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 18, 1999
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 18th day of May, 1999
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 Company;
2. 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
26, 1998 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 16, 1999
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF DEARBORN BANCORP, INC.
May 18, 1999
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 "Company") from the holders of the Company's
Common Stock to be used at the Annual Meeting of Shareholders to be held on
Tuesday, the 18th day of May 1999, 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 16, 1999. The address of the
principal corporate offices of the Company 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 Secretary of the Company 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 26, 1998 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 Company was 2,473,295
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, 1999, the number
of shares of the Company'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.
Number Percent
Name of Individual of Shares (1) of Class
- ---------------------- ------------- --------
Wilber M. Brucker, Jr. 10,412 (2) *
Margaret I. Campbell 26,505 1.07
Timothy J. Cuttle 12,750 (3) *
John E. Demmer 122,317 (4) 4.95
Michael V. Dorian, Jr. 30,504 1.23
David Himick 186,309 7.53
Jeffrey L. Karafa 13,886(3)(5) *
Donald G. Karcher 24,485 *
Bradley F. Keller 76,793 (6) 3.10
Jeffrey G. Longstreth 11,375 *
Brian A. Mamo 350 (3) *
Richard Nordstrom 49,273 (7) 1.99
Michael J. Ross 35,936(3)(8) 1.45
Robert C. Schwyn 20,900 (9) *
Ronnie J. Story 91,498 3.70
Jeffrey J. Wolber 13,695 (3) *
All Directors and
Executive Officers as a
Group (10)(16 persons) 726,988 29.39
* 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 790 shares owned by Mr. Brucker's wife.
(3) The number of shares shown in the table includes shares issuable upon
the exercise of stock options by the following executive officers:
Timothy J. Cuttle - 7,650 shares; Jeffrey L. Karafa - 13,056 shares;
Michael J. Ross - 32,640 shares; and Jeffrey J. Wolber - 13,056 shares.
The table excludes the following stock options granted by the Company on
January 19, 1999: Timothy J. Cuttle - 7,500 shares; Jeffrey L. Karafa -
6,000 shares; Brian A. Mamo - 5,000 shares; Michael J. Ross - 15,000
shares; and Jeffrey J. Wolber - 6,000 shares.
2
<PAGE>
(4) Includes 41,742 shares held by Mr. Demmer's wife as a Trustee of a
Trust.
(5) Includes 614 shares held for Mr. Karafa in the Community Bank of
Dearborn 401(k) trust.
(6) Includes 2,397 shares owned by Mr. Keller's wife.
(7) Includes 173 shares owned by Mr. Nordstrom's wife.
(8) Includes 107 shares held for Mr. Ross in the Community Bank of Dearborn
401(k) trust.
(9) Includes 15,800 shares held for the benefit of Mr. Schwyn in a defined
benefit plan trust.
(10) Includes 66,402 shares issuable upon the exercise of stock options.
Certain Beneficial Owners
The following table sets forth as of March 1, 1999 the number
of shares of the Company's Common Stock owned by the only persons who were
known by the Company to own beneficially more than five percent of the Common
Stock of the Company:
Number Percent
Name of Beneficial Owner of Shares of Class
------------------------ --------- --------
David Himick 186,309 7.53
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 Board of Directors has nominated Wilber
M. Brucker, Jr., Bradley F. Keller, Richard Nordstrom and Ronnie J. Story for
election as directors for a term expiring at the 2002 Annual Meeting of
Shareholders, in each case until their successors are elected and qualified.
Other directors who are remaining on the Board will continue in office in
accordance with their previous election by shareholders until expiration of
their terms at the 2000 or 2001 Annual Meeting of Shareholders, as the case
may be.
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.
