UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN A PROXY STATEMENT
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 o
Check the
appropriate box:
o |
Preliminary
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o |
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) |
x |
Definitive
Proxy Statement |
o |
Definitive
Additional Materials |
o |
Soliciting
Material Pursuant to Section 240.14a-12 |
Republic
Bancorp Inc.
(Name of
Registrant as Specified In Its Charter)
_________________________________________________________
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
x |
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fee required |
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11. |
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(1) |
Title
of each class of securities to which transaction
applies: |
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(2) |
Aggregate
number of securities to which transaction applies: |
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(3) |
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule |
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0-11
(set forth the amount on which the filing fee is calculated and state how
it was determined): |
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paid previously with preliminary materials. |
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing. |
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(4) |
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Filed: |
NOTICE
OF 2005 ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON APRIL 27, 2005
NOTICE IS
HEREBY GIVEN that Republic Bancorp Inc.’s 2005 annual meeting of stockholders
will be held at The Henry Center, 3535 Forest Road, Lansing, Michigan, at 9:00
a.m., local time, on Wednesday, April 27, 2005, for the following purposes:
|
-
To
consider and vote upon a proposed amendment to Article III of the
articles of incorporation of Republic to increase the total authorized
common stock of Republic from 75,000,000 shares to 100,000,000 shares.
|
|
Your
Board of Directors is not aware of any other business to come before this
meeting.
The close
of business on March 8, 2005 has been fixed as the record date for the
determination of stockholders entitled to notice of and to vote at this meeting
and any adjournments or postponements thereof. Republic common stock constitutes
the only security whose holders are entitled to vote at this meeting and any
adjournments or postponements of the meeting. Only stockholders of record at the
close of business on that date are entitled to notice of and to vote at this
meeting and any adjournments or postponements of the meeting. A list of Republic
stockholders entitled to vote at this meeting will be available for examination
at the meeting.
You may
revoke your proxy at any time prior to its exercise. Any stockholder of record
present at the meeting or at any adjournments or postponements thereof may
revoke his or her proxy and vote personally on each matter brought before the
meeting. See “General Information About Voting” in the accompanying proxy
statement.
This
notice and the accompanying proxy statement were first mailed to our
stockholders on or about March 24, 2005. They were prepared by management for
your Board of Directors and are being furnished to you in connection with the
solicitation of proxies by your Board of Directors for use at the meeting. They
describe in more detail the matters to be acted upon at the meeting and your
voting rights with respect to such matters. Please review them carefully.
|
By
order of the Board of Directors, |
|
|
|
/s/
Thomas F. Menacher |
March
24, 2005 |
Thomas
F. Menacher |
|
Corporate
Secretary |
It
is important that your shares be represented at the meeting, even if you
expect to attend.
PLEASE
SIGN AND RETURN YOUR PROXY CARD
PROMPTLY. |
GENERAL
INFORMATION ABOUT VOTING
Unless
you instruct otherwise, your proxies will vote your shares FOR the election of
each of the 15 director nominees nominated by your Board of Directors, FOR the
proposed increase in Republic’s authorized capital stock, and in their
discretion on every other matter considered at the meeting.
Who
can vote?
You can
vote your shares of common stock at the meeting if our records show that you
owned the shares as of the close of business on March 8, 2005. A total of
70,409,388
shares of common stock can vote at the meeting.
How
many votes do I have?
On each
matter considered at the meeting, other than the election of directors, you will
have one vote for each of your shares of common stock.
Voting
for the election of directors will be cumulative. This means that you are
entitled to a number of votes in the election of directors equal to 15 (the
total number of directors to be elected) multiplied by the number of shares you
are entitled to vote. For example, if you are entitled to vote 100 shares then
you will have 1,500 votes in the election of directors (100 shares x 15
directors to be elected = 1,500). You may cast all of your votes for one
candidate, or you may distribute these votes among the nominees as you want.
However, unless you otherwise indicate on your proxy card your votes will be
distributed equally among the nominees. Discretionary authority to cumulate
votes is solicited.
How
do I vote?
You can
vote on matters that are properly presented at the meeting in four
ways:
If you
sign and return the enclosed proxy card or vote by telephone or the Internet,
the proxies named on the enclosed proxy card will vote your shares of common
stock as you instruct. If you do not vote on a proposal, your proxies will vote
for you on that proposal. Unless
you instruct otherwise, your proxies will vote your shares FOR the election of
each of the 15 director nominees nominated by your Board of Directors, FOR the
proposed increase in Republic’s authorized capital stock, and in their
discretion on every other proposal considered at the meeting.
How
do I vote if my shares are held in “street name”?
If your
shares are held in the name of your broker, a bank, or other nominee, then that
party should give you instructions for voting your shares.
Can
I revoke my proxy or change my vote?
Yes. If
your shares are held in your name and not through a broker, bank or other
nominee, then you can change your vote at any time before your proxy is voted at
the meeting. You can do this in three ways: First, you can send a written
statement that you would like to revoke your proxy. Second, you can send a new
proxy card. You should send your revocation or new proxy card to Thomas F.
Menacher, Secretary, Republic Bancorp Inc., 1070 East Main Street, Owosso,
Michigan 48867. Third, you can attend the meeting and vote in person. However,
your attendance alone will not revoke your proxy. If you instructed a broker,
bank or other nominee to vote your shares and you would like to revoke or change
your vote, then you must follow their instructions.
How
are votes counted?
We will
hold the meeting if holders of a majority of the shares of common stock entitled
to vote are represented by proxy or in attendance at the meeting. If you sign
and return your proxy card, your shares will be counted to determine whether we
have a quorum even if you abstain or fail to vote on any of the proposals listed
on the proxy card.
If your
shares are held in the name of a nominee, and you do not tell the nominee by
April 26, 2005 how to vote your shares (so-called “broker nonvotes”), then
the nominee can vote them as it sees fit only on matters that are determined to
be routine and not on any other proposal. Broker nonvotes will be counted as
present to determine if a quorum exists but will not be counted as present and
entitled to vote on any nonroutine proposal.
Except
for the election of directors and the proposal to amend our articles of
incorporation, any action taken by a vote of our stockholders at the meeting
will be authorized by a majority of the votes cast by the holders of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the action.
In the
election of directors, director nominees receiving a plurality of votes cast at
the meeting will be elected directors of Republic. The adoption of the proposed
amendment to our articles of incorporation must be by a majority of our
outstanding shares of common stock.
For
purposes of the proposal to amend our articles of incorporation to increase the
number of shares of authorized common stock, a broker nonvote is the functional
equivalent of a “no” vote on that proposal.
ELECTION
OF DIRECTORS
From and
after our 2005 annual meeting, your Board of Directors will consist of 15
members, all of whom will be elected at the annual meeting. The individuals who
are elected as directors at this meeting will hold office for a term expiring at
the next annual meeting of stockholders and upon the election and qualification
of their respective successors or upon their earlier resignation or removal.
Your
Board of Directors recommends that you vote FOR the election of each of the 15
director nominees nominated by your Board of Directors.
The 15
nominees receiving the highest number of votes will be elected directors. All of
the nominees are currently directors of Republic. Each of the persons named
below has agreed to serve as a director if elected. The ages listed for the
director nominees are as of March 8, 2005. Biographical information
concerning the director nominees is presented after the following table.
Name |
Position |
Age |
Officer/
Director
Since |
|
|
|
|
Jerry
D. Campbell |
Chairman
of the Board |
64 |
1985 |
Dana
M. Cluckey |
President,
Chief Executive Officer and Director |
45 |
1986/1995 |
George
J. Butvilas |
Vice
Chairman of the Board |
59 |
1990(1) |
Richard
J. Cramer, Sr. |
Director |
64 |
1990 |
Barry
J. Eckhold |
Executive
Vice President, Chief Credit Officer and Director |
58 |
1991/2003(2) |
Gary
Hurand |
Director |
58 |
1990 |
Dennis
J. Ibold |
Director |
56 |
1993 |
Stanley
A. Jacobson |
Director |
54 |
1996(1) |
John
J. Lennon |
Director |
68 |
1993 |
Kelly
E. Miller |
Director |
50 |
1990 |
Randolph
P. Piper |
Director |
56 |
1982(1) |
Dr.
