<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14(a)(6)(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
University Bancorp, Inc.
------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
----------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.
N/A
4) Proposed maximum aggregate value of transaction:
N/A
5) Total fee paid:
N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
Page 1 of 24
<PAGE> 2
UNIVERSITY BANCORP, INC.
959 Maiden Lane
Ann Arbor, Michigan 48105
(734) 741-5858
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
June 9, 1998
To the Holders of Common Stock of University Bancorp, Inc.:
The Annual Meeting (the "Meeting") of Stockholders of University Bancorp,
Inc. (the "Company") will be held at the main office of University Bank, the
Company's bank subsidiary, 959 Maiden Lane, Ann Arbor, Michigan 48105, at 12:00
noon, local time, on Monday, June 9, 1998 for the following purposes:
1. To elect eight directors to serve until the next Annual Meeting of
Stockholders;
2. To consider a proposal to amend Article FOURTH of the Company's
Certificate of Incorporation to increase the authorized number of shares of
Common Stock from 2,500,000 to 5,000,000 and to increase the total number of
authorized shares of capital stock from 3,000,000 to 5,500,000; and
3. To transact such other business as may properly come before the
Meeting.
The Board of Directors has set 5:30 p.m. Central Standard Time, on April
27, 1998 as the record date for the determination of the stockholders entitled
to vote at the Meeting. All stockholders as of the record date are entitled to
receive this notice. The Proxy Statement and form of proxy for the Meeting are
being mailed with this notice and the initial mailing including the Proxy
Statement and form of proxy will be sent to stockholders on approximately May
5, 1998.
By order of the Board of
Directors,
Joseph L. Ranzini,
Secretary
April 27, 1998
If you wish to participate in the vote on the matters coming before the Annual
Meeting and do not intend to attend in person, please mark, sign and date the
enclosed form of proxy and return it promptly to the Company, c/o University
Bank, 959 Maiden Lane, Ann Arbor, Michigan 48105.
<PAGE> 3
UNIVERSITY BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
June 9, 1998
TABLE OF CONTENTS
Page
----
General Information 2
Election of Directors 3
Proposal 2: Proposal to Amend Article FOURTH of the Company's
Certificate of Incorporation 6
Security Ownership of Certain Beneficial
Owners and Management 9
Executive Officers 11
Executive Compensation 12
Section 16(a) Beneficial Ownership Reporting Compliance 15
Compensation Plans 15
Certain Relationships and Related Transactions 18
Independent Public Accountants 20
Other Matters 20
<PAGE> 4
GENERAL INFORMATION
By appointing "proxies", stockholders may vote their shares at the Annual
Meeting of Stockholders (the "Meeting") of University Bancorp, Inc. (the
"Company"), which is scheduled to be held on June 9, 1998 and any adjournments
thereof, whether or not they attend. With this Proxy Statement, the Company's
Board of Directors provides information on the items of business scheduled for
the Meeting and asks you to appoint proxies selected by the Board of Directors
to vote your shares. The Company's Board of Directors is soliciting your
proxy. The cost of such solicitation is being paid for by the Company.
The proxies will vote your shares according to your instructions. The
Board of Directors recommends a vote:
1) "FOR" the election of each of the nominees for election as directors of
the Company indicated in the accompanying form of proxy. You may vote "FOR" or
"WITHHOLD" as to all or any one or more nominees for election as directors.
2) "FOR" Proposal 2, that is, approval of the amendment of the Certificate
of Incorporation of the Company to increase the number of authorized shares of
Common Stock from 2,500,000 to 5,000,000 and to increase the total number of
authorized shares of capital stock from 3,000,000 to 5,500,000. You may vote
"FOR" or "AGAINST" or "ABSTAIN" with respect to Proposal 2.
You have one vote for each share of Common Stock, par value $.01 per
share, of the Company ("Common Stock") registered in your name on the Company's
books on April 27, 1998 at 5:30 p.m., Central Standard Time, the record date
for the determination of stockholders entitled to notice of and to vote at the
Meeting. At that time, the Company had 2,000,840 shares of Common Stock
outstanding and entitled to vote.
If you wish to participate in the vote on the matters coming before the
Meeting, please sign, date and promptly return your form of proxy to the
Company, c/o University Bank, 959 Maiden Lane, Ann Arbor, Michigan 48105.
If you return a properly signed and dated form of proxy but do not mark
any choices for the election of directors or for Proposal 2, your shares will
be voted in accordance with the recommendations of the Board of Directors as to
such election, and "FOR" approval of the proposed amendment to the Certificate
of Incorporation.
You may revoke the proxy solicited by the Board of Directors before its
exercise by delivering written notice of such revocation to the Company c/o
University Bank, 959 Maiden Lane, Ann Arbor, Michigan 48105, or by submitting a
subsequently dated proxy, or by attending the Meeting and voting by ballot.
<PAGE> 5
Directors will be elected by plurality of the votes of Common Stock cast
at the Meeting. Approval of the proposed amendment to the Certificate of
Incorporation requires the affirmative vote of the holders of a majority of the
issued and outstanding shares of Common Stock as of the record date for the
Meeting. For these purposes, abstentions and broker non-votes are not
considered votes cast.
All per share and share amounts in this Statement have been adjusted for
the 3 for 2 stock split effected in the form of a 50% stock dividend paid by
the Company on February 24, 1998.
PRESENTATION OF
PROPOSALS OF STOCKHOLDERS
It is expected that the next annual meeting of stockholders of the Company
will be held in the 1999 calendar year. Proposals of stockholders to be
presented at such annual meeting must be received by the Company prior to
February 1, 1999 to be included in the Company's proxy statement and form of
proxy for such annual meeting. The notice and any such proposal must comply
with the applicable provisions of Rule 14a-8 under the Securities Exchange Act
of 1934, as amended.
CORPORATE GOVERNANCE - ATTENDANCE
AT BOARD OF DIRECTOR MEETINGS
The Board of Directors oversees the management of the business of the
Company. The Board of Directors had no audit or nominating committees during
the fiscal year ended December 31, 1997. The Compensation Committee of the
Board of Directors consists of three members of the board, presently Messrs.
Stephen Lange Ranzini, Joseph L. Ranzini and Michael Talley. The Compensation
Committee met once and all members of this committee attended each meeting.
The Board of Directors held a total of 3 meetings during the 1997 fiscal year.
