MARATHON BANCORP
11150 W. OLYMPIC BOULEVARD
LOS ANGELES, CALIFORNIA 90064
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 16, 2001
TO OUR SHAREHOLDERS:
The 2001 Annual Meeting of Shareholders of Marathon Bancorp will be held at the
Bancorp's main office located at 11150 W. Olympic Boulevard, Los Angeles,
California, on Monday, April 16, 2001, at 4:00 p.m. local time.
At the meeting, we will ask you to act on the following matters:
1. ELECTION OF DIRECTORS To elect seven (7) persons to the board of
-----------------------
directors to serve until the next annual meeting. The following seven persons
are nominees:
Robert J. Abernethy Robert Oltman
Craig D. Collette Ann Pappas
Frank Jobe, M.D. Nick Patsaouras
C. Thomas Mallos
2. OTHER BUSINESS To transact such other business as may properly come
---------------
before the meeting or any adjournment thereof.
If you were a shareholder of record at the close of business on March 12, 2001,
you may vote at the meeting or at any postponement or adjournment of the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Robert L. Oltman
----------------
March 12, 2001 Robert L. Oltman, Secretary
PROXY STATEMENT FOR
MARATHON BANCORP
This Proxy Statement contains information on the 2001 Annual Meeting of
Shareholders of Marathon Bancorp to be held at its offices located at 11150 W.
Olympic Boulevard, Los Angeles, California, on Monday, April 16, 2001 at 4:00
p.m., and at any and all adjournments of the meeting.
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
WHY DID YOU SEND ME THIS PROXY STATEMENT?
We sent you this Proxy Statement and the enclosed proxy card because the Board
of Directors is soliciting your vote at the 2001 Annual Meeting of the
Shareholders.
This Proxy Statement summarizes the information you need to know to cast an
informed vote at the meeting. However, you do not need to attend the meeting to
vote your shares. Instead, you may simply complete, sign and return the
enclosed proxy card.
We will begin sending this Proxy Statement, Notice of Annual Meeting and the
enclosed proxy card on or about March 22, 2001 to all shareholders entitled to
vote. The record date for those entitled to vote is March 12, 2001. On March
12, 2001, there were 3,849,819 shares of our common stock outstanding. Common
stock is our only class of stock outstanding. We are also sending our Annual
Report for the year ended December 31, 2000 along with this Proxy Statement.
The Annual Report is not to be deemed a part of the material for the
solicitation of proxies.
HOW DO I VOTE BY PROXY?
Whether you plan to attend the meeting or not, we urge you to complete, sign and
date the enclosed proxy card and to return it promptly in the envelope provided.
Returning the proxy card will not affect your right to attend the meeting and
vote.
If you properly fill in your proxy card and send it to us in time to vote, your
"proxy" (one of the individuals named on your proxy card) will vote your shares
as you have directed. If you sign the proxy card but do not make specific
choices, your proxy will vote your shares as recommended by the Board of
Directors as follows:
"FOR" THE ELECTION OF ALL SEVEN NOMINEES FOR DIRECTOR
If any other matter is presented, your proxy will vote in accordance with the
recommendation of the Board of Directors, or, if no recommendation is given, in
their own discretion. At the time this Proxy Statement went to press, we knew
of no matters that needed to be acted on at the meeting, other than those
discussed in this Proxy Statement.
HOW MANY VOTES DO I HAVE?
Each share of common stock entitles you to one vote. The proxy card indicates
the number of shares of common stock that you own. However, in the election of
directors, you are entitled to cumulate your votes if you are present at the
meeting, the nominee's(s') name(s) have properly been placed in nomination, and
a shareholder has given notice at the meeting prior to the actual voting of his
intention to vote shares cumulatively. Cumulative voting allows you to give one
nominee as many votes as is equal to the number of directors to be elected,
multiplied by the number of shares you own, or to distribute your votes in the
same fashion between two or more nominees. The return of an executed proxy
grants the Board of Directors the discretionary authority to also cumulate
votes.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote at any
time before the proxy is exercised if you file with the Secretary of the Company
either a notice of revocation or a duly executed proxy bearing a later date.
The powers of the proxy holders will be suspended if you attend the meeting in
person and so request, although attendance at the meeting will not by itself
revoke a previously granted proxy.
HOW DO I VOTE IN PERSON?
If you plan to attend the meeting and vote in person, we will provide a ballot
form when you arrive. However, if your shares are held in the name of your
broker, bank or other nominee, you must bring a legal proxy from the broker
authorizing you to vote the shares at the meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a majority
of the shares of common stock outstanding on the record date will constitute a
quorum, permitting the conduct of business at the meeting. Proxies which are
marked as abstentions will be included in the calculation of the number of
shares considered to be present at the meeting.
WHAT VOTE IS REQUIRED FOR EACH PROPOSAL?
