<PAGE>
June 12, 1996
Dear Shareholder:
It is our pleasure to invite you to attend the Annual Meeting of
Shareholders of Metropolitan Bancorp. Our meeting will be held at the
Washington Athletic Club, Noble Room, 1325 Sixth Avenue, Seattle, Washington,
on Wednesday, July 17, 1996, at 2 p.m.
The Company's Notice of Annual Meeting and Proxy Statement is attached and
describes in detail the formal business we will transact. As an integral part
of the meeting, we will report on the Company's operations. Our directors and
officers will, of course, be available for your questions.
Detailed information concerning our activities and operating performance
during the fiscal year ended March 31, 1996 is contained in our Annual Letter
to Shareholders and Form 10-K, which are also enclosed.
Your vote is important, regardless of the number of shares you own. ON
BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO COMPLETE AND RETURN THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND
THE ANNUAL MEETING. This will not prevent you from voting in person at the
meeting, but will ensure that your vote is counted if you are unable to
attend.
Sincerely,
/s/ Patrick F. Patrick
Patrick F. Patrick
President and Chief Executive Officer
<PAGE>
METROPOLITAN BANCORP
1520 Fourth Avenue
Seattle, Washington 98101-1648
(206) 625-1818
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on July 17, 1996
Notice is hereby given that the Annual Meeting of Shareholders of
Metropolitan Bancorp (the "Company"), will be held at the Washington Athletic
Club, Noble Room, 1325 Sixth Avenue, Seattle, Washington, on Wednesday, July
17, 1996, at 2 p.m., Pacific Daylight Time.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Company for three-year terms; and
2. Such other matters as may properly come before the Annual Meeting or any
adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the Annual Meeting.
Any action may be taken on the foregoing proposal at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or
later adjournment, the Annual Meeting may be adjourned. Shareholders of
record of the Company at the close of business on June 1, 1996, are entitled
to notice of and to vote at the Annual Meeting and any adjournments thereof.
You are requested to complete, sign and date the enclosed form of proxy
which is solicited by the Board of Directors and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Annual Meeting in person.
By Order of the Board of Directors
/s/ Edwin C. Hedlund
Edwin C. Hedlund
Secretary
Seattle, Washington
June 12, 1996
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
<PAGE>
PROXY STATEMENT
OF
METROPOLITAN BANCORP
1520 4TH AVENUE
SEATTLE, WASHINGTON 98101-1648
(206) 625-1818
ANNUAL MEETING OF SHAREHOLDERS
JULY 17, 1996
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Metropolitan Bancorp (the "Company")
for use at the Annual Meeting of Shareholders of the Company (the "Meeting")
to be held at the Washington Athletic Club, Noble Room, 1325 Sixth Avenue,
Seattle, Washington 98101, on Wednesday, July 17, 1996, at 2 p.m., and at any
adjournment of such meeting. The accompanying Notice of Annual Meeting of
Shareholders and this Proxy Statement are being first mailed to shareholders
on or about June 12, 1996. The shareholders are being asked to vote on the
election of three directors.
REVOCATION OF PROXIES
The enclosed proxy is being solicited only for the Meeting and any
adjournments thereof and will not be voted at any other meeting. Shareholders
who execute a proxy retain the right to revoke it at any time before it is
voted. Unless so revoked, the shares represented by such proxies will be
voted at the Meeting and all adjournments thereof. Before they are exercised,
proxies may be revoked by written notice to Edwin C. Hedlund, the Secretary of
the Company, at the address set forth above, or by the signing and delivering
of the later proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a shareholder attends the Meeting and
votes in person. Proxies solicited by the Board of Directors of the Company
will be voted in accordance with the directions given therein. Where no
instructions are indicated, proxies will be voted for the election of the
nominees to the Board of Directors named on the following page.
