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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.___)*
Newberry Bancorp, Inc.
(Name of Issuer)
Common Stock, par value $.01 per share
(TITLE OF CLASS OF SECURITIES)
650 667 207
(CUSIP NUMBER)
Mark Ouimet, 3502 River Pines Drive,
Ann Arbor, Michigan 48103, (313) 663-0927
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS)
December 15, 1995
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with this statement. /X/
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class). (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 31 pages
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CUSIP NO. 650 667 207
1) Name of Reporting Person Mark Ouimet
S.S. or I.R.S. Identification
No. of Above Person ###-##-####
2) Check the Appropriate Box (a) _____
if a Member of a Group (b) _____
(See Instructions)
3) SEC Use Only
4) Source of Funds (See Instructions)
00, PF
5) Check Box if Disclosure of Legal
Proceedings is Required / /
Pursuant to Items 2(d) or 2(e)
6) Citizenship or Place of
Organization United States
Number of 7) Sole Voting Power 112,600*
Shares 8) Shared Voting
Beneficially Power
Owned by 9) Sole Dispositive
Each Report- Power 112,600*
ing Person 10) Shared Dispositive
With Power
11) Aggregate Amount Beneficially
Owned by Each Reporting Person 112,600*
12) Check Box if the Aggregate Amount
in Row (11) Excludes Certain /X/
Shares (See Instructions)
13) Percent of Class Represented
by Amount in Row (11) 8.4
14) Type of Reporting Person IN
(See Instructions)
* See Item 5 for description.
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Item 1. Security and Issues.
This Statement on Schedule 13D, relates to the Common Stock, par
value $.01 per share ("Common Stock"), of Newberry Bancorp, Inc., a Delaware
corporation (the "Corporation") with principal executive offices at 209 East
Portage Street, Sault Ste. Marie, Michigan 49783.
Item 2. Identity and Background.
(a) This Statement is filed by Mark Ouimet.
(b)-(c) Mark Ouimet's residence address is 3502 River Pines Drive,
Ann Arbor, Michigan 48103. His principal occupation is President of University
Bank (the "Bank"), a Michigan banking corporation and a wholly-owned subsidiary
of the Corporation. The present principal executive office of the Bank is 209
Portage Street, Sault Ste. Marie, Michigan 49783, and it is expected that the
Bank will shortly open offices at 959 Maiden Lane, Ann Arbor, Michigan 48105.
(d) During the last five years, Mr. Ouimet has not been convicted
in a criminal proceeding (excluding, if any, traffic violations or similar
misdemeanors).
(e) During the last five years, Mr. Ouimet has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction, as a result of which proceeding he was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) Mr. Ouimet is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
As described in Item 5 below, Mr. Ouimet has been granted options to
purchase an aggregate of 180,000 shares of Common Stock. Options for 100,000
of such shares are immediately exercisable, subject to the Corporation
obtaining the approval of the stockholders of the corporation of the 1995 Stock
Plan of the Corporation under which such options are granted.
If requested by Mr. Ouimet, the Corporation has agreed (under
certain circumstances set forth in his Employee Stock Option Agreement) to make
a loan to, or arrange for a loan to be made to, Mr. Ouimet, of the funds
necessary to cover the portion of the purchase price of the shares to be
purchased upon the exercise of the options referred to above in excess of the
par value of such shares. Any such loan shall be at an interest rate equal to
the Wall Street posted prime rate for commercial loans. Any such loan is to
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have a maturity of three years and shall have an amortization schedule of not
less than fifteen years. If Mr. Ouimet elects, interest accruing under such
loan shall not be due before the earlier of the maturity date of the loan or
December 31, 2000. Each such loan shall be secured by the shares purchased.
Pursuant to Mr. Ouimet's Employment Agreement with the Bank and the
Corporation, Mr. Ouimet is also entitled to be issued shares of Common Stock by
January 5, 1996, based on a formula set forth in such Employment Agreement. It
is estimated, based on an assumed value of $4.50 per share of Common Stock as
applied to such formula, that Mr. Ouimet will be entitled to approximately
12,600 shares of Common Stock pursuant to this arrangement (such shares to be
so issued being herein called the "Employment Agreement Shares"). The actual
number of shares will be determined as of December 31, 1995.
Item 4. Purpose of Transaction.
Mr. Ouimet intends to hold shares of Common Stock issuable upon the
exercise of options granted to him by the Corporation, as well as the
Employment Agreement Shares, for investment and not with the purpose of
changing or influencing the control of the Corporation. He has no plan or
proposal which relates to or would result in any of the actions enumerated in
Item 4 of Schedule 13D, except that he may dispose of some or all of the Common
Stock he may acquire, or may acquire additional shares of Common Stock, from
time to time, depending upon price and market conditions, evaluation of
alternative investments, and other factors.
Item 5. Interest in Securities of the Issuer.
The aggregate number of shares of Common Stock deemed to be
beneficially owned by Mr. Ouimet for purposes of this Statement, as of the date
hereof, is 112,600 shares, representing 8.4% of the issued and outstanding
shares of Common Stock of the Corporation as of December 1, 1995 (treating as
additional outstanding shares for this purpose such 112,600 shares). He is
deemed to have sole voting and dispositive power as to all such shares.
Such shares consist of 100,000 shares of Common Stock issuable upon
the exercise of options granted to Mr. Ouimet, as such options are immediately
exercisable, subject to the condition that the 1995 Stock Plan of the
Corporation (the "Plan") is approved by the stockholders of the Corporation at
their next annual meeting, scheduled to take place in the first half of
calendar year 1996. Messrs. Stephen L. Ranzini and Joseph L. Ranzini,
president and chairman of the board, respectively, of the Corporation, have
agreed, pursuant to Mr. Ouimet's Employment Agreement, to assure the
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availability of substitute options to be granted to Mr. Ouimet if such Plan is
not so approved. Such individuals, together with trusts for the benefit of
members of their family, beneficially own a majority of the issued and
outstanding shares of the Corporation.
