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 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DEARBORN BANCORP, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Not Applicable
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
<PAGE>
DEARBORN BANCORP, INC.
-----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 20, 1997
To the Shareholders of
Dearborn Bancorp, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of Dearborn Bancorp, Inc. will be held on Tuesday, the 20th day of May, 1997
at 4:00 P.M., Local Time, at Park Place, 23400 Park Avenue (two blocks south
of Michigan Avenue at Outer Drive), Dearborn, Michigan, for the following
purposes:
1. To elect four directors of the Corporation;
2. To consider and vote upon a proposal to approve an
amendment to the Company's Articles of Incorporation to
increase the authorized number of shares of Common
Stock;
3. To consider and vote upon a proposal to approve certain
amendments to the Company's Stock Option Plan; and
4. To transact such other business as may properly come
before the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on
March 28, 1997 as the record date for the meeting and only shareholders of
record at that time will be entitled to notice of and to vote at the meeting
or any adjournments thereof. Shareholders who are unable to attend the
meeting in person, as well as shareholders who plan to attend the meeting,
are requested to date, sign and mail the enclosed proxy promptly. If you are
present at the meeting and desire to vote in person, you may revoke your
proxy.
By Order of the Board of Directors,
Wilber M. Brucker, Jr.
Secretary
April 18, 1997
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF DEARBORN BANCORP, INC.
May 20, 1997
To the Shareholders of
Dearborn Bancorp, Inc.
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Dearborn Bancorp, Inc.
(hereinafter referred to as the "Corporation") from the holders of the
Corporation's Common Stock to be used at the Annual Meeting of Shareholders
to be held on Tuesday, the 20th day of May 1997, at 4:00 P.M., Local Time, at
Park Place, 23400 Park Avenue, Dearborn, Michigan, and at any adjournments
thereof. The approximate date on which this Proxy Statement and the enclosed
form of proxy are being sent to shareholders is April 18, 1997. The address
of the principal corporate offices of the Corporation is 22290 Michigan
Avenue, P. O. Box 2247, Dearborn, Michigan 48123-2247.
Any proxy given pursuant to this solicitation may be revoked
by notice in writing to the Corporation prior to voting. Unless the proxy is
revoked, the shares represented thereby will be voted at the Annual Meeting
or any adjournments thereof. The giving of the proxy does not affect the
right to vote in person should the shareholder attend the meeting.
The Board of Directors in accordance with the By-Laws has
fixed the close of business on March 28, 1997 as the record date for
determining the shareholders entitled to notice of and to vote at the Annual
Meeting of Shareholders or any adjournments thereof. At the close of business
on such date the outstanding number of voting securities of the Corporation
was 950,000 shares of Common Stock, each of which is entitled to one vote.
Abstentions and broker non-votes are each included in the determination of
the number of shares present for determining a quorum but not counted on any
matters brought before the meeting. Directors are elected by a plurality of
the votes properly cast at the meeting.
<PAGE>
SECURITY OWNERSHIP
Management
The following table sets forth, as of March 1, 1997, the
number of shares of the Corporation's Common Stock beneficially owned by each
director, each executive officer, each nominee for election as a director and
all directors and executive officers as a group.
<TABLE>
<CAPTION>
Number Percent
Name of Individual of Shares (1) of Class
------------------ ------------- --------
<S> <C>
Wilber M. Brucker, Jr. 9,282 *
Margaret I. Campbell 11,978 1.26%
Timothy J. Cuttle --- *
John E. Demmer 66,310(2) 6.98%
Michael V. Dorian, Jr. 14,090 1.48%
David Himick 59,709 6.29%
Jeffrey L. Karafa 193 *
Donald G. Karcher 12,752 1.34%
Bradley F. Keller 34,826 3.67%
Steven M. Kirkpatrick 39,400(3) 4.15%
William E. Kreger 38,043 4.00%
Jeffrey G. Longstreth 7,224 *
Richard Nordstrom 29,221 3.08%
Michael J. Ross 2,300 *
Robert C. Schwyn 11,272 1.19%
Ronnie J. Story 48,343 5.09%
Jeffrey J. Wolber 298 *
All Directors and Executive Officers
as a Group (17 persons) 385,241 40.55%
<FN>
* Less than one percent
(1) Beneficial ownership of shares, as determined in
accordance with applicable Securities and Exchange Commission rules, includes
shares as to which a person has or shares voting power and/or investment
power.
