1
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO STATEMENT 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec. 240.14a-12
[ ] Confidential for the Commission only as permitted by Rule 14a-1(c)(2)
MARATHON BANCORP
- --------------------------------------------------------------------------------
(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 filing fee.
[ ] 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:
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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 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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 by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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Definitive Proxy Materials will be forwarded to shareholders on or about April
1, 1999.
<PAGE>
MARATHON BANCORP
11150 W. OLYMPIC BOULEVARD
LOS ANGELES, CALIFORNIA 90064
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 1999
TO THE SHAREHOLDERS
OF MARATHON BANCORP:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its board of directors, the
1999 Annual Meeting of Shareholders (the "Meeting") of Marathon Bancorp (the
"Company") will be held at the Bancorp's main office located at 11150 W. Olympic
Boulevard, Los Angeles, California, on Monday, April 26, 1999 at 4:00 p.m. for
the purpose of considering and voting upon the following matters:
1. ELECTION OF DIRECTORS. To elect seven (7) persons to the board of
directors to serve until the 2000 Annual Meeting of Shareholders and until their
successors are elected and have been qualified. The persons nominated by the
Board of Directors to serve as directors are:
Robert J. Abernethy Robert Oltman
Craig D. Collette Ann Pappas
Frank Jobe, M.D. Nick Patsaouras
C. Thomas Mallos
2. OTHER BUSINESS. To transact such other business as may properly come
before the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 17, 1999 as the
record date for determination of shareholders entitled to notice of, and to vote
at, the Meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert L. Oltman
March 17, 1999 Robert L. Oltman, Secretary
YOU ARE URGED TO VOTE IN FAVOR OF MANAGEMENT'S PROPOSAL BY SIGNING AND RETURNING
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING IN PERSON. THE ENCLOSED PROXY IS SOLICITED BY THE BANCORP'S BOARD
OF DIRECTORS. ANY SHAREHOLDER GIVING A PROXY MAY REVOKE IT PRIOR TO THE TIME IT
IS VOTED BY NOTIFYING THE SECRETARY OF THE BANCORP IN WRITING OF REVOCATION OF
THE PROXY, BY FILING A DULY EXECUTED PROXY BEARING A LATER DATE, OR BY ATTENDING
THE MEETING AND VOTING IN PERSON. PLEASE INDICATE ON THE PROXY WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING SO THAT WE CAN ARRANGE FOR ADEQUATE
ACCOMMODATIONS.
MARATHON BANCORP
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 1999
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of Proxies
for use at the 1999 Annual Meeting of Shareholders (the "Meeting") of Marathon
Bancorp (the "Company") to be held at the offices of the Company's subsidiary
Marathon National Bank (the "Bank") located at 11150 W. Olympic Boulevard, Los
Angeles, California, on Monday, April 26, 1999 at 4:00 p.m., and at any and all
adjournments thereof.
It is anticipated that this Proxy Statement and the accompanying Notice and form
of Proxy will be mailed on or about April 1, 1999 to shareholders eligible to
receive notice of, and to vote at, the Meeting.
REVOCABILITY OF PROXIES
- -------------------------
A form of Proxy for voting your shares at the Meeting is enclosed. Any
shareholder who executes and delivers such Proxy has the right to and may revoke
it at any time before it is exercised by filing with the Secretary of the
Company an instrument revoking it or a duly executed Proxy bearing a later date.
In addition, the powers of the proxyholders will be suspended if the person
executing the Proxy is present at the Meeting and elects to vote in person by
advising the chairman of the Meeting of his or her election to vote in person,
and votes in person at the Meeting. Subject to such revocation or suspension,
all shares represented by a properly executed Proxy received in time for the
Meeting will be voted by the proxyholders in accordance with the instructions
specified on the Proxy. UNLESS OTHERWISE DIRECTED IN THE ACCOMPANYING PROXY,
THE SHARES REPRESENTED BY YOUR EXECUTED PROXY WILL BE VOTED "FOR" THE NOMINEES
FOR ELECTION OF DIRECTORS NAMED HEREIN. IF ANY OTHER BUSINESS IS PROPERLY
PRESENTED AT THE MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF MANAGEMENT.
