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)
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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>
April 20, l999
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, May 20,
1999, 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 so that you are 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 are able 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 of your company. We continue to encourage the establishment
of your banking relationship with MetroBank. We look forward to seeing you on
May 20, 1999.
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
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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, May 20, 1999, 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 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,
1999.
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 March 29, 1999
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
April 20, 1999
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 May 20, 1999
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 its Annual Meeting of Shareholders to be
held on Thursday, May 20, 1999 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 April 20, 1999.
Only shareholders of record as of March 29, 1999, will be entitled to
notice of and to vote at the Annual Meeting or any adjournment thereof. As of
March 29, 1999, the Company had 1,941,726 shares of common stock issued and
outstanding, which were held by 301 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 whom 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 who was elected in 1988 and James C.
Lintzenich who is proposed for election for the first time at the Annual
Meeting. 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 for the ensuing year:
<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, 60 (2,3,7) Director President, Heptagon, Inc. 37,539 1.92%
615 W. Colfax Avenue (advertising)
South Bend, IN 46601
Ike G. Batalis, 52 (2,3,4,7) Director, President and President and Chief 78,725 3.92%
10333 N. Meridian, Ste 111 Chief Executive Officer Executive Officer of the
Indianapolis, IN 46290 Company and MetroBank
since 1987
Terry L. Eaton, 56 (3,5,7) Director Chairman, 36,962 1.89%
10645 Winterwood Eaton Investments
Carmel, IN 46032 (investments)
Evans M. Harrell, 72 (3,6,7) Director Real estate developer 41,106 2.10%
551 N. Mary's Lane N.W.
Marietta, GA 30064-1441
Robert L. Lauth, Jr., 47 (3,7) Director Chairman and CEO, Eaton & 42,736 2.18%
12220 N. Meridian, Ste 100 Lauth Real Estate Services,
PO Box 1999 Inc. (real estate
Carmel, IN 46032 development and management)
James C. Lintzenich, 46 (8, 12) Director President & CEO, 53,872 2.77%
30 South Meridian Street USA Group, Inc.
Indianapolis, IN 46207-7039 (student loan administration
and servicing)
2
<PAGE>
Title of Position with Principal Occupation for the Shares and Percent
Name and Age Corporation Last Five Years Beneficially Owned(1)
- ------------ ---------------------- ---------------------------- ---------------------
Edward G. McMahon, 72 (7) Director Owner and President, McMahon 56,895 2.91%
112 Mill Farm Road Enterprises, Inc.
Noblesville, IN 46060 (investments)
R.D. "Rusty" Richardson, 49 (3,7,9) Director President, Richardson 37,192 1.90%
12220 N. Meridian, Suite 145 Partners (real estate
Carmel, IN 46032 partnerships and investments)
Edward R. Schmidt, 51 (3,7,10) Director Executive Vice President, 33,723 1.72%
30 South Meridian Street General Counsel and
Indianapolis, IN 46207-7039 Secretary of USA Group, Inc.
Donald F. Walter, 66 (3,7,11) Director, President and Chief 36,384 1.86%
423 Sycamore St., Suite 101 Chairman Executive Officer, Walter
PO Box 909 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) 502,753 23.00%
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</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 2,600 shares of common stock issuable under options granted
pursuant to the Company's Incorporators' and Founders' Stock Option
Program.
(4) Includes 403 shares of common stock, which are held by one adult son.
Mr. Batalis disclaims any beneficial interest in these shares held for
the benefit of his son. Also includes 3,522 shares held by a custodian
for Mr. Batalis' benefit in an individual retirement account, and
15,708 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 34,894 shares
of common stock issued under options granted pursuant to the Company's
1994 Stock Option and Stock Appreciation Rights Plan.
(5) Includes 17,325 shares of common stock held jointly with Mr. Eaton's
spouse.
(6) Includes 2,695 shares of common stock held by Mr. Harrell's spouse with
respect to which he disclaims any beneficial interest.
