20
(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 (Amendment No. )
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[ ] Preliminary Proxy Statement [ ] Confidential, for use of the
Commission Only (as permitted by Rule
14(a)(6)(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
University Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
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Page 1 of 20
UNIVERSITY BANCORP, INC.
959 Maiden Lane
Ann Arbor, Michigan 48105
(734) 741-5858
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
June 24, 2003
To the Holders of Common Stock of University Bancorp, Inc.:
The Annual Meeting (the "Meeting") of Stockholders of University Bancorp,
Inc. (the "Company") will be held at the main office of University Bank (the
"Bank"), the Company's bank subsidiary, 959 Maiden Lane, Ann Arbor, Michigan
48105, at 12:00 noon, local time, on Tuesday, June 24, 2003 for the following
purposes:
1. To elect six directors to serve until the next Annual Meeting of
Stockholders;
2. To reauthorize, at the Board of Directors' discretion, an amendment to
University Bancorp's Amended and Restated Certificate of Incorporation effecting
a 1-for-2 reverse split of University Bancorp's common stock.
3. To transact such other business as may properly come before the
Meeting.
The Board of Directors has set 5:30 p.m. Central Standard Time, on April
30, 2003 as the record date for the determination of the stockholders entitled
to vote at the Meeting. All stockholders as of the record date are entitled to
receive this notice. The Proxy Statement and form of proxy for the Meeting are
being mailed with this notice and the initial mailing including the Proxy
Statement and form of proxy will be sent to stockholders on approximately May
20, 2003.
By order of the Board of Directors,
Stephen L. Ranzini,
President and Chief Executive Officer
April 30, 2003
If you wish to participate in the vote on the matters coming before the Annual
Meeting and do not intend to attend in person, please mark, sign and date the
enclosed form of proxy and return it promptly to the Company, c/o University
Bank, 959 Maiden Lane, Ann Arbor, Michigan 48105.
UNIVERSITY BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
June 24, 2003
TABLE OF CONTENTS
Page
General Information 3
Election of Directors 5
Proposal to Re-authorize a 1 for 2 Reverse Stock Split 7
Security Ownership of Certain Beneficial
Owners and Management 13
Executive Officers 14
Executive Compensation 15
Section 16(a) Beneficial Ownership Reporting Compliance 16
Compensation Plans 16
Certain Relationships and Related Transactions 18
Independent Public Accountants 20
Other Matters 20
Audit Committee Charter 21
GENERAL INFORMATION
By appointing "proxies", stockholders may vote their shares at the Annual
Meeting of Stockholders (the "Meeting") of University Bancorp, Inc. (the
"Company"), which is scheduled to be held on June 24, 2003 and any adjournments
thereof, whether or not they attend. With this Proxy Statement, the Company's
Board of Directors provides information on the items of business scheduled for
the Meeting and asks you to appoint proxies selected by the Board of Directors
to vote your shares. The Company's Board of Directors is soliciting your proxy.
The Company is paying for the cost of such solicitation.
The proxies will vote your shares according to your instructions. The Board
of Directors recommends a vote:
1) "FOR" the election of each of the nominees for election as directors
of the Company indicated in the accompanying form of proxy. You may
vote "FOR" or "WITHHOLD" as to all or any one or more nominees for
election as directors.
2) "FOR" the reauthorization, at the Board of Directors' discretion, of
an amendment to University Bancorp's Amended and Restated Certificate
of Incorporation effecting a 1-for-2 reverse split of University
Bancorp's common stock.
You have one vote for each share of Common Stock, par value $.01 per share,
of the Company ("Common Stock") registered in your name on the Company's books
on April 30, 2003 at 5:30 p.m., Central Standard Time, the record date for the
determination of stockholders entitled to notice of and to vote at the Meeting.
At that time, the Company had 3,899,548 shares of Common Stock outstanding and
entitled to vote.
If you wish to participate in the vote on the matters coming before the
Meeting, please sign, date and promptly return your form of proxy to the
Company, c/o University Bank, 959 Maiden Lane, Ann Arbor, Michigan 48105.
If you return a properly signed and dated form of proxy but do not mark any
choices for the election of directors your shares will be voted in accordance
with the recommendations of the Board of Directors as to such election.
You may revoke the proxy solicited by the Board of Directors before its
exercise by delivering written notice of such revocation to the Company c/o
University Bank, 959 Maiden Lane, Ann Arbor, Michigan 48105, or by submitting a
subsequently dated proxy, or by attending the Meeting and voting by ballot.
Directors will be elected by plurality of the votes of Common Stock cast at
the Meeting. For these purposes, abstentions and broker non-votes are not
considered votes cast.
Presentation of Proposals of Stockholders
It is expected that the next annual meeting of stockholders of the Company
will be held in the 2004 calendar year. Proposals of stockholders to be
presented at such annual meeting must be received by the Company prior to
December 15, 2003 to be included in the Company's proxy statement and form of
proxy for such annual meeting. The notice and any such proposal must comply with
the applicable provisions of Rule 14a-8 under the Securities Exchange Act of
1934, as amended.
Corporate Governance - Attendance at Board of Director and Committee Meetings
The Board of Directors oversees the management of the business of the
Company. The Board of Directors has an audit committee consisting of Gary Baker,
Robert Goldthorpe, and Michael Talley, which met four times during 2002. The
Compensation Committee of the Board of Directors consists of three members of
the board, presently Messrs. Gary Baker, Robert Goldthorpe, and Michael Talley
and formerly during 2002, Stephen Lange Ranzini, former Chairman Joseph Louis
Ranzini and Michael Talley. The Compensation Committee met once and all members
of this committee attended each meeting. The board had no nominating committee
during the fiscal year ended December 31, 2002. The Board of Directors held just
one meeting during the 2002 fiscal year because former board Chairman Joseph
Louis Ranzini (now deceased) did not call any other meetings as a result of a
debilitating illness and the directors did not wish to usurp his prerogatives as
Chairman. All directors attended this meeting and received monthly information
packages and communicated informally on a frequent basis between meetings.
Corporate Governance - Discussion of Committees
The Audit Committee receives audit reports and management recommendations
from the Company's outside independent auditors and responds to these reports
and recommendations. All members of the Audit Committee are independent as
required by 4200(a)(15) of the National Association of Securities Dealers
listing standards.
