SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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
[ ] Definitive proxy statement permitted by Rule
14a-6(e) (2) )
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
REPUBLIC 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: ______
______________________________________________________________________
(2) Aggregate number of securities to which transaction applies: ________
______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________
(4) Proposed maximum aggregate value of transaction: _____________________
______________________________________________________________________
(5) Total fee paid: ______________________________________________________
[ ] Fees 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: _____________________________________________
(2) Form, schedule or registration statement no.: _______________________
(3) Filing party: _______________________________________________________
(4) Date filed: _________________________________________________________
<PAGE>
Notice Of Annual Meeting Of Shareholders
The Annual Meeting of Shareholders of Republic Bancorp Inc. (the
"Company") will be held at the Novi Hilton, 21111 Haggerty Road, Novi,
Michigan 48050, on Wednesday, April 23, 1997 at 9:00 a.m., local time, for
the following purposes:
1. To elect fifteen (15) directors of the Company to hold office
until the next annual meeting of shareholders or until their successors are
elected and qualified.
2. To amend the Company's Articles of Incorporation to increase its
authorized common stock, $5.00 par value, from 20,000,000 shares to
30,000,000 shares.
3. To approve the adoption of the Republic Bancorp Inc. 1997 Stock
Option Plan.
4. To consider and act upon any other matters which may properly come
before the meeting.
Shareholders of record at the close of business on March 7, 1997 are
entitled to notice of and to vote at the meeting and at any adjournments
thereof.
By order of the Board of Directors,
George E. Parker, III
General Counsel and
Corporate Secretary
Dated: March 17, 1997
It is important that your shares be represented at the meeting, even if
you expect to attend.
PLEASE SIGN AND RETURN YOUR PROXY CARD PROMPTLY.
<PAGE>
PROXY STATEMENT
Annual Meeting of Shareholders
Republic Bancorp Inc.
April 23, 1997
GENERAL INFORMATION
This Proxy Statement is furnished to shareholders of Republic Bancorp
Inc. in connection with the solicitation of proxies by the Company's Board of
Directors for use at the Annual Meeting of Shareholders to be held at 9:00
a.m., local time, on April 23, 1997 at the Novi Hilton, 21111 Haggerty Road,
Novi, Michigan 48050, and at any adjournments thereof. It is expected that
the proxy materials will be mailed to shareholders on or about March 17,
1997.
The registered office of the Company is located at 122 South Main
Street, Ann Arbor, Michigan 48104, telephone number (313) 665-4030.
Shareholders who have questions regarding the matters to be voted on at the
Annual Meeting should address them to George E. Parker, III General Counsel
and Corporate Secretary, at the Company's principal office at 1070 East Main
Street, P.O. Box 70, Owosso, Michigan 48867, telephone number (517) 725-7337.
All votes will be tabulated by employees of Boston EquiServe, a Bank
Boston/State Street Service Company, the Company's transfer agent for the
Common Stock, who will serve as inspectors of election. Abstentions and
broker non-votes are each included in the determination of the number of
shares present and voting. Abstentions are counted for purposes of
determining whether a proposal has been approved, whereas broker non-votes
are not.
A proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted by (1) filing with the
Corporate Secretary of the Company, at or before the Annual Meeting, a
written notice of revocation bearing a date later than that of the proxy, (2)
duly executing a subsequent proxy relating to the same shares and delivering
it to the Corporate Secretary of the Company, or (3) attending the Annual
Meeting and voting in person. Any written notice of revocation should be sent
to the Company at its principal office, Attention: George E. Parker, III
General Counsel and Corporate Secretary. All proxies will be voted in
accordance with the direction of the shareholder executing such proxy and, to
the extent no directions are given, they will be voted "for" approval for
election of the nominees for directors.
Solicitation of proxies will be made by mail, personally or by
telephone, by directors, officers and regular employees of the Company. The
Company will request brokerage houses and other custodians, nominees and
fiduciaries to forward soliciting materials to the beneficial owners of the
voting securities of the Company held of record by such persons, and will
reimburse them for their reasonable charges and out-of-pocket expenses in
connection therewith. All expenses of solicitation of proxies will be paid by
the Company.
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<PAGE>
ELECTION OF DIRECTORS
The directors of the Company who have been nominated for reelection
to the Board for a one year term, and their respective positions with the
Company are as follows:
<TABLE>
<CAPTION>
Officer/
Name Position Director Since
- ---- ------------------------- --------------
<S> <C> <C>
Jerry D. Campbell Chairman of the Board and 1985
Chief Executive Officer
Dana M. Cluckey President, Chief Operating 1986/1995
Officer and Director
Bruce L. Cook Director 1985
Richard J. Cramer Director 1991
George A. Eastman Director 1990
Howard J. Hulsman Director 1985
Gary Hurand Director 1990
Dennis J. Ibold Director 1993
Stephen M. Klein Director 1988
John J. Lennon Director 1993
Sam H. McGoun Director 1990
Kelly E. Miller Director 1990
Joe D. Pentecost Director 1985
George B. Smith Director 1987
Jeoffrey K. Stross Director 1993
</TABLE>
Each of the above-listed directors is willing to serve another term
on the Board. If any director at the time of reelection is unable to serve,
or is otherwise unavailable for election, and if other nominees are
designated, the persons named in the enclosed form of proxy shall have the
discretionary authority to vote or refrain from voting in accordance with
their judgment on such other nominees. However, if any nominees are
substituted by the Board of Directors, the persons named in the accompanying
form of proxy intend to vote for such nominees.
The Bylaws of the Company provide for a Board of Directors (the
"Board") of not less than six (6) nor more than thirty (30) persons. The
current Board of Directors has determined that the number of directors who
shall serve on the Board for the ensuing term shall be fifteen (15) persons.
The terms of each current director will expire at the Annual Meeting. It is
therefore the intention of the persons named on the enclosed form of proxy to
vote such proxy for reelection of the above-listed current Board members,
each of whose term shall expire at the 1998 Annual Meeting. Nominees
receiving a plurality of votes cast at the meeting will be elected directors.
All proxies will be voted in accordance with the direction of the shareholder
executing such proxy and, to the extent no directions are given, they will be
voted "for" approval for election of the nominees for directors.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION
OF ALL NOMINEES AS DIRECTORS.
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AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE ITS
AUTHORIZED COMMON STOCK
The Board of Directors of the Company recommends approval of the
proposed Amendment of the Company's Articles of Incorporation to increase its
authorized Common Stock, $5.00 par value, from 20,000,000 shares currently
authorized to 30,000,000 shares. As of the close of business on March 7,
1997, there were ______ shares of Common Stock outstanding. The Amendment
will be adopted if it is approved by the affirmative vote of the majority of
the shares of Common Stock outstanding. Abstentions on this proposal will be
counted for quorum purposes but not voted.
The Board of Directors has recommended the Amendment in order for the
Company to have additional authorized and unissued shares of Common Stock for
additional stock dividends and for possible future aquisitions, although the
Company has no immediate plans to issue the additional authorized shares if
the Amendment is approved. No further shareholder authorizations will be
required for the Company's issuance of these additional shares.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE INCREASE OF
AUTHORIZED COMMON STOCK TO 30,000,000 SHARES.
1997 STOCK OPTION PLAN
Background
In 1996 the Company's existing Non-Qualified Stock Option Plan (the
"Non-Qualified Plan") concluded in accordance with its terms. The Company
acted to extend the option period for all options granted under the
Non-Qualified Plan for an additional five year term on January 16, 1997. At
the same time, the Board extended the exercise period under all outstanding
warrants issued with respect to the Company's Common Stock for an additional
five year term.
The Board adopted the 1997 Stock Option Plan (the "Plan") on January
16, 1997, subject to the approval of the Company's shareholders. The Board
believes that the Plan will further assist the Company in attracting,
retaining and motivating the best qualified officers and other key employees,
and will further enhance the long-term mutuality of interest between the
Company's shareholders and its officers and key employees. The principal
features of the Plan are summarized below.
Summary of Principal Features of the Plan
Under the 1997 Stock Option Plan, the Personnel, Nominating and
Compensation Committee ("Compensation Committee") may grant options to
officers and other key employees of the Company and its subsidiaries
("participants"). The number of participants and the number of shares of
Common Stock subject to options awarded to each participant may vary from
year to year. The maximum number of shares of Common Stock for which a
participant may receive awards of options is limited to 37,500 shares of
Common Stock over a one-year period. As of the date of this Proxy Statement,
no determination has been made regarding the identity of the officers and key
employees to whom awards of options may be made under the 1997 Stock Option
Plan or the number and type of such awards that will be made to any such
officer or key employee. The Company estimates that approximately 100
employees of the Company will be eligible to receive options under the 1997
Stock Option Plan, including the current Chief Executive Officer and the
other most highly compensated current executive officers named in the Summary
Compensation Table.