Of such options for 100,000 shares of Common Stock, (i) 20,000 of
such shares are intended to be "incentive stock options" and (ii) 80,000 of
such shares are intended to be "non-qualified" stock options, for federal
income tax purposes. All of such options are exercisable, subject to
stockholder approval of the Plan as noted above, upon grant and expire on
December 31, 1997.
The balance of the 112,600 shares of Common Stock referred to above
consist of the estimated number of Employment Agreement Shares which the
Corporation is to issue to Mr. Ouimet pursuant to his Employment Agreement as
described in the third paragraph under Item 3 above.
Mr. Ouimet has also been granted options to purchase an additional
80,000 shares of Common Stock, also under the 1995 Stock Plan of the
Corporation. Such options become exercisable, subject to stockholder approval
of the Plan as noted above, as follows: 20,000 shares on January 10, 1997,
20,000 shares on January 10, 1998, 20,000 shares on January 10, 1999 and 20,000
shares on January 10, 2000. The option for the first 20,000 of such shares
expires on December 31, 1997. The options for the balance of such shares
expire on September 30, 2000.
If such additional 80,000 shares were deemed beneficially owned by
Mr. Ouimet, he would be deemed to beneficially own an aggregate of 13.5% of the
shares of Common Stock deemed outstanding as of December 1, 1995 (treating such
80,000 shares and such 112,600 shares referred to above as if they were
outstanding for such purpose).
The grant of all options referred to above was made as of December
15, 1995. The commencement of Mr. Ouimet's employment under the Employment
Agreement was December 8, 1995.
Item 6. Contracts, Arrangements, Understandings or Relationships
with respect to Securities of the Issuer.
The agreement to grant to Mr. Ouimet options to purchase shares of
Common Stock and to issue to Mr. Ouimet an estimated 12,600 shares of Common
Stock, as described in the third paragraph under Item 3 above, as well as the
agreement of Messrs. Stephen L. Ranzini and Joseph L. Ranzini as to the
availability of substitute options if the 1995 Stock Plan of the Corporation is
not approved by the stockholders of the Corporation, is provided for in Mr.
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Ouimet's Employment Agreement with University Bank and the Corporation.
The grant of options in satisfaction of the provisions of Mr.
Ouimet's Employment Agreement has been made pursuant to the 1995 Stock Option
Plan of the Corporation, and terms of an Employee Stock Option Agreement,
between Mr. Ouimet and the Corporation, pursuant to such Plan.
The Corporation has also agreed to make arrangements for the loan to
Mr. Ouimet of funds to exercise such options granted to him. Such arrangement
is described under Item 3 above, and is included in his Employee Stock Option
Agreement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Employment Agreement, between Mark Ouimet and University Bank
and Newberry Bancorp., Inc., as amended.
2. Stock Option Agreement, between Mark Ouimet and Newberry
Bancorp, Inc.
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SIGNATURE.
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: December 15, 1995
/s/ Mark Ouimet
---------------------------------
MARK OUIMET
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Exhibit Index
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Exhibit Description Numbered Page
---------- ------------------- -------------
<S> <C> <C>
99.1 Employment Agreement, between Mark Ouimet and
University Bank and Newberry Bancorp., Inc., as
amended. 9
99.2 Stock Option Agreement, between Mark Ouimet and
Newberry Bancorp, Inc. 24
</TABLE>
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EXHIBIT 99.1
EMPLOYMENT AGREEMENT
1. PREAMBLE
AGREEMENT made this 30th day of October, 1995, between University
Bank, a Michigan Banking Corporation, its main offices at 209 East Portage
Avenue, Sault St. Marie, Michigan, 49783 hereafter called the "Bank" or
"Employer"; Mark Ouimet of 3502 River Pines Drive, Ann Arbor, Michigan, 48103
hereafter called the "Employee"; and Newberry Bancorp Inc., pursuant to the
terms of paragraph 3(c) below, hereafter called "Newberry".
WHEREAS, the Bank shall engage in any lawful business of which
Michigan banking corporations are authorized to do in the State of Michigan;
and
WHEREAS, Employee desires to be employed by the Bank and the Bank
desires to employ Employee on the following terms.
NOW, THEREFORE, it is mutually agreed as follows:
2. EMPLOYMENT DUTIES
The Bank hereby employs Employee, and Employee hereby accepts
employment by the Bank as President and Chief Executive Officer of University
Bank. During the term of his employment, Employee shall at all times be
appointed to the Bank's Board of Directors and shall serve as Chairman and
Chief Executive Officer of the Bank and the Employee may, at his discretion,
retain the office of President. Employee shall be in charge of all offices of
the Bank wherever located, but shall principally oversee the operation of the
Ann Arbor office. Employee shall report directly to the Board of Directors of
the Bank. Employee shall attend all monthly Board of Director meetings of the
Bank as well as all special meetings of the Board of Directors, unless absent
on vacation or sick leave. The Bank shall reimburse employee for all expenses
incurred in attending the meetings of the Board of Directors not held in Ann
Arbor. Employee shall perform such duties in connection herewith as may be
fixed by the Board of Directors from time to time consistent with those
customarily performed by Chief Executive Officers of financial institutions.
In addition, during his employment with the Bank, Employee shall continually
serve as a member of the Board of Directors of Newberry.
Employee shall have authority to make loans without approval of the
Board of Directors of the Bank of up to $100,000.00 in accordance with
generally accepted banking practices. The Board of Directors of the Bank shall
approve all other loans in excess of $100,000.00 and up to the current limit of
$500,000.00.
3. COMPENSATION
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(a) Base Salary. As compensation for the services to be rendered by
Employee, the Bank shall pay him an annual salary of $127,000 as of the date of
commencement of employment (the "Start Date") which salary shall be increased
annually at a minimum of 5% payable in equal bi-monthly installments beginning
on the start date. In addition, Employee shall be entitled to customary fees
for service as a member of the Bank's Board and the Board of Newberry.