All directors attended each meeting, except three of the nine directors (Keith
Brenner, Robert Goldthorpe and Dr. Joseph Lange Ranzini) attended 2 of the 3
meetings as a result of conflicting travel plans.
COMPENSATION OF DIRECTORS
Directors are not compensated for attendance at meetings, although they
are reimbursed for travel expenses.
ELECTION OF DIRECTORS
The Board of Directors recommends a vote "FOR" the slate of eight
directors named below. Biographical information is included below for each
nominee. Persons elected at the Meeting will hold office until a successor is
elected or until earlier resignation or removal. In the event that any of
these director nominees becomes unavailable to serve, proxies will be voted for
the election of such other person(s) as may be recommended by the Board of
Directors.
- 5 -
<PAGE> 6
NOMINEES FOR ELECTION AS DIRECTORS OF THE COMPANY
Stephen Lange Ranzini, age 33, has been President, CEO and a director of
the Company or its Predecessors since July 1988, and served as the Treasurer of
the Company and its Predecessors from July 1988 to December 1995. Since May
1993, Mr. Ranzini has also served as the Treasurer and a Director of Michigan
BIDCO, Inc. (the "BIDCO"), a community development lending organization
described further below. Since December 1995, Mr. Ranzini has been Treasurer
and a Director of Northern Michigan Foundation, a non-profit organization which
shares common senior management with BIDCO. Since March 1994 Mr. Ranzini has
served as a director of University Bank and has held various senior management
positions with the bank, including that of President of the Bank between
October 1994 and November 1995 and again since November 1997. Between December
1995 and October 1997 he served as the Bank's Senior Vice President - Mortgage
Banking, supervising the Bank's subsidiaries: Arbor Street LLC, Midwest Loan
Services, Inc., Varsity Funding, LLC., and Varsity Mortgage, LLC. He is the
son of Joseph L. and Mildred Ranzini and the brother of Joseph Lange Ranzini
and Paul Lange Ranzini.
Since July 1991, Mr. Ranzini has been a director of CityFed Financial
Corp., a former savings and loan holding company now based in Massachusetts.
Since May 1997 he has been a director of MFC, Inc., a Toronto Stock Exchange
listed financial services company based in Toronto, Canada. Related to his
duties for BIDCO, Mr. Ranzini also serves as a director or officer of two
northern Michigan based firms: a tissue paper mill and an ABC-TV broadcast
affiliate.
Joseph L. Ranzini, Esq., age 69, has been Chairman of the Board, a
director and Secretary of the Company or of predecessor corporations merged
into the Company (the "Predecessors") since July 1988. Mr. Ranzini has been a
Director of University Bank (the Company's subsidiary) since July 1988 and
served as Chairman of the Board from March 1994 to January 1996 and Secretary
since November 1997. Since May 1993, Mr. Ranzini has served as the President
and Chairman of the Board of Michigan BIDCO, Inc. Since December 1995, Mr.
Ranzini has been President and Chairman of the Board of Northern Michigan
Foundation. Mr. Ranzini maintained a private law practice in New Jersey from
1965 until June 1991.
Keith Brenner, age 53, has served as a director of the Company or its
Predecessors from October 1985, and also as the President and Treasurer of the
Company or its Predecessors (the Company was then known as Fortune 44 Company,
and manufactured and sold fortune cookies) from inception until December 31,
1989. Prior to forming the Company, Mr. Brenner was employed by Celestial
Seasonings, Inc., a tea manufacturer located in Boulder, Colorado, from 1980 to
1985 as Vice President of Marketing and Vice President of Corporate
Development. Since the fourth quarter of 1988, Mr. Brenner has been President
and owner
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<PAGE> 7
of Brenner & Associates, a strategic planning and marketing consulting firm,
located in Boulder, Colorado.
Robert Goldthorpe, age 61, has served as a director of the Company since
April 1996. Mr. Goldthorpe also served as a Director of University Bank from
September 1992 to January 1996. For more than the past five years, Mr.
Goldthorpe has been President of Goldthorpe Enterprises, a diversified holding
company with operations in the central and eastern portion of the Upper
Peninsula of Michigan, with investments in hotels, restaurants, apartment
buildings, a hardware store, and the construction and contracting business.
Dr. Joseph Lange Ranzini, age 38, has served as a director of the Company
since April 1996. A graduate of Dartmouth College in 1982, he earned his M.D.
from the University of Virginia in 1986, and completed his residency with a
specialty in General Surgery at Mary Imogene Bassett Hospital, an affiliate of
Columbia University in Cooperstown, New York, in 1992. Since that time he has
been in a general surgery private practise at Augusta Medical Center in
Fishersville, Virginia. He is the son of Joseph L. and Mildred Ranzini and the
brother of Stephen Lange Ranzini and Paul Lange Ranzini.
Mildred Lange Ranzini, age 66, has been a director of the Company or its
Predecessors since July 1988, and has served as Assistant Secretary since
January 1990. Mrs. Ranzini holds a M. Div. from Princeton Theological
Seminary, a Masters Degree in Education from Columbia University and a B.A.
from Wellesley College. Mrs. Ranzini has not otherwise held an active business
position during the prior five years.
Prof. Paul Lange Ranzini, age 36, has served as a director of the Company
since April 1996. He is a Musicology Editor at A-R Editions and a Doctoral
Candidate in Music History and Theory at the University of Chicago. He has
attended the University of Chicago since 1989, except in 1994 and 1995, when he
earned a Fulbright Fellowship to Germany for Dissertation Research. At the
University of Chicago, he was also employed part-time as the computer data
center manager at the University's International House. From 1984 to 1988 he
was a graduate student at the University of Michigan in Ann Arbor, Michigan,
where he earned two Masters, an M.A. in Musicology and an M.M. in Organ and
Church Music. From 1979 to 1983 he was a student at the College of William and
Mary, where he received a B.A. in Philosophy. He is the son of Joseph L. and
Mildred Ranzini and the brother of Stephen Lange Ranzini and Joseph Lange
Ranzini.
Michael Talley, age 47, has served as a director of the Company or its
Predecessors since 1988. Since March 1990, Mr. Talley has served as an Account
Executive at Ladenburg, Thalmann & Co. Inc. in New York, New York. Between
February 1988 and March 1990 Mr. Talley served as an Account Executive at
Oppenheimer & Co., Inc. in New York, New York. For more than five years until
February 1988, he served as an Account Executive
- 7 -
<PAGE> 8
at L.F. Rothschild Unterberg Towbin in New York, New York. Mr. Talley is a
native of Detroit, Michigan, and a graduate of Michigan State University, in
East Lansing, Michigan.