The maximum number of shares of Common Stock that may be issued under
the 1997 Stock Option Plan is 750,000. The shares of Common Stock may be
unissued shares or issued shares that were reaquired by the Company. The
aggregate number of shares of Common Stock available for options under this
plan, the shares subject to any option, and the price per share, will all be
proportionately adjusted for any subsequent increase or decrease in the
number of issued shares of Common Stock resulting from (i) a subdivision or
consolidation of shares or any other capital adjustment, (ii) the payment of
a stock dividend, or (iii) other increase or decrease in such shares effected
without receipt of consideration by the Company. Upon dissolution or
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<PAGE>
liquidation of the Company, all options outstanding under the 1997 Stock
Option Plan will terminate; provided, however, that each participant (and
each other person entitled under the 1997 Stock Option Plan to exercise an
option) will have the right, immediately prior to such dissolution or
liquidation, to exercise such options in whole or in part, but only to the
extent that such options are otherwise exercisable under the terms of the
1997 Stock Option Plan. If shares of Common Stock under an option are not
issued, those shares will again be available for inclusion in future grants.
Grants Under The Plan
The Committee may grant participants options qualifying as incentive
stock options under Section 422 of the Internal Revenue Code (the " Code") or
non-qualified stock options. The exercise price of either a non-qualified
stock option or an incentive stock option will be equal to the greater of the
fair market value of the shares of Common Stock on the date of grant or the
par value per share of Common Stock. With respect to any individual who owns
10% or more of the total combined voting power of all classes of stock of the
Company or a subsidiary (a "10% Owner"), the exercise price for an incentive
stock option will be not less than 110% of the fair market value of the
shares of Common Stock on the date of grant. For purposes of the 1997 Stock
Option Plan, fair market value means, on any date, the closing price of the
shares of Common Stock as reported on the Nasdaq National Market on such
date.
The exercise price of an option will be payable (i) in full in cash
or check made payable to the Company's order; or (ii) in full through a sale
and remittance procedure pursuant to which a participant will (A) provide
irrevocable written instructions to a designated brokerage firm to effect the
immediate sale of the shares of Common Stock to be purchased and remit to the
Company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the shares
of Common Stock to be purchased and (B) will concurrently provide written
directives to the Company to deliver the certificates for the shares of
Common Stock to be purchased directly to such brokerage firm in order to
complete the sale transaction. The term of each option will be fixed by the
Committee but may not exceed ten years from the date of grant. With respect
to a 10% Owner, the term of any incentive stock option may not exceed five
years from the date of grant. The Committee will determine the time or times
when each option may be exercised. Options may be made exercisable in
installments, and the exercisability of options may be accelerated by the
Committee. The Committee may, in its discretion, include in any option
granted under the 1997 Stock Option Plan a condition that the grantee of an
option agree to remain in the employ, and to render services to, the Company
or any of its subsidiaries for a specified period of time following the date
the option is granted. No such condition or agreement will impose upon the
Company or any of its subsidiaries, however, any obligation to employ such
individual for any period of time.
If a participant ceases to be employed by the Company or any of its
subsidiaries, then his or her options will terminate immediately. If a
participant's cessation of employment with the Company and its subsidiaries
is due to retirement with the consent of the Company or any of its
subsidiaries, he or she may, at any time within three (3) months after such
cessation of employment, exercise his or her options to the extent that he or
she was entitled to exercise them on the date of cessation of employment, but
in no event shall any option be exercisable more than ten (10) years from the
date it was granted. If a participant's cessation of employment with the
Company and its subsidiaries is due to permanent disability (within the
meaning of Code Section 22(e)(3)), the participant will have twelve (12)
months after the date of termination of employment, but in no event after the
stated expiration date of the participant's options, to exercise options that
the participant was entitled to exercise on the date the participant's
employment terminated as a result of the disability. The Committee may cancel
an option during the three (3) or twelve (12) month periods referred to in
this paragraph, if the participant engaged in employment or activities
contrary, in the opinion of the Committee, to the best interests of the
Company or any of its subsidiaries.
Awards under the 1997 Stock Option Plan are not transferable except
by will or the laws of descent and distribution and during a participant's
lifetime may be exercised only by the participant. If a participant dies
while employed by the Company or any of its subsidiaries or within three (3)
months after having retired with the consent of the Company or any of its
subsidiaries, and without having fully exercised his or her options, the
executors or administrators, or legatees or heirs, of the participant's
estate will have the right to exercise such options to the extent that such
deceased participant was entitled to exercise the options on the date of the
participant's death.
The Board, by resolution, may terminate, amend or revise the 1997
Stock Option Plan at any time but such termination, amendment or revision
will not affect any options then outstanding under the 1997 Stock Option
Plan. Unless terminated by action of the Board, the 1997 Stock Option Plan
will continue in effect until January 16, 2007, but awards granted prior to
such date will continue in effect until they expire in accordance with their
terms. While the Board may amend the 1997 Stock Option Plan as it deems
advisable, it is presently intended that all material amendments
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<PAGE>
to this plan will be submitted to the shareholders for their approval to the
extent required by Rule 16b-3 promulgated under the Securities Exchange Act
of 1934 (the "Exchange Act") as time to time in effect and the Code. No
amendment without the approval of the stockholders of the Company shall be
made if stockholder approval under Code Section 422 or Rule 16b-3 would be
required. The Committee may amend, modify or terminate any outstanding option
held by a participant, including substituting therefor another option of the
same or a different type, changing the date of exercise or vesting and
converting an incentive stock option to a non-qualified stock option,
provided that the Participant's consent to such action will be required
unless the Committee determines in its sole discretion that the action,
taking into account any related action, would not materially and adversely
affect the participant.
Federal Income Tax Consequences
Non-qualified Stock Options. An individual will not recognize income
upon the grant of a non-qualified stock option. The individual may recognize
ordinary income upon the exercise of a non-qualified stock option, in which
event the Company will receive a tax deduction for compensation equal to the
amount of income recognized, for the excess of the fair market value on the
exercise date of the shares of Common Stock acquired over the aggregate
exercise price paid. Any ordinary income recognized by an individual upon the
exercise of a non-qualified stock option will increase such individual's tax
basis for the shares of Common Stock received. Upon a subsequent sale or
exchange of such shares, the individual will recognize capital gain or loss
to the extent of the difference between the selling price of such shares and
his tax basis in such shares. Such gain or loss will be long-term or
short-term capital gain or loss, depending on the individual's holding period
for such shares of Common Stock.
Incentive Stock Options. An employee will not recognize income upon
either the grant of an incentive stock option or upon the exercise of the
incentive stock option. The employee will recognize gain or loss, depending
on such individual's basis in the shares of Common Stock (which is generally
equal to the exercise price paid for the shares of Common Stock), upon the
sale or other disposition of the shares of Common Stock acquired upon
exercise. If certain statutory holding periods are met, such gain or loss
will be long-term capital gain or loss and the Company will not be entitled
to any Federal income tax deduction. If the holding periods are not met, the
employee may be required to recognize ordinary income and the Company will be
entitled to a tax deduction for compensation equal to the amount of ordinary
income, if any, recognized, provided that applicable withholding requirements
are satisfied. Incentive stock options will be treated as non-qualified stock
options to the extent that the aggregate fair market value of the shares of
Common Stock (determined at the time the options are granted) with respect to
which incentive stock options are exercisable for the first time by an
individual during a calendar year (whether as a result of acceleration of
exercisability or otherwise) exceeds $100,000. An employee who exercises an
incentive stock option may be subject to an alternative minimum tax since,
for purposes of the alternative minimum tax, the option will be treated as a
non-qualified stock option. Accordingly, the taxable event for alternative
minimum tax purposes will generally occur on the exercise of the option.
Other Matters. The 1997 Stock Option Plan is intended to comply with
Section 162(m) of the Code which was enacted as part of the Omnibus Budget
Reconciliation Act of 1993. Upon the approval of the 1997 Stock Option Plan
by the shareholders, options awarded under the 1997 Stock Option Plan will
qualify as performance-based compensation, as defined in Code Section 162(m)
and the regulations issued by the Department of the Treasury under such
section. As such, the income attributable to such options is not subject to
the $1 million deduction limit of Code Section 162(m).
Recommendation and Vote
To be approved, this proposal requires the affirmative vote of the
holders of a majority of the voting stock of the Company present in person or
represented by proxy at the Annual Meeting and entitled to vote thereon.
Abstentions on this proposal will be counted for quorum purposes but not
voted.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
ADOPTION OF THE REPUBLIC BANCORP INC. 1997 STOCK OPTION PLAN
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<PAGE>
VOTING SECURITIES
Holders of record of Republic Bancorp Inc. Common Stock, $5.00 par
value (Common Stock), at the close of business on March 7, 1997, will be
entitled to vote at the annual meeting of shareholders on April 23, 1997, and
any adjournments of that meeting. As of March 7, 1997, there were ________
shares of Common Stock issued and outstanding. Each share of Common Stock is
entitled to one vote on each matter presented for shareholder action.
