SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MetroBanCorp
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(Name of Registrant as Specified In Its Charter)
Charles V. Turean
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) 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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<PAGE>
March 23, l998
Dear Shareholder:
On behalf of the Board of Directors of MetroBanCorp, we would like to
invite you to the Annual Meeting of Shareholders to be held on Thursday, April
23, 1998, at 1:00 p.m., Indianapolis time, in the Three Meridian Plaza
Conference Center, 10333 North Meridian Street, Indianapolis, Indiana 46290.
The formal Notice of Annual Meeting of Shareholders, Proxy Statement, and
Proxy are enclosed and should be read closely.
The enclosed Proxy Statement contains information relating to the
actions to be taken at the Annual Meeting and information concerning events
which occurred during the past year. We urge you to review the Proxy
Statement in its entirety in order that you may be fully informed about the
proposals which the Board of Directors will present for your consideration and
approval at the Annual Meeting.
We hope that you will be able to attend the Annual Meeting in person.
It is important that your shares be voted at the Annual Meeting in accordance
with your preference. PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE AT YOUR EARLIEST CONVENIENCE. If you do find it
possible to attend the Annual Meeting and wish to vote in person, you may
withdraw your Proxy at that time.
We recognize and express our appreciation to our shareholders for your
continuing support. We continue to encourage the establishment of your banking
relationship with MetroBank. We look forward to seeing you on April 23, 1998.
Sincerely,
/s/ Charles V. Turean
--------------------------------------
Charles V. Turean
Executive Vice President and Secretary
<PAGE>
METROBANCORP
10333 NORTH MERIDIAN STREET, SUITE 111
INDIANAPOLIS, INDIANA 46290
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
Notice is hereby given that, pursuant to the call of the Board of
Directors, the Annual Meeting of Shareholders of MetroBanCorp will be held on
Thursday, April 23, 1998, at 1:00 p.m., Indianapolis time, in the Three
Meridian Plaza Conference Center, 10333 North Meridian Street, Indianapolis,
Indiana 46290.
The Annual Meeting is being held for the following purposes:
1. Elect the Board of Directors consisting of ten Directors to
serve for the ensuing year.
2. Ratify the appointment of Arthur Andersen LLP, Indianapolis,
Indiana, as independent public accountants for MetroBanCorp
and its subsidiary for the fiscal year ending December 31,
1998.
3. Transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only shareholders of record at the close of business on
February 27, 1998 are entitled to notice of and to vote at the Annual Meeting
and any adjournment thereof.
By Order of the Board of Directors
/s/ Charles V. Turean
----------------------------
Charles V. Turean
Secretary
March 23, 1998
Indianapolis, Indiana
YOUR VOTE IS IMPORTANT - PLEASE MAIL YOUR PROXY PROMPTLY. IN ORDER THAT THERE
MAY BE PROPER REPRESENTATION AT THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHETHER OR
NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
<PAGE>
METROBANCORP
10333 NORTH MERIDIAN STREET, SUITE 111
INDIANAPOLIS, INDIANA 46290
317-573-2400
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 1998
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of MetroBanCorp
("Company") in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of Shareholders to be
held on Thursday, April 23, 1998 at 1:00 p.m., Indianapolis time, in the Three
Meridian Plaza Conference Center, 10333 North Meridian Street, Indianapolis,
Indiana 46290, and at any and all adjournments thereof. This Proxy Statement
and accompanying form of proxy is first being mailed to the Company's
shareholders on or about March 24, 1997.
Only shareholders of record as of February 27, 1998 will be entitled
to notice of and to vote at the Annual Meeting or any adjournment thereof. As
of February 27, 1998, the Company had 1,681,291 shares of common stock issued
and outstanding, which were held by 313 shareholders of record. There is no
other class or series of stock of the Company outstanding and entitled to vote
at the Annual Meeting. Each shareholder of record as of the record date will
be entitled to one vote for each share of common stock registered in the
shareholders name.
For the matters to be voted on at the Annual Meeting, each share is
entitled to one vote, exercisable in person or by proxy. Provided that a
quorum of shareholders is present at the Annual Meeting, there will be
considered and voted upon: (i) director nominees to be elected to the Board of
Directors of the Company, and (ii) a proposal to ratify the appointment of
Arthur Andersen LLP as independent public accountants for the Company.
The cost of soliciting proxies will be borne by the Company. In
addition to use of the mails, proxies may be solicited personally or by
telephone by directors, officers and certain employees of the Company, none of
whom will be specially compensated for such soliciting.
Any shareholder giving a proxy has the right to revoke it at any time
before it is exercised. Therefore, execution of a proxy will not affect a
shareholder's right to vote in person if he or she attends the Annual Meeting.
Revocation may be made prior to the Annual Meeting by written notice sent to
Charles V. Turean, Secretary, MetroBanCorp, P.O. Box 80451, Indianapolis,
Indiana 46280-0451; at the Annual Meeting in person or by oral or written
notice to the Secretary; or by duly executing and delivering to the Secretary
a proxy bearing a later date. To be effective, any revocation must be
received before the proxy is exercised.
