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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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EXCHANGE ACT OF 1934
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[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
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[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
METROPOLITAN FINANCIAL CORP.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
METROPOLITAN FINANCIAL CORP.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
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[METROPOLITAN FINANCIAL CORP. LOGO]
METROPOLITAN FINANCIAL CORP.
6001 Landerhaven Drive
Mayfield Heights, Ohio 44124
March 26, 1999
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend
the 1999 Annual Meeting of Shareholders of Metropolitan Financial Corp., which
will be held at our executive offices, 6001 Landerhaven Drive, Mayfield Heights,
Ohio, at 9:00 a.m., local time, on Tuesday, April 27, 1999.
All holders of record of shares of Common Stock of Metropolitan
Financial Corp. as of March 1, 1999, are entitled to vote at the 1999 Annual
Meeting.
As described in the accompanying Notice and Proxy Statement, you will be
asked to vote on the election of four directors for three-year terms expiring in
2002 and to ratify the appointment of independent auditors for 1999.
The accompanying Notice and Proxy Statement and the Annual Report for
the year ended December 31, 1998, are being mailed to shareholders on or about
March 26, 1999.
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 1999 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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[METROPOLITAN FINANCIAL CORP. LOGO]
METROPOLITAN FINANCIAL CORP.
6001 Landerhaven Drive
Mayfield Heights, Ohio 44124
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
APRIL 27, 1999
The Annual Meeting of Shareholders of Metropolitan Financial Corp. will
be held at 6001 Landerhaven Drive, Mayfield Heights, Ohio, on Tuesday, April 27,
1999, at 9:00 a.m., local time, for the following purposes:
1. To elect four directors to serve for three-year terms expiring
in 2002.
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, 1999.
3. To transact such other business as may properly come before the
1999 Annual Meeting or any postponement or adjournment thereof.
The Board of Directors has selected March 1, 1999, 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 1999
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.
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By Order of the Board of Directors
/s/ Malvin E. Bank
MALVIN E. BANK
Secretary
March 26, 1999
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TABLE OF CONTENTS
VOTING INFORMATION FOR THE ANNUAL MEETING.......................................................... 1
ISSUE I ELECTION OF DIRECTORS ............................................................. 2
Nominees for Terms that Expire at the 2002 Annual Meeting.......................... 2
Continuing Directors............................................................... 3
BOARD'S RECOMMENDATION............................................................. 4
Board Information.................................................................. 4
Compensation Committee Interlocks and Insider Participation........................ 5
Certain Transactions............................................................... 5
Compensation Committee Report on Executive Compensation............................ 6
Performance Graph.................................................................. 8
Executive Compensation and Other Information....................................... 10
Summary Compensation Table......................................................... 10
Option / SAR Grants in Last Fiscal Year Table...................................... 10
Section 16(a) Beneficial Ownership Reporting Compliance............................ 11
Metropolitan Share Ownership....................................................... 12
Certain Beneficial Owners.......................................................... 13
Change in Control.................................................................. 13
ISSUE II RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS................................ 13
BOARD'S RECOMMENDATION............................................................. 14
GENERAL 2000 Shareholder Proposals......................................................... 14
Voting Procedures.................................................................. 14
General Information................................................................ 14
Voting Your Proxy Card............................................................. 14
Revoking Your Proxy................................................................ 14
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[METROPOLITAN FINANCIAL CORP. LOGO]
METROPOLITAN FINANCIAL CORP.
6001 Landerhaven Drive
Mayfield Heights, Ohio 44124
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PROXY STATEMENT
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VOTING INFORMATION FOR THE ANNUAL MEETING
ANNUAL April 27, 1999 Corporate Headquarters
MEETING: 9:00 a.m., EST 6001 Landerhaven Drive
Mayfield Heights, OH 44124
RECORD DATE: The close of business on March 1, 1999. If you were a
shareowner 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 7,756,393
shares of our common stock outstanding.
AGENDA: 1. To elect four directors
2. Ratify the selection of Crowe, Chizek and
Company LLP as our independent auditors for
1999.
3. Any other proper business
PROXIES: Unless you tell us on the proxy card to vote
differently, we will vote signed returned proxies
"for" the Board's nominees and "for" agenda item 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 carry on our
present policies.
