SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934.
(Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[x] Definitive Proxy Statement
[x] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Provident Bankshares Corporation
(Name of Registrant as Specified In Its Charter)
Mid-Atlantic Investors
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
Provident Bankshares Corporation
PROXY STATEMENT OF MID-ATLANTIC INVESTORS
-------------------------------------------------
This Proxy Statement is furnished to stockholders of Provident Bankshares
Corporation, a Maryland corporation (herein, unless the context otherwise
requires, together with its subsidiaries, the "Company"), in connection with the
solicitation of proxies by Mid-Atlantic Investors, a South Carolina general
partnership ("Mid-Atlantic") for the purposes set forth herein for use at the
Annual Meeting of Stockholders of the Company to be held at the offices of the
Company, 114 East Lexington Street, Baltimore, Maryland 21202, on April 19,
2000, at 10:00 a.m., and at any adjournment thereof (the "Annual Meeting").
Solicitation of proxies may be made in person or by mail, telephone,
telegraph or other electronic means by Mid-Atlantic, its office employees and
its general partners. Mid-Atlantic may also request banking institutions,
brokerage firms, custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owners of Common Stock of the Company held of record
by such persons, and Mid-Atlantic will reimburse the reasonable forwarding
expenses. Mid-Atlantic has employed D.F. King & Co., Inc. in connection with the
solicitation of proxies at a cost of approximately $10,000. Approximately 25
employees of D.F. King & Co., Inc. will be involved in soliciting proxies for
Mid-Atlantic. The total cost of this solicitation of proxies is expected to be
approximately $100,000, and will be paid by Mid-Atlantic. Expenditures through
March 1, 2000, in furtherance of, or in connection with solicitation of proxies
were less than $2,000. Mid-Atlantic will not seek reimbursement from the Company
for any expenses. This Proxy Statement and the enclosed form of proxy were first
sent or given to stockholders on or about March 24, 2000.
The Company has its principal executive offices at the offices of the
Company, 114 East Lexington Street, Baltimore, Maryland 21202. The Company's
telephone number is (410) 277-7000. Mid-Atlantic has its principal offices at
289 Hunters Blind Drive, Columbia, South Carolina 29212. Mid-Atlantic's
telephone number is (803) 749-7888.
RESOLUTION TO BE PRESENTED AT THE
ANNUAL MEETING BY MID-ATLANTIC
Mid-Atlantic plans to present the resolution set forth below to the
stockholders for a vote at the Annual Meeting. Mid-Atlantic is soliciting
proxies pursuant hereto to vote "FOR" the resolution.
Resolution Proposed By Mid-Atlantic Investors
RESOLVED that the stockholders hereby inform the board of directors that it
is the desire of the stockholders that the board of directors immediately take
the necessary steps to achieve a sale, merger or other acquisition of the
Company on terms that will maximize stockholder value as promptly as possible.
Mid-Atlantic recommends you vote FOR this resolution.
This is the same resolution Mid-Atlantic proposed at the April 23, 1999
annual stockholder meeting. Since closing at $28.097 on April 16, 1999,
Provident common stock has lost 43% of its value as of March 17, 2000, when it
closed at $16.00. Mid-Atlantic has discussed with management of the Company
management's vision for the Company's future on a number of occasions.
Management has not articulated to Mid-Atlantic or the stockholders a clear plan
for maximizing the value of the Company to its stockholders. It appears to
Mid-Atlantic that management is operating from a misguided and erroneous belief
that the Company will have greater value to the stockholders if it remains
independent rather than if it is sold. Based on publicly available information,
Mid-Atlantic believes that a sale of the Company would be in the best interest
of the stockholders. Mid-Atlantic hopes that adoption of this resolution will
lead to a prompt sale of the Company.
<PAGE>
Because the proposal is advisory only, it will not bind the Board of
Directors to take any action if approved. It is, nevertheless, an opportunity
for stockholders to communicate their wishes to the Board of Directors.
REVOCATION OF PROXY
Any stockholder returning the accompanying proxy may revoke such proxy at
any time prior to its exercise (a) by giving written notice to the Secretary of
the Company of such revocation or (b) by a later dated proxy. Attendance at the
Annual Meeting will not in itself constitute revocation of a proxy. Any written
notice of revocation should be sent to Corporate Secretary. Please also send a
copy to Mid-Atlantic Investors at Post Office Box 7574, Columbia, South Carolina
29202.
