SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
- OR -
TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-17728
Northern Illinois Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
Illinois 36-6137500
State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
486 W. Liberty St., Wauconda, IL 60084-2489
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (847) 487-1818
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days. Yes X
or No
The number of shares of the registrant's Common Stock outstanding on
May 10, 1996 was 2,956,784 shares.
NORTHERN ILLINOIS FINANCIAL CORPORATION
FORM 10-Q - QUARTERLY REPORT
FOR QUARTER ENDED MARCH 31, 1996
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets, March 31, 1996
and December 31, 1995. 1
Consolidated Statements of Income
Three Months Ended March 31, 1996 and 1995 2 - 3
Consolidated Statements of Changes in Shareholders'
Equity, Three Months Ended March 31, 1996 and 1995 4
Consolidated Statements of Cash Flow, Three Months
Ended March 31, 1996 and 1995 5 - 6
Note to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition. 8 - 10
PART II. OTHER INFORMATION 11
Item 6. A. Exhibits
B. Reports on Form 8-K
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(000's omitted
except share data)
March 31, December 31,
1996 1995
(Unaudited) (Audited)
Cash and due from banks $ 22,198 $ 27,888
Interest bearing deposits in other banks 1,520 4,848
Securities
Available for sale, at market 319,874 333,244
Federal funds sold 4,450 6,500
Loans, net of unearned income 561,728 548,055
Less allowance for loan losses (5,779) (5,585)
Premises and equipment 22,694 22,778
Accrued interest receivable 7,766 7,183
Other real estate owned 2,091 1,610
Other assets 8,015 7,933
$944,557 $954,454
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing $117,786 $113,839
Interest bearing 683,126 686,325
Total deposits 800,912 800,164
Short-term borrowings 28,224 36,872
Long-term borrowings 8,655 11,588
Other liabilities 10,901 11,077
Dividends payable 503 857
Total liabilities 849,195 860,558
Shareholders' equity
Common stock, no par value; authorized
10,000,000 shares; issued and outstanding
2,956,784 and 2,956,784 shares 16,697 16,697
Retained earnings 69,929 68,391
Net unrealized securities gains, net of tax 8,736 8,808
Total shareholders' equity 95,362 93,896
$944,557 $954,454
The accompanying note is an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's omitted
except per share data)
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995
Interest income
Interest and fees on loans $12,126 $10,616
Interest on federal funds sold 84 122
Interest on securities
Taxable 3,271 3,308
Exempt from federal income tax 1,449 1,145
Interest on deposits in other banks 28 7
Total interest income 16,958 15,198
Interest expense
Interest on deposits 7,657 6,295
Interest on short-term borrowings 496 614
Interest on long-term debt 130 79
Total interest expense 8,283 6,988
Net interest income 8,675 8,210
Provision for loan losses 306 64
Net interest income after provision
for loan losses 8,369 8,146
Other income
Fees for customer deposit services 929 825
Other fees and operating income 434 508
Trust department income 125 109
Securities gains 12 293
Total other income 1,500 1,735
Other expenses
Salaries and employee benefits 4,134 3,733
Occupancy and equipment expense 1,104 1,022
Data processing 291 295
Other 1,760 2,029
Total other expenses 7,289 7,079
The accompanying note is an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Continued)
(000's omitted
except per share data)
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995
Income before income taxes $ 2,580 $ 2,802
Applicable income taxes 539 634
Net income $ 2,041 $ 2,168
Average number of common shares
outstanding 2,957 3,001
Earnings per common share $ .69 $ .72
The accompanying note is an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(000's omitted
except share data)
Net
Unrealized
Gains(Losses)
on Available
Common Stock Retained for Sale
Shares Amount Earnings Securities
Balance January 1, 1995 3,006,477 $16,978 $61,090 $(3,409)
Net Income 2,168
Cash dividends $.17 per share (510)
Cost of shares acquired (7,561) (43) (167)
Change in unrealized gains
on available for sale
securities 2,678
Balance, March 31, 1995 2,998,916 $16,935 $62,581 $( 731)
Balance, January 1, 1996 2,956,784 $16,697 $68,391 $ 8,808
Net income 2,041
Cash dividends $.17 per share (503)
Change in unrealized gains
on available for sale
securities ( 72)
Balance, March 31, 1996 2,956,784 $16,697 $69,929 $ 8,736
The accompanying note is an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(000's omitted)
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995
Cash flows from operating activities:
Interest and dividends received $ 16,472 $14,873
Fees and commissions received 1,488 1,442
Interest paid (8,231) (6,799)
Cash paid to suppliers and employees (6,029) (8,272)
Income taxes (paid) refunded (375) 519
Net cash provided by operating activities 3,325 1,763
Cash flows from investing activities:
Net decrease in interest bearing
deposits in other banks 3,328 984
Sales of securities
Available for sale 9,325 9,447
Maturities of securities
Held for investment 1,594
Available for sale 44,105 23,336
Purchase of securities
Available for sale (41,437) (13,948)
Net increase in loans (14,266) (12,689)
Capital expenditures (460) (374)
Proceeds from the sale of property and equipment 30 12
Proceeds from sale of other real estate owned 165
Net cash provided by investing activities 625 8,527
Cash flows from financing activities
Net increase (decrease) in deposits 748 (14,137)
Net increase (decrease) in short term borrowings (8,648) 4,986
Net increase (decrease) in long term borrowings (2,933) 850
Dividends paid (857) (872)
Common stock acquired (210)
Net cash used in financing activities (11,690) ( 9,383)
Net increase (decrease) in cash and cash equivalents (7,740) 907
Cash and cash equivalents at beginning of year 34,388 36,866
Cash and cash equivalents at end of period $26,648 $37,773
The accompanying note is an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Continued)
(Unaudited)
(000's omitted)
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995
Reconciliation of net income to net
cash provided by operating activities:
Net income $2,041 $2,168
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for premium amortization 544 661
Provision for discount accretion (446) (378)
Provision for depreciation 515 503
Provision for loan losses 306 64
Provision for deferred income taxes (434)
Gain on sale of securities (12) (293)
(Gain) Loss on sale of equipment (1) 12
Changes in assets decrease (increase):
Interest receivable (583) (608)
Prepaid expenses and other assets 348 13
Changes in liabilities increase 613 55
Total adjustments 1,284 (405)
Net cash provided by operating activities $3,325 $1,763
Supplemental schedule of noncash investing
and financing activities:
Net change in unrealized gains on securities
available for sale $117 $4,371
Contributions and net earnings of
Execuflex Plan $417 $100
Securities with a 1994 trade date settled in 1995 $(936)
Securities with a 1995 trade date settled in 1996 $(1,353)
Securities purchased not settled $439 $2,018
Securities sold not settled $260 $232
Loans transferred to OREO $481
The accompanying note is an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
financial information of Northern Illinois and its subsidiary. All
significant intercompany balances and transactions have been eliminated.
In management's opinion, all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the financial position
and the results of operations for the interim periods have been made.