(b) Bonus Salary. In addition to the base salary described above,
Employee shall receive bonuses tied to the performance of the Bank's office(s)
located in the lower peninsula of Michigan. The bonus shall be paid when the
following financial milestones are achieved (as of the end of any calendar
quarter).
<TABLE>
<CAPTION>
On-Balance
Bonus Deposits Sheet loans Incentive
- -------- -------- ----------- ---------
<S> <C> <C> <C>
#1 $5,000,000 $0 $30,000
#2 $10,000,000 $5,000,000 $60,000
#3 $15,000,000 $8,000,000 $75,000
#4 $20,000,000 $11,000,000 $90,000
#5 $25,000,000 $14,000,000 $100,000
#6 $30,000,000 $18,000,000 $110,000
#7 $35,000,000 $22,000,000 $135,000
#8 $40,000,000 $26,000,000 $150,000
</TABLE>
The total cumulative amount of bonus available being $750,000.
Deposits are defined as all deposits of the Bank originated through
any Bank office located in the Lower Peninsula of Michigan. On-Balance Sheet
loans include any loans originated through any retail Bank office located in
the Lower Peninsula of Michigan and held for investment by the Bank, plus an
amount equal to the cumulative amount of 10% of any loans originated for sale
to investors or correspondents from any retail Bank office or Bank employed
originator reporting to the Bank's retail mortgage department located in the
Lower Peninsula of Michigan (Secondary Market Mortgages), plus an amount equal
to the Bank's retained percentage of any loans originated through any retail
bank office located in the Lower Peninsula and in which a participation is
sold. It is understood that existing or future correspondents and net branches
of the wholesale mortgage division of the Bank shall be excluded from this sum
of Secondary Market Mortgage originations so long as the Sault St. Marie office
of the Bank is responsible for supervision of quality control and accounting
for Secondary Market Mortgages. However, correspondents, originators and net
branches established by the Bank's retail mortgage department based in Ann
Arbor which report directly to the Employee or to a subordinate of the Employee
shall be added to the sum of Secondary Market Mortgages, regardless.
(c) Stock Options. As further compensation for the services to be
rendered by Employee, Newberry hereby provides the Employee with an option
("Option 1") to buy up to 60,000 shares of common stock of Newberry Bancorp,
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Inc. at a price of $4.50 per share within five years of the Start Date. Such
stock option will unconditionally and irrevocably vest at a rate of 20% of the
option shares per year during the term of this Agreement, beginning one year
from the Start Date. The option may be exercised in one or more transactions
for any number of shares not to exceed 60,000 shares in the aggregate. In
addition, Employee is also hereby granted by Newberry an unqualified option
("Option 2") to purchase at any time prior to December 31, 1997 up to 120,000
shares of Newberry common stock at a price of $4.50 per share. The option may
be exercised in one or more transactions for any number of shares not to exceed
120,000 shares in the aggregate. As further assurance for the granting of the
foregoing Option 1 and Option 2, in executing this Agreement, Stephen L.
Ranzini and Joseph L. Ranzini, hereby jointly and severally guarantee to the
Employee the availability of said stock options in accordance with the terms of
this Agreement.
If Employee requests, Newberry shall either lend Employee the funds to
exercise the stock options described in this paragraph, or arrange for a loan
to Employee to allow Employee to exercise these options at an interest rate
equal to the Wall Street Journal posted Prime Rate for commercial loans with a
term of not less than three years and an amortization schedule of not less than
15 years. At the option of the Employee, interest on any such loans may
accumulate without payment until December 31, 2000.
Employee shall also participate in the Newberry Bancorp Inc. Employee
Stock Option Plan and shall have the opportunity to purchase additional shares
with any other offer to employees, existing shareholders or prospective
shareholders.
(d) Former employment benefits. Current benefits to be paid by
Employer in lieu of payment by previous employer:
1) Employee Stock Ownership Program (Great Lakes Bancorp
payout), $15,000
2) Bonus for 1995, $35,000
3) The grant of shares of common stock of Newberry equal
in value, as of December 31, 1995, to 20% of all
shares of TCF Bancorp stock contemplated by the
Restricted Stock Agreement between Employee and TCF
Financial Corporation, dated February 9, 1995, but in
any event not less than 900 shares of TCF Bancorp
stock.
The benefits described in paragraph (d)(1) and (2)
shall be paid by check to Employee within five days
after execution of this Agreement by all parties and
held by Employee until the Start Date at which time
such check may be cashed. The benefits in paragraph
(d)(3) shall be granted to Employee on or before
January 5, 1996.
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(e) Disability Insurance. Employer shall pay all premiums for
Employee's disability insurance under a policy in form and
substance satisfactory to Employee with a waiting period of
not more than 90 days and a disability payment of not less
than 66% of Employee's then base salary.
(f) Life Insurance. Employer shall pay all premiums for
Employee's life insurance policies consistent with the
standard life insurance benefits available to other officers
of the Bank and the officers of Newberry.
4. TERM OF AGREEMENT
The term of this employment shall be through December 31, 2000
beginning from the date of this Agreement. This Agreement may be renewed,
modified or changed only upon a new signed written agreement from both parties
to this employment contract.
Termination for Cause. Employee's employment under this Agreement
shall continue until the occurrence of any of the following:
(a) Employee's death.
(b) Employee's physical or mental disability for a period of 90
days in any twelve (12) month period.
(c) Employee's gross or reckless disregard for duties and, or
responsibilities to the Bank.
(d) Conviction of a felony.
(e) If the Bank's Ann Arbor division does not reach the level of
deposits and On-Balance Sheet loans equal to $10,000,000 in
deposits and $10,000,000 in On-Balance Sheet loans as adjusted
and defined in paragraph (3)(b) by December 31, 1997.