PERSONS MAKING THE SOLICITATION
- ----------------------------------
This solicitation of Proxies is being made by the board of directors (the
"Board") of the Company. The expense of preparing, assembling, printing and
mailing this Proxy Statement and the materials used in the solicitation of
Proxies for the Meeting will be borne by the Company. It is contemplated that
Proxies will be solicited principally through the use of the mail, but
directors, officers and employees of the Company and the Bank may solicit
Proxies personally or by telephone, without receiving special compensation
therefore. Although there is no formal agreement to do so, the Company may
reimburse banks, brokerage houses and other custodians, nominees and fiduciaries
for their reasonable expenses in forwarding these Proxy materials to
shareholders whose stock in the Company is held of record by such entities. In
addition, the Company may use the services of individuals or companies it does
not regularly employ in connection with this solicitation of Proxies, if
management determines it to be advisable.
VOTING SECURITIES
There were issued and outstanding 3,826,819 shares of the Company's, no par,
common stock ("Common Stock") on March 17, 1999, which has been fixed as the
record date for the purpose of determining shareholders entitled to notice of,
and to vote at, the Meeting (the "Record Date"). On any matter submitted to the
vote of the shareholders, each holder of Common Stock will be entitled to one
vote, in person or by Proxy, for each share of Common Stock he or she held of
record on the books of the Company as of the Record Date. In connection with
the election of directors, shares may be voted cumulatively if a shareholder
present at the Meeting gives notice at the Meeting, prior to the voting for
election of directors, of his or her intention to vote cumulatively. If any
shareholder of the Company gives such notice, then all shareholders eligible to
vote will be entitled to cumulate their shares in voting for election of
directors. Cumulative voting allows a shareholder to cast a number of votes
equal to the number of shares held in his or her name as of the Record Date,
multiplied by the number of directors to be elected. These votes may be cast
for any one nominee, or may be distributed among as many nominees as the
shareholder sees fit. If cumulative voting is declared at the Meeting, votes
represented by Proxies delivered pursuant to this Proxy Statement may be
cumulated in the discretion of the proxies, in accordance with management's
recommendation.
Abstentions from voting on any matter other than the election of directors will
have the effect of a vote "Against" the proposal. If you hold your shares of
Company common stock in street name and fail to instruct your broker or nominee
as to how to vote such shares of common stock, your broker or nominee may, in
its discretion, vote your shares of common stock "For" the election of nominees
for director set forth herein.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Management of the Company knows of no person who owns, beneficially or of
record, either individually or together with associates, 5 percent or more of
the outstanding shares of the Company's common stock, except as set forth in the
table on the following page. The following table sets forth, as of February
19,1999 the number and percentage of shares of the Company's outstanding common
stock beneficially owned, directly or indirectly, by each of the Company's
directors and named officers and by the directors and named officers of the
Company as a group. The shares "beneficially owned" are determined under
Securities and Exchange Commission rules, and do not necessarily indicate
ownership for any other purpose. In general, beneficial ownership includes
shares over which a director or named officer has sole or shared voting or
investment power and shares which such person has the right to acquire within 60
days of February 19,1999. Unless otherwise indicated, the persons listed below
have sole voting and investment powers. Management is not aware of any
arrangements which, at a subsequent date, may result in a change of control of
the Company.
In the election of directors, the seven candidates receiving the highest number
of votes are elected. It is not anticipated that any matters will be
presented at the meeting other than those set forth in the accompanying notice
of meeting. If,however, any other matters properly are presented at the meeting,
the proxy will be voted in accordance with the best judgment and in the
discretion of the proxyholders.