(2) Includes 21,840 shares held by his wife as Trustee of a
Trust.
(3) These shares are owned of record by The Bancorp Group,
Inc., of which company Mr. Kirkpatrick serves as President and Chief
Executive Officer.
</TABLE>
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<PAGE>
Certain Beneficial Owners
The following table sets forth as of March 1, 1997 the number
of shares of the Corporation's Common Stock owned by the only persons who
were known by the Corporation to own beneficially more than five percent of
the Common Stock of the Corporation:
<TABLE>
<CAPTION>
Number Percent
Name of Beneficial Owner of Shares of Class
------------------------ --------- --------
<S> <C> <C>
John E. Demmer 66,310 (1) 6.98%
David Himick 59,709 6.29%
Ronnie J. Story 48,343 5.09%
<FN>
(1) Includes 21,840 shares held by his wife as Trustee of a Trust.
</TABLE>
ELECTION OF DIRECTORS
The members of the Board of Directors are divided into three
classes, each class to be as nearly equal in number as possible, with each
class to serve a three-year term. The terms of David Himick, William E.
Kreger, Jeffrey G. Longstreth and Michael J. Ross will expire at the 1997
Annual Meeting of Shareholders. The Board of Directors has nominated such
persons for re-election as directors to serve until the 2000 Annual Meeting
of Shareholders.
The proposed nominees for election as directors are willing to
be elected. If any of the nominees at the time of election is unable to
serve, or is otherwise unavailable for election, and if other nominees are
designated, the proxies shall have discretionary authority to vote or refrain
from voting in accordance with their judgment on such other nominees.
However, if any nominees are substituted by management, the proxies intend to
vote for such nominees. It is not anticipated that any of such nominees will
be unable to serve as a director.
INFORMATION ABOUT DIRECTORS AND NOMINEES FOR DIRECTORS
The following information is furnished with respect to each
person who is presently a director of the Corporation whose term of office
will continue after the Annual Meeting of Shareholders, as well as those who
have been nominated for election as a director.
<TABLE>
<CAPTION>
Year in Which
Has Served Term or Proposed
as Director Term of Office
Name and Age of Director Principal Occupation (2) Since Will Expire
- - ------------------------ ------------------------ ----------- ----------------
<S> <C> <C> <C>
Wilber M. Brucker, Jr., 71 Retired Attorney; 1992 1999
Secretary of the Corporation
Margaret I. Campbell, 57 President, Kean Manufacturing 1992 1998
Corporation
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<PAGE>
<CAPTION>
Year in Which
Has Served Term or Proposed
as Director Term of Office
Name and Age of Director Principal Occupation (2) Since Will Expire
- - ------------------------ ------------------------ ----------- ----------------
<S> <C> <C> <C>
John E. Demmer, 73 Chairman of the Board and Chief 1992 1998
Executive Officer, Jack Demmer
Ford, Inc. and Jack Demmer
Leasing; Chairman of the Board
and Chief Executive Officer of
of the Corporation
Michael V. Dorian, Jr., 37 Vice President, Mike Dorian Ford 1994 1998
David Himick, 71 (1) Financial Consultant 1995 2000
Donald G. Karcher, 67 Chairman of the Board, Karcher 1992 1998
Agency, Inc.; Vice President
and Treasurer of the Corporation
Bradley F. Keller, 55 President, Braden Associates, 1992 1999
Inc.
Steven M. Kirkpatrick, 49 President and Chief Executive 1994 1999
Officer, The Bancorp Group,
Inc.; President and Chief
Executive Officer,
Capital Mortgage
Funding, L.L.C.
