SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
[X] 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)
DEARBORN BANCORP, INC.
-----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 16, 2000
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 16th day of May, 2000 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 Corporation's Stock Option Plan; and
3. 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 24, 2000 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,
/s/ Jeffrey L. Karafa
Secretary
April 14, 2000
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF DEARBORN BANCORP, INC.
May 16, 2000
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 16th day of May, 2000 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 14, 2000. 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 Secretary of 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 24, 2000 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
2,406,902 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.
SECURITY OWNERSHIP
Management
The following table sets forth, as of March 1, 2000, 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.
Number Percent
Name of Individual of Shares (1) of Class
----------------------------------------- --------------- --------
Wilber M. Brucker, Jr. 12,412 (2) *
Margaret I. Campbell 20,305 (3) *
Timothy J. Cuttle 20,760 (4)(5) *
John E. Demmer 126,616 (6) 5.24
Michael V. Dorian, Jr. 35,504 1.47
David Himick 187,809 7.77
Jeffrey L. Karafa 20,928 (5)(7) *
Donald G. Karcher 33,485 (8) 1.38
Bradley F. Keller 81,354 (9) 3.36
Jeffrey G. Longstreth 11,335 (10) *
Brian A. Mamo 5,812(5)(11) *
Warren R. Musson 20,000(5)(12) *
Richard Nordstrom 53,273 (13) 2.20
H. Kristene Rautio 645 *
Michael J. Ross 52,805(5)(14) 2.18
Robert C. Schwyn 20,900 (15) *
Ronnie J. Story 91,498 3.78
Jeffrey J. Wolber 19,779(5)(16) *
All Directors and Executive Officers
as a Group (17)(18 persons) 815,220 33.72
* 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) Includes 2,000 shares owned by Mrs. Campbell's husband.
(4) Includes 510 shares owned by Mr. Cuttle's wife.
2
(5) 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 - 15,150 shares; Jeffrey L. Karafa - 19,056 shares;
Brian A. Mamo - 5,000 shares; Warren R. Musson - 12,500 shares; Michael
J. Ross - 47,640 shares; and Jeffrey J. Wolber - 19,056 shares. The
table excludes the following stock options granted by the Corporation on
January 18, 2000: Timothy J. Cuttle - 6,000 shares; Jeffrey L. Karafa -
6,000 shares; Brian A. Mamo - 6,000 shares; Warren R. Musson - 6,000
shares; H. Kristene Rautio - 6,000 shares; Michael J. Ross - 7,500
shares; and Jeffrey J. Wolber - 6,000 shares.
(6) Includes 41,742 shares held by Mr. Demmer's wife as a trustee of a
trust.
(7) Includes 614 shares held for Mr. Karafa in the Community Bank of
Dearborn 401(k) trust.
(8) Includes 6,100 shares held by Mr. Karcher's wife as a Trustee of a
trust.
(9) Includes 2,397 shares owned by Mr. Keller's wife.
(10) Includes 616 shares owned by Mr. Longstreth's wife.
(11) Includes 462 shares held for Mr. Mamo in the Community Bank of Dearborn
401(k) trust.
(12) Includes 372 shares owned by Mr. Musson's wife.
(13) Includes 173 shares owned by Mr. Nordstrom's wife.
(14) Includes 701 shares held for Mr. Ross in the Community Bank of Dearborn
401(k) trust.
(15) Includes 15,800 shares held for the benefit of Dr. Schwyn in a defined
benefit plan trust.
(16) Includes 84 shares held for Mr. Wolber in the Community Bank of Dearborn
401(k) trust.
(17) Includes 118,402 shares issuable upon the exercise of stock options.
3
Certain Beneficial Owners
The following table sets forth as of March 1, 2000 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:
Number Percent
Name of Beneficial Owner of Shares of Class
------------------------- --------- --------
David Himick 187,809 7.77
John E. Demmer 126,616 5.24
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 David
Himick, Jeffrey G. Longstreth, Michael J. Ross and Robert C. Schwyn for
election as directors for a term expiring at the 2003 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 2001 or 2002 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.