OUTSTANDING SHARES AND VOTING RIGHTS
Holders of record of the Company's common stock, par value $.01 per share
(the "Common Stock"), as of the close of business on June 1, 1996 are entitled
to one vote for each share then held. As of June 1, 1996, the Company had
3,710,205 shares of Common Stock issued and outstanding. The presence, in
person or by proxy, of at least a majority of the total number of outstanding
shares of Common Stock entitled to vote is necessary to constitute a quorum at
the Meeting.
Under applicable law, the Company's Articles of Incorporation and the
Company's Bylaws, if a quorum is present at the Meeting, the three nominees
for election to the Board of Directors who receive the greatest number of
votes cast for the election of Directors at the Meeting by the shares present
in person or represented by proxy at the Meeting shall be elected Directors.
In the election of Directors, an abstention or broker nonvote will have the
effect of withholding a vote with respect to that nominee.
PROPOSAL - ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes as nearly
equal in number as possible. The term of office of only one class of directors
expires in each year, and their successors are elected for terms of three
years and until their successors are elected and qualified.
At the Meeting, three directors, David C. Cortelyou, John H. Fairchild, and
Virgil Fassio, will stand for election to a three-year term. Unless otherwise
specified on the proxy, it is intended that the persons named in the proxies
solicited by the Board will vote for the election of the nominees named below.
The Company's Articles of Incorporation and Bylaws provide that shareholders
may not cumulate their votes for the election of directors at this Meeting.
<PAGE>
If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute nominee as the Board
of Directors may recommend. At this time the Board of Directors knows of no
reason why any nominee might be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES NAMED
BELOW FOR DIRECTORS OF THE COMPANY.
Information With Respect To Directors
The following table sets forth the names of the Board of Directors'
nominees for election as directors and of those directors continuing in
office. Mr. W. Gordon Dowling, currently a director of the Company, will
retire as a director effective immediately following the Annual Meeting of
Shareholders. The size of the Board of Directors will be reduced to nine
directors effective with Mr. Dowling's retirement. Also set forth is certain
other information with respect to each person's age, principal occupation(s)
during the past five years, the year he first became a director and any
position(s) held with the Company.
<TABLE>
<CAPTION>
Year
First Elected
Name Age<F1> Positions(s) Held Or Appointed Year Term
With the Company Director<F2> Expires
<S> <C> <C> <C> <C>
BOARD NOMINEES
David C. Cortelyou 57 Director 1993 1999<F3>
John H. Fairchild 57 Director 1994 1999<F3>
Virgil Fassio 68 Director 1993 1999<F3>
DIRECTORS CONTINUING IN OFFICE
John F. Clearman 58 Director, 1993 1998
Vice Chairman
Allen E. Doan 62 Director, 1981 1997
Chairman
H. Dennis Halvorson 57 Director 1994 1997
Larry O. Hillis 56 Director 1989 1998
John J. Knight 69 Director 1965 1997
Patrick F. Patrick 54 Director, 1990 1998
President and
Chief Executive
Officer
<FN>
<F1> As of May 1, 1996.
<F2> Includes tenure as a director of Metropolitan Federal Savings and Loan
Association of Seattle ("Metropolitan Savings"). In 1993, Metropolitan
Savings formed the Company and became a subsidiary in connection with a
reorganization into a holding company structure.
<F3> Assuming the nominees are elected.
</FN>
</TABLE>
<PAGE>
Information concerning each director of the Company is set forth below.
ALLEN E. DOAN, Director since 1981 and Chairman of the Board since 1992, is
a retired cardiologist. He practiced in Bellevue, Washington from 1966 until
his retirement in March 1996. He was chief of staff of Overlake Hospital from
1981 to 1982. He has also organized and managed cardiology clinics and a
Medic I program in the Bellevue area.
JOHN F. CLEARMAN, Director since July 1993, and Vice Chairman of the Board
since 1994, served as president and chief executive officer of N.C. Machinery
Co. from 1985 until his retirement in January 1994, and as chief financial
officer of that company from 1982 to 1985. He served as partner in the
international accounting firm Deloitte & Touche LLP, from 1968 until 1982.