The shares represented by proxies at the Annual Meeting will be voted
as instructed by the shareholders giving the proxy. In the absence of
specific instructions to the contrary, proxies will be voted FOR (i) the
election of the ten persons named as nominees in this Proxy Statement as
Directors of the Company and (ii) ratification of the appointment of Arthur
Andersen LLP as independent public accountants for the Company and its
subsidiary. Any other matters that may properly come before the Annual Meeting
or any adjournment thereof will be acted upon by the persons named as proxies
in the accompanying proxy in accordance with the recommendation of the Board
of Directors.
1
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors is composed of 10 members, all of who hold
office for a term of one year or until their respective successors are duly
elected and qualified. The following table sets forth certain information
concerning each of the 10 director nominees. All nominees were initially
elected in 1987, except Edward G. McMahon and Larry E. Reed, who were elected
in 1988. If for any reason a director nominee becomes unable or unwilling to
serve at the time of the Annual Meeting (an event which the Board of Directors
does not anticipate at this time), the persons named as proxies in the
accompanying proxy will have discretionary authority to vote for a substitute
nominee or nominees named by the Board of Directors if the Board of Directors
elects to fill such nominee's position. The Board of Directors of the Company
unanimously recommends a vote FOR the election of each of the following
nominees as a director of the Company:
<TABLE>
<CAPTION>
Title of Position with Principal Occupation for the Shares and Percent
Name and Age Corporation Last Five Years Beneficially Owned(1)
- ------------ ----------- --------------- ---------------------
<S> <C> <C> <C> <C>
Chris G. Batalis, 59 (2,3,7) Director President, Heptagon, Inc. 29,500 1.74%
615 W. Colfax Avenue (advertising)
South Bend, IN 46601
Ike G. Batalis, 51 (2,3,4,7) Director, President and President and Chief 61,700 3.56%
10333 N. Meridian, Ste 111 Chief Executive Officer Executive Officer of the
Indianapolis, IN 46290 Company and MetroBank
since 1987
Terry L. Eaton, 55 (3,5,7) Director Director, 29,000 1.71%
12220 N. Meridian, Ste 100 Eaton & Lauth Real Estate
PO Box 1999 Services, Inc.
Carmel, IN 46032 (real estate development
and management)
Evans M. Harrell, 71 (3,6,7) Director Real estate developer 32,590 1.92%
342 Sequoia Drive
Marietta, GA 30060
Robert L. Lauth, Jr., 46 (3,7) Director Chairman and CEO, Eaton & 34,000 2.01%
12220 N. Meridian, Ste 100 Lauth Real Estate Services,
PO Box 1999 Inc. (real estate development
Carmel, IN 46032 and management)
Edward G. McMahon, 71 (7) Director Owner and President, 46,260 2.74%
112 Mill Farm Road McMahon Enterprises, Inc.
Noblesville, IN 46060 (investments)
Larry E. Reed, 63 (7,8) Director Chairman, Chief Executive 46,386 2.74%
515 Franklin Square Officer and a Director of
Michigan City, IN 46360 Horizon Bancorp and First
Citizens Bank, N.A.
(financial services)
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Title of Position with Principal Occupation for the Shares and Percent
Name and Age Corporation Last Five Years Beneficially Owned(1)
- ------------ ----------- --------------- ---------------------
<S> <C> <C> <C> <C>
R.D. "Rusty" Richardson, 48 (3,7,9) Director President, Richardson 29,200 1.72%
12220 N. Meridian, Suite 145 Partners (real estate
Carmel, IN 46032 partnerships and
investments)
Edward R. Schmidt, 50 (3,7,10) Director Executive Vice President, 26,000 1.54%
30 South Meridian Street General Counsel and
Indianapolis, IN 46207-7039 Secretary of USA Group,
Inc.
Donald F. Walter, 65 (3,7,11) Director, President and Chief 28,500 1.68%
423 Sycamore St., Suite 101 Chairman Executive Officer, Walter
PO Box 906 and Keenan Financial
Niles, MI 49120 Consulting Co. (financial
consultants); Director of
National Standard Company
and CerProbe
Directors and Executive Officers as a group (12) 400,031 21.43%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based upon information provided to the Company by each director and
executive officer.
(2) Chris G. Batalis and Ike G. Batalis are brothers.
(3) Includes 2,250 shares of common stock issuable under options granted
pursuant to the Company's Incorporators' and Founders' Stock Option
Program.
(4) Includes 700 shares of common stock, which are held in equal amounts
by two adult sons. Mr. Batalis disclaims any beneficial interest in
these shares held for the benefit of his sons. Also includes 3,050
shares held by a custodian for Mr. Batalis' benefit in an individual
retirement account, and 13,600 shares issuable under options granted
pursuant to the Company's 1987 Stock Option and Stock Appreciation
Rights Plan and the 1991 Stock Option and Stock Appreciation Rights
Plan. Also includes 22,000 shares of common stock issued under
options granted pursuant to the Company's 1994 Stock Option and Stock
Appreciation Rights Plan.