VOTING PROCEDURES
The securities that may be voted at the meeting consist of shares of Common
Stock of the Company (the "Common Stock"), with each share entitling its owner
to one vote on all matters to be voted on at the Annual Meeting, except as
described below. The close of business on February 21, 2000 has been established
by the Board of Directors as the record date (the "Record Date") for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 25,532,918.
Directors are elected by a majority of the votes present, without regard to
either: (i) broker non-votes or (ii) proxies as to which authority to vote for
one or more of the nominees being proposed is withheld. The resolution proposed
by Mid-Atlantic will be determined by a majority of the votes cast, without
regard to either: (i) broker non-votes or (ii) proxies marked "ABSTAIN" as to
that matter. Proxies specifying abstention as to a proposal will cause the
shares so represented to be counted toward a quorum, but not counted as voting
for such proposal. To the extent holders or brokers having the right to vote
shares do not attend the meeting or return a proxy, such shares will not count
toward a quorum and, if a quorum is otherwise achieved, will have no effect on
the proposals considered at the meeting.
ACTIONS TO BE TAKEN BY THE PROXIES
Each proxy executed pursuant to this solicitation by Mid-Atlantic, unless
the stockholder otherwise specifies therein, will be voted "FOR" the election of
the persons named in this Proxy Statement as nominees for election to the Board
of Directors; "FOR" approval of the Resolution of Stockholders introduced by
Mid-Atlantic recommending that the Board of Directors immediately take the
necessary steps to achieve a sale, merger or other acquisition of the Company;
and "FOR" the resolution to approve the independent auditors. In each case where
the stockholder has appropriately specified how the proxy is to be voted, it
will be voted in accordance with those specifications. Mid-Atlantic does not
hereby seek authority to vote on any other matter of business which may be
brought before the Annual Meeting, unless such matter relates to the foregoing
resolutions, or is incidental to the conduct of the meeting, in which case, a
vote may be cast pursuant to the accompanying proxy in accordance with the best
judgment of the persons voting the same.
STOCKHOLDER PROPOSALS
To be eligible under the Securities and Exchange Commission's stockholder
proposal rule (Rule 14a-8) for inclusion in the Company's proxy statement and
form of proxy card, and for presentation at the Company's 2001 Annual Meeting,
currently scheduled to be held on April 18, 2001, a proposal of a stockholder
must be received by the Company at 114 East Lexington Street, Baltimore,
Maryland 21202 prior to November 7, 2000. For a stockholder proposal submitted
outside of the process provided by Rule 14a-8 to be eligible for presentation at
the Company's 2001 Annual Meeting, timely notice thereof must be received by the
Company by December 19, 2000 in the manner and form required by the Company's
By-Laws. In order to curtail controversy as to compliance with these
requirements, stockholders are urged to submit proposals to the Secretary of the
Company by Certified Mail-Return Receipt Requested. If the date of the 2001
Annual Meeting should change, such deadlines would also change.
2
<PAGE>
SECURITY OWNERSHIP OF PARTICIPANTS
IN MID-ATLANTIC PROXY SOLICITATION
The following table sets forth, as of February 21, 2000, the number and
percent of outstanding shares of the Company's common stock beneficially owned
by participants in Mid-Atlantic's proxy solicitation.
<TABLE>
<CAPTION>
Number of Shares % of
Name of Participants Business Address Beneficially Owned Shares
- -------------------- ----------------- ------------------ ------
<S> <C> <C> <C>
Mid-Atlantic Investors P.O. Box 7574 812,150(1) 3.2%
Columbia, SC 29202
H. Jerry Shearer 289 Hunters Blind Drive 842,238(1)(2) 3.3%
Columbia, SC 29212
Jerry Zucker 4838 Jenkins Avenue 1,340,150(1) 5.2%
Charleston, SC 29405
Mid-Atlantic Partners P. O. Box 7574 417,625 1.6%
Columbia, SC 29202
Shearer Enterprises, Inc. 289 Hunters Blind Drive 4,410 0.02%
Columbia, SC 29212
Mid-Atlantic Investors and 1,370,238(3) 5.4%
Messrs. Shearer and Zucker
as a group
</TABLE>
- -------------------------
(1) Includes the shares owned by Mid-Atlantic Investors and Mid-Atlantic
Partners.
