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SCHEDULE 14A
(RULE 14A-101)
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SECURITIES EXCHANGE ACT OF 1934
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Metropolitan Financial Corp.
----------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------
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[COMPANY LOGO: METROPOLITAN FINANCIAL CORP.]
METROPOLITAN FINANCIAL CORP.
22901 MILL CREEK BOULEVARD
HIGHLAND HILLS, OHIO 44122
April 2, 2001
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend
the 2001 Annual Meeting of Shareholders of Metropolitan Financial Corp., which
will be held at our executive offices, 22901 Mill Creek Boulevard, Highland
Hills, Ohio, at 9:00 a.m., local time, on Tuesday, April 24, 2001.
All holders of record of shares of Common Stock of Metropolitan
Financial Corp. as of March 5, 2001, are entitled to notice of and to vote at
the 2001 Annual Meeting.
As described in the accompanying Notice and Proxy Statement, you will be
asked to vote on two proposals: 1) election of four directors to serve for
three-year terms expiring in 2004; and 2) ratification of the appointment of
independent auditors for 2001.
The accompanying Notice and Proxy Statement and the Annual Report for
the year ended December 31, 2000, are being mailed to shareholders on or about
April 2, 2001.
Your vote is very important, regardless of the number of shares you own.
I urge you to complete, sign, and date each proxy card you receive and return it
as soon as possible in the postage-paid envelope provided, even if you currently
plan to attend the 2001 Annual Meeting. This will not prevent you from voting in
person, but will assure that your vote is counted if you are unable to attend
the meeting. Thank you for your consideration of these matters and please vote
today.
Sincerely,
/s/ Robert M. Kaye
ROBERT M. KAYE
Chairman of the Board
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[COMPANY LOGO: METROPOLITAN FINANCIAL CORP.]
METROPOLITAN FINANCIAL CORP.
22901 Mill Creek Boulevard
Highland Hills, Ohio 44122
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
APRIL 24, 2001
The Annual Meeting of Shareholders of Metropolitan Financial Corp. will
be held at 22901 Mill Creek Boulevard, Highland Hills, Ohio, on Tuesday, April
24, 2001, at 9:00 a.m., local time, for the following purposes:
1. To elect four directors to serve for three-year terms expiring
in 2004.
2. To ratify the appointment of Crowe, Chizek and Company LLP as
Metropolitan Financial Corp.'s independent auditors for the
fiscal year ending December 31, 2001.
3. To transact such other business as may properly come before
the 2001 Annual Meeting or any postponement or adjournment
thereof.
The Board of Directors has selected March 5, 2001, as the record date
for the Annual Meeting. Only those shareholders of record at the close of
business on that date will be entitled to notice of and to vote at the 2001
Annual Meeting or any postponement or adjournment thereof.
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YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
By Order of the Board of Directors
MALVIN E. BANK
Secretary
April 2, 2001
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TABLE OF CONTENTS
VOTING INFORMATION FOR THE ANNUAL MEETING....................................... 1
PROPOSAL 1 ELECTION OF DIRECTORS........................................... 2
Nominees for Terms that Expire at the 2004 Annual Meeting....... 2
BOARD'S RECOMMENDATION.......................................... 2
Continuing Directors............................................ 3
Board Information............................................... 4
Compensation Committee Interlocks and Insider Participation..... 5
Certain Transactions............................................ 5
Audit Committee Report.......................................... 6
Compensation Committee Report on Executive Compensation......... 7
Performance Graph............................................... 8
Executive Compensation and Other Information.................... 10
Summary Compensation Table...................................... 10
Option / SAR Grants in Last Fiscal Year......................... 11
Section 16(a) Beneficial Ownership Reporting Compliance......... 11
Employment Contract............................................. 11
Metropolitan Share Ownership.................................... 12
Certain Beneficial Owners....................................... 13
Change in Control............................................... 13
PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS............. 13
BOARD'S RECOMMENDATION.......................................... 14
GENERAL 2002 Shareholder Proposals...................................... 14
Voting Procedures............................................... 14
General Information............................................. 14
Voting Your Proxy Card.......................................... 15
Revoking Your Proxy............................................. 15
APPENDIX "1" Audit Committee Charter......................................... 16
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[LOGO]
METROPOLITAN FINANCIAL CORP.
22901 Mill Creek Boulevard
Highland Hills, Ohio 44122
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PROXY STATEMENT
---------------------------
VOTING INFORMATION FOR THE ANNUAL MEETING
ANNUAL MEETING April 24, 2001 Corporate Headquarters
DATE, TIME 9:00 a.m., EDT, 22901 Mill Creek Boulevard
AND PLACE: and at any postponement Highland Hills, OH 44122
or adjournment thereof
RECORD DATE: The close of business on March 5, 2001. If you were a
shareholder at that time, you may vote at the
meeting. Each share is entitled to one vote. You may
not cumulate votes. On the record date, we had
8,106,200 shares of our common stock outstanding.
PROPOSALS: 1. To elect four directors to serve for three-year
terms expiring in 2004;
2. To ratify the selection of Crowe, Chizek and
Company LLP as our independent auditors for the
fiscal year ending December 31, 2001; and
3. To transact any other proper business.
PROXIES: The proxy card authorizes Robert M. Kaye, Kenneth T.
Koehler and Malvin E. Bank, and each of them, with
full power of substitution, as proxies to vote at
the annual meeting as you designate on the proxy
card. Unless you tell us on the proxy card to vote
differently, we will vote signed returned proxies
"For" the Board's nominees and "For" proposal 2. The
Board or proxy holders will use their discretion on
other matters. If a nominee cannot or will not serve
as a director, the Board or proxy holders will vote
for a person whom they believe will act in the best
interests of Metropolitan.
PROXIES SOLICITED BY: The Board of Directors
MAILING DATE: Approximately April 2, 2001
REVOKING YOUR: You may revoke your proxy before it is
PROXY: voted at the 2001 Annual Meeting by following the
procedures listed on page 15 under "Voting
Procedures/Revoking Your Proxy."
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YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
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PROPOSAL 1
ELECTION OF DIRECTORS
BOARD STRUCTURE: The Board has 11 directors. The directors are divided
into three classes. At each annual meeting, the term
of one class expires. Directors in each class serve
for three-year terms. Each director of Metropolitan
Financial Corp. ("Metropolitan") also serves as a
director of its largest subsidiary, Metropolitan Bank
and Trust Company ("Bank").
BOARD NOMINEES: Each of the Board's nominees for terms expiring in
2004 currently serves as a director. Each nominee has
agreed to serve if elected.
NOMINEES FOR TERMS THAT EXPIRE AT THE 2004 ANNUAL MEETING
ROBERT R. Mr. Broadbent has served as a Director of
BROADBENT Metropolitan and the Bank since 1992. From 1984 to
1989, Mr. Broadbent served as Chairman and Chief
Director Since 1992 Executive Officer of The Higbee Company, a
Cleveland-based clothing and housewares retailer. Mr.