PROXIES SOLICITED BY: The Board of Directors
MAILING DATE: Approximately March 26, 1999
REVOKING YOUR PROXY: You may revoke your proxy before it is voted at the
meeting. To revoke, follow the procedures listed on
page 14 under "Voting Procedures/Revoking Your
Proxy."
NOTE ON 10% STOCK We distributed a 10% stock dividend on December 29,
DIVIDEND: 1998, to shareholders of record on December 15, 1998.
All shares, share prices and related figures are
restated in this proxy statement to reflect the stock
split.
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YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD IN THE ENCLOSED ENVELOPE.
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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
2002 currently serves as a director. Each nominee has
agreed to serve if reelected.
NOMINEES FOR TERMS THAT EXPIRE AT THE 2002 ANNUAL MEETING:
MALVIN E. Mr. Bank has served as Secretary, Assistant Treasurer
BANK and Director of Metropolitan and Secretary and
Director of the Bank since 1991. Mr. Bank is a senior
Director since 1991 partner with the Cleveland law firm of Thompson Hine
& Flory LLP. Mr. Bank serves as a Director of Oglebay
Norton Company. Mr. Bank also serves 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 68.
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 Corporate Council of the
Cleveland Museum of Art since its inception in 1993
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 62.
DAVID G. Mr. Lodge joined Metropolitan in December 1988 as
LODGE Executive Vice President. He has served as President
of Metropolitan and the Bank since August 1991. Mr.
Director since 1991 Lodge has also served as Director of Metropolitan and
the Bank since 1991 and as Assistant Secretary and
Assistant Treasurer of Metropolitan since 1992.
Mr. Lodge has served as a Director of University
Circle Incorporated and Vocational Guidance Services
since 1994 and became a member of the Board of
Trustees of The Cleveland Playhouse in June 1995.
Age 59.
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 66.
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CONTINUING DIRECTORS
DIRECTORS WHOSE TERMS EXPIRE AT THE 2000 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 and Eldred
Theater. Age 65.
MARGUERITE B. HUMPHREY Ms. Humphrey has served as a Director of Metropolitan
and the Bank since 1994. Ms. Humphrey developed and
Director since 1994 implemented workshops for trustee education for the
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 57.
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. Mr. Mattia is a CPA and a founding
Director Since 1996 partner of Amper, Politziner & Mattia, a New
Jersey-based accounting and consulting firm. Mr.
Mattia serves on the Assurance Services Executive
Committee of the AICPA and is co-Chairman of the
Rutgers University Family Business Forum. Mr. Mattia
also serves as a director of United Heritage Bank.
Age 57.
DIRECTORS WHOSE TERMS EXPIRE AT THE 2001 ANNUAL MEETING
ROBERT R. BROADBENT Mr. Broadbent has served as a Director of
Metropolitan and the Bank since 1992. From 1984 to
Director Since 1992 1989, Mr. Broadbent served as Chairman and Chief
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 77.
MARJORIE M. CARLSON Ms. Carlson has served as a Director of Metropolitan
and the Bank since 1994. She is the retired Director
Director since 1994 of Development for the Cleveland Foundation. Ms.
Carlson is a member of the Board of Trustees of the
College of Wooster, the Musical Arts Association and
Playhouse Square Foundation. Age 58.
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. since 1963, and in 1978 he
Director Since 1992 became President of RPM, Inc., a manufacturer of
protective coatings, sealants and specialty
chemicals. Mr. Karman serves as a member of the Board
of Directors of RPM, Inc., A. Schulman, Inc. and
Shiloh Industries, Inc. Mr. Karman also serves as a
member of the Board of Trustees of the Boys & Girls
Club of Cleveland, Boys Hope, The Western Reserve
Historical Society, and is a member of the Corporate
Council, Cleveland Museum of Art. Age 61.
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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 that, 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 Oglebay Norton Company, Thomas
Industries, Inc., and Lithium Technologies, Inc. Age
72.
BOARD'S THE BOARD UNANIMOUSLY RECOMMENDS ELECTION OF THE
RECOMMENDATION ABOVE NOMINEES FOR DIRECTORS WHOSE TERMS EXPIRE AT
THE 2002 ANNUAL MEETING.
BOARD INFORMATION
BOARD In 1998, the Metropolitan Board held a total of four
MEETINGS: regular quarterly meetings. Each director attended at
least 75% of his or her Metropolitan Board and
committee meetings.