The Compensation Committee sets the amount and type of pay for the
employees of the Company. Each subsidiary has its own compensation committee and
independent compensation process. The Company has a policy that executives of
the Company do not draw pay directly from the Company because they spend their
time mainly on the business of the subsidiaries. The Company's Compensation
Committee establishes the level of ESOP and Stock Option Plan compensation
through recommendations to the Company's Board of Directors.
Compensation of Directors
Directors are not compensated for attendance at meetings, although they are
reimbursed for travel expenses. In addition, each of the outside directors was
awarded 25,000 stock options to buy common stock at $1 per share expiring April
1, 2012 in April 2002. Directors were last awarded stock options in 1993.
ELECTION OF DIRECTORS
The Board of Directors recommends a vote "FOR" the slate of six directors
named below. Biographical information is included below for each nominee.
Persons elected at the Meeting will hold office until a successor is elected or
until earlier resignation or removal. In the event that any of these director
nominees becomes unavailable to serve, proxies will be voted for the election of
such other person(s) as may be recommended by the Board of Directors.
Nominees for Election as Directors of the Company
Stephen Lange Ranzini, age 38, has been President, CEO and a director of
the Company or its Predecessors since July 1988, and served as the Treasurer of
the Company and its Predecessors from July 1988 to December 1995. Since May
1993, Mr. Ranzini has also served as the Treasurer and a Director of Michigan
BIDCO, Inc. (the "BIDCO") and since December 2002 also served as President and
Chairman of BIDCO, which is a community development lending organization. Since
December 1995, Mr. Ranzini has been Treasurer and a Director of Northern
Michigan Foundation and since December 2002, as President and Chairman of
Northern Michigan Foundation, which is a non-profit community development
lending organization that shares common senior management with BIDCO. Since
March 1994 Mr. Ranzini has served as a director of University Bank and since
November 1997 has served as Chairman of the Bank's Board of Directors. He has
held various senior management positions with the bank, including that of
President of the Bank between October 1994 and November 1995 and again since
November 1997. Between December 1995 and October 1997 he served as the Bank's
Senior Vice President - Mortgage Banking, supervising the Bank's subsidiaries:
Arbor Street LLC, Midwest Loan Services, Inc., Varsity Funding, LLC, and Varsity
Mortgage, LLC. He earned a B.A. from Yale in 1986. He is the brother of Joseph
Lange Ranzini and Paul Lange Ranzini.
Since July 1991, Mr. Ranzini has been a director of CityFed Financial
Corp., a former savings and loan holding company now based in Massachusetts.
Since May 1997 he has been a director of Newco Bancorp (formerly Municipal
Bancorp), a financial services company based in Toronto, Canada formerly listed
on the Toronto Stock Exchange.
Gary Baker, age 48, was elected as a director of the Company in April 2002.
He is currently EDS's Director, GM Global Supply Chain & eGM. He also hosts a
radio show called the Internet Advisor on Detroit's WJR 760AM and a similar TV
segment on Detroit's WXYZ-TV Channel 7 Action News. Gary is a former Partner in
the Advanced Technology Group in Arthur Andersen and in April 1994 founded and
was the CEO of Online Technologies Corporation, one of the oldest ISPs in
Michigan specializing in hosting and developing business Websites. He earned a
BA and an MBA from the University of Michigan.
Robert Goldthorpe, age 66, has served as a director of the Company since
April 1996 and was elected Chairman of the Board in January 2003. Mr. Goldthorpe
also served as a Director of University Bank from September 1992 to January
1996. For more than the past five years, Mr. Goldthorpe has been President of
Goldthorpe Enterprises, a diversified holding company with operations in the
central and eastern portion of the Upper Peninsula of Michigan, with investments
in hotels, restaurants, apartment buildings, a hardware store, and the
construction and contracting business.
Dr. Joseph Lange Ranzini, age 43, has served as a director of the Company
since April 1996. A graduate of Dartmouth College in 1982, he earned his M.D.
from the University of Virginia in 1986, and completed his residency with a
specialty in General Surgery at Mary Imogene Bassett Hospital, an affiliate of
Columbia University in Cooperstown, New York, in 1992. Since that time he has
been in a general surgery private practice at Augusta Medical Center in
Fishersville, Virginia. He is the brother of Stephen Lange Ranzini and Paul
Lange Ranzini.
Paul Lange Ranzini, age 41, has served as a director of the Company since
April 1996. He is Managing Editor at A-R Editions, a leading musicology book
publisher, and a Doctoral Candidate in Music History and Theory at the
University of Chicago. He has attended the University of Chicago since 1989,
except in 1994 and 1995, when he earned a Fulbright Fellowship to Germany for
Dissertation Research. At the University of Chicago, he was also employed
part-time as the computer data center manager at the University's International
House. From 1984 to 1988 he was a graduate student at the University of Michigan
in Ann Arbor, Michigan, where he earned two Masters, an M.A. in Musicology and
an M.M. in Organ and Church Music. From 1979 to 1983 he was a student at the
College of William and Mary, where he received a B.A. in Philosophy. He is the
brother of Stephen Lange Ranzini and Joseph Lange Ranzini.
Michael Talley, age 52, has served as a director of the Company or its
Predecessors since 1988. Mr. Talley is the lead independent director and
Chairman of the Audit Committee. Since March 1990, Mr. Talley has served as an
Account Executive at Ladenburg, Thalmann & Co. Inc. in New York, New York.
Between February 1988 and March 1990 Mr. Talley served as an Account Executive
at Oppenheimer & Co., Inc. in New York, New York. For more than five years until
February 1988, he served as an Account Executive at L.F. Rothschild Unterberg
Towbin in New York, New York. Mr. Talley is a native of Detroit, Michigan, and a
graduate of Michigan State University, in East Lansing, Michigan.
There is no family relationship between any current director or executive
officer of the Company and any other current director or executive officer of
the Company, except as indicated above.
PROPOSAL TO RE-AUTHORIZE A REVERSE STOCK SPLIT
Overview
You are being asked to vote to reauthorize, at the Board of Directors
discretion, an amendment to our Amended and Restated Certificate of
Incorporation which would effect a one-for-two reverse stock split of all
outstanding shares of our common stock. Our Board of Directors has adopted a
resolution approving, declaring advisable and recommending to our stockholders
for their approval a proposal to reauthorize the filing of an amendment to our
Amended and Restated Certificate of Incorporation to effect this reverse stock
split. At last years annual meeting the shareholders approved the amendment,
however, the board of directors did not implement the reverse stack split.