He also serves on the boards of directors of Esterline Corporation, Lang
Manufacturing, Pinnacle Publishing, St. Andrews Housing Group, and Barclay
Dean Co. He is past chair of The Economic Development Council of Seattle &
King County, Puget Sound Chapter of Financial Executives Institute, and the
Washington Society of CPAs, and currently serves as a board member of numerous
philanthropic and civic organizations.
DAVID C. CORTELYOU, Director since March 1993, is president and chief
executive officer of UNICO Properties, Inc. He has been employed by UNICO
since 1963, and has been its president and chief executive officer since
February 1992. Among his many civic and charitable activities, he is
president of Seattle Rotary #4, and former chair of the Downtown Seattle
Association and the 1990 Seattle Public School Levy.
W. GORDON DOWLING, Director since April 1990, served as president and chief
executive officer of West Coast Fruit and Produce for 25 years before retiring
in 1989. He is active in an investment and development partnership named
Anderson Dowling Partnership. He has been active in the Puget Sound banking
community for many years, having served on the board of directors of State
Mutual Bank prior to its acquisition by United Bank, a Savings Bank, in 1985.
He then served on the board of United Bank until it was acquired by Rainier
Bank, now Seafirst, in 1987, and is a former director of the Bank of Tacoma.
Mr. Dowling is a trustee of Annie Wright School.
JOHN H. FAIRCHILD, Executive Vice President and a Director since July 1994,
serves as President and Chief Executive Officer of Phoenix Mortgage &
Investment, Inc., a subsidiary of the Company. He founded Phoenix Mortgage &
Investment, Inc. in 1984 and has continually served as its president and chief
executive officer. Previously, he had founded Fairchild Mortgage Service,
Inc. and Columbia Mortgage Service, Inc. He is currently a director of
Interlinq Software Corporation and on the advisory board of the Western Region
of the Federal National Mortgage Association. Mr. Fairchild was treasurer of
the Washington Mortgage Bankers Association in 1990 and 1991 and on the
advisory board of Chicago Title Company in 1989 and 1990.
VIRGIL FASSIO, Director since March 1993, served as publisher of the
Seattle Post-Intelligencer from 1978 until his retirement in 1993. He had
earlier been an executive with several other newspapers including the Chicago
Tribune and Detroit Free Press. He is chair of the Hope Heart Institute, past
chair of the Washington Council on International Trade, the Downtown Seattle
Association, and the Seattle-King County Convention and Visitors Bureau, and
currently serves on the boards of various other civic and philanthropic
organizations.
H. DENNIS HALVORSON, Director since September 1994, served as a thrift
executive until his retirement in 1989. He was director of regulatory affairs
at the Federal Home Loan Bank of Seattle, president and chief executive
officer of United Bank, a Savings Bank, and executive vice president and
trustee of Puget Sound Mutual Savings Bank.
LARRY O. HILLIS, Director since 1989, is a real estate investor and
developer, and has been his entire career. He was the owner of Hillis Homes,
Inc., a well-known Puget Sound single-family residential real estate
development company, from 1967 until he sold the company to Centex Corporation
in 1980. Mr. Hillis currently serves as chairman of the board of Commonwealth
Land Title Company of Snohomish County and Evergreen Title Company, Inc.
<PAGE>
JOHN J. KNIGHT, Director since 1965, served as president of Pacific
Equipment Company from 1965 until 1980. Mr. Knight has been retired since
1980.
PATRICK F. PATRICK has served as President, Chief Executive Officer and a
Director since May 1990. He was the president and chief executive officer of
Prudential Bancorporation and Prudential Bank, FSB, Seattle, Washington. He
was also the chief executive officer of Mariner Federal Savings and Loan
Association as part of the FSLIC Management Consignment Program.
Meetings and Committees of the Board of Directors
From April 1, 1995, through March 31, 1996, the Company's Board of
Directors held 13 meetings. No director of the Company attended fewer than
75% of the total meetings of the Board of Directors and committee meetings on
which such Board member served. The following describes the duties and
responsibilities of certain committees of the Board of Directors, current
membership of these committees and the number of committee meetings held in
fiscal year 1996.