If Employee's employment under this Agreement is terminated through
the causes stated in subparagraphs (a) or (b) above, then in addition to all
life, health and disability insurance benefits payable to the Employee or the
Employee's estate, the Employee or his estate shall promptly receive from the
Employer all salary and bonuses accrued but unpaid up to the date of
termination, and Option 1 and Option 2 as provided in paragraph 3(c) above,
shall continue to be exercisable by the Employee or the Employee's estate until
the respective expiration dates; provided, however, that stock Option 1 shall
be deemed immediately vested in full.
If the Board of Directors terminates this Employment Agreement for any
of the causes stated in subparagraphs (c) or (d) above, then the Employer shall
pay and the Employee shall be entitled to the immediate payment of all salary
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and bonuses accrued but unpaid up to the time of termination.
If the Board of Directors terminates this Employee Agreement for the
cause set forth in paragraph (e) above, then the Employer shall pay and the
Employee shall be entitled to: (i) the immediate payment of all salary and
bonuses accrued but unpaid up to the termination date; and (ii) the immediate
payment of twelve (12) months' future salary from the termination date; and
(iii) Option 1 and Option 2 as provided in paragraph 3(c) above, shall continue
to be exercisable until their respective expiration dates, including the right
to receive loan proceeds to exercise any option.
Termination without Cause. If the Board of Directors terminates this
Employment Agreement except where based upon one or more of the causes set
forth in subparagraphs (a) through (e) above, or if there is any material
reduction of the responsibilities of the Employee without the Employee's
express written consent, then the Employer shall pay and the Employee shall be
entitled to (i) the immediate payment of all salary and bonuses accrued but
unpaid to the date of termination; and (ii) the immediate payment of the unpaid
amount of base salary payable to the Employee during the remaining portion of
the term of this Agreement; provided, however, that in no event shall this
payment be equal to less than twelve (12) months' salary; and (iii) the
immediate payment of all future bonus salary when earned and otherwise payable
to the Employee if the termination or reduction of the responsibilities had not
occurred; and (iv) Option 1 and Option 2 as provided in paragraph 3(c) above,
shall continue to be exercisable until their respective dates, including the
right to receive loan proceeds to exercise any option; provided, however, that
stock Option 1 shall be deemed immediately vested in full; and (v) all health
and life insurance premiums for the Employee required to maintain the same or
comparable benefits coverage shall be promptly paid when due by the Employer
for a period of one (1) year from the date of termination.
In any event, the involuntary termination or reduction of
responsibilities of Employee's employment under this Agreement may only be made
pursuant to the lawful action of the Bank's Board of Directors. If the
stockholders' equity of Newberry falls below 3% of total consolidated assets,
the amount of all future salary, stock and bonuses payable to the Employee will
be immediately placed by Newberry in an escrow account with an escrow agent and
under such terms and conditions as are reasonably satisfactory to the Employee
and Newberry for the future benefit, as earned, of the Employee. Newberry
shall provide the Employee with updated quarterly financial statements within
45 days after the end of each calendar quarter and within 90 days after the end
of each fiscal year of Newberry and promptly provide Employee with a copy of
all audited and/or reviewed financial statements. Failure by Newberry to
comply with any of the foregoing provisions shall constitute a material breach
by the Employer of this Agreement.
The Bank will directly pay all legal costs incurred by the Employee in
connection with the negotiation, review and execution of this Agreement.
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5. OUTSIDE ACTIVITIES RESTRICTIONS
During the term of this Agreement, Employee shall devote his entire
working time to this employment, provided, however, the Employee shall be free
to continue to develop personal financial interests, and the Employee is
encouraged to be actively involved in community and political activities which
benefit the Bank so long as these activities are not competitive with the
business of the Bank.
6. RESTRICTIVE COVENANTS
Employee agrees that for the term hereof, and for one (1) year
thereafter, he will not aid or take part in the establishment or operation of
any enterprise competitive with that of the Bank and that he will not
participate directly or indirectly as stockholder (except as what is currently
held at employment or otherwise available as stock options for unrestricted
stock), director, officer, partner, principal, agent or otherwise in any
business that competes with the Bank in the Ann Arbor market; provided,
however, that the foregoing covenant shall apply and be enforceable only where
the termination of employment is a voluntary one by Employee or where the
termination is based on one or more of the causes in paragraph 4(a)-(e). This
excludes and is not applicable to continuing to run for political office and
serving on the Board of Trustees at Northwood University which the Bank
encourages the Employee to do.
Employee acknowledges that during the course of his employment he will
receive confidential information pertaining to the Bank's business and agrees
not to disclose same, either during or after the termination of his employment,
to any person who is not a stockholder, officer, director or employee of the
Bank or any of the Bank's professional representatives such as attorneys or
accountants. Such confidential information shall include information
constituting a trade secret. Upon termination of this employment Employee
shall promptly deliver to the Bank all files, lists, and other written data in
his possession pertaining to the Bank's business. The parties hereto recognize
that the services to be performed are special and unique hereunder and in the
course thereof Employee will acquire confidential information. It is agreed
that any material breach of the foregoing provisions will authorize the Bank to
apply to any court of competent jurisdiction to enjoin any violation,
threatened or actual, of such provisions.
7. VACATION
Employee shall be entitled to three (3) weeks paid vacation annually.
Such vacation shall be taken at such time or times as may be specified by the
Employee and notification at least two (2) weeks in advance to the Bank's Board
of Directors. In addition, employee shall be entitled to such personal days,
sick days and holidays as are customarily provided by the Bank to its other
executives.
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8. FRINGE BENEFITS
During the term of this Agreement, Employee shall be entitled to the
following benefits:
(a) Automobile. An automobile will be provided by the Bank or
reimbursement for lease payments and all service, maintenance,
gas and insurance.
(b) Health benefits. Employer shall purchase and maintain for the
benefit of Employee and family, medical insurance as received
by other similarly situated employees of the Bank providing
such coverage as may from time to time be determined by the
Employer's Board of Directors and immediately effective upon
termination of employee's prior employment. If the Bank opts
to change its health plan to a medical savings account plan,
or similar such plan, the Bank shall pay and provide for full
coverage and benefits under such plan for Employee and his
family consistent with other officers and/or directors of the
Bank and Newberry; provided, however, that if the Bank does
not adopt a medical savings account plan within 3 years from
the date hereof, the Employee may, at his option, take the
amount of the premium as additional compensation.