Isaac J. Powell |
Director |
64 |
1998 |
William
C. Rands III |
Director |
61 |
2003 (2) |
Dr.
Jeoffrey K. Stross |
Director |
63 |
1993 |
Steven
E. Zack |
Director |
54 |
1996(1) |
(1) |
Date
shown is year in which the named individual became a director of D&N
Financial Corporation. Each such individual became a director of Republic
effective May 17, 1999 upon completion of the merger of Republic and
D&N. |
(2) |
Each
nominee has been a director of Republic Bank, a wholly-owned subsidiary of
Republic, for at least five years. |
Jerry D.
Campbell has served as Chairman of the Board of Republic since it was organized
and served as Chief Executive Officer from April 1986 to January 2000. From
April 1986 to January 1996, Mr. Campbell also served as President of Republic.
Mr. Campbell is a director of Magna Entertainment Corporation, a publicly held
company whose common stock is listed on the Nasdaq Stock Market under the symbol
“MECA”. Mr. Campbell has a B.S. degree in liberal arts from Central Michigan
University, a M.B.A. degree from Wayne State University and a M.B.A. degree from
The University of Michigan.
Dana M.
Cluckey has served as President and Chief Executive Officer of Republic since
January 2000, and served as President and Chief Operating Officer from January
1996 to January 2000. He has been employed by Republic since September 1986.
From November 1992 to January 1996 he was Executive Vice President and Treasurer
of Republic, from October 1987 to November 1992 he was the Chief Financial
Officer of Republic and from September 1986 to October 1987 he was the
Controller of Republic and Cashier of Republic Bank. Mr. Cluckey has a B.B.A.
degree from The University of Michigan and is a Certified Public Accountant.
George J.
Butvilas has served as Vice Chairman of the Board of Republic since May 1999. He
served as President and Chief Executive Officer of D&N Bank from 1991 to
February 2000. Prior to joining D&N Bank, he served most recently as
Executive Vice President and Director of Boulevard Bancorp, Inc. of Chicago,
Illinois. A graduate of the U.S. Naval Academy, he has a M.B.A. degree from the
Illinois Institute of Technology and graduated from the Advanced Management
Program of the Harvard University Graduate School of Business.
Richard
J. Cramer, Sr. is Chairman of Dee Cramer, Inc., a sheet metal heating and air
conditioning contractor located in Grand Blanc, Michigan. Mr. Cramer previously
served as President, Dee Cramer, Inc. where he has been employed since 1964. Mr.
Cramer has a B.S. degree from the University of Notre Dame and a M.S. degree
from Michigan State University.
Barry J.
Eckhold has been Executive Vice President and Chief Credit Officer of Republic
Bancorp Inc. since February 2005, Senior Vice President and Chief Credit Officer
from 1999 to February 2005, and Vice President and Chief Credit Officer from
1991 to January 1999. Mr. Eckhold is also Vice Chairman, President and Chief
Executive Officer of Republic Bank. He has been employed by Republic since
November 1984. He has a B.A. from Michigan State University and an M.B.A. from
Eastern Michigan University.
Gary
Hurand is President of Dawn Donut Systems, Inc. located in Flint, Michigan and
has served in that capacity since 1971. Mr. Hurand is a Trustee of BRT Realty
Trust, a publicly held company located in Great Neck, New York whose common
stock is listed on the New York Stock Exchange under the symbol “BRT”. Mr.
Hurand has a B.A. degree from Michigan State University.
Dennis J.
Ibold is President of Petersen & Ibold (attorneys at law) of Chardon, Ohio
and has been with the firm since 1973. Mr. Ibold has a B.A. degree from
Marquette University and a J.D. degree from Cleveland State University.
Stanley
A. Jacobson is an attorney and has been active in southeastern Michigan real
estate developments for his own account and in association with Mark Jacobson
& Associates, Inc. since 1986. Mr. Jacobson was President since 1989, and a
director since 1975, of Macomb Federal Savings Bank until its merger with
D&N Bank in 1996. He has a B.B.A. degree from The University of Michigan, a
M.B.A. degree from New York University, and a J.D. degree from the University of
Detroit Law School.
John J.
Lennon is a consultant. From 1976 to 1987, Mr. Lennon was Chairman and Chief
Executive Officer of White Engines, Inc. of Canton, Ohio.
Kelly E.
Miller is President and Chief Executive Officer of Eagle Investments Inc., a
privately held oil and gas exploration and production company headquartered in
Traverse City, Michigan, since December 2003. Mr. Miller previously served as
President and Chief Executive Officer of Miller Exploration Company, a publicly
traded oil and gas company from its founding in 1997 until its merger in 2003.
Mr. Miller was also President of Miller Oil Corporation, a venture capital
company concentrating in the oil and gas industry, from 1986 through 1997. Mr.
Miller has B.S. and B.B.A. degrees from the University of Oklahoma.
Randolph
P. Piper has been an attorney at law in Flint, Michigan for over 25 years. He
was a director of First Federal Savings and Loan Association of Flint from 1979
until its merger with D&N Bank in 1982. He has a B.A. degree from Albion
College and a J.D. degree from the University of Detroit Law School.
Dr. Isaac
J. Powell is board certified in urology and has practiced medicine since 1974.
Since 2002, Dr. Powell has been a Professor in Urology at the Karmanos Cancer
Institute. He has also been Assistant and Associate Professor in Urology in the
Department of Urology, Wayne State University, School of Medicine, Detroit,
Michigan since 1986. Dr. Powell is also Chief of Urology at Veterans Hospital,
Detroit, Michigan. He has a B.S. degree from The University of Michigan, and a
M.S. degree from Howard University Graduate School. He is a graduate of the
Indiana University Medical School.
William
C. Rands III is General Partner of Sagres Partners L.P. and has served in that
capacity since 1983. He has a B.A. from Yale University.
Dr.
Jeoffrey K. Stross is a Professor of Internal Medicine, University Medical
Center, The University of Michigan and has served in this capacity since 1987.
He has a B.S. degree from The University of Michigan and a M.D. degree from The
University of Michigan.
Steven E.
Zack has served as Chairman of Global Commercial Credit, a specialty insurance
firm in Franklin, Michigan, since January 2001 and served as President from
March 1996 to January 2001. Mr. Zack has also served as Executive Vice President
of LSG Insurance Partners, a Michigan retail insurance broker, since September
2000. From May 1994 to September 2000, he served as Executive Vice President of
J.A. Versical & Associates, Inc. From May 1992 to May 1994, he served as an
independent insurance consultant. Mr. Zack was a director of Macomb Federal
Savings Bank from 1989 until its merger with D&N Bank in 1996. He has B.S.
and B.A. degrees from Michigan State University.
No
director nominee, director, or executive officer is related to any other
director nominee, director or executive officer (or to any director or executive
officer of any of our subsidiaries) by blood, marriage or adoption. There are no
arrangements or understandings between any nominee or any of our directors or
executive officers and any other person pursuant to which that nominee or
director or executive officer was nominated or elected as a director or an
executive officer of Republic or any of its subsidiaries.
Messrs.
Campbell, Cluckey, Butvilas and Eckhold are the only directors of Republic who
are also employees of Republic or a subsidiary of Republic. All other directors
of Republic are independent (as that term is defined in Rule 4200(a)(15) of the
listing standards of the National Association of Securities
Dealers).
No
director or executive officer of Republic is a party to any material legal
proceedings, or has a material interest in any such legal proceedings that is
adverse to Republic or any of its subsidiaries.
If any
director nominee is unable to serve, your Board of Directors may reduce its size
or designate a substitute. If a substitute is designated, then proxies voting
FOR the election of the original director nominee will be cast FOR the election
of the substituted nominee. At this time, your Board of Directors knows of no
reason why any of the director nominees might be unable to serve, if elected.
Board
Committees and Meetings
Your
Board of Directors conducts its business through its meetings and through the
activities of its committees. During 2004, your Board of Directors had four
standing committees as follows:
Name
of Committee
and
Members |
Function
of the Committee |
Meetings
in 2004 |
|
|
|
Executive
Committee:
Jerry
D. Campbell,
Chairperson
George
J. Butvilas
Dana
M. Cluckey
Gary
Hurand
Dennis
J. Ibold
Stanley
A. Jacobson
Dr.