4
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., 74 Retired Attorney; 1992 2002
Margaret I. Campbell, 60 Retired, Consultant 1992 2001
John E. Demmer, 76 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 Corporation
Michael V. Dorian, Jr., 40 Vice President, Mike Dorian Ford 1994 2001
David Himick, 74(1) Financial Consultant 1995 2003
Donald G. Karcher, 70 Chairman of the Board, Karcher 1992 2001
Agency, Inc.; Vice President
of the Corporation
Bradley F. Keller, 58 President, Braden Associates, Inc. 1992 2002
and MultiGard Properties, Ltd.
Jeffrey G. Longstreth, 57(1) President, Prudential Christie 1992 2003
Real Estate, Inc.
Richard Nordstrom, 72 Retired, Architect; Vice Chairman 1992 2002
of the Corporation
Michael J. Ross, 49(1) President and Chief Executive 1994 2003
Officer, Community Bank of
Dearborn; President of the
Corporation
5
<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, 61(1) Physician 1994 2003
Ronnie J. Story, 53 President and Chief Executive 1994 2002
Officer, Story Development
Corporation and Story Brothers
Grading and Excavating, Inc.
<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 1991 to 1995 Mr. Brucker was Of
Counsel to the law firm of Riley and Roumell; 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
1999, 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 1999 were Wilber M.
Brucker, Jr., Michael V. Dorian, Jr., Margaret I. Campbell, Donald G. Karcher
and Bradley F. Keller. The Audit Committee, which met two times during 1999,
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 certified public accountants.
The members of the Compensation Committee for 1999 were Wilber M.
Brucker, Jr., John E. Demmer, David Himick, Donald G. Karcher, Bradley F.
Keller and Richard Nordstrom. The Compensation Committee met three times
during 1999. The Committee reviews and recommends to the Board of Directors
the compensation of the officers of the Bank.
The Board of Directors held seven meetings during 1999. The
Corporation did not pay any director fees in 1999. Each incumbent director
attended at least seventy-five percent of the total number of meetings of the
Board of Directors held during 1999 except Margaret I. Campbell who was
present for fifty-seven percent of the total number of meetings.
6
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.
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 $5,000 for 1999.
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. 71,000 options were
granted in 1999, 33,150 options were granted in 1998 and 46,002 options were
granted in 1997. No options were exercised in 1999, 1998 or 1997.
COMPENSATION COMMITTEE
John E. Demmer, Chairman
Wilber M. Brucker, Jr.
David Himick
Donald G. Karcher
Bradley F. Keller
Richard Nordstrom
7
EXECUTIVE COMPENSATION
The Chairman of the Board and Chief Executive Officer of the
Corporation, John E. Demmer, received no compensation in 1999. 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 1999 other than the Chief
Executive Officer of the Bank.
Summary Compensation Table
Annual Compensation
-----------------------------------
Options
Name and Principal Position Year Salary Bonus Granted
- --------------------------- ---- ------ ----- -------
Michael J. Ross 1999 $164,759 $ 5,000 15,000
President and Chief Executive Officer, 1998 149,613 30,000 10,200
Community Bank of Dearborn 1997 122,916 25,000 22,440
Options Grants During 1999
The following table sets forth information on stock options
granted during 1999 under the Corporation's Stock Option Plan to the only
officer of the Bank named in the Summary Compensation Table. No stock options
were exercised during 1999.
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------
Potential Realizable
Value at
Percent of Assumed Rates
Number of Total Options of Stock Price
Securities Granted to Appreciation for
Underlying Employees Option Term (3)
Options During 1999 Exercise Price Expiration --------------------
Name Granted (1) Per Share (2) Date 5% 10%
- --------------- ---------- ------------- -------------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Michael J. Ross 15,000 21 $11.625 01/19/09 $109,725 $277,875
<FN>
(1) The Corporation granted options aggregating 71,000 shares to officers and
key employees during 1999.
(2) The exercise price may be paid at the discretion of the Stock Option Plan
Committee by delivery of already-owned shares.
(3) As required by rules of the Securities and Exchange Commission, potential
values stated are based on the prescribed assumption that the
Corporation'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 153%) respectively, and therefore are not
intended to forecast possible future appreciation, if any, in the price
of the Corporation's Common Stock.