For a further description of significant accounting policies of the
Northern Illinois, see the 1995 Form 10-K.
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATION AND FINANCIAL CONDITION
The following is Northern Illinois' management's discussion and
analysis of the financial condition of Northern Illinois and
subsidiaries at March 31, 1996 (unaudited) when compared with December
31, 1995, and the results of operations for the three months ended March
31, 1996 and 1995 (unaudited). This discussion and analysis should be
read in conjunction with the Northern Illinois' consolidated financial
statements and notes thereto appearing elsewhere in this quarterly
report.
On January 22, 1996, the Company signed a definitive agreement to
merge its assets and operations with Premier Financial Services, Inc.,
located in Freeport, Illinois and form a new financial services
organization to be named Grand Premier Financial, Inc. The proposed
merger is expected to be finalized in the third quarter of 1996 and is
subject to shareholder and regulatory approval. In February of 1996, all
of the subsidiary banks of the Company were merged with and into a
single bank charter under the title of Grand National Bank.
Financial Condition at March 31, 1996 Compared to December 31, 1995
Total assets of the Northern Illinois decreased $9.9 million to
$944.6 million from December 31, 1995 to March 31, 1996.
Total securities declined $13.4 million for the comparative periods.
Excluding the effect of accounting to market for investments available
for sale, the amortized cost of total securities decreased $13.3
million. The reduction reflects the decrease in funding liabilities and
loan growth.
Loans net of unearned income increased $13.7 million from the year
ended 1995. Increase in the commercial mortgage portfolio was the major
contributor to this growth.
Allowance for loan losses was 1.02% and 1.03% of loans net of
unearned income on December 31, 1995 and March 31, 1996, respectively.
Nonaccrual loans and loans past due 90 days or more and still accruing
were .88% and .89% of loans net of unearned income as of December 31,
1995 and March 31, 1996, respectively.
Other real estate owned increased approximately $.5 million from $1.6
million on December 31, 1995 to $2.1 million on March 31, 1996. In
April, 1996 Grand National Bank completed the sale of the largest
component of other real estate owned which as of April 30, 1996
decreased the reported balance by $1.2 million.
Historically, the first quarter reflects a net outflow of certain
transaction based accounts including NOW and money market deposits. NOW
and money market deposits decreased $9.9 million between December 31,
1995 and March 31, 1996. Northern Illinois does not expect this trend to
continue for the remainder of 1996.
Total borrowing decreased $11.6 million with $9.7 million of that
decrease attributed to declines in customer contracts for securities
sold with agreement to repurchase. Management chose to discourage
renewal or sale of these contracts and encourage the purchase of
interest bearing time deposits.
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATION AND FINANCIAL CONDITION
(continued)
Results of Operations for the Three Months Ended March 31, 1995 and 1996
Income:
Net income:
Net income decreased from $2,168,000 on March 31, 1995 to $2,041,000
on March 31, 1996.
Net Interest Income:
For the comparable periods both interest income and interest expense
increased. The $1,760,000 increase in interest income was largely due
to increases in loan volume. The $1,295,000 increase in interest
expense was, primarily, due to rate and volume increases in the time
deposit category. The average earning asset yield increased 26 basis
points while average rates paid on interest earning liabilities
increased 40 basis points resulting in a reduction in the net yield on
average earning assets from 4.04% on March 31, 1995 to 3.97% on March
31, 1996.
Provision for Loan Losses:
Provision for loan losses was $64,000 and $306,000 for the three
months ended 1995 and 1996, respectively. The increase was primarily
reflective of the growth in loans net of unearned income. Loan charge
offs net of recoveries to average loans net of unearned income were .04%
on March 31, 1995 and .02% on March 31, 1996.
Noninterest Income:
Total noninterest income decreased from $1,735,000 on March 31, 1995
to $1,500,000 on March 31, 1996. The $281,000 comparative decrease in
security gains was the major contributing factor.
Fees for customer deposit services increased $104,000 from $825,000
in 1995 to $929,000 in 1996. The increase was primarily due to a
restructuring and standardization of service charges to facilitate the
February, 1996 merger of the four subsidiary banks.
Other fees and operating income decreased $74,000 due, largely, to
one time litigation recovery recorded in the first quarter of 1995.
Excluding this litigation recovery, the comparative periods would have
shown an increase of approximately $75,000 of which the major
contributor was fees associated with secondary market mortgage
operations.
Security gains decreased $281,000 from $293,000 on March 31, 1995 to
$12,000 on March 31, 1996.
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATION AND FINANCIAL CONDITION
(continued)
Noninterest Expense:
For the three months ended 1995 and 1996, noninterest expense rose
$210,000 from $7,079,000 to $7,289,000.
Salaries and benefits rose $401,000 from $3,733,000 on March 31, 1995
to $4,134,000 on March 31, 1996. Of the $401,000 increase 88% was
attributed to compensation increases for merit and promotion plus an
increase in full time equivalent employees from 399 in March of 1995 to
419 in March of 1996. As a result of the February, 1996 merger of the
subsidiary banks, management anticipates that in the second quarter of
1996 one time salary payments of approximately $300,000 will be made
pursuant to a reduction in force policy.
Occupancy and equipment expense increased $82,000 from $1,022,000 in
the first quarter of 1995 to $1,104,000 in the first quarter of 1996.
The increase is, largely, attributed to the addition of three bank
facilities that commenced operation between September, 1995 and
February, 1996.
Other expenses declined $269,000 from $2,029,000 to $1,760,000 for
March 31, 1995 and 1996, respectively. In late 1995, the Federal
Deposit Insurance Corporation reduced the deposit premium rates to
reflect that the Bank Insurance Fund had neared fully funded status.
Deposit premiums declined $412,000 between the comparative periods and
were offset, primarily, by material increases in postage, printing and
legal costs related to the February, 1996 merger of the subsidiary
banks. Management anticipates merger expenses to be incurred through
the remainder of 1996, related to the proposed merger with Premier
Financial Services, Inc.
Income Taxes:
Income taxes were $634,000 and $539,000 representing effective tax
rates of 23% and 21% for March 31, 1995 and 1996 respectively. The
decline in the tax rate reflects the increase dollar volume associated
with income exempt from federal income taxes.
Shareholder Equity
Total shareholder equity includes net unrealized gains (losses) on
securities available for sale net of tax. Removing the effect of the
net unrealized gains (losses) of securities net of tax, shareholder
equity would have been $79,516,000 on March 31, 1995 and $86,626,000 on
March 31, 1996 or a 8.94% increase. Average shareholder equity to
average assets was 8.73% and 10.02% on March 31, 1995 and March 31,
1996, respectively.
NORTHERN ILLINOIS FINANCIAL CORPORATION
PART II. OTHER INFORMATION
Item 6. Exhibit and Reports on Form 8-K
(a) Exhibit
Number Description
(10.1) NIFCO Execuflex Plan as amended 1995
(10.2) Amendment No. 1 to NIFCO Execuflex Plan
(27) Financial Data Schedule for quarter ended
March 31, 1996.