The following table sets forth certain information concerning the
number of shares of the Company's Common Stock as of December 31, 1996, of
each of the Company's directors, each of the named executive officers, and
for all directors and executive officers of the Company as a group. There are
no shareholders known to Republic Bancorp Inc. management to have been the
beneficial owner of more than 5% of the outstanding shares of Common Stock as
of December 31, 1996.
<TABLE>
<CAPTION>
Percentage of
Outstanding
Name of Shares Common Shares
Beneficial Owner Beneficially Owned (1) Beneficially Owned
- ------------------ ----------------------- ------------------
<S> <C> <C>
Jerry D. Campbell,
Chairman of the Board and
Chief Executive Officer 335,176 (2) 1.92%
Dana M. Cluckey, President,
Chief Operating Officer and
Director 53,893 (3) *
Barry J. Eckhold,
Vice President,
Chief Credit Officer and Secretary 29,338 (4) *
Thomas F. Menacher, Senior Vice
President, Treasurer and Chief
Financial Officer 29,592 (5) *
Bruce L. Cook, Director 55,904 (6) *
Richard J. Cramer, Director 51,932 (7) *
George A. Eastman, Director 147,672 (8) *
Howard J. Hulsman, Director 374,466 (9) 2.18%
Gary Hurand, Director 57,450 (10) *
Dennis J. Ibold, Director 104,210 (11) *
Stephen M. Klein, Director 83,268 (12) *
John J. Lennon, Director 21,590 (13) *
Sam H. McGoun, Director 30,053 (14) *
Kelly E. Miller, Director 127,441 (15) *
Joe D. Pentecost, Director 253,473 (16) 1.48%
George B. Smith, Director 636,326 (17) 3.71%
Jeoffrey K. Stross, Director 20,760 (18) *
All Directors and Executive
Officers as a group (17 persons) 2,412,544 (19) 13.73%
<FN>
- ---------
* Indicate that the designated individual owns less than one percent of the
Company's Common Shares.
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(1) The numbers of shares stated are based on information furnished by
each person listed and include shares personally owned of record by
that person and shares that are considered to be otherwise
beneficially owned by that person. A beneficial owner of a security
includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has
or shares voting power or dispositive power with respect to the
security. Voting power includes the power to vote or direct the
voting of the security. Dispositive power includes the power to
dispose or direct the disposition of the security. A person will also
be considered the beneficial owner of a security if the person has a
right to acquire beneficial ownership of the security within 60 days.
Unless otherwise indicated below, each beneficial owner named has
sole voting and investment power with respect to the shares
identified.
(2) Of the 335,176 shares beneficially owned by Mr. Campbell, (i) 33,675
shares are owned directly by Mr. Campbell, (ii) 12,907 shares are
owned by Mr. Campbell and held in the Company's 401(k) plan, (iii)
2,035 shares are owned by Volar Corporation, a corporation wholly
owned by Mr. Campbell, and (iv) 286,559 shares are available to Mr.
Campbell upon exercise of options he holds.
(3) Of the 53,893 shares beneficially owned by Mr. Cluckey, (i) 17,437
shares are owned directly by Mr. Cluckey, (ii) 6,619 shares are owned
by Mr. Cluckey and held in the Company's 401(k) plan, (iii) 94 shares
are owned jointly with his spouse, (iv) 21,230 shares are Restricted
Stock in which Mr. Cluckey maintains full voting rights, and (v)
8,513 shares are available upon exercise of warrants he holds.
(4) Of the 29,338 shares beneficially owned by Mr. Eckhold, (i) 10,392
shares are owned by Mr. Eckhold and held in the Company's 401(k)
plan, (ii) 13,853 are owned jointly with his spouse, (iii) 1,100
shares are Restricted Stock in which Mr. Eckhold maintains full
voting rights, and (iv) 3,993 shares are available upon exercise of
options he holds.
(5) Of the 29,592 shares beneficially owned by Mr. Menacher, i) 59 shares
are owned directly by Mr. Menacher, ii) 2,369 shares are owned by Mr.
Menacher and held in the Company's 401(k) plan, iii) 1,331 are owned
jointly with his spouse, iv) 14,520 shares are Restricted Stock in
which Mr. Menacher maintains full voting rights, and v) 11,313 shares
are available upon exercise of options he holds.
(6) Of the 55,904 shares beneficially owned by Mr. Cook, (i) 38,582
shares are owned directly by Mr. Cook, and (ii) 17,322 shares are
available upon exercise of warrants he holds.
(7) Of the 51,932 shares beneficially owned by Mr. Cramer, (i) 32,764
shares are owned directly by Mr. Cramer, (ii) 2,662 shares are owned
by trusts of which he is trustee, (iii) 1,590 shares are owned
jointly with his spouse, and (iv) 14,916 shares are available upon
exercise of warrants he holds.
(8) Of the 147,672 shares beneficially owned by Mr. Eastman, (i) 132,861
shares are held jointly with his spouse, and (ii) 14,811 shares are
available upon exercise of warrants he holds.
(9) Of the 374,466 shares beneficially owned by Mr. Hulsman, (i) 213,841
shares are owned directly by Mr. Hulsman, (ii) 142,551 shares are
owned by trusts of which Mr. Hulsman is trustee, and (iii) 18,074
shares are available upon exercise of warrants he holds.
(10) Of the 57,450 shares beneficially owned by Mr. Hurand, (i) 37,268
shares are owned directly by Mr. Hurand, (ii) 2,024 shares are owned
by a partnership in which he has an interest, (iii) 2,653 are owned
jointly with his spouse, and (iv) 15,505 shares are available upon
exercise of warrants he holds.
(11) Of the 104,210 shares beneficially owned by Mr. Ibold, (i) 88,780
shares are owned directly by Mr. Ibold, (ii) 6,736 shares are held by
his spouse, (iii) 4,393 shares are owned by Mr. Ibold's son's trust
for which Mr. Ibold's father serves as trustee, (iv) 110 shares are
owned by Mr. Ibold's stepson, (v) 4,191 shares are available upon
exercise of warrants he holds.
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<PAGE>
(12) Of the 83,268 shares beneficially owned by Mr. Klein, (i) 2,220
shares are owned directly by Mr. Klein (ii) 63,990 shares are
controlled by Mr. Klein through a trust for which he is custodian,
and (iii) 17,058 shares are available upon exercise of warrants he
holds.
(13) Of the 21,590 shares beneficially owned by Mr. Lennon, (i) 17,399
shares are owned directly by Mr. Lennon and (ii) 4,191 shares are
available upon exercise of warrants he holds.
(14) Of the 30,053 shares beneficially owned by Mr. McGoun, (i) 1,697
shares are directly owned by Mr. McGoun, (ii) 22,701 shares are
controlled by his spouse through a trust for which she is the
custodian, and (iii) 5,655 shares are available upon exercise of
warrants he holds.
(15) Of the 127,441 shares beneficially owned by Mr. Miller, (i) 120,717
shares are owned directly by Mr. Miller, and (ii) 6,724 shares are
available upon exercise of warrants he holds.
(16) Of the 253,473 shares beneficially owned by Mr. Pentecost, (i) 5,776
shares are owned directly by Mr. Pentecost, (ii) 98,898 shares are
controlled by Mr. Pentecost through a trust for which he is
custodian, (iii) 7,200 shares are held by his spouse, (iv) 3,709
shares are owned jointly by his spouse and several grandchildren, (v)
133,699 shares are held by Better Properties Inc., a corporation of
which he is President, and (vi) 4,191 shares are available upon
exercise of warrants he holds.
(17) Of the 636,326 shares beneficially owned by Mr. Smith, (i) 9,317
shares are owned directly by Mr. Smith, (ii) 19,368 shares are owned
by Mr. Smith and held in the Company's 401(k) plan, (iii) 607,641
shares are owned jointly by Mr. Smith and his spouse.
(18) Of the 20,760 shares beneficially owned by Mr. Stross, (i) 15,105
shares are owned directly by Mr. Stross, and (ii) 5,655 shares are
available upon exercise of warrants he holds.
(19) Includes 301,865 and 136,806 shares of Common Stock available upon
exercise of options and warrants, respectively, for all directors and
executive officers as a group. On January 16, 1997, the Company's
Board of Directors extended the exercise period for all options
granted under the Non-Qualified Stock Option Plan and all outstanding
warrants with respect to the Company's Common Stock for an additional
five-year term.
</TABLE>
8
<PAGE>
BOARD OF DIRECTORS:
Biographical information concerning nominees for election to the Board of
Directors at the annual meeting is presented below:
JERRY D. CAMPBELL He has served as Chairman of the Board since the
Company was organized and has served as Chief
Executive Officer since April 1986. From April
1986 to January 1996, Mr. Campbell also served as
President of the Company. Presently, Mr. Campbell
is a director of Newcor, Inc., a director of
Mercantile Bank of Naples, Florida and a director
of Physicians Insurance Company of Michigan of
Okemos, Michigan. Mr. Campbell has a B.S. degree
in liberal arts from Central Michigan University,
an M.B.A. degree from Wayne State University and
an M.B.A. degree from The University of Michigan.