(5) Includes 15,000 shares of common stock held jointly with Mr. Eaton's
spouse.
(6) Includes 2,334 shares of common stock held by Mr. Harrell's spouse
with respect to which he disclaims any beneficial interest.
(7) Includes 750 shares of common stock issuable under options granted
pursuant to the Company's 1987 Directors' Stock Option Plan, 1,000
shares issuable under options granted pursuant to the 1991 Directors'
Stock Option Plan, and 8,000 shares issuable under options granted
pursuant to the 1994 Directors' Stock Option Plan.
3
<PAGE>
(8) Includes 36,336 shares of common stock owned by Horizon Bancorp, a
corporation of which Mr. Reed is a Director and the Chairman and Chief
Executive Officer, and with respect to which he disclaims any
beneficial interests.
(9) Includes 200 shares common stock held in equal amounts for the benefit
of Mr. Richardson's minor son and daughter and with respect to which
he disclaims any beneficial interest.
(10) Includes 1,000 shares of common stock held by three adult sons. Mr.
Schmidt disclaims any beneficial interest in these shares. Also
includes 750 shares of common stock held by a custodian for Mr.
Schmidt's benefit in an individual retirement account.
(11) Includes 3,000 shares of common stock held by Walter and Keenan
Financial Consulting Co., of which Mr. Walter serves as the President
and Chief Executive Officer.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS AND
DIRECTORS FEES
ATTENDANCE AT MEETINGS
During 1997, the Board of Directors of the Company held eight
meetings. All incumbent Directors attended 75% or more of the total number of
1997 meetings of the Board and of the Board committees to which they were
appointed, except for Messrs. Lauth, Jr. and Reed, who each attended 50% of
such meetings.
COMMITTEES
The Board of Directors of the Company has an Executive Committee, a
Nominating Committee and an Audit Committee. The members of the Executive
Committee are Terry L. Eaton, Chairman, and Ike G. Batalis, Edward G. McMahon,
Edward R. Schmidt and Donald F. Walter. The members of the Nominating
Committee are Robert L. Lauth, Jr., Chairman, and Ike G. Batalis, Edward G.
McMahon and Russell D. Richardson. The members of the Audit Committee are
Evans M. Harrell, Chairman, and Chris G. Batalis and Larry E. Reed. The
Executive Committee acts pursuant to the By-Laws of the Company and
authorization of the Board of Directors and approves or recommends to the
Board compensation and employee benefit matters. The Nominating Committee
recommends prospective nominees for election to the Boards of Directors of the
Company and MetroBank ("Bank"), and will consider shareholder recommendations
for consideration as directors. These recommendations should be forwarded by
the shareholder to the Secretary of the Company with biographical data about
the recommended individual. The Audit Committee performs the function of
recommending the independent external accountants, overseeing the work of the
internal auditor and serving as liaison to the Bank Audit Committee. The
Executive Committee met seven times in 1997. The Nominating Committee met one
time in 1997. The Audit Committee met three times in 1997.
DIRECTOR COMPENSATION
In 1997, each director of the Company received an annual retainer of
$2,500 and a fee of $500 for each Board meeting attended. Directors of the
Company who also serve as directors of the Bank received an additional fee of
$250 for attending meetings of the Bank's Board. Members of the Company's
director committees receive $250 per meeting attended.
Executive officers of the Company and the Bank who serve as Directors
do not receive Directors fees, nor do they receive additional or separate
compensation from the Company for their Director service to the Company.
4
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are listed in the table below.
Each officer serves a term of office of one year or until the election and
qualification of his successor.
Name Age Office and Business Experience
- ---- --- ------------------------------
Ike G. Batalis 51 President and Chief Executive Officer of the
Company and Bank. Mr. Batalis has over
twenty-five years of banking experience and
served as President and CEO of Wainwright
Financial Corporation prior to forming the
Company.
Andrew E. Illyes 49 Executive Vice President and Senior Loan
Officer of Bank. Previously, he served as
Community President of Ameritrust National
Bank, Central Indiana, formerly American
National Bank. Mr. Illyes has an extensive
bank lending background.
Charles V. Turean 45 Executive Vice President, Chief Financial
Officer and Secretary of the Company and Bank.
Mr. Turean has over twenty years of
progressively increasing financial
responsibilities with banking institutions.
Prior to his current position, Mr. Turean was
Senior Vice President and Controller with
Wainwright Financial Corporation and served as
Treasurer of Wainwright's subsidiary insurance
company. Mr. Turean is also a certified
public accountant.