If our stockholders re-approve the proposal to amend our Amended and
Restated Certificate of Incorporation to effect the reverse stock split, we may
file a certificate of amendment to our Amended and Restated Certificate of
Incorporation with the Secretary of State of the State of Delaware. The
certificate of amendment will effect a one-for-two reverse split of the shares
of our issued and outstanding common stock but will not change the number of
authorized shares of common stock or preferred stock, or the par value of
University Bancorp's common stock or preferred stock.
Reasons for the Reverse Stock Split
Our Board of Directors believes that a reverse stock split may facilitate
the continued listing of our common stock on the NASDAQ Small-Cap Market and may
enhance the desirability and marketability of our common stock to the financial
community and the investing public.
Our common stock is quoted on the NASDAQ Small-Cap Market. To be quoted on
the NASDAQ Small-Cap Market, among other things, a company's common stock must
maintain a minimum bid price of $1.00 per share. NASDAQ has informed management
that the Company's common stock would be de-listed from the NASDAQ Small Cap
Market if the bid price of the Company's common stock does not trade for at
least $1.00 per share for ten consecutive trading days prior to September 2,
2003. Our Board of Directors believes that the reverse stock split will
facilitate regaining compliance with the NASDAQ minimum bid price listing
requirement by causing an increase in the minimum bid price of our common stock
to above the $1.00 per share minimum, although we cannot assure you that this
will occur. If we do not regain compliance, and our common stock is delisted
from the NASDAQ Small-Cap Market, trading in our common stock, if any, would
have to be conducted on the OTC Bulletin Board or in the non-NASDAQ
over-the-counter market (or "pink sheet" market). This would likely
significantly decrease the liquidity of our common stock.
If we effect the reverse stock split, our Board of Directors believes that
the resulting reduction in the number of our outstanding shares of our common
stock may encourage greater interest in our common stock by the investment
community. Our Board of Directors believes that the current market price of our
common stock may impair its acceptability to institutional investors,
professional investors and other members of the investing public. Many
institutional investors have policies prohibiting them from holding lower-priced
stocks in their own portfolios, which reduces the number of potential buyers of
our common stock. In addition, financial advisors and analysts at many brokerage
firms are reluctant to recommend lower-priced stocks to their clients or monitor
the activity of lower-priced stocks. A variety of brokerage house
policies andpractices also tend to discourage individual brokers within those
firms from dealing in lower-priced stocks. Some of those policies and practices
pertain to the payment of brokers' commissions and to time-consuming procedures
that function to make the handling of lower-priced stocks unattractive to
brokers from an economic standpoint. Our Board of Directors believes that if the
reverse stock split has the effect of raising the trading price of our common
stock, this will increase the attractiveness of our common stock to the
investment community and possibly promote greater liquidity for our existing
stockholders.
Risks Associated with the Reverse Stock Split
This proxy includes forward-looking statements including statements
regarding our intent to solicit re-approval of a reverse stock split, the timing
of the proposed reverse stock split, and the potential benefits of a reverse
stock split, including but not limited to increased investor interest, continued
listing on the NASDAQ Small-Cap Market and the potential for a higher stock
price. The words "believe," "expect," "will," "may" and similar phrases are
intended to identify such forward-looking statements. Such statements reflect
the current views and assumption of University Bancorp, and are subject to
various risks and uncertainties that could cause actual results to differ
materially from expectations. These risks include but are not limited to risks
relating to the volatility of our stock price, general market and economic
conditions and risks related to the development of our business. For a
discussion of these and other risk factors that could affect our business,
investors should read the risk factors listed beginning on page 22 in our Form
10-K for the year ended December 31, 2001 filed with the Securities and Exchange
Commission.
There can be no assurance that the reverse stock split will result in the
benefits described above under the heading "Reasons for the Reverse Stock
Split." Specifically, there can be no assurance that the market price of our
common stock immediately after the effective date of the proposed reverse stock
split would be maintained for any period of time or that such market price would
approximate two times the market price of our common stock before the reverse
stock split. Accordingly, the total market capitalization of our common stock
after the proposed reverse stock split may be lower than the total market
capitalization before the proposed reverse stock split and, in the future, the
market price of our common stock following the reverse stock split may not
exceed or remain higher than the current market price. In many cases, the total
market capitalization of a company following a reverse stock split is lower than
the total market capitalization before the reverse stock split. We cannot assure
you that the reverse stock split will not further adversely impact the market
price of University Bancorp's common stock.
Furthermore, we cannot assure you that the reverse stock split will result
in a per share price that will attract institutional investors and brokers.
While our Board of Directors believes that a higher stock price may help
generate investor interest, there can be no assurance that the reverse stock
split will result in a per share price that will attract institutional investors
and brokers.
Implementation and Effects of the Reverse Stock Split
If our stockholders re-authorize the reverse stock split proposal and our
Board of Directors implements the reverse stock split, the reverse stock split
would have the following effects:
o every 2 shares of our common stock owned bya stockholder will
automatically be changed into and become one new share of our common stock;
o the number of shares of our common stock issued and outstanding will be
reduced proportionately;
o proportionate adjustments will be made to the per share exercise price
and the number of shares issuable upon the exercise of all outstanding options
and warrants entitling the holders thereof to purchase shares of our common
stock, which will result in approximately the same aggregate price being
required to be paid for such options or warrants upon exercise of such options
or warrants immediately preceding the reverse stock split;
o the number of shares reserved for issuance under our existing stock
option plans will be reduced proportionately based on the 1-for-2 reverse
stocksplit ratio. In addition, the number of shares reserved for issuance under
our existing stock option plans will be adjusted to take into account the 50%
stock dividend previously paid to shareholders in 1998. By approving the
re-authorization of the reverse stock split, shareholdesr are authorizing the
board to make this adjustment, whether or not the reverse stock split itself is
implemented.
The reverse stock split will be effected simultaneously for all of our
common stock and the exchange number will be the same for all of our common
stock. The reverse stock split will affect all of our stockholders uniformly and
will not affect any stockholder's percentage ownership interests in University
Bancorp, except to the extent that the reverse stock split results in any of our
stockholders owning a fractional share. As described below, stockholders holding
fractional shares will be entitled to an additional share of common stock in
lieu of such fractional shares. Such additional full shares of common stock will
increase the proportionate interest of stockholders effected. This, however, is
not the purpose for which we are effecting the reverse stock split. We will
continue to be subject to the periodic reporting requirements of the Securities
Exchange Act of 1934, as amended.