The seven nominees for director who receive the most votes will be elected. So,
if you do not vote for a particular nominee or you indicate "withhold authority
to vote" for a particular nominee on your proxy card, your vote will not count
either "for" or "against" the nominee.
WHAT ARE THE COSTS OF SOLICITATION OF PROXIES?
We will bear the costs of this solicitation, including the expense of preparing,
assembling, printing and mailing this Proxy Statement and the material used in
this solicitation of proxies. The proxies will be solicited principally through
the mails, but directors, officers and regular employees of the Company may
solicit proxies personally or by telephone. Although there is no formal
agreement to do so, we may reimburse banks, brokerage houses and other
custodians, nominees and fiduciaries for their reasonable expense in forwarding
these proxy materials to their principals. In addition, we may pay for and
utilize the services of individuals or companies that are not regularly employed
in connection with the solicitation of proxies.
STOCK OWNERSHIP
WHO ARE THE LARGEST OWNERS OF THE COMPANY'S STOCK?
The following table shows the beneficial ownership of common stock as of March
12, 2001 by each person we know to be the beneficial owner of more than five
percent of the outstanding shares of common stock. "Beneficial ownership" is a
technical term broadly defined by the Securities and Exchange Commission to mean
more than ownership in the usual sense. So, for example, you beneficially own
the Company's common stock not only if you hold it directly, but also if you
indirectly, through a relationship, contract or understanding, have, or share,
the power to vote the stock, to sell it or you have the right to acquire it
within 60 days of March 12, 2001:
Number of Percent of
Name Shares Class
- ---- ------------- -----------
Oppenheimer-Spence Financial Services 224,897(1) 5.6
Partnership LP.
Robert L. Oltman 211,792(2) 5.3
(1) Based on a Schedule 13D/A filed with the Securities and Exchange
Commission on September 12, 1997. The address of this beneficial owner is 119
West 57th Street, New York, NY 10019.
(2) Includes 20,870 shares acquirable by the exercise of stock options. Mr.
Oltman's address is c/o Marathon National Bank, 11150 W. Olympic Blvd., Los
Angeles, CA 90064.
HOW MUCH STOCK DO OUR DIRECTORS AND OFFICERS OWN?
Common Stock Beneficially Owned as of
March 12, 2001
------------------------------------
Number of Percent of
Name of Beneficial Owner Shares Class
- -------------------------------- ------ -----
Directors and Named Executive Officers:
- ---------------------------------------
Nikolas Patsaouras 64,477(1) 1.6
Robert J. Abernethy 124,169(2) 3.1
Craig D. Collette 90,923(3) 2.2
Frank W. Jobe, M.D. 87,186(4) 2.1
C. Thomas Mallos 68,748(5) 1.7
Robert L. Oltman 211,792(6) 5.3
Ann Pappas 82,398(7) 2.0
Timothy J. Herles 25,458(8) 0.6
Howard J. Stanke 23,100(9) 0.5
Adrienne Caldwell 7,600(10) 0.1
Total for all directors, named executive officers
and all executive officers (numbering 10). . . . 785,851(11) 19.2
__________________
(1) Mr. Patsaouras has shared voting and investment powers as to 37,500 of
these shares. The amount includes 26,567 shares acquirable by exercise of stock
options.
(2) The amount includes 16,870 shares acquirable by exercise of stock
options.
(3) Mr. Collette has shared voting and investment powers as to 88,923
shares. The amount includes 2,000 shares acquirable by exercise of stock
options.
(4) The amount includes 12,996 shares acquirable by exercise of stock
options.
(5) Mr. Mallos has shared voting and investment powers as to 45,108 of these
shares. The amount includes 20,870 shares acquirable by exercise of stock
options.
(6) Mr. Oltman has shared voting and investment powers as to 179,424 of
these shares. The amount includes 20,870 shares acquirable by exercise of stock
options. His address is c/o Marathon Bancorp, 11150 West Olympic Boulevard, Los
Angeles, California 90064.
(7) Ms. Pappas has shared voting and investment powers as to 61,413 of these
shares. The amount includes 20,870 shares acquirable by exercise of stock
options.
(8) Mr. Herles has shared voting and investment powers as to 1,184 of these
shares. The amount includes 24,274 shares acquirable by exercise of stock
options.
(9) Mr. Stanke has shared voting and investment powers as to 23,100 shares.
(10) These shares are acquirable by exercise of stock options.
(11) This amount includes 152,917 shares acquirable by exercise of stock
options within 60 days of March 12, 2001.
DID DIRECTORS AND OFFICERS COMPLY WITH THEIR SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE REQUIREMENTS IN 2000?
Section 16(a) of the Securities and Exchange Act of 1934 requires our executive
officers and directors, and persons who own more than ten percent of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). The SEC requires
executive officers directors and greater than ten-percent shareholders to
furnish to us copies of all Section 16(a) forms they file.