Each Metropolitan director also serves as a director
of the Bank. The Bank's Board held 12 regular monthly
meetings in 1998. The Bank's Board has also
established several committees, including an Audit
Committee and a Compensation and Organization
Committee. Each director attended at least 75% of his
or her Bank Board and committee meetings.
BOARD COMMITTEES: The Audit Committee recommends appointment of
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 1998. Members:
Messrs. Bank (Chair), Broadbent, Karman, Ketchum,
Mattia, and Miller and Ms. Humphrey.
The Compensation and Organization Committee reviews
and recommends compensation with respect to
Metropolitan's Chairman of the Board and its
President. The committee held two meetings during
1998. Members: Messrs. Ketchum (Chair), Bank, Karman
and Kaye.
The Board does not have a standing Nominating
Committee. The entire Board performs that function.
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 earlier of the date we gave
the prior notice to make your nomination. If given to
our shareholders, the prior notice is given when we
mail it.
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All nominations must include all of 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; (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) if there
are 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.
BOARD Directors of the Bank who are neither employees of
COMPENSATION Metropolitan or the Bank receive a monthly retainer
of $1,000, plus a $500 attendance fee for each Bank
Board meeting attended. 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 RESIDENTIAL Planned Residential Communities, Inc. ("PRC")
COMMUNITIES provides Metropolitan with consulting services on
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.
THOMPSON HINE The law firm of Thompson Hine & Flory LLP provided
& FLORY LLP legal services to Metropolitan in 1998 and during the
current year at costs negotiated in arms-length
transactions. Malvin E. Bank is a partner in that
firm.
1993 Several of Metropolitan's directors and executive
SUBORDINATED officers purchased 10% subordinated notes (due
NOTES December 31, 2001) from Metropolitan during its 1993
private offering (the "Subordinated Notes"). Those
purchases were made on the same terms and conditions
as sales to nonaffiliated purchasers. All
Subordinated Notes were repurchased by Metropolitan
on May 22, 1998 with the proceeds of its Trust
Preferred Securities offering, including $515,000 and
$200,000, in principal amounts, held respectively by
Messrs. Kaye and Ketchum.
CERTAIN TRANSACTIONS
AMPER, POLITZINER & The accounting firm of Amper, Politziner & Mattia
MATTIA provided tax services to Metropolitan in 1998 and
during the current year at costs negotiated in
arms-length transactions. Alfonse M. Mattia is a
partner in that firm.
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1993 As noted above, several of Metropolitan's directors
SUBORDINATED and executive officers purchased subordinated notes
NOTES (due December 31, 2001) from Metropolitan during its
AND OTHER DEBT 1993 private offering (the "Subordinated Notes").
Those purchases were made on the same terms and
conditions as sales to nonaffiliated purchasers. All
subordinated Notes were repurchased by Metropolitan
on May 22, 1998 with the proceeds of its Trust
Preferred Securities offering, including the
following principal amounts: (a) $200,000 held by
David P. Miller; (b) $400,000 jointly held by the
Bank's 401(k) Plan and Planned Residential
Communities Management Co. Inc. and Affiliates 401(k)
Plan; and (c) $200,000 held by the Amper, Politziner
& Mattia Profit Sharing Trust, of which Alfonse M.
Mattia is a trustee.
The Bank has had banking transactions, including
loans, with Metropolitan's and the Bank's directors,
officers, shareholders and associates, and expects
these to continue into the future. Those transactions
are in the ordinary course of the Bank's business and
are on substantially the same terms, including
interest rates and collateral on loans, prevailing at
the time for comparable transactions with other
persons. Those transactions do not involve more than
the normal risk of collectability or present other
terms unfavorable to the Bank.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
THE COMMITTEE: The Compensation and Organization Committee (the
"Committee") of the Board of Directors of the Bank
reviews all issues pertaining to the compensation of
Mr. Kaye and Mr. Lodge. 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. Those goals include:
- Reward performance that increases the value of
your stock.
- Attract, retain and motivate executives and
key employees with competitive compensation
opportunities.
- Balance short-term and long-term strategic goals.
- Address 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 Mr. Kaye and Mr. Lodge, the
REVIEW 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
Metropolitan. 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 Performance Graph set
forth below are companies included in the Bank
Compensation Survey prepared by Crowe, Chizek and
Company LLP.