Fractional Shares
No fractional share certificates will be issued in connection with the
reverse stock split. Stockholders who otherwise would be entitled to receive
fractional shares because they hold a number of shares of our common stock not
evenly divisible by 2 will instead receive an additional share of common stock
in lieu thereof.
Authorized Shares
The reverse stock split would not change the number of authorized shares of
our common stock designated in our Amended and Restated Certificate of
Incorporation, which is currently 5,000,000 shares. Therefore, because the
number of issued and outstanding shares of our common stock would decrease, the
number of shares remaining available for issuance under our authorized pool of
common stock would increase. In addition, we will continue to have 500,000
authorized but unissued and undesignated shares of preferred stock.
These additional shares would be available for issuance from time to time
for corporate purposes such as raising additional capital, acquisitions of
companies or assets and sales of stock or securities convertible into common
stock. We believe that the availability of the additional shares will
provide us with the flexibility to meet business needs as they arise, to take
advantage of favorable opportunities and to respond to a changing corporate
environment. If we issue additional shares, the ownership interests of holders
of our common stock may be diluted. Also, if we issue shares of our preferred
stock, the issued shares may have rights, preferences and privileges senior to
those of our common stock. We have no current plan to issue these additional
shares.
Potential Anti-Takeover Effect
The additional shares of common stock that would become available for
issuance if the reverse stock split is approved could also be used by us to
oppose a hostile takeover attempt or delay or prevent changes of our control or
changes in or removal of our management, including transactions that are favored
by a majority of the independent stockholders or in which the stockholders might
otherwise receive a premium for their shares over then-current market prices or
benefit in some other manner. For example, without further stockholder approval,
our Board of Directors could strategically sell shares of our common stock in a
private transaction to purchasers who would oppose a takeover or favor our
current board of directors. Although the increased proportion of unissued
authorized shares to issued shares could, under certain circumstances, have an
anti-takeover effect, the reverse stock split proposal is not being proposed in
response to any effort of which we are aware to accumulate our shares of common
stock or obtain control of University Bancorp, and it is not part of a plan by
management to recommend a series of similar amendments to our Board of Directors
and stockholders. Other than the reverse stock split proposal, our Board of
Directors does not currently contemplate recommending the adoption of any other
amendments to our Amended and Restated Certificate of Incorporation that could
be construed as affecting the ability of third parties to take over or change
the control of University Bancorp.
Other Effects on Outstanding Shares
If a reverse stock split is implemented, the rights and preferences of the
outstanding shares of our common stock would remain the same after the reverse
stock split. Each share of common stock issued pursuant to the reverse stock
split would be fully paid and non-assessable.
In addition, the reverse stock split would result in some stockholders
owing "odd-lots" of fewer than 100 shares of our common stock. Brokerage
commissions and other costs of transactions in odd-lots are generally higher
than the costs of transactions in "round-lots" of even multiples of 100 shares.
Accounting Matters
The reverse stock split will not affect the par value of our common stock.
On the effective date of the reverse stock split, the stated capital on
University Bancorp's balance sheet attributable to University Bancorp's common
stock will be reduced proportionately, and the additional paid-in capital
account will be credited with the amount by which the stated capital is reduced.
The per share net income or loss and net book value of University Bancorp's
common stock will be increased because there will be fewer shares of University
Bancorp's common stock outstanding.
Procedure for Effecting Reverse Stock Split and Exchange of Stock Certificates
If the stockholders re-approve the reverse stock split proposal, we intend
to implement the reverse stock split as soon as possible thereafter. The reverse
stock split would be implemented by filing a certificate of amendment to our
Amended and Restated Certificate of Incorporation with the Secretary of State of
the State of Delaware. The reverse stock split will become effective at the time
specified in the certificate of amendment, which will most likely be immediately
after the filing of the certificate of amendment and which we refer to as the
"effective time." Beginning at the effective time, each certificate representing
shares of our common stock before the reverse stock split will automatically be
deemed for all corporate purposes to evidence ownership of one-half of one share
of our common stock after the reverse stock split. All shares issuable upon
exercise or conversion of outstanding options, warrants or other securities will
automatically be adjusted. The form of the proposed amendment to effect the
reverse stock split is attached hereto as Appendix A; however, the text of the
certificate of amendment is subject to modification to include such changes as
may be required by the office of the Secretary of State of the State of Delaware
and as our Board of Directors deems necessary and advisable to effect the
reverse stock split.
As soon as practicable after the effective time, stockholders will be
notified that the reverse stock split has been effected. University Bancorp
expects that its transfer agent, Computershare, will act as exchange agent for
purposes of implementing the exchange of stock certificates. Stockholders of
record will receive a letter of transmittal requesting that they surrender the
stock certificates they currently hold for stock certificates reflecting the
adjusted number of shares as a result of the reverse stock split. Persons who
hold their shares in brokerage accounts or "street name" will not be required to
take any further actions to effect the exchange of their certificates. No new
certificates will be issued to a stockholder until the stockholder has
surrendered the stockholder's outstanding certificate(s) together with the
properly completed and executed letter of transmittal to the exchange agent.
Until surrender, each certificate representing shares before the reverse stock
split will continue to be valid and will represent the adjusted number of shares
rounded down to the nearest whole share. Stockholders should not destroy any
stock certificate and should not submit any certificates until they receive a
letter of transmittal. Our transfer agent, Computershare, will charge a fee for
exchanging shares together with a letter of transmittal, so the board of
directors recommends that shareholders NOT immediately exchange the shares they
hold, but rather, that shareholders keep their existing share certificates and
the letter of transmittal for future use in the event they ever need to transfer
their shares in the future.
No Dissenters' Rights
Under the Delaware General Corporation Law, our stockholders are not
entitled to dissenters' rights with respect to the reverse stock split, and we
will not independently provide stockholders with any such right.
Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of certain material United States federal income
tax consequences of the reverse stock split. It does not purport to be a
complete discussion of all of the possible United States federal income tax
consequences of the reverse stock split and is included for general information
only. Further, it does not address any state, local or foreign income or other
tax consequences. This discussion does not address the tax consequences to
holders that are subject to special tax rules, such as banks, insurance
companies, regulated investment companies, personal holding companies, foreign
entities, nonresident alien individuals, broker-dealers and tax-exempt entities.
The discussion is based on the provisions of the United States federal income
tax law as of the date hereof, which is subject to change retroactively as well
as prospectively. This summary also assumes that the shares of our common stock
held by our stockholders before the reverse stock split were, and the shares of
our common stock held after the reverse stock split will be, held as "capital
assets," as defined in the Internal Revenue Code of 1986, as amended, or the
"Code" (i.e., generally, property held for investment). The tax treatment of a
stockholder may vary depending upon the particular facts and circumstances of
such stockholder. Each stockholder is urged to consult with such stockholder's
own tax advisor with respect to the tax consequences of the reverse stock split.
Stockholders will not recognize any gain or loss upon such stockholder's
exchange of shares held before the reverse stock split for shares after the
reverse stock split. The aggregate tax basis of the shares of our common stock
received in the reverse stock split (including any fraction of a share deemed to
have been received) will be the same as the stockholder's aggregate tax basis in
the shares of our common stock exchanged therefor. In general, stockholders who
receive a full share instead of their fractional share interests in the shares
of our common stock as a result of the reverse stock split will recognize no
gain or loss as a result of the exchange or additional share issuance until they
sell shares at a future date. The stockholder's holding period for the shares of
our common stock after the reverse stock split will include the period during
which the stockholder held the shares of our common stock surrendered in the
reverse stock split.
This summary of certain material United States federal income tax
consequences of the reverse stock split is not binding on the Internal Revenue
Service or the courts. Accordingly, each stockholder should consult with his or
her own tax advisor with respect to all of the potential tax consequences to him
or her of the reverse stock split.
Required Vote
The affirmative vote of the holders of a majority of the outstanding shares
of University Bancorp's common stock is required to approve the proposal to
reauthorize the reverse stock split. A majority of the shareholders of
University Bancorp have advised the board that they intend to vote "FOR" the
proposal.
Recommendation of the Board of Directors
The Board of Directors has determined that the proposal to reauthorize the
reverse stock split is advisable and in the best interests of our stockholders
and recommends that the stockholders vote "FOR" re-authorization of the reverse
stock split proposal.
Security Ownership of Certain Beneficial Owners and Management
Set forth below is information with respect to number and percentage of
outstanding shares of the Company beneficially owned by certain persons,
including those known to the Company to own beneficially more than 5% of the
Company's outstanding Common Stock, the directors of the Company individually
and the directors and officers of the Company as a group. The information in the
table is as of April 14, 2003, except as otherwise indicated.
Amount and Nature Percent
Title of of Beneficial of
Name and Address Class Ownership (1) Class
Stephen Lange Ranzini Common 2,583,596 (2)(3) 66.26%
c/o University Bank Stock (5)
959 Maiden Lane
Ann Arbor, MI 48105
Dr. Joseph Lange Ranzini Common 1,998,357 (2)(3) 51.75%
675 Cherry Avenue Stock (5)
Waynesboro, VA 22980
Paul Lange Ranzini Common 1,998,357 (2)(3) 51.75%
1024 Pleasant View Road Stock (5)
Middleton, WI 53562
Gary Baker Common 25,000 (4) 0.64%
2215 Londonderry Stock
Ann Arbor, MI 48104
Robert Goldthorpe Common 52,810 (4) 1.35%
2564 Helmer St. Stock
McMillan, MI 49853
Michael Talley Common 25,000 (4) 0.64%
55 Payson Ave. #4I Stock
New York, NY 10034
Orpheus Capital, L.P. Common 1,958,757 (2) 50.23%
959 Maiden Lane Stock
Ann Arbor, MI 48105
Ranzini Family Trust Common 1,998,357 (2)(3) 51.25%
dated 12/20/89 Stock
c/o University Bank
959 Maiden Lane
Ann Arbor, MI 48105
Mildred Lange Ranzini Common 578,274 (6) 14.83%
43 Sweetwater Drive Stock
Belle Mead, NJ 08502
All Current Officers Common 2,686,406 (2)(3) 77.02%
and Directors, as a Stock (4)(5)
Group (Six Persons)
[footnotes continued on following page]
(1) Unless otherwise indicated, the indicated person is believed to
have sole voting and investment power over shares indicated as beneficially
owned by such person.
(2) Includes 1,958,757 shares of Common Stock held by a limited
partnership, the primary beneficiaries of which are Mr. Stephen Lange Ranzini,
Dr. Joseph Lange Ranzini, Mr. Paul Lange Ranzini, Ms. Mildred Lange Ranzini and
the other children and grandchildren of Ms. Mildred Lange Ranzini and former
Chairman Joseph Louis Ranzini (deceased), or trusts for their benefit. The
general partner of the limited partnership is the Ranzini Family Trust of
12/20/1989 and the trustees of the trust are Mr. Stephen Lange Ranzini, Dr.
Joseph Lange Ranzini and Mr. Paul Lange Ranzini.
(3) Includes 39,600 shares of Common Stock held by Ranzini Family Trust
of 12/20/1989, the General Partner of Orpheus Capital, L.P. the primary
beneficiaries of which are and the five adult children of former Chairman Joseph
Louis Ranzini (deceased) and Ms. Mildred Lange Ranzini. The trustees of the
trust are Mr. Stephen Lange Ranzini, Dr. Joseph Lange Ranzini and Mr. Paul Lange
Ranzini. Mr. Stephen Lange Ranzini, Dr. Joseph Lange Ranzini and Mr. Paul Lange
Ranzini are each primary beneficiaries of one-fifth or 7,920 of the shares of
Common Stock held under the terms of the trust.
(4) Includes currently exercisable options on 25,000 shares of common
stock are held by each of Mr. Baker, Mr. Goldthorpe and Mr. Talley. The shares
subject to such person's respective option are included in such person's
respective holdings and in the total shares held by all current officers and
directors as a group.
(5) Includes 28,371 shares of Common Stock allocated to Mr. Stephen
Lange Ranzini under the terms of the Company's Employee Stock Ownership Plan.
Such shares are fully vested.