(b) Reports on Form 8-K
The registrant filed a report on Form 8-K, dated January 18,
1996, reporting an Agreement and Plan of Reorganization, among the
Registrant, Premier Financial Services, Inc and Grand Premier Financial,
Inc.
NORTHERN ILLINOIS FINANCIAL CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHERN ILLINOIS FINANCIAL CORPORATION
(Registrant)
May 14, 1996 /s/ Robert W. Hinman
Date Robert W. Hinman, President
May 14, 1996 /s/ David Albright
Date David Albright, Chief Financial Officer
EXHIBIT 10.1
NIFCO
EXECUFLEX PLAN
(AS AMENDED 1995)
Effective Date of Restatement: April 1, 1995
WHEREAS, NORTHERN ILLINOIS FINANCIAL CORPORATION ("Employer") has
previously established a flexible benefit plan ("Plan") for a select
group of executive management or highly compensated employees
("Eligible Employees"), effective July 1, 1991;
WHEREAS, the purpose of the Plan is to provide selected executives an
opportunity to allocate a designated dollar amount, otherwise budgeted
by the Employer towards executive compensation, amongst alternative
benefit programs best suited to each executive's individual needs, and
to further allow the participating executives to defer a portion of
their base salary and/or bonus in order to supplement and increase
their benefits;
WHEREAS the Company desires to amend the Plan;
NOW, THEREFORE, to effectuate its intentions, the Employer hereby
adopts this restated Plan as of the 1st day of April, 1995.
This Plan shall be known as the
NIFCO
EXECUFLEX PLAN
(AS AMENDED 1995)
<PAGE>
Table of Contents
Section Contents Page
1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . 1
2 MEMBERSHIP IN THE PLAN . . . . . . . . . . . . . . 3
2.1 Designation as Eligible Employee . . . . . . 3
2.2 Commencement of Membership . . . . . . . . . 3
2.3 Procedure For and Effect of Admission. . . . 3
2.4 Cessation of Membership. . . . . . . . . . . 3
3 PLAN CONTRIBUTIONS . . . . . . . . . . . . . . . . 4
3.1 Deferral Contributions . . . . . . . . . . . 4
3.2 Rules Governing Deferral Contributions . . . 4
3.3 Matching Contributions . . . . . . . . . . . 4
3.4 Employer Discretionary Contributions . . . . 4
3.5 Vesting. . . . . . . . . . . . . . . . . . . 5
4 MEMBER ACCOUNTS. . . . . . . . . . . . . . . . . . 6
4.1 Establishment of Accounts. . . . . . . . . . 6
4.2 Benefit Allocation . . . . . . . . . . . . . 6
4.3 Irrevocable Allocation . . . . . . . . . . . 6
4.4 Directed Adjustment of Certain Accounts. . . 6
4.5 Suballocation Within the Education Account . 7
4.6 Election Limitation. . . . . . . . . . . . . 7
4.7 Benefit Purchase Adjustments . . . . . . . . 7
4.8 Investment Obligation of the Employer. . . . 7
5 BENEFITS . . . . . . . . . . . . . . . . . . . . . 8
5.1 Retirement Account . . . . . . . . . . . . . 8
5.2 Education Account. . . . . . . . . . . . . . 9
5.3 Fixed Period Account . . . . . . . . . . . . 10
5.4 Preretirement Survivor Income Account. . . . 11
5.5 Beneficiary Designation. . . . . . . . . . . 11
5.6 Tax Withholding. . . . . . . . . . . . . . . 12
6 ADMINISTRATION . . . . . . . . . . . . . . . . . . 12
6.1 Appointment of Administrator . . . . . . . . 12
6.2 Administrator's Responsibilities . . . . . . 12
6.3 Records and Accounts . . . . . . . . . . . . 12
6.4 Administrator's Specific Powers and Duties . 12
6.5 Employer's Responsibility to Administrator . 12
6.6 Liability. . . . . . . . . . . . . . . . . . 13
6.7 Payment of Expenses. . . . . . . . . . . . . 13
6.8 Indemnity of Plan Administrator. . . . . . . 13
6.9 Substitute Payee . . . . . . . . . . . . . . 13
6.10 Trust Fund . . . . . . . . . . . . . . . . . 13
Table of Contents
Section Contents Page
7 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . 14
7.1 Claim. . . . . . . . . . . . . . . . . . . . 14
7.2 Review Procedure . . . . . . . . . . . . . . 14
7.3 Final Decision . . . . . . . . . . . . . . . 14
7.4 Satisfaction of Liability. . . . . . . . . . 14
8 AMENDMENT AND TERMINATION. . . . . . . . . . . . . 15
8.1 Plan Amendment . . . . . . . . . . . . . . . 15
8.2 No Premature Distribution. . . . . . . . . . 15
8.3 Termination of the Plan. . . . . . . . . . . 15
9 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . 16
9.1 Supplemental Benefits. . . . . . . . . . . . 16
9.2 Governing Law. . . . . . . . . . . . . . . . 16
9.3 Jurisdiction . . . . . . . . . . . . . . . . 16
9.4 No Assignment Permitted. . . . . . . . . . . 16
9.5 Binding Terms. . . . . . . . . . . . . . . . 16
9.6 Spendthrift Provision. . . . . . . . . . . . 16
9.7 Headings . . . . . . . . . . . . . . . . . . 16
9.8 Rule of Interpretation . . . . . . . . . . . 16
9.9 Limitation of Rights . . . . . . . . . . . . 16
9.10 Severability . . . . . . . . . . . . . . . . 17
SECTION 1
DEFINITIONS
1.1 Account means a recordkeeping source from which Plan benefits
are provided. The specific Accounts under this Plan are listed
in Section 4.1.
1.2 Administrator or Plan Administrator means the individual or
committee appointed to administer the Plan pursuant to Section
6.
1.3 Base Pay means an Eligible Employee's base salary, Deferral
Contributions and any pretax elective deferrals to any
Employer-sponsored plan which include either a qualified cash
or deferred arrangement under Section 401(k) of the Code or a
cafeteria plan under section 125 of the Code.
1.4 Beneficiary means the person, persons, trust or other entity
a Member designates by written revocable designation filed with
the Administrator to receive payments in the event of his
death. A Member may designate a different Beneficiary with
respect to each Account established for him.
1.5 Board means the Employer's Board of Directors.
1.6 Bonus means any cash remuneration paid to an Eligible Employee
as a specific incentive award pursuant to any incentive plan
or arrangement adopted by the Board.
1.7 Change in Control means one or a series of transactions whereby
50% or more of the Employer's common stock is transferred to
persons or entities other than family members (or trusts
established for the benefit of family members) of persons who
are shareholders in the Employer on the Effective Date or sale
of substantially all of the business assets of the Employer to
a person or entity 80% or more owned by persons or entities
other than the shareholders or family members of shareholders
(or trusts established for the benefit of shareholders or their
family members) in the Employer on the Effective Date.
