of Missouri in general and the identified
markets within Missouri in particular represent an attractive opportunity to
build a multi-market banking franchise. Missouri has a current population of
approximately 5.4 million making it the fifteenth most populous state in the
country. Missouri has experienced growth in the amount of commercial and
consumer deposits.
Certain demographic and deposit information with respect to each of the
identified markets is discussed below.
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St. Louis Market. The St. Louis market area includes the city of St. Louis
and the surrounding counties in both Missouri and Illinois. St. Louis'
population increased from approximately 2.49 million in 1990 to approximately
2.56 million in 1998, representing an increase of approximately 2.7% over that
period compared to the national increase of 8.31% for the same period. The
population is projected to increase to approximately 2.62 million by 2003. Over
the period from 1990 to 1998, average household income in the St. Louis market
has increased 38.9% compared to the national increase of 38.2% for the same
period. As of June 30, 1998, there were 124 financial institutions represented
in St. Louis with aggregate deposits of $36.1 billion. Deposits in St. Louis
increased $7.6 billion from June 30, 1993 through June 30, 1998, at an annual
growth rate of 4.84% for that period.
Kansas City Market. The Kansas City market area includes the city of
Kansas City as well as surrounding counties in Missouri and Kansas. Kansas
City's population increased from approximately 1.58 million in 1990 to
approximately 1.72 million in 1998, representing an increase of approximately
8.6% over that period compared to the national increase of 8.3% for the same
period. The population is projected to increase to approximately 1.79 million by
2003. Over the period from 1990 to 1998, average household income in the Kansas
City market increased 42.2% compared to the national increase of 38.2% for the
same period. As of June 30, 1998, there were 136 financial institutions
represented in the Kansas City market with aggregate deposits of $24.2 billion.
Deposits in the Kansas City market increased $4.4 billion from June 30, 1993
through June 30, 1998, at an average annual growth rate of 4.10% for that
period.
Springfield Market. The Springfield market area includes the city of
Springfield, as well as the counties of Christian, Greene and Webster.
Springfield's population increased from approximately 264,000 in 1990 to
approximately 305,000 in 1998, representing an increase of approximately 15.5%
over that period compared to the national increase of 8.3% for the same period.
The population is projected to increase to approximately 322,000 by 2003. Over
the period from 1990 to 1998, average household income in the Springfield market
increased 51.3% compared to the national increase of 38.2% for the same period.
As of June 30, 1998, there were 34 financial institutions represented in the
Springfield market with aggregate deposits of $3.9 billion. Deposits in the
Springfield market increased $1.1 billion from June 30, 1993 through June 30,
1998, at an average annual growth rate of 6.85% for that period.
Columbia Market. The Columbia market area includes the city of Columbia,
as well as Boone county. Columbia's population increased from approximately
112,000 in 1990 to approximately 130,000 in 1998, representing an increase of
approximately 15.2% over that period compared to the national increase of 8.3%
for the same period. The population is projected to increase to approximately
138,000 by the year 2003. Over the period from 1990 to 1998, average household
income in the Columbia market increased 52.2% compared to the national increase
of 38.2% for the same period. As of June 30, 1998, there were 12 financial
institutions represented in the Columbia market with aggregate deposits of $1.4
billion. Deposits in the Columbia market increased $300 million from June 30,
1993 through June 30, 1998, at an average annual growth rate of 4.94% for that
period.
Jefferson City Market. The Jefferson City market area includes Jefferson
City and Cole County. Jefferson City's population increased from approximately
35,500 in 1990 to approximately 36,200 in 1998, representing an increase of
approximately 2.0% over that period compared to the national increase of 8.3%
for the same period. The population is projected to increase to approximately
36,800 by 2003. Over the period from 1990 to 1998, average household income in
the Jefferson City market increased 51.1% compared to the national increase of
38.2% for the same period. As of June 30, 1998, there were 16 financial
institutions represented in the Jefferson City market with aggregate deposits of
$1.4 billion.
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Deposits in the Jefferson City market increased $350 million from June 30, 1993
through June 30, 1998, at an average annual growth rate of 5.92% for that
period.
OPERATIONS OF FIRST PREMIER
First Premier will remain in the development stage until the completion of
the acquisition of Premier Bank and the offering. First Premier's corporate
offices will be located in the St. Louis metropolitan area.
First Premier presently has six full-time employees.
At the holding company level, First Premier will provide a variety of
support services for each of the banking centers. These services will include
back office operations, investment portfolio management, credit administration
and review, human resources, training and strategic planning. First Premier has
hired a Chief Financial Officer, a Chief Credit Officer, and a Senior Vice
President of Commercial Real Estate and the President of the St. Louis market.
First Premier intends to use Premier Bank's facilities and outsourcing
arrangements for its data processing, operational and back office support
activities. The banking centers will utilize the operational support provided by
Premier Bank to perform account processing, loan accounting, loan support,
network administration and other functions. Premier Bank has developed extensive
procedures for many aspects of its operations, including operating procedures
manuals and compliance procedures. Specific operating procedures for the banking
centers will be developed from the procedures that are currently utilized by
Premier Bank. We believe that Premier Bank's existing operations and support
management are capable of providing continuing operational support for all of
the banking centers.
Outsourcing
We believe that by outsourcing a major portion of our back office
operations, we can realize greater efficiencies and economies of scale. In
addition, various products and services, especially technology-related
services, can be offered through third-party vendors at a substantially lower
cost than the costs of developing these products internally.
Premier Bank is utilizing Computer Services Incorporated to provide its
core data processing and certain customer products. In addition to account level
processing for loans and deposits, Premier Bank also utilizes CSI for computer
network support, proof of deposit processing, on-line support, telephone banking
services, cash management, automated clearing house services and consulting
services.
Credit Administration
We will oversee all credit policy operations at the holding company level
while still granting local lending authority to management in each local market.
The Chief Credit Officer of First Premier will be primarily responsible for
maintaining a quality loan portfolio and developing a strong credit culture
throughout the entire organization. The Chief Credit Officer will be responsible
for developing and updating the credit policy and procedures for the
organization. In addition, he will work closely with each lending officer at the
banking centers to ensure that the business being solicited is of the quality
and structure that fits our desired risk profile. Credit quality will be
controlled through uniform compliance to credit policy. Our risk-decision
process will be actively managed in a disciplined fashion to maintain an
acceptable risk profile.
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<PAGE> 59
Our credit approval process will consist of specific authorities granted
to the lending officers. Loans exceeding a particular lending officer's level of
authority will be reviewed and considered for approval by the next level of
authority. The Chief Credit Officer has ultimate credit decision-making
authority, subject to review by the Chief Executive Officer and our board of
directors. Risk management will require active involvement with our customers
and active management of our portfolio. The Chief Credit Officer will review our
credit policy with the local management teams at least annually but more
frequently if necessary. The results of these reviews will then be presented to
our board of directors. The purpose of these reviews will be to attempt to
ensure that the credit policy remains compatible with our short and long-term
business strategies. The Chief Credit Officer will also generally require all
individuals charged with risk management to reaffirm their familiarity with the
credit policy annually.
OPERATIONS OF PREMIER BANCSHARES, INC.
Premier Bancshares, Inc. was incorporated in 1994 as a Missouri
corporation. Premier Bank commenced operations on May 15, 1995, as a full
service, state-chartered commercial bank in Jefferson City, Missouri. Premier
Bank opened its branch office in Columbia in April, 1998. Premier Bank owns both
of its facilities. Premier Bank has received regulatory approval to open an
additional branch in a leased facility in Jefferson City which is expected to
open in the first quarter of 2000.
Premier Bank will apply for a branch location in the St. Louis
metropolitan area which would open following the completion of the offering and
the merger.
Premier Bank is currently providing many of the products and services
which First Premier expects to offer. Premier Bank offers a variety of loan
products, including commercial loans, real estate loans, home equity loans,
consumer/installment loans, SBA loans and offers credit cards through a third
party. Premier Bank also offers a broad range of interest-bearing and
noninterest-bearing deposit accounts, including commercial and retail checking
accounts, money market accounts, individual retirement accounts, regular
interest-bearing savings accounts and certificates of deposit. In addition,
Premier Bank provides such consumer services as U.S. Savings Bonds, travelers
checks, cashiers checks, safe deposit boxes, bank-by-mail services, direct
deposit and telephone banking. Premier Bank is also offering limited investment
services, such as securities brokerage, through a third party provider.
Premier Bank engages in a broad array of lending activities, including
commercial/industrial, SBA guaranteed loans, consumer and real estate loans. As
of December 31, 1998, Premier Bank had a legal lending limit for loans of
approximately $1.0 million per borrower.
ASSET/LIABILITY MANAGEMENT
Our objective is to manage assets and liabilities to provide a
satisfactory level of consistent operating profitability. Our Chief Financial
Officer is primarily responsible for monitoring policies and procedures that are
designed to maintain an acceptable composition of the asset/liability mix while
adhering to prudent banking practices. Our management philosophy is to support
asset growth primarily through growth of core deposits. We intend to continue to
invest the largest portion of earning assets in commercial industrial and
construction and commercial real estate loans.
Currently, Premier Bank's asset/liability mix is monitored on a daily
basis, with monthly reports presented to Premier Bank's board of directors. The
objective of this policy is to control interest-sensitive assets and liabilities
so as to minimize the impact of substantial movements in interest rates on
Premier Bank's earnings.
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COMPETITION
Competition among financial institutions in the state of Missouri and the
markets in which Premier Bank currently operates and into which we may expand is
intense. We will compete with other bank holding companies, state and national
commercial banks, savings and loan associations, consumer finance companies,
credit unions, securities brokerages, insurance companies, mortgage banking
companies, money market mutual funds, asset-based non-bank lenders and other
financial institutions. Many of these competitors have substantially greater
resources and lending limits, larger branch networks and are able to offer a
broader range of products and services than we will be able to offer.
Various legislative actions in recent years have led to increased
competition among financial institutions. With the enactment of the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 and other laws and
regulations affecting interstate bank expansion, financial institutions located
outside of the state of Missouri may now more easily enter our targeted markets.
In addition, recent legislative and regulatory changes and technological
advances have enabled customers to conduct banking activities without regard to
geographic barriers through computer and telephone-based banking and similar
services. There can be no assurance that the United States Congress or the
Missouri Legislature or the applicable bank regulatory agencies will not enact
legislation or promulgate rules that may further increase competitive pressures
on First Premier. Our failure to compete effectively for deposit, loan and other
banking customers in its market areas could have a material adverse effect on
our business, future prospects, financial condition or results of operations.
DATA PROCESSING
Premier Bank currently has an agreement with CSI to provide its core
processing and certain customer products. First Premier believes that CSI will
be able to provide technologically advanced data processing and customer
service-related processing at a competitive price to support First Premier's
future growth. We believe that CSI's services are adequate for our business
expansion plans.
FACILITIES
First Premier's temporary offices are located at 13004 Starbuck Road, St.
Louis, Missouri 63141. First Premier is currently negotiating for office space
in the St. Louis metropolitan area.
EMPLOYEES
We presently have six full-time employees. We will hire additional
employees as needed to support our growth.
Premier Bank presently has 20 full-time employees and one part-time
employee, including 10 officers. Premier Bank will hire additional employees as
needed, including additional tellers and financial service representatives.
LEGAL PROCEEDINGS
From time to time, First Premier may be involved in litigation relating to
claims arising out of operations in the normal course of business. As of the
date of this prospectus, neither First Premier nor Premier Bank is engaged in
any legal proceedings that are expected, individually or in the aggregate, to
have a material effect on First Premier or Premier Bank.
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PRINCIPAL SHAREHOLDERS OF FIRST PREMIER
The following table sets forth information with respect to the beneficial
ownership of shares of the common stock as of April 30, 1999, and as adjusted to
reflect the sale of the shares offered hereby and the shares offered in
connection with the merger, with respect to (1) each director of First Premier;
(2) each person, including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, who is known by First Premier to own
beneficially more than five percent of the outstanding shares of the common
stock and (3) all directors and executive officers of First Premier as a group.
Unless otherwise indicated, each shareholder has sole voting and investment
power with respect to the indicated shares.
<TABLE>
<CAPTION>
Ownership
Ownership Prior After the merger
to the offering and the offering
-------------------------- --------------------------
Name of Beneficial Owner Shares (1) Percent Shares(1) Percent(2)
------------------------ ----------- ------- ---------- ----------
<S> <C> <C> <C> <C>
Richard C. Jensen................................. 105,273 35.1% 230,273(3) 5.4%
Allan D. Ivie, IV................................. -- * -- *
John S. Rouse..................................... -- * -- *
Sanford B. Scott.................................. -- * -- *
Daniel R. Sills................................... -- * -- *
T. Stephen Johnson............................... 48,836(4) 16.3% 116,000(5) 2.7%
Alan C. Henderson................................. -- * -- *
Gerald G. Kaufman................................. 10,525 3.6% 25,000(6) *
Frank Trulaske.................................... -- * -- *
Bruce W. Wiley.................................... -- * 111,712(7) 2.6%
Lewis A. Levey.................................... -- * -- *
Marvin I. Moskowitz............................... -- * -- *
Andrew M. Rosen................................... -- * -- *
Patricia Whitaker................................. -- * -- *
Bank Julius Baer & Co. Ltd........................ 38,525(8) 12.8% 38,525 *
All executive officers and directors as a group
(14 persons)...................................... 115,798 38.6% 366,985 8.5%
</TABLE>
- --------------------------
*Less than 1%.
(1) Pursuant to the rules of the Commission, the determinations of "beneficial
ownership" of common stock are based upon Rule 13d-3 under the Exchange
Act, which provides that shares will be deemed to be "beneficially owned"
where a person has, either solely or in conjunction with others, the power
to vote or to direct the voting of shares and/or the power to dispose, or
to direct the disposition of, shares or where a person has the right to
acquire any such power within 60 days after the date such "beneficial
ownership" is determined. Shares of common stock that a beneficial owner
has the right to acquire within 60 days pursuant to the exercise of stock
options or warrants are deemed to be outstanding for the purpose of
computing the percentage ownership of such owner but are not deemed
outstanding for the purpose of computing the percentage ownership of any
other person.
(2) The percentages are based upon the aggregate number of shares of common
stock issued and outstanding as of May 7, 1999, as adjusted to reflect the
3,000,000 shares issuable pursuant to the offering (assuming no exercise of
the underwriters' over-allotment option) and the 1,000,000 shares issuable
pursuant to the merger (assuming an $11.00 initial public offering price of
the common stock in the offering, the mid-point of the estimated range).
(3) Includes 125,000 shares issuable upon the exercise of immediately
exercisable options to be granted simultaneously with the closing of the
offering. Mr. Jensen's business address is 13004 Starbuck Road, St. Louis,
Missouri 63141.
(4) Includes 21,050 shares which are owned by Mr. Johnson's wife, 4,210 shares
held by Mr. Johnson's wife as a custodian for their children, and 421
shares held by Mr. Johnson as a custodian for his nephew. Mr. Johnson's
business address is 9755 Dogwood Road, Suite 310, Roswell, Georgia 30075.
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<PAGE> 62
(5) Includes 31,845 shares issuable upon the exercise of immediately
exercisable warrants, 28,950 shares issuable upon the exercise of
immediately exercisable warrants to Mr. Johnson's wife, 5,790 shares
issuable upon the exercise of immediately exercisable warrants to Mr.
Johnson's wife as custodian for their children and 579 shares issuable upon
the exercise of immediately exercisable warrants to Mr. Johnson as
custodian for his nephew.
(6) Includes 14,475 shares issuable upon the exercise of immediately
exercisable options to be granted simultaneously with the closing of the
offering.
(7) Includes 40,000 shares issuable upon the exercise of immediately
exercisable options to be granted simultaneously with the closing of the
offering and 71,712 shares upon conversion and exchange of shares of
Premier's common stock pursuant to the merger.
(8) Includes 10,525 shares which are beneficially owned by Robin C. Kelton,
Chairman of the Board of Kelton International Limited, an underwriter and
one of the representatives in the initial public offering. Bank Julius Baer
& Co. Ltd.'s address is Bahnhofstrasse 36, 8010 Zurich, Switzerland.
MANAGEMENT OF FIRST PREMIER
Executive Officers and Directors
The following table sets forth information concerning First Premier's
executive officers and directors upon completion of the offering and of the
merger.
<TABLE>
<CAPTION>
NAME AGE POSITION(1)
- ---- --- -----------
<S> <C> <C>
Richard C. Jensen................................ 54 Chairman of the Board, President, Chief
Executive Officer and Director
Allan D. Ivie, IV................................ 38 President of the St. Louis Market
John S. Rouse.................................... 50 Chief Credit Officer
Sanford B. Scott................................. 38 Senior Vice President of Commercial Real Estate
Daniel R. Sills.................................. 39 Chief Financial Officer
Bruce W. Wiley................................... 42 President of the Mid-Missouri Market and Director
Alan C. Henderson................................ 52 Director
Gerald G. Kaufman................................ 51 Director and Vice President(2)
Lewis Levey...................................... 57 Director
Marvin I. Moskowitz.............................. 57 Director
Andrew Rosen..................................... 48 Director
Frank Trulaske................................... 50 Director
Patricia Whitaker................................ 54 Director
</TABLE>
- ----------------------
(1) The Board of Directors of First Premier will be divided into three classes,
designated Class I, Class II and Class III.
(2) Upon completion of the offering, Mr. Kaufman will resign from his position
as Vice President of First Premier but will continue as a director of
First Premier.
Each of the following directors and executive officers, with the exception
of Mr. Jensen , Mr. Kaufman and Mr. Wiley, have been with First Premier since
May 1999.
Richard C. Jensen has served as Chairman of the Board, President, Chief
Executive Officer and a director of First Premier since July 1998. Mr. Jensen
served as the President of Royal Banks of Missouri from April 1998 to May 1998.
Since 1980, Mr. Jensen served in various positions at NationsBank, N.A. - St.
Louis, formerly Boatmen's National Bank of St. Louis, most recently as President
since 1997. At
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NationsBank, Mr. Jensen was responsible for NationsBank's General Bank, which
included over 60 branches in St. Louis, small business, middle market lending
and professional and executive banking. Mr. Jensen has over 25 years of banking
experience in Missouri.
Allan D. Ivie, IV has served as the President of the St. Louis market since
May 1999. Mr. Ivie served in various positions with NationsBank/Boatmen's
National Bank of St. Louis since 1988, most recently as Senior Vice President of
the Private Client Group where he was primarily responsible for implementing the
Private Client Group after NationsBank's acquisition of Boatmen's. From 1995 to
1997, Mr. Ivie served as Vice President and Director of Private Banking. Mr.
Ivie has over 14 years of banking experience in Missouri.
John S. Rouse has served as Chief Credit Officer of First Premier since May
1999. Mr. Rouse served in various positions with NationsBank, N.A. and Boatman's
National Bank of St. Louis since 1979. From 1990 to 1995,Mr. Rouse served as
Vice President and Manager of Loan Originations in the Structured Finance Group
and from 1995 to 1997, Mr. Rouse served as Vice President in the St. Louis
Corporate Group with Boatmen's. Since 1997, Mr. Rouse has been the Senior Vice
President/Senior Lender in the Private Client Group with NationsBank where he
was responsible for providing credit approval and administering the loan
portfolio for the Private Client Group with commitments of more than $750
million. Mr. Rouse has over 20 years of banking experience in the Missouri
market.
Sanford B. Scott has served as Senior Vice President of Commercial Real
Estate of First Premier since May 1999. Prior to joining First Premier, Mr.
Scott served in various positions with NationsBank since 1988, most recently as
Manager and Senior Commercial Mortgage Originator for the Midwest. Prior to this
position, Mr. Scott was manager of the Commercial Real Estate Division for the
Central Region of Boatmen's National Bank of St. Louis, where he managed a $200
million commercial mortgage and construction loan portfolio. From 1985 to 1988,
Mr. Scott served in various positions with Mark Twain Banks, N.A. Mr. Scott has
over 14 years of banking experience in Missouri.
Daniel R. Sills has served as Chief Financial Officer of First Premier
since May 1999. Prior to joining First Premier, Mr. Sills worked in the
financial institutions consulting group as a certified public accountant with
KPMG LLP in St. Louis since 1997. From 1993 to 1997, Mr. Sills served in various
positions at Boatmen's Bancshares (now NationsBank) including Chief Financial
Officer of Boatmen's Credit Card Bank and Boatmen's Merchant Processing Company.
From 1989 to 1993, Mr. Sills was with KPMG LLP in St. Louis where he was
responsible for conducting consulting engagements for a wide range of financial
institution clients.
Bruce W. Wiley is currently President and Chief Executive Officer of
Premier Bancshares, Inc. and Premier Bank. In 1994, Mr. Wiley and other
investors founded Premier. Upon completion of the merger and the offering, Mr.
Wiley will continue with Premier Bank as President of the Mid-Missouri market
and a director and Vice President of First Premier. Mr. Wiley has over six years
of banking experience in Missouri.
Alan C. Henderson has served as the President, Chief Executive Officer and
as a director of RehabCare Group, Inc., a publicly traded company since June
1998. From 1991 to 1998, Mr. Henderson served as Executive Vice President and
Chief Financial Officer of RehabCare Group, Inc. Mr. Henderson is also a
director of General American Capital Corporation, a registered investment
company and a member of the Health Services Board of Mercantile Bank, N.A.
Gerald G. Kaufman has served as a director and Vice President of First
Premier since its inception. Since 1997, Mr. Kaufman has served as the President
of T. Stephen Johnson & Associates, Inc. an investment banking firm located in
Atlanta, Georgia. Prior to his service with TSJ&A, Mr. Kaufman was
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<PAGE> 64
President of Bretton Woods Group, a management consulting and investment banking
firm. From 1980 to 1991, Mr. Kaufman served as the Managing Director for Bank
Earnings International, one of the nation's largest bank consulting firms. Mr.
Kaufman began his banking career with Citizens and Southern National Bank,
Atlanta, Georgia in 1973 as a Vice President in Bank Operations and the
International Banking Division.
Lewis A. Levey is a principal of the Paragon Group and the Trust Manager of
the Camden Property Trust. Mr. Levey currently serves on the boards of Grand
Center, Care & Counseling, Inc. and the St. Louis Psychoanalytic Institute.
Andrew M. Rosen is currently the Senior Vice President and Treasurer of
Brown Group, Inc., one of the largest shoe retailers in the country. Mr. Rosen
has been with Brown Group since 1974. Mr. Rosen has served as past President of
the Financial Executives Institute and the Washington University Business School
Alumni Executive Committee. Mr. Rosen also serves on the boards of Junior
Achievement of Mississippi Valley Inc. and the Harris Stowe Advisory Board.
Marvin I. Moskowitz served as the Chairman and Chief Executive Officer of
Prudential Home Mortgage Company from 1986 to 1996. In 1994, Mr. Moskowitz was
also made Chief Executive Officer of Prudential's Real Estate Affiliates, a real
estate franchise network. From 1969 to 1986, Mr. Moskowitz served in various
positions with Citicorp, most recently as President of Citicorp Mortgage. Since
the sale of Prudential Home Mortgage Company in 1996, Mr. Moskowitz has devoted
his time to venture capital work investing primarily in start-up technology and
healthcare-related enterprises. Mr. Moskowitz is on the board of the Arts &
Education Counsel of St. Louis, and a member of the National Council of National
Jewish Medical and Research Center.
Frank Trulaske is the owner of TRUE Fitness Technology, Inc., a
manufacturer of treadmills and exercise equipment he founded in 1981. Mr.
Trulaske is a former member of the board of directors of Magna Bank, N.A. and a
member of the board of directors of Lindenwood University, The Salvation Army,
The St. Charles Regional Commerce and Growth Advisory Committee, and the
development board of St. Louis Children's Hospital.
Patricia Whitaker is the President and Chief Executive Officer of Interior
Space Inc., an interior design firm. Ms. Whitaker serves on the boards of the
Hawthorn Foundation, the March of Dimes, the YMCA, the St. Louis Arts and
Education Council, McKendree College and the St. Louis Forum.
Board of Directors
The number of directors of First Premier is currently fixed at nine. The
Certificate of Incorporation and the By-Laws provide for the board of directors
to consist of not less than three, nor more than 15 persons, with the precise
number to be determined from time to time by the Board of Directors. Upon
amendment to the Certificate of Incorporation, the directors will be divided
into three classes, designated Class I, Class II and Class III. Each class
consists, as nearly as may be possible, of one-third of the total number of
directors. The term of First Premier's initial Class I Directors will expire at
the first annual meeting of shareholders to be held in 2000; the term of First
Premier's initial Class II Directors will expire at the second annual meeting of
shareholders to be held in 2001; and the term of First Premier's initial Class
III Directors will expire at the third annual meeting of shareholders to be held
in 2002. At each annual meeting of shareholders, successors to the class of
directors whose term expires at the annual meeting will be elected for a
three-year term. If the number of directors is changed, an increase or decrease
will be apportioned among the classes so as to maintain the number of directors
in each class as equally as possible. Any additional director of any class
elected to fill a vacancy resulting from an increase in such class will hold
office for a term that will expire at the next annual meeting, but in no event
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<PAGE> 65
will a decrease in the number of directors shorten the term of any incumbent
director. Any director elected to fill a vacancy due to resignation, removal or
death will have the same remaining term as that of his predecessor. In the case
of the removal of a director from office, the resulting vacancy on the board of
directors will be filled by the vote of at least 75% of the outstanding shares
of common stock. Any other vacancy on the board of directors will be filled by a
majority vote of the remaining directors then in office or by action of the
shareholders. Any director may be removed, with or without cause, at any regular
or special meeting of shareholders called for that purpose.
The effect of the classified board of directors is to make it more
difficult for a person, entity or group to effect a change in control of First
Premier through the acquisition of a large block of First Premier's voting
stock. The executive officers of First Premier serve at the pleasure of the
board of directors.
The board of directors will have an Executive Committee, an Audit Committee
and a Compensation Committee. The Executive Committee will exercise the
authority of the board of directors in accordance with the company's By-Laws
between regular meetings of the board of directors. The Audit Committee will
review and make recommendations to the board of directors on First Premier's
audit procedures and independent auditors' report to management and will
recommend to the board of directors the appointment of the independent auditors
for First Premier. The Compensation Committee will review and make
recommendations to the board of directors with respect to the compensation of
officers of First Premier and will assist the board in the administration of
First Premier's stock option plan.
Executive Compensation
The following table provides certain summary information for the fiscal
year ended December 31, 1998 concerning compensation paid or accrued by First
Premier to or on behalf of First Premier's Chief Executive Officer. No other
executive officer of First Premier had total annual salary and bonus which
exceeded $100,000 during the last fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
----------------------------------- ------------------------------------------------
Number
Restricted of
Name and Principal Position Stock Options All Other
- --------------------------- Year Salary Bonus Awards Awarded Compensation
---- ------ ----- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Jensen
Chairman, President and Chief
Executive Officer 1998 $114,583 $ -- 105,273(1) -- $ --
</TABLE>
-------------------------------
(1) In August 1998, First Premier issued 250,000 shares of common stock to Mr.
Jensen at a price of $.01 per share. On April 29, 1999, First Premier
repurchased 144,727 of these shares at a price of $.01 per share.
Employment Agreements
First Premier and Richard C. Jensen have entered into an employment
agreement which provides that Mr. Jensen will serve as the President and Chief
Executive Officer of First Premier and as President and Chief Executive Officer
of Premier Bank upon completion of the merger and the offering. Mr. Jensen also
serves as a member of the board of directors and will serve on Premier Bank's
board of directors after the
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<PAGE> 66
closing of the merger. Mr. Jensen's employment agreement has a three-year term
and provides for a minimum annual base salary of $250,000. Upon completion of
the offering, Mr. Jensen will receive a payment of $150,000. In addition, the
Board will issue options to Mr. Jensen to purchase up to 125,000 shares of
common stock at the initial public offering price of the common stock sold in
the offering. This option will be exercisable for a period of ten years.
After the closing of the offering, in the event of a "change in control" of
First Premier (as defined in the employment agreement), Mr. Jensen will be
entitled to give written notice to First Premier of termination of the
employment agreement and to receive a cash payment equal to approximately 300%
of the compensation received by Mr. Jensen in the one-year period immediately
preceding the change in control. In addition, if Mr. Jensen elects to terminate
the employment agreement pursuant to a change in control, Mr. Jensen will
further be entitled to, in lieu of options, an amount in cash or common stock
equal to the excess of the fair market value of the common stock as of the date
of closing of the transaction effecting the change of control over the per share
exercise price of the options held by Mr. Jensen, times the number of shares of
common stock subject to such options.
If the board of directors determines that First Premier is unable to close
the offering, then the employment agreement may be terminated by the board of
directors at any time during the term of the employment agreement without notice
with the condition that Mr. Jensen will be entitled to liquidated damages in the
amount of $250,000. If Mr. Jensen is terminated for cause (as that term is
defined in the employment agreement), the employment agreement may be terminated
by the board of directors without notice and without further obligation than for
salary already earned. Upon 30 days' written notice to Mr. Jensen, First Premier
may terminate the employment agreement without cause with the condition that Mr.
Jensen will be entitled to the same compensation as he would have been entitled
to receive in the event of a change of control of First Premier. Likewise, Mr.
Jensen may, upon thirty days' written notice to First Premier, terminate the
employment agreement without cause. In the event of termination by Mr. Jensen,
First Premier will have no further obligation than for salary earned and First
Premier will be entitled to enforcement of the non-compete and non-solicitation
provisions. After the closing of the offering, in the event of Mr. Jensen's
death, First Premier will pay to Mr. Jensen's designated beneficiary an amount
equal to Mr. Jensen's base salary through the end of the month in which Mr.
Jensen's death occurred. The employment agreement also contains a non-compete
provision which provides that if Mr. Jensen terminates his employment agreement,
he will not, for a period of 12 months, without the prior written consent of
First Premier, either directly or indirectly, serve as an executive officer of
any bank, bank holding company or other financial institution within St. Louis
County, Missouri. The employment agreement further obligates Mr. Jensen to
protect the confidentiality of First Premier's information following termination
of his employment.
First Premier has also entered into employment agreements with its
executive officers, including Mr. Ivie, Mr. Rouse, Mr. Scott, and Mr. Sills. All
of these employment agreements provide for a three year term. These employment
agreements provide for annual base salaries to be paid in the following amounts:
Mr. Ivie ($125,000), Mr. Rouse ($130,000), Mr. Scott ($115,000), and Mr. Sills
($125,000). The employment agreements also provide for the grant of options to
purchase shares at the initial public offering price which are exercisable for a
term of 10 years. Messrs. Ivie, Scott, and Rouse will receive options to
purchase up to 30,000 shares and Mr. Sills will receive options to purchase up
to 20,000 shares. Otherwise, these agreements contain similar provisions to
those contained in Mr. Jensen's employment agreement.
First Premier has entered into an employment agreement with Bruce W. Wiley,
the President of Premier Bank. Mr. Wiley's agreement provides for a five year
term commencing at the closing of the offering. Mr. Wiley's employment agreement
provides for an annual base salary of $150,000 and the grant of options to
purchase up to 70,000 shares of First Premier common stock at the initial public
58
<PAGE> 67
offering price. Of these options, 30,000 options will be granted under First
Premier's stock option plan on the same terms as options issued to other members
of senior management and will vest over a period of three years. The remaining
40,000 options will be granted on the same terms as those warrants which were
issued to certain founders of First Premier in April 1998 and will be
exercisable for 10 years. In addition, Mr. Wiley's employment agreement provides
that he will serve as a director of First Premier and his title following the
merger and the offering will be President of the Mid-Missouri Market. In the
event of a "change in control" of First Premier (as defined in the employment
agreement), Mr. Wiley may elect to give written notice to First Premier of
termination of the agreement and to receive a cash payment equal to
approximately 300% of the compensation received by him in the one year period
immediately preceding the change in control. Mr. Wiley's employment agreement
also contains certain non-compete and non-solicitation provisions which are
similar to those described in the employment agreement of Mr. Jensen discussed
above.
Stock Option Plan
On April 29, 1999, the board of directors adopted the First Premier
Financial Corporation 1999 Stock Option Plan (the "1999 Plan") to promote First
Premier's growth and financial success. Options may be granted under the 1999
Plan to First Premier's directors, officers and employees, as well as certain
consultants and advisors. The 1999 Plan contemplates the grant of nonqualified
stock options and incentive stock options as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). The 1999 Plan is not
qualified under Section 401(a) of the Code and is not subject to the provisions
of the Employee Retirement Income Security Act of 1974, as amended. The 1999
Plan provides for option grants to purchase up to an aggregate of 500,000 shares
of common stock, subject to adjustment under certain circumstances (the "Option
Shares"). The 1999 Plan will expire upon the earlier to occur of: (1) the date
on which all Option Shares have been issued upon exercise of options under the
1999 Plan; or (2) the tenth anniversary of the 1999 Plan's effective date. The
1999 Plan will be administered by the board of directors or by a committee
appointed by the board and consisting of least two non-employee board members.
The exercise price of options granted under the 1999 Plan will be
determined by the board of directors, but will in no event be less than 100% of
the market price of the common stock on the grant date. However, nonqualified
stock options may be granted at an exercise price of no less than 75% of the
market price of the common stock on the date of grant. Vested options under the
1999 Plan may be exercised in whole or in part, but in no event later than 10
years from the grant date. If an optionee during his or her lifetime ceases to
be an officer, director, employee, consultant or advisor of First Premier or any
subsidiary of First Premier for any reason other than his or her death or total
disability, any option or unexercised portion thereof which is exercisable on
the date the optionee ceases employment will expire 90 days following the date
the optionee ceases to be an officer, director or employee of First Premier or
of a subsidiary of First Premier, but in no event after the term provided in the
optionee's option agreement. If an optionee dies or becomes totally disabled
while he or she is an officer, director or employee of First Premier or of a
subsidiary of First Premier, the option may be exercised by a legatee or
legatees of the optionee under his or her last will or by his or her personal
representative or representatives at any time within one year following his or
her death or total disability, but in no event after the term provided in his or
her option agreement. Options granted under the 1999 Plan will only be
assignable or transferable by the optionee by will or the laws of descent and
distribution. During the optionee's lifetime, options are only exercisable by
him or her. The board of directors may at any time terminate, modify or amend
the 1999 Plan in any respect, except that without shareholder approval the board
of directors may not:
o increase the number of Option Shares,
o extend the period during which options may be granted or exercised, o
change the class of 1999 Plan participants, or
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<PAGE> 68
o otherwise materially modify the requirements as to eligibility for
participation in the 1999 Plan.
In no event will the termination, modification or amendment of the 1999
Plan, without the written consent of an optionee, affect his or her rights under
an option or right previously granted to him or her. The 1999 Plan must be
approved by First Premier's shareholders within 12 months from the adoption of
the 1999 Plan by the Board of directors.
No stock options were granted during the fiscal year ended December 31,
1998.
Compensation of Directors
Directors of First Premier will not receive any compensation based on their
attendance at board meetings until Premier becomes cumulatively profitable. Upon
consummation of the offering, directors of First Premier will be entitled to
receive stock option awards under the 1999 Plan. The members of the local boards
of directors will receive compensation in a format to be determined by the board
of directors of Premier. Such compensation may be incentive-based and include
cash and options to purchase common stock. Under the terms of the merger
agreement, if, during the four years following the merger, any options are
granted to the former directors of Premier Bank, then we have agreed to issue a
proportionate amount of options to the remaining former shareholders of Premier
Bank.
CERTAIN TRANSACTIONS
TSJ&A has provided consulting services during the organization and
formation of First Premier. Gerald G. Kaufman, a director and Vice President of
First Premier, is President of TSJ&A. Specific responsibilities undertaken by
TSJ&A include assisting management of First Premier in formulating First
Premier's business plan, conducting a feasibility analysis, drafting proposed
administrative and operational procedures, and preparing the necessary
regulatory filings for approval of the formation of First Premier and the
acquisition of Premier Bank. As compensation for its services, TSJ&A is being
paid a monthly fee of $25,000 until the closing of the offering and the merger.
In addition, TSJ&A will receive a finder's fee in connection with the
acquisition of Premier of $110,000 (one percent of the aggregate purchase
price), which finder's fee will be paid from the proceeds of the offering.
Once Premier Bank becomes a wholly-owned subsidiary of First Premier,
Premier Bank may extend loans from time to time to certain of First Premier's
directors, their associates and members of the immediate families of the
directors and executive officers of First Premier. These loans will be made in
the ordinary course of business on substantially the same terms, including
interest rates, collateral and repayment terms, as those prevailing at the time
for comparable transactions with persons not affiliated with First Premier or
Premier, and will not involve more than the normal risk of collectibility or
present other unfavorable features.
60
<PAGE> 69
INFORMATION ABOUT PREMIER
GENERAL
Premier is a Missouri general business corporation organized in November
1994 and owns all of the capital stock of Premier Bank. Premier Bank is a
Missouri state-chartered bank currently operating in Jefferson City and
Columbia, Missouri. Premier Bank offers a wide range of commercial and retail
banking products and services to its customers. Deposit accounts include
certificates of deposit, individual retirement accounts and other time deposits,
checking and other demand deposit accounts, interest-bearing checking accounts,
savings accounts and money market accounts. Premier Bank targets small and
medium sized business and provides a high level of service. Other products and
services include automatic teller machines and safe deposit boxes.
Premier Bank is subject to examination and comprehensive regulation by the
Missouri Division of Finance and the Federal Deposit Insurance Corporation.
ASSET/LIABILITY MANAGEMENT
Premier's objective is to manage assets and liabilities to provide a
satisfactory, consistent level of operating profitability within the framework
of established cash, loan, investment, borrowing and capital policies. The
President of Premier is primarily responsible for monitoring policies and
procedures that are designed to maintain an acceptable composition of the
asset/liability mix, while adhering to prudent banking practices. It is the
overall philosophy of management to support asset growth primarily through
growth of core deposits.
Premier's asset/liability mix is monitored on a daily basis, with monthly
reports presented to the Premier Board. The objective of this policy is to
control interest-sensitive assets and liabilities so as to minimize the impact
of substantial movements in interest rates on Premier's earnings. Management of
First Premier intends to maintain an asset/liability mix policy similar to
Premier's current policy.
COMPETITION
Premier encounters strong competition, both in attracting deposits and in
the origination of loans. Competition among financial institutions is based upon
interest rates offered on deposit accounts, interest rates charged on loans and
other credit service charges, the quality of the services rendered, and the
convenience of banking facilities. In one or more aspects of its business,
Premier Bank has competed with other commercial banks, savings and loan
associations, credit unions, finance companies, mutual funds, insurance
companies, brokerage and investment banking companies and other financial
intermediaries operating in its market area and elsewhere. Most of these
competitors have substantially greater resources and lending limits than Premier
Bank and may offer certain services that Premier Bank does not provide. Recent
legislative and regulatory changes and technological advances have enabled
customers to conduct banking activities without regard to geographic barriers
through computer and telephone-based banking and similar services. In addition,
many of Premier Bank's non-bank competitors are not subject to the same
extensive federal regulations that govern bank holding companies and
state-chartered and federally insured banks.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF PREMIER
The following table sets forth certain information with respect to the
present beneficial ownership of Premier's outstanding common stock (1) each
person known by Premier to own beneficially more than
61
<PAGE> 70
five percent of Premier's common stock, (2) each directors and executive officer
and (3) all directors and executive officers as a group,.
<TABLE>
<CAPTION>
Number
Beneficially
Name of Beneficial Owner Owned(1) Percent
- ------------------------ ----- -------
<S> <C> <C>
Charles R. Willibrand 3,000(2) 7.17%
Bruce W. Wiley 3,000(3) 7.17
Mark W. Naeger 583 1.30
Steven A. Smith 1,192 2.85
Larry R. Bloebaum 3,000(4) 7.17
Donald E. Krattli 3,000(5) 7.17
Harold B. Remley 3,000(6) 7.17
Floyd Trim 3,000(7) 7.17
James M. and Elizabeth R. Huber 3,000(8) 7.17
Steven J. Huber 3,000(9) 7.17
William E. and Pamela H. Stricker 2,148(10) 5.13
John C. and Sandra A. Willibrand 2,148(11) 5.14
------ -----
All directors and executive officers as
a group (8 persons) 19,775 47.27%
</TABLE>
- ---------------------------
(1) Unless otherwise indicated, each person has sole voting and investment
power as to all such shares of common stock shown as beneficially owned by
them. Information as to the beneficial ownership of common stock has been
furnished by the respective persons listed in the above table.
(2) The business address of Mr. Willibrand is 815 W. Stadium Boulevard,
Jefferson City, Missouri 65201.
(3) The business address of Mr. Wiley is 815 W. Stadium Boulevard, Jefferson
City, Missouri 65201.
(4) The business address of Mr. Bloebaum is 815 W. Stadium Boulevard, Jefferson
City, Missouri 65201.
(5) The business address of Mr. Krattli is 815 W. Stadium Boulevard, Jefferson
City, Missouri 65201.
(6) Includes 1,500 shares owned directly by Harold B. Remley and 1,500 shares
owned jointly with Ruth Nandson. The business address of Mr. Remley is 815
W. Stadium Boulevard, Jefferson City, Missouri 65201.
(7) The business address of Mr. Trim is 815 W. Stadium Boulevard, Jefferson
City, Missouri 65201.
(8) The business address James and Elizabeth Huber is 1300 Edgewood Drive,
Jefferson City, Missouri 65109.
(9) The business address of Steven Huber is 1300 Edgewood Drive, Jefferson
City, Missouri 65109.
(10) The business address of William and Pamela Stricker is 2801 Butternut
Court, Columbia, Missouri 65201.
(11) The business address of John and Sandra Willibrand is 425 Valley View Ct.,
Jefferson City, Missouri 65109.
FACILITIES
Premier Bank's main offices, which contain approximately 7,500 square
feet, are located at 815 West Stadium Boulevard, Jefferson City, Missouri 65109.
Premier Bank also operates a branch office, which contains approximately 5,000
square feet of office space at 15 South Fifth Street, Columbia, Missouri 65201.
Premier has received regulatory approval and has entered into an agreement to
lease approximately 1,800 square feet for an additional branch facility in
Jefferson City. This branch is expected to open in the first quarter of 2000.
EMPLOYEES
Premier Bank presently has 20 full-time employees and one part-time
employee, including 10 officers. Premier Bank will hire additional persons as
needed, including additional tellers and financial service representatives.
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<PAGE> 71
LEGAL PROCEEDINGS
From time to time, Premier may be involved in litigation relating to
claims arising out of operations in the normal course of business. As of the
date of this Proxy Statement/Prospectus, Premier is not engaged in any legal
proceedings that are expected, individually or in the aggregate, to have a
material effect on Premier.
MONETARY POLICIES
The results of operations of Premier are, and the results of operations of
Premier Bank will be, affected by credit policies of monetary authorities,
particularly the Federal Reserve Board. The instruments of monetary policy
employed by the Federal Reserve Board include open market operations in U.S.
Government securities, changes in the discount rate on member bank borrowings,
changes in reserve requirements against member bank deposits and limitations on
interest rates which member banks may pay on time and savings deposits. In view
of changing conditions in the national economy and in the money markets, as well
as the effect of action by monetary and fiscal authorities, including the
Federal Reserve Board, no prediction can be made as to possible future changes
in interest rates, deposit levels, loan demand or the business and earnings of
Premier or Premier Bank, respectively.
CERTAIN TRANSACTIONS
Premier Bank has extended loans from time to time to certain of Premier's
directors, their associates and members of the immediate families of the
directors and executive officers of Premier. These loans were made in the
ordinary course of business on substantially the same terms, including interest
rates, collateral and repayment terms, as those prevailing at the time for
comparable transactions with persons not affiliated with Premier or Premier
Bank, and did not involve more than the normal risk of collectibility or present
other unfavorable features.
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<PAGE> 72
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FIRST PREMIER FINANCIAL CORPORATION
First Premier was incorporated on May 1, 1998 to acquire or establish a
bank in Missouri. Prior to the acquisition of Premier, First Premier will have
no operating activities. The acquisition of Premier will be closed immediately
prior to the closing of the offering. Upon completion of the merger, Premier's
shareholders will own greater than 50% of the outstanding common stock of First
Premier, excluding the issuance of the shares in connection with the offering.
Accordingly, the merger will be accounted for as if Premier had acquired First
Premier, the consolidated financial statements of Premier will become the
historical consolidated financial statements of First Premier and no goodwill
will be recorded as a result of the merger.
First Premier has funded its start-up and organization costs through the
sale of units, consisting of common stock, preferred stock and warrants to
purchase shares of common stock. First Premier operated as a development company
and had no operating revenue during 1998. Costs incurred by First Premier during
1998 primarily related to costs associated with its formation, the development
of its business plan and identification of a potential merger candidate. At
December 31, 1998, the assets of First Premier consisted solely of the remaining
proceeds from the sale of units. Accordingly, Management's Discussion and
Analysis of Financial Condition and Results of Operations of First Premier at
December 31, 1998 and for the period then ended is not included in this
prospectus.
PREMIER BANCSHARES, INC.
Management believes that the acquisition of Premier will enable First
Premier to implement its strategy in the Jefferson City, Columbia and St. Louis
market areas and provide a platform for further expansion into other identified
markets. The purpose of the following discussion is to focus on significant
changes in the results of operations and the financial condition of Premier
during the three years ended December 31, 1996, 1997 and 1998. This discussion
and analysis is intended to supplement information contained in the accompanying
consolidated financial statements and the selected financial data and other
financial information presented elsewhere in this prospectus.
SUMMARY
In April 1998, Premier opened a branch in Columbia, Missouri. Due
primarily to the one-time start-up costs related to this opening, the increased
general expenses associated with operating an additional branch, and additional
provision for loan losses resulting from the growth in Premier's loan portfolio,
Premier's net income for 1998 decreased $75,000, or 76.9%, to $22,000 from
$97,000 in 1997, an increase of $210,000 from the 1996 net loss of $113,000.
Basic earnings (loss) per share were $0.55 for 1998, $2.99 for 1997 and $(3.54)
in 1996. 1996 was the first full year of operations for Premier. Losses or
reduced earnings are typical for banks during start-up periods. The basic
earnings (loss) per share amounts are based upon Premier's historical weighted
average number of shares outstanding and do not reflect any pro forma
adjustments relating to the offering or the exchange of shares upon consummation
of the merger.
The decrease in net income from 1997 to 1998 was primarily attributable to
increased noninterest expense and provision for loan losses, partially offset by
increased net interest income and noninterest income. Noninterest expense
increased $460,000, or 62.6%, from $736,000 in 1997 to $1.2 million in 1998. The
provision for loan losses increased $180,000, or 159.8%, from $112,000 in 1997
to $292,000
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<PAGE> 73
in 1998. Net interest income increased $484,000 to $1.4 million in 1998 from
$866,000 in 1997. Noninterest income increased $79,000, or 88.7%, to $169,000 in
1998 from $90,000 in 1997.
Total assets at December 31, 1998 were $57.8 million, an increase of $24.0
million, or 71.3%, over total assets of $33.7 million at December 31, 1997.
Loans, net increased 76.4% to $41.2 million at December 31, 1998, from $23.3
million at December 31, 1997. Total deposits increased 72.7% to $48.8 million at
December 31, 1998 from $28.4 million at December 31, 1997.
Shareholders' equity increased to $4.4 million at December 31, 1998 from
$3.2 million at December 31, 1997. This increase was attributable to the
proceeds from the issuance of 9,231 additional shares of common stock totaling
$1.2 million, retained net income of $22,000, and an increase in accumulated
other comprehensive income resulting from unrealized gains on debt and
marketable equity securities available-for-sale of $26,000, partially offset by
the purchase of 240 shares of treasury stock for $32,000.
The operating performance of Premier is reflected in the calculations of
net income as a percentage of average total assets ("Return on Average Assets")
and net income as a percentage of average shareholders' equity ("Return on
Average Equity"). During 1998, the Return on Average Assets and Return on
Average Equity were 0.05% and 0.53%, respectively, compared to 0.34% and 3.15%,
respectively, during 1997. Premier's ratio of total shareholders' equity to
total assets decreased to 7.68% at December 31, 1998 from 9.55% at December 31,
1997.
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<PAGE> 74
RESULTS OF OPERATIONS
Net Interest Income
The following table sets forth, for the periods indicated, certain
information related to Premier's average balance sheet, its yields on average
earning assets and its average rates on interest-bearing liabilities. Such
yields and rates are derived by dividing income or expense by the average
balance of the corresponding assets or liabilities. Average balances have been
derived from the daily balances throughout the periods indicated.
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------------------------
1996 1997
-------------------------------- -----------------------------
Interest Interest
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
------- ------- ---- ------- ------- ----
ASSETS (dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Earning assets:
Loans(1) .................................. $ 10,856 $1,008 9.29% $ 19,212 $1,750 9.11%
Securities and interest-bearing deposits(2) 5,857 359 6.13 5,670 356 6.29
Federal funds sold ........................ 1,225 63 5.12 1,245 69 5.52
-------- ------- -------- ------
Total earning assets ................... 17,938 1,430 7.97 26,127 2,175 8.33
Cash and due from banks ...................... 375 571
Premises and equipment, net .................. 1,168 1,382
Other assets ................................. 204 383
Allowance for loan losses .................... (93) (157)
-------- --------
Total assets ........................... $ 19,592 $ 28,306
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
NOW ....................................... $ 429 $ 13 3.05 $ 654 $ 20 3.07%
Money market deposits ..................... 1,534 67 4.38 2,339 104 4.43
Savings deposits .......................... 1,681 87 5.16 4,615 243 5.26
Certificates of deposit ................... 11,677 688 5.89 15,382 886 5.76
FHLB advances ............................. -- -- -- 404 22 5.42
Note payable .............................. 300 28 9.25 425 34 7.99
-------- ------- -------- -----
Total interest-bearing liabilities ..... 15,621 883 5.65 23,819 1,309 5.50
-------- ------- -------- -----
Noninterest-bearing demand deposits .......... 721 1,253
Other liabilities ............................ 108 155
Shareholders' equity ......................... 3,142 3,079
-------- --------
Total liabilities and
shareholders' equity ................... $ 19,592 $ 28,306
======== ========
Net interest income .......................... $ 547 $ 866
====== ======
Net interest spread .......................... 2.32% 2.83%
Net interest margin .......................... 3.05% 3.32%
<CAPTION>
Years Ended December 31,
------------------------------
1998
------------------------------
Interest
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
ASSETS (dollars in thousands)
<S> <C> <C> <C>
Earning assets:
Loans(1) .................................. $ 31,734 $2,850 8.98%
Securities and interest-bearing deposits(2) 6,474 408 6.29
Federal funds sold ........................ 3,621 182 5.03
-------- ------
Total earning assets ................... 41,829 3,440 8.22
Cash and due from banks ...................... 1,111
Premises and equipment, net .................. 1,895
Other assets ................................. 811
--------
Allowance for loan losses .................... (290)
Total assets ........................... $ 45,356
========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
NOW ....................................... $ 828 $ 22 2.69%
Money market deposits ..................... 3,762 149 3.96
Savings deposits .......................... 8,572 402 4.68
Certificates of deposit ................... 22,797 1,312 5.75
FHLB advances ............................. 2,134 133 6.21
Note payable .............................. 838 72 8.65
-------- ------
Total interest-bearing liabilities ..... 38,931 2,090 5.37
-------- ------
Noninterest-bearing demand deposits .......... 1,982
Other liabilities ............................ 251
Shareholders' equity ......................... 4,192
--------
Total liabilities and
shareholders' equity ................... $ 45,356
========
Net interest income .......................... $1,350
======
Net interest spread .......................... 2.85%
Net interest margin .......................... 3.23%
</TABLE>
- --------------------
(27) Nonaccrual loans are included in the average loan amounts outstanding.
Interest on nonaccrual loans is recorded when received.
(28) The yield on securities is computed based upon the average balance of
securities at amortized cost and does not reflect the unrealized gains or
losses on such securities.
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<PAGE> 75
Net interest income is the principal component of a financial institution's
income stream and represents the difference or spread between interest and
certain fee income generated from earning assets and the interest expense paid
on deposits and other borrowed funds. Fluctuations in interest rates, as well as
volume and mix changes in earning assets and interest-bearing liabilities, can
materially impact net interest income. Premier had no investments in tax-exempt
securities during 1996, 1997 and 1998. Accordingly, no adjustment is necessary
to facilitate comparisons on a taxable equivalent basis.
Net interest income increased $484,000 to $1.4 million in 1998 from
$866,000 in 1997. This increase in net interest income can be attributed to the
growth in average earning assets, partially offset by the growth in
interest-bearing deposits, Federal Home Loan Bank advances and the note payable.
The trend in net interest income is commonly evaluated using net interest margin
and net interest spread. The net interest margin, or net yield on average
earning assets, is computed by dividing fully taxable equivalent net interest
income by average earning assets. The net interest margin decreased 9 basis
points to 3.23% in 1998 on average earning assets of $41.8 million from 3.32% in
1997 on average earning assets of $26.1 million. This change is primarily due to
a 11 basis point decrease in the average yield on earning assets to 8.22% in
1998 from 8.33% in 1997, partially offset by a 13 basis point decrease in the
average rate paid on interest-bearing liabilities to 5.37% in 1998 from 5.50% in
1997. The decreased yield on earning assets was primarily the result of lower
market rates on loans, which decreased from 9.11% in 1997 to 8.98% in 1998. The
decrease in the cost of interest-bearing liabilities is attributable to a
decrease in rates on all interest-bearing deposit categories, partially offset
by an increase in the average rates paid on Federal Home Loan Bank advances and
the note payable.
Net interest income increased $319,000 to $866,000 in 1997 from $547,000 in
1996. This increase in net interest income is attributable to the growth in and
yield on average earning assets and the decrease in the average rate paid on
interest-bearing liabilities, partially offset by the growth in interest-bearing
liabilities. Net interest margin increased 27 basis points to 3.32% in 1997 on
average earning assets of $26.1 million from 3.05% in 1996 on average earning
assets of $17.9 million. The increased yield on earning assets was primarily the
result of the growth in average loans from $10.9 million in 1996 to $19.2
million in 1997, partially offset by a decrease in the average rate earned on
loans from 9.29% in 1996 to 9.11% in 1997. The decrease in the cost of
interest-bearing liabilities is attributable to a decrease in the average rates
paid on certificates deposits and the note payable.
The net interest spread increased two basis points to 2.85% in 1998 from
the 1997 net interest spread of 2.83% as the cost of interest-bearing
liabilities decreased 13 basis points, which was substantially offset by the
decrease in yield on average earning assets of 11 basis points. The net interest
spread measures the absolute difference between the yield on average earning
assets and the rate paid on average interest-bearing sources of funds. The net
interest spread eliminates the impact of noninterest-bearing funds and gives a
direct perspective on the effect of market interest rate movements. This
measurement allows management to evaluate the variance in market rates and
adjust rates or terms as needed to maximize spreads.
The net interest spread increased 51 basis points to 2.83% in 1997 from a
net interest spread of 2.32% in 1996. The increase resulted from an increase in
the yield on average earning assets of 36 basis points and a 15 basis point
decrease in the cost of average interest-bearing liabilities.
During recent years, the net interest margins and net interest spreads have
been under pressure, due in part to intense competition for funds with non-bank
institutions and changing regulatory supervision for some financial
intermediaries. This pressure on interest rate margins and spreads was
experienced by the banking industry nationwide.
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<PAGE> 76
To counter potential declines in the net interest margin and the interest
rate risk inherent in the balance sheet, Premier adjusts the rates and terms of
its interest-bearing liabilities in response to general market rate changes and
the competitive environment. Premier monitors the amounts of Federal funds sold
throughout the year, investing excess funds to maintain appropriate liquidity in
higher yielding investments such as short-term U. S. government and agency
securities. Premier will continue to manage its consolidated balance sheet and
its interest rate risk based on changing market interest rate conditions.
Rate/Volume Analysis of Net Interest Income
The table below presents the changes in interest income and interest
expense attributable to volume and rate changes. The effect of a change in
average balance has been determined by applying the average rate in the initial
year to the change in average balance between the two years. The effect of
change in rate has been determined by applying the average balance in the
initial year to the change in the average rate between the two years. The net
change attributable to the combined impact of the volume and rate has been
allocated to both components in proportion to the relationship of the absolute
dollar amounts of the change in each.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 YEAR ENDED DECEMBER 31, 1998
COMPARED WITH COMPARED WITH
DECEMBER 31, 1996 DECEMBER 31, 1997
------------------- ------------------
INCREASE (DECREASE) DUE TO: INCREASE (DECREASE) DUE TO:
--------------------------- ---------------------------
VOLUME RATE TOTAL VOLUME RATE TOTAL
------ ---- ----- ------ ---- -----
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest Earned On:
Loans....................................... $ 762 $(20) $ 742 $1,125 $(25) $1,100
Securities and interest bearing deposits.... (12) 9 (3) 52 -- 52
Federal funds sold.......................... 1 5 6 120 (7) 113
----- ---- ----- ------ ---- ------
Total earning assets.................... 751 (6) 745 1297 (32) 1,265
----- ---- ----- ------ ---- ------
Interest Paid On:
NOW deposits................................ 7 -- 7 5 (3) 2
Money market deposits....................... 36 1 37 57 (12) 45
Savings deposits............................ 154 2 156 188 (29) 159
Certificates of deposit..................... 213 (15) 198 428 (2) 426
Federal Home Loan Bank advances............. 22 -- 22 111 -- 111
Note payable................................ 10 (4) 6 35 3 38
----- ---- ----- ------ ---- ------
Total interest-bearing liabilities...... $ 442 $(16) $ 426 $ 824 (43) 781
----- ---- ----- ------ ---- ------
Net interest income...................... $ 309 $ 10 $ 319 $ 473 $ 11 $ 484
===== ==== ===== ====== ==== ======
</TABLE>
Provision for Loan Losses
The provision for loan losses is the expense of providing an allowance or
reserve for inherent losses on loans. The amount of the provision for each
period is dependent upon many factors, including loan growth, net charge-offs,
changes in the composition of the loan portfolio, delinquencies, management's
assessment of loan portfolio quality, the value of loan collateral and general
business and economic conditions.
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<PAGE> 77
The provision for loan losses charged to operations was $292,000 in 1998
compared to $112,000 in 1997. Net loans charged-off increased to $63,000 in 1998
as compared to $22,000 in 1997. Of the $63,000 in net charge-offs in 1998,
$61,000 was attributable to two real estate loans. Additionally, the balance of
loans outstanding increased 76.7% at December 31, 1998 as compared to December
31, 1997, while the allowance for loan losses increased 109.0%. At December 31,
1998 the allowance for loan losses represented 1.05% of total loans as compared
to 0.89% at December 31, 1997.
The provision for loan losses charged to operations was $112,000 in 1997
compared to $80,000 in 1996. Management's analysis of the allowance for loan
losses during 1997 and 1996 indicated no material changes in the quality of the
loan portfolio, economic outlook or other factors generally considered by
management. Accordingly, the increase in provision for loan losses for 1997 and
1996 was generally due to increases in the amount of loans outstanding.
Noninterest Income
The following table presents an analysis of the noninterest income for the
periods indicated with respect to each major category of noninterest income:
<TABLE>
<CAPTION>
% CHANGE % CHANGE
1996 1997 1998 1996-1997 1997-1998
------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Service charges on deposits ... $18,889 $ 34,930 $ 58,958 84.9% 68.8%
Loss on sale of securities, net -- (210) -- -- --
Other noninterest income ...... 28,383 54,584 109,559 92.3 100.7
------- -------- --------
Total ..................... $47,272 $ 89,304 $168,517 88.9% 88.7%
======= ======== ========
</TABLE>
Noninterest income consists of revenues generated from a broad range of
financial services, products and activities, including service charges on
deposits and other activities.
Noninterest income increased 88.7% to $169,000 in 1998 from $90,000 in
1997. This increase resulted from the increase in service charges on deposits of
$24,000, or 68.8%, to $59,000 in 1998 from $35,000 in 1997 due to increased
deposit volume. Other non-interest income, which includes various recurring
noninterest income items such as gain on sale of loans, credit life insurance
income, safe deposit box fees and ATM fees, increased $55,000, or 100.7%, to
$110,000 in 1998 from $55,000 in 1997. The increase related primarily to the
increase in gain on sale of loans from $26,000 in 1997 to $70,000 in 1998,
resulting from the increase in the number of residential mortgage loans sold in
the secondary market.
Noninterest income increased 88.9% to $90,000 in 1997 from $47,000 in
1996. This increase resulted primarily from higher service charges on deposits
and an increase in other income. Deposit volume growth increased service charges
on deposits by $16,000, or 84.9%, to $35,000 in 1997 from $19,000 in 1996. Other
income increased $26,000, or 92.3%, to $55,000 in 1997 from $28,000 in 1996.
Included in other income is gain on sales of loans, which increased 52.9% from
$17,000 in 1996 to $26,000 in 1997.
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<PAGE> 78
Noninterest Expense
The following table presents an analysis of the noninterest expense for
the periods indicated with respect to each major category of noninterest
expense:
<TABLE>
<CAPTION>
% CHANGE % CHANGE
1996 1997 1998 1996-1997 1997-1998
---- ---- ---- --------- ---------
<S> <C> <C> <C> <C> <C>
Salaries and employee benefits.................. $298,307 $354,371 $ 598,308 18.8% 68.8%
Occupancy and equipment expense................. 82,030 118,965 188,108 45.0 58.1
Other noninterest expense....................... 247,024 262,315 409,498 6.2 56.1
-------- ------- ----------
Total....................................... $627,361 $735,651 $1,195,914 17.3% 62.6%
======== ======== ==========
</TABLE>
Noninterest expense increased 62.6% to $1.2 million in 1998 from $736,000
in 1997 primarily as a result of the costs associated with the opening of the
Columbia branch in April 1998 and the continued growth in the operations in
Jefferson City. Management attributes this increase to an increase in personnel
costs, occupancy and equipment expense, and other operating expenses. Salaries
and employee benefits increased 68.8% to $598,000 in 1998 from $354,000 in 1997.
This increase is attributable to an increase in the number of full-time
equivalent employees from 11 in 1997 to 17 in 1998 reflecting the increase in
business as a result of the opening of the Columbia branch in April 1998, in
addition to normal increases in salaries. Occupancy and equipment expense
increased 58.1% to $188,000 in 1998 from $119,000 in 1997, primarily as a result
of opening of the new branch in Columbia. The increase in other noninterest
expense is attributable primarily to amounts associated with the operation and
promotion of the new Columbia branch, continued growth in the operations of the
Jefferson City location and an increase of $29,000 in directors' fees. Prior to
1998, due to the start-up nature of Premier, directors fees paid were nominal.
Noninterest expense increased to $736,000 in 1997 from $627,000 in 1996.
Increases in personnel costs and occupancy expense were the primary factors for
the increase. Salaries and employee benefits expense increased 18.8% to $354,000
in 1997 from $298,000 in 1996. This increase resulted from an increase in the
number of full-time equivalent employees from seven in 1996 to 11 in 1997,
reflecting the increase in business during the second full year of operations,
in addition to normal increases in salaries. Occupancy and equipment expense
increased 45.0% to $119,000 in 1997 from $82,000 in 1996 due to 1997 including a
full year of depreciation on the Jefferson City location, which opened in 1996.
Other noninterest expenses increased 6.2% to $262,000 in 1997 from $247,000 in
1996. The increase in other noninterest expense is attributable primarily to
growth in the operations of the Jefferson City location.
Income Tax Expense
Income tax expense decreased to $9,000 in 1998 from $11,000 in 1997,
reflecting an effective tax rate of 27.6% for 1998, compared to an effective tax
rate of 9.9% for 1997. The increase in the effective tax rate is due to a
smaller decrease in the valuation allowance for deferred tax assets of $6,000 in
1998 compared to $39,000 in 1997. A deferred tax asset valuation allowance is
established if it is more likely than not that all or a portion of the deferred
tax assets will not be realized. The deferred tax valuation allowance was
$57,000 and $63,000 at December 31, 1998 and 1997, respectively.
Certain income and expense items are recognized in different periods for
financial reporting purposes and for income tax return purposes. Deferred income
tax assets and liabilities reflect the differences between the
70
<PAGE> 79
values of certain assets and liabilities for financial reporting purposes and
for income tax purposes, computed at the current tax rates. Deferred income tax
expense is computed as the change in Premier's deferred tax assets, net of
deferred tax liabilities and the valuation allowance. Premier's deferred income
tax assets consist principally of the financial statement reporting amount of
the provision for loan losses in excess of the amount reported for income tax
purposes.
Net Income
Net income decreased 76.9% to $22,000 in 1998 from $97,000 in 1997. The
decrease in net income from 1997 to 1998 was primarily attributable to increased
noninterest expense, related primarily to the opening of the Columbia branch,
increased provision for loan losses, related to growth in the loan portfolio,
partially offset by increased net interest income and noninterest income. Basic
earnings per share decreased to $0.55 in 1998 from $2.99 in 1997. Return on
Average Assets decreased 29 basis points to 0.05% in 1998 from 0.34% in 1997.
Return on Average Equity decreased 262 basis points to 0.53% in 1998 from 3.15%
in 1997.
Net income for 1997 increased $210,000 from the 1996 net loss of $113,000
to net income in 1997 of $97,000. The increase in net income for 1997 was
attributable to an increase in net interest income and an increase in
noninterest income, which were partially offset by an increase in noninterest
expense and in income tax expense. Basic earnings (loss) per share was $2.99 for
1997 and $(3.54) in 1996. Return on Average Assets increased 92 basis points to
0.34% in 1997 from (0.58%) in 1996. Return on Average Equity increased 675 basis
points to 3.15% in 1997 from (3.60%) in 1996.
FINANCIAL CONDITION
Earning Assets
Average earning assets increased 60.1% to $41.8 million in 1998 from $26.1
million in 1997. During 1998, loans represented 75.9%, securities and interest
bearing deposits comprised 15.5% and Federal funds sold comprised 8.6% of
average earning assets. In 1997, loans comprised 73.5%, securities and interest
bearing deposits comprised 21.7% and Federal funds sold comprised 4.8% of
average earning assets. The variance in the mix of earning assets is primarily
attributable to continued growth of the loan portfolio. Premier manages its
securities portfolio to minimize interest rate fluctuation risk and to provide
liquidity.
In 1998, growth in earning assets was funded primarily through an increase
in all deposit categories, Federal Home Loan Bank advances, the note payable and
shareholders' equity.
Loan Portfolio
Premier's total loans outstanding increased 76.7% to $41.6 million at
December 31, 1998 from $23.6 million at December 31, 1997. Loan growth for 1998
was funded primarily through the growth in deposits. The growth in the loan
portfolio primarily was a result of an increase in real estate loans of $15.1
million, or 78.3%, from December 31, 1997 to December 31, 1998. Average total
loans in 1998 were $31.7 million compared to $19.2 million in 1997. Premier
engages in a full complement of lending activities, including commercial, real
estate, installment and residential mortgage loans held for sale.
71
<PAGE> 80
The following table presents various categories of loans contained in
Premier's loan portfolio for the periods indicated, the total amount of all
loans for such periods, and the percentage of total loans represented by each
category for such periods:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
---------------------------------------------------------------------
1997 1998
-------------------------------- ----------------------------------
BALANCE % OF TOTAL BALANCE % OF TOTAL
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
TYPE OF LOAN
Commercial .............. $ 2,905,207 12.3% $ 5,292,128 12.7%
Real estate ............. 19,329,657 82.1 34,465,883 82.8
Installment and others .. 1,317,437 5.6 1,618,363 3.9
Loans held for sale ..... -- -- 233,165 0.6
------------ ----- ------------ -----
Total loans ....... $ 23,552,301 100.0% 41,609,539 100.0%
===== =====
Allowance for loan losses (210,000) (438,841)
------------ ------------
Loans, net ........ $ 23,342,301 $ 41,170,698
============ ============
</TABLE>
Commercial. This category of loans includes loans made to individual,
partnership or corporate borrowers, and obtained for a variety of business
purposes. At December 31, 1998, commercial loans represented 12.7% of
outstanding loan balances, compared to 12.3% at December 31, 1997.
