<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:
[X] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14(a)(6)(e)(2)
[ ] 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
PRELIMINARY PROXY MATERIAL
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, 1997 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
<TABLE>
<CAPTION>
Page
----
<S> <C>
General Information 2
Election of Directors 3
Proposal 2: Proposal to Amend Article FOURTH of the Company's
Certificate of Incorporation 7
Security Ownership of Certain Beneficial
Owners and Management 10
Executive Officers 12
Executive Compensation 12
Section 16(a) Beneficial Ownership Reporting Compliance 16
Compensation Plans 16
Certain Relationships and Related Transactions 18
Independent Public Accountants 21
Other Matters 21
</TABLE>
<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. 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.
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
<PAGE> 5
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 of Brenner & Associates, a strategic planning and marketing
consulting firm, located in Boulder, Colorado.
- 6 -
<PAGE> 7
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 at L.F. Rothschild
Unterberg Towbin in New York, New York. Mr.
- 7 -
<PAGE> 8
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 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.
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.
ITEM 3:
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> <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 29,582 (7)(9) 1.47%
135 Green Meadow Lane Stock
Boulder, CO 80302
</TABLE>
(TABLE CONTINUED AND FOOTNOTES LOCATED ON FOLLOWING PAGE)
- 11 -
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
Robert Goldthorpe Common 52,500 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 1,462,703 (2)(3)(7) 70.87%
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 and 1,830 shares owned by Copy Time Communications,
Ltd., a company owned 50% by Mr. Brenner, for which, Mr. Brenner advises, he
has sole voting and investment power.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
(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 as
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 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
- 13 -
<PAGE> 14
Bank. From November 1987 to June 1991 he was Corporate Auditor and Senior
Auditor with Banc One Corporation.
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
$100,000:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation($) 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>
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
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
- 14 -
<PAGE> 15
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.
(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>
[footnote on following page]
(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 in 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 or 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" Proposals 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.