1.8 Code means the Internal Revenue Code of 1986, as amended, and
the same as may be further amended from time to time
1.9 Deferral Agreement means a written agreement between a Member
and the Employer whereby a Member agrees to defer a portion of
his Base Pay or Bonus and the Employer agrees to provide Plan
benefits.
1.10 Deferral Contribution means a Member's elective contribution
described in Section 3.1.
1.11 Determination Date means March 31, June 30, September 30 and
December 31 of each calendar year and, for each Member, his
date of death, Retirement, Disability or other termination of
employment.
1.12 Disability means an illness or injury which completely prevents
a Member from performing the Member's occupation. Disability
shall be determined by the Administrator on the basis of a
certificate from a physician approved by the Administrator.
1.13 Effective Date means July 1, 1991.
1.14 Effective Date of Restatement means April 1, 1995.
1.15 Eligible Dependent means an individual who is a child,
stepchild, grandchild, niece or nephew, or who is otherwise
identified as a dependent of a Member for purposes of the Code
who is living at any time throughout the Enrollment Period and
who is either younger than age 14 or younger than age 18 but
for whom a subaccount was initially established pursuant to
Section 4.5 prior to his attaining age 14.
1.16 Eligible Employee means each employee of the Employer
designated by the Administrator pursuant to Section 2 as
eligible to participate in the Plan and each member of the
Board.
1.17 Employer means Northern Illinois Financial Corporation and any
successor thereto, and for purposes of determining eligibility
to participate in the Plan and vesting under the Plan, any
affiliated company which is a member of a controlled group of
corporations (within the meaning of section 1563(a) of the
Code) with Northern Illinois Financial Corporation which adopts
this Plan with consent of the Board.
1.18 Enrollment Period means the period set by the Administrator
which ends prior to the first day of a Plan Year and, with
respect to an Eligible Employee designated as such effective
as of any date other than the first day of a Plan Year, the
one-week period following his designation as an Eligible
Employee.
1.19 Investment Fund or Fund means the investments described in
Section 4.4 which serve as a means to measure value increases
or decreases with respect to a Member's Accounts.
1.20 Matching Contributions means the Employer contributions
described in Section 3.3.
1.21 Member means any Eligible Employee who has elected to
participate in the Plan.
1.22 Plan means the NIFCO Execuflex Plan as described in this
instrument, and the same as may be amended from time to time.
1.23 Plan Year means, effective April 1, 1994, the twelve (12)
consecutive month period beginning on each April 1 and ending
on the following March 31. However, prior to April 1, 1994,
"Plan Year" means the twelve (12) consecutive month period
beginning on each January 1 and ending on the following
December 31, except that the first Plan Year shall begin on the
Effective Date and end on December 31, 1991 and the Plan Year
beginning on January 1, 1994 shall end on March 31, 1994.
1.24 Retirement means any severance from service by a Member for any
reason other than death or Disability after attaining age 65
or after attaining age 55 and completing five years of service.
1.25 Total Compensation means the Employee's Base Pay for the
current Plan Year plus the total Incentive/Profit Sharing Bonus
paid for services provided in the current Plan Year.
SECTION 2
MEMBERSHIP IN THE PLAN
2.1 Designation as Eligible Employee. The Administrator shall from
time to time specify a select group of management employees as
Eligible Employees. Such specification shall be in writing,
with a copy delivered to the Employer and the person designated
as eligible, and shall set the date as of which the person
becomes eligible. The specification shall also provide whether
the person is a Category I or Category II Eligible Employee.
2.2 Commencement of Membership. Each Eligible Employee may elect
to become a Member as of the first day of the calendar quarter
following his initial eligibility or as of the first day of any
calendar quarter thereafter by satisfying the requirements of
Section 2.3.
2.3 Procedure For and Effect of Admission. Each Eligible Employee
who desires to participate in this Plan shall complete such
forms and provide such data as are reasonably required by the
Employer during the applicable Enrollment Period. By becoming
a Member, an Eligible Employee shall be deemed to have agreed
to the provisions of this Plan and all amendments hereto.
2.4 Cessation of Membership. A Member shall cease to be an active
participant on the earlier of:
A. the date on which the Plan terminates, or
B. the date on which he ceases to be an Eligible Employee.
Notwithstanding the foregoing, (i) a former Eligible Employee
who is absent by reason of an authorized leave of absence shall
remain a Member for so long as such authorized absence
continues, but shall be ineligible for further contributions
to his Deferred Benefit Accounts as described in Section 3;
(ii) a former active Member will be deemed a Member for all
purposes with respect to the Plan, except contributions as
described in Section 3., as long as such former active Member
retains an Account; and (iii), in the event that the Department
of Labor (DOL) issues regulations or other official notice
specifically defining the group of employees that may
participate in a plan of this type and any current Members do
not meet the criteria set forth in the DOL regulations or
notice, such Members shall be deemed to be inactive Members as
described in Subsection (i) and (ii) as of the later of the
effective date or publication date of the notice or
regulations, provided such notice or regulations include a
grandfather provision for such participants with respect to
their account balances on such date. In the event no such
grandfather provision is provided, the accounts of such
participants shall be distributed in accordance with the last
paragraph of Subsection 5.1B.2.
<PAGE>
SECTION 3
PLAN CONTRIBUTIONS
3.1 Deferral Contributions. Each Member who is an employee may
authorize the Employer to reduce his (i) Base Pay for a current
Plan Year, by a fixed percentage, or (ii) Bonus accrued for a
current Plan Year and paid either in the current or next
succeeding Plan Year, by a percentage and to have a
corresponding amount credited to his Accounts, in accordance
with Section 4.2, by filing a Deferral Agreement with the
Administrator during his initial Enrollment Period or any
subsequent Enrollment Period preceding the Plan Year during
which such Base Pay or Bonus will be earned. The deferral
shall be made from Base Pay or Bonus as the Member shall
specify; however, to the extent the deferral is to be made from
Bonus and no or insufficient Bonus is paid, the deferral shall
be reduced.
Notwithstanding the foregoing, a Member may not make
contributions to this Plan during any period for which
contributions must be suspended in accordance with regulation
section 1.401(k)-1(d)(2)(iii)(B)(3) of the Code, as a condition
of the Member's receipt of a hardship withdrawal from any plan
of the Employer which includes a qualified cash or deferred
arrangement section 401(k) of the Code.
3.2 Rules Governing Deferral Contributions.
A. Each annual election to defer is irrevocable.
B. The amount that a Member elects to defer shall be credited
to the Member's Accounts as soon as practicable, but no
longer than 30 days following the date on which the Member
is paid the nondeferred portion of the compensation which is
the source of the deferral.
C. For Members who are employees of the Employer, deferral for
a Plan Year shall not exceed 50% of the sum of his
annualized Base Pay on the election date and 100% of his
Bonus paid in the prior Plan Year.
D. The minimum amount a Member may defer for any Plan Year
beginning on or after January 1, 1992 is $1,000.