The Audit Committee is comprised of Directors Knight (Chairman), Fassio,
Hillis and Clearman. It serves as the Board of Directors' liaison with the
Company's internal auditor. The committee meets quarterly. From April 1,
1995, through March 31, 1996, the committee met four times.
The Stock Options and Compensation Committee of the Board of Directors is
comprised of Directors Halvorson (Chairman), Clearman, Dowling and Fassio.
This committee administers the executive compensation program. From April 1,
1995, through March 31, 1996, the committee met four times.
The Executive and Nominating Committee is comprised of Directors Clearman
(Chairman), Doan, Halvorson, Patrick, Hillis and Knight. This committee makes
nominations annually for members of the Board of Directors. From April 1,
1995, through March 31, 1996, the committee met three times. The Executive
and Nominating Committee will consider proposals for nominees for director
from shareholders that are made in writing to the Corporate Secretary of the
Company at 1520 4th Avenue, Seattle, WA 98101-1648. Such nominations must be
received by the Company not less than 60 nor more than 90 days before the
Annual Meeting.
Director Compensation
Members of the Company's Board of Directors who are not officers of the
Company receive a quarterly retainer of $1,500 and a fee of $500 for each
board meeting and $200 for each committee meeting attended not held in
conjunction with a board meeting. The Vice Chairman of the Board also
receives an additional annual fee of $5,000 and health benefits for Vice
Chairman duties. Officers of the Company who serve on the Board of Directors
receive no fee.
The Company's Stock Option Plan for Non-employee Directors, which was
approved by the Company's shareholders in July 1993, provided for an automatic
grant of options to purchase 6,600 shares (after adjustment for the August
1994 stock dividend) of the Company's Common Stock to each non-employee
director upon the effectiveness of the plan and provides for an automatic
grant of options to purchase 6,600 shares of the Company's Common Stock upon
each non-employee director's initial election or appointment. Options under
the plan are granted at an exercise price equal to the fair market value of
the Company's Common Stock on the date of grant. Of the options granted,
options to purchase 2,200 shares vest immediately, options to purchase 2,200
shares vest on the first anniversary of the date of grant provided that the
optionee remains a director, and options to purchase the remaining 2,200
shares vest on the second anniversary of the date of grant provided that the
optionee remains a director. Upon approval of the plan by the Company's
shareholders in July 1993, options to purchase 6,600 shares were granted to
each of: Messrs. Cortelyou, Doan, Dowling, Fassio, Hillis and Knight pursuant
to the plan. Options to purchase 6,600 shares were granted to Mr. Clearman
upon his appointment to the Board of Directors in July 1993, and to Mr.
Halvorson upon his appointment to the Board of Directors in September 1994.
<PAGE>
Executive Compensation
The tables set forth below provide information with respect to the annual
and long-term compensation for services in all capacities to the Company for
fiscal years 1996, 1995, and 1994, and the option values in and at the end of
fiscal year 1996 of those persons who were, at March 31, 1996, the Company's
Chief Executive Officer and the other most highly compensated executive
officers whose salary and bonus exceeded $100,000 in fiscal 1996 (the "named
executive officers"). No options were granted to the named executive officers
in fiscal 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long-Term
Year Compensation Compensation
Name and Ended Number of All Other
Principal Position March 31, Salary Bonus<F1> Options Compensation
<S> <C> <C> <C> <C> <C>
Patrick F. Patrick 1996 $225,100 $12,180<F2>
President, Chief 1995 224,900 10,920<F2>
Executive Officer 1994 200,000 $16,667 15,000 8,994<F2>
and Director
John H. Fairchild<F3> 1996 112,500 900<F4>
Executive Vice 1995 170,000 900<F4>
President and Director
of the Company, Chief
Executive Officer,
Phoenix Mortgage &
Investment, Inc.