Based solely on our review of these reports and of certifications furnished to
us, we believe that during the fiscal year ended December 31, 2000 all executive
officers and directors complied with all applicable Section 16 (a) filing
requirements.
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD OF DIRECTORS
PROPOSAL 1:
ELECTION OF DIRECTORS
WHAT DO THE BYLAWS SAY ABOUT THE ELECTION OF DIRECTORS?
Our Bylaws presently provide that the number of directors of the Company shall
not be less than seven (7) nor more than twelve (12) until changed by an
amendment to the Bylaws adopted by our shareholders. The Bylaws further provide
that the exact number of directors shall be seven (7) until changed by a Bylaw
or Bylaw amendment duly adopted by our shareholders or board of directors.
We have nominated seven directors for election at the annual meeting, which is
the number of slots fixed for the election of directors.
We will nominate the persons named below, all of whom are present members of our
Board of Directors, for election to serve until the 2002 Annual Meeting of
Shareholders. Each of these persons is also a member of the Board of Directors
of our subsidiary Marathon National Bank. The Board will cast its votes to
effect the election of these nominees. If any nominee is unable to serve, your
proxy may vote for another nominee proposed by the Board. Nominations may be
made by shareholders at the meeting.
The following table sets forth as of March 12, 2001, the names of, and certain
information concerning, the persons nominated by the board of directors for
election as directors of the Company.
THE NOMINEES
Year First
Name and Title Appointed Principal Occupation
Other than Director Age Director During Past Five Years
- ---------------------- --- --------- ------------------------------
Nikolas Patsaouras 57 1982 President of Patsaouras & Associates
Chairman (consulting engineers).
Robert J. Abernethy 61 1983 President, American Standard
Development Co.
Craig D. Collette 58 1997 President and Chief Executive Officer
President & CEO of the Company and the Bank. Former
President and Chief Operating Officer
of TransWorld Bank from June 1996 to
January 1997,and former President and
Chief Executive Officer of Landmark
Bank from January 1979 to April 1996.
Frank W. Jobe, M.D. 75 1985 Orthopedic Surgeon
C. Thomas Mallos 64 1982 President, C. Thomas Mallos,
Accountancy Corp.
Robert L. Oltman 63 1982 President, Oltman Management
Company.
Ann Pappas 72 1982 Restaurateur.
All of the nominees have served as members of our board of directors during the
past year. Mr. Abernethy is a director of Public Storage Inc. which also is a
public company registered with the Securities and Exchange Commission.
THE BOARD OF DIRECTORS AND COMMITTEES
Our board of directors held twelve (12) meetings during 2000. Two of the
directors attended less than 75 percent of all board of directors meetings and
committee meetings (of which they were a member) that were held in 2000. Mr.
Abernethy attended three meetings and Dr. Jobe attended four meetings. Marathon
Bancorp and Marathon National Bank has a standing Audit/Compliance Committee.
In 2000, Marathon National Bank had a standing Executive and Compensation
Committee and Loan Committee
THE AUDIT/COMPLIANCE COMMITTEE
Marathon Bancorp's Audit/Compliance Committee, which consisted of Thomas Mallos
(chairman) and Messrs. Patsaouras, Oltman and Ms. Pappas, met three times during
2000. The purpose of the Audit/Compliance Committee is to direct the activities
of the external auditors of the Company and Bank to fulfill the legal and
technical requirements necessary to adequately protect the shareholders,
directors and employees. The Audit/Compliance Committee also recommends to the
Board of Directors the appointment of independent accountants and reviews the
findings and recommendations from all the external auditors. Each of the members
is "independent" as defined by policy and the National Association of Securities
Dealers, Inc. listing standards.
Audit/Compliance Committee Report
- -----------------------------------
The following Report of the Audit/Compliance Committee does not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any other Company filings under the Securities Act of 1933 or under the
Securities Act of 1934, except to the extent we specifically incorporate this
Report by reference.
The Audit/Compliance Committee reports to the board and is responsible for
overseeing and monitoring financial accounting and reporting, the system of
internal controls established by management and the audit process of Marathon
Bancorp.
The Audit/Compliance Committee Charter adopted by the board sets out the
responsibilities, authority and specific duties of the audit committee. A copy
of the Audit/Compliance Committee Charter is attached to this Proxy Statement as
Appendix A.
- -----------
Pursuant to the charter, the audit committee has the following responsibilities:
- - To monitor the preparation of quarterly and annual financial reports;
- - To review the adequacy of internal control systems and financial reporting
procedures with management and independent auditors;
- - To review the general scope of the annual audit and the fees charged by
the independent auditors.
- - To review and approve audit policies and audit department job
descriptions.
In discharging its oversight responsibility the audit committee has met and held
discussions with management and Vavrinek, Trine, Day & Co., the independent
auditors for Marathon Bancorp. Management represented to the audit committee
that all consolidated financial statements were prepared in accordance with
generally accepted accounting principles, and the audit committee has reviewed
and discussed the consolidated financial statements with management and the
independent auditors. The audit committee discussed with the independent
auditors matters required to be discussed by Statement on Auditing Standards No.