(c) Other benefits.
(1) Employee shall be entitled to participate in any
life insurance plans, pension plans, employee stock
ownership plans (ESOP) or any other health insurance
plans that the company may adopt from time to time
for the benefit of its officers or other employees.
(2) Bank shall pay all assessments and annual dues to a
Country Club and other Civic or Professional
Organizations as provided by employee's current
employer. Employer will also pay any country club
equity reimbursement as may be required by Employee's
previous employer, such country club membership to be
the property of the Employee and shall not be
refundable to the Bank in the event that Employee's
employment with the Bank terminates.
(3) Conferences. Employee is entitled to participate in
and the Bank will pay for at least one state and one
national conference annually for his ongoing
education to be paid by the Bank.
(4) Education. The Bank will pay for continuing
education for the Employee as it relates to business.
(5) Physical. The Bank will pay for an annual physical
for the Employee.
(6) Business Related Expenses. The Bank will pay for
business related community expenses. The Bank will
also pay matching charitable
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contributions made by the Employee that are deemed
appropriate by the Bank's Board of Directors.
(7) The Bank shall pay all dental costs incurred for the
Employee through December 31, 1995.
9. GUARANTEE
Newberry hereby unconditionally guarantees the Bank's performance and
payment obligations under this Agreement; this guarantee being a continuing
irrevocable guarantee of payment and not collection.
10. ASSIGNMENT
The rights and obligations of the Bank under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
the Employer. This Agreement shall not be assignable by Employee.
11. START DATE
The Start Date of this Agreement shall be the first date when Employee
begins full time activities on behalf of the Employer, and in any event not
later than January 1, 1996. If the Start Date is January 1, 1996, the
compensation to be paid to Employee under paragraph 3(d)(1) and (2) in lieu of
payment by previous employer (viz, $15,000 and $35,000) shall not be paid by
Employer to Employee.
12. NOTICES
Any notice required to be given under this Agreement shall be deemed
sufficiently given if sent by regular mail to the party to be notified at the
address set forth above or to such other address or addresses as either party
may hereafter designate by notice given in the same manner.
13. ARBITRATION
Any controversy or claim arising out of or related to this Agreement
shall be resolved by binding arbitration in Ann Arbor or Detroit, Michigan, at
the Bank's option, in accordance with the commercial arbitration rules of the
America Arbitration Association. A judgment upon any award may be entered in
any Court having jurisdiction thereof. Notwithstanding the provisions of this
paragraph, the Bank shall have the right to apply to any Court of competent
jurisdiction to enjoin any violation, threatened or actual, of this Agreement
by Employee pending the final resolution of the arbitration procedure as
provided in this paragraph.
- 16 -
<PAGE> 9
14. WAIVER OF BREACH
In the event that any breach of this Agreement is waived by the
non-breaching party, such waiver shall not constitute a waiver of any
subsequent breach. No waiver shall be valid unless made in writing and signed
by the non-breaching party, whether the Employee or an authorized
representative of the Employer.
15. SEVERABILITY
If one or more of the provisions of this Agreement should be found
invalid or otherwise unenforceable, the validity, effectiveness and
enforceability of any and all other provisions hereof shall not be affected.
16. ENTIRE AGREEMENT
This Agreement together with any employee manual hereafter created for
the Employer shall constitute the entire agreement and understanding between
the Bank and Employee and supersedes any prior agreement and understanding
relating to the subject matter; provided, however, that any conflict between
the terms and conditions contained in such employee manual and this Agreement
shall be resolved in favor of the terms and conditions contained in this
Agreement. This Agreement may be modified or amended only by a written
instrument executed by Sellers and Purchasers each acting through its duly
authorized agent.
17. LAWS GOVERNING AGREEMENT
This Agreement shall be construed in accordance with and governed by
the laws of the State of Michigan.
18. CAPTIONS
The captions in this Agreement are for convenience only and shall not
be considered a part hereof or affect the construction or interpretation of any
provisions of this Agreement.
IN WITNESS WHEREOF, THE parties have executed this Agreement as of the
day and year first above mentioned.
Witnesses: BANK:
UNIVERSITY BANK, a Michigan
banking corporation
By: /s/ Stephen Lange Ranzini
- ------------------------------- ------------------------------------
Stephen Lange Ranzini, President
- 17 -
<PAGE> 10
EMPLOYEE:
By:/s/ Mark Ouimet
- ------------------------------ --------------------------------------
Mark Ouimet
NEWBERRY:
By:/s/ Stephen Lange Ranzini
- ------------------------------ --------------------------------------
Stephen Lange Ranzini, President
/s/ Stephen Lange Ranzini
- ------------------------------ -----------------------------------------
Stephen Lange Ranzini, Individually
/s/ Joseph L. Ranzini
- ------------------------------ -----------------------------------------
Joseph L. Ranzini, Individually
- 18 -
<PAGE> 11
Amendment to Employment Agreement
Amendment, dated as of December 15, 1995, to the Employment
Agreement dated October 30, 1995 (the "Employment Agreement") between
University Bank, a Michigan banking corporation ("Bank") and Mark Ouimet
("Employee") and, as to the provisions of paragraph 3(c) of said Employment
Agreement, Newberry Bancorp., a Delaware corporation ("Newberry").
The parties hereto mutually agree as follows:
1. Employee has commenced his employment with the Bank,
thereby rendering effective the Employment Agreement, as the same is amended
hereby.