Michael M. Pete<F5> 1996 102,200 6,653<F6>
Chief Financial 1995 56,959 30,000 3,174<F6>
Officer, Senior
Vice President and
Treasurer
<FN>
<F1> The bonus shown for fiscal 1994 represents amounts paid in fiscal 1995
for services rendered in fiscal 1994.
<F2> Represents $9,240, $7,980, $8,994 in Company matching contributions
under the 401(k) feature of the Deferred Profit Sharing Plan in 1996,
1995, and 1994, respectively; $1,440 in life insurance premiums and a
$1,500 automobile allowance in both 1996 and 1995.
<F3> John Fairchild joined the Company on July 1, 1994.
<F4> Represents $900 in Company matching contributions under the 401(k)
feature of the Deferred Profit Sharing Plan.
<F5> Michael Pete joined the Company on September 1, 1994.
<F6> Represents $6,125 and $3,000 in Company matching contributions under the
401(k) feature of the Deferred Profit Sharing Plan in 1996 and 1995,
respectively; and $528 and $174 in life insurance premiums in 1996 and
1995, respectively.
</FN>
</TABLE>
Aggregated Option Exercises In Fiscal Year 1996
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In the Money Options at
Options at Fiscal Year End Fiscal Year End<F1>
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Patrick F. Patrick 60,500 0 $231,346 $ 0
John H. Fairchild 0 0 0 0
Michael M. Pete 20,000 10,000 $ 21,250 $10,625
<FN>
<F1> This amount represents the aggregate of the number of in-the-money
options multiplied by the difference between the closing price of the
Company's Common Stock on the NASDAQ National Market System on March 29,
1996, and the exercise price for that option.
</FN>
</TABLE>
No options were exercised by the named executive officers during fiscal 1996.
<PAGE>
CHANGE IN CONTROL ARRANGEMENTS
Pursuant to the Company's Stock Option and Incentive Plan (the "Stock
Plan"), in the event of a change in control or imminent change in control of
the Company (as defined in the Stock Plan), all outstanding stock options
become immediately exercisable and the optionee, at the discretion of the Plan
administrator, is entitled to receive cash in an amount equal to the fair
market value of the Company's Common Stock subject to the option minus the
exercise price for such option.
STOCK OPTIONS AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the Stock
Options and Compensation Committee (the "Committee"), which is comprised of
four non-employee directors. The Committee works with management to develop
compensation plans for the Company and is responsible for determining the
compensation of each executive officer and recommending such compensation to
the Board of Directors.
The Company's executive compensation program is designed to align executive
compensation with the Company's business objectives and long-term interests of
shareholders, and to enable the Company to attract, retain and reward
executive officers who contribute, and are expected to continue to contribute,
to the Company's long-term success.
The Committee considers many factors in setting compensation for the
President and Chief Executive Officer and establishing guidelines for the
compensation of other executive officers of the Company. Among the most
important of these factors are: (1) establishing compensation that is
commensurate with the Company's performance, as measured by operating,
financial and strategic goals (Company performance is measured against
previous performance, budgeted goals, the operating results of the Company's
Peer Group (the "Peer Group"), which is comprised of Pacific Northwest
financial institutions of a similar asset size and complexity (most of which
are included in the CRSP NASDAQ Financial Stock Index used in the Company's
performance graph that appears later in this proxy statement), and the
performance of the economy as a whole); (2) individual performance in terms of
both qualitative and quantitative goals (in setting compensation for executive
officers the Committee assesses, in varying degrees depending upon the
position held by the individual officer, the performance of the Company, the
performance of the officer's department, and the officer's individual
performance; and, with the exception of assessing the performance of the
Company, the Committee does not have specific measures and its decisions are
subjective); (3) industry surveys of compensation for comparable positions in
the Company's Peer Group; and (4) retention of superior executives by
providing some equity-based compensation, currently in the form of stock
options. It is the Committee's belief that officers who are owners of their
company not only have longer tenure, but are also more aligned with the long-
term performance expectations of shareholders.
COMPONENTS OF COMPENSATION. At present, the executive compensation program
is comprised of base salary, annual cash incentive compensation and long-term
incentive compensation in the form of stock options.