Real Estate. Real estate loans consist of loans secured by owner-occupied
commercial properties, income producing properties and construction and land
development, as well as first and second mortgage loans on residential
properties. At December 31, 1998, real estate loans represented 82.8% of
outstanding loan balances, compared to 82.1% at December 31, 1997.
Installment and Others. Premier's installment loans consist primarily of
loans to individuals for personal, family and household purposes, education and
other personal expenditures. At December 31, 1998, installment and others
represented 3.9% of outstanding loan balances, compared to 5.6% at December 31,
1997.
Loans Held For Sale. This category represents residential real estate
loans in the process of being sold to the secondary market. At December 31,
1998, loans held for sale represented 0.6% of outstanding loan balances.
Premier's only area of credit concentration is commercial and commercial
real estate loans. Premier has not invested in loans to finance highly leveraged
transactions, such as leveraged buy-out transactions, as defined by the Federal
Reserve Board and other regulatory agencies. In addition, Premier had no foreign
loans or loans to lesser developed countries as of December 31, 1998.
While risk of loss in Premier's loan portfolio is primarily tied to the
credit quality of the borrowers, risk of loss may also increase due to factors
beyond Premier's control, such as local, regional and/or national economic
downturns. General conditions in the real estate market may also impact the
relative risk in Premier's real estate portfolio. Of Premier's target areas of
lending activities, commercial loans are generally considered to have greater
risk than real estate loans or installment loans.
From time to time, management of Premier has originated certain loans
which, because they exceeded Premier's legal lending limit, were sold to other
banks. As a result of the offering, Premier expects to have an increased lending
limit. Accordingly, Premier may, at its discretion, repurchase certain loan
participations, thereby increasing earning assets. Loan participation agreements
allow Premier to repurchase loans at the outstanding principal balance plus
accrued interest, if any, at Premier's discretion.
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<PAGE> 81
Premier also purchases participations from other banks. When Premier
purchases these participations, such loans are subjected to Premier's
underwriting standards as if Premier originated the loan. Accordingly,
management of Premier does not believe that loan participations purchased from
other banks pose any greater risk of loss than loans that Premier originates.
The repayment of loans in the loan portfolio as they mature is a source of
liquidity for Premier. The following table sets forth the maturity of Premier's
loan portfolio within specified intervals as of December 31, 1998:
<TABLE>
<CAPTION>
DUE IN ONE YEAR OR LESS AFTER ONE THROUGH FIVE YEARS DUE AFTER FIVE YEARS TOTAL
- ----------------------- ---------------------------- -------------------- -----
(in thousands)
<S> <C> <C> <C> <C>
$23,369 $15,673 $2,568 $41,610
======= ======= ====== =======
</TABLE>
The following table presents the maturity distribution as of December 31,
1998 for loans with predetermined fixed interest rates and floating interest
rates by various maturity periods:
<TABLE>
<CAPTION>
DUE IN ONE AFTER ONE THROUGH DUE AFTER FIVE
YEAR OR LESS FIVE YEARS YEARS TOTAL
------------ ---------- ----- -----
(in thousands)
<S> <C> <C> <C> <C>
Interest Category
Predetermined fixed interest rate....... $4,324 8,928 2,246 $15,498
Floating interest rate.................. 19,045 6,745 322 26,112
------- ------ ----- -------
Total......................... $23,369 15,673 2,568 $41,610
======= ====== ===== =======
</TABLE>
Asset Quality and Nonperforming Assets
At December 31, 1998 nonaccrual loans totaled $94,000, as compared to
nonaccrual loans of $161,000 at December 31, 1997. At December 31, 1998, no
loans were past due 90 days or more. At December 31, 1997, one loan totaling
$315,000 was contractually past due by 90 days or more as to principal and
interest payments and continued to accrue interest. At December 31, 1998 and
1997 there were no loans classified as "troubled debt restructurings" as that
term is defined in Statement of Financial Accounting Standards No. 15.
At December 31, 1998 and 1997, there were $899,000 and $436,000,
respectively, of loans in addition to those disclosed above that were internally
classified as substandard which (a) represented or resulted from trends or
uncertainties which management reasonably expects will materially impact future
operating results, liquidity, or capital resources, or (b) represented credits
about which management is aware of any information which causes management to
have serious doubts as to the ability of such borrowers to comply with the loan
repayment terms. There are no loans other than those disclosed above where known
information about possible credit problems of borrowers causes management to
have serious doubts as to the ability of such borrowers to comply with loan
repayment terms.
Premier has policies, procedures and underwriting guidelines intended to
assist in maintaining the overall quality of its loan portfolio. Premier
monitors its delinquency levels for any adverse trends. Non-performing
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<PAGE> 82
assets consist of loans on nonaccrual status, real estate and other assets
acquired in partial or full satisfaction of loan obligations and loans that are
past due 90 days or more.
Premier's policy generally is to place a loan on nonaccrual status when it
is contractually past due 90 days or more as to payment of principal or
interest. A loan may be placed on nonaccrual status at an earlier date when
concerns exist as to the ultimate collections of principal or interest. At the
time a loan is placed on nonaccrual status, interest previously accrued but not
collected is reversed and charged against current earnings. Recognition of any
interest after a loan has been placed on nonaccrual is accounted for on a cash
basis. Loans that are contractually past due 90 days or more which are well
secured or guaranteed by financially responsible third parties and are in the
process of collection generally are not placed on nonaccrual status.
Allowance for Loan Losses and Net Charge-Offs
The allowance for loan losses represents management's estimate of an
amount adequate to provide for potential losses inherent in the loan portfolio.
In its evaluation of the allowance and its adequacy, management considers loan
growth, changes in the composition of the loan portfolio, the loan charge-off
experience, the amount of past due and nonperforming loans, current economic
conditions, underlying collateral values securing loans and other factors. While
it is Premier's policy to charge-off in the current period the loans in which a
loss is considered probable, there are additional risks of future losses that
cannot be quantified precisely or attributed to particular loans or classes of
loans. Because these risks include the state of the economy, management's
judgment as to the adequacy of the allowance is necessarily approximate and
imprecise.
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<PAGE> 83
An analysis of Premier's loss experience is furnished in the following
table for the periods indicated, as well as a detail of the allowance for loan
losses:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1997 1998
--------- ---------
<S> <C> <C>
Balance at beginning of period ......................... $ 120,000 $ 210,000
Charge-offs
Commercial ........................................ (5,807) (1,427)
Real estate ....................................... (10,000) (61,159)
Installment and others ............................ (6,833) (2,057)
Loans held for sale ............................... -- --
--------- ---------
Total charge-offs ............................ (22,641) (64,643)
Recoveries:
Commercial ........................................ -- --
Real estate ....................................... -- 1,750
Installment and others ............................ 362 --
Loans held for sale ............................... -- --
--------- ---------
Total recoveries ............................. 362 1,750
--------- ---------
Net charge-offs ........................................ (22,279) (62,893)
Provision for loan losses .............................. 112,279 291,734
--------- ---------
Balance at end of period ............................... $ 210,000 $ 438,841
========= =========
Net charge-offs as a percentage of average loans ....... 0.12% 0.20%
Allowance for loan losses as a percentage of total loans 0.89 1.05
</TABLE>
Net charge-offs were $63,000 or 0.20% of average loans outstanding in 1998
as compared to $22,000 or 0.12% of average loans outstanding in 1997. The
allowance for loan losses increased 109.0% to $439,000 or 1.05% of loans
outstanding at December 31, 1998 from $210,000 or 0.89% of loans outstanding at
December 31, 1997. The allowance for loan losses as a multiple of net loans
charged off was 6.98 for the year ended December 31, 1998.
Net charge-offs decreased to $22,000 in 1997, representing 0.12% of
average loans outstanding, from $24,000 in 1996 or 0.22% of average loans
outstanding. The allowance for loan losses increased to $210,000 or 0.89% of
loans outstanding at December 31, 1997, from $120,000 or 0.78% of loans
outstanding at December 31, 1996.
In assessing the adequacy of the allowance for loan losses, management
relies predominantly on its ongoing review of the loan portfolio, which is
undertaken to ascertain whether there are probable losses which must be charged
off and to assess the risk characteristics of the portfolio as a whole. This
review encompasses the judgment of management, utilizing internal loan rating
standards, guidelines provided by the banking regulatory authorities governing
Premier, and their loan portfolio reviews as part of the bank examination
process.
75
<PAGE> 84
Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan" ("SFAS 114") was issued in May 1993. SFAS
114 requires that impaired loans be measured based on the present value of
expected future cash flows discounted at the loan's effective interest rate or
the fair value of the collateral if the loan is collateral dependent. Premier
adopted SFAS 114 during 1995, its year of formation. At December 31, 1998,
Premier held impaired loans of $94,000 for which specific allocations of $24,000
have been established within the allowance for loan losses, based upon the fair
value of the collateral. At December 31, 1997, Premier held impaired loans of
$161,000 for which specific allocations of $28,000 have been established within
the allowance for loan losses, based upon the fair value of the collateral.
Forgone interest on impaired loans totaled $7,000 for both 1998 and 1997. For
the periods indicated, the allowance for loan losses was allocated to the
various loan categories as follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-----------------------------------------------------
1997 1998
------------------------ -----------------------
CATEGORY AS A CATEGORY AS A
AMOUNT % OF TOTAL AMOUNT % OF TOTAL
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Commercial ........... $ 14,526 12.3% $ 26,461 12.7%
Real estate .......... 188,887 82.1 298,885 82.8
Installment and others 6,587 5.6 8,092 3.9
Loans held for sale .. -- -- -- 0.6
Unallocated .......... -- -- 105,403 --
-------- ----- -------- -----
Total ... $210,000 100.0% $438,841 100.0%
======== ===== ======== =====
</TABLE>
In considering the adequacy of Premier's allowance for loan losses,
management has focused on the fact that as of December 31, 1998, 12.7% of
outstanding loans are in the category of commercial loans and 82.8% are in real
estate loans.
Commercial loans are generally considered by management to have greater
risk than other categories of loans in Premier's loan portfolio. Generally, such
loans are secured by accounts receivable, marketable securities, deposit
accounts, equipment and other fixed assets, which reduces the risk of loss
inherently present in commercial loans. Real estate loans secured by commercial
real estate inherently have a higher risk due to depreciation of the facilities,
limited purposes of the facilities and the effect of general economic
conditions. Premier attempts to limit this risk by generally lending no more
than 80% of the appraised value of the property held as collateral. A portion of
the real estate portfolio represents residential real estate mortgages where the
amount of the original loan generally does not exceed 85% of the appraised value
of the collateral. These loans are considered by management to be well secured
with a low risk of loss. At December 31, 1998, the majority of Premier's
installment and other loans were secured by collateral primarily consisting of
automobiles, boats and other personal property.
Premier's primary regulator, the Missouri Division of Finance, conducts
periodic examinations of the loan portfolio. Upon completion, the Missouri
Division of Finance presents its report of examination to Premier's board of
directors and management of Premier. Procedures are also performed related to
the loan portfolio in conjunction with the year-end audit by Premier's
independent accountants. Procedures performed include analyses of historical
performance, the level of nonconforming and rated loans, loan volume and
activity, review of loan files and consideration of economic conditions and
other pertinent information. Findings are communicated verbally to Premier's
management. Information provided from the above two independent sources,
together with information provided by the management of Premier and other
information known to members of Premier's board of directors, is utilized by
Premier's board of directors to monitor the loan
76
<PAGE> 85
portfolio and the allowance for loan losses. Specifically, Premier's board of
directors attempts to identify risks inherent in the loan portfolio (e.g.,
problem loans, potential problem loans and loans to be charged off), assess the
overall quality and collectibility of the loan portfolio, and determine amounts
of the allowance for loan losses and the provision for loan losses to be
reported based on the results of their review.
Investment Portfolio
Total debt and marketable equity securities available-for-sale increased
19.6% to $6.5 million at December 31, 1998 from $5.4 million at December 31,
1997. At December 31, 1998, debt and marketable equity securities
available-for-sale totaled $6.4 million, with an unrealized gain of $34,000, net
of tax effect. At December 31, 1997, debt and marketable equity securities
available-for-sale totaled $5.4 million, with an unrealized gain of $8,000, net
of tax effect. Average debt and marketable equity securities as a percentage of
average earning assets decreased to 15.5% in 1998 from 21.7% in 1997.
Premier invests primarily in direct obligations of the United States,
obligations guaranteed as to principal and interest by the United States and
obligations of agencies of the United States. In addition, Premier enters into
Federal funds transactions with its principal correspondent banks, and acts as a
net seller of such funds. The sale of Federal funds amounts to a short-term loan
from Premier to another bank.
Proceeds from maturities of debt and marketable equity securities
available-for-sale increased 38.1% to $3.5 million in 1998 from $2.6 million in
1997. No debt and marketable equity securities available-for-sale were sold
during 1998. In 1997, debt and marketable equity securities available-for-sale
of $553,000 were sold with a resulting loss on sales of $210. Such proceeds are
generally used to reinvest in additional debt and marketable equity securities
available-for-sale.
Other investments primarily represent Federal Home Loan Bank stock that is
required for Premier to be a member of and to conduct business with such
institution. Dividends on such investment are determined by the institutions and
are payable quarterly. Other investments increased 121.3% to $176,000 at
December 31, 1998 from $80,000 at December 31, 1997. Other investments are
carried at cost, as such investments do not have readily determinable fair
values.
During 1998 and 1997, Premier did not invest in collateralized mortgage
obligations ("CMOs"). In addition, at December 31, 1998, the debt and marketable
equity securities available-for-sale portfolio did not include any U.S.
government agency investments that are defined as derivatives or structured
notes.
77
<PAGE> 86
The following table presents, for the periods indicated, the carrying
amount of Premier's debt and marketable equity securities available-for-sale,
including mortgage-backed securities.
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
---------------------------------------------------------
1997 1998
------------------------- -------------------------
BALANCE % OF TOTAL BALANCE % OF TOTAL
<S> <C> <C> <C> <C>
Debt securities:
U.S. Treasury securities ...................... $ 765,583 14.1% $ 512,810 7.9%
U.S. government corporations and agencies ..... 3,757,744 69.4 4,893,647 75.6
Obligations of state and political subdivisions 361,096 6.7 370,159 5.7
Mortgage-backed securities .................... 453,827 8.4 525,429 8.1
---------- ----- ---------- -----
Total debt securities ............... $5,338,250 98.6% $6,302,045 97.3%
---------- ----- ---------- -----
Equity securities:
Federal Home Loan Bank stock ............... $ 77,000 1.4% $ 173,400 2.7%
Other ...................................... 2,500 -- 2,500 --
---------- ----- ---------- -----
Total equity securities ............. $ 79,500 1.4% $ 175,900 2.7%
---------- ----- ---------- -----
Total ........................ $5,417,750 100.0% $6,477,945 100.0%
========== ===== ========== =====
</TABLE>
At December 31, 1998, $525,000 or 8.1% of the debt and marketable equity
securities available-for-sale portfolio consisted of mortgage-backed securities
compared to $454,000 or 8.4% at December 31, 1997. Premier has segregated its
debt and marketable equity securities portfolio into securities held-to-maturity
and available-for-sale. Debt and marketable equity securities held-to-maturity
are those securities for which management has both the ability and intent to
hold to maturity and are carried at amortized cost. At December 31, 1998 and
1997, no debt and marketable equity securities were classified as
held-to-maturity. Debt and marketable equity securities available-for-sale are
securities identified by management as securities which may be sold prior to
maturity in response to various factors including liquidity needs, capital
compliance, changes in interest rates or portfolio risk management. The
available-for-sale debt and marketable equity securities provide interest income
and serve as a source of liquidity for Premier.
These securities are carried at fair value, with unrealized gains and
losses, net of tax effect, reported as accumulated other comprehensive income, a
separate component of shareholders' equity.
Debt and marketable equity securities available-for-sale with a carrying
value of approximately $1.4 million and $1.5 million at December 31, 1998 and
1997, respectively, were pledged to secure public funds and for other purposes
as required or permitted by law.
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<PAGE> 87
The maturities and weighted average yields of the debt and marketable
equity securities available-for-sale portfolio at December 31, 1998 are
presented in the following table using primarily the stated maturities,
excluding the effects of prepayments.
<TABLE>
<CAPTION>
AFTER ONE AFTER FIVE WEIGHTED
ONE YEAR THROUGH THROUGH AFTER TEN AVERAGE
OR LESS FIVE YEARS TEN YEARS YEARS YIELD(1)
------- ---------- --------- ----- --------
<S> <C> <C> <C> <C> <C>
U.S. Treasury securities ....................... $251,560 $ -- $ 261,250 $ -- 6.24%
U.S. Government corporations and
agencies ................................. 501,713 1,352,199 2,784,428 255,307 6.10%
Obligations of states and political subdivisions -- 370,159 -- -- 6.17%
Mortgage-backed securities ..................... -- 368,724 156,705 -- 5.96%
-------- ---------- ---------- ------------
Total debt securities(2) ....................... $753,273 $2,091,082 $3,202,383 $ 255,307 6.10%
======== ========== ========== ------------
Weighted average yield ......................... 6.25% 6.02% 6.20% 5.13%
======== ========== ========== ============
</TABLE>
(1) Premier has not invested in any tax-exempt obligations.
(2) As of December 31, 1998, except for the U.S. Government and its agencies,
there was not any issuer within the investment portfolio who represented
10% or more of the shareholders' equity.
Deposits
Premier's average deposits increased 56.5%, or $13.7 million, to $37.9
million during 1998 from $24.2 million during 1997. This growth primarily
relates to the Columbia branch opened in April 1998 and the continued growth of
the Jefferson City branch, and resulted in a 52.8% increase in average
noninterest-bearing demand deposits, a 26.6% increase in average NOW accounts, a
60.8% increase in average money market accounts, an 85.8% increase in average
savings accounts and a 48.2% increase in average certificates of deposit.
Average noninterest-bearing deposits increased 58.2% to $2.0 million in
1998 from $1.3 million in 1997. As a percentage of average total deposits, these
deposits remained constant at 5.2% in 1998 and 1997. Noninterest-bearing
deposits increased 90.6% to $2.8 million at December 31, 1998, from $1.5 million
at December 31, 1997.
Average NOW accounts increased 26.6% to $828,000 in 1998 from $654,000 in
1997. As a percentage of average total deposits, these deposits decreased to
2.2% of average total deposits in 1998 as compared to 2.7% in 1997. NOW accounts
increased 72.6% to $1.2 million at December 31, 1998, from $709,000 at December
31, 1997.
Average money market accounts increased 60.8% to $3.8 million in 1998 from
$2.3 million in 1997. As a percentage of average total deposits, these deposits
increased to 9.9% of average total deposits in 1998 as compared to 9.6% in 1997.
Money market accounts increased 111.2% to $4.9 million at December 31, 1998,
from $2.3 million at December 31, 1997.
Average savings accounts increased 85.8% to $8.6 million in 1998 from $4.6
million in 1997. As a percentage of average total deposits, these deposits
increase to 22.6% of average total deposits in 1998 as compared to 19.0% in
1997. Savings accounts increased 104.4% to $12.5 million at December 31, 1998,
from $6.1 million at December 31, 1997.
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<PAGE> 88
Average certificates of deposit increased 48.2% to $22.8 million in 1998
from $15.4 million in 1997. As a percentage of average total deposits, these
deposits decreased to 60.1% of average total deposits in 1998 as compared to
63.5% in 1997. Certificates of deposit increased 54.6% to $27.5 million at
December 31, 1998, from $17.8 million at December 31, 1997.
The following table presents, for the periods indicated, the average
amount of and average rate paid on each of the following deposit categories:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
1997 1998
--------------------------- -------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE RATE BALANCE RATE
------- ------- ------- -------
<S> <C> <C> <C> <C>
Deposit Category
Noninterest-bearing demand............................... $ 1,253,307 --% $ 1,982,363 --%
NOW...................................................... 654,229 3.07 828,494 2.69
Money market deposits.................................... 2,339,249 4.43 3,761,926 3.96
Savings deposits......................................... 4,614,491 5.26 8,572,118 4.68
Certificates of deposit.................................. 15,382,207 5.76 22,796,540 5.75
---------- -----------
Total.............................................. $24,243,483 5.16% $37,941,441 4.96%
=========== ===========
</TABLE>
Certificates of deposit will continue to be a major source of funding for
Premier. However, there is no specific emphasis placed on time deposits of
$100,000 and over. During l998, aggregate average balances of time deposits of
$100,000 and over comprised 4.4% of average total deposits. The average rate on
certificates of deposit of $100,000 or more decreased to 5.40% at December 31,
1998, compared to 5.72% at December 31, 1997. The following table indicates
amounts outstanding of certificates of deposit of $100,000 or more and
respective maturities:
<TABLE>
<CAPTION>
1997 1998
-------------------------- ------------------------------
AVERAGE AVERAGE
AMOUNT RATE AMOUNT RATE
------ ------- ------ -------
(dollars in thousands)
<S> <C> <C> <C> <C>
3 months or less........... $1,499 5.53% $ 3,662 5.25%
3-6 months................. 1,436 5.69 2,454 5.58
6-12 months................ 1,880 5.8 3,854 5.36
Over 12 months............. 1,469 5.85 1,226 5.65
----- -----
Total................ $6,284 5.72% $11,196 5.40%
====== ==== ======= ====
</TABLE>
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<PAGE> 89
Federal Home Loan Bank Advances and Note Payable
Average Federal Home Loan Bank advances increased to $2.1 million in 1998
from $404,000 in 1997. Premier is a member of the Federal Home Loan Bank of Des
Moines. At December 31, 1998, Premier had a borrowing capacity from the Federal
Home Loan Bank of $4.9 million. The balance of Federal Home Loan Bank advances
outstanding was $3.4 million and $940,000 at December 31, 1998 and 1997,
respectively. At December 31, 1998, $250,000 of the Federal Home Loan Bank
advance balance had a weighted average interest rate of 6.18% and was due to
mature in one year or less, while the remaining $3.2 million, with a weighted
average interest rate of 5.70%, is due to mature after five years. At December
31, 1998, $2.2 million of the Federal Home Loan Bank advances were used to
"match fund" loans made by Premier to borrowers at interest rates ranging from
2.14% to 2.75% over the rate paid on the Federal Home Loan Bank advance. Terms
of the Federal Home Loan Bank advances generally match term loans to the
borrower. Thus, by match funding long-term loans with long-term advances,
Premier can reduce certain interest rate risks. The remaining $1.2 million in
Federal Home Loan Bank advances were for general funding purposes, and are not
specifically matched to any of Premier's loans or securities. Federal Home Loan
Bank advances are secured under a blanket agreement which assigns all Federal
Home Loan Bank stock and one-to-four family mortgage loans equal to 130% of the
outstanding advance balance.
The average balance of the note payable increased 97.1% to $838,000 in
1998 as compared to $425,000 in 1997. The outstanding balance of the note
payable was $750,000 and $1,050,000 at December 31, 1998 and 1997, respectively.
The note payable is a term loan with an unaffiliated financial institution that
bears interest at the prime rate (7.75% at December 31, 1998), is due on
November 15, 1999 and is secured by 35,020 common shares of Premier Bank stock.
Capital Resources
Shareholders' equity increased 37.8% to $4.4 million at December 31, 1998
from $3.2 million at December 31, 1997. This increase was attributable to the
proceeds from the issuance of 9,231 additional shares of common stock totaling
$1.2 million, retained net income of $22,000, and an increase in accumulated
other comprehensive income resulting from unrealized gains on debt and
marketable equity securities available for sale of $26,000, partially offset by
the purchase of 240 shares of treasury stock for $32,000.
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<PAGE> 90
Average shareholders' equity as a percentage of total average assets is one
measure used to determine capital strength. The ratio of average shareholders'
equity to average assets decreased to 9.24% in 1998 from 10.88% in 1997 and
16.04% in 1996 due to the continued growth of Premier Bank. The actual and
minimum required capital amounts and ratios for Premier Bank at December 31,
1997 and 1998 are as follow:
<TABLE>
<CAPTION>
REGULATORY CAPITAL CALCULATION
-------------------------------------------------
1997 1998
---------------------- ----------------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
(dollars in thousands)
<S> <C> <C> <C> <C>
Tier 1 risk based:
Actual ................. $ 4,215 22.40% $ 5,074 12.19%
Minimum required ....... 753 4.00 1,665 4.00
------- ----- ------- -----
Excess above minimum ... 3,462 18.40% 3,409 8.19%
======= ===== ======= =====
Total risk-based:
Actual ................. $ 4,425 23.51% $ 5,513 13.24%
Minimum required ....... 1,505 8.00 3,330 8.00
------- ----- ------- -----
Excess above minimum ... $ 2,920 15.51% $ 2,183 5.24%
======= ===== ======= =====
Leverage:
Actual ................. $ 4,215 13.20% $ 5,074 9.09%
Minimum required ....... 958 3.00 1,675 3.00
------- ----- ------- -----
Excess above minimum ... $ 3,257 10.20% $ 3,399 6.09%
======= ===== ======= =====
Total risked weighted assets $18,818 $41,729
======= =======
Total average assets ....... $31,925 $55,848
======= =======
</TABLE>
The various federal bank regulators, including the Federal Reserve and the
FDIC, have risk-based capital requirements for assessing bank capital adequacy.
These standards define capital and establish minimum capital standards in
relation to assets and off-balance sheet exposures, as adjusted for credit
risks. Capital is classified into two tiers. For banks, Tier 1 or "core" capital
consists of common shareholders' equity, qualifying noncumulative perpetual
preferred stock and minority interests in the common equity accounts of
consolidated subsidiaries, reduced by goodwill, other intangible assets and
certain investments in other corporations ("Tier 1 Capital"). Tier 2 Capital
consists of Tier 1 Capital, as well as a limited amount of the allowance for
possible loan losses, certain hybrid capital instruments (such as mandatory
convertible debt), subordinated and perpetual debt and non-qualifying perpetual
preferred stock ("Tier 2 Capital").
At December 31, 1994, a risk-based capital measure and a minimum ratio
standard was fully phased in, with a minimum total capital ratio of 8.00% and
Tier 1 Capital equal to at least 50% of total capital. The Federal Reserve also
has a minimum leverage ratio of Tier 1 Capital to total assets of 3.00%. The
3.00% Tier 1 Capital to total assets ratio constitutes the leverage standard for
bank holding companies and Bank Insurance Fund-insured state chartered
non-member banks, and is used in conjunction with the risk-based ratio in
determining the overall capital adequacy of banking organizations. The FDIC has
similar capital requirements for BIF-insured state chartered non-member banks.
The Federal Reserve and the FDIC have emphasized that the foregoing
standards are supervisory minimums and that an institution would be permitted to
maintain such minimum levels of capital only if it were rated a composite "one"
under the regulatory rating systems for bank holding companies and banks. All
other bank holding companies are required to maintain a leverage ratio of 3.00%
plus at least 1.00% to 2.00% of
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<PAGE> 91
additional capital. These rules further provide that banking organizations
experiencing internal growth or making acquisitions will be expected to maintain
capital positions substantially above the minimum supervisory levels and
comparable to peer group averages, without significant reliance on intangible
assets. The Federal Reserve continues to consider a "tangible Tier 1 leverage
ratio" in evaluation proposals for expansion or new activities. The tangible
Tier 1 leverage ratio is the ratio of a banking organization's Tier 1 Capital
less all intangibles, to total average assets less all intangibles.
Premier Bank's Tier 1 (to risk-weighted assets) capital ratio decreased to
12.19% at December 31, 1998 from 22.40% at December 31, 1997. Premier Bank's
total risk based capital ratio decreased to 13.24% at December 31, 1998 from
23.51% at December 31, 1997. Premier Bank's capital ratios decreased due to the
continued leveraging of existing capital through growth in the loan portfolio.
These ratios exceed the minimum capital adequacy guidelines imposed by
regulatory authorities on banks and bank-holding companies, which are 4.00% for
Tier 1 capital and 8.00% for total risk based capital. The ratios also exceed
the minimum guidelines imposed by the same regulatory authorities to be
considered "well-capitalized," which are 6.00% of Tier 1 capital and 10.00% for
total risk based capital.
Premier does not have any commitments that it believes would reduce
Premier Bank's capital to levels inconsistent with the regulatory definition of
a "well capitalized" financial institution.
Interest Rate Sensitivity and Liquidity Management
Liquidity is the ability of a company to convert assets into cash or cash
equivalents without significant loss and to raise additional funds by increasing
liabilities. Liquidity management involves maintaining Premier's ability to meet
the day-to-day cash flow requirements of its customers, whether they are
depositors wishing to withdraw funds or borrowers requiring funds to meet their
credit needs.
The primary function of asset/liability management is not only to assure
adequate liquidity in order for Premier to meet the needs of its customer base,
but to maintain an appropriate balance between interest-sensitive assets and
interest-sensitive liabilities so that Premier can profitably deploy its assets.
Both assets and liabilities are considered sources of liquidity funding and both
are, therefore, monitored on a daily basis.
Interest rate sensitivity is a function of the repricing characteristics
of Premier's portfolio of assets and liabilities. These repricing
characteristics are the time frames within which the interest-earnings assets
and interest-bearing liabilities are subject to change in interest rates either
at replacement, repricing or maturity during the life of the instruments.
Interest rate sensitivity management focuses on repricing relationships of
assets and liabilities during periods of changes in market interest rates.
Interest rate sensitivity is managed with a view to maintaining a mix of assets
and liabilities that respond to changes in interest rates within an acceptable
time frame, thereby managing the effect of interest rate movements on net
interest income. Interest rate sensitivity is measured as the difference between
the volume of assets and liabilities that are subject to repricing at various
time horizons. The differences are interest sensitivity gaps: less than one
month, one to three months, four to 12 months, one to five years, over five
years and on a cumulative basis.
83
<PAGE> 92
The following table shows interest sensitivity gaps for these different
intervals as of December 31, 1998.
<TABLE>
<CAPTION>
ONE ONE- FOUR- OVER NON-
MONTH THREE TWELVE ONE-FIVE FIVE INTEREST
OR LESS MONTHS MONTHS YEARS YEARS SENSITIVE TOTAL
------- ------ ------ ----- ----- --------- -----
(dollars in thousands)
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Earning assets:
Securities and interest-bearing deposits ..... $ 435 $ 1,388 $ 2,798 $ 2,057 $ 35 $ 176 $ 6,889
Federal funds sold ........................... 5,111 -- -- -- -- -- 5,111
Loans ........................................ 13,927 2,375 7,067 15,673 2,315 253 41,610
-------- ------- -------- ------- ------- ------- -------
Total earning assets ...................... $ 19,473 $ 3,763 $ 9,865 $17,730 $ 2,350 $ 429 $53,610
======== ======= ======== ======= ======= ======= =======
LIABILITIES
Interest-bearing liabilities:
NOW deposits ................................. $ 1,225 -- -- -- -- -- $ 1,225
Money market deposits ........................ 4,858 -- -- -- -- -- 4,856
Savings deposits ............................. 12,454 -- -- -- -- -- 12,454
Certificates of deposit $100,000 or more ..... 741 2,921 6,308 1,226 -- -- 11,196
Certificates of deposits less than $100,000 . 2,739 4,144 7,574 1,811 -- -- 16,268
Federal Home Loan Bank advances .............. -- -- 250 -- 3,195 -- 3,445
Note payable ................................. -- -- 750 -- -- -- 750
-------- ------- -------- ------- ------- ------- -------
Total interest-bearing liabilities ........ $ 22,015 $ 7,065 $ 14,882 $ 3,037 $ 3,195 -- $50,194
Non-interest bearing demand deposits ............ -- -- -- -- -- $ 2,817 2,817
-------- ------- -------- ------- ------- ------- -------
Total liabilities ......................... $ 22,015 $ 7,065 $ 14,882 $ 3,037 $ 3,195 $ 2,817 $53,011
======== ======= ======== ======= ======= ======= =======
Interest sensitivity gap:
Amount ....................................... $ (2,542) $(3,302) $ (5,017) $14,693 $ (845) $(2,388)
======== ======= ======== ======= ======= =======
Cumulative amount ............................ $ (2,542) $(5,844) $(10,861) $ 3,832 $ 2,987 $ 599
Percent of total earning assets .............. (4.74%) (6.16%) (9.36%) 27.41% (1.58%) (4.45%)
Cumulative percent of total earning assets ... (4.74%) (10.90%) (20.26%) 7.15% 5.57%
Ratio of rate sensitive assets to rate sensitive 8
liabilities .................................. 0.88 0.53 0.66 5.84 0.74
Cumulative ratio of rate sensitive assets to rate
sensitive liabilities ........................ 0.88 0.80 0.75 1.08 1.06
</TABLE>
In the current interest rate environment, the liquidity and maturity
structure of Premier's assets and liabilities are important to the maintenance
of acceptable performance levels. A decreasing rate environment negatively
impacts earnings as Premier's rate-sensitive assets generally reprice faster
than its rate-sensitive liabilities. Conversely, in an increasing rate
environment, earnings are positively impacted. This asset/liability mismatch in
pricing is referred to as gap ratio and is measured as rate sensitive assets
divided by rate sensitive liabilities for a defined time period. A gap ratio of
1.00 means that assets and liabilities are perfectly matched as to repricing.
Management has specified gap ratio guidelines for a one-year time horizon of
between 0.80 and 1.20. At December 31, 1998, Premier had
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<PAGE> 93
gap ratios of approximately 0.80 for the next three month time period and 0.75
for the one year period ending December 31, 1999. Thus, over the next twelve
months, rate-sensitive assets will reprice slightly faster than rate-sensitive
liabilities.
The allocations used for the interest rate sensitivity report above were
based on the maturity schedules for the loans and deposits and the duration
schedules for the investment securities. All interest-bearing demand deposits
and savings deposits were allocated to the one month or less category. Changes
in the mix of earning assets or supporting liabilities can either increase or
decrease the net interest margin without affecting interest rate sensitivity. In
addition, the net interest spread between an asset and its supporting liability
can vary significantly while the timing of repricing for both the asset and the
liability remain the same, thus impacting net interest income. This is referred
to as basis risk and, generally, relates to the possibility that the repricing
characteristics of short-term assets tied to Premier's prime lending rate are
different from those of short-term funding sources such as certificates of
deposit.
Varying interest rate environments can create unexpected changes in
prepayment levels of assets and liabilities, which are not reflected in the
interest sensitivity analysis report. Prepayments may have significant effects
on Premier's net interest margin. Because of these factors and in a static test,
interest sensitivity gap reports may not provide a complete assessment of
Premier's exposure to changes in interest rates. Management utilizes
computerized interest rate simulation analysis to determine Premier's interest
rate sensitivity. The table above indicates Premier is in a liability sensitive
gap position for the first year, then moves into a matched position through the
five-year period. Overall, due to the factors cited, current simulation results
indicate a relatively low sensitivity to parallel shifts in interest rates. A
liability sensitive bank will generally benefit from a falling interest rate
environment as the cost of interest-bearing liabilities falls faster than the
yields on interest-bearing assets, thus creating a widening of the net interest
margin. Conversely, an asset sensitive bank will benefit from a rising interest
rate environment as the yields on earning assets rise faster than the costs of
interest-bearing liabilities. Management also evaluates economic conditions, the
pattern of market interest rates and competition to determine the appropriate
mix and repricing characteristics of assets and liabilities required to produce
a targeted net interest margin. In addition to the gap analysis, management uses
rate shock simulation to measure the rate sensitivity of its investment
portfolio. Rate shock simulation is a modeling technique used to estimate the
impact of changes in rates on the market value of Premier's investment
portfolio. Premier measures its interest rate risk by estimating the changes in
the market value resulting from instantaneous and sustained parallel shifts in
interest rates of plus or minus 300 basis points. Premier's most recent rate
shock simulation analysis which was performed as of December 31, 1998, indicates
that a 300 basis points increase in rates would cause a decrease in market value
of investment securities of $640,000. Conversely, a 300 basis points decrease in
rates would cause an increase in market value of investment securities of
$219,000.
While this simulation is a useful measure of Premier's sensitivity to
changing rates, it is not a forecast of the future results and is based on many
assumptions that, if changed, could cause a different outcome. In addition, a
change in U.S. Treasury rates in the designated amounts accompanied by a change
in the shape of the Treasury yield curve would cause significantly different
changes to net interest income than indicated above.
Generally, Premier's commercial and commercial real estate loans are
indexed to the prime rate. A portion of Premier's investment in mortgage-backed
securities is indexed to U.S. Treasury rates. Accordingly, any changes in these
indices will have a direct impact on Premier's interest income. The majority of
Premier's savings deposits are based on competitive interest rates in the
market. Certificates of deposit are generally priced based upon current market
conditions that include changes in the overall interest rate environment and
pricing of such deposits by competitors. Other interest-bearing deposits
are not priced against any particular index, but rather, reflect changes in the
overall interest rate
85
<PAGE> 94
environment. The Federal funds sold rate and other borrowed funds are indexed to
U.S. Treasury rates. Premier adjusts the rates and terms of its loans and
interest-bearing liabilities in response to changes in the interest rate
environment.
Premier does not currently engage in trading activities or use derivative
instruments to manage interest rate risk.
At December 31, 1998, debt securities available-for-sale with a carrying
value of $6.0 million are scheduled to mature within the next five years. Of
this amount, $753,000 is scheduled to mature within one year. Premier's main
source of liquidity is Federal funds sold. Average Federal funds sold were $3.6
million in 1998, or 8.8% of average earning assets, compared to $1.2 million in
1997, or 4.8% of average earning assets. Federal funds sold totaled $5.1 million
at December 31, 1998, or 9.6% of earning assets, compared to $1.8 million at
December 31, 1997, or 5.8% of earning assets.
At December 31, 1998, loans with a carrying value of approximately $39.0
million are scheduled to mature or reprice within the next five years. Of this
amount, $23.4 million is scheduled to mature or reprice within one year. At
December 31, 1998, certificates of deposit with a carrying value of
approximately $26.5 million are scheduled to mature within the next three years.
Of this amount, $20.9 million is scheduled to mature within one year.
Premier's average loan-to-deposit ratio was 83.64% during 1998 and 79.25%
during 1997. Management attempts to manage Premier's loan-to-deposit ratio on an
average basis, as opposed to on a daily basis.
Premier has short-term funding available through its membership in the
Federal Home Loan Bank. Further, the Federal Home Loan Bank membership provides
the availability of participation in loan programs with varying maturities and
terms. At December 31, 1998, Premier had availability of borrowing up to an
additional $4.9 million from the Federal Home Loan Bank under a line of credit.
There are no known trends, demands, commitments, events or uncertainties
that will result in or that are reasonably likely to result in liquidity
increasing or decreasing in any material way.
It is not anticipated that First Premier will find it necessary to raise
additional funds to meet expenditures required to operate the business of First
Premier and Premier over the next twelve months. All anticipated material
expenditures for such period have been identified and provided for out of the
proceeds of the offering.
YEAR 2000 READINESS
First Premier will utilize and will be dependent upon data processing
systems and software to conduct its business. The approach of the Year 2000
presents a problem in that many computer programs have been written using two
digits rather than four to define the applicable year. Computer programs that
have time-sensitive software may recognize a date using "00" as the year 1900
rather than the Year 2000. For example, computer systems may compute payment,
interest, delinquency or other figures important to the operations of First
Premier based on the wrong date. This could result in internal system failure or
miscalculation, and also creates risk for First Premier from third parties with
whom we deal on financial transactions.
Following the acquisition of Premier Bank, First Premier will use Premier
Bank's existing computer and data processing systems and will be dependent upon
these systems for its own operations. Premier Bank is utilizing CSI, a
third-party vendor, to provide its primary banking applications, including core
processing systems. In addition, Premier Bank also uses CSI's software for
certain ancillary computer applications. CSI has given Premier Bank assurances
of Year 2000 compliance on core loan, deposit and
86
<PAGE> 95
accounting-related programming. The following discusses in greater detail
Premier Bank's efforts to become Year 2000 compliant.
The FDIC has issued guidelines for insured financial institutions with
respect to Year 2000 compliance. Premier Bank has developed a Year 2000 action
plan based in part on the guidelines and timetables issued by the FDIC. Premier
Bank's action plan focuses on four primary areas: (1) information systems, (2)
embedded systems located at Premier Bank's offices and within its off-site ATM
machines, (3) third party and customer relationships, and (4) contingency
planning. Premier Bank has designated a Year 2000 compliance team, headed by its
Vice President/Cashier, who reports to the board of directors.
Information Systems. Premier Bank has identified all mission critical
information ("IT") systems and has developed a schedule for testing and
remediation of such systems. Testing of key computer hardware has been
completed, and Premier Bank has also completed mission critical hardware
modification or replacement. Premier Bank has completed its inventory of mission
critical software and is in the process of contacting software vendors for
certification of Year 2000 compliance. Testing of internal mission critical
systems was completed and no problems were identified.
Embedded Systems. Premier Bank has performed a comprehensive inventory of
its embedded systems, such as micro-controllers used to operate security
systems, and has completed its inventory of mission critical non-IT systems.
Premier Bank has contacted manufacturers and vendors of those components
utilized in operations to determine whether such components are Year 2000
compliant. Premier Bank has remediated or replaced, as applicable, any
non-compliant components and expects to complete this process for mission
critical systems by June 30, 1999.
Third Party and Customer Relationships. Premier Bank is in the process of
initiating communications with all suppliers and vendors to determine the
potential impact of such third parties' failure to remediate their own Year 2000
issues. These third parties include other financial institutions, office supply
vendors and telephone, electric and other utility companies. Premier Bank is
encouraging its counterparties and customers to conduct their own Year 2000
assessment and take appropriate steps to become Year 2000 compliant.
Premier Bank outsources its principal data processing activities to CSI,
and Premier Bank is actively communicating with and monitoring the progress of
such institution to assess the impact of Year 2000 issues on such institution
and its ability to provide such data processing services. Premier Bank will
consider new business relationships with alternate providers of products and
services if necessary. Additionally, Premier Bank has initiated communications
with its larger and commercial borrowers to assess the potential impact of Year
2000 on them and their ability to remain current on loan repayments.
Contingency Plans. As part of PremierBank's normal business practice, it
maintains contingency plans to follow in the event of emergency situations, some
of which could arise from Year 2000-related problems. Premier Bank has
formulated a detailed Year 2000 contingency plan, which assesses several
possible scenarios to which Premier Bank may be required to react. Premier
Bank's formal Year 2000 contingency plan was completed in the first quarter of
1999.
Financial Implications. Management of Premier Bank currently does not
expect the amounts required to be expensed to resolve Year 2000 issues to have a
material effect on its financial position or results of operations. Premier Bank
currently estimates that the costs of assessing, testing and remediation of Year
2000 issues totaled approximately $6,500 in 1998 and are expected to total
approximately $9,000 in 1999. The anticipated costs associated with Premier
Bank's Year 2000 compliance program do not include time and costs that may be
incurred as a result of any potential failure of third parties to become Year
2000 compliant or costs to implement Premier Bank's contingency plans.
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<PAGE> 96
Potential Risks. The Year 2000 issue presents a number of risks to the
business and financial condition of Premier Bank. External factors, which
include but are not limited to electric and telephone service, are beyond the
control of Premier Bank and the failure of such systems could have a material
adverse effect on Premier Bank, its customers and third parties on whom Premier
Bank relies for its day-to-day operations. The business of many of Premier
Bank's customers may be negatively affected by the Year 2000 issue, and any
financial difficulties incurred by Premier Bank's customers in connection with
the century change could negatively affect such customer's ability to repay
loans to Premier Bank. The failure of Premier Bank's computer system or
applications or those operated by customers or third parties could have a
material adverse effect on Premier Bank's results of operations and financial
condition. In addition, as the Year 2000 approaches, Premier Bank may be
required to keep higher levels of noninterest earning assets due to its need to
keep extra cash reserves available.
The foregoing are forward-looking statements reflecting management's
current assessment and estimates with respect to Premier Bank's Year 2000
compliance efforts and the impact of Year 2000 issues on Premier Bank's business
and operations. Various factors could cause actual plans and results to differ
materially from those contemplated by such assessments, estimates and
forward-looking statements, many of which are beyond the control of Premier
Bank. Some of these factors include, but are not limited to, representations by
Premier Bank's vendors and counterparties, technological advances, economic
considerations and consumer perceptions. Premier Bank's Year 2000 compliance
program is an ongoing process involving continual evaluation and may be subject
to change in response to new developments.
ACCOUNTING PRONOUNCEMENTS
In June, 1997 the Financial Accounting Standards Board ("FASB") issued
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
130") which establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains, and losses) in a full set
of general-purpose financial statements. Premier adopted SFAS 130 on January 1,
1998. SFAS 130 is a disclosure requirement and had no impact on Premier's
consolidated financial position and results of operations.
In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, Disclosures about Segments of an Enterprise and Related Information
("SFAS 131") which establishes standards for the way that public enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim reports issued to stockholders. SFAS 131 is effective for
financial statements for periods beginning after December 15, 1997. As Premier
operates as a single segment, it has no reporting requirements under SFAS 131.
In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS
133") which establishes standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
SFAS 133 requires an entity to recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. SFAS 133 is effective for all fiscal years beginning after June
15, 1999. Earlier application of SFAS 133 is encouraged but the pronouncement
should not be applied retroactively to financial statements of prior periods.
Premier is currently evaluating the requirements and impact of SFAS 133, but as
Premier has not invested in any investments that are defined as derivatives,
SFAS 133 is expected to have no impact on its consolidated financial position or
results of operations.
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EFFECTS OF INFLATION AND CHANGING PRICES
Inflation generally increases the cost of funds and operating overhead,
and to the extent loans and other assets bear variable rates, the yields on such
assets. Unlike most industrial companies, virtually all of the assets and
liabilities of a financial institution are monetary in nature. As a result,
interest rates generally have a more significant impact on the performance of a
financial institution than the effects of general levels of inflation. Although
interest rates do not necessarily move in the same direction or to the same
extent as the prices of goods and services, increases in inflation generally
have resulted in increased interest rates. In addition, inflation affects
financial institutions through increased cost of goods and services purchased,
the cost of salaries and benefits, occupancy expense, and similar items.
Inflation and related increases in interest rates generally decrease the market
value of investments and loans held and may adversely effect liquidity,
earnings, and shareholders' equity. Mortgage originations and refinancings tend
to slow as interest rates increase, and can reduce Premiers' earnings from such
activities and the income from the sale of residential mortgage loans in the
secondary market.
MONETARY POLICIES
The results of operations of First Premier and Premier will be affected by
credit policies of monetary authorities, particularly the Federal Reserve Board.
The instruments of monetary policy employed by the Federal Reserve Board include
open market operations in U.S. Government securities, changes in the discount
rate on member bank borrowings, changes in reserve requirements against member
bank deposits and limitations on interest rates which member banks may pay on
time and savings deposits. In view of changing conditions in the national
economy and in the money markets, as well as the effect of action by monetary
and fiscal authorities, including the Federal Reserve Board, no prediction can
be made as to possible future changes in interest rates, deposit levels, loan
demand or the business and earnings of First Premier or Premier.
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DESCRIPTION OF FIRST PREMIER CAPITAL STOCK AND
PREMIER CAPITAL STOCK
FIRST PREMIER CAPITAL STOCK
General
First Premier is authorized to issue 20,000,000 shares of common stock,
$.01 par value per share, and 1,000,000 shares of preferred stock, $.01 par
value per share, of which 100,000 shares of preferred stock have been designated
as the Series A Preferred Stock. As of the date hereof, 300,000 shares of common
stock and 99,900 shares of Series A Preferred Stock are issued and outstanding,
held by 31 and 12 shareholders of record, respectively.
The following summary of the common stock and preferred stock is qualified
in its entirety by reference to the Certificate of Incorporation, the By-Laws,
and the Delaware General Corporation Law, as amended (the "Delaware Law").
Common Stock
Subject to such preferential rights as may be granted by the board of
directors in connection with any issuances of preferred stock, holders of shares
of common stock are entitled to receive such dividends as may be declared by the
board of directors in its discretion from funds legally available for that
purpose. At this time, the board of directors intends to retain all earnings to
support anticipated growth in the current operations of First Premier and to
finance future expansion. Additional restrictions on the payment of cash
dividends may be imposed in connection with future issuances of preferred stock
and indebtedness by First Premier. Further declarations and payments of cash
dividends, if any, will also be determined in light of then-current conditions,
including First Premier's earnings, operations, capital requirements, liquidity,
financial condition, restrictions in financing agreements and other factors
deemed relevant by the board of directors. Upon the liquidation, dissolution or
winding up of First Premier, after payment of creditors, the remaining net
assets of First Premier will be distributed pro rata to the holders of common
stock, subject to any liquidation preference of the holders of preferred stock.
There are no preemptive rights, conversion rights, or redemption or sinking fund
provisions with respect to the shares of common stock. All of the outstanding
shares of common stock are, and the shares to be outstanding upon completion of
the offering will be, duly and validly authorized and issued, fully paid and
nonassessable.
Holders of common stock are entitled to one vote per share of common stock
held of record on all such matters submitted to a vote of the shareholders.
Holders of common stock do not have cumulative voting rights. As a result, the
holders of a majority of the outstanding shares of common stock voting for the
election of directors can elect all the directors, and, in such event, the
holders of the remaining shares of common stock will not be able to elect any
persons to the board of directors.
Preferred Stock
The board of directors may, without approval of First Premier's
shareholders, from time to time authorize the issuance of preferred stock in one
or more series for such consideration and, within certain limits, with such
relative rights, preferences and limitations as the board of directors may
determine. The relative rights, preferences and limitations that the board of
directors has the authority to determine as to any such series of preferred
stock include, among other things, dividend rights, voting rights, conversion
rights, redemption rights and liquidation preferences. Because the board of
directors has the power to establish the relative rights, preferences and
limitations of each series of preferred stock, it may afford to the holders of
any such series, preferences and rights senior to the rights of the holders of
shares of common stock. Although the board of directors has no present intention
to do so, it could cause the issuance of preferred stock which could discourage
an acquisition attempt or other transactions that
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some, or a majority of, the shareholders might believe to be in their best
interests or in which the shareholders might receive a premium for their shares
of common stock over the market price of such shares.
First Premier presently has 99,900 shares of preferred stock outstanding,
designated as the Series A Preferred Stock. The terms of the Series A Preferred
stock provide that no dividends or other distributions shall be declared or
payable on the Series A Preferred Stock. The terms of the Series A Preferred
Stock provide for a liquidation preference in the event of a winding up,
liquidation or dissolution of First Premier in the amount of $10.00 per share
for an aggregate liquidation preference of $999,000. Except as may be required
by law, the holders of the Series A Preferred Stock do not have any voting
rights. The terms of the Series A Preferred Stock may be redeemed, at the option
of First Premier, at a price of $10.00 per share. First Premier intends to
redeem the outstanding shares of Series A Preferred Stock with the proceeds of
the offering.
Certain Provisions of the Certificate of Incorporation and By-Laws
Supermajority Voting Requirements. Under Delaware Law, the shareholders
have the power to adopt, amend or repeal bylaws; however, the certificate of
incorporation may confer such power upon the board of directors, although in
doing so it may not divest the shareholders of their power to adopt, amend or
repeal the bylaws. First Premier's Certificate of Incorporation (the
"Certificate") provides that the board of directors is authorized to make,
repeal, alter, amend and rescind First Premier's Bylaws. The Certificate also
contains a supermajority (75%) voting requirement for amendments to the Bylaws
by the shareholders.
In addition to the supermajority vote required to amend the Bylaws, the
Certificate provides in Article ___ that the following provisions of the
Certificate may be amended or repealed only by the affirmative vote of the
holders of not less than 75% of the then outstanding common stock of First
Premier: (i) Article ___, which limits or eliminates the monetary liability of
directors for a breach of their fiduciary duty in certain circumstances; (ii)
Article ___, which provides that elections of directors need not be by written
ballot unless the Bylaws so provide; (iii) Article___, which allows the board of
directors to amend or repeal any provision of the Bylaws and requires the
affirmative vote of 75% of the shareholders for the shareholders to adopt,
amend, alter or repeal the Bylaws; (iv) Article ___, which eliminates the
ability of shareholders to take action by written consent; and (v) Article ___,
which provides that only the board of directors can call special meetings of
shareholders. Delaware Law provides generally that a corporation's certificate
of incorporation may be amended by a vote of shareholders holding a majority of
the outstanding stock. Where the certificate of incorporation requires a
supermajority vote with respect to a particular matter, however, the same
supermajority vote is required to amend such supermajority voting requirement of
the certificate of incorporation. Therefore, both Delaware Law and the
Certificate provide that in order to amend or repeal the provisions in the
Certificate which require the affirmative vote of the holders of not less than
75% of the then outstanding common stock, the same 75% vote will be necessary to
amend such provisions.
These supermajority voting provisions could render more difficult or
discourage a merger, tender offer, proxy contest or the assumption of control of
First Premier by a large stockholder or group of shareholders. To the extent
that these provisions enable the board of directors to resist a takeover or
change in control of First Premier, it could make it more difficult to remove
the existing board of directors and management.
Certain Business Combinations. In the past several years, a number of
states have adopted special laws designed to make certain kinds of "unfriendly"
corporate takeovers, or other transactions involving a corporation and one or
more of its significant shareholders, more difficult. Under Section 203 of the
Delaware Law ("Section 203") certain "business combinations" with "interested
stockholders" of Delaware corporations are subject to a three-year moratorium
unless specified conditions are met.
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Section 203 prohibits certain mergers, consolidations, sales of assets and
other transactions with an "interested stockholder" (generally a 15% stockholder
or group of stockholders) for three years following the date the stockholder
became an interested stockholder. This prohibition on business combinations is
subject to certain exceptions, the most significant of which are that the
prohibition does not apply if: (1) the business combination or transaction in
which the stockholder becomes an interested stockholder is approved by the
corporation's board of directors prior to the stockholder becoming an interested
stockholder; (2) the business combination is with an interested stockholder who
became an interested stockholder in a transaction whereby he acquired 85% of the
corporation's voting stock, excluding shares held by directors who are also
officers and certain employee stock plans; or (3) the business combination is
approved by the corporation's board of directors and authorized at a meeting by
the affirmative vote of at least 66 2/3% of the outstanding voting stock which
is not owned by the interested stockholder.
Section 203 only applies to Delaware corporations which have a class of
voting stock that is listed on a national securities exchange, authorized for
quotation on the Nasdaq National Market, or held of record by more than 2,000
shareholders. Because First Premier's common stock will be presently listed on
the Nasdaq National Market, it is anticipated that Section 203 will be
applicable to First Premier. A Delaware corporation may elect not to be governed
by Section 203 by including a provision to that effect in its certificate of
incorporation or bylaws. The Certificate does not contain any such provision
and, accordingly, the Company believes Section 203 will apply to it.
First Premier expects that Section 203 will have the effect of encouraging
any potential acquiror to negotiate with the board of directors. Section 203
also might have the effect of limiting the ability of a potential acquiror to
engage in certain tactics (such as "two-tier pricing") that can result in
dissimilar treatment of a corporation's shareholders. At the time Section 203
was adopted by the Delaware Legislature, a number of corporations had been
subject to tender offers for, or other acquisitions of, more than 15% but less
than 85% of their outstanding stock. In many cases, such purchases were followed
by business combinations in which the purchaser either paid a lower price for
the remaining outstanding shares than the price it paid in acquiring its
original interest in the corporation, or paid a less desirable form of
consideration. Federal securities laws and regulations applicable to business
combinations govern the disclosure required to be made to minority shareholders
in order to consummate such a transaction, but do not assure shareholders that
the terms of the business combination will be fair to them or that they can
effectively prevent its consummation. Moreover, the statutory right of the
remaining shareholders of the corporation to dissent in connection with certain
business combinations and receive the "fair value" of their shares in cash may
involve significant expense to such dissenting shareholders and may not be
meaningful in all cases. Such an appraisal standard as applied under Delaware
Law does not take into account any appreciation of the stock's market value due
to anticipation of the business combination and may not recognize that the
market value of the shares may be adversely influenced by the interested
person's controlling stock ownership. In addition, in the case of some business
combinations, such as a sale of assets or a reclassification or recapitalization
of a corporation's capital stock, the statutory right of dissent is not
available at all. Section 203 was intended to partially close these "gaps" in
federal and state law and to prevent certain of the potential inequities of
business combinations.
Shareholders should note, however, that the application of Section 203 to
First Premier will confer upon the board of directors the power to reject a
proposed business combination in certain circumstances, even though a potential
acquiror may be offering a substantial premium for First Premier's shares over
the then-current market price. Section 203 should also discourage certain
potential acquirors unwilling to comply with its provisions.
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Indemnification
This provision of the Certificate of Incorporation will limit the remedies
available to a shareholder who is dissatisfied with a decision of the Board of
Directors protected by this provision, and such shareholder's only remedy in
that circumstance may be to bring a suit to prevent the action of the Board of
Directors. In many situations, this remedy may not be effective, including
instances when shareholders are not aware of a transaction or an event prior to
action of the Board of Directors in respect of such transaction or event.
Transfer Agent and Registrar
United Missouri Bank, Kansas City will be the Transfer Agent and Registrar
for First Premier's common stock.
PREMIER CAPITAL STOCK
Common Stock
General. Premier is authorized to issue 100,000 shares of common stock,
$1.00 par value per share. At present, 41,834 shares of common stock are issued
and outstanding. The following is a summary of the respective rights of the
common stock and is qualified in its entirety by Premier's Articles of
Incorporation.
Dividends. The holders of Premier's common stock are entitled to share
ratably in dividends thereon when, as, and if declared by the Board of Directors
out of funds legally available for such purposes.
Voting Rights. The holders of Premier's common stock have one vote for each
share held on matters presented for consideration by the shareholders. In the
election of directors, cumulative voting does not apply.
Preemptive Rights. The holders of Premier's common stock do not have
preemptive rights to purchase additional unissued shares or treasury shares of
Premier in the event that Premier proposes to issue the same.
Liquidation Rights. In the event of liquidation, dissolution, or winding up
of Premier, whether voluntary or involuntary, the holders of common stock will
be entitled to share ratably in any of the assets or funds of Premier available
for distribution after the satisfaction of Premier's liabilities (or after
adequate provision is made therefor) and after satisfaction of all preferences
on any outstanding senior securities of Premier.
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COMPARISON OF SHAREHOLDER RIGHTS
Premier is incorporated under the laws of the state of Missouri, while
First Premier is incorporated under the laws of the state of Delaware. The
rights of Premier shareholders are governed by Premier's articles of
incorporation, bylaws and the Missouri Revised Statutes. The rights of First
Premier shareholders are governed by First Premier's Certificate of
Incorporation, bylaws and by the Delaware General Corporation Law. At the
Effective Time, the rights of Premier shareholders who receive shares of First
Premier common stock in the merger will thereafter be governed by the First
Premier Certificate of Incorporation, the First Premier Bylaws and Delaware law.
The following discussion compares certain provisions of Delaware and Missouri
law which could materially affect the rights of shareholders of Premier upon
consummation of the merger.
CALL OF SPECIAL SHAREHOLDER MEETINGS
Under Delaware and Missouri law, special shareholders' meetings may be
called by the board of directors or by such other person as may be authorized by
the certificate of incorporation (in the case of a Delaware corporation),
articles of incorporation (in the case of a Missouri corporation) or the bylaws.
Such meetings may be held in or out of the state at a place stated in or fixed
in accordance with a corporation's bylaws. Premier's bylaws provide that special
meetings of the shareholders may be called by the Chairman of the Board, the
President or the Board of Directors. First Premier's bylaws provide that special
meetings of the shareholders shall be called in accordance with the certificate
of incorporation. First Premier's certificate provides that special meetings of
the stockholders may be called at any time and only by a majority of the Board
of Directors.
SHAREHOLDER CONSENT IN LIEU OF MEETING
Missouri law permits any action to be taken at a meeting of shareholders
to be taken without a meeting if consents in writing setting forth the action so
taken shall be signed by all of the shareholders entitled to vote on the action.
Delaware law permits any action required or permitted to be taken at a
shareholders' meeting to be taken without a meeting, without prior notice and
without a vote, by action of the shareholders having at least the minimum number
of votes that would be necessary to authorize or take such action at a
shareholders meeting at which shares entitled to vote thereon were present and
voted. To be effective, the action must be evidenced by at least one written
consent describing the action taken, dated and signed by the requisite holders
and delivered to the corporation.
Premier's bylaws provide that any action required to be taken at a meeting
of shareholders, or any other action which may be taken at a meeting of
shareholders, may be taken without a meeting if consents, in writing, setting
forth the action taken shall be signed by all the shareholders entitled to vote
with respect to the subject matter thereof. First Premier's bylaws provide that
shareholders may not take any action by written consent in lieu of a meeting of
the shareholders.
SHAREHOLDER VOTING
Under Missouri law, a majority of the outstanding shares entitled to vote
at any meeting shall constitute a quorum, unless otherwise provided in the
articles of incorporation or bylaws. Every decision of a majority of shares
entitled to vote on a matter at meeting at which a quorum is present shall be
valid as an action of the shareholders. In addition, unless the corporation's
articles of incorporation provide otherwise, directors are elected by a majority
of the votes cast by the shares entitled to vote when the vote is taken.
However, in the case of cumulative voting, directors shall be elected by a
plurality of votes.
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Under Delaware law, in the absence of a specification in the corporation's
certificate of incorporation or bylaws, a majority of the votes entitled to be
cast on a particular matter constitutes a quorum. Once a quorum is obtained, the
affirmative vote of a majority of shares present in person or represented by
proxy and entitled to vote on the subject matter is sufficient for stockholder
action; however, directors are elected by a plurality of votes.
Premier's bylaws provide that the holders of a majority of the voting
shares issued and outstanding and entitled to vote for the election of directors
shall constitute a quorum for the transaction of business at all meetings of the
shareholders, except as may be otherwise provided by law or by the articles of
incorporation. Under First Premier's bylaws, a majority of the outstanding
shares of First Premier entitled to vote, represented in person or by proxy,
shall constitute a quorum for the transaction of business at such meeting.
Furthermore, directors shall be elected by a plurality of the shares represented
at the meeting and entitled to vote in the election of directors.
With certain exceptions, Missouri law requires that a merger, share
exchange, sale of all or substantially all the corporation's assets or similar
transaction be approved by a vote of two-thirds of the votes entitled to be cast
by each class of shares outstanding. Delaware law generally requires approval by
only a majority of the shares outstanding and does not require such class
voting, except in the case of transactions involving an amendment to the
certificate of incorporation where the amendment would increase or decrease the
aggregate number of authorized shares of such class, increase or decrease the
par value of the shares of such class, or alter or change the powers,
preferences or special rights of the shares of such class so as to affect them
adversely. Accordingly, there is a lower threshold for approval of such
transactions in Delaware.
Delaware Law does not require a vote of the stockholders of the surviving
corporation in a merger (unless the corporation provides otherwise in its
certificate of incorporation) if (a) the merger agreement does not amend the
existing certificate of incorporation, (b) each share of the stock of the
surviving corporation outstanding immediately before the effective date of the
merger is an identical outstanding or treasury share after the merger, and (c)
either no shares of common stock of the surviving corporation and no shares,
securities or obligations convertible into such stock are to be issued or
delivered under the plan of merger, or the authorized and unissued shares or the
treasury shares of common stock of the surviving corporation to be issued or
delivered under the plan of merger plus those initially issuable upon conversion
of any other shares, securities or obligations to be issued or delivered under
such plan do not exceed 20% of the shares of common stock of such constituent
corporation outstanding immediately prior to the effective date of the merger.
LIMITATION OR ELIMINATION OF DIRECTORS' PERSONAL LIABILITY
Missouri law does not contain a provision for eliminating or limiting the
personal liability of a director. Under Delaware Law, a corporation's
certificate of incorporation may eliminate or limit a director's liability for
monetary damages for breach of fiduciary duty as a director. However, a
corporation's certificate of incorporation may not limit or eliminate a
director's personal liability (a) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (b) for acts or omissions not in
good faith or involving intentional misconduct or a knowing violation of law,
(c) unlawful distributions, or (d) for any transaction in which the director
received an improper personal benefit.
Under First Premier's certificate of incorporation, directors' personal
liability to First Premier or its stockholders for monetary damages for breach
of fiduciary duty has been eliminated.
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INDEMNIFICATION
In general, Missouri law requires indemnification for a director or
officer who has successfully defended an action, on the merits or otherwise,
when he or she was a party because he or she is or was a director or officer.
Delaware law requires indemnification to the extent any present or former
director or officer has been successful, on the merits or otherwise, in defense
of an action where such person was a party by reason of the fact that he or she
was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another entity.
The provisions of Missouri and Delaware Law are substantially similar with
respect to permissive indemnification. In general, both permit indemnification
against expenses reasonably incurred, provided there is a determination by a
majority vote of disinterested directors or a committee thereof, by independent
legal counsel or by a majority vote of a quorum of the shareholders that the
person seeking indemnification acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interest of the corporation and,
with respect to any criminal proceeding, had no reasonable cause to believe that
the person's conduct was unlawful.
Under Missouri law, expenses incurred by a director, officer, employee or
agent in defending an action may be paid in advance. However, the individual
must undertake to repay any amounts advanced if it is ultimately determined that
he or she is not entitled to indemnification. Similarly, Delaware law provides
that expenses incurred by an individual in defending an action may be paid in
advance, if such individual undertakes to repay all amounts advanced if it is
ultimately determined that such person is not entitled to be indemnified (except
with respect to former directors and officers, and employees and agents, with
respect to whom the corporation need not obtain such undertaking).
In addition, the laws of both states authorize a corporation's purchase of
indemnity insurance for the benefit of its officers, directors, employees and
agents whether or not the corporation would have the power to indemnify against
the liability covered by the policy.
Premier's articles and bylaws provide indemnification to directors and
officers to the fullest extent permitted by Missouri law. First Premier's bylaws
provide indemnification to the fullest extent authorized by the Delaware General
Corporation Law. In addition, if a claim for indemnification in Delaware has not
been paid in full by the corporation within 60 days after a written claim has
been received by the corporation, the indemnitee may bring a suit against the
corporation to recover the unpaid amount of the claim. However, the corporation
shall indemnify such indemnitee in connection with a proceeding initiated by the
indemnitee only if the proceeding was authorized by the board of directors of
the corporation.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers, or persons
controlling Premier pursuant to the foregoing provisions, Premier has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy and therefore unenforceable.
AMENDMENTS TO ARTICLES OR CERTIFICATE OF INCORPORATION AND BYLAWS
Amendments to the articles of incorporation may be approved in Missouri
generally by a majority of the votes cast. Under Delaware Law, amendments to the
certificate of incorporation generally require the affirmative vote of the
holders of a majority of the outstanding stock.
Missouri law provides that a corporation's shareholders have the power to
amend or repeal the corporation's bylaws unless the articles of incorporation
vest such power in the board of directors. Under Delaware Law, stockholders have
the power to adopt, amend or repeal bylaws, although a
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corporation's certificate of incorporation may confer such power on the board of
directors without divesting the stockholders of their right to act.
Premier's articles of incorporation provide that the Board of Directors
has the power to make, alter, amend or repeal the bylaws of the corporation.
First Premier's certificate of incorporation provides that the Board of
Directors is authorized to make, repeal, alter, amend and rescind First
Premier's bylaws. The certificate also contains a supermajority (75%) voting
requirement for amendment to the bylaws by the shareholders. In addition to the
supermajority vote required to amend the bylaws, the certificate provides that
certain provisions of the certificate may be amended or repealed only by the
affirmative vote of the holders of note less than 75% of the outstanding common
stock of First Premier: (1) article _______, which eliminates or limits the
monetary liability of directors for a breach of their fiduciary duty in certain
circumstances; (2) article ______, which provides that elections of directors
need not be by written ballot unless the bylaws so provide; (3) article ______,
which allows the Board of Directors to amend or repeal any provision of the
bylaws and requires the affirmative vote of 75% of the shareholders for the
shareholders to adopt, amend, alter or repeal the bylaws; (4) article _____,
which eliminates the ability of the shareholders to take action by written
consent; and (5) article _____, which provides that only the Board of Directors
can call special meetings of the shareholders. While the certificate of
incorporation requires a supermajority vote with respect to a particular matter,
however, the same supermajority vote is required to amend such supermajority
voting requirements of the certificate of incorporation. Therefore, both
Delaware law and the certificate provide that, in order to amend or repeal the
provisions of the certificate which require the affirmative vote of the holders
of not less than 75% of the outstanding common stock, the same 75% vote will be
necessary to amend such provisions.