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BANK'S PERFORMANCE Mr. Kaye's and Mr. Lodge's base salary and bonus are
AFFECTS reviewed annually. In making its determinations
EXECUTIVE 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 Before 1996, Mr. Kaye received only base salary. His
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 1998 was
$395,000. In addition, in January of 1999, the
Committee determined that Mr. Kaye should receive a
$75,000 bonus as part of his compensation for fiscal
1998. This increase in salary was based on Mr. Kaye's
business planning and entrepreneurial skills, his
vision, judgment and leadership as well as his
excellent attention to detail. The Committee also
recognized the excellent performance of Mr. Kaye in
continuing to attract and retain outstanding officers
and his overall management of those officers. The
Committee awarded the bonus to Mr. Kaye in part due
to the continued success of Metropolitan and the Bank
during 1998. The determination of the bonus amount is
completely within the discretion of the Committee.
MR. LODGE Mr. Lodge has traditionally received both salary and
bonus. In 1998, Mr. Lodge's base salary was $270,000.
Mr. Lodge's salary is based in part on the
recommendation of Mr. Kaye and has traditionally been
set by the Committee at a level competitive with
salaries of chief operating officers of banks of
similar geographic location and asset size. In
January 1999, the Committee determined that Mr. Lodge
was entitled to a bonus of $75,000. Although Mr.
Lodge'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.
OTHER The salary portion of compensation earned by the
NAMED other Named Executive Officers is determined by Mr.
EXECUTIVE Lodge, after consultation with Mr. Kaye. The named
OFFICERS executive officers' salaries are set by Mr. Lodge 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. Bevack and Mr. Bell earned
their bonuses in 1998 pursuant to the Mortgage
Banking Incentive Plan and the Commercial Real Estate
Department Bonus Programs, respectively. Business
generation and profits earned for the Bank primarily
determine bonuses earned under Messrs. Bevack's and
Bell's programs. Mr. Lodge determined Ms. Adam's 1998
bonus. Metropolitan continues to review expanding the
scope of the duties of the Committee to include an
annual review of the terms and amount of the
compensation of executive officers in addition to the
Chief Executive Officer and the President.
STOCK The Committee believes that the Chief Executive
OPTION Officer, the other executive officers and certain
INCENTIVES other officers and key employees of Metropolitan and
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. The Committee determines Metropolitan's
stock option policies and makes the actual grants of
options. The actual grants were made in May 1998
pursuant to the terms of the Metropolitan Financial
Corp. 1997 Stock Option Plan, which was approved by
Metropolitan's shareholders on April 28, 1998, and
are based on the
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grantee's historical and/or anticipated contributions
to the long-term financial and operational results of
Metropolitan. The aggregate number 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
Malvin E. Bank
James A. Karman
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
THE MARKET AND 419 publicly held savings and loan associations
ITS PEERS located 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 each of the common shares, 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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COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
------------------FISCAL YEAR ENDING-------------------
COMPANY/INDEX/MARKET 10/29/1996 12/31/1996 12/31/1997 12/31/1998
Metropolitan Fncl 100.00 103.23 290.91 216.79
Savings & Loans 100.00 106.20 178.56 156.53
NASDAQ Market Index 100.00 105.97 129.63 182.83
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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, 1998, 1997 and 1996, 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 COMPENSATION (1)
- ------------------ ----------- --------- ----- ----------------
Robert M. Kaye 1998 $394,465 $75,000(2) $5,000
Chairman of the 1997 351,000 75,000(2) 4,750
Board and Chief 1996 295,000 65,000(2) 4,750
Executive Officer
David G. Lodge 1998 269,696 75,000(2) 5,000
President, Assistant 1997 242,654 75,000(2) 4,750
Treasurer and 1996 205,000 65,000 4,750
Assistant Secretary
Patrick W. Bevack 1998 142,525 277,185 5,000
Executive Vice 1997 146,042 39,553(3) 4,750
President of the Bank 1996 135,000 7,500 4,750
Lloyd W. W. Bell, Jr. 1998 125,654 139,871 -
Senior Vice President 1997 23,077 - -
and Chief Lending (4)
Officer of the Bank
Judith Z. Adam 1998 105,482 7,000 4,499
Senior Vice President 1997 99,137 6,000 4,205
and Chief Financial 1996 89,144 4,000 3,726
Officer of the Bank
- --------------------------------------------------------------------------------
(1) Represents the Bank's contribution to the Metropolitan Bank and Trust
Company 401(k) Plan.