EXECUTIVE COMPENSATION
The following table contains information with respect to cash
compensation paid by the Bank to any employee who served as an executive
officer of the Company or the Bank for the years ended December 31, 1997, 1996
and 1995, and whose cash compensation exceeded $100,000 in 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Name/Principal Other Annual Securities Underlying
Position Year Salary Bonus Compensation ($) Options/SARs(#)
- -------- ---- ------ ----- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Ike G. Batalis 1997 $125,000 $31,312 $19,898 4,400
President, CEO 1996 $117,000 $20,943 $18,143 7,500
1995 $117,000 $27,612 $15,630 8,100
</TABLE>
The following table provides information with respect to stock options
granted to or held by the Company's executive officers in 1997.
5
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------------------------------------------
Number of Securities % of Total Options
Underlying Options Granted to Employees in
Name Granted (#)(a) Fiscal Year Exercise Price Expiration Date
- ---- -------------- ----------- -------------- ---------------
<S> <C> <C> <C> <C>
Ike G. Batalis 4,400 55.7% $9.00 3/30/2004
</TABLE>
(a) Options are immediately exercisable. The exercise price of the option
is the market value of the common shares on the date of grant.
EMPLOYMENT AGREEMENTS
The Company and the Bank have entered into written employment
agreements with Ike G. Batalis, Charles V. Turean and Andrew E. Illyes.
Pursuant to such agreements, Mr. Batalis has been selected as a director and
the chief executive officer of the Company and the Bank, Mr. Illyes has been
selected to serve as executive vice president and a director of the Bank, and
Mr. Turean has been selected to serve as executive vice president of the
Company and the Bank and a director of the Bank. Each of the executive
officers may terminate his respective employment agreement at will with 90
days' prior written notice, for good reason (as defined in each employment
agreement) upon 30 days' prior written notice, or within 6 months of a
change in control (as defined in each employment agreement) of the Company.
Such agreements provide that upon termination of such executive officer's
employment as a result of a change in control of the Company or the Bank, he
would be entitled to an amount equivalent of 3 years' base salary in the case
of Mr. Batalis, and 2 years' base salary in the case of Mr. Turean and Mr.
Illyes. Except for these employment agreements, there are no other
arrangements or understandings between any of the directors or executive
officers and any other person according to which any of them has been selected
for their respective positions as directors or executive officers of the
Company.
In connection with Mr. Batalis' employment agreement, the Board of
Directors of the Company adopted on December 10, 1992 an Incentive Plan, which
provides for the establishment of a fund in an amount equal to 4% of the net
total sale value of the Company (as defined in the Incentive Plan) in the
event of an acquisition of Company. Upon consummation of an acquisition of
Company, 75% of the amount in the fund shall be paid to the Chief Executive
Officer of the Company, currently Mr. Batalis, and the remainder shall be paid
to such other employees of Company as determined by the Board of Directors of
Company.
THRIFT AND RETIREMENT PLAN
Effective January 1, 1988, the Board of Directors of Company adopted
the MetroBanCorp Employees' Thrift and Retirement Plan ("Thrift Plan"). The
Bank adopted the Thrift Plan effective April 4, 1988. The Thrift Plan is
funded by contributions to Norwest Bank Indiana, N.A., in South Bend, Indiana,
as Trustee.
Salary redirection or "401(k)" contributions are made by participants
by redirecting a portion of their compensation from the Bank to the Thrift
Plan, on a pre-tax basis, in an amount not less than 1 percent nor more than
10 percent of their compensation. Matching contributions of up to 6 percent
are made to the Thrift Plan by the Bank and relate to the amount of salary
contributions made by each participant. For 1997, the Bank's matching
contribution was 100 percent of each participant's salary redirection for
those participants who elect to make salary redirection contributions of not
less than 2 percent of compensation.
6
<PAGE>
For an employee to be eligible to participate in the Thrift Plan, the
employee must have attained the age of 21 and have been credited with 1,000
hours of service for the Company or the Bank during the twelve month period
commencing with the employee's date of hire. The portion of each
participant's account under the Thrift Plan attributable to the Bank's
matching contribution becomes fully vested after the completion of 5 years of
service. Participants are fully vested at all times in their salary
redirection amounts. Benefits under the Thrift Plan are distributable to
participants or their beneficiaries in a lump sum payment in cash or in kind.
For the year ended December 31, 1997, the Bank made $57,600 in matching
contributions to the Thrift Plan.
OTHER EMPLOYEE AND DIRECTOR BENEFIT PLANS
In addition to the Thrift Plan, Company maintains other benefit plans
for its employees and directors, including the 1987 Stock Option and Stock
Appreciation Rights Plan of MetroBanCorp, the 1987 Directors' Stock Option
Plan of MetroBanCorp, the Incorporators' and Founders' Stock Option Program of
MetroBanCorp, the 1991 Stock Option and Stock Appreciation Rights Plan of
MetroBanCorp, the 1991 Directors' Stock Option Plan of MetroBanCorp, the 1994
Stock Option and Stock Appreciation Rights Plan of MetroBanCorp, the 1994
Directors' Stock Option Plan, and the MetroBanCorp Supplemental Executive
Retirement Plan.