DISSENTERS' RIGHTS OF APPRAISAL
Under both Missouri and Delaware law, a shareholder of a corporation
participating in certain major corporate transactions may, under varying
circumstances, be entitled to appraisal rights pursuant to which the shareholder
may receive cash in the amount of the fair market value of his or her shares in
lieu of the consideration he or she would otherwise receive in the transaction.
Delaware law does not, in general, afford dissenters' rights of appraisal
with respect to (a) a sale of assets, (b) a merger by a corporation, the shares
of which are either (i) listed on a national securities exchange or designated
as a national market system security or (ii) widely held (by more than 2,000
stockholders) if such stockholders receive shares of the surviving corporation
or of a listed or widely held corporation, or (c) stockholders of a corporation
surviving a merger if no vote of the stockholders is required to approve the
merger under the circumstances set forth above in the section titled
"Shareholder Voting."
Missouri law generally affords dissenters' rights of appraisal with
respect to a merger, share exchange and sale of a corporation's assets. Missouri
law does not contain the exclusion from dissenters' rights for corporations the
shares of which are publicly traded, as described above.
INSPECTION OF BOOKS, RECORDS AND SHAREHOLDERS LIST
Both Missouri and Delaware Law allow any shareholder to inspect the books
and records of the corporation. Missouri law allows inspection of its books and
records at all proper times and under such regulations as may set forth in the
bylaws. Delaware allows inspection of its books, records and shareholder list
for any proper purpose upon a written demand under oath stating the purpose of
the inspection. A proper purpose means a purpose reasonably related to the
shareholder's interest as a stockholder. In both Missouri and Delaware, the
corporation shall make available a complete list of shareholders entitled to
vote at the meeting at least 10 days before every shareholders' meeting. Lack of
access to stockholder records could result in impairment of a stockholder's
ability to coordinate
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opposition to management proposals, including proposals with respect to a change
in control of the company. First Premier's bylaws provide that directors shall
have the absolute right to inspect all books and records and the physical
properties of First Premier and of its subsidiaries. Premier's bylaws provide
that a Premier shareholder may inspect Premier's records during regular business
hours if such shareholder is entitled to inspect the records pursuant to any
statutory or other legal right. To exercise this right of examination, a Premier
shareholder must make written demand upon Premier, stating the specific records
sought to be examined and the purpose of the inspection of the records. No
Premier shareholder shall use or permit to be used any information obtained in
the inspection of the records to the detriment of Premier and no shareholder
shall furnish any information inspected to any competitor or prospective
competitor of Premier. Furthermore, Premier may require the shareholder to
indemnify the corporation against any loss or damage caused from an unauthorized
disclosure of the information obtained in the course of inspecting the records.
Premier may require the shareholder to execute a confidentiality agreement prior
to the inspection of any records. Premier may also require any representative or
personal financial advisor of the shareholder to sign a confidentiality
agreement.
DISSOLUTION
Under Missouri law, a corporation can voluntarily dissolve upon its board
of directors' adopting a resolution setting forth a proposal to dissolve which
proposal is submitted to the shareholders and is approved by two-thirds of the
votes entitled to vote thereon. Under Delaware Law, a corporation can
voluntarily dissolve if its board of directors and stockholders owning a
majority of the shares entitled to vote approve the dissolution or if all of its
stockholders approve such a dissolution.
PREEMPTIVE RIGHTS
Under Delaware Law, stockholders do not have preemptive rights to new
shares unless there is a specific provision granting such rights in the
corporation's certificate of incorporation. Missouri law provides that the
preemptive right of a shareholder to acquire additional shares of a corporation
may be limited or denied to the extent provided in the articles of
incorporation.
Premier's articles contain a denial of preemptive rights. First Premier's
certificates does not contain a preemptive rights provision.
INTERESTED DIRECTOR TRANSACTIONS
Under the Missouri and Delaware Law, certain contracts or transactions in
which one or more of a corporation's directors has an interest are not void or
voidable solely because of such interest. However, the contract or transaction
must be fair and reasonable at the time it is authorized, is ratified by the
corporation's stockholders after disclosure of the relationship or interest, or
it must be authorized in good faith by a majority of the disinterested members
of the board of directors or a committee thereof after disclosure of the
relationship or interest. In addition, Missouri and Delaware Law permit the
interested director to be counted in determining whether a quorum of the
directors is present at the meeting approving the transaction.
FILLING VACANCIES ON THE BOARD OF DIRECTORS
Missouri law provides that, unless a corporation's articles of
incorporation or bylaws specify otherwise, vacancies on the board may be filled
by a majority vote of the remaining directors, though less than a quorum of the
board, or by a sole remaining director. Under Delaware law, vacancies and newly
created directorships may be filled by a majority of the directors then in
office (even though less than a quorum) or by a sole remaining director, unless
otherwise provided in the corporation's certificate of incorporation or bylaws
(or unless the certificate of incorporation directs that a particular class of
stock is to elect such director(s), in which case a majority of the directors
elected by such class, or a sole remaining director so elected, may fill such
vacancy or newly created directorship).
98
<PAGE> 107
In addition to the foregoing, Missouri law provides that the term of a
director who is elected to fill a vacancy expires at the next shareholders'
meeting at which directors are elected. However, if shareholders elect directors
by class, then any director elected to fill a vacancy or to a newly created
directorship is to hold office until the next election of the class for which
the director was chosen. The Delaware Law provides that in the case of a
corporation, the directors of which are divided into classes, any director
elected to fill a vacancy is to hold office until the next election of the class
for which he or she was chosen.
Neither the First Premier certificate nor bylaws limits the ability of
directors to fill vacancies. Similarly, neither the Premier articles or bylaws
limits the ability of directors to fill vacancies.
DIVIDENDS AND REPURCHASES OF SHARES
Under Missouri law, a corporation may pay dividends in cash, other
property or repurchase its shares so long as the corporation's total net assets
would not be less than its stated capital.
Delaware Law permits a corporation to declare and pay dividends out of
surplus or, if there is no surplus, out of net profits for the fiscal year in
which the dividend is declared and/or for the preceding fiscal year as long as
the amount of capital of the corporation following the declaration and payment
of the dividend is not less than the aggregate amount of the capital represented
by the issued and outstanding stock of all classes having a preference upon the
distribution of assets. In addition, the Delaware Law generally provides that a
corporation may redeem or repurchase its shares only if the capital of the
corporation is not impaired and such redemption or repurchase would not impair
the capital of the corporation.
ANTI-TAKEOVER STATUTES
Missouri law contains certain provisions applicable to Missouri
corporations which may be deemed to have an anti-takeover effect.
The Missouri Business Combination Statute protects domestic corporations
after hostile takeovers by prohibiting certain transactions once an acquirer has
gained control. The statute restricts certain business combinations between a
corporation and an interested shareholder or affiliates of the interested
shareholder for a period of five years unless certain conditions are met. A
business combination includes a merger or consolidation, certain sales, leases,
exchanges, pledges, similar dispositions of corporate assets or stock, and
certain reclassifications and recapitalizations. An interested shareholder
includes any person or entity which beneficially owns or controls 20 percent or
more of the outstanding voting shares of the corporation.
During the initial five-year restricted period, no business combination
may occur unless such business combination or the transaction in which an
interested shareholder becomes "interested" (the "Acquisition Transaction") was
approved by the board of directors of the corporation on or before the date of
the Acquisition Transaction. Business combinations may occur after the five-year
period following the Acquisition Transaction only if: (1) prior to the stock
acquisition of the interested shareholder, the board of directors approves the
transaction in which the interested shareholder became an interested shareholder
or approves the business combination in question; (2) the holders of a majority
of the outstanding voting stock, other than stock owned by the interested
shareholder, approve the business combination; or (3) the business combination
satisfies certain detailed fairness and procedural requirements.
Missouri law exempts from its provisions: (1) corporations not having a
class of voting stock registered under Section 12 of the Exchange Act; (2)
corporations which adopt provisions in their articles of incorporation or
by-laws expressly electing not to be covered by the statute; and (3) certain
circumstances in which a shareholder inadvertently becomes an interested
shareholder.
99
<PAGE> 108
Missouri law also contains a control share acquisition statute which
provides that an acquiring person who, after any acquisition of shares of a
publicly traded corporation has the voting power, when added to all shares of
the same corporation previously owned or controlled by the acquiring person, to
exercise or direct the exercise of: (1) 20 percent but less than 33-1/3 percent;
(2) 33-1/3 percent or more but less than a majority; or (3) a majority, of the
voting power of outstanding stock of such corporation, must obtain shareholder
approval for the purchase of the control shares. If approval is not given, the
acquiring person's shares lose the right to vote. The statute prohibits an
acquiring person from voting its shares unless certain disclosure requirements
are met and the retention or restoration of voting rights is approved by both:
(1) a majority of the outstanding voting stock, and (2) a majority of the
outstanding voting stock after exclusion of interested shares. Interested shares
are defined as shares owned by the acquiring person, by directors who are also
employees, and by officers of the corporation. Shareholders are given
dissenters' rights with respect to the vote on control share acquisitions and
may demand payment of the fair value of their shares.
A number of acquisitions of shares are deemed not to constitute control
share acquisitions, including good faith gifts, transfers pursuant to wills,
purchases pursuant to an issuance by the corporation, mergers involving the
corporation which satisfy the other requirements of the Missouri law,
transactions with a person who owned a majority of the voting power of the
corporation within the prior year, or purchases from a person who has previously
satisfied the provisions of the control share acquisition statute so long as the
transaction does not result in the purchasing party having voting power after
purchase in a percentage range (such ranges are as set forth in the immediately
preceding paragraph) beyond the range for which the selling party previously
satisfied the provisions of the statute. Additionally, a corporation may exempt
itself from application of the statute by inserting a provision in its articles
of incorporation or by-laws expressly electing not to be covered by the statute.
Delaware law contains a business combination statute similar to that
contained in Missouri. The Delaware business combination statute generally
prohibits a domestic corporation from engaging in mergers or other business
combinations with interested persons (as defined in the Delaware statute) for a
statutory time period. The prohibition can be avoided if the business
combination is approved by the board of directors prior to the date on which the
interested person acquires the requisite percentage of stock or the business
combination is approved by the board of directors and the vote of at least
66-2/3 of the outstanding voting stock of the corporation excluding stock owned
by the interested party. Missouri law imposes a longer prohibition period on
transactions with interested persons (five years) than Delaware (three years),
thereby potentially increasing the period during which a hostile takeover may be
frustrated. In addition, the Delaware statute, unlike its Missouri counterpart,
does not apply if the interested person obtains at least 85% of the
corporation's voting stock upon consummation of the transactions which resulted
in the stockholder becoming an interested person. Thus, a person acquiring at
least 85% of the corporation's voting stock could circumvent the defensive
provisions of the Delaware statute while being unable to do so under Missouri
law. The effect of the Delaware business combination statute may be avoided if
the corporation provides in its certificate of incorporation that the statute
shall not apply to such corporation. Delaware law does not contain a control
share acquisition statute similar to that contained in the Missouri statute.
100
<PAGE> 109
LEGAL OPINIONS
The legality of the shares of First Premier common stock to be issued to
the holders of Premier common stock pursuant to the Merger will be passed upon
by Smith, Gambrell & Russell, LLP, Atlanta, Georgia. Smith, Gambrell & Russell,
LLP has from time to time acted as counsel in advising First Premier and its
affiliates with respect to certain matters and in connection with various
transactions. Certain other legal matters will be passed upon for Premier by
Suelthaus & Walsh, P.C.
The merger agreement provides as a condition to each party's obligation to
consummate the merger that First Premier and Premier receive the opinion of
Smith, Gambrell & Russell, LLP, Atlanta, Georgia, special counsel to First
Premier, substantially to the effect that the merger will constitute a
"reorganization" under Section 368(a) of the Code.
EXPERTS
The financial statements of First Premier and the consolidated financial
statements of Premier included in this Proxy Statement/Prospectus have been
audited by KPMG LLP, independent auditors, as stated in their reports appearing
in this Proxy Statement/Prospectus and are included in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
OTHER MATTERS
Premier. As of the date of this Proxy Statement/Prospectus, the Premier
Board knows of no matters that will be presented for consideration at the
special meeting other than as described in this Proxy Statement/Prospectus.
However, if any other matters will properly come before the special meeting or
any adjournments or postponements thereof and be voted upon, the enclosed
proxies will be deemed to confer discretionary authority on the individuals
named as proxies therein to vote the shares represented by such proxies as to
any such matters. The persons named as proxies intend to vote or not to vote in
accordance with the recommendation of the management of Premier.
First Premier. As of the date of this Proxy Statement/Prospectus, the
First Premier Board knows of no matters that will be presented for consideration
at the special meeting other than as described in this Proxy
Statement/Prospectus. However, if any other matters will properly come before
the special meeting or any adjournments or postponements thereof and be voted
upon, the enclosed proxies will be deemed to confer discretionary authority on
the individuals named as proxies therein to vote the shares represented by such
proxies as to any such matters. The persons named as proxies intend to vote or
not to vote in accordance with the recommendation of the management of First
Premier.
101
<PAGE> 110
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page No.
--------
FINANCIAL STATEMENTS FOR FIRST PREMIER FINANCIAL CORPORATION
<S> <C>
Independent Auditors' Report........................................................ F-2
Balance Sheet as of December 31, 1998............................................... F-3
Statement of Operations for the period from May 1, 1998 (date of
inception) through December 31, 1998............................................ F-4
Statement of Shareholders' Equity for the period from May 1, 1998 (date
of inception) through December 31, 1998......................................... F-5
Statement of Cash Flows for the period from May 1, 1998 (date of
inception) through December 31, 1998............................................ F-6
Notes to Financial Statements....................................................... F-7
FINANCIAL STATEMENTS FOR PREMIER BANCSHARES, INC.
Independent Auditors' Report........................................................ F-13
Consolidated Balance Sheets as of December 31, 1997 and 1998........................ F-14
Consolidated Statements of Operations for the Years Ended
December 31, 1996, 1997 and 1998................................................ F-15
Consolidated Statements of Shareholders' Equity and Comprehensive
Income for the Years Ended December 31, 1996, 1997 and 1998..................... F-16
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1996, 1997 and 1998................................................ F-17
Notes to Consolidated Financial Statements.......................................... F-18
</TABLE>
F-1
<PAGE> 111
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
First Premier Financial Corporation:
We have audited the accompanying balance sheet of First Premier Financial
Corporation, a development stage corporation (the Company), as of December 31,
1998 and the related statements of operations, shareholders' equity, and cash
flows for the period May 1, 1998 (date of inception) through December 31, 1998.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
1998 and the results of its operations and its cash flows for the period May 1,
1998 (date of inception) through December 31, 1998, in conformity with generally
accepted accounting principles.
KPMG LLP
St. Louis, Missouri
April 8, 1999, except for note 5 for
which the date is May 6, 1999
F-2
<PAGE> 112
FIRST PREMIER FINANCIAL CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Cash........................................................ $ 711,515
-----------
Total assets........................................... $ 711,515
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued payroll taxes....................................... $ 1,158
Obligation to repurchase common stock....................... 2,750
-----------
Total liabilities...................................... 3,908
-----------
Shareholders' equity:
Series A preferred stock; $0.01 par value; 1,000,000
shares authorized; 99,900 shares issued and
outstanding; redemption price of $10.00................ 999,000
Common stock; $0.01 par value; 20,000,000 shares
authorized; 575,000 shares issued and outstanding...... 5,750
Common stock to be repurchased (275,000 shares at $0.01
per share)............................................. (2,750)
-----------
Common stock outstanding after repurchase.............. 3,000
-----------
Additional paid-in capital................................ 3,297,000
Warrants to acquire 215,798 shares of common stock........ 107,899
Deficit accumulated during development stage.............. (3,699,292)
-----------
Total shareholders' equity............................. 707,607
-----------
Total liabilities and shareholders' equity............. $ 711,515
===========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE> 113
FIRST PREMIER FINANCIAL CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM MAY 1, 1998 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1998
<TABLE>
<S> <C>
Income:
Interest income........................................... $ 20,508
Other income.............................................. 52
-----------
Total income...................................... 20,560
-----------
Expenses:
Salary and benefits....................................... 2,326,660
Financing costs........................................... 1,199,000
Legal and consulting fees................................. 172,598
Other..................................................... 21,594
-----------
Total expenses......................................... 3,719,852
-----------
Net loss............................................... $(3,699,292)
===========
Loss per share -- basic and diluted......................... $ (12.33)
===========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 114
FIRST PREMIER FINANCIAL CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM MAY 1, 1998 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1998
<TABLE>
<CAPTION>
DEFICIT
SERIES A WARRANTS ACCUMULATED
PREFERRED STOCK COMMON STOCK ADDITIONAL TO ACQUIRE DURING
------------------- ----------------- PAID-IN COMMON DEVELOPMENT
SHARES AMOUNT SHARES AMOUNT CAPITAL STOCK STAGE TOTAL
-------- -------- -------- ------ ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of units...... 99,900 $999,000 100,000 $1,000 1,099,000 50,000 -- 2,149,000
Issuance of common
stock................ -- -- 475,000 4,750 5,220,250 -- -- 5,225,000
Common stock to be
repurchased.......... -- -- (275,000) (2,750) (3,022,250) 57,899 -- (2,967,101)
Net loss............... -- -- -- -- -- -- (3,699,292) (3,699,292)
------ -------- -------- ------ ---------- ------- ---------- ----------
Balance, December 31,
1998................. 99,900 $999,000 300,000 $3,000 3,297,000 107,899 (3,699,292) 707,607
====== ======== ======== ====== ========== ======= ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE> 115
FIRST PREMIER FINANCIAL CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MAY 1, 1998 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1998
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss.................................................. $(3,699,292)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in accrued payroll taxes...................... 1,158
Noncash compensation and financing charge for issuance
of common stock and warrants.......................... 3,404,899
-----------
Net cash used in operating activities................ (293,235)
Cash flows from financing activities -- proceeds from the
issuance of units and common stock........................ 1,004,750
-----------
Net increase in cash................................. 711,515
Cash, beginning of period................................... --
-----------
Cash, end of period......................................... $ 711,515
===========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE> 116
FIRST PREMIER FINANCIAL CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Missouri Holdings, Inc. was incorporated on May 1, 1998 for the purpose of
becoming a bank holding company. The name of the corporation was subsequently
changed to First Premier Financial Corporation (the Company). The Company is in
the development stage and will remain in the development stage until the
consummation of an acquisition or merger with a banking organization.
Operations through December 31, 1998 relate primarily to expenditures for
incorporating and organizing the Company.
Basis of Presentation
The accompanying financial statements have been prepared on the accrual basis of
accounting in conformity with generally accepted accounting principles. The
presentation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Organizational Costs
The Company has elected to early adopt the provisions of SOP 98-5, Reporting on
the Costs of Start-Up Activities, which requires that start-up costs (including
organizational costs) be expensed as incurred.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
Loss Per Share
As the Company has no dilutive instruments, basic loss per share and dilutive
loss per share are equal. Basic loss per share is computed by dividing net loss
by 300,000, the weighted average number of common shares outstanding during the
period after giving effect to the obligation to repurchase 275,000 shares.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of
three months or less when purchased to be cash equivalents.
Stock Options
The Company applies the measurement provisions of Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees, in accounting for
stock options.
F-7
<PAGE> 117
FIRST PREMIER FINANCIAL CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
New Accounting Pronouncements
Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income (SFAS 130), which was issued in June 1997, establishes standards for
reporting and display of comprehensive income and its components (revenues,
expenses, gains, and losses) in a full set of general-purpose financial
statements. SFAS 130 requires that all items required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements, and requires an enterprise to (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position. SFAS 130 is effective for fiscal years beginning after
December 15, 1997. The Company has no other comprehensive income for the period
from May 1, 1998 (date of inception) through December 31, 1998.
(2) RELATED PARTY TRANSACTIONS
In 1998, the Company entered into an agreement with T. Stephen Johnson &
Associates to provide consulting services during the development stage of the
Company. The president of T. Stephen Johnson & Associates is a director of the
Company. The consulting agreement provides for a monthly payment of $25,000 for
six months and a finder's fee for the successful completion of a bank
acquisition equal to 1% of the aggregate purchase price, plus reimbursement of
expenses. Fees paid to T. Stephen Johnson & Associates for the period from May
1, 1998 (date of inception) through December 31, 1998 amounted to $126,540.
(3) SHAREHOLDERS' EQUITY
Sale of Units
In June 1998, the Company sold 100 units to accredited European investors at the
price of $10,000 per unit plus a distribution fee of $750 per unit paid by the
purchaser to Kelton International Limited. Each unit was comprised of (a) 999
shares of Series A preferred stock, (b) 1,000 shares of common stock, and (c)
warrants to purchase 1,000 shares of common stock at the initial public offering
price for a period of ten years following the initial public offering. Mr. Robin
C. Kelton, a shareholder of the Company, serves as the chairman of Kelton
International Limited.
The net proceeds from the sale of units is being used to provide funding for the
operations of the Company during the development stage.
The Series A preferred stock, which the Company contemplates redeeming with a
portion of the proceeds of the initial public offering, is non-voting and, at
the option of the Company, is redeemable at a cash redemption price of $10 per
share.
In connection with the sale of the units, the Company recorded a non-cash charge
of $1,149,000 related to the sale of the common stock and warrants, with
corresponding increases to additional paid-in capital and warrants. The non-cash
financing cost has been measured as the difference between the estimated fair
value of the common stock of $11.00 per share (the mid-point of the estimated
range) and the allocated proceeds of $0.01 per share. Such non-cash financing
cost and corresponding increase in additional paid-in capital will be adjusted
to the actual initial public offering price. The warrants have been valued at an
aggregate price of $50,000, or $0.50 per share, as determined by an independent
appraisal.
F-8
<PAGE> 118
FIRST PREMIER FINANCIAL CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Sale of Founders Shares
In August 1998, the Company sold 475,000 shares of common stock to investors as
founders shares at $0.01 per share. Such investors include the President and
Chief Executive Officer of the Company, certain directors of the Company, T.
Stephen Johnson, and other employees of T. Stephen Johnson & Associates. In
April 1999, based on discussions with the underwriters for the initial public
offering, the Company agreed to repurchase 275,000 founders shares at $0.01 per
share and issue 115,798 warrants to certain non-employee investors. The
difference between the proceeds from the sale, as adjusted for the 275,000
shares to be repurchased, and the estimated fair value of the common stock,
based on an assumed initial public offering price of $11.00 per share (the
mid-point of the estimated range), of $2,198,000 has been recorded as
compensation expense with a corresponding increase to additional paid-in
capital. Such compensation expense and corresponding increase to additional
paid-in capital relating to the sale of the founders shares will be adjusted to
the actual initial public offering price. The warrants have been valued at an
aggregate price of $57,899, or $0.50 per share, as determined by an independent
appraisal.
(4) INCOME TAXES
For the period May 1, 1998 through December 31, 1998 no income tax expense or
benefit has been recognized. The primary reconciling difference between the
income tax benefit and the amount of benefit that would be expected by the
result of applying the federal statutory rate of 34% to the loss before income
taxes for the period from May 1, 1998 (date of inception) through December 31,
1998 is as follows:
<TABLE>
<S> <C>
Expected federal income tax benefit......................... $(1,257,759)
Financing and compensation costs not deductible for income
tax purposes.............................................. 1,157,665
Establishment of valuation allowance........................ 100,094
-----------
Income tax expense..................................... $ --
===========
</TABLE>
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets at December 31, 1998 are as follows:
<TABLE>
<S> <C>
Deferred tax assets:
Start-up costs............................................ $ 51,837
Net operating loss carryforward........................... 48,257
-----------
Gross deferred tax asset............................... 100,094
Less valuation allowance.................................. 100,094
-----------
Net deferred tax asset................................. $ --
===========
</TABLE>
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon generation of future taxable income during the periods in which
those temporary differences become deductible. Management considers projected
future taxable income and tax planning strategies in making this assessment.
Management does not believe it is more likely than not the Company will realize
the benefits of these deductible differences. Accordingly, a valuation allowance
has been established for the deferred tax asset.
At December 31, 1998, the Company had a net operating loss carryforward for
federal income tax purposes of approximately $140,000, which is available to
offset future federal taxable income, if any, through 2013.
F-9
<PAGE> 119
FIRST PREMIER FINANCIAL CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(5) SUBSEQUENT EVENTS
Acquisition Activity
On May 6, 1999, the Company entered into a definitive agreement with Premier
Bancshares, Inc. (Premier), the bank holding company for Premier Bank, located
in Jefferson City, Missouri. At December 31, 1998, Premier had consolidated
total assets of $57.8 million, loans of $41.2 million, deposits of $48.8
million, and shareholders' equity of $4.4 million. The agreement provides for
the shareholders of Premier to exchange their shares of common stock, in a
tax-free reorganization, for $11.0 million of newly issued shares of common
stock of the Company (valued at the initial public offering price of the common
stock of the Company). The transaction, which requires the approval of bank
regulatory authorities and the shareholders of the Company and Premier, is
expected to close in the third quarter of 1999.
Employment Agreements
The Company and Richard C. Jensen entered into an employment agreement which
provides that Mr. Jensen will serve as the President and Chief Executive Officer
of the Company and as President and Chief Executive Officer of Premier Bank upon
completion of the merger and the initial public offering. Mr. Jensen also serves
as a member of the board of directors of the Company and will serve on Premier
Bank's board of directors after the closing of the initial public offering. Mr.
Jensen's employment agreement has a three-year term and provides for a minimum
annual base salary of $250,000. Upon completion of the initial public offering,
Mr. Jensen will receive a payment of $150,000. In addition, the Board will issue
an option to Mr. Jensen to purchase up to 125,000 shares of common stock at the
initial public offering price of the common stock. This option will be
exercisable for a period of ten years. After the closing of the initial public
offering, in the event of a "change in control" of the Company (as defined in
his employment agreement), Mr. Jensen will be entitled to give written notice to
the Company of termination of the employment agreement and to receive a cash
payment equal to approximately 300% of the compensation received by Mr. Jensen
in the one-year period immediately preceding the change in control. In addition,
if Mr. Jensen elects to terminate the employment agreement pursuant to a change
in control, Mr. Jensen will further be entitled to, in lieu of shares of common
stock issuable upon the exercise of options, an amount in cash or common stock
equal to the excess of the fair market value of the common stock as of the date
of closing of the transaction effecting the change in control over the per share
exercise price of the options held by Mr. Jensen, times the number of shares of
common stock subject to such options. In the event that the board of directors
determines in its sole discretion that the Company is unable to close the
initial public offering, then the employment agreement may be terminated by the
board of directors at any time during the term of the employment agreement
without notice, with the condition that Mr. Jensen will be entitled to
liquidated damages in the amount of $250,000.
In connection with the agreement to acquire Premier Bancshares, Inc., the
Company has agreed entered into an employment agreement with Bruce W. Wiley, the
current President of Premier Bank. Mr. Wiley's employment agreement provides for
a five-year term commencing at the closing of the initial public offering. Mr.
Wiley's employment agreement provides for an annual base salary of $150,000 and
the grant of an option to purchase up to 70,000 shares of Company common stock
at the initial public offering price. 30,000 options will be granted under the
Company's stock option plan on the same terms as options issued to other members
of senior management and will vest over a period of three years. The remaining
40,000 options will be granted on the same terms as those warrants which were
issued to certain founders of the Company in April 1998 and will also be
exercisable for 10 years. In addition, Mr. Wiley's employment agreement provides
that he will serve as a director of the Company and his title following the
merger and the initial public offering will be President of the Mid-Missouri
Market. In the event of a "change in control" of the Company (as defined in his
employment agreement), Mr. Wiley's employment
F-10
<PAGE> 120
FIRST PREMIER FINANCIAL CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
agreement provides that he may elect to give written notice to the Company of
termination of his employment agreement and to receive a cash payment equal to
approximately 300% of the compensation received by him in the one-year period
immediately preceding the change in control.
In addition, the Company has also entered into employment agreements with four
additional executive officers. All of these employment agreements provide for a
three-year term. These employment agreements provide for annual base salaries
and the grant of options to purchase up to an aggregate of 110,000 shares at the
initial public offering price. These options will be exercisable for a period of
ten years.
Stock Option Plan
On April 29, 1999, the board of directors adopted the First Premier Financial
Corporation 1999 Stock Option Plan (the 1999 Plan) to promote the Company's
growth and financial success. Options may be granted under the 1999 Plan to the
Company's directors, officers, and employees, as well as certain consultants and
advisors. The 1999 Plan contemplates the grant of nonqualified stock options and
incentive stock options. The 1999 Plan provides for option grants to purchase up
to an aggregate of 500,000 shares of common stock, subject to adjustment under
certain circumstances (the Option Shares). The 1999 Plan will expire upon the
earlier to occur of: (a) the date on which all Option Shares have been issued
upon exercise of options under the 1999 Plan; or (b) the tenth anniversary of
the 1999 Plan's effective date. The 1999 Plan will be administered by the board
of directors or by a committee appointed by the board and consisting of at least
two non-employee board members.
The exercise price of incentive stock options granted under the 1999 Plan will
be determined by the board of directors, but will in no event be less than 100%
of the market price of one share of common stock on the option grant date.
Nonqualified stock options under the 1999 Plan may be granted at an exercise
price of no less than 75% of the market price of the common stock on the date of
the grant. Vested options under the 1999 Plan may be exercised in whole or in
part, but in no event later than 10 years from the grant date. The board of
directors may at any time terminate, modify, or amend the 1999 Plan in any
respect, except that without shareholder approval the board of directors may
not:
- - Increase the number of Option Shares,
- - Extend the period during which options may be granted or exercised,
- - Change the class of 1999 Plan participants, or
- - Otherwise materially modify the requirements as to eligibility for
participation in the 1999 Plan.
In no event will the termination, modification, or amendment of the 1999 Plan,
without the written consent of an optionee, affect his or her rights under an
option or right previously granted him or her. The 1999 Plan must be approved by
the Company's shareholders within twelve months from the adoption of the 1999
Plan by the board of directors.
F-11
<PAGE> 121
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Premier Bancshares, Inc.:
We have audited the accompanying consolidated balance sheets of Premier
Bancshares, Inc. and subsidiary (the Company) as of December 31, 1997 and 1998,
and the related consolidated statements of operations, shareholders' equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended December 31, 1998. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Premier Bancshares,
Inc. and subsidiary as of December 31, 1997 and 1998, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1998, in conformity with generally accepted accounting
principles.
KPMG LLP
St. Louis, Missouri
February 12, 1999, except for note 17
for which the date is May 6, 1999
F-12
<PAGE> 122
PREMIER BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1998
<TABLE>
<CAPTION>
1997 1998
----------- ----------
<S> <C> <C>
ASSETS
Cash and due from banks..................................... $ 514,002 1,156,049
Interest-bearing deposits................................... 497,540 410,774
Federal funds sold.......................................... 1,802,000 5,111,000
----------- ----------
Cash and cash equivalents.............................. 2,813,542 6,677,823
Debt and marketable equity securities available-for-sale, at
fair value................................................ 5,417,750 6,477,945
Loans, net.................................................. 23,342,301 41,170,698
Premises and equipment, net................................. 1,393,233 2,543,762
Accrued interest receivable................................. 268,335 348,624
Other assets................................................ 481,681 536,976
----------- ----------
Total assets........................................... $33,716,842 57,755,828
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing....................................... $ 1,478,183 2,817,137
Interest-bearing.......................................... 26,874,744 45,998,685
----------- ----------
Total deposits......................................... 28,352,927 48,815,822
Federal Home Loan Bank advances............................. 940,000 3,445,153
Note payable................................................ 1,050,000 750,000
Accrued interest payable.................................... 115,715 207,529
Other liabilities........................................... 36,616 99,163
----------- ----------
Total liabilities...................................... 30,495,258 53,317,667
----------- ----------
Commitments and contingencies
Shareholders' equity:
Common stock, $1 par value, 100,000 shares authorized,
32,843 and 41,834 shares issued and outstanding in 1997
and 1998, respectively................................. 32,843 41,834
Surplus................................................... 3,394,172 4,553,421
Accumulated deficit....................................... (213,383) (191,030)
Accumulated other comprehensive income.................... 7,952 33,936
----------- ----------
Total shareholders' equity............................. 3,221,584 4,438,161
----------- ----------
Total liabilities and shareholders' equity............. $33,716,842 57,755,828
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-13
<PAGE> 123
PREMIER BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996, 1997, AND 1998
<TABLE>
<CAPTION>
1996 1997 1998
---------- --------- ---------
<S> <C> <C> <C>
Interest income:
Interest and fees on loans................................ $1,008,332 1,750,020 2,849,946
Interest and dividends on debt and marketable equity
securities............................................. 359,220 356,490 407,387
Interest on federal funds sold............................ 62,763 68,702 182,177
---------- --------- ---------
Total interest income.................................. 1,430,315 2,175,212 3,439,510
---------- --------- ---------
Interest expense:
Interest on deposits...................................... 855,131 1,253,198 1,884,612
Interest on Federal Home Loan Bank advances............... -- 21,905 132,748
Interest on note payable.................................. 27,744 33,975 72,140
---------- --------- ---------
Total interest expense................................. 882,875 1,309,078 2,089,500
---------- --------- ---------
Net interest income.................................... 547,440 866,134 1,350,010
Provision for loan losses................................... 80,582 112,279 291,734
---------- --------- ---------
Net interest income after provision for loan losses.... 466,858 753,855 1,058,276
---------- --------- ---------
Noninterest income:
Service charges on deposits............................... 18,889 34,930 58,958
Loss on sale of securities, net........................... -- (210) --
Gain on sale of loans, net................................ 16,922 26,270 70,055
Other noninterest income.................................. 11,461 28,314 39,504
---------- --------- ---------
Total noninterest income............................... 47,272 89,304 168,517
---------- --------- ---------
Noninterest expense:
Salaries and employee benefits............................ 298,307 354,371 598,308
Occupancy and equipment expense........................... 82,030 118,965 188,108
Other noninterest expense................................. 247,024 262,315 409,498
---------- --------- ---------
Total noninterest expense.............................. 627,361 735,651 1,195,914
---------- --------- ---------
Income (loss) before income tax expense................ (113,231) 107,508 30,879
Income tax expense.......................................... -- 10,613 8,526
---------- --------- ---------
Net income (loss)...................................... $ (113,231) 96,895 22,353
========== ========= =========
Basic and diluted earnings (loss) per share................. $ (3.54) 2.99 0.55
========== ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-14
<PAGE> 124
PREMIER BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1996, 1997, AND 1998
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
COMMON STOCK ACCU- COMPRE- TOTAL
---------------- TREASURY MULATED HENSIVE SHAREHOLDERS'
SHARES AMOUNT SURPLUS STOCK DEFICIT INCOME EQUITY
------ ------- --------- -------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995..... 35,020 $35,020 3,605,580 (307,530) (189,517) 47,633 3,191,186
Retirement of treasury stock..... (3,000) (3,000) (304,530) 307,530 -- -- --
Transfer from accumulated deficit
to surplus..................... -- -- 7,530 -- (7,530) -- --
Comprehensive income:
Net loss....................... -- -- -- -- (113,231) -- (113,231)
Other comprehensive income --
change in unrealized gain
(loss) on securities
available-for-sale, net of
tax.......................... -- -- -- -- -- (61,756) (61,756)
---------
Total comprehensive income... (174,987)
------ ------- --------- -------- -------- ------- ---------
Balance at December 31, 1996..... 32,020 32,020 3,308,580 -- (310,278) (14,123) 3,016,199
Issuance of common stock......... 823 823 85,592 -- -- -- 86,415
Comprehensive income:
Net income..................... -- -- -- -- 96,895 -- 96,895
Other comprehensive income --
change in unrealized gain
(loss) on securities
available-for-sale, net of
tax and reclassification
amount....................... -- -- -- -- -- 22,075 22,075
---------
Total comprehensive income... 118,970
------ ------- --------- -------- -------- ------- ---------
Balance at December 31, 1997..... 32,843 32,843 3,394,172 -- (213,383) 7,952 3,221,584
Issuance of common stock......... 9,231 9,231 1,190,799 -- -- -- 1,200,030
Purchase of treasury stock....... -- -- -- (31,790) -- -- (31,790)
Retirement of treasury stock..... (240) (240) (31,550) 31,790 -- -- --
Comprehensive income:
Net income..................... -- -- -- -- 22,353 -- 22,353
Other comprehensive income --
change in unrealized gain
(loss) on securities
available-for-sale, net of
tax.......................... -- -- -- -- -- 25,984 25,984
---------
Total comprehensive income... 48,337
------ ------- --------- -------- -------- ------- ---------
Balance at December 31, 1998..... 41,834 $41,834 4,553,421 -- (191,030) 33,936 4,438,161
====== ======= ========= ======== ======== ======= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-15
<PAGE> 125
PREMIER BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1997, AND 1998
<TABLE>
<CAPTION>
1996 1997 1998
------------ ---------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)......................................... $ (113,231) 96,895 22,353
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization........................... 59,405 73,823 115,188
Provision for loan losses............................... 80,582 112,279 291,734
Loss on sale of securities.............................. -- 210 --
Increase in accrued interest receivable................. (15,438) (83,205) (80,289)
Increase in accrued interest payable.................... 25,100 29,768 91,814
Increase in other assets................................ (3,459) (459,880) (55,295)
Other, net.............................................. (9,877) 43,701 49,161
------------ ---------- -----------
Net cash provided by (used in) operating activities... 23,082 (186,409) 434,666
------------ ---------- -----------
Cash flows from investing activities:
Proceeds from sales of debt and marketable equity
securities available-for-sale........................... -- 553,120 --
Proceeds from maturities and principal payments on debt
and marketable equity securities available-for-sale..... 1,726,054 2,564,969 3,542,196
Purchases of debt and marketable equity securities
available-for-sale...................................... (2,693,239) (2,260,555) (4,575,742)
Net increase in loans..................................... (9,022,096) (8,249,077) (18,120,131)
Purchases of premises and equipment, net.................. (709,899) (67,658) (1,252,996)
------------ ---------- -----------
Net cash used in investing activities................. (10,699,180) (7,459,201) (20,406,673)
------------ ---------- -----------
Cash flows from financing activities:
Net increase in deposits.................................. 10,761,404 6,084,663 20,462,895
Federal Home Loan Bank advances........................... -- 1,940,000 2,805,000
Principal payments on Federal Home Loan Bank advances..... -- (1,000,000) (299,847)
Proceeds from note payable................................ -- 1,050,000 --
Repayment of note payable................................. -- (300,000) (300,000)
Purchase of treasury stock................................ -- -- (31,790)
Proceeds from sale of common stock........................ -- 86,415 1,200,030
------------ ---------- -----------
Net cash provided by financing activities............. 10,761,404 7,861,078 23,836,288
------------ ---------- -----------
Net increase in cash and cash equivalents............. 85,306 215,468 3,864,281
Cash and cash equivalents at beginning of year.............. 2,512,768 2,598,074 2,813,542
------------ ---------- -----------
Cash and cash equivalents at end of year.................... $ 2,598,074 2,813,542 6,677,823
============ ========== ===========
Supplemental information -- interest paid................... $ 857,775 1,279,310 1,997,686
============ ========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-16
<PAGE> 126
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1997, AND 1998
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Premier Bancshares, Inc. provides a full range of banking services to corporate
and individual customers throughout Jefferson City and Columbia, Missouri,
through its wholly owned subsidiary, Premier Bank (the Bank). Premier
Bancshares, Inc. and the Bank (the Company), which operate as a single business
segment, are subject to competition from other financial and nonfinancial
institutions providing financial products in these Missouri markets.
Additionally, the Company is subject to the regulations of certain federal and
state agencies and undergoes periodic examinations by those regulatory agencies.
The accounting and reporting policies of the Company conform, in all material
respects, to generally accepted accounting principles within the banking
industry.
The more significant of the Company's accounting policies are set forth below:
Use of Estimates
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions, including the determination of the allowance for
loan losses, that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results differ from those
estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of Premier
Bancshares, Inc. and the Bank. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Cash and Cash Equivalents
For purposes of the consolidated statements of cash flows, cash and cash
equivalents include cash, due from banks, interest-bearing deposits, and
federal funds sold.
Investment Securities
At the time of purchase for the periods covered, all debt and equity
securities were classified as available-for-sale. Unrealized gains and
losses, net of tax, are excluded from earnings and reported as accumulated
other comprehensive income, a separate component of shareholders' equity,
until realized. A decline in the market value of any security below cost
that is deemed other than temporary results in a charge to earnings and the
establishment of a new cost basis for the security.
Premiums and discounts are amortized or accreted over the lives of the
respective securities as an adjustment to yield using the interest method.
Dividend and interest income is recognized when earned. Realized gains and
losses are included in earnings and are derived using the specific-
identification method for determining the cost of securities sold.
The Bank, as a member of the Federal Home Loan Bank System administered by
the Federal Housing Finance Board, is required to maintain an investment in
the capital stock of the Federal Home Loan Bank (FHLB) in an amount equal
to the greater of 1% of the Bank's total mortgage-related assets at the
beginning of each year, 0.3% of the Bank's total assets at the beginning of
each
F-17
<PAGE> 127
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
year, or 5% of advances from the FHLB to the Bank. This investment is
recorded at cost which represents redemption value.
Loans
Interest on loans is credited to income based upon the principal amount
outstanding. The recognition of interest income is discontinued when, in
management's judgment, the interest will not be collectible in accordance
with the contractual terms of the loan agreement or when either principal
or interest is past due over 90 days. Subsequent payments received on such
loans are applied to principal if there is any doubt as to the
collectibility of such principal; otherwise, such receipts are recorded as
interest income. Loans are returned to accrual status when management
believes full collectibility of principal and interest is expected.
A loan is considered impaired when it is probable the Company will be
unable to collect all amounts due -- both principal and
interest -- according to the contractual terms of the loan agreement. When
measuring impairment, the expected future cash flows of an impaired loan
are discounted at the loan's effective interest rate. Alternatively,
impairment is measured by reference to an observable market price, if one
exists, or the fair value of the collateral for a collateral-dependent
loan. Regardless of the historical measurement method used, the Company
measures impairment based on the fair value of the collateral when
foreclosure is probable. Additionally, impairment of a restructured loan is
measured by discounting the total expected future cash flows at the loan's
effective rate of interest as stated in the original loan agreement. The
Company uses its nonaccrual policy for recognizing interest income on
impaired loans.
The allowance for loan losses is available to absorb loan charge-offs. The
allowance is increased by provisions charged to expense and reduced by loan
charge-offs less recoveries. The provision charged to expense is that
amount which management believes is sufficient to bring the balance of the
allowance for loan losses to a level adequate to absorb potential loan
losses, based on their knowledge and evaluation of the current loan
portfolio and the current economic environment in which the borrowers of
the Bank operate.
Management believes the allowance for loan losses is adequate to absorb
losses in the loan portfolio. While management uses available information
to recognize loan losses, future additions to the allowance may be
necessary based on changes in economic conditions and changes in the
financial condition of borrowers. Additionally, regulatory agencies, as an
integral part of the examination process, periodically review the Bank's
allowance for loan losses. Such agencies may require the Bank to increase
its allowance for loan losses based on their judgments and interpretations
about information available to them at the time of their examinations.
Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is provided using the straight-line method over the estimated
useful lives of the respective assets, which is 50 years for buildings, and
range from 3 to 10 years for furniture, fixtures, and equipment. Property
additions and betterments are capitalized, while maintenance and repairs
which do not extend the useful life of the asset are expensed as incurred.
Income Taxes
Premier Bancshares, Inc. and the Bank file consolidated income tax returns.
F-18
<PAGE> 128
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the estimated future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income
in the period which includes the enactment date.
Treasury Stock
The purchase of the Company's common stock is recorded at cost. Upon
subsequent reissuance or retirement, the treasury stock account is reduced
by the average cost basis of such common stock.
Earnings (Loss) Per Share
As the Company has no dilutive instruments, basic earnings (loss) per share
and dilutive earnings (loss) per share are equal. Basic earnings (loss) per
share is computed by dividing net income (loss) by 32,020, 32,375, and
40,443, the weighted average number of common shares outstanding during
1996, 1997, and 1998, respectively.
Financial Instruments
Financial instruments are defined as cash, evidence of an ownership
interest in any entity, or a contract that both imposes on one entity a
contractual obligation to deliver cash or another financial instrument to a
second entity, and conveys to that second entity a contractual right to
receive cash or another financial instrument from the first entity.
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flow
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured as the amount by
which the carrying amount of the assets exceeds the fair value of the
assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
130, Reporting Comprehensive Income, during 1998. SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains, and losses) in a full set of
general-purpose financial statements. SFAS No. 130 requires that all items
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements, and requires an
enterprise to (a) classify items of other comprehensive income by their
nature in a financial statement and (b) display the accumulated balance of
other comprehensive income separately from retained earnings and additional
paid-in capital in the equity section of a statement of financial position.
The Company reports comprehensive income in the consolidated statements of
shareholders' equity and comprehensive income. The adoption of SFAS No. 130
did not have an effect on the financial position or results of operations
of the Company.
F-19
<PAGE> 129
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(2) REGULATORY RESTRICTIONS AND CAPITAL REQUIREMENTS
The Bank is subject to various regulatory capital requirements administered by
federal and state banking agencies. Failure to meet minimum capital requirements
can initiate certain mandatory, and possibly additional discretionary, actions
by regulators that, if undertaken, could have a direct material effect on the
Bank's financial statements. Under capital adequacy guidelines, the Bank must
meet specific capital guidelines that involve quantitative measures of assets,
liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices. The capital amounts and classification of the Bank are
subject to qualitative judgments by the regulators about components,
risk-weightings, and other factors. As of December 31, 1997 and 1998, without
prior approval of the regulatory banking authorities, the Bank was unable to pay
cash dividends on its common stock.
Quantitative measures established by regulations to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the
following table) of total and Tier I capital to risk-weighted assets, and of
Tier I capital to adjusted average assets. Management believes, as of December
31, 1998, the Bank meets all capital and adequacy requirements to which it is
subject.
The Bank is also subject to the regulatory framework for prompt corrective
action. The Bank's most recent notification from the Federal Deposit Insurance
Corporation, dated November 30, 1998, categorized it as well capitalized under
the regulatory framework for prompt corrective action. To be categorized as well
capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based,
and Tier I to adjusted average assets ratios as set forth in the following
table. There are no obligations or events since November 30, 1998 that
management believes have changed the Bank's category.
The actual and required capital amounts and ratios for the Bank as of December
31, 1997 and 1998 are as follows (dollars in thousands):
<TABLE>
<CAPTION>
REQUIREMENTS TO
CAPITAL BE CLASSIFIED AS
ACTUAL REQUIREMENTS WELL CAPITALIZED
-------------- -------------- ----------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------ ----- ------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C>
1997:
Total capital (to risk-weighted
assets).............................. $4,425 23.51% $1,505 8.00% $1,882 10.00%
Tier I capital (to risk-weighted
assets).............................. 4,215 22.40 753 4.00 1,129 6.00
Tier I capital (to average assets)...... 4,215 13.20 958 3.00 1,596 5.00
====== ===== ====== ==== ====== =====
</TABLE>
<TABLE>
<CAPTION>
REQUIREMENTS TO
CAPITAL BE CLASSIFIED AS
ACTUAL REQUIREMENTS WELL CAPITALIZED
-------------- -------------- ----------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------ ----- ------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C>
1998:
Total capital (to risk-weighted
assets).............................. $5,513 13.24% $3,330 8.00% $4,163 10.00%
Tier I capital (to risk-weighted
assets).............................. 5,074 12.19 1,665 4.00 2,498 6.00
Tier I capital (to average assets)...... 5,074 9.09 1,675 3.00 2,792 5.00
====== ===== ====== ==== ====== =====
</TABLE>
F-20
<PAGE> 130
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(3) DEBT AND MARKETABLE EQUITY SECURITIES
The amortized cost and fair values of debt and marketable equity securities
available-for-sale at December 31, 1997 and 1998 are as follows:
<TABLE>
<CAPTION>
1997
------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Debt securities:
U.S. Treasury securities....................... $ 759,840 5,743 -- 765,583
U.S. Government corporations and agencies...... 3,753,039 8,394 (3,689) 3,757,744
Obligations of state and political
subdivisions................................ 358,748 3,286 (938) 361,096
Mortgage-backed securities..................... 454,575 2,671 (3,419) 453,827
---------- ------ ------ ---------
5,326,202 20,094 (8,046) 5,338,250
---------- ------ ------ ---------
Marketable equity securities:
Federal Home Loan Bank stock................... 77,000 -- -- 77,000
Other.......................................... 2,500 -- -- 2,500
---------- ------ ------ ---------
79,500 -- -- 79,500
---------- ------ ------ ---------
$5,405,702 20,094 (8,046) 5,417,750
========== ====== ====== =========
</TABLE>
<TABLE>
<CAPTION>
1998
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Debt securities:
U.S. Treasury securities..................... $ 506,230 6,580 -- 512,810
U.S. Government corporations and agencies.... 4,860,592 35,828 (2,773) 4,893,647
Obligations of state and political
subdivisions.............................. 359,279 10,880 -- 370,159
Mortgage-backed securities................... 524,525 3,355 (2,451) 525,429
---------- ------ ------ ---------
6,250,626 56,643 (5,224) 6,302,045
---------- ------ ------ ---------
Marketable equity securities:
Federal Home Loan Bank stock................. 173,400 -- -- 173,400
Other........................................ 2,500 -- -- 2,500
---------- ------ ------ ---------
175,900 -- -- 175,900
---------- ------ ------ ---------
$6,426,526 56,643 (5,224) 6,477,945
========== ====== ====== =========
</TABLE>
F-21
<PAGE> 131
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The amortized cost and fair values of debt securities available-for-sale at
December 31, 1997 and 1998, by contractual maturity, are shown below. Actual
maturities may differ from contractual maturities because borrowers have the
right to repay obligations with or without prepayment penalties.
<TABLE>
<CAPTION>
1997 1998
----------------------- ----------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Due in one year or less...................... $ 499,372 499,807 750,225 753,273
Due after one year through five years........ 3,765,535 3,770,534 2,231,764 2,091,082
Due after five years through ten years....... 1,061,295 1,067,909 3,010,558 3,202,383
Due after ten years.......................... -- -- 258,079 255,307
---------- --------- --------- ---------
$5,326,202 5,338,250 6,250,626 6,302,045
========== ========= ========= =========
</TABLE>
Debt and marketable equity securities with carrying values aggregating
$1,464,302 and $1,369,034 at December 31, 1997 and 1998, respectively, were
pledged to secure public funds and for other purposes as required or permitted
by law.
(4) LOANS
The composition of the loan portfolio at December 31, 1997 and 1998 is as
follows:
<TABLE>
<CAPTION>
1997 1998
----------- ----------
<S> <C> <C>
Commercial.................................................. $ 2,905,207 5,292,128
Real estate................................................. 19,329,657 34,465,883
Installment and others...................................... 1,317,437 1,618,363
Loans held for sale......................................... -- 233,165
----------- ----------
23,552,301 41,609,539
Allowance for loan losses................................... (210,000) (438,841)
----------- ----------
Loans, net............................................. $23,342,301 41,170,698
=========== ==========
</TABLE>
The Bank grants commercial, residential mortgage, and installment loans to
customers primarily in their service area of Jefferson City and Columbia,
Missouri. The Company has a diversified loan portfolio, with no particular
concentration of credit in any one economic sector in this service area;
however, a substantial portion of the portfolio is concentrated in and secured
by real estate. The ability of the Company's borrowers to honor their
contractual obligations is dependent upon the local economies and their effect
on the real estate market.
Following is a summary of activity for the year ended December 31, 1998, of
loans to executive officers and directors or to entities in which such
individuals had beneficial interest as shareholders, officers, or directors.
Such loans were made in the normal course of business on substantially the same
terms, including interest rates and collateral, as those prevailing at the same
time for comparable transactions with other persons, and did not involve more
than the normal risk of collectibility.
<TABLE>
<S> <C>
Balance at December 31, 1997................................ $273,332
New loans................................................... 886,100
Payments received........................................... (654,098)
--------
Balance at December 31, 1998................................ $505,334
========
</TABLE>
F-22
<PAGE> 132
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Transactions in the allowance for loan losses for the years ended December 31,
1996, 1997, and 1998 are summarized as follows:
<TABLE>
<CAPTION>
1996 1997 1998
-------- ------- -------
<S> <C> <C> <C>
Balance at January 1........................................ $ 63,430 120,000 210,000
Provision charged to expense................................ 80,582 112,279 291,734
Loans charged-off........................................... (24,012) (22,641) (64,643)
Recoveries of loans previously charged-off.................. -- 362 1,750
-------- ------- -------
Balance at December 31...................................... $120,000 210,000 438,841
======== ======= =======
</TABLE>
A summary of impaired loans at December 31, 1997 and 1998 follows:
<TABLE>
<CAPTION>
1997 1998
-------- ------
<S> <C> <C>
Nonaccrual loans............................................ $161,234 94,072
Impaired loans continuing to accrue interest................ -- --
-------- ------
Total impaired loans................................... $161,234 94,072
======== ======
Allowance for losses on impaired loans...................... $ 27,532 24,072
Impaired loans with no related allowance for loan losses.... -- --
======== ======
</TABLE>
The average balance of impaired loans during 1997 and 1998 was $82,690 and
$158,233, respectively.
There were no nonaccrual or impaired loans as of and for the year ended December
31, 1996. A summary of interest income on nonaccrual and other impaired loans
for 1997 and 1998 is as follows:
<TABLE>
<CAPTION>
IMPAIRED LOANS
NONACCRUAL CONTINUING TO
LOANS ACCRUE INTEREST TOTAL
---------- --------------- -----
<S> <C> <C> <C>
1997:
Income recognized........................................ $ -- -- --
Interest income had interest accrued..................... 7,399 -- 7,399
====== ===== =====
1998:
Income recognized........................................ $ -- -- --
Interest income had interest accrued..................... 7,650 -- 7,650
====== ===== =====
</TABLE>
(5) PREMISES AND EQUIPMENT
A summary of premises and equipment at December 31, 1997 and 1998 is as follows:
<TABLE>
<CAPTION>
1997 1998
---------- ---------
<S> <C> <C>
Land........................................................ $ 400,000 650,000
Buildings................................................... 872,839 1,552,925
Furniture, fixtures, and equipment.......................... 236,578 545,114
---------- ---------
1,509,417 2,748,039
Less accumulated depreciation............................... 116,184 204,277
---------- ---------
$1,393,233 2,543,762
========== =========
</TABLE>
Amounts charged to occupancy expense for depreciation aggregated $43,769,
$60,193, and $102,467 for the years ended December 31, 1996, 1997, and 1998,
respectively.
F-23
<PAGE> 133
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
At December 31, 1998, the Bank had entered into an operating lease for a
facility which begins in February 2000 and expires in 2005. Minimum future lease
payments required are as follows:
<TABLE>
<S> <C>
Year ending December 31:
1999...................................................... $ --
2000...................................................... 24,475
2001...................................................... 26,700
2002...................................................... 26,700
2003...................................................... 26,700
2004 and thereafter....................................... 28,925
--------
$133,500
========
</TABLE>
(6) INTEREST-BEARING DEPOSITS
A summary of interest-bearing deposits at December 31, 1997 and 1998 is as
follows:
<TABLE>
<CAPTION>
1997 1998
----------- ----------
<S> <C> <C>
NOW and money market demand accounts........................ $ 3,008,584 6,080,659
Savings..................................................... 6,091,624 12,454,092
Other time deposits:
Less than $100,000........................................ 11,490,200 16,267,823
$100,000 and over......................................... 6,284,336 11,196,111
----------- ----------
$26,874,744 45,998,685
=========== ==========
</TABLE>
Interest expense on deposits for the years ended December 31, 1996, 1997, and
1998 is summarized as follows:
<TABLE>
<CAPTION>
1996 1997 1998
-------- --------- ---------
<S> <C> <C> <C>
NOW and money market demand accounts...................... $ 80,291 123,663 171,269
Savings................................................... 86,675 242,812 401,601
Other time deposits....................................... 688,165 886,723 1,311,742
-------- --------- ---------
$855,131 1,253,198 1,884,612
======== ========= =========
</TABLE>
The maturities of other time deposits at December 31, 1998 are show below.
Expected maturities may differ from contractual maturities because depositors
may redeem deposits early.
<TABLE>
<S> <C>
Due in three months or less................................. $ 7,032,398
Due in greater than three months through one year........... 13,901,527
Due in greater than one year through three years............ 5,550,580
Due in greater than three years............................. 979,429
-----------
$27,463,934
===========
</TABLE>
F-24
<PAGE> 134
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(7) FEDERAL HOME LOAN BANK ADVANCES
At December 31, 1998 and 1997, the Bank has fixed rate advances outstanding with
the Federal Home Loan Bank of Des Moines, with stated maturities as follows:
<TABLE>
<CAPTION>
1997 1998
------------------- ---------------------
WEIGHTED WEIGHTED
INTEREST 1998 INTEREST
AMOUNT RATE AMOUNT RATE
-------- -------- ---------- --------
<S> <C> <C> <C> <C>
Due in one year or less............................. $500,000 6.02% $ 250,000 6.18%
Due after five years................................ 440,000 6.43 3,195,153 5.70
-------- ==== ---------- ====
$940,000 $3,445,153
======== ==========
</TABLE>
The Bank maintains an $8.3 million line of credit with the FHLB and had
availability under that line of $4.9 million at December 31, 1998.
FHLB advances are secured under a blanket agreement which assigns all FHLB stock
and one-to-four family mortgage loans equal to 130% of the outstanding advance
balance.
(8) NOTE PAYABLE
The note payable at December 31, 1998 is a term loan between the Company and an
unaffiliated financial institution which bears interest at the prime rate (7.75%
at December 31, 1998), is due on November 15, 1999, and is secured by 35,020
common shares of the Bank.
(9) OTHER COMPREHENSIVE INCOME
The Company's other comprehensive income included the following components:
<TABLE>
<CAPTION>
1996 1997 1998
-------- ------ ------
<S> <C> <C> <C>
Net realized and unrealized gain (loss) on securities
available-for-sale, net of tax......................... $(61,756) 22,214 25,984
Less adjustment for net securities loss realized in net
income, net of tax..................................... -- (139) --
-------- ------ ------
$(61,756) 22,075 25,984
======== ====== ======
</TABLE>
(10) INCOME TAXES
The components of income tax expense for the years ended December 31, 1996,
1997, and 1998 are as follows:
<TABLE>
<CAPTION>
1996 1997 1998
-------- ------- ------
<S> <C> <C> <C>
Current expense:
Federal............................................... $ -- 8,926 --
State................................................. -- 1,687 8,526
Increase(decrease)in the beginning of the year balance
of the valuation allowance for deferred tax
assets............................................. 42,895 (39,038) (6,416)
Deferred -- federal..................................... (42,895) 39,038 6,416
-------- ------- ------
$ -- 10,613 8,526
======== ======= ======
</TABLE>
F-25
<PAGE> 135
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A reconciliation of expected income tax expense to federal income tax expense,
computed by applying the federal statutory rate of 34% to income (loss) before
income tax expense for the years ended December 31, 1996, 1997, and 1998 to
reported income tax expense, is as follows:
<TABLE>
<CAPTION>
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Income tax expense (benefit) at statutory rate......... $(38,499) $ 36,553 $ 10,499
Increase (decrease) in income taxes resulting from:
State income tax, net of federal income tax
benefit........................................... -- 1,113 5,627
Officer's life insurance -- book to tax treatment.... -- 861 (4,222)
Change in the beginning of the year balance of the
valuation allowance for deferred tax assets
allocated to income tax expense................... 42,895 (39,038) (6,416)
Other, net........................................... (4,396) 11,124 3,038
-------- -------- --------
Income tax expense................................ $ -- $ 10,613 $ 8,526
======== ======== ========
</TABLE>
The tax effect of temporary differences which give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31, 1997 and
1998 are presented below:
<TABLE>
<CAPTION>
1997 1998
-------- --------
<S> <C> <C>
Deferred tax assets:
Book provision for loan loss in excess of tax............. $ 54,143 $126,213
Deferred compensation..................................... 849 3,818
Available-for-sale securities market valuation............ 4,096 17,483
Organizational costs...................................... 10,258 5,862
Net operating loss carryforward........................... 71,545 16,503
-------- --------
Gross deferred tax assets.............................. 140,891 169,879
Less valuation allowance.................................. (63,311) (56,895)
-------- --------
Net deferred tax assets, net........................... 77,580 112,984
-------- --------
Deferred tax liabilities:
Premises and equipment, basis............................. (25,791) (51,299)
Accrual to cash conversion for book to tax accounting
methods................................................ (44,638) (41,717)
Other..................................................... (3,055) (2,486)
-------- --------
Total gross deferred tax liabilities................... (73,484) (95,502)
-------- --------
Net deferred tax assets................................ $ 4,096 $ 17,482
======== ========
</TABLE>
At December 31, 1998, the Company has net operating loss carryforwards (NOLs) of
approximately $50,000. Their utilization is subject to annual limitations. The
NOLs for the Company at December 31, 1998 expire during 2009 through 2011.
The ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which those temporary differences
become deductible. Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income, and tax planning strategies in
making this assessment. A valuation allowance is provided on deferred tax assets
when it is more likely than not that some portion of the assets will not be
realized. The valuation allowance for deferred tax assets as of December 31,
1996 was $102,349. The net change in the total valuation allowance for the years
ended December 31, 1997 and 1998 was a decrease of $39,038 and $6,416,
respectively.
F-26
<PAGE> 136
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(11) EMPLOYEE BENEFITS
During 1997, the Company adopted a SIMPLE IRA for all employees meeting certain
eligibility requirements. An eligible employee may make a salary reduction
election, expressed as a percentage of compensation, not to exceed $6,000 for
any calendar year. The Company makes contributions to the plan equal to the
employees' salary reduction contributions up to a limit of 3% of the employee's
compensation for the calendar year subject to certain provisions which could
reduce such contributions. All contributions are fully vested and
nonforfeitable; there are no withdrawal restrictions, and no cost or penalty for
transfer to another IRA. Employer matching contributions to the plan totaled
$4,232 and $8,239 in 1997 and 1998, respectively.
In 1997, the Company's Board entered into a Director Deferred Fee Agreement
(Agreement) with five of the six Directors and one Company officer; the
Agreement provides the participants with the opportunity to defer fees and to
accumulate assets for retirement. The Board has determined that it is in the
best interest of the Company to recover the cost of the benefit obligations by
purchasing life insurance. These life insurance policies are owned by the
Company and are designed to insure against the contingent liability associated
with the premature death of any of the Directors. The Company did not make any
contributions related to the Agreement during 1998. The current surrender value
of the life insurance policies, included in other assets in the consolidated
balance sheets, totaled $452,468 and $473,621 at December 31, 1997 and 1998,
respectively. The accrued benefit obligations totaled $2,496 and $11,232 at
December 31, 1997 and 1998, respectively, and is included in other liabilities
in the consolidated balance sheets.
(12) OTHER NONINTEREST EXPENSE
Other noninterest expense for the years ended December 31, 1996, 1997, and 1998
are as follows:
<TABLE>
<CAPTION>
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Data processing........................................ $ 25,599 $ 49,911 $ 61,502
Professional services.................................. 42,206 26,826 44,927
Directors' fees........................................ 5,300 8,650 38,000
Advertising............................................ 45,376 25,484 51,706
Postage and supplies................................... 22,670 20,075 50,231
Other.................................................. 105,873 131,369 163,132
-------- -------- --------
$247,024 $262,315 $409,498
======== ======== ========
</TABLE>
(13) COMMITMENTS AND CONTINGENCIES
During the normal course of business, various legal claims have arisen which, in
the opinion of management, will not result in any material liability to the
Company.
(14) DISCLOSURES ABOUT FINANCIAL INSTRUMENTS
The Bank issues financial instruments with off-balance sheet risk in the normal
course of the business of meeting the financing needs of its customers. These
financial instruments include commitments to extend credit and standby letters
of credit. These instruments may involve, to varying degrees, elements of credit
risk in excess of the amount recognized in the consolidated balance sheets.
The contractual amounts of these instruments reflect the extent of involvement
the Bank has in such particular classes of financial instruments.
F-27
<PAGE> 137
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The exposure to credit loss in the event of nonperformance by the other party to
the financial instrument for commitments to extend credit and standby letters of
credit is represented by the contractual amount of such instruments. The Bank
uses the same credit policies in making commitments and conditional obligations
as they do for on-balance-sheet financial instruments included in the
consolidated balance sheets. Following is a summary of off-balance-sheet
financial instruments at December 31, 1997 and 1998, respectively:
<TABLE>
<CAPTION>
1997 1998
---------- ----------
<S> <C> <C>
Financial instruments whose contractual amounts represent:
Commitments to extend credit.............................. $3,940,969 6,937,356
Standby letters of credit................................. 53,985 53,148
---------- ----------
Total off-balance-sheet financial instruments.......... $3,994,954 6,990,504
========== ==========
</TABLE>
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. At December 31, 1998, $1,461,268 represent fixed rate
loan commitments. Since certain of the commitments may expire without being
drawn upon, the total commitment amounts do not necessarily represent future
cash requirements. The Bank evaluates each customer's creditworthiness on a
case-by-case basis. The amount of collateral obtained, if deemed necessary by
the Bank upon extension of credit, is based on management's credit evaluation of
the borrower. Collateral held varies, but is generally residential or
income-producing commercial property, inventory, accounts receivable, or
equipment.
Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. These guarantees are
primarily issued to support public and private borrowing arrangements. The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers.
(15) PARENT COMPANY FINANCIAL INFORMATION
Condensed balance sheets as of December 31, 1997 and 1998 and the related
condensed schedules of operations and cash flows for the years ended December
31, 1996, 1997, and 1998 of the Company (parent company only) are as follows:
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
1997 1998
---------- ---------
<S> <C> <C>
Assets:
Cash...................................................... $ 39,903 39,879
Investment in Bank........................................ 4,227,653 5,107,802
Other assets.............................................. 17,297 47,917
---------- ---------
Total assets........................................... $4,284,853 5,195,598
========== =========
Liabilities:
Note payable.............................................. $1,050,000 750,000
Other liabilities......................................... 13,269 7,437
---------- ---------
Total liabilities...................................... 1,063,269 757,437
Total shareholders' equity.................................. 3,221,584 4,438,161
---------- ---------
Total liabilities and shareholders' equity............. $4,284,853 5,195,598
========== =========
</TABLE>
F-28
<PAGE> 138
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED SCHEDULES OF OPERATIONS
<TABLE>
<CAPTION>
1996 1997 1998
--------- ------- --------
<S> <C> <C> <C>
Revenue.................................................... $ -- -- --
Expenses:
Interest expense......................................... 27,744 33,975 72,140
Other operating expenses................................. 29,100 15,485 44,388
--------- ------- --------
Total expenses........................................ 56,844 49,460 116,528
--------- ------- --------
Loss before income tax expense (benefit) and equity in
undistributed income (loss) of Bank................. (56,844) (49,460) (116,528)
Income tax expense (benefit)............................... -- -- --
--------- ------- --------
Loss before equity in undistributed income (loss) of
Bank................................................ (56,844) (49,460) (116,528)
Equity in undistributed income (loss) of Bank.............. (56,387) 146,355 138,881
--------- ------- --------
Net income (loss)..................................... $(113,231) 96,895 22,353
========= ======= ========
</TABLE>
CONDENSED SCHEDULES OF CASH FLOWS
<TABLE>
<CAPTION>
1996 1997 1998
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)...................................... $(113,231) 96,895 22,353
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Equity in undistributed (income) loss of Bank....... 56,387 (146,355) (138,881)
Other, net.......................................... 6,450 143 (1,736)
--------- --------- ---------
Net cash used in operating activities............. (50,394) (49,317) (118,264)
--------- --------- ---------
Cash flows from investing activities -- capital
contribution to Bank................................... -- (750,000) (750,000)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from note payable............................. -- 1,050,000 --
Repayment of note payable.............................. -- (300,000) (300,000)
Purchase of treasury stock............................. -- -- (31,790)
Proceeds from sale of common stock..................... -- 86,415 1,200,030
--------- --------- ---------
Net cash provided by financing activities......... -- 836,415 868,240
--------- --------- ---------
Net increase (decrease) in cash and cash
equivalents.................................... (50,394) 37,098 (24)
Cash and cash equivalents at beginning of year........... 53,199 2,805 39,903
--------- --------- ---------
Cash and cash equivalents at end of year................. $ 2,805 39,903 39,879
========= ========= =========
</TABLE>
(16) RESTRICTIVE STOCK AGREEMENT
Effective December 1994, all persons who purchase shares of common stock in the
offer and sale of shares of the Company were required to enter into the
Restrictive Stock Agreement which provides that all parties give the Company and
its shareholders a right of first refusal to purchase their shares of common
stock should they decide to transfer them to unrelated third parties (including
involuntary transfers). The purchase price for such shares is the lower of the
book value of the shares of common stock to be transferred or the amount of a
legitimate third party offer; provided that book value shall be increased by (i)
20% if the purchase occurs between January 1, 1997 and December 31, 1997 and
(ii) 25% if the purchase occurs on or after January 1, 1998. Additionally, the
parties to the Restrictive Stock Agreement
F-29
<PAGE> 139
PREMIER BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
may choose to vote to value shares of common stock at a price that is different
than book value, by the affirmative vote of 80% of the shares of common stock
subject to the Restrictive Stock Agreement. Also, under this Restrictive Stock
Agreement, the Company must buy shares of common stock owned by employees who
cease to be employed by the Company. On December 4, 1998, the Restrictive Stock
Agreement was amended to explicitly state that its provisions would not apply to
the pending potential transaction with First Premier Financial Corporation.