2. (a) The parties acknowledge that it was at the time of
execution thereof and continues to be their intent that the provisions of
paragraphs 3(c) and 4 of the Employment Agreement relating to the grant and
exercise of options to purchase shares of Common Stock of Newberry be
implemented by the grant of options, at such time as the Employee commenced his
employment with the Bank, pursuant to the stock option plan of Newberry in
effect at the inception of such employment. Such stock option plan is the 1995
Stock Plan of Newberry, as adopted by the Board of Directors of Newberry and as
to be presented to the stockholders for approval at the next annual meeting of
stockholders of Newberry (the "Plan"). Accordingly, it is hereby acknowledged
and agreed that Employee is, on or about the date hereof, being granted options
to purchase an aggregate of 180,000 shares of Common Stock pursuant to the
Plan, of which options for 100,000 of such shares are intended to be "incentive
stock options" as defined in the Plan, and with the options for the remaining
80,000 of such shares intended to be "Non Qualified" options, as defined in the
Plan. The exercise price and the latest expiration dates of such options and
the date as of which such options are to become exercisable are set forth in
Exhibit A hereto. Certain other terms and conditions of or pertaining to such
options shall be set forth in the Employee Stock Option Agreement to be entered
into by Employee and Newberry (the "Option Agreement").
(b) It is also agreed that the loans to be provided
or arranged in connection with the exercise of the aforementioned options, as
referred to in paragraphs 3(c) and 4 of the Employment Agreement, shall be made
in accordance with, and the rights and obligations with respect thereto shall
be as set forth in, the applicable provisions of the Option Agreement.
(c) The terms of the Option Agreement and of this
Section 2 shall and hereby supersede all provisions of the Employment Agreement
regarding the grant and exercise of options to purchase shares of Newberry and
shall henceforth govern such options and matters pertaining thereto.
- 19 -
<PAGE> 12
(d) If stockholder approval for the Plan is not
obtained by December 31, 1996, Stephen L. Ranzini and Joseph L. Ranzini shall
arrange for Newberry to grant to Employee options ("New Options") to replace
and in substitution for, the options granted to Employee under the Plan and
otherwise conforming as nearly as is practicable to the terms of said options
(except all such New Options shall be non-qualified options).
3. This Amendment may be executed in counterparts.
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<PAGE> 13
IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of the date first above written:
/s/ Mark Ouimet
----------------------------------
Mark Ouimet
UNIVERSITY BANK, a Michigan banking Corporation
By: /s/ Stephen L. Ranzini
----------------------------------
Sr. Vice President
As to Paragraph 2 above:
NEWBERRY BANCORP. INC.
By: /s/ Stephen L. Ranzini
----------------------------------
President
As to Paragraph 2(c) above:
/s/ Stephen L. Ranzini
----------------------------------
Stephen L. Ranzini
/s/ Joseph L. Ranzini
----------------------------------
Joseph L. Ranzini
- 21 -
<PAGE> 14
Exhibit A
Incentive Options (Total Shares: 100,000) as follows:
(a) 20,000 shares of Common Stock:
(i) Exercisable immediately (subject to satisfaction of
the conditions set forth in Section 7 of the Employee
Stock Option Agreement).
(ii) Latest expiration date: December 31, 1997.
(iii) Purchase price per share: $4.50
(b) 20,000 shares of Common Stock:
(i) Exercisable on or after January 10, 1997 (subject to
satisfaction of the conditions set forth in Section 7
of the Employee Stock Option Agreement).
(ii) Latest expiration date: December 31, 1997.
(iii) Purchase price per share: $4.50
(c) 20,000 shares of Common Stock:
(i) Exercisable on or after January 10, 1998 (subject to
satisfaction of the conditions set forth in Section 7
of the Employee Stock Option Agreement).
(ii) Latest expiration date: September 30, 2000
(iii) Purchase price per share: $4.50
(d) 20,000 shares of Common Stock:
(i) Exercisable on or after January 10, 1999 (subject to
satisfaction of the conditions set forth in Section 7
of the Employee Stock Option Agreement).
(ii) Latest expiration date: September 30, 2000
(iii) Purchase price per share: $4.50
- 22 -
<PAGE> 15
(e) 20,000 shares of Common Stock:
(i) Exercisable on or after January 10, 2000 (subject to
satisfaction of the conditions set forth in Section 7
of the Employee Stock Option Agreement).
(ii) Latest Expiration Date: September 30, 2000
(iii) Purchase price per share: $4.50
Other Options :
(a) 80,000 shares of Common Stock:
(i) Exercisable immediately (subject to satisfaction of
the conditions set forth in Section 7 of the Employee
Stock Option Agreement)
(ii) Expiration date: December 31, 1997
(iii) Purchase price: $4.50
- 23 -
<PAGE> 1
EXHIBIT 99.2
NEWBERRY BANCORP, INC.
EMPLOYEE STOCK OPTION AGREEMENT
Agreement, dated as of December 15, 1995, between Newberry Bancorp,
Inc., a Delaware corporation (the "Corporation"), and Mark Ouimet ("Optionee").
W I T N E S S E T H :
1) Grant of Option. Pursuant to the provisions of the 1995 Stock
Plan (the "Plan"), the Corporation hereby grants to Optionee, subject to the
terms and conditions of the Plan and subject further to the terms and
conditions herein set forth, the right and option to purchase from the
Corporation the number of shares of Common Stock of the Corporation ("Stock")
set forth in Exhibit A hereto at the price per share set forth in Exhibit A, as
incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code") ("Incentive Options") or as non-incentive stock options
("Other Options"), as set forth in Exhibit A (the Incentive Options and Other
Options granted hereby being referred to together herein as the "Option" or the
"Options").
2) Terms and Conditions. The term of each respective Option
shall be for the applicable period specified in Exhibit A. The Options shall
be exercisable at any time in whole or in part and from time to time, subject
to earlier termination as provided in Paragraphs 3 and 4 of this Agreement,
from and after the applicable date(s) provided in Exhibit A. Unless otherwise
provided in Exhibit A as to Other Options, the Option may not be exercised (a)
as to fewer that 100 shares at any one time (or for the remaining shares then
purchasable under the Option, if fewer than 100 shares), (b) prior to the
expiration of the first six months after the date hereof, and (c) until
fulfillment of the conditions precedent set forth in Paragraph 7 hereof. The
holder of the Option shall not have any rights as a stockholder with respect to
the Stock issuable upon exercise of an Option until certificates for such Stock
shall have been issued and delivered to him after the exercise of the Option.