In connection with the organization of the Company and the Bank, the
Board of Directors adopted, and at their first meeting the shareholders of the
Company approved, the following stock option plans: (i) 1987 Stock Option and
Stock Appreciation Rights Plan of MetroBanCorp ("1987 Employee Plan"), (ii)
1987 Directors' Stock Option Plan of MetroBanCorp ("1987 Directors' Plan"),
and (iii) Incorporators' and Founders' Stock Option Program of MetroBanCorp
("Incorporators' and Founders' Plan") (collectively referred to herein as the
"1987 Plans").
SUMMARY DESCRIPTION OF 1987 EMPLOYEE PLAN
The 1987 Employee Plan provides for the award of incentive stock
options ("ISOs"), within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended ("Code"), non-qualified stock options ("NSOs") and
stock appreciation rights ("SARs") to officers and key employees of the
Company and its subsidiaries, including the Bank. As of December 31, 1997,
options to acquire 10,900 shares of the Company common stock had been granted
in the form of NSOs to key employees and officers of the Company and the Bank.
No ISOs have been granted under the 1987 Employee Plan. A total of 15,000
shares of the Company common stock have been reserved for issuance under the
1987 Employee Plan.
SUMMARY DESCRIPTION OF 1987 DIRECTORS' PLAN
The 1987 Directors' Plan originally provided for the grant of NSOs to
individuals who serve as directors of the Company or the Bank, up to an
aggregate of 17,000 shares of Company common stock. The 1987 Directors' Plan
originally provided for the grant of NSOs to acquire the Company common stock
at a price per share equal to the greater of $10.00 per share or the fair
market value of the stock on the date of grant. The 1987 Directors' Plan also
provides that outstanding options vest and become exercisable in increments of
250 shares at December 31, 1988 and 100 shares at December 31st of each year
thereafter through 1993, but only if such person is in service as a director
as of a vesting date. As of December 31, 1997, options to acquire 13,000
shares of the Company common stock have been granted to directors of the
Company and the Bank at an initial option price of $10.00 per share, and all
of these options have vested as of December 31, 1997.
SUMMARY DESCRIPTION OF INCORPORATORS' AND FOUNDERS' PLAN
Under the Incorporators' and Founders' Plan, the Company has granted
to each of the eleven incorporators of the Company options to acquire 250
shares of the Company common stock, for an aggregate of 2,750 shares, at an
initial option price of $10.00 per share. In addition, the ten founders who
advanced funds to the Company for payment of organizational and other expenses
have been granted options to purchase an aggregate of 20,000 shares of the
7
<PAGE>
Company common stock at the rate of one share for each $10.00 advanced to the
Company at an initial option price of $10.00 per share.
REPRICING OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS, EXTENSION OF TERM OF
OUTSTANDING OPTIONS AND TERMINATION OF 1987 PLANS
In 1991, the 1987 Plans were amended to: (i) reprice the NSOs granted
under the 1987 Plans at a price of $6.75 per share, (ii) reprice each SAR
granted under the 1987 Employee Plan at $6.75 per share, and (iii) extend,
until December 31, 2000, the term of each option (and related SAR, in the case
of the 1987 Employee Plan) granted under the 1987 Plans. In addition, the
Board of Directors of the Company determined not to grant any new options or
SARs under the 1987 Employee Plan or any new NSOs under the 1987 Directors'
Plan, to terminate such plans with respect to the grant of new NSOs and SARs
thereunder, and to adopt new option plans for the employees and directors of
the Company and the Bank. In connection therewith, the 1987 Plans were
amended to provide that options and SARs granted thereunder which lapse or
otherwise terminate will not be made available for reissuance. All other
terms and conditions of the NSOs and SARs, as provided in the 1987 Plans and
the stock option agreements executed by the optionees under the 1987 Plans,
remain in effect.
SUMMARY DESCRIPTION OF 1991 EMPLOYEE PLAN
Company adopted, effective as of March 31, 1991, the 1991 Stock Option
and Stock Appreciation Rights Plan of MetroBanCorp ("1991 Employee Plan"). The
1991 Employee Plan provides for the granting of ISOs, within the meaning of
Section 422 of the Code, NSOs and SARs to officers and key employees of the
Company and its subsidiaries, including the Bank. ISOs and NSOs may be
granted with or without the SARs under the 1991 Employee Plan. With respect
to options granted in tandem with SARs in the event an optionee elects to
exercise a SAR, the underlying option or applicable portion thereof must be
surrendered. Underlying options will not be exercisable by an optionee to the
extent they are surrendered upon exercise of a related SAR.
Over the life of the 1991 Employee Plan, the Company is authorized to
issue 20,000 shares of its common stock pursuant to the exercise of ISOs, NSOs
and SARs. This maximum is subject to adjustment for any future stock
dividends, splits, combinations or other changes in capitalization as
described in the plan document. The 1991 Employee Plan will terminate on
March 30, 2001, but the Company's Board of Directors retains the right to
amend, modify, suspend or discontinue the 1991 Employee Plan.