(6) Includes 294,549 shares of Common Stock of the shares held by
Orpheus Capital, which is 15.038% of the total shares held by Orpheus Capital,
L.P. The Mildred Lange Ranzini Trust owns 15.038% of Orpheus Capital, L.P., and
Ms. Mildred Lange Ranzini is the primary beneficiary of the Mildred Lange
Ranzini Trust.
EXECUTIVE OFFICERS
Stephen Lange Ranzini is the President and Chief Executive Officer of the
Company, as indicated above under "Election of Directors". Officers of the
Company serve at the discretion of the Board of Directors and generally are to
be elected annually. Rebecca David, by virtue of her position as CEO of the
Company's University Bank subsidiary could also be considered an executive
officer of the Company.
Rebecca David, age 49, has served as CEO and a Director of University Bank
since January 2001. Between April 1985 and July 2000, Ms. David served in a
variety of positions at Franklin Bank of Southfield, Michigan, a community bank
that serves the Detroit, Michigan area with over $500 million in assets. Her
positions at Franklin Bank included President from January 1999 to July 2000, a
Director from 1997 to 2000, Executive Vice President in 1997 and 1998 and Senior
Vice President from 1993 to 1997.
Executive Compensation
The following table sets forth information concerning all cash compensation
paid or accrued for services rendered in all capacities to the Company and
affiliates for the fiscal years ended December 31, 2002, 2001 and 2000, of the
Chief Executive Officer of the Company. There were no other individuals whose
salary and bonus from the Company or its affiliates for the latest fiscal year
exceeded $100,000:
Summary Compensation Table
Securities
Name and Principal Other Annual Restricted Stock Underlying
------------------- ------------- ----------------- ----------
Position Year Salary Bonus Compensation Options/ Awards($) SARs (#)
-------- ---- ------ ----- ------------ ------------------ --------
Rebecca David $120,400 $ 0 $ 0 $ 0 0
CEO of University Bank 2002 (3)
Rebecca David $122,400 $ 0 $ 0 $31,200 100,000
CEO of University Bank 2001 (3) (5) (5)
Stephen Lange Ranzini, 2002 $ 77,854 $ 0 $ 0 $ 0 0
President & CEO (1)(3)
Stephen Lange Ranzini, 2001 $ 74,790 $ 0 $ 6,750 $ 0 0
President & CEO (1)(3) (2)
Stephen Lange Ranzini, 2000 $ 82,404 $ 0 $ 6,750 $ 0 0
President & CEO (1)(3) (2)
(1) Salary in 2002, 2001 and 2000 includes $14,000, $12,000 and $18,750,
respectively, from Michigan BIDCO, Inc., for which Mr.Ranzini served as
Treasurer.
(2) Includes SEP IRA pension payment of $6,750 from Michigan BIDCO, Inc.
in 2001 and 2000.
(3) At the end of the Company's fiscal year ended December 31, 2002, 27,487
shares of the Company's common stock were allocated to Mr. Ranzini
under the Company's ESOP. Mr. Ranzini's rights in all of all these
shares are vested. Valued at $0.69 per share, the last sale price of
the Company's common stock on December 31, 2002, the aggregate value of
such shares was $18,966.
(4) Allocation under the Company's ESOP of 2,392 shares of the Company's
common stock to Mr. Ranzini in 1999.
(5) During 2001, Ms. David was allocated 100,000 options to purchase common
stock under the University Bancorp, Inc. 1995 Stock Plan at $2 per
share (the price was adjusted to reflect the value of the rights
offering distribution in 2001), vesting 20% per year beginning December
1, 2001 and expiring December 1, 2005. Ms. David also received a
signing bonus of restricted shares of common stock valued at $31,200 in
2001.
No options to purchase shares of Common Stock were granted to the
executive officer named in the above summary compensation table during 2002.
Mr. Ranzini did not receive during the three fiscal years ended December
31, 2002 nor did he hold at December 31, 2002, any stock options, SAR grants or
Long Term Incentive Plan Awards.
Ms. David did not receive during the three fiscal years ended December
31, 2002 nor did he hold at December 31, 2002, any stock options, SAR grants or
Long Term Incentive Plan Awards other than the options and shares referenced
above in footnote 5.
The Company does not have a defined benefit or actuarial pension plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The management of the Company ("we") reviewed the Forms 3 and 4 and
amendments thereto furnished to the Company pursuant to Rule 16a-3(e)
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), during its most recent fiscal year. We also reviewed the Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, and written representations from executive officers and directors
of the Company that did not file a Form 5 with respect to its most recent fiscal
year, to the effect that no filing of a Form 5 is required with respect to such
person. Based upon our review, no person who, at any time during the Company's
most recent fiscal year, was a director, officer or beneficial owner of more
than 10% of the Company's Common Stock, failed, as disclosed in the above Forms,
to file on a timely basis, any reports required by Section 16(a) of the Exchange
Act.
COMPENSATION PLANS
University Bancorp, Inc. 1995 Stock Plan. The 1995 Stock Plan of the
Company was adopted by the Board of Directors in November 1995 (and amended in
April 1996) and later approved by the Company's stockholders. The purpose of the
1995 Stock Plan is to provide incentives to officers, directors, employees and
consultants of the Company. Under the 1995 Stock Plan, officers and other
employees of the Company and any present or future parent or subsidiary
(collectively "Related Corporations") are provided with the opportunity to
purchase shares of Common Stock as "incentive stock options" ("ISOs"), as
defined in Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), and directors, officers, employees and consultants of the Corporation
and Related Corporations are provided with the opportunity to purchase shares of
Common Stock of the Company pursuant to options which do not qualify as ISOs
("Non-Qualified Options") and, in addition, such directors, officers, employees
and consultants may be granted awards of stock in the Company ("Awards") and
opportunities to make direct purchases of stock in the Company ("Purchases").
Both ISOs and Non-Qualified Options are referred to hereafter individually as an
"Option" and collectively as "Options". Options, Awards and Purchases are
referred to hereafter as "Stock Rights".
A total of 525,000 shares of Common Stock (as adjusted automatically per
the terms of the Plan as a result of the Company's February 1998 3 for 2 stock
split effected in the form of a 50% stock dividend of Common Stock) are reserved
for issuance upon the exercise of Options or in connection with Awards or
Purchases of stock under the 1995 Stock Plan (subject to adjustment for capital
changes). Shares subject to Options that for any reason expire or are terminated
unexercised may again be available for grant under the 1995 Stock Plan. Unless
sooner terminated, the 1995 Stock Plan will terminate on November 15, 2005.