3) Termination of Employment. In the event that the employment
of Optionee shall be terminated (otherwise than by reason of death), the
Incentive Options shall be exercisable (to the extent that Optionee shall have
been entitled to do so at the termination of his employment) at any time prior
to the expiration of the period of sixty days after such termination, but not
later than the earlier of 1. the applicable expiration date specified in
Exhibit A and 2. the date which is ten years (five years in the case of an
Incentive Option granted to a 10% Stockholder, as defined in the plan) after
- 24 -
<PAGE> 2
the date on which the Option shall have been granted, except as may be provided
in Exhibit A with respect to Other Options. In the event that the employment of
Optionee shall be terminated, the Other Options shall be exercisable (to the
extent that Optionee shall have been entitled to do so at the termination of
his employment, at any time prior to the applicable expiration date thereof
specified in Exhibit A. Nothing in the Plan or in this Agreement shall confer
upon Optionee any right to be continued in the employ of the Corporation or its
subsidiaries or interfere in any way with the right of the Corporation or any
such subsidiary to terminate or otherwise modify the terms of Optionee's
employment; provided, however, that a change in Optionee's duties or position
shall not affect Optionee's Options so long as Optionee is still an employee of
the Corporation or its subsidiaries.
4) Death of Optionee. In the event of the death of Optionee, any
unexercised portion of any of the Incentive Options shall be exercisable (to
the extent that Optionee shall have been entitled to do so at the time of his
death) at any time prior to the earlier of the specified expiration date of
such Incentive Option or 180 days from the date of the Optionee's death, and
any unexercised portion of the Other Options shall be exercisable prior to the
applicable expiration date thereof specified in Exhibit A, and in each case
only by such person or persons to whom Optionee's rights shall pass under
Optionee's will or by the law of descent and distribution, except as may be
provided in Exhibit A with respect to Other Options.
5) Non-Transferability of Options. The Option shall not be
transferable otherwise than by will or the law of descent and distribution and
shall be exercisable during the lifetime of Optionee only by the Optionee.
6) Adjustments. In the event of changes in the outstanding stock
of the Corporation by reason of stock dividends, split-ups, recapitalizations,
mergers, consolidations, combinations or exchanges of shares, separations,
reorganizations or liquidations, the number and class of shares subject to the
Option shall be correspondingly adjusted. The provisions of paragraph 13 of
the Plan shall apply to all Options.
7) Conditions Precedent To Grant of Option. Anything in this
Agreement to the contrary notwithstanding, the effectiveness of the grant of
all Options pursuant to this Agreement are in all respects subject to, and this
Agreement and the Options granted under it shall be of no force or effect
unless and until, and no Options granted hereunder shall in any way vest or
become exercisable in any respect unless and until, approval of the Plan is
obtained by the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock of the Corporation present in person or by
proxy and entitled to vote at a meeting of stockholders at which the plan is
- 25 -
<PAGE> 3
presented for approval, in form and substance satisfactory to counsel for the
Company. In the event that such stockholder approval as aforesaid has not been
received by the first anniversary of the date of adoption of the Plan by the
Board of Directors of the Corporation, then in such event this Agreement and
all Options granted under this Agreement shall be null and void, and upon the
occurrence of such approval, this Agreement and the Options shall become
effective as of the date of the grant of the Options.
8) Conditions Precedent To Exercise of Option. In the event that
the exercise of any of the Options or the issuance and delivery of the shares
hereunder shall be subject to, or shall require, any prior exchange listing,
prior stockholder approval, or other prior condition or act, pursuant to the
applicable laws, regulations or policies of any stock exchange, federal or
local government or its agencies or representatives, then no Option shall be
deemed to be exercisable under this Agreement until such condition is
satisfied. The Corporation shall not be liable in any manner to Optionee or
any other party for any failure or delay by the Corporation on its part to
fulfill any such condition.
9) Method of Exercising Option. Subject to the terms and
conditions of this Agreement, the Option may be exercised by written notice to
the Corporation, at its office at 209 East Portage Avenue, Sault Ste Marie,
Michigan 49783. Such notice shall 1. identify the Option to which it applies
(i.e., Incentive Option and/or Other Option), 2. state the election to exercise
the Option, 3. designate the number of shares in respect of which the Option is
being exercised, and 4. be signed by the person or persons so exercising the
Option. Such notice shall be accompanied by payment of the full purchase price
for such shares. The Corporation shall deliver to Optionee, at such address as
is provided in the notice, a certificate or certificates representing such
shares as soon as practicable after the notice shall be received. Payment of
such purchase price shall be made (a) in United States dollars in cash or by
certified or official bank check payable to the order of the Corporation.
Subject to the limitations hereinafter set forth, if Optionee requests, the
Corporation shall either lend to Optionee or arrange for a loan to Optionee of
the funds necessary to cover the portion of the purchase price of the shares
for which any Option is exercised in excess of the aggregate par value of such
shares. Such loan shall be evidenced by a personal recourse note of Optionee
to the lender, shall have a term of three years and a monthly amortization
schedule of 15 years, provided that, at the option of Optionee, interest
accruing on such loan shall not be due until the earlier of the maturity date
thereof or December 31, 2000. Each such note shall otherwise be in form and
substance reasonably required by the Corporation, and the indebtedness and
obligations evidenced thereby shall be secured by a pledge of and security
interest in the shares purchased with the proceeds thereof pursuant to a
security agreement in form and substance reasonably required by the
- 26 -
<PAGE> 4
Corporation. The right to obtain loans as provided in the preceding provisions
of this paragraph 9 shall terminate if Optionee shall cease to be an employee
of the Corporation's University Bank subsidiary for any reason unless such
termination of employment is a termination by the employer for the cause set
forth in clause (e) of paragraph 4 of Optionee's Employment Agreement (as
hereinafter defined), or a termination by Optionee due to a material reduction
of the responsibilities of Optionee under his Employment Agreement without
Optionee's express written consent. The certificate or certificates for the
shares as to which the Option shall have been so exercised shall be issued in
the name of the person so exercising the Option (or, if the Option shall be
exercised by Optionee and if Optionee shall so request in the notice exercising
the Option, the certificate shall be issued in the name of the Optionee and
another person jointly, with right of survivorship) and shall be delivered as
provided above to or upon the written order of the person exercising the
Option. In the event the Option shall be exercised, pursuant to Paragraph 4
hereof, by any person other than Optionee, such notice shall be accompanied by
appropriate proof of the right of such person to exercise the Option. At the
election of the Corporation, such certificate may bear such legends regarding
the limited transferability of the shares under applicable securities laws as
counsel for the Corporation may require. All shares that shall be purchased
upon the exercise of the Option as provided herein shall be fully paid and
non assessable.