3.3 Matching Contributions. The Employer shall make a contribution
for each Category I Eligible Employee which shall equal 100%
of his contribution under Section 3.1, subject to the lesser
of 10% of the sum determined under Section 3.2C or $15,000
(indexed by the CPI beginning January 1, 1992). The Employer
shall make a contribution for each Category II Eligible
Employee which shall equal 50% of his contribution under
Section 3.1, subject to a maximum of 10% of the sum determined
under Section 3.2C.
3.4 Employer Discretionary Contributions. The Employer, in its
discretion, may make an employer discretionary contribution for
each contributing Member for any Plan Year in an amount
determined by the Employer. Any such contribution, if
allocated on the basis of compensation, shall consider
compensation before any Employee Deferral Contributions to this
Plan which are eligible for Employer Matching Contributions.
3.5 Vesting. Benefits derived from Deferral Contributions are not
subject to forfeiture for any reason. Benefits derived from
Matching and Employer Discretionary Contributions shall vest
at the rate of 20% per year of service, beginning at the end
of a Member's second year of service with NIFCO and/or any of
its affiliates, as illustrated by the following schedule:
Years of Service Vested Percentage
Less than 2 years 0%
2 full years 20%
3 full years 40%
4 full years 60%
5 full years 80%
6 or more full years 100%
Notwithstanding the foregoing, if a Member terminates
employment incident to a Change in Control, all contributions
made on behalf of such Member shall become 100% vested and
shall be paid out immediately.
If a Member dies before becoming fully vested, any nonvested
Company contributions shall vest immediately.
SECTION 4
MEMBER ACCOUNTS
4.1 Establishment of Accounts. The following Accounts shall be
established with respect to each Member:
A. Retirement Account,
B. Education Account,
C. Fixed Period Account, and
D. Preretirement Survivor Income Account.
4.2 Benefit Allocation. Each Member shall submit to the Plan
Administrator before the close of the Enrollment Period for
each Plan Year a written statement specifying the Member's
allocation of anticipated contributions to his Accounts and
the resultant benefits the Member has elected. A Member's
elective deferrals from a Bonus, Matching Contributions and
Employer Discretionary Contributions, may only be allocated
to Accounts specified in Section 4.1A-C.
4.3 Irrevocable Allocation. An Eligible Employee may not
modify, alter, amend or revoke his allocation for a Plan
Year after such Plan Year begins.
4.4 Directed Adjustment of Certain Accounts. A Member may
direct by written instruction delivered to the
Administrator that his Accounts specified in Section 4.1A-C
be valued as if they were invested in one or more of the
Investment Funds designated by the Plan Administrator for
such purpose in multiples of 5% and may make a separate
selection with respect to each Account. Such election,
which must be in writing, shall be effective as soon as
administratively possible following timely delivery to the
Administrator and shall apply to new contributions and
previous accumulations as the Member specifies. If any
Member fails to file a selection he shall be deemed to have
selected the most conservative fund (e.g. fixed income or
money market fund).
The selection of the Investment Funds that will be in
effect for a Plan Year shall be selected by the Plan
Administrator and announced to the Members prior to the
beginning of such Plan Year. The Plan Administrator may
from time to time change the Investment Funds, provided
such change is evidenced by a written resolution executed
by the Plan Administrator and the Members are given timely
notice of such change.
The valuation of the Members' Accounts shall reflect the
net asset value expressed per share of the designated
Investment Fund(s). The fair market value of an Investment
Fund shall be determined by the Plan Administrator. It
shall represent the fair market value of all securities or
other property held for the respective fund, plus cash and
accrued earnings, less accrued expenses and proper charges
against the Fund. A valuation summary shall be prepared on
each Determination Date. Members shall receive statements
reflecting activity on their Accounts each quarter.
Each Member's Accounts established under Section 4.1D.
shall be valued, in accordance with Section 4.7, as if
utilized to provide benefits by purchase of an appropriate
insurance policy designated by the Administrator.
4.5 Suballocation Within the Education Account. If a Member
allocates a portion of his anticipated contributions to his
Education Account, the Member may further allocate among
subaccounts on behalf of any Eligible Dependent. In the
absence of such suballocation, all contributions to the
Member's Education Account shall be equally allocated to
the Member's Eligible Dependents. A Member's adjustment
election pursuant to Section 4.4 shall apply uniformly to
each subaccount.
4.6 Election Limitation. The Plan Administrator may establish
uniform rules limiting a Member's eligibility to allocate
contributions to an Account based on health, income or such
other factors the Administrator deems appropriate.
4.7 Benefit Purchase Adjustments.
A. While a Member is an employee of the Employer, his
Account specified in Section 4.1 D. shall be
immediately debited with that portion of the
contributions made by or on his behalf as is necessary
to provide the benefits the Member selected pursuant to
Section 4.2.
B. If the amount a Member allocates to an Account
specified in Section 4.1 D. exceeds the amount
necessary to provide currently elected benefits, then
the excess portion of the Account shall be valued as if
it were invested in a manner designated by the
Administrator from time to time. If a Member
terminates employment for any reason, including death,
any amounts accumulated in excess of that allocated to
the provision of benefits shall be distributed pursuant
to Section 5.1 as if accumulated in Member's Retirement
Account.
C. The required allocation for each Account under Section
4.1 D. shall be determined by the Plan Administrator in
a uniform manner. The amounts required are subject to
change at the discretion of the Plan Administrator at
any time.
4.8 Investment Obligation of the Employer. Benefits are
payable as they become due irrespective of any actual
investments the Employer may make to meet its obligations.
Neither the Employer nor any trustee (in the event the
Employer elects to use a grantor trust to accumulate funds)
shall be obligated to purchase or maintain any asset, and
any reference to investments or Investment Funds is solely
for the purpose of computing the value of benefits. To the
extent a Member or any person acquires a right to receive
payments from the Employer under this Plan, such right
shall be no greater than the right of any unsecured
creditor of the Employer. Neither this Plan nor any action
taken pursuant to the terms of this Plan shall be
considered to create a fiduciary relationship between the
Employer and the Plan Members or any other persons, or to
establish a trust in which the assets are beyond the claims
of any unsecured creditor of the Employer.
SECTION 5
BENEFITS
5.1 Retirement Account.
A. If a Member terminates employment for any reason,
including death, the Employer shall pay him a benefit
at the time described in Paragraph B. and in the form
determined under Paragraphs C. and D. based on the
value of his Retirement Account. If the Member is
deceased, the benefit shall be paid to his
Beneficiary.
B. Benefit Commencement Date
1. All benefits payable under the Plan shall
commence as soon as administratively practicable
following the date on which the Member's
termination of employment occurs.
2. Notwithstanding the foregoing paragraph, if an
individual ceases to be a Member in accordance
with Subsection 2.4(iii) and the circumstances
described in the last sentence of such Subsection
apply, the total value of his Retirement Account
shall be distributed as soon administratively
practicable following the later of the effective
date or publication date of the DOL notice or
regulations.
C. Method of Distribution
Distribution of benefits shall be in one of the
following forms at the Member's election, subject to
the rules set forth in Section 5.1E.