(17) ACQUISITION ACTIVITY
On May 6, 1999, the Company entered into a definitive agreement with First
Premier Financial Corporation (First Premier). The agreement provides for the
shareholders of the Company to exchange their shares in a tax free
reorganization for $11 million of newly issued shares of common stock of First
Premier, valued at the initial public offering price of First Premier's common
stock. The transaction is subject to the receipt of regulatory approval and the
approval of the shareholders of the Company and First Premier and is expected to
close in the third quarter of 1999. The transaction is contingent upon a number
of factors, including the successful initial public offering of First Premier's
common stock.
F-30
<PAGE> 140
APPENDIX A
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
FIRST PREMIER FINANCIAL CORPORATION
AND
PREMIER BANCSHARES, INC.
DATED AS OF MAY 6, 1999
<PAGE> 141
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger...........................................................1
1.2 Time and Place of Closing........................................1
1.3 Effective Time...................................................2
ARTICLE 2
TERMS OF MERGER
2.1 Certificate of Incorporation.....................................2
2.2 Bylaws...........................................................2
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares.............................................2
3.2 Anti-Dilution Provisions.........................................3
3.3 Shares Held by Premier...........................................3
3.4 Fractional Shares................................................3
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures..............................................4
4.2 Rights of Former Premier Shareholders............................4
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PREMIER
5.1 Organization, Standing, and Power................................5
5.2 Authority; No Breach by Agreement................................5
5.3 Capital Stock....................................................6
5.4 Premier Subsidiaries.............................................6
5.5 Regulatory Filings; Financial Statements.........................7
5.6 Notes and Obligations. ..........................................7
5.7 Absence of Certain Changes or Events.............................8
5.8 Tax Matters......................................................8
5.9 Assets...........................................................9
5.10 Environmental Matters............................................9
5.11 Compliance With Laws............................................10
5.12 Labor Relations.................................................10
5.13 Employee Benefit Plans..........................................10
</TABLE>
A-2
<PAGE> 142
<TABLE>
<CAPTION>
<S> <C> <C>
5.14 Material Contracts..............................................12
5.15 Legal Proceedings...............................................13
5.16 Reports.........................................................13
5.17 Statements True and Correct.....................................13
5.18 Accounting, Tax and Regulatory Matters..........................13
5.19 Anti-Takeover Provisions........................................14
5.20 Derivatives Contracts...........................................14
5.21 Year 2000.......................................................14
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF FIRST PREMIER
6.1 Organization, Standing, and Power...............................14
6.2 Authority; No Breach By Agreement...............................14
6.3 Capital Stock...................................................15
6.4 First Premier Subsidiaries......................................16
6.5 Financial Statements............................................16
6.6 Absence of Certain Changes or Events............................16
6.7 Tax Matters.....................................................16
6.8 Compliance With Laws............................................16
6.9 Assets..........................................................17
6.10 Legal Proceedings...............................................17
6.11 Reports.........................................................18
6.12 Statements True and Correct.....................................18
6.13 Accounting, Tax and Regulatory Matters..........................18
6.14 Environmental Matters...........................................18
6.15 Derivatives Contracts...........................................19
6.16 Outstanding Premier Common Stock................................19
6.17 Material Contracts..............................................19
6.18 Employee Benefit Plans..........................................19
6.19 Year 2000.......................................................21
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of Premier................................21
7.2 Negative Covenants of Premier...................................22
7.3 Covenants of First Premier......................................24
7.4 Adverse Changes In Condition....................................24
7.5 Reports.........................................................24
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Shareholder Approval...25
</TABLE>
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<TABLE>
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8.2 Share Purchases by and Option Grants to Premier Shareholders....25
8.3 Restrictions on Transfer of Shares Held by Premier Directors,
Officers and Shareholders.......................................26
8.4 Agreement as to Efforts to Consummate...........................26
8.5 Applications....................................................27
8.6 Access to Information; Confidentiality..........................27
8.7 Current Information.............................................27
8.8 Other Actions...................................................27
8.9 Press Releases..................................................28
8.10 No Solicitation.................................................28
8.11 Accounting and Tax Treatment....................................28
8.12 Anti-Takeover Provisions........................................28
8.13 Agreement of Affiliates.........................................28
8.14 Employee Benefits and Contracts.................................29
8.15 Management Contracts............................................29
8.16 Indemnification and Directors' Liability Insurance..............29
8.17 Filings with State of Missouri..................................30
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party.........................30
9.2 Conditions to Obligations of First Premier......................31
9.3 Conditions to Obligations of Premier............................32
ARTICLE 10
TERMINATION
10.1 Termination.....................................................33
10.2 Effect of Termination...........................................34
10.3 Non-Survival of Representations and Covenants...................36
ARTICLE 11
MISCELLANEOUS
11.1 Definitions.....................................................36
11.2 Expenses........................................................43
11.3 Brokers and Finders.............................................43
11.4 Entire Agreement................................................43
11.5 Amendments......................................................43
11.6 Obligations of First Premier....................................43
11.7 Waivers.........................................................43
11.8 Assignment......................................................44
11.9 Notices.........................................................44
11.10 Governing Law...................................................45
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<TABLE>
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11.11 Counterparts....................................................45
11.12 Captions........................................................45
11.13 Severability....................................................45
11.14 Enforcement of Agreement........................................45
</TABLE>
LIST OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
1. FORM OF AGREEMENT OF AFFILIATES OF PREMIER BANCSHARES, INC. (SECTION
8.13)
2. Form of opinion of Suelthaus & Walsh, P.C. (Section 9.2(e))
3. Form of opinion of Smith, Gambrell & Russell, LLP (Section 9.3(f))
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of May 6, 1999, by and between FIRST PREMIER FINANCIAL
CORPORATION ("First Premier"), a Delaware corporation having its principal
office located in St. Louis, Missouri, and PREMIER BANCSHARES, INC., a Missouri
corporation having its principal office located in Jefferson City, Missouri
("Premier").
PREAMBLE
The Boards of Directors of First Premier and Premier are of the opinion
that the acquisition described herein is in the best interests of the Parties
and their respective shareholders. This Agreement provides for the acquisition
of Premier by First Premier pursuant to the merger of Premier with and into
First Premier (the "Merger"). At the effective time of such Merger, the
outstanding shares of the capital stock of Premier shall be converted into the
right to receive shares of the common stock of First Premier (except as provided
herein). As a result, shareholders of Premier shall become shareholders of First
Premier. The transactions described in this Agreement are subject to the
approvals of the shareholders of First Premier and Premier, the Board of
Governors of the Federal Reserve System, the Division of Finance of the Missouri
Department of Economic Development, and the satisfaction of certain other
conditions described in this Agreement. It is the intention of the Parties that
the Merger for federal income tax purposes shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code, and will be a
tax free exchange for the shareholders of Premier except for cash received in
connection with fractional shares and the exercise of dissenters' rights.
Certain terms used in this Agreement are defined in Section 11.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
Parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of
this Agreement, at the Effective Time, Premier shall be merged
with and into First Premier in accordance with the provisions
of the General and Business Corporation Law of Missouri (the
"GBCL") and the Delaware General Corporation Laws ("DGCL"). The
separate existence of Premier shall thereupon cease, and First
Premier shall be the Surviving Corporation resulting from the
Merger and shall continue to be governed by the DGCL. The
Merger shall have the effects specified in ss. 351.450 RSMo of
the GBCL and ss. 251 of the DGCL. The Merger shall be
consummated pursuant to the terms of this Agreement, which has
been approved and adopted by the respective Boards of Directors
of First Premier and Premier.
1.2 Time and Place of Closing. The closing of the
transactions contemplated by this Agreement (the "Closing")
will be immediately prior to the closing of First Premier's
public offering referred to Section 9.1(g) herein. The Closing
will take place at a time, place
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and date specified by the Parties as they, acting through their
chief executive officers or chief financial officers, may
mutually agree.
1.3 Effective Time. The Merger and other transactions
contemplated by this Agreement shall become effective as set
forth in the certificate of merger (the "Certificate of
Merger") which shall be filed with the office of the Secretary
of State of Delaware. The term "Effective Time" shall mean the
date and time when the Merger becomes effective, as set forth
in the Certificate of Merger. Subject to the terms and
conditions hereof, unless otherwise mutually agreed upon in
writing by each Party, the Parties shall use their reasonable
best efforts to cause the Effective Time to occur on the date
of Closing.
ARTICLE 2
TERMS OF MERGER
2.1 Certificate of Incorporation. Pursuant to the
Merger, the Certificate of Incorporation of First Premier in
effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation until
otherwise amended or repealed in accordance with applicable
Law.
2.2 Bylaws. Pursuant to the Merger, the Bylaws of
First Premier in effect immediately prior to the Effective Time
shall be the bylaws of the Surviving Corporation until
otherwise amended or repealed, in accordance with applicable
Law.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions
of this Article 3, at the Effective Time, by virtue of the
Merger and without any action on the part of First Premier or
Premier, or the shareholders of any of the foregoing, the
shares of the constituent corporations shall be converted as
follows:
(a) Each share of First Premier Capital
Stock issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding
from and after the Effective Time.
(b) Except for Premier Common Stock issued
and outstanding immediately prior to the Effective
Time as to which dissenters' rights have been
perfected and not withdrawn, and subject to Section
3.4 relating to fractional shares, each share of
Premier Common Stock issued and outstanding at the
Effective Time shall cease to be outstanding and
shall be converted into and exchanged for the number
of shares of First Premier Common Stock equal to the
quotient obtained by dividing $262.944 by the initial
public offering price of one share of First Premier
Common Stock as determined by First Premier's
underwriters in the public offering referred to in
Section 9.1(g) of this Agreement, rounded to the
nearest third decimal
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point (the "Exchange Ratio"). Notwithstanding the
foregoing, in no event shall more than 42,000 shares
of Common Stock of Premier be converted to First
Premier Common Stock.
(c) Notwithstanding Section 3.1(b) of this
Agreement, Premier Common Stock issued and
outstanding at the Effective Time which is held by a
holder who has not voted in favor of the Merger and
who has demanded payment of the fair value of such
shares ("Dissenting Premier Shares") in accordance
with ss. 351.455 RSMo of the GBCL (the "Dissent
Provisions") shall not be converted into or represent
the right to receive the First Premier Common Stock
payable thereon pursuant to Section 3.1(b) of this
Agreement, and shall be entitled only to such rights
of appraisal as are granted by the Dissent
Provisions, unless and until such holder fails to
perfect or effectively withdraws or otherwise loses
the right to appraisal. If, after the Effective Time,
any such holder fails to perfect or effectively
withdraws or loses the right to appraisal, such
shares of Premier Common Stock shall be treated as if
they had been converted at the Effective Time into
the right to receive the First Premier Common Stock
payable thereon pursuant to Section 3.1(b) of this
Agreement. Premier shall give First Premier prompt
notice upon receipt by Premier of any written
objection to the Merger and such written demands for
payment of the fair value of shares of Premier Common
Stock, and the withdrawals of such demands, and any
other instruments provided to Premier pursuant to the
Dissent Provisions (any shareholder duly making such
demand being hereinafter called a "Dissenting
Shareholder"). Each Dissenting Shareholder that
becomes entitled, pursuant to the Dissent Provisions,
to payment for any shares of Premier Common Stock
held by such Dissenting Shareholder shall receive
such payment from First Premier (but only after the
amount thereof shall have been agreed upon or at the
times and in the amounts required by the Dissent
Provisions) and all of such Dissenting Shareholders'
shares of Premier Common Stock shall be canceled.
Premier shall not, except with the prior written
consent of First Premier, voluntarily make any
payment with respect to, or settle or offer to
settle, any demand for payment by any Dissenting
Shareholder.
(d) All shares of First Premier issued
pursuant to Section 3.1 shall be subject to the
restrictions set forth in Section 8.3 and shall bear
an appropriate restrictive legend on the face of the
certificate representing such shares. First Premier
shall instruct its transfer agent and registrar to
issue separate certificates to each Premier
shareholder for each period of restriction on trading
with respect to shares, each certificate to be for
the number of shares that are restricted for each
individual period; fractional shares shall not be
represented by such individual certificates, and
numbers of shares shall be rounded down to the next
lower whole number, with the final certificate
(representing shares restricted for 120 days after
closing) including any fractional shares omitted from
the other certificates due to this rounding. At such
time or times as the restrictions no longer apply
with respect to one or more such certificates, First
Premier shall promptly assist any former shareholder
of Premier in causing such restrictive legend to be
removed, including, but not limited to giving written
authorization to First Premier's transfer agent and
registrar to permit such shares to be sold.
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3.2 Anti-Dilution Provisions. In the event First
Premier changes the number of shares of First Premier Common
Stock issued and outstanding prior to the Effective Time as a
result of a stock split, stock dividend, recapitalization,
reclassification, or similar transaction with respect to such
stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is
not established) shall be prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted.
3.3 Shares Held by Premier. Each share of Premier
Capital Stock, if any, held by any Premier Company, other than
in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time
and no consideration shall be issued in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other
provision of this Agreement, each holder of shares of Premier
Common Stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share
of First Premier Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu
thereof, cash (without interest) in an amount equal to such
fractional part of a share of First Premier Common Stock
multiplied by the initial public offering price of one share of
First Premier Common Stock as determined by First Premier's
underwriters in the public offering referred to in Section
9.1(g) of this Agreement.
3.5 Options. There are no outstanding options to
purchase Premier Common Stock ("Premier Options").
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. At the Effective Time, First
Premier shall deposit or shall cause to be deposited with UMB
Bank, n.a., Kansas City, Missouri (the "Exchange Agent")
certificates evidencing shares of First Premier Common Stock in
such amount necessary to provide all consideration required to
be exchanged by First Premier for Premier Common Stock pursuant
to the terms of this Agreement. Promptly after the Effective
Time, First Premier shall cause the Exchange Agent to mail to
the former shareholders of Premier appropriate transmittal
materials (which shall specify that delivery shall be effected,
and risk of loss and title to the certificates theretofore
representing shares of Premier Common Stock shall pass, only
upon proper delivery of such certificates to the Exchange
Agent). After the Effective Time, each holder of shares of
Premier Common Stock issued and outstanding at the Effective
Time shall surrender the certificate or certificates
representing such shares to the Exchange Agent and shall upon
surrender thereof promptly receive in exchange therefor the
consideration provided in Section 3.1 of this Agreement,
together with all undelivered dividends or distributions in
respect of such shares (without interest thereon) pursuant to
Section 4.2 of this Agreement. To the extent required by
Section 3.4 of this Agreement, each holder of shares of Premier
Common Stock issued and outstanding at the Effective Time also
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shall receive, upon surrender of the certificate or
certificates representing such shares, cash in lieu of any
fractional share of First Premier Common Stock to which such
holder may be otherwise entitled (without interest). First
Premier shall not be obligated to deliver the consideration to
which any former holder of Premier Common Stock is entitled as
a result of the Merger until such holder surrenders such
holder's certificate or certificates representing the shares of
Premier Common Stock for exchange as provided in this Section
4.1. The certificate or certificates of Premier Common Stock so
surrendered shall be duly endorsed as the Exchange Agent may
require. Any other provision of this Agreement notwithstanding,
neither First Premier nor the Exchange Agent shall be liable to
a holder of Premier Common Stock for any amounts paid or
property delivered in good faith to a public official pursuant
to any applicable abandoned property Law. In the event that any
shareholder of Premier is unable to surrender a certificate
because it is lost or destroyed, the Exchange Agent may make
distribution to that shareholder upon receipt of such
affidavits, undertakings, indemnity bonds, and other agreements
as are customary in such circumstances.
4.2 Rights of Former Premier Shareholders. At the
Effective Time, the stock transfer books of Premier shall be
closed as to holders of Premier Common Stock immediately prior
to the Effective Time and no transfer of Premier Common Stock
by any such holder shall thereafter be made or recognized.
Until surrendered for exchange in accordance with the
provisions of Section 4.1 of this Agreement, each certificate
theretofore representing shares of Premier Common Stock shall
from and after the Effective Time represent for all purposes
only the right to receive the consideration provided in
Sections 3.1 and 3.4 of this Agreement in exchange therefor,
subject, however, to First Premier's obligation to pay any
dividends or make any other distributions with a record date
prior to the Effective Time which have been declared or made by
Premier in respect of such shares of Premier Common Stock in
accordance with the terms of this Agreement and which remain
unpaid at the Effective Time. Whenever a dividend or other
distribution is declared by First Premier on the First Premier
Common Stock, the record date for which is at or after the
Effective Time, the declaration shall include dividends or
other distributions on all shares issuable pursuant to this
Agreement, but beginning 30 days after the Effective Time no
dividend or other distribution payable to the holders of record
of First Premier Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any
certificate representing shares of Premier Common Stock issued
and outstanding at the Effective Time until such holder
surrenders such certificate for exchange as provided in Section
4.1 of this Agreement. However, upon surrender of such Premier
Common Stock certificate, or in the case of lost or destroyed
certificates delivery of the requisite affidavits,
undertakings, indemnity bonds and other agreements customary in
such circumstances, both the First Premier Common Stock
certificate (together with all such undelivered dividends or
other distributions without interest) and any undelivered
dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with
respect to each share represented by such certificate. Any
portion of the consideration (including the proceeds of any
investments thereof) which had been made payable to the
Exchange Agent pursuant to Section 4.1 of this Agreement that
remain unclaimed by the shareholders of Premier for six (6)
months after the Effective Time shall be paid to First Premier.
Any shareholders of Premier who have not theretofore complied
with this Article 4 shall thereafter look only to First Premier
for payment of their shares of First Premier Common Stock and
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cash in lieu of fractional shares and unpaid dividends and
distributions on the First Premier Common Stock deliverable in
respect of each Premier share of Common Stock such shareholder
holds as determined pursuant to this Agreement, in each case,
without any interest thereon.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PREMIER
Premier hereby represents and warrants to First Premier as follows:
5.1 Organization, Standing, and Power. Premier is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Missouri, and has the
corporate power and authority to carry on its business as now
conducted and to own, lease and operate its material Assets.
Premier is duly qualified or licensed to transact business as a
foreign corporation and is in good standing in each
jurisdiction where the character of the Assets or the nature or
conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to
be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Premier and its Subsidiaries taken as a whole.
5.2 Authority; No Breach by Agreement.
(a) Premier has the corporate power and
authority necessary to execute and deliver this
Agreement and, subject to the approval and adoption
of this Agreement by the shareholders of Premier and
the receipt of the consents sent forth in Section
9.1(b), to perform its obligations under this
Agreement and consummate the transactions
contemplated hereby. The execution, delivery, and
performance of this Agreement by Premier and the
consummation by Premier of the transactions
contemplated herein, including the Merger, have been
duly and validly authorized by all necessary
corporate action in respect thereof on the part of
Premier, subject to the approval of this Agreement by
its shareholders as contemplated by Section 8.1 of
this Agreement. Subject to such requisite shareholder
approval (and assuming due authorization, execution
and delivery by First Premier and Premier) and to
such Consents of Regulatory Authorities as required
by applicable Law, this Agreement represents a legal,
valid, and binding obligation of Premier, enforceable
against Premier in accordance with its terms (except
in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting the enforcement
of creditors' rights generally and except that the
availability of the equitable remedy of specific
performance or injunctive relief is subject to the
discretion of the court before which any proceeding
may be brought). The Premier Board of Directors will
have received from GRA Thompson White & Company, PC,
a letter dated on or about the date of the Proxy
Statement to the effect that, in the opinion of such
firm, the Exchange Ratio is fair, from a financial
point of view, to the holders of Premier Common
Stock.
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(b) Neither the execution and delivery of
this Agreement by Premier, nor the consummation by
Premier of the transactions contemplated hereby, nor
compliance by Premier with any of the provisions
hereof, will (i) conflict with or result in a breach
of any provision of Premier's Articles of
Incorporation or Bylaws, or, (ii) except as disclosed
in Section 5.2(b) of the Disclosure Schedule,
constitute or result in a Default under, or require
any Consent pursuant to, or result in the creation of
any Lien on any Asset of any Premier Company under,
any Contract or Permit of any Premier Company, where
such Default or Lien, or any failure to obtain such
Consent, is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on
Premier and its Subsidiaries taken as a whole, or,
(iii) subject to receipt of the requisite Consents
referred to in Section 9.1(b) of this Agreement,
violate any Law or Order applicable to any Premier
Company or any of their respective material Assets.
(c) Other than in connection or compliance
with the provisions of the Securities Laws,
applicable state corporate and securities Laws, and
other than notices to or Consents required from
Regulatory Authorities, and other than notices to or
filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to
any employee benefit plans, and other than Consents,
filings, or notifications which, if not obtained or
made, are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on
Premier, no notice to, filing with, or Consent of,
any public body or authority is necessary for the
consummation by Premier of the Merger and the other
transactions contemplated in this Agreement.
5.3 Capital Stock.
(a) The authorized capital stock of Premier
consists of 100,000 shares of Premier Common Stock,
of which 41,834 shares are issued and outstanding as
of the date of this Agreement and not more than
42,000 shares will be issued and outstanding at the
Effective Time. All of the issued and outstanding
shares of capital stock of Premier are duly and
validly issued and outstanding and are fully paid and
nonassessable under the GBCL. None of the outstanding
shares of capital stock of Premier has been issued in
violation of any preemptive rights. Premier has no
options or warrants to purchase shares of Premier
Common Stock.
(b) Except as set forth in Section 5.3(a) of
this Agreement, there are no shares of Premier
Capital Stock or other equity securities of Premier
outstanding and no outstanding Rights relating to
Premier Capital Stock.
5.4 Premier Subsidiaries. Premier has disclosed in
Section 5.4 of the Disclosure Schedule all of the Premier
Subsidiaries as of the date of this Agreement. Except as
disclosed in Section 5.4 of the Disclosure Schedule, Premier or
one of its Subsidiaries owns all of the issued and outstanding
shares of capital stock of each Premier Subsidiary. No equity
securities of any Premier Subsidiary are or may become required
to be issued (other than to another Premier Company) by reason
of any Rights, and there are no Contracts by which any Premier
Subsidiary is bound to issue (other than to another Premier
Company) additional
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shares of its capital stock or Rights or by which any Premier
Company is or may be bound to transfer any shares of the
capital stock of any Premier Subsidiary (other than to another
Premier Company). There are no Contracts relating to the rights
of any Premier Company to vote or to dispose of any shares of
the capital stock of any Premier Subsidiary. All of the shares
of capital stock of each Premier Subsidiary held by a Premier
Company are fully paid and nonassessable under the applicable
corporation or banking Law of the jurisdiction in which such
Subsidiary is incorporated or organized and, except as set
forth in Section 5.4 of the Disclosure Schedule, are owned by
the Premier Company free and clear of any Lien. Each Premier
Subsidiary is either a bank or a corporation, and is duly
organized, validly existing, and (as to corporations) in good
standing under the Laws of the jurisdiction in which it is
incorporated or organized, and has the corporate power and
authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each
Premier Subsidiary is duly qualified or licensed to transact
business as a foreign corporation in good standing in each
jurisdiction where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to
be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Premier and its Subsidiaries taken as a whole. Each Premier
Subsidiary that is a depository institution is an "insured
institution" as defined in the Federal Deposit Insurance Act
and applicable regulations thereunder, and the deposits of
which are insured by the Bank Insurance Fund.
5.5 Regulatory Filings; Financial Statements. Premier
has filed and made available to First Premier copies of the
Premier Financial Statements and all reports of any outside
auditors, consultants or advisors to Premier. Each of the
Premier Financial Statements (including, in each case, any
related notes), including any Premier Financial Statements
filed after the date of this Agreement until the Effective
Time, was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may
be indicated in the notes to such financial statements), and
fairly present the consolidated financial position of Premier
and its Subsidiaries at the respective dates and the
consolidated results of its operations and cash flows for the
periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material
in amount and except for the absence of certain footnote
information in the unaudited interim financial statements.
5.6 Notes and Obligations.
(a) Except as set forth in Section 5.6 of
the Disclosure Schedule, or as provided in the loss
reserve described in subparagraph (b) below, without
conducting any independent investigation, to the
Knowledge of Premier no notes receivable or any other
obligations owned by Premier or any Premier Company
or due to any of them, shown on the Premier Financial
Statements or any such notes receivable and
obligations on the date hereof and as of the
Effective Time have not been and will not be genuine,
legal, valid and collectible obligations of the
respective makers thereof and are not and will not be
subject to any offset or counterclaim. Except as set
forth in subparagraph (b) below, all such notes and
obligations are evidenced by written agreements, true
and correct copies of which will be made available to
First Premier for examination prior to the Effective
Time.
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All such notes and obligations were entered into by
either Premier or a Premier Company in the ordinary
course of its business and in compliance with all
applicable laws and regulations, except as to any
non-compliance which has not and will not have a
Material Adverse Effect on Premier.
(b) Premier has established a loss reserve
on the Premier Financial Statements which is adequate
to cover anticipated losses which might result from
such items as the insolvency or default of borrowers
or obligors on such loans or obligations, defects in
the notes or evidences of obligation (including
losses of original notes or instruments), offsets or
counterclaims properly chargeable to such reserve, or
the availability of legal or equitable defenses which
might preclude or limit the ability of Premier to
enforce the note or obligation, and the
representations set forth in subparagraph (a) above
are qualified in their entirety by the aggregate of
such loss reserves.
5.7 Absence of Certain Changes or Events. Since
December 31, 1998, except as disclosed in Section 5.7 of the
Disclosure Schedule, (i) there have been no events, changes, or
occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Premier, and (ii) Premier has not taken any action, or failed
to take any action, prior to the date of this Agreement, which
action or failure, if taken after the date of this Agreement,
would represent or result in a material breach or violation of
any of the covenants and agreements of Premier provided in
Article 7 of this Agreement.
5.8 Tax Matters.
(a) All Tax Returns required to be filed by
or on behalf of any Premier Company have been timely
filed for periods ended on or before December 31,
1997, and all Tax Returns filed are complete and
accurate in all material respects to the Knowledge of
Premier. All Taxes shown on filed Tax Returns have
been paid. There is no audit examination, deficiency,
or refund Litigation with respect to any Taxes that
is reasonably likely to result in a determination
that would have, individually or in the aggregate, a
Material Adverse Effect on Premier and its
Subsidiaries taken as a whole, except as reserved
against in the Premier Financial Statements delivered
prior to the date of this Agreement or as disclosed
in Section 5.8(a) of the Disclosure Schedule. All
Taxes and other Liabilities due with respect to
completed and settled examinations or concluded
Litigation have been paid.
(b) No Premier Company has executed an
extension or waiver of any statute of limitations on
the assessment or collection of any Tax due that is
currently in effect.
(c) Adequate provision for any Taxes due or
to become due for any Premier Company for the period
or periods through and including the date of the
Premier Financial Statements has been made and is
reflected on the Premier Financial Statements.
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(d) Deferred Taxes of each Premier Company
have been adequately provided for in the Premier
Financial Statements.
(e) Each Premier Company is in compliance
with, and its records contain all information and
documents (including properly completed Internal
Revenue Service Forms W-9) necessary to comply with,
all applicable information reporting and Tax
withholding requirements under federal, state, and
local Tax Laws, and such records identify with
specificity all accounts subject to backup
withholding under Section 3406 of the Internal
Revenue Code, except for such instances of
noncompliance and such omissions as are not
reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Premier and
its Subsidiaries taken as a whole.
(f) Except as disclosed in Section 5.8(f) of
the Disclosure Schedule, no Premier Company has made
any payments, is obligated to make any payments, or
is a party to any contract, agreement, or other
arrangement that could obligate any Premier Company
to make any payments that would be disallowed as a
deduction under Section 280G or 162(m) of the
Internal Revenue Code.
(g) There are no Liens with respect to Taxes
upon any of the Assets of any Premier Company.
(h) No Premier Company has filed any consent
under Section 341(f) of the Internal Revenue Code
concerning collapsible corporations.
(i) All material elections with respect to
Taxes affecting any Premier Company as of the date of
this Agreement have been or will be timely made as
set forth in Section 5.8 of the Disclosure Schedule.
After the date hereof, other than as set forth in
Section 5.8(a) of the Disclosure Schedule, no
election with respect to Taxes will be made without
the prior written consent of First Premier, which
consent will not be unreasonably withheld.
5.9 Assets. Except as disclosed in Section 5.9 of the
Disclosure Schedule, each Premier Company has good and
marketable title, free and clear of all Liens, to all of its
respective Assets. All tangible properties used in the
businesses of each Premier Company are in good condition,
reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with Premier's past
practices. All Assets which are material to Premier's business
held under leases or subleases by any Premier Company, are held
under valid Contracts which to the Knowledge of Premier are
enforceable in accordance with their respective terms (except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting
the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and
each such Contract is in full force and effect. Each Premier
Company currently maintains insurance in amounts, scope, and
coverage as disclosed in Section 5.9 of the Disclosure
Schedule. No Premier Company has received written notice from
any insurance carrier that (i) such insurance will be canceled
or that coverage
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thereunder will be reduced or eliminated, or (ii) premium costs
with respect to such policies of insurance will be
substantially increased. Except as disclosed in Section 5.9 of
the Disclosure Schedule, there are presently no claims pending
under such policies of insurance and no notices have been given
by any Premier Company under such policies. The Assets of
Premier include all required assets, leases and Permits
necessary to operate its business as presently conducted.
5.10 Environmental Matters.
(a) To the Knowledge of Premier, each
Premier Company, its Participation Facilities, and
its Loan Properties are, and have been, in compliance
with all Environmental Laws, except for violations
which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on
Premier and its Subsidiaries taken as a whole.
(b) To the Knowledge of Premier, there is no
Litigation pending or threatened before any court,
governmental agency, or authority or other forum in
which any Premier Company or any of its Loan
Properties or Participation Facilities has been or,
with respect to threatened Litigation, may be named
as a defendant or potentially responsible party (i)
for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any
Hazardous Material, whether or not occurring at, on,
under, or involving any of its Loan Properties or
Participation Facilities, except for such Litigation
pending or threatened that is not reasonably likely
to have, individually or in the aggregate, a Material
Adverse Effect on Premier and its Subsidiaries taken
as a whole.
(c) To the Knowledge of Premier, there is no
reasonable basis for any Litigation of a type
described above in subsection (b), except such as is
not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Premier.
(d) To the Knowledge of Premier, except as
disclosed in Section 5.10(d) of the Disclosure
Schedule, during the period of (i) Premier's
ownership or operation of any of their respective
properties, (ii) Premier's participation in the
management of any Participation Facility, or (iii)
Premier's holding a security interest in a Loan
Property, there have been no releases of Hazardous
Material in, on, under, or affecting any
Participation Facility or Loan Property of any
Premier Company, except such as are not reasonably
likely to have, individually or in the aggregate, a
Material Adverse Effect on Premier and its
Subsidiaries taken as a whole.
5.11 Compliance With Laws. Premier is duly registered
as a bank holding company under the BHC Act. Except as set
forth in Section 5.11 of the Disclosure Schedule, each Premier
Company has in effect all Permits necessary for it to own,
lease, or operate its material Assets and to carry on its
business as now conducted, except for those Permits the absence
of which are not reasonably likely to have, individually or in
the aggregate, a
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Material Adverse Effect on Premier and its Subsidiaries taken
as a whole. No Premier Company is presently in default under
any such Permit, other than defaults which are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Premier and its Subsidiaries taken as a
whole. Except as disclosed in Section 5.11 of the Disclosure
Schedule, no Premier Company:
(a) to the Knowledge of Premier, is in
violation of any Laws or Orders, applicable to its
business or employees conducting its business, except
for violations which are not reasonably likely to
have, individually or in the aggregate, a Material
Adverse Effect on Premier and its Subsidiaries taken
as a whole; and
(b) has received any written notification or
communication from any agency or department of
federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any
Premier Company is not in substantial compliance with
any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where
such noncompliance is reasonably likely to have,
individually or in the aggregate, a Material Adverse
Effect on Premier and its Subsidiaries taken as a
whole, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, a
Material Adverse Effect on Premier and its
Subsidiaries taken as a whole, or (iii) requiring any
Premier Company to enter into or consent to the
issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of
understanding, or to adopt any Board resolution or
similar undertaking, which restricts materially the
conduct of its business, or in any manner relates to
its capital adequacy, its credit or reserve policies,
its management, or the payment of dividends.
5.12 Labor Relations. No Premier Company is the
subject of any Litigation asserting that it has committed an
unfair labor practice (within the meaning of the National Labor
Relations Act or comparable state law) or seeking to compel it
or any other Premier Company to bargain with any labor
organization as to wages or conditions of employment, nor is
there any strike or other labor dispute involving any Premier
Company, pending or, to the Knowledge of Premier, threatened,
nor is there any activity involving any employees of any
Premier Company seeking to certify a collective bargaining unit
or engaging in any other organization activity.
5.13 Employee Benefit Plans.
(a) Premier has disclosed in Section 5.13(a)
of the Disclosure Schedule and has delivered or made
available to First Premier prior to the execution of
this Agreement, copies in each case of, all pension,
retirement, profit-sharing, deferred compensation,
stock option, employee stock ownership, severance
pay, vacation, bonus, or other incentive plans, all
other written employee programs, arrangements, or
agreements, all medical, vision, dental, or other
health plans, all life insurance plans, and all other
employee benefit plans or fringe benefit plans,
including "employee benefit plans" (as that term is
defined in Section 3(3) of ERISA), currently adopted,
maintained by, sponsored in whole or in part by, or
contributed to by Premier for the benefit of
employees, retirees, dependents, spouses, directors,
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independent contractors, or other beneficiaries and
under which employees, retirees, dependents, spouses,
directors, independent contractors, or other
beneficiaries are eligible to participate
(collectively, the "Premier Benefit Plans"). Any of
the Premier Benefit Plans which is an "employee
pension benefit plan" (as that term is defined in
Section 3(2) of ERISA), is referred to herein as a
"Premier ERISA Plan." No Premier Benefit Plan is or
has been a multiemployer plan within the meaning of
Section 3(37) of ERISA.
(b) Except as disclosed in Section 5.13(b)
of the Disclosure Schedule, all Premier Benefit Plans
are in compliance with the applicable terms of ERISA,
the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably
likely to have, individually or in the aggregate, a
Material Adverse Effect on Premier, and each Premier
ERISA Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code has
received a favorable determination letter from the
Internal Revenue Service, and Premier is not aware of
any circumstances likely to result in revocation of
any such favorable determination letter. To the
Knowledge of Premier, it has not engaged in a
transaction with respect to any Premier Benefit Plan
that, assuming the taxable period of such transaction
expired as of the date hereof, would subject it to a
Tax imposed by either Section 4975 of the Internal
Revenue Code or Section 502(i) of ERISA in amounts
which are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on
Premier.
(c) Except as disclosed in Section 5.13(c)
of the Disclosure Schedule, no Premier ERISA Plan has
any "unfunded current liability" (as that term is
defined in Section 302(d)(8)(A) of ERISA) and the
fair market value of the assets of any such plan
exceeds the plan's "benefit liabilities," as that
term is defined in Section 4001(a)(16) of ERISA, when
determined under actuarial factors that would apply
if the plan terminated in accordance with all
applicable legal requirements. Except as disclosed in
Section 5.13(c) of the Disclosure Schedule, since the
date of the most recent actuarial valuation, there
has been (i) no material change in the financial
position of any Premier ERISA Plan, (ii) no change in
the actuarial assumptions with respect to any Premier
ERISA Plan, and (iii) no increase in benefits under
any Premier ERISA Plan as a result of plan amendments
or changes in applicable Law which is reasonably
likely to have, individually or in the aggregate, a
Material Adverse Effect on Premier or materially
adversely affect the funding status of any such plan.
Neither any Premier ERISA Plan nor any "single-
employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently or formerly
maintained by Premier, or the single-employer plan of
any entity which is considered one employer with
Premier under Section 4001 of ERISA or Section 414 of
the Internal Revenue Code or Section 302 of ERISA
(whether or not waived) (an "ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning
of Section 412 of the Internal Revenue Code or
Section 302 of ERISA, which is reasonably likely to
have a Material Adverse Effect on Premier. Premier
has not provided, and is not required to provide,
security to an Premier ERISA Plan or to any
single-employer plan of an ERISA Affiliate pursuant
to Section 401(a)(29) of the Internal Revenue Code.
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(d) Within the six-year period preceding the
Effective Time, no Liability under Subtitle C or D of
Title IV of ERISA has been or is expected to be
incurred by Premier with respect to any ongoing,
frozen, or terminated single- employer plan or the
single-employer plan of any ERISA Affiliate, which
Liability is reasonably likely to have a Material
Adverse Effect on Premier. Premier has not incurred
any withdrawal Liability with respect to a
multiemployer plan under Subtitle B of Title IV of
ERISA (regardless of whether based on contributions
of an ERISA Affiliate), which Liability is reasonably
likely to have a Material Adverse Effect on Premier.
No notice of a "reportable event," within the meaning
of Section 4043 of ERISA for which the 30-day
reporting requirement has not been waived, has been
required to be filed for any Premier ERISA Plan or by
any ERISA Affiliate within the 12-month period ending
on the date hereof.
(e) Except as disclosed in Section 5.13(e)
of the Disclosure Schedule, Premier has no Liability
for retiree health and life benefits under any of the
Premier Benefit Plans and there are no restrictions
on the rights of Premier to amend or terminate any
such plan without incurring any Liability thereunder,
which Liability is reasonably likely to have a
Material Adverse Effect on Premier.
(f) Neither the execution and delivery of
this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in
any payment (including severance, unemployment
compensation, golden parachute, or otherwise)
becoming due to any director or any employee of
Premier or any of its Subsidiaries from Premier or
any of its Subsidiaries under any Premier Benefit
Plan or otherwise, (ii) increase any benefits
otherwise payable under any Premier Benefit Plan, or
(iii) result in any acceleration of the time of
payment or vesting of any such benefit, where such
payment, increase, or acceleration is reasonably
likely to have, individually or in the aggregate, a
Material Adverse Effect on Premier.
(g) The actuarial present values of all
accrued deferred compensation entitlements (including
entitlements under any executive compensation,
supplemental retirement, or employment agreement) of
employees and former employees of Premier and their
respective beneficiaries, other than entitlements
accrued pursuant to funded retirement plans subject
to the provisions of Section 412 of the Internal
Revenue Code or Section 302 of ERISA, have been fully
reflected on the Premier Financial Statements to the
extent required by and in accordance with GAAP.
5.14 Material Contracts. Except as disclosed in
Section 5.14(a) of the Disclosure Schedule, neither Premier nor
any of its Subsidiaries is a party to or subject to the
following: (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate
payments to any Person in any calendar year in excess of
$50,000, (ii) any Contract relating to the borrowing of money
by Premier or the guarantee by Premier of any such obligation
exceeding $50,000 (other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully-secured
repurchase agreements, and Federal Home Loan Bank advances of
depository institution Subsidiaries, trade payables, and
Contracts relating
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to borrowings or guarantees made in the ordinary course of
business), and (iii) any other Contract or amendment thereto as
of the date of this Agreement not made in the ordinary course
of business to which Premier is a party or by which it is bound
(together with all Contracts referred to in Sections 5.9 and
5.13(a) of this Agreement, the "Premier Contracts"). With
respect to each Premier Contract and except as disclosed in
Section 5.14(b) of the Disclosure Schedule: (i) the Contract is
in full force and effect; (ii) neither Premier nor any of its
Subsidiaries, as the case may be, is in Default thereunder,
other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Premier and its Subsidiaries taken as a whole; (iii) neither
Premier nor any of its Subsidiaries, as the case may be, has
repudiated or waived any material provision of any such
Contract; and (iv) no other party to any such Contract is, to
the Knowledge of Premier, in Default in any respect, other than
Defaults which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Premier, or
has repudiated or waived any material provision thereunder.
Except for Federal Home Loan Bank advances, all of the
indebtedness of Premier and any of its Subsidiaries for money
borrowed is prepayable at any time by Premier or any of its
Subsidiaries, as the case may be, without penalty or premium.
5.15 Legal Proceedings. Except as disclosed in
Section 5.15(a) of the Disclosure Schedule, there is no
Litigation instituted or pending, or, to the Knowledge of
Premier, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against
Premier, or against any Asset, employee benefit plan, interest,
or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Premier, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators
outstanding against any Premier Company, that are reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Premier and its Subsidiaries taken as a
whole. Section 5.15(b) of the Disclosure Schedule includes a
summary report of all Litigation as of the date of this
Agreement to which any Premier Company is a party and which
names a Premier Company as a defendant or cross-defendant and
where the estimated maximum exposure to be $10,000 or more.
5.16 Reports. For the three years ended December 31,
1998, 1997 and 1996, and since January 1, 1999, or the date of
organization if later, each Premier Company has timely filed
and to the extent permitted by Law has made available for First
Premier to review, all reports and statements, together with
any amendments required to be made with respect thereto, that
it was required to file with any Regulatory Authorities. As of
their respective dates, each of such reports and documents,
including the financial statements, exhibits, and schedules
thereto, complied in all material respects with all applicable
Laws. As of its respective date, each such report and document
did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
5.17 Statements True and Correct. None of the
information supplied or to be supplied by any Premier Company
or any Affiliate thereof for inclusion in the Registration
Statement to be filed by First Premier with the SEC will, when
the Registration Statement
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becomes effective, be false or misleading, with respect to any
material fact, or omit to state any material fact necessary to
make the statements therein not misleading. None of the
information supplied by any Premier Company for inclusion in
the Proxy Statement to be mailed to Premier's shareholders in
connection with the Shareholders' Meeting, and any other
documents to be filed by a Premier Company with any Regulatory
Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed,
and with respect to the Proxy Statement, when first mailed to
the shareholders of Premier, be false or misleading with
respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or,
in the case of the Proxy Statement or any amendment thereof or
supplement thereto, at the time of the Shareholders' Meeting,
be false or misleading with respect to any material fact, or
omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the
solicitation of any proxy for the Shareholders' Meeting. All
documents that Premier is responsible for filing with any
Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.
5.18 Accounting, Tax and Regulatory Matters. To the
Knowledge of Premier, neither Premier nor any Affiliate thereof
has taken or agreed to take any action or has any Knowledge of
any fact or circumstance that is reasonably likely to (i)
prevent the transactions contemplated hereby, including the
Merger, from qualifying as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this
Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of
such Section.
5.19 Anti-Takeover Provisions. Each Premier Company
has taken all action so that the entering into of this
Agreement and the consummation of the Merger and the other
transactions contemplated by this Agreement do not and will not
result in any super-majority voting requirement or the grant of
any rights to any Person under its Articles of Incorporation,
Bylaws, or any other governing instruments.
5.20 Derivatives Contracts. Neither Premier nor any
of its Subsidiaries is a party to nor has it agreed to enter
into an exchange-traded or over-the-counter swap, forward,
future, option, cap, floor, or collar financial contract, or
any other interest rate or foreign currency protection contract
not included on its balance sheet which is a financial
derivative contract (including various combinations thereof)
(each a "Derivatives Contract").
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5.21 Year 2000. All computer software and hardware
necessary for the conduct of business by any Premier Company
(the "Software") is designed to be used before, on, and after
January 1, 2000 and the Software will operate during each such
time period without error relating to the year 2000,
specifically including any error relating to, or the product
of, any date data representing or referring to any particular
date. As used in the preceding sentence, "operate" further
includes, but is not limited to, accepting input of dates
without ambiguity, outputting all dates without ambiguity, and
performing calculations, comparisons, extractions, sorting and
any other processing or taking actions or making decisions
using dates or time periods without suffering any abends,
aborts, invalid or incorrect results or other interruptions,
whether before, on, or after January 1, 2000. Further, every
Premier Company has received all year 2000 examinations and
certifications as required by applicable Law and will, prior to
the Effective Time, make available for First Premier's review
all such examinations and certifications.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF FIRST PREMIER
First Premier hereby represents and warrants to Premier as follows:
6.1 Organization, Standing, and Power. First Premier
is a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Delaware, and has the
corporate power and authority to carry on its business as now
conducted and to own, lease, and operate its material Assets.
First Premier is in good standing in Missouri and such other
states of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed except for
such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First Premier.
6.2 Authority; No Breach By Agreement.
(a) First Premier has the corporate power
and authority necessary to execute, deliver, and
perform its obligations under this Agreement and,
subject to the approval and adoption of this
Agreement by the shareholders of First Premier, to
consummate the transactions contemplated hereby. The
execution, delivery, and performance of this
Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been
duly and validly authorized by all necessary
corporate action in respect thereof on the part of
First Premier, subject to the approval of this
Agreement by its shareholders. Subject to such
requisite shareholder approval (and assuming due
authorization, execution and delivery by First
Premier and Premier) and to such Consents of
Regulatory Authorities as required by applicable Law,
this Agreement represents a legal, valid, and binding
obligation of First Premier, enforceable against
First Premier, in accordance with its terms (except
in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium, or similar Laws affecting the enforcement
of creditors' rights generally and except that the
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availability of the equitable remedy of specific
performance or injunctive relief is subject to the
discretion of the court before which any proceeding
may be brought).
(b) Neither the execution and delivery of
this Agreement by First Premier nor the consummation
by First Premier of the transactions contemplated
hereby, nor compliance by First Premier with any of
the provisions hereof, will (i) conflict with or
result in a breach of any provision of the
Certificate of Incorporation or Bylaws of First
Premier or (ii) constitute or result in a Default
under, or require any Consent pursuant to, or result
in the creation of any Lien on any Asset of First
Premier under any Contract or Permit of First
Premier, where such Default or Lien, or any failure
to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse
Effect on First Premier, or, (iii) subject to receipt
of the requisite Consents referred to in Section
9.1(b) of this Agreement, violate any Law or Order
applicable to First Premier or any of its respective
material Assets.
(c) Other than in connection or compliance
with the provisions of the Securities Laws,
applicable state corporate and securities Laws, and
rules of NASDAQ, and other than Consents required
from Regulatory Authorities, and other than notices
to or filings with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation with respect
to any employee benefit plans, and other than
Consents, filings, or notifications which, if not
obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse
Effect on First Premier, no notice to, filing with,
or Consent of, any public body or authority is
necessary for the consummation by First Premier of
the Merger and the other transactions contemplated in
this Agreement.
6.3 Capital Stock. The authorized capital stock of
First Premier consists of 21,000,000 shares of First Premier
Common Stock, of which 300,000 shares were issued and
outstanding as of the date of this Agreement and (ii) 1,000,000
shares of First Premier Preferred Stock, of which 99,900 shares
were issued and outstanding as of the date of this Agreement.
All of the issued and outstanding shares of First Premier
Capital Stock are authorized and validly issued, and all of the
First Premier Common Stock to be issued in exchange for Premier
Common Stock upon consummation of the Merger, will be
authorized and reserved for issuance prior to the Effective
Time and, when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and
fully paid and nonassessable under the DGCL. First Premier has
reserved 500,000 shares of First Premier Common Stock for
issuance under the First Premier Stock Plans, pursuant to which
options to purchase not more than 329,475 shares of First
Premier Common Stock are outstanding. Warrants to purchase not
more than 215,798 shares of First Premier Common Stock are
outstanding. None of the shares of First Premier Common Stock
to be issued under First Premier Stock Plan or to be issued
pursuant to warrants to purchase shares of First Premier Common
Stock are subject to preemptive rights of any current or past
shareholders of First Premier. None of the outstanding shares
of First Premier Capital Stock has been, and none of the shares
of First Premier Common Stock to be issued in exchange for
shares of Premier Common Stock upon consummation of the Merger
will be, issued in violation of any
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preemptive rights of the current or past shareholders of First
Premier. First Premier will issue no additional Common Stock
or Preferred Stock until the Effective Time.
6.4 First Premier Subsidiaries. First Premier has no
active or inactive Subsidiaries as of the date of this
Agreement; provided, however, that pursuant to the Merger and
after the Effective Time, First Premier shall own those
Subsidiaries disclosed in Section 5.4 of the Disclosure
Schedule.
6.5 Financial Statements. First Premier has delivered
to Premier prior to the execution of this Agreement copies of
the First Premier Financial Statements as of December 31, 1998.
First Premier shall provide Premier with its unaudited
Financial Statements for the stub period ending March 31, 1999
[VERIFY], as soon as practicable after the same become
available. The First Premier Financial Statements (as of the
dates thereof): (i) are, or will be, in accordance with the
books and records of First Premier, which are complete and
accurate in all material respects and which have been
maintained in accordance with good business practices, and (ii)
present fairly the financial position of First Premier as of
December 31, 1998 in accordance with GAAP.
6.6 Absence of Certain Changes or Events. Since
January 1, 1998, except as disclosed in the First Premier
Financial Statements delivered prior to the date of this
Agreement, (i) there have been no events, changes or
occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
First Premier, and (ii) First Premier has not taken any action,
or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of
this Agreement, would represent or result in a material breach
or violation of any of the covenants and agreements of First
Premier provided in Articles 7 or 8 of this Agreement.
6.7 Tax Matters.
(a) As of the date of this Agreement, no
federal, state, local and foreign Tax Returns have
been required to be filed by or on behalf of First
Premier. There is no audit examination, deficiency,
or refund Litigation with respect to any Taxes that
is reasonably likely to result in a determination
that would have, individually or in the aggregate, a
Material Adverse Effect on First Premier, except as
reserved against in the First Premier Financial
Statements delivered prior to the date of this
Agreement. All Taxes and other liabilities due with
respect to completed and settled examinations or
concluded Litigation have been paid.
(b) Adequate provision for any Taxes due or
to become due for First Premier for the period or
periods through and including the date of the
respective First Premier Financial Statements has
been made and is reflected on such First Premier
Financial Statements.
(c) Deferred Taxes of First Premier have
been adequately provided for in the First Premier
Financial Statements.
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(d) To the Knowledge of First Premier, First
Premier is in compliance with, and its records
contain all information and documents (including
properly completed Internal Revenue Service Forms
W-9) necessary to comply with, all applicable
information reporting and Tax withholding
requirements under federal, state, and local Tax
Laws, and such records identify with specificity all
accounts subject to backup withholding under Section
3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are
not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First
Premier.
6.8 Compliance With Laws. Prior to the consummation
of the transactions contemplated by this Agreement, First
Premier will become duly registered as a bank holding company
under the BHC Act. First Premier has in effect all Permits
necessary for it to own, lease, or operate its material Assets
and to carry on its business as now conducted, except for those
Permits the absence of which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
First Premier. First Premier is not presently in Default under
or in violation of any such Permit, other than Defaults which
are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Premier. First
Premier:
(a) is not in violation of any Laws, Orders,
or Permits applicable to its business or employees
conducting its business, except for violations which
are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First
Premier; and
(b) has not received any notification or
communication from any agency or department of
federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that
First Premier is not in compliance with any of the
Laws or Orders which such governmental authority or
Regulatory Authority enforces, where such
noncompliance is reasonably likely to have,
individually or in the aggregate, a Material Adverse
Effect on First Premier, (ii) threatening to revoke
any Permits, the revocation of which is reasonably
likely to have, individually or in the aggregate, a
Material Adverse Effect on First Premier, or (iii)
requiring First Premier to enter into or consent to
the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of
understanding, or to adopt any board resolution or
similar undertaking, which restricts materially the
conduct of its business, or in any manner relates to
its capital adequacy, its credit or reserve policies,
its management or the payment of dividends.
6.9 Assets. Except as disclosed in Section 6.9(a) of
the Disclosure Schedule, First Premier has good and marketable
title, free and clear of all Liens (except for those Liens
which are not likely to have a Material Adverse Effect on First
Premier), to all of its respective material Assets, reflected
in First Premier Financial Statements as being owned by First
Premier as of the date hereof. All material tangible properties
used in the business of First Premier are in good condition,
reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with First Premier's
past practices. All Assets
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which are material to First Premier's business on a
consolidated basis, held under leases or subleases by First
Premier, are held under valid Contracts enforceable in
accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting
the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and
each such Contract is in full force and effect. First Premier
currently maintains insurance in amounts, scope, and coverage
as disclosed in Section 6.9(b) of the Disclosure Schedule.
First Premier has not received written notice from any
insurance carrier that (i) such insurance will be canceled or
that coverage thereunder will be reduced or eliminated, or (ii)
premium costs with respect to such policies of insurance will
be substantially increased. Except as disclosed in Section
6.9(c) of the Disclosure Schedule, to the Knowledge of First
Premier there are presently no occurrences giving rise to a
claim under such policies of insurance and no notices have been
given by First Premier under such policies.
6.10 Legal Proceedings. There is no Litigation
instituted or pending, or, to the Knowledge of First Premier,
threatened (or unasserted but considered probable of assertion
and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against First Premier,
or against any Asset, interest, or right of any of them, that
is reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on First Premier, nor are there any
Orders of any Regulatory Authorities, other governmental
authorities, or arbitrators outstanding against First Premier,
that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Premier.
6.11 Reports. Since its incorporation, First Premier
has filed all reports and statements, together with any
amendments required to be made with respect thereto, that it
was required to file with Regulatory Authorities (except, in
the case of state securities authorities, failures to file
which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Premier). As of
their respective dates, each of such reports and documents,
including the financial statements, exhibits, and schedules
thereto, complied in all material respects with all applicable
Laws. As of its respective date, each such report and document
did not, in all material respects, contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were
made, not misleading.
6.12 Statements True and Correct. None of the
information supplied or to be supplied by First Premier for
inclusion in the Registration Statement to be filed by First
Premier with the SEC, will, when the Registration Statement
becomes effective, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to
make the statements therein not misleading. None of the
information supplied or to be supplied by First Premier for
inclusion in the Proxy Statement to be mailed to Premier's
shareholders in connection with the Shareholders' Meeting, and
any other documents to be filed by First Premier or with the
SEC or any other Regulatory Authority in connection with the
transactions contemplated hereby, will, at the respective time
such documents are filed, and with respect to the Proxy
Statement, when first mailed to the shareholders of Premier,
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be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, or, in the case of the Proxy
Statement or any amendment thereof or supplement thereto, at
the time of the Shareholders' Meeting, be false or misleading
with respect to any material fact, or omit to state any
material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for
the Shareholders' Meeting. All documents that First Premier is
responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will
comply as to form in all material respects with the provisions
of applicable Law.
6.13 Accounting, Tax and Regulatory Matters. To the
Knowledge of First Premier neither First Premier nor any
affiliate has taken or agreed to take any action or has any
Knowledge of any fact or circumstance that is reasonably likely
to (i) prevent the transactions contemplated hereby, including
the Merger, from qualifying as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this
Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of
such Section.
6.14 Environmental Matters.
(a) To the Knowledge of First Premier,
except as disclosed in Section 6.14(a) of the
Disclosure Schedule, First Premier, its Participation
Facilities, and its Loan Properties are, and have
been, in compliance with all Environmental Laws,
except for violations which are not reasonably likely
to have, individually or in the aggregate, a Material
Adverse Effect on First Premier.
(b) Except as disclosed in Section 6.14(b)
of the Disclosure Schedule, there is no Litigation
pending, or, to the Knowledge of First Premier,
threatened before any court, governmental agency, or
authority or other forum in which First Premier or
any of its Loan Properties or Participation
Facilities has been or, with respect to threatened
Litigation, may be named as a defendant or
potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release
into the environment of any Hazardous Material,
whether or not occurring at, on, under, or involving
any of its Loan Properties or Participation
Facilities, except for such Litigation pending or
threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse
Effect on First Premier.
(c) To the Knowledge of First Premier,
except as disclosed in Section 6.14(c) of the
Disclosure Schedule, there is no reasonable basis for
any Litigation of a type described above in Section
6.14(b), except such as is not reasonably likely to
have, individually or in the aggregate, a Material
Adverse Effect on First Premier.
(d) To the Knowledge of First Premier,
except as disclosed in Section 6.14(d) of the
Disclosure Schedule, during the period of (i) First
Premier's
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ownership or operation of any of their respective
properties, (ii) First Premier's participation in the
management of any Participation Facility, or (iii)
First Premier's holding a security interest in a Loan
Property, to the Knowledge of First Premier there
have been no releases of Hazardous Material in, on,
under, or affecting any Participation Facility or
Loan Property of First Premier, except such as are
not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First
Premier.
6.15 Derivatives Contracts. First Premier is not a
party to or has agreed to enter into any Derivatives
Contracts.
6.16 Outstanding Premier Common Stock. As of the date
of this Agreement, First Premier does not beneficially own any
shares of Premier Capital Stock. During the term of this
Agreement, First Premier shall not purchase or otherwise
acquire beneficial ownership of any Premier Common Stock except
pursuant to the terms of this Agreement.
6.17 Material Contracts. Except as disclosed in
Section 6.17 of the Disclosure Schedule, neither First Premier
is not a party to or subject to the following: (i) any
employment, severance, termination, consulting, or retirement
Contract providing for aggregate payments to any Person in any
calendar year in excess of $50,000, (ii) any Contract relating
to the borrowing of money by First Premier or the guarantee by
First Premier of any such obligation exceeding $50,000 (other
than Contracts evidencing deposit liabilities, purchases of
federal funds, fully-secured repurchase agreements, and Federal
Home Loan Bank advances of depository institution Subsidiaries,
trade payables, and Contracts relating to borrowings or
guarantees made in the ordinary course of business), and (iii)
any other Contract or amendment thereto as of the date of this
Agreement not made in the ordinary course of business to which
First Premier is a party or by which it is bound (together with
all Contracts referred to in Sections 6.9 and 6.18 of this
Agreement, the "First Premier Contracts"). With respect to each
First Premier Contract and except as disclosed in Section 6.17
of the Disclosure Schedule: (i) the Contract is in full force
and effect; (ii) First Premier is not in Default thereunder,
other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
First Premier; (iii) First Premier has not repudiated or waived
any material provision of any such Contract; and (iv) no other
party to any such Contract is, to the Knowledge of First
Premier, in Default in any respect, other than Defaults which
are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Premier, or has
repudiated or waived any material provision thereunder. Except
for Federal Home Loan Bank advances, all of the indebtedness of
First Premier for money borrowed is prepayable at any time by
First Premier, without penalty or premium.
6.18 Employee Benefit Plans.
(a) First Premier has disclosed in Section
6.18(a) of the Disclosure Schedule and has delivered
or made available to Premier prior to the execution
of this Agreement, copies in each case of, all
pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive
plans, all other written employee programs,
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arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance
plans, and all other employee benefit plans or fringe
benefit plans, including "employee benefit plans" (as
that term is defined in Section 3(3) of ERISA),
currently adopted, maintained by, sponsored in whole
or in part by, or contributed to by First Premier for
the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other
beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to
participate (collectively, the "First Premier Benefit
Plans"). Any of the First Premier Benefit Plans which
is an "employee pension benefit plan" (as that term
is defined in Section 3(2) of ERISA), is referred to
herein as a "First Premier ERISA Plan." No First
Premier Benefit Plan is or has been a multiemployer
plan within the meaning of Section 3(37) of ERISA.
(b) Except as disclosed in Section 6.18(b)
of the Disclosure Schedule, all First Premier Benefit
Plans are in compliance with the applicable terms of
ERISA, the Internal Revenue Code, and any other
applicable Laws the breach or violation of which are
reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First
Premier, and each First Premier ERISA Plan which is
intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable
determination letter from the Internal Revenue
Service, and First Premier is not aware of any
circumstances likely to result in revocation of any
such favorable determination letter. To the Knowledge
of First Premier, it has not engaged in a transaction
with respect to any First Premier Benefit Plan that,
assuming the taxable period of such transaction
expired as of the date hereof, would subject it to a
Tax imposed by either Section 4975 of the Internal
Revenue Code or Section 502(i) of ERISA in amounts
which are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on First
Premier.
(c) Except as disclosed in Section 6.18(c)
of the Disclosure Schedule, no First Premier ERISA
Plan has any "unfunded current liability" (as that
term is defined in Section 302(d)(8)(A) of ERISA) and
the fair market value of the assets of any such plan
exceeds the plan's "benefit liabilities," as that
term is defined in Section 4001(a)(16) of ERISA, when
determined under actuarial factors that would apply
if the plan terminated in accordance with all
applicable legal requirements. Except as disclosed in
Section 6.18(c) of the Disclosure Schedule, since the
date of the most recent actuarial valuation, there
has been (i) no material change in the financial
position of any First Premier ERISA Plan, (ii) no
change in the actuarial assumptions with respect to
any First Premier ERISA Plan, and (iii) no increase
in benefits under any First Premier ERISA Plan as a
result of plan amendments or changes in applicable
Law which is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on
First Premier or materially adversely affect the
funding status of any such plan. Neither any First
Premier ERISA Plan nor any "single-employer plan,"
within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by First Premier, or
the single-employer plan of any entity which is
considered one employer with First Premier under
Section 4001 of ERISA or Section 414 of the Internal
Revenue Code or Section 302 of ERISA (whether or not
waived) (an "ERISA Affiliate") has an "accumulated
funding
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deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA, which
is reasonably likely to have a Material Adverse
Effect on First Premier. First Premier has not
provided, and is not required to provide, security to
an First Premier ERISA Plan or to any single-employer
plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Internal Revenue Code.
(d) Within the six-year period preceding the
Effective Time, no Liability under Subtitle C or D of
Title IV of ERISA has been or is expected to be
incurred by First Premier with respect to any
ongoing, frozen, or terminated single- employer plan
or the single-employer plan of any ERISA Affiliate,
which Liability is reasonably likely to have a
Material Adverse Effect on First Premier. First
Premier has not incurred any withdrawal Liability
with respect to a multiemployer plan under Subtitle B
of Title IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate), which Liability
is reasonably likely to have a Material Adverse
Effect on First Premier. No notice of a "reportable
event," within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not
been waived, has been required to be filed for any
First Premier ERISA Plan or by any ERISA Affiliate
within the 12-month period ending on the date hereof.
(e) Except as disclosed in Section 6.18(e)
of the Disclosure Schedule, First Premier has no
Liability for retiree health and life benefits under
any of the First Premier Benefit Plans and there are
no restrictions on the rights of First Premier to
amend or terminate any such plan without incurring
any Liability thereunder, which Liability is
reasonably likely to have a Material Adverse Effect
on First Premier.
(f) Neither the execution and delivery of
this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in
any payment (including severance, unemployment
compensation, golden parachute, or otherwise)
becoming due to any director or any employee of First
Premier, (ii) increase any benefits otherwise payable
under any First Premier Benefit Plan, or (iii) result
in any acceleration of the time of payment or vesting
of any such benefit, where such payment, increase, or
acceleration is reasonably likely to have,
individually or in the aggregate, a Material Adverse
Effect on First Premier.
(g) The actuarial present values of all
accrued deferred compensation entitlements (including
entitlements under any executive compensation,
supplemental retirement, or employment agreement) of
employees and former employees of First Premier and
their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement
plans subject to the provisions of Section 412 of the
Internal Revenue Code or Section 302 of ERISA, have
been fully reflected on the First Premier Financial
Statements to the extent required by and in
accordance with GAAP.
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6.19 Year 2000. All computer software and hardware
necessary for the conduct of business by First Premier (the
"Software") is designed to be used before, on, and after
January 1, 2000 and the Software will operate during each such
time period without error relating to the year 2000,
specifically including any error relating to, or the product
of, any date data representing or referring to any particular
date. As used in the preceding sentence, "operate" further
includes, but is not limited to, accepting input of dates
without ambiguity, outputting all dates without ambiguity, and
performing calculations, comparisons, extractions, sorting and
any other processing or taking actions or making decisions
using dates or time periods without suffering any abends,
aborts, invalid or incorrect results or other interruptions,
whether before, on, or after January 1, 2000. Further, First
Premier has received all year 2000 examinations and
certifications as required by applicable Law and will, prior to
the Effective Time, make available for First Premier's review
all such examinations and certifications.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of Premier. Unless the
prior written consent of First Premier shall have been obtained
which consent shall not be unreasonably withheld, and except as
otherwise expressly contemplated herein, Premier shall and
shall cause each of its Subsidiaries: (i) operate its business
only in the usual, regular, and ordinary course, (ii) use its
reasonable best efforts to preserve intact its business
organization and Assets and maintain its rights and franchises,
(iii) use its reasonable best efforts to maintain its current
employee relationships, and (iv) take no action which would
materially adversely affect the ability of any Party to obtain
any Consents required for the transactions contemplated hereby
without imposition of a condition or restriction of the type
referred to in the last sentence of Section 9.1(b) of this
Agreement, or materially adversely affect the ability of any
Party to perform its covenants and agreements under this
Agreement.