Jeoffrey K. Stross |
-
Meets
in place of full Board on special issues or when entire Board does not
convene
-
May
act on behalf of full Board on all but major corporate matters
-
All
actions taken by this committee are reported at next meeting of full
Board
|
8 |
Personnel
and Compensation Committee:
Dr.
Jeoffrey K. Stross,
Chairperson
Stanley
A. Jacobson
Kelly
E. Miller
|
-
Approves
standards for setting executive compensation levels
-
Recommends
executive compensation to Board
-
Grants
awards under Republic’s incentive compensation plans and makes
recommendations to Board when full Board approval required
-
Reviews
senior management development and evaluation
|
5 |
Corporate
Governance and Nominating Committee:
Dennis
J. Ibold,
Chairperson
John
J. Lennon
Steven
E. Zack
|
-
Advises
Board on tenure, potential conflicts of interest and related director
matters
-
Administers
corporate governance principles and codes of corporate conduct
-
Identifies
qualified candidates for membership on the Board
-
Considers
all director nominee recommendations
-
Reviews
and administers the Directors Compensation Plan
-
Reviews
structure and compensation of the Board and its committees
-
Monitors
and assesses director development and evaluation
|
4 |
|
|
|
|
|
|
Name
of Committee
and
Members |
Function
of the Committee |
Meetings
in 2004 |
Audit
Committee:
Stanley
A. Jacobson,
Chairperson
Gary
Hurand,
Vice
Chairperson
Richard
J. Cramer
Sam
H. McGoun
Dr.
Isaac J. Powell
William
C. Rands III
|
-
Reviews
audited financial statements with management prior to filing with the
Securities and Exchange Commission
-
Reviews
quarterly financial statements with management prior to filing with the
Securities and Exchange Commission
-
Confers
with independent auditors and internal audit department regarding scope
of examinations
-
Reviews
qualifications and reports of independent auditors and internal
auditors
-
Approves
all audit engagement fees and terms and any non-audit services provided
by the independent auditors
-
Reviews
recommendations about internal controls and engages internal
audits
-
Recommends
selection of independent auditors to Board
-
Reviews
independence of independent auditors
-
Administers
the ethics hotline
|
4 |
|
|
|
Your
Board of Directors has determined that Mr. Gary
Hurand, Vice
Chairperson of the Audit Committee, meets the requirements adopted by the
Securities and Exchange Commission for qualification as an audit committee
financial expert. An audit committee financial expert is defined as a person who
has the following attributes: (i) an understanding of generally accepted
accounting principles and financial statements; (ii) the ability to assess the
general application of such principles in connection with the accounting for
estimates, accruals and reserves; (iii) experience preparing, auditing,
analyzing or evaluating financial statements that present a breadth and level of
complexity or accounting issues that are generally comparable to the breadth and
complexity of issues that can reasonably be expected to be raised by the
registrant’s financial statements, or experience actively supervising one or
more persons engaged in such activities; (iv) an understanding of internal
controls and procedures for financial reporting; and (v) an understanding of
audit committee functions.
The
identification of a person as an audit committee financial expert does not
impose on such person any duties, obligations or liability that are greater than
those that are imposed on such person as a member of either the audit committee
or your Board of Directors in the absence of such identification. Moreover, the
identification of a person as an audit committee financial expert for purposes
of the regulations of the Securities and Exchange Commission does not affect the
duties, obligations or liability of any other member of the audit committee or
your Board of Directors. Finally, a person who is determined to be an audit
committee financial expert will not be deemed an “expert” for purposes of
Section 11 of the Securities Act of 1933.
Each of
the members of the Audit Committee is independent (as that term is defined in
Rule 4200(a)(15) of the listing standards of the National Association of
Securities Dealers) and no Rule 10A-3 exemptions from the SEC’s requirements for
audit committee member independence have been utilized.
Each of
the members of the Personnel and Compensation Committee and the Corporate
Governance and Nominating Committee is independent (as that term is defined in
rule 4200(a)(15) of the listing standards of the National Association of
Securities Dealers).
A total
of nine meetings of your Board of Directors were held in 2004. No incumbent
director attended fewer than 75% of the total meetings of your Board of
Directors and committees on which such director served during 2004.
There
have been no material changes to the procedures by which security holders may
recommend nominees.
You may
send communications to your Board of Directors and to individual directors. Such
communications should be submitted in a writing addressed to your Board of
Directors or to one or more named individual directors in care of Thomas F.
Menacher, Secretary, Republic Bancorp Inc., 1070 East Main Street, Owosso,
Michigan 48867. All such communications will be forwarded promptly to your Board
of Directors or such named individual directors.
It is
expected that all directors will attend our annual meeting of stockholders. All
of our directors attended last year’s annual meeting of
stockholders.
Director
compensation
Directors
who are also officers do not receive additional compensation for their service
as directors. In 2004, compensation for non-employee directors included the
following:
All
director compensation is payable in Republic common stock under the Republic
Bancorp Inc. Directors Compensation Plan. A director who retires from your Board
of Directors prior to the mandatory retirement age may receive a retirement
award not to exceed $25,000. Such award may be paid in stock or in
cash.
PROPOSED
INCREASE IN AUTHORIZED CAPITAL STOCK
On
February 17, 2005, your Board of Directors (with 18 directors present and 2
directors absent) unanimously approved a proposal to increase our authorized
capital stock. If approved by shareholders, the proposed increase in our
authorized capital stock will be accomplished through an amendment to the
Company’s articles of incorporation that will increase the total authorized
common stock of Republic from 75,000,000 shares to 100,000,000 shares. A copy of
the proposed amendment is attached to this proxy statement as Annex A and is
herein incorporated by reference.
Your
Board approved the proposed increase in authorized common stock because it
believes that the continued availability of shares of common stock is advisable
to provide the Company with the flexibility to take advantage of opportunities
to issue such stock in order to obtain capital, as consideration for possible
acquisitions or for other purposes (including, without limitation, the issuance
of additional shares of common stock through stock splits and stock dividends in
appropriate circumstances). There are, at present, no plans, understandings,
agreements or arrangements concerning the issuance of additional shares of
common stock or preferred stock.
Your
Board of Directors recommends that you vote FOR the proposed increase in
authorized common stock.
If
a majority of our outstanding shares of common stock are voted FOR the
amendment, then the amendment will be approved.
If your
shares are held in the name of the nominee and you do not tell the nominee by
April 26, 2005 how to vote your shares, then your nominee may not be permitted
to vote your shares on this proposal (a so-called “broker nonvote”). For
purposes of this proposal, a broker nonvote is the functional equivalent of “no”
vote on this proposal.
EXECUTIVE
OFFICERS
During
2004, your executive officers consisted of the persons named below. Your
executive officers are elected annually and serve at the pleasure of your Board
of Directors.
Name |
Age |
Current
Position |
Jerry
D. Campbell |
64 |
Chairman
of the Board |
Dana
M. Cluckey |
45 |
President
and Chief Executive Officer |
Barry
J. Eckhold |
58 |
Senior
Vice President and Chief Credit Officer |
Thomas
F. Menacher |
48 |
Executive
Vice President, Treasurer, Chief Financial |
|
|
Officer
and Corporate Secretary |
For
information with respect to Messrs. Campbell, Cluckey and Eckhold, see “Election
of Directors”.
Thomas F.
Menacher has served as Executive Vice President, Treasurer and Chief Financial
Officer of Republic since April 1999 and Senior Vice President, Treasurer and
Chief Financial Officer from December 1995 to April 1999. Mr. Menacher has been
Chief Financial Officer of Republic since 1992. On March 1, 2001, he was
appointed Corporate Secretary of Republic.