61 (Communications with Audit Committees).
The audit committee also obtained from the independent auditors a formal written
statement describing all relationships between us and the auditors that bear on
the auditors' independence consistent with Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committee. The audit committee
discussed with the independent auditors any relationships that may impact on the
firm's objectivity and independence and satisfied itself as to the auditors'
independence.
Based on these discussions and reviews, the audit committee recommended that the
Board of Directors approve the inclusion of the Company's audited consolidated
financial statements in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000, for filing with the Securities and Exchange Commission.
Respectfully submitted by the members of the audit committee of the Board of
Directors:
Thomas Mallos, Chairman
Nikolas Patsaouras
Robert L. Oltman
Ann Pappas
THE EXECUTIVE AND COMPENSATION COMMITTEE
The Bank's Executive and Compensation Committee, which consisted of Mr.
Patsaouras (chairman) and Messrs. Abernethy, Collette, Mallos, Oltman and Ms.
Pappas, met six times in 2000. The Executive and Compensation Committee
generally is authorized to act for the board in its absence. This committee
usually handles matters requiring board review that arise between full board
meetings. The committee also reviews and approves compensation arrangements of
the Bank's senior officers and reviews staff compensation and benefits.
THE LOAN COMMITTEE
The Bank's Loan Committee, which consists of Messrs. Collette (Chairman),
Patsaouras, Herles, Mallos, Oltman and Ms. Pappas meet weekly to review and
approve loan requests.
EXECUTIVE OFFICERS
The following table provides certain information as of March 12, 2001 (except
as otherwise disclosed) regarding the executive officers of Marathon
Bancorp and Marathon National Bank, other than Mr.Collette, whose information
is provided in the table above.
Principal Occupation
Name Age During Past Five Years
- ----------------- --- -------------------------------------------------------
Timothy J. Herles 59 Executive Vice President/Senior Credit Officer of the
Bank since 1982.
Adrienne Caldwell 58 Executive Vice President/Chief Operations Administrator
of the Bank since 1990.
Howard J. Stanke 52 Executive Vice President/Chief Financial Officer of the
Company and Bank effective June 9, 1997. Mr. Stanke was
previously Executive Vice President/Chief Financial
Officer of TransWorld Bancorp and TransWorld Bank since
1980 and was with TransWorld Bancorp and Bank from June
1978 to May 1997.
EXECUTIVE COMPENSATION
HOW DO WE COMPENSATE EXECUTIVE OFFICERS?
The following table sets forth certain summary compensation information for our
Chief Executive Officer and each executive officer of Marathon National Bank
whose total annual salary and bonus exceeded $100,000 (the "Named Executives")
for the fiscal year ended December 31, 2000.
SUMMARY COMPENSATION TABLE
----------------------------
Long Term Compensation
Annual Compensation Awards
- -------------------------------- --------------------------------
Other
Annual Restricted All Other
Name and Compen- Stock Compen-
Principal Salary Bonus sation Award(s) Options sation
Position. . . . . . . . . . . . Year ($) ($) ($) (1) ($) (#) ($)
- -------------------------------- ---- -------- ------ -------- ----------------------- -------- ----------
Craig D. Collette
President and
Chief Executive Officer
of the Company and the Bank. . . 2000 174,100 8,400 8,400 0 0 85,013(2)
1999 173,000 5,600 8,400 0 11,000 72,069(2)
1998 170,000 0 8,400 0 5,000 5,199
- ------------------------------- ---- -------- ------ -------- ----------------------- -------- ----------
Timothy J. Herles
Executive Vice President and
Chief Credit Officer of the Bank 2000 106,593 6,650 8,400 0 5,512 28,914(3)
1999 106,593 4,100 8,400 0 8,000 4,539
1998 103,488 0 8,400 0 34,184 4,177
- ------------------------------- ---- -------- ------ -------- ----------------------- -------- ----------
Howard J. Stanke
Executive Vice President and
Chief Financial Officer of the
Company and Bank . . . . . . . . 2000 95,000 6,650 7,800 0 0 26,539(4)
1999 95,000 4,100 7,200 0 8,000 3,168
1998 85,000 0 7,200 0 0 2,852
- ------------------------------- ---- -------- ------ -------- ----------------------- -------- ----------
(1) These amounts represent the automobile allowance.
(2) This amount includes $66,870 for 1999, and $79,219 for year 2000 of
accrued benefits in Mr. Collette's salary continuation plan.
(3) This amount includes $23,371 of accrued benefits in Mr. Herles's Salary
Continuation Plan.
(4) This amount includes $23,371 of accrued benefits in Mr. Stanke's Salary
Continuation Plan.