<TABLE>
<CAPTION>
Common Stock Beneficially Owned as of
February 19, 1999
----------------------
Number of Percent of
Name of Beneficial Owner Shares Class
- -------------------------------------------------- ---------- ----------
<S> <C> <C>
Directors and Named Executive Officers:
- --------------------------------------------------
Nikolas Patsaouras . . . . . . . . . . . . . . . . 37,910(1) 1.0
Robert J. Abernethy. . . . . . . . . . . . . . . . 107,793 2.8
Craig D. Collette. . . . . . . . . . . . . . . . . 47,723(2) 1.3
Frank W. Jobe, M.D.. . . . . . . . . . . . . . . . 74,190 1.9
C. Thomas Mallos . . . . . . . . . . . . . . . . . 47,878(3) 1.3
Robert L. Oltman . . . . . . . . . . . . . . . . . 191,032(4) 5.0
Ann Pappas . . . . . . . . . . . . . . . . . . . . 60,011(5) 1.6
Timothy J. Herles. . . . . . . . . . . . . . . . . 9,696(6) 0.3
Total for all directors, named executive officers
and all executive officers (numbering 9) . . . . . 602,679(7) 15.7
__________________
<FN>
(1) Mr. Patsaouras has shared voting and investment powers as to 37,500 of
these shares.
(2) Mr. Collette has shared voting and investment powers as to 47,723
shares.
(3) Mr. Mallos has shared voting and investment powers as to 45,108 of these
shares.
(4) Mr. Oltman has shared voting and investment powers as to 3,052 of these
shares. His address is c/o Marathon Bancorp, 11150 West Olympic Boulevard, Los
Angeles, California 90064.
(5) Ms. Pappas has shared voting and investment powers as to 59,896 of these
shares.
(6) Mr. Herles has shared voting and investment powers as to 1,184 of these
shares. The amount includes 8,512 shares acquirable by exercise of stock
options.
(7) This amount includes 19,458 shares acquirable by exercise of stock
options within 60 days of February 19, 1999.
</TABLE>
<TABLE>
<CAPTION>
Number of Percent of
Name of 5% Owner Shares Class
- ------------------------------------- ---------- -----------
<S> <C> <C>
Oppenheimer-Spence Financial Services 224,897(1) 5.9%
Partnership L.P.
<FN>
(1) Based on a Schedule 13D/A filed with the Securities and Exchange
Commission on September 12, 1997. The address of this beneficial owner is 119
West 57th Street, New York, NY 10019.
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
-------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and more than ten-percent shareholders are required by
Securities Exchange Commission regulation to furnish the Company with copies of
all Section 16(a) forms they file.
The Company filed Form 5 reports after year-end for the directors that were
granted non-qualified stock options during the year. Mrs. Adrienne Caldwell
filed her Form 3, Initial Statement of Beneficial Ownership of Securities, late.
The other officer and director purchases and sales were filed during the year on
the appropriate Form 4's.
PROPOSAL 1:
ELECTION OF DIRECTORS
NOMINEES
- --------
The Company's Bylaws presently provide that the number of directors of the
Company shall not be less than seven (7) nor more than twelve (12) until changed
by an amendment to the Bylaws adopted by the Company's shareholders. The Bylaws
further provide that the exact number of directors shall be seven (7) until
changed by a Bylaw or Bylaw amendment duly adopted by the Company's shareholders
or board of directors.
The persons named below, all of whom are currently members of the board of
directors of the Company, have been nominated for election as directors to serve
until the 2000 Annual Meeting of Shareholders and until their successors are
elected and have qualified. Unless otherwise instructed, the proxyholders will
vote the Proxies received by them for the election of the nominees named below.