Summary
Compensation Table
The
following table shows the compensation paid in all capacities by Republic and
its subsidiaries during 2004, 2003 and 2002 to the Chief Executive Officer of
Republic and the three other executive officers of Republic in 2004.
|
Annual
Compensation |
Long-Term
Compensation Awards |
Name
and
Principal
Position |
Year |
Salary
($) |
Bonus
($)(1) |
Other
Annual
Compen-
sation
($) |
Restricted
Stock
Award(s)
($)(2) |
Securities
Underlying Options/
SARs (#) |
LTIP
Payouts
($) |
All
Other
Compensation
($)(3) |
|
|
|
|
|
|
|
|
|
Jerry
D. Campbell |
2004 |
172,000 |
282,375 |
- |
266,743(4) |
- |
- |
6,686 |
Chairman
of the Board |
2003 |
166,000 |
199,881 |
- |
159,697(5) |
- |
- |
6,179 |
|
2002 |
160,000 |
167,876 |
- |
55,959(6) |
27,500 |
- |
5,673 |
|
|
|
|
|
|
|
|
|
Dana
M. Cluckey |
2004 |
354,000 |
1,070,438 |
- |
633,001(4) |
- |
- |
6,882 |
President
and |
2003 |
342,000 |
969,758 |
- |
509,395(5) |
- |
- |
6,369 |
Chief
Executive Officer |
2002 |
330,000 |
835,710 |
- |
278,570(6) |
88,000 |
- |
5,856 |
|
|
|
|
|
|
|
|
|
Barry
J. Eckhold |
2004 |
209,000 |
795,674 |
- |
437,839(4) |
- |
- |
6,726 |
Senior
Vice President, |
2003 |
202,000 |
708,125 |
- |
329,106(5) |
- |
- |
6,218 |
Chief
Credit Officer |
2002 |
195,000 |
580,780 |
- |
193,593(6) |
27,500 |
- |
5,711 |
|
|
|
|
|
|
|
|
|
Thomas
F. Menacher |
2004 |
172,000 |
739,088 |
- |
522,559(4) |
- |
- |
6,686 |
Executive
Vice President, |
2003 |
166,000 |
628,015 |
- |
395,486(5) |
- |
- |
6,179 |
Treasurer,
CFO, and |
2002 |
160,000 |
542,678 |
- |
180,892(6) |
44,000 |
- |
5,673 |
Corporate
Secretary |
|
|
|
|
|
|
|
|
(1) |
Includes
compensation deferred under Republic’s deferred compensation plan.
Mr. Cluckey and Mr. Menacher deferred $10,000 and $389,088 of the
2004 bonus, respectively. |
(2) |
At
December 31, 2004, Mr. Campbell owned 28,241 shares of restricted stock
worth $431,522, Mr. Cluckey owned 66,430 shares of restricted stock
worth $1,015,050, Mr. Eckhold owned 42,014 shares of restricted stock
worth $641,974 and Mr. Menacher owned 64,489 shares of restricted stock
worth $985,392. Messrs. Campbell, Cluckey, Eckhold and Menacher are
entitled to dividends paid on such shares of restricted
stock. |
(3) |
Amounts
shown consist of sums paid as matching contributions under Republic’s
tax-deferred savings plan and premiums paid for life insurance for each of
the named officers. Premiums paid for life insurance during 2004 totaled
$186, $382, $226 and $186 for Messrs. Campbell, Cluckey, Eckhold and
Menacher, respectively. |
(4) |
Amounts
shown include the value of 6,694 shares, 25,377 shares, 18,863 shares and
17,522 shares of restricted stock issued to Messrs.
Campbell, Cluckey, Eckhold and Menacher, respectively,
of restricted stock issued on January 28, 2005 at the closing price for
Republic common stock of $14.06 under Republic’s Management Incentive
Bonus Plan as 25% of the awarded bonus for 2004 was paid in restricted
stock. Such shares vest in January 2006. The stock was granted under the
terms of Republic’s Incentive Stock Plan. |
|
In
addition, amounts shown include the value of 12,500 shares, 20,000 shares,
12,500 shares and 20,000 shares of restricted stock issued to Messrs.
Campbell, Cluckey, Eckhold and Menacher, respectively, on January 15, 2004
at the closing price for Republic common stock of $13.81, which vest in
January 2008. |
(5) |
Amounts
shown include the value of 4,924 shares, 23,891 shares, 17,445 shares, and
15,472 shares of restricted stock issued to Messrs. Campbell, Cluckey,
Eckhold and Menacher, respectively, on January 30, 2004 at the closing
price for Republic common stock of $13.53 under Republic’s Management
Incentive Bonus Plan as 25% of the awarded bonus for 2003 was paid in
restricted stock. Such shares vested in January 2005. The stock was
granted under the terms of Republic’s Incentive Stock Plan.
|
|
In
addition, amounts shown include the value of 7,500 shares, 15,000 shares,
7,500 shares, and 15,000 shares of restricted stock issued to Messrs.
Campbell, Cluckey, Eckhold and Menacher, respectively, on
February 20, 2003 at the closing price for Republic common stock of
$12.41, which vest in February 2007. |
(6) |
Amounts
shown represent the value of shares of restricted stock issued to Messrs.
Campbell, Cluckey, Eckhold and Menacher on January 24, 2003 at the closing
price for Republic common stock of $12.09 under Republic’s Management
Incentive Bonus Plan as 25% of the awarded bonus for 2002 was paid in
restricted stock. Such shares vested in January 2004. The stock is granted
under the terms of Republic’s Incentive Stock
Plan. |
Option/SAR
Grants in Last Fiscal Year
There
were no stock options granted to Republic’s executive officers in
2004.
Aggregated
Option/SAR Exercises in Last Fiscal Year and Fiscal Year End Option/SAR Values
The
following table sets forth certain information concerning the number and value
of stock options exercised during 2004, and held at December 31, 2004, by your
executive officers.
Name |
Shares
Acquired
on
Exercise
(#) |
Value
Realized
(pre-tax)
(1) |
Number
of
Securities
Underlying
Unexercised
Options/SARs
at
Fiscal
Year-End
Exercisable/
Unexercisable |
Value
of
Unexercised
In-the-Money
Options/SARs
at
Fiscal
Year-End
Exercisable/
Unexercisable(2) |
Jerry
D. Campbell |
50,000 |
$
459,800 |
229,758
/ 23,957 |
$1,658,374
/ $153,958 |
Dana
M. Cluckey |
113,315 |
$1,022,450 |
363,230
/ 80,691 |
$2,566,826
/ $519,484 |
Barry
J. Eckhold |
- |
- |
47,000 / 23,957 |
$
324,903 / $153,958 |
Thomas
F. Menacher |
- |
- |
174,310
/ 37,600 |
$1,260,615
/ $241,465 |
(1) |
For
purposes of this column, “value” is determined for each exercised by
subtracting the exercise price from the sales price received by the
particular officer for Republic common stock on the exercise
date. |
|
|
(2) |
For
purposes of this column, “value” is determined for each unexercised by
subtracting the aggregate exercise price for the option shares from the
closing price for Republic common stock on The Nasdaq Stock
Market® of
$15.28 as of December 31, 2004. |
Long-Term
Incentive Plans - Awards in Last Fiscal Year
There
were no long-term incentive plan awards granted to Republic’s executive officers
in 2004.
Equity
Compensation Plan Information
Plan
Category |
(a)
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights |
(b)
Weighted-average
price of outstanding options, warrants and
rights |
(
c)
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in
column (a))(1) |
Equity
compensation plans approved by
security
holders |
2,688,453 |
$7.48 |
4,678,003 |
Equity
compensation plans not approved by
security
holders |
- |
- |
- |
|
|
|
|
Total
|
2,688,453 |
$7.48 |
4,678,003 |
(1) |
Of
the equity securities listed in this column, 2,994,412 are shares issuable
under the Incentive Stock Plan, 285,483 are warrants and shares issuable
under the Director Compensation Plan, 988,578 are options issuable under
the 1998 Stock Option Plan (which includes 543,972 options issuable under
the Voluntary Management Stock Accumulation Program), and 409,530 are
options issuable under the 1997 Stock Option Plan. The number of shares
available for issuance under the incentive stock plan is based on a
formula and at any time is equal to 5% of the issued and outstanding stock
of Republic. See Note 16 of the Notes to Consolidated Financial Statements
for Republic that are included in the Annual Report on Form 10-K for the
fiscal year ended December 31, 2004. |
Change-In-Control
Agreements
Republic
has entered into change-in-control agreements with each of Messrs. Campbell,
Cluckey, Menacher and Eckhold (the “Named Officers”). Each agreement provides
severance benefits to the Named Officers if the Named Officer’s employment is
terminated within either the six months preceding a change of control or the two
years following a change of control by Republic without “cause” (as defined in
the agreement) or by the Named Officer with “good reason” (as defined in the
agreement). The Named Officer would not be entitled to such severance benefits
if the termination is (A) because of the Named Officer’s death, disability or
voluntary retirement, (B) by Republic for cause, or (C) by the Named Officer
other than for good reason.