There is no family relationship between any current director or executive
officer of the Company and any other current director or executive officer of
the Company, except as indicated above.
PROPOSAL 2: PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED SHARES OF COMMON STOCK FROM 2,500,000 TO 5,000,000.
The Company is currently authorized to issue 2,500,000 shares of its
Common Stock, par value $.01 per share ("Common Stock"), of which 2,000,840
shares of Common Stock were issued and outstanding as of March 31, 1998. In
addition, the Company has reserved for future issuance up to 495,435 additional
shares of Common Stock under the terms of its 1995 Stock Plan.
The Company is also currently authorized to issue 500,000 shares of
Preferred Stock, par value $.001 per share ("Preferred Stock"). The Preferred
Stock is so-called "blank check" Preferred Stock, and the Board of Directors is
authorized to determine the respective preferences, limitations and relative
rights of each possible future series of the Preferred Stock, including without
limitation voting rights, dividend rates and preferences, liquidation
preferences, conversion rights and redemption rights. Such rights, as so
determined, may be senior to those of the Common Stock and, among other
matters, could reduce the amount available for dividends on or payable upon
liquidation to the Common Stock and/or dilute the voting power of the Common
Stock. In July 1994, the Board of Directors designated a series of 20,000
shares of the Preferred Stock as Series 2 6% Cumulative Convertible Preferred
Stock, carrying a liquidation preference of $100 per share, and a cumulative
dividend rate of $6.00 per share, in each case senior to the Common Stock, and
the right to convert shares of such series of Preferred Stock into Common Stock
at the rate of $4.67 per share (after giving effect to the Stock Split noted
below). Shares of such series of Preferred Stock are also redeemable at the
option of the Company under certain circumstances at a price of $100 per share
plus accrued but unpaid dividends. No shares of this series of Preferred Stock
have ever been issued.
In February 1998, the Company effected a three-for-two stock split of the
outstanding Common Stock by means of a 50% stock dividend (the "Stock Split").
As a result of the Stock Split, the number of outstanding shares of Common
Stock was increased and the relative number of authorized but unissued shares
of Common Stock was substantially reduced. The Stock Split was effected in
order to comply with one of the new requirements for continued listing of the
Common Stock on the NASDAQ Small Cap Stock Market, specifically the requirement
that a listed company have at least 500,000 shares of Common Stock in its
public float.
- 8 -
<PAGE> 9
The Board of Directors has determined that it would be advisable and in
the best interest of the Company to increase the number of authorized shares of
Common Stock from 2,500,000 shares to 5,000,000 shares in order to provide the
Company with an adequate supply of authorized but unissued shares of Common
Stock for general corporate needs, including without limitation possible stock
dividends or possible future stock splits effected through the mechanism of a
stock dividend, employee incentive and benefit plans, consummation of
acquisitions or obtaining additional financing, in each case at times when the
Board, in its discretion, deems it advantageous to do so. The increase could
also facilitate the possible future use of the Company's authorized but
unissued class of 500,000 shares of Preferred Stock. As noted above, the terms
of the Preferred Stock may be set by the Board of Directors and may include a
feature allowing conversion into shares of Common Stock.
Accordingly, the Board of Directors has approved an amendment to the
Company's Certificate of Incorporation that would increase the number of the
Company's authorized shares of Common Stock from 2,500,000 shares to 5,000,000
shares and correspondingly increase the total number of authorized shares of
capital stock from 3,000,000 shares to 5,500,000 shares. If the amendment is
approved by the stockholders, the Certificate of Incorporation will be amended
to reflect the increase. The proposed text of Article FOURTH of the
Certificate of Incorporation, as proposed to be amended and restated to reflect
the foregoing, and as approved by the Board of Directors, is annexed hereto as
Exhibit A. While the Board of Directors is seeking such approval from the
stockholders at this time, it has no present aggrement, commitment, plan or
intent to issue any of the additional shares of Common Stock provided for in
this Proposal, except for the shares reserved for issuance pursuant to the
Company's 1995 Stock Plan, previously approved by the Company's stockholders.
All shares of Common Stock are equal to each other with respect to voting,
liquidation, dividend and other rights. Owners of shares of Common Stock are
entitled to one vote for each share they own at any stockholders' meeting.
Holders of Common Stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor, and
upon liquidation are entitled to participate pro rata in a distribution of
assets available for such distribution to holders of Common Stock (subject to
any preferences of holders of Preferred Stock). There are no conversion,
pre-emptive or other subscription rights or privileges with respect to any
shares of Common Stock. The Common Stock does not have cumulative voting
rights, which means that the holders of shares representing more than 50% of
the voting power represented by all shares of the Company's Common Stock in an
election of directors may elect all of the directors if they choose to do so.
In such event, the holders of the remaining shares aggregating less than 50% of
the voting power would not be able to elect any directors.
As noted below, the total number of shares of Common Stock held by Mr.
Joseph L. Ranzini, Mr. Stephen Lange Ranzini, Mrs. Mildred Ranzini, the various
Ranzini family trusts and the
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<PAGE> 10
shares allocated to Mr. Stephen Lange Ranzini pursuant to the Company's
Employee Stock Ownership Plan was, as of March 31, 1998, 1,313,121, and
therefore these persons and trusts together hold more than 50% of the voting
power represented by all shares of the Company's Common Stock.
Although in certain circumstances additional shares of Common Stock would
be available for general corporate purposes and could be placed privately in a
manner which would make a change in control of the Company more difficult, such
an effect currently seems unlikely in view of the majority ownership of
shares of Common Stock by members of and trusts related to the Ranzini family.
If such majority ownership were to cease at some time in the future, then,
under certain circumstances, the Board of Directors could create impediments
to, or frustrate, persons seeking to effect a takeover or transfer in control
of the Company by causing the increased authorized shares to be issued to a
holder or holders who might side with the Board of Directors in opposing a
takeover bid that the Board of Directors has determined is not in the best
interests of the Company and its stockholders, but in which unaffiliated
stockholders may wish to participate. Furthermore, the existence of such
shares might, in such a case, have the effect of discouraging any attempt by a
person, through the acquisition of a substantial number of shares of Common
Stock, to acquire control of the Company, since the issuance of such shares
could dilute the Company's book value per share and the Common Stock ownership
of such person. Accordingly, although no such action seems possible in light of
the current ownership of the outstanding Common Stock, one of the effects of
the Proposal, if approved, might be to make a tender offer more difficult to
accomplish. This may be beneficial to management in a hostile tender offer,
thus having an adverse effect on stockholders who may want to participate in
such tender offer.