Mr. Campbell is 56.
DANA M. CLUCKEY He has served as President of the Company since
January 1996, and has been employed by the Company
since September 1986. From November 1992 to
January 1996 he was Executive Vice President and
Treasurer, from October 1987 to November 1992 he
was the Chief Financial Officer of the Company and
from September 1986 to October 1987 he was
Controller of the Company and Cashier of Republic
Bank. Mr. Cluckey has a B.B.A. degree from The
University of Michigan and is a Certified Public
Accountant. Mr. Cluckey is 37.
BRUCE L. COOK He is Chairman of Wolverine Sign Works of Owosso,
Michigan, a family-owned company specializing in
outdoor advertising, and has served in that
capacity, or as President of the Company for
several years. Mr. Cook was also President and
owner of Fairlane Builders, Inc., a residential
construction and development company, from 1954
through 1971. Mr. Cook has both a B.B.A. and an
M.B.A. degree from The University of Michigan. Mr.
Cook is 68.
RICHARD J. CRAMER He is President of Dee Cramer, Inc., sheet metal,
heating and air conditioning contractors, where he
has been employed since 1964. Mr. Cramer has a
B.S. degree from University of Notre Dame and an
M.S. degree from Michigan State University. Mr.
Cramer is 56.
GEORGE A. EASTMAN He is an Orthodontic Consultant. Mr. Eastman
previously had a private practice in Flint,
Michigan since 1963. Dr. Eastman has an M.S.
degree from The University of Michigan and a D.D.S
degree from The University of Michigan. Mr.
Eastman is 62.
HOWARD J. HULSMAN He is Chairman of the Board of Ross Learning,
Inc., a private educational concern of Oak Park,
Michigan, and has served in that capacity since
July 1984. From August 1973 to July 1984, he
served as the President of Ross Learning, Inc. Mr.
Hulsman has a B.S. degree from Ferris State
College and an M.A. degree from Central Michigan
University. Mr. Hulsman is 58.
GARY HURAND He is President of Dawn Donut Systems, Inc., and
has served in that capacity since 1971. Mr. Hurand
is a director of BRT Realty Trust, a publicly held
company located in Great Neck, New York. Mr.
Hurand has a B.A. degree from Michigan State
University. Mr. Hurand is 50.
DENNIS J. IBOLD He is a partner at Petersen & Ibold (attorneys at
law) of Chardon, Ohio and has served in that
capacity since 1973. Mr. Ibold has a B.A. degree
from Marquette University and a J.D. degree from
Cleveland State University. Mr. Ibold is 48.
STEPHEN M. KLEIN He is Chairman and Chief Executive Officer of Omni
Financial Services, Inc., a consumer finance
company, and has served in this capacity since
1993. Mr. Klein served as Chairman of the Board of
Diversified Insurance Services from 1989 through
1993, Chief Executive Officer from 1985 through
1989, and President from 1972 through 1985. Mr.
Klein was also previously President and Chief
9
<PAGE>
Executive Officer of Hamady Complete Food Centers,
Inc. ("Hamady"). During 1991, while he was serving
as an officer of Hamady, Hamady became involved in
bankruptcy proceedings. Mr. Klein was also
previously Executive Vice President of Finance of
M & B Distributing Company, Inc., a wholesale food
distributor, and a director of McColgan Investment
Company, Inc., a wholly-owned subsidiary of M & B
Distributing Company, Inc. Mr. Klein has a J.D.
degree from John Marshall Law School. Mr. Klein is
43.
JOHN J. LENNON He is retired. From 1977 to 1987, Mr. Lennon was
Chairman and Chief Executive Officer of White
Engines, Inc. of Canton, Ohio. Mr. Lennon is 60.
SAM H. MCGOUN He is President and Chief Executive Officer of
Willis Corroon Corporation of Michigan, Inc., an
insurance agency, and has served in that capacity
since 1985. Mr. McGoun has a B.S. degree from
Miami University of Ohio. Mr. McGoun is 57.
KELLY E. MILLER He is President of Miller Oil Company, a joint
venture capital company concentrating in the oil
and gas industry, and has served in this capacity
since 1986. Mr. Miller has a B.S. and B.B.A.
degrees from University of Oklahoma. Mr. Miller is
42.
JOE D. PENTECOST He has served as President of Better Properties
Inc., a commercial real estate development company
of Lansing, Michigan since 1965. He is also a
director of Mercantile Bank of Naples, Florida.
Mr. Pentecost is 65.
GEORGE B. SMITH He is Chairman of the Board of Republic Bancorp
Mortgage Inc. ("Republic Mortgage"), a subsidiary
of Republic Bank headquartered in Farmington
Hills, Michigan, and has served in that capacity
since 1987. From 1983 to 1987, Mr. Smith served as
Chairman of the Board of Republic Mortgage's
predecessor, Mayflower Mortgage Company. Mr. Smith
served as Chairman of the Board and President of
Ann Arbor Mortgage Corporation from 1969 to 1983,
and previously was a real estate broker in Wayne
County, Michigan. Mr. Smith has a B.S. degree from
Michigan State University. Mr. Smith is 68.
JEOFFREY K. STROSS He is a Professor of Internal Medicine and
Associate Chief of Clinical Affairs, University
Medical Center, The University of Michigan. He has
a B.S. degree from The University of Michigan and
an M.D. degree from The University of Michigan.
Mr. Stross is 55.
10
<PAGE>
COMMITTEES AND MEETINGS
The Board of Directors has four standing Committees as follows:
The Executive Committee meets in place of the full board or special
issues or scheduling make it difficult to convene all of the
Directors. The Committee may act on behalf of the Board on all but
major corporate matters. All actions taken by the Committee are
reported at the Board's next meeting. Messrs. Campbell, Cluckey,
Cook, Hulsman, Miller, Pentecost and Smith are members of the
Executive Committee.
The Audit Committee represents the Board in discharging its
responsibilities relating to the accounting, reporting and financial
control practices of the Company and its subsidiaries. The Committee
annually reviews the qualifications of the independent certified
public accountants, makes recommendations to the Board as to their
selection, reviews the scope, fees and results of their audit and
approves their non-audit services and related fees. The Committee
reviews the distribution of, and compliance with, the Company's
conflict of interest policy, which is sent to all Directors and
appropriate managerial employees of the Company and its subsidiaries,
and receives reports as to any exceptions. The Committee also reviews
the scope of the internal auditors' plans each year and the results
of their audits. Messrs. Hulsman, Cook, Cramer, Eastman, Hurand and
Lennon are members of the Audit Committee.
The Loan Committee reviews and approves or declines loan applications
submitted from Company's affiliates (principally Republic Bank and
Republic Savings Bank) on loans of, or related loans totaling,
$1,500,000 and above. The Committee also reviews the consolidated
allowance for loan losses, charge-offs and problem loans on a
periodic basis. Messrs. Campbell, Cluckey, Cramer, Hurand, Ibold,
Klein and Pentecost are members of the Loan Committee.
The Personnel, Compensation and Nominating Committee identifies and
recommends candidates for election to the Board. It advises the Board
on terms of tenure and related matters, including issues involving
potential conflicts of interest. The Committee approves standards for
setting compensation levels for Company executives and grants the
specific awards made under the Company's incentive bonus plan. The
Committee also approves compensation of employees whose salaries are
above specified levels and makes recommendations to the Board for
action on compensation of executives on all matters requiring full
Board approval. It also reviews senior management development and
appraisal programs. Messrs. Cook, Eastman, Hulsman, Ibold, McGoun,
Miller and Stross are members of the Personnel, Compensation and
Nominating Committee.
During 1996, there were eight regularly scheduled meetings of the
Board of Directors of the Company, eleven meetings of the Executive
Committee, three meetings of the Audit Committee, seven meetings of the Loan
Committee and three meetings of the Personnel, Compensation and Nominating
Committee. All directors attended at least 75% of the aggregate number of
meetings of the Board of Directors and meetings of committees on which they
served during the year, except for Mr. McGoun who attended 64% of the
meetings and Mr. Miller who attended 68% of the meetings.
Each director (excluding directors who are also officers of the
Company) was entitled to a fee of $770 for each board meeting and $275 for
each committee meeting attended during 1996, payable in the Company's Common
Stock under the Company's Director Compensation Plan. In addition, at the
annual meeting of the Board of Directors, each director (excluding directors
who are also officers of the Company) receives a warrant to acquire 1,500
shares of the Company's common stock at the fair market value of the date the
warrant is granted as an annual retainer fee. The warrant to acquire 1,500
shares issued under the Company's Director Compensation Plan was increased
from 1,000 shares at the 1996 Annual Meeting.