A
“change-in-control” is generally defined as to have occurred upon (i) a change
in the composition of a majority of the board of directors that is not approved
in the manner specified in the agreement, or (ii) the purchase or other
acquisition by any person, entity or group of persons, within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, of more than 50%
of either the outstanding shares of common stock or the combined voting power of
Republic’s then outstanding voting securities, or (iii) the consummation of
certain business combination transactions, that result in either Republic
stockholders holding less than 50% of the post-combination voting power or
Republic directors representing less than 50% of the post-combination directors,
or (iv) stockholder approval of a plan of complete liquidation or dissolution of
Republic, or (v) the consummation of a sale of all or substantially all of
Republic’s assets.
Each
agreement continues in effect while the Named Officer continues to be employed
by Republic and for such further period as may be required for the Company to
perform its obligations thereunder in the event of a qualifying termination. The
severance benefits to be paid in the event of a qualifying termination consist
of the following: (i) severance of three times base salary, three times the
average bonus paid in the three years preceding the year of termination and a
pro rated bonus for the year of termination for Messrs. Campbell and Cluckey;
(ii) severance of two times base salary, two times the average bonus paid in the
three years preceding the year of termination and a pro rated bonus for the year
of termination for Messrs. Menacher and Eckhold; (iii) three years continued
health and welfare benefits for Messrs. Campbell and Cluckey; (iv) two years
continued health and welfare benefits for Messrs. Menacher and Eckhold; (v)
payment of lost 401(k) plan contributions for three years for Messrs. Campbell
and Cluckey; (vi) payment of lost 401(k) plan contributions for two years for
Messrs. Menacher and Eckhold; (vii) outplacement costs of up to $50,000 for each
of Messrs. Cluckey and Menacher; (viii) full payment of legal expenses incurred
by the Named Officer in enforcing his rights under the agreement (unless a court
determines that a suit by the Named Officer was frivolous or in bad faith; and
(ix) indemnification of the Named Officer by Republic to the maximum extent
permitted by law. Each agreement provides for a full excise tax gross up in
respect of any payments and benefits received in connection with a change of
control that exceed the limit imposed by Section 280G of the Internal Revenue
Code.
PERSONNEL
AND COMPENSATION COMMITTEE REPORT
The
report which follows is provided to stockholders by the members of the Personnel
and Compensation Committee of your Board of Directors.
General. The
Personnel and Compensation Committee has been a standing committee of your Board
of Directors since 1985. Only independent non-employee directors serve on this
Committee. Among its other duties, this Committee is charged with the
responsibilities, subject to the approval of your Board of Directors, of
establishing, periodically reevaluating and, as appropriate, adjusting and
administering Republic’s policies concerning the compensation of management
personnel, including the Chief Executive Officer and all other executive
officers. This Committee is responsible for annually determining and
recommending to your entire Board of Directors the annual base salary for each
executive officer and for establishing the criteria under which incentive
bonuses may be paid to such executive officers for the year. In addition, this
Committee administers Republic’s current Management Incentive Bonus Plan,
Republic’s 1997 and 1998 Stock Option Plans, Republic’s Amended and Restated
Incentive Stock Plan, and Republic’s Voluntary Management Stock Accumulation
Program.
For a
number of years, including fiscal 2004, a basic tenet of Republic’s compensation
policy has been to directly link a substantial portion of the annual
compensation of executive officers, as well as other key management personnel,
to operating performance for the year. This “pay for performance” philosophy has
been implemented through Republic’s Management Incentive Bonus Plan since its
adoption in 1991.
Another
basic tenet of Republic’s compensation philosophy is to tie compensation for key
employees to the long-term performance of the Company’s common stock. This
linking of compensation closely aligns the interests of such employees with
those of Republic’s stockholders and provides an incentive for increasing
stockholder value over the long term. This philosophy has been implemented
through the 1997 and 1998 Stock Option Plans, our Incentive Stock Plan and our
Voluntary Management Stock Accumulation Program. Additionally, starting in
fiscal 2000, 25% of executive officers’ bonuses, including Messrs. Campbell,
Cluckey, Eckhold and Menacher and other members of senior management, were paid
in restricted common stock that is subject to forfeiture.
For 2002
and 2003, the Management Incentive Bonus Plan included an Incentive Bonus Stock
Performance Adjustment Factor ranging from 75% to 125% for executive officers
and other members of senior management. The adjustment factor was applied
against the bonus incentive awarded based upon the performance of Republic
common stock for the fiscal year compared to the Nasdaq Bank Stock Index. For
2004 compensation plans, the Incentive Bonus Stock Performance Adjustment Factor
for executive officers and other members of senior management has been
eliminated.
Overall, Republic’s compensation
policies have been aimed at providing executive officers with compensation
opportunities competitive with those provided executives with comparable
experience and responsibilities at comparable companies, while at the same time
placing a substantial portion of such potential compensation “at risk” until the
achievement of performance goals determined by this Committee.
Base
Salaries. Base
salaries of Republic’s executive officers are less than executive officers in
Republic’s peer group, defined as the largest 51 to 100 publicly traded bank
holding companies in the United States based on total assets. Republic’s
executive officers, however, have an opportunity to earn above peer group
compensation through attainment of above peer group financial performance. Base
salaries for Republic’s executive officers are initially established by
evaluating the responsibilities of the position to be held and the experience of
the individual, and by reference to the competitive marketplace for executive
talent, including a comparison to base salaries for comparable positions at
other companies. In determining its recommendations for annual adjustments to
the base salaries of Republic’s executive officers, this Committee focuses
primarily on similar “executive marketplace” data, including survey material on
salary movement and range improvement for peer executives. It also considers the
extent of Republic’s success in meeting return on equity and earnings per share
growth goals (“financial goals”) for the most recently completed fiscal year and
assesses the performance rendered by Republic’s executive officers during the
year.
Mr.
Cluckey’s 2004 base salary as Chief Executive Officer was $354,000. Mr.
Cluckey’s base salary for 2005 was set at $366,000. Based on survey data and the
Company’s “at risk” compensation objectives, the salary paid in 2004 to Mr.
Cluckey equaled approximately 69% of the average salary paid in 2004 to chief
executive officers in Republic’s peer group.
Management
Incentive Bonus Plan. Any cash
bonuses awarded to executive officers for fiscal 2004 were pursuant to
Republic’s Management Incentive Bonus Plan. That Plan enables executive officers
to earn an annual bonus generally ranging from 100% to 500% of base salary for
the fiscal year, but only if Republic’s financial results for the year have met
or exceeded targets established at the start of the year. If the financial
results are less than the targets but above a certain minimum level, the maximum
cash bonus which an executive officer may be awarded for the year is reduced
proportionately. Both the target and the minimum financial goals for the year
are determined by this Committee at the start of the year based on an analysis
of historical data, strategic issues and general business
conditions.
For 2004,
the Company minimum financial goals for return on equity and earnings per share
growth were 15.0% and 4%, respectively. The Company’s targeted financial goals
for 2004 for return on equity and earnings per share growth were 17.01% and 8%,
respectively. For 2004 the Company achieved a return on equity of 17.03% and
earnings per share growth of 9%.
After
fiscal year-end, the bonus to be awarded to an executive officer for that year
is determined as described above. For fiscal 2004, Republic exceeded its
targeted financial goal established by this Committee for return on equity and
earnings per share growth rate. As a result, Mr. Cluckey and other executive
officers received bonus awards based on exceeding their respective financial
goals. Additionally, 25% of Mr. Cluckey’s and other executive officers’ bonuses
for 2004 were paid in restricted stock. Based on these calculations, Mr. Cluckey
received a cash bonus of $1,070,438 and restricted stock valued at $356,812 for
fiscal 2004.