(2) Mr. Shearer's wife, Martha M. Shearer, has joint ownership with Mr. Shearer
of 12,075 shares of the Company's Common Stock which are included in the
shares beneficially owned by Mr. Shearer. Mrs. Shearer resides at 289
Hunters Blind Drive, Columbia, South Carolina 29212. Total also includes
4,410 shares of the Company's Common Stock owned by Shearer Enterprises,
Inc., as to which Mr. Shearer has voting and dispositive power.
(3) The total shares beneficially owned by Mid-Atlantic, Mid-Atlantic Partners
and Messrs. Shearer and Zucker
ADDITIONAL INFORMATION ABOUT PARTICIPANTS
IN MID-ATLANTIC PROXY SOLICITATION
Mid-Atlantic is a general partnership organized under the laws of the
State of South Carolina for the purpose of investing in financial institutions.
Jerry Zucker and H. Jerry Shearer are the general partners of Mid-Atlantic. Mr.
Zucker is the chief executive of The InterTech Group, Inc. and the Polymer
Group, Inc., the address of both of which is Post Office Box 5205, North
Charleston, South Carolina 29405. The principal business of the InterTech Group,
Inc. is manufacture of a wide and diverse variety of polymer and elastomer based
products. The principal business of The Polymer Group, Inc. is manufacture and
marketing of non-woven and woven polyolefin products. Mr. Shearer is managing
partner of Mid-Atlantic.
Mid-Atlantic Partners is a limited partnership formed under the laws of
the State of South Carolina for the purpose of investing in financial
institutions. Mid-Atlantic is the general partner of Mid-Atlantic Partners.
During the past two years Mid-Atlantic made the following purchases of
Company stock: 7/21/99 - 18,900 shares; 1/26/00 - 50,000 shares; 1/27/00 -
50,000 shares.
During the past two years Mid-Atlantic Partners made the following
purchases of Company stock: 7/21/99 - 42,000 shares; 12/8/99 - 100,000 shares.
During the past two years Mr. Zucker made the following purchases of
Company stock: 1/26/00 - 75,000 shares; 1/27/00 - 230,000 shares; 1/31/00 -
20,000 shares; 2/1/00 - 45,000 shares; 2/2/00 - 10,000 shares; 2/4/00 - 75,000
shares; 2/7/00 - 8,000 shares; 2/8/00 - 12,000 shares; 2/9/00 - 5,000 shares;
2/10/00 - 45,000 shares; 2/11/00 - 3,000 shares.
3
<PAGE>
During the past two years Mr. Shearer made the following purchases of
Company stock: 3/24/98 - 1,575 shares; 4/8/98 - 1,653 shares; 4/20/98 - 11,025
shares; 2/4/00 - 10,000 shares; 2/10/00 - 3,000. Mr. Shearer sold Company stock
as follows: 6/2/98 - 175 shares; 8/7/98 - 500 shares; 10/6/98 - 126 shares;
10/15/98 - 60 shares; 12/8/98 - 714 shares. Shearer Enterprises, Inc., purchased
Company stock: 3/24/98 - 2,152 shares; 3/26/98 - 3,308 shares. It sold Company
stock: 9/30/98 - 465 shares; 10/12/98 - 585 shares.
All of the share amounts in the preceding three paragraphs have been
adjusted to give effect to subsequent stock splits and dividends.
The shares of common stock owned by Mid-Atlantic, Mid-Atlantic Partners,
Mr. Zucker and Mr. Shearer which had a value at March 7, 2000 of approximately
$21,323,867, are pledged to secure margin accounts, which represent funds
borrowed for the purpose of acquiring or holding such shares.
Other than the Mid-Atlantic partnership agreement between Messrs. Shearer
and Zucker pursuant to which they share dispositive and voting power with
respect to partnership matters, neither Mid-Atlantic, nor either of Messrs.
Shearer or Zucker is, or has been in the past year, a party to any contract,
arrangement or understanding with any person with respect to any securities of
the Company. Neither Mid-Atlantic nor Messrs. Shearer or Zucker, nor any of
their associates has any arrangement or understanding with any person with
respect to any future employment by the Company or its affiliates, or with
respect to any future transactions to which the Company or any of its affiliates
will or may be a party.
ELECTION OF DIRECTORS AND APPROVAL OF INDEPENDENT AUDITORS
The Company's Board of Directors has nominated seven persons to be elected
as directors at the Annual Meeting. Such persons are identified in the Board's
Proxy Statement filed with the Securities and Exchange Commission on March 6,
2000 (the "Board's Proxy Statement"), and information about such persons'
employment, business experience and terms of office is also required to be set
forth therein.