Votes of the proxyholders will be cast in such a manner as to effect, if
possible, the election of all seven (7) nominees, as appropriate, (or as many
thereof as possible under the rules of cumulative voting). The seven nominees
for directors receiving the most votes will be elected directors. In the event
that any of the nominees should be unable to serve as a director, it is intended
that the Proxy will be voted for the election of such substitute nominee, if
any, as shall be designated by the board of directors. The board of directors
has no reason to believe that any of the nominees named below will be unable to
serve if elected. Nominations may be made by shareholders at the meeting.
The following table sets forth as of March 15, 1999, the names of, and certain
information concerning, the persons nominated by the board of directors for
election as directors of the Company.
<TABLE>
<CAPTION>
Name and Title Year First Principal Occupation
Other than Director Appointed During Past
Age Director Five Years
- ------------------------- --- --------- -----------------------
<S> <C> <C> <C>
Nikolas Patsaouras 55 1982 President of Patsaouras & Associates
Chairman (consulting engineers).
Robert J. Abernethy 59 1983 President, American Standard
Development Co.
Craig D. Collette 56 1997 President and Chief Executive Officer of
President & CEO the Company and the Bank. Former President and
Chief Operating Officer of TransWorld Bank
from June 1996 to January 1997, and former
President and Chief Executive Officer of
Landmark Bank from January 1979 to April
1996.
Frank W. Jobe, M.D 73 1985 Orthopedic Surgeon
C. Thomas Mallos 62 1982 President, C. Thomas Mallos, Accountancy Corp.
Robert L. Oltman 61 1982 President, Oltman Management Company.
Ann Pappas 70 1982 Restaurateur.
</TABLE>
All of the nominees named above have served as members of the Company's board of
directors during the past year. All nominees will continue to serve if elected
at the Meeting until the 2000 Annual Meeting of Shareholders and until their
successors are elected and have qualified. None of the directors were selected
pursuant to any arrangement or understanding other than with the directors and
officers of the Company acting within their capacities as such. There are no
family relationships among any of the directors and executive officers of the
Company. No director or executive officer of the Company serves as a director
of any company which has a class of securities registered under, or which is
subject to the periodic reporting requirements of, the Securities Exchange Act
of 1934, or of any company registered as an investment company under the
Investment Company Act of 1940, except Mr. Abernethy who is a director of Public
Storage Inc.
THE BOARD OF DIRECTORS AND COMMITTEES
- ------------------------------------------
The Company's board of directors held twelve (12) meetings during 1998. None of
the directors attended less than 75 percent of all board of directors meetings
and committee meetings (of which they were a member) that were held in 1998,
except for Dr. Jobe who attended three meetings.
There were no standing committees of the Company's board of directors. In 1998,
the Bank had a standing Audit Committee, Personnel Committee and Loan Committee.
The Bank's Audit Committee, which consisted of Thomas Mallos (chairman) and
Messrs. Patsaouras, Oltman and Ms. Pappas, met four times during 1998. The
Audit Committee reviews the audits of the Bank and considers the adequacy of its
auditing procedures. The Bank's Personnel Committee, which consisted of Mr.
Oltman (chairman) and Messrs. Patsaouras, Mallos, Abernethy and Ms. Pappas, met
two times in 1998. The Personnel Committee reviews and approves compensation
arrangements of the Bank's senior officers and reviews staff compensation and
benefits. The Bank's Loan Committee, which consists of Messrs. Patsaouras
(Chairman), Collette, Herles, Mallos, Oltman and Ms. Pappas meet weekly to
review and approve loan requests.
EXECUTIVE OFFICERS
- -------------------
The following table provides certain information as of March 15, 1999 (except as
otherwise disclosed) regarding the executive officers of the Company and the
Bank, other than Mr. Collette, whose information is provided in the table above.
<TABLE>
<CAPTION>
Name Age Principal Occupation During Past Five Years
---- --- ------------------------------------------------
<S> <C> <C>
Timothy J. Herles 57 Executive Vice President/Senior Credit Officer of
the Bank since 1982
Adrienne Caldwell 56 Executive Vice President/Chief Operations
Administrator of the Bank since 1990.