William E. Kreger, 81 (1) Retired, Real Estate Investor 1994 2000
Jeffrey G. Longstreth, President, Prudential Christie 1992 2000
54 (1) Real Estate
Richard Nordstrom, 70 Retired, Architectural 1992 1998
Consultant
Michael J. Ross, 46 (1) President and Chief Executive 1994 2000
Officer, Community Bank of
Dearborn; Vice President of the
Corporation
Robert C. Schwyn, 58 Physician 1994 1998
Ronnie J. Story, 50 President and Chief Executive 1994 1999
Officer, Story Development
Corporation
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<PAGE>
<FN>
(1) Nominated for election as a director.
(2) Each of the directors has had the same principal occupation
during the past five years except as follows: From 1992 to 1993 Mr. Ross was
President of Mike Ross & Associates, Inc., a bank consulting firm; from 1987
to 1994 Mr. Story served as President of S & H Homebuilders; from 1991 to
1995 Mr. Brucker was Of Counsel to the law firm of Riley and Roumel; from
1960 to 1996 Mr. Nordstrom served as Chairman of the Board of Nordstrom
Samson Associates; and from 1981 to 1997 Mr. Keller served as President of
MultiGard Security Systems, Inc.
</TABLE>
The Nominating Committee is composed of Bradley F. Keller,
Jeffrey G. Longstreth and Ronnie J. Story. This Committee, which met once
during 1996, recommends nominees for election as directors at the Annual
Meeting of Shareholders, and recommends individuals to fill vacancies which
may occur between annual meetings. The Committee will consider as potential
nominees persons recommended by shareholders. Recommendations should be
submitted to the Nominating Committee in care of the Secretary of the
Corporation.
The members of the Audit Committee during 1996 were Wilber M.
Brucker, Jr., Michael V. Dorian, Jr., Margaret I. Campbell, Donald G. Karcher
and Bradley F. Keller. The Audit Committee, which met four times during 1996,
reviews, acts, and reports to the Board of Directors with respect to various
auditing and accounting matters, including the selection of the Corporation's
independent certified public accountants, the scope of audit procedures, the
nature of services to be performed for the Corporation and its subsidiary,
and the fees to be paid to the independent public accountants.
The members of the Compensation Committee for 1996 were Wilber
M. Brucker, Jr., John E. Demmer, Donald G. Karcher and Richard Nordstrom. The
Compensation Committee met one time during 1996. The Committee reviews and
recommends to the Board of Directors the compensation of the officers of the
Bank.
The Board of Directors held five meetings during 1996. The
Corporation did not pay any director fees in 1996. Each incumbent director
attended at least seventy-five percent of the total number of meetings of the
Board of Directors held during 1996, except for Robert C. Schwyn.
REPORT ON COMPENSATION
The Compensation Committee of the Board of Directors is
responsible for developing the Corporation's executive compensation policies
and making recommendations to the Board of Directors with respect thereto. In
addition, the Committee makes annual recommendations to the Board of
Directors concerning the compensation to be paid to the Chief Executive
Officer of the Bank and determines the compensation to be paid to each of the
other executive officers of the Bank. No compensation is payable to the
executive officers of the Corporation. The Committee also administers all
aspects of the Corporation's executive compensation program including its
stock option plan.
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<PAGE>
Base Salaries
Salaries for the executive officers of the Bank are established by examining
the experience and responsibility requirements of the position held.
Marketplace information for comparable positions is also reviewed, including
peer executives in comparable markets. With respect to the base salary of Mr.
Ross, the Bank's Chief Executive Officer, the Compensation Committee took
into account a comparison of base salaries of chief executive officers of
peer banks and an assessment of Mr. Ross' individual performance.
Bonus Awards
Officers of the Bank may be considered for annual discretionary cash bonuses
which may be awarded to recognize and reward corporate and individual
performance, based on attainment of specific goals and objectives. Mr. Ross
was awarded a bonus of $17,000 for 1996.