</TABLE>
8
Year-end Option Values
The following table sets forth certain information on the number
of stock options remaining unexercised at December 31, 1999 by the only
officer of the Bank named in the Summary Compensation Table and the value of
such options at December 31, 1999.
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Stock Options
Shares Value at December 31, 1999 at December 31, 1999
Acquired Realized -------------------------- --------------------------
Name on Exercise at Exercise Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael J. Ross -- -- 47,640 -- -- --
</TABLE>
9
CUMULATIVE STOCK PERFORMANCE GRAPH
The graph and table that follow show the cumulative return on the
Common Stock from April 8, 1998 through December 31, 1999. 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.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG DEARBORN BANCORP, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ BANK INDEX
[graph omitted]
* $100 invested on 04/08/98 in stock or on 03/31/98 in index, including
reinvestment of dividends. Fiscal year ending December 31.
Peer Group Total Return
Cumulative Total Return
DEARBORN NASDAQ STOCK NASDAQ
BANCORP, INC MARKET (U.S.) BANK
------------ ------------- ------
04/08/98 100.00 100.00 100.00
06/30/98 103.29 104.54 97.84
09/30/98 84.07 94.40 82.60
12/31/98 75.00 122.50 93.84
03/31/99 65.60 137.03 90.08
06/30/99 67.42 149.93 96.67
09/30/99 60.13 153.35 87.98
12/31/99 43.73 221.32 90.20
10
Dearborn Bancorp, Inc. Total Return
Beginning Stock Cumulative
Transaction Closing No. Of Dividend Ending Total
Date (1) Type Price Shares (2) per Share Shares Return
- -------- ----------- ------- ---------- --------- ------ ----------
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 84.07
12/31/98 Q'tr End 10.50 7.14 -- 7.14 75.00
03/31/99 Q'tr End 9.00 7.14 0.15 7.29 65.60
06/30/99 Q'tr End 9.25 7.29 -- 7.29 67.42
09/30/99 Q'tr End 8.25 7.29 -- 7.29 60.13
12/31/99 End 6.00 7.29 -- 7.29 43.73
(1) Specified ending dates or ex-dividend dates.
(2) "Begin Shares" based on $100 investment.
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 1999. 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
Crowe, Chizek and Company LLP has been selected by the Board of
Directors of the Corporation as independent certified public accountants to
audit the Corporation's books as of and for the year ended December 31, 2000.
A representative of Crowe, Chizek and Company 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.
11
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
make available an additional 245,000 shares of the Corporation's Common Stock
for issuance upon the exercise of options granted thereunder. The Plan was
previously approved by the shareholders at the Annual Meeting in June 1994
and amended by the shareholders at the Annual Meeting in May 1997 to make an
additional 100,000 shares available for issuance under the Plan and in May
1998 to make an additional 85,000 shares available for issuance under the
Plan.
As of March 1, 2000, options were outstanding for 210,652 of the
255,000 shares of Common Stock reserved for issuance under the Plan. Share
figures have been adjusted to reflect a 10% stock dividend paid in January
1998 and a 2% stock dividend paid in January 1999.
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 44,348 shares
remain to be granted. In the opinion of the Board of Directors, this number
is insufficient for the future needs of the Corporation. 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 Corporation 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. 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.
Option Agreement. Each option granted under the Plan is evidenced
by an agreement in 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.
12
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 determines
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 stock 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 received upon the exercise
of a non-qualified stock 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.
13
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.
The Board of Directors recommends that the stockholders vote FOR
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 2001 Annual
Meeting of Shareholders must be received by the secretary of the Corporation
at the corporate offices on or before December 22, 2000.
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,
/s/ Jeffrey L. Karafa
Secretary
April 14, 2000
14
PROXY
DEARBORN BANCORP, INC.
PROXY - Solicited by Board of Directors
For Annual Meeting of Shareholders To Be Held May 16, 2000
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 16, 2000, 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, Jeffrey G. Longstreth,
Michael J. Ross and Robert C. Schwyn.
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 1994 Stock Option Plan.
____ For ____ Against ____ Abstain
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 PROPOSAL.
-------------------------------------
Signature of Shareholder
-------------------------------------
Signature of Shareholder
Dated___________________________, 2000
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.