Base Salary
Base salaries of the President and Chief Executive Officer and the other
executive officers are based on surveys and data relating to the Company's
Peer Group. These surveys are used to determine whether compensation is
competitive with that offered by other companies in the banking and financial
services industries. In addition, base salaries are based on an assessment of
individual performance and are not routinely increased. In assessing
performance, the Committee takes into consideration individual experience and
contributions, level of responsibility, department performance, and Company
performance, which is measured primarily by net income. With the exception of
Company performance, the Committee does not have any specific measures, and
its decisions are subjective. During fiscal 1996, the salaries of certain
executive officers, based in part on individual contributions and Company
performance during fiscal 1996, were increased an average of 2.8%. Consistent
with the Company's compensation program for all employees, base salaries for
executive officers are below the median for executive officers in the
Company's Peer Group. The Compensation policy allows for total compensation
of individuals to exceed the median through incentive compensation plans based
on achievement of the Company's operating, financial and strategic objectives.
<PAGE>
Annual Cash Incentive Compensation
The Annual Cash Incentive Compensation Program is intended to assist in the
attraction and retention of qualified employees and to further link the
financial interest and objectives of employees with those of the Company. The
Program is designed to encourage and reward the achievement of the Company's
operating, financial and strategic objectives which focus on fundamental
earnings from recurring sources. The fiscal 1996 program set operating profit
goals concerning net income and earnings per share. Due to industry
conditions and the build-up of four new savings branches (additions which the
Committee believes will enhance long-term earnings), the Company did not meet
its operating profit goals for fiscal 1996. Therefore, no bonuses were paid
to executive officers for fiscal 1996.
Incentive Stock Option Plan.
Awards of stock options under the Company's incentive stock option plan are
designed to more closely align the long-term interests of the Company's
executives and its shareholders, and to assist in the retention of executives.
The Committee selects the executive officers, if any, to receive stock
options, and determines the number of shares subject to each grant. The
Committee's determination of the size of option grants is generally intended
to reflect an executive's position with the Company and his or her
contributions, as described above, relative to guidelines for compensation.
The option plan has a ten-year term, and options generally become exercisable
according to the following schedule: one-third upon grant, another one-third
exercisable upon the first anniversary of the grant, with all options granted
exercisable upon the second anniversary of the grant. The Committee reviews
the outstanding options of the executive officers from time to time and may
grant additional options to encourage the retention of executive officers.
Subsequent option grants are primarily based on the Company's net income,
without setting specific goals, but consideration is also given to the
Company's size and the number of outstanding options held by individual
executive officers. Considering all these factors, no options were granted
to the named executive officers during fiscal year 1996.
President and Chief Executive Officer Compensation.
The compensation for the Company's President and Chief Executive Officer,
Mr. Patrick, was determined based on the same policies and criteria as the
compensation for the other executive officers. Mr. Patrick received a base
salary increase of $15,000 effective April 1, 1996, which represents an
increase of 6.7% based in part on individual contributions and Company
performance during fiscal 1996. The previous base salary increase Mr. Patrick
received was effective two years earlier, on April 1, 1994. Based on the
factors described above and consistent with the treatment of other executive
officers, no bonuses were paid or options granted to Mr. Patrick for fiscal
1996.
Tax Deductibility Limitation for Executive Compensation.
Under Section 162(m) of the Internal Revenue Code, publicly traded
companies are prohibited from receiving a tax deduction for compensation in
excess of $1 million paid to the chief executive officer or to any of its four
other most highly compensated executive officers for any fiscal year. The
prohibition does not apply to certain performance-based compensation. The
Committee intends to maintain the Company's stock option plan so that option
grants under the plan will be treated as performance-based compensation that
may be excluded from the deductibility limit. To the extent that there is no
adverse effect on the Company's ability to provide competitive compensation,
it is the policy of the Committee and the Board to minimize executive
compensation that may not be deductible for tax purposes. At this time, the
Company's executive officer compensation which is subject to the deductibility
limit does not exceed $1 million and, in the Committee's view, is not likely
to be affected by the nondeductibility rules in the near future.