11
<PAGE>
PERSONNEL, COMPENSATION AND NOMINATING COMMITTEE REPORT
The report which follows is provided to shareholders by the members
of the Personnel, Compensation and Nominating Committee of the Board of
Directors of the Company ("Compensation Committee").
General. The Compensation Committee has been a standing committee of
the Board since 1985. Throughout its history, only "outside" non-employee
Directors have served on this committee. Among its other duties, the
Compensation Committee is charged with the responsibilities, subject to Board
of Directors' approval, of establishing, periodically reevaluating and, as
appropriate, adjusting and administering Company policies concerning the
compensation of management personnel, including the Chief Executive Officer
("CEO") and all other Executive Officers. In discharging such duties, the
Compensation Committee is responsible for annually determining and
recommending to the entire Board the annual base salary for each Executive
Officer and for establishing the criteria under which cash incentive bonuses
may be paid to such executives for the year. In addition, the Compensation
Committee is responsible for administering the Company's current Management
Incentive Bonus Plan (the "Incentive Bonus Plan"), the Republic Bancorp Inc.
Non-Qualified Stock Option Plan (the "Option Plan") and its Amended and
Restated Restricted Stock Plan of Republic Bancorp Inc. (the "Restricted
Stock Plan"). If the Republic Bancorp Inc. 1997 Stock Option Plan (the "1997
Option Plan") receives shareholder approval, the Compensation Committee will
also be responsible for administering this plan, too. No grants have been
made under the 1997 Option Plan and as of the date of this Proxy Statement,
no determination has been made by the Compensation Committee regarding the
identity of individuals to whom awards may be made under this plan or the
number and type of such awards that will be made to any such individual.
For a number of years, including fiscal 1996, a basic tenet of the
Company's compensation policy as set by the Compensation Committee has been
that a substantial portion of the annual compensation of Executive Officers,
as well as other key management personnel, should be directly linked to
operating performance for the year. Since the adoption of the Incentive Bonus
Plan in 1991, this policy has been implemented through that plan. The Option
Plan and Restricted Stock Plan, which were adopted and approved by
shareholders in 1986 and 1993, respectively, have been implemented by the
Compensation Committee to further another basic tenet of the Company's
compensation philosophy that a component of potential compensation for such
key employees should be tied to the market value of Common Stock. Assuming
the 1997 Stock Option Plan receives shareholder approval, the Compensation
Committee currently intends to implement that plan in a fashion similar to
that utilized in connection with the Option Plan and the Restricted Stock
Plan. This compensation philosophy closely aligns the interests of such
employees with those of the shareholders and provides an incentive for the
creation of increasing shareholder value over the long term.
Overall, during fiscal 1996 as in prior years, the Executive
Officer's compensation policies administered by the Compensation Committee
have been aimed at providing Executive Officers with compensation
opportunities competitive with those provided executives with comparable
experience and responsibilities at comparable companies, while at the same
time tying a substantial portion of such potential compensation to the
achievement of performance goals determined by the Compensation Committee.
Base Salaries. Base salaries for Executive Officers are initially
established by evaluating the responsibilities of the position to be held and
the experience of the individual, and by reference to the competitive
marketplace for executive talent, including a comparison to base salaries for
comparable positions at other companies. In determining its recommendations
for annual adjustments to such Executive Officers' base salaries, the
Compensation Committee focuses primarily on similar "executive marketplace"
data, including survey material on salary movements and range improvement for
peer executives, along with consideration to the extent of the Company's
success in meeting net earnings goals for the most recently completed fiscal
year and its assessment of the performance rendered by such Executive
Officers during the year. Based upon survey data on base salaries, the
salaries of the Executive Officers are less than peer group.
12
<PAGE>
During 1996, according to survey data on salary movements, peer
executives' salaries increased. However, due to the Company's policy that
places emphasis on payment for results versus higher fixed base salaries,
with respect to Mr. Campbell, the Compensation Committee made no increase in
his base salary for 1996. Mr. Campbell's 1996 salary and his 1997 salary was
set at $164,151. Any increase in Mr. Campbell's total compensation will be
tied instead to the attainment of net earnings goals in 1997.
Incentive Bonus Plan. Any cash bonuses awarded to Executive Officers
for fiscal 1996 were pursuant to the Incentive Bonus Plan. That plan enables
Executive Officers to earn an annual cash bonus generally ranging from 100%
to 360% of base salary for the fiscal year, but only if Company net earnings
(including bonuses) for the year have met or exceeded a target amount
established at the start of the year. If less than that target but at least a
certain minimum net earnings amount is achieved, which is established at the
start of the year, the maximum cash bonus which an Executive Officer may be
awarded for the year is reduced proportionately. Both the target and minimum
net earnings amount are determined by the Compensation Committee, after
analyzing historical data, strategic issues and general business conditions.
After fiscal year-end, the cash bonus potentially awardable to an
Executive Officer for that year is determined as described above. For fiscal
1996, the Company exceeded the minimum net earnings target established by the
Compensation Committee. As a result, Mr. Campbell and other Executive
Officers received bonus awards based on achieving their respective net
earnings amount. Mr. Campbell received a bonus of $367,200 for fiscal 1996.
Stock Option Plan, Restricted Stock Plan and 1997 Stock Option Plan.
The Option Plan and Restricted Stock Plan provide for the grant of options to
purchase Common Stock and awards of restricted stock to Executive Officers
and key employees of the Company and its subsidiaries who, in the judgment of
the Compensation Committee, are expected to contribute materially to the
Company's success in the future. The awards of options and restricted stock
made to Executive Officers and key employees during 1996 were determined in
light of the above criterion and after consideration of performance factors
similar to those applicable under the Incentive Bonus Plan, including the
Company's target net earnings amount for fiscal 1996. There were no awards of
options to the Chief Executive Officer or Named Officers during 1996. Mr.
Cluckey, President and Chief Operating Officer was awarded 5,500 shares of
restricted stock during 1996 and Mr. Eckhold, Vice President and Chief Credit
Officer was awarded 1,100 shares of restricted stock during 1996.
If the 1997 Stock Option Plan receives shareholder approval, then
under that plan the Compensation Committee may grant options to officers and
other key employees of the Company and its subsidiaries. The number of
grantees and the number of shares of Common Stock subject to options awarded
to each grantee may vary from year to year. As of the date of this Proxy
Statement, no determination has been made by the Compensation Committee
regarding the identity of the officers and key employees to who awards of
options may be made under the Plan or the number and type of such awards that
will be made to any such officer or key employee.
13
<PAGE>
Certain Tax Developments. In mid-1993, Section 162(m) was added to
the Internal Revenue Code ("the Code"). Subject to certain exceptions
(including exceptions relating to stock options and for "performance-based"
compensation if certain conditions are met), Code Section 162(m) prohibits
the deduction of compensation in excess of $1 million paid in any year
beginning with 1994 by a publicly-held corporation to any Named Officers for
the year. Although Mr. Campbell's total compensation exceeded $1 million in
1996, the income realized by him as a result of the exercise of options is
exempt from the $1 million deduction limit because the Option Plan was
previously approved by the shareholders in 1993. For fiscal 1996, the salary
and bonus paid to each of the Company's Named Officers was below $1 million,
and the Committee expects the same will be true for the current fiscal year.
Consequently, for the present the Committee has decided to defer
consideration of any compensation policies relating to Code Section 162(m).
The 1997 Stock Option Plan is intended to comply with Section 162(m) of the
Code and if approved by the shareholders, income attributable to the exercise
of options granted under the 1997 Stock Option Plan will not be subject to
the $1 million deduction limit.
Personnel, Compensation and Nominating Committee Members
Bruce L. Cook, Chairperson
George A. Eastman
Howard J. Hulsman
Dennis J. Ibold
Sam H. McGoun
Kelly E. Miller
Jeoffrey K. Stross
Stock Performance Graph
The graph on the following page compares the cumulative total
shareholder return on the Company's Common Stock for the last five fiscal
years with the cumulative total return on (1) The NASDAQ Stock Market Index,
which is comprised of all United States common shares traded on the NASDAQ
and (2) The NASDAQ Bank Stocks Index, which is comprised of bank and bank
holding company common shares traded on the NASDAQ over the same period. The
graph assumes the investment of $100 in the Company's Common Stock, The
NASDAQ (Stock Market) Index and The NASDAQ Bank Stocks Index on December 31,
1991 and the reinvestment of all dividends. The shareholder return shown on
the graph is not necessarily indicative of future performance.
14
<PAGE>
Comparison of Five Year Cumulative Total Return
[Performance Graph]
The dollar value for total shareholder return plotted in the graph above are
shown in the table below.