7.2 Negative Covenants of Premier. From the date of
this Agreement until the earlier of the Effective Time or the
termination of this Agreement, Premier covenants and agrees
that it will not do or agree or commit to do, any of the
following without the prior written consent of the chief
executive officer of First Premier:
(a) amend the Articles of Incorporation,
Bylaws, or other governing instruments of any Premier
Company, except as expressly contemplated by this
Agreement; or
(b) incur any additional debt obligation or
other obligation for borrowed money in excess of an
aggregate of $50,000 (for every Premier Company on a
consolidated basis) except in the ordinary course of
the business of Premier Subsidiaries consistent with
past practices (it being understood and agreed that
the incurrence of indebtedness in the ordinary course
of business shall include, without limitation,
creation of deposit liabilities, purchases of federal
funds, advances from the Federal Reserve Bank or
Federal Home Loan Bank, and entry into repurchase
agreements fully secured by U.S. government or agency
securities), or impose, or
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suffer the imposition, on any Asset of any Premier
Company of any Lien or permit any such Lien to exist
which Lien or Liens individually or in the aggregate
secure an obligation not in excess of $50,000 (other
than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and
loan" accounts established in the ordinary course of
business, the satisfaction of legal requirements in
the exercise of trust powers, and Liens in effect as
of the date hereof that are disclosed in the
Disclosure Schedule) provided, however, that nothing
in this paragraph shall prohibit Premier or any
Premier Subsidiary from honoring any contractual
obligation in existence on the date of this
Agreement; or
(c) repurchase, redeem, or otherwise acquire
or exchange (other than exchanges in the ordinary
course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible
into any shares, of the capital stock of any Premier
Company, or declare or pay any dividend or make any
other distribution in respect of Premier's capital
stock; or
(d) except for this Agreement, or pursuant
to the exercise of stock options outstanding as of
the date hereof and pursuant to the terms thereof in
existence on the date hereof, or as disclosed in
Section 7.2(d) of the Disclosure Schedule, issue,
sell, pledge, encumber, authorize the issuance of,
enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional shares
of Premier Common Stock, or any stock appreciation
rights, or any option, warrant, conversion, or other
right to acquire any such stock, or any security
convertible into any such stock; or
(e) adjust, split, combine, reclassify or
declare and pay any dividend or other distribution on
any capital stock of any Premier Company or issue or
authorize the issuance of any other securities in
respect of or in substitution for shares of Premier
Common Stock, or sell, lease, mortgage, or otherwise
dispose of or otherwise encumber (x) any shares of
capital stock of any Premier Subsidiary, or (y) any
Asset other than in the ordinary course of business
for reasonable and adequate consideration; or
(f) except for purchases of United States
Treasury securities or United States Government
agency securities, which in either case have
maturities of five years or less, purchase any
securities or make any material investment, either by
purchase of stock or securities, contributions to
capital, Asset transfers, or purchase of any Assets,
in any Person other than a wholly owned Premier
Subsidiary, or otherwise acquire direct or indirect
control over any Person, other than in connection
with (i) foreclosures in the ordinary course of
business, (ii) acquisitions of control by a
depository institution Subsidiary, in its fiduciary
capacity, or (iii) the creation of new wholly owned
Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or
benefits to the officers or directors of any Premier
Company (provided, however, that Premier may increase
the compensation of non-officer employees by not more
than 5% of such
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employees' annual compensation if such increase is
consistent with past practice); pay any severance or
termination pay or any bonus other than pursuant to
written policies or written Contracts in effect on
the date of this Agreement and as disclosed in
Section 7.2(g) of the Disclosure Schedule; enter into
or amend any severance agreements with officers of
any Premier Company; or voluntarily accelerate the
vesting of any stock options or other stock-based
compensation or employee benefits; or
(h) enter into or amend any employment
Contract between any Premier Company and any Person
(unless such amendment is required by Law) which
provides that such Premier Company does not have the
unconditional right to terminate without Liability
(other than Liability for services already rendered),
at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of
any Premier Company or make any material change in or
to any existing employee benefit plans of any Premier
Company other than any such change that is required
by Law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified
status of any plan; or
(j) make any significant change in any Tax
or accounting methods or systems of internal
accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory
accounting requirements or GAAP; or
(k) commence any Litigation other than in
accordance with past practice or in the ordinary
course of business or settle any Litigation involving
any Liability of Premier Company which may have a
Material Adverse Effect on Premier or result in the
imposition of restrictions upon the operations of any
Premier Company which may have a Material Adverse
Effect on Premier without first consulting with First
Premier; or
(l) except in the ordinary course of
business, modify, amend, or terminate any material
Contract other than renewals without material adverse
change of terms, or waive, release, compromise, or
assign any material rights or claims; or
(m) make any investment in excess of $50,000
either by purchase of stock or securities,
contributions to capital, property transfers, or
purchase of any property or assets of any other
individual, corporation or other entity other than a
wholly owned Subsidiary thereof; or
(n) sell, transfer, mortgage, encumber or
otherwise dispose of any of its material properties
or assets to any individual, corporation or other
entity other than a direct or indirect wholly owned
Subsidiary, or cancel, release or assign any
indebtedness to any such Person or any claims held by
any such Person, except in the ordinary course of
business consistent with past practice or pursuant to
contracts or agreements in force at the date of this
Agreement.
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7.3 Covenants of First Premier. From the date of this
Agreement until the earlier of the Effective Time or the
termination of this Agreement, First Premier covenants and
agrees that it shall (i) continue to conduct its business and
the business of its Subsidiaries in a manner designed in its
reasonable judgment, to enhance the long-term value of the
First Premier Common Stock and the business prospects of First
Premier, and (ii) take no action which would (a) materially
adversely affect the ability of any Party to obtain any
Consents required for the transactions contemplated hereby
without imposition of a condition or restriction of the type
referred to in the last sentence of Section 9.1(b) of this
Agreement, or (b) materially adversely affect the ability of
any Party to perform its covenants and agreements under this
Agreement; provided, that the foregoing shall not prevent First
Premier from discontinuing or disposing of any of its Assets or
business if such action is, in the judgment of First Premier,
desirable in the conduct of the business of First Premier.
First Premier further covenants and agrees that it will not,
without the prior written consent of the Chairman and Chief
Executive Officer of Premier, which consent shall not be
unreasonably withheld, amend the Certificate of Incorporation
or Bylaws of First Premier, in each case in any manner adverse
to the holders of Premier Common Stock, issue additional Common
Stock of First Premier, or warrants or options to purchase
Common Stock of First Premier; or make an Acquisition Proposal
to any individual or entity.
7.4 Adverse Changes In Condition. Each Party agrees
to give written notice promptly to the other Party upon
becoming aware of the occurrence or impending occurrence of any
event or circumstance relating to it which (i) is reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable best
efforts to prevent or promptly to remedy the same.
7.5 Reports. Each Party and their respective
Subsidiaries shall file all reports required to be filed by
each of them with Regulatory Authorities between the date of
this Agreement and the Effective Time and shall deliver to each
other copies of all such reports promptly after the same are
filed. If financial statements are contained in any such
reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the
entity filing such statements as of the dates indicated and the
consolidated results of operations, changes in shareholders'
equity, and cash flows for the periods then ended in accordance
with GAAP (subject in the case of First Premier financial
statements to normal recurring year-end adjustments that are
not material and except for the absence of certain footnote
information in the unaudited financial statements). As of their
respective dates, such reports filed with the SEC will comply
in all material respects with the Securities Laws and will not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Any financial statements contained in any other reports to
another Regulatory Authority shall be prepared in accordance
with Laws applicable to such reports.
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ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement;
Shareholder Approval. As soon as practicable after execution of
this Agreement (in no event later than May 31, 1999), First
Premier shall file the Registration Statement related to First
Premier's proposed Initial Public Offering ("IPO") and First
Premier and Premier shall file the Registration Proxy Statement
in connection with the Merger with the SEC, and shall use their
reasonable best efforts to cause the Registration Statement and
the Registration Proxy Statement to become effective under the
1933 Act and take any action required to be taken under the
applicable state blue sky or securities Laws in connection with
the issuance of the shares of First Premier Common Stock upon
consummation of the Merger. Premier shall furnish all
information concerning it and the holders of its capital stock
as First Premier may reasonably request in connection with such
action. Premier shall call a Shareholders' Meeting, to be held
on a date that is determined by the Parties to be a mutually
desirable date, which date shall be as soon as practicable
after the Registration Statement is declared effective by the
SEC, for the purpose of voting upon approval of this Agreement
and such other related matters as it deems appropriate. In
connection with the Shareholders' Meeting, (i) Premier shall
prepare a Proxy Statement relating to the Merger and mail such
Proxy Statement to its shareholders, (ii) the Parties shall
furnish to each other all information concerning them that they
may reasonably request in connection with the preparation of
such Proxy Statement, (iii) the Board of Directors of Premier
shall recommend (subject to compliance with their fiduciary
duties under applicable law as advised by counsel) to its
shareholders the approval of this Agreement, and (iv) the Board
of Directors and officers of Premier shall (subject to
compliance with their fiduciary duties under applicable law as
advised by counsel) use their reasonable best efforts to obtain
such shareholders' approval.
8.2 Share Purchases by and Option Grants to Premier
Shareholders. To induce Premier to enter into this Agreement,
Premier Shareholders shall be entitled to the following: (i) In
addition to any shares received in the Merger, Premier
shareholders shall not be limited in the number of shares which
they may purchase in First Premier's IPO at the initial public
offering price, subject to any required regulatory approvals
for purchases that result in a Premier shareholder owning more
than ten percent (10%) of the total outstanding shares of First
Premier; (ii) Upon completion of the IPO, First Premier will
grant to each Premier shareholder (other than Bruce W. Wiley)
(collectively, the "Premier Shareholders") a warrant to
purchase shares of First Premier at the initial public offering
price for a period of ten (10) years from the date of such
grant. These warrants will be granted on the same terms and
conditions as the warrants referenced in Section 6.3 of this
Agreement. The aggregate number of shares subject to these
warrants shall not exceed 40,000. In addition, the number of
shares granted under each Premier Shareholder's warrant will be
determined on a pro rata basis, whereby each Premier
Shareholder will receive a warrant to purchase one share of
First Premier for each share of Premier owned by such
shareholder prior to the Merger; and (iii) for a period of
forty-eight (48) months after the closing of the IPO, if any
additional options are granted to any Premier Shareholder who
serves as a First Premier advisory director or to any other
non-employee Premier Shareholder; then warrants will be granted
to each Premier Shareholder on a pro rata basis,
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whereby each Premier Shareholder will receive a warrant to
purchase additional shares in the same proportion as the amount
of option shares granted to each advisory director or
non-employee Premier Shareholder relative to the amount of
shares owned by such advisory director or non-employee
shareholder at the Effective Time of the Merger. For example,
if an advisory director or any non-employee Premier Shareholder
owned 3,000 shares of Premier at the Effective Time of the
Merger and is thereafter granted options to purchase 1,000
shares, then each Premier Shareholder will a warrant for
one-third (i.e., 1,000 / 3,000) of the amount of shares owned
by such shareholder at the Effective Time of the Merger.
Therefore, pursuant to the example above, a Premier Shareholder
who owns 1,000 shares of Premier would receive warrants to
purchase 333 shares of First Premier.
8.3 Restrictions on Transfer of Shares Held by
Premier Directors, Officers and Shareholders.
(a) Premier and its directors will agree
that, for a period of 180 days after the effective
date of the Company's Registration Statement on Form
S-1 related to the proposed IPO, they shall not
directly or indirectly sell, offer to sell, contract
to sell, solicit an offer to buy, grant any option,
right or warrant for the purchase or sale of, assign,
pledge, distribute or otherwise transfer, dispose of,
encumber, (or make any announcement with respect to
any of the foregoing), any shares of common stock
received pursuant to Section 3.1 of this Agreement,
which such director or officer currently owns, has
the right to dispose of or hereafter acquire, either
of record or beneficially, nor will any director or
officer request the registration of the offer or sale
of any of the foregoing.
(b) Premier Shareholders, except for any
shareholder who serves as a director (whose First
Premier shares will be restricted as described in
Section 8.3(a) above) shall not directly or
indirectly sell, offer to sell, contract to sell,
solicit an offer to buy, grant any option, right or
warrant for the purchase or sale of, assign, pledge,
distribute or otherwise transfer, dispose of,
encumber, (or make any announcement with respect to
any of the foregoing), any shares of common stock
received pursuant to Section 3.1 of this Agreement,
which such shareholder owns, has the right to dispose
of or hereafter acquire, either of record or
beneficially, except as permitted in the schedule set
forth below:
<TABLE>
<CAPTION>
Aggregate Percentage of Shares Issued
to Such Person Pursuant to Section 3.1
TIME TABLE Permitted for Sale by Such Person
- ---------- ---------------------------------
<S> <C>
From the date of pricing of the IPO
through the date of closing of the IPO No sales are permitted
From 1 to 30 days after closing 10%
From 31 to 60 after closing 20%
From 61 to 90 days after closing 40%
</TABLE>
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From 91 to 120 days after closing 60%
From 121 days after closing and after 100%
8.4 Agreement as to Efforts to Consummate. Subject to
the terms and conditions of this Agreement, each Party agrees
to use, and to cause its Subsidiaries to use, its reasonable
best efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make
effective, as soon as practicable after the date of this
Agreement, the transactions contemplated by this Agreement,
including the use of their respective reasonable best efforts
to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to
cause to be satisfied the conditions referred to in Article 9
of this Agreement; provided, that nothing herein shall
preclude either Party from exercising its rights under this
Agreement. Each Party shall use, and shall cause each of its
Subsidiaries to use, its reasonable best efforts to obtain all
Permits and Consents necessary or desirable for the
consummation of the transactions contemplated by this
Agreement.
8.5 Applications. First Premier shall promptly
prepare and file, and Premier shall cooperate in the
preparation and, where appropriate, filing of, applications
with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the
requisite Consents necessary to consummate the transactions
contemplated by this Agreement and thereafter use its
reasonable best efforts to cause the Merger to be consummated
as expeditiously as possible.
8.6 Access to Information; Confidentiality. From the
date hereof to the Effective Time or termination pursuant to
Article 10 of this Agreement, upon reasonable notice and
subject to applicable Laws, First Premier and Premier shall
afford each other, and each other's accountants, counsel, and
other representatives, during normal working hours for the
period of time prior to the Effective Time, reasonable access
to all of its and its Subsidiaries' properties, books,
contracts, commitments, and records and, during such period,
each shall furnish promptly to the other party (i) a copy of
each report, schedule, and other document filed or received by
it or any of its Subsidiaries during such period pursuant to
the requirements of the Securities Laws, (ii) a copy of all
filings made with any Regulatory Authorities or other
governmental entities in connection with the transactions
contemplated by this Agreement and all written communications
received from such Regulatory Authorities and governmental
entities related thereto, and (iii) all other information
concerning its or its Subsidiaries' business, properties and
personnel as such other party may reasonably request,
including reports of condition filed with Regulatory
Authorities. In this regard, without limiting the generality
of the foregoing, each of the parties hereto shall notify the
other parties hereto promptly upon the receipt by it of any
comments from the SEC, or its staff, and of any requests by
the SEC for amendments or supplements to the Registration
Statement or the Proxy Statement or for additional information
and will supply the other parties hereto with copies of all
correspondence between it and its representatives, on the one
hand, and the SEC or the members of its staff or any other
government official, on the other hand, with respect to the
Registration Statement or the Proxy Statement. Each party
hereto shall, and shall cause its advisors and representatives
to (x) conduct its investigation in such a manner which will
not
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unreasonably interfere with the normal operations, customers
or employee relations of the other and shall be in accordance
with procedures established by the parties having the due
regard for the foregoing, and (y) refrain from using for any
purposes other than as set forth in this Agreement, and shall
treat as confidential, all information obtained by each
hereunder or in connection herewith and not otherwise known to
them prior to the Effective Time. Except as otherwise agreed
to in writing, First Premier and Premier shall be bound by and
all information given or received pursuant to this Section 8.5
shall be subject to the terms and conditions of that certain
confidentiality agreement entered into between First Premier
and Premier dated November 19, 1998, which shall survive the
termination of this Agreement.
8.7 Current Information. During the period from the
date of this Agreement until the Effective Time or termination
of this Agreement pursuant to Article 10 hereof, each of
Premier and First Premier shall, and shall cause its
representatives to, confer on a regular and frequent basis
with representatives of the other. Each of Premier and First
Premier shall promptly notify the other of (i) any material
change in its business or operations, (ii) any material
complaints, investigations, or hearings (or communications
indicating that the same may be contemplated) of any
Regulatory Authority, (iii) the institution or threat of
material Litigation involving such party, or (iv) the
occurrence or nonoccurrence, of an event or condition, the
occurrence, or nonoccurrence, of which would be reasonably
expected to cause any of such party's representations or
warranties set forth herein to be false or untrue in any
respect as of the Effective Time; and in each case shall keep
the other fully informed with respect thereto.
8.8 Other Actions. No Party shall, or shall permit
any of its Subsidiaries, if any, to, take any action, except
in every case as may be required by applicable Law, that would
or is intended to result in (i) any of its representations and
warranties set forth in this Agreement that are qualified as
to materiality being or becoming untrue, (ii) any of such
representations and warranties that are not so qualified
become untrue in any material manner having a Material Adverse
Effect, (iii) any of the conditions set forth in this
Agreement not being satisfied or in a violation of any
provision of this Agreement, or (iv) adversely affecting the
ability of any of them to obtain any of the Consents or
Permits from Regulatory Authorities (unless such action is
required by sound banking practice).
8.9 Press Releases. Prior to the Effective Time,
Premier and First Premier shall consult with each other as to
the form and substance of any press release or other public
disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in
this Section 8.9 shall be deemed to prohibit any Party from
making any disclosure which its counsel deems necessary or
advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.10 No Solicitation. Except with respect to this
Agreement and the transactions contemplated hereby, from the
date of this Agreement until the Effective Time or termination
pursuant to Article 10, neither a Premier Company nor any
Affiliate thereof, shall directly or indirectly solicit any
Acquisition Proposal by any Person. Except to the extent
necessary to comply with the fiduciary duties of Premier's
Board of Directors, determined after consultation with
counsel, neither a Premier Company nor any Affiliate
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thereof, or any Representative thereof shall furnish any
nonpublic information that it is not legally obligated to
furnish or negotiate with respect to, any Acquisition
Proposal, but Premier may communicate information about such
an Acquisition Proposal to its shareholders if and to the
extent that it is required to do so in order to comply with
its legal obligations as advised by counsel. Premier shall
promptly notify First Premier orally and in writing in the
event that it receives any inquiry or proposal relating to any
such transaction. Premier shall (i) immediately cease and
cause to be terminated any existing activities, discussions,
or negotiations with any Persons conducted heretofore with
respect to any of the foregoing and (ii) direct and use its
reasonable best efforts to cause of all its Representatives
not to engage in any of the foregoing.
8.11 Accounting and Tax Treatment. Each of the
Parties undertakes and agrees to use its reasonable best
efforts to cause the Merger, and to take no action which would
cause the Merger not, to qualify for treatment as a
"reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code for federal income tax purposes.
8.12 Anti-Takeover Provisions. Each Premier Company
shall take all necessary action to ensure that the entering
into of this Agreement and the consummation of the Merger and
the other transactions contemplated hereby do not and will not
result in any super-majority voting requirements or the grant
of any rights to any Person under its Articles of
Incorporation, Bylaws, or any other governing instruments. In
addition, each Premier Company shall take all necessary steps
to exempt the transactions contemplated by this Agreement
from, or if necessary challenge the validity or applicability
of, ss. 351.459 RSMo of the GBCL.
8.13 Agreement of Affiliates. Premier has disclosed
in Section 8.13 of the Disclosure Schedule all Persons whom it
reasonably believes are "affiliates" of Premier for purposes
of Rule 145 under the 1933 Act. Premier shall use its
reasonable best efforts to cause each such Person to deliver
to First Premier not later than 30 days prior to the Effective
Time, a written agreement, substantially in the form of
Exhibit 2 attached hereto, providing that such Person will not
sell, pledge, transfer, or otherwise dispose of the shares of
Premier Common Stock held by such Person, except as
contemplated by such agreement or by this Agreement and will
not sell, pledge, transfer, or otherwise dispose of the shares
of First Premier Common Stock to be received by such Person
upon consummation of the Merger except in compliance with
applicable provisions of the 1933 Act and the rules and
regulations thereunder (and First Premier shall be entitled to
place restrictive legends upon certificates for shares of
First Premier Common Stock issued to affiliates of Premier
pursuant to this Agreement to enforce the provisions of this
Section 8.13). First Premier shall not be required to maintain
the effectiveness of the Registration Statement under the 1933
Act for the purposes of resale of First Premier Common Stock
by such affiliates.
8.14 Employee Benefits and Contracts. Following the
Effective Time, First Premier shall provide generally to
continuing officers and employees of Premier Companies
employee benefits under employee benefit plans (other than
stock option or other plans involving the potential issuance
of First Premier Common Stock), on terms and conditions which
when taken as a whole are no less favorable than those
currently provided by Premier. For purposes of participation
and vesting (but not benefit accrual under any
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employee benefit plans of First Premier other than the Premier
Benefit Plans) under such employee benefit plans, the service
of the employees of Premier prior to the Effective Time shall
be treated as service with First Premier participating in such
employee benefit plans. First Premier shall honor in
accordance with their terms all employment, severance,
consulting, and other compensation Contracts disclosed in
Section 8.13 of the Disclosure Schedule between Premier and
any current or former director, officer, or employee thereof,
and all provisions for vested benefits or other vested amounts
earned or accrued through the Effective Time under the Premier
Benefit Plans.
8.15 Management Contracts. First Premier and Bruce W.
Wiley have entered into an employment agreement dated as of
the date hereof which agreement will become effective as of
the Closing.
8.16 Indemnification and Directors' Liability
Insurance.
(a) First Premier shall, and shall cause the
Surviving Corporation (and its successors and
assigns) to, indemnify, defend, and hold harmless the
present and former directors, officers, employees,
and agents of Premier (each, an "Indemnified Party")
against all costs, fees or expenses (including
reasonable attorneys' fees), judgments, fines,
penalties, losses, claims, damages, liabilities and
amounts paid in settlement in connection with any
Litigation arising out of actions or omissions
occurring at or prior to the Effective Time
(including the transactions contemplated by this
Agreement) to the full extent permitted under
applicable Law and by Premier's Articles of
Incorporation and Bylaws as in effect on the date
hereof, including provisions relating to advances of
expenses incurred in the defense of any Litigation.
Without limiting the foregoing, in any case in which
approval by First Premier is required to effectuate
any indemnification, First Premier shall direct, at
the election of the Indemnified Party, that the
determination of any such approval shall be made by
independent counsel mutually agreed upon between
First Premier and the Indemnified Party.
(b) If First Premier or the Surviving
Corporation or any of their successors or assigns
shall consolidate with or merge into any other Person
and shall not be the continuing or surviving
corporation of such consolidation or merger or shall
transfer all or substantially all of its assets to
any Person, then and in each case, proper provision
shall be made so that the successors and assigns of
First Premier shall assume the obligations set forth
in this Section 8.16.
(c) Prior to the Effective Time, Premier
shall purchase for, and on behalf of, its current and
former officers and directors, extended coverage
under the current directors' and officers' liability
insurance policy maintained by Premier to provide for
continued coverage of such insurance for a period of
five years following the Effective Time with respect
to matters occurring prior to the Effective Time.
(d) The provisions of this Section 8.16 are
intended to be for the benefit of and shall be
enforceable by, each Indemnified Party, his or her
heirs and
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representatives and shall survive the consummation of
the Merger and be binding on all successors and
assigns of First Premier and the Surviving
Corporation.
8.17 Filings with State of Missouri. Upon the terms
and subject to the conditions of this Agreement, Premier and
First Premier shall execute articles of merger (the "Articles
of Merger") and First Premier shall file the Articles of
Merger and a copy thereof with the office of the Secretary of
State of Missouri and Delaware in connection with the Closing.
In addition, First Premier shall execute and file, pursuant to
ss. 351.458 RSMo of the GBCL, (i) an agreement that First
Premier will promptly pay to any Dissenting Shareholder the
amount, if any, to which such shareholder shall be entitled
under the Dissent Provisions, (ii) an agreement that First
Premier may be served with process in the State of Missouri
and (iii) an irrevocable appointment of the Secretary of State
of Missouri as First Premier's agent to accept service of
process in any proceeding based upon any cause of action
against Premier arising prior to the Effective Time and any
proceeding for the enforcement of rights of any Dissenting
Shareholder under the Dissent Provisions.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The
respective obligations of each Party to perform this Agreement
and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant
to Section 11.7 of this Agreement:
(a) Shareholder Approval. The shareholders
of Premier shall have approved this Agreement and the
consummation of the transactions contemplated hereby,
including the Merger, by the requisite 662/3% vote
pursuant to applicable provisions of the GBCL, and
applicable Law. In addition, the shareholders of
First Premier shall have approved this Agreement and
the consummation of the transactions contemplated
hereby, including the Merger, by the requisite
majority vote pursuant to Section 251 of the DGCL,
and applicable Law.
(b) Regulatory Approvals. All Consents of,
filings and registrations with, and notifications to,
all Regulatory Authorities required for consummation
of the Merger shall have been obtained or made and
shall be in full force and effect and all waiting
periods required by Law shall have expired. No
Consent obtained from any Regulatory Authority which
is necessary to consummate the transactions
contemplated hereby shall be conditioned or
restricted in a manner (including requirements
relating to the raising of additional capital or the
disposition of Assets) which in the reasonable
judgment of the Board of Directors of either Party
would so materially adversely impact the economic or
business benefits of the transactions contemplated by
this Agreement that, had such condition or
requirement been known, such Party would not, in its
reasonable judgment, have entered into this
Agreement.
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(c) Consents and Approvals. Other than
filing the Articles of Merger and receipt of the
Certificate of Merger, each Party shall have obtained
any and all Consents required for consummation of the
Merger (other than those referred to in Section
9.1(b) of this Agreement or listed in Section 9.1(c)
of the Disclosure Schedule) or for the preventing of
any Default under any Contract or Permit of such
Party which, if not obtained or made, is reasonably
likely to have, individually or in the aggregate, a
Material Adverse Effect on such Party.
(d) Legal Proceedings. No court or
governmental or regulatory authority of competent
jurisdiction shall have enacted, issued, promulgated,
enforced, or entered any Law or Order (whether
temporary, preliminary, or permanent) or taken any
other action which prohibits, restricts, or makes
illegal consummation of any of the transactions
contemplated by this Agreement.
(e) Registration Statement. The Registration
Statement shall have been declared effective under
the 1933 Act, and no stop orders suspending the
effectiveness of the Registration Statement shall
have been issued, and no action, suit, proceeding, or
investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing,
and all necessary approvals under state securities
Laws or the 1933 Act or 1934 Act relating to the
issuance or trading of the shares of First Premier
Common Stock issuable pursuant to the Merger or the
IPO shall have been received.
(f) Tax Matters. Each Party shall have
received a written opinion or opinions from Smith,
Gambrell & Russell, LLP, and in a form reasonably
satisfactory to such Parties (the "Tax Opinion"), to
the effect that (i) the Merger will constitute a
reorganization within the meaning of Section 368(a)
of the Internal Revenue Code and (ii) the exchange in
the Merger of Premier Common Stock for First Premier
Common Stock will not give rise to gain or loss to
the shareholders of Premier with respect to such
exchange (except to the extent of any cash received).
In rendering such Tax Opinion, such counsel shall be
entitled to rely upon representations of officers of
Premier and First Premier reasonably satisfactory in
form and substance to such counsel.
(g) Public Offering. First Premier shall
have executed a definitive underwriting agreement
with a reputable and financially capable investment
banking firm, chosen in the sole discretion of the
Board of Directors of First Premier, providing for
the firm commitment underwriting of shares of First
Premier Common Stock having an aggregate gross
purchase price of at least $25 million and such
shares shall, upon issuance, be available for trading
on a registered stock exchange or the National Market
of the Nasdaq Stock Market.
9.2 Conditions to Obligations of First Premier. The
obligations of First Premier to perform this Agreement and
consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following
conditions, unless waived by First Premier pursuant to Section
11.7(a) of this Agreement:
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(a) Representations and Warranties. For purposes of
this Section 9.2(a), the accuracy of the representations and
warranties of Premier set forth in this Agreement shall be
assessed as of the date of this Agreement and as of the
Effective Time with the same effect as though all such
representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of
such date). The representations and warranties of Premier set
forth in Section 5.3 of this Agreement shall be true and
correct (except for inaccuracies which are de minimus in
amount). The representations and warranties of Premier set
forth in Sections 5.17, 5.18, 5.19, and 5.20 of this Agreement
shall be true and correct in all material respects. There
shall not exist inaccuracies in the representations and
warranties of Premier set forth in this Agreement (including
the representations and warranties set forth in Sections 5.3,
5.17, 5.18, 5.19, and 5.20) such that the aggregate effect of
such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on Premier and its Subsidiaries taken
as a whole; provided that, for purposes of this sentence only,
those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" shall be
deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each
and all of the agreements and covenants of Premier to be
performed and complied with pursuant to this Agreement and the
other agreements contemplated hereby prior to the Effective
Time shall have been duly performed and complied with in all
respects.
(c) Certificates. Premier shall have delivered to
First Premier (i) a certificate, dated as of the Effective
Time and signed on its behalf by its chief executive officer
and its chief financial officer acting in their capacities as
officers of Premier, to the effect that the conditions of its
obligations set forth in Section 9.2(a) and 9.2(b) of this
Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by Premier's Board of Directors and
shareholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable
detail as First Premier and its counsel shall request.
(d) Affiliates Agreements. First Premier shall
have received from each affiliate of Premier the affiliates
agreements referred to in Section 8.13 of this Agreement.
(e) Opinion of Counsel. First Premier shall have
received a written opinion of Suelthaus & Walsh, P.C., counsel
to Premier, dated as of the Effective Time, with respect to
such matters and in such form as shall be agreed upon between
such firm and First Premier in substantially the form that is
attached as Exhibit 2.
9.3 Conditions to Obligations of Premier. The obligations
of Premier to perform this Agreement and consummate the Merger and the
other transactions
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contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by Premier pursuant to Section 11.7(b) of
this Agreement:
(a) Representations and Warranties. For purposes
of this Section 9.3(a), the accuracy of the representations
and warranties of First Premier set forth in this Agreement
shall be assessed as of the date of this Agreement and as of
the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of
such date). The representations and warranties of First
Premier set forth in Section 6.3 of this Agreement shall be
true and correct (except for inaccuracies which are de minimus
in amount). The representations and warranties of First
Premier set forth in Section 6.11 of this Agreement shall be
true and correct in all material respects. There shall not
exist inaccuracies in the representations and warranties of
First Premier set forth in this Agreement (including the
representations and warranties set forth in Sections 6.3 and
6.11) such that the aggregate effect of such inaccuracies has,
or is reasonably likely to have, a Material Adverse Effect on
First Premier; provided that, for purposes of this sentence
only, those representations and warranties which are qualified
by references to "material" or "Material Adverse Effect" shall
be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each
and all of the agreements and covenants of First Premier to be
performed and complied with pursuant to this Agreement and the
other agreements contemplated hereby prior to the Effective
Time shall have been duly performed and complied with in all
material respects.
(c) Certificates. First Premier shall have
delivered to Premier (i) a certificate, dated as of the
Effective Time and signed on its behalf by its chief executive
officer and its chief financial officer, to the effect that
the conditions of its obligations set forth in Section 9.3(a)
and 9.3(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by First
Premier's Board of Directors evidencing the taking of all
corporate action necessary to authorize the execution,
delivery, and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in
such reasonable detail as Premier and its counsel shall
request.
(d) Fairness Opinion. Premier shall have received
from GRA Thompson White & Company, PC, a letter, dated not
more than five business days prior to the date of the Proxy
Statement, to the effect that, in the opinion of such firm,
the Exchange Ratio is fair, from a financial point of view, to
the holders of Premier Common Stock.
(e) Payment of Consideration. First Premier shall
have delivered to the Exchange Agent the consideration to be
paid to holders of the Premier Common Stock pursuant to
Sections 3.1 and 3.4 of this Agreement.
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(f) Opinion of Counsel. Premier shall have
received a written opinion of Smith, Gambrell & Russell, LLP,
counsel to First Premier, dated as of the Effective Time, with
respect to such matters and in such the form as shall be
agreed upon between such firm and Premier in substantially the
form that is attached hereto as Exhibit 3.
(g) Underwriters to Perform. The underwriters in
the IPO shall have given their assurances that they are ready,
willing, and able to close on the IPO, and have the funds
available to deliver the full amount of the purchase price
(less the underwriters' discount) for the shares under the
IPO, immediately following the consummation of the Merger.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of
this Agreement, and notwithstanding the approval of this Agreement by
the shareholders of First Premier and Premier, this Agreement may be
terminated and the Merger abandoned at any time prior to the Effective
Time:
(a) By mutual written consent of the Board of
Directors of First Premier and the Board of Directors of
Premier; or
(b) By the Board of Directors of either First
Premier or Premier (provided that the terminating Party is not
then in breach of any representation or warranty contained in
this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of Premier and
Section 9.3(a) in the case of First Premier or in material
breach of any covenant or other agreement contained in this
Agreement) in the event of an inaccuracy of any representation
or warranty of the other Party contained in this Agreement
which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such
inaccuracy and which inaccuracy would provide the terminating
Party the ability to refuse to consummate the Merger under the
applicable standard set forth in Section 9.2(a) of this
Agreement in the case of Premier and Section 9.3(a) of this
Agreement in the case of First Premier; or
(c) By the Board of Directors of either First
Premier or Premier in the event of a material breach by the
other Party of any covenant, agreement, or obligation
contained in this Agreement which breach cannot be or has not
been cured within 30 days after the giving of written notice
to the breaching Party of such breach; or
(d) By the Board of Directors of either First
Premier or Premier in the event (i) any Consent of any
Regulatory Authority required for consummation of the Merger
and the other transactions contemplated hereby shall have been
denied by final nonappealable action of such authority or if
any action taken by such
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authority is not appealed within the time limit for appeal; or
(ii) the shareholders of either First Premier or Premier fail
to vote their approval of this Agreement and the transactions
contemplated hereby as required by the DGCL and GBCL,
respectively; or
(e) By the Board of Directors of either First
Premier or Premier in the event that the Merger shall not have
been consummated by September 30, 1999, if the failure to
consummate the transactions contemplated hereby on or before
such date is not caused by any breach of this Agreement by the
Party electing to terminate pursuant to this Section 10.1(e);
or
(f) By First Premier in the event appraisal
rights are claimed, pursuant to the Dissent Provisions, by
persons owning in the aggregate more than 10% of the issued
and outstanding Premier Common Stock; or
(g) By the Board of Directors of either First
Premier or Premier (provided that the terminating Party is not
then in breach of any representation or warranty contained in
this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of Premier and
Section 9.3(a) in the case of First Premier or in material
breach of any covenant or other agreement contained in this
Agreement) in the event that any of the conditions precedent
to the obligations of such Party to consummate the Merger
cannot be satisfied or fulfilled by the date specified in
Section 10.1(e) of this Agreement; or
(h) By Premier, if at any time prior to the
Effective Time, the fairness opinion of GRA Thompson White &
Company, PC is withdrawn.
(i) By Premier if prior to the Effective Time, a
corporation, partnership, person, or other entity or group
shall have made a bona fide Acquisition Proposal that the
Board of Directors of Premier determines in its good faith
judgment and in the exercise of its fiduciary duties, with
respect to legal matters on the written opinion of legal
counsel and as to financial matters on the written opinion of
GRA Thompson White & Company, PC, or another investment
banking firm of national reputation, is more favorable to the
shareholders of Premier and that the failure to terminate this
Agreement and accept such alternative Acquisition Proposal
would be inconsistent with the proper exercise of such
fiduciary duties.
10.2 Effect of Termination.
(a) In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this
Agreement, this Agreement shall become void and have no
effect, except that (i) the provisions of this Section 10.2
and Sections 8.6 and 11.1 of this Agreement shall survive any
such termination and abandonment, and (ii) a termination
pursuant to Sections 10.1(b) or 10.1(c) or 10.1 (f), of this
Agreement shall not relieve the breaching Party from liability
for an uncured willful breach of a representation, warranty,
covenant, or agreement giving rise to such
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termination; provided, further, that in the event of any
termination of this Agreement following the occurrence of an
Initial Triggering Event (as defined below) other than
termination due to: (A) the failure of First Premier to
satisfy a condition to closing, (B) determination of First
Premier pursuant to Section 9.2(a) not to perform this
Agreement, (C) withdrawal of the fairness opinion of GRA
Thompson White & Company, PC (so long as such withdrawal is
not due to materially inaccurate or fraudulent information
provided by Premier to GRA Thompson White & Company, PC), or
(D) the failure to satisfy the conditions set forth in Section
9.1 paragraphs (b), (d), (e), (f) and (g), First Premier shall
be entitled to a cash payment from Premier in an amount equal
to $200,000 upon the occurrence of any Subsequent Triggering
Event (as defined below) within twelve (12) months following
the date of such termination. In the event this Agreement is
terminated as a result of First Premier's or Premier's failure
to satisfy any of its representations, warranties or covenants
set forth herein in addition to any other claims or rights,
the non-terminating party shall reimburse the terminating
party for its reasonable out-of-pocket expenses relating to
the Merger in an amount not to exceed $50,000.
(b) The term "Initial Triggering Event" shall
mean any of the following events or transactions occurring
after the date of this Agreement:
(i) Premier, without having received
First Premier's prior written consent, shall have entered
into an agreement to engage in an Acquisition Transaction
(as hereinafter defined) with any Person (the term
"Person" for purposes of this Section also having the
meaning assigned thereto in Sections 3(a)(9) and 13(d)(3)
of the 1934 Act, and the rules and regulations thereunder)
other than First Premier or the Board of Directors of
Premier shall have recommended that the shareholders of
Premier approve or accept any Acquisition Transaction
other than as contemplated by this Agreement. For purposes
of this Agreement, "Acquisition Transaction" shall mean
(x) a merger or consolidation, or any similar transaction,
involving Premier, (y) a purchase, lease or other
acquisition of all or substantially all of the assets or
deposits of Premier, or (z) a purchase or other
acquisition (including by way of merger, consolidation,
share exchange or otherwise) of securities representing
25% or more of the voting power of Premier;
(ii) Any Person (excluding the officers,
directors and existing shareholders of Premier), other
than First Premier, acting in a fiduciary capacity, shall
have acquired beneficial ownership or the right to acquire
beneficial ownership of 15% or more of the outstanding
Premier Common Stock (the term "beneficial ownership" for
purposes of this Agreement having the meaning assigned
thereto in Section 13(d) of the 1934 Act, and the rules
and regulations thereunder) and such Person does not vote
such Premier Common Stock in favor of this Agreement at
the Shareholders' Meeting or such meeting is not held or
is canceled;
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(iii) The Shareholders' Meeting shall not have been
held or shall have been canceled prior to termination of this
Agreement, or Premier, without having received First Premier's
prior written consent, shall have authorized, recommended,
proposed (or publicly announced its intention to authorize,
recommend or propose, or its interest in authorizing,
recommending or proposing) an agreement to engage in an
Acquisition Transaction, with any Person other than First
Premier;
(iv) Any Person other than First Premier shall
have made a bona fide proposal to any Premier Company or its
shareholders by public announcement or written communication
(a copy of which shall be provided to First Premier) to engage
in an Acquisition Transaction, which proposal has an economic
value to the shareholders of Premier equivalent to or in
excess of that of the Merger.
(v) After a proposal is made by a third party to
any Premier Company to engage in an Acquisition Transaction,
Premier shall have willfully and materially breached any
material covenant or obligation contained in this Agreement in
anticipation of engaging in an Acquisition Transaction, and
such breach would entitle First Premier to terminate this
Agreement and such breach is not cured; or
(vi) Any person other than First Premier, other
than in connection with a transaction to which First Premier
has given its prior written consent, shall have filed an
application or notice with the Board of Governors of the
Federal Reserve System or other federal or state bank
regulatory authority, which application or notice has been
accepted for processing, for approval to engage in an
Acquisition Transaction.
(c) The term "Subsequent Triggering Event" shall
mean any of the following events or transactions occurring
after the date hereof:
(i) The acquisition by any person (excluding the
officers, directors and existing shareholders of Premier) of
beneficial ownership of 50% or more of the then outstanding
Premier Common Stock; or
(ii) The closing of the Acquisition Transaction
described in clause (i) of subsection (b) of this Section
10.2, except that the percentage referred to in clause (z)
shall be 50%.
(d) Premier shall notify First Premier promptly
upon the occurrence of any Initial Triggering Event or
Subsequent Triggering Event.
10.3 Non-Survival of Representations and Covenants. The
respective representations and warranties of the Parties shall not
survive the Effective Time. All agreements of the Parties to this
Agreement which by their terms are to be performed
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following the Effective Time shall survive the Effective Time until
performed in accordance with their terms.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions.
(a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the
following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Acquisition Proposal" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger,
acquisition of all of the stock or assets of, or other business
combination involving such Party or any of its Subsidiaries or any
proposal or offer to acquire in any manner a substantial equity
interest in, or a substantial portion of the assets of, such Party or
any of its material Subsidiaries (other than the transactions
contemplated or permitted by this Agreement).
"Affiliate" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such Person;
(ii) any officer, director, partner, employer, or direct or indirect
beneficial owner of any 10% or greater equity or voting interest of
such Person; or (iii) any other Person for which a Person described in
clause (ii) acts in any such capacity.
"Agreement" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated
herein by reference.
"Assets" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character,
and description, whether real, personal, or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of
such Person and wherever located.
"BHC Act" shall mean the Bank Holding Company Act of 1956, as
amended.
"Closing" shall have the meaning set forth in Section 1.2 of
this Agreement.
"Certificate of Merger" shall have the meaning set forth in
Section 1.3 of this Agreement.
"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
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"Contract" shall mean any written agreement, commitment,
contract, note, bond, mortgage, indenture, instrument, lease,
obligation, license, or plan of any kind or character, or other
document to which any Person is a party or that is binding on any
Person or its capital stock or Assets.
"Default" shall mean (i) any breach or violation of or default
under any Contract, (ii) any occurrence of any event that with the
passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, or (iii) any
occurrence of any event that with or without the passage of time or the
giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate,
increase, or impose any liability under, any Contract where, in any
such event, such default is reasonably likely to have a Material
Adverse Effect on a Party.
"Derivatives Contract" shall have the meaning set forth in
Section 5.20 of this Agreement.
"DGCL" shall have the meaning set forth in Section 1.1 of this
Agreement.
"Dissent Provisions" shall have the meaning set forth in
Section 3.1(d) of this Agreement.
"Dissenting Premier Shares" shall have the meaning set forth
in Section 3.1(d) of this Agreement.
"Dissenting Shareholders" shall have the meaning set forth in
Section 3.1(d) of this Agreement.
"Effective Time" shall have the meaning set forth in Section
1.3 of this Agreement.
"Environmental Laws" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient
air, surface water, ground water, land surface, or subsurface strata)
and which are administered, interpreted, or enforced by the United
States Environmental Protection Agency and state and local agencies
with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42
U.S.C. 9601 et seq., the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. 6901 et seq., and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material,
or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of any
Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" shall have the meaning set forth in Section
5.13(c) of this Agreement.
"Exchange Agent" shall have the meaning set forth in Section
4.1 of this Agreement.
"Exchange Ratio" shall have the meaning set forth in Section
3.1(c) of this Agreement.
"Exhibits" 1, 2, and 3 shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and
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may be referred to in this Agreement and any other related instrument
or document without being attached hereto.
"First Premier" shall have the meaning set forth in the first
paragraph of this Agreement.
"First Premier Capital Stock" shall mean, collectively, First
Premier Common Stock, First Premier Preferred Stock, and any other
class or series of capital stock of First Premier.
"First Premier Common Stock" shall mean the $.01 par value per
share common stock of First Premier.
"First Premier Financial Statements" shall mean the (i)
audited consolidated balance sheets (including related notes and
schedules, if any) of First Premier as of December 31, 1998, and the
related audited statements of income, changes in stockholders' equity,
and cash flows (including related notes and schedules, if any) for the
fiscal year then ended, and (ii) the unaudited consolidated balance
sheets (including related notes and schedules, if any) of First Premier
as of March 31, 1999, and the related unaudited statements of income,
changes in stockholders' equity, and cash flows (including related
notes and schedules, if any) for the portion of the fiscal year then
ended.
"First Premier Preferred Stock" shall mean the $.01 par value
per share preferred stock of First Premier.
"GAAP" shall mean generally accepted accounting principles in
the United States, consistently applied during the periods involved
applicable to banks or bank holding companies, as the case may be.
"GBCL" shall have the meaning set forth in Section 1.1 of this
Agreement.
"Hazardous Material" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"Indemnified Party" shall have the meaning set forth in
Section 8.16 of this Agreement.
"Initial Public Offering" shall have the meaning set forth in
Section 8.1 of the Agreement.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall
mean the personal knowledge of the chairman, president, chief financial
officer, chief accounting officer, chief credit officer, general
counsel, any assistant or deputy general counsel, or any senior or
executive vice president of such Person and the knowledge
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of any such persons obtained or which would have been obtained from a
reasonable investigation, except as otherwise stated in this Agreement.
"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities, or business, including those
promulgated, interpreted, or enforced by any Regulatory Authority.
"Lien" with respect to any Asset, shall mean any conditional
sale agreement, default of title, easement, encroachment, encumbrance,
hypothecation, infringement, lien, mortgage, pledge, reservation,
restriction, security interest, title retention, or other security
arrangement, or any adverse right or interest, charge, or claim of any
nature whatsoever of, on, or with respect to any property or property
interest, other than (i) Liens for current property Taxes not yet due
and payable, (ii) for depository institution Subsidiaries of a Party,
pledges to secure deposits, and (iii) other Liens incurred in the
ordinary course of the banking business.
"Litigation" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice by any Person alleging
potential liability.
"Loan Property" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in
which such Party or its Subsidiary holds a security or other interest
(including an interest in a fiduciary capacity), and, where required by
the context, includes the owner or operator of such property, but only
with respect to such property.
"Material Adverse Effect" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, (i) would in the aggregate result in an
adverse impact of $125,000 or more on the financial position or results
of operations of such Party, or (ii) would impair the ability of such
Party to perform its obligations under this Agreement or to consummate
the Merger or the other transactions contemplated by this Agreement,
provided that "Material Adverse Effect" shall not be deemed to include
the impact of (a) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental
authorities, (b) changes in GAAP or regulatory accounting principles
generally applicable to banks and their holding companies, (c) actions
and omissions of a Party (or any of its Subsidiaries) taken with the
prior informed consent of the other Party in contemplation of the
transactions contemplated hereby, and (d) the Merger and compliance
with the provisions of this Agreement on the operating performance of
the Parties, (e) changes in the general economic conditions, (f)
changes in the securities markets, or (g) changes generally affecting
the financial institution industry in general, or the banking industry
in Missouri or in the Jefferson City of Columbia, Missouri areas
specifically. When used with respect to Premier, a Material Adverse
Effect shall exist only if it exists with respect to Premier and its
subsidiaries taken as a whole.
"Merger" shall have the meaning set forth in the Preamble of
this Agreement.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NASDAQ" shall mean the Nasdaq Stock Market, Inc.
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"Order" shall mean any decree, injunction, judgment, order,
decision or award, ruling, or writ of any federal, state, local, or
foreign or other court, arbitrator, mediator, tribunal, administrative
agency, or Regulatory Authority.
"Participation Facility" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates
in the management and, where required by the context, said term means
the owner or operator of such facility or property, but only with
respect to such facility or property.
"Party" shall mean either First Premier or Premier, and
"Parties" shall mean collectively, First Premier and Premier.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person.
"Person" shall mean a natural person or any legal, commercial,
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"Premier" shall have the meaning set forth in the first
paragraph of this Agreement.
"Premier Benefits Plans" shall have the meaning set forth in
Section 5.13(a) of this Agreement.
"Premier Capital Stock" shall mean, collectively, Premier
Common Stock and any other class or series of capital stock of Premier.
"Premier Common Stock" shall mean the $1.00 par value common
stock of Premier.
"Premier Companies" shall mean, collectively, Premier and all
Premier Subsidiaries.
"Premier Contracts" shall have the meaning set forth in
Section 5.14 of this Agreement.
"Premier ERISA Plan" shall have the meaning set forth in
Section 5.13(a) of this Agreement.
"Premier Financial Statements" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of
Premier as of March 31, 1999, and as of December 31, 1998, 1997 and
1996, and the related statements of income, changes in shareholders'
equity, and cash flows (including related notes and schedules, if any)
for the three months ended March 31, 1999, and for each of the three
fiscal years ended December 31, 1998, 1997, and 1996, as filed by
Premier with the Board of Governors of the Federal Reserve System and
(ii) the consolidated balance sheets of Premier (including related
notes and schedules, if any) and related statements of income, changes
in shareholders' equity, and cash flows (including related notes and
schedules, if any) included in Premier's financial statements filed and
published in accordance with applicable federal regulations with
respect to periods ended subsequent to December 31, 1998.
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"Proxy Statement" shall mean the proxy statement used by
Premier to solicit the approval of its shareholders of the transactions
contemplated by this Agreement, which shall include the prospectus of
First Premier relating to the issuance of First Premier Common Stock to
holders of Premier Common Stock.
"Registration Statement" shall mean the Registration Statement
on Form S-1, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
First Premier under the 1933 Act with respect to the shares of First
Premier Common Stock to be issued to the shareholders of Premier in
connection with the transactions contemplated by this Agreement and
with respect to the IPO.
"Regulatory Authorities" shall mean, collectively, the Board
of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the SEC, the Missouri Division of Finance, the
NASD, NASDAQ and all state regulatory agencies having jurisdiction over
the Parties and their respective Subsidiaries.
"Rights" shall mean all arrangements, calls, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or
other binding obligations of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of
the capital stock of a Person or any Contract, commitments or other
arrangements by which a Person is or may be bound to issue additional
shares of its capital stock or options, warrants, rights to purchase or
acquire any additional shares of its capital stock, or other Rights.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Documents" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and
the rules and regulations of any Regulatory Authority promulgated
thereunder.
"Shareholders' Meeting" shall mean the meeting of the
shareholders of Premier to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.
"Subsidiaries" shall mean all corporations, banks,
associations, or other entities of which the entity in question owns or
controls 50% or more of the outstanding equity securities, either
directly or through an unbroken chain of entities as to each of which
50% or more of the outstanding equity securities is owned directly or
indirectly by its parent; provided, however, there shall not be
included in this definition any such entity acquired through
foreclosure or any such entity the equity securities of which are owned
or controlled in a fiduciary capacity.
"Surviving Corporation" shall mean the surviving corporation
resulting from the Merger.
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"Tax" or "Taxes" shall mean all federal, state, local, and
foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duties, capital stock, paid-up capital,
profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum,
estimated, or other tax or governmental fee of any kind whatsoever,
imposed or required to be withheld by the United States or any state,
local, foreign government or subdivision or agency thereof, including
any interest, penalties or additions thereto.
"Tax Opinion" shall have the meaning set forth in Section
9.1(f) of this Agreement.
"Taxable Period" shall mean any period prescribed by any
governmental authority, including the United States or any state,
local, foreign government or subdivision or agency thereof for which a
Tax Return is required to be filed or Tax is required to be paid.
"Tax Return" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
(b) Any singular term in this Agreement
shall be deemed to include the plural, and any plural
term the singular. Whenever the words "include,"
"includes," or "including" are used in this
Agreement, they shall be deemed followed by the words
"without limitation."
11.2 Expenses.
(a) Except as otherwise provided in
this Section 11.2 and in Section 10.2, each of First
Premier and Premier shall bear and pay all direct
costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated
hereunder, including filing, registration, and
application fees, printing fees, and fees and
expenses of its own financial or other consultants,
investment bankers, accountants, and counsel.
(b) Nothing contained in this Section
11.2 shall constitute or shall be deemed to
constitute liquidated damages for the willful breach
by a Party of the terms of this Agreement or
otherwise limit the rights of the nonbreaching Party.
11.3 Brokers and Finders. Each of the Parties
represents and warrants that neither it nor any of its
officers, directors, employees, or Affiliates has employed any
broker or finder in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by
any broker or finder based upon his or its representing or
being retained by or allegedly representing or being retained
by First Premier or Premier, each of First Premier and
Premier, as the case may be, agrees to indemnify and hold the
other Party harmless of and from any Liability in respect of
any such claim.
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11.4 Entire Agreement. Except for the
Confidentiality Agreement and except as otherwise expressly
provided herein, this Agreement constitutes the entire
agreement between the Parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral.
11.5 Amendments. To the extent permitted by Law,
this Agreement may be amended by a subsequent writing signed
by each of the Parties upon the approval of the Boards of
Directors of each of the Parties, whether before or after
shareholder approval of this Agreement has been obtained;
provided, that after any such approval by the shareholders of
either First Premier or Premier, there shall be made no
amendment that reduces or modifies in any material respect the
consideration to be received by holders of Premier Common
Stock, without the further approval of such shareholders.
11.6 Obligations of First Premier. Whenever this
Agreement requires First Premier (including the Surviving
Corporation) to take any action, such requirement shall be
deemed to include an undertaking by First Premier to cause any
future First Premier Subsidiaries to take such action.
11.7 Waivers.
(a) Prior to or at the Effective Time,
First Premier, acting through its Board of Directors,
chief executive officer, president or other
authorized officer, shall have the right to waive any
default in the performance of any term of this
Agreement by Premier, to waive or extend the time for
the compliance or fulfillment by Premier of any and
all of its obligations under this Agreement, and to
waive any or all of the conditions precedent to the
obligations of First Premier under this Agreement,
except any condition which, if not satisfied, would
result in the violation of any Law. No such waiver
shall be effective unless in writing signed by a duly
authorized officer of First Premier.
(b) Prior to or at the Effective Time,
Premier, acting through its Board of Directors, chief
executive officer, president or other authorized
officer, shall have the right to waive any default in
the performance of any term of this Agreement by
First Premier, to waive or extend the time for the
compliance or fulfillment by First Premier of any and
all of its obligations under this Agreement, and to
waive any or all of the conditions precedent to the
obligations of Premier under this Agreement, except
any condition which, if not satisfied, would result
in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly
authorized officer of Premier.
(c) The failure of any Party at any
time or times to require performance of any provision
hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any
other provision of this Agreement. No waiver of any
condition or of the breach of any term contained in
this Agreement in one or more instances shall be
deemed to be or construed as a further or continuing
waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of
this Agreement.
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11.8 Assignment. Except as expressly contemplated
hereby, neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by any
Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject
to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by the
Parties and their respective successors and assigns.
11.9 Notices. All notices or other communications
which are required or permitted hereunder shall be in writing
and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons
at the addresses set forth below (or at such other address as
may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered:
Premier: Premier Bancshares, Inc.
815 West Stadium Boulevard
Jefferson City, Missouri 65110
Telephone Number: (573) 893-6000
Telecopy Number: (573) 893-6200
Attention: Charles R. Willibrand, Chairman
and Bruce Wiley, President and Chief Executive
Officer
Copy to Counsel: Suelthaus & Walsh, P.C.
7733 Forsyth Boulevard, Twelfth Floor
St. Louis, Missouri 63105
Telephone Number: (314) 727-7676
Telecopy Number: (314) 727-7166
Attention: Kenneth H. Suelthaus, Esq.
First Premier: First Premier Financial Corporation
13004 Starbuck Road
St. Louis, Missouri 63141
Telephone Number: (314) 514-8491
Telecopy Number: (314) 453-0981
Attention: Richard C. Jensen, President and
Chief Executive Officer
Copy to Counsel: Smith, Gambrell & Russell, LLP
Suite 3100, Promenade II
1230 Peachtree Street
Atlanta, Georgia 30309-3592
Telephone Number: (404) 815-3758
Telecopy Number: (404) 685-7058
Attention: Robert C. Schwartz, Esq.
Copies to Counsel shall not constitute notice.
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11.10 Governing Law. This Agreement shall be
governed by and construed in accordance with the Laws of the
State of Missouri, without regard to any applicable principals
of conflicts of laws, except to the extent that the Laws of
the United States govern the consummation of the Merger.
11.11 Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed to
be an original, but all of which together shall constitute one
and the same instrument.
11.12 Captions. The captions contained in this
Agreement are for reference purposes only and are not part of
this Agreement.
11.13 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
11.14 Enforcement of Agreement. The Parties hereto
agree that irreparable damage would occur in the event that
any of the provisions of this Agreement was not performed in
accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to
an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
FIRST PREMIER FINANCIAL CORPORATION
By: /s/ Richard C. Jensen
-------------------------------------
Name: Richard C. Jensen
Title: President and Chief Executive Officer
PREMIER BANCSHARES, INC.
By: /s/ Charles R. Willibrand
-------------------------------------
Name: Charles R. Willibrand
Title: Chairman
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APPENDIX B
MO. REV. STAT. SS.351.455
351.455 SHAREHOLDER WHO OBJECTS TO MERGER MAY DEMAND VALUE OF SHARES,
WHEN.--1. If a shareholder of a corporation which is a party to a merger or
consolidation shall file with such corporation, prior to or at the meeting of
shareholders at which the plan of merger or consolidation is submitted to a
vote, a written objection to such plan of merger or consolidation, and shall not
vote in favor thereof, and such shareholder, within twenty days after the merger
or consolidation is effected, shall make written demand on the surviving or new
corporation for payment of the fair value of his shares as of the day prior to
the date on which the vote was taken approving the merger or consolidation, the
surviving or new corporation shall pay to such shareholder, upon surrender of
his certificate or certificates representing such shares, the fair value
thereof. Such demand shall state the number and class of the shares owned by
such dissenting shareholder. Any shareholder failing to make demand within the
twenty day period shall be conclusively presumed to have consented to the merger
or consolidation and shall be bound by the terms thereof.
2. If within thirty days after the date on which such merger or
consolidation was effected the value of such shares is agreed upon between the
dissenting shareholder and the surviving or new corporation, payment therefor
shall be made within ninety days after the date on which such merger or
consolidation was effected, upon the surrender of his certificate or
certificates representing said shares. Upon payment of the agreed value the
dissenting shareholder shall cease to have any interest in such shares or in the
corporation.
3. If within such period of thirty days the shareholder and the
surviving or new corporation do not so agree, then the dissenting shareholder
may, within sixty days after the expiration of the thirty day period, file a
petition in any court of competent jurisdiction within the county in which the
registered office of the surviving or new corporation is situation, asking for a
a finding and determination of the fair value of such shares, and shall be
entitled to judgment against the surviving or new corporation for the amount of
such fair value as of the day prior to the date on which such vote was taken
approving such merger or consolidation, together with interest thereon to the
date of such judgment. The judgment shall be payable only upon and
simultaneously with the surrender to the surviving or new corporations of the
certificate or certificates representing said shares. Upon the payment of the
judgment, the dissenting shareholder shall cease to have any interest in such
shares, or in the surviving or new corporation. Such shares may be held and
disposed of by the surviving or new corporation as it may see fit. Unless the
dissenting shareholder shall file such petition within the time herein limited,
such shareholder and all persons claiming under him shall be conclusively
presumed to have approved and ratified the merger or consolidation, and shall be
bound by the terms thereof.
4. The right of a dissenting shareholder to be paid the fair value
of his shares as herein provided shall cease if and when the corporation shall
abandon the merger or consolidation.
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APPENDIX C
SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
SECTION 262 -- APPRAISAL RIGHTS. (a) Any stockholder of a corporation
of this State who holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to such shares, who
continuously holds such shares through the effective date of the merger or
consolidation, who has otherwise complied with subsection (d) of this section
and who has neither voted in favor of the merger or consolidation nor consented
thereto in writing pursuant to ss.228 of this title shall be entitled to an
appraisal by the Court of Chancery of the fair value of the stockholder's shares
of stock under the circumstances described in subsections (b) and (c) of this
section. As used in this section, the word "stockholder" means a holder of
record of stock in a stock corporation and also a member of record of a nonstock
corporation; the words "stock" and "share" mean and include what is ordinarily
meant by those words and also membership or membership interest of a member of a
nonstock corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any
class or series of stock of a constituent corporation in a merger or
consolidation to be effected pursuant to ss.251 (other than a merger effected
pursuant to ss.251 (g) of this title), ss.252, ss.254, ss.257, ss.258, ss.263 or
ss.264 of this title:
(1) Provided, however, that no appraisal rights
under this section shall be available for the shares of any
class or series of stock, which stock, or depository receipts
in respect thereof, at the record date fixed to determine the
stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities
exchange or designated as a national market system security on
an interdealer quotation system by National Association of
Securities Dealers, Inc. or (ii) held of record by more than
2,000 holders; and further provided that no appraisal rights
shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving
corporation as provided in subsection (f) of ss.251 of this
title.
(2) Notwithstanding paragraph (1) of this
subsection, appraisal rights under this section shall be
available for the shares of any class or series of stock of a
constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant
to ss.ss.251, 252, 254, 257, 258, 263 and 264 of this title to
accept for such stock anything except:
a. Shares of stock of the corporation
surviving or resulting from such merger or
consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other
corporation, or depository receipts in respect
thereof, which shares of stock (or depository
receipts in respect thereof) or depository receipts
at the effective date of the merger or consolidation
will be either listed on a national securities
exchange or designated as a national market system
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security on an interdealer quotation system by the
National Association of Securities Dealers, Inc. or
held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or
fractional depository receipts described in the
foregoing subparagraphs a. and b. of this paragraph;
or
d. Any combination of the shares of stock,
depository receipts and cash in lieu of fractional
shares or fractional depository receipts described in
the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary
Delaware corporation party to a merger effected under ss.253
of this title is not owned by the parent corporation
immediately prior to the merger, appraisal rights shall be
available for the shares of the subsidiary Delaware
corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be available for
the shares of any class or series of its stock as a result of an amendment to
its certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or substantially all
of the assets of the corporation. If the certificate of incorporation contains
such a provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for
which appraisal rights are provided under this section is to
be submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting, shall
notify each of its stockholders who was such on the record
date for such meeting with respect to shares for which
appraisal rights are available pursuant to subsections (b) or
(c) hereof that appraisal rights are available for any or all
of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each
stockholder electing to demand the appraisal of his shares
shall deliver to the corporation, before the taking of the
vote on the merger or consolidation, a written demand for
appraisal of his shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand
the appraisal of his shares. A proxy or vote against the
merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a
separate written demand as herein provided. Within 10 days
after the effective date of such merger or consolidation, the
surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied
with this subsection and has not voted in favor of or
consented to the merger, or consolidation of the date that the
merger or consolidation has become effective; or
(2) If the merger or consolidation was approved
pursuant to ss.228 or ss.253 of this title, each constituent
corporation, either before the effective date of the merger or
consolidation or within ten days thereafter, shall notify each
of the holders of any class or series of stock of such
constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that
appraisal rights are available for any or all
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shares of such class or series of stock of such constituent
corporation, and shall include in such notice a copy of this
section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice
shall be given by the surviving or resulting corporation to
all such holders of any class or series of stock of a
constituent corporation that are entitled to appraisal rights.
Such notice may, and, if given on or after the effective date
of the merger or consolidation, shall, also notify such
stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights
may, within 20 days after the date of mailing of such notice,
demand in writing from the surviving or resulting corporation
the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such holder's shares. If
such notice did not notify stockholders of the effective date
of the merger or consolidation, either (i) each such
constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each
of the holders of any class or series of stock of such
constituent corporation that are entitled to appraisal rights
of the effective date of the merger or consolidation or (ii)
the surviving or resulting corporation shall send such a
second notice to all such holders on or within 10 days after
such effective date; provided, however, that if such second
notice is sent more than 20 days following the sending of the
first notice, such second notice need only be sent to each
stockholder who is entitled to appraisal rights and who has
demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant
secretary or of the transfer agent of the corporation that is
required to give either notice that such notice has been given
shall, in the absence of fraud, be prima facie evidence of the
facts stated therein. For purposes of determining the
stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date
that shall be not more than 10 days prior to the date the
notice is given, provided, that if the notice is given on or
after the effective date of the merger or consolidation, the
record date shall be such effective date. If no record date is
fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next
preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.
(f) Upon the filing of any such petition by a stockholder, service
of a copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office
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of the Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded payment
for their shares and with whom agreements as to the value of their shares have
not been reached by the surviving or resulting corporation. If the petition
shall be filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal,
the Court shall appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or execution of the merger
or consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and the
case of holders of shares represented by certificates upon the surrender to the
corporation of the certificates representing such stock. The Court's decree may
be enforced as other decrees in the Court of Chancery may be enforced, whether
such surviving or resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
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(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded his appraisal rights as provided
in subsection (d) of this section shall be entitled to vote such stock for any
purpose or to receive payment of dividends or other distributions on the stock
(except dividends or other distributions payable to stockholders of record at a
date which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal of
his demand for an appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(l) The shares of the surviving or resulting corporation to which
the shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
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APPENDIX D
May 12, 1999
Board of Directors
Premier Bancshares, Inc.
c/o Premier Bank
Jefferson City, Missouri
Board of Directors:
We have been retained by the Board of Directors of Premier Bancshares
Inc. (Premier) to render an opinion of fairness, from a financial viewpoint, of
a transaction whereby common shareholders of Premier would receive common shares
of First Premier Financial Corporation (FPFC) in a merger.
We have provided accounting and consulting services to Premier since
its inception in 1995. We have no present or contemplated future direct
financial interest in Premier, its subsidiary, Premier Bank or in FPFC. The
compensation for preparation of this letter is not contingent upon any action or
conclusion.
In the development of our opinion, our approach included:
1) A review of the historical and projected financial performance
of Premier Bank and Premier including draft of audited
consolidated financial statements as of December 31, 1998.
2) A review of financial information and other information
regarding the stock of FPFC including draft of audited
financial statements as of December 31, 1998.
3) A review of the Draft Agreement and Plan of Merger dated April
28, 1999 by and between Premier and FPFC.
4) A review of information regarding other comparable mergers in
Missouri.
5) A review of market prices of publicly held bank stocks in the
region.
6) A review of the investment characteristics of Premier and
FPFC.
7) Any other factors that were considered necessary to render
this opinion.
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In reviewing these items, we have considered the following items
pertaining to Premier and FPFC.
- Historical financial performance
- Dividend paying record
- Marketability of common stock
- Competition in the banking industry
- Market area for banking companies
- Comparison with other banking organizations
- Comparison with other sales transactions in Missouri and the region
- Risk areas inherent in banking
- Financial impact of transaction
- Tax consequences of the proposed merger for Premier shareholders
- Such other factors as we considered necessary
GRA assumes for the purpose of its opinion that the exchange of shares
in the transaction constitutes a non-taxable reorganization for federal income
tax purposes, and therefore, the shareholders of Premier will incur no federal
tax liability as a result of the exchange.
In the performance of this engagement we did not visit with management
representatives of FPFC.
We visited with management of Premier during the review concerning the
future prospects of the Company as well as its current operating performance.
We have reviewed the Draft Agreement and Plan of Merger between Premier
and FPFC dated April 28, 1999 and have assumed that the finally executed version
is substantially the same. We have discussed appropriate aspects of this
agreement and memorandum with management and counsel for Premier.
The Agreement stipulates that each shareholder of Premier will receive
a calculated number of common shares of FPFC stock for each share of Premier
stock. The formula utilizes $262.944 as the quotient. Based upon the 41,834
outstanding shares of Premier, the total consideration for all of the
outstanding shares of Premier is $11,000,000. The book value of Premier shares
at December 31, 1998 was $106.09. Consequently, the calculated multiple of
December 31, 1998 book value is 2.47.
The Agreement calls for a closing of First Premier's public offering.
Our opinion is subject to the successful public offering and dependent upon
Premier's shareholders receiving shares which are marketable subject to certain
time restrictions as outlined in Section 8.3 of the Agreement and applicable
securities laws.
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The proposed exchange of shares and public offering provide a market
for shareholders of Premier which is not currently available due to the limited
number of shareholders in Premier. The shares received will be registered with
the Securities and Exchange Commission and will be able to sold on the National
Market of the Nasdaq Stock Market. Also, each Premier common shareholder, other
than Bruce Wiley, will receive warrants to purchase FPFC common shares as
described in the Agreement. The time restrictions on sale of the shares as
outlined in Section 8.3 of the Agreement result in these shares being partially
illiquid for up to 120 days for general shareholders and wholly illiquid up to
180 days for directors of Premier. Consequently, the shareholder is not
guaranteed a market price equivalent to the value received at the initial
exchange. Our opinion does not extend to any period subsequent to the initial
exchange and public offering.
Premier Bancshares, Inc. - Background
Premier Bancshares, Inc. (hereinafter referred to as Company) was
organized in 1995 as a one-bank holding company under the Federal Bank Holding
Company Act of 1956, as amended. The Company's operations are subject to
supervision of the Board of Governors of the Federal Reserve System. The Company
owns 100% of the outstanding shares of Premier Bank. The Company's only assets
are its invested cash at the subsidiary bank and its investment in the
subsidiary which is accounted for on the equity method of accounting. The
Company's value is primarily dependent upon the subsidiary bank.
The Company has a note payable to a commercial bank which bears
interest at the prime rate and is secured by the subsidiary's common stock. The
note payable was reduced by $300,000 in 1998 utilizing proceeds from a new stock
offering. The total proceeds were approximately $1.2 million. Of the total
proceeds, $750,000 was contributed as capital to the subsidiary Bank.
There is one class of common stock issued and outstanding. The common
stock consists of 100,000 authorized shares with a par value of $1.00. Issued
and outstanding shares total 41,834.
A comparative balance sheet of the Company is presented in Appendix B
of this report.
Premier Bank - Background
Premier Bank was chartered in 1995 in Jefferson City, Missouri. Its
primary regulator is the Missouri Division of Finance and its deposits are
insured by the Federal Deposit Insurance Corporation (FDIC). Jefferson City
(population 36,000) is located in Cole County (population 65,000). Jefferson
City is the state capital of Missouri. Cole County and parts of surrounding
counties are considered to be the Bank's primary market area.