It should also be noted that future issuances of a substantial number of
additional shares of Common Stock could result in potential dilution of
existing stockholders' equity interests depending on the nature and value of
the consideration received for such newly issued shares. Prior to the
amendment covered by this Proposal, the total number of new shares which could
be issued (with such a potentially dilutive effect) would be significantly
limited.
The additional authorized shares of Common Stock resulting from the
Proposal would, when issued, have the same rights as the issued and outstanding
existing shares of Common Stock. Stockholders of the Company do not have
preemptive rights nor will they as a result of the Proposal.
If the Proposal is approved, the additional authorized Common Stock as
well as the currently authorized but unissued Common Stock would be available
for issuance in the future for such corporate purposes as the Board of
Directors deems advisable from time to time without the delay and expense
incident to obtaining shareholder approval, unless such action is required by
applicable law or by the rules of the National Association of Securities
Dealers, Inc. or of any stock exchange upon which the Company's shares may then
be listed.
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<PAGE> 11
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote at the Meeting on this Proposal is
required for approval of this Proposal (Proposal No. 2 on the Proxy Card). The
Directors of the Company, who together control a majority of the voting power
of the Company's outstanding Common Stock, intend to cast their votes for this
Proposal. Accordingly, its adoption is assured, even if other stockholders
fail to vote in favor of the Proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO INCREASE THE
AUTHORIZED SHARES OF COMMON STOCK FROM 2,500,000 TO 5,000,000.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below and on the following pages is information with respect to
number and percentage of outstanding shares of the Company beneficially owned
by certain persons, including those known to the Company to own beneficially
more than 5% of the Company's outstanding Common Stock, the directors of the
Company individually and the directors and officers of the Company as a group.
The information in the table is as of March 31, 1998, except as otherwise
indicated.
<TABLE>
<CAPTION>
Amount and Nature Percent
Name and Address Title of of Beneficial of
Class Ownership (1) Class
--------------------- -------- ------------------- -------
<S> <C> <C> <C>
Joseph L. Ranzini, Esq. Common 895,277 (2)(4) 44.75%
959 Maiden Lane Stock (10)
Ann Arbor, MI 48105
Mildred Ranzini Common 724,308 (2)(3)(5) 35.93%
43 Sweetwater Drive Stock (10)
Belle Mead, NJ 08502
Stephen Lange Ranzini Common 456,845 (3)(6) 22.83%
c/o University Bank Stock (11)
959 Maiden Lane
Ann Arbor, MI 48105
Dr. Joseph Lange Ranzini Common 92,400 (11) 4.62%
30 Chestnut Avenue Stock
Waynesboro, VA 22980
Prof. Paul Lange Ranzini Common 171,600 (11) 8.58%
1024 Pleasant View Road Stock
Middleton, WI 53562
Keith E. Brenner Common 34,228 (7)(9) 1.70%
135 Green Meadow Lane Stock
Boulder, CO 80302
</TABLE>
(TABLE CONTINUED AND FOOTNOTES LOCATED ON FOLLOWING PAGE)
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<PAGE> 12
<TABLE>
<S> <C> <C> <C>
Robert Goldthorpe Common 52,500 (9) 2.60%
2564 Helmer St. Stock
McMillan, MI 49853
Michael Talley Common 15,000 (9) 0.74%
55 Payson Avenue #4I Stock
New York, NY 10034
Ranzini Family Trust Common 480,000 (2) 23.99%
dated 11/8/90 Stock
c/o University Bank
959 Maiden Lane
Ann Arbor, MI 48105
Ranzini Family Trust Common 199,308 (3) 9.96%
dated 12/20/89 Stock
c/o University Bank
959 Maiden Lane
Ann Arbor, MI 48105
All Current Officers Common 1,467,349 (2)(3)(7) 71.10%
and Directors, as a Stock (8)(9)(10)
Group (Nine Persons) (11)(12) -
</TABLE>
______________________
(1) Unless otherwise indicated, the indicated person is believed to have
sole voting and investment power over shares indicated as beneficially owned by
such person.
(2) Includes 480,000 shares of Common Stock held by an irrevocable trust,
the primary beneficiary of which is Mr. Stephen Lange Ranzini. The trustees of
the trust are Mr. Joseph L. Ranzini and Mrs. Mildred Ranzini.
(3) Includes 199,308 shares of Common Stock held by an irrevocable trust,
the primary beneficiaries of which are Mr. Joseph L. Ranzini's five adult
children. The trustees of the trust are Mr. Stephen Lange Ranzini and Mrs.
Mildred Ranzini. Mr. Stephen Lange Ranzini is a primary beneficiary of
one-fifth or 39,862 of the shares of Common Stock held under the terms of the
trust.
(4) Does not include the 199,308 shares of Common Stock referred to in
note 3 above, as to which Mr. Ranzini disclaims beneficial ownership.
(5) Mrs. Ranzini disclaims beneficial ownership of shares of Common Stock
owned by her spouse, Joseph L. Ranzini.
(6) Includes 20,912 shares of Common Stock which represent Mr. Stephen
Lange Ranzini's current accrued allocation of shares of Common Stock under the
University Bancorp, Inc. ESOP. Does not include the shares held in the trust
referred to above in note 2 as to which Mr. Ranzini is the primary beneficiary.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
- 12 -
<PAGE> 13
(7) Includes shares of Common Stock owned beneficially by Mr. Brenner's
retirement plan, and also includes 1,062 shares of Common Stock owned by Mr.
Brenner's minor children.
(8) Does not include shares held by the University Bancorp, Inc. ESOP,
other than the accrued allocation of shares thereunder to Stephen Lange Ranzini
referred to in note 6 above.
(9) Currently exercisable options on 15,000 shares of common stock are
held by each of Mr. Brenner, Mr. Goldthorpe, Mrs. Ranzini and Mr. Talley. An
option to purchase shares of Common Stock which will be exercisable as to 3,000
shares on June 1, 1998 is held by the Chief Financial Officer of the Company.
The shares subject to such person's respective option are included in such
person's respective holdings and in the total shares held by all current
officers and directors as a group.
(10) Includes 34,500 shares of Common Stock held by Michigan BIDCO, Inc.,
as to which each individual disclaims beneficial ownership.