<TABLE>
<CAPTION>
NASDAQ
Stock Market NASDAQ
RBNC (U.S. Companies) Bank Stocks
---- ---------------- -----------
<S> <C> <C> <C>
1991 100.0 100.0 100.0
1992 200.2 116.4 145.6
1993 256.9 133.6 166.0
1994 208.2 130.6 165.4
1995 256.8 184.7 246.3
1996 316.2 227.2 325.6
</TABLE>
15
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following summary compensation table shows the compensation
paid in all capacities by the Company and its subsidiaries during fiscal
years 1996, 1995 and 1994 to those persons who, at December 31, 1996, were i)
the Company's Chief Executive Officer, and (ii) the only other executive
officers of the Company whose salary and bonus for 1996 exceeded $100,000
(Named Officers):
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation (1) Awards
--------------------------- ------------------------
Stock
Name and Principal Restricted Underlying All Other
Position Year Salary(2) Bonus(2) Stock Options Compensation(3)
- ------------------ ---- --------- -------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Jerry D. Campbell 1996 $164,151 $367,200 -- -- $4,750
Chairman and 1995 164,151 -0- -- -- 4,620
Chief Executive 1994 164,151 -0- -- -- 4,620
Officer
Dana M. Cluckey 1996 $125,000 $275,400 $ 57,187(4) -- $4,541
President and Chief 1995 74,304 -0- 137,625(4) -- 2,600
Operating Officer 1994 74,304 -0- -- -- 4,620
Barry J. Eckhold 1996 $112,212 $174,859 $ 11,437(5) -- $4,750
Vice President 1995 92,212 80,000 -- -- 4,620
and Chief Credit 1994 92,212 92,000 -- 3,993 4,620
Officer
Thomas F. Menacher 1996 $80,000 $183,600 -- -- $2,965
Senior Vice President, 1995 65,000 -0- $126,755(6) -- 2,221
Treasurer and Chief 1994 65,000 -0- -- -- 2,750
Financial Officer
<FN>
(1) The aggregate amount of perquisites and other personal benefits for any
Named Officer did not exceed the lesser of $50,000 or 10% of the total
of annual salary and bonus for any such Named Officer, and is therefore,
not reflected in the table.
(2) Includes compensation deferred under the Republic Bancorp Inc. Deferred
Compensation Plan. During 1996 Mr. Campbell deferred $50,000 of salary,
Mr. Cluckey deferred $10,000 of salary and $87,700 of bonus and Mr.
Menacher deferred $108,600 of bonus in the Deferred Compensation Plan.
(3) The Company has a tax-deferred savings plan qualified under Internal
Revenue Code Sections 401(a) and 401(k). Participants may voluntarily
reduce the wages paid to them by having the Company pay a portion of
their wages into the plan and the Company may contribute money to the
plan which will match a portion of each participant's deferral. During
1996, 1995, and 1994, the Company paid the above amounts to the accounts
of Messrs. Campbell, Cluckey, Eckhold, and Menacher, as matching
contributions.
(4) Amounts represent the value of 5,500 shares of Restricted Stock issued
on June 20, 1996, and the aggregate of 3,630 shares of Restricted Stock
issued on January 9, 1995 and 12,100 shares of Restricted Stock issued
on January 26, 1995, the grant dates to Mr. Cluckey. The aggregate value
and number of shares of Restricted Stock owned by Mr. Cluckey at
December 31, 1996 was $246,799 and 21,230 shares, respectively. Of the
21,230 shares owned by Mr. Cluckey, 15,730 shares vest in January 1998
and 5,500 shares vest in June 1999. Mr. Cluckey is entitled to all
dividends paid on such shares of Restricted Stock.
16
<PAGE>
(5) Amount represents the value of 1,100 shares of Restricted Stock issued
on June 20, 1996, the grant date to Mr. Eckhold. The aggregate value and
number of shares of Restricted Stock owned by Mr. Eckhold at December
31, 1996 was $12,788 and 1,100 shares, respectively. Of the 1,100 shares
owned by Mr. Eckhold, all shares vest in June 1999. Mr. Eckhold is
entitled to all dividends paid on such shares of Restricted Stock.
(6) Amount represents the aggregate value of 2,420 shares of Restricted
Stock issued on January 9, 1995 and 12,100 shares of Restricted Stock
issued on January 26, 1995, the grant dates to Mr. Menacher. The
aggregate value and number of shares of Restricted Stock owned by Mr.
Menacher at December 31, 1996 was $168,795 and 14,520 shares,
respectively. All shares owned by Mr. Menacher vest in January 1998. Mr.
Menacher is entitled to all dividends paid on such shares of Restricted
Stock.
</TABLE>
Shown below is information with respect to the stock options exercised
by the Named Officers during 1996 and their holdings of options at December
31, 1996. There were no stock options granted to the Named Officers during
1996.
Aggregated Option Exercises in Last Fiscal Year
and Year-End Option Values
<TABLE>
<CAPTION>
Number of Shares
Underlying Unexercised Value of Unexercised
Options Held at In-the-Money Options at
December 31, 1996 December 31, 1996(2)
Number of ---------------------- -----------------------
Shares Value
Acquired Realized
Name on Exercise (Pre-tax)(1) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ----------- ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Jerry D. Campbell 112,500 $972,757 286,559 / -0- $2,258,629 / -0-
Dana M. Cluckey -- -- -0- / -0- -0- / -0-
Thomas F. Menacher 13,310 $ 39,797 11,313 / -0- $ 15,076 / -0-
Barry J. Eckhold -- -- 3,993 / -0- $3,694 / -0-
<FN>
(1) For purposes of this column, "value" is determined for each exercised
option by subtracting the exercise price from the bid price received by
the Named Officer for the Company's Common Stock on the exercise date,
as reported on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ").
(2) For purposes of this column, "value" is determined for each unexercised
option by subtracting the aggregate exercise price for the option shares
from the NASDAQ reported last trade price for the Company's Common Stock
as of December 31, 1996 of $11.625.
</TABLE>
17
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. George B. Smith, Chairman of the Board of Republic Mortgage, and
a director of the Company, receives a base salary of $50,000, together with a
bonus plan based upon new loan origination volume and Republic Mortgage's net
earnings. For 1996, a bonus of $71,207 was paid to Mr. Smith. Mr. Smith's
base salary and bonus plan were approved by the Personnel, Compensation and
Nominating Committee and the Board of Directors. Republic Mortgage also
leases its office in Plymouth, Michigan, from Mr. Smith, under a
month-to-month lease, for $2,829 per month. Management of the Company
believes this amount to be reasonable and substantially similar to rental
fees for comparable buildings.
The Company and its subsidiaries paid insurance premiums totaling
approximately $178,000 for bonding and mortgage protection insurance to the
Willis Corroon Corporation of Michigan, Inc., an insurance agent of which Mr.
Sam H. McGoun, a director of the Company, is the President and Chief
Executive Officer. Management of the Company believes these premiums paid
were reasonable.
The Company's subsidiary banks, Republic Bank and Republic Savings
Bank have, in the normal course of business, made loans to certain of the
Company's directors and officers and to organizations in which certain
directors and officers have an interest. In the opinion of management, such
loans were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unrelated parties and did not involve more than the normal risk of
collectibility. The Company's Named Officers do not have any loans with any
of the Company's subsidiaries.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, independent certified public accountants for
fiscal 1996, have been reappointed by the Board of Directors for fiscal 1997.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting to respond to appropriate questions by shareholders and to make a
statement if they so desire.
PROPOSALS OF SHAREHOLDERS
A proposal submitted by a shareholder for the 1998 annual meeting
must be received by the Secretary of the Company at its principal office by
November 20, 1997, in order to be eligible to be included in the Company's
proxy statement and form of proxy relating to that meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Directors and Executive Officers of the Company and beneficial owners
of more than 10% of its Common Stock are required to file initial reports of
ownership and reports of changes in ownership of Company securities pursuant
to Section 16(a) of the Exchange Act. Since May 1, 1991, such persons also
have been required to provide the Company with copies of such reports. The
Company has reviewed all such copies as it has received from persons known to
the Company to be (or during fiscal year 1996 to have been) subject to these
Section 16(a) provisions and also has received and reviewed written
representations from certain persons to the effect that other reports have
not been required of them. Based solely on such review, the Company believes
that for fiscal year 1996 its directors and officers all complied with all
applicable filing requirements.
MISCELLANEOUS
Consolidated financial statements of the Company for the year ended
December 31, 1996 are attached as a supplement to this Proxy Statement.
18
<PAGE>
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or
the Exchange Act, which might incorporate future filings, including this
Proxy Statement, in whole or in part, the Compensation Committee Report and
the Stock Performance Graph contained herein shall not be incorporated by
reference in any such filings.
It is not expected that any other matters are likely to be brought
before the meeting. However, if any other matters are to be presented, it is
the intention of the persons named in the proxy to vote the proxy in
accordance with their best judgment.
It is important that proxies be returned promptly to avoid
unnecessary expense. Therefore, shareholders who do not expect to attend in
person are urged, regardless of the number of shares of stock owned, to mark,
sign, date, and return the enclosed proxy promptly to:
Boston Financial Data Services
c/o Boston EquiServe
Proxy Department
P.O. Box 1719
Boston, MA 02105
Corporate Services Department
P.O. Box 592
Boston, Massachusetts 02102-9906
19
<PAGE>
EXHIBIT A
REPUBLIC BANCORP INC.