Howard J. Stanke 50 Executive Vice President/Chief Financial Officer of
the Company
and Bank effective June 9, 1997. Mr. Stanke was previously
Executive Vice President/Chief Financial Officer of TransWorld
Bancorp and TransWorld Bank since 1980 and was with
TransWorld Bancorp and Bank from 1978 to May 1997.
</TABLE>
The following table sets forth certain summary compensation information for
the Company's and the Bank's Chief Executive Officer and each executive officer
whose total annual salary and bonus exceeded $100,000 (the "Named Executives")
for the fiscal year ended December 31,1998.
<TABLE>
Executive Compensation
Summary Compensation Table
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long Term Compensation
------------------------------
Annual Compensation Awards Payouts
- ----------------------------------------------------------------- -------------------- --------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Annual Restricted All Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus sation Award(s) SARs Payouts
Position Year ($) ($) ($)(1) ($) (#) ($) ($)
- --------------------- ------ -------- ----- ------- ---------- -------- ------- ---------
Craig D. Collette(3) 1998 $170,102 $0 $8,400 0 5,000 0 $1,800
President and 1997 $160,714 $0 $8,400 0 30,000 0 $1,238
Chief Credit Officer of the Bank 1996 N/A
Timothy J. Herles 1998 $101,089 $0 $8,400 0 34,184 0 $1,940
Executive Vice President and 1997 $ 96,372 $0 $8,400 0 15,000 0 $1,490
Chief Credit Officer of the Bank 1996 $ 92,391 $0 $8,400 0 0 0 $1,210
<FN>
(1) These amounts represent the automobile allowance.
(2) These amounts represent excess life insurance premiums.
(3) Mr. Collette commenced employment on January 22, 1997.
</TABLE>
The following table presents information with respect to stock options to
purchase shares of the Company's common stock granted during the fiscal year
ended December 31, 1998 to any of the Company's Named Executives.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS TABLE
-------------------------
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<S> <C> <C> <C> <C>
Individual Grants
- --------------------------------
(a) (b) (c) (d) (e)
- -------------------------------- --------------------- ------------- ------------- -----------
% of Total
Number of Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name. Granted (#) Fiscal Year ($/Share) Date
- -------------------------------- --------------------- ------------- ------------- -----------
Craig D. Collette. . . . . . . . 5,000(1) 11.4% $ 3.55 6/29/2008
- -------------------------------- --------------------- ------------- ------------- -----------
Timothy Herles . . . . . . . . . 30,120(1) 68.5% $ 3.32 8/26/2008
4,064(2) 9.2% $ 3.32 8/26/2008
- -------------------------------- --------------------- ------------- ------------- -----------
</TABLE>
[FN]
(1) The stock options are incentive stock options as provided in Section 422
of the Internal Revenue Code. The vesting of the stock options is in equal
installments of 20% per year from the date of the option grant.
(2) The stock options are non-qualified stock options. The vesting of the
stock options is 20% per year from the date of the option grant.
The following table provides information with respect to the Named Executives
concerning the exercise of options during the fiscal year ended December 31,
1998, and unexercised options held by the Named Executives as of December 31,
1998.
<TABLE>
<CAPTION>
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
--------------------------------------------------
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION/SAR VALUE
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
- ------------------ ------------------- ---------------------- --------------- ---------------
Number of Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Year-End (#) Year-End ($)
Shares Acquired on Value Realized Exercisable/ Exercisable/
Name. . . . . . . Exercise (#) ($) Unexercisable Unexercisable
- ------------------ ------------------- ---------------------- --------------- ---------------
Craig D. Collette. 6,000 $ 8,070 0/24,000(1) $ 0/5,160(1)
- ------------------ ------------------- ---------------------- --------------- ---------------
Timothy J. Herles. 0 N/A 8,512/49,184(1) $ 0/0(1)
- ------------------ ------------------- ---------------------- --------------- ---------------
>
<FN>
N/A-means not applicable. (1) Options only.