Submitted by Members of the Stock Options and Compensation Committee.
H. Dennis Halvorson, Chairman
John F. Clearman
W. Gordon Dowling
Virgil Fassio
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, certain directors (including members of the Stock
Options and Compensation Committee) and executive officers of the Company,
their associates, and members of their immediate families were customers of
the Company and subsidiaries. Transactions which involved loans by the
subsidiaries with such persons were made in the ordinary course of business
and on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other persons
and did not involve more than normal risk of collectibility or present other
unfavorable features.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10 percent of a registered class of the Company's equity securities, to file
with the SEC initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of the Company. To the Company's
knowledge, based solely on review of the copies of such reports furnished to
the Company, and written representations that no other reports were required
during the fiscal year, all reports required by Section 16(a) to be filed by
its officers, directors and greater-than-10-percent beneficial owners were
timely filed.
PERFORMANCE GRAPH
Cumulative Total Return Comparison<F1>
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
MSEA [diamond] $100 $170 $204 $200 $131 $227
NASDAQ Stock Market [square] 100 127 147 158 176 239
NASDAQ Financial Stocks [triangle] 100 139 198 206 231 318
<FN>
<F1> Assumes $100 invested on March 31, 1991 in (1) Metropolitan Bancorp
(MSEA) Common Stock, (2) NASDAQ Financial Stocks, and (3) NASDAQ Stock Market
(U.S. Companies). The graph then observes, in each case, stock price growth
and dividends paid (assuming dividend reinvestment) over the following five
years. All NASDAQ Indices prepared by Center for Research in Security Prices
at the University of Chicago (CRSP). A list of the companies included in the
indices is available upon request.
</FN>
</TABLE>
<PAGE>
Beneficial Ownership
The following table sets forth the beneficial ownership of Common Stock as
of May 1, 1996, by: (a) each director, (b) each named executive officer, (c)
all directors and executive officers as a group, and (d) each person known by
the Company to own beneficially 5% or more of the Common Stock.
<TABLE>
<CAPTION>
Shares of Common Stock Percent
Name Beneficially Owned<F1> of Class
<S> <C> <C>
John F. Clearman 10,700<F1> *<F3>
David C. Cortelyou 9,700<F2> *<F3>
Allen E. Doan 39,320<F2> 1.06
W. Gordon Dowling 110,690<F2><F4> 2.98
John H. Fairchild 362,637 9.77
Virgil Fassio 21,700<F2> *<F3>
H. Dennis Halvorson 12,500<F5> *<F3>
Larry O. Hillis 52,926<F2> 1.42
John J. Knight 37,760<F2> 1.02
Patrick F. Patrick 134,725<F6> 3.57
Michael M. Pete 23,000<F7> *<F3>
Heartland Advisors, Inc. 468,950<F8> 12.64
790 N. Milwaukee St.
Milwaukee, WI 53202
All Executive Officers and 927,917<F9> 24.05
Directors as a Group(13 persons)
<FN>
<F1> Includes shares owned by spouses, other immediate family members, in
trust and other forms of ownership, over which the person named in the
table possesses shared voting and/or investment power.
<F2> Includes options to purchase 6,600 shares exercisable within 60 days of
May 1, 1996.
<F3> Less than 1%.
<F4> Includes 3,090 shares owned by Mr. Dowling directly. Also includes
90,000 shares owned in partnership with Mr. Herman Anderson and 11,000
shares owned by Mr. Anderson for which Mr. Dowling holds voting rights.
<F5> Includes options to purchase 4,400 shares exercisable within 60 days of
May 1, 1996.
<F6> Includes options to purchase 60,500 shares exercisable within 60 days of
May 1, 1996.
<F7> Includes options to purchase 20,000 shares exercisable within 60 days of
May 1, 1996.
<F8> Based on publicly available information reported as of December 31,
1995.