1997 STOCK OPTION PLAN
A. PURPOSE AND SCOPE
1. The purposes of this 1997 Stock Option Plan are to encourage stock
ownership by key management employees of the Company and its Subsidiaries, to
provide an incentive for such employees to expand and improve the profits and
prosperity of the Company and its Subsidiaries, and to assist the Company and
its Subsidiaries in attracting and retaining key personnel through the grant
of Options to purchase shares of the Company's common stock.
2. The Plan is intended to comply with Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as such
Rule may be amended from time to time ("Rule 16b-3") and shall be construed
to so comply.
B. DEFINITIONS
Unless otherwise required by the context:
1. "Board" shall mean the Board of Directors of the Company.
2. "Committee" shall mean the Personnel, Nominating and Compensation
Committee, which is appointed by the Board and which shall be composed of at
least two members of the Board, each of whom is a "Non-Employee Director" as
defined in Rule 16b-3. Unless the Board determines otherwise, the Committee
shall be comprised solely of "outside" directors within the meaning of Code
Section 162(m)(4)(C)(i).
3. "Company" shall mean REPUBLIC BANCORP INC., a Michigan
corporation.
4. "Code" shall mean the Internal Revenue Code of 1986, as amended.
5. "Fair Market Value" shall be the closing price per share of Stock
on the date in question in the over-the-counter market, as such price is
reported by the National Association of Securities Dealers through its Nasdaq
system or any successor system. If there is no reported closing price for the
Stock on the date in question, then the closing price on the last preceding
date for which such quotation exists shall be determinative of fair market
value.
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6. "Incentive Stock Option" means an Option meeting the requirements
and containing the limitations and restrictions set forth in Code Section
422.
7. "Non-Qualified Stock Option" means an Option other than an
Incentive Stock Option.
8. "Option" shall mean a right to purchase Stock granted pursuant to
the Plan. An Option may be either an Incentive Stock Option or a
Non-Qualified Stock Option.
9. "Option Price" shall mean the purchase price for Stock under an
Option, as determined in Section F below.
10."Participant" shall mean an employee of the Company, or of any
Subsidiary of the Company, to whom an Option is granted under the Plan.
11."Plan" shall mean this REPUBLIC BANCORP INC. 1997 Stock Option
Plan.
12."Stock" shall mean the common stock of the Company, $5.00 par
value.
13."Subsidiary" shall mean a subsidiary corporation of the Company,
as defined in Code Sections 425(f) and 425(g).
14. "Ten-Percent Shareholder" means an individual who "owns" (as
defined in Code Section 425) stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or a
Subsidiary.
C. STOCK TO BE OPTIONED
1. Subject to the provisions of Section L of the Plan, the maximum
number of shares of Stock that may be optioned or sold under the Plan is
750,000 shares. Such shares may be authorized but unissued shares of Stock of
the Company or issued shares that were reacquired by the Company.
2. The maximum number of shares of Stock with respect to which
Options may be granted during any fiscal year to any Participant shall not
exceed 37,500 subject to adjustments noted in paragraph L, herein.
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D. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall
make all decisions with respect to participation in the Plan by employees of
the Company and its Subsidiaries, and with respect to the extent of that
participation. The interpretation and construction of any provision of the
Plan by the Committee shall be final. No member of the Committee shall be
liable for any action or determination made by him in good faith.
E. ELIGIBILITY
The Committee may grant Options to any key employee (including an
employee who is a director or an officer) of the Company or its Subsidiaries.
Options may be awarded by the Committee at any time and from time to time to
new Participants, or to then Participants, or to a greater or lesser number
of Participants, and may include or exclude previous Participants as the
Committee shall determine. Options granted at different times need not
contain similar provisions.
F. OPTION PRICE
The purchase price for Stock under each Option shall be one hundred
per cent (100%) of the Fair Market Value of the Stock on the date the Option
is granted, but in no event less than the par value of the Stock.
Notwithstanding anything herein to the contrary, in the event an Incentive
Stock Option is granted to a Participant who, at the time such Incentive
Stock Option is granted, is a Ten-Percent Shareholder, then the Option price
per share of such Incentive Stock Option shall not be less than one hundred
ten percent (110%) of the Fair Market Value of the shares covered by the
Incentive Stock Option on the date the Incentive Stock Option is granted.
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G. TERMS AND CONDITIONS OF OPTIONS.
Options granted pursuant to the Plan shall be authorized by the
Committee and shall be evidenced by agreements in such form as the Committee
shall from time to time approve. Such agreements shall comply with and be
subject to the following terms and conditions.
1. Condition of Employment. The Committee may, in its discretion,
include in any Option granted under the Plan a condition that the Participant
shall agree to remain in the employ, and to render services to, the Company
or any of its Subsidiaries for a period of time (specified in the agreement)
following the date the Option is granted. No such agreement shall impose upon
the Company or any of its Subsidiaries, however, any obligation to employ the
Participant for any period of time.
2. Types of Options. Options granted under this Plan may be (a)
Incentive Stock Options, (b) Non-Qualified Stock Options, or (c) a
combination of the foregoing. The Option Agreement shall designate whether an
Option is an Incentive Stock Option or a Non-Qualified Stock Option. Any
Option which is designated as a Non-Qualified Stock Option shall not be
treated by the Company or the Participant to whom the Option is granted as an
Incentive Stock Option for federal income tax purposes.
3. Method of Exercise. To exercise an Option, a Participant (or in
the case of an exercise after a Participant's death, such Participant's
executor, administrator, heir or legatee, as the case may be) must take the
following action:
(a) execute and deliver to the Company a written notice of
exercise signed in writing by the person exercising the Option specifying the
number of shares of Stock with respect to which the Option is being
exercised;
(b) pay the aggregate Option Price in one of the alternate
forms as set forth in Section G.4 below; and
(c) furnish appropriate documentation that the person or
persons exercising the Option (if other than the Participant) has the right
to exercise such Option.
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As soon as practical after the exercise date, the Company will mail or
deliver to or on behalf of the Participant (or any other person or persons
exercising this Option under the Plan) a certificate or certificates
representing the Stock acquired upon exercise of the Option. A Participant
shall have none of the rights of a shareholder until shares are issued to
him, and no adjustment will be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued, except
as noted in paragraph L, herein.
4. Payment Price. The aggregate Option Price shall be payable in
one of the alternative forms specified below:
(a) Full payment in cash or check made payable to the
Company's order; or
(b) Full payment through a sale and remittance procedure
pursuant to which the Participant (i) shall provide irrevocable written
instructions to a designated brokerage firm to effect the immediate sale of
the Stock to be purchased and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the Stock to be purchased and (ii) shall
concurrently provide written directives to the Company to deliver the
certificates for the Stock to be purchased directly to such brokerage firm in
order to complete the sale transaction.
5. Number of Shares. Each Option agreement shall state the total
number of shares of Stock to which it pertains, the exercise price for the
shares covered by the Option, the time at which the Option vests and becomes
exercisable, the Option's scheduled expiration date, and such other terms and
conditions not inconsistent with the Plan as the Committee shall determine.
6. Option Period and Limitations on Exercise of Options. The
Committee may, in its discretion, provide that an Option may not be exercised
in whole or in part for any period or periods of time specified in the Option
agreement. Except as provided in the Option agreement, an Option may be
exercised in whole or in part at any time during its term. No Option may be
exercised after the expiration of ten (10) years from the date it is granted.
Notwithstanding anything herein to the contrary, in the event an Incentive
Stock Option is granted to a Participant who, at the time such Incentive
Stock Option is granted, is a Ten-Percent Shareholder, then such Incentive
Stock Option shall not be exercisable more than five (5) years from the date
of grant and shall be subject to earlier termination as hereinafter provided.
No Option may be exercised for a fractional share of Stock.
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7. Limit on Fair Market Value of Incentive Stock Options. In any
calendar year, no Participant may be granted an Incentive Stock Option
hereunder to the extent that the aggregate Fair Market Value (such Fair
Market Value being determined as of the date of grant of the Option in
question) of the Stock with respect to which Incentive Stock Options first
become exercisable by the Participant during any calendar year (under all
such plans of the Participant's employer corporation, its parent, if any, and
its Subsidiaries, if any) exceeds the sum of One Hundred Thousand Dollars
($100,000). For purposes of the preceding sentence, Options shall be taken
into account in the order in which they were granted. Any Option granted
under the Plan which is intended to be an Incentive Stock Option, but which
exceeds the limitation set forth in this Section G.7, shall be a
Non-Qualified Stock Option to the extent that a portion of the Option exceeds
this limitation.