(2) Value of unexercised options is the difference between the fair
market value of the common stock underlying the options and the exercise
price of the grant at fiscal year-end, respectively.
</TABLE>
EMPLOYMENT AGREEMENT
- ---------------------
The Company and the Bank have an employment agreement with Mr. Craig D.
Collette. Pursuant to Mr. Collette's employment agreement, Mr. Collette is to
serve for a term of five years commencing January 15, 1997 as the President and
Chief Executive Officer of the Company and the Bank. The base annual salary for
Mr. Collette is $170,000 per year, with increases to be determined at the
discretion of the Boards of Directors of the Bank and the Company. The
agreement provides Mr. Collette with four weeks vacation, health, disability and
life insurance benefits, $700 per month for car allowance, stock options to
acquire 30,000 shares of Common Stock with vesting at 20% per year (which were
granted in 1997), salary continuation benefits as described below, and
indemnification for matters incurred in connection with any action against the
executive which arose out of and was within the scope of his employment,
provided that the executive acted in good faith and in a manner the executive
reasonably believed to be in the best interests of the Company and the Bank and
with respect to a criminal matter if the executive also had no reasonable cause
to believe his conduct was unlawful. If the Company and the Bank terminate Mr.
Collette without cause, Mr. Collette shall be entitled to (i) two years then
base salary in a lump sum at the time of termination, and (ii) continuation of
insurance benefits for 24 months. Upon any merger or consolidation where the
Company and the Bank are not the surviving or resulting corporations, or upon
any transfer of all or substantially all of the assets of the Company and the
Bank, and Mr. Collette not be retained for the remaining term of the agreement
in a comparable position of the resulting corporation, Mr. Collette shall be
paid two years of his then base salary in a lump sum within ten days of such
termination.
SALARY CONTINUATION PLAN
- --------------------------
On January 16, 1998, the Bank and Mr. Collette entered into a salary
continuation agreement to provide salary continuation benefits to Mr. Collette.
If Mr. Collette continues in the employ of the Bank until age 65 ("Retirement
Age"), he will receive from the Bank under the salary continuation agreement
$150,000 per year for 10 years beginning at his reaching Retirement Age. In the
event Mr. Collette terminates employment due to disability prior to age 65, he
will receive the salary continuation benefits in the amount of $150,000 per year
for 10 years beginning at his reaching Retirement Age. In the event Mr.
Collette dies while actively employed by the Bank prior to reaching Retirement
Age, his beneficiary will receive from the Bank benefits in the amount of
$150,000 per year for 10 years beginning with the month following his death or
the total benefit value in a lump sum 30 days following his death at the choice
of the beneficiary. In the event of termination without cause Mr. Collette
shall receive a benefit amount of $150,000 to be paid each year for 10 years
beginning at Retirement Age. In the event of termination due to early
retirement or voluntary termination other than due to a change of control, Mr.
Collette shall receive an annual benefit amount beginning after Retirement Age
for 10 years that is based on his years of service with the Bank and subject to
a maximum annual benefit amount of $150,000 per year. In the event of a change
in control of the Bank while Mr. Collette is in active service with the Bank, he
will receive beginning on the first day of the month following the consummation
of the change in control $150,000 per year for 10 years. In the event Mr.
Collette is terminated for cause he will forfeit any benefits from the salary
continuation agreement.
<PAGE>
DIRECTOR COMPENSATION
- ----------------------
The Company pays no directors fees. Each nonemployee director of the Bank
receives $250 per meeting for his or her attendance at all regular or special
meetings of the Bank. Each nonemployee director also receives $25 per committee
meeting of the Bank. The maximum a Bank director (other than the Chairman) may
receive for attendance at the Bank's board and committee meetings is $500 per
month. The Chairman receives additional directors fees of $1,500 per month from
the Bank with a maximum of directors fees of $2,000 per month. In addition, the
Bank pays for some of the directors' insurance premiums for medical, dental and
vision coverage and for all of the directors basic and voluntary life insurance
premiums. The total amount the Bank paid on behalf of its directors pursuant to
these benefits was $40,800 in 1998.