3
<PAGE>
INFORMATION ABOUT DIRECTORS AND NOMINEES FOR DIRECTORS
The following information is furnished with respect to each
person who is presently a director of the Company 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., 73(1) Retired Attorney; 1992 2002
Secretary of the Company
Margaret I. Campbell, 59 Retired, Consultant 1992 2001
John E. Demmer, 75 Chairman of the Board and Chief 1992 2001
Executive Officer, Jack Demmer
Ford, Inc. and Jack Demmer
Leasing; Chairman of the Board
and Chief Executive Officer of
of the Company
Michael V. Dorian, Jr., 39 Vice President, Mike Dorian Ford 1994 2001
David Himick, 73 Financial Consultant 1995 2000
Donald G. Karcher, 69 Chairman of the Board, Karcher 1992 2001
Agency, Inc.; Vice President
of the Company
Bradley F. Keller, 57(1) President, Braden Associates, Inc. 1992 2002
and MultiGard Properties, Ltd.
Jeffrey G. Longstreth, 56 President, Prudential Christie 1992 2000
Real Estate, Inc.
Richard Nordstrom, 71(1) Retired, Architect; Vice Chairman 1992 2002
of the Company
Michael J. Ross, 48 President and Chief Executive 1994 2000
Officer, Community Bank of
Dearborn; President of the
Company
4
<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>
Robert C. Schwyn, 60 Physician 1994 2000
Ronnie J. Story, 52(1) President and Chief Executive 1994 2002
Officer, Story Development
Corporation and Story Brothers
Grading and Excavating, Inc.
(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 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 1998, 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
Company.
The members of the Audit Committee during 1998 were Wilber M.
Brucker, Jr., Michael V. Dorian, Jr., Margaret I. Campbell, Donald G. Karcher
and Bradley F. Keller. The Audit Committee, which met three times during
1998, reviews, acts, and reports to the Board of Directors with respect to
various auditing and accounting matters, including the selection of the
Company's independent certified public accountants, the scope of audit
procedures, the nature of services to be performed for the Company and its
subsidiary, and the fees to be paid to the independent public accountants.
The members of the Compensation Committee for 1998 were Wilber
M. Brucker, Jr., John E. Demmer, Donald G. Karcher and Richard Nordstrom. The
Compensation Committee met one time during 1998. The Committee reviews and
recommends to the Board of Directors the compensation of the officers of the
Bank.
The Board of Directors held six meetings during 1998. The
Company did not pay any director fees in 1998. Each incumbent director
attended at least seventy-five percent of the total number of meetings of the
Board of Directors held during 1998.
5
<PAGE>
REPORT ON COMPENSATION
The Compensation Committee of the Board of Directors is
responsible for developing the Company'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 Company. The Committee also administers all aspects
of the Company's executive compensation program including its stock option
plan.
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 $30,000 for 1998.
Stock Options
Under the Company'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 Company and the Bank. 33,150 options were
granted in 1998 and 46,002 options were granted in 1997. No options were
exercised in 1998 or 1997.
COMPENSATION COMMITTEE
John E. Demmer, Chairman
Wilber M. Brucker, Jr.
Donald G. Karcher
Richard Nordstrom
6
<PAGE>
EXECUTIVE COMPENSATION
The Chairman of the Board and Chief Executive Officer of the
Company, John E. Demmer, received no compensation in 1998. The following
table sets forth information with respect to the Chief Executive Officer of
the Bank. There were no executive officers of the Company or the Bank whose
total compensation exceeded $100,000 during 1998 other than the Chief
Executive Officer of the Bank.
Summary Compensation Table
Annual Compensation
Name and -------------------------------------------
Principal Position Year Salary Bonus Options Granted
- ------------------- ---- -------- -------- ---------------
Michael J. Ross 1998 $149,613 $ 30,000 10,200
President and Chief 1997 122,916 25,000 22,440
Executive Officer, 1996 106,734 17,000 --
Community Bank of
Dearborn
Options Grants During 1998
The following table sets forth information on stock options
granted during 1998 under the Company's Stock Option Plan to the only officer
of the Bank named in the Summary Compensation Table. No stock options were
exercised during 1998.
<TABLE>
<CAPTION>
Individual Grants
- ----------------------------------------------------------------------
Percent of Potential Realizable
Number of Total Options Value at Assumed Rates of
Securities Granted to Exercise Stock Price Appreciation
Underlying Employees Price for Option Term (3)
Options During 1998 Per Expiration -------------------------
Name Granted (1) Share(2) Date 5% 10%
-------------- ---------- ------------- --------- ----------- -- --
<S> <C> <C> <C> <C> <C> <C>
Michael J. Ross 10,200 31 $12.74 01/20/08 $81,867 $206,617
<FN>
(1) The Company granted options aggregating 39,500 shares to officers and key
employees during 1998.