Stock Options
Under the Corporation's 1994 Stock Option Plan, which was approved by the
shareholders, stock options may be granted, from time to time, to officers
and key employees of the Corporation and the Bank. No options were granted in
1996.
COMPENSATION COMMITTEE
John E. Demmer, Chairman
Wilber M. Brucker, Jr.
Donald G. Karcher
Richard Nordstrom
EXECUTIVE COMPENSATION
The Chairman of the Board and Chief Executive Officer of the
Corporation, John E. Demmer, received no compensation in 1996. The following
table sets forth information with respect to the Chief Executive Officer of
the Bank. There were no executive officers of the Corporation or the Bank
whose total compensation exceeded $100,000 during 1996 other than the Chief
Executive Officer of the Bank.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
--------------------------------
Name and Principal Position Year Salary Bonus
- - --------------------------- ------ ---------- --------
<S> <C> <C> <C>
Michael J. Ross 1996 $106,734 $17,000
President and Chief Executive 1995 101,529 12,000
Officer, 1994 98,210 10,000
Community Bank of Dearborn
</TABLE>
6
<PAGE>
RELATED TRANSACTIONS
Certain directors and officers of the Corporation, their
associates and members of their immediate families were customers of, and had
transactions including loans and commitments to lend with the Bank in the
ordinary course of business during 1996. All such loans and commitments were
made by the Bank on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions
with other persons and did not involve more than the normal risk of
collectibility or present other unfavorable features. Similar transactions
may be expected to take place in the ordinary course of business in the
future.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Grant Thornton LLP has been selected by the Board of Directors
of the Corporation as independent certified public accountants to audit the
Corporation's books for the year 1997. A representative of Grant Thornton LLP
will be present at the Annual Meeting of Shareholders, will have the
opportunity to make a statement if the representative desires to do so, and
will be available to respond to appropriate questions by shareholders.
PROPOSAL TO AMEND ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has unanimously approved an amendment
to the Corporation's Articles of Incorporation (the "Articles") to increase
the number of authorized shares of Common Stock to 3,000,000 shares.
The Articles presently authorize 1,000,000 shares of Common
Stock. As of March 1, 1997, 950,000 shares of Common Stock were issued and
outstanding; and 50,000 shares of Common Stock were reserved for issuance
pursuant to the Corporation's Stock Option Plan.
The proposed amendment would provide additional Common Stock
which could be used from time to time without further action by the
shareholders unless required by applicable law or regulation for corporate
purposes which the Board of Directors deems advisable, such as stock splits,
stock dividends, financing, acquisitions, and other corporate purposes. The
Corporation currently has no plans, understandings or arrangements for the
issuance of the additional shares of Common Stock to be authorized by the
proposed amendment.
The proposed amendment to the Articles is not intended as an
anti-takeover provision. However, an increase in the authorized number of
shares of Common Stock could make more difficult, and thereby discourage,
attempts to acquire control of the Corporation. Issuance of shares of Common
Stock could dilute the ownership interest and voting power of present
shareholders, including any shareholder who might seek control of the
Corporation.
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<PAGE>
The affirmative vote of the holders of a majority of the
Corporation's outstanding shares of Common Stock will be required for
approval of the proposed amendment to the Article of Incorporation.
The Board of Directors unanimously recommends a vote FOR the
proposed amendment to the Articles of Incorporation.
PROPOSAL TO AMEND STOCK OPTION PLAN
The Board of Directors of the Corporation has adopted, subject
to shareholder approval, amendments to the Stock Option Plan (the "Plan"), to
(a) make available an additional 100,000 shares of the Corporation's Common
Stock for issuance upon the exercise of options granted thereunder, and to
(b) eliminate the provision in the Plan which provides that no person may be
granted options which would result in such person receiving in the aggregate
during the term of the Plan more than 10% of the number of shares of Common
Stock available for issuance under the Plan. The Plan was previously approved
by the shareholders at the Annual Meeting in June 1994.