(11) Includes shares held by various of the thirteen Ranzini family trusts
established in 1996, which collectively hold 171,600 shares of Common Stock, as
follows: Stephen Lange Ranzini and Prof. Paul Lange Ranzini are trustees of
each of such 13 trusts covering all 171,600 shares, and disclaim beneficial
ownership of such 171,600 shares of Common Stock held by such trusts for which
they are trustees. Dr. Joseph Lange Ranzini is a trustee as to certain of such
trusts covering 92,400 shares, and disclaims beneficial ownership of such
92,400 shares of Common Stock held by such trusts for which he is a trustee.
(12) The total number of shares of Common Stock held by Mr. Joseph L.
Ranzini, Mr. Stephen Lange Ranzini, Mrs. Mildred Ranzini, the various Ranzini
family trusts, and the shares included in note 6, above, is 1,313,121. In
addition, Mrs. Mildred Ranzini holds options on 15,000 shares of Common Stock.
EXECUTIVE OFFICERS
Joseph L. Ranzini and Stephen Lange Ranzini hold executive officer
positions with the Company, as indicated above under "Election of Directors".
Donald Rositano, age 34, is Chief Financial Officer of the Company. A
Certified Public Accountant, he was elected to such position in July 1997.
From June 1991 to February 1995, he was CFO of Bank One Fenton, Michigan. Bank
One Fenton was acquired by Citizens Bank of Flint, Michigan, and then from
March 1995 to July 1997 he was VP, Operations Control and Coordination Manager
and then Retail Deposit Product Manager with Citizens Bank. From November 1987
to June 1991 he was Corporate Auditor and Senior Auditor with Banc One
Corporation.
- 13 -
<PAGE> 14
Officers of the Company serve at the discretion of the Board of Directors
and generally are to be elected annually.
EXECUTIVE COMPENSATION
The following table sets forth information concerning all cash
compensation paid or accrued for services rendered in all capacities to the
Company and affiliates for the fiscal years ended December 31, 1997, 1996, and
1995, of the Chief Executive Officer of the Company, and the Chief Executive
Officer of the Bank, who was elected to such position in December 1995 and
resigned in November 1997. There were no other individuals whose salary and
bonus from the Company or its affiliates for the latest fiscal year exceeded
$100,000:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation($) Awards
------------------------ -------------------------
Other Securities
Name and Annual Restricted Underlying
Principal Compen- Stock Options/
Position Year Salary Bonus sation Awards($) SARs (#)
- ----------- ---- ------ ----- ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Stephen Lange 1997 $110,080 $ - $ 6,750 $6,884 -
Ranzini (1) (2) (3)(4)
President & 1996 $108,524 $ - $ - $2,605 -
CEO (1) (5)
1995 $103,750 $ - $ - $5,208 -
(1) (6)
Mark Ouimet 1997 $116,342 $300,000 $128,248 $ - -
former (7) (8)
Director & 1996 $127,000 $165,000 $ 8,507 $ - -
Pres. of (7) (9)
University
Bank 1995 $ 7,815 $ - $114,922 $ - 180,000
(10)
</TABLE>
- -----------------
(1) Salary in 1997, 1996 and 1995 includes $45,600, $44,025 and 41,250,
respectively, from Michigan BIDCO, Inc., for which Mr. Ranzini served as
Treasurer.
(2) Represents SEP IRA pension payment of $6,750 from Michigan BIDCO, Inc. in
1997.
(3) At the end of the Company's fiscal year ended December 31, 1997, 20,912
shares of the Company's common stock were allocated to Mr. Ranzini under
the Company's ESOP. Mr. Ranzini's rights in all of said shares are
vested. Valued at $3.25 per share, the last sale price of the Company's
common stock on December 31, 1997, the aggregate value of such shares was
$67,963.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
- 14 -
<PAGE> 15
(4) Allocation under the Company's ESOP of 2,118 shares of the Company's common
stock to Mr. Ranzini in August 1997.
(5) Allocation under the Company's ESOP of 782 shares of the Company's common
stock to Mr. Ranzini in June 1996.
(6) Allocation under the Company's ESOP of 1,689 shares of the Company's common
stock to Mr. Ranzini in April 1995.
(7) Includes $300,000 and $165,000 incentive bonus, pursuant to the terms of
his Employment Agreement, paid in 1997 and 1996 respectively.
(8) Includes severance of $115,000 paid in 1997, $80,000 to be paid in 1998
pursuant to the severance agreement, and perquisite amounts aggregating
$13,248 representing car lease payments allocable to 1997 and amounts
paid to or paid on behalf of Mr. Ouimet as reimbursement for certain
expenses incurred by him.
(9) Includes perquisite amounts aggregating $8,507 representing car lease
payments allocable to 1996 and amounts paid to or paid on behalf of Mr.
Ouimet as reimbursement for certain expenses incurred by him.
(10) Consists of bonus amounts paid to Mr. Ouimet in connection with the
commencement of his employment with University Bank, pursuant to the
terms of his Employment Agreement (in part to cover benefits from his
former employer foregone by Mr. Ouimet), including the issuance of 18,000
shares of Common Stock, valued for this purpose at $3.083 per share, the
closing bid for the Common Stock on December 31, 1995, and perquisite
amounts aggregating $9,422 representing car lease payments allocable to
1995 and amounts paid to Mr. Ouimet as reimbursement for certain expenses
incurred by him.
No options to purchase shares of Common Stock were granted to the
executive officers named in the above summary compensation table during 1997.
- 15 -
<PAGE> 16
Aggregated Option Exercises in Last Fiscal Year & FY-End Option Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized($) Unexercisable Unexercisable
- ----- ------------ ----------- -------------- -------------
<S> <C> <C> <C> <C>
Stephen Lange
Ranzini 0 - - -
Mark Ouimet
(exercisable) 0 - 180,000 (1) $45,000
(unexercisable) 0 - - (1) $ -
</TABLE>
(1) These options expired, unexercised effective January 1, 1998. Options
covering an additional 90,000 shares were reserved for Mr. Ouimet but
never vested because he left the Company's employment in November 1997.
Except as indicated in the above table and as indicated below in the
description of Mr. Ouimet's Employment Agreement, neither Stephen Lange Ranzini
nor Mark Ouimet received during the three fiscal years ended December 31, 1997
or held at December 31, 1997, any stock options, SAR grants or Long Term
Incentive Plan Awards.