<F9> Includes 94,659 shares owned and options to purchase 17,600 shares
exercisable within 60 days of May 1, 1996, that are held by executive
officers of the Company and its subsidiaries other than those named
above.
</FN>
</TABLE>
<PAGE>
INDEPENDENT AUDITORS
The firm of Deloitte & Touche LLP has been selected to continue as the
Company's independent auditors for the year ending March 31, 1997. Deloitte &
Touche LLP will have one or more representatives at the Meeting to respond to
questions and to make a statement if they desire.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted with respect
thereof in accordance with the judgment of the person or persons voting the
proxies.
SOLICITATION OF PROXIES
The proxy accompanying this Proxy Statement is solicited by the Board of
Directors of the Company. The cost of solicitation of proxies will be borne
by the Company. The Company also will reimburse brokerage firms and other
custodians, nominees and fiduciaries for the reasonable expenses incurred by
them in sending proxy materials to the beneficial owners of the Company's
Common Stock. In addition to solicitations by mail, directors, officers and
employees of the Company may solicit proxies personally or by telephone,
telex, telegraph or messenger without additional compensation.
FINANCIAL INFORMATION
The Company's Annual Letter to Shareholders and Form 10-K for the fiscal
year ended March 31, 1996, accompany this Proxy Statement. Such reports are
not to be treated as part of the proxy solicitation materials or as having
been incorporated herein by reference.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at the Company's main office at 1520
4th Avenue, Seattle, Washington, 98101-1648, between the dates of April 17,
1997 and May 17, 1997. Any such proposals shall be subject to the
requirements of the proxy rules adopted under the Securities Exchange Act of
1934, as amended.
By Order of the Board of Directors
/s/ Edwin C. Hedlund
Edwin C. Hedlund
Secretary
June 12, 1996
FORM 10-K
A COPY OF THE COMPANY'S FORM 10-K AS FILED WITH THE SEC HAS BEEN FURNISHED
WITHOUT CHARGE TO SHAREHOLDERS AS OF THE RECORD DATE. AN ADDITIONAL COPY WILL
BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS UPON WRITTEN OR ORAL REQUEST TO
EDWIN C. HEDLUND, SECRETARY, METROPOLITAN BANCORP, 1520 4TH AVENUE, SEATTLE,
WASHINGTON 98101-1648, TELEPHONE (206) 625-1818.
<PAGE>
REVOCABLE PROXY
METROPOLITAN BANCORP
1996 ANNUAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Directors of Metropolitan
Bancorp for the 1996 Annual Meeting of Shareholders to be Held July 17, 1996.
The undersigned hereby appoints the official proxy committee consisting of all
members of the Board of Directors of Metropolitan Bancorp, with full powers of
substitution to act as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of Metropolitan Bancorp which the undersigned is
entitled to vote at the Annual Meeting of Shareholders, to be held at the
Washington Athletic Club, Noble Room, 1325 Sixth Avenue, Seattle, Washington,
98101, on Wednesday, July 17, 1996, at @:00 p.m. and at any and all
adjournments thereof, as follows:
For Vote Withheld
1. The election of directors of all
nominees listed below (except as
marked to the contrary below).
For Three-Year Terms
David C. Cortelyou, John H. Fairchild, Virgil Fassio
The Board of Directors recommends a vote "for" each of the nominees for
director.
(continued on other side)
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTION ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES LISTED. If any other
business is presented at the meeting, this proxy will be voted by those named
in this proxy in their best judgment. At the present time, the Board of
Directors knows of no other business to be presented at the meeting.. This
proxy also confers discretionary authority on the official proxy committee to
vote with respect to the election of any person as director where the nominee
is unable to serve or for good cause will not serve, and matters incident to
the conduct of the 1996 annual meeting.
Please sign exactly as name appears on label. When shares are held by joint
tenants, both should sign. Persons signing in a representative capacity
should give their title.
Please mark, date, sign and promptly return this proxy card.
Date
Shareholder sign above
Co-holder sign above (if held jointly)