8. Option Modification. The Committee may amend, modify or terminate
any outstanding Option held by a Participant, including substituting therefor
another Option of the same or a different type, changing the date of exercise
or vesting and converting an Incentive Stock Option to a Non-Qualified Stock
Option, provided that the Participant's consent to such action shall be
required unless the Committee determines in its sole discretion that the
action, taking into account any related action, would not materially and
adversely affect the Participant.
H. TERMINATION OF EMPLOYMENT.
Except as provided in this paragraph and in Section I below, if a
Participant ceases to be employed by the Company or any of its Subsidiaries,
his Options shall terminate immediately. If a Participant's cessation of
employment with the Company and its Subsidiaries is due to his retirement
with the consent of the Company or any of its Subsidiaries, the Participant
may, at any time within three (3) months after such cessation of employment,
exercise his Options to the extent that he was entitled to exercise them on
the date of cessation of employment, but in no event shall any Option be
exercisable more than ten (10) years from the date it was granted. If a
Participant's cessation of employment with the Company and its Subsidiaries
is due to permanent disability (within the meaning of Code Section 22(e)(3)),
the Participant will have twelve (12) months after the date of termination of
employment, but in no event after the stated expiration date of the
Participant's Options, to exercise Options that the Participant was entitled
to exercise on the date the Participant's employment terminated as a result
of the disability. The Committee may cancel an Option during the three (3) or
twelve (12) month periods
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referred to in this paragraph, if the Participant engaged in employment or
activities contrary, in the opinion of the Committee, to the best interests
of the Company or any of its Subsidiaries. The Committee shall determine in
each case whether a termination of employment shall be considered a
retirement with the consent of the Company or a Subsidiary, whether a
disability is "permanent" and, subject to applicable law, whether a leave of
absence shall constitute a termination of employment. Any such determination
of the Committee shall be final and conclusive.
I. RIGHTS IN EVENT OF DEATH
If a Participant dies while employed by the Company or any of its
Subsidiaries or within three (3) months after having retired with the consent
of the Company or any of its Subsidiaries, and without having fully exercised
his Options, the executors or administrators, or legatees or heirs, of his
estate shall have the right to exercise such Options to the extent that such
deceased Participant was entitled to exercise the Options on the date of his
death; provided, however, that in no event shall the Options be exercisable
more than ten (10) years from the date they were granted.
J. NO OBLIGATIONS TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the
Participant to exercise such Option.
K. NONASSIGNABILITY
Options shall not be transferable other than by will or by the laws
of descent and distribution, and during a Participant's lifetime shall be
exercisable only by such Participant.
L. EFFECT OF CHANGE IN STOCK SUBJECT TO THE PLAN
The aggregate number of shares of Stock available for Options under
the Plan, the shares subject to any Option, and the price per share shall all
be proportionately adjusted for any increase or decrease in the number of
issued shares of Stock subsequent to the effective date of the Plan resulting
from (1) a subdivision or consolidation of shares or any
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other capital adjustment, (2) the payment of a stock dividend, or (3) other
increase or decrease in such shares effected without receipt of consideration
by the Company. If the Company shall be the surviving corporation in any
merger or consolidation, any Option shall pertain, apply and relate to the
securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled after the merger or consolidation. Upon
dissolution or liquidation of the Company, all Options outstanding under the
Plan shall terminate; provided, however, that each Participant (and each
other person entitled under Section I to exercise an Option) shall have the
right, immediately prior to such dissolution or liquidation, to exercise such
Participant's Options in whole or in part, but only to the extent that such
Options are otherwise exercisable under the terms of the Plan.
M. AMENDMENT AND TERMINATION
The Board, by resolution, may terminate, amend or revise the Plan
with respect to any shares as to which Options have not been granted,
provided, that no amendment without the approval of the stockholders of the
Company shall be made if stockholder approval under Code Section 422 or Rule
16b-3 would be required. Neither the Board nor the Committee may, without the
consent of the holder of an Option, alter or impair any Option previously
granted under the Plan, except as authorized herein. Unless sooner
terminated, the Plan shall remain in effect for a period of ten (10) years
from the date the Plan was originally adopted by the Board. Termination of
the Plan shall not affect any Option previously granted.
N. WITHHOLDING FOR TAXES
The Company shall, before any payment is made or a certificate for
any Stock is delivered or any Stock is credited to any brokerage account,
deduct or withhold from any payment under the Plan any Federal, state, local
or other taxes, including transfer taxes, required by law to be withheld or
to require the Participant or his beneficiary or estate, as the case may be,
to pay any amount, or the balance of any amount, required to be withheld. The
Company may elect to deduct such taxes from any amounts payable then or any
time thereafter in cash to the Participant and, in the Participant's sole
discretion, the payment of such taxes may be made from Stock previously held
by such Participant. If the
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Participant disposes of Stock acquired pursuant to an Incentive Stock Option
in any transaction considered to be a disqualifying transaction under Code
Sections 421 and 422, the Participant must give the Company written notice of
such transfer and the Company shall have the right to deduct any taxes
required by law to be withheld from any amounts otherwise payable to the
Participant.
O. AGREEMENT AND REPRESENTATION OF EMPLOYEES
As a condition to the exercise of any portion of an Option, the
Company may require the person exercising such Option to represent and
warrant at the time of such exercise that any shares of Stock acquired at
exercise are being acquired only for investment and without any present
intention to sell or distribute such shares, if, in the opinion of counsel
for the Company, such a representation is required under the Securities Act
of 1933 or any other applicable law, regulation or rule of any governmental
agency.
P. RESERVATION OF SHARES OF STOCK
The Company, during the term of this Plan, will at all times reserve
and keep available, and will seek or obtain from any regulatory body having
jurisdiction any requisite authority necessary to issue and to sell, the
number of shares of Stock that shall be sufficient to satisfy the
requirements of this Plan. The inability of the Company to obtain from any
regulatory body having jurisdiction the authority deemed necessary by counsel
for the Company for the lawful issuance and sale of its Stock hereunder shall
relieve the Company of any liability in respect of the failure to issue or
sell Stock as to which the requisite authority has not been obtained.
Q. EFFECTIVE DATE OF PLAN
The Plan was effective on January 16, 1997, the date that the Plan
was approved by the Board. The Plan shall thereafter be submitted to the
Company's stockholders for approval and unless the Plan is approved by the
affirmative votes of the holders of shares having a majority of the voting
power of all shares represented at a meeting duly held in accordance with
Michigan law within twelve (12) months after being approved by the Board, the
Plan and all awards made under it shall be void and of no force and effect.
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R. GOVERNING LAW
This Plan and the rights of all persons claiming hereunder shall be
construed in accordance with the laws of the State of Michigan without giving
effect to the conflicts of laws principles thereof, except to the extent that
such laws are preempted by federal law.
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To record the adoption of the Plan by the Board on January 16, 1997,
the Company has caused its authorized officer to affix the corporate name and
seal hereto.
REPUBLIC BANCORP INC.
By: _________________________________
Jerry D. Campbell
Chief Executive Officer &
Chairman of the Board
<PAGE>
REPUBLIC BANCORP INC.
Common Stock, $5.00 Par Value
PROXY Solicited by the Board of Directors for the Annual Meeting of
Shareholders to Be Held April 23, 1997
The undersigned hereby appoints Jerry D. Campbell and George E. Parker
III, or either of them, with power of substitution in each, proxies to vote
all Common Stock of the undersigned in Republic Bancorp Inc. ("Company") at
the Annual Meeting of Shareholders to be held on April 23, 1997 and at all
adjournments thereof, upon all matters coming before said meeting.
1. ELECTION OF DIRECTORS
|_| FOR all nominees listed |_| WITHHOLD AUTHORITY to vote for
(except as indicated below) all nominees listed below
Nominees as Directors:
Jerry D. Campbell George A. Eastman Stephen M. Klein Joe D. Pentecost
Dana M. Cluckey Howard H. Hulsman John J.Lennon George B. Smith
Bruce L. Cook Gary Hurand Sam H. McGoun Jeoffrey K. Stross
Richard J. Cramer Dennis J. Ibold Kelly E. Miller
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
(INSTRUCTION: To vote for an individual other than a nominee listed
above, write the individual's name in the space provided below. You may
vote for a total of fifteen (15) individuals.)
2. To approve the increase of authorized common stock to 30,000,000 shares.
|_|YES |_| NO |_| WITHHOLD AUTHORITY to vote
3. To approve the adoption of the Republic Bancorp Inc. 1997 Stock Option
Plan.
|_|YES |_| NO |_| WITHHOLD AUTHORITY to vote
4. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDER-SIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE DIRECTORS.
(INSTRUCTION: This proxy must be signed as the name appears on the stock
certificate. Executors, administrators, personal representatives, trustees,
etc., should give full title as such. If the signer is a corporation, please
sign full corporate name by a duly authorized officer.)
___________________________
Signature of Shareholder
________________________Dated:_______________________1997.
Signature if held jointly (When shares are held by joint tenants,
both should sign)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