The Board of Directors of the Company administers the 1995 Stock Plan. The
Board has the right, in accordance with the Plan, to appoint a Compensation
Committee ("Compensation Committee") of three or more of its members to
administer the Plan. The Compensation Committee of the Board of Directors has
been established and provides recommendations to the Board on the granting of
options. The 1995 Stock Plan requires that each Option shall expire on the date
specified by the Compensation Committee, but not more than ten years from its
date of grant in the case of ISOs and not more than ten years and one day in the
case of Non-Qualified Options. However, in the case of any ISO granted to an
employee or officer owning more than 10% of the total combined voting power of
all classes of stock of the Company or any Related Corporation, the ISO expires
no more than five years from its date of grant.
Exercise of any Stock Right, in whole or in part, under the 1995 Stock Plan
is effected by a written notice of exercise delivered to the Company at its
principal office together with payment for the Common Stock in full, or, at the
discretion of the Compensation Committee, by the delivery of shares of Common
Stock of the Company, valued at fair market value, a promissory note, or through
an exercise notice payment procedure, or any combination thereof.
During 2002, options for a total of 75,000 shares of Common Stock were
granted under the 1995 Stock Plan. No options of Common Stock shares were
exercised in 2002. As of March 31, 2003, options for a total of 283,909 shares
of Common Stock were outstanding under the 1995 Stock Plan and 206,526 shares of
Common Stock were available for grant of Stock Rights under the 1995 Stock Plan.
Director Stock Options. In 1993, the Board of Directors approved the grant
of options to purchase 15,000 shares of common stock to each of the four
non-executive directors, in lieu of compensation. The exercise price was set at
$2.08 per share, which was the then current bid price per share as reported by
NASDAQ. The options are immediately exercisable and expire July 19, 2003.
Options granted on 30,000 shares remain outstanding under this plan at March 31,
2003.
University Bancorp, Inc. Employee Stock Ownership Plan. The Company has had
in effect an employee stock ownership plan (the "ESOP") for eligible employees
of the Company and its subsidiaries. The ESOP is a qualified plan under section
401(a) of the Internal Revenue Code, as amended. The ESOP provides that the
employer may contribute thereto such amounts as it may determine and the
contributions may be in cash or in stock, at the election of
the Company. Contributions are allocated among employees who have reached age
21, have at least one year of service and are employed more than 500 hours
throughout the year. Contributions are allocated in the proportion that the
employee's total compensation for the year (up to $200,000) bears to the total
compensation of all ESOP participants for the year (up to $200,000 per
participant). However, the sum of contributions and forfeitures allocated to an
employee in any year cannot exceed the lesser of $30,000 or 25 percent of his or
her compensation for the year, subject to indexing in accordance with Internal
Revenue Service regulations to reflect changes in the cost of living. Employees
who retire, die, become disabled or terminate their employment for any other
reason would receive the value of the vested portion of their accounts, in cash
or stock. Employees vest in their accounts in accordance with a vesting schedule
based on years of credited service. No shares were contributed to the ESOP in
2002 or 2001.
University Bank 401(k) Profit Sharing Plan. The Bank established a new
401(k) Profit Sharing Plan (the "401(k) Plan"), effective January 1, 1996, which
allows an employee of the Company or any of its subsidiaries who has reached age
18 and has completed one year of service to elect to reduce their compensation
by up to 12% (subject to specified maximum limitations) and have such amounts
contributed on their behalf to the 401(k) Plan. The 401(k) Plan provides for
matching employer contributions for each employee who elects to reduce his or
her compensation. The amount of matching contribution is up to the sole
discretion of the employer. The employer can also make additional discretionary
contributions for participating employees. The sum of an employee's salary
reductions, and the matching and discretionary contributions and forfeitures
allocated to an employee in the year could not exceed the lesser of $30,000 or
25 percent of his or her compensation for the year, subject to indexing in
accordance with Internal Revenue Service regulations to reflect changes in the
cost of living. Participants in the 401(k) Plan who retire, die or terminate
their employment for any other reason after having completed at least five years
of service would receive the total amount of their account; others receive their
own salary reduction contributions plus only a portion of any employer matching
contributions based on a vesting schedule. No matching contributions were made
by the Bank for the years ended December 31, 2002 and 2001.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1993, a Rural Business and Industrial Development Company now called
Michigan BIDCO, Inc. was established (the "BIDCO"). The BIDCO is licensed by the
Michigan Financial Institutions Bureau (the "FIB") under the State of Michigan
BIDCO program, and regulated and examined by the Bank & Trust Division of the
FIB. The BIDCO invests in businesses in Michigan with the objective of fostering
job growth and economic development.
Stephen Lange Ranzini is the President, Treasurer, and Chairman of the
Board of BIDCO. Stephen Lange Ranzini received $14,000 in salary and board fee
compensation from BIDCO in 2002.
When the BIDCO invests in businesses, it generally requires as part of its
lending and/or investing agreement the right to designate one seat on the board
of the companies in which it invests. Staff members of the BIDCO are assigned
the task of sitting on such boards or administering such investments.
Remuneration for such assignments is paid directly to the BIDCO and none to the
individual who performs those services. In connection with his duties as
Treasurer of BIDCO, Stephen Lange Ranzini, was the President of Arbor Street
Corp. (New Jersey), the General Partner for Austin Trading Partners, LP, an
investor in a mixed office waste deinked pulp mill until its liquidation in
March 2003.
The BIDCO provides management services to Northern Michigan Foundation, an
IRS approved 501(c)3 non-profit organization, under contract. Stephen Lange
Ranzini is the President, Treasurer, and Chairman of the Board of the
Foundation. The Foundation's Board of Directors has a majority of
non-affiliated, independent directors. From time to time, the Foundation, to
meet its own program goals, sells participations to the BIDCO in loan financings
that it arranges. The Foundation has also from time to time provided financing
and refinancings to companies that the BIDCO has outstanding loans to.
During 2001, Michigan BIDCO redeemed University Bank's 280 shares in
Michigan BIDCO, Inc. in exchange for $600,227 in cash and $600,000 of 7.5%
cumulative redeemable preferred stock.