Broadbent served as the Chairman of the Rock and Roll
Hall of Fame Museum, Inc. until May 1994 and is now
on the advisory board. Mr. Broadbent also serves as a
director of PICO Holdings, Inc., as well as a trustee
of the Murphy Foundation. Age 79.
MARJORIE M. Ms. Carlson has served as a Director of Metropolitan
CARLSON and the Bank since 1994. She is the retired Director
of Development for The Cleveland Foundation. Ms.
Director Since 1994 Carlson is a member of the Board of Trustees of the
College of Wooster, the Musical Arts Association,
Playhouse Square Foundation, The Gund Foundation and
Exuma Foundation. Age 60.
JAMES A. Mr. Karman has served as a Director of Metropolitan
KARMAN and the Bank since 1992. Mr. Karman has been
affiliated with RPM, Inc., a manufacturer of
Director Since 1992 protective coatings, sealants and specialty
chemicals, since 1963. From 1978 to 1999, Mr. Karman
served as President and Chief Operating Officer of
RPM, Inc., and in 1999 was elected its Vice Chairman.
Mr. Karman serves as a member of the Board of
Directors of RPM, Inc., A. Schulman, Inc. and Shiloh
Industries, Inc. In addition, Mr. Karman serves as a
member of the Board of Trustees of the Boys & Girls
Club of Cleveland and The Western Reserve Historical
Society, and is a member of the Corporate Council and
Finance Committee of the Cleveland Museum of Art. Age
63.
RALPH D. Mr. Ketchum has served as a Director of Metropolitan
KETCHUM and the Bank since 1991. Since 1987, Mr. Ketchum has
been President of RDK Capital Inc., a general partner
Director Since 1991 in a partnership formed for the purposes of acquiring
and managing companies serving the aircraft industry.
Before joining RDK Capital Inc., he was a Senior Vice
President and Group Executive for the General
Electric Company, Lighting Group. Mr. Ketchum is also
a member of the Board of Directors of Lithium
Technologies, Inc. Age 75.
BOARD'S THE BOARD UNANIMOUSLY RECOMMENDS ELECTION OF THE
RECOMMENDATION ABOVE NOMINEES FOR DIRECTORS WHOSE TERMS EXPIRE AT
THE 2004 ANNUAL MEETING.
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CONTINUING DIRECTORS
DIRECTORS WHOSE TERMS EXPIRE AT THE 2002 ANNUAL MEETING
MALVIN E. Mr. Bank has served as a Director and as Secretary of
BANK Metropolitan and as Secretary of the Bank since 1991.
In 2000, Mr. Bank was elected Vice Chairman of
Director since 1991 Metropolitan and the Bank. Mr. Bank also serves as
Assistant Treasurer of Metropolitan. Mr. Bank is
General Counsel of The Cleveland Foundation.
Previously, Mr. Bank was a senior partner with the
Cleveland law firm of Thompson Hine & Flory LLP for
more than five years. Mr. Bank also serves as a
director of Oglebay Norton Company and as a trustee
of Case Western Reserve University, The Holden
Arboretum, Chagrin River Land Conservancy, Cleveland
Center for Research in Child Development, Hanna
Perkins School, and numerous other civic and
charitable organizations and foundations. Age 70.
ROBERT M. Mr. Kaye has served as Chairman and Chief Executive
KAYE Officer of Metropolitan and the Bank since 1987. He
has also served as President of Planned Residential
Director since 1987 Communities, Inc. since 1960. Planned Residential
Communities, Inc. is actively engaged in every aspect
of multifamily housing from new construction and
rehabilitation to acquisition and management. Mr.
Kaye serves as a member of the Board of Directors of
Community Bank of New Jersey. He has also been a
member of the Board of Trustees and Corporate Council
of the Cleveland Museum of Art, a member of the Board
of Directors of Neighborhood Progress, Inc., Chairman
of the Board of Directors of New Village Corp., and
has been a member of the Board of Trustees of the
College of New Jersey since 1980 and of The Peddie
School since 1988. Age 64.
DAVID P. Mr. Miller has served as a Director of Metropolitan
MILLER and the Bank since 1992. Mr. Miller also serves as
Treasurer and Assistant Secretary of Metropolitan.
Director Since 1992 Since 1986, Mr. Miller has been the Chairman and
Chief Executive Officer of Columbia National Group,
Inc., a Cleveland-based scrap and waste materials
wholesaler and steel manufacturer. He is currently
commissioner of the Ohio Lottery. Age 68.
DIRECTORS WHOSE TERMS EXPIRE AT THE 2003 ANNUAL MEETING
LOIS K. Ms. Goodman has served as a Director of Metropolitan
GOODMAN and the Bank since 1994. Since 1990, she has been
President of the Work & Family Consulting Group,
Director Since 1994 Inc., a consulting service for employers on managing
working families. Ms. Goodman is also a member of the
Board of Trustees for the Cleveland Opera, the Jewish
Community Federation, Starting Point, Eldred Theater
and The Montefiore Home (including serving as its
immediate Past President). Age 67.
MARGUERITE B. Ms. Humphrey has served as a Director of Metropolitan
HUMPHREY and the Bank since 1994. Ms. Humphrey developed and
implemented workshops for trustee education for the
Director Since 1994 Cultural Arts Trustee Forum at the Cleveland Mandel
Center from 1992 to 1995. She is a trustee for the
American Symphony Orchestra League, the Cleveland
Institute of Music, the Musical Arts Association,
Rainbow Babies and Children's Hospital and the
Cleveland Zoological Society. Age 59
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KENNETH T. Mr. Koehler joined Metropolitan in January 1999 as
KOEHLER Executive Vice President. He has served as President
and Chief Operating Officer since October 1999. Prior
Director Since 1999 to that, Mr. Koehler served as President and Chief
Executive Officer of United Heritage Bank, Edison,
NJ, a de-novo $40 million community bank, from
February 1998 to January 1999, where he was
responsible for all areas of operations. From 1994 to
February 1998, Mr. Koehler served as President of
Golden City Commercial Bank, New York, NY, an $80
million community bank, where he was responsible for
all areas of operations. Mr. Koehler's previous
experience also includes serving as President and
Chief Executive Officer of Dollar Dry Dock Bank, a $5
billion financial institution headquartered in White
Plains, NY, and as Executive Vice President of RI
Hospital Trust National Bank, a $4.0 billion
subsidiary of Bank of Boston, Providence, RI. Mr.
Koehler is currently a Trustee of the Catholic
Charities Corporation of the Diocese of Greater
Cleveland and a Trustee of the Great Lakes Theater
Festival. He has also served as a director of
Cumberland Farms/Gulf Oil Company and as a trustee of
Providence Performing Arts Association and Catholic
Charities Annual Appeal, Diocese of Rhode Island. Age
55.
ALFONSE M. Mr. Mattia has served as a consultant to the Bank
MATTIA since 1987 and as a Director of Metropolitan and the
Bank since 1996. He is a Certified Public Accountant
Director Since 1996 and a founding partner of Amper, Politziner & Mattia,
a regional public accounting and consulting firm.