NSOs granted under the 1991 Employee Plan may be exercisable at a
price established by the committee which administers the plan. ISOs may be
exercisable only at a price which is not less than the fair market value of
the stock on the date of grant. As of December 31, 1997, options for 15,600
shares of common stock have been granted, in the form of NSOs, under the 1991
Employee Plan at an exercise price of $6.75 per share.
SUMMARY DESCRIPTION OF 1991 DIRECTORS' PLAN
Company adopted the 1991 Directors' Stock Option Plan of MetroBanCorp
("1991 Directors' Plan") effective as of March 31, 1991. The 11 individuals
who constituted the members of the Board of Directors of the Company on May 1,
1991 received grants of NSOs and the 15 individuals who constituted the
members of the Board of Directors of the Bank on May 1, 1991 received grants
of NSOs under the 1991 Directors' Plan. Members of the Board of Directors of
the Company who are also directors of the Bank may not receive grants of
options in both capacities. With respect to Bank directors, however, options
may be re-granted if they have been forfeited or if the shares to which they
relate remain unpurchased upon expiration or termination of the option.
Over the life of the 1991 Directors' Plan, the Company is authorized
to issue 16,000 shares of its common stock pursuant to the exercise of options
thereunder. Of this number, 11,000 shares are reserved for issuance pursuant
8
<PAGE>
to the exercise of options by members of the Board of Directors of the Company
and 5,000 shares are reserved for issuance pursuant to the exercise of options
granted to the members of the Board of Directors of the Bank. The aggregate
maximum is subject to adjustment for any future stock dividends, splits,
combinations or other changes in capitalization as described in the plan
document. The 1991 Directors' Plan will terminate on March 30, 2001, but the
Board of Directors of Company retains the right to suspend, terminate or amend
the 1991 Directors' Plan at any time.
For members of the Board of Directors of the Bank, options will vest
in each optionee and become exercisable commencing December 31, 1991 and,
thereafter, on the last day of each calendar year in which the director is a
member of the Board of Directors of the Bank in accordance with the following
schedule:
<TABLE>
<CAPTION>
Percentage of Option Shares
---------------------------
Calendar Year of Service Ended Vesting Each Year
------------------------------ -----------------
<S> <C>
December 31, 1991 20%
December 31, 1992 20%
December 31, 1993 20%
December 31, 1994 20%
December 31, 1995 20%
</TABLE>
Options granted under the 1991 Directors' Plan to members of the Board
of Directors of the Company will fully vest and become exercisable on and
after the date of grant. At December 31, 1997, options to acquire 10,000
shares were outstanding and vested to directors of the Company, and options to
acquire 3,000 shares were outstanding and vested to directors of the Bank. The
exercise price for all of these outstanding options is $6.75 per share.
SUMMARY DESCRIPTION OF 1994 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
The Company adopted, effective as of April 28, 1994, the 1994 Stock
Option and Stock Option Appreciation Rights Plan of MetroBanCorp ("1994
Employee Plan"), which provides for the granting of ISOs, NSOs, and SARs to
officers and key employees of the Company and the Bank. As of December 31,
1997, options to acquire 45,400 shares have been granted, in the form of NSOs,
to officers and key employees of the Company and the Bank, at an option price
ranging from $5.00 to $9.00 per share (which price was equal to the per share
fair market value of the common stock on the date on which the options were
granted). The shareholders of the Company approved an increase of 50,000
shares of common stock available for issuance under the 1994 Employee Plan at
its 1996 annual meeting. As a result, a total of 74,000 shares of the Company
common stock have been reserved for issuance under the 1994 Employee Plan.
SUMMARY DESCRIPTION OF 1994 DIRECTORS' STOCK OPTION PLAN
The 1994 Directors' Stock Option Plan of MetroBanCorp ("1994
Directors' Plan"), adopted effective as of April 28, 1994, provides for the
granting of NSOs to directors of the Company. As of December 31, 1997,
options to acquire 83,500 shares of the Company common stock have been
granted, in the form of NSOs, to directors of the Company at an option price
ranging from $6.125 to $6.25 per share (which price was equal to the per share
fair market value of the common stock on the date on which the options were
granted). The shareholders of Company approved an increase of 177,500 shares
of common stock available for issuance under the 1994 Directors' Plan at its
1996 annual meeting. A total of 50,000 shares of the Company's common stock
have been reserved for issuance under the 1994 Directors' Plan.
SUMMARY DESCRIPTION OF SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective January 1, 1993, the Board of Directors adopted the
MetroBanCorp Supplemental Executive Retirement Plan ("SERP"), an unfunded,
non-qualified deferred compensation plan, for certain key managerial
9
<PAGE>
employees of the Company. The Company has also entered into a Trust Agreement
with Norwest Bank Indiana, N.A. ("Trust") to pay benefits due under the SERP.