1. A single lump sum.
2. Substantially equal annual installments over a
period of not less than 2 nor more than 10 full
years.
Notwithstanding any provision to the contrary, if the
Member's Retirement Account has a value less than
$10,000 at the time benefits are to commence, then
the Member's benefit shall be paid as a lump sum as
soon as administratively feasible following the
Member's termination.
D. Determination of Benefits
1. In the event that the Member elects to have
his benefits distributed in accordance with
Subsection 5.1C.1, he shall receive a single
lump sum equal to the total vested value of
his Account determined as of the date such
benefits are processed for payment.
2. In the event that the Member elects to have
his benefits distributed in accordance with
Subsection 5.1C.2, the
(i) amount of the first payment shall be
determined by multiplying the vested
value of the Member's Account as of his
Determination Date by a fraction,
(A) the denominator of which equals
the number of years over which
the benefits are to be paid; and
(B) the numerator of which is one.
(ii) amounts of the payments for each
succeeding year shall be determined
by multiplying the vested value of the
Member's Account as of the applicable
anniversary of his Determination Date by
a fraction,
(A) the denominator of which equals
the number of remaining years
over which the benefits are to
be paid; and
(B) the numerator of which is one.
E. Election of Form of Benefit Payment
1. A Member shall elect the form in which
his benefits are payable in accordance with
Subsection 5.1C. Separate elections shall
be made with respect to the form in which
benefits shall be distributed upon the
occurrence of the following events:
(i) voluntary termination, including
Retirement;
(ii) involuntary termination, excluding
disability and death; and
(iii) Disability; and
(iv) death.
Such elections must be made when the Member
makes his initial election to participate in
the Plan in accordance with Section 3.
2. Notwithstanding the foregoing, the Member
may elect to change the form(s) elected in
accordance with Paragraph 1. above, provided
such new election is made at least one full
calendar year prior to the Member's
termination of employment.
3. Any election made pursuant to this Article
shall be made on forms and in the manner
prescribed by the Committee and shall be
irrevocable, except as provided in Paragraph
2. above.
5.2 Education Account.
A. If a Member remains continuously employed by the
Employer until April 1 of the calendar year in which
an Eligible Dependent attains age 18, the Employer
shall pay to the Member a benefit, as soon after
such April 1st and each of the next three
anniversaries thereof as administratively
practicable, determined as follows:
Percentage of Eligible
April 1st Dependent's Subaccount
1 25%
2 33-1/3%
3 50%
4 100%
B. A Member may establish subaccounts under his
Education Account, with separate payments for each.
A Member may have a maximum of five subaccounts at
any time.
C. Subject to Subsection D., if a Member terminates his
employment and for any reason still has a balance in
his Education Account, the vested portion of the
balance shall be transferred to his Retirement
Account and distributed in accordance with Section
5.1.
D. Notwithstanding Subsection C., a Member who
terminates his employment and for any reason still
has a balance in his Education Account may elect to
have such Account paid in the manner described in
Subsection A., provided he files a written
notification of such election with the Plan
Administrator at least one full calendar year prior
to such termination of employment.
E. Notwithstanding any provision to the contrary, if on
the April 1 of the calendar year in which an Eligible
Dependent of a Member attains age 18 the Eligible
Dependent's subaccount has a balance of less than
$1,000, then the balance shall be paid to the Member
in one lump sum.
F. If any portion of an Education Account is not vested
on the date such portion is to be paid, distribution
will be postponed until the April 1 following the
date it is vested.
5.3 Fixed Period Account.
A. A benefit equal to the lump sum value of the vested
portion of a Member's Fixed Period Account shall be
paid to him as soon as administratively practicable
after April 1 of the payment year specified by the
Member (which shall be at least 4 years from the date
of initial deferral to such Fixed Period Account).
Nonvested amounts will be paid as soon as
administratively practicable after April 1 following
the year the Member becomes vested.
B. A Member may establish subaccounts under his Fixed
Period Account, with separate payment years for each.
A Member may have a maximum of five subaccounts at
any time.
C. Subject to Subsection D., if a Member's employment
terminates for any reason and the Member has a
balance in his Fixed Period Account, the vested
portion of the balance shall be transferred to his
Retirement Account and be distributed in accordance
with Section 5.1.
D. Notwithstanding Subsection C., a Member who
terminates his employment and for any reason still
has a balance in his Fixed Period Account may elect
to have such Account paid in the manner described in
Subsection A., provided he files a written
notification of such election with the Plan
Administrator at least one full calendar year prior
to such termination of employment.
5.4 Preretirement Survivor Income Account.
A. If a Member dies while an active employee of the
Employer, the Employer shall pay the Member's
Beneficiary a benefit in equal monthly installments,
commencing the first day of the first month following
the date of the Member's death, and continuing
uninterrupted throughout a payout as selected by the
Member at the time he establishes his Preretirement
Survivor Income Account.
B. The amount of supplemental benefit payable hereunder
shall be determined in accordance with Section 4.2
within administrative guidelines established by the
Plan Administrator.
C. A benefit shall be payable under this Section 5.4
only if a Member dies in a Plan Year for which he has
allocated a portion of Plan contributions to the
Preretirement Survivor Income Account.
D. All rights of a Member under this Section 5.4 shall
terminate on the date he terminates employment.
E. In the event a Member's death occurs as a result of
suicide prior to completing twenty-five (25) months
of continuous allocations to his Preretirement
Survivor Income Account, then the Employer may elect
to reduce the benefits payable under this Section 5.4
to an amount equal to the aggregate contributions
allocated to the Member's Preretirement Survivor
Income Account. For the purpose of the preceding
sentence, an election to increase the Member's annual
benefit or to lengthen the payout period shall be
considered a new benefit election, and the first
month of the Plan Year in which the enhanced benefits
become effective shall be treated as the first month
of a separate twenty-five (25) month period with
respect to such enhanced benefits.
5.5 Beneficiary Designation
A. Each Member, upon becoming eligible for participation
in the Plan, may designate a Beneficiary to receive
the benefits payable in the event of his death, and
designate a successor Beneficiary to receive any
benefits payable in the event of the death of any
other Beneficiary.
B. A Member may change his Beneficiary at any time. All
Beneficiary designations and changes shall be made on
an appropriate form as designated by the Plan
Administrator and filed with the Plan Administrator.
C. If no person shall be designated by the Member, or if
the designated Beneficiary shall not survive the
Member, payment of his interest shall be made to the
Member's estate.
5.6 Tax Withholding. To the extent required by the law in
effect at the time benefits are distributed pursuant to
this Section 5, the Trustee shall withhold any taxes
required by the federal or any state or local government
from payments made hereunder.
<PAGE>
SECTION 6
ADMINISTRATION
6.1 Appointment of Administrator. The Employer shall appoint
an individual or a committee to serve as Administrator.
The Administrator (or any member of the Committee) may be
removed by the Employer at any time; and any individual
may resign at any time by submitting his resignation in
writing to the Employer. A new Administrator (or
Committee member) shall be appointed as soon as
practicable in the event of a removal or resignation.