Mr. Mattia is a charter member of the Rutgers
University Family Business Forum, a member of the
Harvard Business School Club of New York and a member
of several senior committees of the American
Institute of Certified Public Accountants. Age 59.
BOARD INFORMATION
BOARD During 2000, the Metropolitan Board held four
MEETINGS regular quarterly meetings and four special meetings.
Each director attended at least 75% of his or her
Metropolitan Board meetings except for Mr. Karman,
who attended 50% of the meetings.
Each Metropolitan director also serves as a director
of the Bank. The Bank's Board held 12 regular
monthly meetings in 2000. The Bank's Board has also
established several committees, including an Audit
Committee and a Compensation and Organization
Committee. The Bank Board Committees perform the
same functions for the Boards of Directors of both
Metropolitan and the Bank. Each director attended at
least 75% of his or her Bank Board and committee
meetings.
BANK BOARD The Audit Committee recommends appointment of
COMMITTEES Metropolitan's independent auditors. It also receives
and approves reports and plans, accounting policies
and financial statements. The committee oversees
Metropolitan's internal audit function and reviews
our internal control and audit systems with
management and the independent auditors. The Audit
Committee held four meetings in 2000. Present
members: Messrs. Miller (Chair), Broadbent, Karman
and Mattia.
The Compensation and Organization Committee reviews
and recommends compensation with respect to
Metropolitan's Chairman of the Board and President
and the Bank's Executive Vice Presidents. The
committee held two meetings during 2000. Present
members: Messrs. Ketchum (Chair) and Kaye, Ms.
Carlson and Ms. Humphrey.
A Stock Option Committee was formed in February 2001
to have concurrent authority with the Board of
Directors on matters relating to stock options under
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Metropolitan's 1997 Stock Option Plan. The members
of the Stock Option Committee are Mr. Ketchum
(Chair), Ms. Carlson and Ms. Humphrey.
The Bank Board of Directors established a Corporate
Governance Committee in March 2000, which functions
as the standing Nominating Committee for
Metropolitan and the Bank. Members: Mr. Bank
(Chair), Ms. Carlson and Ms. Goodman.
The required procedures to be nominated as a
director are found in Metropolitan's Amended and
Restated Code of Regulations (the "Regulations").
Only those persons nominated according to the
Regulations are eligible to be elected. All
nominations must be in writing and given to our
Corporate Secretary between 60 and 90 days before
the annual shareholders meeting. However, if we give
less than 75 days prior notice (either to our
shareholders or by public disclosure) of the annual
shareholders meeting, then you have 15 days from the
date we gave the prior notice to make your
nomination. The prior notice is given when mailed.
All nominations must include the following
information about the proposed nominee: the
nominee's (a) name, age, business, and residence
address; (b) principal occupation or employment for
the last five years; (c) beneficial ownership, by
class and number, of Metropolitan common shares and
other Metropolitan securities; (d) other positions
held as a director, officer, partner, employee or
controlling shareholder of any corporation or other
business entity; (e) prior position as a director,
officer or employee of a depository institution or
any company controlling a depository institution, if
any; (f) certain information which would be required
to be disclosed in a proxy statement; and (g)
written consent to serve if nominated or elected.
The nomination must also contain information about
the shareholder making the nomination, including:
(a) the shareholder's name and record address; (b) a
statement that the shareholder is a record holder
entitled to vote at the annual meeting; (c) a
description of any arrangement or understandings
between the shareholder and the nominee and any
other person(s) must be described (including naming
such person(s)); and (d) the shareholder's
beneficial ownership, by class and number of shares,
of Metropolitan common shares.
BANK BOARD Except for Messrs. Kaye and Koehler, directors of the
COMPENSATION Bank receive a monthly retainer of $1,000. Except for
Messrs. Bank and Koehler, directors of the Bank
receive a $500 attendance fee for each Bank Board
meeting attended. As Chairman of the Bank's Executive
Committee, Mr. Bank also receives $9,167 per month.
Otherwise, directors receive no fees or other
retainers for serving on Metropolitan's Board, or on
any of the Board committees of Metropolitan or the
Bank.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
PLANNED Planned Residential Communities, Inc. ("PRC")
RESIDENTIAL provides Metropolitan with consulting services on
COMMUNITIES employee benefits and multifamily property matters
for an annual retainer of $96,000. Mr. Kaye,
Chairman of the Board, is the sole shareholder of
PRC.
CERTAIN TRANSACTIONS
BANKING The Bank has had banking transactions, including
TRANSACTIONS loans, with Metropolitan's and the Bank's directors,
officers, shareholders and associates, and expects
these transactions
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to continue into the future. The transactions are in
the ordinary course of the business of the Bank and
are on substantially the same terms, including
interest rates and collateral on loans, prevailing
at the time for comparable transactions with other
persons. The transactions do not involve more than
the normal risk of collectability or present other
terms unfavorable to the Bank.
AUDIT COMMITTEE REPORT
CHARTER The Audit Committee of the Bank's Board of
Directors most recently amended its written charter
on March 23, 2001, which has been adopted by the
Bank's Board of Directors. A copy of the Audit
Committee's charter is attached as Appendix "1" to
this Proxy Statement.
AUDIT Each of the members of the Audit Committee is either
COMMITTEE independent as defined in the applicable listing
MEMBER standards of the National Association of Securities
INDEPENDENCE Dealers ("NASD") or has been appointed to serve on
the Audit Committee by the Bank's Board of Directors
in accordance with Rule 4460(d)(2)(B) of NASD's
listing standards (the "Rule"). Mr. Miller serves as
the non-employee Treasurer of Metropolitan. While
Mr. Miller earns no salary or other compensation for
serving as Metropolitan's non-employee Treasurer,
NASD's listing standards technically deem Mr. Miller
not to be independent within the meaning of the
applicable rule. Because of this and pursuant to the
Rule, the Board of Directors appointed Mr. Miller to
serve as Chairman of the Audit Committee for the
following reasons: 1) as chairman and president of a
number of privately-held companies, Mr. Miller
possess a great deal of knowledge and experience of
financial, business and other matters; and, 2) the
Board of Directors has always valued the insight,
comments and direction provided by Mr. Miller's
experience and judgement on matters presented to it
over the years, and desires to continue to benefit
from Mr. Miller's participation in its Audit
Committee matters.
AUDIT As a part of the normal conduct of its duties, the
COMMITTEE Bank's Audit Committee:
REPORT
- reviewed and discussed the audited financial
statements for the year ending December 31,
2000 with members of management.
- discussed with Metropolitan's independent
auditors, Crowe, Chizek and Company LLP, the
matters discussed by SAS 61.
- received the written disclosures and the
letter from Crowe, Chizek and Company LLP
required by Independence Standards Board
Standard No. 1 and discussed with Crowe,
Chizek and Company LLP the degree of its
independence.
Based upon the above review and discussions, the
Audit Committee recommended to Metropolitan's Board
of Directors that the audited financial statements
be included in Metropolitan's Annual Report on Form
10-K for the year ended December 31, 2000 for
filing with the SEC.