Incentive
Stock Plans and Programs.
Republic’s 1997 and 1998 Stock Option Plans, the Incentive Stock Plan and
Voluntary Management Stock Accumulation Program provide for the grant of options
to purchase common stock and awards of incentive stock, respectively, to
executive officers and key employees of Republic who are expected to contribute
materially to Republic’s success in the future. Awards of options and incentive
stock made to executive officers and key employees are determined in light of
the above criteria and after consideration of performance factors similar to
those applicable under Republic’s Incentive Bonus Plan, including Republic’s
financial goals. There were no options awarded to executive officers during
2004.
The
Company has no defined benefit plan or executive supplemental retirement
plan.
Submitted
by the Personnel and Compensation Committee:
Dr.
Jeoffrey K. Stross, Chairperson
Stanley
A. Jacobson
Kelly E.
Miller
The
Personnel and Compensation Committee Report does not constitute soliciting
material. It is not considered filed by us, and shall not be incorporated by
reference into any of our other filings under the Securities Act or the Exchange
Act unless we state otherwise.
Compensation
Committee Interlocks and Insider Participation
During
the last completed fiscal year, the voting members of the Personnel and
Compensation Committee were Dr. Jeoffrey K. Stross, Stanley A. Jacobson and
Kelly E. Miller. None of these persons was an officer or employee of Republic or
any of its subsidiaries, or was formerly an officer of Republic or any of its
subsidiaries during such fiscal year. None of these persons had any relationship
requiring disclosure by Republic under Item 404 of Regulation S-K.
No
executive officer of Republic served as a member of the compensation committee
(or other board committee performing equivalent functions or, in the absence of
any such committee, the entire board of directors) of another entity, one of
whose executive officers served on the compensation committee or Board of
Directors of Republic. No executive officer of Republic served as a director of
another entity, one of whose executive officers served on the compensation
committee or Board of Directors of Republic. No executive officer of Republic
served as a member of the compensation committee (or other board committee
performing equivalent functions or, in the absence of any such committee, the
entire board of directors) of another entity, one of whose executive officers
served as a director of Republic.
CORPORATE
GOVERNANCE AND NOMINATING COMMITTEE REPORT
Pursuant
to the charter of the Corporate Governance and Nominating Committee adopted by
your Board of Directors (a copy of which can be found on our website,
www.republicbancorp.com under the Governance Documents link in the Investor
Relations section), this Committee performs the following functions for your
Company:
Each of
the members of the Corporate Governance and Nominating Committee is independent
(as that term is defined in rule 4200(a)(15) of the listing standards of the
National Association of Securities Dealers). Dennis J. Ibold is the chairperson
of this committee and serves as the presiding director for all executive
sessions of the Board of Directors. The other members of this committee are John
J. Lennon and Steven E. Zack.
The Board
of Directors had two executive sessions during the year ended December 31, 2004,
in which Dennis J. Ibold served as the presiding director.
One of
the purposes of this committee is to assist the Board in identifying qualified
individuals to become members of your Board. The committee seeks individuals who
have an inquisitive and objective perspective, practical wisdom and mature
judgment, and the talent and expertise to understand, and provide sound and
prudent guidance with respect to, the Company’s activities, operations and
interests. Candidates must also be individuals who have the highest personal and
professional integrity, who have demonstrated exceptional ability and judgment,
and who are likely to be the most effective, in conjunction with the other
members of your Board, in collectively serving the long-term interests of
shareholders. As all of the nominees to be elected to your Board at this year’s
annual meeting are current director’s standing for re-election, your company did
not pay any fee to any third party to identify or evaluate or assist in
identifying or evaluating potential nominees in 2004.
The
Corporate Governance and Nominating Committee will consider director nominees
recommended by security holders. Recommendations should be submitted in writing
and a reasonable time before we mail our proxy materials for the applicable
meeting of shareholders. We recommend that any such recommendations for next
year’s annual meeting be submitted to Thomas F. Menacher, Secretary, Republic
Bancorp Inc., 1070 East Main Street, Owosso, Michigan 48867, on or before
February 6, 2006 (forty-five days prior to the date on which we mailed our proxy
materials for this year’s annual meeting). No recommendations were so submitted
for this year’s annual meeting.
Each
nominee to be elected to your Board at this year’s annual meeting is either an
executive officer or a director standing for re-election. The committee and your
Board believe that all of such nominees satisfy the above described director
standards. Accordingly, all of such nominees were selected for re-election by
your Board. With respect to this year’s annual meeting of stockholders, no
nominations for director were received from security holders.
Submitted
by the Corporate Governance and Nominating Committee:
Dennis
J. Ibold, Chairperson |
John
J. Lennon |
Steven
E. Zack |
The
Corporate Governance and Nominating Committee Report does not constitute
soliciting material. It is not considered filed by us, and shall not be
incorporated by reference into any of our other filings under the Securities Act
or the Exchange Act unless we state otherwise.
AUDIT
COMMITTEE REPORT
Pursuant
to the charter of the Audit Committee adopted by your Board of Directors (a copy
of which was attached as Annex B to our proxy statement for our 2003 annual
meeting of stockholders), and on behalf of your Board of Directors, this
Committee oversees the accounting and financial reporting processes and the
financial statements of your Company. In addition, this Committee recommends to
your Board of Directors the selection of your Company’s independent registered
public accounting firm (“independent auditors”). Each of the members of the
Audit Committee is independent (as that term is defined in Rule 4200(a)(15) of
the listing standards of the National Association of Securities Dealers) and no
Rule 10A-3 exemptions from the SEC’s requirements for audit committee member
independence have been utilized.
Management
of your Company is responsible for the preparation, presentation and integrity
of your Company’s financial statements and for the effectiveness of internal
control over reporting. Management and the internal auditing department are
responsible for maintaining your Company’s accounting and financial reporting
principles and internal controls and procedures designed to maintain compliance
with accounting standards and applicable laws and regulations. The independent
auditors are responsible for auditing your Company’s financial statements,
expressing an opinion as to their conformity with generally accepted accounting
principles and annually auditing management’s assessment of the effectiveness of
internal control over financial reporting (commencing in the fiscal year ending
December 31, 2004).
In the
performance of its oversight function, this Committee has reviewed and discussed
with management and the independent auditors, the audited financial statements
for the year ended December 31, 2004. In addition, this Committee has discussed
with the independent auditors, the matters required to be discussed by SAS 61.
This Committee also has received from the independent auditors the written
disclosures and the letter required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees) and has discussed with the
independent auditors their independence.
This
Committee discussed with the Company’s independent auditors the overall scope
and plans for their audit. This Committee meets with the independent auditors,
with and without management present, to discuss the results of their
examinations, the evaluations of your Company’s internal controls, and the
overall quality of your Company’s financial reporting.
The
members of this Committee are not full-time employees of your Company and are
not performing the functions of auditors or accountants. As such, it is not the
duty or responsibility of this Committee or its members to conduct “field work”
or other types of auditing or accounting reviews or procedures or to set auditor
independence standards. Members of this Committee necessarily rely on the
information provided to them by management and the independent auditors.
Accordingly, this Committee’s considerations and discussions referred to above
do not assure that the audit of your Company’s financial statements has been
carried out in accordance with generally accepted auditing standards, that the
financial statements are presented in accordance with generally accepting
accounting principles or that your Company’s auditors are in fact
“independent”.
Based
upon the reports and discussions described in this report, and subject to the
limitations on the role and responsibilities of this Committee that are
described above and in this Committee’s charter, this Committee recommended to
your Board of Directors that the audited financial statements be included in
your Company’s Annual Report on Form 10-K for the year ended December 31,
2004.
Submitted
by the Audit Committee:
Stanley
A. Jacobson, Chairperson |
Sam
H. McGoun |
Gary
Hurand, Vice Chairperson |
Dr.
Isaac J. Powell |
Richard
J. Cramer |
William
C. Rands III |
The Audit
Committee Report does not constitute soliciting material. It is not considered
filed by us, and shall not be incorporated by reference into any of our other
filings under the Securities Act or the Exchange Act unless we state
otherwise.