(7) Includes 867 shares of common stock issuable under options granted
pursuant to the Company's 1987
3
<PAGE>
Directors' Stock Option Plan, 1,155 shares issuable under options
granted pursuant to the 1991 Directors' Stock Option Plan, and 12,705
shares issuable under options granted pursuant to the 1994 Directors'
Stock Option Plan.
(8) Includes 51,333 shares of common stock by Educational Loan Servicing
Center, Inc. an affiliate of USA Group, Inc., a corporation of which
Mr. Lintzenich is a Director and the Chief Executive Officer, and
includes 1,268 shares of common stock which are held in equal amounts
by two minor children, with respect to which he disclaims any
beneficial interests.
(9) Includes 230 shares common stock held in equal amounts for the benefit
of Mr. Richardson's minor son and daughter with respect to which he
disclaims any beneficial interest.
(10) Includes 1,383 shares of common stock held by three adult sons. Mr.
Schmidt disclaims any beneficial interest in these shares. Also
includes 865 shares of common stock held by a custodian for Mr.
Schmidt's benefit in an individual retirement account.
(11) Includes 3,465 shares of common stock held by Walter and Keenan
Financial Consulting Co., of which Mr. Walter serves as the President
and Chief Executive Officer.
(12) Includes 1,156 shares of common stock issuable under options granted
pursuant to the 1994 Directors' Stock Option Plan.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS AND
DIRECTORS FEES
Attendance at Meetings
During 1998, the Board of Directors of the Company held seven meetings.
All incumbent Directors attended 75% or more of the total number of 1998
meetings of the Board and of the Board committees to which they were appointed.
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 eight times in 1998.
The Nominating Committee met one time in 1998. The Audit Committee met three
times in 1998.
Director Compensation
In 1998, each director of the Company received an annual retainer of
$3,000 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
4
<PAGE>
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.
5
<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 52 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 50 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 46 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, 1998, 1997 and 1996,
and whose cash compensation exceeded $100,000 in 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------ ----------------------
Name/Principal Other Annual Securities Underlying
Position Year Salary Bonus Compensation ($) Options/SARs(#)
- -------------- ---- ------ ----- ---------------- ---------------------
<S> <C> <C> <C> <C> <C>
Ike G. Batalis 1998 $127,500 $30,855 $22,353 4,400
President, CEO 1997 $125,000 $31,312 $19,898 5,082
1996 $117,000 $20,943 $18,143 8,663
Charles V. Turean 1998 $87,000 $15,660 $16,885 2,750
Executive Vice 1997 $83,000 $15,531 $14,154 2,888
President, CFO 1996 $78,000 $10,675 $13,143 4,620
</TABLE>
The following table provides information with respect to stock options
granted to or held by the Company's executive officers in 1998.
6
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------------------------
Number of Securities % of Total Options
Underlying Options Granted to Employees
Name Granted (#)(a) in Fiscal Year Exercise Price Expiration Date
- ---- -------------------- -------------------- -------------- ---------------
<S> <C> <C> <C> <C>
Ike G. Batalis 4,400 53.3% $9.125 12/30/2008
Charles V. Turean 2,750 33.3% $9.125 12/30/2008
</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 for
each 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 the Company. Upon consummation of an acquisition of the
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 the Company as determined by the Board of Directors
of the 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 1998, 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.
7
<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, 1998,
the Bank made $68,100 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, 1998, 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 17,325 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, 1998, options to acquire 15,015 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, 1998.