THE AUDIT COMMITTEE
David P. Miller, Chair
Robert R. Broadbent
James A. Karman
Alfonse M. Mattia
March 23, 2001
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COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation and Organization Committee (the
THE "Committee") of the Bank's Board of Directors reviews
COMMITTEE all issues pertaining to the compensation of the
Bank's Chief Executive Officer and President and the
Bank's Executive Vice Presidents. The Committee
submits its recommendations concerning compensation
to the full Board of Directors of the Bank for
approval.
OVERALL The overriding objectives of the Committee are to
OBJECTIVES motivate employees to accomplish goals desired by
Metropolitan and the Bank. During 2000, those goals
included:
- attracting, retaining and motivating
executives and key employees with
competitive compensation opportunities.
- balancing short-term and long-term strategic
goals.
- rewarding performance that furthered the
goal of strengthening Metropolitan's and the
Bank's balance sheets.
- addressing the concerns of shareholders,
employees, the financial community and the
general public.
COMPETITIVE As an overall evaluation tool used in setting the
MARKET compensation for the Chief Executive Officer and
REVIEW President, the Committee reviews a bank compensation
survey prepared annually by the accounting firm of
Crowe, Chizek and Company LLP. By studying this
report, the Committee is able to review compensation
levels and structures for banks with characteristics
similar to the Bank. The Committee gives particular
weight to banks with similar geographic location and
similar asset size. The companies listed in the
selected peer group used in developing the following
performance graph include companies included in the
bank compensation survey prepared by Crowe, Chizek
and Company LLP.
BANK'S PERFORMANCE The base salary and bonus of the Chief Executive
AFFECTS Officer, President and the Executive Vice Presidents
EXECUTIVE are reviewed annually. In making its determinations
COMPENSATION concerning salary and bonuses, the Committee
evaluates the executive's level of responsibility and
performance. In the past, the Committee has also
taken the performance of the Bank into account by
measuring the Bank's financial performance for the
previous year in light of the internal projections
and forecasts prepared by management for the period.
MR. KAYE Mr. Kaye's salary has traditionally been set by the
Committee at a level competitive with salaries of
chief executive officers of banks of similar
geographic location and asset size. Mr. Kaye's base
salary for 2000 was $474,994. This increase in salary
from 1999 was based in part on Mr. Kaye's business
planning and entrepreneurial skills, vision, judgment
and leadership as well as his attention to detail.
Mr. Kaye was also instrumental in Metropolitan's goal
in 2000 to strengthen its balance sheet by increasing
its reserves for loan losses. The Committee also
recognized the performance of Mr. Kaye in continuing
to attract several new key officers and retain
outstanding present officers, and his overall
management of those officers.
MR. KOEHLER The year 2000 marked Mr. Koehler's first complete
year as President and Chief Operating Officer of
Metropolitan and the Bank. The Bank's Board, upon the
recommendation of the Committee, paid Mr. Koehler an
annual salary of
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$260,000. In recognition of Mr. Koehler's efforts in
implementing Metropolitan's 2000 plan to strengthen
its balance sheet, the Committee also determined that
Mr. Koehler was entitled to a bonus of $86,350 for
his efforts during 2000. Although Mr. Koehler's bonus
is also based in part on a recommendation by Mr.
Kaye, the determination of the bonus amount is
completely within the discretion of the Committee.
During 2000, the salary portion of compensation
OTHER earned by the other named executive officer, Donald
NAMED F. Smith, was determined by the Committee, after
EXECUTIVE consultation with the Chief Executive Officer and the
OFFICER President. Mr. Smith's salary was set at a level
competitive with the salaries of officers fulfilling
the same responsibilities for banks of similar
geographic location and asset size. In addition to
salary, Mr. Smith earned a bonus of $46,300 for his
efforts during 2000. Although Mr. Smith's bonus is
also based in part on a recommendation by Messrs.
Kaye and Koehler, the determination of the bonus
amount is completely within the discretion of the
Committee.
The Committee believes that the Chief Executive
STOCK Officer, the other executive officers and certain
OPTION other officers and key employees of Metropolitan and
INCENTIVES the Bank will be motivated, and their financial
interests will be more closely aligned with those of
Metropolitan's shareholders, with an award of stock
options. During 2000, a committee which consisted
entirely of directors who qualified as both outside
directors as defined by Section 162m of the Internal
Revenue Code and non-employee directors as defined by
Rule 16b-3 of the Securities Exchange Act of 1934,
determined Metropolitan's stock option policies and
made its recommendation to the entire Board. The
Board of Directors then determined the actual grants
of options. Commencing in 2001, the Stock Option
Committee (which has concurrent authority to grant
options with the Board of Directors) will make such
recommendations to the Board of Directors. The Board
of Directors made grants aggregating 47,500 of stock
options during 2000. All grants were based on the
grantee's historical and/or anticipated contributions
to the long-term financial and operational results of
Metropolitan. The aggregate number of shares
underlying the options, option price, and vesting
terms may vary based on the Committee's judgment as
to the best form of long-term motivation under the
particular circumstances.
THE COMPENSATION AND ORGANIZATION COMMITTEE
Ralph D. Ketchum, Chair
Robert M. Kaye
Marjorie M. Carlson
March 20, 2001 Marguerite B. Humphrey
PERFORMANCE GRAPH
HOW The chart on the following page compares
METROPOLITAN'S Metropolitan's common shares with (a) the Nasdaq
SHARES HAVE Market Index and (b) a selected peer group published
PERFORMED by Media General Financial Services, Richmond,
AGAINST Virginia ("MG Peer Group"), which includes 419
THE MARKET AND publicly held savings and loan associations located
ITS PEERS in the United States. The chart assumes an investment
of $100 on October 29, 1996, the day on which
Metropolitan's common shares became publicly held, in
the common shares of Metropolitan, the Nasdaq Market
Index and the stocks in the selected peer group. The
overall performance assumes dividend reinvestment
throughout the period.
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COMPARE CUMULATIVE TOTAL RETURN
AMONG METROPOLITAN FINANCIAL CORP.,
NASDAQ MARKET INDEX AND MG GROUP INDEX
Measurement Period Metropolitan MG Peer NASDAQ Market
(Fiscal Year Covered) Financial Group Index
- --------------------- --------- ----- -----
10/29/96 100.00 100.00 100.00
12/31/96 103.23 106.20 105.97
12/31/97 290.91 178.56 129.63
12/31/98 216.79 156.53 182.83
12/31/99 92.91 125.83 322.47
12/31/00 49.04 203.98 202.68
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EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE COMPENSATION
SUMMARY OF The following table sets forth certain information
COMPENSATION with respect to compensation provided by Metropolitan
and its subsidiaries during the years ended December
31, 2000, 1999 and 1998, to its chief executive
officer and Metropolitan's other executive officers
whose annual salary and bonus exceed $100,000.