(2) Paid in January in the following year.
(3) Mr. Bevack's 1997 bonus was not paid until after the Registrant's 1998
Proxy Statement was filed.
(4) Mr. Bell did not join the Bank until October 20, 1997.
OPTION GRANTS
STOCK The following table provides information regarding grants of
OPTIONS Options made during the year ended December 31, 1998, to each
of the executive officers named in the Summary Compensation
Table. All share and base price figures reflect Metropolitan's
completion, on December 29, 1998, of a 10% stock dividend.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS TEN YEAR OPTION TERM
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% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE OR
OPTIONS IN FISCAL BASE PRICE EXPIRATION
NAME GRANTED YEAR ($/SHARE) DATE 5% 10%
(#)(1)
- ------------------------- --------------- -------------- ------------- --------------- -------------- --------------
Robert M. Kaye 55,000 47.17% $14.43 05/20/2008 $499,122 $1,264,874
6,600 (2) 5.66 15.87 05/20/2008 50,391 142,281
David G. Lodge 22,000 18.87 14.43 05/19/2008 199,649 505,949
6,600 (2) 5.66 14.43 05/19/2008 59,895 151,785
Patrick W. Bevack 3,300 (2) 2.83 14.43 05/19/2008 29,947 75,892
Lloyd W.W. Bell, Jr. 5,500 (2) 4.72 14.43 05/19/2008 49,912 126,487
Judith Z. Adam 5,500 (2) 4.72 14.43 05/19/2008 49,912 126,487
- ---------------------------------------------------------------------------------------------------------------------------
INCREASE IN VALUE TO ALL COMMON SHAREHOLDERS (3) $70,350,485 $178,397,039
- -----------------
(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.
Number of options reflects Metropolitan's 10% stock dividend on December
29, 1998.
(2) Represents grants of incentive stock options.
(3) Calculated for the total number of shares outstanding on December 31, 1998
(7,756,393), at a per share price of $23.50 for 5% annual 10-year price
appreciation, and at a per share price of $37.43 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 is noted
below, there were no late filings during 1998.
Alfonse M. Mattia made 22 separate purchases of
Metropolitan's common shares, individually and/or as
trustee, of which five of those purchases were
inadvertently reported late on two Forms 4. David P.
Miller made nine separate purchases of Metropolitan's
common shares, of which two of those purchases were
inadvertently reported late on two Forms 4. Judith Z.
Adam and Lloyd W.W. Bell, Jr. filed their respective
Forms 3 one month late.
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METROPOLITAN SHARE OWNERSHIP
DIRECTORS AND The following tables list, as of February 26, 1999,
EXECUTIVE information about Metropolitan's OFFICERS 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 OF
NAME OF INDIVIDUAL OR PERSONS IN GROUP BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS
-------------------------------------- ------------------------ ----------------
Robert M. Kaye 6,013,997 (2) 77.5%
David G. Lodge 31,127 (3) *
Malvin E. Bank 16,500 *
David P. Miller 40,706 *
Ralph D. Ketchum 25,300 (4) *
James A. Karman 7,700* *
Robert R. Broadbent 43,430 (5) *
Marjorie M. Carlson 22,000* *
Lois K. Goodman 18,700 (6) *
Marguerite B. Humphrey 11,000* *
Alfonse M. Mattia 83,820 (7) 1.1%
Patrick W. Bevack 9,350* *
Lloyd W.W. Bell, Jr. 2,200 *
Judith Z. Adam 2,200 *
All directors and executive officers as a group
(15 persons) 6,328,250 81.6%
-----------------------------------------------------
(1) The common shares indicated reflect Metropolitan's completion, on
December 29, 1998, of a 10% stock dividend to shareholders of record
as of December 15, 1998.
(2) Total includes 6,600 common shares held by Mr. Kaye as trustee with
sole investment and voting power.
(3) Total includes 2,747 common shares held by Mr. Lodge as custodian for
his children and 3,520 common shares held by Mr. Lodge's spouse, as
to which Mr. Lodge disclaims beneficial ownership.
(4) Total includes 7,700 common shares held by Mr. Ketchum's spouse, as to
which Mr. Ketchum disclaims beneficial ownership.
(5) Total includes 6,050 common shares held by the Broadbent Family
Foundation, of which Mr. Broadbent is Chair.
(6) Total includes 11,000 common shares held by Ms. Goodman's spouse, as
to which Ms. Goodman disclaims beneficial ownership.