The following table presents information with respect to stock options to
purchase shares of the Company's common stock granted during the fiscal year
ended December 31, 2000, to any of the Company's Named Executives.
OPTION/SAR GRANTS TABLE
-------------------------
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
- ------------------
(a) . . . . . . . (b) (c) (d) (e)
- ------------------ --------------------- ------------- ------------- -----------
% of Total
Number of Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name . . . . . . . Granted (#)(1) Fiscal Year ($/Share) Date
- ------------------ --------------------- ------------- ------------- -----------
Craig D. Collette. 0 N/A N/A N/A
- ------------------ --------------------- ------------- ------------- -----------
Timothy Herles . . 5,512 29% $ 3.125 09/19/2010
- ------------------ --------------------- ------------- ------------- -----------
Howard J. Stanke . 0 N/A N/A N/A
- ------------------ --------------------- ------------- ------------- -----------
1) The stock options are incentive stock options as provided in Section 422
of the Internal Revenue Code. The vesting of the stock options is in equal
installments of 20% per year from the date of the option grant.
The following table provides information with respect to the Named Executives
concerning the exercise of options during the fiscal year ended December 31,
2000, and unexercised options held by the Named Executives as of December 31,
2000.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
--------------------------------------------------
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION/SAR VALUE
(a) (b) (c) (d) (e)
- ------------------ ------------------- ---------------- ------------------ ---------------------
Number of Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Year-End (#) Year-End ($)
Shares Acquired on Value Realized Exercisable/ Exercisable/
Name. . . . . . . Exercise (#) ($) Unexercisable Unexercisable
- ------------------ ------------------- ---------------- ------------------ ---------------------
Craig D. Collette. 7,000 $ 447 3,200 / 23,800(1) 270 / 9,140(2)
- ------------------ ------------------- ---------------- ------------------ ---------------------
Timothy J. Herles. 0 N/A 24,274 / 38,422(1) 305 / 6,732(2)
- ------------------ ------------------- ---------------- ------------------ ---------------------
Howard J. Stanke . 1,000 $ 45 3,600 / 12,400(1) 2,010 / 4,970(2)
- ------------------ ------------------- ---------------- ------------------ ---------------------
(1) Options only.
(2) Value of unexercised options is the difference between the fair market
value of the common stock underlying the options and the exercise
price of the grant at December 31, 2000.
EMPLOYMENT AGREEMENTS
Marathon Bancorp and Marathon National Bank have an employment agreement with
Mr. Craig D. Collette and Mr. Howard J. Stanke. Mr. Collette's employment
agreement provides that he is to serve for a term of five years commencing
January 15, 1997 as the President and Chief Executive Officer of Marathon
Bancorp and Marathon National Bank. The base annual salary for Mr. Collette is
$170,000 per year, with increases to be determined at the discretion of the
Boards of Directors of Marathon National Bank and Marathon Bancorp. The
agreement provides Mr. Collette with four weeks vacation, health, disability and
life insurance benefits, $700 per month for car allowance, stock options to
acquire 30,000 shares of Common Stock with vesting at 20% per year, which were
granted in 1997, salary continuation benefits as described below, and
indemnification for certain matters incurred in connection with his actions
which arose out of and was within the scope of his employment. If Marathon
Bancorp and Marathon National Bank terminate Mr. Collette without cause, Mr.
Collette shall be entitled to (i) two years then base salary in a lump sum at
the time of termination, and (ii) continuation of insurance benefits for 24
months. Upon any merger or consolidation where Marathon Bancorp and the Bank are
not the surviving or resulting corporations, or upon any transfer of all or
substantially all of the assets of Marathon Bancorp and Marathon National Bank,
and Mr. Collette is not retained for the remaining term of the agreement in a
comparable position of the resulting corporation, Mr. Collette shall be paid two
years of his then base salary in a lump sum within ten days of such termination.
Mr. Stanke's employment agreement provides that Mr. Stanke shall serve for a
term of five years commencing June 1, 1997 as the Executive Vice-President and
Chief Financial Officer of Marathon Bancorp and Marathon National Bank. The base
annual salary for Mr. Stanke is $85,000 per year, with increases to be
determined at the discretion of the Boards of Directors of Marathon National
Bank and Marathon Bancorp. The agreement provides Mr. Stanke with four weeks
vacation, health, disability and life insurance benefits, $600 per month for car
allowance, stock options to acquire 15,000 shares of Common Stock with vesting
at 20% per year, which were granted in 1997, and indemnification for certain
matters incurred in connection with his actions which arose out of and was
within the scope of his employment. If Marathon Bancorp and Marathon National
Bank terminate Mr. Stanke without cause, Mr. Stanke shall be entitled to (i) one
year's then base salary in a lump sum at the time of termination, and (ii)
continuation of insurance benefits for 24 months. Upon any merger or
consolidation where Marathon Bancorp and Marathon National Bank are not the
surviving or resulting corporations, or upon any transfer of all or
substantially all of the assets of Marathon Bancorp and Marathon National Bank,
and Mr. Stanke not be retained for the remaining term of the agreement in a
comparable position of the resulting corporation, Mr. Stanke shall be paid the
greater of one year of his then base salary or the negotiated severance payment
for change of control in a lump sum within ten days of such termination.