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 289 shares of
the Company common stock, for an aggregate of 3,178 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 23,100 shares of the
8
<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, 1998, options for 18,018 shares of common
stock have been granted, in the form of NSOs, under the 1991 Employee Plan at an
initial 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 18,480 shares of its common stock pursuant to the exercise of options
thereunder. Of this number, 12,705 shares are reserved for issuance pursuant
9
<PAGE>
to the exercise of options by members of the Board of Directors of the Company
and 5,775 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:
Percentage of Option Shares
Calendar Year of Service Ended Vesting Each Year
------------------------------ -----------------
December 31, 1991 20%
December 31, 1992 20%
December 31, 1993 20%
December 31, 1994 20%
December 31, 1995 20%
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, 1998, options to acquire 11,550 shares were
outstanding and vested to directors of the Company, and options to acquire 3,465
shares were outstanding and vested to directors of the Bank. The initial
exercise price for all of these outstanding options was $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, 1998, options to
acquire 52,440 shares have been granted, in the form of NSOs, to officers and
key employees of the Company and the Bank, at an initial option price ranging
from $4.00 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).
Also, as of December 31, 1998, options to acquire 8,250 shares have been granted
in the form of ISOs to officers of the Company and the Bank, at an option price
of $9.125 (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 57,750 shares of common stock available for
issuance under the 1994 Employee Plan at the 1996 annual meeting. As a result, a
total of 85,470 shares of the Company's 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, 1998, options to acquire
138,610 shares of the Company common stock have been granted, in the form of
NSOs, to directors of the Company at an initial 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 the Company approved an increase of 205,012 shares of common
stock available for issuance under the 1994 Directors' Plan at the 1996 annual
meeting. A total of 57,750 shares of the Company's common stock have been
reserved for issuance under the 1994 Directors' Plan.
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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 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, 1998, the Bank made $18,900 matching contributions to the SERP.
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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 1998 were as follows (dollars in thousands):
Balance at Beginning of Year $ 1,025
Loans Made 957
Loans Repaid (656)
--------
Balance at End of Year $ 1,326
========
Certain directors of the Company and the companies with which they are
affiliated also provide certain services to the Company. The Company conducts
business with these affiliated companies for advertising and public relations
and leasing office space. The amount paid for these services was $178,000,
$208,000, $213,000 in 1998, 1997, and 1996, respectively. The amount paid for
leasing office space was $2,000, $11,000 and $11,000 in 1998, 1997 and 1996
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 $37,000, $63,000 and $108,000 in 1998, 1997 and 1996, 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 1998 and 1997. In 1997
and 1996, the Bank sold $3.5 million and $1.2 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, 1998 more than 5% of the Company's
outstanding shares of common stock.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
------------------- -------------------- ----------
Mary Morris Leighton and
Judd C. Leighton (1) 463,155 23.82%
211 West Washington Avenue
Suite 2400
South Bend, Indiana 46601
John Hancock Advisers, Inc. (2) 143,220 7.38%
101 Huntington Avenue
Boston, Massachusetts 02199-7603
(1) Mary Morris Leighton and Judd C. Leighton are husband and wife. Mrs.
Leighton disclaims beneficial ownership of
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260,453 shares of common stock beneficially owned by her husband.
Shares held by Mr. Leighton include 2,311 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. 56,595 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. 86,625 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.
-----------------------------
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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, 1999. 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, 1999. 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, 1999
SHAREHOLDER PROPOSALS
Any proposals which shareholders desire to present at the 2000 Annual
Meeting of Shareholders must be received by the Company at its principal
executive office on or before November 30, 1999, 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 presently known to the
Board of Directors and which may properly come before the Annual Meeting. It is
the intention
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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: April 20, 1999
Indianapolis, Indiana
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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 held of record by the undersigned on March 29, 1999, and which the
undersigned would be entitled to vote at the Annual Meeting of Shareholders, to
be held on Thursday, May 20, 1999, 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.
Chris G. Batalis Evans M. Harrell Edward G. McMahon
Donald F. Walter
Ike G. Batalis Robert L. Lauth, Jr. R. D. "Rusty" Richardson
Terry L. Eaton James C. Lintzenich Edward R. Schmidt
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, 1999.
__________ 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.
_______________________________
(Signature of Shareholder)
(Place label w/# of shares here)
_______________________________
(Signature of Shareholer)
DATE ________________, 1999
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.