In 1995, the Bank, through a 100%-owned subsidiary, Arbor Street LLC
(Michigan), purchased $1,000,000 in federal low income housing tax credits
through a partnership investment in Michigan Capital Fund for Housing Limited
Partnership I, a Michigan limited partnership (the "Partnership"). The
investment consisted of a $100,000 equity purchase and the execution by Arbor
Street LLC of a $900,000 promissory note held by the Partnership (the "Note").
In connection with the execution of the Note, the Partnership required Joseph
Louis Ranzini (father of Stephen Lange Ranzini and now deceased) and the Ranzini
Family Trust dated 12/20/89 to personally guarantee the Note, because the Bank
was prohibited from doing so by state banking regulations. The Note was paid in
full in December 2002.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountant selected to be the Company's principal
external auditor for the fiscal years ending December 31, 2002, 2001 and 2000 is
Grant Thornton, LLP. A representative of the Grant Thornton firm is expected to
be available by speaker telephone at the Meeting. Such representative will have
an opportunity to make a statement, if he or she desires to do so, or to respond
to appropriate questions.
The Company paid a total of $67,940 in audit fees to Grant Thornton,
LP, its independent public accountants for 2002 and the fiscal year ended
December 31, 2002 through the end of the first quarter of 2003. During that
period, the Company paid $0 in Financial Information Systems Design and
Implementation Fees to its independent public accountants and a total of $0 in
All Other Fees to its independent public accountants.
OTHER MATTERS
The cost of proxy solicitation will be borne by the Company. Banks, brokers
and other nominees will be reimbursed for their customary expenses incurred in
connection with the forwarding of proxy materials. Directors, officers and other
regular employees of the Company and its subsidiaries may solicit proxies by
telephone, fax, in person, or by other electronic means without additional
compensation.
Audit Committee Charter
The audit committee is appointed by the Board to assist the Board in monitoring:
1) the integrity of the financial statements of the Company, 2) the compliance
by the Company with legal and regulatory requirements and 3) the independence
and performance of the Company's internal and external auditors.
The members of the Audit Committee shall meet the independence and experience
requirements of the NASDAQ Stock Market. The members of the Audit Committee
shall be appointed by the Board on recommendation of the Compensation Committee.
The Audit Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee. The Audit Committee may request
any officer or employee of the Company or the Company's outside counsel or
independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and submit
it to the Board for approval.
2. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles
and practices as well as the adequacy of internal controls that could
significantly affect the Company's financial statements.
3. Review an analysis prepared by management and the independent auditor
of significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial statements.
4. Review with management and the independent auditor the Company's
quarterly financial statements prior to the release of quarterly
earnings.
5. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor
and control such exposures.
6. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor,
internal auditors or management.
7. Recommend to the Board the appointment of the independent auditor,
which firm is ultimately accountable to the Audit Committee and the
Board.
8. Approve the fees to be paid to the independent auditor.
9. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, and if
so determined by the Audit Committee, recommend that the Board take
appropriate action to insure the independence of the auditor.
10. Evaluate the performance of the independent auditor and, if so
determined by the Audit Committee, recommend that the Board replace
the independent auditor.
11. Review the appointment and replacement of the senior internal auditing
executive.
12. Review the significant reports to management prepared by the internal
auditing department and management's responses.
13. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.
14. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit.
15. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the
auditor and the Company's response to that letter. Such review should
include:
(a) Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information.
(b) Any changes required in the planned scope of the internal audit. (c)
The internal audit department responsibilities, budget and staffing.
16. Prepare the reports required by the rules of the Securities and
Exchange Commission in the Company's annual proxy statement.
17. Advise the Board with respect to issues that arise concerning the
Company's policies and procedures regarding compliance with applicable
laws and regulations and with the Company's Code of Conduct.
18. Review as required with the Company's General Counsel legal matters
that may have a material impact on the financial statements, the
Company's compliance policies and any reports or inquiries received
from regulators or government agencies that could have a material
impact on the financial statements.
19. Meet at least annually together with the chief financial officer, the
senior internal auditing executive and the independent auditor in
separate executive sessions.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to:
1. Plan or conduct audits. [This is the responsibility of management and the
independent auditor.]
2. Determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. [This is
the responsibility of management and the independent auditor.]
3. Conduct investigations.
4. Resolve disagreements, if any, between management and the independent
auditor. 5. Assure compliance with laws and regulations and the Company's Code
of Conduct.
Dated: April 30, 2003
UNIVERSITY BANCORP, INC.
This proxy is solicited on behalf of the Board of Directors for the Annual
Meeting of Stockholders of University Bancorp, Inc. (the "Company") scheduled
for June 24, 2003.
The undersigned hereby appoints Dr. Joseph Lange Ranzini, Stephen Lange
Ranzini and Paul Lange Ranzini, and each of them individually, proxies, with
full power of substitution, to vote all shares of Common Stock of the
undersigned at the Annual Meeting of Stockholders (the "Meeting") scheduled to
be held on June 24, 2003, and at any adjournment(s) thereof, upon all subjects
that may properly come before the Meeting and any adjournments thereof,
including the matters described in the proxy statement furnished herewith,
subject to any directions indicated on the reverse side of this proxy. If no
directions are given, the proxies will vote "FOR" the election of all listed
nominees for election as Directors and at their direction on any other matter
that may properly come before the Meeting or any adjournment thereof.
Your vote for the election of directors, described in the proxy statement
may be indicated on the reverse side of this proxy.
The nominees for election as directors are: Gary Baker, Robert Goldthorpe,
Dr. Joseph Lange Ranzini, Paul Lange Ranzini, Stephen Lange Ranzini and Michael
Talley.
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The Board of Directors recommends a vote FOR all listed candidates for
election as Directors.
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(SEE REVERSE SIDE)
This proxy, when properly executed, will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR the election as
Directors of the nominees listed on the reverse side of this proxy.
ELECTION OF DIRECTORS (see reverse side for list of nominees)
FOR WITHHELD FOR, except vote withheld from the
following nominee(s):
[ ] [ ]
----------------------------------
----------------------------------
The signer hereby revokes all proxies
heretofore given by the signer to vote at the
Meeting or any adjournment thereof.
Dated:__________________
Stockholder: x_______________________
Signature
------------------------
Signature (if held jointly)
Please sign above exactly as name appears
hereon. Joint owners should each sign. When
signing as officer, attorney, executor,
administrator, trustee or guardian, please
give full title as such.