(7) Total includes 42,460 common shares held by Mr. Mattia as trustee,
5,610 common shares held by a partnership in which Mr. Mattia is a
partner, and 1,100 common shares held by Mr. Mattia's spouse, as to
which Mr. Mattia disclaims beneficial ownership
* Represents less than 1% of Metropolitan's outstanding common shares.
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CERTAIN BENEFICIAL Except as set forth below, no person is known to
OWNERS Metropolitan at February 26, 1999 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 (1) PERCENT OF CLASS
- ------------------- --------------------------- ----------------
Robert M. Kaye 6,013,997 77.5%
6001 Landerhaven Drive
Mayfield Heights, Ohio 44124
- ---------------------------
(1) The common shares indicated reflect Metropolitan's completion, on
December 29, 1998, of a 10% stock dividend to shareholders of record as
of December 15, 1998
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 30, 1999, 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, 1999, the
outstanding balance under the Commercial Bank
Agreement was $12.0 million.
ISSUE II
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, 1999, to audit the books and
accounts of Metropolitan for that year, subject to
ratification of the selection by the shareholders at
the 1999 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 1999 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.
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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, 1999.
GENERAL
2000 SHAREHOLDER PROPOSALS
PROPOSALS Any shareholder of Metropolitan wishing to have a
MUST BE proposal considered for inclusion in Metropolitan's
TIMELY 2000 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, 1999.
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 Amended and Restated
Code of Regulations.
VOTING PROCEDURES / REVOKING YOUR PROXY
GENERAL In order for action to be taken at the 1999 Annual
INFORMATION Meeting, a quorum must exist. A quorum will exist if
at least a majority (i.e., 3,878,197 shares) of the
total shares outstanding and entitled to vote is
either present or represented by proxy at the Annual
Meeting. Regarding Issue I, Election of Directors to
the Class of 2002, 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 Issue II, Ratification of
Metropolitan's Independent Auditors for 1999, 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
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 The enclosed proxy card representing your common
YOUR shares will be voted in accordance with the
PROXY instructions you place on the proxy card. If no
CARD instructions are given, the proxy card will be
voted for the election as directors of the nominees
named in this Proxy Statement and in favor of
ratifying the appointment of Crowe, Chizek and
Company LLP as independent auditors for the fiscal
year ending December 31, 1999. The Board of Directors
knows of no other matters which will be presented at
the 1999 Annual Meeting. However, if other matters
properly come before the 1999 Annual Meeting or any
adjournment, the person or persons voting the cards
will vote them in accordance with their best judgment
on such matters.
REVOKING Proxies may be revoked at any time before it is
YOUR voted if you:
PROXY - Deliver a signed, written revocation letter,
dated later than the proxy, to Malvin E. Bank,
Secretary, Metropolitan Financial Corp., 6001
Landerhaven Drive, Mayfield Heights, OH 44124; or
- By delivering a signed proxy, dated later than
the first one, to Fifth-Third Bancorp, Mail Drop
No. 1090D2, 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
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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
MALVIN E. BANK
Secretary
March 26, 1999
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[LOGO]
METROPOLITAN
------------
FINANCIAL CORP.
METROPOLITAN FINANCIAL CORP.
6001 Landerhaven Drive
Mayfield Heights, Ohio 44124
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Robert M. Kaye, David G. Lodge 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 27, 1999 at 9:00 a.m. at the offices of said CORPORATION,
6001 Landerhaven Drive, Mayfield Heights, Ohio, or at any adjournment thereof.
The Board of Directors recommend a FOR vote on the election of Directors,
and the proposal to appoint Crowe, Chizek and Company LLP. Please mark an X in
one box under each item.
1. ELECTION of four Class III directors:
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY to vote for
listed below. all nominees listed below.
CLASS III- Malvin E. Bank, Robert M. Kaye, David G. Lodge and David P. Miller
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, 1999.
[] FOR [] AGAINST [] ABSTAIN
21
[LOGO]
METROPOLITAN
FINANCIAL CORP.
c/o Corporate Trust Services
Mail Drop 10AT66-4129
38 Fountain Square Plaza
Cincinnati, OH 45263
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:________________, 1999
-------------------------------------
(Signature of Shareholder)
-------------------------------------
(Signature of Shareholder)
(Please sign exactly as your name or 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.)