The bank has a branch in Columbia, Missouri. Columbia is located 30
miles north of Jefferson City and this market has a population of approximately
120,000.
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The Bank maintains lobby hours between 9:00 a.m. and 4:00 p.m., Monday
through Friday and is open Saturday until noon. The Bank provides a full range
of banking services including the following:
<TABLE>
<CAPTION>
Loans Deposits Other
--------------------------------- ----------------------------------------------
<S> <C> <C>
Consumer Purpose Demand Cashiers Check
Commercial Interest bearing transaction Travelers' Checks
Real Estate Certificates of Deposit Wire Transfer
Community Development Individual Retirement Accounts Safe Deposit
</TABLE>
The Bank does not have a Trust Department.
Employees
As of December 31, 1998, the Bank employed 17 persons. The Bank
provides health, life, dental and disability benefits to employees. Benefits are
fully paid by the Bank for employee coverage. There has been very minimal
employee turnover and employee relations are considered to be good.
Regulatory Relations
The Bank is examined regularly by the Missouri Division of Finance and
FDIC. Mr. Bruce Wiley, President, indicated that the last examination was in
late 1997 and that the Bank had received good performance ratings.
Data Processing and Year 2000
The Bank utilizes Computer Services, Inc. processing software.
The Bank also has customers who rely upon computers in their
businesses. These customers are also subject to similar Year 2000 risks which
could inhibit them from performing their normal business activities. If such
problems are encountered, these customers may experience difficulties in meeting
contractual loan obligations with the Bank.
The Bank has received regulatory reviews of Year 2000 preparedness and
the software developer has communicated its efforts relative to compliance with
Year 2000 computerized processing. Due to the complexity of this matter,
management made no representations to us as to the Bank's Year 2000
preparedness.
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Litigation
The Bank is regularly involved in legal proceedings relative to its
lending activities. However, management indicated that they were not aware of
any pending litigation which would materially impact the financial condition of
the entity as of December 31, 1998. Financial Review
Our review of the financial data for Premier Bank consisted of
information obtained from:
1) The annual Consolidated Reports of Condition and Income as filed with
the FFIEC for the three years ended December 31, 1998.
2) Uniform Bank Performance Report for December 31, 1998 (peer group
reference only for analysis purposes).
3) Internally prepared financial statements for the year ended December
31, 1998.
This information was prepared by the Bank's management in accordance
with generally accepted accounting principles. We have accepted this information
without further investigation as being an accurate representation of the Bank's
financial condition and results of operations. We have assumed that management
1) is responsible for the integrity and objectivity of the financial statements
and other related information, and 2) maintains a system of internal controls,
policies and procedures to provide reasonable assurance that the Bank's assets
are safeguarded and that financial transactions are fairly reflected in the
financial statements. Since these financial statements also include estimates of
value or potential exposure, we have also relied upon management's evaluation of
asset quality.
Balance Sheet
As of December 31, 1998, the Bank had total assets of $57,808,000. The
Bank has grown rapidly since its chartering in 1995. Consequently, there has
been a need for additional capital to maintain compliance with regulatory
requirements.
Total equity capital at December 31, 1998, aggregated $5,193,000 or
8.98% of total assets. This capital ratio is in excess of minimum regulatory
guidelines of 3% to 6% and the Bank is considered to be well-capitalized.
The Bank's loan-to-deposit ratio varies based upon seasonal demand but
is generally between 80% - 85%. The Bank's liquidity position is adequate to
support this level of lending.
As of December 31, 1998, the Bank's loan portfolio consisted of the
following:
D-5
<PAGE> 210
<TABLE>
<CAPTION>
Amount Percentage
Category (000's) of Portfolio (%)
- ------------------------------------------ --------------- ---------------------
<S> <C> <C>
Real Estate:
Construction and Land Development $ 7,161 17.18
Farmland 613 1.47
Residential (1-4 Family) 14,411 34.58
Multifamily 2,452 5.88
Nonfarm Nonresidential Properties 10,678 25.62
--------------- ---------------------
Subtotal $ 35,315 84.73
--------------- ---------------------
Agricultural Production 5 .01
Commercial and Industrial 4,172 10.01
Loans to Individuals (Consumer) 976 2.34
Other 1,203 2.89
--------------- ---------------------
Subtotal $ 6,356 15.25
--------------- ---------------------
$ 41,671 99.98
=============== =====================
</TABLE>
Source: Consolidated Report of Condition and Income (Schedule RC-C
Loans and Lease Financing Receivables) December 31, 1998.
The allowance for loan and lease losses was $400,000 at December 31,
1998, which was .96% of total loans. The current allowance amount is deemed
adequate by Bank management.
The market value of the Bank's securities portfolio as of December 31,
1998, was $6,478,000 as compared to amortized cost of $6,427,000 for a $51,000
positive variance. The Bank carries 100% of its portfolio in an available for
sale category. The portfolio consists primarily of securities issued by the U.S.
Government, U.S. Government Agencies and state and political subdivisions.
Demand deposits represent 4% - 6% of total deposits which is less than
peer group averages of 9% - 10%.
Income Statement
The Bank's net income history is as follows:
<TABLE>
<S> <C>
1998 $187,000
1997 $155,000
1996 ($56,000)
1995 ($129,000)
</TABLE>
D-6
<PAGE> 211
The Bank has paid no dividends since its initial chartering in 1995.
Market Information
Public Company
The aggregate market value (market capitalization) of publicly traded
banks or bank holding companies can be calculated by multiplying the current
quoted price of the stock by the number of shares outstanding. This value can
then be correlated to readily available data resulting in price-to-earnings and
price-to-equity multiples. However, this calculated value is based upon a price
of a single share of stock and, therefore, represents an estimation of value
from a minority perspective since purchasers of these shares are not able to
influence operations or management decisions. Consequently, adjustments must be
made to reflect an estimated value for a control price valuation.
While the estimated value using public company market data should have
a bearing on the market value of any banking institution, there are other
factors which must be considered. Large publicly held companies generally have
more diverse markets through well-developed branching networks, and they have
also benefitted from certain economies of scale. The subject bank of this
valuation operates in a more localized market area with a smaller shareholder
group.
Even though direct comparisons are impossible, we have selected some
publicly traded multi-bank holding companies which operate in the Midwest for
our guideline company comparable data. As of December 31, 1998, the current
data is as follows:
<TABLE>
<CAPTION>
Market
Capitalization Current Price Current Price
Publicly Held Stock (in millions) to Earnings to Book Value
- ------------------- ------------- ----------- -------------
<S> <C> <C> <C>
Commerce Bancshares (MO) $ 2,616.7 18.1 2.47
Mercantile Bancorp. (MO) 7,257.9 18.0 2.37
UMB Financial (MO) 930.3 17.5 1.43
First Banks America (MO) 50.9 19.5 1.76
Mississippi Valley Bancshares (MO) 320.2 18.1 2.75
Southside Bancshares (MO) 115.2 16.4 1.74
Allegiant Bancorporation, Inc. (MO) 60.5 16.4 1.32
Cass Commercial Corp. (MO) 96.1 12.9 1.70
Gold Bancorporation, Inc. (KS) 171.0 32.0 3.09
Intrust Financial Corp. (KS) 279.1 16.1 1.97
MNB Bancshares, Inc. (KS) 15.0 14.9 1.15
BancFirst Corp. (OK) 332.6 14.5 1.68
BOK Financial Corp. (OK) 1,060.3 16.8 2.22
Southwest Bancorp (OK) 101.1 11.8 1.79
Range 11.8 - 32.0 1.15 - 3.09
</TABLE>
Source: Bank INVESTOR - SNL Securities
D-7
<PAGE> 212
Specific Transaction
Although the public markets provide a basis for valuation purposes, the
availability of information for other bank sales transactions also serves as a
component for analysis purposes. Such transactions are documented via regulatory
filings and through public disclosure. Various sources provide summaries of this
information. Since these transactions are based upon majority sales, they must
be analyzed in that context and are not comparable to the public company
information presented above. These sales are for whole institutions, therefore,
reported prices likely include elements of synergistic value. When a motivated
buyer observes possibilities of synergistic operations or economies of scale,
the resulting price is likely to be higher than a price arrived at by the
theoretical fair market value standard. Additionally, these transactions include
both cash and stock transactions with the majority of larger transactions being
for stock. The statistics for "all cash" transactions indicates that ratios are
20-30% less than stock transactions and 10-25% less than the overall average.
The following data was used as the basis for the "Specific Transaction" method.
<TABLE>
<CAPTION>
Number of
Second Quarter-1998 Transactions Price-to-Earnings Price-to-Equity
- ------------------- ------------ ----------------- ---------------
<S> <C> <C> <C>
All Banks 33 21.29 2.48
Less than $50 million 6 14.79 2.34
Greater than $50 million and 14 19.84 2.35
less than $150 million
Cash Deals 10 21.63 1.97
Stock Deals 22 20.17 2.83
Third Quarter-1998
- ------------------
All Banks 30 18.36 2.23
Less than $50 million 10 20.80 1.69
Greater than $50 million and 15 16.69 2.43
less than $150 million
Cash Deals 14 17.22 1.79
Stock Deals 15 19.02 2.63
</TABLE>
Source: The Banking Company Report, Kansas City, Missouri
As mentioned previously, the transaction results in total consideration
of $11,000,000 for the Company's stock. The calculated multiple of December 31,
1998 book value is 2.47. This is comparable to the multiples shown above for
price-to-equity. Since the Bank is only four years old and has expanded rapidly,
it has not established a strong earnings level. Consequently, the price-to-
earnings ratio for this transaction is far in excess of the multiples shown
above.
D-8
<PAGE> 213
We have relied on data available to us as of the date of this letter
which was obtained from or developed by sources which we deem to be reliable
without independent verification. Our opinion is for the use and benefit of the
Board of Directors of Premier. The opinion is not intended to be and does not
constitute a recommendation to the aforementioned parties as to whether to
accept FPFC shares in exchange for Premier shares as stipulated in the proposed
transaction.
Based upon our valuation of the proposed merger and exchange of shares
between Premier and FPFC, it is our opinion that the exchange ratio for the
conversion of Premier common shares into FPFC common shares in the proposed
transaction is fair from a financial viewpoint to the shareholders of Premier.
GRA, Thompson, White & Co., P.C.
by
/s/ Terry W. White
Terry W. White
D-9
<PAGE> 214
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation and By-Laws require First Premier to indemnify
the directors and officers of First Premier to the fullest extent permitted by
law. In addition, as permitted by Delaware Law, the Certificate of Incorporation
and By-Laws provide that no director of First Premier shall be personally liable
to First Premier or its shareholders for monetary damages for breach of duty of
care or other duty as a director if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of First
Premier and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. This provision, however,
shall not eliminate or limit the liability of a director:
- for any breach of the director's duty of loyalty to the
corporation or its shareholders,
- for act or omissions not in good faith or which involve
intentional misconduct or knowing violation of law,
- under Section 174 of Delaware Law, involving the payment of
unlawful dividends, stock repurchases or redemptions, or
- for any transaction from which the director derived an
improper personal benefit.
II-1
<PAGE> 215
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C> <C>
2 - Agreement and Plan of Merger, dated as of May 6, 1999 by and
between First Premier Financial Corporation and Premier
Bancshares, Inc. (included as Appendix A to the Proxy
Statement/Prospectus)
3.1 - Certificate of Incorporation of First Premier.
3.1.1 - Certificate of Designations, Preferences and Rights of Series A
Preferred Stock of First Premier.
3.1.2 - Certificate of Amendment to the Certificate of Incorporation of First
Premier.
3.1.3 - Articles of Incorporation of Premier
3.1.4 - Amendment of Articles of Incorporation of Premier
3.1.5 - Articles of Agreement of Premier Bank
3.2 - By-Laws of First Premier.
3.2.1 - By-Laws of Premier
3.2.2 - By-Laws of Premier Bank
4.2 - See Exhibits 3.1 and 3.2 for provisions of the Certificate of
Incorporation, as amended, and By-Laws of First Premier defining
rights of the holders of the common stock of First Premier.
5 - Opinion of Smith, Gambrell & Russell, LLP.
8 - Tax Opinion of Smith, Gambrell & Russell, LLP *
10.1 - Employment Agreement dated July 16, 1998 between First Premier
and Richard C. Jensen
10.1.1 - Amendment No. 1 to Employment Agreement between First Premier
and Richard C. Jensen dated ___________, 1999.*
10.2 - Form of Employment Agreement between First Premier and First
Premier's executive officers.
10.3 - First Premier's 1999 Stock Option Plan.*
10.4 - Employment Agreement dated May 6, 1999 between First Premier
and Bruce W. Wiley
23.1 - Consent of Smith, Gambrell & Russell, LLP (contained in their
opinion at Exhibit 5).
</TABLE>
II-2
<PAGE> 216
<TABLE>
<S> <C> <C>
23.2(a) - Consent of KPMG LLP with respect to the financial statements of
First Premier.
23.2(b) - Consent of KPMG LLP with respect to the consolidated financial
statements of Premier.
24 - Power of Attorney (included in original signature page to this
Registration Statement).
99.1 - Form of Proxy for Special Meeting of Shareholders of Premier *
99.2 - Form of Proxy for Special Meeting of Shareholders of First Premier*
99.3 - Opinion of GRA Thompson White & Company, P.C. (included as
Appendix D to the Proxy Statement/Prospectus)
99.4 - Provisions of the General and Business Corporation Law of
Missouri regarding dissenters' rights of Premier Shareholders
(included as Appendix B to the Proxy Statement/Prospectus)
99.5 - Provisions of the Delaware General Corporation Law regarding
dissenters' rights of First Premier shareholders (included as
Appendix C to the Proxy Statement/Prospectus)
</TABLE>
- ----------------------
* To be filed by amendment.
II-3
<PAGE> 217
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
which, individually or together, represent a fundamental change in the
registration statement.
(iii) To include any additional material information
with respect to the plan of distribution:
(2) For determining liability under the Securities Act, treat
each such post-effective amendment as a new registration statement to
the securities offered, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the
termination of the offering.
(b) (1) The undersigned registrant hereby undertakes as
follows: that prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of
this registration statement, by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c), the issuer undertakes
that such reoffering prospectus will contain the information called for
by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(2) The registrant undertakes that every prospectus (i) that
is filed pursuant to paragraph (1) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Securities
Act and is used in connection with an offering of securities subject to
Rule 415, will be filed as a part of an amendment to the registration
statement and will not be used until such
II-4
<PAGE> 218
amendment is effective, and that, for purposes of determining any
liability under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
(d) The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that was
not the subject of and included in the registration statement when it
became effective.
II-5
<PAGE> 219
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all the requirements of filing on Form S-4 and has authorized
this Registration Statement to be signed on its behalf by the
undersigned, in the City of St. Louis, State of Missouri, on the 19th
day of May, 1999.
First Premier Financial Corporation
By:/s/ Richard C. Jensen
----------------------------------------
Richard C. Jensen
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Richard C. Jensen and Gerald G.
Kaufman and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him, in
his name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this
registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, including a
registration statement filed under Rule 462(b) of the Securities Act of
1933, as amended, with the Securities and Exchange Commission granting
unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be
done in and about the premises as fully and to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents may lawfully do or cause to be
done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the
capacities and on the dates stated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Richard C. Jensen President and Chief Executive Officer May 19, 1999
---------------------------------- (Principal Executive Officer) and Director
Richard C. Jensen
/s/ Daniel R. Sills Chief Financial Officer (Principal Financial May 19, 1999
---------------------------------- and Accounting Officer)
Daniel R. Sills
/s/ Alan C. Henderson Director May 19, 1999
----------------------------------
Alan C. Henderson
/s/ Gerald G. Kaufman Director May 19, 1999
----------------------------------
Gerald G. Kaufman
/s/ Lewis A. Levey Director May 19, 1999
----------------------------------
Lewis A. Levey
Director May 19, 1999
----------------------------------
Marvin I. Moskowitz
/s/ Andrew M. Rosen Director May 19, 1999
----------------------------------
Andrew M. Rosen
/s/ Frank R. Trulaske Director May 19, 1999
----------------------------------
Frank R. Trulaske
/s/ Patricia D. Whitaker Director May 19, 1999
----------------------------------
Patricia D. Whitaker
</TABLE>
II-6
<PAGE> 220
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- -----------------------------------------------------
<S> <C>
2 - Agreement and Plan of Merger, dated as of May 6, 1999 by and between First
Premier Financial Corporation and Premier Bancshares, Inc. (included as
Appendix A to the Proxy Statement/Prospectus)
3.1 - Certificate of Incorporation of First Premier.
3.1.1 - Certificate of Designations, Preferences and Rights
of Series A Preferred Stock of First Premier.
3.1.2 - Certificate of Amendment to the Certificate of Incorporation of First
Premier.
3.1.3 - Articles of Incorporation of Premier
3.1.4 - Amendment of Articles of Incorporation of Premier
3.1.5 - Articles of Agreement of Premier Bank
3.2 - By-Laws of First Premier.
3.2.1 - By-Laws of Premier
3.2.2 - By-Laws of Premier Bank
4.2 - See Exhibits 3.1 and 3.2 for provisions of the Certificate of Incorporation, as
amended, and By-Laws of First Premier defining rights of the holders of the
common stock of First Premier.
5 - Opinion of Smith, Gambrell & Russell, LLP.
8 - Tax Opinion of Smith, Gambrell & Russell, LLP *
10.1 - Employment Agreement dated July 16, 1998 between First Premier and
Richard C. Jensen
10.1 .1 - Amendment No. 1 to Employment Agreement between First Premier and
Richard C. Jensen dated ___________, 1999.*
10.2 - Form of Employment Agreement between First Premier and First Premier's
executive officers.
10.3 - First Premier's 1999 Stock Option Plan.*
10.4 - Employment Agreement dated May 6, 1999 between First Premier and Bruce
W. Wiley
23.1 - Consent of Smith, Gambrell & Russell, LLP (contained in their opinion at
Exhibit 5).
23.2(a) - Consent of KPMG LLP with respect to the financial statements of First
Premier.
23.2(b) - Consent of KPMG LLP with respect to the consolidated financial statements
of Premier.
24 - Power of Attorney (included in original signature page to this Registration
Statement).
</TABLE>
II-7
<PAGE> 221
<TABLE>
<S> <C>
99.1 - Form of Proxy for Special Meeting of Shareholders of Premier *
99.2 - Form of Proxy for Special Meeting of Shareholders of First Premier*
99.3 - Opinion of GRA Thompson White & Company, P.C. (included as Appendix D
to the Proxy Statement/Prospectus)
99.4 - Provisions of the General and Business Corporation
Law of Missouri regarding dissenters' rights of
Premier Shareholders (included as Appendix B to the
Proxy Statement/Prospectus)
99.5 - Provisions of the Delaware General Corporation Law regarding dissenters'
rights of First Premier shareholders (included as Appendix C to the Proxy
Statement/Prospectus)
</TABLE>
----------------------
* To be filed by amendment.
II-8
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
MISSOURI HOLDINGS, INC.
I.
The name of the Corporation is Missouri Holdings, Inc.
II.
The street address of the registered office of the Corporation is 1209
Orange Street, Wilmington, New Castle County, Delaware 19801. The registered
agent of the Corporation at such office is The Corporation Trust Company.
III.
The Corporation is organized for the purpose of engaging in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of Delaware, and the Corporation shall be authorized to exercise
and enjoy all powers, rights and privileges conferred upon corporations by the
laws of the State of Delaware as in force from time to time, including, without
limitation, all powers necessary or appropriate to carry out all those acts and
activities in which it may lawfully be engaged.
IV.
The Corporation shall have authority to issue 21,000,000 shares of
capital stock, which shall be divided into two classes with the following
designations, preferences, limitations and relative rights:
(A) Common Stock. One class shall consist of 20,000,000
shares of common stock having a $ .01 par value, designated "Common
Stock."
(B) Preferred Stock. One class shall consist of 1,000,000
shares of preferred stock having a $ .01 par value, designated
"Preferred Stock." The board of directors is authorized, subject to any
limitations prescribed by law, to provide for the issuance of the
shares of Preferred Stock in series, and by filing a certificate
pursuant to the applicable law of the State of Delaware, to establish
from time to time the number of shares to be included in each such
series, and to fix the designation, powers, preferences, and rights of
the shares of each such series and any qualifications, limitations or
restrictions thereof. The number of authorized shares of Preferred
Stock may be increased or decreased (but not below the number of shares
thereof then outstanding) by the affirmative vote of the holders of a
majority of the Common Stock, without a vote of the holders of the
Preferred Stock, or of any series thereof, unless a vote of any such
holders is required pursuant to the certificate or certificates
establishing the series of Preferred Stock.
1
<PAGE> 2
V.
The name and mailing address of the Incorporator of the Corporation is:
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Robert C. Schwartz Suite 3100, Promenade II
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309-3592
</TABLE>
VI.
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that this Article VI shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law (as in
effect and as hereafter amended) or (iv) for any transaction from which the
director derived an improper personal benefit. If the Delaware General
Corporation Law is hereafter amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of each director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.
Neither the amendment nor repeal of this Article VI, nor the adoption of any
provision of this Certificate of Incorporation inconsistent with this Article
VI, shall eliminate or reduce the effect of this Article VI in respect of any
acts or omissions occurring prior to such amendment, repeal or adoption of any
inconsistent provision.
VII.
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Incorporation on this 30TH day of April, 1998.
/s/ Robert C. Schwartz
--------------------------------------------
Robert C. Schwartz
Incorporator
2
<PAGE> 3
EXHIBIT A
SERIES A PREFERRED STOCK
1. Designation. 100,000 shares of the preferred stock, par value,
$0.01 per share, stated value $10.00 per share, of the Corporation are hereby
constituted as a series of the preferred stock designated as "Series A Preferred
Stock" (the "Series A Preferred Stock") and having relative rights and
preferences to all other classes and series of the capital stock of the
Corporation as set forth herein.
2. Dividends.
No dividends or other distributions shall be declared or
payable with respect to Series A Preferred Stock.
3. Preference on Liquidation.
(a) Liquidation Preference for Series A Preferred Stock.
In the event that the Corporation shall commence a voluntary case under the
Federal bankruptcy laws or any other applicable Federal or state bankruptcy,
insolvency or similar law, or consent to the entry of an order for relief in an
involuntary case under such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of the
Corporation or of any substantial part of its property, or make an assignment
for the benefit of its creditors, or admit in writing its inability to pay its
debts generally as they become due, or if a decree or order for relief in
respect of the Corporation shall be entered by a court having jurisdiction in
the premises in an involuntary case under the Federal bankruptcy laws or any
other applicable Federal or state bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Corporation or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and on
account of any such event the Corporation shall liquidate, dissolve or wind up,
or if the Corporation shall otherwise liquidate, dissolve or wind up, no
distribution of the assets of the Corporation shall be made to the holders of
shares of Common Stock or other Junior Securities (as hereinafter defined)(and
no monies shall be set apart for such purpose) unless (i) prior thereto, the
holders of shares of Series A Preferred Stock shall have received from the
assets of the Corporation an amount per share having a value equal to not less
than $10.00 (the "Series A Liquidation Preference").
(b) Pro Rata Payments. If, upon any such liquidation,
dissolution or other winding up of the affairs of the Corporation, the assets of
the Corporation shall be insufficient to permit the payment in full of the
Series A Liquidation Preference for each share of Series A Preferred Stock then
outstanding and the full liquidating payments on all Parity Securities (as
hereinafter defined) then the assets of the Corporation remaining after the
distribution to holders of any Senior Securities (as hereinafter defined) of the
full amounts to which they may be entitled shall be ratably distributed among
the holders of Series A Preferred Stock and of any Parity Securities in
proportion to the full amounts to which they would otherwise be respectively
entitled if all amounts thereon were paid in full.
(c) Sale not a Liquidation. Neither the voluntary sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all the property
<PAGE> 4
or assets of the Corporation nor the consolidation, merger or other business
combination of the Corporation with or into one or more corporations or other
Person (as hereinafter defined) shall be deemed to be a liquidation, dissolution
or winding up, voluntary or involuntary, of the Corporation.
(d) Notice of Liquidation. Written notice of any
liquidation, dissolution or winding up of the Corporation, stating the payment
date or dates when and the place or places where amounts distributable in such
circumstances shall be payable, shall be given by first class mail, postage
prepaid, not less than thirty (30) days prior to any payment date specified
therein, to the holders of record of the Series A Preferred Stock at their
respective addresses as shall appear on the records of the Corporation.
4. Voting. Except as otherwise provided by law, the shares of the
Series A Preferred Stock shall have no voting rights.
5. Redemption.
(a) Redemption Price. Any redemption of the Series A
Preferred Stock pursuant to this Section 5 shall be at a price equal to $10.00
per share (the "Redemption Price").
(b) Optional Redemption. At the option of the
Corporation, shares of the Series A Preferred Stock may be redeemed at any time
as a whole or in part from time to time, out of funds legally available
therefor, at a cash redemption price of $10.00 per share.
(c) Procedures for Redemption. In the event the
Corporation shall elect to redeem shares of Series A Preferred Stock pursuant to
Section 5(b), the Corporation shall give written notice of such redemption by
first class mail, postage prepaid, mailed not less than thirty (30) nor more
than ninety (90) days prior to the Redemption Date (as hereinafter defined), to
each holder of record of the shares to be redeemed, at such holder's address as
the same appears on the stock records of the Corporation. Each such notice shall
state: (i) the date on which the shares of the Series A Preferred Stock shall be
redeemed (the "Redemption Date"); (ii) the number of shares of Series A
Preferred Stock to be redeemed; (iii) the Redemption Price; (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the Redemption Price; (v) that payment will be made upon presentation and
surrender of such Series A Preferred Stock; and (vi) that such redemption is
mandatory. Notice having been mailed as aforesaid, from and after the Redemption
Date, unless the Corporation shall be in default in the payment of the
Redemption Price (A) shares of Series A Preferred Stock shall be deemed no
longer outstanding, and (B) all rights of the holders thereof as stockholders of
the Corporation (except the right to receive from the Corporation any moneys
payable upon redemption without interest thereon) shall cease.
Upon surrender in accordance with such notice of the
certificates for any such shares so redeemed (properly endorsed or assigned for
transfer with signatures guaranteed), such shares shall be redeemed by the
Corporation at the applicable Redemption Price.
6. Shares to be Retired. Any share of Series A Preferred Stock
repurchased or otherwise acquired by the Corporation shall be retired and
canceled and shall upon cancellation be restored to the status of authorized but
unissued shares of preferred stock, subject to reissuance by the Board of
Directors as shares of preferred stock of one or more other series but not as
shares of Series A Preferred Stock.
<PAGE> 5
7. Definitions. As used herein, the following terms shall have
the respective meanings set forth below:
"Business Day" means any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the
State of Florida.
"Common Stock" means the Corporation's Common Stock, $.01 par
value per share, and any stock into which such Common Stock may
hereafter be changed or for which such Common Stock may be exchanged
after giving effect to the terms of such change or exchange (by way of
reorganization, recapitalization, merger, consolidation or otherwise).
"Junior Securities" means the Common Stock and any other class
of capital stock or series of preferred stock hereafter created by the
Corporation which does not expressly provide that it ranks senior to or
pari passu with the Series A Preferred Stock as to dividends, other
distributions, liquidation preference or otherwise.
"Parity Securities" mean any class of capital stock or series
of preferred stock hereafter created by the Corporation which expressly
provides that it ranks pari passu with the Series A Preferred Stock as
to dividends, other distributions, liquidation preference or otherwise.
"Person" or "person" shall mean an individual, partnership,
corporation, trust, unincorporated organization, joint venture,
government or agency, political subdivision thereof, or any other
entity of any kind.
"Senior Securities" means any class or series of capital
stock, debt instrument or security convertible into capital stock or
debt securities of the Corporation other than Parity Securities or
Junior Securities.
"Series A Liquidation Preference" shall have the meaning set
forth in Section 3(a).
"Series A Preferred Stock" shall have the meaning set forth in
Section 1.
8. Notices. Except as may otherwise be provided for herein, all
notices referred to herein shall be in writing, and all notices hereunder shall
be deemed to have been given upon the earlier of (x) receipt of such notice, (y)
two Business Days after the mailing of such notice if sent by registered mail
(unless first-class mail shall be specifically permitted for such notice under
the terms hereof) or (z) the Business Day following the date such notice is put
in the possession of an overnight courier, in any case with postage or delivery
charges prepaid, addressed: if to the Corporation, to its temporary offices at
9755 Dogwood Road, Suite 310, Roswell, Georgia 30075, Attention: Mary E.
Johnson, Secretary and Treasurer of the Corporation, or to an agent of the
Corporation designated as permitted by the Articles of Incorporation, or, if to
any holder of the Series A Preferred Stock, to such holder at the address of
such holder of the Series A Preferred Stock as listed in the stock record books
of the Corporation.
<PAGE> 1
EXHIBIT 3.1.1
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF
SERIES A PREFERRED STOCK
OF
MISSOURI HOLDINGS, INC.
PURSUANT TO SECTION 151 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
Missouri Holdings, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify that, pursuant to the authority contained in paragraph IV of its
Certificate of Incorporation and in accordance with Section 151 of the General
Corporation Law of the State of Delaware, the following resolutions creating a
series of Preferred Stock, $.01 par value, designated as Series A Preferred
Stock, were duly adopted by the Board of Directors of the Corporation (the
"Board") as of June 19, 1998:
RESOLVED, that the Board hereby creates from among the Corporation's
1,000,000 authorized and previously undesignated shares of Preferred Stock, $.01
par value per share, a series of such Preferred Stock to be known as the "Series
A Preferred Stock" and to comprise 100,000 shares, and hereby adopts and
prescribes therefore the designation, number of shares and relative rights,
preferences and limitations, and other terms and conditions of such series as
set forth in, and governed by, Exhibit A attached to these minutes, with such
Exhibit A being hereby incorporated as part of this resolution; and
FURTHER RESOLVED, that the officers of the Corporation be and hereby
are authorized and directed to take any and all further action that may be
necessary or desirable to accomplish the above authorized action, including but
not limited to the execution and filing of all instruments or documents that may
be necessary to create, designate, issue or evidence shares of the Corporation's
Series A Preferred Stock.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed in its name by the undersigned duly authorized officers of the
Corporation, this 23rd day of July, 1998.
By: /s/ T. Stephen Johnson
--------------------------------
T. Stephen Johnson
Title: President
ATTEST:
By: /s/ Mary E. Johnson
-----------------------------
Mary E. Johnson
Title: Secretary and Treasurer
<PAGE> 1
EXHIBIT 3.1.2
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
MISSOURI HOLDINGS, INC.
MISSOURI HOLDINGS, INC. (the "Corporation"), a corporation incorporated
on May 1, 1998, and organized and existing under and by virtue of the Delaware
General Corporation Law, does hereby certify:
FIRST: That the Board of Directors of this Corporation, by the
unanimous written consent of its members, filed with the minutes of the Board,
duly adopted resolutions setting forth a proposed Certificate of Amendment of
the Certificate of Incorporation of this Corporation, declaring said amendment
to be advisable and submitting said amendment to the shareholders of this
Corporation for consideration thereof. The resolution setting forth the
amendment is as follows:
RESOLVED, that Section I of the Certificate of Incorporation
of this Corporation is hereby deleted in its entirety and the following
shall be inserted in lieu thereof:
I.
The name of the Corporation shall be First Premier Financial Corporation.
SECOND: That the shareholders of this Corporation approved the
Certificate of Amendment of the Certificate of Incorporation by written consent
of the holders of a majority of the shares entitled to vote in accordance with
Section 228 of the Delaware General Corporation Law, and that notice has been
given in accordance with the provisions of Section 228.
THIRD: That said Certificate of Amendment was duly adopted in
accordance with the provisions of Section 242 of the Delaware General
Corporation Law.
FOURTH: This Certificate of Amendment shall become effective upon the
time of its filing with the Secretary of State of the State of Delaware in
accordance with Section 103 of the Delaware General Corporation.
IN WITNESS WHEREOF, the undersigned have signed this Certificate of
Amendment on this 28th day of April, 1999.
MISSOURI HOLDINGS, INC.
By: /s/ Mary E. Johnson
--------------------------------
Mary E. Johnson, Secretary
<PAGE> 1
EXHIBIT 3.1.3
STATE OF MISSOURI OFFICE OF SECRETARY OF STATE
JUDITH K. MORIARTY, SECRETARY OF STATE
ARTICLES OF INCORPORATION
AS AMENDED OCTOBER 9, 1996 AND APRIL 8, 1998
Honorable Judith K. Moriarty
Secretary of State
State of Missouri
Jefferson City, MO 65101
The undersigned natural persons of the age of eighteen (18) years or
more for the purpose of forming a corporation under The General and Business
Corporation Law of Missouri hereby adopts the following Articles of
Incorporation.
ARTICLE ONE
The name of the Corporation is PREMIER BANCSHARES, INC.
ARTICLE TWO
The address, including street and number, if any, of the Corporation's
initial registered office in this State is 308 East High Street, Suite 301,
Jefferson City, Missouri 65101 and the name of its initial registered agent at
such address is James B. Deutsch.
ARTICLE THREE
The aggregate number, class and par value, if any, of shares which the
Corporation shall have authority to issue shall be 100,000 shares of common
stock each with a par value of One Dollar ($1.00).
The preferences, qualifications, limitations, restrictions, and the
special or relative rights, including convertible rights, if any, in respect of
the shares of each class are as follows:
None except as otherwise set forth above.
ARTICLE FOUR
The extent, if any, to which the preemptive right of a shareholder to
acquire additional shares is limited or denied:
<PAGE> 2
No shareholder shall have any preemptive right to obtain any additional
shares of stock in the corporation.
ARTICLE FIVE
The name and place of residence of each Incorporator is as follows:
<TABLE>
<CAPTION>
Name Street City
<S> <C> <C>
Bruce W. Wiley 2109 Julie Ln. Jefferson City, MO 65109
</TABLE>
ARTICLE SIX
The number of Directors to constitute the first Board of Directors is
nine (9). Thereafter the number of Directors shall be fixed by, or in the manner
provided in, the By-Laws. Any changes in the number of Directors will be
reported to the Secretary of State within thirty (30) calendar days of such
change.
ARTICLE SEVEN
The duration of the Corporation is Perpetual.
ARTICLE EIGHT
The Corporation is formed for the following purposes:
To engage in any lawful business for which Corporations may be
organized under the General and Business Corporation Law of Missouri, including,
without limitation, that of a bank holding company.
To own, hold, build, construct, and erect buildings, and structures of
all types and to buy, sell, lease, own, manage, operate, maintain, repair, or
store real and personal property of all kinds; to transport, convey and deliver,
as a private carrier, all kinds and character of commodities, for the
Corporation and for others, and to do all things necessary, convenient or
incidental thereto; to execute deeds, mortgages, deeds of trust, contracts and
other types of written instruments; to acquire, hold, own, buy, sell, transfer
and otherwise dispose of patents and patent rights, trademarks and tradenames,
copyrights, licenses, franchises, permits and other evidences of right; to
engage in any and all businesses and activities permitted by law; to have and to
exercise all powers necessary or incident to carrying out its corporate
purposes; to exercise all other powers permitted by law, and to possess and
enjoy all rights and powers which now or at any time hereafter may be granted to
or exercised by a corporation of this character; to exercise all of the powers
granted under the provisions of Section 351.385 of the Revised Statutes of
Missouri (1986) and Amendments thereto.
<PAGE> 3
ARTICLE NINE
Except as other-wise specifically provided by statute, all powers of
management and direct control of the Corporation shall be vested in the Board of
Directors, including, but not limited to, the power to make, alter, amend or
repeal the By-Laws of the Corporation.
ARTICLE TEN
No contract or other transaction between this Corporation and any other
firm or corporation shall be affected or invalidated by reason of the fact that
any of the Directors or Officers of this Corporation are interested in or are
members, shareholders, directors or officers of such other firm or corporation,
and any Director or Officer of this Corporation may be a party to or may be
interested in any contract or transaction of this Corporation in which this
Corporation is interested and no such contract or transaction shall be affected
or invalidated thereby, and each and every person who may become a Director or
Officer of this Corporation is hereby relieved from any liability as a result of
holding any such position that might otherwise exist from contracting or
transacting business with this Corporation for the benefit of such Director or
Officer or of any person, firm, association or corporation in which such
Director or Officer may be in anywise interested.
ARTICLE ELEVEN
The private property of the Shareholders of this Corporation shall not
be subject to the payment of corporate debts, except to the extent of any unpaid
balance of subscriptions for shares.
ARTICLE TWELVE
Each Director, Officer, employee or agent, or former Director, Officer,
employee or agent of this Corporation and his or her legal representatives,
shall be indemnified by the Corporation against liabilities, expenses, counsel
fees and costs reasonably incurred by such Director, Officer, employee or agent
or his or her estate in connection with, or arising out of, any action, suit,
proceeding or claim in which he or she is made a party by reason of his or her
being or having been such Director, Officer, employee or agent; and any person
who, at the request of this Corporation, served as director, officer, employee
or agent of another corporation in which this Corporation owned corporate stock
and his or her legal representative shall in like manner be indemnified by this
Corporation if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Corporation; or had no reasonable cause to believe his or her conduct was
unlawful. However, in neither case shall the Corporation indemnify such
Director, Officer, employee or agent with respect to any matters as to which he
or she shall be finally adjudged in any such action, suit or proceeding to have
been liable for negligence or misconduct in the performance of his or her duties
as such Director, Officer, employee or agent unless the court in which the
action or suit was brought determines upon application that despite the
adjudication of liability and in view of all the circumstances of
<PAGE> 4
the case, the person is fairly and reasonably entitled to indemnification for
such expenses which the court shall deem proper. The indemnification herein
provided for, however, shall apply also in respect of any amount paid in
compromise or settlement of any such action, suit or proceeding or claim
asserted against such Director, Officer, employee or agent (including expenses,
counsel fees and costs reasonably incurred in connection therewith), provided
the Board of Directors shall have first approved such proposed compromise
settlement by a majority vote of the Board of Directors and determined that the
Director, Officer, employee or agent involved was not guilty of negligence or
misconduct, but, in taking such action, any Director involved shall not be
qualified to vote thereon, and if for this reason a quorum of the Board cannot
be obtained to vote on such matters, it shall be determined by a Committee of
three (3) or more persons appointed by the Shareholders at a duly called special
meeting or a regular meeting. In determining whether or not a Director, Officer,
employee or agent was guilty of negligence or misconduct in relation to any such
matter, the Board of Directors or Committee, as the case may be, may rely
conclusively upon an opinion of independent counsel selected by such Board or
Committee. The right to indemnification herein provided shall not be exclusive
of any other rights not inconsistent herewith to which such Director, Officer,
employee or agent may be entitled under the Articles of Incorporation, the
By-Laws of the Corporation, any agreement with the Corporation, vote of the
Shareholders or disinterested Directors under Section 351 of the Missouri
Corporation Laws of 1986, as amended, or otherwise.
IN WITNESS WHEREOF, these Articles of Incorporation have been signed
this November 22nd, 1994.
/s/ Bruce W. Wiley
---------------------------
Bruce W. Wiley
Incorporator
STATE OF MISSOURI )
) SS.
COUNTY OF COLE )
1, a Notary Public in and for said State, do hereby certify that on the
22nd day of November, 1994, personally appeared before me, Bruce W. Wiley, who
being by me first duly sworn, declared that he is the person who signed the
foregoing document as Incorporator, and that the statements therein contained
are true.
/s/ Llana Sue Gerard
----------------------------
Notary Public
My Commission Expires: Jan. 5, 1996
<PAGE> 1
[SEAL OF THE STATE EXHIBIT 3.1.4
OF MISSOURI]
STATE OF MISSOURI
REBECCA MCDOWELL COOK, SECRETARY OF STATE
P.O. BOX 778, JEFFERSON CITY, MO. 65102
Corporation Division
AMENDMENT OF ARTICLES OF INCORPORATION
(To be submitted in duplicate)
Pursuant to the provisions of The General and Business Corporation Law of
Missouri, the undersigned Corporation certifies the following:
1. The present name of the Corporation is PREMIER BANCSHARES, INC.
--------------------------------
-----------------------------------------------------------------------
The name under which it was originally organized was PREMIER
BANCSHARES, INC. ------------------
-----------------------------------------------------------------------
2. An amendment to the Corporation's Articles of Incorporation was adopted
by the shareholders on APRIL 8, 1998 .
------------------------------------------------
3. Article Number 3 is amended to read as follows:
The aggregate number, class and par value, if any, of shares which the
Corporation shall have authority to issue shall be 100,000 shares of
common stock each with a par value of One Dollar ($1.00).
(If more than one article is to be amended or
more space is needed attach fly sheet.)
<PAGE> 2
4. Of the 38,905 shares outstanding, 38,905 of such shares were entitled
to vote on such amendment. The number of outstanding shares of any
class entitled to vote thereon as a class were as follows:
<TABLE>
<CAPTION>
Class Number of Outstanding Shares
<S> <C>
COMMON 38,905
</TABLE>
5. The number of shares voted for and against the amendment was as
follows:
<TABLE>
<CAPTION>
Class No Voted For No. Voted Against
<S> <C> <C>
COMMON 26,884 -0-
</TABLE>
6. If the amendment changed the number or par value of authorized shares
having a par value, the amount in dollars of authorized shares having a
par value as changed is:
$100,000.00
If the amendment changed the number of authorized shares without par
value, the authorized number of shares without par value as changed and
the consideration proposed to be received for such increased authorized
shares without par value as are to be presently issued are:
N/A
7. If the amendment provides for an exchange, reclassification, or
cancellation of issued shares, or a reduction of the number of
authorized shares of any class below the number of issued shares of
that class, the following is a statement of the manner in which such
reduction shall be effected:
N/A
<PAGE> 3
IN WITNESS WHEREOF, the undersigned, BRUCE W. WILEY, PRESIDENT President or
___________________________________________ has executed this instrument and its
Vice President
SECRETARY has affixed its corporate seal hereto and attested said seal on the
14th day of APRIL, 1998.
PLACE PREMIER BANCSHARES, INC.
CORPORATE SEAL ----------------------------------
HERE Name of Corporation
(IF NO SEAL, STATE "NONE.")
ATTEST:
By /s/ Bruce W. Wiley
- ------------------------------ ----------------------------------
Secretary President
State of Missouri } SS.
County of Cole
I, ROBERT W. KUCSIK, a Notary Public, do hereby certif that on this 14th day of
APRIL, 19 98, personally appeared before me BRUCE W. WILEY who, being by me
first duly sworn, declared that he is the PRESIDENT OF PREMIER BANCSHARES, INC.
that he signed the foregoing documents as PRESIDENT of the corporation, and that
the statements therein contained are true.
(Notarial Seal) /s/ Robert W. Kucsik
--------------------------------
- --------------------------------------------------------------------------------
ROBERT W. KUCSIK Notary Public
NOTARY PUBLIC My commission expires 10/7/2001
NOTARY SEAL ---------
STATE OF MISSOURI
<PAGE> 1
EXHIBIT 3.1.5
ARTICLES OF AGREEMENT
Know all men by these presents:
That we, the undersigned, desirous of forming a corporation under the laws of
the State of Missouri, and more particularly under the provisions of Chapter
362, RSMo, thereto, for the purpose of converting a bank to a trust charter,
have entered into the following agreements:
FIRST: That the name of this corporation shall be:
Premier Bank
------------------------------------
SECOND: That the bank shall be located at 815 W. Stadium Blvd. in the City of
Jefferson City County of Cole, State of Missouri.
THIRD: That the amount of the capital stock of the corporation shall be
$1,751,000.00 divided into 35,020 shares of the par value of $50.00 each; that
this is the present number and amount of capital stock outstanding, and is to be
paid in assets of Premier Bank, a state chartered bank, which assets will be
assigned to the trust company on the date it is incorporated, that the net value
of such assets is equal to at least the full amount of the aforesaid capital
stock, that the surplus will be $3,251,000.00 and the undivided profits shall be
$100,235.11 (as of 8-31-98).
FOURTH: That the names and places of residence of the several shareholders and
the number of shares subscribed by each are as follows:
<TABLE>
<CAPTION>
NAME RESIDENCE NUMBER OF SHARES
---- --------- ----------------
<S> <C> <C>
Bruce W. Wiley 2109 Julie Lane 3,000
Charles R. Willibrand 416 Valley View 3,000
Donald Krattli 3109 Citadel 3,000
Larry Bloebaum 3105 Citadel 3,000
Harold B. Remley 601 E. McCarty 3,000
</TABLE>
FIFTH: The proposed resulting trust company, Premier Bank is and shall be
considered the same business and corporate entity as and a continuation of the
corporate entity and identity of, the converting state banking association,
Premier Bank, although as to rights, powers and duties, the proposed resulting
institution is a trust company incorporated under the laws of State of Missouri.
<PAGE> 2
SIXTH: That the name and places of residence of the proposed officers are as
follows:
<TABLE>
<CAPTION>
NAME RESIDENCE
---- ---------
<S> <C>
Bruce W. Wiley 2109 Julie Lane, JC
Steven A. Smith 1603 Caton Drive, Columbia
Mark Wm. Naeger 5510 Saddlebrooke Lane, Lohman
Randy Bono 995 Diamond Ridge, JC
Robert Kucsik 3412 N. Ten Mile Dr., JC
Tama Lootens 6912 Bode Ferry Rd., JC
James Smith 5213B Collier Court, JC
</TABLE>
SEVENTH: The Board of Directors shall consist of 6 shareholders, and the
following are the names of those agreed upon as the first directors:
Charles R. Willibrand
Bruce W. Wiley
Donald E. Krattli
Larry R. Bloebaum
Harold B. Remley
Floyd Trim
EIGHTH: The duration of the corporation shall be perpetual.
NINTH: The purpose for which this corporation is formed is to have and exercise
all rights and powers of a trust company under Chapter 362, RSMo. except that
this corporation shall not execute as surety of any bond or act as trustee of
any trust or engage in fiduciary activities without the written authorization of
the Commissioner of Finance.
IN TESTIMONY WHEREOF, we have hereunto, this 9th day of September 1998 set our
hands.
DIRECTORS:
/s/ Charles R. Willibrand
--------------------------------------
Charles R. Willibrand, Chairman
<PAGE> 3
/s/ Larry R. Bloebaum
--------------------------------------
Larry R. Bloebaum
/s/ Donald E. Krattli
--------------------------------------
Donald E. Krattli
/s/ Harold B. Remley
--------------------------------------
Harold B. Remley
/s/ Floyd Trim
--------------------------------------
Floyd Trim
STATE OF MISSOURI )
) SS.
COUNTY OF COLE )
On this 9th day of September, 1998, before me personally appeared the
above directors to me known to be the persons described in and who executed the
foregoing instrument, and acknowledged that they executed the same as their free
act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notary
seal the day and year above mentioned. My commission expires: 10/1/2001.
/s/ Robert W. Kucsik
---------------------------------------
Notary Public
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
MISSOURI HOLDINGS, INC.
ARTICLE XII
STOCKHOLDERS
1.01 Place of Meetings. Annual and special meetings of the
stockholders shall be held at such place, either within or without of the State
of Delaware, as may be designated by the Board of Directors. In the absence of
such designation, such meeting shall be held at the principal office of the
Corporation located within the State of Missouri.
1.02 Annual Meeting. The annual meeting of the stockholders for the
election of directors and the transaction of such other business as may properly
come before the meeting shall be held on such date as may be determined by
resolution of the Board of Directors.
1.03 Special Meeting. Unless otherwise prescribed by statute,
special meetings of the stockholders, for any purpose or purposes, shall be
called in accordance with the Certificate of Incorporation of the Corporation.
No business other than that specified in the notice of special meeting shall be
transacted at any such special meeting.
1.04 Notice of Meetings. Written or printed notice stating the
place, day and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten (10) nor more than sixty (60) days before the date of the meeting,
either personally or by mail, by or at the direction of the President, the
Secretary or the Board of Directors or officer calling the meeting, to each
stockholder of record in the manner above provided. The notice of special
meeting may be waived by submitting a signed waiver or by attendance at the
meeting.
1.05 Closing of Transfer Books and Fixing Record Date. For the
purposes of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or stockholders entitled to
receive payment of any dividend, or in order to make a determination of
stockholders for any other proper purpose, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period not to exceed
in any case sixty (60) days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of stockholders, such date in
any case to be not more than sixty (60) days, and in case of a meeting of
stockholders, not less than ten (10) days, prior to the date on which the
particular action requiring such determination of stockholders is to be taken,
and in no event may the record date precede the date upon which the Directors
adopt a resolution fixing the record date. If the stock transfer books are not
closed and no record date is fixed for the determination of stockholders
entitled to notice of or to vote at a meeting of stockholders, or stockholders
entitled to receive payment of a dividend, or a determination of stockholders
for any other proper purpose, the date on which notice of the meeting is given
(as defined in Article IX hereof) or the date on which the resolution of the
Board of Directors declaring such dividend is adopted, as the case may be, shall
be the record date for such determination of the stockholders. When a
<PAGE> 2
determination of stockholders entitled to vote at any meeting of stockholders
has been made as provided in this Section 1.05, such determination shall apply
to any adjournment thereof, unless the Board of Directors fixes a new record
date for the adjournment.
1.06 Voting List. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make, at least ten (10) days
before each meeting of stockholders, a complete list of the stockholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each,
which list, for a period of ten (10) days prior to such meeting, shall be kept
on file at the principal office of the Corporation and shall be subject to
inspection by any stockholder at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any stockholder during the whole time of
the meeting. The original stock transfer books shall be prima facie evidence as
to who are the stockholders entitled to examine such list or transfer books or
to vote at any meeting of stockholders.
1.07 Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum for the transaction of business at such meeting. If a quorum
is present, the affirmative vote of the majority of the shares represented at
the meeting entitled to vote on the subject matter shall be the act of the
stockholders, unless the vote of a greater number of shares on the matter being
voted on is required by the Certificate of Incorporation of the Corporation,
these Bylaws or applicable law. Directors shall be elected by a plurality of the
shares represented at the meeting and entitled to vote in the election of
Directors.
1.08 Adjournment of Stockholder Meeting. Any meeting of
stockholders may be adjourned at any time, whether or not there is a quorum, by
the chairman of such meeting or the vote of the majority of shares represented
at such meeting. When a meeting is adjourned to another time or place, notice
need not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting, the Corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
1.09 Proxies. At all meetings of stockholders, a stockholder may
vote by proxy, executed in writing by the stockholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
three (3) years from the date of its execution, unless otherwise provided in the
proxy.
1.10 Voting of Shares. Each outstanding share shall be entitled to
one vote and each fractional share shall be entitled to a corresponding
fractional vote on each matter submitted to vote at a meeting of stockholders.
1.11 Voting by Voice, Hand or Ballot. All voting at meetings of the
stockholders, including voting for the election of directors but excepting where
otherwise required by law, shall be by a voice or hand vote; provided, however,
that upon demand therefor by a stockholder entitled to vote or by his or her
proxy, a vote by written ballot shall be taken. Every written ballot shall state
the name of the stockholder or proxy voting and such other information as may be
required under the procedure established for the meeting.
-2-
<PAGE> 3
1.12 Voting of Shares by Certain Holders. The rights of persons in
whose names shares stand on the stock records of the Corporation to vote is
subject to the following provisions:
(a) Neither treasury shares, nor shares of its
own stock held by the Corporation in a fiduciary capacity, nor shares held by
another Corporation if the majority of the shares entitled to vote for the
election of directors of such other Corporation is held by the Corporation,
shall be voted at any meeting or counted in determining the total number of
outstanding shares at any given time.
(b) Shares standing in the name of another
corporation, domestic or foreign, may be voted by such officer, agent, or proxy
as the bylaws of such corporation may prescribe, or, in the absence of such
provision, as the board of directors of such Corporation may determine.
(c) Shares held by an administrator, executor,
personal representative, guardian, or conservator may be voted by him, either in
person or by proxy, without a transfer of such shares into his name.
(d) Shares standing in the name of a trustee
may be voted by him, either in person or by proxy, but no trustee shall be
entitled to vote shares held by him without a transfer of such shares into his
name.
(e) Shares standing in the name of a receiver
may be voted by such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer thereof into his
name if authority to do so be contained in an appropriate order of the court by
which such receiver was appointed.
(f) A stockholder whose shares are pledged
shall be entitled to vote such shares until the shares have been transferred
into the name of the pledgee, and thereafter the pledgee shall be entitled to
vote the shares so transferred.
1.13 Informal Action by Stockholders. Any action required or
permitted to be taken by the stockholders must be affected at a duly called
annual or special meeting of the stockholders of the Corporation. Stockholders
may not take any action by written consent in lieu of a meeting of the
stockholders.
1.14 Conduct of Stockholder Meetings. Meetings of the stockholders
shall be presided over by the Chairman of the Board or, in his absence, the
President of the Corporation, or, if no such person is present, a person
designated by the Chairman of the Board or, in his absence, the President of the
Corporation. The Secretary of the Corporation or, in his absence, an Assistant
Secretary, or, if no such person is present, a person designated by the chairman
of the meeting, shall act as secretary of the meeting. The precedence of and
procedure on motions and other procedural matters at a meeting shall be as
determined by the chairman of such meeting, in his sole discretion, provided
that such chairman acts in a manner which is not inconsistent with the
Certificate of Incorporation of the Corporation, these Bylaws and applicable
law.
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1.15 Notification of Stockholder Business.
(a) All business properly brought before an
annual meeting of the stockholders shall be transacted at such meeting. Business
shall be deemed properly brought before an annual meeting of stockholders only
if it is (i) specified in the notice of meeting (or any supplement thereto)
given by or at the request of the Board of Directors, (ii) otherwise properly
brought before the meeting by or at the direction of the Board of Directors or
(iii) brought before the meeting by a stockholder of record entitled to vote at
such meeting if written notice of such stockholder's intent to bring such
business before such meeting is delivered to the Secretary of the Corporation at
the principal executive offices of the Corporation not later than the close of
business on the sixtieth (60th) day nor earlier than the ninetieth (90th) day
prior to the first anniversary of the preceding year's annual meeting of
stockholders; provided, however, that in the event that the date of such meeting
is more than thirty (30) days before or more than sixty (60) days after such
anniversary date, written notice by the stockholder must be delivered not
earlier than the close of business on the ninetieth (90th) day prior to such
meeting and not later than the close of business on the later of the sixtieth
(60th) day prior to such meeting or the tenth (10th) day following issuance by
the Corporation of a press release announcing the date of such meeting. In no
event shall any press release announcing an adjournment of an annual meeting
commence a new time period for the giving of written notice by a stockholder
described above.
(b) Each written notice by a stockholder described above shall set
forth, at a minimum, the following: (i) as to the stockholder giving the notice
and, if applicable, the beneficial owner or the person on whose behalf such
proposal is being made (A) the name and address of such person as such
information appears on the books of the Corporation, (B) the class and number of
such shares of the Corporation which are owned beneficially and of record by
such person; (ii) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting;
(iii) a representation that the stockholder is a holder of record of shares of
the Corporation entitled to vote at such meeting and intends to appear in person
or in proxy at such meeting to propose such business; (iv) any material interest
of the stockholder in such business.
(c) The chairman of the meeting may refuse to transact any
business at any meeting presented without compliance with the procedures set
forth in this Section 1.15.
ARTICLE XIII
BOARD OF DIRECTORS
2.01 General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors, except as otherwise provided in the
Certificate of Incorporation or by applicable law.
2.02 Number; Qualifications. The Corporation's Board of Directors
shall consist of not fewer than two (2) and not more than twenty-five (25)
Directors, as such number may be designated from time to time by the Board of
Directors. Directors need not be stockholders of the Corporation or residents of
the State of Delaware or the State of Missouri.
2.03 Classified Board; Election; Term of Office. Concurrent with
the adoption of these Bylaws, the Board of Directors shall be classified with
respect to the time for which they severally hold
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office, into three classes as nearly equal in number as possible. One class of
directors ("Class I Directors") shall be elected originally for a term expiring
at the annual meeting of shareholders to be held in 2000; another class of
directors ("Class II Directors") shall be elected originally for a term expiring
at the annual meeting of shareholders to be held in 2001; and another class of
directors ("Class III Directors") shall be elected originally for a term
expiring at the annual meeting of shareholders to be held in 2002. Each member
of each class shall hold office until his or her successor is elected and has
qualified. Directors shall be elected by plurality vote of the stockholders. No
reduction in the number of Directors shall have the effect of removing any
director before such Director's term of office shall expire.
2.04 Removal of Directors. Any Director may be removed only in the
manner provided in the Corporation's Certificate of Incorporation, as amended.
If no such provision appears therein, any Director may be removed either with or
without cause, at any time, by vote of the stockholders holding a majority of
the shares then entitled to vote for the election of Directors, present at any
special meeting called for that purpose. In case any vacancy so created shall
not be filled by the stockholders at such meeting, such vacancy may be filled by
the Board of Directors as provided in Section 2.06 hereof.
2.05 Resignation. Any Director may resign at any time by giving
written notice to the President or to the Secretary of the Corporation. Such
resignation shall take effect at the time specified therein; and unless
otherwise specified therein, the acceptance of such resignation by the
Corporation shall not be necessary to make it effective.
2.06 Vacancies. Any vacancy occurring in the Board of Directors,
whether by resignation of a Director or an increase in the number of Directors,
may be filled by the affirmative vote of a majority of the remaining Directors,
though less than a quorum, or by a sole remaining Director. A Director elected
by the remaining Directors or the stockholders to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any directorship to
be filled by reason of an increase in the number of Directors shall be filled by
the affirmative vote of a majority of the Directors then in office or by
election at an annual meeting or a special meeting of stockholders called for
that purpose, and a Director so chosen shall hold office for the term specified
in Section 2.03 of this Article.
2.07 Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately after and at the
same place as the annual meeting of the stockholders. The Board of Directors may
provide by resolution the time and place, either within or without the State of
Delaware, for the holding of additional regular meetings without other notice
than such resolution.
2.08 Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President, the Chairman of the Board
or a majority of the Directors. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, either within or without
the State of Delaware, as the place for holding any special meeting of the Board
of Directors called by them.
2.09 Telephonic Meetings. Members of the Board of Directors or any
committee designated by the Board of Directors may participate in a meeting of
the Board of Directors or committee by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear one another at the same time. Such participation shall constitute presence
in person at the meeting. All participants in any meeting of Directors, by
virtue of their participation and without
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further action on their part, shall be deemed to have consented to the recording
of such meeting by electronic device or otherwise, and to the making of a
written transcript thereof, in order that minutes thereof shall be available for
the Corporation's records.
2.10 Notice. Notice of any special meeting shall be given at least
four (4) days previous thereto by written notice mailed to each Director at his
business address, or by notice given at least two (2) days prior to the meeting,
in person or by any means specified in Section 9.01(b) or (c). Any Director may
waive notice of any meeting. The attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting, except where a Director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or waiver of notice of such
meeting.
2.11 Quorum. A majority of the number of Directors fixed in
accordance with these Bylaws shall constitute a quorum for the transaction of
business. The act of the majority of the Directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
2.12 Compensation. The amount, if any, which each Director shall be
entitled to receive as compensation for his services as a Director shall be
fixed from time to time by resolution of the Board of Directors. If any director
shall serve as a member of any committee of the Board of Directors or perform
special services at the instance of the Board of Directors, such may be paid
additional compensation as the Board of Directors may determine. Each Director
shall be entitled to reimbursement for traveling expenses incurred by him in
attending any meeting of the Board of Directors or of a committee. Such
compensation shall be payable even though a meeting may be adjourned because of
a lack of a quorum.
2.13 Action by Directors Without Meeting. Any action required to be
taken at a meeting of the Directors of the Corporation or any action which may
be taken at such a meeting, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
Directors entitled to vote with respect to the subject matter thereof. A consent
shall be sufficient for this Section 2.13 if it is executed in counterparts, in
which event all of such counterparts, when taken together, shall constitute one
and the same consent.
2.14 Designation of Committees. The Board of Directors may by
resolution or resolutions passed by a majority of the whole Board of Directors
designate one or more committees, each committee to consist of two or more of
the directors of the Corporation, which to the extent provided in the resolution
or resolutions shall have and may exercise the powers of the Board of Directors
in the management of the business and affairs of the Corporation, and may have
power to authorize the seal of the Corporation to be affixed to all papers which
may require it; provided, however, that no such committee shall have any power
or authority in reference to those matters prohibited by Section 141(c) of the
Delaware General Corporation Law. Such committee or committees shall have such
name or names as may be determined from time to time by resolution or
resolutions adopted by the Board of Directors. If provisions be made for any
such committee or committees, the members thereof shall be appointed by the
Board of Directors and shall serve during the pleasure of the Board of
Directors. A majority of the members of a committee shall constitute a quorum
for the transaction of business. The Board of Directors may designate one or
more directors of the Corporation as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee and
who, in such event, shall be counted in determining the presence of a quorum.
Vacancies in such committees shall be filled by the Board of
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Directors; provided, however, that in the absence or disqualification of any
member of such committee or committees, the member or members thereof present at
any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. The Board of Directors may at its pleasure discontinue any such
committee or committees.
ARTICLE XIV
OFFICERS
3.01 Generally. The Board of Directors at its first meeting and at
each annual meeting thereafter shall elect, at a minimum, the following
officers: a President, a Secretary and a Treasurer. The Board of Directors at
any time and from time to time may elect or appoint such other officers as it
shall deem necessary, including, but not limited to, a Chairman of the Board of
Directors, one or more Vice Presidents, one or more Assistant Vice Presidents,
one or more Assistant Treasurers, and one or more Assistant Secretaries, who
shall hold their offices for such terms as shall be determined by the Board of
Directors and shall exercise such powers and perform such duties as are
specified by these Bylaws, or as shall be determined from time to time by the
Board of Directors. Any person may hold two or more offices, except that no
person may hold the office of President and Secretary. No officer need be a
shareholder of the Corporation.
3.02 Compensation. The salaries of the officers of the corporation
shall be fixed by the Board of Directors, except that the Board of Directors may
delegate to any committee or officer or officers the power to fix the
compensation of any other officer.
3.03 Tenure. Each officer of the corporation shall hold office for
the term for which he is elected or appointed, and until his successor has been
duly elected or appointed and has qualified, or until his earlier resignation,
removal from office or death. Any officer may be removed by the Board of
Directors whenever in its judgment the best interest of the corporation will be
served thereby.
3.04 Vacancies. A vacancy in any office, because of resignation,
removal or death may be filled by the Board of Directors for the unexpired
portion of the term.
3.05 Chairman of the Board. The Chairman of the Board shall preside
at all meetings of stockholders and of the Board of Directors. He shall be the
chief executive officer and the head of the corporation and, subject to the
Board of Directors, shall have the general control and management of the
business and affairs of the corporation. He shall vote any shares of stock or
other voting securities owned by the corporation. He may sign, with the
Secretary or any other proper officer of the corporation thereunto authorized by
the Board of Directors, certificates for shares of the corporation, any deeds,
mortgages, bonds, policies of insurance, contracts, investment certificates or
other instruments which the Board of Directors has authorized to be executed. In
general, he shall perform all duties incident to the office of the Chairman of
the Board and such other duties as may from time to time be assigned to him by
the Board.
3.06 President. The President shall be the chief operating officer
of the corporation and, subject to the control of the Board of Directors, shall
in general manage, supervise and control the day to day business and affairs of
the corporation. He shall, when present, preside at meetings of all of the
stockholders
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in the absence of the Chairman of the Board or if no Chairman of the Board has
been elected. He may sign, with the Secretary or any other proper officer of the
corporation thereunto authorized by the Board of Directors, certificates for
shares of the corporation, any deeds, mortgages, bonds, policies of insurance,
contracts, investment certificates, or other instruments which the Board of
Directors has authorized to be executed, except in cases where signing the
execution thereof shall be expressly delegated by the Board of Directors or by
these Bylaws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and in general shall perform
all duties incident to the office of the President and such other duties as may
be prescribed by the Board of Directors from time to time.
3.07 Vice Presidents. In the absence of the President or in the
event of his death or inability or refusal to act, the Vice President (or in the
event there may be more than one Vice President, the Vice Presidents in the
order designated at the time of their election, or in the absence of any
designation, then in order of election) shall perform the duties of the
President and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. Any Vice President may sign, with the
Secretary or an Assistant Secretary, certificates for shares of the corporation
and shall perform such other duties as shall from time to time be assigned to
him by the President or by the Board of Directors. All Vice Presidents shall
have such other duties as prescribed by the Board of Directors from time to
time.
3.08 Secretary. The Secretary shall: (a) attend and keep the
minutes of the stockholders' meetings and of the Board of Directors' meetings in
one or more books provided by that purpose; (b) see that all notices are duly
given in accordance with the provisions of these Bylaws as required by law; (c)
be custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents, the execution of
which on behalf of the corporation under its seal is duly authorized; (d) keep a
register of the post office address of each stockholder which shall be furnished
to the Secretary by such stockholder; (e) sign with the President or a Vice
President certificates for shares of the corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the corporation; (g) in general
perform all duties incident to the office of the Secretary and such other duties
as from time to time may be assigned to him by the President or the Board of
Directors.
3.09 Treasurer. The Treasurer, unless otherwise determined by the
Board of Directors, shall: (a) have charge and custody of and be responsible for
all funds and securities of the corporation; (b) receive and give receipts for
monies due and payable to the corporation from any source whatsoever, and
deposit all such monies in the name of the corporation in such banks, trust
companies or other depositories as shall be selected by the Board of Directors;
and (c) in general perform all the duties incident to the office of Treasurer
and such other duties as from time to time may be assigned by the Board of
Directors.
3.10 Assistant Officers. The Assistant Secretaries, when authorized
by the Board of Directors, may sign with the President or a Vice President
certificates for shares of the corporation the issuance of which shall have been
authorized by a resolution of the Board of Directors. The Assistant Vice
Presidents, Secretaries and Treasurers, in general, shall perform such duties as
shall be assigned by the Vice President(s), Secretary or Treasurer,
respectively, or by the President or by the Board of Directors.
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ARTICLE XV
INDEMNIFICATION
4.01 Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter, a "proceeding"), by reason of the fact that he or
she is or was a director or an officer of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise tax or penalties and amounts paid in settlement)
reasonably incurred or suffered by such indemnitee in connection therewith;
provided, however, that, except as provided in Section 4.03 hereof with respect
to proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
4.02 Right to Advancement of Expenses. The right to indemnification
conferred in Section 4.01 of this Article IV shall include the right to be paid
by the Corporation the expenses (including attorneys' fees) incurred in
defending any such proceeding in advance of its final disposition (hereinafter,
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking (hereinafter, an "undertaking"),
by or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is not
further right to appeal (hereinafter, a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section 4.02 or otherwise. The rights to indemnification and to the advancement
of expenses conferred in Section 4.01 and 4.02 of this Article IV shall be
contract rights and such rights shall continue as to an indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.
4.03 Right of Indemnitee to Bring Suit. If a claim under Section
4.01 or 4.02 of this Article IV is not paid in full by the Corporation within
sixty (60) days after a written claim therefor has been received by the
Corporation (except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty (20) days) the indemnitee may
at any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, or in a
suit brought by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, the indemnitee shall be entitled to be paid also
to the expense of prosecuting or defending such suit. In (a) any suit brought by
the indemnitee to enforce a right to indemnification hereunder (but not in a
suit brought by the indemnitee to enforce a right to an advancement of expenses)
it shall be a defense that
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and (b) in any suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the Corporation shall be
entitled to recover such expenses upon a final adjudication that, the indemnitee
has not met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel or its
stockholders) that the indemnitee has not met such applicable standard of
conduct shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article IV or otherwise, shall be on the Corporation.
4.04 Non-Exclusivity of Rights. The right to indemnification and to
the advancement of expenses conferred in this Article IV shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, the Certificate of Incorporation of the Corporation, these Bylaws, any
agreement or vote of stockholder or disinterested directors or otherwise.