Mid-Atlantic does not endorse those nominees. As a convenience to
stockholders who want to vote in the election of directors, Mid-Atlantic has
provided a place on its proxy card for stockholders to register their votes for
directors. Mid-Atlantic has also provided a space on its proxy card for
stockholders to vote on the approval of Price-waterhouseCoopers, LLP as
independent auditors for 1999. The proxy agents named on the proxy card will
vote in accordance with the instructions of the stockholder.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Information about compensation of directors and executive officers of the
Company is required to be set forth in the Board's Proxy Statement, and
reference is made thereto for such information. It may help explain management's
opposition to Mid-Atlantic's proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The securities ownership of and other information about the Board of
Directors and Executive Officers of the Company is set forth in the Board's
Proxy Statement.
OTHER BUSINESS
Mid-Atlantic is not aware of any other business to be conducted at the
Annual Meeting. Mid-Atlantic does not seek authority hereby to vote on any other
business unless it relates to nominees for the Board of Directors of the
Company, the resolution discussed herein, or is incidental to the conduct of the
meeting, in which case, it is the intention of the persons named in the
accompanying proxy to vote such proxy in accordance with their best judgment on
such matters.
4
<PAGE>
************IMPORTANT************
1. Be sure to vote on the GREEN card. Vote "FOR" the
shareholder resolution proposal. We urge you not to sign
any proxy card which is sent to you by Provident
Bankshares. Remember, each properly executed proxy you
submit revokes all prior proxies. Even if you have already
submitted a proxy sent to you by Provident Bankshares, you
should sign and return the Mid-Atlantic GREEN proxy.
2. If any of your shares are held in the name of a bank
broker or other nominee, please contact the person
responsible for your account and direct him/her to vote on
the GREEN PROXY CARD "FOR" the Shareholder Resolution.
3. If you have any questions or need assistance in voting
your shares, please feel free to contact:
D. F. King & Co., Inc.
(800) 578-5378
5
<PAGE>
[FORM OF PROXY]
PROXY
PROXY SOLICITED ON BEHALF OF MID-ATLANTIC INVESTORS
2000 ANNUAL MEETING OF STOCKHOLDERS OF PROVIDENT BANKSHARES CORPORATION
H. Jerry Shearer and Jerry Zucker, or either of them, with full power of
substitution, are hereby appointed as agent(s) of the undersigned to vote as
proxies all of the shares of Common Stock of Provident Bankshares Corporation
(the "Company") held of record by the undersigned on the Record Date at the 2000
Annual Meeting of Stockholders to be held at the offices of the Company, at 114
East Lexington Street, Baltimore, Maryland 21202 on April 19, 2000, at 10:00
a.m., and at any adjournment thereof, as follows:
1. ELECTION OF [ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
DIRECTORS. below to vote for all nominees
LISTED BELOW
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL(S), LINE THROUGH
OR STRIKE OUT THE INDIVIDUAL(S) NAME(S).
NOMINEES: Dr. Calvin W. Burnett, Pierce B. Dunn, Mark K. Joseph, Peter M.
Martin, Sheila K. Riggs.
2. RESOLUTION OF THE STOCKHOLDERS:
RESOLVED that the stockholders hereby inform the board of directors that it
is the desire of the stockholders that the board of directors immediately
take the necessary steps to achieve a sale, merger or other acquisition of
the Company on terms that will maximize stockholder value as promptly as
possible.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF AUDITORS:
To approve the selection of PricewaterhouseCoopers LLP as the independent
auditors of the Company for the fiscal year 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. And, in the discretion of said agents, upon such other business relating to
the foregoing as may properly come before the meeting, and matters
incidental to the conduct of the meeting.
THE PROXIES WILL BE VOTED AS INSTRUCTED. IF NO CHOICE IS INDICATED WITH RESPECT
TO A MATTER WHERE A CHOICE IS PROVIDED, THIS PROXY WILL BE VOTED "FOR" SUCH
MATTER.
Please sign exactly as name appears below. When signing as attorney, executor,
administrator, trustee, guardian, or similar position, please give full title.
If more than one trustee, all should sign. Joint accounts need only one
signature, but all account holders should sign if possible.