The Company does not have a defined benefit or actuarial pension
plan.
On November 17, 1997, University Bank and the Company entered into a
severance agreement with Mr. Ouimet, under which terms Mr. Ouimet was paid
$115,000 in 1997 and an additional $80,000 was to be paid in 1998. The
severance agreement terminated an Employment Agreement among University Bank,
the Company and Mr. Mark Ouimet, providing for his retention as President and
Chief Executive Officer of the Bank. It provided for a base annual salary of
$127,000, increasing annually by a minimum of 5%, and bonus compensation tied
to the performance of the Bank's office(s) in the lower peninsula in Michigan,
with incremental bonus amounts payable upon the achievement of cumulative
financial milestones in terms of dollar amounts of deposits and of "on balance
sheet" loans. The total cumulative amount of bonuses available under the
Employment Agreement was $750,000, of which $300,000 was paid in 1997 and
$165,000 was paid in 1996.
Under the terms of the Employment Agreement options to purchase up to
270,000 shares of Common Stock at $3.00 per share were granted to Mr. Ouimet
under the Company's 1995 Stock Plan.
- 16 -
<PAGE> 17
Mr. Ouimet, under the terms of his Employment Agreement and the agreement
granting him such options, was entitled to loans from the Company to finance
the exercise price of such options. The options granted to Mr. Ouimet prior to
his leaving the Company's employment expired on January 1, 1998 and were not
exercised by Mr. Ouimet.
Under the terms of the Employment Agreement, Mr. Ouimet also received a
payment of $50,000 and the grant to him of 18,000 shares of Common Stock in
respect of benefits foregone by him from his prior employer, as well as an
amount to cover Mr. Ouimet's legal costs in connection with the negotiation,
review and execution of the Employment Agreement and to cover dental costs
through December 31, 1996.
Mr. Ouimet was also entitled to certain other benefits under the
Employment Agreement, including disability and life insurance coverage at the
Bank's cost, reimbursement for lease payments, maintenance, gas and insurance
on an automobile, participation in the Bank's medical savings account benefit
program, reimbursement for club and civic and professional association dues and
for continuing education, and matching charitable contributions as deemed
appropriate by the Bank's Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The management of the Company ("we") reviewed the Forms 3 and 4 and
amendments thereto furnished to the Company pursuant to Rule 16a-3(e)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), during its most recent fiscal year. We also reviewed the
Forms 5 and amendments thereto furnished to the Company with respect to its
most recent fiscal year, and written representations from executive officers
and directors of the Company that did not file a Form 5 with respect to its
most recent fiscal year, to the effect that no filing of a Form 5 is required
with respect to such person. Based upon our review, no person who, at any time
during the Company's most recent fiscal year, was a director, officer or
beneficial owner of more than 10% of the Company's Common Stock, failed, as
disclosed in the above Forms, to file on a timely basis, any reports required
by Section 16(a) of the Exchange Act.
COMPENSATION PLANS
University Bancorp, Inc. 1995 Stock Plan. The 1995 Stock Plan of the
Company was adopted by the Board of Directors in November 1995 (and amended in
April 1996) and later approved by the Company's stockholders. The purpose of
the 1995 Stock Plan is to provide incentives to officers, directors, employees
and consultants of the Company. Under the 1995 Stock Plan, officers and other
employees of the Company and any present or future parent or subsidiary
(collectively "Related Corporations") are provided with the opportunity to
purchase shares of Common Stock as "incentive stock options" ("ISOs"), as
defined in
- 17 -
<PAGE> 18
Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), and directors, officers, employees and consultants of the Corporation
and Related Corporations are provided with the opportunity to purchase shares
of Common Stock of the Company pursuant to options which do not qualify as ISOs
("Non-Qualified Options") and, in addition, such directors, officers, employees
and consultants may be granted awards of stock in the Company ("Awards") and
opportunities to make direct purchases of stock in the Company ("Purchases").
Both ISOs and Non-Qualified Options are referred to hereafter individually as
an "Option" and collectively as "Options". Options, Awards and Purchases are
referred to hereafter as "Stock Rights".
A total of 525,000 shares of Common Stock (as adjusted automatically per
the terms of the Plan as a result of the Company's February 1998 3 for 2 stock
split effected in the form of a 50% stock dividend of Common Stock) are
reserved for issuance upon the exercise of Options or in connection with Awards
or Purchases of stock under the 1995 Stock Plan (subject to adjustment for
capital changes). Shares subject to Options which for any reason expire or are
terminated unexercised may again be available for grant under the 1995 Stock
Plan. Unless sooner terminated, the 1995 Stock Plan will terminate on November
15, 2005.
The 1995 Stock Plan is administered by the Board of Directors of the
Company. The Board has the right, in accordance with the Plan, to appoint a
Compensation Commitee ("Compensation Committee") of three or more of its
members to administer the Plan. The Compensation Committee of the Board of
Directors has been established and provides recommendations to the Board on the
granting of options. The 1995 Stock Plan requires that each Option shall
expire on the date specified by the Compensation Committee, but not more than
ten years from its date of grant in the case of ISOs and not more than ten
years and one day in the case of Non-Qualified Options. However, in the case
of any ISO granted to an employee or officer owning more than 10% of the total
combined voting power of all classes of stock of the Company or any Related
Corporation, the ISO expires no more than five years from its date of grant.
Exercise of any Stock Right, in whole or in part, under the 1995 Stock
Plan is effected by a written notice of exercise delivered to the Company at
its principal office together with payment for the Common Stock in full, or, at
the discretion of the Compensation Committee, by the delivery of shares of
Common Stock of the Company, valued at fair market value, a promissory note, or
through an exercise notice payment procedure, or any combination thereof.
During 1997, options for a total of 140,700 shares of Common Stock were
granted under the 1995 Stock Plan. Options for a total of 22,753 shares of
Common Stock were exercised in 1997. As of March 31, 1998, options for a total
of 188,447 shares of Common Stock were outstanding under the 1995 Stock Plan
and 306,988 shares of Common Stock were available for grant of Stock Rights
under the 1995 Stock Plan.