INDEPENDENT
PUBLIC ACCOUNTANTS
Ernst
& Young LLP were our independent public accountants for fiscal 2004 and they
have been reappointed by your Board of Directors for fiscal 2005.
Representatives of Ernst & Young LLP are expected to be present at the
annual meeting to respond to appropriate questions by stockholders and to make a
statement if they so desire.
Audit
Fees. We paid
Ernst & Young LLP $650,000 and $370,500 during fiscal 2004 and fiscal 2003,
respectively, for fees and professional services rendered in connection with the
audit of our annual financial statements (including services incurred with
rendering an opinion under Section 404 of the Sarbanes-Oxley Act of 2002) and
reviews of the financial statements included in our quarterly reports on Form
10-Q.
Audit
Related Fees. We paid
Ernst & Young LLP $10,000 and $32,750 during fiscal 2004 and fiscal 2003,
respectively, for the audit of our employee benefit plan in and, in fiscal 2003,
for information system audits.
Tax
Fees. We paid
Ernst & Young LLP $54,000 and $54,500 during fiscal 2004 and fiscal 2003,
respectively, for federal and state tax return preparation and tax
consultations.
All
Other Fees. Ernst
& Young LLP did not perform any other services during fiscal 2004 or fiscal
2003. We do not use Ernst & Young LLP for internal audit
services.
Your
Audit Committee has considered whether the provision of services described under
the headings “Tax Fees” and “All Other Fees” is compatible with maintaining
Ernst and Young LLP’s independence. In light of the nature of work performed and
amount of the fees paid to Ernst & Young LLP for those services, they have
concluded that the provision of such services is compatible with maintaining
Ernst & Young LLP’s independence.
Your
Audit Committee’s current policy requires pre-approval of all audit and
non-audit services provided by the independent auditors before the engagement of
the independent auditors perform them. Your Audit Committee may delegate
authority to a member of the Audit Committee to pre-approve the engagement of
independent auditors when the entire committee is unable to do so. All such
pre-approvals must be reported to the entire committee at the next committee
meeting.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Our
subsidiary bank, Republic Bank, has, in the ordinary course of business, made
loans to certain our directors and officers and to organizations in which some
of those directors and officers have an interest. In the opinion of management,
all of these loans were made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with unrelated parties and did not involve more than the normal
risk of collectibility or present other unfavorable features. Our executive
officers do not have any loans with Republic Bank.
STOCK
PERFORMANCE GRAPH
The
following line graph compares the yearly percentage change in the cumulative
total stockholder return on Republic common stock for the last five fiscal years
with the cumulative total return on:
The
following graph assumes the investment of $100 in Republic common stock, The
Nasdaq Stock Market® Index
and The Nasdaq Bank Stocks Index on December 31, 1999 and the reinvestment of
all dividends. The returns shown on the graph are not necessarily indicative of
future performance.
The
dollar values for total stockholder return plotted in the graph above are shown
in the table below.
|
RBNC |
Nasdaq
Stock
Market®
Index
(U.S.
Companies) |
Nasdaq
Bank
Stocks
Index |
December
31, 1999 |
100.0 |
100.0 |
100.0 |
December
31, 2000 |
101.7 |
60.8 |
117.7 |
December
31, 2001 |
147.0 |
48.2 |
132.5 |
December
31, 2002 |
141.0 |
33.1 |
141.7 |
December
31, 2003 |
182.8 |
49.9 |
188.6 |
December
31, 2004 |
234.3 |
54.5 |
214.3 |
STOCK
OWNERSHIP
The
following table shows the number of shares owned by beneficial owners of more
than 5% of the outstanding shares of Republic common stock known to us as of
December 31, 2004.
Title
of Class |
Name
and Address of
Beneficial
Owner |
Amount
and Nature
of
Beneficial Owner |
Percent
of Class |
Common
Stock |
Barclays
Global Investors, NA
45
Fremont Street
San
Francisco, CA 94105 |
4,276,564
shares |
6.07% |
|
|
|
|
The
following table shows the number of shares of common stock beneficially owned
(as of December 31, 2004) by:
Name
of
Beneficial
Owner (1) |
|
Number
of
Shares
Owned
(2) |
|
Right
to
Acquire
(3) |
|
Restricted
Stock
(4) |
|
Percentage
of
Outstanding
Shares (5) |
|
Jerry
D. Campbell |
|
|
182,466 |
|
|
245,397 |
|
|
28,241 |
|
|
* |
|
Dana
M. Cluckey |
|
|
284,116 |
|
|
417,301 |
|
|
66,430 |
|
|
1.08 |
% |
Barry
J. Eckhold |
|
|
205,032 |
|
|
62,639 |
|
|
42,014 |
|
|
* |
|
Thomas
F. Menacher |
|
|
89,877 |
|
|
198,600 |
|
|
64,489 |
|
|
* |
|
George
J. Butvilas |
|
|
380,201 |
|
|
230,411 |
|
|
- |
|
|
* |
|
Lee
E. Benz
(6) |
|
|
105,579 |
|
|
- |
|
|
- |
|
|
* |
|
Mary
P. Cauley
(7) |
|
|
9,510 |
|
|
25,541 |
|
|
- |
|
|
* |
|
Richard
J. Cramer |
|
|
122,679 |
|
|
23,183 |
|
|
- |
|
|
* |
|
Gary
Hurand |
|
|
176,877 |
|
|
23,183 |
|
|
- |
|
|
* |
|
Dennis
J. Ibold |
|
|
300,937 |
|
|
16,227 |
|
|
- |
|
|
* |
|
Stanley
A. Jacobson |
|
|
371,422 |
|
|
52,137 |
|
|
- |
|
|
* |
|
John
J. Lennon |
|
|
50,336 |
|
|
23,183 |
|
|
- |
|
|
* |
|
Milton
F. Lutz II
(7) |
|
|
78,266 |
|
|
- |
|
|
- |
|
|
* |
|
Sam
H. McGoun
(7) |
|
|
65,124 |
|
|
1,996 |
|
|
- |
|
|
* |
|
Kelly
E. Miller |
|
|
193,540 |
|
|
23,183 |
|
|
- |
|
|
* |
|
Randolph
P. Piper |
|
|
54,699 |
|
|
107,979 |
|
|
- |
|
|
* |
|
Dr.
Isaac J. Powell |
|
|
17,372 |
|
|
12,578 |
|
|
- |
|
|
* |
|
William
C. Rands III |
|
|
204,277 |
|
|
- |
|
|
- |
|
|
* |
|
B.
Thomas M. Smith, Jr.
(6) |
|
|
552,645 |
|
|
78,733 |
|
|
- |
|
|
* |
|
Dr.
Jeoffrey K. Stross |
|
|
58,662 |
|
|
23,183 |
|
|
- |
|
|
* |
|
Steven
E. Zack |
|
|
83,279 |
|
|
52,137 |
|
|
- |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
Directors and Executive Officers as a group (21 persons) |
|
|
3,586,896 |
|
|
1,617,591 |
|
|
201,174 |
|
|
7.50 |
% |
_______________
(1) |
The
address for each named person is 1070 East Main Street, Owosso, Michigan
48867. |
(2) |
The
number of shares stated for each named person includes shares for which
the named person has sole voting and investment power or has shared voting
and investment power with a spouse. It also includes shares held in
Republic’s 401(k) plan, shares purchased under Republic’s Voluntary
Management Stock Accumulation Program, or in an individual retirement
account over which the named person has control, shares held by any
corporation of which the named person is a director, executive officer or
controlling stockholder, shares held by a trust of which the named person,
or his or her spouse, is a trustee or custodian, shares held by a
partnership which the named person is a general partner, and shares held
by a spouse or minor children. |
|
|
|
The
number of shares stated for each named person excludes shares that are
restricted stock holdings, or may be acquired through stock option
exercises. |
|
|
(3) |
Number
of shares that can be acquired through stock options or warrants
exercisable within sixty days of December 31, 2004. |
|
|
(4) |
Number
of shares subject to a vesting schedule, forfeiture risk and other
restrictions, includes shares issued under Republic’s Incentive Stock
Plan. |
|
|
(5) |
*
indicates that the named person owns less than one percent of Republic
common stock. |
|
|
(6) |
Mr.