The SERP and Trust are designed to allow participants to defer a portion of
their compensation in addition to their deferrals under the Thrift Plan and to
provide a vehicle for the holding and investment of such deferrals until a
distributable event occurs under the SERP. Participants in the SERP may not
make deferrals in any year unless they have made the maximum deferral
allowable under the Thrift Plan. The maximum deferral a participant may make
for a year under the SERP and the Thrift Plan is 25 percent of compensation.
The SERP also allows the Company to make discretionary contributions which
match a portion of a participant's deferrals and to make supplemental
contributions under the SERP. All contributions to the Trust and any earnings
thereon are subject to the claims of the Company's creditors. A participant's
benefit under the SERP is distributable within 30 days of the participant's
termination of employment with the Company for any reason and is equal to the
amount of annual compensation deferred by such participant and any employer
contributions plus any earnings thereon. The participant benefits by a
deferral of recognition of income to the extent of the amount deferred, the
extent of employer contributions and the extent of earnings on such
contributions. The Company must also postpone its tax deductions with respect
to the amounts deferred until they are recognized by the participant. Under
applicable law, employees who qualify for participation under the SERP must be
limited to individuals who are members of a select group of management or who
are highly compensated employees. The current participants in the SERP are
Ike G. Batalis, Charles V. Turean and Andrew E. Illyes. For the year ended
December 31, 1997, the Bank made $13,000 in matching contributions to the
SERP.
10
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain directors of the Company and the companies with which they are
affiliated, and certain principal officers of the Bank, are customers of, and
have banking transactions with, the Bank in the ordinary course of business.
All such loans and commitment for loans included in such transactions have
been made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unrelated persons and, in the opinion of management, did not involve more than
a normal risk of collectibility or present other unfavorable features.
Loan transactions with directors and their affiliates and principal
officers of the Company for 1997 were as follows (dollars in thousands):
Balance at Beginning of Year $ 1,212
Loans Made 204
Loans Repaid (391)
--------
Balance at End of Year $ 1,025
========
Certain directors of the Company and the companies with which they are
affiliated also provide certain services to the Company. The Company had
commitments under operating lease arrangements with a director-affiliated
company to lease certain office space for two of the Bank's branch offices.
Total lease payments made in 1997, 1996 and 1995 under such lease agreements
were $11,088, $10,500, and $2,000, respectively. Certain advertising and
public relations service are also provided by a director-affiliated company.
The amount paid for these services was $208,000, $213,000, and $209,000, in
1997, 1996, and 1995, respectively.
The Bank purchased student loans from a company of which certain
executive officers serve as directors of the Company and the Bank. The loans
are serviced by and guaranteed by the seller. Loan servicing fees paid to the
seller were $63,000, $108,000, and $133,000, in 1997, 1996 and 1995,
respectively. The loans are purchased on the same terms as those offered by
the seller to other institutions. There were no purchases of student loans in
1997 and 1996. Student loan purchases were $2.0 million in 1995. In 1997,
1996 and 1995, the Bank sold $3.5 million, $1.2 million, and $4.0 million,
respectively, of student loans back to the seller.
PRINCIPAL SHAREHOLDERS
The following table contains certain information concerning persons,
other than directors of the Company, who to the knowledge of the Company may
be deemed to beneficially own as of December 31, 1997 more than 5% of the
Company's outstanding shares of common stock.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
---------------- -------------------- -----
<S> <C> <C>
Mary Morris Leighton and
Judd C. Leighton (1) 401,000 23.82%
211 West Washington Avenue
Suite 2400
South Bend, Indiana 46601
John Hancock Advisers, Inc. (2) 124,000 7.38%
P.O. Box 111
Boston, Massachusetts 02117
</TABLE>
11
<PAGE>
(1) Mary Morris Leighton and Judd C. Leighton are husband and wife. Mrs.
Leighton disclaims beneficial ownership of 225,500 shares of common
stock beneficially owned by her husband. Shares held by Mr. Leighton
include 2,000 shares of common stock issuable under options granted
pursuant to the Company's Incorporators' and Founders' Stock Option
Program.
(2) John Hancock Advisers, Inc., a wholly owned subsidiary of John Hancock
Mutual Life Insurance Company, beneficially own these shares of common
stock. 49,000 shares are held by the John Hancock Bank & Thrift
Opportunity Fund, a closed-end diversified management company
registered under Section 8 of the Investment Company Act. 75,000
shares are held by the John Hancock Regional Bank Fund, an open-end
diversified management company registered under Section 8 of the
Investment Company Act.
_____________________________
12
<PAGE>
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors purposes for ratification by the shareholders
the appointment of Arthur Andersen LLP, Indianapolis, Indiana, as independent
public accountants for the Company and its subsidiary for the fiscal year
ending December 31, 1998. Although ratification by the shareholders of the
Board's selection of Arthur Andersen LLP is not required, the Board deems it
desirable to submit such selection to the shareholders for ratification.