- 18 -
<PAGE> 19
University Bancorp, Inc. Employee Stock Ownership Plan. The Company has
had in effect an employee stock ownership plan (the "ESOP") for eligible
employees of the Company and its subsidiaries. The ESOP is a qualified plan
under section 401(a) of the Internal Revenue Code, as amended. The ESOP
provides that the employer may contribute thereto such amounts as it may
determine and the contributions may be in cash or in stock, at the election of
the Company. Contributions are allocated among employees who have reached age
21, have at least one year of service and are employed more than 500 hours
throughout the year. Contributions are allocated in the proportion that the
employee's total compensation for the year (up to $200,000) bears to the total
compensation of all ESOP participants for the year (up to $200,000 per
participant). However, the sum of contributions and forfeitures allocated to
an employee in any year cannot exceed the lesser of $30,000 or 25 percent of
his or her compensation for the year, subject to indexing in accordance with
Internal Revenue Service regulations to reflect changes in the cost of living.
Employees who retire, die, become disabled or terminate their employment for
any other reason would receive the value of the vested portion of their
accounts, in cash or stock. Employees vest in their accounts in accordance
with a vesting schedule based on years of credited service. Employees have the
right to require the Company to repurchase shares distributed to them pursuant
to the terms of the ESOP. In 1997 and 1996, the Company contributed to the
ESOP 9,906 and 4,050 additional shares of Common Stock valued at $36,322 and
$15,056, respectively, based upon the then current bid price of the Company's
common stock of $3.6667, and $3.7083.
University Bank 401(k) Profit Sharing Plan. In 1996 the Bank replaced the
SEP IRA Plan with a new 401(k) Profit Sharing Plan (the "401(k) Plan"),
effective January 1, 1996, which allows an employee of the Company or any of
its subsidiaries who has reached age 18 and has completed one year of service
to elect to reduce their compensation by up to 12% (subject to specified
maximum limitations) and have such amounts contributed on their behalf to the
401(k) Plan. The 401(k) Plan provides for matching employer contributions for
each employee who elects to reduce his or her compensation. The amount of
matching contribution is up to the sole discretion of the employer. The
employer can also make additional discretionary contributions for participating
employees. The sum of an employee's salary reductions, and the matching and
discretionary contributions and forfeitures allocated to an employee in the
year could not exceed the lesser of $30,000 or 25 percent of his or her
compensation for the year, subject to indexing in accordance with Internal
Revenue Service regulations to reflect changes in the cost of living.
Participants in the 401(k) Plan who retire, die or terminate their employment
for any other reason after having completed at least five years of service
would receive the total amount of their account. No matching contributions
were made by the Bank for the years ended December 31, 1997 and 1996.
- 19 -
<PAGE> 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1993, a Rural Business and Industrial Development Company now
called Michigan BIDCO, Inc. was established (the "BIDCO"). The BIDCO is
licensed by the Michigan Financial Institutions Bureau (the "FIB") under the
State of Michigan BIDCO program, and regulated and examined by the Bank & Trust
Division of the FIB. The BIDCO invests in businesses in Michigan with the
objective of fostering job growth and economic development. In 1995 and 1996,
the Company purchased a total of $197,000 convertible debentures of BIDCO for
$203,000, convertible into 131 shares of BIDCO's shares, representing 4.97% of
BIDCO's shares on a fully diluted basis. Joseph L. Ranzini is the President
and Chairman of the Board of BIDCO and Stephen Lange Ranzini is the Treasurer.
Stephen Lange Ranzini received $52,350 in salary, SEP IRA and board fee
compensation from BIDCO in 1997. Joseph L. Ranzini received $99,018 in salary,
SEP IRA and board fee compensation from BIDCO in 1997.
When the BIDCO invests in businesses, it generally requires as part of its
lending and/or investing agreement the right to designate one seat on the board
of the companies in which it invests. Staff members of the BIDCO are assigned
the task of sitting on such boards. Remuneration for such board assignments is
paid directly to the BIDCO. In connection with his duties as Treasurer of
BIDCO, Stephen Lange Ranzini, is a director of Great Lakes Tissue, a tissue
paper mill, and Scanlan Communications, an ABC-TV broadcast affiliate. He also
serves as the President of Arbor Street Corp. (New Jersey), the General Partner
for Austin Trading Partners, LP, an investor in a mixed office waste deinked
pulp mill.
The BIDCO has, by general policy of its board of directors, a loan and
investment in one borrower limit of $500,000. From time to time, the BIDCO
receives loan and/or investment proposals from third parties requesting an
investment by the BIDCO in excess of this $500,000 limit. In such event, the
BIDCO has in certain instances formed single purpose limited liability
companies (the "LLCs") whose members, including Joseph and Stephen Ranzini, are
directors, shareholders and bondholders of the BIDCO to fund amounts over the
$500,000 limit. The outside investor groups invest on a pro rata, parri passu
(equal) basis with the BIDCO. Since the inception of the BIDCO the following
investments were made with investor group participation:
The BIDCO invested $500,000 and an LLC invested $800,000 of a $1,300,000,
5.5 year fully amortizing lease at 24% interest, plus an upfront $100,000
origination fee, secured by railroad boxcars through Northern Federal Leasing
LLC. The BIDCO invested $500,000 and an LLC invested $280,000 of a $780,000
investment in Northern Federal Pulp and Paper LLC, which made an equity
investment in Austin Trading Partners, LP (a partner in the Great Lakes Pulp
and Fibre recycle pulp mill being built in
- 20 -
<PAGE> 21
Menominee, Michigan). In each of these LLCs, Joseph and Stephen
Ranzini each contributed 1/9th of the LLCs' investment. The BIDCO invested
$42,000 and an LLC (in which Joseph and Stephen Ranzini each contributed 1/10th
of the LLCs' investment) invested $28,000 for a 50% equity investment in
Northern Federal Hotels LLC.
In 1995, the Bank, through a 98%-owned subsidiary, Arbor Street LLC
(Michigan), purchased $1,000,000 in federal low income housing tax credits
through a partnership investment in Michigan Capital Fund for Housing Limited
Partnership I, a Michigan limited partnership (the "Partnership"). The
investment consisted of a $100,000 equity purchase and the execution by Arbor
Street LLC of a $900,000 promissory note held by the Partnership (the "Note").
In connection with the execution of the Note, the Partnership required Joseph
L. Ranzini and the Ranzini Family Trust dated 12/20/89 to personally guarantee
the Note, because the Bank was prohibited from doing so by state banking
regulations. In exchange for arranging for the guaranty of the Note, Joseph L.
Ranzini and Stephen Lange Ranzini each received a 1% interest in Arbor Street
LLC.