SALARY CONTINUATION PLAN FOR EXECUTIVE OFFICERS
On January 16, 1998, Marathon National Bank and Mr. Collette entered into a
salary continuation agreement to provide salary continuation benefits to Mr.
Collette. If Mr. Collette continues in the employ of Marathon National Bank
until age 65, he will receive from Marathon National Bank under the salary
continuation agreement $150,000 per year for 10 years beginning at his reaching
this retirement age. In the event Mr. Collette terminates employment due to
disability prior to age 65, he will receive the salary continuation benefits in
the amount of $150,000 per year for 10 years beginning at his reaching
retirement age. In the event Mr. Collette dies while actively employed by
Marathon National Bank prior to reaching retirement age, his beneficiary will
receive from the Bank benefits in the amount of $150,000 per year for 10 years
beginning with the month following his death or the total benefit value in a
lump sum 30 days following his death at the choice of the beneficiary. In the
event of termination without cause Mr. Collette shall receive a benefit amount
of $150,000 to be paid each year for 10 years beginning at retirement age. In
the event of termination due to early retirement or voluntary termination other
than a change of control, Mr. Collette shall receive an annual benefit amount
beginning after retirement age for 10 years that is based on his years of
service with the Bank and subject to a maximum annual benefit amount of $150,000
per year. In the event of a change in control of the Bank while Mr. Collette is
in active service with Marathon National Bank, he will receive beginning on the
first day of the month following the consummation of the change in control
$150,000 per year for 10 years. In the event Mr. Collette is terminated for
cause he will forfeit any benefits from the salary continuation agreement.
On January 1, 2000 Marathon National Bank entered into salary continuation
agreements with Mr. Herles and Mr. Stanke to provide salary continuation
benefits to them. If they continue in the employ of Marathon National Bank
until retirement, they will receive from Marathon National Bank under the salary
continuation agreement $50,000 for each year they have been vested to be paid
out at a rate of 10% per year for 10 years beginning at their reaching
retirement age. They will vest 10% each year Marathon Bancorp achieves a 1%
return on assets and a 10% return on equity. In the event they terminate
employment due to disability prior to retirement age, they will receive the
salary continuation benefits in their vested amount of $50,000 per year for 10
years beginning the month after termination of employment. In the event they
die while actively employed by Marathon National Bank prior to reaching
retirement age, their beneficiaries will receive from Marathon National Bank
benefits in the amount of $50,000 per year for 10 years beginning with the month
following their death or the total benefit value in a lump sum 30 days following
their death at the choice of the beneficiary. In the event of early termination
due to involuntary termination, early retirement or voluntary termination other
than a change of control, they shall receive an annual benefit amount beginning
after retirement age for 10 years that is based on their vested years of service
with Marathon National Bank and subject to a maximum annual benefit amount of
$50,000 per year. In the event of a change in control of the Bank while they
are in active service with Marathon National Bank, they will receive beginning
on the first day of the month following termination of employment $50,000 per
year for 10 years. In the event they are terminated for cause they will forfeit
any benefits from the salary continuation agreement. Under the terms of the 1998
Stock Option Plan, in the event of certain mergers, consolidations or sale of
assets involving Marathon Bancorp or Marathon National Bank, stock options under
the plan shall accelerate and become immediately vested.
HOW DO WE COMPENSATE DIRECTORS?
The Company pays no directors fees. Each director of Marathon National Bank,
including Mr. Collette, receives $500 per meeting for his or her attendance at
all regular or special board meetings of Marathon National Bank. Each
non-employee director also receives $100 per committee meeting of the Marathon
National Bank. The maximum a Marathon National Bank director (other than the
Chairman) may receive for attendance at the Marathon National Bank's board and
committee meetings is $1,000 per month. The Chairman receives additional
directors fees of $1,500 per month from Marathon National Bank with a maximum of
directors fees of $2,500 per month. In addition, Marathon National Bank pays for
some of the directors' insurance premiums for medical, dental and vision
coverage and for all of the directors basic and voluntary life insurance
premiums. The total amount Marathon National Bank paid on behalf of its
directors pursuant to these benefits was $38,225 in 2000. In addition, under
our 1998 Stock Option Plan directors are eligible to receive stock options.
There were no grants made to directors in 2000 under our 1998 Stock Option Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of our directors and executive officers and their immediate families as
well as the companies with which they are associated are customers of, or have
had banking transactions with, Marathon National Bank in the ordinary course of
Marathon National Bank's business, and Marathon National Bank expects to have
banking transactions with such persons in the future. In management's opinion,
all loans and commitments to lend included in such transactions were made in
compliance with applicable laws on substantially the same terms, including
interest rates and collateral, as those prevailing for comparable transactions
with other persons of similar creditworthiness and, in the opinion of
management, did not involve more than a normal risk of collectability or present
other unfavorable features.