Any person so appointed shall signify his acceptance by
filing a written acceptance with the Employer.
6.2 Administrator's Responsibilities. The Administrator is
responsible for the day to day administration of the
Plan. The Administrator may appoint other persons or
entities to perform any of its fiduciary functions. Such
appointment shall be made and accepted by the appointee
in writing and shall be effective upon the written
approval of the Employer. The Administrator and any such
appointee may employ advisors and other persons necessary
or convenient to help him carry out his duties, including
his fiduciary duties. The Administrator shall have the
right to remove any such appointee from his position.
Any person, group of persons or entity may serve in more
than one fiduciary capacity.
6.3 Records and Accounts. The Administrator shall maintain
or shall cause to be maintained accurate and detailed
records and accounts of Members and of their rights under
the Plan, and of all investments, receipts, disbursements
and other transactions. Such accounts, books and records
relating thereto shall be open at all reasonable times to
inspection and audit by the Employer and by persons
designated thereby.
6.4 Administrator's Specific Powers and Duties. In addition
to any powers, rights and duties set forth elsewhere in
the Plan, the Administrator shall have the following
powers and duties:
A. to adopt such rules and regulations consistent with
the provisions of the Plan;
B. to enforce the Plan in accordance with its terms and
any rules and regulations it establishes;
C. to maintain records concerning the Plan sufficient to
prepare reports, returns and other information
required by the Plan or by law;
D. to construe and interpret the Plan and to resolve all
questions arising under the Plan;
E. to direct the Employer to pay benefits under the
Plan, and to give such other directions and
instructions as may be necessary for the proper
administration of the Plan;
F. to be responsible for the preparation, filing and
disclosure on behalf of the Plan of such documents
and reports as are required by any applicable federal
or state law.
6.5 Employer's Responsibility to Administrator. The Employer
shall furnish the Administrator such data and information
as it may require. The records of the Employer shall be
determinative of each Member's period of employment,
termination of employment and the reason therefor, leave
of absence, reemployment, years of service, personal
data, and compensation reductions. Members and their
Beneficiaries shall furnish to the Administrator such
evidence, data, or information, and execute such
documents, as the Administrator requests.
6.6 Liability. Neither the Administrator nor the Employer
shall be liable to any person for any action taken or
omitted in connection with the administration of this
Plan unless attributable to its own fraud or wilful
misconduct; nor shall the Employer be liable to any
person for such action unless attributable to fraud or
wilful misconduct on the part of a director, officer or
employee of the Employer.
6.7 Payment of Expenses. All expenses of the Administrator
incurred in the operation or administration of this Plan
shall be paid by Employer.
6.8 Indemnity of Plan Administrator. Employer shall
indemnify the Administrator or any individual who is a
delegate against any and all claims, loss, damage,
expense or liability arising from any action or failure
to act, except when due to gross negligence or wilful
misconduct.
6.9 Substitute Payee. If a Member or Beneficiary entitled to
receive any benefits hereunder is in his minority, or is,
in the judgment of the Plan Administrator, legally,
physically, or mentally incapable of personally receiving
and receipting any distribution, the Plan Administrator
may make distributions to a legally appointed guardian or
to such other person or institution as, in the judgment
of the Plan Administrator, is then maintaining or has
custody of the payee.
6.10 Trust Fund. The Employer reserves the right to
establish, subject to the provisions of Sections 4.8 and
9.9, a grantor trust (known as a "rabbi trust") for the
purpose of accumulating funds to satisfy the obligations
incurred by the Employer under the Plan.
SECTION 7
CLAIMS PROCEDURE
7.1 Claim. If a Member or Beneficiary is denied all or a
portion of an expected Plan benefit for any reason, he
must file a written notification of his claim with the
Administrator. The Administrator shall notify the Member
or Beneficiary within sixty (60) days of allowance or
denial of the claim. If the Administrator fails to
notify the claimant of his decision to grant or deny the
claim within sixty (60) days, such claim shall be deemed
to have been denied; and the review procedure described
in Section 7.2 shall become available to the claimant.
The notice provided by the Administrator under this
Section shall be in writing, sent by mail to the Member's
last known address and, if a denial, must contain the
following information:
A. the specific reasons for the denial;
B. the specific reference to the pertinent Plan
provision on which the denial is based;
C. if applicable, a description of any additional
information or material necessary to perfect the
claim, and an explanation of why such information or
material is necessary; and
D. an explanation of the claims review procedure and the
time limitations of the review procedure applicable
thereto.
7.2 Review Procedure. A Member or Beneficiary is entitled to
request a review of any denial of his claim by the
Administrator. The request for review must be submitted
in writing within sixty (60) days of mailing of notice of
the denial. Absent a request for review within the 60-
day period, the claim will be deemed to be conclusively
denied. The Member or Beneficiary or his representative
shall be entitled to review all pertinent documents and
to submit issues and comments in writing. The
Administrator shall provide a full and fair review of the
claim and render the final decision.
7.3 Final Decision. Within sixty (60) days of mailing of a
request for review the Administrator shall allow or deny
the claim, unless special circumstances require an
extension (such as for a hearing); provided, however,
that in no event shall the decision be delayed beyond one
hundred twenty (120) days after receipt of the request
for review. The decision shall be communicated in
writing to the Member or Beneficiary. The decision shall
recite the facts and reasons for denial, with specific
reference to the pertinent Plan provisions.
7.4 Satisfaction of Liability. After all benefits have been
distributed in full to a Member or to his Beneficiary,
all liability to such Member or to his Beneficiary shall
cease.
SECTION 8
AMENDMENT AND TERMINATION
8.1 Plan Amendment. The Plan may be amended or otherwise
modified by the Board of Directors, in whole or in part,
either retroactively or prospectively, provided that no
amendment or modification shall, with respect to
contributions already credited, change the amount of
contributions under Subsections 3.1, 3.3 or 3.4 or
increase vesting requirements under Subsection 3.5 unless
the consent of each adversely affected Member is acquired
prior to such amendment. Notice of any amendment shall
be given in writing to each Member and Beneficiary of a
deceased Member.
8.2 No Premature Distribution. Subject to Section 8.3, no
amendment hereto shall permit amounts accumulated prior
to the amendment to be paid to a Member or Beneficiary
prior to the time he would otherwise be entitled thereto.
8.3 Termination of the Plan. The Employer reserves the right
to terminate the Plan and/or the Deferral Agreement
pertaining to any Member at any time prior to the
commencement of benefits. In the event of any such
termination, the Employer shall pay a benefit to the
Member or the Beneficiary of any deceased Member, in lieu
of other benefits hereunder, equal to the value of the
Member's Accounts.
SECTION 9
MISCELLANEOUS
9.1 Supplemental Benefits. The benefits provided for the
Members under this Plan are in addition to benefits
provided by any other plan or program of the Employer
and, except as otherwise expressly provided herein, the
benefits of this Plan shall supplement and shall not
supersede any plan or agreement between the Employer and
any Member or any provisions contained herein.