SUMMARY COMPENSATION TABLE
FISCAL YEAR
NAME AND ENDED ALL OTHER
PRINCIPAL POSITION DECEMBER 31 SALARY BONUS (3) COMPENSATION (4)
- ------------------ ----------- ------ ---------- ----------------
Robert M. Kaye 2000 $474,994 -- $ 5,598
Chairman of the 1999 461,330 -- 6,368
Board and Chief 1998 394,465 $ 75,000 6,043
Executive Officer
Kenneth T. Koehler 2000 260,000 86,350 4,621
President, Chief 1999 (1) 219,917 60,000 41,318
Operating Officer and 1998 -- -- --
Assistant Secretary
Donald F. Smith 2000 (2) 196,154 46,350 887
Chief Financial 1999 -- -- --
Officer and Executive 1998 -- -- --
Vice President of
the Bank
- -------------------------------------------------------------------------------
(1) Mr. Koehler did not join the Bank until January 18, 1999.
(2) Mr. Smith did not join the Bank until January 1, 2000.
(3) Paid in January of the following year, except that $1,350 of the 2000
bonus for each of Mr. Koehler and Mr. Smith was paid during 2000.
(4) Includes the following amounts paid for 2000 for term life insurance
and the Bank's contributions to the Metropolitan Bank and Trust Company
401(k) Plan: Kaye ($1,444 and $4,154); Koehler ($1,171 and $3,450); and
Smith ($887 and $0). Mr. Smith was not eligible to participate in the
401(k) plan for 2000. The total amount shown for all other compensation
in 1999 for Mr. Koehler included a one-time reimbursement of $40,569
for moving and relocation expenses.
OPTION GRANTS
STOCK The following table provides information regarding
OPTIONS grants of options made during the year ended December 31,
2000, to each of the executive officers named in the
Summary Compensation Table.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS TEN YEAR OPTION TERM
--------------------------------------------------------------- ------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN OR BASE
GRANTED FISCAL PRICE EXPIRATION
NAME (#)(1) YEAR(2) ($/SHARE) DATE 5% 10%
- -------------------------- ------------------------------- -------------- ---------------- -------------- -------------
Robert M. Kaye - 0% - - - -
Kenneth T. Koehler - 0% - - - -
Donald F. Smith 10,000 21.05% $4.888 01/18/2010 $30,720 $77,902
- --------------------------------------------------------------------------------------------------------------------------
INCREASE IN VALUE TO ALL COMMON SHAREHOLDERS (3) $24,902,246 $63,163,510
- ---------------------------
(1) These options vest 50% on the third anniversary, 25% on the fourth
anniversary and 25% on the fifth anniversary from the date of grant.
(2) Represents grants of incentive stock options.
(3) Calculated for the total number of shares outstanding on December 31,
2000 (8,106,200), at a per share price for the $4.888 base price
options of $7.96 for 5% annual 10-year price appreciation, and at a per
share price of $12.68 for 10% annual 10-year price appreciation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, Metropolitan's
directors and certain officers are required to report their
ownership and changes in ownership of Common Shares to the
Securities and Exchange Commission (the "SEC") and NASDAQ. The
SEC has established certain due dates for these reports. Based
on a review of the copies of such forms furnished to
Metropolitan in accordance with SEC regulations, and certain
representations received by it, Metropolitan believes that,
except as noted below, there were no late filings during 2000.
Mr. Mattia filed late Forms 4 for November (three trades) and
December 2000 (one trade); and Mr. Bank filed a late Form 4
for August 2000 (two trades).
EMPLOYMENT Mr. Koehler and the Bank are parties to a severance agreement
CONTRACT that provides in the relevant part that if Mr. Koehler is
terminated other than for cause, in exchange for the delivery
by Mr. Koehler of a resignation and an executed release
agreement acceptable to the Bank, he will receive a severance
payment equal to either nine months of his then-current base
salary if the termination occurs prior to October 3, 2001, or
12 months if the termination occurs thereafter. The agreement
also provides that Mr. Koehler is not entitled to any
severance amounts should the Chairman request his resignation
for cause or if he resigns without being requested to do so by
the Chairman.
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METROPOLITAN SHARE OWNERSHIP
DIRECTORS AND The following tables list, as of February 28, 2001,
EXECUTIVE OFFICERS information about Metropolitan's common shares
beneficially owned by current directors of and
nominees for director of Metropolitan, executive
officers included in the Summary Compensation Table,
and all directors, nominees for director and
executive officers of Metropolitan and the Bank as a
group. Except as otherwise noted, each beneficial
owner listed has sole investment and voting power
with respect to the common shares indicated.
AMOUNT AND NATURE
NAME OF INDIVIDUAL OR PERSONS IN GROUP OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
-------------------------------------- ----------------------- ----------------
Robert M. Kaye 6,060,387.68(1) 74.76%
Malvin E. Bank 64,203.42(2) *
Robert R. Broadbent 32,754.65(3) *
Marjorie M. Carlson 29,243.72(4) *
Lois K. Goodman 18,700.00(5) *
Marguerite B. Humphrey 11,000.00 *
James A. Karman 7,700.00 *
Ralph D. Ketchum 33,000.00(6) *
Kenneth T. Koehler 2,943.67(7) *
Alfonse M. Mattia 89,245.20(8) 1.22%
David P. Miller 51,413.32(9) *
Donald F. Smith 2,808.78(10) *
All directors and executive officers 6,403,643.76 79.00%
as a group (13 persons)
-------------------------------------------------------------------
(1) Total includes 6,600 common shares held by Mr. Kaye as trustee with
sole investment and voting power and 28,835.04 and 4,155.64 held
indirectly under the Metropolitan Bank and Trust Company 401(k) Plan
("401(k) Plan") and the Metropolitan Financial Corp. Stock Purchase
Plan ("Stock Purchase Plan"), respectively.
(2) Total includes 61,500 shares held by Mr. Bank as trustee with sole
investment and voting power and 2,703.42 shares held indirectly under
the Stock Purchase Plan.
(3) Total includes 6,500 common shares held by the Broadbent Family
Foundation, of which Mr. Broadbent is Chairman and 2,304.65 shares held
indirectly by him under the Stock Purchase Plan.
(4) Total includes 2,043.72 common shares held indirectly by Ms. Carlson
under the Stock Purchase Plan.
(5) Total includes 11,000 common shares held by Ms. Goodman's spouse, as to
which Ms. Goodman disclaims beneficial ownership.
(6) Total includes 7,700 common shares held by Mr. Ketchum's spouse, as to
which Mr. Ketchum disclaims beneficial ownership.
(7) Includes 1,943.67 shares held indirectly by Mr. Koehler under the Stock
Purchase Plan.
(8) Total includes 45,510 common shares held by Mr. Mattia as trustee;
2,540 common shares held by Mr. Mattia's spouse, as to which Mr. Mattia
disclaims beneficial ownership; and 3,070.20 shares held indirectly
under the Stock Purchase Plan.
(9) Total includes 1,407.32 shares held indirectly by Mr. Miller under the
Stock Purchase Plan.