Arthur Andersen LLP has served as independent public accountants for the
Company and its subsidiary since its incorporation in 1987. In the event that
the appointment of Arthur Andersen LLP is not ratified by the shareholders,
the Board of Directors will consider the appointment of other independent
accountants for the fiscal year ending December 31, 1998. A representative of
Arthur Andersen LLP will be present at the Annual Meeting and will have an
opportunity to make a statement and to respond to any appropriate questions
from shareholders.
The Board of Directors of the Company unanimously recommends a vote
"FOR" ratification of the appointment of Arthur Andersen LLP as independent
public accountants for the Company and its subsidiary for the fiscal year
ending December 31, 1998.
SHAREHOLDER PROPOSALS
Any proposals which shareholders desire to present at the 1999 Annual
Meeting of Shareholders must be received by the Company at its principal
executive office on or before November 28, 1998 to be considered for inclusion
in the Company's proxy material for that meeting. Any such proposals should
be sent to the attention of Charles V. Turean, Secretary, MetroBanCorp, P.O.
Box 80451, Indianapolis, Indiana 46280-0451.
ANNUAL REPORT
Upon written request, the Company will provide without charge to each
shareholder who does not otherwise receive a copy of the Company's Annual
Report to Shareholders a copy of the Company's Annual Report on Form 10- KSB
which is required to be filed with the Securities and Exchange Commission.
Requests should be directed to: Charles V. Turean, Executive Vice President,
MetroBanCorp, P.O. Box 80451, Indianapolis, Indiana 46280-0451.
VOTE REQUIRED
The nominees for election as directors of the Company named in this
Proxy Statement will be elected by a plurality of the votes cast. Action on
the other items or matters to be presented at the meeting will be approved
(assuming a quorum is present) if the votes cast in favor of the action exceed
the votes cast opposing the action. Abstentions or broker non-votes will not
be voted for or against any items or other matters presented at the meeting.
Abstentions will be counted for purposes of determining the presence of a
quorum at the annual meeting, but broker non-votes will not be counted for
quorum purposes if the broker has failed to vote as to all matters.
OTHER MATTERS
The Annual Meeting is called for the purposes set forth in the
attached Notice of Annual Meeting of Shareholders. The Board of Directors of
the Company does not know of any matters requiring action on the part of
shareholders at the Annual Meeting other than those described in the Notice.
However, execution and delivery of the enclosed proxy will confer
discretionary authority upon the named proxies with respect to any matters
which are not
13
<PAGE>
presently known to the Board of Directors and which may properly come before
the Annual Meeting. It is the intention of the persons named in the proxy to
vote pursuant to the proxy with respect to such matters in accordance with
their best judgment.
By Order of the Board of Directors
/s/ CHARLES V. TUREAN
----------------------------------
CHARLES V. TUREAN
Secretary
Date: March 23, 1998
Indianapolis, Indiana
14
<PAGE>
PROXY METROBANCORP
10333 NORTH MERIDIAN STREET, SUITE 111
INDIANAPOLIS, INDIANA 46290
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Ike G. Batalis, Terry L. Eaton, and
Donald F. Walter, and each of them, as Proxies of the undersigned, each with
the power of substitution and re-substitution, and authorizes each of them to
represent and to vote, as designated below, all of the shares of common stock
of MetroBanCorp of record by the undersigned on February 27, 1998, and which
the undersigned would be entitled to vote at the Annual Meeting of
Shareholders, to be held on Thursday, April 23, 1998, and any adjournment
thereof, with all of the powers the undersigned would have if personally
present.
1. Election of Directors:
___ FOR the election of all nominees listed below (except as marked to
the contrary).
___ WITHHOLD AUTHORITY to vote for all nominees listed below.
<TABLE>
<S> <C> <C> <C>
Chris G. Batalis Evans M. Harrell Larry E. Reed Donald F. Walter
Ike G. Batalis Robert L. Lauth, Jr. R. D. "Rusty" Richardson
Terry L. Eaton Edward G. McMahon Edward R. Schmidt
</TABLE>
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PLACE A LINE THROUGH
THE NAME OF THAT NOMINEE.
(continued on other side)
<PAGE>
(continued from other side)
2. Ratification of the appointment of Arthur Andersen LLP as independent
public accountants for MetroBanCorp and its subsidiary for the fiscal year
ending December 31, 1998.
______ FOR ______ AGAINST ______ ABSTAIN
3. In their discretion, on such other business as may properly come
before the Annual Meeting and any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NOT OTHERWISE DIRECTED, THIS
PROXY WILL BE VOTED "FOR" EACH ITEM LISTED ABOVE. ON ANY OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE ANNUAL MEETING, THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE BEST JUDGMENT OF THE ABOVE-NAMED PROXIES.
DATE_____________________, 1998
----------------------------------
(Signature of Shareholder)
(Place label w/# of shares here)
----------------------------------
(Signature of Shareholer)
Joint owners should each sign personally. Trustees and others signing in a
representative capacity should indicate the capacity in which they sign. SIGN
EXACTLY AS YOUR NAME APPEARS ON YOUR STOCK CERTIFICATES.