As of March 1, 1997, options are outstanding for 41,000 of the
50,000 shares of Common Stock reserved for issuance under the Plan.
The Corporation has elected to continue issuing options
pursuant to the Plan rather than initiating a new plan. Of the total shares
currently authorized for issuance pursuant to the Plan, options for only
9,000 shares remain to be granted. In the opinion of the Board of Directors,
this number is insufficient for the future needs of the Corporation and the
limitation on the number of shares which may be optioned to any one person is
to restrictive. The Board of Directors believes that its continued ability to
grant options will be of assistance in attracting and retaining highly
qualified associates to the benefit of the Corporations and its shareholders.
Summary of Plan
The following is a summary of the principal provision of the
Plan:
Administration. The Plan is administered by the Stock Option
Plan Committee of the Board of Directors of the Corporation comprised of
directors who are not eligible to participate in the Plan. The Committee
makes determinations with respect to the officers and other key employees of
the Corporation or a subsidiary who shall participate in the Plan and the
extent of their participation.
Options may be either incentive stock options or non-qualified
stock options. More than one option may be granted to the same person
provided. No person may be granted options which would result in such person
receiving in the aggregate during the term of the Plan more than 10% of the
number of shares of Common Stock available for issuance under the Plan. The
Committee may not grant an employee incentive stock options which in the
aggregate are first exercisable during any one calendar year with respect to
Common Stock the aggregate fair market value of which (determined as of the
time of grant) exceeds $100,000.
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<PAGE>
Option Agreement. Each option granted under the Plan is
evidenced by an agreement is such form as the Committee shall from time to
time approve, which agreement must comply with and be subject to certain
conditions set forth in the Plan.
Option Price. The option price shall not be less than the full
fair market value of the shares of Common Stock at the time the option is
granted. Fair market value is defined as the price established and determined
by the Board of Directors, provided, however, if the Common Stock is traded
in the over-the-counter market, fair market value shall mean the closing
price of the Common Stock, in such market rounded, if necessary, to the next
full one cent, or if there is no such price published, then on the most
recent preceding date on which such prices are published.
Duration and Exercise of Options. The duration of each option
is determined by the Committee, except that the maximum duration may not
exceed ten years from the date of grant. No option may be exercisable prior
to the expiration of six months from the date of grant. The Committee
determines at the time of grant whether the option will be exercisable in
full or in cumulative installments.
Except as hereinafter provided, an option may be exercised by
an optionee only while such optionee is in the employ of the Corporation or a
subsidiary. In the event that the employment of an optionee to whom an option
has been granted under the Plan shall terminate (except as set forth below)
such option may be exercised, to the extent that the option was exercisable
on the date of termination of employment, only until the earlier of three (3)
months after such termination or the original expiration date of the option;
provided, however, that if termination of employment results from death or
total and permanent disability, such three (3) month period shall be extended
to twelve (12) months; and provided, further, that any option held by an
optionee whose employment shall be terminated either (i) for cause or (ii)
voluntarily by the optionee and without the consent of the Corporation shall,
to the extent not theretofore exercised, forthwith terminate. In the event of
a change in control (as defined in the Plan) unless the Committee determine
otherwise, all outstanding options shall become exercisable in full.
Payment of Option Price. The option price shall be paid in
cash or at the discretion or the Committee through (i) the delivery of
previously owned shares of the Corporation's Common Stock or (ii) by a
combination of cash and Common Stock.
Adjustments. The Committee shall make appropriate adjustment
in the number of shares of Common Stock for which options may be granted or
which may be issued under the Plan and the price per share of each option if
there is any change in the Common Stock as a result of a stock dividend,
stock split, recapitalization or otherwise.
Termination of Plan and Amendments. An option may not be
granted pursuant to the Plan after May 16, 2004. The Board of Directors may
from time to time terminate the Plan or amend the Plan subject to shareholder
approval to the extent necessary to satisfy the requirements of Section 16
under the Securities Exchange Act of 1934, or any successor rule.