9.2 Governing Law. The Plan shall be governed and construed
under the laws of the State of Illinois as in effect at
the time of its adoption.
9.3 Jurisdiction. The courts of the State of Illinois shall
have exclusive jurisdiction in any or all actions arising
under this Plan.
9.4 No Assignment Permitted. No Member, Beneficiary or heir
shall have any right to commute, sell, transfer, assign
or otherwise convey the right to receive any payment
under the terms of this Plan. Any such attempted
assignment shall be considered null and void.
No benefit shall in any manner be subject to the debts,
contracts, liabilities, engagements or torts of any
person, nor shall it be subject to attachments or other
legal process for or against any person, except to such
extent as may be required by law.
9.5 Binding Terms. The terms of this Plan shall be binding
upon and inure to the benefit of the parties hereto,
their respective heirs, executors, administrators and
successors.
9.6 Spendthrift Provision. The interest of any Member or any
beneficiary receiving payments hereunder shall not be
subject to anticipation, nor to voluntary or involuntary
alienation, until distribution is actually made.
9.7 Headings. All headings preceding the text of the several
Sections hereof are inserted solely for reference and
shall not constitute a part of this Plan, nor affect its
meaning, construction or effect.
9.8 Rule of Interpretation. Where appropriate, words in the
masculine gender shall include the feminine and neuter
genders.
9.9 Limitation of Rights. Neither the establishment of the
Plan or a trust agreement (in accordance with Section
6.10), nor any modification thereof, nor the creation of
an account, nor the payment of any benefits shall be
construed as giving
A. any Member, Beneficiary, or any other person
whomsoever, any legal or equitable right against the
Company or the Plan Administrator unless such right
shall be specifically provided for in the Plan or
trust agreement or conferred by affirmative action of
the Plan Administrator in accordance with the terms
and provisions of the Plan; or
B. any Member the right to be retained in the service of
the Company, and all Members and other employees
shall remain subject to discharge to the same extent
as if the Plan had never been adopted.
9.10 Severability. Should any provision of the Plan or any
regulations adopted thereunder be deemed or held to be
unlawful or invalid for any reason, such fact shall not
adversely affect the other provisions or regulations
unless such invalidity shall render impossible or
impractical the functioning of the Plan and, in such
case, the appropriate parties shall immediately adopt a
new provision or regulation to take the place of the one
held illegal or invalid.
NORTHERN ILLINOIS FINANCIAL
CORPORATION
ATTEST:
By:
EXHIBIT 10.2
AMENDMENT NO. 1 TO
NIFCO EXECUFLEX PLAN
(AS AMENDED 1995)
WHEREAS NORTHERN ILLINOIS FINANCIAL CORPORATION ("Employer") has
previously established a flexible benefit plan ("Plan") for a select
group of executive management or highly compensated employees
("Eligible Employees"), originally effective July 1, 1991 and
subsequently restated in its entirety as of April 1, 1995; and
WHEREAS, pursuant to Section 8.1 of the Plan, the Employer retains
the right to amend the Plan;
WHEREAS, the Employer now desires to amend the Plan;
NOW, THEREFORE, to effectuate its intentions, the Employer hereby
adopts the following Amendment No. 1 to the Plan, effective April
1, 1996.
1. SECTION 1 DEFINITIONS
Section 1.23 is hereby deleted in its entirety and replaced by
the following:
1.23 Plan Year means, effective January 1, 1997, the twelve
(12) consecutive month period beginning on each January
1 and ending on the following December 31. However,
prior
A. to January 1, 1997, "Plan Year" means the twelve (12)
consecutive month period beginning on each April 1
and ending on the following March 31 and the Plan
Year beginning on April 1, 1996 shall be for a period
of nine consecutive months ending on December 31,
1996.
B. prior to April 1, 1994, "Plan Year" means the twelve
(12) consecutive month period beginning on each
January 1 and ending on the following December 31,
except that the first Plan Year shall begin on the
Effective Date and end on December 31, 1991 and the
Plan Year beginning on January 1, 1994 shall end on
March 31, 1994.
2. SECTION 5 BENEFITS
Section 5.2 is hereby deleted in its entirety and replaced by
the following:
5.2 Education Account.
A. If a Member remains continuously employed by the
Employer until the first day of the Plan Year in
which an Eligible Dependent attains age 18
("Commencement Date"), the Employer shall pay to the
Member a benefit, as soon after such date and each of
the next three anniversaries thereof as
administratively practicable, determined as follows:
Commencement Date Percentage of Eligible
and Anniversaries Dependent's Subaccount
1 25%
2 33-1/3%
3 50%
4 100%
B. A Member may establish subaccounts under his
Education Account, with separate payments for each.
A Member may have a maximum of five subaccounts at
any time.
C. Subject to Subsection 5.2D., if a Member terminates
his employment and for any reason still has a balance
in his Education Account, the vested portion of the
balance shall be transferred to his Retirement
Account and distributed in accordance with Section
5.1.
D. Notwithstanding Subsection 5.2C., a Member who
terminates his employment and for any reason still
has a balance in his Education Account may elect to
have such Account paid in the manner described in
Subsection 5.2A., provided he files a written
notification of such election with the Plan
Administrator at least one full calendar year prior
to such termination of employment.
E. Notwithstanding any provision to the contrary, if the
Eligible Dependent's subaccount has a balance of less
than $1,000 on the Commencement Date, then the
balance shall be paid to the Member in one lump sum.
F. If any portion of an Education Account is not vested
on the date such portion is to be paid, distribution
will be postponed until the anniversary of the
Commencement Date coincident with or following the
date it is vested.
Subsection 5.3 is hereby deleted in its entirety and replaced by
the following:
5.3 Fixed Period Account.
A. A benefit equal to the lump sum value of the vested
portion of a Member's Fixed Period Account shall be paid
to him as soon as administratively practicable after the
first day of the of Plan Year which coincides with the
payment year specified by the Member (which shall be at
least 4 years from the date of initial deferral to such
Fixed Period Account). Nonvested amounts will be paid
as soon as administratively practicable after the first
day of the Plan Year following the Plan Year in which
the Member becomes vested.
B. A Member may establish subaccounts under his Fixed
Period Account, with separate payment years for each.
A Member may have a maximum of five subaccounts at any
time.
C. Subject to Subsection 5.3D., if a Member's employment
terminates for any reason and the Member has a balance
in his Fixed Period Account, the vested portion of the
balance shall be transferred to his Retirement Account
and be distributed in accordance with Section 5.1.
D. Notwithstanding Subsection 5.3C., a Member who
terminates his employment and for any reason still has
a balance in his Fixed Period Account may elect to have
such Account paid in the manner described in Subsection
5.3A., provided he files a written notification of such
election with the Plan Administrator at least one full
calendar year prior to such termination of employment.
NORTHERN ILLINOIS FINANCIAL
CORPORATION
ATTEST:
By:
DATE:
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