10) Taxes. The Corporation may make such provisions as
it may deem appropriate for the withholding of any taxes which it determines is
required in connection with the Option granted hereunder. The Corporation may
further require notification from Optionee upon any disposition of Stock
acquired pursuant to the exercise of the Option.
11) Fair Market Value of Stock. If the Stock is publicly
traded, "fair market value" shall be determined as of the last business day for
which the prices or quotes discussed in this sentence are available prior to
the date in question and shall mean 1. the average (on that date) of the high
and low prices of the Stock on the principal national securities exchange on
which the Stock is traded, if the Stock is then traded on a national securities
exchange;or 2. the last reported sale price (on that date) of the Stock on the
NASDAQ National Market List, if the Stock is not then traded on a national
securities exchange; or 3. the closing bid price last quoted (on that date) by
an established quotation service for over-the-counter securities, if the Stock
is not reported on the NASDAQ National Market List. However, if the Stock is
not publicly traded at the time in question, "fair market value" shall be
deemed to be the fair value of the Stock as determined by the Committee after
taking into consideration all factors which it deems appropriate, including,
without limitation, recent sale and offer prices of the Stock in private
- 27 -
<PAGE> 5
transactions negotiated at arm's length.
12) Employment Agreement. It is expressly acknowledged
and agreed that the Options granted and provided for by this Agreement
constitute all of the options to purchase shares of capital stock of the
Corporation provided for and/or required to be granted pursuant to the
Employment Agreement, dated October 30, 1995, as amended, between University
Bank, Optionee, and the Corporation (the "Employment Agreement"), and that the
provisions of this Agreement shall supersede the provisions of the Employment
Agreement with respect thereto. This Agreement shall not, however, affect the
obligation to Optionee as to the availability of substitute stock options in
accordance with the terms of the Employment Agreement if the conditions
specified in Section 7 above are not satisfied.
13) Terms of Plan Control. The Option granted hereunder
is granted pursuant to the provisions of the Plan, the receipt of a copy of
which Optionee hereby acknowledges. Nothing contained in this Agreement shall
in any way be deemed to alter or modify the provisions of the Plan and no act
of the Corporation or its directors, officers or employees shall be deemed to
be a waiver or modification of any provision of the Plan. The provisions of
the Plan shall in all respects govern the Option. The Committee shall have
authority in its discretion, but subject to the express provisions of the Plan,
to interpret the Plan and this Agreement; to prescribe, amend and rescind rules
and regulations relating to the Plan, the Option and this Agreement; and to
make all other determinations deemed necessary or advisable for the
administration of the Plan, the Option and this Agreement. The Committee's
determination on the foregoing matters shall be conclusive.
14) Counterparts. This Agreement may be executed in
counterparts.
- 28 -
<PAGE> 6
IN WITNESS WHEREOF, the Corporation has caused this Agreement
to be duly executed by its Officer and Optionee as of the day and year first
above written.
NEWBERRY BANCORP, INC.
BY: /s/ Stephen L. Ranzini
---------------------------
President
/s/ Mark Ouimet (L.S.)
- ---------------------------
Mark Ouimet, Optionee
- 29 -
<PAGE> 7
Exhibit A
Incentive Options (Total Shares: 100,000) as follows:
(a) 20,000 shares of Common Stock:
(i) Exercisable immediately (subject to satisfaction of
the conditions set forth in Section 7 of the Employee
Stock Option Agreement).
(ii) Latest expiration date: December 31, 1997.
(iii) Purchase price per share: $4.50
(b) 20,000 shares of Common Stock:
(i) Exercisable on or after January 10, 1997 (subject to
satisfaction of the conditions set forth in Section 7
of the Employee Stock Option Agreement).
(ii) Latest expiration date: December 31, 1997.
(iii) Purchase price per share: $4.50
(c) 20,000 shares of Common Stock:
(i) Exercisable on or after January 10, 1998 (subject to
satisfaction of the conditions set forth in Section 7
of the Employee Stock Option Agreement).
(ii) Latest expiration date: September 30, 2000
(iii) Purchase price per share: $4.50
(d) 20,000 shares of Common Stock:
(i) Exercisable on or after January 10, 1999 (subject to
satisfaction of the conditions set forth in Section 7
of the Employee Stock Option Agreement).
(ii) Latest expiration date: September 30, 2000
(iii) Purchase price per share: $4.50
- 30 -
<PAGE> 8
(e) 20,000 shares of Common Stock:
(i) Exercisable on or after January 10, 2000 (subject to
satisfaction of the conditions set forth in Section 7
of the Employee Stock Option Agreement).
(ii) Latest Expiration Date: September 30, 2000
(iii) Purchase price per share: $4.50
Other Options :
(a) 80,000 shares of Common Stock:
(i) Exercisable immediately (subject to satisfaction of
the conditions set forth in Section 7 of the Employee
Stock Option Agreement)
(ii) Expiration date: December 31, 1997
(iii) Purchase price: $4.50
- 31 -