4.05 Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
4.06 Indemnification of Employees and Agents. The Corporation may,
to the extent authorized from time to time by the Board of Directors, grant
rights to indemnification and to the advancement of expenses to any employee or
agent of the Corporation to the fullest extent of the provisions of this Article
IV with respect to the indemnification and advancement of expenses of directors
and officers of the Corporation.
ARTICLE V
EXECUTION OF INSTRUMENTS AND DEPOSIT OF FUNDS
5.01. Contracts and Other Documents. Contracts and other instruments
or documents may be signed in the name of the Corporation by the President or by
any other officer authorized to sign such contract, instrument, or document by
the Board of Directors, and such authority may be general or confined to
specific instances.
5.02. Interested Directors; Quorum. No contract or transaction
between the Corporation and one (1) or more of its directors or officers, or
between the Corporation and any other corporation, partnership, association, or
other organization in which one (1) or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or
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officer is present at or participates in the meeting of the Board of Directors
or committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if (i) the material
facts as to his relationship or interest and as to the contract or transaction
are disclosed or are known to the Board of Directors or the committee, and the
Board of Directors or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(ii) the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or (iii) the contract or transaction is
fair as to the Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee which authorizes
the contract or transaction.
5.03 Dividends. Subject to the laws of the State of Delaware, the
Board of Directors may, from time to time, declare and the Corporation may pay
dividends on its outstanding shares in cash, property, or its own shares, except
when the Corporation is insolvent or when the declaration or payment thereof
would e contrary to any restrictions contained in the Certificate of
Incorporation.
5.04 Bank Accounts and Deposits. All funds of the Corporation shall
be deposited from time to time to the credit of the Corporation with such banks,
bankers, trust companies or other depositories as the Board of Directors may
select or as may be selected by any officer or officers, agent or agents of the
Corporation to whom such power may be delegated from time to time by the Board
of Directors.
5.05. Signing of Checks and Drafts. Except as otherwise provided in
these Bylaws, all checks, drafts, or other order or payment of money, notes, or
other evidences of indebtedness, issued in the name of or payable to the
Corporation, shall be signed or endorsed by such person or persons and in such
manner as shall be determined from time to time by resolution of the Board of
Directors.
5.06. Loans. No loans and no renewals of any loans shall be
contracted on behalf of the Corporation except as authorized by the Board of
Directors. When authorized so to do by the Board of Directors, any officer or
agent of the Corporation may effect loans and advances for the Corporation from
any bank, trust company or other institution or from any firm, corporation or
individual, and for such loans and advances may make, execute and deliver
promissory notes, bonds or other evidences of indebtedness of the Corporation.
When authorized so to do by the Board of Directors, any officer or agent of the
Corporation may pledge, hypothecate or transfer, as security for the payment of
any and all loans, advances, indebtedness and liabilities of the Corporation,
any and all stocks, securities and other personal property at any time held by
the Corporation, and, to that end, may endorse, assign and deliver the same.
Such authority may be general or confined to specific instances.
ARTICLE VI
ISSUANCE AND TRANSFER OF SHARES
6.01. Issuance of Certificates. Each stockholder of the Corporation
shall be entitled to a certificate or certificates, in such form as shall be
approved by the Board of Directors and required by law, certifying the number of
shares of the Corporation owned by such stockholder.
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6.02. Signature on Stock Certificates. The shares of the Corporation
shall be represented by certificates signed by the President or a Vice President
and the Secretary, and may be sealed with the seal of the Corporation or a
facsimile thereof. The signature of any of these officers upon a certificate may
be a facsimile. In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon such certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the Corporation with the same effect as if he
were such officer at the date of its issue.
6.03. Stock Transfer Books. A record of all certificates for shares
issued by the Corporation shall be the Secretary or by any transfer agent or
registrar appointed pursuant to Section 6.04 below at the principal office of
the Corporation or at the office of such transfer agent or registrar. Such
record shall show the name and address of the person, firm or corporation in
which certificates for shares are registered, the number and classes of shares
represented by each such certificate, the date of each such certificate, and in
case of certificates which have been canceled, the dates of cancellation
thereof.
6.04 Transfer Agents and Registrars. The Board of Directors may
appoint one (1) or more transfer agents, registrars of other agents for the
purpose of registering transfer of shares of the Corporation, issuing new
certificates of shares of the Corporation and canceling certificates surrendered
to the Corporation. Such agents and registrars shall be appointed at such times
and places as the requirements of the Corporation may necessitate and the Board
of Directors may designate. Any such transfer agent, registrar or other agent
shall be under a duty to the Corporation to exercise good faith and due
diligence in performing his functions. Such transfer agent, registrar or other
agent shall have, with regard to the particular functions he performs, the same
obligation to the holder or owner of shares of the Corporation and shall have
the same rights and privileges as the Corporation has in regard to those
functions. Notice to a transfer such agent, registrar or other such agent is
notice to the Corporation with respect to the functions performed by the agent.
6.05. Replacement of Lost, Destroyed and Stolen Certificates. Where
a certificate for shares of the Corporation has been lost, destroyed or stolen,
the Corporation shall issue a new certificate in place of the original
certificate if the owner (a) files with the Corporation a sufficient indemnity
bond, and (b) satisfies any other reasonable requirements imposed by the Board
of Directors of the Corporation.
6.06. Transfer of Shares. Shares of the capital stock of the
Corporation shall be transferred on the books of the Corporation by the holder
thereof in person or by his attorney duly authorized in writing, upon surrender
and cancellation of certificates for the number of shares to be transferred,
except as provided in the preceding section. Books for the transfer of shares of
the capital stock shall be kept by the Corporation or by one or more transfer
agents appointed by it.
6.07. Regulations. The Board of Directors shall have power and
authority to make such rules and regulations as-it may deem expedient concerning
the issue, transfer and registration of certificates for shares of the capital
stock of the Corporation.
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ARTICLE VII
CORPORATE RECORDS, REPORTS, AND SEAL
7.01. Minutes of Corporate Meetings. The Corporation shall keep at
its principal place of business, or at such other place as may be directed by
the Board of Directors, a book of minutes of all proceedings of its stockholders
and Board of Directors, with the time and place of holding of all meetings,
whether regular or special, and, if special, how authorized, the notice thereof
given, the names of those present at directors meetings, the number of shares or
members present or represented at stockholders meetings, and the proceedings
thereof.
7.02. Inspection of Records and Properties by Directors. Every
Director shall have the absolute right at any reasonable time to inspect all
books, records, documents of every kind, and the physical properties of the
Corporation, and also of its subsidiary corporations. Such inspection by a
Director may be made in person or by agent or attorney, and the right of
inspection includes the right to make extracts.
7.03. Fiscal Year. The fiscal year of the Corporation shall begin on
the first day of January, and terminate on the last day of December of each
succeeding year; unless the Board of Directors shall adopt a different fiscal
year.
7.04. Corporate Seal. The seal of the Corporation shall be circular
in form and shall have engraved upon it the words, "Missouri Holdings, Inc." The
seal shall be used by causing it to be affixed or impressed or a facsimile
thereof may be reproduced or otherwise used in such manner as the Board of
Directors shall determine.
ARTICLE VIII
ADOPTION, AMENDMENT, AND REPEAL OF BY LAWS
8.01. Power of Directors to Amend. The Board of Directors shall have
the power to alter, amend or repeal the Bylaws of the Corporation or adopt new
Bylaws for the Corporation as provided in the Certificate of Incorporation of
the Corporation; provided, however, that the Board of Directors may not alter,
amend, or repeal any provision of the Bylaws which was adopted by the
stockholders pursuant to the Certificate of Incorporation and which specifically
provides that it cannot be altered, amended or repealed by the Board of
Directors.
8.02. Power of Stockholders to Amend. The stockholders shall have
the power to alter, amend or repeal the Bylaws of the Corporation or adopt new
Bylaws of the Corporation at any regular or special meeting of the stockholders
if notice of such alteration, amendment, repeal or adoption of new Bylaws be
contained in the notice of such special meeting.
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ARTICLE IX
NOTICES
9.01 Giving of Notice. Except as otherwise provided by the General
Corporation Law of Delaware, these Bylaws, the Corporation's Certificate of
Incorporation, or resolution of the Board of Directors, every meeting notice or
other notice, demand, bill, statement or other communication (collectively,
"Notice") to or from the Corporation from or to a Director, Officer or
stockholder shall be duly given if it is written or printed and is (a) sent by
first class mail or by overnight service of the U.S. Postal Service, postage
prepaid, (b) sent by any established overnight air courier service, such as
Federal Express, Emery, Airborne or UPS, (c) sent by telegraph, tested telex or
other tested facsimile transmission, (d) delivered by any commercial messenger
service which regularly retains its receipts, or (e) personally delivered,
provided a receipt is obtained reflecting the date of delivery. Notice shall not
be duly given unless all delivery or postage charges are pre-paid. Notice shall
be given to an addressee's most recent address as it appears on the
Corporation's records. A Notice shall be deemed "given" when dispatched for
delivery, or if mailed, on the date postmarked. This Section shall not have the
effect of shortening any notice period provided for in these Bylaws.
9.02 Waiver of Notice. Any Notice required by the General
Corporation Law of Delaware, the Certificate of Incorporation or these Bylaws
may be waived in writing at any time by the person entitled to the Notice, and
such waiver shall be equivalent to the giving of notice. Notice of any meeting
shall be waived by attendance (if a stockholders' meeting, in person or by
proxy) at the meeting. A waiver of Notice of a special meeting of stockholders
shall state the purpose for which the meeting was called or the business to be
transacted thereat.
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EXHIBIT 3.2.1
AMENDED AND RESTATED BY-LAWS
OF
PREMIER BANCSHARES, INC.
(A Missouri Corporation)
ARTICLE I Offices and Records
ARTICLE II Corporate Seal
ARTICLE III Shareholders
ARTICLE IV Directors
ARTICLE V Officers
ARTICLE VI Shares of Stock
ARTICLE VII Indemnification
ARTICLE VIII General Provisions
<PAGE> 2
ARTICLE I
OFFICES AND RECORDS
SECTION 1. REGISTERED OFFICE AND REGISTERED AGENT. The location of the
registered office and the name of the registered agent of the Corporation in the
State of Missouri shall be determined from time to time by the Board of
Directors and shall be on file in the appropriate office of the State of
Missouri pursuant to applicable provisions of law.
SECTION 2. CORPORATE OFFICES. The Corporation may have such corporate
offices, anywhere within and without the State of Missouri as the Board of
Directors from time to time may appoint, or the business of the Corporation may
require. The "principal place of business" or "principal business" or "executive
office or offices" of the Corporation may be fixed and so designated from time
to time by the Board of Directors, but the location or residence of the
Corporation in Missouri shall be deemed for all purposes to be in the county in
which its registered office in Missouri is maintained.
SECTION 3. RECORDS. The Corporation shall keep at its registered office
in Missouri, at its principal place of business, or at the office of its
transfer agent in Missouri, original or duplicate books in which shall be
recorded the number of its shares subscribed, the names of the owners of its
shares, the numbers owned of record by them respectively, the amount of shares
paid, and by whom, the transfer of said shares with the date of transfer. the
amount of its assets and liabilities, and the names and places of residence of
its officers, and from time to time such other or additional records,
statements, lists, and information as may be required by law, including the
shareholder lists mentioned in these By-laws.
SECTION 4. INSPECTION OF RECORDS. A shareholder, if such shareholder is
entitled to and demands to inspect the records of the Corporation pursuant to
any statutory or other legal right, shall be privileged to inspect such records
only during the usual and customary hours of business and in such manner as will
not unduly interfere with the regular conduct of the business of the
Corporation. In order to exercise this right of examination, a shareholder must
make written demand upon the Corporation, stating with particularity the records
sought to be examined and the purpose therefor. A shareholder may delegate this
right of inspection to such shareholder's representative on the condition that,
if the representative is not an attorney, the shareholder and representative
agree with the Corporation to furnish to the Corporation, promptly as completed
or made, a true and correct copy of each report with respect to such inspection
made by such representative. No shareholder shall use or permit to be used or
acquiesce in the use by others of any information so obtained, to the detriment
competitively of the Corporation, nor shall any shareholder furnish or permit to
be furnished any information so obtained to any competitor or prospective
competitor of the Corporation.
The Corporation may, as a condition precedent to any shareholder's
inspection of the records of the Corporation, require the shareholder to
indemnify the Corporation against any loss or damage
Amended and Restated By-Laws
Adopted July 29, 1997
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<PAGE> 3
which may be suffered by it arising out of or resulting from any unauthorized
disclosure made or permitted to be made by such shareholder or any
representative or financial advisor of the shareholder of information obtained
in the course of such inspection. The Corporation may, as a further condition
precedent to any shareholder's inspection of the records of the Corporation,
also require the shareholder to execute and deliver to the Corporation a
confidentiality agreement in which the shareholder: (i) acknowledges that the
Corporation is engaged in a highly competitive economic environment, that the
nonpublic records of the Corporation are secret and confidential, and that the
Corporation would suffer material adverse financial consequences if competitors
or other entities with which the Corporation does business should gain access to
nonpublic information contained in the records of the Corporation; (ii) agrees
that the shareholder will not, directly or indirectly, without the Corporation's
prior written consent, disclose any nonpublic information obtained from the
records of the Corporation to any party other than the shareholder's
representative or personal financial advisor; and (iii) agrees to instruct any
such representative and/or any such personal financial advisor not to disclose,
directly or indirectly, without the Corporation's prior written consent, any
such nonpublic information received and that no applicable professional-client
privileges shall be waived. The Corporation may also require any representative
or personal financial advisor of a shareholder to sign a confidentiality
agreement containing substantially the provisions described above as a condition
precedent to inspection of the records of the Corporation. As used herein,
"nonpublic" information is all information other than: (i) what the Corporation
has filed with a governmental agency and which (a) was not designated as
confidential, secret, proprietary, or the like and (b) is Generally open to
public inspection in accordance with applicable laws, rules, and regulations;
and (ii) what the Corporation has released to the press or other media for
general publication.
ARTICLE II
CORPORATE SEAL
SECTION 1. CORPORATE SEAL. The corporate seal, if any, shall have
inscribed thereon the name of the Corporation and the words: Corporate
Seal--Missouri. Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
ARTICLE III
SHAREHOLDERS
SECTION 1. PLACE OF MEETINGS. All meetings of the shareholders shall be
held at the principal business office of the Corporation, except such meetings
as the Board of Directors to the extent permissible by law expressly determines
shall be held elsewhere, in which case such meetings may be held, upon notice
thereof as herein provided, at such other place or places, within or without the
State of Missouri, as said Board of Directors shall determine and as shall be
stated in such notice; and, unless if specifically prohibited by law, any
meeting may be held at any place and time, and for any purpose if consented to
in writing by all of the shareholders entitled to vote thereat.
Amended and Restated By-Laws
Adopted July 29, 1997
Page 3
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SECTION 2. ANNUAL MEETING. An annual meeting of shareholders shall be
held on the third Friday in the month of March in each year, if not a legal
holiday, and if a legal holiday then on the next business day following, at
11:30 a.m. when the shareholders shall elect directors to Succeed those whose
terms expire and transact such other business as may property be brought before
the meeting.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called by the Chairman of the Board (if any), the President, or the Board of
Directors and shall be held on such date and at such time as the Chairman of the
Board (if any), the President. or the Board of Directors shall fix.
SECTION 4. ACTION IN LIEU OF MEETING. Any action required to be taken
at a meeting of the shareholders or any other action which may be taken at a
meeting of the shareholders may be taken without a meeting if consents in
writing setting forth the action so taken shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
SECTION 5. NOTICE OF MEETINGS. Written or printed notice stating the
place, day, and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be given not less
than ten nor more than fifty days before the date of the meeting, either
personally or by mail, by or at the direction of the Board of Directors, the
Chairman of the Board (if any), the President, or the Secretary, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail in a
sealed envelope addressed to the shareholder at such shareholder's address as it
appears on the records of the Corporation, with postage thereon prepaid.
SECTION 6. PRESIDING OFFICIALS. Every meeting of the shareholders for
object, shall be convened (in the order shown, unless otherwise determined by
resolution of the Board of Directors) by the Chairman of the Board (if any), or
by the President, or by the officer who called the meeting by notice as above
provided; but it shall be presided over by the officers specified elsewhere in
these By-laws.
SECTION 7. WAIVER OF NOTICE. Whenever any notice is required to be
given under the provisions of these By-laws, the Articles of Incorporation of
the Corporation, or any law, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether before, at, or after the time stated
therein, shall be deemed the equivalent of the giving of such notice. To the
extent provided by law, attendance at any meeting shall constitute a waiver of
notice of such meeting
SECTION 8. BUSINESS TRANSACTED AT ANNUAL MEETINGS. At each annual
meeting of the shareholders, the shareholders shall elect a Board of Directors
to hold office until the next succeeding annual meeting, or, in the case of a
classified Board of Directors, the shareholders shall elect Directors to fill
those director positions the terms of which are set to expire at that annual
meeting of shareholders; and they may transact such other business as may be
desired, whether or
Amended and Restated By-Laws
Adopted July 29, 1997
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<PAGE> 5
not the same was specified in the notice of the meeting, unless the
consideration of such other business without its having been specified in the
notice of the meeting as one of the purposes thereof is prohibited by law. the
Corporation's Articles of Incorporation, or any other provision of these Amended
and Restated By-laws.
SECTION 9. BUSINESS TRANSACTED AT SPECIAL MEETINGS. Business transacted
at all special meetings of the shareholders shall be confined to the purposes
stated in the notice of such meetings, unless the transaction of other business
is consented to by the holders of all of the outstanding shares of the
Corporation entitled to vote thereat.
SECTION 10. QUORUM. Except as may be otherwise provided by law or by
the Articles of Incorporation, the holders of a majority of the voting shares
issued and outstanding and entitled to vote for the election of directors,
whether present in person or by proxy, shall constitute a quorum for the
transaction of business at all meetings of the shareholders. Every decision of a
majority in amount of shares of such quorum shall be valid as a corporate act,
except in those specific instances in which a larger vote is required by law, by
these By-laws, or by the Articles of Incorporation. if, however, such quorum
should not be present at any meeting, the shareholders present and entitled to
vote shall have the power successively to adjourn the meeting, without notice
other than announcement at the meeting, to a specified date not longer than
ninety days after such adjournment. At any such adjourned meeting at which a
quorum is present any business may be transacted which might have been
transacted at the meeting of which the shareholders were originally notified.
However, if the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, notice of the
adjourned meeting shall be given in the manner otherwise provided herein to each
shareholder of record entitled to vote, it such adjourned meeting. Withdrawal of
shareholders from any meeting shall not cause the failure of a duly constituted
quorum at such meeting.
SECTION 11. PROXIES. At any meeting of the shareholders every
shareholder having the right to vote shall be entitled to vote in person, or by
vesting another person with authority to exercise the voting power of any or all
of such shareholder's stock by executing in writing any voting, trust agreement,
proxy, or any other type of appointment form or agreement, except as may be
expressly limited by law or by the Articles of Incorporation. Any copy,
facsimile telecommunication, or other reliable reproduction of any writing
referred to in this Section may be used in lieu of the original writing for any
and all purposes for which the original writing could be used, provided that
such copy, facsimile telecommunication, or other reproduction shall be a
complete reproduction of the entire original writing. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided in
the proxy.
SECTION 12. VOTING. Each shareholder shall have one vote (or such other
number of votes as may be specifically provided) for each share of stock
entitled to vote under the provisions of the Articles of Incorporation which is
registered in such shareholder's name on the books of the Corporation; in all
elections of directors of the Corporation, each share of stock entitled to vote
shall
Amended and Restated By-Laws
Adopted July 29, 1997
Page 5
<PAGE> 6
be entitled to one vote as to each director to be elected by the holders thereof
and no shareholder shall have the right to cast votes in the aggregate or to
cumulate such shareholder's votes for the election of any director, and
cumulative voting of shares in elections of directors is hereby specifically
negated. All elections for directors shall be determined by a plurality of the
votes cast. All other matters, except as required by law, the Articles of
Incorporation, or these By-laws shall be determined by a majority of the votes
cast. Any shareholder who is in attendance at a meeting of the shareholders
either in person or by proxy, but who abstains from voting on any matter, shall
not be deemed present or represented at such meeting for purposes of the
preceding sentence with respect to such vote, but shall be deemed present or
represented for all other purposes.
The rights and powers of the holders of any class or series of
preferred stock with respect to the election of directors shall be only as may
be duly designated with respect to such class or series and as is consistent
with the provisions of the Articles of Incorporation.
No person shall be permitted to vote any shares belonging to the
Corporation.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent, or proxy as the by-laws of such
corporation may prescribe in the absence of such provision, as the board of
directors of such corporation may determine.
Shares standing in the name of a deceased person may be voted by that
person's personal representative either in person or by proxy. Shares standing
'n the name of a conservator or trustee may be voted by such fiduciary, either
in person or by proxy, but no conservator or trustee shall be entitled as such
fiduciary to Note shares held by him, her, or it without transfer of such shares
into his, her, or its name.
Shares standing in the name of a receiver, and shares held by or under
the control of a receiver may be voted by such receiver without the transfer
thereof into his, her, or its name if authority to do so is contained in an
appropriate order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares transferred.
Shares standing in the names of two or more persons shall be voted or
represented in accordance with the vote or consent of a majority of the persons
in whose names the shares are registered. If only one such person is present in
person or by proxy, such person may vote all of the shares, and all of the
shares standing in the names of such persons shall be deemed represented for
purposes of determining a quorum. The foregoing provisions shall also apply to
shares held by two or more personal representatives, trustees, or other
fiduciaries unless the instrument or order appointing them otherwise directs.
Amended and Restated By-Laws
Adopted July 29, 1997
Page 6
<PAGE> 7
SECTION 13. REGISTERED SHAREHOLDERS. The Corporation shall be entitled
to treat the holder of any share or shares of stock of the Corporation, as
recorded on the stock record or transfer books of the Corporation, as the holder
of record and as the holder and owner in fact thereof and, accordingly, shall
not be required to recognize any equitable or other claim to or interest in such
share(s) on the part of any other person, firm. partnership, corporation or
association, whether or not the Corporation shall have express or other notice
thereof, save as is otherwise expressly required by law, and the term
"shareholder" as used in these By-laws means one who is a holder of record of
shares of the Corporation.
SECTION 14. SHAREHOLDER LISTS. A complete list of the shareholders
entitled to vote at each meeting of the shareholders, arranged in alphabetical
order, with the address of, and the number of voting shares held by each, shall
be prepared by the officer of the Corporation having charge of the stock
transfer books of the Corporation, and shall for a period of ten days prior to
the meeting be kept on file in the registered office of the Corporation in
Missouri, and shall at any time during the usual hours for business be subject
to inspection by any shareholder. A similar or duplicate list shall also be
produced and kept open for the inspection of any shareholder during the whole
time of the meeting. The original share ledger or transfer book, oi- a duplicate
thereof kept in the State of Missouri, shall be prima facie evidence as to who
are shareholders entitled to examine such list, ledger, or transfer book or to
vote at any meeting of shareholders. Failure to comply with the foregoing shall
not affect the validity of any action taken at any such meeting.
SECTION 15. REMOVAL OF DIRECTORS. Except as otherwise provided in the
Articles of Incorporation or by law, the shareholders shall have the power by an
affirmative vote of a majority of the outstanding shares then entitled to vote
for the election of directors at any regular meeting, or special meeting
expressly called for that purpose, to remove any director from office with or
without cause. Such meeting, shall be held at any place prescribed by law or at
any other place which may, under law, permissibly be, and which is, designated
in the notice of the special meeting. If cumulative voting applies to the
election of directors and if less than the entire Board is to be removed, no one
of the directors may be removed if the votes cast against his or her removal
would be sufficient to elect him or her if then cumulatively voted at an
election of the entire Board of Directors.
SECTION 16. NOMINATION OF DIRECTORS. Nominations of persons for
election to the Board of Directors of the Corporation at a meeting of the
shareholders may be made by or at the direction of the Board of Directors or may
be made at a meeting of shareholders by any shareholder of the Corporation
entitled to vote for the election of directors at the meeting who complies with
the procedures set forth in this Section. Such nominations, other than those
made by or at the direction of the Board, shall be made by delivering, timely
notice in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice shall be delivered to or mailed and received at the
principal office of the Corporation not less than one hundred twenty days nor
more than one hundred eighty days prior to the anniversary of the previous
year's Annual Meeting of Shareholders; provided that if no annual meeting was
held in the previous year or the date of the annual meeting has been
Amended and Restated By-Laws
Adopted July 29, 1997
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<PAGE> 8
chanced by more than 30 calendar days from the date contemplated at the time of
the previous year's annual meeting, a proposal shall be received ed within such
time before the annual meeting as shall be established by the Board of
Directors. To be valid, such shareholder's notice to the Secretary shall set
forth: (i) as to each person whom the shareholder proposes to nominate for
election or re-election as a director, (a) the name, age, business address, and
residence address of the person; (b) the principal occupation or employment of
the person; (c) the number of shares of stock of the Corporation that are
beneficially owned by the person; and (d) any other information relating to the
person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (whether or not the provisions of such Regulation are
then applicable to the Corporation); provided, however, that nothing in this
Section is intended to create or imply any obligation on the part of the
Corporation to include within the Corporation's proxy solicitation materials, if
any, any materials or information regarding persons nominated for election to
the Board of Directors by shareholders of the Corporation; and (ii) as to the
shareholder giving notice (a) the name and record address of the shareholder and
(b) the number of shares of stock of the Corporation that are beneficially owned
by the shareholder. The Corporation may require any proposed nominee to furnish
such other information as may be reasonably required by the Board of Directors
to determine the eligibility of such proposed nominee to serve as director of
the Corporation. No person shall be eligible for election as a director of the
Corporation at a meeting of the shareholders unless nominated in accordance with
the procedures set forth herein. The chairman of the meeting shall, if the facts
warrant determine and declare that a nomination was not made in accordance with
the foregoing procedure, in which case the defective nomination shall be
disregarded.
SECTION 17. PROPOSALS FOR ANNUAL MEETING. Shareholder proposals
intended for presentation at the annual meeting of shareholders must comply as
respects time of submission, contents, and otherwise with Rule 14a-8 promulgated
by the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, as amended from time to time (whether or not the provisions of Rule
14a-8 are then applicable to the Corporation). Any shareholder proposal that is
advisory or precatory in nature and which requests the Board of Directors to
take any action shall require the affirmative vote of a majority of the shares
entitled to vote for the election of directors in order for any resolution,
shareholder referendum, or the like embodying such proposal to be adopted.
ARTICLE IV
DIRECTORS
SECTION 1. QUALIFICATIONS AND NUMBER. Each director shall be a natural
person who is at least eighteen years of age. A director need not be a
shareholder, a citizen of the United States, or a resident of the State of
Missouri unless required by law or the Articles of Incorporation.
Unless and until changed, the number of directors to constitute the
full Board of Directors shall be the same number as is provided for the first
Board in the Articles of Incorporation. The
Amended and Restated By-Laws
Adopted July 29, 1997
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Board of Directors, if, to the extent, and in such manner as may be permitted by
the Articles of Incorporation and by law, shall have the power to change the
number of directors, in which case any notice required by law of any such change
shall be duly given. If the power to change these by-law provisions concerning
the number of directors is not granted to the Board of Directors, such power
shall be exercised by such vote of the shareholders entitled to vote as may be
required in the Articles of Incorporation; and if no specific vote of the
shareholders is required, then by a majority of the shareholders then entitled
to vote.
SECTION 2. POWERS OF THE BOARD. The property and business of the
Corporation shall be managed by the directors, acting as a Board. The Board
shall have and is vested with all and unlimited powers and authorities, except
as may be expressly limited by law, the Articles of Incorporation, or these
By-laws, to do or cause to be done any and all lawful things for and on behalf
of the Corporation (including, without limitation, the declaration of dividends
on the outstanding shares of the Corporation and the payment thereof in cash,
property or shares), and to exercise or cause to be exercised any or all of its
powers, privileges and franchises, and to seek the effectuation of its objects
and purposes.
SECTION 3. ANNUAL MEETING OF THE BOARD, NOTICE. Any continuing members
and the newly elected members of the Board shall meet: (i) as soon as reasonably
practicable following the conclusion of the annual meeting of the shareholders
for the purpose of appointing officers and for such other purposes as may come
before the meeting, and the time and place of such meeting shall be announced at
the annual meeting of the shareholders by the chairman of such meeting, and no
other notice to any continuing or the newly elected directors shall be necessary
in order to legally constitute the meeting, provided a quorum of the directors
shall be present; or (ii) if no meeting immediately following the annual meeting
of shareholders is announced, at such time and place, either within or without
the State of Missouri, as may be suggested or provided for by resolution of the
shareholders at their annual meeting, and no other notice of such meeting shall
be necessary to the newly elected directors in order to legally constitute the
meeting, provided a quorum of the directors shall be present; or (iii) if not so
suggested or provided for by resolution of the shareholders or if a quorum of
the directors shall not be present, at such time and place as may be consented
to in writing by a majority of any continuing and the newly elected directors,
provided that written or printed notice of such meeting shall be given to each
of any continuing and the newly elected directors in the same manner as provided
in these By-laws with respect to the notice for special meetings of the Board,
except that it shall not be necessary to state the purpose of the meeting in
such notice; or (iv) regardless of whether or not the time and place of such
meeting shall be suggested or provided for by resolution of the shareholders at
the annual meeting, at such time and place as may be consented to in writing by
all of any continuing and the newly elected directors. Each director, upon his
or her election, shall qualify by accepting the office of director, and his or
her attendance at, or his or her written approval of the minutes of, any meeting
of the newly elected directors shall constitute his or her acceptance of such
office; or he or she may execute such acceptance by a separate writing, which
shall be placed in the minute book.
Amended and Restated By-Laws
Adopted July 29, 1997
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SECTION 4. REGULAR MEETING, NOTICE. Regular meetings of the Board may
be held at such times and places either within or without the State of Missouri
as shall from time to time be fixed by resolution adopted by a majority of the
full Board of Directors. No notice of any regular meeting need be given other
than by announcement at the immediately preceding regular meeting, communicated
in writing to all absent directors; provided, however, that written notice of
any regular meeting of the Board of Directors stating the place, day, and hour
of such meeting shall be required by resolution adopted by the Board of
Directors. Any business may be transacted at a regular meeting. Neither the
business to be transacted at nor the purpose need be specified in any notice or
waiver of notice of any regular meeting of the Board of Directors.
SECTION 5. SPECIAL MEETINGS, NOTICE. Special meetings of the Board may
be called at any time by the Chairman of the Board (if any), the President, or
by one-half of the directors (rounded up to the nearest whole number). The place
may be within or without the State of Missouri as designated in the notice.
Written notice of each special meeting of the Board, stating the place,
day, and hour of the meeting shall be given to each director at least two days
before the date on which the meeting is to be held. The notice (i) shall be
given in the manner provided for in these By-laws or (ii) may be give
telephonically, if confirmed promptly in writing, in which case the notice shall
be deemed to have been given at the time of telephonic communication. The notice
may be given by any officer directed to do so by any officer having authority to
call the meeting or by the director(s) who have called the meeting.
Neither the business to be transacted at nor the purpose need be
specified in the notice or any waiver of notice of any special meeting of the
Board of Directors.
SECTION 6. ACTION IN LIEU OF MEETINGS. Unless otherwise restricted by
the Articles of Incorporation, these By-laws, or applicable law, any action
required to be taken at a meeting of the Board of Directors or any other action
which may be taken at a meeting of the Board of Directors may be taken without a
meeting if a consent in writing setting forth the action so taken shall be
signed by all of the directors. Any such consent signed by all the directors
shall have the same effect as a unanimous vote and may be stated as such in any
document describing the action taken by the Board of Directors.
SECTION 7. MEETINGS BY CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT. Unless otherwise restricted by the Articles of Incorporation or these
By-laws or by law, members of the Board of Directors of the Corporation, or any
committee designated by such Board, may participate in a meeting of such Board
or committee by means of conference telephone or similar communications
equipment whereby all persons participating in the meeting can hear each other,
and participation in a meeting in such manner shall constitute presence in
person at such meeting.
Amended and Restated By-Laws
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SECTION 8. QUORUM. At all meetings of the Board a majority of the full
Board of Directors shall, unless a greater number as to any particular matter is
required by the Articles of Incorporation or these By-laws, constitute a quorum
for the transaction of business. The act of a majority of the directors present
at any meeting, at which there is a quorum, except as may be otherwise
specifically provided by law, by the Articles of Incorporation, or by these
By-laws, shall be the act of the Board of Directors. A director who is in
attendance at a meeting of the Board of Directors but who abstains from voting
on a matter shall not be deemed present at such meeting for purposes of the
preceding sentence with respect to such vote, but shall be deemed present at
such meeting for all other purposes. Withdrawal by a director from any meeting
at which a duly constituted quorum is present shall not cause the failure of the
quorum.
Less than a quorum may adjourn a meeting successively until a quorum is
present, and no notice of adjournment shall be required.
SECTION 9. WAIVER OF NOTICE; ATTENDANCE AT MEETING. Any notice provided
or required to be given to the directors may be waived in writing by any of
them, whether before, at, or after the time stated therein.
Attendance of a director at any meeting shall constitute a waiver of
notice of such meeting except where the director attends for the express
purpose, and so states at the opening of the meeting, of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 10. VACANCIES. If the office of any director is or becomes
vacant by reason of the death, resignation, or due to an increase in the number
of directors, a majority of the survivors or remaining directors, though less
than a quorum, may appoint a director to fill the vacancy until a successor
shall have been duly elected at an annual meeting of the shareholders. Whenever
the Board of Directors is divided into separate classes, the surviving or
remaining directors shall designate the class in which the newly appointed
director shall serve, and the term of office of such newly appointed director
shall be until the annual meeting of shareholders in which the terms of
directors in that class are scheduled to expire.
SECTION 11. EXECUTIVE COMMITTEE. The Board of Directors may, by
resolution passed by a majority of the full Board, designate an executive
committee, such committee to consist of two or more directors of the
Corporation. Such committee, except to the extent limited in said resolution,
shall have and may exercise all of the all of the powers of the Board of
Directors in the management of the Corporation. The members constituting the
executive committee shall be determined time to time by resolution adopted by a
majority of the full Board; and any director may vote for himself as a member of
the executive committee. In no event, however, shall the executive committee
have any authority to amend the Articles of Incorporation, to adopt any plan of
mercer or consolidation with another corporation or corporations, to recommend
to the shareholders the sale, lease, exchange, mortgage, pledge, or other
disposition of all or substantially all of the property and assets of the
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Corporation if not made in the usual and regular course of its business, to
recommend to the shareholders a voluntary dissolution of the Corporation or a
revocation thereof, to amend, alter or repeal the By-laws of the Corporation, to
elect or remove officers of the Corporation or members of the executive
committee, to fix the compensation of any member of the executive committee, to
declare any dividend, or to amend, alter or repeal any resolution of the Board
of Directors which by its terms provides that it shall not be amended, altered
or repealed by the executive committee.
The executive committee shall keep regular minutes of its proceedings
and the same shall be recorded in the minute book of the Corporation. The
Secretary or an Assistant Secretary of the Corporation may act as secretary for
the executive if the executive committee.
SECTION 12. OTHER COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the full Board, designate one or more standing or ad hoc
committees, each committee to consist of two or more of the directors of the
Corporation and such other person(s) as may be appointed as advisory members
under authority provided in the resolution. Each such committee, to the extent
provided in the resolution and permitted by law, shall have and may exercise the
power of the Board of Directors. The members constituting each such committee
shall be determined from time to time by resolution adopted by a majority of the
full Board; and any director may vote for himself or herself as a member of any
such committee.
Each such committee shall, to the extent required by resolution of the
Board of Directors (or, in the absence of any such resolution, to the extent a
majority of its members determines is appropriate) keep minutes of its
proceedings and the same shall be recorded in thee minute book of the
Corporation. The Secretary or Assistant Secretary of the Corporation may act as
secretary for any such committee if the committee so requests.
SECTION 13. COMPENSATION OF DIRECTORS AND COMMITTEE MEMBERS. Directors
and members of all committees shall receive such compensation for their services
as may be determined from time to time by resolution adopted from time to time
by the Board, as well as such expenses, if any, as may be allowed pursuant to
resolution adopted from time to time by the Board. No such resolution shall be
deemed voidable or invalid by reason of the personal or pecuniary interest of
the directors or any director in adopting it. Nothing herein contained shall be
construed to preclude any director or committee member from serving the
Corporation in any other capacity and receiving compensation therefor.
SECTION 14. PROTECTION OF DIRECTOR FOR RELIANCE ON CORPORATE RECORDS.
No director shall be liable for dividends legally declared, distributions
legally made to shareholders, or any other action taken in reliance in good
faith upon financial statements of the Corporation represented to him to be
correct by the Chairman of the Board (if any), the President or the officer of
the Corporation having charge of the books of account, or certified by an
accountant to fairly represent the financial condition of the Corporation; nor
shall any such director be liable for determining in good faith the amount
available for dividends or distributions by considering the assets to be of
their book values.
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SECTION 15. ADVISORY DIRECTORS. The Board of Directors of the
Corporation may appoint one or more Advisory Directors from time to time, whose
function shall be to provide advice and counsel to the members of the
Corporation's Board of Directors on matters brought to the attention of the
Advisory Directors. No Advisory Director shall have any vote on any matter to be
decided by the Board of Directors, and no Advisory Director shall have any
responsibility to the Corporation or its shareholders to take or not to take any
action on behalf of the Corporation. Notwithstanding the foregoing, each
Advisory Director shall be entitled to the same indemnification against claims
and losses as is provided for regular members of the Corporation's Board of
Directors pursuant to other provisions of these Amended and Restated By-laws.
ARTICLE V
OFFICERS
SECTION 1. OFFICERS--WHO SHALL CONSTITUTE. The officers of the
Corporation shall be a Chairman of the Board, a President, an Executive Vice
President, one or more Vice Presidents, a Secretary, a Treasurer, one or more
Assistant Secretaries, and one or more Assistant Treasurers. The Board shall
appoint a Chairman of the Board, President, and Secretary at its first meeting,
and at each annual meeting of the Board of Directors which shall follow the
annual meeting of the shareholders. The Board then, or from time to time, may
also elect or appoint one or more of the other prescribed officers as it shall
deem advisable, but need not elect or appoint any officers other than a
President and a Secretary. The Board may, if it desires, further identify or
describe any one or more of such officers.
An officer need not be a shareholder unless required by law or the
Articles of Incorporation. Any two or more of such offices may be held by the
same person.
An officer shall be deemed qualified when he or she enters upon the
duties of the office to which he or she has been elected or appointed and
furnishes any bond required by the Board; but the Board may also require such
person to accept any such office and promise faithfully to discharge the duties
of such office in writing.
SECTION 2. TERM OF OFFICE. Each officer of the Corporation shall hold
his or her office for the term for which he or she was elected, or until he or
she resigns or is removed by the Board, whichever first occurs.
SECTION 3. APPOINTMENT OF OFFICERS AND AGENTS--TERMS OF OFFICE. The
Board from time to time may also appoint such other officers and agents for the
Corporation as it shall deem necessary or advisable. All appointed officers and
agents shall hold their respective positions at the pleasure of the Board or for
such terms as the Board may specify, and they shall exercise such powers and
perform such duties as shall be determined from time to time by the Board, or by
an elected officer empowered by the Board to make such determination.
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SECTION 4. REMOVAL. Any officer or agent elected or appointed by the
Board of Directors, and any employee, may be removed or discharged by the Board
whenever in its judgment the best interests of the Corporation would be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights.
SECTION 5. SALARIES AND COMPENSATION. Salaries and compensation of all
elected officers of the Corporation shall be fixed, increased or decreased by
the Board of Directors, but this power may, unless prohibited by law, be
delegated by the Board to the Chairman of the Board (if any) or to the President
(except as to their own compensation), to a committee. Salaries and compensation
of all other appointed officers and acents, and employees of the Corporation,
may be fixed, increased or decreased by the Board of Directors or a committee
thereof, but until action is taken with respect thereto by the Board of
Directors or a committee thereof, the same may be fixed, increased or decreased
by the Chairman of the Board (if any), the President, or by such other officer
or officers as may be empowered by the Board of Directors or a committee thereof
to do so.
SECTION 6. DELEGATION OF AUTHORITY TO HIRE, DISCHARGE, ETC. The Board,
from time to time, may delegate to the Chairman of the Board (if any), the
President, or any other officer or executive employee of the Corporation,
authority to hire, discharge, and fix and modify the duties, salary, or other
compensation of employees of the Corporation under their jurisdiction; and the
Board may delegate to such officer or executive employee similar authority with
respect to obtaining and retaining for the Corporation the services of
attorneys, accountants, and other experts.
SECTION 7. THE PRESIDENT. The President shall be the chief executive
officer of the Corporation. Except as otherwise provided for in these By-laws,
the President shall preside at all meetings of the Shareholders and Directors.
The President shall have general and active management of the business of the
Corporation and shall carry into effect all directions and resolutions of the
Board.
The President may execute all bonds, notes, debentures, mortgages and
other contracts requiring a seal to be affixed thereto, and all other
instruments for and in the name of the Corporation.
The President, when authorized to do so by the Board, may execute
powers of attorney from, for, and in the name of the Corporation, to such proper
person or persons as he or she may deem fit, in order that thereby the business
of the Corporation may be furthered or action taken as may be deemed by the
President necessary or advisable in furtherance of the interests of the
Corporation.
The President, except as may be otherwise directed by the Board, shall
be authorized to attend meetings of shareholders of other corporations to
represent this Corporation thereat and to vote or take action with respect to
the shares of any such corporation owned by this Corporation in
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such manner as the President shall deem to be for the interest of the
Corporation or as may be directed by the Board.
The President shall, unless the Board otherwise provides, be ex officio
a member of all standing committees. The President shall have such general (and
concurrent) executive powers and duties of supervision and management as are
usually vested in the office of the chief executive of a corporation.
The President shall have such other or further duties and authority as
may be prescribed elsewhere in these By-laws or from time to time by the Board
of Directors, and the Board may from time to time divide the responsibilities,
duties, and authority between him or her and such other officers of the
Corporation to such extent as it may deem advisable.
SECTION 8. VICE PRESIDENTS. The Vice Presidents, in the order of their
seniority as determined by the Board, shall, in the absence, disability or
inability to act of the President, perform the duties and exercise the powers of
the President, and shall perform such other duties as the Board of Directors
shall from time to time prescribe.
SECTION 9. THE SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall
attend all sessions of the Board and except as other-wise provided for in these
By-laws, all meetings of the shareholders, and shall record or cause to be
recorded all votes taken and the minutes of all proceedings in a minute book of
the Corporation to be kept for that purpose. The Secretary shall perform like
duties for the executive and other standing committees when requested by the
Board or such committee to do so.
The Secretary shall have the principal responsibility to cive, or cause
to be given, notice of all meetings of the shareholders and of the Board of
Directors, but this shall not lessen the authority of others to give such notice
as is authorized elsewhere in these By-laws.
The Secretary shall see that all books, records, lists and information,
or duplicates, required to be maintained at the registered office or at some
office of the Corporation in Missouri, or elsewhere, are so maintained.
The Secretary, shall keep in safe custody the seal of the Corporation,
and when duly authorized to do so, shall affix the same to any instrument
requiring it, and when so affixed, shall attest the same by his or her
signature.
The Secretary shall perform such other duties and have such other
authority as may be prescribed elsewhere in these By-laws or from time to time
by the Board of Directors or the President, under whose direct supervision the
Secretary shall be.
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The Secretary shall have the general duties, powers and
responsibilities of a Secretary of a corporation.
The Assistant Secretaries, in the order of their seniority, in the
absence, disability, or inability to act of the Secretary, shall perform the
duties and exercise the powers of the Secretary, and shall perform such other
duties as the Board may from time to time prescribe.
SECTION 10. THE TREASURER AND ASSISTANT TREASURERS. The Treasurer shall
have responsibility for the safekeeping of the funds and securities of the
Corporation, and shall keep or cause to be kept full and accurate accounts of
receipts and disbursements in books belonging to the Corporation. The Treasurer
shall keep, or cause to be kept, all other books of account and accounting
records of the Corporation, and shall deposit or cause to be deposited all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse, or permit to be disbursed, the funds of
the Corporation as may be ordered, or authorized generally, by the Board and
shall render to the chief executive officer of the Corporation and the
directors, whenever they may require it, an account of all his transactions as
Treasurer and of those under the Treasurer's jurisdiction, and of the financial
condition of the Corporation.
The Treasurer shall perform such other duties and shall have such other
responsibility and authority as may be prescribed elsewhere in these By-laws or
from responsibility to time by the Board of Directors.
The Treasurer shall have the general duties, powers and responsibility
of a Treasurer of a corporation, and shall be the chief financial and accounting
officer of the Corporation.
If required by the Board, the Treasurer shall have the Corporation a
bond in a sum and with one or more sureties satisfactory to the Board for the
faithful performance of the duties of the Treasurer office, and for the
restoration to the Corporation, in the case of the Treasurer's death,
resignation, retirement, or removal from office, of all books. papers, vouchers,
money and other property of whatever kind in the Treasurer's possession or under
the Treasurer's control which belong to the Corporation.
The Assistant Treasurers in the order of their seniority shall, in the
absence, disability or inability to act of the Treasurer, perform the duties and
exercise the powers of the Treasurer, and shall perform such other duties as the
Board of Directors shall from time to time prescribe.
SECTION 11. BOND. At the option of the Board of Directors, any officer
may be required to give bond for the faithful performance of such officer's
duties.
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SECTION 12. CHECKS AND OTHER INSTRUMENTS. All checks, drafts, notes,
acceptances, bills of exchange and other negotiable and non-negotiable
instruments and obligations for the payment of money, and all contracts, deeds,
mortgages and all other papers and documents whatsoever, unless otherwise
provided for by these By-laws, shall be signed by such officer or officers or
such other person or persons and in such manner as the Board of Directors from
time to time shall designate. If no such designation is made, and unless and
until the Board otherwise provides, the Chairman of the Board (if any) or the
President and the Secretary, or the Chairman of the Board (if any) or the
President and the Treasurer, shall have power to sign all such instruments for,
and on behalf of and in the name of the Corporation, which are executed or made
in the ordinary course of the Corporation's business.
SECTION 13. DUTIES OF OFFICERS MAY BE DELEGATED. If any officer of the
Corporation shall be absent or unable to act, or for any other reason the Board
may deem sufficient, the Board may delegate, for the time being, some or all of
the functions, duties, powers and responsibilities of any officer to any other
officer, or to any other agent or employee of the Corporation or other
responsible person, provided a majority of the then sitting Board concurs
therein.
ARTICLE VI
SHARES OF STOCK
SECTION 1. PAYMENT FOR SHARES OF STOCK. The Corporation shall not issue
shares of stock except for (i) money paid, (ii) labor done or services actually
received, or (iii) property actually received; provided, however, that shares
may also be issued (iv) in consideration of the cancellation of valid bona fide
antecedent debts, (v) as stock dividends, (vi) pursuant to stock splits, reverse
stock splits, stock combinations, reclassifications of outstanding shares into
shares of another class or classes, exchanges of outstanding shares for shares
of another class or classes, or (vii) other bona fide changes respecting
outstanding shares. No note or obligation given by any shareholder, whether
secured by deed of trust, mortgage or otherwise shall be considered as payment
of any part of any share or shares.
SECTION 2. CERTIFICATES FOR SHARES OF STOCK. The certificates for
shares of stock of the Corporation shall be numbered, shall be in such form as
may be prescribed by the Board of Directors in conformity with law, and shall be
entered in the stock books of the Corporation as they are issued, and such
entries shall show the name and address of the person, firm, partnership,
corporation, or association to whom each certificate is issued. Each certificate
shall have printed, typed, or written thereon the name of the person, fin-n,
partnership, corporation, or association to whom it is issued, and number of
shares represented thereby and shall be signed by the Chairman of the Board (if
any) or the President or a Vice President, and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Corporation and
sealed with the seal of the Corporation, which seal may be facsimile, engraved,
or printed. If the Corporation has a registrar, a transfer agent, or a transfer
clerk who actually signs such certificates, the signature of any of the other
officers above mentioned may be facsimile, engraved, or printed. In case any
such officer who has signed or whose
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facsimile signature has been placed upon any such certificate shall have ceased
to be such officer before such certificate is issued, such certificate may
nevertheless be issued by the Corporation with the same effect as if such
officer were an officer at the date of its issue.
SECTION 3. LOST OR DESTROYED CERTIFICATES. In case of the loss or
destruction of any certificate for shares of stock of the Corporation, upon due
proof of the registered thereof or such person's representative, by affidavit of
such loss or otherwise, the Chairman of the Board (if any) or the President and
Secretary may issue a duplicate certificate or replacement certificate in its
place, upon the Corporation being fully indemnified therefor. Any such officer
may request the posting of an indemnity bond in favor of the Corporation
whenever and to the extent that they deem appropriate as a precondition to the
issuance of any duplicate or replacement certificate.
SECTION 4. TRANSFERS OF SHARES, TRANSFER AGENT, REGISTRAR. Transfers of
shares of stock shall be made on the stock record or transfer books of the
Corporation only by the person named in the stock certificate, or by such
person's attorney lawfully constituted in writing, and upon surrender of the
certificate therefor. The stock record book and other transfer records shall be
in the possession of the Secretary (or other person appointed and empowered by
the Board to do so) or of a transfer agent or clerk for the Corporation. The
Corporation, by resolution of the Board, may from time to time appoint a
transfer agent, and, if desired, a registrar, under such arrangements and upon
such terms and conditions as the Board deems advisable; but until and unless the
Board appoints some other person, firm, or corporation as its transfer agent
(and upon the revocation of any such appointment, thereafter until a new
appointment is similarly made) the Secretary of the Corporation (or other person
appointed and empowered by the Board) shall be the transfer agent or clerk of
the Corporation, without the necessity of any formal action of the Board, and
the Secretary or other person shall perform all of the duties thereof.
SECTION 5. CLOSING OF TRANSFER BOOKS, RECORD DATE. The Board of
Directors shall have the power to close the stock transfer books of the
Corporation for a period not more than seventy days preceding the date of any
meeting of the shareholders, or the date for payment of any dividend, or the
date for the allotment of rights, or the date when any chance or conversion or
exchange of shares shall go into effect; provided, that in lieu of closing the
stock, transfer books as aforesaid, the Board of Directors may fix in advance a
date not exceeding seventy days preceding the date of any meeting of
shareholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any chance or conversion or exchange of
shares shall go into effect, as a record date for the determination of the
shareholders entitled to notice of, and to vote at, the meeting or any
adjournment thereof, or entitled to receive payment of the dividends, or
entitled to the allotment of rights, or entitled to exercise the rights in
respect of the change, conversion, or exchange of shares. In such case, only the
shareholders who are shareholders of record on the date of closing of the
transfer books or on the record date so fixed shall be entitled to such notice
of, and to vote at, the meeting, and any adjournment thereof, or to receive
payment of the dividend, or to receive the allotment of rights, or to exercise
the rights, as the case may be, notwithstanding any transfer of any shares on
the books of the Corporation after the date of closing of the transfer books
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or the record date fixed as aforesaid. If the Board of Directors does not close
the transfer books or set a record date for the determination of the
shareholders entitled to notice of, and to vote at, the meeting, and any
adjournment of the meeting, the record date shall be the date that is twenty
days previous to the meeting; except that, if prior to the meeting written
waivers of notice of the meeting are signed and delivered to the Corporation by
all of the shareholders of record at the time the meeting is convened, only the
shareholders who are shareholders of record at the time the meeting is convened
shall be entitled to vote at the meeting and at any adjournment of the meeting.
If the Board of Directors does not set a record date with respect to any
dividend, allotment of rights, or exercise of rights in respect of the change,
conversion, or exchange of shares, the record date for such purpose shall be the
close of business on the day on which the Board of Directors adopts the
resolution relating thereto.
SECTION 6. FRACTIONAL SHARE INTERESTS OR SCRIP. The Corporation may
issue fractions of a share and it may issue a certificate for a fractional
share, or by action of the Board of Directors, the Corporation may issue in lieu
thereof scrip or other evidence of ownership which shall entitle the holder to
receive a certificate for a full share upon the surrender of such scrip or other
evidence of ownership aggregating a full share. A certificate for a fractional
share shall (but scrip or other evidence of ownership shall not, unless
otherwise provided by resolution of the Board of Directors) entitle the holder
to all of the rights of a shareholder, including without limitation the right to
exercise any voting right, or to receive dividends thereon or to participate in
any of the assets of the Corporation in the event of liquidation. The Board of
Directors may cause such scrip or evidence of ownership (other than a
certificate for a fractional share) to be issued subject to the condition that
it shall become void if not exchanged for share certificates before a specified
date, or subject to the condition that the shares for which such scrip or
evidence of ownership is exchangeable may be sold by the Corporation and the
proceeds thereof distributed to the holders of such scrip or evidence of
ownership, or subject to any other condition which the Board of Directors may
deem advisable.
ARTICLE VII
INDEMNIFICATION
SECTION 1. THIRD PARTY ACTIONS. The Corporation shall indemnify, any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that such person is or was a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses, including attorney
fees, judgments, fines, and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit, or proceeding if
such person acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his or
her conduct was unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contenders or
its equivalent, shall not,
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of itself, create a presumption that the person did not act in good faith and in
a manner which he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
SECTION 2. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that such person is or was a director or officer of the Corporation, or is
or was a director officer of another corporation, partnership, joint venture,
trust, or other enterprise against expenses, including attorney fees and amounts
paid in settlement, actually and reasonably incurred by such person in
connection with the defense or settlement of the action or suit if he or she
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Corporation, except that no indemnification shall
be made in respect of any claim, issue, or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his or her duty to the Corporation unless and only to the extent that the
court in which such action or suit was brought determines upon application that,
despite the adjudication of liability and in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper.
SECTION 3. INDEMNITY IF SUCCESSFUL. To the extent that a director,
officer, employee, or agent of the Corporation has been successful on the merits
or otherwise in defense of any action, suit, or proceeding referred to in
Sections 1 and 2 of this Article, or in defense of any claim, issue, or matter
therein, such person shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection with the
action, suit, or proceeding
SECTION 4. STANDARD OF CONDUCT. Any indemnification under Sections 1
and 2 of this Article (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in this
Article. The determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit, or proceeding, (ii) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the shareholders by majority
vote of the shares eligible to vote for directors and actually voted, where
shares held by the individual about whom such indemnification is at issue shall
not be eligible to vote.
SECTION 5. EXPENSES. Expenses incurred in defending a civil or criminal
action, suit, or proceeding may be paid b the Corporation in advance of the
final disposition of the action, suit, or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on behalf
of the director or officer to repay such amount unless it shall ultimately
Amended and Restated By-Laws
Adopted July 29, 1997
Page 20
<PAGE> 21
be determined that he or she is entitled to be indemnified by the Corporation as
authorized in this Article.
SECTION 6. NONEXCLUSIVITY. The indemnification provided by this Article
shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under the Articles of Incorporation, these
By-laws, or any agreement, vote of the shareholders or disinterested directors
or otherwise, both as to action in such person's official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director or officer and shall inure to the benefit
of the heirs, personal representatives, and administrators of such a person.
SECTION 7. FURTHER INDEMNITY PERMISSIBLE. The Corporation shall have
the power to give further indemnity, in addition to the indemnity authorized or
contemplated under the various sections of this Article, including Section 6
thereof, to any person who is or was a director, officer, employee, or agent, or
to any person who is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, provided such further indemnity is either
(i) authorized, directed, or provided for in the Articles of Incorporation of
the Corporation or a duly adopted amendment thereof or (ii) authorized,
directed, or provided for in these By-laws or in any agreement of the
Corporation which has been adopted by the shareholders of the Corporation, and
provided further that no such indemnity shall indemnify any person from or on
account of such person's conduct which has been finally adjudged to have been
knowingly fraudulent, deliberately dishonest, or willful misconduct. Nothing in
this Section 7 shall be deemed to limit the power of the Corporation under
Section 6 of this Article to enact By-laws or to enter into agreements without
shareholder adoption of the same.
SECTION 8. INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against any
liability asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not the
Corporation would have the power to indemnify such person against such liability
under the provisions of this Article.
SECTION 9. CORPORATION. For the purpose of this Article, references to
"the Corporation" include all constituent corporations absorbed in a
consolidation or merger as well as the resulting or surviving corporation so
that any person who is or was a director or officer of such a constituent
corporation or is or was serving at the request of such constituent corporation
as a director or officer of another corporation, partnership, joint venture,
trust, or other enterprise shall stand in the same position under the provisions
of this Article with respect to the resulting or surviving corporation as such
person would if he or she had served the resulting or surviving corporation in
the same capacity.
Amended and Restated By-Laws
Adopted July 29, 1997
Page 21
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SECTION 10. OTHER DEFINITIONS. For purposes of this Article, the term
"other enterprise" shall include without limitation employee benefit plans; the
term "fines" shall include without limitation any excise taxes assessed on a
person with respect to an employee benefit plan; and the term "serving at the
request of the Corporation" shall include without limitation any service as a
director, officer, employee, or agent of the Corporation which imposes duties
on, or involves services by, such director, officer, employee., or agent with
respect to an employee benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner such person reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" as referred to in this Article.
SECTION 11. INDEMNITY FOR AGENTS AND EMPLOYEES. The Corporation may, by
resolution duly adopted by a majority of the disinterested members of the Board
of Directors, grant such indemnity rights and reimbursement for such expenses as
it determines to be appropriate to any person who was or IS a party to any
threatened. pending, or completed action or suit, whether civil, criminal,
administrative, or investigative, including any action by or in the right of the
Corporation, by reason of the fact that such person is or was an agent or
employee of the Corporation, or is or was serving as an agent or employee, at
the request of the Corporation, of another corporation, partnership, joint
venture, trust, or other enterprise. Any such grant of indemnification shall be
only to the extent so provided in the resolution granting indemnification, but
shall, in no event, be greater than the rights of indemnification and
reimbursement of expenses granted to directors and officers of this Corporation.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 1. FIXING OF CAPITAL, TRANSFERS OF SURPLUS. Except as may be
specifically otherwise provided in the Articles of Incorporation, the Board of
Directors is expressly empowered to exercise all authority conferred upon it or
the Corporation by any law or statute, and in conformity therewith, relative to:
The determination of what part of the consideration received
for shares of the Corporation shall be capital;
Increasing capital;
Transferring surplus to capital;
The consideration to be received by the Corporation for its
shares, and
All similar or related matters;
Amended and Restated By-Laws
Adopted July 29, 1997
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<PAGE> 23
provided that any concurrent action or consent by or of the Corporation and its
shareholders required to be taken or given pursuant to law shall be duly taken
or given in connection therewith.
SECTION 2. DIVIDENDS. Ordinary dividends upon the shares of the
Corporation, subject to the provisions of the Articles of Incorporation and
applicable law, may be declared by the Board of Directors at any regular or
special meeting. Dividends may be paid in cash,, in property, or in shares of
its stock.
Liquidating dividends or dividends representing a distribution of
paid-in surplus or a return of capital shall be made only when and in the manner
permitted by law.
SECTION 3. CREATION OF RESERVES. Before the payment of any dividend,
there may be set aside out of any funds of the Corporation available for
dividends such sum or sums as the directors from time to time, in their
reasonable discretion, think proper as a reserve fund or funds, to meet
contingencies. or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for such other purposes as the Board of
Directors shall determine in the best interests of the Corporation, and the
Board may abolish any such reserve in the manner in which it was created.
SECTION 4. FISCAL YEAR. The Board of Directors shall have the paramount
power to fix, and from time to time, to change, the fiscal year of the
Corporation. In the absence of action by the Board of Directors, however, the
fiscal year of the Corporation shall be determined and signified by the filing
of the Corporation's first federal income tax return, and shall so continue
until such time, if any, as the fiscal shall be changed by the Board of
Directors.
SECTION 5. NOTICES. Except as otherwise specifically provided herein
with respect to notice to shareholders or otherwise, or as otherwise required by
law, all notices required to be given by any provision of these By-laws shall be
in writing and shall be deemed to have been given: (i) when received if
delivered in person; (ii) on the date of acknowledgment or confirmation of
receipt if sent by telex, facsimile, or other electronic transmission; (iii) one
day after delivery, properly addressed and fees prepaid, to a reputable courier
for same day or overnight delivery; or (iv) two days after being deposited,
properly addressed and postage prepaid, in the United States mail.
SECTION 6. AMENDMENTS TO BY-LAWS. The By-laws of the Corporation may
from time to time be repealed, amended or altered, or new and/or restated
By-laws may be adopted, in either of the following ways:
By such vote of the shareholders entitled to vote at any annual or
special meeting thereof as may be required by the Articles of Incorporation, and
if there is no such specific requirement, then by the vote of a majority of said
shareholders, or
Amended and Restated By-Laws
Adopted July 29, 1997
Page 23
<PAGE> 24
By resolution adopted by the Board of Directors if such power shall
have been Nested in the Board of Directors by the Articles of Incorporation;
provided, however, that such power shall be exercisable only by such number or
percentage of the Directors as is required by the Articles of Incorporation, and
if there is no such specific requirement, then by a majority of the full Board
of Directors. Notwithstanding the foregoing, the Board of Directors shall not
have the power to suspend, repeal, amend or otherwise alter the By-laws or
portion thereof enacted by the shareholders if at the time of such enactment or
thereafter the shareholders shall so expressly provide.
----------------------------------------
Amended and Restated By-Laws
Adopted July 29, 1997
Page 24
<PAGE> 25
CERTIFICATE
We, the undersigned, hereby certify that we acted as Chairman and
Secretary, respectively, of a meeting of the Board of Directors of Premier
Bancshares, Inc. held on the 29th day of July, 1997, at which the foregoing
By-laws were duly adopted as and for the By-laws of said Corporation, and hereby
further certify that the foregoing constitute the By-laws of said Corporation.
Dated as of the 29th day of July, 1997.
/s/ Charles R. Willibrand
-------------------------------------
Charles R. Willibrand
Chairman of the Meeting
/s/ Mark Wm. Naeger
-------------------------------------
Mark Wm. Naeger
Secretary of the Meeting
Amended and Restated By-Laws
Adopted July 29, 1997
Page 25
<PAGE> 1
EXHIBIT 3.2.2
BY-LAWS
OF
PREMIER BANK
I. OFFICES
The principal office of the Bank in the State of Missouri shall be
located in the City of Jefferson City. Subject to regulatory approval, to the
extent required, the Bank may have such other offices, either within or without
the State of Missouri, as the Board of Directors may designate or as the
business of the Bank may require from time to time.
II. SHAREHOLDERS
1. ANNUAL MEETING. The annual meeting of the Shareholders shall be held on
the third Friday in the month of March in each year, beginning with the year
1996, at the hour of 11:00 a.m. for the purpose of electing Directors and for
the transaction of such other business as may come before the meeting. If the
day fixed for the annual meeting shall be a legal holiday in the State of
Missouri such meeting shall be held on the next succeeding business day. If the
election of Directors shall not be held on the day designated herein for any
annual meeting of the Shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held on a specified date not longer
than ninety (90) days from the date of adjournment.
2. SPECIAL MEETING. Special meetings of the Shareholders, for any purpose
or purposes, unless otherwise prescribed by statute, may be called by the
President or by the Board of Directors, or shall be called by the President at
the request of the holders of not less than twenty-five percent (25%) of all the
outstanding shares of the Bank entitled to vote at the meeting.
3. PLACE OF MEETING. All meetings of the Shareholders shall be at the
office of the Bank or at such other place within or without the State of
Missouri as may be designated by the President or the Board of Directors. The
Board of Directors may designate any place, either within or without the State
of Missouri unless otherwise prescribed by statute, as the place of meeting for
any annual meeting or for any special meeting called by the Board of Directors.
A waiver of notice signed by the majority of Shareholders entitled to vote at a
meeting may designate any place, either within or without the State of Missouri.
4. NOTICE OF MEETING. Unless otherwise prescribed by statute, written
notice stating the place, day and hour of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall,
unless otherwise prescribed by statute, be delivered not less than ten (10) days
nor more than fifty (50) days before the date of the meeting, either personally
or by mail. by or at the direction of the President, or the Secretary, or the
officers or persons calling the meeting to each Shareholder of record entitled
to vote at such meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail, addressed to the Shareholder at the
address as it appears on the stock transfer books of the Bank, with postage
thereon prepaid.
5. CLOSING OF TRANSFER BOOKS OR FIXING RECORD DATE. For the purposes of
determining Shareholders entitled to notice of or to vote at any meeting of
Shareholders or any adjournment thereof, or Shareholders entitled to receive
payment of any dividend, or in order to make a determination of Shareholders for
any
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other proper purpose, the Board of Directors of the Bank shall have the power to
close the transfer books of the Bank for a period not exceeding fifty (50) days
of any meeting of the Shareholders or the date of payment of any dividend or the
date from allotment of rights or the date when any change or conversion or
exchange of shares shall go into effect. If the stock transfer books are closed
for the purpose of determining Shareholders entitled to notice of or to vote at
a meeting of Shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting. In lieu of closing the stock transfer books,
the Board of Directors may fix in advance a date as the record date for any such
determination of Shareholders, such date in any case to be not more than fifty
(50) days and, in case of a meeting of Shareholders, not less than ten (10)
days, prior to the date on which the particular action requiring such
determination of Shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for either the determination of
Shareholders entitled to notice of or to vote at a meeting of Shareholders, or
for the determination of Shareholders entitled to receive payment of a dividend,
only the Shareholders who are Shareholders of record at the close of business on
the twentieth (20th) day preceding the date of the meeting shall be entitled to
notice of and to vote at the meeting. When a determination of Shareholders
entitled to vote at any meeting of Shareholders has been made as provided in
this Section, such determination shall apply to any adjournment thereof.
6. VOTING LISTS. The officer having charge of the stock transfer books for
shares of the Bank shall make, at least ten (10) days prior to each meeting of
the Shareholders, a complete list of the Shareholders entitled to vote at each
meeting of Shareholders or any adjournment thereof. Said list shall be arranged
in alphabetical order, stating the address of and the number of shares held by
each Shareholder. Such list, for a period of ten (10) days prior to such
meeting, shall be produced and kept on file at the registered office of the Bank
and shall be subject to the inspections of any Shareholder during the whole time
of the meeting for the purposes thereof.
7. QUORUM. A majority of the outstanding shares of the Bank entitled to
vote, represented in person or by proxy, shall constitute a quorum at a meeting
of Shareholders. If less than a quorum of the outstanding shares are represented
at a meeting, a majority of the shares so represented may adjourn the meeting
without further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The Shareholders present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Shareholders to leave less than a
quorum.
8. PROXIES. At all meetings of Shareholders, a Shareholder may vote in
person or by proxy executed in writing by a Shareholder or by his or her duly
authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the
Bank before or at the time of the meeting. No proxy shall be valid after eleven
(11) months from the date of its execution, unless otherwise provided in the
proxy.
9. VOTING OF SHARES. Each outstanding share entitled to vote shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
Shareholders. Voting upon each matter submitted to a vote at a meeting of
Shareholders shall be non-cumulative.
10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the name of
another corporation, foreign or domestic, may be voted by such officer. agent or
proxy as the by-laws of that corporation may prescribe, or, in the absence of
such provision, as the board of directors of that corporation may determine.
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Shares held by an administrator, executor, guardian or conservator may
be voted by him or her, either in person or by proxy, without a transfer of such
shares into his or her name. Shares standing in the name of a trustee may be
voted by him or her, either in person or by proxy, but no trustee shall be
entitled to vote shares held by such trustee without a transfer of such shares
into the trustee's name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
so to do be contained in an appropriate order of the court by which such
receiver was appointed.
A Shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to the Bank shall not be voted,
directly or indirectly, at any meeting, and shalt not be counted in determining
the total number of outstanding shares at any given time.
11. INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise provided by law, any
action required to be taken at a meeting of the Shareholders, or any other
action which may be taken at a meeting of the Shareholders, may be taken without
holding a meeting if a consent in writing, setting forth the action so taken,
shall be signed by no less than a majority of all of the Shareholders entitled
to vote with respect to the subject matter thereof.
III. BOARD OF DIRECTORS
1. GENERAL POWERS. The business and affairs of the Bank shall be managed
by its Board of Directors.