(10) Total includes 1,808.78 common shares held indirectly by Mr. Smith
under the Stock Purchase Plan.
* Represents less than 1% of Metropolitan's outstanding common shares.
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CERTAIN BENEFICIAL Except as set forth below, no person was known to
OWNERS Metropolitan on March 5, 2001 to own beneficially
within the meaning of the regulations of the
Securities and Exchange Commission, more than 5% of
Metropolitan's outstanding common shares.
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------- ----------------------- ----------------
Robert M. Kaye 6,060,387.68 74.76%
22901 Mill Creek Boulevard
Highland Hills, OH 44122
- ---------------------------
CHANGE IN CONTROL Metropolitan has a revolving credit agreement with a
commercial bank (the "Commercial Bank Agreement").
The Commercial Bank Agreement is a revolving line of
credit that matures on May 31, 2001, but can be
renewed annually upon agreement of both parties. The
maximum permitted borrowing amount is $12.0 million.
As collateral for the Commercial Bank Agreement, Mr.
Kaye pledged a portion of his common shares in an
amount at least equal in value to 200% of any
outstanding balance. At March 1, 2001, the
outstanding balance under the Commercial Bank
Agreement was $6.0 million.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
RATIFICATION Upon the recommendation of its Audit Committee, the
OF THE BOARD'S Board has selected Crowe, Chizek and Company LLP as
SELECTION Metropolitan's independent auditors for the fiscal
year ending December 31, 2001, to audit the books
and accounts of Metropolitan for that year, subject
to ratification of the selection by the shareholders
at the 2001 Annual Meeting. Crowe, Chizek and
Company LLP has been the independent auditors of
Metropolitan since 1991.
Representatives of Crowe, Chizek and Company LLP
are expected to be present at the 2001 Annual
Meeting and to be available to respond to
appropriate questions. Their representatives will
also be provided an opportunity to make a
statement, if they desire to do so.
Although shareholder approval of this appointment
is not required by law or binding on the Board, the
Board believes that shareholders should be given
the opportunity to express their views. If the
shareholders do not ratify the appointment of
Crowe, Chizek and Company LLP as Metropolitan's
independent auditors, the Board will consider this
vote in determining whether to continue the
engagement of Crowe, Chizek and Company LLP.
AUDIT FEES The aggregate fees billed to Metropolitan by Crowe,
Chizek and Company LLP for professional services
rendered for the audit of Metropolitan's financial
statements for the year ended December 31, 2000 and
for reviews of financial
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statements included in Metropolitan's Forms 10-Q for
the 2000 fiscal year have not been finalized, but is
believed will approximate $100,000.
FINANCIAL There were no services rendered and, therefore, no
INFORMATION fees billed, to Metropolitan by Crowe, Chizek and
SYSTEMS Company LLP for professional services rendered by it
DESIGN AND during 2000 related to financial information system
IMPLEMENTATION design and implementation services as described
FEES in paragraph (c)(4)(ii) of rule 2-01 of SEC
Regulation S-X.
ALL OTHER FEES The aggregate fees billed to Metropolitan by Crowe,
Chizek and Company LLP during 2000 for all other
services than included in the above amounts totaled
$168,438, the majority of which was related to a data
conversion project.
AUDIT COMMITTEE The Audit Committee considered whether the
REVIEW OF NON- provision of services covered in the amounts
AUDIT FEES charged during 2000 by Crowe, Chizek and Company
LLP for financial information systems design and
implementation and all other fees impaired Crowe,
Chizek and Company LLP's independence was
compatible with maintaining of Crowe, Chizek and
Company LLP's independence. After reviewing and
considering this matter, the Audit Committee
determined that the provision of those services was
compatible with maintaining the appropriate level
of independence.
BOARD'S THE BOARD UNANIMOUSLY RECOMMENDS RATIFICATION OF THE
RECOMMENDATION SELECTION OF CROWE, CHIZEK AND COMPANY LLP AS
INDEPENDENT AUDITORS FOR METROPOLITAN FINANCIAL CORP.
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2001.
GENERAL
2002 SHAREHOLDER PROPOSALS
PROPOSALS Any shareholder of Metropolitan wishing to have a
MUST BE proposal considered for inclusion in Metropolitan's
TIMELY 2002 proxy solicitation materials must set forth such
SUBMITTED proposal in writing and file it with the Secretary of
ACCORDING Metropolitan on or before November 27, 2001.
TO METROPOLITAN'S Shareholder proposals submitted after that date are
REGULATIONS considered untimely and not eligible to be submitted
to shareholders for their approval or adoption
according to Metropolitan's Regulations.
VOTING PROCEDURES/REVOKING YOUR PROXY
GENERAL In order for action to be taken at the 2001 Annual
INFORMATION Meeting, a quorum must exist. A quorum exists if at
least a majority of the total shares outstanding and
entitled to vote is either present or represented by
proxy at the Annual Meeting. Regarding Proposal 1,
Election of Directors to the Class of 2004, directors
will be elected if they receive a plurality (i.e.,
the greatest number) of the votes cast by shares
present and voting in person or by proxy. Passage of
Proposal 2, Ratification of Metropolitan's
Independent Auditors for 2001, will occur with at
least a majority vote. Unless a broker's authority to
vote on a particular matter is limited, abstentions
and broker non-votes are counted in determining the
votes present at a meeting. Consequently, an
abstention or a broker non-vote has
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the same effect as a vote against a proposal, as each
abstention or broker non-vote would be one less vote
in favor of a proposal.
VOTING Your shares of Common Stock will be voted in
YOUR accordance with the instructions you place on the
PROXY proxy card. If no instructions are given on the proxy
CARD card, your shares will be voted for the election as
directors of the nominees named in this Proxy
Statement and ratifying the appointment of Crowe,
Chizek and Company LLP as independent auditors for
the fiscal year ending December 31, 2001. The proxy
also grants the proxy holders the power to vote on
all matters that may come before the 2001 Annual
Meeting for which Metropolitan did not have notice of
prior to November 27, 2000. The Board of Directors
knows of no other matters which will be presented at
the 2001 Annual Meeting. However, if other matters
properly come before the 2001 Annual Meeting or any
adjournment, the person or persons named in the proxy
cards will vote on those matters in accordance with
their best judgment.
Proxies may be revoked at any time before it is voted if
you:
REVOKING - deliver a signed, written revocation letter,
YOUR dated later than the proxy, to Malvin E.
PROXY Bank, Secretary, Metropolitan Financial
Corp., 22901 Mill Creek Boulevard, Highland
Hills, Ohio 44122; or
- by delivering a signed proxy, dated later
than the first one, to Fifth-Third Bancorp,
Mail Drop No. MD10AT60, 38 Fountain Square
Plaza, Cincinnati, OH 45263; or
- by attending the Annual Meeting and giving
notice of your revocation in open meeting.