The Board of Directors recommends a vote "FOR" all seven nominees.
WHO ARE THE INDEPENDENT ACCOUNTANTS WE HAVE ENGAGED?
The firm of Vavrinek, Trine, Day & Co. LLP served as independent public
accountants for Marathon Bancorp and Marathon National Bank through the year
2000 and has been selected to be the independent public accountants for the year
2001. All services rendered were approved by Marathon Bancorp's Audit
Committee, which has determined the firm of Vavrinek, Trine, Day & Co. LLP to be
independent. It is expected that one or more representatives of Vavrinek,
Trine, Day & Co. LLP will be present at the Meeting and will be given the
opportunity to make a statement, if desired, and to respond to appropriate
questions.
INDEPENDENT AUDITORS
The following table sets forth the aggregate fees we incurred for audit and
non-audit services provided by Vavrinek, Trine, Day & Co., who acted as
independent auditors for the fiscal year ending 2000 and performed our audit
services in fiscal year 2000. The table lists audit fees and other fees.
AUDIT FEES. The audit fees include only fees that are customary under generally
accepted auditing standards and are the aggregate fees we incurred for
professional services rendered for the audit of our annual financial statements
for fiscal year 2000 and the reviews of the financial statements included in our
Quarterly Reports on Forms 10-Q for fiscal year 2000.
ALL OTHER FEES. All other fees include the aggregate fees billed for services
rendered by Vavrinek, Trine, Day & Co., other than those services covered above.
DECEMBER 31, 2000
-------------------
Audit Fees $ 33,550
---------
Other Fees $ 3,500
---------
The audit committee of our board did consider whether other non-audit
services is compatible with maintaining the independence of Vavrinek, Trine, Day
& Co
SHAREHOLDER PROPOSALS
Under certain circumstances, shareholders are entitled to present proposals at
shareholder meetings. Any such proposal to be included in the Proxy Statement
for our 2002 Annual Meeting of Shareholders must be submitted by a shareholder
prior to November 23, 2001 in a form that complies with applicable regulations.
In addition, in the event a shareholder proposal is not submitted to our prior
to February 6, 2002, the proxy to be solicited for by the Board of Directors for
the 2002 Annual Meeting of Shareholders will confer authority to the holders of
the proxy to vote the shares in accordance with their best judgment and
discretion, if the proposal is presented at the 2002 Annual Meeting of
Shareholders, without any discussion of the proposal in the proxy statement for
such meeting.
OTHER MATTERS
Management does not know of any matters to be presented at the Meeting other
than those set forth above. However, if other matters come before the Meeting,
it is the intention of the persons named in the accompanying Proxy as
proxyholders to vote the shares represented by the Proxy in accordance with the
recommendations of management on such matters, and discretionary authority to do
so is included in the Proxy.
MARATHON BANCORP
Robert L. Oltman
----------------
Dated: March 12, 2001 Robert L. Oltman, Secretary
ANNUAL REPORT
Together with this Proxy Statement, Marathon Bancorp has distributed to each of
its shareholders our 2000 Annual Report to shareholders for the year ended
December 31, 2000, which includes our consolidated financial statements of
Marathon Bancorp and its subsidiaries and the report thereon of Vavrinek, Trine,
Day & Co., our independent public accountants.
The Annual Report on Form 10-K includes a list of exhibits filed with the
Securities and Exchange Commission, but does not include the exhibits. If you
wish to receive copies of the exhibit, we will send them to you. Expenses for
copying and mailing will be your responsibility. Please write to:
Irma Altamira, Assistant Secretary
Marathon Bancorp
11150 W. Olympic Blvd.
Los Angeles, CA 90064
In addition, the Securities and Exchange Commission maintains an internet site
at http://www.sec.govthat contains information filed with them.
------------------
APPENDIX A
MARATHON BANCORP/MARATHON NATIONAL BANK
AUDIT/COMPLIANCE COMMITTEE CHARTER
ORGANIZATION AND MEMBERSHIP
- -----------------------------
The Board of Directors (Board) of Marathon Bancorp and Marathon National Bank
(Bancorp/Bank) have established an Audit/Compliance Committee (Committee) with
authority, responsibility and specific duties as identified in this Charter.
The voting members of the committee consist of a minimum of four (4) outside
directors appointed by the Board, all of whom are independent of the management
of Marathon Bancorp or Marathon National Bank. One outside Director is appointed
committee Chairperson by the Board Chairman. A quorum shall be three (3)
members for the purpose of transacting business.