2. TENURE. Each Director shall hold office until the next annual meeting
of Shareholders or until his successor shall have been elected and qualified.
3. PLACE OF MEETINGS. Regular and specific meetings of the Board of
Directors of the Bank, or of any committee designated by the Board of Directors,
both regular and special, may be held at any place either within or without the
State of Missouri, and unless otherwise designated as herein provided, shall be
held at the office of the Bank.
4. FIRST MEETING OF INITIAL BOARD. The first meeting of the initial Board
of Directors for the purposes of electing officers and transacting such other
business as may come before the meeting shall be held as soon as conveniently
possible upon the issuance of the Bank's Charter by the Division of Finance for
the State of Missouri. No notice of such organizational meeting of Directors
need be given, provided that a quorum shall be present. If, for any reason, such
meeting of the Directors is not or cannot be held as herein prescribed, the
officers may be elected at any meeting of the Directors thereafter called for
such purpose pursuant to these By-Laws.
5. REGULAR MEETINGS. Regular meetings of the Board of Directors shall be
held on the third Friday of each month, beginning with first month the Bank is
open for business, at the hour of 11:30 a.m. for the purpose of transacting of
the business prescribed by statute and such additional business as may come
before the meeting. If the day fixed for a regular meeting shall be a legal
holiday in the State of Missouri such
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meeting shall be held on the next succeeding business day or at such time and
place as be determined by resolution of the Board.
6. ANNUAL MEETINGS. Annual meetings of the Board of Directors shall be
held immediately after the final adjournment of the annual meeting of the
Shareholders.
7. NOTICE OF REGULAR MEETINGS. After the time and place of regular
meetings has been determined by a majority of Directors, no notice of any other
regular meetings need be given. Notice of any change in the time or place of
holding any regular meeting or any adjournment of a regular meeting shall be
given by mail or telegram not less than forty-eight (48) hours before such
meeting, to all Directors who were absent at the time such action was taken.
8. SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called by or at the request of the Chairperson of the Board or the President or
two (2) Directors. The person or persons authorized to call special meetings of
the Board of Directors may fix the time and place for holding any special
meeting of the Board of Directors provided that no special meeting be held
outside the County and/or City of the principal place of business without the
consent of all the members of the Board of Directors.
9. NOTICE. Notice of any special meeting for any purpose or purposes may
be given by the President on five (5) days notice delivered personally or mailed
to each Director at his business address, or by telegram, or by facsimile. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States Mail so addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any Director may waive notice of any
meeting. The attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting, except where a Director attends a meeting for the
express purpose of objecting to the transaction of any business thereat because
the meeting has not been lawfully called or convened.
10. QUORUM. A majority of the Directors of the Bank shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors,
but if less than such majority is present at a meeting, a majority of the
Directors present may adjourn the meeting from time to time without further
notice.
11. MANNER OF ACTING. The act of the majority of the Directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors.
12. ACTION WITHOUT A MEETING. Any action that may be taken by the Board of
Directors or any committee of the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so to be
taken, is signed by all of the members of the Board of Directors or the
committee, as the case may be. The Secretary shall file the consents with the
minutes of the meeting of the Board of Directors or of the Committee, as the
case may be.
13. VACANCIES. In each of the following instances. a vacancy in the Board
shall be deemed to have occurred:
(1) in the case of death, resignation or disqualification
of a director; or
(2) in the event a loan from the Bank to a director is
designated as a "classified asset" in any examination
conducted of the Bank's operations (for purposes of
this paragraph,
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"classified asset" shall mean any loan or credit
classified as substandard, doubtful or loss in an
examination of the Bank's operations by its primary
regulators).
Upon the occurrence of any of the foregoing events, a majority of the remaining
Directors shall elect replacement Director(s) to fill such vacancy or vacancies,
who shall serve until the duly qualified successor(s) is (are) elected at the
next annual meeting of the Shareholders. A Director elected to fill a vacancy
shall serve until the next annual Shareholders' meeting.
14. REMOVAL. At a meeting called expressly for the purpose of removal, one
or more of the Directors or the entire Board of Directors may be removed, with
or without cause. by a vote of the holders of a majority of the shares entitled
to vote at a meeting of the Shareholders. If less than the entire Board of
Directors is to be removed, no one of the Directors may be removed if the votes
cast opposed to such Director's removal would be sufficient to elect him if such
votes were then voted at an election of the entire Board of Directors. Such
meeting shall be held at the registered office or principal business off-ice of
the Bank.
15. COMPENSATION. By resolution of the Board of Directors, each Director
may be paid his or her expenses, if any, for attendance at each meeting of the
Board of Directors, and may be paid a stated salary as Director or a fixed sum
for attendance at each meeting of the Board of Directors or both. No such
payment shall preclude any Director from serving the Bank in any other capacity
and receiving compensation therefor.
16. PRESUMPTION OF ASSENT. A Director of the Bank who is present at a
meeting of the Board of Directors at which action on any corporate matter is
taken shall be presumed to have assented to the action taken unless such
Director's dissent shall be entered in the minutes of the meeting or unless such
Director shall file a written dissent to such action with the person acting as
the Secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the Secretary of the Bank immediately after
the adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
17. COMMITTEES OF DIRECTORS. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one (1) or more committees,
each committee to consist of two (2) or more of the Directors of the Bank,
which, to the extent provided in the resolution, shall have and may exercise the
powers of the Board of Directors in the management of the business and affairs
of the Bank and may authorize the seal of the Bank to be affixed to all papers
which may require it. Such committee or committees shall have such name or names
as may be determined from time to time by resolution adopted by the Board of
Directors. Each committee shall keep regular minutes of its meetings and report
the same to the Board of Directors when required. A committee may not:
(1) Authorize distributions of assets or dividends
(2) Approve action required to be approved by
shareholders
(3) Fill vacancies on the Board of Directors or any of
its committees
(4) Amend the articles of agreement
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(5) Adopt, amend, or repeal by-laws
(6) Authorize or approve issuance or sale of contract for
sale of shares, or determine the designation and
relative rights, preferences and limitations of a
class or series of shares.
18. LOAN COMMITTEE. There shall be a loan committee composed of four (4)
Directors and the chief tending officer, appointed by the Board annually or more
often. The loan committee shalt have the power to discount and purchase bills,
notes, and other evidences of debt, to buy and sell bills of exchange, to
examine and approve loans and discounts, to exercise authority involving loans
and discounts, and to exercise, when the Board is not in session, all other
powers of the Board regarding investment securities that may be lawfully
delegated. The loan committee shalt keep minutes of its meetings, and such
minutes shall be submitted at the next regular meeting of the Board of Directors
at which a quorum is present, and any action taken by the Board with respect
thereto shall be entered in the minutes of the Board.
19. INVESTMENT COMMITTEE. There shall be an investment committee composed
of three (3) Directors, appointed by the Board annually or more often. The
investment committee shall have the power to ensure adherence to the investment
policy, to recommend amendments thereto, to purchase and sell securities, to
exercise authority regarding investments and to exercise, when the Board is not
in session, all other powers of the Board regarding investment securities that
may be lawfully delegated. The investment committee shall keep minutes of its
meetings, and such minutes shall be submitted at the next regular meeting of the
Board of Directors at which a quorum is present, and any action taken by the
Board with respect thereto shall be entered in the minutes of the Board.
20. AUDIT. There shall be an examining committee composed of not less than
three (3) Directors, exclusive of any active officers, appointed by the Board
annually or more often. The duty of that committee shall be to examine at least
once during each calendar year and within 15 months of the last examination the
affairs of the association or cause suitable examinations to be made by auditors
responsible only to the Board of Directors and to report the result of such
examination in writing to the Board at the next regular meeting thereafter. Such
report shall state whether the association is in a sound condition, and whether
adequate internal controls and procedures are being maintained and shall
recommend to the Board such changes in the manner of conducting the affairs of
the association as shall be deemed advisable.
21. ORGANIZATION. The Chairperson of the Board, and in his or her absence,
the President, and in his or her absence the Vice President, and in the absence
of the Chairperson of the Board, the President and all the Vice Presidents, a
Chairman pro tem, chosen by the Directors present, shall preside at each meeting
of the Directors and shall act as Chairman thereof. The Secretary, and in his or
her absence the Assistant Secretary, and in the absence of the Secretary and the
Assistant Secretary, a Secretary pro tem, chosen by the Directors present shall
act as Secretary of all meetings of the Directors.
22. MINUTES AND STATEMENTS. The Board of Directors shall cause to be kept a
complete record of its meetings and acts.
IV. OFFICERS
1. NUMBER. The officers of the Bank shall be a President, a Vice
President, and a Secretary, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be deemed necessary
may be elected or appointed by the Board of Directors.
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2. ELECTION AND TERM OF OFFICE. The officers of the Bank shall be elected
by the Board of Directors at the Board's first initial meeting and shall be
elected thereafter by the Board of Directors at the Board's annual meeting. If
the election of officers shall not be held at such meeting, such election shall
be held as soon thereafter as conveniently may be held. Each officer shall hold
office until such officer's successor shall have been duly elected and shall
have qualified or until such officer's death or resignation or until removal in
the manner hereinafter provided.
3. REMOVAL. Any officer or agent appointed by the Board of Directors may
be removed by the Board of Directors whenever, in its judgment, the best
interests of the Bank will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the persons so removed. Election or
appointment of an officer or agent shall not of itself create contract rights.
4. VACANCIES. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by the Board of Directors
for the unexpired portion of the term.
5. CHAIRPERSON OF THE BOARD. The Board of Directors shall appoint one of
its members to be the Chairperson of the Board to serve at its pleasure. Such
person shall preside at all meetings of the Board of Directors. The Chairperson
of the Board shall supervise the carrying out of the policies adopted or
approved by the Board; shall have general executive powers, as well as the
specific powers conferred by these by-laws; and shall also have and may exercise
such further powers and duties as from time to time may be conferred, or
assigned by the Board of Directors,
6. PRESIDENT. The President shall have general executive powers and,
subject to the control of the Board of Directors, shall in general supervise and
control all of the business and affairs of the Bank.
7. VICE PRESIDENT. In the absence of the President or in the event of his
death, inability or refusal to act, the Vice President shall perform the duties
of the President, when so acting, shall have the powers of and be subject to all
the restrictions upon the President. The Vice President shall perform such other
duties as from time to time may be assigned to him by the President or by the
Board of Directors.
8. SECRETARY. The Secretary shall: (a) keep the minutes of the proceedings
of the Shareholders and of the Board of Directors in one or more books provided
for that purpose; (b) see that all notices are duly given in accordance with the
provisions of these By-Laws or as required by law; (c) be custodian of the
corporate records and of the seal of the Bank and see that the seal of the Bank
is affixed to all documents the execution of which on behalf of the Bank under
its seal is duly authorized; (d) keep a register of the post office address of
each Shareholder which shall be furnished to the Secretary of State by such
Shareholder; (e) sign with the President certificates for shares of the Bank,
the issuance of which shall have been authorized by resolution of the Board of
Directors; (f) have general charge of the stock transfer books of the Bank; and
(g) in general perform all duties incident to the office of Secretary and such
other duties as from time to time may be assigned to him or her by the President
or by the Board of Directors.
9. THE ASSISTANT SECRETARY. Each Assistant Secretary shall assist the
Secretary in the performance of his or her duties, and may at any time perform
any of the duties of the Secretary, in case of the death, resignation, absence
or disability of the Secretary, the duties of the Secretary shall be performed
by an Assistant Secretary, and each Assistant Secretary shall have such other
powers and perform such other duties as, from time to time, may be assigned to
him or her by the Board of Directors.
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<PAGE> 8
10. CASHIER. The Cashier shall: (a) have custody of and be responsible for
all funds and securities of the Bank; (b) keep full and accurate accounts of
receipts and disbursements in the corporate books, and deposit all such monies
and other valuables in the name of and to the credit of the Bank in such banks,
trust companies or other depositories as shall be selected in accordance with
the provisions of Article VI of these By-Laws; and (c) in general perform all of
the duties incident to the office of Cashier and such other duties as from time
to time may be assigned to him by the President or by the Board of Directors. If
required by the Board of Directors, the Cashier shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the Board of Directors shall determine.
11. THE ASSISTANT CASHIER. Each Assistant Cashier shall assist the Cashier
in the performance of his or her duties, and may at any time perform any of the
duties of the Cashier; in case of the death, resignation, absence or disability
of the Cashier, the duties of the Cashier shall be performed by an Assistant
Cashier, and each Assistant Cashier shall have such other powers and perform
such other duties as, from time to time, may be assigned to him or her by the
Board of Directors.
12. SALARIES. The salaries of the officers shall be fixed from time to time
by the Board of Directors, and no officer shall be prevented from receiving such
salary by reason of the fact that such officer is also a Director of the Bank.
V. RESIGNATIONS
Any Director or officer may resign his or her office at any time, such
resignation to be made in writing and to take effect from the time of its
receipt by the Bank, unless some time be fixed in the resignation, and then from
that time. The acceptance of a resignation shall not be required to make it
effective.
VI. CONTRACTS, LOANS. CHECKS AND DEPOSITS
1. CONTRACTS. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Bank, and such authority may be
general or confined to specific instances.
2. LOANS. No loans shall be contracted on behalf of the Bank, and no
evidences of indebtedness shall be issued in ITS name, unless authorized by a
resolution of the Board of Directors. Such authority may be general or confined
to specific instances.
3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
Bank, shall be signed by such officer or officers, agent or agents of the Bank
and in such manner as shall from time to time be determined by resolution of the
Board of Directors.
4. DEPOSITS. All funds of the Bank not otherwise employed shall be
deposited from time to time to the credit of the Bank in such banks, trust
companies or other depositories as the Board of Directors may select.
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<PAGE> 9
VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER
1. CERTIFICATES FOR SHARES. Certificates representing shares of the Bank
shall be in such form as shall be determined by the Board of Directors. Such
certificates shall be signed by the President and by the Secretary or by such
other officers as authorized by law and by the Board of Directors and sealed
with the corporate seal. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the person to whom the
shares represented thereby are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the Bank. All
certificates surrendered to the Bank for transfer shall be canceled, and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in case of a lost,
destroyed or mutilated certificate, a new one may be issued therefor upon such
terms and indemnity to the Bank as the By-Laws may prescribe.
2. REGISTERED SHAREHOLDERS. The Bank shall be entitled to treat the
registered holder of any share or shares of stock whose name appears on its
books as the owner or holder thereof as the absolute owner of all legal and
equitable interests therein for all purposes and (except as may be otherwise
provided by law) shall not be bound to recognize any equitable or other claim to
or interest in such shares of stock on the part of any other person, regardless
of whether or not it shall have actual or implied notice of such claim or
interest.
3. LOST CERTIFICATES. The Board of Directors may direct a new certificate
or certificates to be issued in place of any certificate or certificates
theretofore issued by the Bank alleged to have been lost or destroyed, upon the
making of an affidavit of the fact by the person claiming the certificate of
stock to be lost or destroyed. When authorizing such issue of a new certificate
or certificates, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost or
destroyed certificate or certificates or such owner's legal representative, to
advertise the same in such manner as it shall require and/or to give the Bank a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Bank with respect to the certificate alleged to have been lost
or destroyed.
VIII. CORPORATE SEAL
The Board of Directors may provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the Bank, the
State of incorporation and the words "Corporate Seal."
IX. WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any Shareholder or Director of the Bank under the provisions of these
By-Laws or under the provisions of the Articles of Agreement or under the
provisions of Chapter 362, R.S.Mo., a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
X. MISCELLANEOUS PROVISIONS
1. FISCAL YEAR. The fiscal year of the Bank shall be determined by the
Board of Directors.
2. INSPECTION OF BOOKS. The Directors shall determine from time to time
whether, and if allowed, when and under what conditions and regulations the
accounts and books of the Bank (except such as may
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<PAGE> 10
by statute be specifically open to inspection) or any of them shall be open to
inspection of the Shareholders, and Shareholders' rights in this respect are and
shall be restricted and limited accordingly.
3. CHECKS AND NOTES. All checks and drafts on the Bank's bank accounts and
all bills of exchange and promissory notes, and all acceptances, obligations and
other instruments for the payment of money, shall be signed by such officer or
officers or agent or agents as shall be thereunto duly authorized from time to
time by the Board of Directors, provided, that checks drawn on the Bank's
payroll, dividend and special accounts may bear the facsimile signatures,
affixed thereto by a mechanical device, of such officers or agents as the Board
of Directors may authorize.
4. DIVIDENDS. The Board of Directors shall declare such dividends as the
Directors in their discretion see fit whenever the condition of the Bank, in
their opinion, shall warrant the same subject to the limitations of Chapter 362,
R.S.Mo. and other applicable statutes and regulations. The Board may declare
dividends in cash, in property or in capital stock.
5. EXECUTION OF INSTRUMENTS. All agreements, indentures, mortgages, deeds,
conveyances, transfers, certificates, declarations, receipts, discharges,
releases, satisfactions, settlements, petitions, schedules, accounts,
affidavits, bonds, undertakings, proxies and other instruments or documents may
be signed, executed, acknowledged, verified, delivered or accepted on behalf of
the association by the chairperson of the Board, or the president, or any vice
president, or the secretary, or the cashier, or, if in connection with exercise
of fiduciary powers of the association, by any of those officers or by any trust
officer. Any such instruments may also be executed, acknowledged, verified,
delivered or accepted on behalf of the association in such other manner and by
such other officers as the Board of Directors may from time to time direct. The
provisions of this section 6 are supplementary to any other provision of these
bylaws.
6. RECORDS. The articles of association, the bylaws and the proceedings of
all meetings of the shareholders, the Board of Directors, and standing
committees of the Board, shall be recorded in appropriate minute books provided
for that purpose. The minutes of each meeting shall be signed by the secretary,
cashier or other officer appointed to act as secretary of the meeting.
ARTICLE XI
INDEMNIFICATION
Each Director, Officer, employee or agent, or former Director, Officer,
employee or agent of this Bank and his or her legal representatives, shall be
indemnified by the Bank against liabilities, expenses, counsel fees and costs
reasonably incurred by such Director, Officer, employee or agent or his or her
estate in connection with, or arising out of, any action, suit, proceeding or
claim in which he or she is made a party by reason of his or her being or having
been such Director, Officer, employee or agent; and any person who, at the
request of this Bank, served as director, officer, employee or agent of another
corporation in which this Bank owned corporate stock and his or her legal
representative shall in like manner be indemnified by this Bank if such person
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Bank; or had no reasonable cause to
believe his or her conduct was unlawful. However, in neither case shall the Bank
indemnify such Director, Officer, employee or agent with respect to any matters
as to which he or she shall be finally adjudged in any such action, suit or
proceeding to have been liable for negligence or misconduct in the performance
of his or her duties as such Director, Officer, employee or agent unless the
court in which the action or suit was brought determines upon application that
despite the adjudication of liability and in view of all the circumstances of
the case, the
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person is fairly and reasonably entitled to indemnification for such expenses
which the court shall deem proper. The indemnification herein provided for,
however, shall apply also in respect of any amount paid in compromise or
settlement of any such action, suit or proceeding or claim asserted against such
Director, Officer, employee or agent (including expenses, counsel fees and costs
reasonably incurred in connection therewith), provided the Board of Directors
shall have first approved such proposed compromise settlement by a majority vote
of the Board of Directors and determined that the Director, Officer, employee or
agent involved was not guilty of negligence or misconduct, but, in taking such
action, any Director involved shall not be qualified to vote thereon, and if for
this reason a quorum of the Board cannot be obtained to vote on such matters, it
shall be determined by a Committee of three (3) or more persons appointed by the
Shareholders at a duly called special meeting or a regular meeting. In
determining whether or not a Director, Officer, employee or agent was guilty of
negligence or misconduct in relation to any such matter, the Board of Directors
or Committee, as the case may be, may rely conclusively upon an opinion of
independent counsel selected by such Board or Committee. The right to
indemnification herein provided shall not be exclusive of any other rights not
inconsistent herewith to which such Director, Officer, employee or agent may be
entitled under the Articles of Agreement, the By-Laws of the Bank, any agreement
with the Bank, vote of the Shareholders or disinterested Directors under Section
351 of the Missouri Corporation Laws of 1986, as amended, or otherwise.
NOTWITHSTANDING THE FOREGOING INDEMNIFICATION PROVISIONS, THE BANK SHALL NOT IN
ANY EVENT INDEMNIFY ANY INDIVIDUAL OR PERSON AGAINST LIABILITIES, PENALTIES, OR
EXPENSES INCURRED AS A RESULT OF AN ADMINISTRATIVE PROCEEDING OR ACTION
INSTITUTED AND SUCCESSFULLY CONCLUDED AGAINST SUCH PERSON OR INDIVIDUAL BE A
REGULATORY AGENCY.
XI. AMENDMENTS
1. AMENDMENT OF BY-LAWS. Subject to applicable taw, these By-Laws may be
altered, amended or repealed, and new By-Laws may be adopted by vote of a
majority of the Directors, as specified in the Articles of Agreement, at any
regular or special meeting of the Directors.
2. INSPECTION. A copy of these By-Laws, with all amendments, shall at all
times be kept in a convenient place at the main office of the Bank, and shall be
open for inspection to all shareholders during banking hours.
EXECUTED this 11th day of April, 1995.
/s/ Charles R. Willibrand
---------------------------------------
Chairperson
ATTEST:
/s/ Mark W. Naeger
- --------------------------------------
Secretary
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<PAGE> 1
EXHIBIT 5
ROBERT C. SCHWARTZ E-MAIL: [email protected]
Direct Dial: (404) 815-3758 Direct Fax: (404) 685-7058
[LETTERHEAD OF SMITH, GAMBRELL & RUSSELL, L.P.]
May 14, 1999
Board of Directors
First Premier Financial Corporation
13004 Starbuck Road
St. Louis, Missouri 63141
Re: First Premier Financial Corporation
Registration Statement on Form S-4
1,100,000 Shares
Ladies and Gentlemen:
We have acted as counsel for First Premier Financial Corporation (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, pursuant to a Registration Statement on Form S-4 (the "Registration
Statement") of 1,100,000 Shares of the Company's Common Stock, $.01 par value
per share (the "Shares"). The Shares are issuable by the Company in exchange for
previously outstanding shares of the common stock, $1.00 par value per share, of
Premier Bancshares, Inc., a Missouri corporation ("Premier Bancshares"),
pursuant to the terms and conditions of that certain Agreement and Plan of
Merger dated May 6, 1999 by and between the Company and Premier Bancshares.
In connection therewith, we have examined the following:
(1) The Certificate of Incorporation, as amended, of the
Company, certified by the Secretary of State of the
State of Delaware;
(2) The By-Laws of the Company, certified as complete and
correct by the Secretary of the Company;
(3) The minute book of the Company, certified as correct
and complete by the Secretary of the Company;
<PAGE> 2
Board of Directors
First Premier Financial Corporation
May 14, 1999
Page 2
(4) Certificate of Good Standing with respect to the
Company, issued by the Secretary of State of the
State of Delaware; and
(5) The Registration Statement.
Based upon such examination and upon examination of such other
instruments and records as we have deemed necessary, we are of the opinion that:
(A) The Company has been duly incorporated and is in good
standing under the laws of the State of Delaware; and
(B) The Shares covered by the Registration Statement to
be sold by the Company have been legally authorized
and, when issued and sold in accordance with the
terms described in the Registration Statement, will
be legally issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus contained in said Registration Statement. In
giving this consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
SMITH, GAMBRELL & RUSSELL, LLP
/s/ Robert C. Schwartz
--------------------------------------
Robert C. Schwartz
RCS/DWG/dkaw
<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 16th day of July, 1998, by and between
Missouri Holdings, Inc., a Delaware corporation (the "Company" or "Employer")
and Richard C. Jensen (the "Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company intends to seek approval
from the Board of Governors of the Federal Reserve System (the "Fed"), the
Comptroller of the Currency ("OCC") and the Federal Deposit Insurance
Corporation ("FDIC") to acquire a bank with federally insured deposits in St.
Louis, Missouri (the "Bank") and to expand the Company's banking business
throughout Missouri; and
WHEREAS, the Board of Directors of the Company intends to approve the
sale in a firm underwritten public offering of an amount of Company common stock
requisite to expanding the Company's banking business (the "Initial Public
Offering"); and
WHEREAS, Executive is willing to assist the directors of the Company in
the acquisition of the Bank and subsequent public offering and to become the
President and Chief Executive Officer of the Bank and the Company in accordance
with the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. Employer employs Executive and Executive accepts
employment upon the terms and conditions set forth in this Agreement.
2. TERM. The term of employment of Executive under this Agreement
shall be the three year period commencing on July 16, 1998 and ending on July
15, 2001.
3. COMPENSATION. (a) Prior to Closing of the Initial Public
Offering. The Company shall pay Executive a minimum annual base salary of
$250,000, payable in semi-monthly installments from the date of this Agreement
until the closing of the Initial Public Offering. Salary payments shall be
subject to withholding and other applicable taxes. As an additional inducement
to Executive to accept employment with the Company, the Company agrees to pay
Executive a signing bonus in the amount of $300,000, such payment to be made in
a manner including, but not limited to, installment payments or in connection
with a deferred compensation arrangement to be mutually agreed to by the Company
and the Executive as soon as practicable after the execution of this Agreement.
Upon execution of this Agreement and for a period of thirty days
thereafter, Executive shall be granted the right to acquire 250,000 shares of
Common Stock of the Company on the same basis
<PAGE> 2
as other organizers of the Company and at a per share price of fair market value
determined in good faith by the Board of Directors of the Company. These 250,000
shares shall have the same registration rights, if any, held by the existing
shareholders of the Company. As soon as practicable after the payment by
Executive of the purchase price for such Common Stock the Company shall deliver
a certificate or certificates representing those shares to Executive.
The Company represents and warrants that it currently has 100,000
shares of common stock and 99,900 shares of preferred stock issued and
outstanding, and total equity in excess of $1 million and no debt other than
trade accounts payable.
Except as provided in Section 7 and Section 11(a) below, no additional
compensation or benefits will be provided to Executive prior to the closing of
the Initial Public Offering.
(b) After the Closing of the Initial Public Offering. The Company
shall pay Executive a minimum annual base salary of $250,000, payable in
semi-monthly installments beginning the first of the month immediately
subsequent to the closing of the Initial Public Offering. Salary payments shall
be subject to withholding and other applicable taxes.
At the first Board of Directors meeting subsequent to the closing of
the Initial Public Offering the Company shall issue a warrant to Executive
providing for the purchase of 250,000 shares of the Company's Common Stock at a
per share price equal to the per share price at which the Company sold its
shares of Common Stock in the Initial Public Offering. Such warrant shall be
exercisable in whole or in part for a period of ten years from the date of grant
and shall be subject to such other customary terms and conditions as set forth
in the warrant agreement which shall be delivered to Executive by the Company as
soon as practicable after the date of grant. Upon the written request of
Executive, the Company shall, at no cost to Executive, effect the registration
under the securities laws of any or all of the shares of the Company's Common
Stock acquired upon exercise of the warrant; provided, however, that the Company
shall not be required to effect such registration prior to the date three years
from the date of this Agreement. Further, if the Company at any time proposes
for any reason to register securities under the securities laws, it shall
provide Executive with 20 days' written notice of such proposed registration
and, upon the written request of Executive, shall, at no cost to Executive,
effect the registration of any or all of the shares of the Company's Common
Stock acquired upon exercise of the warrant. All such registration rights of
Executive with respect to the shares underlying the warrant shall terminate upon
the termination of the warrant.
4. TITLE AND DUTIES. Prior to the Closing of the Initial Public
Offering Executive shall serve as President and Chief Executive Officer of the
Company and shall be nominated as a director of the Company for the term of this
Agreement. Executive shall run the day-to-day activities of the Company and
oversee the Company, within the framework of the approved annual budget, and
with a sound system of internal controls and in compliance with the policies of
the Board of Directors of the Company, and all applicable laws and regulations.
After the Closing of the Initial Public offering Executive shall also
be elected President, Chief Executive Officer and a Director of the Bank and
shall run the day-to-day activities of the
2
<PAGE> 3
Bank and oversee the Bank within the framework of the approved annual budget,
and with the sound system of internal controls and in compliance with the
policies of the Board of Directors of the Bank and all applicable laws and
regulations.
5. EXTENT OF SERVICES. After the Closing of the Initial Public
Offering Executive shall devote his entire time, attention and energies to the
business of Employer and shall not during the term of this Agreement be engaged
in any other business activity which requires the attention or participation of
Executive during normal business hours of Employer, recognition being given to
the fact that Executive is expected on occasion to participate in client
development after normal business hours. However, Executive may invest his
assets in such form or manner as will not require his services in the operation
of the affairs of the companies in which such investments are made. Executive
shall notify Employer of any significant participation by him in any trade
association or similar organization and the Board of Directors shall approve in
advance Executive's service as a director of any entity or organization.
Notwithstanding the foregoing, charitable activities of Executive are
encouraged.
6. WORKING FACILITIES. After the Closing of the Initial Public
Offering Executive shall have such assistants, perquisites, facilities and
services as are suitable to his position and appropriate for the performance of
his duties, including membership in the Bellreve Country Club and the St. Louis
Club (including dues and assessments).
7. EXPENSES. Executive may incur reasonable expenses for
promoting the business of the Employer, including expenses for entertainment,
travel, and similar items. Executive will be reimbursed for all such expenses
upon Executive's periodic presentation of an itemized account of such
expenditures.
8. VACATIONS. After the Closing of the Initial Public Offering
Executive shall be entitled each year to a vacation in accordance with the
personnel policy established by the Company's Board of Directors, during which
time Executive's compensation shall be paid in full.
9. ADDITIONAL COMPENSATION. After the Closing of the Initial
Public Offering and as additional consideration paid to Executive, Executive
shall be provided with health, hospitalization, disability and a minimum of $
350,000 in term life insurance. In addition, after the Closing of the Initial
Public Offering Executive shall be provided with an automobile for his use or an
automobile allowance, in accordance with the automobile policy established by
the Company's Board of Directors.
10. CHANGE IN CONTROL OF THE COMPANY. (a) After the Closing of the
Initial Public Offering in the event of a "change in control" of the Company, as
defined herein, Executive shall be entitled, for a period of thirty (30) days
from the date of closing of the transaction effecting such change in control and
at his election, to give written notice to Employer of termination of this
Agreement and to receive a cash payment equal to two hundred ninety-nine percent
(299%) times the compensation, including bonus, if any, received by Executive in
the one-year period immediately preceding the change in control. The severance
payments provided for in this Section 10(a) shall be paid in cash, commencing
not later than ten (10) days after the date of notice of
3
<PAGE> 4
termination by Executive under this Section 10 or ten (10) days after the date
of closing of the transaction effecting the change in control of the Company,
whichever is later.
(b) In addition, if Executive elects to terminate this Agreement
pursuant to this Section 10, Executive shall further be entitled, in lieu of
shares of Common Stock of the Company issuable upon exercise of warrants to
which Executive is entitled under this Agreement, to an amount in cash or Common
Stock of the Company (or any combination thereof) as Executive shall in his
election designate equal to the excess of the fair market value of the Common
Stock as of the date of closing of the transaction effecting the change in
control over the per share exercise price of the warrants held by Executive,
times the number of shares of Common Stock subject to such warrants (whether or
not then fully exercisable). The fair market value of the Common Stock shall be
equal to the higher of (i) the value as determined by the Board of Directors of
the Company if there is no organized trading market for the shares at the time
such determination is made, or (ii) the closing price (or the average of the bid
and asked prices if no closing price is available) on any nationally recognized
securities exchange or association on which the Company's shares may be quoted
or listed, or (iii) the highest per share price actually paid for Common Stock
in connection with any change in control of the Company. The severance payments
provided for in this Section 10(b) shall be paid in full not later than ten (10)
days after the date of notice of termination by Executive under this Section 10
or ten (10) days after the date of closing of the transaction effecting the
change in control of the Company, whichever is later.
(c) For purposes of this Section 10, "change in control" of the
Company shall mean:
(i) any transaction, whether by merger, consolidation,
asset sale, tender offer, reverse stock split, or
otherwise, which results in the acquisition or
beneficial ownership (as such term is defined under
rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended) by any
person or entity or any group of persons or entities
acting in concert, of 50% or more of the outstanding
shares of Common Stock of the Company;
(ii) the sale of all or substantially all of the assets of
the Company; or
(iii) the liquidation of the Company.
11. TERMINATION. (a) For Failure to Close the Initial Public
Offering. If during the period beginning one (1) year from the date hereof, or
such longer period as mutually agreed upon by the Executive and the Board of
Directors of the Company, the Board of Directors of the Company determines in
its sole discretion that the Company is unable to close the Initial Public
Offering then this Agreement may be terminated by the Board of Directors of the
Company without notice upon the condition that Executive shall be entitled, as
liquidated damages in lieu of all other claims, to be paid the sum of $250,000,
which payment shall be subject to withholding and other applicable taxes and
shall be made simultaneously with such termination of this Agreement.
4
<PAGE> 5
(b) For Cause. This Agreement may be terminated
by the Board of Directors of the Company without notice and without further
obligation than for monies already paid, for any of the following reasons:
(i) failure of Executive to follow reasonable written
instructions or policies of the Board of Directors of
the Company or the Bank;
(ii) receipt by the Company or the Bank of written notice
from any bank regulatory agency having jurisdiction
over the Company or the Bank that such agency has
criticized Executive's performance or his area of
responsibility and has either (A) rated the Company
or the Bank a "4" or a "5" under the Uniform
Financial Institution Rating System or (B) has
determined that the Bank is in a "troubled condition"
as defined under Section 914 of the Financial
Institutions Reform, Recovery and Enforcement Act of
1989;
(iii) gross negligence or willful misconduct of Executive
materially damaging to the business of the Company or
Bank during the term of this Agreement, or at any
time while he was employed by the Company prior to
the term of this Agreement, if not disclosed to the
Company prior to the commencement of the term of this
Agreement; or
(iv) conviction of Executive during the term of this
Agreement of a crime involving breach of trust or
moral turpitude.
In the event that the Bank discharges Executive alleging
"cause" under this Section 11(b) and it is subsequently determined judicially
that the termination was "without cause," then such discharge shall be deemed a
discharge without cause subject to the provisions of Section 11(c) hereof. In
the event that the Bank discharges Executive alleging "cause" under this Section
11(b), such notice of discharge shall be accompanied by a written and specific
description of the circumstances alleging such "cause." The termination of
Executive for "cause" shall not entitle the Bank to enforcement of the
non-competition and non-solicitation covenants contained in Section 13 hereof.
(c) Without Cause.
(i) The Bank may, upon thirty (30) days' written notice
to Executive, terminate this Agreement without cause
at any time after the closing of the Initial Public
Offering during the term of this Agreement upon the
condition that Executive shall be entitled, as
liquidated damages in lieu of all other claims, to
the same severance payments as provided in Section 10
hereof; provided that for purposes of Section 10(b),
the fair market value of Common Stock shall be
determined as of the date of notice of termination of
this Agreement given by the Bank to Executive. The
severance payments provided for in this Section 11(c)
shall commence not later than thirty (30) days after
the actual
5
<PAGE> 6
date of termination of employment of Executive. The
termination of Executive "without cause" shall not
entitle the Bank to enforcement of the
non-competition and non-solicitation covenants
contained in Section 13 hereof.
(ii) Executive may upon thirty (30) days' written notice
to Employer terminate this Agreement without cause at
any time during the term of this Agreement. In the
event of termination of this Agreement by Executive,
the Bank shall have no further obligation to
Executive other than for monies paid and the Bank
shall be entitled to enforcement of the
non-competition and non- solicitation covenants
contained in Section 13 hereof.
12. DEATH OR DISABILITY. After the closing of the Initial Public
Offering, in the event of Executive's death, Employer shall pay to Executive's
designated beneficiary, or, if Executive has failed to designate a beneficiary,
to his estate, an amount equal to Executive's base salary pursuant to Section
3(b) hereof through the end of the month in which Executive's death occurred.
Such compensation shall be in lieu of any other benefits provided hereunder,
except that (i) in the event of a change in control of the Company as defined
herein, Executive's designated beneficiary or his estate, as the case may be,
shall be entitled to the benefits of Section 10(b) hereof, and (ii) any benefit
payable pursuant to Section 3(b) shall be prorated and made available to
Executive in respect of any period prior to his death. The Bank may maintain
insurance on its behalf to satisfy in whole or in part the obligations of this
Section 12.
After the closing of the Initial Public Offering, in the event of
Executive's disability, as hereinafter defined, Employer shall pay to Executive
the base salary then in effect through the end of the month in which Executive
became disabled. Executive shall be deemed disabled if, by reason of physical or
mental impairment, he is incapable of performing his duties hereunder for a
period of 180 consecutive days.
13. NON-COMPETITION AND NON-SOLICITATION. (a) Executive
acknowledges that he has performed services or will perform services hereunder
which directly affect Employer's business. Accordingly, the parties deem it
necessary to enter into the protective agreement set forth below, the terms and
condition of which have been negotiated by and between the parties hereto.
(b) In the event of termination of employment under this
Agreement by action of Executive pursuant to 11(c)(ii) prior to the expiration
of the term of this Agreement, Executive agrees with Employer that through the
actual date of termination of the Agreement, and for a period of twelve (12)
months after such termination date, Executive shall not, without the prior
written consent of Employer, within St. Louis County, Missouri either directly
or indirectly, serve as an executive officer of any bank or bank holding
company.
(c) The covenants of Executive set forth in this Section
13 are separate and independent covenants for which valuable consideration has
been paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce Employer to enter into
this Agreement. Each of the aforesaid covenants may be availed of
6
<PAGE> 7
or relied upon by Employer in any court of competent jurisdiction, and shall
form the basis of injunctive relief and damages including expenses of litigation
(including but not limited to reasonable attorney's fees) suffered by Employer
arising out of any breach of the aforesaid covenants by Executive. The covenants
of Executive set forth in this Section 13 are cumulative to each other and to
all other covenants of Executive in favor of Employer contained in this
Agreement and shall survive the termination of this Agreement for the purposes
intended. Should any covenant, term, or condition contained in this Section 13
become or be declared invalid or unenforceable by a court of competent
jurisdiction, then the parties may request that such court judicially modify
such unenforceable provision consistent with the intent of this Section 13 so
that it shall be enforceable as modified, and in any event the invalidity of any
provision of this Section 13 shall not affect the validity of any other
provision in this Section 13 or elsewhere in this Agreement.
14. NOTICES. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of Executive, or to its principal office in the case of
Employer.
15. WAIVER OF BREACH. The waiver by Employer of a breach of any
provision of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive. No waiver shall be valid unless in
writing and signed by an authorized officer of Employer.
16. ASSIGNMENT. Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Executive may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer.
17. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Missouri.
18. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties hereto regarding employment of Executive, and supersedes and
replaces any prior agreement relating thereto. It may not be changed orally but
only by an agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, extension, or discharge is sought.
7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"COMPANY"
MISSOURI HOLDINGS, INC.
By: /s/ Gerald G. Kaufman
-----------------------------------------
Name: Gerald G. Kaufman
Title: Vice President
"EXECUTIVE"
/s/ Richard C. Jensen (L.S.)
--------------------------------------------
Richard C. Jensen
8
<PAGE> 1
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the _____ day of ____________________ 1999,
by and between Missouri Holdings, Inc., a Delaware corporation (the "Company" or
"Employer") and ________________________ (the "Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company intends to seek approval
from the Board of Governors of the Federal Reserve System (the "Fed"), the
Missouri Division of Finance and the Federal Deposit Insurance Corporation
("FDIC") to acquire a bank with federally insured deposits in St. Louis,
Missouri (the "Bank") and to expand the Company's banking business throughout
Missouri; and
WHEREAS, the Board of Directors of the Company intends to approve the
sale in a firm underwritten public offering of an amount of Company common stock
requisite to expanding the Company's banking business (the "Initial Public
Offering"); and
WHEREAS, Executive is willing to assist the directors of the Company in
the acquisition of the Bank and subsequent public offering and to become the
____________________ of the Bank and the Company in accordance with the terms
and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. Employer employs Executive and Executive accepts
employment upon the terms and conditions set forth in this Agreement.
2. TERM. The term of employment of Executive under this Agreement
shall be the three year period commencing on _____________, 1999 and ending on
_____________, 200_.
3. COMPENSATION.
The Company shall pay Executive a minimum annual base salary of
$__________, payable in semi-monthly installments beginning on the date of this
Agreement. Salary payments shall be subject to withholding and other applicable
taxes.
At the first Board of Directors meeting subsequent to the closing of
the Initial Public Offering the Company shall grant of options to Executive
providing for the purchase of _________ shares of the Company's Common Stock at
a per share price equal to the per share price at which the Company sold its
shares of Common Stock in the Initial Public Offering. Such options shall be
exercisable in whole or in part for a period of ten years from the date of grant
and shall be subject to such other customary terms and conditions as set forth
in the option agreement which shall be delivered to Executive by the Company as
soon as practicable after the date of grant.
<PAGE> 2
4. TITLE AND DUTIES. Executive shall serve as
____________________________ of the Company. Executive shall run the day-to-day
activities of _____________ and oversee _______________, within the framework of
the approved annual budget, and with a sound system of internal controls and in
compliance with the policies of the Board of Directors of the Company, and all
applicable laws and regulations.
5. EXTENT OF SERVICES. Executive shall devote his entire time,
attention and energies to the business of Employer and shall not during the term
of this Agreement be engaged in any other business activity which requires the
attention or participation of Executive during normal business hours of
Employer, recognition being given to the fact that Executive is expected on
occasion to participate in client development after normal business hours.
However, Executive may invest his assets in such form or manner as will not
require his services in the operation of the affairs of the companies in which
such investments are made. Executive shall notify Employer of any significant
participation by him in any trade association or similar organization and the
Board of Directors shall approve in advance Executive's service as a director of
any entity or organization. Notwithstanding the foregoing, charitable activities
of Executive are encouraged.
6. WORKING FACILITIES. After the Closing of the Initial Public
Offering Executive shall have such assistants, perquisites, facilities and
services as are suitable to his position and appropriate for the performance of
his duties, including membership in a luncheon club and a country club
(including dues and assessments).
7. EXPENSES. Executive may incur reasonable expenses for
promoting the business of the Employer, including expenses for entertainment,
travel, and similar items. Executive will be reimbursed for all such expenses
upon Executive's periodic presentation of an itemized account of such
expenditures.
8. VACATIONS. Executive shall be entitled each year to a vacation
in accordance with the personnel policy established by the Company's Board of
Directors, during which time Executive's compensation shall be paid in full.
9. ADDITIONAL COMPENSATION. After the Closing of the Initial
Public Offering and as additional consideration paid to Executive, Executive
shall be provided with health, hospitalization, disability and a minimum of one
times Executive's annual salary in term life insurance. In addition, after the
Closing of the Initial Public Offering Executive shall be provided with an
automobile for his use or an automobile allowance, in accordance with the
automobile policy established by the Company's Board of Directors.
10. CHANGE IN CONTROL OF THE COMPANY. (a) After the Closing of the
Initial Public Offering in the event of a "change in control" of the Company, as
defined herein, Executive shall be entitled, for a period of thirty (30) days
from the date of closing of the transaction effecting such change in control and
at his election, to give written notice to Employer of termination of this
Agreement and to receive a cash payment equal to two hundred ninety-nine percent
(299%) times the compensation, including bonus, if any, received by Executive in
the one-year period
2
<PAGE> 3
immediately preceding the change in control. The severance payments provided for
in this Section 10(a) shall be paid in cash, commencing not later than ten (10)
days after the date of notice of termination by Executive under this Section 10
or ten (10) days after the date of closing of the transaction effecting the
change in control of the Company, whichever is later.
(b) In addition, if Executive elects to terminate this
Agreement pursuant to this Section 10, Executive shall further be entitled, in
lieu of shares of Common Stock of the Company issuable upon exercise of options
to which Executive is entitled under this Agreement, to an amount in cash or
Common Stock of the Company (or any combination thereof) as Executive shall in
his election designate equal to the excess of the fair market value of the
Common Stock as of the date of closing of the transaction effecting the change
in control over the per share exercise price of the options held by Executive,
times the number of shares of Common Stock subject to such options (whether or
not then fully exercisable). The fair market value of the Common Stock shall be
equal to the higher of (i) the value as determined by the Board of Directors of
the Company if there is no organized trading market for the shares at the time
such determination is made, or (ii) the closing price (or the average of the bid
and asked prices if no closing price is available) on any nationally recognized
securities exchange or association on which the Company's shares may be quoted
or listed, or (iii) the highest per share price actually paid for Common Stock
in connection with any change in control of the Company. The severance payments
provided for in this Section 10(b) shall be paid in full not later than ten (10)
days after the date of notice of termination by Executive under this Section 10
or ten (10) days after the date of closing of the transaction effecting the
change in control of the Company, whichever is later.
(c) For purposes of this Section 10, "change in control"
of the Company shall mean:
(i) any transaction, whether by merger, consolidation,
asset sale, tender offer, reverse stock split, or
otherwise, which results in the acquisition or
beneficial ownership (as such term is defined under
rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended) by any
person or entity or any group of persons or entities
acting in concert, of 50% or more of the outstanding
shares of Common Stock of the Company;
(ii) the sale of all or substantially all of the assets of
the Company; or
(iii) the liquidation of the Company.
11. TERMINATION. (a) For Cause. This Agreement may be terminated
by the Board of Directors of the Company without notice and without further
obligation than for monies already paid, for any of the following reasons:
(i) failure of Executive to follow reasonable written
instructions or policies of the Board of Directors of
the Company or the Bank;
(ii) gross negligence or willful misconduct of Executive
materially damaging to the business of the Company or
Bank during the term of this Agreement; or
3
<PAGE> 4
(iii) conviction of Executive during the term of this
Agreement of a crime involving breach of trust or
moral turpitude.
In the event that the Bank discharges Executive alleging
"cause" under this Section 11(a) and it is subsequently determined judicially
that the termination was "without cause," then such discharge shall be deemed a
discharge without cause subject to the provisions of Section 11(b) hereof. In
the event that the Bank discharges Executive alleging "cause" under this Section
11(a), such notice of discharge shall be accompanied by a written and specific
description of the circumstances alleging such "cause." The termination of
Executive for "cause" shall not entitle the Bank to enforcement of the
non-competition and non-solicitation covenants contained in Section 13 hereof.
(b) Without Cause.
(i) The Bank may, upon thirty (30) days' written notice
to Executive, terminate this Agreement without cause
at any time after the closing of the Initial Public
Offering during the term of this Agreement upon the
condition that Executive shall be entitled, as
liquidated damages in lieu of all other claims, to
the payment of Executive's base salary for a period
of ___ months and the exercise, for a period of
ninety (90) days, of all options to purchase the
Company's Common Stock granted to Executive
hereunder, whether or not such options are then
currently exercisable. The severance payments
provided for in this Section 11(b) shall commence not
later than thirty (30) days after the actual date of
termination of employment of Executive. The
termination of Executive "without cause" shall not
entitle the Bank to enforcement of the
non-competition and non-solicitation covenants
contained in Section 13 hereof.
(ii) Executive may upon thirty (30) days' written notice
to Employer terminate this Agreement without cause at
any time during the term of this Agreement. In the
event of termination of this Agreement by Executive,
the Bank shall have no further obligation to
Executive other than for monies paid and the Bank
shall be entitled to enforcement of the
non-competition and non-solicitation covenants
contained in Section 13 hereof.
12. DEATH OR DISABILITY. After the closing of the Initial Public
Offering, in the event of Executive's death, Employer shall pay to Executive's
designated beneficiary, or, if Executive has failed to designate a beneficiary,
to his estate, an amount equal to Executive's base salary pursuant to Section
3(b) hereof through the end of the month in which Executive's death occurred.
Such compensation shall be in lieu of any other benefits provided hereunder,
except that (i) in the event of a change in control of the Company as defined
herein, Executive's designated beneficiary or his estate, as the case may be,
shall be entitled to the benefits of Section 10(b) hereof, and (ii) any benefit
payable pursuant to Section 3(b) shall be prorated and made available to
Executive in respect of any period prior to his death. The Bank may maintain
insurance on its behalf to satisfy in whole or in part the obligations of this
Section 12.
4
<PAGE> 5
After the closing of the Initial Public Offering, in the event of
Executive's disability, as hereinafter defined, Employer shall pay to Executive
the base salary then in effect through the end of the month in which Executive
became disabled. Executive shall be deemed disabled if, by reason of physical or
mental impairment, he is incapable of performing his duties hereunder for a
period of 180 consecutive days.
13. NON-COMPETITION AND NON-SOLICITATION. (a) Executive
acknowledges that he has performed services or will perform services hereunder
which directly affect Employer's business. Accordingly, the parties deem it
necessary to enter into the protective agreement set forth below, the terms and
condition of which have been negotiated by and between the parties hereto.
(b) In the event of termination of employment under this
Agreement by action of Executive pursuant to 11(b)(ii) prior to the expiration
of the term of this Agreement, Executive agrees with Employer that through the
actual date of termination of the Agreement, and for a period of
________________ months after such termination date, Executive shall not,
without the prior written consent of Employer, either directly or indirectly,
serve as an executive officer or director of any bank or bank holding company or
as an executive officer, director, consultant, advisor or in any other capacity
to any person, firm, partnership or corporation or any other entity which is
involved in the organization of or chartering of any bank or bank holding
company, which is or intends to engage in competition in any substantial manner
with Employer.
(c) The covenants of Executive set forth in this Section
13 are separate and independent covenants for which valuable consideration has
been paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce Employer to enter into
this Agreement. Each of the aforesaid covenants may be availed of or relied upon
by Employer in any court of competent jurisdiction, and shall form the basis of
injunctive relief and damages including expenses of litigation (including but
not limited to reasonable attorney's fees) suffered by Employer arising out of
any breach of the aforesaid covenants by Executive. The covenants of Executive
set forth in this Section 13 are cumulative to each other and to all other
covenants of Executive in favor of Employer contained in this Agreement and
shall survive the termination of this Agreement for the purposes intended.
Should any covenant, term, or condition contained in this Section 13 become or
be declared invalid or unenforceable by a court of competent jurisdiction, then
the parties may request that such court judicially modify such unenforceable
provision consistent with the intent of this Section 13 so that it shall be
enforceable as modified, and in any event the invalidity of any provision of
this Section 13 shall not affect the validity of any other provision in this
Section 13 or elsewhere in this Agreement.
14. NOTICES. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of Executive, or to its principal office in the case of
Employer.
15. WAIVER OF BREACH. The waiver by Employer of a breach of any
provision of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive. No waiver shall be valid unless in
writing and signed by an authorized officer of Employer.
5
<PAGE> 6
16. ASSIGNMENT. Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Executive may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer.
17. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Missouri.
18. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto regarding employment of Executive, and
supersedes and replaces any prior agreement relating thereto. It may not be
changed orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"COMPANY"
MISSOURI HOLDINGS, INC.
By:
-----------------------------------------
Name:
Title:
"EXECUTIVE"
(L.S.)
-----------------------------------------
6
<PAGE> 1
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 6thday of May 1999, by and between
First Premier Financial Corporation, a Delaware corporation (the "Company" or
"Employer") and Bruce W. Wiley (the "Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company intends to seek approval
from the Board of Governors of the Federal Reserve System (the "Fed"), the
Missouri Division of Finance ("Missouri Division") and the Federal Deposit
Insurance Corporation ("FDIC") to acquire a state-chartered bank with federally
insured deposits in Jefferson City, Missouri (the "Bank") and to expand the
Company's banking business throughout Missouri; and
WHEREAS, the Board of Directors of the Company intends to approve the
sale in a firm underwritten public offering of an amount of Company common stock
requisite to expanding the Company's banking business (the "Initial Public
Offering"); and
WHEREAS, After the Closing of the Initial Public Offering, Executive is
willing to become the President of the Middle Missouri Market Area of the Bank
in accordance with the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. Employer employs Executive and Executive accepts
employment upon the terms and conditions set forth in this Agreement. Executive
acknowledges and agrees that all obligations of Employer under this Agreement
may be transferred and assigned to any wholly-owned banking subsidiary of the
Employer. Further, upon the commencement of the term of the Agreement, Executive
cancels and terminates any and all previous employment agreements entered into
with Premier Bank, Jefferson City, Missouri, and all provisions contained in any
such employment agreements are, as of the commencement of the term hereof, null
and void and of no further force or effect.
2. TERM. The term of employment of Executive under this Agreement
shall be the five year period commencing on the date of Closing of the Initial
Public Offering and ending on the last day of the sixtieth (60th) month
thereafter.
3. COMPENSATION. The Company shall pay Executive a minimum annual
base salary ("Base Salary") as computed below, payable in semi-monthly
installments beginning the first of the month immediately subsequent to the
closing of the Initial Public Offering. Salary payments shall be subject to
withholding and other applicable taxes. The Base Salary shall be $150,000
initially, and thereafter shall increase by five percent on each anniversary of
the date of the Closing of the Initial Public Offering. Immediately after the
Closing of the Initial Public Offering, the Executive
<PAGE> 2
and the Company, or a banking subsidiary of the Company that employs the
Executive (collectively referred to as the "Company"), shall use all reasonable
efforts to obtain one or more life insurance policies on the life of the
Executive designed in the aggregate to provide the Executive and his
beneficiaries the death benefits and nonqualified retirement benefits in form
and substance substantially similar to the benefits described in the Life
Insurance Endorsement Method Split Dollar Plan Agreement (the "Split Dollar
Agreement"), the Executive Supplemental Retirement Plan Agreement (the
"Retirement Plan Agreement"), and the Executive Supplemental Retirement Plan
Summary pro Forma dated March 24, 1999 (the "Summary"), attached hereto as
Exhibit "A" and made a part hereof. Notwithstanding the foregoing sentence,
however, the obligation of the Company to execute the Supplemental Retirement
Agreement, the Split Dollar Agreement and the Summary, and to pay the premium
described in the Summary, shall become effective only upon the later of the date
of Closing of the Initial Public Offering and the date that the insurance policy
or policies contemplated under the Split Dollar Agreement, the Supplemental
Retirement Agreement and the Summary are in force. It is understood and agreed
that the Company does not guaranty the amount of benefits that may be provided
by the insurance policy or policies. Moreover, in the event the Executive is
uninsurable or is rated to the extent that such rating materially affects the
earnings of the insurance policy or policies, the Executive shall instruct the
Company in writing either (i) to complete the purchase of such life insurance
policy or policies on the life of the Executive, or (ii) to use the Company's
best efforts to use a suitable surrogate insured in order to provide the
Executive the best benefits obtainable under the circumstances, for the premium
described in the Summary. When the insurance policy or insurance policies
(insuring the Executive or the surrogate, as the case may be) have been issued,
the Retirement Plan Agreement shall provide therein under the definition of
"Index" a description of the policy or policies actually obtained in the manner
provided under such definition. Executive shall also be eligible to participate
in any discretionary bonus plan or program adopted by the Board of Directors on
the same basis as other executive officers of the Company.
At the first Board of Directors meeting subsequent to the Closing of
the Initial Public Offering, Executive shall be granted warrants to purchase
40,000 shares of common stock of the Company on the same terms and conditions as
warrants granted to Founders of the Company as set forth in the Company's
Registration Statement on Form S-1 filed with the Securities and Exchange
Commission in connection with the Initial Public Offering and Executive shall be
granted options to purchase 30,000 shares of common stock of the Company. The
options shall vest on the following schedule: options to purchase 10,000 shares
shall vest and become exercisable on each of the first, second and third
anniversaries of the date of grant. All such options shall be exercisable at a
per share price equal to the per share price at which the Company sold its
shares of common stock in the Initial Public Offering, shall be exercisable in
whole or in part for a period of ten years from the date of grant and shall be
subject to such other customary terms and conditions as set forth in the option
agreement which shall be delivered to Executive by the Company as soon as
practicable after the date of grant.
4. TITLE AND DUTIES. Executive shall be President of the Middle
Missouri Market Area, shall be provided an office in Boone or Cole County, and
shall manage the day-to-day activities of the Bank in the Middle Missouri Market
and oversee the Bank in the Middle Missouri Market within the framework of the
approved annual budget, and with the sound system of internal controls and
<PAGE> 3
in compliance with the policies of the Board of Directors of the Bank and all
applicable laws and regulations. At the first Board of Directors meeting
subsequent to the Closing of the Initial Public Offering, Executive shall be
elected as a Class III director of the Company and as a Vice President of the
Company and shall be reelected as a director so long as Executive remains
employed by the Company. Executive shall also be elected as a director of the
Bank so long as Executive remains employed by the Company.
5. EXTENT OF SERVICES. After the Closing of the Initial Public
Offering, Executive shall devote his entire time, attention and energies to the
business of Employer and shall not during the term of this Agreement be engaged
in any other business activity which requires the attention or participation of
Executive during normal business hours of Employer, recognition being given to
the fact that Executive is expected on occasion to participate in client
development after normal business hours. However, Executive may invest his
assets in such form or manner as will not require his services in the operation
of the affairs of the companies in which such investments are made. Executive
shall notify Employer of any significant participation by him in any trade
association or similar organization and the Board of Directors shall approve in
advance Executive's service as a director of any entity or organization.
Notwithstanding the foregoing, charitable activities of Executive are
encouraged.
6. WORKING FACILITIES. Executive shall have such assistants,
perquisites, facilities and services as are suitable to his position and
appropriate for the performance of his duties, including membership in a country
club and business persons' luncheon club (including dues and assessments) as
mutually agreed upon by Executive and the Company.
7. EXPENSES. Executive may incur reasonable expenses for promoting
the business of the Employer, including expenses for entertainment, travel, and
similar items. Executive will be reimbursed for all such expenses upon
Executive's periodic presentation of an itemized account of such expenditures.
8. VACATIONS. After the Closing of the Initial Public Offering,
Executive shall be entitled each year to a vacation in accordance with the
personnel policy established by the Company's Board of Directors, during which
time Executive's compensation shall be paid in full; provided, however, that
such vacation shall not be less than four weeks.
9. ADDITIONAL COMPENSATION. After the Closing of the Initial Public
Offering and as additional consideration paid to Executive, Executive shall be
provided with health, hospitalization, and disability insurance on the same
terms as executive officers of Employer and in amounts and on terms no less
favorable than that provided to Executive by Premier Bancshares, Inc., and a
minimum of $250,000 in term life insurance payable to a beneficiary designated
by Executive. In addition, after the Closing of the Initial Public Offering,
Executive shall be provided with an automobile for his use substantially similar
to that provided to Executive by Premier Bank, in accordance with the automobile
policy established by the Company's Board of Directors.
10. CHANGE IN CONTROL OF THE COMPANY. (a) After the Closing of the
Initial Public Offering in the event of a "change in control" of the Company, as
defined herein, Executive shall
<PAGE> 4
be entitled, for a period of thirty days from the date of closing of the
transaction effecting such change in control and at his election, to give
written notice to Employer of termination of this Agreement and to receive a
cash payment equal to two hundred ninety-nine percent (299%) times the
compensation, including bonus, if any, received by Executive in the one-year
period immediately preceding the change in control or which would have been
received by Executive during the one year period following the Initial Public
Offering if the change in control occurs during the first year of the term of
this Agreement. The severance payments provided for in this Section 10(a) shall
be paid in cash, not later than ten days after the date of notice of termination
by Executive under this Section 10 or ten days after the date of closing of the
transaction effecting the change in control of the Company, whichever is later.
(b) In addition, if Executive elects to terminate this Agreement
pursuant to this Section 10, Executive shall further be entitled, in lieu of
shares of Common Stock of the Company issuable upon exercise of options to which
Executive is entitled under this Agreement, an amount in cash or Common Stock of
the Company (or any combination thereof) as Executive shall in his election
designate equal to the excess of the fair market value of the Common Stock as of
the date of closing of the transaction effecting the change in control over the
per share exercise price of the options held by Executive, times the number of
shares of Common Stock subject to such options (whether or not then fully
exercisable). The fair market value of the Common Stock shall be equal to the
higher of (i) the value as determined by the Board of Directors of the Company
if there is no organized trading market for the shares at the time such
determination is made, or (ii) the closing price (or the average of the bid and
asked prices if no closing price is available) on any nationally recognized
securities exchange or association on which the Company's shares may be quoted
or listed, or (iii) the highest per share price actually paid for Common Stock
in connection with any change in control of the Company. The severance payments
provided for in this Section 10(b) shall be paid in full not later than ten (10)
days after the date of notice of termination by Executive under this Section 10
or ten (10) days after the date of closing of the transaction effecting the
change in control of the Company, whichever is later.
(c) For purposes of this Section 10, "change in control" of the
Company shall mean:
(i) any transaction, whether by merger, consolidation,
asset sale, tender offer, reverse stock split, or
otherwise, which results in the acquisition or
beneficial ownership (as such term is defined under
rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended) by any
person or entity or any group of persons or entities
acting in concert, of 50% or more of the outstanding
shares of Common Stock of the Company;
(ii) the sale of all or substantially all of the assets of
the Company; or
(iii) the liquidation of the Company.
11. TERMINATION. (a) For Cause. This Agreement may be terminated by
the Board of Directors of the Company upon ten (10) days written notice to
Executive in which time Executive
<PAGE> 5
shall have the right to cure such "cause" (and thus reverse such decision to
terminate this Agreement) without further obligation than for monies already
paid, for any of the following reasons:
(i) failure of Executive in a material manner to follow
reasonable written instructions or written policies
of the Board of Directors of the Company or the Bank;
(ii) gross negligence or willful misconduct of Executive
materially damaging to the business of the Company or
Bank during the term of this Agreement, or at any
time while he was employed by the Company prior to
the term of this Agreement, if not disclosed to the
Company prior to the commencement of the term of this
Agreement; or
(iii) conviction of Executive during the term of this
Agreement of a crime involving breach of trust or
moral turpitude.
In the event that the Bank discharges Executive alleging
"cause" under this Section 11(a) and it is subsequently determined judicially
that the termination was "without cause," then such discharge shall be deemed a
discharge without cause subject to the provisions of Section 11(b) hereof. In
the event that the Bank discharges Executive alleging "cause" under this Section
11(a), such notice of discharge shall be accompanied by a written and specific
description of the circumstances alleging such "cause." The termination of
Executive for "cause" shall not entitle the Bank to enforcement of the
non-competition and non-solicitation covenants contained in Section 13 hereof.
(b) Without Cause.
(i) The Bank may, upon thirty (30) days' written notice
to Executive, terminate this Agreement without cause
at any time after the Closing of the Initial Public
Offering during the term of this Agreement upon the
condition that Executive shall be entitled, as
liquidated damages in lieu of all other claims, to 24
monthly payments of $12,500 and all of the options
referred to in Section 3 shall become immediately
exercisable on the date of termination and shall
remain exercisable for a period of 90 days following
the date of termination, at which time such options
(to the extent not previously exercised) shall
expire. The severance payments provided for in this
Section 11(b) shall commence not later than thirty
(30) days after the actual date of termination of
employment of Executive. The termination of Executive
"without cause" shall not entitle the Bank to
enforcement of the non-competition and
non-solicitation covenants contained in Section 13
hereof. Termination "without cause" shall include
termination by Executive in the event Employer fails
to perform any material provision of this Agreement
after written notice thereof from Employee and thirty
(30) days time for Employer to cure.
<PAGE> 6
(ii) Executive may upon thirty (30) days' written notice
to Employer terminate this Agreement without cause at
any time during the term of this Agreement. In the
event of termination of this Agreement by Executive,
the Bank shall have no further obligation to
Executive other than for monies paid and the Bank
shall be entitled to enforcement of the
non-competition and non-solicitation covenants
contained in Section 13 hereof.
12. Death or Disability. After the Closing of the Initial Public
Offering, in the event of Executive's death, Employer shall pay to Executive's
designated beneficiary, or, if Executive has failed to designate a beneficiary,
to his estate, an amount equal to Executive's base salary pursuant to Section 3
hereof through the end of the month in which Executive's death occurred. Such
compensation shall be in lieu of any other benefits provided hereunder, except
that (i) in the event of a change in control of the Company as defined herein,
Executive's designated beneficiary or his estate, as the case may be, shall be
entitled to the benefits of Section 10(b) hereof, and (ii) any benefit payable
pursuant to Section 3 shall be prorated and made available to Executive in
respect of any period prior to his death. The Bank may maintain insurance on its
behalf to satisfy in whole or in part the obligations of this Section 12.
After the Closing of the Initial Public Offering, in the event of
Executive's disability, as hereinafter defined, Employer shall pay to Executive
the base salary then in effect through the end of the month in which Executive
became disabled. Executive shall be deemed disabled if, by reason of physical or
mental impairment, he is incapable of performing his duties hereunder for a
period of 180 consecutive days.
13. Non-Competition and Non-Solicitation. (a) Executive acknowledges
that he has performed services or will perform services hereunder which directly
affect Employer's business. Accordingly, the parties deem it necessary to enter
into the protective agreement set forth below, the terms and condition of which
have been negotiated by and between the parties hereto.
(b) In the event of termination of employment under this
Agreement by action of Executive pursuant to 11(b)(ii) prior to the expiration
of the term of this Agreement, Executive agrees with Employer that through the
actual date of termination of the Agreement, and for a period of 12 months after
such termination date, Executive shall not, without the prior written consent of
Employer, either directly or indirectly, serve as an executive officer or
director of any bank or bank holding company (other than a banker's bank or a
holding company of a banker's bank) or as an executive officer, director,
consultant, advisor or in any other capacity to any person, firm, partnership or
corporation or any other entity which is involved in the organization of or
chartering of any bank or bank holding company, which is or intends to engage in
competition in any substantial manner with Employer in Cole or Boone County,
Missouri.
(c) The covenants of Executive set forth in this Section 13 are
separate and independent covenants for which valuable consideration has been
paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce Employer to enter into
this Agreement. Each of the aforesaid covenants may be availed of or relied upon
by Employer in any court of competent jurisdiction, and shall form the basis of
<PAGE> 7
injunctive relief and damages including expenses of litigation (including but
not limited to reasonable attorney's fees) suffered by Employer arising out of
any breach of the aforesaid covenants by Executive. The covenants of Executive
set forth in this Section 13 are cumulative to each other and to all other
covenants of Executive in favor of Employer contained in this Agreement and
shall survive the termination of this Agreement for the purposes intended.
Should any covenant, term, or condition contained in this Section 13 become or
be declared invalid or unenforceable by a court of competent jurisdiction, then
the parties may request that such court judicially modify such unenforceable
provision consistent with the intent of this Section 13 so that it shall be
enforceable as modified, and in any event the invalidity of any provision of
this Section 13 shall not affect the validity of any other provision in this
Section 13 or elsewhere in this Agreement.
14. Notices. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of Executive, or to its principal office in the case of
Employer.
15. Waiver of Breach. The waiver by Employer of a breach of any
provision of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive. No waiver shall be valid unless in
writing and signed by an authorized officer of Employer.
16. Assignment. Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Executive may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer.
17. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Missouri.
18. Entire Agreement. This Agreement contains the entire
understanding of the parties hereto regarding employment of Executive, and
supersedes and replaces any prior agreement relating thereto. It may not be
changed orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"COMPANY"
FIRST PREMIER FINANCIAL CORPORATION
By: /s/ Richard C. Jensen
------------------------------------------
Name: Richard C. Jensen
Title: President and CEO
"EXECUTIVE"
/s/ Bruce W. Wiley (L.S.)
------------------------------------------
Bruce W. Wiley
<PAGE> 1
Exhibit 23.2a
Independent Auditors' Consent
The Board of Directors
First Premier Financial Corporation:
We consent to the use of our report included herein and to the reference to our
firm under the headings "Summary Selected Consolidated Financial Data" and
"Experts" in the prospectus.
/s/ KPMG LLP
St. Louis, Missouri
May 18, 1999
<PAGE> 1
Exhibit 23.2b
Independent Auditors' Consent
The Board of Directors
Premier Bancshares, Inc.:
We consent to the use of our report included herein and to the reference to our
firm under the headings "Summary Selected Consolidated Financial Data" and
"Experts" in the prospectus.
/s/ KPMG LLP
St. Louis, Missouri
May 18, 1999