Dated: , 2000
--------------------------------
MID-ATLANTIC INVESTORS
A.S.C. General Partnership
P.O. Box 7574 Tel. 803-749-7888
Columbia, South Carolina 29202 FAX 803-749-7090
- --------------------------------------------------------------------------------
ATTENTION PROVIDENT BANKSHARES SHAREHOLDERS
March 22, 2000
Dear Fellow Provident Shareholder:
Mid-Atlantic Investors has submitted a shareholder resolution for the April 19
annual meeting of shareholders calling upon the directors of Provident
Bankshares to take immediate steps to achieve a sale, merger or other
acquisition of the Company on terms that will maximize stockholder value as
promptly as possible. We encourage you to sign, date and promptly mail the
enclosed GREEN PROXY CARD to vote FOR this proposal.
Here are some reasons Provident needs to put up a FOR SALE sign:
. All of management's achievements over the last 2 years have failed to
result in the enhancement of your share value.
. The value of Provident stock has declined more than the Middle Atlantic
Bank Index in the last two years. The Index is down 12.9% while Provident's
stock lost 37.5% of its value.
. This is not just an "all bank stocks are down" problem.
. The market price of the Provident stock represents the combined opinion of
many investors who have "voted" with a precious commodity - their own
money.
. We believe that other banks with depressed stock prices will see their
stock prices recover faster than your Provident stock will. Other banks
have histories of better earnings, better returns on equity, better returns
on assets and better efficiency ratios. The others should lead the way.
. By merging with a proven leader Provident could share the rewards of being
a leader with its shareholders. Otherwise, Provident will probably continue
to trail behind.
. The danger of waiting can be demonstrated by a hypothetical:
Assume Provident had been acquired by First Union Corporation on
December 31, 1997, at a 30% premium to the market value for Provident.
A Provident shareholder with $1,000 of Provident stock would have
received $1,300 worth of First Union stock. If the shareholder held on
to the First Union stock and reinvested dividends, at December 31,
1999, the $1,000 worth of Provident stock would have become worth
$899.52. This is $274.94 more than the actual value the $1,000 worth
of Provident stock had at December 31, 1999 ($624.58). Please bear in
mind that this is the result even though First Union stock lost 43% of
its value in 1999.
Note that this is only a hypothetical. Actual merger results could vary
substantially.
<PAGE>
. Now is the time to merge Provident. Management says merging now would
sacrifice their long-term plans for a short-term gain. We urge you not to
forget the saying "a bird in the hand is worth two in the bush."
. Management says its long-term strategy is enhancing shareholder value. We
believe a merger with a desirable acquiror would enhance shareholder value
more in the long-term and the short-term.
. The Board of Director's recommendations to shareholders may be colored by
the salaries and fees and benefits the executive officers and directors
receive. In 1999, those totaled $2.5 million or about 5% of Provident's net
income. The CEO managed to receive $731,822 plus stock options in a year
when shareholders received 60 cents a share in dividends and a more than
$10.00 per share decrease in the value of their stock.
. Management's prospective retirement benefits may have gone up in 1999 but
yours went down if you are counting on Provident stock as part of your
retirement funding.
Mid-Atlantic Investors has no hidden agenda. We will receive no
collateral benefit from having, or not having, a merger. Our interest is solely
as shareholders. It is the same as your interest and the interest of every other
shareholder who is not on Provident's payroll.
We firmly believe that the shareholders will benefit more if there is a
merger than if there is no merger. This is your chance to tell management what
you think. It's your money. It's your future. It's your vote. Please sign, date,
and promptly mail your GREEN PROXY CARD.
We urge you to VOTE FOR our proposal.
Thank you for your support
Sincerely,
Jerry Shearer
Managing Partner
Mid-Atlantic Investors is a partnership of Jerry Zucker and Jerry Shearer that
invests in the stocks of financial institutions. Mid-Atlantic and its partners
own 5.4% of the common stock (1,370,238 shares) of Provident, an investment
which is worth over $21 million. Mr. Zucker is the Chief Executive Officer of
the Polymer Group, Inc., a New York Stock Exchange traded company, and has
experience as a director of a bank. Mr. Shearer has also been a director of a
bank and has over 40 years experience with the banking industry. He was the
Chief Financial Officer of two banks and a bank holding company before becoming
managing partner of Mid-Atlantic.
The opinions and views expressed in this letter are based upon publicly
available information about Provident and other financial institutions as well
as the experience and judgment of Mid-Atlantic's partners. Shareholders are
encouraged to seek advice about Provident's future and the desirability of a
merger from their brokers, financial advisers and others who have no conflict of
interest.
o NOT PRINTED OR DISTRIBUTED AT COMPANY EXPENSE o