Shareholders may only nominate a person for
election as a director of Metropolitan at a
meeting of shareholders if the nominating
shareholder has strictly complied with the
applicable notice and procedural requirements set
forth in the Regulations, including, without
limitation, timely providing to the Secretary of
Metropolitan the requisite notice of the proposed
nominee(s) containing all the information
specified by the Regulations. Metropolitan will
provide to any shareholder, without charge, a copy
of the applicable procedures governing nomination
of directors set forth in the Regulations upon
request made to the Secretary of Metropolitan.
Metropolitan will bear the expense of preparing,
printing and mailing this Proxy Statement. In
addition to solicitation by mail, personnel of
Metropolitan and its subsidiaries may solicit the
return of proxies in person, by telephone or
through other forms of communication. Metropolitan
personnel who participate in this solicitation
will not receive any additional compensation for
such solicitation. Metropolitan will request
brokers, banks and other custodians, nominees and
fiduciaries to send proxy material to beneficial
owners and will, upon request, reimburse them for
their expense in so doing.
By Order of the Board of Directors
/s/ Malvin E. Bank
MALVIN E. BANK
Secretary
April 2, 2001
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APPENDIX "1"
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF
METROPOLITAN BANK AND TRUST COMPANY
INTRODUCTION
Metropolitan Bank and Trust Company's (the "Bank") executive
management is primarily responsible for the completeness and accuracy of its
financial reporting and the adequacy of its internal operating controls. Its
Board of Directors has statutory and fiduciary responsibility, subject to and
limited by all applicable statutory limitations of personal liability and rights
to indemnification under the Bank's Amended and Restated Constitution, to
oversee management's exercise of these responsibilities. To assist the Board,
the Bank has established, through its Amended and Restated Constitution, an
Audit Committee (the "Committee") whose authority and responsibility are
described by this charter.
AUTHORITY
The Committee has, along with the authority to otherwise fully
discharge its responsibilities, authority to:
A. Investigate or direct investigations of any activity of the
Bank, its subsidiaries and affiliates, related to its
responsibilities upon the approval of the Board of Directors.
B. Have unrestricted access to Bank documents and personnel; and,
C. Retain persons having special competence as is necessary in
discharging its responsibilities.
STRUCTURE OF THE AUDIT COMMITTEE
The Audit Committee shall have such number of members, as the Board of
Directors shall decide from time to time; however, the Audit Committee
shall not be comprised of less than three members. Except as is otherwise
permitted by Rule 4460(d)(2)(B) of the listing standards of the National
Association of Securities Dealers, Inc., as amended, only independent
directors will serve on the Committee. Each member of the Audit Committee
shall be financially literate or become financially literate within a
reasonable period of time after his or her appointment to the Audit
Committee. At least one member of the Audit Committee shall possess
accounting or related financial management expertise.
RESPONSIBILITIES
On behalf of the Board of Directors, the Committee shall satisfy itself
that open channels of communication exist among management, the internal
auditors, and the independent auditors and has responsibilities in the
following general areas:
A. Financial Reporting: To satisfy itself that financial
disclosures made or to be made by management reasonably
portray the Bank's financial condition, results of operations
and plans and long-term commitments. The independent auditing
firm is ultimately accountable to the Board of Directors and
the Audit Committee and, therefore, these shareholder
representatives shall have the ultimate authority to select,
evaluate, and, where appropriate, to replace the outside
auditor and to make recommendations to the Board of Directors
of Metropolitan Financial Corp. on such nominations concerning
the independent auditor for ratification by Metropolitan
Financial Corp. shareholders;
B. Bank Oversight: To satisfy itself that the Bank is in
reasonable compliance with pertinent laws and regulations, is
conducting its affairs ethically and is maintaining effective
controls against employee conflict of interest and fraud;
C. Independence: To confirm and assure the independence of the
Bank's independent accountant, including review of consulting
services performed by independent accountants and fees paid
for them;
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D. Internal Control: To understand, to the extent deemed
necessary by the Committee, the Bank's key financial reporting
risk areas and systems of internal control, and methods of
monitoring the control process;
E. Internal Audit: To oversee, to the extent deemed necessary by
the Committee, the Bank's internal audit function;
F. Meet at least four (4) times per year or more frequently as
circumstances require; and
G. Report periodically to the Board of Directors on significant
results of the foregoing activities.
Appendix A lists examples of actions the Committee may take in fulfilling
these responsibilities. The description or listing of any matter in the
appendix attached hereto or of any matter as a responsibility shall, in
no way, be construed as a mandatory function of the Committee which, if
not performed, shall constitute a breach of the statutory and fiduciary
responsibilities of the members of the Committee or be deemed to be
willful misconduct or recklessness. The Committee may consider such other
matters relating to the financial affairs, internal audit or independent
audit of the Bank as the Committee, in its sole discretion, deems
advisable.
OBLIGATIONS AND LIMITATIONS OF LIABILITY OF MEMBERS OF THE COMMITTEE
As directors of the Bank, the members of the Committee shall perform the
responsibilities of the Committee in good faith, in a manner each of them
reasonably believes to be in the best interest of the Bank and in
accordance with laws and regulations and bylaws of the NASDAQ Stock
Market, Inc., and with such care, including reasonable inquiry, skill and
diligence, as a person of ordinary prudence would use under similar
circumstances. In performing responsibilities as a member of the
Committee, each member shall be entitled to rely in good faith on
information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented
by persons, committees, entities or organizations so authorized by the
Ohio Business Bank Law presently in effect or as may hereafter be
applicable to the Bank. The provisions of this Charter and/or
specification of any matter set forth herein shall, in no way, (i) amend,
alter or otherwise change the statutory or regulated fiduciary
responsibility or personal liability of the members of the Committee or
(ii) amend, alter or otherwise change the Bank's Amended and Restated
Constitution as to liabilities of directors and their indemnification.
APPROVAL
This Charter is subject to periodic review and amendment by the Board
of Directors.
- -------------------------------------------------------------------------------
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APPENDIX A
TO AUDIT COMMITTEE CHARTER
A. FINANCIAL REPORTING
To satisfy itself that financial disclosures made or to be made by
management reasonably portrays the Bank's financial condition, results of
operations, and plans and long-term commitments, the Committee may:
1. Oversee the Bank's relationship with its independent auditors by:
a. Recommending for Board approval the appointment,
reappointment, or termination of the Bank's independent audit
firm.
b. Approving the independent audit firm's planned audit scope,
approach, and estimated fees for the annual audit and
quarterly review work as outlined in its engagement letter.
c. Approving the planned timing of the independent audit firm's
visits.
d. Reviewing the level of coordination with internal auditing.
e. Reviewing the independent auditors' performance.
f. Reviewing plans for engaging the independent audit firm to
perform management advisory or other non-audit services as
well as projected fees for these services, and assessing the
possible effect these services could have on the firm's
independence. The Audit Committee shall be responsible for
insuring the receipt from the independent auditor of a written
statement delineating all relationships between the
independent auditor and the Bank, consistent with Independence
Standards Board Standard No. 1.
g. Supporting and encouraging a Bank environment in which the
Bank's independent auditors have the freedom to perform their
work properly.