(2) The exercise price may be paid at the discretion of the Stock Option Plan
Committee by delivery of already-owned shares.
7
<PAGE>
(3) As required by rules of the Securities and Exchange Commission, potential
values stated are based on the prescribed assumption that the Company's
Common Stock will appreciate in value from the date of grant to the end
of the option term at annualized rates of 5% and 10% (total appreciation
of 63% and 159%) respectively, and therefore are not intended to forecast
possible future appreciation, if any, in the price of the Company's
Common Stock.
</TABLE>
CUMULATIVE STOCK PERFORMANCE GRAPH
The graph and table that follow show the cumulative return on
the Common Stock since the commencement of trading on April 8, 1998. This
return is compared in the table and graph with the cumulative return over the
same period with the following two indices: (i) the All U.S. Nasdaq Index and
(ii) the Nasdaq Bank Index. The graph and table were prepared assuming that
$100 was invested on April 8, 1998 in the Common Stock and in each of the
indices. Cumulative total return on the Common Stock or the two indices
equals the total increase (decrease) in value since April 8, 1998. The
stockholder returns shown on the performance graph are not necessarily
indicative of the future performance of the Common Stock or any particular
index.
[GRAPH OF COMPARATIVE STOCK PERFORMANCE OMMITTED]
8
<PAGE>
Peer Group Total Return
Cumulative Total Return
------------------------------
4/08/98 6/98 9/98 12/98
DEARBORN BANCORP, INC 100 103 84 75
NASDAQ STOCK MARKET (U.S.) 100 103 93 120
NASDAQ BANK 100 98 83 94
<TABLE>
<CAPTION>
Dearborn Bancorp, Inc. Total Return
Beginning Cumulative
Transaction Closing No. Of Dividend Dividend Shares Ending Total
Date (1) Type Price (2) Shares (3) per Share Paid Reinvested Shares Return
- -------- ---- --------- ---------- --------- ---- ---------- ------ ----------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
04/08/98 Begin $14.00 7.14 -- -- -- 7.14 100.00
06/30/98 Q'tr End 14.46 7.14 -- -- -- 7.14 103.29
09/30/98 Q'tr End 11.77 7.14 -- -- -- 7.14 84.03
12/31/98 End 10.50 7.14 -- -- -- 7.14 75.00
<FN>
(1) Specified ending dates or ex-dividend dates.
(2) All Closing Prices and Dividends are adjusted for stock splits and stock
dividends.
(3) "Begin Shares" based on $100 investment.
</TABLE>
RELATED TRANSACTIONS
Certain directors and officers of the Company, 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 1998. 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 Company as independent certified public accountants to audit the
Company's books for the year 1999. 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.
9
<PAGE>
SHAREHOLDER PROPOSALS
Pursuant to the General Rules under the Securities Exchange Act
of 1934, proposals of shareholders intended to be presented at the 1999
Annual Meeting of Shareholders must be received by secretary of the Company
at the corporate offices on or before December 17, 1999.
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 Company. Solicitation of proxies will be made by mail,
personally, or by telephone or telegraph, by officers and employees of the
Company and the Bank.
By Order of the Board of Directors,
Wilber M. Brucker, Jr.
Secretary
April 16, 1999
10
<PAGE>
PROXY
DEARBORN BANCORP, INC.
PROXY - Solicited by Board of Directors
For Annual Meeting of Shareholders To Be Held May 18, 1999
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 18, 1999, and at all adjournments thereof,
upon the following:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS ___ FOR all nominees listed below ___ WITHHOLD AUTHORITY
(except as indicated to the contrary below) to vote for all nominees listed below
</TABLE>
Nominees as Directors: Wilber M. Brucker, Jr., Bradley F. Keller,
Richard Nordstrom and Ronnie J. Story.
INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name on the space provided
below.
----------------------------------------------------------------------
(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.
-------------------------------------
Signature of Shareholder
-------------------------------------
Signature of Shareholder
Dated _________________________, 1999
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.