Federal Income Tax Consequences. The Corporation is advised by
counsel that the grant of a non-qualified option or incentive stock option
has no tax consequences for the optionee or the Corporation. Upon the
exercise of a non-qualified option, the optionee is deemed to realize taxable
income to the extent that the fair market value of the shares of Common Stock
exceeds the option price. The Corporation is entitled to a tax deduction for
such amounts at the date of exercise. If any stock
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<PAGE>
received upon the exercise of a non-qualified option is later sold, any
excess of the sale price over the fair market value of the stock at the date
of exercise is taxable to the optionee.
The exercise of an incentive stock option will not result in
income to the optionee if the optionee (a) does not dispose of the shares
within two years after the date of grant or one year after exercise and (b)
is an employee from date of the grant until three months before the exercise.
If these requirements are met, the basis of the shares upon later disposition
will be the option price. Any gain will be taxed to the optionee as a
long-term capital gain and the Corporation will not be entitled to a
deduction. The excess of the market value on the exercise date over the
option price is an item of tax preference, potentially subject to the
alternative minimum tax. If the optionee disposes of the shares prior to the
expiration of either of the holding periods in (a) above, the optionee will
generally recognize compensation income and the Corporation will be entitled
to a deduction equal to the fair market value of the shares on the exercise
date minus the option price. Any gain in excess of the compensation income
portion will be treated as a long-term or short-term capital gain.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE
ISSUED AND OUTSTANDING SHARES OF COMMON STOCK WILL BE REQUIRED FOR APPROVAL
OF THE AMENDMENT TO THE STOCK OPTION PLAN.
SHAREHOLDER PROPOSALS
Pursuant to the General Rules under the Securities Exchange
Act of 1934, proposals of shareholders intended to be presented at the 1998
Annual Meeting of Shareholders must be received by management of the
Corporation at the corporate offices on or before December 19, 1997.
MISCELLANEOUS
It is not expected that any other matters will be brought
before the meeting. However, if any other matters are presented, it is the
intention of the persons named in the proxy to vote the proxy in accordance
with their best judgment.
The entire cost of preparing and mailing the proxy material
will be borne by the Corporation. Solicitation of proxies will be made by
mail, personally, or by telephone or telegraph, by officers and employees of
the Corporation and the Bank.
By Order of the Board of Directors,
Wilber M. Brucker, Jr.
Secretary
April 18, 1997
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<PAGE>
PROXY
DEARBORN BANCORP, INC.
PROXY - Solicited by Board of Directors
For Annual Meeting of Shareholders To Be Held May 20, 1997
The undersigned hereby appoints John E. Demmer and Michael J. Ross, or either
of them, with power of substitution in each, proxies to vote all Common Stock
of the undersigned in Dearborn Bancorp, Inc. at the Annual Meeting of
Shareholders to be held on May 20, 1997, and at all adjournments thereof,
upon the following:
1. ELECTION OF DIRECTORS FOR all nominees listed below
--- (except as indicated to the contrary below)
WITHHOLD AUTHORITY
---- to vote for all nominees listed below
Nominees as Directors: David Himick, William E. Kreger, Jeffrey G.
Longstreth and Michael J. Ross.
INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name on the space provided below.
- - -------------------------------------------------------------------------------
2. To approve an amendment to the Articles of Incorporation.
For Against Abstain
---- ---- ----
3. To approve amendments to the 1994 Stock Option Plan.
For Against Abstain
----- ---- -----
(continued and to be signed on other side)
In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THE PROXIES ARE APPOINTED
TO VOTE FOR THE ELECTION OF ALL DIRECTORS AND FOR THE
PROPOSALS.
-------------------------------------
Signature of Shareholder
-------------------------------------
Signature of Shareholder
Dated , 1997
---------------------------
Please sign exactly as your name is printed
hereon. When signing as attorney, executor,
administrator, personal representative, trustee,
or guardian, please give full title. If stock is
held jointly, each joint owner must sign.