2. Review the Bank's accounting policies and their application.
3. Review the Bank's financial statements, including interim financial
statements, annual financial statements with accompanying auditors'
opinion and management letters, and any other financial reports
requiring Board approval before submission to the Securities and
Exchange Commission or other government agency. In reviewing the
Bank's financial statements, the Committee may:
a. Review the quarterly reporting process, including review of
management established acceptability and quality of the
controls to protect the integrity of the quarterly reporting
process, discussion of significant variances between actual
results and budgeted or projected results previously given to
the Board or Audit Committee, and discussion of proposed
changes in accounting or financial reporting practices or any
other unusual events that did or could have a material impact
on the financial statements.
b. Inquire about and secure such assurances as the Committee may
deem appropriate as to the conformity of the financial
statements to generally accepted accounting principles and
regulatory requirements and the adequacy of financial
statement disclosures in relation to financial reporting and
regulatory disclosure rules.
c. Inquire about the existence and substance of any significant
accounting accruals, reserves, or estimates made by management
that had or may have a material impact on the financial
statements, and about underlying assumptions used to arrive at
the amounts.
d. Inquire about the status of any tax reserves related to
significant items that have been or might be disputed by the
Internal Revenue Service for any open tax years.
e. Review with management the management's discussion and
analysis section of the annual report.
f. Review with management and the independent auditors any
significant reporting or operational issues affecting the
financial statements that were discussed during the accounting
period and their resolution, including the nature of any
significant adjustments, reclassifications, or additional
disclosures suggested by the independent auditors that are
currently or may become significant.
g. Obtain from management a notification of issues and responses
whenever a second opinion is sought from another independent
public accountant.
h. Review the letter of management representations given to the
independent auditors and inquire whether any difficulties were
encountered in obtaining the letter.
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i. Arrange for periodic reports from management, the independent
auditor and the internal auditor to assess the impact of
significant regulatory changes and accounting or reporting
developments proposed or implemented by the Financial
Accounting Standards Board or the Securities and Exchange
Commission or any other significant matters that might affect
the Bank.
j. Discuss with independent auditors any variations from the
audit scope originally planned and approved and any internal
control weaknesses, which the independent auditors reported as
a result of their audit and management's response to such
weaknesses.
B. BANK OVERSIGHT
To satisfy itself that the Bank is in reasonable compliance with pertinent
laws and regulations, is conducting its affairs ethically, and is
maintaining effective controls against employee conflict of interest and
fraud, the Committee may:
1. Review Bank policies relating to compliance with laws and
regulations, ethics, conflicts of interest, and the investigation of
misconduct and fraud.
2. Review current and pending material litigation or regulatory
proceedings in which the Bank is a party, and meet with the Bank's
general counsel to discuss other legal matters that may have a
significant impact on the Bank.
3. Review significant cases of employee conflict of interest,
misconduct or fraud.
4. Review Bank policies and procedures relating to review of officers'
expenses and perquisites, including use of Bank assets.
C. INTERNAL CONTROL
To understand, to the extent deemed necessary by the Committee, the Bank's
key financial reporting risk areas and systems of internal control and to
monitor its control processes, the Committee may, to the extent deemed
necessary by the Committee:
1. Determine that a sound internal accounting control system is
maintained and that management understands it.
2. Determine the extent to which the planned audit scope of both the
internal auditors and the independent audit firm can be relied on to
detect internal control weaknesses, and review management's plans to
monitor compliance with internal controls.
3. Meet privately with representatives of the independent audit firm to
discuss the quality and cooperativeness of management, financial,
accounting, and internal audit personnel to determine if any
restrictions have been placed by management on the scope of the
independent audit, and to allow the firm to discuss other matters it
believes should be discussed with the Committee.
4. Review the Bank's insurance coverage.
D. INTERNAL AUDIT
To oversee, to the extent deemed necessary by the Committee, the internal
audit function, the Committee may:
1. Approve the Bank's Internal Audit Policy that explains the purpose,
responsibility, authority, and reporting relationships of the
internal audit function.
2. Review management's appointment and termination of the Bank's
Internal Audit Manager.
3. Review internal audit's objectives and goals, schedules, staffing
plans, and financial budgets to assure they provide adequate support
for the Committee's own goals and objectives.
4. Review summary results of internal audits, including those related
to Bank governance, supplemented with detail regarding significant
audit findings and recommendations.
5. Provide periodic quality assurance reviews to ensure that the
internal audit function operates in accordance with Internal Audit
Standards.
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[COMPANY LOGO]
25
METROPOLITAN FINANCIAL CORP.
C/O CORPORATE TRUST SERVICES
MAIL DROP 10AT66--4129
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OH 45263
NAME APPEARS
FOLD AND DETACH HERE
In their discretion, the PROXIES are authorized to vote upon such other
business as may properly come before the meeting.
This PROXY when executed will be voted in the manner directed hereon by the
undersigned SHAREHOLDER(S).
If no direction is made, this PROXY will be voted FOR Proposals 1 and 2.
ALL FORMER PROXIES ARE HEREBY REVOKED.
Dated:_______________________________, 2001
--------------------------------------------
(Signature of Shareholder)
NAME APPEARS
--------------------------------------------
(Signature of Shareholder)
(Please sign exactly as your names appear
opposite. All joint owners should sign. When
signing in a fiduciary capacity or as a
corporate officer, please give your full
title as such.)
26
METROPOLITAN FINANCIAL CORP.
22901 MILL CREEK BOULEVARD
HIGHLAND HILLS, OHIO 44122
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert M. Kaye, Kenneth T. Koehler and
Malvin E. Bank and each of them, with FULL power of substitution, as proxies to
vote, as designated below, FOR and in the name of the undersigned all shares of
common stock of Metropolitan Financial Corp. which the undersigned is entitled
to vote at the Annual Meeting of the Shareholders of said CORPORATION scheduled
to be held Tuesday, April 24, 2001 at 9:00 a.m. at the offices of said
CORPORATION, 22901 Mill Creek Boulevard, Highland Hills, Ohio, 44122 or at any
postponement or adjournment thereof.
The Board of Directors recommends a FOR vote on the election of
Directors, and the proposal to ratify the appointment of Crowe, Chizek and
Company LLP. Please mark an X in one box under each item.
1. ELECTION of four directors to Class of 2004: |_| FOR ALL NOMINEES |_| WITHHOLD AUTHORITY TO VOTE FOR
LISTED BELOW. ALL NOMINEES LISTED BELOW.
CLASS OF 2004 DIRECTORS--ROBERT R. BROADBENT, MARJORIE M. CARLSON, JAMES A.
KARMAN AND RALPH D. KETCHUM
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THE
NOMINEE'S NAME IN THE SPACE BELOW:
- --------------------------------------------------------------------------------
2. Proposal to approve the appointment of Crowe, Chizek and Company LLP as
independent auditors of the Corporation for the fiscal year ending December
31, 2001.
|_| FOR |_| AGAINST |_| ABSTAIN