RESPONSIBILITIES
- ----------------
The Committee assists the Board in fulfilling its fiduciary and oversight
responsibility to the shareholders as it pertains to the quality and integrity
of the accounting policies, reporting practices, internal control structure and
compliance to banking regulations. In this regard, the Committee is responsible
for monitoring the Bancorp's/Bank's training, internal controls and the degree
of compliance with policies and regulations. The Committee is also responsible
for monitoring the preparation of quarterly and annual financial reports.
These responsibilities are addressed through a comprehensive audit program that
provides for an ongoing focus on control issues through the periodic review of
all aspects of Bancorp/Bank operations. The audit program consists of
examinations done by both external and internal auditors
EXTERNAL AUDITORS:
- -------------------
The Committee has the following responsibilities with respect to the
Bancorp's/Bank's external auditors:
Select and recommend annually to the Board the appointment of the
Bancorp's/Bank's independent public accountants.
Review the independence, qualifications, annual engagement letter, audit scope
and related services and fees.
Review the results of the audited financial statements, related notes and
opinions.
INTERNAL AUDITORS OR OUTSIDE REVIEW
- ---------------------------------------
The Committee supervises the internal audit process and/or outside review and
acts in all matters of internal audit supervision in relation to the appointment
of internal audit personnel, salary compensation, benefits, terminations,
outside audit fees and audit schedules.
ANNUALLY THE COMMITTEE:
- -------------------------
Conducts a planning meeting to discuss the annual audit schedule and compliance
issues. The President, Executive Management and Auditing are invited to attend.
Upon the recommendation of the President, the Committee will review and approve
the annual schedule.
Reviews and approves the policies of the Department and all job descriptions of
each employee within the Department, to ensure that the responsibilities of the
Committee's Charter are carried out.
QUARTERLY OR MORE FREQUENTLY, IF NEEDED, THE COMMITTEE WILL MEET TO:
- ------------------------------------------------------------------------------
1. Review the status of the annual audit plan.
2. Discuss significant audit findings from internal and outside audits, along
with management's response to the audit findings.
The Committee may utilize outside audit firms to do operational and loan audits.
In these instances, the President and/or compliance manager will, based upon the
instructions of the Committee, coordinate the examination assignments.
In addition to the responsibilities outlined above, the Committee will review
significant findings reported by regulatory agencies, management's responses and
will monitor corrective actions on any significant deficiencies.
17
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO ITS EXERCISE
MARATHON BANCORP
The UNDERSIGNED HEREBY APPOINTS Messrs. Craig D. Collette and Nikolas Patsaouras
and each of them as, attorneys, agents and proxyholders, with full power of
substitution, to represent, vote and act with respect to all shares of common
stock of Marathon Bancorp which the undersigned would be entitled to vote at the
meeting of shareholders to be held on April 16, 2001 at 4:00 p.m. at the offices
of Marathon Bancorp located at 11150 W. Olympic Blvd., 8th floor, Los Angeles,
California, or any adjournments thereof, with all the powers the undersigned
would possess if personally present as follows:
1. To elect seven persons to be directors. Discretionary authority to
cumulate votes is granted to the Board.
Robert J. Abernethy C. Thomas Mallos Ann Pappas
Craig C. Collette Robert L. Oltman Nikolas Patsaouras
Frank W. Jobe, M.D.
[ ] FOR ALL NOMINEES [ ] WITHHELD FOR ALL
(Except as Marked to the contrary below)
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space below.)
- -------------------------------------------------------------------------------
2. Transaction of such other business as may properly come before the
meeting and any adjournment or adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES FOR ELECTION OF
DIRECTORS NAMED ON THE REVERSE SIDE. The undersigned hereby ratifies and
confirms all that said attorneys and proxies, or any of them or their
substitutes, shall lawfully do or cause to be done by virtue hereof, and hereby
revokes any and all proxies heretofore given by the undersigned to vote at said
meeting. The undersigned acknowledges receipt of the notice of Annual Meeting
and the Proxy Statement accompanying said notice. The Proxy confers authority to
vote and shall be voted in accordance with such recommendation unless a contrary
instruction is indicated, in which case, the shares represented by the Proxy
will be voted in accordance with such instruction. IF NO INSTRUCTION IS
SPECIFIED WITH RESPECT TO THE ELECTION OF DIRECTORS, THE SHARES REPRESENTED BY
THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF MANAGEMENT.
If any other business is presented at the meeting, this proxy confers authority
to and shall be voted in accordance with the recommendations of management.
[ ] I DO [ ] DO NOT EXPECT TO ATTEND THE MEETING
,2001
---------------------
(Date)
___________________________________________
(Signature of Shareholder)
___________________________________________
(Signature of Shareholder)
(Please date this Proxy and sign your name exactly as it appears on your stock
certificates. Executors, administrators, trustees, etc., should give their full
title. If a corporation, please sign in full corporate name by the president or
other authorized officer. If a partnership, please sign in partnership name by
an authorized person. All joint owners should sign.)