During 1998 non-qualified stock options were granted to directors at a price of
$3.80 per share to expire on May 11, 2008. Options were granted in the
following amounts: 39,676 to Robert Abernethy, 29,990 to Frank Jobe, 49,676 to
C. Thomas Mallos, Robert Oltman and Ann Pappas and 63,917 to Nikolas Patsaouras.
The options were granted pursuant to the Company's 1998 Stock Option Plan and
vest in equal installments over a five-year period.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the Company's directors and executive officers and their immediate
families as well as the companies with which they are associated are customers
of, or have had banking transactions with, the Bank in the ordinary course of
the Bank's business, and the Bank expects to have banking transactions with such
persons in the future. In management's opinion, all loans and commitments to
lend included in such transactions were made in compliance with applicable laws
on substantially the same terms, including interest rates and collateral, as
those prevailing for comparable transactions with other persons of similar
creditworthiness and, in the opinion of management, did not involve more than a
normal risk of collectibility or present other unfavorable features.
INDEPENDENT ACCOUNTANTS
The firm of Vavrinek, Trine, Day & Co. LLP served as independent public
accountants for the Company and the Bank through the year 1998 and has been
selected to be the Company's independent public accountants for the year 1999.
All services rendered were approved by the Company's board of directors, which
has determined the firm of Vavrinek, Trine, Day & Co. LLP to be independent. It
is expected that one or more representatives of Vavrinek, Trine, Day & Co. LLP
will be present at the Meeting and will be given the opportunity to make a
statement, if desired, and to respond to appropriate questions.
On October 20, 1997, the Board of Directors of the Company approved the
recommendation of Audit Committee of the Board of Directors of the Bank to (i)
engage Vavrinek, Trine, Day & Co., LLP, as the independent accountants for the
Company and (ii) dismiss Deloitte & Touche, LP as independent accounts subject
to approval of the Board's Executive Committee, which was given on October 27,
1997.
During the two fiscal years ended December 31, 1996 and the subsequent interim
period through September 30, 1997, (i) there were no disagreements with Deloitte
& Touche on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures, which disagreements, if
not resolved to its satisfaction, would have caused it to make reference in
connection with its report to the subject matter of the disagreement. During
the fiscal year of 1995, there was a disagreement with Deloitte & Touche on the
market valuation of two of the Company's other real estate owned properties.
The Deloitte & Touche valuation was less than the Company's valuation and
Deloitte & Touche indicated it could not issue an opinion on the December 31,
1995 financials unless the lower valuation was used. The disagreement was
settled with the Company accepting and using the lower valuation. There were no
other disagreements on any other matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures and (ii)
Deloitte & Touche has not advised the Company of any reportable events, as
defined in paragraph (A) through (D) of Item 304(a)(1)(v) of Regulation S-K,
promulgated by the Securities and Exchange Commission, which are required to be
disclosed.
The report of Deloitte & Touche on the Company's consolidated financial
statements for the years ended December 31, 1995 and 1996 did not contain any
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.
SHAREHOLDER PROPOSALS
Under certain circumstances, shareholders are entitled to present proposals at
shareholder meetings. Any such proposal to be included in the Proxy Statement
for the Company's 2000 Annual Meeting of Shareholders must be submitted by a
shareholder prior to December 1, 1999 in a form that complies with applicable
regulations.