The Bank had a vacant residential lot in Sault Ste. Marie, Michigan which
it had repossessed on its books and which it was unable to sell for a number of
years because the lot needed substantial investment before a home could be
built on it. In late 1996, the Bank arranged for Goldthorpe Enterprises, a
general contracting firm which is an affiliate of Robert Goldthorpe, a director
of the Company, to improve the lot and erect a pre-fabricated home on the lot.
The Bank financed the improvements and then sold the property to Goldthorpe
Enterprises for $101,905 in early 1997 based on the Bank's cost plus an annual
yield of 8.25% interest (the then current Prime Rate).
In February 1996, the Bank lent LDD Capital, which is not affiliated with
the Company, $300,000 secured by $800,000 of residential rental properties.
LDD Capital used the funds to acquire $300,000 principal amount of convertible
bonds of AIM Group, an SEC-registered industrial minerals firm listed on the
NASDAQ Bulletin Board in a $1,050,000 private placement. An LLC 2/3 owned by
members of the Ranzini family and their family trusts, and 1/3 owned by the
President of AIM Group also acquired $450,000 principal amount of convertible
bonds of AIM Group in the same private placement. In May 1997 LDD Capital
repaid the $300,000 loan from the Bank in full.
The Company maintains an investment securities account with Ladenburg
Thalmann & Co. Inc. Michael Talley, a director of the Company, receives
commissions on the transactions in this account. The Company pays commissions
at rates which are comparable to those paid in its other investment securities
accounts at other brokerage firms.
- 21 -
<PAGE> 22
Stephen Lange Ranzini, Prof. Paul Lange Ranzini and Dr. Joseph Lange
Ranzini are the sons of Joseph L. Ranzini and Mildred Ranzini.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountant selected to be the Company's principal
accountants for the fiscal year ending December 31, 1998 is Crowe, Chizek & Co.
A representative of such accounting firm is expected to be available by
speaker telephone at the Meeting. Such representative will have an opportunity
to make a statement, if he or she desires to do so, or to respond to
appropriate questions.
OTHER MATTERS
The cost of proxy solicitation will be borne by the Company. Banks,
brokers and other nominees will be reimbursed for their customary expenses
incurred in connection with the forwarding of proxy materials. In addition,
proxies may be solicited, without additional compensation, by directors,
officers and other regular employees of the Company and its subsidiaries by
telephone, telegraph, telecopy or in person.
Dated: April 27, 1998
- 22 -
<PAGE> 23
EXHIBIT A
ARTICLE FOURTH OF THE
COMPANY'S CERTIFICATE OF INCORPORATION,
AS PROPOSED TO BE AMENDED AND RESTATED
FOURTH. The Corporation shall be authorized to issue two classes of capital
stock to be designated, respectively, "Common Stock" and "Preferred Stock"; the
total number of shares which the Corporation shall have the authority to issue
is Five Million Five Hundred Thousand (5,500,000)); the total number of shares
of Common Stock shall be Five Million (5,000,000) and each such share shall
have a par value of $0.01; and the total number of shares of Preferred Stock
shall be Five Hundred Thousand (500,000) and each such share shall have a par
value of $0.001. Any shares of the Preferred Stock may be issued from time to
time in one or more series for such consideration as may be fixed from time to
time by the Board of Directors of the Corporation. Before any shares of
Preferred Stock of any particular series will be issued, a certificate will be
filed with the Secretary of State of Delaware setting forth the designation,
rights, privileges, restrictions, and conditions to be attached to the
Preferred Stock of such series and such other matters as may be required, and
the Board of Directors will fix and determine, in the manner provided by law,
the particulars of the shares of such series, whether such series shall have
voting rights, whether such series shall have conversion privileges, whether or
not the shares of such series shall be redeemable, whether such series shall
have a sinking fund for the redemption or purchase of shares of that series,
the rights of the shares of such series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and the
relative rights of priority, if any, of payment of shares of that series; and
any other relative rights, preferences and limitations of such series.
- 23 -
<PAGE> 24
UNIVERSITY BANCORP, INC.
This proxy is solicited on behalf of the Board of Directors for the Annual
Meeting of Stockholders of University Bancorp, Inc. (the "Company") scheduled
for June 9, 1998.
The undersigned hereby appoints Joseph L. Ranzini, Stephen Lange Ranzini
and Robert Goldthorpe, and each of them individually, proxies, with full power
of substitution, to vote all shares of Common Stock of the undersigned at the
Annual Meeting of Stockholders (the "Meeting") scheduled to be held on June 9,
1998, and at any adjournment(s) thereof, upon all subjects that may properly
come before the Meeting and any adjournments thereof, including the matters
described in the proxy statement furnished herewith, subject to any directions
indicated on the reverse side of this proxy. If no directions are given, the
proxies will vote "FOR" the election of all listed nominees for election as
Directors and "FOR" Proposal No. 2, and at their direction on any other matter
that may properly come before the Meeting or any adjournment thereof.
Your vote for the election of directors, described in the proxy statement
may be indicated on the reverse side of this proxy.
The nominees for election as directors are: Keith Brenner, Robert
Goldthorpe, Joseph L. Ranzini, Dr. Joseph Lange Ranzini, Mildred Ranzini, Prof.
Paul Lange Ranzini, Stephen Lange Ranzini and Michael Talley.
_________________________________________________________________
The Board of Directors recommends a vote FOR all listed
candidates for election as Directors and FOR Proposal No. 2.
_________________________________________________________________
(SEE REVERSE SIDE)
<PAGE> 25
This proxy, when properly executed, will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR the election as
Directors of the nominees listed on the reverse side of this proxy and "FOR
Proposal No. 2.
ELECTION OF DIRECTORS (see reverse side for list of nominees)
FOR WITHHELD FOR, except vote withheld from the
following nominee(s):
[ ] [ ]
__________________________________
__________________________________
PROPOSAL NO. 2 (the amendment of the Article FOURTH of the Certificate of
incorporation of the Company to increase the amount of the authorized
shares of Common Stock from 2,500,000 to 5,000,000 and accordingly the
total number of authorized shares of capital stock from 3,000,000 to
5,500,000)
FOR AGAINST WITHHELD
[ ] [ ] [ ]
The signer hereby revokes all
proxies heretofore given by
the signer to vote at the
Meeting or any adjournment
thereof.
Dated:__________________
x_______________________
Signature
Stockholder: ________________________
Signature (if held jointly)
Please sign above exactly as
name appears hereon. Joint
owners should each sign. When
signing as officer, attorney,
executor, administrator,
trustee or guardian, please
give full title as such.