Benz and Mr. Smith will retire from the Board of Directors effective April
27, 2005. |
|
|
(7) |
Ms.
Cauley, Mr. Lutz and Mr. McGoun will no longer be directors upon the
expiration of their term on April 27, 2005. |
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 requires Republic’s directors and
executive officers, and persons who beneficially own more than 10 percent of a
registered class of Republic’s equity securities, to file with the SEC initial
reports of ownership and reports of changes in ownership of Republic common
stock and other equity securities of Republic. Officers, directors and greater
than 10 percent stockholders are required by the SEC regulation to furnish
Republic with copies of all Section 16(a) forms they file.
Based
solely on our review of the copies of such forms that were received by us, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, we believe that all filing requirements applicable
to our directors, executive officers and greater than 10 percent stockholders
were complied with during fiscal 2004.
SOLICITATION
OF PROXIES
Republic
is paying for this proxy solicitation. In addition to sending you these
materials, some of our employees may contact you in person, by mail or by
telecommunications equipment, to solicit your proxy. None of these employees
will receive any extra compensation for doing this. We have also retained The
Altman Group to assist us in soliciting your proxy for a fee of $5,000 plus
reasonable out-of-pocket expenses. We will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
soliciting your proxy.
STOCKHOLDER
PROPOSALS
Any
security holder proposal which a stockholder wishes to submit for possible
inclusion in the proxy statement and proxy for Republic’s 2006 annual meeting of
stockholders must be received by Republic on or before November 22, 2005. Such
proposals must comply with the rules and regulations of the SEC then in effect
and should be sent by registered or certified mail to Thomas F. Menacher,
Secretary of Republic Bancorp Inc., at 1070 East Main Street, Owosso, Michigan
48867.
Any
security holder proposal which a stockholder wishes to present at Republic’s
2006 annual meeting of stockholders but which is not intended to be considered
for inclusion in the proxy statement and proxy for that meeting must be received
by Republic on or before February 6, 2006. Such proposals should be sent by
registered or certified mail to Thomas F. Menacher, Secretary of Republic
Bancorp Inc., at 1070 East Main Street, Owosso, Michigan 48867. If Republic does
not have notice of the proposal by that date, Republic’s form of proxy in
connection with that meeting may confer discretionary voting authority to vote
on that matter and the persons named in Republic’s form of proxy will vote the
shares represented by such proxies in accordance with their best judgment.
OTHER
MATTERS
We are
not aware of any business to come before this meeting other than the matters
described in this proxy statement. However, if any other matters should properly
come before this meeting, it is intended that holders of the proxies will act in
accordance with their best judgment.
A copy of
our Annual Report on Form 10-K for the year ended December 31, 2004 (without
exhibits) has been provided with this notice and proxy statement.
Our
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and all other reports required to be filed by us with the S.E.C. are
available free of charge through the Investor Relations section of our website
at www.republicbancorp.com as soon
as practicable after such material is electronically filed with, or furnished
to, the Securities and Exchange Commission.
No person
is authorized to give any information or to make any representation other than
that contained in this proxy statement, and if given or made, such information
may not be relied upon as having been authorized.
ANNEX
A
PROPOSED
AMENDMENT TO ARTICLES OF INCORPORATION
OF
REPUBLIC BANCORP INC.
The
proposed amendment to Republic’s articles of incorporation would amend and
restate the first sentence of Article III in its entirety to read as follows
(material in brackets would be deleted from, and material in bold type would be
added to, the present provision):
The total
authorized capital stock of the corporation [is] shall
consist of
[75,000,000] 100,000,000 shares
of Common Stock, par value of $5.00 per share (hereinafter called the “Common
Stock”) and 5,000,000 shares of Preferred Stock, no par value per share,
issuable in series (hereinafter called the “Preferred Stock”).
[X] PLEASE
MARK VOTES AS IN THIS EXAMPLE
---------------------------------
REPUBLIC
BANCORP INC.
---------------------------------
The Board
of Directors recommends that you vote FOR the election of each of the 15
Director nominees, and FOR the ratification and adoption of the proposed
amendment to Republic’s articles of incorporation.
Mark box
at right if an address change or comment has been noted on the reverse side of
this card. [_]
1. |
The
election of 15 directors to the Board of Directors of Republic for terms
expiring at the next Annual Meeting of Stockholders, and upon the election
and qualification of their successors or upon their earlier resignation or
removal. |
For
All
Nominees
[__] |
Withhold
For
All
[__] |
Cumulative
Voting
[__] |
Cumulative
votes for one or more nominees as follows:
|
|
|
|
|
Jerry
D. Campbell (01) |
____ |
|
John
J. Lennon (09) |
____ |
Dana
M. Cluckey (02) |
____ |
|
Kelly
E. Miller (10) |
____ |
George
J. Butvilas (03) |
____ |
|
Randolph
P. Piper (11) |
____ |
Richard
J. Cramer, Sr. (04) |
____ |
|
Dr.
Isaac J. Powell (12) |
____ |
Barry
J. Eckhold (05) |
____ |
|
William
C. Rands III (13) |
____ |
Gary
Hurand (06) |
____ |
|
Dr.
Jeoffrey K. Stross (14) |
____ |
Dennis
J. Ibold (07) |
____ |
|
Steven
E. Zack (15) |
____ |
Stanley
A. Jacobson (08) |
____ |
|
|
|
|
|
|
|
|
2. |
Approve
the amendment to Republic’s articles of
incorporation
to increase the total authorized common
stock
from 75,000,000 shares to 100,000,000 shares |
[_]
For [_] Against [_] Abstain |
NOTE:
Your votes will be split equally among all nominees unless you mark the
“Cumulative Voting” box. In that case, your votes will be split among those
nominees for whom a vote is recorded in the space beside the nominee’s name. You
can withhold authority to vote for any nominee by lining through or otherwise
striking out the name of any nominee.
Please be
sure to sign and date this Proxy.
Signature
|
Date
|
|
|
Co-owner
Signature __________________________ |
Date
|
Your vote
is important. Please vote immediately.
Vote-by-Internet |
|
Vote-by-Telephone |
|
OR |
|
Log
on to the Internet and go to |
|
Call
toll-free |
http://www.eproxyvote.com/rbnc |
|
1-877-PRX-VOTE
(1-877-779-8683) |
|
|
|
If you
vote over the Internet or by telephone, please do not mail your
card.
DETACH
HERE: IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL.
DETACH
HERE: IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL.
REPUBLIC
BANCORP INC.
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For the
2005 Annual Meeting of Stockholders to be held on Wednesday, April 27,
2005
The
Stockholder executing this Proxy appoints Dana M. Cluckey and Thomas F.
Menacher, and each of them, each with full power to appoint his substitute,
attorneys and proxies to represent the Stockholder and to vote and act with
respect to all shares of common stock of Republic Bancorp Inc. (“Republic”) that
the Stockholder would be entitled to vote on all matters which come before the
Annual Meeting of Stockholders of Republic referred to above and at any
adjournment(s) or postponement(s) of that meeting.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF REPUBLIC. IF THIS
PROXY IS PROPERLY EXECUTED, THE SHARES OF REPUBLIC COMMON STOCK REPRESENTED BY
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, SUCH SHARES
WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED ON THE REVERSE SIDE (WITH
THE VOTES SPLIT EQUALLY AMONG THOSE NOMINEES) AND WILL BE VOTED FOR THE ADOPTION
OF THE PROPOSED AMENDMENT TO REPUBLIC’S ARTICLES OF INCORPORATION. THE SHARES OF
REPUBLIC COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION
OF THE PROXIES ON ANY OTHER MATTERS WHICH MAY COME BEFORE REPUBLIC’S 2005 ANNUAL
MEETING OF STOCKHOLDERS.
________________________________________________________________________
PLEASE
MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
_______________________________________________________________________
Please
sign exactly as name appears on this proxy. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by an authorized officer. If a partnership, please
sign in partnership name by authorized person.
________________________________________________________________________
HAS YOUR
ADDRESS CHANGED?
DO YOU
HAVE ANY COMMENTS?
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________