In addition, in the event a shareholder proposal is not submitted to the Company
prior to February 15, 2000, the proxy to be solicited for by the Board of
Directors for the 2000 Annual Meeting of Shareholders will confer authority to
the holders of the proxy to vote the shares in accordance with their best
judgment and discretion, if the proposal is presented at the 2000 Annual Meeting
of Shareholders, without any discussion of the proposal in the proxy statement
for such meeting.
OTHER MATTERS
Management does not know of any matters to be presented at the Meeting other
than those set forth above. However, if other matters come before the Meeting,
it is the intention of the persons named in the accompanying Proxy as
proxyholders to vote the shares represented by the Proxy in accordance with the
recommendations of management on such matters, and discretionary authority to do
so is included in the Proxy.
MARATHON BANCORP
/s/ Robert L. Oltman
Dated: March 17, 1999 Robert L. Oltman, Secretary
The Annual Report to Shareholders for the fiscal year ended December 31, 1998 is
being mailed concurrently to the Company's shareholders. The Company's Annual
Report contains the consolidated financial statements of the Company and its
subsidiary.
A COPY OF THE COMPANY'S 1998 ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K WILL BE PROVIDED TO THE COMPANY'S SHAREHOLDERS WITHOUT
CHARGE UPON WRITTEN REQUEST TO THE SECRETARY, MARATHON BANCORP, 11150 W. OLYMPIC
BOULEVARD, LOS ANGELES, CALIFORNIA 90064.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO ITS EXERCISE
MARATHON BANCORP
The UNDERSIGNED HEREBY APPOINTS Messrs. Craig D. Collette and Nikolas Patsaouras
and each of them as, attorneys, agents and proxyholders, with full power of
substitution, to represent, vote and act with respect to all shares of common
stock of Marathon Bancorp which the undersigned would be entitled to vote at the
meeting of shareholders to be held on April 26, 1999 at 4:00 p.m. at the offices
of Marathon National Bank located at 11150 W. Olympic Blvd., Los Angeles,
California, or any adjournments thereof, with all the powers the undersigned
would possess if personally present as follows:
1. To elect seven persons to be directors. Discretionary authority to
cumulative vote is granted.
Robert J. Abernethy C. Thomas Mallos Ann Pappas
Craig D. Collette Robert L. Oltman Nikolas Patsaouras
Frank W. Jobe, M. D.
[ ] FOR ALL NOMINEES [ ] WITHHELD FOR ALL
(Expect as marked to the contrary below)
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name of the space below.)
- --------------------------------------------------------------------------------
2. Transaction of such other business as may properly come before the meeting
and any adjournment or adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES FOR ELECTION OF
DIRECTORS NAMED ON THE REVERSE SIDE. The undersigned hereby ratifies and
confirms all that said attorneys and proxies, or any of them or their
substitutes, shall lawfully do or cause to be done by virtue hereof, and hereby
revokes any and all proxies heretofore given by the undersigned to vote at said
meeting. The undersigned acknowledges receipt of the notice of Annual Meeting
and the Proxy Statement accompanying said notice. The Proxy confers authority to
vote and shall be voted in accordance with such recommendation unless a contrary
instruction is indicated, in which case, the shares represented by the Proxy
will be voted in accordance with such instruction. IF NO INSTRUCTION IS
SPECIFIED WITH RESPECT TO THE ELECTION OF DIRECTORS, THE SHARES REPRESENTED BY
THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF MANAGEMENT.
If any other business is presented at the meeting, this proxy confers authority
to and shall be voted in accordance with the recommendations of management.
[ ] I DO [ ] DO NOT EXPECT TO ATTEND THE MEETING
1999
------------------------------------
(Date)
------------------------------------
(Signature of Shareholder)
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(Signature of Shareholder)
((Please date this Proxy and sign your name exactly as it appears on your stock
certificates. Executors, administrators, trustees, etc., should give their full
title. If a corporation, please sign in full corporate name by the president or
other authorized officer. If a partnership, please sign in partnership name by
an authorized person. All joint owners should sign.)
